The Tánaiste told us to-day, Sir, about the extra cost of wheat, and he pointed out that the extra price payable for home-grown wheat would impinge upon the subsidy next autumn. He did not go on to tell the House that freight rates on foreign wheat have in the last month fallen by 50 per cent. Tramp shipping rates from the Atlantic coast and the Pacific coast and from Australian ports have fallen by 50 per cent.
Committee on Finance. - Resolution No. 11—General (Resumed).
Might I direct the attention of the House to the fact that the Minister has his back turned to the Chair, which is discourteous in my opinion?
Deputy Dillon on Financial Resolution No. 11.
The Minister again has his back towards the Chair.
Does not the Tánaiste think that if he directs the attention of the House to an element in the price of wheat which he expects will raise the price, he has a corresponding duty to tell the House of an element in the price of wheat which he knows brings down the price? He does know that because the price of imported wheat is fixed by an international wheat agreement made by our Government at a maximum of $1.80. The only element in the price of foreign wheat that fluctuates is freight. Freight rates went up by more than 100 per cent. when the inter-Party Government was responsible for the bread supply of this country. They have fallen by 50 per cent. in the last month.
Did any Deputy note the explanation of why bread rationing is coming to an end? "Because," says the Minister, "by removing a part of the subsidy on bread, we brought the price of flour and bread above the price of animal feeding stuffs. I believe the gap will widen as the year goes on." What does that mean? What did that mean? Did it mean the price of bread was going up still more or could it mean that the Minister for Agriculture had promised to bring down the price of feeding stuffs? If he has, Deputy Blaney says that there ought to be enough feeding stuffs produced in Ireland this year for all the needs that may arise. Is the gap going to be widened by bringing down their price? I have no doubt that the vigilant and independent eye of Deputy Cogan is fixed upon the Minister. He will want to know——
I put you there, anyhow.
——what is going to happen feeding stuffs to come down? Is this the compensatory tax on the farmers of this country? Is this the way of ensuring that the Minister for Agriculture does his part to ensure that the peasants will not eat too much or buy radios?
We will get no maize at £1 per ton.
The Deputy had to be prompted. He did not know that until Deputy O'Sullivan told him.
Deputy O'Sullivan? Oh, yes.
Oh, there is one blessed feature about Deputy Cogan. We need never worry ourselves when the division bell rings. He will be respectful and respectable in the Fianna Fáil Lobby.
But they will not take him into the Fianna Fáil Party.
Oh, they will not do that but they will keep him in the Lobby until the general election in June 12 months.
That has nothing to do with the Financial Resolution.
I suppose Deputy Cogan has not got much to do with the Resolution right enough. The Tánaiste practised the age-old hoary device—it is unworthy of him as he is too resourceful a gambler—of challenging the Opposition to show him the place where economies might be made or how taxation might be reduced.
I will show him, after a cursory perusal of the Book of Estimates, two items which are manifestly, openly and incontrovertibly fraudulent. There is in the Estimate for Agriculture a subhead provided for the loan of £400,000 sterling to Comhlucht Siúicre Éireann for the purchase of superphosphate to be sold to the farmers within the financial year. The money must come back into the Exchequer.
There is a provision for £300,000 for the lime subsidy, which is to be financed ultimately out of the Grant Counterpart Fund, which is at present lying in the Central Bank. Technically, the Minister may cover himself by an Appropriation-in-Aid or an extra Exchequer receipt in respect of the £400,000, but there is no corresponding receipt in respect of the £300,000 for the lime subsidy. He has not told this House that he abandons the American Grant Counterpart Fund at present. He cannot touch it on account of their own laches in completing the necessary formalities, formalities that should have been completed before the 8th June. I believe they will get it owing to the friendship of the American Government.
Our people are going to be taxed this year to produce the surplus which the Tánaiste intends to employ in his election campaign in June 12 months, after the Minister for Finance, Deputy MacEntee, is in the ash can with Deputy Dr. Ryan, the present Minister for Health. It is part of the gamble that the present Minister for Finance shall be party to the rotten political confidence trick that is going to throw many into unemployment and close down small businesses during the next 12 months, so that the present Tánaiste, Deputy Lemass, will have the wherewithal to invite the electorate of this country to make the same bargain with him next June that he has successfully negotiated with the dance hall proprietors this March.
"Everybody," says the Tánaiste, Deputy Lemass, "clamours for social services, but they cannot have social services if they do not pay for them. Look all around the world and you will see that the social services have increased. Yet in Ireland the prices of tobacco, beer, spirits and petrol are lower than anywhere else in Europe."
I wonder did Deputy Lemass, the Tánaiste, or the Minister for Finance ever hear the name of a man called Eisenhower, popularly known as "Ike"? Did they ever hear of an institution called N.A.T.O.? Do they know what General Eisenhower and N.A.T.O. have been interesting themselves in—tanks, guns, armaments and aeroplanes for the defence of Europe? Do they know that the tanks, guns and the planes cost money? Do they know that Ireland has no charge on its Exchequer in respect of that?
Is it not queer that in Europe these high taxes finance N.A.T.O. but it is only in Ireland that these high taxes, plus the reduction of the subsidies on all foodstuffs, go to furnish forth a Social Security Bill which does not levy 3/6 a week on the poor working man, like William Norton's criminal Bill, but only increases his subscription by 5d. a week but which raises his subscription by from 8/- to 10/- a week in the Budget introduced the day after? Is it not funny that all over Europe tobacco, beer and spirits and all the rest have grown dearer to purchase guns and ammunition — they have better social services, according to the Tánaiste, than we have in Ireland or are about to have—but in Ireland all this extra money is needed simply for the social services that our petulant people keep on crying for?
Are Fianna Fáil Deputies so blind as not to see through that? I think they see through it. I think they have been sold the grandest gamble that a politician ever staged in Ireland. I think that the Tánaiste's game is like that of the ragged, down-at-heel man who came up to Joe Lee, the Scots bookmaker, at Aintree and asked him what odds he was laying on a horse. Then he said: "How much will you take?""Any sum you can lay," said Joe Lee, and the ragged man handed him up £10,000. The horse won and Joe Lee paid him. Somebody asked Joe Lee what was the explanation of that and he said: "It is very simple. That was the last time he could safely put his hand in the till, and it was either £330,000 for him or the Mersey."
Now, as certain as we are in this House, the Tánaiste's game is this. If he can pull off the gamble of holding that motley collection together for the next 12 months, he thinks he has backed a red-hot outsider and that he will come steaming down the electoral Grand National course at 33 to 1, scattering largesse wherever he goes, while the four hopeful jockeys are decking themselves out in red, white and blue to come trotting after him. That is lots of fun for the Tánaiste and the passengers. But I am thinking of the small business men in this country who will have to shut their doors. I am thinking of the individuals who will have to take single tickets to the armament factories and the mines because it is much more important to earn sterling so that our invisible exports will be enhanced to maintain the balance of trade than it is to multiply unduly ambitious peasants on the insufficient resources of this island. Remember, that is the Treasury point of view— there are too many of them and they eat too much. Public finance is a science and one of the difficulties about indicting at the moment what this Fianna Fáil Government have done is that public finance is a science which a good many people fail to comprehend.
We made up our mind as a Government quite deliberately three and a half years ago that it was possible to develop the resources of this country so as to raise the national income to a level which would justify the standard of living our people now enjoy and to keep it there. We had strong advice to the effect that we were attempting the impossible, that our people aspired to too high a standard of living and there was no solution except to bring down the standard of living within the capacity of the people to bear. We heard that advice with respect and rejected it and proceeded to build up a programme of capital development, taking what people might call the risk that that investment in Ireland and our people would in time yield a profit amply sufficient to sustain the standard of living which we thought was the fair and minimum standard that the people of this country should enjoy. To do that we had to make provision for the current annual recurring expenses and for the money we intended to borrow each year for capital development.
We brought before this House for the first time in its history a Book of Estimates which stated on the cover, before there was any question of a Budget discussion: "This is what we intend to borrow." Now what happened? We were held up before the country as rogues, twisters, deceivers and people who borrowed to balance the Budget. This little man here had the impudence to stump the country and say that his sense of financial rectitude was all upset because of this wicked departure from orthodoxy. I respected the poor little man and said: "He is silly and narrow-minded and vain and maybe he believes it, and you have to respect him for stumping the country and stating what he believes, even if you despise his intellect." But he comes trotting in yesterday to announce, having denounced this procedure up and down the country, that he had changed his mind. He got his mind changed for him. The ball and chain that accompanied him to Downing Street rattled and he was told: "Brother, I am boss now. You toe the line or go out now, whether it suits you to go or not." It did not suit him to go. Deputy McGrath, of Cork, was recently sent by Deputy Corry for his visit to Canossa. The Tánaiste has sent the Minister for Finance, naked except for his hair shirt, to the Canossa of his own Budget statement.
Look at his Book of Estimates. It is adorned with eloquent protestations that to have recourse to the method employed in the previous Book of Estimates would degrade the noble citizen who now defends our finances. The ball and chain have rattled since that document was circulated and the Minister came in yesterday to ask our pardon for having failed to present the Book of Estimates in the correct form, and he told us that that notwithstanding he proposes to proceed on exactly the same basis upon which his predecessor had proceeded. Have they no shame, the Deputies who are sitting behind him? Do you not think that a man who can change like that, who can be kicked about like that, do you not think that it is time that he quit being Minister for Finance? Next to the Taoiseach, he is supposed to be the principal adviser to the Government of the day. Can you appreciate an adviser of the Government of the day who gets kicked all around the oblong table every time the Tánaiste goes out to find someone he wants to kick around?
We built up, and I want to tell the House how it was created, a credit creation device to serve this House and the country for the next ten years, and it consisted of the small savings of our people; the annual national loans that we estimated we needed, and for which we could get support; the Marshall Counterpart Fund, the Central Bank's Report, and behind that by the reserves of the joint stock banks, and behind that again, a judicious section of the currency reserve. These, in fact, provided ample reserves for the next ten years, and we bound ourselves, under the 1950 Finance Act, to charge on the Central Fund for 30 years an annual annuity every year to amortise in 30 years every penny borrowed in that way.
And you were charging to the next generation what you should have paid in the last three years.
I cannot see that, in 30 years' time, you have the next generation. Many of the Deputies here will still be around in that time, and the Minister and I will possibly still be here, though we may be hobbling a little. I would be prepared to pay a tax in 30 years' time on my own and the Minister's bath-chairs as a contribution to the building up of this country instead of accumulating mythical assets in the sterling area.
That is the difference. We had provided so that we could amortise each year's borrowing in 30 years. Is that passing it on to the next generation? I think it is not; I think it is bearing it in this generation.
What does this man do? He came into office in the month of June, and in one six months he spent the whole of £28,000,000 Counterpart Fund. Observe our plan when we decided to borrow. We first went to the small lender; we then went to the market and took off the consumer market of this country as much purchasing power as we could induce the people to subscribe to a national loan, in so far as that was wanted for the development programme. If we found that we did not get as much in this way as we wanted, we then borrowed from the joint stock banks, and then, if we required to do it, we would come into the House to use the guarantee of the currency reserve. By the Minister's action, the Marshall Counterpart Fund, which was the first reserve, has now gone.
The Agricultural Credit Corporation have announced to-day that they have increased their rates by 1 per cent. to 6 per cent.
That is the damnable position into which we have got to-day. We had the position that if we decided to borrow £10,000,000 or £14,000,000 we could go and get that and it was our job to advise the House against getting too much in any given year lest it would upset the balance of our economic capital but this House is no longer the person to decide. If this House wants to borrow the £15,000,000 to bridge the present gap where is it to get it? The only place you could get it is from the banks, the moneylenders, and they will tell you what you have to pay and how and when you will pay it and whether or not you will get it. We have no resources left to us whereby we could say to them "do not get tough because we can continue without you". When the bank rate was raised in England that issue was raised and the Minister then told us that there was no use in trying to restrain the joint stock banks because the money would go to the English banks and for that reason he had to give way. That is all being done to advance this Party political racket to make Deputy Lemass the Taoiseach when Deputy de Valera retires. Is it not criminal to have done that especially damaging act? I am convinced, and saying this carries no political advantage, that if we were returned to power to-morrow we would not be able to repair the damage that has now been done to this country. Deputies should not laugh lightly when I say that I am making that statement as an ex-Minister of the Government. Deputy Morrissey and myself and the others were elected members of the Irish Government by the people, and it would become Deputies of this House to respect the position of a Cabinet Minister even if they do not have respect for the person himself. I am proud to have been a Minister of an Irish Government, and Deputies should not grovel at the feet of any British Minister or French Minister or Greek Minister or Sudanese Minister, and then presume to despise an Irish Minister. As I have said, I do not believe that, if we got back to power to-morrow, we could repair the damage which has been done to our financial structure. That is one of the most tragic features of this whole business.
How is it that when discussing the balance of trade in the 17 pages devoted to it in his statement the Minister, when discussing exports in the context of balance of payment, deals not with volume but with prices? I want to direct the attention of Dáil Éireann to this. There was reference in this Budget statement to the balance of visible trade, January and February. Did the Deputies in this House notice this interesting fact, that we have not got these returns yet; they have not been published? It is said here they are not reassuring.
What are the facts? The value of our imports in January, 1952, are 44 per cent. higher than the value of our exports in January, 1951. The value of our exports in February, 1952, are 40 per cent. higher than the value of our exports in February, 1951. Why then is the adverse trade balance on visible trade the same? Because the imports being brought in nine months after the Fianna Fáil Government took office are substantially greater than they were this time 12 months ago. If our blood is to be made run cold with the imminence of disaster, may we not legitimately inquire of the Minister who has cried havoc for the last six months: If you believe that that is the method of putting right what is wrong, why let the imports run at their present level? We never advanced the doctrine that you could correct the economic problems of this country by cutting down imports. Our thesis was: Draw surplus purchasing power off the market by prudently administering national loans, raise the production and exports, and restore equilibrium by raising the value of our exports, visible and invisible, and allowing your imports to meet the requirements of your people as they develop, and control price inflation which must supervene if you allow excess income to chase diminished supplies of goods.
If the Minister for Finance's policy is physically to check imports why does he not do it? Why does he conceal from the House that the increasingly adverse trade balance is not due to stability in our exports, but to an increase in our imports representing the 44 per cent. increase in our exports in January and 40 per cent. in February.
I want to remind the House that the Minister for Industry and Commerce— the Tánaiste—has given us the official Government view on whether we are dealing with a problem of inflation or deflation. Speaking at column 241, Volume 130, No. 2, he said:—
"Deputies opposite have been talking about the present situation in which we are and in which other countries also find themselves, without reference to the changes that are taking place right now and the changes that have taken place during the past month or six weeks. There have been critical changes in the whole world situation in the past few weeks. Almost every country in the world which, like ourselves, was concerned at the beginning of this year or towards the end of last year, at the danger of the inflationary forces, which were then active, getting out of hand, are now no longer worried, any more than we are, about the danger of runaway inflation. They are beginning to get much more worried about the possibility of deflation, of the downward spiral beginning to move."
At column 246, he said:—
"These dangers are quite considerable. I will concede—and Deputies can make any point they like out of it—that right now they look to be very different in character than what they looked 12 months, or even six months ago, but they are not less serious in their significance."
The Tánaiste, as Minister for Industry and Commerce, speaking last week, warned us that he is getting apprehensive about the danger of deflationary forces beginning to operate which may multiply unemployment and expedite emigration from this country. The Minister for Finance yesterday said at page 5 of the Budget statement: "The Government cannot force consumers to buy." At page 6, he said: "Provided the price factor is favourable, trade should revive as soon as the individual need for more consumer goods in the form of clothes and footwear becomes significant and expresses itself in a resumption of individual purchasing."
Take the case of a woman who has four children and a husband to provide for. She makes up her mind to-morrow that the time has come to buy two pairs of shoes for the children, and she goes out with £2 to make the purchase. She finds that the impact of the increased charges made upon her as a result of this Budget will leave her nothing out of the £2 wherewith to buy the shoes. Is the hopeful development envisaged by the Minister for Finance going to take place? No. The only difference is that a month ago the woman had the money but she thought she would not get value for it if she went to buy the shoes; she waited till she would get better value for the money. To-morrow she will not have that question to resolve at all. She need not worry because, whether the shoes are dear or cheap, she has not the money to buy either and she need not even go to price them. From the point of view of inflation or deflation, employment or unemployment, it does not matter what reason prevents that woman from going to that shoe shop; the shoes still stay on the shoemaker's shelf and the man who hopes to make their replacement can leave for Bootle, Liverpool, Birmingham, the armament factory and the mine. No doubt Mr. Butler and the Minister for Fuel will be glad of the opportunity to announce amidst murmurs of approval from the Tory Benches that the problem of labour in the mines is not so stringent as it was heretofore. Doubtless the Minister for Finance will be proportionately gratified by the murmurs of approval.
Some people may doubt that there was ever a Treasury view expressed in this country that our people ate too much. On page 11 of the Minister's oration yesterday, the following statement is made:
"In other words, as a result of the excessive increases in consumption in recent years and the corresponding diminution in saving, the additions to internal assets which have taken place—mainly, I may say, in nonproductive capital such as houses and hospitals—have been effected largely by drawing on our external investments and by incurring external liabilities."
External liabilities? What did he mean by that? He meant to fool the poor silly-billies who sit behind him into believing that the Marshall Loan represented a net debt on our people that there was no asset in hand to meet. And, God help them, they believed it.
Deputy Cowan said that the Minister's speech should not be circulated in manuscript form. I do not agree with that because I think it is a most valuable document. The Minister for Industry and Commerce contributed to our deliberations to-day. He went all pious in the middle of his speech. I do not know if the Deputies noticed that he suddenly assumed the mantle of Fr. Mathew and of the Pioneer Association and said that percipient Deputies who could not divorce from their minds the hidden purpose in the Minister for Finance's action to contribute to the uplift of the public morality by the taxes he proposed to impose on beer and spirits, of which he felt too much were being consumed in Ireland. He said that, apart from fiscal reasons, there were certain moral considerations which would commend this tax to the far-sighted moral citizens of Ireland. He must have forgotten what was in the manuscript because the Minister for Finance was assuring us of special concessions to the smaller brewer which were designed to ensure that he would brew as he never brewed before.
Yesterday was spent in hearing the Minister for Finance say "No" and the Minister for Industry and Commerce say "Yes," but the Minister for Finance was determined to have the last word and said: "You will get no undertaking from me," as much as to say: "Whatever the other yob gives you." Are we to look upon the Minister for Finance as a Fr. Mathew, as reported by the Tánaiste, or as a cunning villain trying to promote the consumption of alcohol amongst the weakly Irish? "You pays your money and you takes your choice." Those who want to think that he has the motives reported by the Tánaiste will look upon him as the spiritual child of Fr. Mathew, but those who think about him as I do will see in him the offspring of "Demon Rum."
I will now quote from page 51 of the Budget statement in which the Minister says: "I am obliged to forgo the customary £300,000 because of the need for increased outlay on the roads, a need so great as to render inevitable an increase in rates of motor taxation in the near future." I understand that in England they have reduced the taxation on motor cars to a level £12 10s. 0d. I also understand that that country is on the verge of collapse, fiscally and economically. We are the largest creditor nation in Europe. Per head of the population we are the largest creditor nation in the world at the moment.
We are going to raise the taxation on motor cars, having already put 4d. on the gallon of petrol to be company for the other 2d. which we put on it last year, and which caused our versatile Minister for Finance to lament.
Now comes the crowning glory of the Budget. In effect, tea has been taxed, butter has been taxed, also bread, beer, tobacco and cigarettes, and motor cars will be taxed. However, dances will be free. How understanding. Picture the whole community yearning to rush out on to the streets and dance in jubilation at this new birth of freedom. We are to shovel our substance into the Tánaiste's election chest for 1953. To crown our aspiration, there at the door stands the Minister for Finance, like the good fairy he is, saying: "Strike up the fiddle, proclaim a jubilee and join us in the dance." The Mock Turtle of Irish politics says: "Will you, won't you, will you, won't you come and join the dance?" He is like Alice in Wonderland, or, if you like, Alice Through the Looking-glass. Do you remember that picture of Alice and the Mock Turtle? The Mock Turtle says: "Won't you come, won't you come and join us in the dance?" Then we see Alice and the Turtle prancing around in a soup tureen enjoying the dance. That is a ridiculous sight, but is it so ridiculous when it transpires that the Minister for Finance, who has decreed universal austerity, was obliged to include in his Budget this most egregious concession? When he was asked why, here is his explanation: "I am proposing a concession as regards entertainments duty. Dancing has been the victim of varying fortune in this regard. The duty on entertainments was first imposed in 1916 but payments for the right to take part in dances did not come within its scope until 1932. In 1946 the tax as applied to these payments was abolished, but was restored by my predecessor in 1949. Dancing is the only amusement which is discriminated against by levying a tax on active participants as distinct from spectators." Can you picture the heart of the Minister being moved at the jubilation of the dancing? All-in wrestlers have to pay their levy, but the dancers are to go free. That is the explanation given in the Budget speech to an Irish Parliament: all-in wrestlers have to pay their levy for groaning and rolling on the floor, or rather they are free and it is only the lunatics who want to go and watch them who have to pay. Hereafter we may all go and look at the populace prancing around the floor glorying in their freedom from taxation, on the grounds that the Minister for Finance has come to the conclusion that these and the all-in wrestlers are entitled to a square deal.
This justification might be used for providing a free ration of beef to the lions in the Zoo. What is the truth behind this? That is the best he could cook up for what was bound to cause a growl. That is all he himself has to tell us, but what was the truth? The truth was that the Secretary of the Dance Hall Proprietors' Association had a letter from the Tánaiste saying: "If you will vote for us, we will take the tax off dances", and when the noble five, now shrunk to four, in stalled the native Government, the credit did not go to the "busted flush", but the dance hall proprietors turned up for their pound of flesh and the astonishing thing to me is that, in that set-up, they were able to get it. I want to ask any Fianna Fáil T.D. in this House will he justify the removal of this tax from dancing on the ground that it is not paid by the all-in wrestler?
If he does not accept that explanation, does he think it was becoming for the Tánaiste to put the jack-boot on the Minister for Finance and to say:
"No matter how ludicrous it makes you look before the public, you have got to pay my piper, for I said I would pay him if he would pipe the proper tune." He did so to the tune of £100 subscription to the election fund. I think that is rather disreputable. It does not surprise me much. I am accustomed to seedy and disreputable goings-on wherever Fianna Fáil appear. They are a seedy lot.
What distresses me about this is that we had started on an enterprise in this country which was fun. It was fun because, for the first time, we had succeeded in getting a Government that believed in this country, our people and their potentialities. For the first time we had a Government that correctly valued and set a high value, quite genuinely and without any irony whatever, on the Treasury view cogently, resolutely, even ferociously put, who recognised it for what it was, the Treasury view to be carefully considered by a responsible Minister for Finance, who would consider it in evolving his policy, sometimes complying with it, often departing from it. We had established that, in the last analysis, the wealth of our country came from the land and we had declared, to the admiration of every stranger who came to the shores of our country, the right of an Irish Government to invest our people's savings in their own country and not to be afraid to do it. The first fruits of our spending visible to every man's eye were 200,000 acres of arable land that were not there, just were not there, three years ago.
And they are not there now.
I can only go on what the colleague of this Tetrazzini of politics says.
You said that yesterday. Do not repeatedly repeat yourself.
You aspire to be a Melba, perhaps. Deputy Walsh, the Minister for Agriculture, told me about it. Has the Minister studied the return circulated by Deputy Walsh? He said there were 200,000 acres of land rehabilitated or in the process of rehabilitation. Does the Minister deny it?
Rehabilitation is a relative and very indefinite term.
Born on the agricultural horizon of West Belfast, I cannot expect from the Minister a clear or cogent appreciation of the value of agricultural land, but I am obliged to admit that not infrequently I feel that the Fianna Fáil Government accept the views of Falls Road and Capel Street as coercive in all matters of agriculture, and reject as contemptible a view on that matter which comes from Kilkenny or Mayo. I prefer the Kilkenny outlook on that. I think it is more likely to be right than the outlook of a man who was born, bred and reared in a city and never saw the country except when he was on a holiday, a man that would not be able to walk across a ploughed field without falling and getting lost in it, and having to be dragged out of it. That is no disgrace to him. He is a city-bred man. He is always accustomed to have his food come to him in a packet or a bag or a jug.
I am approaching this from the point of view of the people who live on the land and get their living on it. They know the difference between land that was rehabilitated and land that was not. The Minister, if he goes out with any of his colleagues, would see this—and this he will understand—land that is green to-day that was brown four years ago. That is a simplification that would appeal to him and that simplification has so fascinated him that he has authorised one of his junior Ministers to undertake a great new national enterprise for which he is providing thousands of pounds. Can you conceive what it is? The Falls Road agriculture, growing grass on the bogs of Bangor-Erris. There are 11,000,000 acres of arable land in Ireland better than any other land in Europe for growing grass, but Fianna Fáil economics have spread their sails and set forth for the bogs of Erris whereon to grow grass for the purpose of drying it to sell it in Northampton. That is what he calls land rehabilitation. That is what I call Bangor-Erris midsummer madness. That is the difference.
We have 200,000 acres of land that we had not here before. We have farm buildings. We have machinery. We have this interesting fact, that our exports are rising and that our people are eating more than they ever ate before and that in every international survey that has been made one thing has stood out, that the people of Ireland are better fed and better provided for than any other people in Europe.
What has changed since this time 12 months? Everybody in this country felt they were going places this time 12 months. Everybody in this country who was working felt that, in addition to the monetary reward for his work, he was taking a share in something that was worth doing. There were more people working in Ireland 12 months ago than there had been for years and years. I have told the story and I will tell it again, of the men working on the land project who had come from Africa and Suez to use their skill at home on our own land in the land project. Fianna Fáil was on this side of the House and often troublesome. It was jealous of what we were doing. Even Deputy Allen used to grind his teeth at me for hours at a time to prove that I was not doing anything at all. What is happening to the country? On what side of the House to-day is there jubilation about anything? Where is there a cheerful face or a confident man? Of stiff upper lips I see aplenty. I never saw such an array of stiff upper lips in my life as I have seen in the last few days on the Fianna Fáil Deputies, but it is whalebone they have in them.
Keep up your heart.
It is hard to keep up one's heart, because I do not think that the damage that is now being done can be repaired in my time. It will be repaired, perhaps, by those who come after us. The Minister and myself are getting on. He cannot expect a fool's pardon at his age; the time is long passed for that; neither can I. I never concealed that, for me, it was fun to be a participant in that work. I am sorry to see it wrecked as it has been wrecked. I am sorry to see the country faced with the dilemma with which it is now confronted. I wonder, when looking at the Mayor of Drogheda, who is now about to launch a considerable new industry in Drogheda, for which capital will have to be raised——
Without any difficulty.
——if he is as sure in his mind that that industry will have a prosperous future as he was six months ago?
More so. I certainly would not chance it if you were in power.
If you have Deputy Briscoe with you, you are all right.
The Deputy is going to establish that industry because I was in power. He is going to establish it for the dead meat trade and the canning trade in the United States and in Great Britain. The danger is that these things will perish under the wintry blast of Fianna Fáil administration.
Rather will they flourish.
That is a hope which the Tánaiste shares. He hopes to be riding high, wide and handsome on that gamble. If he set sail for Monte Carlo I would wire the casino: "Close your doors. Here is the biggest chancer that ever crossed your threshold. He will either skin you or leave his coat and trousers on the premises." If that were the measure of his exertions it would be his own business but I take it amiss when, in the casino of politics, he feels himself justified in staking not his all, but our all, on a spin of the wheel, and that is what he is doing. It is the wickedest thing which has ever been done in this country. I doubt if we can repair it and it is certain that before we get the chance to try thousands of our people will suffer bitterly from what Fianna Fáil is doing now. I have no hope that the busted flush will come to realise their duty and prevent what is about to be consummated. I have really no hope that there is any element in Fianna Fáil who will do it either. My one hope is that the endless resilience of our people and our nation will survive the third war which Fianna Fáil has declared upon the Irish people. They led us through the civil war and the economic war and now we are going to have the dollar war. We have survived the first two; God grant that we will survive the next.
We won both. We made you a republican.
Do not forget missing the Mallow train.
The only thing you ever missed was your mammy's apron strings.
The dignity of these ejaculations is edifying.
Major de Valera
It is natural with such a subject as this to find the Opposition exploiting it to the full from their point of view. Nevertheless it is noticeable that hitherto in this debate, although most members of the Opposition have spoken, few have really addressed themselves to the problem which faces the country and which must be faced by whatever Government sits on these benches at this time. It is all very well to complain of taxes. No tax is popular. It is never popular for a Government to have to find the money necessary to run the country in times when it is difficult to find it and when the trend is adverse, but nobody has suggested any alternative. Now Deputy Larkin, who was perhaps the most sober and objective in his approach, very rightly remarked that it is the privilege—I am paraphrasing him—of an Opposition to parry such a challenge from a Government. He was the only person, however, who went any distance to meet that challenge when he frankly suggested that he would consider deficit financing. It is a hard fact, however, that apart from complaints and, I might say, the understandable exploitation of the situation as they find it by the Opposition, there has been from that side no examination of the problem as it exists or the Minister's proposals for meeting it, and no contribution towards the solution of that problem.
Perhaps then I might be permitted to try to supply some factual basis for the discussion for the rest of the way. No matter whose fault it is or what the historical facts are, there is a situation at the moment where a considerable gap has to be bridged between the revenue and the expenditure estimated for the coming year. It is not sufficient to hope that circumstances will improve, as there has been at least one year's experience to show how far the situation can deteriorate. There has been a picture of a growing disproportion between State revenue on the one hand and State expenditure on the other. The problem is what to do in that situation. I do not think that anybody in this House will suggest that money is something which can be printed off, or that you can simply scrap the financial system. Nobody has gone that far. The furthest the Opposition has gone is to say that we can borrow. Nobody suggested that the money is not to be found or must not be found. Assuming for the moment that we are agreed on that premise— because I freely concede that if you take that away we are in a different line of country—the problem is how that money is to be found and for what purpose, how far that money should be found from current resources, and how far it is legitimate or prudent to pass on the burden to the future or, if you like, to mortgage the future of the country. A mortgage can be a perfectly justifiable business transaction, and I do not use the word in a completely condemnatory sense, but it is an accurate description.
This problem is one which, as Deputy Larkin pointed out, cannot be completely answered on a fiscal basis. It is one in which we have to take into account social and other factors. Broadly speaking, for a Government in this country at the moment——
A Coalition Government.
Major de Valera
——for any Government, the factors to be considered are —how far, in meeting the gap which has to be met between the money at present returns available and the expenditure you envisage, can you actually effect monetary economy—in plain language, how far can you cut down expenditure. On the other hand, if you are not going to cut down expenditure, what policy will you adopt to find the money for the expenditure which you think you should maintain?
You told the people that months ago.
Deputy Leary should not interrupt. He should allow the Deputy to make his own speech.
The Deputy told the people that his Party were going to reduce expenditure.
Deputy Leary will have an opportunity of making his own contribution.
Major de Valera
If Deputy Leary wants me to depart into a comparison between people's statements and their performances I will do that to oblige him, and the balance, I think, will be on my side, but for the moment I would prefer to try to deal with the problem and its solution, and I will be obliged if the Deputy allows me to do so.
With regard to approach, there would be one group which might go far in saying that we should economise. But when you say that you are going to economise, are you going to stop the development which is undoubtedly necessary for this country? In other words, you are up against the question of how far right will you go or how far left in that approach. I think there is a rational and prudent answer to that in this country as we stand to-day. There is still a need for development here. There is still a need for expanding our own resources and limiting our dependence on outside. While that situation is still there, we must go as far as we can with the development programme, and we have to find the money to do it. That is, broadly speaking, the answer, that we cannot solve the financial problem completely on the balance sheet basis of reducing the gap between expenditure and income by cutting. We have rather to face the problem on the basis that a certain amount of development has to be provided for; in other words, life has to go on and the money has to be provided.
If you adopt that approach, you must answer the final question: how are you going to find the money? I am pausing there again, because it is there, logically, that the parting of the ways can come. It is there, logically, that certain people whom we used to associate with Fine Gael in the old days might say to you: "Cut down," and that other people might say to you: "Go very much further." I am accepting the position, which I think the Government had to accept in this respect, that certain things had to be provided for, both on the current and the capital side, that there was a limit to the economy that could be effected there, that progress and even the maintenance of the State demanded that the funds required for this purpose should be found and, therefore, the Government had no alternative but to find the money.
That is limited by another proposition. It is limited by the capacity of the community to find that money in whatever way it choses. I have not yet come to the point of discussing the methods of finding the money. Any community, big or small, will have a limit to its overall capacity and there will be a limit, after it has provided for its current living needs, to what it can make available for investment for its own development. The parallel there is close enough of the ordinary individual in more than floating circumstances. Let us take the case of the man who can provide for his ordinary living expenses and those of his family from day to day. That eats up a proportion of his income and must be provided for first. He has a certain amount over for providing for capital betterment, if I may put it that way, for his future, for improving his house and other such purposes, but there is a limit to his capacity to provide these things, and, if he goes beyond the limit, he can only do it by getting into debt, and even in the process of getting into debt he is putting a further commitment on himself. Very soon, you find that there is an overall limit to his potentiality to provide what would, in his personal life, be the analogy of capital services where the State is concerned.
Assuming for the moment that the bill for this year is within the capacity of the country for any one year, taken over all—and that, I think, is a matter that could bear examination at another time and in another place—it is proper, subject to that reservation, to provide for what has to be provided for, and then I say we are back to the problem of finding the money. I should like to put this to the members of the Opposition, not by way of a challenge but by way of a hard, cold question that must have faced them if they were sitting on these benches as it faced the Government. Faced with money as you have it—and as I said earlier, nobody has challenged that—faced with the discrepancy between estimated expenditure for specified items, both current and capital, on the one hand, and estimated revenue on the other, what are you going to do? You have only one of two courses to choose from—you either cut the expenditure or you raise the money to meet the deficit.
Let us take the first alternative. If you are going to cut expenditure, what are you going to cut it on? It is fair to ask that question and I am not asking it specifically of the Opposition as an Opposition. I am posing the question as one for us to examine here in the House. Are you going to cut some of the capital development envisaged, like the development of our power resources, the first primary in any industrial development? Are you going to cut services which are not really in the nature of capital development, the social services for which we have all been clamouring? Are you going to cut any of the other items provided for? Are you going to cut the size of the Civil Service or cut remuneration? If you are going to save you must do one of these things concretely and it is only fair to ask that the particular items to be cut should be specified. I have not yet heard from anybody any concrete suggestion for cutting the expenditure on that side.
If we are to have that expenditure, we must provide for it. If we are to have an expenditure over all of approximately £133,000,000 in the coming financial year, we will have to provide for it, and if our revenue is going to fall short of that by something over £40,000,000, then provision for that £40,000,000 will have to be made. There is no escape from it unless you start playing with the whole monetary machine. I have not heard anyone suggest that yet in this debate, and if anyone does suggest it, I would take this opportunity to say: We will consider it if you get down to a real hard and fast concrete proposal. At this stage of the nation's history, this is no time for theoretical and half-baked assertions in relation to the financial machine. Any suggestions will have to be considered in the same hard, concrete way as we have to consider taxes.
That bill of £133,000,000 has to be met. The money has to be found. I will be bold enough to say, and justified in saying, that I think we are agreed on that. We are agreed that that bill has to be met. How is it to be met? The Minister cannot print banknotes.
I hope that reluctance to interrupt the Deputy is not taken by him to mean tacit consent.
He will be answered.
Major de Valera
It is very difficult to know what Deputy Dillon's attitude to anything is. I am assuming this, however, and I think it is fair to assume it, that from what has been said so far, nobody has asserted that the money should not be provided. As I understand the hostility and the opposition to this Budget, it is based on three heads—(a) the money is raised in the wrong way.
Agreed.
Major de Valera
(b) You are raising too much money, raising money unnecessarily.
Agreed.
Major de Valera
These are the arguments and I will try to answer them in a moment—(c) by borrowing, all the problems of the State could be solved. Lastly, there is another suggestion. Much of what Deputy Larkin said in this debate is worthy of attention—he was the only person who went so far as to make a concrete suggestion and he said—face a deficit. We should consider that, too, I suppose.
The money has to be found. How is the Minister for Finance to find it? He must raise it from the public or borrow it. He has to do pretty well the same as any private individual—raise the money through his own efforts or borrow it. That hard fact has led to what is a general feature of public finance nowadays—the Minister normally has to employ both methods. The fairly common-sense principle has been developed and evolved—and I have not heard anyone assail it very seriously—that where it is ordinary current living needs you raise the money directly.
The current annual charge.
Major de Valera
I would not like to adopt those words unqualified. The analogy which I admit is broad and undefined is, in the circumstances, a more accurate vehicle for conveying the general idea than a technical definition. On the other side, where you want money for something which will give a return, it is legitimate to borrow, on the theory that what you have built, or what you have invested the money in, will give you something, when exchanged—that it will give you the money to pay back your debt and your interest, so that at the end of the transaction you have a net gain or at least no loss.
Like all such propositions, these are quite simple in the clear cut cases, but you meet that undefined "no man's land" where it is difficult of definition. Consequently, over the years there have been variations from time to time in the approach of different people to what is or what is not properly chargeable to current revenue. In one sense, that is very relevant to this debate here to-night. On the other hand, as the Minister pointed out in his Budget statement, it is not so vital, having regard to the size of the sum to be found. For that reason, I do not think we need pursue the point.
The practical fact is that there is a figure round about the £40,000,000 mark to be provided. The Minister, like his predecessor and like that Minister's predecessor, has but two ways of finding that sum—by borrowing it or raising it through current taxation. Of course, the solution has to be a combination of both methods. The discrepancy is a very great one. One may argue as to how it came about, but the fact remains that the money must be found. It is not loading it excessively on the current side to divide it in the proportions in which the Minister has divided it. I grant you that that is a financial argument, but let me get down to the more concrete aspects of the matter. Having regard to the capacity of the country and to the Minister's borrowing capacity, having regard to his actual position, I do not think he could have cut his deficit on current account to anything less than he has cut it. Having regard to the items comprised within what he has allocated to current account, he could not cut it.
There is the significant point in this, and I think the Opposition should appreciate it, that although we have not forgone our point and the differences we have had with you on the question of what is properly chargeable to capital account and what is properly chargeable to current account, nevertheless, for the purposes of this transaction your method of reckoning has been adopted, and even on your method of reckoning there is still this deficit. It is to meet the deficit on your method of reckoning that these taxes have to be raised.
Does the Deputy think that this would be an appropriate moment to make some retribution for all the abuse that was heaped on that method in the last three years?
Major de Valera
If the Deputy asks the question I will be frank in my reply to him. I think not—and for the following reason. I still maintain that much of what has been considered, if not all, and eventually passed off, if I might say so, as capital in the former Estimates is hardly properly so chargeable. It may be necessary to charge some of it as a matter of expediency. In principle, I should say that it is not chargeable at all. From a practical and a social point of view, it might be necessary to have some of it so charged.
I want to make the point that, on your method of reckoning, there is a deficit of £11,000,000 to be made up and that the Minister, having provided for that deficit, currently, still has the over-all problem of providing for the balance of the £40,000,000 mentioned. How you are going to do it is the problem. You are in opposition and it is your privilege to criticise the Government without putting forward a concrete proposal here. But in a matter of such seriousness, if you can show some other practical way of dealing with this problem, I assure you that the Minister for Finance and the Government would be very relieved because in the imposition of taxes of this nature it is no pleasure to anyone to have to meet a problem like this in the way it has to be met. We have yet to hear the alternative proposals. Faced with that position, I have got it down to this: that, on your method of accounting, a deficit of £11,000,000 had to be met from current account. I understood Deputy Costello, the Leader of the Opposition, to make the case that much of this could be written off. I will join issue with that viewpoint in a moment, and the Tánaiste, Deputy Lemass, has already done so. What I say now is said in a full realisation of the points made by the Leader of the Opposition and the answers made to him.
We have got this far: that this money has to be found and that it is on current account. The next question for the Minister for Finance is: "How am I going to tackle this problem?" It is a pretty hefty sum of money to have to find. It has to be got from the community at large. Nobody will believe the fiction of a few rich people or a few companies from whom you can take it. Deputy Larkin pointed out that the number of well-off people in this country is not sufficient for the purpose. The fact is that the money has to be got from the people at large. What should be the social concern of the Minister? It should be the social concern of the Minister to see how he can adjust the burden so that it will fall lightest on the people who can least afford it—and then, of course, he has to take into consideration the over-all interest of the entire community.
I do not think anybody will deny at present that the hardest pressed elements of the community for the last few years have been the families with the lower middle incomes. Many of us have mentioned their case in this House before. It is the people with salaries of, say, under the £700 mark, and corresponding people in other strata of society with comparable incomes, and so forth, who are in the most straitened circumstances. After that there would be certain people such as the aged. What reliefs could be given or how could you adjust the burden you will have to impose so as to treat them as equitably as possible: that was the problem which faced the Minister for Finance. Unfortunately, the hard facts of our financial situation being what they are now, it is not, this year, a question of being able to give benefits. It is unfortunate, but that is the way things have developed over a number of years. It is not a question of being able to give benefits. It is a question of having to find money to maintain your existing standard of living, if I might call it so, for the State. If that is so, it is then primarily a question of trying to adjust the burden.
What has the Minister done? I think that what he did is very commendable. In the first place, coupled with the social service provisions which are coming and will benefit the class which is more immediately liable to the repercussions of an economic situation, as we know in the past, a good measure of protection is being given to them by these provisions. Secondly, the Minister has provided for children's allowances—not only increased allowances for the third child onwards, but also the introduction of the allowance for the second child. Then the income-tax provisions are an important relief in that regard. It is rather difficult for a private Deputy to make calculations in this connection, but from such figures as are available, it appears that the actual increase in income-tax will operate largely by way of a redistribution of that tax rather than an over-all increase in tax. Admittedly, it will lie more heavily on the people in the upper income grades.
The man earning a higher salary will pay more, but, with compensatory reliefs on the lower scale, it will benefit the people in the class of which I have been talking. It would seem, offhand, that the bulk of income-tax payers in the country will pay less tax than formerly, notwithstanding the fact that the rate has gone up. From figures which have been made available to me, it appears that about 188,000 individuals are liable to income-tax at the moment and that, of that 188,000 individuals, 170,000 will pay less tax than formerly in spite of the increase of 1/-.
Does the Deputy seriously suggest that the effect of the increase in the rate of income-tax will be to reduce it for 170,000 income-tax payers?
Major de Valera
From the figures available to me, I understand that 170,000 persons, out of 188,000 persons, will actually pay less tax than formerly, but that 18,000 persons will pay more. That substantiates the point I am making for the Deputy though the Deputy may not have appreciated it. This increase in income-tax is not an increase in the over-all sense; it is an adjustment.
How can we take it as true that the result of increasing it by 1/- is to reduce income-tax for 170,000 out of 180,000?
May I intervene? The result of increasing the standard rate of income-tax by 1/- without making any further changes in the income-tax structure would undoubtedly involve an increase in the over-all tax upon everybody. We, however, are making such significant changes in the earned income relief and in the reduced rates relief that in fact the people who are in the lower income groups will pay very much less next year as compared with what they paid last year.
And you will get £1,000,000 more from the taxpayers.
From what Deputy Larkin described as the wealthier sections of the community.
Do you subscribe to that?
There is no need to get cross. I merely want the truth. It is an admirable point if it is true—170,000 out of 180,000 will pay less.
Mainly employees will pay less.
Is that the proportion?
Major de Valera
I am giving the Deputy the figures available to me. If I am wrong the Minister will undoubtedly correct me later.
But the Deputy has a most excellent point if it can be confirmed.
Major de Valera
That is so and, following it up a little bit further, the bulk of the people paying under Schedule E will actually pay less income-tax though, as the Minister has said, the Exchequer will get more.
Under Schedule E?
Major de Valera
Yes.
Oh! I never got caught on that yet. What is it? What is Schedule E?
Major de Valera
It is particularly beneficial to the married taxpayer in the lower income group. Over 95 per cent. are Schedule E taxpayers and that 95 per cent. will be better off under this Budget.
What is Schedule E?
Major de Valera
Of 27.5 thousand married tax-payers without children approximately 22.5 thousand will benefit; of 25.5 thousand married tax-payers with children almost 20,000 will benefit. Because of the adjustment of rates, in spite of the increase in the standard rate, an unmarried person with an earned income up to £850 a year will actually be better off from an income-tax point of view than he was last year. In other words, if one takes the income-tax paid for last year and compares it with the income-tax that will fall due for payment in the current year the difference, large or small, will be in the tax-payers' favour. In some cases it may be £10. In other cases it may be small. Beyond the £900 level there will be an increase.
Give the figure for the £200 people and the £500 people.
Let the Deputy make his own speech.
Major de Valera
An unmarried man with an earned income of £200 per year would have paid, in the year 1951-52, £3 5s. In the year 1952-53 he will pay £1 10s., leaving a net difference of £1 15s.
That will be very consoling when he has to pay 2/4 for a packet of cigarettes.
Major de Valera
The differential is as much as £10 13s. for a single man under the present system; where in the year that has just gone he would have paid £61 15s, he will only pay in the current year £51 1s. 10d. That gives a differential in his favour of £10 13s. 2d. I am dealing now with the single man. In the case of a married man on a salary up to £1,000 per year, he and his family will be better off by sums varying from £1 to £13 up to £14. In the case of those between £550 and £800 the income-tax relief will amount to anything between £10 and £14. A married couple in the income group from £600 to £900 and up to £1,000 will get relief varying from £10 to £15, or £16, and so on, with comparable results in regard to other categories.
Is this Schedule E?
All employed persons.
Major de Valera
It will be very easy for the Deputy to get accurate figures from the Minister who, undoubtedly, will supply them to the Deputy on request.
Then, I so request. May I have a copy of them?
Major de Valera
I think I am accurate in the point I am making.
If Deputy Dillon will put down a parliamentary question I shall be glad to give him a reply for circulation in the Official Reports.
Ah, I will not get it quite so quickly as the Deputy thought I would.
Major de Valera
I think I am accurate in saying that the effect of these proposals is rather an adjustment in the incidence of income-tax with a consequential benefit to the Exchequer than an increase in actual income-tax rates.
If you can establish that you have a splendid point.
Major de Valera
These income-tax reliefs are particularly favourable to married people, but even unmarried people will also receive some benefit. There will be reliefs in regard to the wage earning classes up to roughly £1,000 a year in the case of a married man. There will be some benefit—it may be small or it may be substantial— depending on the variation from last year to this year. Above that level of £1,000 a higher rate of tax will be paid. The people who are earning over £1,000 a year will pay a proportionately larger tax.
Deputy Dillon says that if I am accurate I have a good point, and I think he will find that I have been accurate in my over-all description. Now, that was a rational step for the Minister to take. These burdens have to be borne by the community and, in imposing them, the Minister has very properly made some adjustments so that they will fall heaviest on the shoulders best able to bear them.
The Minister has given what relief he could to the disabled and so on. We have heard suggestions here about the tax on the poor man's luxury. When the 1947 Supplementary Budget was introduced, I begged the then Minister for Finance to forgo the tax on the pint. I know we shall hear more about it now. I think there is a point there but, nevertheless, the gap is so big now that it almost seems as if the Minister has no alternative but to go to the sources to which he has gone in order to bridge that gap. He has, however, made the burden heavier on the higher income groups. Everybody will have to bear them but heretofore everybody, rich and poor, had the benefit of the subsidies. Now everybody will have to forgo these, and it is only on the higher income groups that the income-tax burden will fall. That is a point which might be remembered.
I am not going to repeat either the social services or the reliefs, the very substantial reliefs, given by the Minister in regard to income-tax, what I shall call the overall benefits. Unfortunately, we are faced with straitened circumstances and it is not so much a question of conferring benefits as of minimising the disadvantages of the situation in which we find ourselves and I think it is good that the Minister has been able to make these adjustments. I think it is good that he has been able to envisage a programme for next year and to maintain such provisions for a capital development as are included in the Government's programme. But, as I say, if you are going to do it you have to find the money.
Perhaps at this stage it would be no harm if we soberly looked, without any recrimination, at the general trend of financial history in this country for the last four years. I have here the Finance Accounts going back to the year 1947-48. There are some general trends in them which are worth examining and worth adverting to, both from the point of view of seeing how we got to the position in which we are and also from the point of view of seeing what would be your future, if you continued on the road on which you were going.
Surely this is not the first time we heard this?
Major de Valera
The Deputy will not quarrel, I think, if we try just to find what was the position. It is not a question of apportioning blame or a question of recrimination, so far as I am concerned, but I think it is very relevant to know where we stand and where we are.
I hope it is for the purpose of apportioning praise where praise is due.
Major de Valera
It would be all very nice if we could arrive at that position in this House, but seeking motives that are not properly inferable from the facts does not help us to get there. The Finance Accounts for the year 1947-48 disclosed the situation that you had a total revenue of £65,000,000 and a total expenditure of £73,000,000. There was for that year a discrepancy between total revenue and total expenditure, as shown on the right hand side of the account, of £8,000,000. We move then to the next year, and we find that the discrepancy between total revenue and total expenditure has jumped to £27,000,000. In 1947-48 it was, as I have said, only £8,000,000. In 1948-49 the total revenue was £71.7 million and the total expenditure was £99.4 million or £99.5 million to the nearest point. Thus the approximate discrepancy between total revenue and total State expenditure—I have not subtracted the small balance items, but I do not think they matter for the general argument—was £27,000,000. That expenditure included Central Fund, Supply Services and capital expenditure.
We then come to the Finance Accounts for 1949-50 and again we find that the discrepancy has risen by an additional £2,000,000. It jumped from £8,000,000 in 1947-48 to £27,000,000 in 1948-49, and then there was a further addition. We find that the revenue in 1949-50 was £74,000,000 odd and the corresponding total expenditure was £103.5 million, showing a discrepancy of £29,000,000. In other words, the gap has been widened very significantly between revenue and expenditure.
We come, then, to the last set of Finance Accounts available, that for 1950-51, and we find that, while revenue was £77.4 million, expenditure reached £109,000,000. Subtracting, we get a gap of £32,000,000; the discrepancy has jumped again. Then during the last year the figures, if my memory serves me, show that total revenue was £83,000,000 and total expenditure £129,000,000, disclosing a sum of nearly £40,000,000 as a discrepancy. The House will pardon me if I read the sequence of these figures again. Beginning with 1947-48 the sequence for revenue was £65.2 million, rising to £71.7 million, rising to £74,000,000, rising to £77,000,000 and, finally, to £83,000,000. While there was that, shall I say, ordinary or normal expansion in revenue, corresponding to external monetary conditions largely, you had on the expenditure side the figures rising from £73,000,000 in 1947-48 to £99.5 million, to £103.5 million, to £109.6 million, to £129.7 million, and then you have your estimate for the current year.
What is the feature of all this sequence? The feature is a widening gap between revenue and expenditure. Although revenue was increasing somewhat, expenditure was increasing at a much greater rate and, of course, that was reflected in what the Government at the time had to do in regard to money raised by the creation of debt. The other receipts shown in these accounts are insignificant and I think we can ignore them. They are less than £1,000,000 in any particular case. If one looks at the money raised by the creation of public debt in these years one finds that in 1947-48 the total of the money raised by debt was somewhere round about £8,000,000—£7.8 million—roughly corresponding to the deficit. By Ways and Means Advances there was only £3,500,000 raised. We come to the following year, 1948-49, and we find that the money raised by the creation of debt had jumped to £27,000,000, of which Ways and Means Advances were a substantial portion. There was an Exchequer loan which, I think, in that case was fully subscribed. You close the gap by the creation of debt and your Ways and Means Advances have gone up.
In the next year, 1949-50, you are up to £28.2 millions. You have roughly balanced the gap between your revenue and your total expenditure, but Ways and Means Advances are up now to £15.9 million. Of course, in the bonds second issue the public did not subscribe just as much as was wanted, and the "kitty" started to run dry. In the final year, 1950-51, for which I have the financial accounts, Ways and Means Advances amounted to £13.5 million. The total borrowing, the money raised by the creation of debt, was £31.5 million, which roughly corresponds to the £32,000,000. To complete it for last year, the money raised by the creation of debt rose to £44.9 million. What do all these figures show, and these are accepted accounts? There was that growing, widening gap between expenditure and revenue. In order to meet expenditure, that gap had to be met by increased borrowing, and was met by increased borrowing.
Now, could that go on? Before we go into the actual figures relating to the particular case, in principle could that thing go on? Take the simple case of an individual. Can he go on and on when he gets into debt and still finds that he wants more money? Can he go on and get further into debt, even supposing that his bank manager will allow him to do it? Supposing that the source from which you are going to do the borrowing still continues to be available, are you going to be able to do it, and, if you try to do it, will you get the money?
These are the problems that are in it. Now, over these years it is quite apparent that, for whatever reason or motives, we were increasing the indebtedness of the State. That is shown by the figures. The figure relating to Ways and Means outstanding at the end of the financial year, is a very interesting one from that point of view.
Table 5 shows you the debt.
Major de Valera
Yes, but there was a very interesting figure published the other day. It is an indicator if you like. It is a simple indication of the amount of your overdraft, so to speak, or of how much was outstanding at the end of the financial year. The Ways and Means Advances on the corresponding dates for two years had risen from £20,000,000 to £57,000,000.
Now, it has been perfectly clear from all that that we had got to the point whether either expenditure had to be cut or where the proportion of the money that came from current revenue, is not going to be sufficient any longer. Let me put it this way: that you cannot go on any longer by simply letting expenditure drift up or go up, and just trust to the normal fluctuations of expenditure, hoping to fill the gap completely by borrowing. That just cannot be allowed to continue any longer. The gap has already got too wide and already there should have been, in previous years, a corrective applied to that. If there had been, we would not find ourselves in quite the same position as we are in to-day. It has now got to the stage where remedial action has to be taken.
Remember this, that even on the figures which the Minister has given himself—nobody, I take it, is challenging the accuracy of the accountancy returns furnished to the Minister— there is that deficit over all in the region of £40,000,000. Granted that the Minister finds the £11,000,000 which he is going to find by taxation, there is still £35.9 million to be found. Perhaps that may be misleading, and that I should say there is the substantial figure of well over £30,000,000 to be found by borrowing anyway. It will be for the Minister a question as how to get it. It is questionable whether the capacity of the State can ever be expanded to bear an annual sum very much greater than the sum which the Minister has here.
Now, have regard to that figure and the sequences which have gone before. We have already got the capacity in the last published accounts of two years ago. As far as the accounts are concerned for 1950 and 1951, on the borrowing of £13,500,000 for that year, the Minister was forced to seek £13.5 million by Ways and Means Advances and only got a little more approximately—£14.8 million by a loan.
In order to get that loan, he had to put up his interest rates. As a result of his having gone to the well for water earlier, he had to put on another ½ per cent. on his rates to get the money. Though I have no figures to guide me, my impression is that the Government of that day did not get that loan fully subscribed, and had to have resort to practices which, no matter how we look at them, were inflationary, and they had probably to realise important revenue bearing investments to meet the liability there.
Sterling assets.
Major de Valera
Sterling assets, if you like. I will deal with that in a moment. I am glad that the Deputy reminded me of it, because there are some interesting points in regard to it. The fact is—I am putting the argument in another way—that, on that showing, already two years ago, we had probably got to the limit of our borrowing capacity. That seems to be borne out by the subsequent history, for the sum to be provided is equal to that. Two years ago we had got to the limit of what I may call our annual borrowing capacity, so that, even if the Minister provides the £11,000,000 on current account, he still has a sum to meet on capital account by borrowing, which is in excess of that sum which was indicated as the limit by the accounts of two years ago. It seems, therefore, on that showing, that there would be no chance, even if the Minister tried to do what some Deputies allege they would like him to do—that is, go and borrow the lot—of his being able to do it.
There are very serious grounds for wondering as to whether the Minister could get that money and could borrow on economic terms. I am using the word "borrow" there as distinct from frittering away existing assets—that is eating in on your capital, which is not borrowing. Now, add to that the current difficulties in the financial market, and I think it will be conceded that the Minister, no matter who the Minister is, has not a pleasant task in facing the raising of a loan.
Whether we like it or not the whole condition of securities in the sterling area is the one that will rule and not any local conditions here. When one has regard to the various facts of the recent past, including the fall in Government security prices and the tendency for investors to go towards the higher-yielding stocks and shares, one feels that borrowing is becoming an increasingly expensive process as well as everything else. Let us not forget that borrowing is loading an increase on to your expenditure side in the Central Fund services. Already the charges for the service of debt have increased over the period of years to which I have referred from £3.5 million to over £7,000,000, that is, double itself. £3.5 million merely to pay interest and Sinking Fund on debts incurred in the last three years would be a substantial relief to the Minister if it could be taken off now.
Does the Deputy believe that?
Major de Valera
I do. If the Minister for Finance had not to pay £3.5 million more on money borrowed for the service of debt he would have to raise £3.5 million less.
Does the Minister confirm that figure?
Major de Valera
I think those are the figures for the service of the public debt, £3.5 million to £7,000,000. I grant the Deputy that, perhaps, that is not an accurate description, but I shall put it this way, which is accurate, that the charge for the service of the public debt—I think that is what it is called—has risen from £3.5 million to £7,000,000. I think these are the figures.
Do not press the Minister. He is trying to fool you with that figure.
Major de Valera
I am speaking from memory but I think that is the figure and it has doubled itself roughly. That represents an increase in the amount that has to be paid in relation to debt. The amount will continue to increase the more you increase your debt. That is the simple argument I want to make out of it. As I say, unfortunately, in giving that figure, I am speaking completely from memory but I would be surprised if I were wrong.
The Deputy's memory is being misled.
Major de Valera
One can get the figure from the bank accounts can not one?
They can be found in the Finance Accounts.
Major de Valera
Yes, I can get them from the Finance Accounts.
We are paying off what those opposite spent.
Major de Valera
Central Fund Services, Service of Public Debt, Interest, £6.3 million, Sinking Fund, £1.7 million. That is over the £7,000,000 I mentioned and the interest is higher. Had the Deputy asked me on the spot I would have told him it would be less. The proportion is £6.3 million. If you look back on the accounts you will find that the corresponding figure was £3.5 million three years ago. The point I want to make in all objectivity is that borrowing is not an unmixed blessing even if you can get away with it. Already in three years the Minister has a burden of £3,500,000 more approximately in relation to debt than he had three years ago. If that £3,500,000 could be taken off the £11,000,000 he has to meet by taxation his taxation would be correspondingly less.
I think it is a fair argument to say— it is legitimate criticism without any-bitterness-that fundamentally our financial criticism of the Coalition Government was that it failed to see where the drift was going. The drift was one where expenditure tended to outpace revenue although revenue was buoyant. The trouble was that the expenditure tended to outdrift the revenue at a fast rate.
In regard to housing, I am taking it as an incontrovertibly good thing to have done in those cricumstances, but by adding to your expenditure side in regard to capital, items which, strictly speaking, were not capital in the sense that they were going to give you a money return that would pay for themselves, you were aggravating that gap and allowing that gap to widen and the drift to accelerate. In allowing that drift to continue and that gap to widen this year it inevitably drifted towards the position where some day some Government would have to bring that up with a jerk.
That is what we are up against. We are feeling the jerk now because the necessary controls were not applied during the three years. In 1947-48, there was only a gap of £8,000,000. That was almost met in a routine way but it had widened to a gap of £40,000,000 this year. The corresponding borrowings had risen to £31,000,000. But it is significant that it is not even what you might call straightforward borrowing. You have the mix-up of Ways and Means Advances coming into the picture.
I do not understand that.
Notwithstanding the fact that the Deputy has repeated it half a dozen times.
Major de Valera
The Deputy asked me to go into the mater of the Grant Counterpart Fund. I shall not forget to do so. You had that situation of drift, the widening discrepancy between revenue and expenditure. The result is that we are faced with the ultimatum, if you like, or the dilemma, that £40,000,000 has to be found. What proportion are you going to raise on current account and what proportion are you going to borrow? Only £11,000,000 on current account is very far from being either orthodox or conservative. I think we will agree with the Government that they are right to keep the programme there and that the Minister was right to make the adjustments in the incidence of the burden which has fallen upon the country largely as a result of the drift I have mentioned. I say objectively and without meaning to hurt anybody that, largely as a result of that drift, this burden has to be met and the Minister has made the best effort he can to place it on the shoulders that can bear it.
The poor people.
Major de Valera
The Deputy was not here when I dealt with the whole question of income-tax and showed that the burden was placed upon people with over £1,000 a year and that those with less than £1,000 a year actually got reliefs.
If the Deputy came down to my constituency he would have no doubt about the truth of what I have said.
Major de Valera
I have no doubt there will be complaints and that the Deputy and many of his colleagues will do their best to aggravate those complaints. It is legitimate, and one expects the people will complain. I would complain too, if the Deputy likes, because what we are faced with is the legacy of three years' drift and a widening gap between expenditure and revenue. If the Coalition Government had only tried to keep revenue and expenditure comparable, then we would not be faced to-day with the gap with which we are faced. They, first of all, let the years of opportunity, 1948 and 1949, drift. Then they got into difficulty and let the cost of living and other things get out of control.
What?
Major de Valera
Yes, let the cost of living and these things get out of control. You must remember that the cost of living rose six points. I am sorry that it has been necessary to take this tone with Deputy O'Leary. I was trying to deal more objectively with Deputy Morrissey and Deputy Dillon. If Deputy O'Leary wants me to follow on this line he can have it. Deputy O'Leary knows very well that, having failed to exercise any control, the Labour Party cannot talk about it. They could not even get their Social Welfare Bill without getting wrecked with the Coalition, and they came out of office discredited.
You expect their votes.
Deputy Leary must cease interrupting.
Major de Valera
I will admit that there has been a certain amount of misfortune in the way things have happened. It has been a misfortune for the world and for this country, for instance, that things turned out as they did at the time of the Korean war. If the situation had developed differently, we might be talking about facts differently. The point I want to make objectively——
And without repetition.
Major de Valera
——is simply that it was the failure to keep that gap closed which has led us to the position where one has, so to speak, just to come up against it and cross it. It is perfectly evident that Deputy McGilligan, while Minister for Finance. was apprehensive of this. The only criticism I shall levy at the Coalition for the moment is that fundementally, with their divergent views, coalitions are weak. The indications are here in Deputy McGilligan's own approach even to this problem. They are worth noting and, for that purpose, I propose to put some matters on record in connection with this debate.
The Deputy made a promise that he would only speak for two hours.
Major de Valera
I have not been speaking anything like as long as Deputy Dillon.
Or as effectively.
Major de Valera
That is a matter of opinion. On the 28th February, 1951, Deputy McGilligan, then Minister for Finance, when presenting his Vote on Account, said:—
"It would appear that the increase in the consumption of essential goods is put at 9 per cent. while the consumption of drink and tobacco have gone up by 16 per cent. The consumption of other goods, as the phrase is used has probably—it would certainly mean non-essential goods—increased by 32 per cent. Taking these two tables together it would appear to be the case that the standard of consumption is being maintained by imports, such imports not being paid by current earnings or by current savings.
The details of the situation will be known to Deputies, but there are one or two I should like to stress. I said already that the lack of the balance which has figured in the 1950 accounts is partly the result of a rise in import prices and that rise is not yet matched by a corresponding increase in the return for exports. The rise in import prices is to some extent the product of devaluation. Certain delayed effects of that began to make their appearance in the early summer of 1950. But, more particularly, the rise is due to rearmament and the scarcity which that caused."
Then he goes on to deal with the ratio of prices.
Will the Deputy give the reference?
Major de Valera
Volume 124, column 786 of the Official Reports. He went on:—
"The developments in 1950 are, of course, disquieting and it is clear that we could not for very long expand consumption at the present excessive level without inflation in the limited sense of price increases. Most of the blame can accordingly be put on external forces outside Government control."
It is quite obvious that the Minister at that time was nervous of the way things were developing. As I say, it was probably unfortunate that things took that particular turn at the time. But already at that time, as he pointed out in the part I have quoted, the terms of trade were going against us. On March 8th, in closing the debate, as reported in column 1614 he refers to five sources of financing. The last two of these five are the American Loan Counterpart Fund and the sales of sterling investments of Government funds. He said:—
"I said with regard to the last two that I brought these under criticism as being ‘unrelated to current savings.' I distinctly said in regard to these that any resort to them would undoubtedly be of an inflationary type and, therefore, caution in resorting to them had to be exercised."
It is clear that at that particular stage Deputy McGilligan, as Minister for Finance, was apprehensive about the turn things were taking and that becomes more clear when you come to his Budget statement a year ago. It might be interesting to Deputy Leary to read this passage for him. As reported in column 1877 of Volume 135, he said:—
"I refer later to the need for moderation on the part of all sections of the community—employers and employees alike—in the pursuit of higher monetary incomes unrelated to increases in prices."
Later on he said:—
"Increases in remuneration offer no escape from this unwelcome development...."
That was that we were not able to produce enough.
"...indeed, they can only accelerate the process of inflation and cause social injustice as between those able to improve or maintain their position and those who cannot enlarge their incomes and are, therefore, forced to assume an undue burden of hardship. For this reason, the Government ask for restraint in the putting forward of wage and salary claims and have taken measures intended to limit price increases to those justified by increases in costs."
That is, by drawing on our external assets to pay for consumer goods. As reported in column 1882 he said:—
"It is still proper and eminently reasonable to draw on our external assets if thereby we speed up the process of capital development at home. What is abnormal and, if it persists can be seriously damaging, is to use up our external resources for consumption purposes. Have we been doing that?"
What about what the people have to pay for tea and sugar?
Major de Valera
Unfortunately, the tea and the sugar depend on this and if Deputy Leary realised that, we might be able to make better provision in regard to these matters. As reported in column 1884 he said:—
"The conclusion to which the analysis leads is that, while the extra external disinvestment we incurred in 1950 was balanced as to roughly two-thirds by new home investment and increased stocks, there still continues to be a substantial use of past savings merely to lever up standards of consumption. Making all allowance for the exceptional conditions now obtaining it is to be feared that we are not producing and earning enough to pay our way. The implication is obvious. We cannot have both consumption and capital development on the present scale unless we save more and produce more."
It is obvious from these quotations that the Minister for Finance at that time was already feeling the seriousness and gravity of the situation which we had to face. Unfortunately, however, no adequate provision was made to meet that situation. Nothing was done to adjust the revenue position in those three years. I know it is difficult for any Coalition Government to meet matters of this sort. It is highly unpopular for anybody and for any Government to do it, but the trouble is that if we do not do it sooner we must do it later and cause the greater suffering as a result. That is the situation which has to be faced now.
All the other palliatives and barriers have been exhausted. There was the Counterpart Fund, to which both Governments resorted as a buffer. However, the moneys under that fund must be paid for and will be paid for but the advantages of that barrier, such as it is, are not there now. What was that dollar loan spent on but things for which mostly there is no large return, and the answer of the Minister given in the Dáil was that it was mostly on wheat, flour and grain. These figures are familiar to most of us but the important thing is to what extent it was spent on capital equipment and machinery and such matters. Only 6.9 or approximately $7,000,000 out of a total of $146,000,000 was spent on those important items. Further sums were spent on raw materials which may have been justifiable in the circumstances of the time, but if we take off a sum for these we find that two-thirds of the money was spent on consumer goods.
It is an old argument as to the advisability of spending dollars in America for the purchase of grain and other foodstuffs which could be grown at home. We have gone into that argument often. The fact is that this was a dollar loan and a commitment which, no matter what distinction Deputy Dillon makes, must be met. It is a loan and a commitment for this country, no matter what way you work out the financial transaction. I think it was seriously wrong to spend this money on goods which we could have produced at home, and Deputy Dillon knows that I think that is so and there is no use in mincing words about it. It was a considerable factor in the situation in which we found ourselves. That money has to be paid back and it is a payment on the wrong side for us, and the goods are gone.
They are not gone.
Major de Valera
They are gone. It was spent on consumer goods.
You have two and a-half years' stock of tobacco.
Where is the wheat of 1950 gone and your coarse grains?
You have two and a-half years' stocks of tobacco.
Major de Valera
It was spent on consumer goods at a time when there was a shortage of dollars and a serious situation, and it was a serious thing in such circumstances to spend the money on consumer goods.
They spent it on Deputy Dillon's cigarettes.
They did not cost as much as the Minister's cigarettes.
$35,000,000.
Major de Valera
There is the situation, and we are limited in borrowing. I have some notes which I took some time back which show that the 3 per cent. loan which was issued by the previous Government was not subscribed from the public to the extent of more than 50 per cent. The Government then unfortunately resorted to inflationary expenditure. The rate was raised to 3½ per cent., but still the public did not subscribe to the extent of more than 60 per cent.
You said that the country was bankrupt.
Major de Valera
I did not, but I say if that had continued it would have led to a very serious situation. These are all factors which we must take into account in this difficult situation. We are not trying to pretend that this taxation can be anything but a burden, but our people will realise that one has to pay for the things that the Government can give them in spite of the fact that they have been misled in so far as some irresponsible people in certain quarters are concerned; and I am not referring to Deputy Morrissey in this connection, because Deputy Morrissey has been very responsible in these matters here frequently in the House. There are, however, others who have not been responsible in representing to the people what the situation actually was.
The money for the social services and capital development and other purposes has to be found, and if it cannot be provided out of revenue it must be provided by some other method. I think the Minister and the Government are trying to provide for a continuance of the development programme, but there is a limit to the country's capacity to do that. I would rather take the view that we will find the money to do the work rather than that we will only do the work for which we have money available.
While taking that attitude we can make the remark that again, unfortunately if you like, there is much to show that the orthodox economists have a lot of right on their side in post-war economic development. These are the hard facts which must be taken into account and faced, whether we like it or not. We will hear much about these taxes and much about this Budget, which is designed to meet a situation where there is a gap between income and expenditure and where the State was living beyond its means. Not only the Fianna Fáil Party were saying this. Deputy McGilligan, as Minister for Finance, had his fears that the State was living beyond its means from a consumer point of view and that we were borrowing more than we could afford.
What about the 74,000 unemployed?
Major de Valera
The situation was getting to the point where we would have to face up to it.
What I am proposing to say now is not quite germane to what I have been saying all along, but it is interesting. I think it was Deputy Dillon who said something about the new taxes aggravating emigration. I wonder how far these taxes can do that? Although it is necessary to say that this Budget will impose a strain, still there is a big discrepancy between the prices of petrol, cigarettes, whisky and stout in the Six Counties and in the rest of Ireland. Although petrol will go to 3/6 per gallon here, it is 4/3 per gallon in the Six Counties. I feel the Deputy will concede that there is a practical problem, unfortunately, resulting from Partition, where big discrepancies in prices on either side of the Border are involved. Where there is a big discrepancy in price there is an immediate problem. I am not suggesting that this is a major consideration with regard to the Budget but it is one to which we might advert. In the Six Counties and in Britain the cigarettes are around about the 3/6 mark per packet, whiskey is 5/- per glass and stout 1/11 per pint.
Why copy England?
Major de Valera
I agree, Deputy. We have said the same thing before. We should not condition ourselves and we do not condition ourselves to circumstances in Britain. That can be said in fairness to both Government and Opposition. Unfortunately, if you like, we are associated in the one financial structure; we are part of the sterling area and certain comparisons are therefore, legitimate as regards prices and living conditions in both countries. Quite frankly, I do not see the force of Deputy Dillon's argument that we are encouraging our people to emigrate and chasing them out of the country in view of the differential between prices and living conditions in Britain and here. In my view, that problem is rather one of another sort which we can discuss at another time.
Lastly, I would like to refer to a remark made by the Leader of the Opposition, which I jotted down. He said: "We had created a financial structure of impressive strength." I must say that I fail to see the strength of a financial structure which is characterised in the widening gap between income and revenue, which I have demonstrated from the accepted figures which I quoted. I fail to see the impressiveness of the structure which is built largely, if it is a structure at all, on a debt basis. I fail to see how a situation in which one has to look to borrow money and at the same time increase the cost of borrowing so as to get the money at all, could be called impressive; a situation where, at the same time, the balance of payments, which is fundamental to this picture, as the Minister has said, was going against the then Administration in the way in which it was; a situation where, coupled with that financial structure, the Government responsible for it should go out of office handing over at a time when the cost of living had started to soar and trends had started to go wrong.
As Deputy McGilligan, when Minister for Finance last year, said in his Budget speech: "Many things are outside the control of the Government." The experience of everybody in this House, acting in or behind a Government, shows that there are great limits to what it can do. I think we are all agreed on that. In these circumstances, frankly, I fail to see that, in the first place, there is any great credit due to the inter-Party Government or, in the second place, that there was anything very impressive about their financial structure. However, I suppose it is too much to hope that this matter can be approached on a hard factual basis. It seems a peculiar thing that, apart from Deputy Costello making certain deductions and making the case that there was overtaxation, there has been a great evasion of figures and facts by members of the Opposition. This is not a challenge, but I feel it would be helpful for us all if those very facts and figures in the Budget with which I have dealt had featured more in this debate. We could have found grounds for commendation or criticism of the Minister if that had been done.
Just now Deputy de Valera challenged us to give more attention to the figures and the facts— the accurate figures—which the Minister had given us.
Major de Valera
I mean Financial Accounts.
I am glad the Minister is here. This morning Deputy Costello described this Budget as being not merely a cruel Budget but an unjust one. I want to go further. I want to say that in this Budget there are figures that are neither true nor accurate. In this Financial Statement—the most important document that issues from the Government of this country in any year—there are figures which are false. I ask Deputy de Valera not to leave the House now, because what I have to say will be worth waiting for. The figures in the Budget statement are not correct, and they are the figures upon which the Minister has sought to justify one of his major impositions on the people of this country.
I refer Deputies and the Minister to page 50 of the statement issued yesterday. I quote the Minister's words:—
"There has also been a spectacular increase in the registration of motor vehicles, which numbered 99,662 in 1939, 173,234 in 1949, and 223,444 in 1951. In the light of these figures, we may assume that petrol will readily bear an additional 4d. per gallon."
May I again draw Deputies' attention and the Minister's attention to the statement: "There has also been a spectacular increase in the registration of motor cars." Some of those figures are out by as much as 50,000. The figures given in this Budget statement, upon which are reared impositions on the public of something in the neighbourhood of £50,000,000 additional taxation, and the preparation of that statement by the Minister, are fraught with criminal negligence.
On a point of order. The Deputy has purported to quote from page 50 of my Budget speech. He has stated that I said there was a "spectacular increase in the registration of motor cars". I said nothing of the sort.
Motor vehicles.
The Deputy deliberately used the words "motor cars", which is quite a different thing.
If I did, I apologise to the Minister. I meant to say "vehicles" in any case. It does not correct the figures. I accept the Minister's correction and I apologise to him for inadvertently using the word "car" instead of "vehicle". I say the figures are completely wrong and I will prove it. The Minister says that the number of motor vehicles registered in 1939 was 99,662. Actually-and I quote from the report of the Department of Local Government and Public Health for 1939-40, page 209- the total number of vehicles, all classes, in that year registered was 73,813. But the total number of driving licences issued was 99,662.
This is the Budget statement in which every figure is supposed to be checked. That was 1939. The Minister told us yesterday that the number of motor vehicles registered in 1949 was 173,234. Again wrong, wrong to the tune of 51,000, because the total number of vehicles of all classes-and I hope that is comprehensive enough for the Minister-registered in 1949 was 122,536, but the total number of driving licences issued was 173,234.
There is the accuracy.
Accuracy of figures. Let me go on to 1951. We are told that in 1951 there were 223,444 motor vehicles registered. Actually it was 70,000 short of that figure. The number registered was 155,982, but the number of driving licences issued was 223,444.
I feel, Sir, that this is an unprecedented happening in this House and I would venture to say in any other Parliament wherein a Budget statement, particularly a Budget of this type, that there is such a glaring and a major blunder made. It is quite obvious that in respect of at least one of the major impositions the Minister based his decision to impose that tax on false premises, on a foundation that was not there. I venture to suggest that this debate ought to be adjourned and this financial statement ought to be withdrawn until such time as the Minister and the Government have an opportunity of checking both the figures I have quoted and the other figures which are given throughout the 71 pages of that statement, so that the House may know what they are really dealing with. At the moment we do not know.
I would suggest with respect, Sir, that having regard to the immense importance of this, not merely to this House but to the people outside, this debate should be adjourned, that this financial statement should be withdrawn and the Minister given an opportunity to correct it. I make that motion now, Sir.
This is preposterous. Let the Deputy continue his speech.
You should resign.
If there is anything more preposterous than facing this House with a Budget statement—
Do not damn yourself.
I am not going to take any silly tricks of that kind from the Minister.
Do not damn yourself.
You are not fit to hold the position in which you are placed.
A Deputy
Conduct yourself.
I am conducting myself but the Minister ought to do so.
Make your speech.
I certainly will make it and the Minister will not stop me, but this House is not going to base its decisions upon a series of false figures.
It is you who want to stop your speech.
Does the Minister challenge any figures I have given?
Continue your speech. I will reply at the end of the debate.
I am putting a motion. I am sorry in a way that it should fall to your lot instead of the Ceann Comhairle, and may I respectfully ask, Sir, that you send for the Ceann Comhairle.
I will not accept that motion.
If you do not then I, and every other Deputy in this House, must endeavour to continue the debate on this Budget, to continue the examination of the impositions which the Minister is seeking to inflict on the citizens of this country without knowing whether those figures are true or false. I have suggested, with respect, to the Acting-Chairman—and the Acting-Chairman is not supposed to do it; therefore I do not wish to press it —that it would be more in keeping with the dignity of this national Assembly if on a discovery and disclosure such as I have now given, the Ceann Comhairle was sent for. It would certainly come more properly from the Minister than from me in the circumstances to suggest that the adjournment which I have proposed should be agreed to.
Acting-Chairman
You can put that to the Ceann Comhairle. He will be here in one minute.
You have sent for him?
Acting-Chairman
He is coming.
May I again call Deputies' attention to the Minister's words which followed immediately on giving the figures? He said: "In the light of these figures"-mark those words—"we may assume that petrol will readily bear an additional 4d. per gallon." May I ask the Minister whether, in the light of the fact that those figures are shown now to be untrue, he is prepared to withdraw that imposition of 4d. per gallon on petrol? Or does he want the House or expect the House to go on discussing this Budget statement and, in particular, the Resolution which imposes this 4d. per gallon, in view of the fact that he imposed it believing, as I am perfectly satisfied he honestly believed, that he was dealing with the real figures of registration.
I want to make it perfectly clear, in case there might be any misunderstanding about this, that not for a moment do I suggest, or has it entered my mind, that there was anything deliberate in regard to this matter of the figures. But I do allege negligence, negligence amounting almost to the verge of being criminal, in bringing in such an immense impost as this on the citizens of this country, that figures of a major kind such as that would not be properly checked. I cannot understand it. It is beyond me.
An Ceann Comhairle took the Chair.
May I put a point to you, Sir?
Yes.
In your absence from the Chair, I pointed out to the House and to the Minister that, on page 50 of the Minister's Budget statement yesterday, there was a mistake, a major mistake, in figures which bear great importance in relation to the Minister's whole Budget structure. The Minister stated on page 50:—
"There has also been a spectacular increase in the registrations of motor vehicles which numbered 99,662 in 1939, 173,234 in 1949 and 223,444 in 1951."
I am not going to weary you, Sir, by going into it as fully as I did go into it in your absence, but I will say that these are not the figures for motor vehicle registrations; these are the figures for the issue of motor licences, which is a completely and entirely different matter. The Minister went on to say, immediately after these figures:—
"In the light of these figures we may assume that petrol will readily bear an additional 4d. per gallon."
A major blunder of this magnitude in a Budget is unprecedented and I respectfully suggest to you and to the Minister, but first to you, Sir, that I now make a motion that, in view of that, either the Dáil adjourn or the debate on the General Resolution be adjourned to give the Minister an opportunity of having his Budget statement further checked and represented to the House. I think, Sir, with all respect, that that is not only a very reasonable request but, unless it is acceded it, it will not be possible for the members of this House usefully to continue the debate on this Budget.
Having listened to the very serious statement made by Deputy Morrissey, and having been as convinced as the Minister obviously is by Deputy Morrissey's statement, I would like to second that motion.
On a point of order. Deputy Morrissey having put his point, are we going to have a debate?
It would seem to me that Deputy Dunne is availing of this opportunity to create a debate on it.
Do not be trying to draw a red herring. This is too serious.
Matters of this kind, perhaps not to the extent to which it is alleged they arise here, come from time to time into the proceedings of the Dáil. These are matters of fact, matters of fact which are in dispute, perhaps, on all sides of the House.
No, it is not in dispute; it is accepted, I think, by the Minister.
These are matters of fact upon which I cannot offer an opinion or decide, without allowing myself to be drawn into the arena of political dispute, which I am not willing to do. Whether the tax is being imposed on the figures as submitted or not I cannot say. The figures are merely submitted as an argument by the Minister in making his case as I understand it.
No.
I understand the Minister submitted these figures as an argument.
If that is the position and if that is the line the Minister is going to take, I regret it very much.
I want the Deputy to understand that I am not taking any line from the Minister.
I did not suggest that.
I do not know what the Minister thinks in respect of this matter. I am only saying that, to me, these figures are merely arguments put forward by the Minister in support of his case. I cannot decide what is right or wrong.
All I want to say is this that any point of substance that Deputy Morrissey makes, I shall deal with in my reply, as is usual.
I would not think the occasion requires or justifies a motion such as Deputy Morrissey asks me to accept.
Very well. That is your opinion and to that I bow. The Minister seems to think that he has gained a victory.
No.
The Minister talks, in that little cheap way of his, of dealing with these matters when he is replying.
I am not breaking the furniture, as the Deputy tried to do a few minutes ago.
If the Minister did occasionally hit the desk with his fist instead of using his tongue in the way in which he sometimes uses it it might be a lot more wholesome.
Less effective, though, in debate.
Deputy Morrissey is in possession. I hope he will be allowed to continue without interruption.
May I restate the position for the members on all sides of the House who were not here when I raised it? May I first express the view that I regret, for the sake of this House, that the Minister has chosen to take the line which he has chosen? The Minister has not denied, and the Minister cannot deny, my statement that those figures which he gave in his Budget speech are inaccurate and wrong. He cannot deny that. The Minister stated in his Budget speech that he had based his decision to increase the tax on petrol by 4d. a gallon on the figures of registration of vehicles which he gave.
I did not. I based it on the consumption of petrol.
You did not.
All right. Go ahead.
Let me read his own words. It only shows you the absolutely irresponsible man we have dealing with this amazing Budget. Let me read his own words:—
"There has also been a spectacular increase in the registrations of motor vehicles which numbered 99,662 in 1939, 173,234 in 1949 and 223,444 in 1951."
Sir—
I am not going to give way to the Minister.
On a point of order. I think it is the custom that when a Deputy quotes from a document, he quotes the document as a whole. I would ask you, therefore, to require Deputy Morrissey to quote the sentence preceding the one he has just quoted.
The point of order is that I am to read 71 pages. The Minister says it is the custom to quote the whole document.
I am only asking you to read the preceding sentence.
The only argument for that is that I would read it in better style than the Minister did yesterday. I am giving him chapter and verse.
Read the preceding sentence.
I know your little tricks too long, but you cannot squirm out of this.
Read the preceding sentence.
The Minister has shown that he was so criminally negligent in the preparation of this Budget statement, if he had any part in the preparation of it—which the line he is taking forces me to say——
The Deputy ought——
Am I to be allowed to make my speech?
I have asked before that Deputy Morrissey, who is in possession, be allowed to make his speech without interruption. Interruptions are disorderly no matter from what side they come.
Quite so.
I would like that remembered by every Deputy in the House. Therefore, Deputy Morrissey is entitled to proceed without interruption except on a point of order.
On a point of order. Is Deputy Morrissey not obliged to address the Chair? He seems to be addressing his remarks to me.
Too much of the second person has been used in this debate.
The Minister should not flatter himself. The Minister should be ashamed. Instead of trying to make little smart cracks in the hope that they will be published at least in the Irish Press——
Deputy Morrissey on the Budget statement.
May I respectfully submit that I am not contravening order in any way? I am not going to be side-tracked by any of the little red herrings which the Minister seeks to introduce. I have stated the facts; I have quoted figures from the official documents and have given the reference; they cannot be challenged. I was prepared to invite the Minister, any of his colleagues on the Front Bench or anybody in the House to challenge the accuracy of what I have said. How am I to know, how is any other Deputy in this House to know, that the same blunders and mistakes were not made in relation to the figures on which it was decided to remove the subsidies? Deputy Costello showed that this morning to the tune of £2,000,000 in respect of subsidies alone. How do we know that we have not the same miscalculation, the same wrong sets of figures, basing the decision to put 1/- on income-tax? I do not know. Is there any member of Dáil Éireann on this or on the other side of the House who will get up and, in the light of what I have now exposed, say that any of the other figures in the Budget statement are watertight and have been checked and re-checked to make sure that they are absolutely sound? Of course there is not. The Minister is trying to be cheap in jibing at me. If I were in the Minister's position and that major blunder were disclosed in this House, the first thing I would do would be immediately to tender my resignation to the Taoiseach.
What a fool he would be.
Ministers, in particular Ministers for Finance, have tendered their resignation, and have had it accepted for considerably less.
He must have got these figures from Mr. Butler.
That is unfair to Mr. Butler. I have listened to Deputies on my own side and in the Labour Party making the allegation that the Minister was following in the most slavish way the line laid out for him by Mr. Butler. I want to repudiate that. Mr. Butler's Budget to the English was milk and honey compared with the Minister's Budget to the Irish people.
Deputy Dillon said it was fraudulent.
What do you say?
What do you say?
I say that this is a fraudulent Budget and I am going to prove it. I am not concerned with Mr. Butler's Budget——
What are you shouting about it for?
——but I am very much concerned about this Budget. We must assume either that all the rest of the figures are correct or that they are incorrect or that some are correct and some incorrect, but in view of the fact that the Minister will not take the obvious course for a man in his position in the debate on this Budget, then I must go on. I listened for an hour and a half to Deputy Vivion de Valera.
An hour and 47 minutes.
The Deputy made the best effort of which he was capable to prove that, instead of being a burden on the majority of the people of the country this Budget was conferring benefits on them. He was just following, or attempting to follow, the line set for him this morning by the Tánaiste. Those of us who know the Tánaiste over a long period of years were not a bit surprised at this line: having regard to the compensation provided in this Budget and in the Social Welfare Bill for those on lower incomes, they would be better off when the Budget became law than they were yesterday. Is there any Deputy even on the Fianna Fáil side who will swallow that an old age pensioner who gets 1/6 under this Budget is going to be better off next Friday than he or she was last Friday? Does anybody believe that for one moment? Does anybody believe that they will be better off after the 1st July?
Deputy Cowan.
Deputy Cowan does not believe it, and there is no man in this House, whatever he may say, who can more readily grasp the full implications of this Budget and realise to the full how it will hit the people of the country, particularly the poorer people, than Deputy Cowan. Do not make the mistake that Deputy Cowan is anybody's fool. Do not make the mistake that he is not an intelligent man. Notwithstanding all that, however, I will lay you 100 to 1 which lobby he will be in. Johnny, do not draw me any further on that.
"We are going to be better off." When I was Minister for Industry and Commerce Fianna Fáil Deputies and other Deputies used to tell me, just as they told my predecessor and successor, Deputy Lemass, that 6 lb. of bread per head per week was not enough for the people of the country, particularly the people of rural Ireland. We recognised that, and met that point of view—both he and I as Minister—to the fullest extent possible in the circumstances, by making available not merely to bog workers and others, but over the whole harvest period, additional supplies of bread. Let us say that a fair ration would be 7 lb. per week, 1 lb. per day per head. Allowances are to be increased by 1/6 and the 2 lb. loaf is to be increased 2 ½d. Just take that without taking tea, sugar or butter, and let us forget for the moment any idea of a bottle of stout, a pint, an ounce of tobacco or a packet of cigarettes. Does anybody think for a moment that 1/6 per week will compensate for that enormous load which starts now, but the impact of which will not be felt until after the 1st July?
We had cheap little interjections from the Minister and from Deputy Vivion de Valera to the effect that the Minister was going to give more to the poor and was getting after the rich. Robin Hood! Deputy de Valera also set out to prove that everybody with a salary under £1,100 per year would, as far as income-tax is concerned, be served by this Budget rather than injured by it. How many rich people have we in this country over that ceiling?
Have we enough to give us an additional £15,000,000 taxation? Is it not all sheer nonsense? I listened on many an occasion to Deputies behind the Government, when they were on this side, bleating about the cost of living. I read a debate two years ago that was dragged out for the best part of three months by Fianna Fáil Deputies on the cost of living, on emigration and on unemployment. How did the cost of living then, which they said was unbearable for the people, compare with the cost of living after ten months of this Government, even before the introduction of this Budget?
Does anybody in the House believe for one moment that the full effect of this Budget is not going to have a more severe impact upon the real cost of living in the country than any single action or group of actions has had in our time? Do we not know that, due to the gloomy speeches, due to the the depressing speeches, due to the untrue speeches, before this Budget hit the country at all, business in certain lines had been brought practically to a standstill; that production in most of our factories had either almost ceased altogether or had slowed down very considerably; that distributors were finding it almost impossible to get buyers for their goods; and that unemployment, or rather, disemployment of persons who were in what they thought to be safe and secure positions has proceeded in the past nine months at the rate of 1,500 for every month Fianna Fáil has sat on that side of the House?
Is there any Deputy who has any knowledge of the economic or social conditions of the country who is in any doubt as to what is going to happen almost immediately? Are we not being thrown back by this Fianna Fáil Budget into the position out of which the inter-Party Government brought this country in 1948—let Deputy Allen allow me to finish and he may smile on the other side of his face—back to the time when we had the old vicious circle of prices and wages chasing each other? Does anybody believe for a moment that there is a working man or working woman inside or outside a trade union who will not demand increases, or insist upon the leaders of his or her union furnishing demands immediately to their employers for increases, sufficient to meet the additions which are being imposed by the Budget? Does everybody not know that, and, as was said earlier by Deputy Dillon, how many of the employers, without still further increasing prices, will be able to meet and pay the increases which their employees will be seeking and insisting on getting? Is there anybody in the House or outside who believes that this will not increase rapidly and by thousands still further the number of unemployed? Does anybody doubt that not merely are we going to have the old vicious circle back, but that it will be a circle more vicious than anything we had before?
I invite some of the Deputies on the opposite side and some of the Ministers who read some of the speeches they made two, three and four years ago inside and outside this House before they seek to justify this Budget. I am perfectly satisfied that a great deal of this taxation is entirely unnecessary. I am perfectly satisfied that this country and its people are in a much worse position to-day than even 12 months ago to meet and cope with this very heavy imposition, whether they be workers, shopkeepers or anybody else. I hear some adverse comment on that and I can only suspect from where it comes. All the long talk, all the quotations and all the repetition by Deputy Vivion de Valera does not change it one iota. I invite Deputies who know the country just as well as I do, who are as conversant with the lives of the people and the sort of life the average person lives as I am and who have as intimate a knowledge of the life of an ordinary working man and his wife and family, and the way in which they have to work their household economy as I have, to get up here and say that the proposals offered in this Budget will more than meet the impositions contained in it. The compensations would not meet the increased charges and the increased prices of the essentials, much less adding in what some people talk about as necessaries and others, depending on which side of the House they are, describe as luxuries.
Deputies cannot cod themselves that the compensations offered for the poor are going to compensate them, because most of us know that it is the poor who will be hit, and the poorer they are the more they will be hit by this Budget, because the poorer they are, the more bread, the more tea, the more sugar, and, in so far as they can, the more butter they will use. They have to use proportionately much more of these items of food than the better-off person and Deputies know that. I want to ask the House, as I am sure everybody in the country is asking himself, what has happened in this country to bring about this economic revolution. The Minister and some of his colleagues, such as Deputy Vivion de Valera, glibly speak of world conditions, world forces.
In some of the countries which have to provide for European defence and perhaps even far beyond what is required for defensive measures and which are spending immense sums on armaments, there has not been as revolutionary a change in their Budgets or their financial structure as there is made here in ours by this Budget, and the impost, the increased impost, over a period of 12 months on their people, not excluding provision for armaments, has not been as considerable as it is here. This Government and the Party behind it know quite well that this is a bad Budget, that the country will be dead against it. They would not dare to face the country on that Budget to-morrow morning. They would not dare to seek a mandate for it, because they would not get it.
Do not be so sure.
I am certain. So certain am I that I assert with confidence that not merely would the Government be beaten but the Fianna Fáil Party would be almost wiped out. Deputy Allen has not been at home yet.
I was at home.
If the Deputy was, he left very quickly.
I came just in time.
I am telling the Deputy what he knows and his colleagues know now, and what they will know much more clearly before they reassemble here. This is a bad Budget, a Budget that is going to place a savage burden on the people, a Budget that will make unquestionably for more unemployment on a very big scale, a Budget that will hit very hard our industries and the whole manufacturing and distributing organisation. I am as sure as I am standing here that, when they learned of the details last night and when some of them read them in the papers this morning, men and women working in shops and offices throughout the country said to themselves: "That is enough, we have not been doing enough for the last month, three months or six months in some cases; this is the final straw; I wonder will I be getting my week or fortnight's notice with the pay envelope on Friday or Saturday next." Does any Deputy think that is an exaggerated picture? Does any Deputy think there are not hundreds, if not thousands, of working men who are wondering whether this Budget will mean not only an increase in their cost of living but deprivation of their weekly wages and the substitution therefor of the queue at the labour exchange?
Let us not try to pretend that there is nothing in this but sugar and no pill inside. Let us remember the increases that will come upon the people on the 1st July—an increase of practically 40 per cent. on sugar, 100 per cent. on tea, practically 25 per cent. on butter, 30 to 35 per cent. on a loaf of bread. In the face of that, I am prepared to say, and I do not care how it is misrepresented, that the imposition on the pint and even on the tobacco is not as serious. May I remind the House of what Deputy McGilligan said yesterday, truthfully, that when the present Ministers were in office in 1947 and introduced a Budget to impose taxes very considerably less drastic than the charges in the present Budget, they sought to justify them on the grounds that the money they would receive by imposing these taxes they were going to use to subsidise essential foodstuffs. When we came into power, at a cost of somewhere in the neighbourhood of £6,000,000, we reduced or removed the additional taxes on beer, tobacco, cinemas and so on imposed in the Supplementary Budget and we did not reduce the subsidies by one brass farthing. Not only that, we increased some of the rations without increasing the subsidy price.
At the price of borrowing.
Now, neither the Deputy nor I know anything about international finance.
That is not international: it is national.
The Deputy believes in lending all the money to England.
Do not forget that a very important part of this Budget— in case the Deputy has not read it or did not listen to the Minister—is the Minister's proposal to borrow a very considerable amount of money this year—which those of us who have some interest in the country and some concern for those to-day employed in capital development schemes, hope will be fully subscribed.
Deputy Allen sometimes takes the Minister for Finance as his model. I would not care to see Deputy Allen— for whom I have a very fine respect, notwithstanding the cracks we may exchange across the House—modelling himself too much or too often on the Minister. This particular Budget not merely puts on increased taxes over and above those which were put on in the Supplementary Budget but it puts on a number of new taxes that were not even attempted in the Supplementary Budget; and on top of that it removes almost entirely the food subsidies.
I want to put this to Deputy Cowan —and I am not trying to put him in any particular corner. He made several contributions to the debate. How can he seek to justify voting for that set of circumstances that I think I have quite fairly and I hope pretty accurately outlined, that he would have denounced as vehemently and as effectively as he did the comparatively mild proposals in the Supplementary Budget? As a matter of fact, we could thank the Supplementary Budget for giving us the honour of the Deputy's presence in this House. I hope we will not have to thank this Budget for depriving us of that presence.
I do not want to go back to where I started in relation to the figures I quoted. The Minister heard them, the House heard them and they are on the record. I gave page and column for the figures which I gave. I assert that this is not a true Budget, that it is based upon a wrong set of figures, conclusions drawn from figures which did not relate to the registration of motor vehicles, which did not come, in one of the years, within 70,000 of the number. I am sorry that the Minister refused to adjourn to have this further examined so that Deputies might at least approach the Budget and make their contribution in the knowledge that the figures which they were using and criticising or trying to analyse were true and accurate figures. The Minister has chosen to take what I conceive to be the wrong course. However, that is a matter for him.
I think the Chair also stated that the proposition was ridiculous.
The Chair did not pass any remark or any criticism whatever on Deputy Morrissey's statement. The only thing the Chair said was that it would not accept a motion to adjourn the Dáil in respect of what Deputy Morrissey urged.
And it would be inconceivable that the Ceann Comhairle would describe the figures as ridiculous.
I did not say that the Ceann Comhairle said that the figures were ridiculous.
I will not allow my decision to be discussed. My decision was given.
My motion was overruled by the Ceann Comhairle in the exercise of his judgment and his duty in the Chair. All he said was that he would not accept the motion which I tendered. By the time this is finished, the Minister will be fully welcome to whatever kudos he can get out of it. I only hope for the Minister's own sake and for his reputation, as well as for the sake of the House, that he will not try to suggest that the figures which I have quoted are other than accurate. I hope that he will not try in any way to justify and prove as accurate in relation to their context the figures which are in his financial statement. The facts are there and the figures are here. They can be quoted from official documents.
No talk, no eloquence, no flights of fancy can make this a good Budget or can make it anything but a harsh and a savage Budget—a Budget that will have a terrific impact on the whole economic and social life of this country. It is a Budget that will leave us much poorer in relation to money and services and infinitely poorer in relation to our boys and girls many more of whom, I am afraid, will now be forced to leave this country.
It is obvious, from the tremendous noise that Deputy Morrissey made about his discovery of some figures which he alleges are not correct, that if there were any more figures in the statement that were not correct we should have heard about them. I wonder if Deputy Morrissey realise that an extra sum of £15,000,000 has to be found this year? Deputy Morrissey did not advert to that matter at all in his statement. He spoke as if there was no need whatsoever for any sort of additional taxation. Apparently, he has even thrown over his leader who has admitted for months past that there is a problem to be faced.
Nobody on this side of the House will contend that this Budget is something that anybody would like to impose if it could be avoided. However, the facts of the situation must be faced. I do not want to repeat the quotations which Deputy Major de Valera read out here this afternoon of speeches made over the past few years by Deputy McGilligan when he was Minister for Finance, pointing to the trend in financial affairs. Deputy McGilligan spoke about that trend, and drew attention to it, but apparently he allowed the Government of which he was the Minister for Finance to do the other thing. We are now facing the result of that default on his part. One need not be deeply versed in high finance to recognise that if the trend were allowed to continue for a few years more, what would have to be done then would be infinitely worse than what is being attempted to-day, and would have infinitely worse consequences for the country. I think that the members of the Coalition Government, in view of what their own Minister for Finance told them over the years, must have been aware of this trend. They must know that the present situation is, to a large extent, the result of the policy they pursued, and they ought at least now face the facts and try to find a way out. Maybe our method is not the best method, but it is a method, and the Coalition Government did not try to remedy the situation at all, but just let things drift.
We have not heard any constructive suggestions from the Opposition Benches. Instead, there has been an attempt to ignore the position that does, in fact, exist to-day. An attempt was made to tell us that a number of the statements made by the Minister are not correct. Take, for example, the question of income-tax. An attempt was made to assert that the Minister's statements last night, and elaborated on to some extent to-day by Deputy Major de Valera, are not correct, and that the bulk of the people will have to pay more under the rearrangement of the income-tax code. I have some figures here which have been worked out. I do not want to bore the House, but they are worth bringing to the attention of the House. Let us examine Schedule E, earned income.
We find that an unmarried man earning £500 a year will actually have to pay £10 2s. 6d. less for income-tax in the coming year. At £600 a year the reduction would be £8 and at £800 the reduction would be £3 15s. At £900 a year he will actually have to pay 5/- more for income-tax than he paid last year. All the above figures are in respect of an unmarried man. Now let us take the figures for a married couple. At £400 a year the husband gains £3 10s. At £700 a year he gains £12 17s. 6d. At £800 a year he gains £10 15s. At £1,000 a year he gains £2 15s. and at £1,100 a year he will have to pay £1 5s. more than he paid last year. The figures for a married couple with one child are as follows. At £500 a year they will gain £4 5s. At £800 a year they will gain £4 15s. At £1,100 they will gain £2 15s. and at £1,200 a year they will have to pay £1 5s. more than they paid last year.
A married man with two children earning £600 a year gains £5; on £800 a year he gains £15 5s.; on £900 a year he gains £14 15s.; on £1,200 a year he gains £2 15s. and on £1,300 he will have to pay 25/- extra. A married man with three children earning £900 a year will actually gain £16 3s. 6d.; with £1,200 a year £5 18s. and he will have to earn £1,400 before he will be asked to pay £2 2s. extra. A married man with four children earning £800 a year will gain £6 18s. 6d.; earning £1,000 a year he will gain £16 12s.; and earning £1,400 a year he will gain £1 1s. 1d.; and he will have to earn £1,500 a year before he will be asked to pay £2 19s. extra.
Let us hear no more about the ordinary man having to pay extra income-tax under this Budget for the ordinary man is getting a fairly substantial relief. In some cases that relief will represent the equivalent of at least 5/- per week to make up, admittedly, for what he will have to pay because of the removal of the subsidies. In addition to that—and this is something I have not heard mentioned here to-day although I have been in the House almost continuously since 12 o'clock—there are increased allowances for children. I remember that Deputy Dillon, when the first Children's Allowances Act was introduced, praised the then Government for its introduction. In future, instead of having 2/6 for the third child there will be 2/6 for the second child and 4/- for each subsequent child. I regard these allowances as one of the best social services we can give our people. From the Christian point of view, it is an excellent social service. In relation to the extra burden which will fall upon families because of the removal of the subsidies these allowances will go a long way towards making some compensation; I have not actually worked out the details but it is clear that they will go a good part of the way towards meeting the increased cost of food.
Nobody on the Opposition Benches while I was in the House referred to that particular aspect of the matter but we had several people telling us that it was the poor who would have to bear the burden. I think an honest attempt has been made in this Budget to face the fact that money had to be found but the burden has been placed, as far as it was humanly possible to do so, on the shoulders of those best able to bear it.
Deputy Larkin referred to Fianna Fáil in relation to its social security programme and its social services as being pushed from behind and only taking one hesitating step at a time. It seems to me rather extraordinary that a Labour leader, who was so recently linked with the Fine Gael Party, should try to insinuate that Fianna Fáil did not do anything in connection with social services. As Deputy Dr. Browne said the other day, social services started in 1933. Because we were not foolish enough not to take account of our finances, because we tried to live within our means and not kill the goose that laid the golden egg, we proceeded bit by bit and parctically every year saw some new aid for the under-dog.
There are £3,000,000 provided in this Budget for the implementation of the Social Welfare Bill at present before the House. Under the Coalition Government Deputy Larkin's leader was in charge of that Department but he did nothing in the three and a quarter years he was there. Instead of being a Welfare Bill it was, as some of us predicted, his farewell Bill. Even if he had remained in office for the remainder of the five-year period it would still have been his farewell Bill because the Coalition Government never had any serious intention of putting it through.
Did you not vote against it?
There were too many differences of opinion about it. Perhaps it was not Deputy Norton's fault. He was in earnest about it, I believe, and I give him credit for it, but it would have been another matter to get it through the Coalition. We have heard a good deal about the removal of the food subsidies but those subsidies are being replaced by a permanent increase in social benefits. Food subsidies were always regarded as being of a temporary nature and nobody contemplated them as a permanency. They will now be replaced for those who really need them by permanent social services. I think every reasonable Deputy will agree that that is right. I think every reasonable Deputy will agree that it was time we got away from the position in which the poor were actually helping to pay taxes to give subsidies to those who could well afford to meet prices. That is what we were doing up to now.
I have dealt with the change in the income-tax code. That change will affect every tradesman, the lower middle classes, the white collar workers, the lower civil servants and the huge bulk of those who pay income-tax. Under Schedule E, of 151,000 income-taxpayers 145,000 will pay less. Only 6,000 will pay more and therefore 95 per cent. of the working people who pay income-tax will actually benefit.
Deputy Larkin also referred to the increases in the cost of living over the last nine months. As I pointed out here, the cost of living was rising even before the Korean war. Undoubtedly the Korean war and the world situation had their effect on prices in this country. So far as that goes, I am not blaming the Coalition Government, for no Government could avoid the consequences of that but there were certain other things which happened here. We know that they were elected on the plea that they were going to reduce the cost of living and the only attempt that was made, was made in panic when the Standstill Price Order was brought in, an Order which had the effect, to my own personal knowledge, of legalising the profiteer in the City of Dublin.
He is not doing too badly now.
That Order, to my own personal knowledge, legalised the profiteer and when we asked what were the legal prices on the 2nd December, the date set out in the Order, we were told that they could not be given, that it was not feasible to give them. That was the attempt of Deputy Norton and the men who came into this House and told us all about what this Order was going to do, to deal with the price situation while they were in power. Deputy Larkin knows perfectly well that every increase, except one or two that were refused for policy sake by the then Government, has been sanctioned and approved of by the Prices Advisory Committee set up by the Coalition Government. He knows that a large number of these Orders were already in the hands of the Minister in the Coalition Government before the change took place and he knows that the present Government had to face the odium of putting those Orders into operation. If they had not been put into operation, we would have had to face another problem, with places closing down completely and not being able to carry on. Surely nobody is going to suggest that the Labour representatives on the Prices Advisory Tribunal are agreeing to those increases unless there is necessity for them and they have been justified. Nothing that this Government did at that time could possibly have increased prices.
I think it is time, considering all that we heard about the matter in 1948, and the lack of effort there was on the part of the Coalition Government to carry out their promises to the electors, or to deal with the question of prices at all, that they would keep silent about it. We all have to face the fact that this money must be found. Facing that fact, I think that anyone who tries to examine this Budget as impartially as he can must be driven to the conclusion that it is a courageous and a good Budget, that it is trying to meet the appalling gap in our finances by putting the cost of meeting that gap on the shoulders of those best able to bear it. I do not think we shall gain anything by trying to run away from the fact that these deficits have been accumulating over the years and that the sooner we face up to this the easier it will be for the people, hard as it may now seem—and I am not denying it is going to create a certain amount of hardship—to get over the present difficulty. I think anybody who examines the position will realise that it is much better to face it this year than to postpone it to next year, or a year later, when the hardship would be far greater.
I miss the portly figure of Deputy Burke from these deliberations. At least, if he could not give any advice to his Minister in his great trouble, he might do what he does for his constituents now and again— he might lead the Fianna Fáil Party and its adherents in supplication. I think the nearest point he hovered to the Chamber since the debate began was to put his head inside the door to see how things were going, to see was the Dáil dissolved yet and had we to go to the country. Of course, this is a Budget of a sadist. It is a Budget that could be conceived only in the mind of a man who was completely cut off from the people of the country, who cared nothing about what the people felt, how they had to live, how they had to work, what they got for working or what their problems were. Not, indeed, that there is anything new in Deputy MacEntee's displaying these sadistic proclivities when it comes to dealing with the working people.
There is nothing new in that. Those of us who have any kind of memory will recall the days when men were compelled to do what Deputy Dr. Browne has described as unproductive work, and inferred in a certain fashion as being a despicable occupation—when men were compelled to take up road work, and there are thousands of them who have to do that work because they can get no other. It is not very long since, when these men were seeking an increase in their wages of 37/6 per week, the present Minister for Finance said: "A shilling a week is enough for them" although the cost of living was sky-rocketing at the time. It is no great surprise therefore for us to find Deputy MacEntee in his capacity as Minister for Finance coming in with this savage onslaught on the people of Ireland. All the vaporising that went on here yesterday and this afternoon when we were treated to a sample of Deputy Vivion de Valera's eloquence for over two hours, about the balance of payments, the dollar gap and our external assets—all that airy effluvia that went on, is of very little good to the people of Ballyfermot or the people of my constituency the bulk of whom have to find their living by the sweat of their brow and many of whom have to find their living in underpaid white-collar occupations. When they picked up this morning's paper they read "Bread gone up again by 50 per cent." I suppose the Minister for Finance has not been in the household of an agricultural worker or a road worker since he was down inciting the small landholders of Kilsallaghan some 25 years ago to get the Carter estate divided amongst themselves.
That is not relevant in this debate.
I merely mention it.
It was the start of a long political career and Deputy Dunne may have the same sort of career, now that he has started.
Now, we have the Minister's defender. In my comparatively short period as a member of the House and my short experience of politics, I have seen a couple of examples of political somersaulting.
We saw it in Kilsallaghan recently.
The Lord bless and save us. Did anybody ever conceive that Deputy Cowan, whom I listened to myself in the Engineers' Hall on an occasion that he remembers——
On a point of order. Is this a debate on the virtues of the honourable Deputy Cowan or on the Budget?
That is not a point of order. Deputy Dunne should get back to the discussion before the House.
I will. I never thought, Peadar, that I would see the day. I am glad to see my colleague, Deputy Burke, has at last arrived.
I think that is a small, petty point. Deputy Burke is as often in the House as Deputy Dunne, if not oftener.
I would appeal to the obdurate Deputy Cowan to try and keep his temper, because, in discussing this Budget and in criticising the Fianna Fáil Party, I do not, unlike Deputy Burke, say a thing behind a man's back, as he likes to do about me.
Oh, no.
Could this be adjourned to the County Dublin?
I want to say, on behalf of the people of the County Dublin, whether they are living in the suburban areas of the city, or the thousands who reside in Ballyfermot and who have to find an occupation as best they can in industry in this city—hundreds of them are now unemployed as a result of Fianna Fáil policy—I want to say on their behalf and on behalf of the thousands of agricultural workers who are trying to eke out an existence on £4 5s. per week in County Dublin, on behalf of the industrial workers in the town of Balbriggan, whom Deputy Burke has tried to mislead on many an occasion, and on behalf of the small, working farmers in North and South County Dublin, because I know I am speaking their minds regardless of how they voted the last time, whether they voted for or against me or for or against Fianna Fáil, that they regard this Budget as a criminal imposition upon them, and that they are longing to-night for the opportunity to go to the polls and banish this Minister for Finance, who has been inflicted upon this country by a minority Government, from political life for once and for all.
Would the Deputy favour shooting him?
Well, I am sure if anyone ever undertakes that national task Deputy Cowan will be at hand to defend him. I think, so far as that is concerned, Deputy Cowan should not indulge in any reference to his militaristic activities. We all know his record in that direction.
He did as much as you did.
I was two years of age at the time Deputy Burke is talking about. Of course, everybody knows that Deputy Burke sports a medal, but nobody knows how he got it. We have a good idea.
That is not relevant. The Deputy should confine himself to what is before the House.
There has been, as I have said, a good deal of reference to the gap which is stated to exist between the income and expenditure accounts as presented to this Dáil, and to the need for bridging that gap. I say "stated to exist" because I want to bring the minds of members of the House back to Deputy Morrissey's revelation here this evening where it was proved beyond yea or nay, and not contradicted by the Minister for Finance, that the Budget figures are not accurate and cannot be relied upon in relation to the number of motor registrations in the country. If that is true of one set of figures in so important a document as the Budget, then, as has been truly said, what reliance can be put on the rest of the figures that have been brought before us for our consideration?
Of course, there are some figures that represent hard facts that we cannot get away from, such, for instance, as those relating to butter. Deputy Colley when speaking, referred to Deputy Larkin's speech which was made this morning. Deputy Colley said that there had been no increase in any commodity since the advent to power of this Government without the prior recommendation of the Prices Advisory Body. Deputy Colley has a short memory. Do we not all remember that, in a frantic effort to curry favour with the farming community, the gentlemen now in government were not there two days until we learned that butter was going up by 2d. per lb.? There was no reference to the Prices Advisory Body. The people of Dublin could pay it; they were going to be made pay it, and there was going to be no examination of farmer's costings or anything else. There had to be ground recovered which had been lost, or at least an effort made in that direction. There was political ground to be recovered, and the farmers were given 2d. per lb. of an increase within a couple of days of this Government's re-election.
Because of Deputy Dillon's policy.
That was followed, of course, by an increase in the price of milk, and, again, who was going to pay that but the ordinary working people? "Sure, they will put up with it as long as we are doing it; we are the party which represents all the people," as Deputy Burke is so fond of saying—all things to all men, mar dheadh, on every side of the fence at once.
However, that was not enough. It was not enough that the working people of this city were asked to pay exorbitant rents in many cases in the new housing schemes at Ballyfermot and Finglas. It was not enough that these people have had to work for so little wages and found the cost of living during the past 12 months making it next door to impossible for them to live. It was not enough that those people should have to pay another 2d. per lb. on butter, bringing it up to 3/- a lb., but along comes this sadist of a Minister to put 10d. a lb. on butter yesterday. I will be happy to see the acrobatics that Deputy Burke and a few more of the gentlemen on the Government side will go through in the next few months trying to explain that away.
Sugar was likewise increased by almost 25 per cent. We were told this morning by that impartial political organ, the Irish Press, which is famous for its absolute impartiality and for the degree of fairness that enters into its political articles, that tea will average 5/6 a lb. and that the price of the loaf of bread will be increased from 6d. to 9d. Have they no conscience at all? Is there no stir of independence in the minds of any member of Fianna Fáil that they would troop into the Lobby, just like so many sheep, and vote for this crime against the people of this country?
It would be much better to get the people increased wages to meet those increased prices. That should be the policy of the Labour Party.
There are 70,000 unemployed.
The only thing that I can suggest for Deputy Captain Cowan is an interview with a psychiatrist. I make that suggestion in all charity. Of course, there are people who will say that cigarettes and tobacco are luxuries and that people can do without those things. My view always has been that, when a consumable commodity comes into widespread use among normal people and among average people, then it is no longer a luxury. It does not enter into the category of being a necessity. People can live without it but, nevertheless, it is no longer a luxury. In putting the impost of 7d. on the packet of 20 cigarettes an added burden of immeasurable proportions has been placed upon the working people. Of course, it does not matter to those who have plenty of the world's goods and plenty of money. Another 7d. on the packet of 20 cigarettes does not mean so much to them but it means a great deal though to the thousands who live on a wage of £3 10/-, £4, £5 or £6 a week and who try to bring up a family at the same time and who have always been used to indulging in a cigarette or, perhaps, a pipeful of tobacco or a pint of beer.
It is of interest to note that there are in this country approximately 150,000 farm workers working for wages, the average wage being between £3 10/- and £3 15/- per week.
A totally inadequate wage.
Words are lightly spoken. What is the use of talking about inadequate wages when you walk into the Lobby and vote to have a higher charge put on these men for the bare necessaries of life?
They should have better wages.
What is the use of words? Actions are what count. Words do not mean a thing.
An Leas-Ceann Comhairle
Deputy Dunne.
What salary is the farm labourer paying you and what are you doing for it?
I did more for them than ever the Deputy did.
They paid the Deputy well for it.
They should get a better wage. These are scandalous wages.
If Deputy Killilea wants a discussion on that basis I will get down to it and he will come out of it the worst.
The poor agricultural worker is getting it badly anyway.
What is being done to to help the agricultural worker by this Budget? This Budget in my view—I say this as seriously as I can and with as much knowledge of and contact with the agricultural workers as any man in this country—will decimate the number of people working on the land. It will drive them from the land. It will drive them from the land the man who is earning £3 15s. a week throughout the country and who is living in a county council cottage. That type of man, as we know, is a good Christian and tries to live as he does and walk upright through this world. Everybody knows that the people of whom I speak are the decentest that God created.
They are saints to live on that wage.
I was about to say that these people are usually blessed with large families. I suppose that the average family of a farm worker would be four or five children. How is he out of £3 15s. to pay more for his butter? Many farmers do not give him butter at all although some would try to give the illusion that they do. He has to pay more for sugar and tea and he has to pay half as much more for his bread. If that type of man is in the habit of smoking a cigarette he can forget about it now. If he has gone off the cigarettes for Lent, the rest of his life will be Lent so long as Fianna Fáil remains in power. The same applies to beer. However, he has the tremendous satisfaction of answering the appeal of the Minister for Finance to save his money and put it in the Post Office Savings Bank. When he has paid all these increased taxes, fed, clothed, educated his children and sent them to the university out of the £3 15s. he can put the rest in the Post Office Savings Bank!
The Deputy is making fun of them now.
I would suggest to Deputy Cowan that that remark comes strange from any individual in this House or outside of it who walked into the Lobby and put greater hardships on the agricultural workers by increased taxes and who not so long ago walked into the Lobby and voted against a motion to increase the wages of agricultural workers.
The wages of County Dublin workers. They were to get more than agricultural workers elsewhere because they were Deputy Dunne's constituents. That was the motion. Give more to Deputy Dunne's County Dublin workers and less to the workers of Meath. That was political hypocrisy.
I can appreciate very well what is wrong with Deputy Cowan.
He has been caught out badly.
He has completed the full circle on the question of budgets and on this Budget in particular. Does the Deputy remember the encounter between Deputy Burke and Deputy Cowan at Swords in the by-election of 1947 and the compliments that were exchanged about the emergency Budget?
It would be very hard to remember what was said that night.
Well I remember what was said. Would the Deputy like me to repeat it?
Deputy Dunne must be allowed to continue his speech without interruption.
What about going back to 1937?
If the Deputy translated that into English we might know what he is saying.
The Deputy has not that much intelligence.
I was going to say that this Budget has been met throughout the country with absolute consternation by the people.
We have had a good deal of talk about political honesty and the desirability of letting people know what the actual economic situation is. In the 1914 war, the slogan used was that it was to make the world safe for democracy.
That was a cod; nobody believed in that.
I was going to add, if the Deputy will be sufficiently orderly to allow me, that this present Government is trying to make Ireland safe for hypocrisy. When I hear certain Deputies talking about political honesty and consistency, it tends to make me physically sick. How anybody can justify a Budget which grinds further down the ordinary mass of the people and at the same time takes the tax off dancing, so that when the people are reduced to a condition of near starvation, they may indulge in the terpsichorean art——
That is a good word, Joxer.
I make you a present of that. I will spell it for you sometime. Any Government which would introduce a Budget such as that is completely out of touch with the people. It has been obvious to those who sat through the long, dreary homily of the Minister for Finance yesterday that very few people knew what was in the Budget. It is quite obvious that the Tánaiste was very perturbed over the Budget and, being the wily politician that he is and knowing how the political winds blow, he was not in love with this policy which was obviously forced on the Cabinet by the Minister for Finance, ably abetted, I am sure, by the Taoiseach, because nobody will suggest that the Taoiseach is in touch with the lives of the ordinary people.
He lives in a world of his own, held up there by the Party in a kind of cocoon. He is inviolable and dare you say a word about him. I recall that some years ago, when a Deputy now supporting the Government ventured a word or two of criticism, he was almost assassinated by some of the gentlemen with whom he is now consorting.
It is obvious that this Budget represents the imposition by the Minister for Finance of his peculiar atrophied outlook on life upon the Fianna Fáil capitalists, who, regardless of whether or not they care for the people, have one thing in common —they care for their own political self-preservation, and that instinct for self-preservation was obviously thrown to the wind yesterday by the Minister for Finance. It was a study to look at the faces of the Fianna Fáil Party while the document was being read. Deputy Burke could hardly stomach it and had to leave the House. If we have an election very shortly, I hope he will not have the unfortunate experience of leaving it permanently. The Budget, in all its aspects, shows the complete failure of the Fianna Fáil policy.
Last week some Deputies took part in a discussion about social welfare. It was boasted then that the present Government were bringing in a Bill to provide social welfare benefits, but they were not half as good as those set out in Deputy Norton's Bill last year. The most important provisions of that Bill, such as death benefits, increased maternity benefits and attendance allowances were left out. It was boasted then by the Minister for Social Welfare that he was only looking for 5d. additional contribution from the workers——
Surely we are not going to discuss the Social Welfare Bill now.
I only want to say that the additional 5d. now becomes something in the neighbourhood of 10/- or 12/- a week as a minimum, because until yesterday the plan that Fianna Fáil had in store for the workers was concealed from them. The workers are to be asked to pay 5d. additional per week, but Fianna Fáil propose to rob them of every single advantage which had been won for them by Labour and trade union agitation during the last 20 years. They are to be deprived of the subsidies on butter, sugar, tea, bread and flour and the price of cigarettes, tobacco, beer and spirits is to be increased and no matter what Deputy Colley may say, there are many workers also who will have their income-tax increased as a result of the imposition announced yesterday.
It is perfectly plain now that the social welfare benefits which are supposed to come into operation on July 1st will be paid for over and over again by the workers of the country. When Deputy Norton wanted a contribution of 3/6 a week, that was a crime. This butcher of a Minister for Finance we now have, who is picking the bones of the workers of the country, demands anything from 12/- to £1 from every household. I cannot find any more adequate words to describe the activities of this Minister. I regret that he is not here. Perhaps his presence might inspire me to greater heights in regard to a suitable description for him. But, as surely as we are in this House, this Budget will reduce to a "new low", the standard of living of the people.
There have been challenges thrown out to the Government to have an election and some Deputies who support the Government have announced that they will not advise having a dissolution for at least another 12 months. I suppose we will find a difficulty in forcing this Government out. We all know very well that they will hang on for dear life at least until the terrible impact of these things wears off and the people become a bit drugged again. I make this challenge to my colleague —I will charitably describe him as my colleague—in County Dublin in regard to this Budget: I will resign my seat if he will resign his, and I will fight County Dublin on the issue of this Budget.
Then there would be two vacancies and the two of you would be elected again.
I make that offer.
The Deputy is getting a long way away from the discussion.
He is asking the two of them to resign and fight for two seats so that both of them could be elected again.
This Budget represents a terrible tyranny brought in by people who do not care anything for the ordinary people of the country. Some effort must be made to bring them to a realisation of their responsibility. We cannot put them out by discussion or debate because they will hang on like barnacles because they know that the next election will mean their political doom. It is impossible to express adequately the feelings of the people whom I represent on this matter. I am speaking on behalf of the people of my own constituency of County Dublin but I think I can also say a few words on behalf of the vast majority of the rural workers throughout the country who as I have indicated are living on bare subsistence level and in many cases far below it. Many of these men trooped to the polling booths to put many of the Fianna Fáil Deputies where they are.
And they will again.
Do you not think there is any limit to human stupidity? Do you think you could fool the people all the time? Just give them the chance and if you do you will shake the dust of Leinster House from your heels no matter how long you have been here and you will never see that august building again.
I think that, politically, this Budget may be described as anything but a popular one.
That is a great understatement.
That, I think, will be accepted by everybody in this House and the introduction of a Budget which is not popular suggests some sense of responsibility. Any Government that is irresponsible may introduce what is known as a popular Budget, but a Budget is simply financial provision for the year based on the facts and circumstances at the time the Budget is introduced. If the Government is satisfied that the facts and circumstances justify increased taxation and, because of a desire for popularity or a desire for political success, do not make the provision in taxation that is necessary or which they consider necessary, that Government, in my view, would be irresponsible.
Are you speaking for the Government?
He is the boss.
I think any Deputy who has considered the matter will come to the conclusion that that is so. Last night, in a short interruption, I made what I intended to be a joke, and which was regarded by the House as being a joke and accepted as such when I said that, in the circumstances, I would not advise a dissolution for at least 12 months.
You are a wise man for your own sake.
Clearly, that was accepted by everyone as a joke, but I only mention the matter to-day because Deputy Larkin has used that observation in a way entirely different to what I intended to make the case that it was a cynical comment on Irish politics that my approach to the Budget was that it would not suit me to have an election in the next 12 months. That is what he said to-day.
That is what you said here last night.
That is not what I said last night. Deputy Larkin and I were associated in many undertakings and activities over a period of 20 years, and I always considered that he made a reasonable approach to problems. I feel to-day, having listened to him make that statement, that he has degenerated a lot in the last 20 years. I want to say that, having known him so long, having known his ideals and objectives, I have been as disappointed with him as have many of the people who had faith and confidence in him in the Labour movement. I do know that, over the past ten or 15 years, as far as Deputy Larkin is concerned——
On a point of order. Is an attack on Deputy Larkin relevant to the matters we are discussing?
Is that a point of order?
What Deputy Larkin has said about me was wrong.
Is Deputy Cowan going to allow the Chair to rule on a point of order?
There is no need for the Chair to rule on that.
Deputy Cowan was merely referring to a statement made by Deputy Larkin.
You were appealing to the Chair to protect Deputy Larkin some years ago, when Deputy Everett said he was a Communist.
What did you call him?
I called him a renegade.
Deputy Cowan is in possession.
In possession of the Government.
Many people like myself have been disappointed at the abject surrender of his ideals and responsibilities by Deputy Larkin. When Deputy Larkin comes into this House and, in the course of a debate such as this, refers to what he terms my cynical approach to the Budget, I find it necessary to answer him bluntly in this House. Everybody knows that at this moment within the Labour Party there is a campaign going on to remove Deputy Norton out of the position of leadership and to install Deputy Larkin in his place.
It is not relevant to this.
But he is expecting to get the Attorney-Generalship.
You have been in every Party except Fianna Fáil. They will not take you in.
Deputy Davin is noted in this House for the charity of his observations.
You give an example now.
Would Deputy Cowan address himself to the Budget?
I listened here to Deputy Dillon speaking on this Budget and what did Deputy Dillon introduce? He said that this was the third attack made by Fianna Fáil on the people.
Deputies
Hear, hear!
The first being the civil war, and he was applauded for that by the Deputies on those benches.
Why not?
He was applauded by those Deputies.
Including Deputy MacBride, I suppose.
No. Deputy MacBride was not here nor were some of the Labour Party Deputies. This shows the solidarity of this Opposition. There is nothing in common between Deputy Dunne and the speech he made there a few moments ago and Deputy Giles, Deputy Rooney or any of the Deputies there. They represent two different parts and aspects of Irish life.
What do you represent?
I am glad to know that Deputy Cowan and Fianna Fáil are so well knit together.
They would not take him when he was recruiting the army.
Deputy Sweetman and Deputy Dunne—could anyone imagine that combination.
A year ago I could not have imagined a combination like Deputy MacEntee and Deputy Cowan.
When I listened to Deputy Dillon making that speech and recollected that he once voted to put Fianna Fáil into power and when I recollect the attack by Deputy Mulcahy on him then——
What about the price of beer?
Deputy Mulcahy is interested in the price of beer. That is what we had here to-day. We had an attack on the Government's policy in removing subsidies. When Deputy McGilligan introduced his Budget two or three years ago I spoke on this problem of the food subsidies. I gave it as my opinion then, supporting the then Government and Deputy McGilligan at the time, that I would like to see this whole problem of food subsidies examined—what benefit a household got through the subsidies and how much they contributed in taxation to provide those subsidies, because, if I may use a word of Deputy Seán Collins, I was not "wedded" to this idea of the food subsidies.
I was interested to-day to refer back —I seldom do it—to the debate in 1947 when these food subsidies were under discussion. Here is what Deputy Norton said about them at column 435. Volume 108 of the 15th October, 1947:—
"The highlight of the documents put before us is, I take it, the subsidies to reduce the prices of tea, bread and sugar. I think these are sham reductions."
That is what Deputy Norton said, that the subsidies are "sham reductions".
Read on.
I will read exactly what I want to read and no more:—
"These are sham reductions. I do not think they make any perceptible contribution to relieving the plight of the ordinary working people to-day."
Do you want me to read further? Should I read the whole debate? I am not going to do that. This is what Deputy Morrissey said—this came as news to me. I had some time to spare, so I read this while I was waiting to be called on to speak.
On a point of order, Deputy Cowan was very anxious last night that references should be given.
I have given the reference.
Read what the Minister said about you last year.
Here is what Deputy Morrissey said at column 641 of the same volume on the 16th October, 1947, dealing with this Supplementary Budget:—
"The people do not know all the blessings that will be poured upon them. The reliefs are spread over three items—bread, sugar and tea. Fortunately, the three of them are rationed, and we know what each citizen is entitled to—6 lb. of bread, 2 oz. of tea and ¾ lb. of sugar for a week. Let us measure the fullness of this blessed relief that the unfortunate taxpayer will get and to what extent the cost of living will be reduced. With 1½d. off the 4 lb. loaf that means 2¼d. on 6 lb. of bread. Each person is entitled to 2 oz. of tea. There is a reduction of 2/2 in the lb. One-eighth of 2/2 is 3¼d. You are entitled to ¾ lb. of sugar and a reduction of 2d. in the lb. is a 1¼d. on that. Tot it up and what do you find? This relief, this blessing, this gesture of Fianna Fáil to settle this dangerous situation, is equivalent to 1d. per person per day. This is the Budget that is going to reduce the cost of living."
And carrying £6,500,000 tax to do that.
That is what Deputy Morrissey said in 1947. I have quoted what Deputy Norton said that day in 1947, and now, when these subsidies are removed, we heard what Deputy Larkin said to-day, what Deputy Dunne said to-night and what Deputy Morrissey said about them this evening. I consider, and I said it on the Budget in the years from 1948 up to last year, that the question of the food subsidies ought to be examined, because I felt, and it has been brought to my notice, that there has been a tragic waste of food under the subsidy system.
Take butter. What do we find in regard to butter at the moment? We find that rations of butter are being distributed from the creameries with a subsidy on them to shops in the West of Ireland. The taxpayers are paying subsidies on that butter, and we find racketeers going to the shops, collecting the butter there, taking it up to the city here and selling it to retailers, who sell it over the counter at 3/10 or 4/-.
That is preposterous.
Deputy O'Sullivan says it is preposterous.
You are criticising the administration of the Minister for Agriculture.
Deputy O'Sullivan says "preposterous". I am stating an absolute fact. If Deputy O'Sullivan had read the evening papers for the last month he would have seen where numerous shopkeepers had been fined very heavily in Dublin for engaging in that traffic. Is that a desirable state of affairs?
That is good for business.
Deputy Cowan must be allowed to make his speech without interruption.
But it is not good for the nation. Is that a situation that anybody wants? Is it a desirable situation and in what way can we put an end to it? Only by the steps that have been taken by the Minister in his Budget.
Do you believe that, Deputy?
I do believe it. Credo. Let us examine the question of bread. The Minister for Industry and Commerce told us to-day and the Minister for Finance told us in his Budget statement yesterday that there is going to be a whiter loaf—a more edible loaf. Everybody knows and, indeed, attention has been drawn to the fact very often, that bread, baked in loaves, has been fed to dogs and to pigs because it was such a cheap food. There has been a wastage of bread because people found that when threequarters of the loaf had been cut it was left aside for a while, and that it was difficult to eat the remainder. Therefore, there has been an extraordinary wastage of bread all over the country—bread for which a subsidy has been paid by the taxpayer. I feel that is a situation which is known to every Deputy in this House. I know myself that Deputy Mulcahy is not a great lover of the food subsidies.
What?
Deputy Mulcahy, as I understand it, and he can correct me if I am wrong, has been opposed to these food subsidies.
What?
Deputy Mulcahy, as I understand it, and he can correct me if I am wrong, has been opposed to these food subsidies.
That is very interesting. It should have been known before.
I think it was known to the inter-Party Government that it was Deputy Mulcahy's views on Budget planning that these subsidies should go.
But they did not go.
Deputy Mulcahy was of the opinion that it was sound national policy to abolish them.
Is that so?
Some other people thought it was not, so they just hung there until now. Now we will not have a waste of bread all through the city and country in respect of which a subsidy is being paid by the taxpayer. That has been happening long enough, and it is time something was done about it.
On the question of tea. The Minister for Industry and Commerce told us to-day that people will have an opportunity of buying different brands of tea at different prices, that some of the tea that can be purchased will be cheaper than the present rationed tea and that some of it will be dearer. I feel there are many thousands of families in this country who will be glad to be able to get a better quality tea, even if they have to pay more for it, than they are getting at the moment.
And the tea racket will be killed.
The abolition of rationing in regard to these commodities is a good thing for this reason also. Customers will not be tied, as they have been up to now, to particular shopkeepers. They can buy the goods that have been rationed up to the present wherever they like. In my view, that is desirable.
We come now to the other items which are taxed, namely cigarettes, beer and spirits. We had a very valuable contribution last night from Deputy O. Flanagan on this subject.
I am just reading your speech of the 10th March——
What year?
The 10th March, 1948. It is very interesting.
I can assure the Deputy that he will get magnificent material in that speech, and I can recommend to him some better speeches that I made.
Three main items on which additional taxes have to be put are cigarettes, beer and spirits. Is it not better that a tax should be put on those articles which are, in effect, luxuries than that it should be put on necessities?
Is dancing a necessity?
I am not interested in dancing.
Is bread a luxury?
I say it is better that these articles should bear the taxation necessary to maintain the administration of this State, to maintain employment, to maintain the Civil Service, the Gardaí, the Army and all these other organisations which depend on the Government for the means of existence. If we compare the price of cigarettes with the price in England, we will find that there is a big difference. The same holds good as regards the price of beer and spirits.
It will not be an argument against Partition.
England is our standard.
I am speaking about the countries nearest to us, the administrations nearest to us, and the country with which we have very continuous association. Our people who go over there, and come back after a period, are amazed that they can procure cigarettes, beer and spirits at the prices operating here.
Spirits are low to-day.
The Budget provides for additional taxation, but, if it does, it makes a counter contribution which I consider to be very valuable. The increase in children's allowances from 2/6 to 4/- is a very valuable increase, and the granting of a new allowance at the rate of 2/6 for the second child in a family is a very welcome addition to the finances of that family. There are many families in the State who will benefit by this transfer of cash from the central funds to the family. The increase in the weekly contributions to the old age pensioners, to the widows and to the unemployed will be very helpful to them.
As the Minister has said, and as has been stressed to-day, the alteration in the income-tax code makes very valuable contributions to the worker—the white-collar worker in particular who is earning up to £1,000 or £1,200 a year. The allowance provided in the Budget is very satisfactory so far as the person in receipt of £300, £400, and £500 a year is concerned. What are we to consider when we come to examine the Budget? We are to consider the state of the national finances and the provision that must be made to meet them in the coming year. We have to do as any prudent housewife has to do. We have to do an ordinary bit of housekeeping budgeting.
It would want to be extraordinary housekeeping.
Every family endeavours to live within its means. It is the duty and responsibility of the nation to do the same in the interests of all the people. That is what is being done in this Budget. The Minister has set out to put the finances of the State in order. I consider that it is necessary that they should be put in order. It is necessary in the interests of all the people who depend on the State, old age pensioners, widows and orphans, families who receive children's allowances, civil servants, the Garda, the Army.
What about your own army? Is your own army included in that?
They all depend on the State and if the State does not make proper provision for them, then, we will arrive at a state if catastrophe in the country.
They were disappointed last June when you joined Fianna Fáil, or are they on reserve?
Deputy Flanagan is all right delivering the type of speech he can deliver down in Ballycumber or somewhere like that.
And here, too.
He delivers the same type of speech here as in Ballycumber. There is no difference.
I think Deputy Cowan must be mixing me up with Deputy Boland. Deputy Boland is from Ballycumber.
There is no difference whatever between the Deputy's approach here and in Ballycumber. He just shouts around from those benches the same as he does from the side of a ditch.
And gets a few thousand votes therefor.
Did you hear what Deputy Dunne said about stupidity?
I never had to sing "Peadar on the Treetop" to get in.
I would suggest to Deputy O'Sullivan, to whom I appear to be some type of red rag every time I get up, and Deputy Flanagan that they might practise the amount of self-restraint that would enable them to hear the truth now and again. Deputy Flanagan announced last night that he is not going to smoke cigarettes.
Not one.
That will require some restraint. I think he ought to practise it while I am speaking. If the Government does not make provision for maintaining the finances of the nation, we are going to have a crisis in a short time. Whom will that crisis affect? It will affect all the people that I have mentioned, the old age pensioner, the widow and orphan, the families receiving children's allowances, every employee of the State, every civil servant, every member of the Army, every member of the Garda and their families. It is better that every one of us should tighten the belt one little bit for a time until we get over the crisis. What is the alternative?
That is revolutionary talk.
Revolution is right. Imagine Deputy Hickey leading any type of revolution. A good follower would be Deputy Davin.
Will you lend me your army?
What is the alternative? That question has been asked to-day. I know that Deputy MacEoin agrees with this because he has stated it so often. If we as a nation do not tax ourselves and provide the money necessary to run the State we have to get it from somebody else and there is only one place where we can get it without any trouble to-morrow. We can get it from America. All the money that we need to balance our Budget, we can get it to-morrow from America.
Who holds our sterling assets?
Try Stalin.
I do not think he is giving away money in that way. I will ask him the next time I see him. If we want money we can get it from the United States of America. We can balance this Budget without any trouble. Some people may say to me, as has been said to me, "You have changed. You are on the wrong side." I am on this side for this reason— because I wanted to make it impossible for the Americans to buy this country—I am satisfied that the Taoiseach and Ministers of this Government would not sell the country to America. That is why I am here. That is why I am on this side and let there be no doubt about that.
The same as the Six Counties were sold.
We can fight out our own battles in Ireland about socialism and all that. We will have plenty of time to do it but we would have neither time nor opportunity for such a fight if this nation were in the state that some other nations are in to-day, tied hand and foot to a big nation like America, Russia or any other country. We want to preserve our freedom. We want to preserve our liberty. That may mean extra taxation but extra taxation is a much smaller sacrifice than men had to render in the past to secure the liberty of this country.
God forgive you.
Many words have been used to describe this Budget. I am afraid I am going to add two new ones. I emphatically assert that this Budget is both outrageous and spiteful, as I will clearly demonstrate in the course of my argument. We have no doubt in our minds that the answer given by the Irish people to the Fianna Fáil Administration as a result of the catastrophic Supplementary Budget that they introduced in 1947 is one of the root causes of the spite that we see in this Budget. On that occasion —and the Provost Marshal may giggle but it will not get him out of this— they introduced taxation for the purpose of paying food subsidies. On this occasion, the "Great I-am" having been transgressed upon, they are going back to the country to impose with a vicious thrust greater and more severe taxation in the same direction and at the same time they are eliminating the food subsidies. That is interesting. It is going to be more interesting as the story unfolds itself, particularly when one appreciates the political background to the mandate that Fianna Fáil now allege they have for their activity.
"Mandate" was a wonderful word of the Taoiseach's, Eamonn de Valera, and I am going to demonstrate in the course of my speech that Fianna Fáil have no mandate for this and that, far from the Independents having a mandate, they were elected, and sought election, on a policy positively, categorically and diametrically opposed to what they are now voting for in the Lobbies.
It was interesting to see the disappearance of the Cork heroes. I have their election address here. The four heroes were Deputy Alderman McGrath, Deputy Alderman Seán MacCarthy, Deputy Alderman Jack Lynch and the Lord Mayor of Cork, who has since seen the light and left the fold, Alderman Furlong. They campaigned viciously and virulently throughout the City of Cork declaring that the last Government was wrong, outrageous and had let the cost of living increase—mark you I am going to quote this document—that everything had gone up under the inter-Party Government. Deputy McGrath, the Parliamentary Secretary to the Government, Deputy Lynch, and Deputy MacCarthy, all conspicuous by their absence, campaigned, saying that in 1947 beef was 2/- a lb. and under the inter-Party Government sirloin beef had gone up to 2/8. They must not have bought beef since Fianna Fáil came into office, because we now know that it is 3/2. Mutton had gone up according to them by 51/2d. per lb. and reached the astronomical figure of 2/4. Now try and buy a sirloin chop or a centre mutton chop or a mutton joint and you will find that it costs 3/- per lb. They were howling about the increase in the cost of living and this was before any of the impositions which are now to come. They said that under their Government streaky bacon cost 1/11½d. and back bacon 2/11.
They say that we let them go up to 3/4 and 3/7. I would like those "bould" heroes to go out any Saturday instead of their respective wives to buy either streaky bacon or back bacon at the price to which they said we allowed it to rise and which they said was fantastic. This was long before the present impact from our hair-shirt, doleful, mournful, bad-tempered Minister for Finance, who got up to give us his 71 pages of fallacy yesterday. Throughout the length and breadth of the City of Cork these worthy warriors moaned and groaned. They said that backs were creaking, that the burden was getting impossible to carry, but that the housewife was safe in the hands of Fianna Fáil. God help the poor disillusioned woman this morning.
The national advertisement of the Fianna Fáil Party is worthy of note and of a place on the records of the House:—
"Fianna Fáil began the system of food subsidies to keep down the cost of living by reducing the price of essential foods. Do not let the Coalition propagandists deceive you. The workers' interests are safe with Fianna Fáil."
"You can trust Dev."
We have a new Deputy in the House. I regret that he is not present, but his worthy pal is present, so I will not do anything unfair in quoting from the circular of Deputy Dr. french-O'Carroll to the poor misguided people of his part of Dublin which includes part of Crumlin. I would love him to go there next Sunday and see what the people of Crumlin think of him. He said:—
"If elected by you, I promise to focus attention on the cost of living and to press for increased subsidies on food."
The cerebral gymnastics of Deputy Peadar Cowan are in no way comparable with those of Deputy ffrench-O'Carroll, who walked into the Lobby with his new-found political masters, not to increase the food subsidies, not even to keep them at the present level, but to ensure that the burden on the already over-burdened back of the housewife in his constituency, the working-class person with a small or large family, would be made intolerable. Interesting: he is going to focus all attention on the cost of living!
In the course of his election address he made some further interesting observations apropos of food subsidies. They were his pièce de résistance. He said:—
"All political Parties have failed in their undertaking to the electorate to reduce the cost of living."
The new Lochinvar has come out of West Crumlin.
Is it quite in order for the Deputy to have his back to the Chair?
The same as the Minister for Finance had his back to the Chair to-day.
I can assure the Chair that if my back was inadvertently turned to him it was in the exuberance of the debate and not in discourtesy. He goes on:—
"While Fianna Fáil did endeavour, rather too late, to stem rising prices by subsidising essential foods during their term of office, the Coalition Government, by refusing to increase these subsidies, knowingly permitted a rise in the cost of living."
Deputy Dr. ffrench-O'Carroll strolls nonchalantly, boldly, into the Lobby to ensure an increase of 3d. per loaf of bread for the citizens of this country, thanks to his gaining election on a document such as that. I advise the Deputy to be wary in his visits to the Crumlin area.
In the light of the campaign during the last election, where Fianna Fáil set itself up as the custodian, the protector, against the drastic increases in the cost of living, the custodian and protector of the housewife, the poor man's friend, I wonder how some of their Deputies are going to face back this week-end to their constituencies.
By car.
It is true that Deputy Seán Flanagan may be able to go back nonchalantly in his car and say: "I am young at the game. I had nothing to do with it." But some of the hardy warriors around him are going to be in a tough spot. If some of the asides heard going up the steps to the Lobbies last night are any foreshadowing of the future, the Minister for Finance must be more adroit than he has ever been before to explain this away to some of his own supporters. I am sure that there is no doubt in the mind of any reasonable Fianna Fáil person that there is no explanation. The sudden sensitivity on the Fianna Fáil benches only indicated that they were the most staggered, stupefied and amazed people in the House yesterday as the picture of ghastly butchery unfolded itself in all its sadism, designed as it was by a person well known in political circles and in the public life of the country for his lack of concern for the interests of the poorer sections of the people.
You can be proud of your Budget, a Budget that marks one further doleful milestone in the tragedy of breach of confidence by a political party to their electorate. If there was one thing which stood out in the background of the election campaign of Fianna Fáil, it was the issue of the cost of living, and let the Minister not think that he is going to sell the pup of small ameliorations for old age pensioners and other oppressed groups and get away with it. A sum of 1/6 for the old age pensioner, a miserable digusting pittance to offer him, in the teeth of taking with the other hand the 1/6 in his rationed goods, together with 7d. if he smokes a packet of cigarattes in the week or 4/1 if he smokes a packet a day. The Minister's heart is bleeding for the poor old age pensioner so much so that he offers this insult of 1/6, while robbing him with the other hand of not less than 1/- more than the relief of 1/6 he gives.
Then, we have an effort made to boost the Minister's greatness on the flagstaff of increased children's allowances. A very welcome feature is the increase in children's allowances, if it were not a deceptive increase, a bit of duplicity on the Irish people— 2/6 for the second child and an increase to 4/- for the subsequent children. Take the unfortunate working man with a wife and three children who gets, by way of children's allowances, the munificent sum of 6/6. He loses in respect of the abolition of the food subsidies the sum of 7/6 and, if he smokes one packet of cigarettes a day, we can add 4/1 to it and if he drinks a modest four pints of stout in the week, another 1/-, and if his wife, as in many cases the wives do, smokes, another 2/- or 3/-. We find, then, on one side, 6/6 graciously donated by the munificent Minister for Finance, while into the other pocket goes the searching, hungry fist that takes out 16/6. Wonderful economics and a grand story for Deputy Seán Flanagan to tell them in Mayo!
Nearly as good as the figures the Minister gave.
I am coming to that; I propose to deal with the hoax element of the Budget in a moment. We are doing very well. I have another most interesting document for the illumination of the minds of members of the House and the edification of the Irish public as to the beautiful type of political skullduggery that goes on in the Fianna Fáil Party. I shall now put on the records of the House this interesting document, a letter from the secretary of the Irish Ballroom Proprietors' Association, c/o Olympic Ballroom. Pleasants Street, Dublin, and the very illuminating answer from Seán F. Lemass, now Tánaiste.
What is the date of it?
15th May, 1951
After the Dáil had been dissolved.
The whole story is told in it—do not worry. It reads:—
"Dear Sir,
At a special meeting of the executive of the association held on 8th inst. it was decided to communicate with the Fianna Fáil Party, they being the Party responsible for the abolition of Dance Tax in 1946 and having since vigorously opposed the re-imposition of same by the Coalition Government, requesting them to inform the Association of their intentions regarding the abolition of tax should they be returned to power.
I am to inform all members of the Association that I have received what the executive consider to be a favourable reply from Mr. Lemass on behalf of the Fianna Fáil Party a copy of which you will find enclosed.
Following receipt of this reply from Mr. Lemass, a further executive meeting was held to-day, the 15th inst., when the meeting confirmed their pledge of support to Fianna Fáil.
It will be appreciated that the Association is entirely non-political and that having failed utterly to impress the previous Government or Minister for Finance though it pointed out the hardships caused to ballroom business, to clubs hiring the ballrooms, musicians, staffs, etc., the Association has now no alternative but to support the Party who has indicated that they are prepared to repeal this tax as soon as it is practicable.
The Association has decided that the support to Fianna Fáil should take the form of substantial financial help and also that all members both city and country should lend a hand in every possible direction to secure the return to power of the one Party who has given the Association an indication that they as a Party are opposed to this undesirable entertainment tax on dances.
It will be appreciated that in order to have the desired effect our financial aid must of necessity be generous. I may mention that one leading commercial ballroom in Dublin has headed the list of subscribers to this fund with the generous sum of £250 and other members of the executive have also indicated their willingness to subscribe very generously.
Whilst the Association does not specify any particular amount to be subscribed they request you in your own interests to give as much as possible. I shall deem it a great favour if you will reply promptly as time is getting short before the General Election and if we are to help it must be done immediately.
Thanking you in anticipation,
Yours faithfully,
Kathleen Morris,
(Secretary)."
Now we know.
And now the letter from the then Seán F. Lemass, now Tánaiste of a Government who, in a Budget of drastic and crushing burdens on the Irish people, offer relief in one direction only, the abolition of tax on dancing. Let you dance, oh people! —the Minister for Finance thinks you have something to dance about in this outrageous and spiteful Budget. The letter reads:—
"Dáil Éireann,
Baile Atha Cliath.
10th May, 1951.
Miss K. Morris,
Secretary,
Irish Ballroom Proprietors' Association,
c/o Olympic Ballroom Company,
Pleasants Street,
Dublin.
A Chara,
I have received your letter of May 6th which has been considered by the Fianna Fáil Party Committee. The committee's view is that the entertainments duty on dances is an undesirable tax. As to its abolition in the present financial year, however, a decision must necessarily await the detailed examination of the Budget introduced in the Dáil immediately prior to its dissolution, but it would be the intention of the Fanna Fáil Party to repeal it as soon as practicable.
In view of this intimation of the committee's attitude, I assume it will not be desired to pursue the request for an interview with me. It will be appreciated that I could not add anything to what is conveyed by this letter.
Is mise,
SEÁN F. LEMASS."
Mr. Flanagan
He got £4,000 out of it.
Before the Deputy proceeds, the letter which he has just read, I respectfully submit, is one that calls for an explanation by a Minister of the Government. I would ask at this stage that the Minister for Finance be permitted to give an explanation, to confirm or deny the allegation about this tax on dancing.
Stop play-acting. Remember your disgraceful speech of 1948, when you got hold of clients' files and used them for political purposes.
We never accepted political bribes.
The Deputy never proceeded with the writ against me. He dare not go into the witness box.
We never framed a Budget on the basis of bribes. This is a public scandal.
Mr. Collins
That correspondence speaks for itself. It is a tragedy to have to put on the records of the House something quite as obnoxious as that, but I think conscientiously that it is in the public interest that they might know the background of this relief in the tax on dances.
The Deputy is delighted.
Tell us about the five Dublin publicans.
Does the Minister admit it or deny it?
On a point of order, that point was explained when it was stated that the cost of collecting the tax was greater than the tax itself.
We now turn to a further tragedy in this Budget. This morning, in a quiet deliberative way, we heard a scathing analysis of the figures in it, by the Leader of the Opposition, Deputy J.A. Costello. In that he revealed a situation that bears restating, one that was added to to-day in a devastating way by the revelation of figures by Deputy Dan Morrissey. Whether it is an error or due to carelessness, or whatever the purpose, we see a figure of actual cost for the subsidies for this year described as the savings for the year; and we find that if you substract a figure of £6.7 million from the real cost of the subsidies for any one year you get the figure of the savings, which is £8.8 million, leaving a discrepancy that needs more than a casual explanation, leaving a concealed tax gathered into the coffers of £2,000,000. We have the position revealed, of Deputy Dr. James Ryan, the Minister for Health, announcing and reiterating here that the cost of social services for this year will be something less than £2,000,000, and his colleague in the same Cabinet, the Minister for Finance, in the Budget figures saying £3,000,000—another £1,000,000. These points are worth repeating, as it is time that the public of Ireland were given a full lesson in the real extent of the bluff, codology and stupidity that goes to make up the Fianna Fáil Party.
Then Deputy Morrissey comes into this House and tells us about something that it will be very difficult to wash away. How, in a document 71 pages long, carefully documented, laboriously read to this House, at page 50, can the figures appear that were quoted to-day by Deputy Morrissey, alleged in this statement to be the figures of new registration of motor vehicles, taking the years as he did, 1939, 1949 and last year, and what figures are in fact disclosed? Not the figures of the registration of motor vehicles but the figures of the numbers of driving licences issued to people. As pointed out by Deputy Morrissey, the discrepancy in the first year is only 20,000, in the second year of choice 50,000, but in the last year under review there is over 73,000 of a discrepancy. Mind you, the Minister has emphatically and with his grandiose eloquence on paper adverted to those figures in a very positive way and asserted that they showed him a certain figure.
Where does the duplicity of this Budget end? What figures in this Budget, if any, can we rely on? There is the demonstration in the items taken by the Leader of the Opposition, and in those items of registration of motor vehicles taken by Deputy Morrissey, that there is a complete lack of accuracy in these figures. Is the whole structure and facade on which this Budget is built and sold to the dumb cattle behind the Minister false? Where is the end of the errors in the figures on which these tax estimates are based? How far do the errors go and where do they end? Why is the Minister not anxious to adjourn this discussion to enable him to recheck the figures? Why has he not intervened, when he got the opportunity when he was challenged, to deny that the official figures in the official documents of this House are wrong but that he is right in his 71-page typewritten, doleful elegy of misery, holding out to this country nothing but gloom? We had a wealth of good will at home, a wealth of co-ordinated expansive endeavour by a people confident in their Government, believing in the investment of their own money at home, believing in the gradual building of their own State into something that they had dreamed about; and all that confidence has been dissipated and shattered by the gloom, the misery of people accidentally returned to ministerial posts by the consistent votes of people like Deputy ffrench-O'Carroll, whose sole worry is going to be food subsidies and the increases on tea and butter, or Deputy Peadar Cowan who can always be trusted to do the right thing.
It is indeed significant that in their queer wanderings around the political arenas of this country those weird specimens have wandered home to the arms of a Minister for Finance who was once described in moving eloquence by Deputy Cogan as the "senile delinquent". Permission was sought from the Chair on one occasion recently by his new-found enthusiastic defender, Deputy Peadar Cowan, to know if it would be in order to describe him in a most offensive way. Nice bedfellows. You are fully welcome to him. Unfortunately, the tragedy of this Budget will go far beyond the whim of these people. It is unfortunate that its impact will be felt in every home, no matter how humble, throughout the length and breadth of this State. No effort by a bemused and befogged spokesman for the Government will cloud the fundamental issue that no matter what section of the community may get back 1/- or 2/- they will pay three, four, five or six times over in the indirect yield of taxation which they will have to give back.
This is a cruel and a vicious Budget. If it were even equitable in its distribution of the load, one would not be so scathing in one's condemnation, but it is certain sure that the vicious spite is there that says to the Irish people: "You threw us out in 1948. We are now back a minority Government by the whim of a number of Independents and as long as we are there, you will feel the lash for that affront"—offered to the alleged great "I am" of the Fianna Fáil Party. This Budget is deliberately designed to retard progress. It is deliberately designed to break down the decent financial structure that was being built up.
A Deputy
What about the Marshall dollars?
I shall deal with that, too. You are interrupting a bit too soon. This Budget was designed to break down a financial structure that was built in such a way as to give the people a burden of taxation which they could bear. The Irish people were encouraged under the inter-Party Government to use their small savings for development at home and they were asked for their other savings for the purpose of investment in Ireland—and they gave them.
Somebody has interrupted about the Marshall dollars. The sooner Fianna Fáil wake up and cop themselves on, the better. In their ten months of office they have succeeded in dissipating what was left of the Marshall moneys, £26,000,000 odd, and the balance was all that we had spent in the previous three years. Work it out even on your own mathematical scales. Fianna Fáil should keep quiet about American dollars. What was the reserve of £26,000,000 for? It was there as a cushion against this type of cruel economic and unnecessary impingement on the Irish people. It was there to ensure that we would have adequate money to finance national development and, at the same time, that we would not have to come down with the crushing heel of the oppressor on the taxpayer of the country.
This Budget is simply and plainly unbludgeoned tyranny activated not by the best motives and manifestly activated by a vicious spite. I feel a tremendous amount of sincere regret because this Budget will do damage that, even with all the courage and ability that may come in the next Government to right the wrong, it will take years to overtake. This Budget represents a crushing burden on every section of the community without exception. There was, however, a great flag at the end of it: "We propose to take the tax off dancing." They propose to take the tax off dancing in the light of the correspondence I have put on the records of this House. It is a shameful and disgusting performance. It is a miserable travesty on the Irish people.
I assert that with an intelligent approach to the finances of this country most of this taxation is completely unnecessary. I assert further that the inevitable outcome of this Budget will be increased emigration, increased unemployment and a continuation and increase of the vicious circle of unrest in industry in this country for which the inter-party Government had found a remedy and eliminated. The inter-Party Government had found the basis of conciliation and co-operation between employer and employee. It had found the machinery by which fair demands were made. That put employers in the position that, with expanding industry, increased output, increased consumption, they were able to improve the lot of the workers. Now the vice is clamped down and again we have the mentality of men who once preached that 50/- a week was enough for any man and that £1,000 a year was too much. We now have the mentality of a Minister for Finance who, in a previous capacity as Minister for Local Government, would not sanction an increase of 1/- a week for the road workers in rural Ireland. That is the foul, vicious, dead hand that has come into Irish politics to-day. I say deliberately to the Government: Face again our masters—all our masters—the public of this country, and we on this side confidently await their verdict.
I listened very carefully to the speech made by Deputy J.A. Costello to-day and I must say that his contribution, as a former Taoiseach of this State, was very poor. He said that this Budget was dishonest. That criticism was not worthy of him. He alleged that the present Minister for Finance, Deputy MacEntee, who has had wide experience of public life, and the Fianna Fáil Party in general, are asking for money by way of taxation that is not, in fact, required. Deputy J.A. Costello also alleged that the officials of the Department of Finance and of the Revenue Commissioners are incompetent and incapable of assessing the amount of money required for the coming financial year. I must say that I have never heard a more dishonest speech in this House than Deputy J.A. Costello's speech, especially in view of the fact that he had the honour of being Taoiseach of this country for three and a half years.
Surely he does not believe that the Irish people will swallow his misrepresentations. Would it be proper for any Government to impose taxation if it were not really necessary to do so? The answer is "no". The task of balancing the Budget, which is the task of every Minister for Finance in every country in the world, is a difficult and a thankless task. If Deputy Costello had said: "I am against all this taxation" I would have said that he was an honest man and his criticism was worth having. Instead of that he tried to twist it around—that the Revenue Commissioners and the officers of the Department of Finance were people who were not worthy of the confidence of the people of this country and that they were dishonest. That was the implication of his speech and his general contribution lasting one and a half hours to this debate.
On a point of order. I am sure that if the former Taoiseach made such a reflection on the civil servants whoever was in the Chair would have ordered its withdrawal.
That is not a point of order. The Chair will protect civil servants as far as necessary.
Deputy J.A. Costello said no such thing.
His statement was to the effect that the Minister for Finance was going to look for £10,000,000 more than he required and that this was a dishonest Budget. That was the theme— gross misrepresentation by the Opposition Deputies who spoke yesterday and to-day. Before I leave the ex-Taoiseach's speech, if he thinks that the people will swallow that misrepresentation he will naturally, of course, have to try to put up some smokescreen——
At 2/4 per packet.
——to cover up the mess that he left the nation in after three years, and I suppose one smoke-screen for Deputy Costello and his colleagues in the Opposition is as good as another. We are in our present position because of the way you have carried on for the last three years and we have to face it now and we have to do the unpopular thing.
Why do you not go to the country and we will have you out of office in 48 hours?
Deputy Burke should be allowed to speak without interruption.
In my absence yesterday, the Deputy made a very uncharitable remark about me. I am alive and well.
I am glad to hear it. How you stuck that Budget I do not know. There were times when I was concerned about you.
Deputy Burke on the motion before the House.
I have sat and listened in this House without interrupting anybody either to-day or yesterday. I say now, without any fear of contradiction, that we on this side of the House have to do unpopular things as a result of the mess we have found the country in after three years of your administration.
Perhaps the Deputy would use the third person and address the Chair.
We have to do the unpopular thing and the Minister for Finance has my wholehearted sympathy in having a tough job to clean up the mess that the people on the other side of the House are responsible for having the country in at the present time.
I have heard a number of speeches here to-day. The same type of speech was made in Europe during the last seven or eight years and prior to the last war—the same destructive speech, misrepresenting the facts in certain European countries. It is the type of speech that has made the nations of Eastern Europe subservient to another nation to-day. Do you want this country to stand on its own feet? Do you want us to try and clear up the mess that the previous Government left to us here? Do you want us to do that or do you want us to carry on in the same way as in other European countries that have been made subservient to a foreign power because the same misrepresentation went on when the finances of the country went down and when chaotic conditions existed there? As far as I know we hope to keep this country for the Irish people.
There will be none of them left shortly.
A Deputy
The Jews have it now.
We want this country for the Irish people and we do not want it to be subservient to any foreign power, if we can help it; but apparently that is not the attitude adopted by Opposition speakers. All they are able to do is to criticise but they never ask themselves how was the Minister for Finance to balance this Budget and to meet the outgoings of this State during the coming year. I have seen none of the previous speakers face up to the position good, bad or indifferent. The only thing they were able to do was to pretend that they were crying salt tears because of the position created by them, and by them alone.
Deputy Dillon spoke also at great length here. He is hardly worth quoting or referring to at all. I see one of his mute mice from County Dublin has just entered the House; it was he who clapped him on the back when he killed the tillage and the agricultural industry in the constituency that I have the honour to represent.
Tell us about the Budget. How are you going to defend that in Balbriggan? That is the point.
We will have the revolution.
Deputy Captain Cowan will tell you all about revolution.
Deputy Dunne referred to me on numerous occasions during his speech. At least I have an opportunity now of answering a few of the points that the Deputy tried to make as usual. He is a past master at misrepresentation and, of course, naturally, I have to show how very good the same Deputy is at misrepresenting facts.
I do not go behind your back like you went behind mine.
Order. Deputy Burke is in possession and entitled to speak without interruption.
Then he should try to make sense.
Deputy Dunne cried here to-night over the agricultural worker in County Dublin. He held his hands up and roared at the top of his voice to show how concerned he was about them but he was not a bit concerned about them when he clapped Deputy Dillon on the back, when the tillage farmer, the agricultural worker, the tomato grower and the fruit grower of County Dublin were nearly squeezed out of existence. Deputy Dunne was as mute as a mouse when a number of these agricultural workers lost their employment.
That, of course, is a lie.
That is the position.
The Deputy used the expression "lie". That must be withdrawn.
I am afraid that, with great, respect to you, I must characterise the statement for what it is—a lie.
If Deputy Dunne will not withdraw the expression he must leave the House.
With respect to you, I will leave the House.
Without any further reference, the Deputy cannot discuss the matter. I will have no further discussion. Deputy Dunne will withdraw the expression or else leave the House.
I leave the House in the knowledge that Deputy Burke will be safer now.
That is good propaganda, Deputy.
Deputy Dunne withdrew.
Deputy Burke on the Budget statement and on Resolution No. 11.
I was speaking about what we are trying to do in this country. We are trying to make this country a decent, self-supporting nation. If any citizen inside this House or outside it is misguided enough to believe the misrepresentations that have been made here by speakers on the Opposition Benches criticising this Budget he will have to ask himself a few very pertinent questions.
They will have to ask themselves, "What would I do in similar circumstances, if I were Minister for Finance?" It is easy enough to try to make a cockshot of the present Minister and to call him names across the floor of the House, or to indulge in cheap misrepresentation, but let any citizen place himself in the same position as the present Minister is in to-day and see what he is going to do. Did any member of the Opposition tell us where we could have saved under the Budget? Do they want us to cut down on social services, on the widows' and orphans' pensions or on the numerous social services that we introduced since 1933? Do they want us to cut down on the Army or the Guards? These are questions to which I expected to hear answers from any person who wished to treat the House to an honest sound criticism on the Budget. Instead of that we find them all shying away from these questions. They started to misrepresent the facts and resorted to calling the Minister names. That is the position we are now facing.
I challenge any one of them to get up and make an honest-to-goodness speech and tell the House how they are going to balance the Budget in the conditions facing the Minister to-day. They bring in cheap gibes about letters written at election time. I am sure the Fine Gael Party and Deputy Collins as a member of that Party, knows well enough what the publicans' junta tried to do with the Fine Gael Party and we hear nothing about that from Deputy Collins. There is nothing about the Fine Gael Central Finance Committee which collected money from the publicans to reduce the beer tax and the sell-out they had on that occasion. I heard Deputy MacBride, a man at whose hands I suffered very hard on one occasion, at whose hands I suffered more than at the hands of any other individual——
Me?
Yes, on one occasion. I was surprised at you.
This is news. I do not know what the Deputy is talking about.
Deputy Burke on the Resolution.
I am dealing with Deputy MacBride.
The Deputy will deal with Resolution No. 11.
I am dealing with the reply Deputy MacBride made in support of Deputy Collins.
I should like to know how I made the Deputy suffer?
I shall hear nothing from the Deputy except on the Resolution under discussion.
That is Deputy MacBride's opinion, not mine.
Deputy Burke on Resolution No. 11.
Deputy MacBride supported Deputy Collins when he was reading a document here a few moments ago about dance halls and he referred to it as dishonest bribery. I want to ask Deputy MacBride seriously did he ever in all his political career in his constituency solicit a vote from publicans.
I certainly did, but I never bought votes. I never framed a Budget on the basis of bribes.
What about a certain lady and her subscription?
I never framed a budget on the basis of bribes and this looks uncommonly like it.
I do not want disorder in this House.
What is this about?
I feel that the letter read by Deputy Collins supported by Deputy MacBride was a dishonest misrepresentation of facts.
On a point of order. When Deputy Collins had read that letter I felt that in fairness to the Government, the Government should be given an opportunity of stating whether the letter was correct and whether they had in fact received subscriptions.
Do stop performing and conduct yourself like a public representative and not like a marionette.
I should like to know how Deputy Burke suffered.
This is the same class of misrepresentation that we have heard since the debate opened. So far as I can see, all the speakers on the opposite side want is to have this country subservient to other mighty nations, to have it begging crumbs from other people——
That is not true and well you know it.
Is Deputy Burke not entitled to make his speech without these unintelligent interruptions?
Deputy Burke is repeating himself.
He is walking in his sleep.
If I am hurting the susceptibilities of the gentlemen opposite I can assure you that I am trying so far as I possibly can to be honest.
That must be torture to you.
I am not concerned with the susceptibilities of the Opposition but Deputy Burke has been repeating himself. I should now like to hear Deputy Burke on Resolution No. 11.
Deputy Dillon, the ex-Minister for imports, to-day made a contribution to this debate which was typical. He said that he was anxious when Minister for Agriculture to increase production in this country. The Deputy who has just left the House, and others who are here present and who were here during the session from 1948-1951, know full well the contribution that that honourable Minister made towards increasing production in this country. As I have just pointed out, the tillage farmers, the market gardeners, the fruit growers and tomato growers of my constituency know how he succeeded in almost putting them out of existence. Then the great leader and archangel of the workers, Deputy Norton, had nothing to say about it. He was just as anxious in supporting Deputy Dillon in trying to run people off the land of old Ireland——
They are running faster than ever to-day under Fianna Fáil.
Deputy Norton was not very concerned about the workers then.
They were all working.
I wonder when will we get in this country people who will be honest enough to face the position as the Minister for Finance is now doing. I know well how the Deputies opposite will go to the chapel gates and the hustings and misrepresent the facts as they are.
You are afraid of that.
If I was, I would not stand up in this House and say what I am saying.
Or at Portrane.
Deputy Flanagan should restrain himself and allow Deputy Burke to make his statemen in his own way without interruption.
His own way?
I was referring to the ex-Minister for Agriculture, Deputy Dillon. He was so interested, supported by his colleagues in the Labour Party, in keeping foreign labour going that he wanted to import commodities which we could have produced here.
On a point of order. Is there any chance or hope that we shall have a deliberate discussion on the Budget rather than the stuff we are listening to?
That is not a point of order.
If Deputy Dillon when Minister for Agriculture, supported by the Labour Party and the Fine Gael Party, had done his job honestly and conscientiously, the present Minister for Finance would have had a very easy and popular job yesterday and to-day. We have to pay dearly for the mess which these people have left us.
The Deputy is repeating himself. I have been very lenient with him and he should come to the motion.
He is really finished, but he will not sit down.
The intelligentsia are to be our educators in the future.
There was a lack of responsibility shown by the previous Government. They carried on in any class of way. I have already referred to other countries in Europe which suffered from the same misrepresentation. We are suffering now. I hope that the people will realise that this Budget, no matter what can be said about it, is honest and true, and that the Minister for Finance has squarely faced up to the position. He had no other alternative, and now has to bridge a very substantial gap by borrowing. That shows us what the Minister is up against. He has not tried to put over something on the country—a popular Budget—and let the country drift and drift, until some day we would find all our social services so disrupted that we would have our country in a position where it would be subservient to other countries. To the Minister for Finance I will conclude by saying: "You have a tough job, you have faced up to it and you are doing well".
The proposals which the Minister introduced in the Budget yesterday were the culmination of a lengthy campaign initiated by the Minister and other members of the Government shortly after they were elected last June. The start of this campaign was the Minister's speech to the House on the 18th July. The House and the country will recollect that the Minister's policy was initiated on that occasion in order, according to himself, to rectify the financial position in which the country found itself, and especially to rectify the disequilibrium in the balance of payments.
That was one problem. The other problem was to pay for current expenditure out of current earnings. When the Minister, supported by other Ministers, initiated that campaign, it was anticipated that the introduction of this Budget and of the Estimates this year would mark a departure in the financial policy adopted by the inter-Party Government. A whole series of speeches, emphasising the alleged critical condition of our finances, were made by Ministers at different functions varying in degree and intensity. The country was led to believe that, whatever measures would be adopted, would have as their aim a rectification in the import excess and would result in an improvement in the terms of trade.
The Minister yesterday, in his speech introducing the Budget, covered a great number of topics and dealt somewhat briefly with this problem. He admitted that, in the first two months of this year, the improvement was negligible. There was something approximating to £1,000,000 reduction in the import excess in the month of January over the same month last year. The reduction in the import excess for the month of February was substantially less, and the March figures are not yet available. It is quite obvious that the campaign which was initiated, the speeches which were made, and the public alarm created caused dislocation, disturbance and lack of confidence resulting in serious unemployment as well as in a serious dislocation in the economy of the country, have not, at the end of that period, resulted in any effective measures being proposed or even in any remedy being anticipated. The country has been deluged with speech after speech, at meeting after meeting, by Ministers, all pointing to the serious economic condition of the country.
The country was led to believe that, when the present Budget would be introduced and the Estimates circulated prior to the Budget, a change in policy was likely. It is true there has been a change in policy but it has not shown any accept on the measures designed to improve the terms of trade or the remedies which the country was led to believe would be adopted as a result of the criticism which was voiced against the inter-Party Government's capital development programme or the description which was applied to the method of financing. We were led to believe from the first page in the Book of Estimates, circulated in February, that, when the Budget would be introduced, a change would be announced in the description applied to capital and current expenditure.
The Book of Estimates issued in February contained a note on page (iii). That note referred to the fact that it was not proposed to follow the procedure of designating particular items in the supply services as capital services and that it was only in the context of the Budget that a full estimate of Exchequer outlay on capital and current account would be available.
The Budget was presented to the House yesterday and the Minister dismissed in a few words the distinction that was drawn between capital and current expenditure and the division which was introduced by the inter-Party Government in the dual Budget. It is obvious from the remarks that he made in dealing with this matter that it was not the intention of the Government to make any real change.
While that in itself may not appear to be a matter of any great significance, the country is entitled to an explanation from the Government and from the representatives elected to the House who supported the Government of the campaign which has continued since the Government was elected criticising the capital development programme and which now, when the Budget has been introduced, makes no serious alteration in the method of financing that programme.
It is, indeed, worthy of comment that the Government has not departed from that policy. It is not sufficient to say that they had not time to do it and that it will have to be considered later in the year. It was quite reasonable, in fact, only human for the Government, in the early months and early weeks after they had assumed office, to lay the blame on their predecessors for unpopular decisions, for any deterioration which had occurred in the economy and for any alterations which were taking place. That was fair tactics, even good tactics. But time has caught up with them.
The changes that have since occurred, the measures that have been proposed during the last ten months and, in particular, the measures which have been proposed in the Budget now presented to the House cannot be defended by attempting to cast the responsibility on their predecessors or by refusing to accept responsibility for the proposals now announced for the heavier burdens now placed on all sections of the community, burdens which have been so spread that the leading article in the Irish Independent is headed: “Everybody in the Casualty List.”
They tried to put the Taoiseach in that list on one occasion a long time ago.
Was not the Deputy terribly sorry?
They put the men of 1916 there and Deputy Mulcahy should not forget that.
Deputy Cogan may be in the casualty list as a result of this Budget. The position is that this Budget has been copied from the Budget proposed recently by the Tory Chancellor of the Exchequer. It is customary, when jockeys go out to ride a race, to give them riding instructions but it does not always follow that the instructions are obeyed. When the present Minister for Finance and the Tánaiste went to London they had discussions. They were so modest about the results of these discussions that, with the exception of a very brief statement published after they returned, the country was given no indication as to what occurred.
Judgment was suspended until the proposals were introduced and no replica was ever produced of any original which bore the same similarity of origin which this Budget bears to the British Budget. When it bears that resemblance it is pertinent to inquire what the British Budget set out to achieve. It is pertinent to inquire what caused the British to get into the position that these measures were required.
The British, as many people are aware, recently fought the biggest war in history and their second biggest war in 30 years, wars which absorbed every thing that they had in the way of strength both physical and economic and which utilised their resources to the last drop.
No such war affected this country. It is true that the recent war affected this country in a variety of ways but we were not injured in our economic strength or resources and our assets were not depleted to the extent they were in Britain. In fact, while the war continued, a great number of our economic assets were strengthened. There is no valid comparison between the conditions in which the British people found themselves at the end of the last war and the conditions in which the people of this country found themselves. There is no valid comparison which justifies the imposition in this country of measures calculated to extricate the British people and the British economy from the situation in which they find themselves.
There is, therefore, no reason for similar methods being adopted here in entirely different circumstances. Of course, the real defect in this Budget is that it follows the British pattern without apparently considering what the consequences of that pattern would be if it were applied to our economy.
In recent years a great number of people have become familiar with the word "austerity". The word was first brought into common use by the former British Chancellor of the Exchequer, Sir Stafford Cripps. He was a munificent Santa Claus in comparison with our Minister. No Budget ever introduced in Great Britain was so austere in its effects or so severe in its results as the Budget introduced here yesterday. No measure designed there to protect their economy impinged so heavily, so severely or so unjustly on all sections of the people as the Budget introduced by the Fianna Fáil Government and which has been supported by a number of their satellites in the House.
The proposals propounded in this Budget, while a replica of the proposals adopted in Great Britain, fail to make provision for the impact of the changes which will inevitably result from the drastic curtailment of the food subsidies.
Considerable attention has been given in debates in recent years in the House to the problems of the cost of living. When a far steeper rise occured than has occured since the advent of the present Government, there was very loud clamour through the country, a clamour initiated and fanned by the then Opposition, and, indeed, a clamour that was to some extent assisted by some of those who are now supporting the Government.
When some of the causes of that situation were attributed to external circumstances, very little attention was paid to the reasons then given. Criticism was voiced that the remedies applied were ineffective. It was asserted that the external influences operating, that the impact of world armament and of stockpiling resulting from the Korean war could not have a very great effect here. That type of propaganda was reasonably successful and, no doubt, in the early stages a great number of people were under the impression that it was difficult to imagine how the effect of that war could impinge on the economy of a small island such as this.
When the present Government assumed responsibility for dealing with the situation, the effects attributable to the Korean war loomed largely in the reasons put forward by them for the deterioration of the situation and for the rise which has occurred in the prices of a number of commodities. But all these considerations are subordinate to the proposals which the Minister and other Ministers have suggested to bridge the gap between expenditure and revenue and to correct the import excess. As I said, none of the remedies propounded in this Budget will correct the import excess. In fact, when the increases in the duties on tobacco, beer, and spirits were announced by the Minister it was expected that they would not result in any diminution in consumption, because the revenue expected is based on consumption remaining approximately the same. Consequently, the arguments we have heard about saving dollars and reducing the drain on the dollar pool have no validity in the context of this Budget and no validity when applied to the figures which the Minister gave a couple of weeks ago on the Vote on Account.
The Government hope that the increased tax on tobacco will not result in a diminution in the quantity consumed because, if it did, the revenue from that source would be reduced. No remedy for reducing the imports from the dollar area was propounded either on the Vote on Account or during the discussion on this Budget. It is obvious that the Government do not expect to achieve a saving of dollars in tobacco imports and we have not yet been informed of the other measures which it is proposed to take to reduce imports from the dollar area. It is significant that that aspect of the problem has been passed over in silence.
During the debate it was suggested that we were living on American dollars for the last three years. Deputies opposite must appreciate the damage that statements of that kind do to our relations with our friends in the United States. This country appreciated the help afforded by the granting of American dollars through Marshall Aid. It is not without signifinance that last May the head of E.C.A., who might be accepted as an impartial expert on the problem, expressed the view that Ireland had achieved results in the short space of three years, which otherwise would have taken a generation to achieve, as a result of the granting of American dollars. The fact that we were able to use these dollars for development purposes and to avail of the technical assistance projects provided by E.C.A. cannot but have resulted in an improvement in the technique and experience of those who were enabled, through that assistance, to go to the United States and to avail of the courses provided there. It is ungracious at this stage, when Marshall Aid is ended, to allege that we were in any way subordinated to the decisions or beholden to the Government of the United States in either economic or military matters. The members of the Government know that that was not the case. In fact, it is common knowledge that discussions have been proceeding since the enactment of the Mutual Security Act with a view to availing of the sum of over £5,000,000 which still remains available and which this Government did not succeed in spending out of the Counterpart Fund.
That money is still available and the discussions are still proceeding. Deputies opposite should remember that before they make the allegation that we were in some way or other pledging to act and direct our policy because of the acceptance of Marshall Aid. The only obligation we undertook in accepting Marshall Aid was the obligation, which will be honoured, to repay the loan which was thereby granted.
It is quite obvious that, because this Government is making heavy weather, because the Party opposite find it difficult to defend the conditions at present for which it was responsible, because they recognise unpopularity of the measures proposed, because they appreciate that any straw will be clutched at by a drowning man, they now seek to introduce the suggestion and allegation that, in some way or another, this country, by its acceptance of Marshall Aid, had pledged its independence or forfeited its right to take independent action economically or militarily.
Those, of course, with a knowledge of the facts—and it is reasonable to assume that the present Government have some knowledge of the facts— recognise that that situation and that picture presented by some Deputies opposite and some of their supporters is not in accordance with the facts, but it is wrong nationally and bad the prestige of the country and bad for the welfare of the State that any suggestion should be voiced of the fact that that loan was accepted. It was accepted because it was recognised that it was given in a magnificent spirit, so that we might develop our economy and adopt plans on the assumption that this money was given to rehabilitate the economy of Western Europe.
The fact that this Budget fails to provide a remedy is significant. It is significant because of the harsh proposals incorporated in it, because it came at the conclusion of a campaign in which the country was led to believe that it would result in specific proposals being introduced which would provide a remedy for the import excess and for the reduction in the heavy import excess over the last years.
It is true that this Budget will effect reductions; it is true that it will effect a reduction in the amount of food consumed by many families; it will effect a reduction in the standard of life of large sections of the people; it will affect intimately the lives of every single section of the community, and affect some of them intensely. No Budget in recent times has affected the people so much but the reductions provided for here will not result in any serious alteration in the import excess. The Minister's references to it yesterday showed that he recognised that whatever proposals are incorporated in this Budget cannot achieve any serious change and cannot effect any really important improvement in the situation that has occurred. The Government took the responsibility of bringing in an early Budget in order to clarify the situation.
It is quite obvious the situation is clarified. It is quite obvious that this Government had decided to adopt the remedies proposed in Britain and to apply them to the situation here. But it is also quite obvious that they have not faced up to the results of these remedies or to the consequences which will follow. We had here to-day a defence by the Minister for Industry and Commerce of the increases in food prices and we had the suggestion that, because these increases were to give beneficial improvements under social welfare and children's allowances, benefits would accrue to the community. It was alleged that the increases which were to be granted in these social services would more than offset the increases in food prices. I challenge the Government, and I do not believe they have made any calculation to prove it, to show that these added benefits will offset the rise in the cost of foodstuffs. Does anybody believe that the increases which will follow will in any way be offset by the social welfare benefits? When this Government announced its programme after the last election, one of the proposals in the 17-point memo which was published was one to increase children's allowances. It was not then announced, either as one of the 17 points or subsequently, that it was proposed at the same time to increase the cost of living.
No calculations have been made, or if they have been made they have not been given to the House, with a view to estimating the rise in the cost of living that will accrue. It is quite obvious that the Government was staggered by the estimate of the rise in the cost-of-living index that would result from the alterations in the food subsidies. It is probably only academic to consider what the rise would be. The real rise will be felt by the people who have to pay these increases; the real impact will have to be borne by all sections, and it is obvious from the increases now proposed and which will come into operation that applications for wage increases are inevitable. The Government appears to have avoided any consideration of this problem, or if any consideration has been given to it, then the results that will accrue from these increases have not been fully understood or sufficiently investigated. I move to report progress.
Progress reported.
The Dáil adjourned at 10.30 p.m. until 10.30 a.m. on Friday, April 4th, 1952.