Prior to the Adjournment last night, I had been discussing the fact that, during the months preceding the introduction of this Budget, a case had been made by Government speakers to the effect that the debt created by the Opposition during its three years' period of office necessitated stringent measures if the Government was to put the country on a sound financial basis. I think it would be desirable to examine the finance accounts for the year 1938-39 and compare them with the finance accounts for the year 1947-48. That was a period during which the Fianna Fáil Government was in office. During that period, it will be seen from the Tables of Account No. 26 of the financial accounts for the financial year 1938-39 and Account No. 25 of the financial accounts for the financial year 1947-48, that the total deadweight debt in 1938-39 was almost £31,000,000, and in 1947-48 it had risen by over £16,000,000 to £47.291349 million. That was during a period when there was no constructive work such as the inter-Party Government carried out during the last three years. Nobody blamed the Government for the fact that it was impossible to build houses or impossible to construct hospitals, because it occurred during the war period, but it is significant that, during the period of almost a decade when the previous Fianna Fáil Administration were in office, no large-scale building programme, no capital development work of any magnitude, was being carried out, the deadweight debt increased by over £16,000,000.
It is true that there has been an increase in debt in recent years. Does anyone suggest that the house-building programme should have been postponed? Although, in the strict economic interpretation of worth-while assets, houses are not included, it is recognised that the social benefits which the country secures by a large-scale house-building programme outweigh whatever temporary economic-losses may be occasioned; in the long run by improvement in the health standards, by providing proper accommodation, by enabling our people to live in decent conditions, a substantial improvement in the health of the people is effected with the consequent reduction in the expenditure on hospitalisation and on health services.
It is noteworthy that, although the Estimates which were presented to the House contain a note on page iii that it was not proposed to designate "particular items in the Supply Services as ‘capital services and, therefore, proper to be met from borrowing'", and that it was necessary "to reconsider the validity of the description ‘capital services' in particular cases; that it is only in the context of the Budget that a full estimate of Exchequer outlay on capital and current account will be available", when the Minister came to present his Budget on Wednesday he dismissed the matter in a few short sentences. He said, on page 38:—
"I am by no means satisfied that all of the voted expenditure described by the previous Government as ‘capital' merits that description. Even if it did—and this is an important point—it is only if savings are available for the purpose that it would be unharmful in our present economic circumstances to borrow to meet such capital outlay."
Later in the Budget speech he announced the Government's intention of floating a loan for capital development purposes. Now the country is entitled to know whether the Government proposes to depart from the capital development programme initiated by the inter-Party Government and, if so, when they will make up their minds what items are properly designated under capital and what under current expenditure. He said they had not time to examine the problem and so decide which was proper to be described as capital and current expenditure. I do not think the country accepts that answer. I do not think that it is fair to mislead the House and the country by the note regarding capital services in the Estimate presented in February and then to dismiss it in a few sentences in the Budget speech.
It is, I think, nothing to be ashamed of—and the House and the country expected it—that when the war ended a large-scale house-building programme was initiated. We proceeded with careful plans under which the local authorities erected a large number of houses and under which facilities were provided for private builders. It is extraordinary that since the change of Government last June there has been a considerable drop in the number of houses constructed. The figures for local authorities have shown a drop and most serious of all the figures for Dublin City show that in the month of January this year there was a substantial drop in the number of houses constructed as against the month of January, 1951.
It is not sufficient to say that they propose to proceed with essential capital development and, at the same time, by an administrative action, prevent local authorities from proceeding with the necessary house-building programme. It is common knowledge what has occurred through administrative action, through procrastination and delay in coming to decisions in the Department of Local Government, through the confusion that has been created by ministerial speeches, that the restriction of credit has operated on the construction of houses by private enterprise. The fact that interest rates have been increased, that banks have notified their customers that overdrafts must be reduced, that a great number of builders and groups organised for the purpose of the Housing Acts into companies, have been obliged to reduce their overdrafts suddenly, has to the knowledge of every Deputy reduced the output of houses, created unemployment and delayed the work which was well in its stride and which in the short space of three years attained new records for house construction in the country.
When the Minister introduced his Budget he admitted that the revenue which the Minister for Finance budgeted for last year exceeded that which was originally anticipated. It is not sufficient for the Government to say that this imposition of taxation was necessary in order to bridge the gap, in order to pay off the debt, in order to meet the expenditure incurred by the previous Government. With regard to the Estimates presented by the previous Minister for Finance in May last, revenue was so buoyant that the sum anticipated was exceeded by £2,000,000. Remember, in presenting his Budget last year the then Minister for Finance could only provide taxes to meet the expenditure that he anticipated: the actual expenditure was carried out by the present administration. When the present Minister discovered, shortly after assuming office, that revenue would be insufficient to meet expenditure, it was his duty and responsibility to take whatever steps were necessary in order to provide an increase in revenue. It is significant that he had little to say on that aspect of the problem and that he mentioned that when Ministers made speeches drawing attention to this problem it was described as "creating a scare and creating uneasiness" and that if the Government had decided last year to float a loan the conditions created by the alarm which had been generated by their speeches would have prevented a loan being properly subscribed.
The present Government could have imposed taxation last July or last August. There were two precedents for that. The Supplementary Budget of 1947 was not for the purpose of meeting expenditure that had been announced in the original Budget but to provide subsidies for the essential foodstuffs which had suddenly increased in price. In the autumn of 1931, the then Government discovered that the estimated revenue which was provided for in the Budget of that year would be inadequate to meet the rate of expenditure then proceeding and a supplementary or second Budget was introduced. On this occasion, according to the Minister, the Government discovered shortly after they assumed office that expenditure was outrunning revenue and that it was obvious that there would be a deficit at the end of the year. In order to avoid the unpopularity of a second Budget the Government decided not to take remedial measures to meet the situation. They deliberately inflated the bill by adding a whole series of additional Estimates such as, for instance, a sum of over £3,000,000 for fuel losses. That particular loss was described by the present Tánaiste and Minister for Industry and Commerce when he was in opposition as one which should be funded and which should be regarded as part of the expenditure incurred during the emergency. In fact, he stated in this House that the Government could count itself lucky if they escaped with that liability. When the Government discovered that, as they allege, expenditure was outrunning revenue instead of taking steps to remedy the situation either by floating a loan or by providing for increased taxation they proceeded on the assumption that they could mislead the country and create confusion by inflating an expenditure that was already high. Every increased expenditure that could be discovered was added to the bill and a huge total of Supplementary Estimates was brought before the House. It is these Estimates and these increases—some of them paying for debts incurred during the previous Fianna Fáil Administration—that have inflated the bill and added the burden to the community.
It is estimated by the Minister for Finance and the figures for revenue prove it, that the estimated amount which the previous Minister for Finance expected would accrue from the taxes imposed in the 1951 Budget was not only realised but exceeded by over £2,000,000. When the present Government discovered, as they allege, that revenue was outrunning expenditure, they had a duty—if they were serious in their attempts to govern the country and to provide the country with a sound economy—to provide the necessary taxes in order that revenue would meet the expenditure that was then being incurred. But however important these questions are—however much discussion has been devoted to the problem of the capital expenditure programme and to the necessity for creating a favourable balance of trade—the real influence and impact of this Budget is in the way in which it affects the pockets of the people. This time last year, or a little later, the inter-Party Government increased by the small amount of 2d. a lb. the price of butter and they added a small increase to the price of petrol—only half the increase proposed in this Budget The Fianna Fáil Party and a number of their supporters—some of those who have since given their allegiance to them in this House—denounced the imposition and criticised the action of the then Government. They denounced the serious burden that was being placed on the housewives. That campaign culminated in a large-scale newspaper advertisement portraying a harassed housewife who was faced with the various increases that had occurred and who did not know how to make ends meet. If, this time last year, an increase of 2d. per lb. on butter—which brought the price from 2/8 to 2/10 per lb.—was regarded as excessive and as a burden that the people could not bear, what words can describe a rise from 2/8 per lb.—which was subsequently increased by the inter-Party Government to 2/10 and then further increased by the present Fianna Fáil Government to 3/—to 3/10 per lb., which will operate from next July?
Sugar has gone up from 4d. per lb. to 6½d. per lb. The two-lb. loaf has gone up in price from 6¼d. or 6½d., as the case may be, to 9d. Are these increases not greater than the whole rise in prices that occurred not merely since the inter-Party Government took office but in the years immediately preceding that, when the previous Fianna Fáil Government were in power? This Budget has been described as an intolerable burden, as unjust and unnecessary. Nobody suggests that if expenditure on essential public services has been incurred— and if these services are demanded by the people and it is decided to provide them—it is not necessary to impose taxation in order to meet these increases. The increases that have been imposed in this Budget exceed the payments which will be made either by the improvements that are proposed in the Social Welfare Bill or in other additional expenditure that has been incurred. The proposals in this Bill, as Deputy J.A. Costello pointed out yesterday, will add an additional burden of from £9,000,000 to £10,000,000 on to the people of this country. It is quite obvious that the Government has decided to continue in office for the remainder of this year, if they can, and are not prepared to face the electorate on the basis of this Budget. They have decided to let time ride in the hope that next year when the full effect of the operation of these taxes can be assessed it will be possible to repeal some of them. It is quite obvious that they are anxious to allow some time to elapse in order to try to consolidate their position and they are not prepared to throw the five beauties to the wolves.