I will give the Minister every opportunity of examining what we have to say about it but I would like to finish my sentence. I do not think there are Deputies in this House attached to any Party who would not claim that when it comes to dealing with vital matters affecting the economic strength and well-being of our people, that they stand above Party and if they stand for Party they only stand for Party as an instrument ministering to the economic strength and the social well-being of our people. I am not rubbing the Minister's nose in this, and I would ask the Minister to believe it, when I inquire: Is it true that the effect of this Budget is to take £11,000,000 odd in taxation out of the people's pockets and that it is going to put £8,500,000 more expense on the people over the present prices of foodstuffs for the last three-quarters of this year?
I say that the facts that are here in the Minister's statement and in the tables put before us are there to be examined by every person here and I say emphatically that that is a fact. There is no one going to go down before the people to-day and tell them that they are not going to pay more for sugar, for bread, for tea and for butter, for all those items from which the subsidies are being removed. Who is going to stand up and persuade the people that is not so? The people know it. They are told it. They have been told how much in the £ they have to pay for these additions. There are additions going to be made across the counter and they can be figured out from the Minister's statement.
If the subsidies were not withdrawn, 2/- per head per week would be paid. One shilling and sixpence will be taken off—and that 1/6 works out at £8,500,000. Let us, therefore, stick to this part of my argument at any rate: £19,870,000 will be taken out of the pockets of the people partly by way of taxation and partly by way of additional payments for food across the counter. That will be the effect of this Budget on the pockets of the people. We must also keep before our minds what effect this Budget will have on employment and on industry in general. When somebody asserts that the Government are budgeting for £10,000,000 more than they require, it is necessary to examine the question carefully.
Let us examine the headings of Deputy J.A. Costello's speech. The Minister indicated just now that nobody will believe these calculations. I do not care whether the calculations I put before this House will be found to be justified or not but I consider that if they are wrong I should be told that they are wrong because, if they are wrong, we want to know what is right so as to bring about a clear and simple discussion on this Budget. The more this debate continues, the more obvious it will be that we cannot get down to a clear discussion either on the intent, which is important, or the effect of this Budget, which is important, too, until we clear up these matters.
When we come to deal with the question of what the Government is saving in the matter of subsidies we have to compare what the total subsidies are with what the people will pay when the subsidies are withdrawn. If the difference between what the people pay and the total estimated subsidies is not what the Government are going to have to pay themselves by way of subsidy, then let us examine that figure and ask why the amount of money saved by the Government and the amount of extra money paid by the people is not the same.
The Minister for Industry and Commerce spoke immediately after Deputy J. A. Costello. Dealing somewhat lightly with the matter, the Minister for Industry and Commerce indicated that the increase in the price of homegrown wheat, and possibly in the price of imported wheat, would, at the end of the nine months' period, affect the amount of money to be paid by the State by way of subsidy. Let us have these figures. When the Estimates for the £15,000,000 subsidies were prepared, the Government, no doubt, had in mind what they would do in regard to an increase in the price of wheat. All the Minister for Industry and Commerce had to say with regard to it was simply to refer to the possible increase in the price of wheat.
The Minister for Social Welfare, however, dealt with the matter at greater length. We see at column 1523 of the Official Report of the 4th April, 1952, that the Minister for Social Welfare divided up the subsidies in respect of bread, flour, tea and butter and gave explicit figures as to what the saving to the Government would be. He stated that the subsidies payable according to the Estimates in respect of bread and flour amounted to £9,280,000 but that the saving would only be £2,710,000. He stated that the subsidies payable, according to the Estimates, would be £2,440,000 in respect of tea and that the saving would be £1,800,000. He said, with regard to butter, that the estimated subsidies, payable according to the Estimates were £3,550,000 and that the savings would be £2,158,000. It would seem, according to the Minister for Social Welfare, that the revised expenditure which the Minister for Finance would have to meet in respect of bread and flour would be £6,570,000; tea, £604,000 and butter, £1,392,000, and that when all these sums were put together to represent the original Estimates—the revised Estimates for Government expenditure and the saving to the Government—the figures were £15,234,000, the original rate, and £8,566,000, the revised rate of expenditure—and he claimed that the saving would be only £6,608,000. One would be inclined to jump a bit at these figures and to say that, again, the Minister has mixed up his figures and that instead of accepting that a sum of £8,580,000 would come out of the pockets of the people across the counter—as I have shown to be correct —the total spending by the Government would be only £6,670,000 and that these figures were transposed because what the Minister claims is that the amount that will be paid in subsidy by the Government is £8,566,000, which is the sum that the people will pay out of their pockets.
If what the Minister for Social Welfare stated is correct, then the effect of what is being done with these subsidies is that instead of having to pay £15,250,000 between what goes over the counter and what goes in by way of taxation to pay the subsidies, a sum of £17,146,000 will be paid—or that the shift in subsidies between all the various frills that are involved will cost £1,900,000 that would not be required if the subsidies were left alone and the Government paid the subsidies they had included in the Estimate.
I wonder if there could be even a little preliminary appreciation of that point. It is figured out by simple subtraction and division that, in the three latter quarters of the present financial year, the people are going to have to pay £8,580,000 more across the counter and that if all that was being spent on these foodstuffs by State subsidy and additional private purchasing was only to be £15,250,000, then all that would have to be paid by the State would be £6,670,000. But the Minister for Social Welfare states that, in the presentation of the case to us, the Government take it that they will have to pay out £8,566,000. What is happening at the present time is that the change in the subsidy situation is being made the excuse for taking out of the people's pockets nearly £2,000,000 more than would be taken out if the subsidies were left alone.
All I want to get settled before we get into a real discussion of this matter is whether that is true or not. If there is any flaw in it, will the Minister say what is his calculation of what the people are going to pay additional out of their pockets and across the counter and will he show how he arrives at the calculation? The Minister for Social Welfare agrees with Deputy Costello's calculation in respect of tea but differs from him in respect of butter. He says in regard to butter that there are arrears on 1st April and that they amount to £217,000. There are no arrears with regard to tea, but while normally one would expect that, if they were winding up at the end of June, there would only be one set of arrears to be minded, the Minister works out things in a general way, slaps a lot of different figures together and arrives at the conclusion that the Government's expenditure on butter is going to be £500,000 more than Deputy Costello says. We ought to have some particulars of that.
The Minister then said that his reasons for dealing with butter specially is that he knows all about it, that he does not know about bread and flour, but he nevertheless lays down categorically with regard to bread and flour that there are two items involved in what the Government will have to pay on the subsidy side. One is that, when there was sale for white flour as against the 85 per cent. extraction flour, there was a considerable Appropriation-in-Aid, but that no one will be compelled to take white flour now and that no income is expected, so that Appropriation-in-Aid will vanish, and the other, that the change from 85 per cent. to 80 per cent. extraction will cost a certain amount of money. He thinks that these two items alone are going to cost £1,400,000.
The question that arises in my mind is: If the burden is going to be so great under any aspect of this Budget, however changed as it goes through the House, what is the policy behind the change from 85 per cent. to 80 per cent. extraction just at this time and what are the people going to pay for it by way of additional price for the bread made from the lower extraction and loss of the appropriation. The main thing which has to be worked out in the end—and for that purpose the effect of the change in regard to subsidy on all these items of foodstuffs has to be examined—is why it is that whatever the Government are doing with regard to subsidies as proposed at present is going to cost the people, between cost over the counter and cost to the taxpayer, in the region of £1,900,000 more than they are paying at present.
The second point Deputy Costello made was that, in the matter of reserve stocks, there was over-budgeting to the extent of £1,800,000. The Minister for Industry and Commerce purported to comment on this matter and he said something which I do not think is very relevant. Further, one has difficulty in understanding what he refers to. Reserve stocks which were accounted for in the table explanatory of the current Budget of 1951 by Deputy McGilligan to the extent of £1,793,000, or £1,800,000, were not included in any statement on the capital side of the Budget. The Minister stated that, in order to set up a true reserve of stocks in certain Departments as provision against higher prices and possible shortages, he was arranging for the purchase of these stocks, but that he did not consider it proper budgeting to pay for all these stocks in the year of purchase. He felt that if he were laying up for the future and laying in stocks which were only going to be used in two years' time, the year in which the stocks were used was the year in which they ought to be budgeted for and the necessary taxation imposed.
At column 1293, Volume 130, No. 9 of the Official Debates the Minister said:—
"May I say that the cost of each of the Supply Services has been accurately calculated and there has been deducted from that cost every item of expenditure which Deputy McGilligan last year chose to describe as a capital investment? There is, therefore, no element in that sum which could be so described and in so far as any expenditure is contemplated upon reserve stocks in this year and that expenditure could legitimately be described as an investment, then the amount has been deducted in calculating the bill which the taxpayer has to meet."
I do not think that last sentence is interpretable at all. The question that arises for us is this. With all that has been said regarding difficulties throughout the world, with all the talk about the possibility of this country being put into pawn to the United States, with all the remarks about demands for bases in this country, are we to understand that, while members of the Government Party are speaking in that strain, no provision has been made for the building up of reserve stocks? The Minister states in his speech that, whereas Deputy McGilligan made provision for £1,800,000 last year, only £800,000 was spent, because of the unavailability of some of those goods. I take it that the necessity remains to get the goods to the extent of that £1,000,000. Furthermore, if there is any reality in the situation painted by various Government speakers, surely they must, somewhere through the Estimates that have been put before us, be providing for further reserve stocks in the same way as the various Government Departments were providing for them when Deputy McGilligan presented his Budget statement in 1951? Therefore, can we not take it that the necessity remains to get goods to the extent of the balance of £1,000,000, plus an additional amount equivalent to what was received last year?
We say that the Estimates as presented to us must cover the building up of reserve stocks in relation to the Department of Local Government, the Department of Health, the Board of Works and so on; and that it is not proper in any year—and particularly in a year in which the Government are making such demands upon the people —to charge by way of taxation the cost of goods that are not likely to be used for two or three years. Anyone will understand that if you buy goods now to be used in five years' time it would be improper to charge the whole of that amount to the current Budget. The same applies if it is three years or two years. The Minister has to tell us whether it is a fact that no reserve stocks are being laid in for the work of the next two, three or four years for services connected with Local Government, Public Works, Health and other Departments. Has the Minister anything to say regarding reserve stocks being built up in connection with defence? These are matters that we ought to know about before we can with any kind of justification take a decision on the general question involved in the taxation that the Minister has put before us.
The third point concerns item No. 4 in the table explanatory of the current Budget, where the Minister adds:—
"Provision for proposals in the Social Insurance Bill, 1951, and for other current services, £3,000,000."
That matter has been commented on by the Minister for Social Welfare. He has pointed out that the Minister for Finance has other services in mind as well as social welfare. I think it is unprecedented to put down a general intention of that kind either in an Estimate or in a table explanatory of the Budget and put £1,000,000 against it. The Minister for Social Welfare has given no indication as to the nature of the "other matters" the Minister for Finance had in mind. Deputy Cogan, however, told us that the Minister for Finance was intending under that heading to increase children's allowances and old age pensions and was going to add other social services and that they would amount at least to £1,000,000.
After listening to the variety of matters that Deputy Cogan spoke about and having seen the precision that he brought to bear on them, the Minister would be asking too much of us if he asked us to take this information, given to the House by Deputy Cogan, as being true. The Minister cannot leave that figure there for "other current services, £1,000,000" without letting the House know what exactly those services are and the particular amounts to be allocated to each of them.
The fourth heading was "over-estimation" and Deputy Costello very conservatively suggested that there was over-estimation to the extent of £2,000,000 in a bill for £107,000,000. Deputy Dr. Ryan, the Minister for Social Welfare, gave it as his opinion, as recorded in column 1530, that one need not say very much about that as it was quite evident from the experience of the last few years that there was no money to be deducted from that Estimate by way of over-estimation. The Minister for Industry and Commerce, however, speaks in a very different way. He said, as given in column 1289:—
"I will admit there is a possibility that the Estimate may be slightly wrong. However, our experience suggests that the margin for error is not much more than 5 per cent. one way or the other."
The experience of the Minister for Social Welfare was that it was not worth talking about, that it was impossible that there should be any money there. The Minister for Industry and Commerce, however, says:—
"Our experience suggests that the margin for error is not much more than 5 per cent. one way or the other."
Five per cent. means £5,000,000.
