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Dáil Éireann debate -
Tuesday, 22 Apr 1952

Vol. 131 No. 1

Committee on Finance. - Resolution No. 11—General (Resumed).

The Leader of the principal Opposition Party repeatedly asked that this important question of the national finances should be treated seriously. We might have been more impressed by Deputy Mulcahy's appeal if there had not been the singularly ill-judged, ill-advised and very partisan attacks on the present Minister for Finance for several months past. A Minister for Finance at no time has a very pleasant task, because, while all other Ministers can put forward proposals in Government for additional expenditure, new schemes and so on, the Minister for Finance has to provide the wherewithal and, once a year, he has to come before the Dáil and the country and tell us where the money is to come from that is to finance these schemes. In modern times the pressure in every democratic country has all been in favour of increased State intervention and increased public expenditure on all fronts, but there has not been a corresponding awareness or a corresponding sense of responsibility as to what that involves. Deputy Mulcahy mentioned a French writer in connection with the economic troubles from which countries everywhere are suffering at present and the need for reducing taxation.

We know, and every Deputy who has any sense of responsibility and has given any consideration to these questions must know, that reduced taxation can only come from reduced expenditure. This Government when it took office was faced with the position of just allowing a situation that they regarded as very serious and which could become very critical and have very serious results for the country, to simply proceed without taking any action. Further, if they were to take action they were faced with two alternatives, either to curtail expenditure on a large scale and interfere with existing schemes, some of them of the greatest importance, some of which had been in operation for a considerable time, while others which had not been so long in operation, were being geared up, so that the annual expenditure upon them was very considerable or to face the situation that heavy financial provision must be made for them. If these schemes were to proceed, and if the housekeeping expenses of the State were to be provided for, it was quite clear that additional taxation would have to be levied.

I should like to deal with this matter as reasonably as I can, and to put forward my point of view, realising that there are many other points of view, but I think that the Government was right and will have no difficulty in defending itself before the country for the position it has taken up in putting the facts before the country as we see them.

As we see them?

"As we see them," and the statistics are there. Deputy Davin is one of those Deputies who speaks and votes against additional taxation on a few days of the year and spends the rest of the time asking that additional moneys and additional expenditure should be made available by the Minister for Finance. But does he ever ask himself where the money is to come from to finance these schemes, or has he ever given any thought to the fact that it is quite obvious under modern conditions even for countries far in advance of ours— owing to the tremendous increase in costs, the rapidity with which the world is moving, the tremendous extension of State services and of the public expenditure that is being asked for—and quite impossible, with the systems of taxation that are in vogue, to keep pace with the demands that are being made upon them. Look at the condition of France.

Is that a fair comparison?

It is a fair comparison. France is an agricultural country and, no matter what its difficulties may be it will, like ourselves, have this consolation that it will probably be able to feed its people.

What is France paying for defence?

I am not going to be interrupted by Deputy Davin. I simply say this, that the Government of France, through the system of taxation which exists there, has not been able to face its responsibilities. There are other countries in the same position. Take the United States of America which can increase its production by 10 per cent. per year. Recessions and temporary depressions do not matter there because the machine is so gigantic and the economic power so colossal, that they can gather up the slack and go ahead. President Truman has said that they can double their standard of living in a generation. But what about poor old Europe? We are a European country and we are bound closely to Great Britain in trade and economic matters.

When Deputy MacEoin goes down the country and tells us that the pound may be worth, or is going to be worth only five bob, why has he agreed to spend the Marshall Aid Counterpart Fund moneys on land development schemes and on agricultural production for the purpose of providing beef and agricultural produce for a country that can only pay us in pounds? They are only worth to us what they will purchase in the international market where prices are constantly rising. Recent reports tell us that a country like Sweden, in view of this lack of equilibrium and the difficult situation that has been created by high international costs, is taking steps to budget for a heavy surplus.

We also have an example from South Africa, one of the most promising countries in the world. Deputies, I take it, have received a copy of the South African survey. The people of South Africa can hardly be accused of not having an independent spirit and a policy of their own in these matters. In his Budget speech, delivered on the 26th March, Mr. Havenga said:—

"Since my last Budget speech the shadow of inflation has darkened and the serious balance of payments crisis of the sterling areas has cast a gloom over large areas of the world.

The Union itself is not faced with a crisis, but we have not escaped the consequences of the world-wide inflationary forces. Basically the present inflationary conditions are due to the fact that few countries are in a position to devote a considerable part of their national income to defence and at the same time, not only improve the standard of living of their people, but also find the resources necessary to carry out a comprehensive programme of development.

No Government in a democratic country can deliberately slow down the pace of development and resist the pressure for a higher standard of living unless public opinion is ripe to accept the sacrifices involved in such a policy."

He then goes on to talk of the action of the British Government, and further on he says:—

"The measure of internal inflation that we have experienced so far is a reflection of the strain that we have imposed on our economy by trying to maintain consumption at a high level and at the same time endeavouring to find the resources necessary for the tremendous developments that have been taking place.... Apart," he says, "from increased taxation we will have to save more money by consuming less; increase our producetivity and slow down the rate of expenditure on development."

Does he mean that the whites or the blacks are to eat more?

I do not know.

If the Deputy is willing to go he will not be asked.

I only want to know who is to eat less.

When we came into office some of us took the opportunity immediately we were acquainted with the position, to acquaint the country, in so far as it lay in our power, with the fact that the predecessor of the present Minister for Finance had left very considerable obligations on his successor and that he had not made provision to meet those obligations. He provided £1,500,000 which was fully mortgaged. In fact, as the House knows—it has been repeated in this debate—as a result of the arbitration award the public service cost an additional £3.6 million in the past financial year. During the coming year it will cost £3,500,000. The old age pensioners were given an increase, at a cost of an extra £1,000,000 last year. When the former Taoiseach was Minister for Health he issued a circular early in May last year in connection with increases in remuneration in the health services down the country. As Deputies know, additional expenditure on local health services has to be provided from the Exchequer. The result was that one of the present Minister's unforeseen liabilities was an amount of £850,000 which had to be provided last year by way of an addition to the health grants.

Then there was the question of Córas Iompair Éireann, in connection with which there was the recoupment of interest amounting to £433,000.

There were losses for the year amounting to nearly £1,900,000. That was over £2,250,000. There was also the question of interest and repayment, the charges on the public debt, coming to an additional £2,000,000. All these the Minister gave a list of in the Supplementary Estimates that had to be introduced. Some may say that they were not the responsibility of our predecessors but, in the main, they were unless the Minister for Finance and the Government were to embark upon a policy of wholesale retrenchment such as his predecessor had promised in 1948 but which he never carried out.

I am always amused by these tremendous tirades on capital investment when I remember the scoffing, jeering remarks of the former Minister for Finance at the Fianna Fáil plans for capital investment as put before the country in 1947, the idea of spending millions on public roads, on telephones, tourist traffic and so on. He laughed at the very idea of it and he seems to have carried some of his 1947 ideas—we must assume they were the orthodox Fine Gael ideas at the time—into his Budget of 1948 when he promised a retrenchment and a careful examination of all capital expenditure with a view to cutting out everything that could possibly be eliminated on grounds of inefficiency, destroying initiative and private enterprise and so on. Later on, then, we had this wonderful policy of capital investment, but I have always wondered by what mental processes did the former Minister for Finance, who was so antagonistic to our programme of capital investment in 1947, who threatened wholesale retrenchment and who did, in fact, embark on a policy of retrenchment with regard to certain important schemes that we were very much interested in when he took up office, could, in the succeeding years, have persuaded himself that the capital investment policy which is now spoken so much about was really ever a bona fide policy, was really ever a policy that could have been taken seriously, could even have been regarded as capable of being carried out to the extent claimed.

Before I deal further with that point, I should like to say, with reference to the current Budget, that Deputy Mulcahy spent a good deal of time trying to persuade us that there was over-estimation, that the expenditure would not reach the estimate that the Minister for Finance has said. Is it suggested that the Minister and his advisers are not capable, are not honest or that there is anything wrong with the figures they have put before the House? There is no foundation whatsoever for such a suggestion, and, if that is not the suggestion, what does the Deputy mean? Was there something experienced during the past three years to suggest that there is any foundation for this contention that the actual expenditure will be below the estimate?

In 1950-51 the actual expenditure exceeded the original Estimates by £1,500,000.

The Minister is in possession.

If they want to talk, let them go to the Library.

We were told by a former Minister that the Estimates for expenditure were written down last year by the then Government by something like £4,000,000. I hope the present Minister, at any rate, is going to be more honest with the people than that proceeding would indicate had been the practice with our predecessors.

Last year, the excess of expenditure over revenue was £7,000,000. Where is the over-estimation of expenditure there? The thing is, the underestimation on the revenue side, the failure to provide for expenditure that could have been foreseen, must have been foreseen in view of the position of Córas Iompair Éireann. It is suggested that the former Minister had not up-to-date information about Córas Iompair Éireann. He did not know about this £2,250,000.

He knew about the Social Welfare Bill and the social welfare proposals. He knew about the Arbitration Tribunal and he knew that the award of that tribunal would apply to all classes of public servants and would have to be met. The award was made retrospective. It was not made from the beginning of the following financial year. It was made retrospective. That £3.6 million had to be found with the result that whatever way you take it —and I challenge contradiction on the figures—there was a deficit last year of about £6.7 million.

We are not facing this difficult budgetary position and extremely serious situation in our national finances in ordinary normal times. The halcyon pre-war days are gone and for all we know they will never come back. We have been living in an inflationary situation for the past five or six years. We have not faced up to that situation.

The former Minister for Finance could not make up his mind whether we had inflation or we had not inflation. He was always telling us there were inflationary tendencies. We might have inflation. It could be very serious and so on but he did nothing about it —Mr. Micawber waiting for something to turn up. But if something turns up that hits you a wallop, and you get into an economic blizzard or into a depression, what are you going to do then when you have made no provision in advance? It shows a peculiar lack of responsibility in a Minister for Finance when the whole credit and finances of the country and, to a large extent, the economic position of the country depends upon the policy he is pursuing. The Budget statement, of course, as I said when in opposition, contained some wonderful maxims. Every year we had these wonderful maxims, but they remained maxims— they were never put into practice.

The Leader of the Labour Party got up here and made a tirade about inflation. He said there was no such thing as inflation. Then all these countries in Europe which are so perturbed about the international level of costs, the balance of payments and the reaction that State expenditure and over-consumption is having in worsening that problem and in getting them into greater difficulties if they do not take steps in time to remedy it, must be all fools. They must not know what they are talking about, although they are independent countries like Sweden and Switzerland, which have managed their affairs pretty well and which have been regarded as models for all the small nations, not for years but for generations. They are not going to allow themselves to be caught up by some international crisis. They are going to take steps in advance to meet the situation.

We can legitimately complain that the last Government allowed—to put it very mildly—a feeling of complacency to grow up—that we were all happy. The phrase was: "Giving the country and the people a very easy time." But how can a country any more than an individual have an easy time? It can use up its accumulated savings but what is going to happen at the end? Deputy Norton says there is no inflation. Last year the Budget speech, as reported in column 1882 of the Official Report, said:—

"This is an appropriate point to introduce the term ‘inflation'. The classical definition, in popular language, is ‘too much money chasing too few goods', and therefore, driving up prices. In our circumstances the definition might be reformulated as ‘too much money attracting too many imports', since overspending by the public and the State is able to find an outlet in purchases from abroad financed not from income but from our past accumulations. In a state of normality we should be able to live on our income and, indeed, save enough of it for capital purposes not only to maintain but actually to increase our production and, therefore, our standard of living. 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."

The Minister went on to examine that and he concluded, as reported in column 1884:—

"Only if the gap in the balance of payments is narrowed so that external disinvestment is balanced by additional home investment— rather than by excessive consumption —can we be satisfied that as a nation we are making ends meet and not wasting our past accumulations."

I wonder what Deputy MacBride would think of this:—

"One of the great benefits conferred by the possession of external assets is ability to ride out periods like the present of exceptional difficulty and stress, but this external mass of manoeuvre is the mainstay of our economic independence."

"The mainstay of our economic independence", because it is the cushion that is there against these vicissitudes, these fluctuations, these depressions that come almost unawares, factors over which we have no control.

Again I ask the question that has been asked in this Budget speech: What is to happen when all these sterling assets have been exhausted, if, as is the case at present, they are being exhausted in a great degree to provide for consumption that we should be paying for by our current labour and by our current production? What is to happen then? Does not our standard of living go down then with a bang? Do we not then have real unemployment, real distress and real hardship? Because the Minister for Finance wants to put the affairs of this country into a solvent condition, to put our finances on a proper basis so that we can face the future with confidence and carry out our plans, knowing that we shall have the wherewithal to enable us to do it, and to build up our resources intelligently and wisely, and to develop them as far as ever we can within our means, is it right or proper, because the Minister has put that policy before the country, and because he is trying to right the situation and to clear up the very difficult position that he found, that he should be attacked in this partisan manner as making "violent", "savage" and "brutal" attacks on the standard of living of the people?

I wonder what the standard of living of the people, of the Irish worker, would be if the present Minister for Finance had allowed the situation to drift and if we were to enjoy a position of laissez faire for another two or three years. Who is going to right the situation then?

Is this the old Manchester school?

It is. It is the speech of the Minister for Finance in the inter-Party Government setting forth his policy only last year, as reported in column 1878. Probably Deputy Davin never read it. I suppose he never reads any Budget speeches. I commend him to read it now for a while.

I am enjoying you.

This is from column 1878 of that speech:—

"When what we produce for export does not go as far as before towards paying for our import needs we suffer, as a nation, a reduction in the standard of living we can afford."

Listen to this:—

"Increases in remuneration offer no escape from this unwelcome development; 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 are taking measures intended to limit price increases to those justified by increases in costs."

I suppose Deputy Davin and his colleagues found that very satisfactory.

You are mixing deflation with inflation.

He does not know what either means.

What has made the position more difficult is the fact that in 1949 we had the devaluation of the £. The Government here followed suit and, as a result, in the international market we had to pay 44 per cent. more in pounds for the imports that we are receiving from the hard currency areas.

Then we had Marshall Aid. For a period of two years the Marshall Aid moneys were being injected into the Irish economy. Everything was buoyant, and everything was lively. The Minister could say that he was giving the people and the country a very "easy time," but Marshall Aid has come to an end and no provision had been made to adjust the country and the economy of the country to that situation. It must have been foreseen that it would come to an end. We are now faced with the position that we have to stand on our own two feet. We are either going to be mendicants, going around with our hats in our hands begging for favours and for financial assistance, trying to make the best bargain we can, or we are going to face up to our responsibilities, as a free people and a free nation and citizens, with a polity that is worth struggling for and worth making sacrifices for. We are going to face our responsibilities or else we are going to let things drift. Where, I wonder, are we going to get the financial assistance? Who is going to lend us the money? In all this talk about capital investment and borrowing, it is apparent that it is forgotten that there are two parties to State or private borrowing: there is the lender as well as the borrower.

I quoted here a few weeks ago the former Minister for Finance in a debate in Seanad Éireann calling attention in connection with the question of housing finance to the fact that people cannot be forced to lend money to the State. They must be offered certain terms and, apart from the terms, they are interested to know what the money is being expended on, the kind of enterprises being embarked upon, whether they are productive enterprises, whether they are going to add to the real wealth of the country, whether they are going to benefit the country generally, or whether the Government is just borrowing money to get out of its difficulties and just framing up some kind of Budget and putting into it some new definitions. The items that formerly were paid for out of revenue collected from taxation, such as housing grants, the provision of schools and so on, items that had been regarded as proper to come out of revenue and to be chargeable to taxation, should be transferred into the capital side of the Budget.

There is a very serious question as to whether there is any sound argument put forward that they are productive. I would like to hear the case made some time in favour of treating housing grants, any more than day-old chicks, as proper objects of long-scale capital investment—borrowing money and repaying it by an annuity over a period of 30 years. The investing public, those who will have large sums of money available for investment, will look well around them to see where they will get the best value for their investments. They will ask themselves are the Government and the country serious, and they will ask themselves if the Government is meeting its normal obligations and meeting its Budget deficits in a proper orthodox fashion, or if it is simply postponing the evil day and trying to transfer as many as possible of what ought to be current obligations to the future.

We are told that if taxation is to be levied and money raised the very rich ought to pay. I am not aware that we have many millionaires in this country. There was a time when the Labour Party used to vote for an increase in the rate of income-tax, but now they vote against such increase. That is simply a proof of the changed situation and the new categories who are paying income-tax. I presume that the great bulk, perhaps not a corresponding bulk, but still a great bulk of the amount that is being collected is coming from the ordinary workers— skilled workers and salary earners. According to the figures available, about 80 or 90 per cent. of income-tax payers will be paying less this year owing to the increased allowances afforded by the Minister than they were paying last year. There are some 18,000 people who will be worse off to a greater or lesser degree. I think it has been clearly established that, so far as the ordinary income-tax payer is concerned—the ordinary worker, whether he be a skilled worker or a civil servant or other salary earner on a yearly income of up to £1,000—he will benefit in some degree by the Minister's proposals in regard to income-tax.

We are aware that, in order to raise the sum of money necessary to bridge the deficit of some £15,000,000, certain well-known revenue-collecting items have had to be attacked. We all know what these are. Unlike direct taxes, indirect taxation affords a choice. The income-tax payer has to write out his cheque and pass on the cash direct to the income-tax collector. He feels very sore about this. However, with regard to indirect taxation, he has the choice of restricting his consumption. If beer is being taxed, he may decide that, instead of drinking four pints, he will do with three. In the case of cigarettes, he may be satisfied with 30 per day, now that he has to pay an additional tax, while he formerly smoked 40. It is quite true that if food subsidies had been entirely eliminated during the present year, the Minister for Finance would not have found it necessary to impose this additional charge, while he formerly food subsidies. Social services and other benefits are being provided, and in the coming year between the proposals in the Social Welfare Bill, as introduced originally in this House and the amendments which are now being brought in to provide for compensation for certain people—recipients of certain assistance payments—the expenditure on these items alone will come to £7,000,000. Can the Labour Party claim that they are really consistent in voting against, let us say, increased income-tax rates or the increased tax on petrol in order to provide the moneys, a great part of which will be utilised in providing these additional social benefits? If they are not to be provided through taxation they must be provided through contributions. The Minister for Social Welfare has the agreement of the Minister for Finance and the Government in raising the moneys that are necessary very largely from taxation, and let it not be forgotten that these social service benefits, as I have said, form a very large proportion of the amount that is being raised by taxation.

It was never intended, as has been stated in the House more than once during this debate, that food subsidies should be permanent. Everybody knows that rationing will have to be brought to an end some time. There should be an administrative saving. It should be a convenience to the business community and to the public generally to have rationing done away with. We have the position with regard to bread and the wheat that produces the flour that makes that bread that we know that bread is actually being used to provide food for animals because it is cheaper than any other cereal for feeding purposes. Is it reasonable or is it contended that that is a situation that should be allowed to continue? Is there any reason, in an agricultural country like this, why we should continue rationing a day longer than is absolutely necessary, why we should not endeavour, even at the cost of some losses or some transitory difficulties when adjustments are being made in trying to get away from this artificial position, in which everybody is being subsidised for the main items of food they are consuming and the public generally is paying? There may be sense in providing social services and benefits for the lower paid or lower income classes who definitely cannot make ends meet, but is there any sense in collecting money to the tune—which it would have been this year, when there was an increase of £2,750,000—of over £15,000,000, to raise that money in taxation from the public generally to pay it out again in subsidies?

The British Labour Government were driven to fix a ceiling on subsidies. They saw that the position could not continue; two successive Chancellors of the Exchequer in the British Labour Government were responsible for that ceiling which amounted to a reduction. In this country, with food in plentiful supply, with fertile soil and with nearly half our population on the land, it is preposterous that it should be pretended that there is any justification for continuing a policy of subsidising foodstuffs at the taxpayers' expense. In any case it is thoroughly unreal and artificial. We know that agricultural prices are going up. Farmers complain that the cost of fertilisers, the cost of their raw materials, the cost of labour is affecting them. We know of difficulties, for example, about milk. Is that situation going to be made any more easy of solution by simply shutting our eyes to it? Is it not more natural and sensible to revert to the normal position so that, in the long run, milk like everything else will find its own price level. The arguments in favour of it should all be in the consumer's interests. In this agricultural country we should restore freedom to the production and the marketing of milk and milk products?

We had many references to the increased bank rate and endeavours made to fasten upon the Government the obliquy or odium of having had something to do with that. The Government had nothing to do with that any more than the former Minister for Finance had to do with it. I suppose it would be heresy or high treason if one were to suggest that Deputy McGilligan, the then Minister for Finance, was in any conspiracy with the banks, that he was a tool of the banks, in a conspiracy with them, when, in his Budget statement, at column 1879, Volume 125, of the Official Debates of 2nd May, 1951, he said:—

"In present circumstances it is desirable that the banks, while continuing to finance capital projects, the laying-in of essential stocks, and normal import requirements, should discourage any merely speculative or excessive borrowing."

Was the former Minister for Finance in league with the wealthy industrialists, these exploiters we hear so much about? In 1947 he attacked the Dublin drapers, the flour millers, the bacon manufacturers, and the former Tánaiste told us on a celebrated occasion that a great many of these exploiters, if they had their deserts, would find themselves inside the four walls of some of our penal establishments.

I remember hearing the former Minister for Finance reading out the enormous profits made by the Dublin drapery stores, and I remember, in 1948, when the first flush of enthusiasm was on him, as in connection with his retrenchment policy at the time, threatening those Dublin businessmen that if they did not reduce prices he would consider very seriously introducing an excess profits tax that would make them "sit up". He was not going to stop with that financial year; he was going to go back during the war period and find out what excess profits those gentlemen had been making when they were exploiting the consumers, as was alleged.

Then he had his opportunity when the Labour Party were in coalition with his Party of enforcing price control, excess profits tax and all the rest of it. Why did they not do it when they had this golden opportunity? The records were then available to them. They could make the case. It was not a case of making a speech in O'Connell Street. They could go and get the official evidence to justify the necessary legislation and excess profits taxation being imposed upon those people. It is rather sad at this hour of the day that the Trades Union Congress has to ask us now, after three years of inter-Party Government in which the Leader of the Labour Party was Tánaiste and Vice-Premier—the second most important person in that Government—with another Minister to support him, to do what they had ample opportunities of doing and did not do.

We have been told also that the speeches of the Minister for Finance and other Ministers, and the attitude of the Government in calling the serious attention of the country to the position with which we are faced and with which the people are faced, has done harm to employment and has created a panic and a feeling of crisis, and so forth. Does everybody not know that every country is faced with a trade recession? It is being experienced in Britain in the textile and other trades. It is in Sweden, and even in the United States. People stocked up when the Korean war started, and when the big rearmament campaigns began. They felt that goods were going to become scarce. The distributors and the big wholesalers stocked up their stores for all they were worth. Since then, they have been trying to unload these excess stocks on the market. We, with our limited market, are not like the United States. We are not accustomed to mass purchases. People do not buy six suits of clothes or a dozen pairs of shoes at a time in this country. Our market is limited.

When there is an amount of over-stocking, and when that over-stocking is a result of excess imports of manufactured and consumable goods into the country during recent years, it is quite natural that such stocking-up should have ill-effects on our Irish factories and create a certain amount of slackness. There is nothing peculiar to this country in that situation. It was making itself manifest before the Fianna Fáil Government took office.

As I said at the outset, the fact is that the State, like the private employer or the private consumer for that matter, has been faced with increased costs all the time. Costs have been piling up. When people have been calling upon the State to do more, to provide more social services, more health services, more large-scale schemes for the provision of employment, and the gearing up of housing activities to the greatest extent possible, they have not stopped to consider how the costs have been piling up all the time. It is only once a year that we have an opportunity of reviewing this situation. In fact, it was not reviewed last year. The former Minister for Finance, Deputy McGilligan, introduced his Budget. Then there was a general election and a new Minister for Finance took office. That new Minister for Finance, Deputy MacEntee, had to take over and carry on with the situation which faced him. He had to wait until the end of the financial year so that there could be no question or doubt about the position. The figures are there. The output and the income, the expenditure and the revenue, for the past financial year are there—and they are the surest indication of what is happening and of what is likely to happen in the coming year.

We have had these increased costs. If we are to maintain the schemes and services we should like to maintain we shall have to face the situation that the money must be provided and that when the Minister for Finance has balanced his Budget, in the narrower sense of providing for the actual administration—the Government Departments, and so forth—he must then turn round and contemplate the commitments which face him in the financing of these big capital investment projects. Anybody who examines these projects—for instance, the Electricity Supply Board—will realise that it is not even by hundreds of thousands of pounds but by millions of pounds per year that the expenditure is increasing.

Bord na Móna, also, is undertaking big projects which will run into millions of pounds a year. Where is the money to come from? The general belief of those who have studied these matters is that the State, or the community, is in no different position from the ordinary individual. If the ordinary individual wants to have a holiday abroad or to buy a car or a new house he must set aside a certain amount of his income for that purpose, even if he is going to borrow. He has to consider what proportion of his income he can set aside in order to provide for these amenities and for this improvement in his position and in his way of living. Very often he must give up something else if he is going to have his new house or his new car or his holiday—perhaps not even a holiday abroad but a holiday at home, which can be fairly costly in present circumstances, even if he is a total abstainer and a non-smoker, if he has a family to bring with him. The State is in exactly the same position. There is a certain national income. If we mean to go ahead with the policy of State capital investment, a certain proportion of that national income must be set aside for that purpose. If it is not set aside by way of savings and investment, the Minister for Finance has no alternative, short of closing down on all these projects or curtailing them very seriously with all that that entails, but to find the money by way of extra taxation. There is no impulse towards saving when consumption is increasing in every direction. People do not feel they have to save. It has not been brought home to them that they should do so. I suggest that it is our duty to make the people realise that if we are to have these national schemes we must pay for them. We have either to provide through taxation—the hard way— or we have to save. We must not encroach upon our accumulated savings except to the extent that is necessary to do so for worth-while projects. We must save from our current expenditure and keep whatever is there for the "rainy day". We cannot continue the position which has existed for the past two years where not alone were we using and spending and consuming far more than we were earning but where we were dipping heavily into whatever assets or resources we have. If that situation were permitted to continue much longer we should be beggars in a few years.

The members of this minority Government are endeavouring by their speeches to put those of us on this side of the House in the position of approaching the consideration of the Budget proposals on the assumption that conditions here in this creditor country are comparable in almost every respect with conditions prevailing in Great Britain. Does any member of the Fianna Fáil Party or any one of the five political perverts responsible for putting them in office believe that? Will any one of them speaking in this debate after me admit that conditions here are comparable to conditions in Great Britain either now or at any time since 1914?

Britain has been involved in two world wars. She had to pay the heavy cost of fighting these wars. In order to do so she had to sell every brass farthing of her foreign investments. Will anybody say that is the position here? This country is practically at the top of the list of creditor countries on this side of the Iron Curtain with anything between £400,000,000 and £500,000,000 of the money that was hard earned by those engaged in industry and agriculture invested in the Bank of England—in a country which two chancellors have admitted is almost on the verge of bankruptcy. I assert here, and I do not care who denies it, that this Budget is a British manufactured Budget. If it was not actually prepared on the occasion of the interview between our present Minister for Finance and Mr. Butler, there is not a shadow of doubt that the raw material for the manufacture of this Budget was bought by the Minister for Finance on the occasion of his recent visit to No. 10 Downing Street.

An exchange of views.

Do not forget that you were one of the fellows who——

I will not be interrupted by this jack-in-the-box mad Minister for Finance. I have asserted that this is a British manufactured Budget.

—— who created the riot at the Labour Party meeting.

Will the Minister when he is replying tell the House and the country why, for the first time in the history of Budget-making since the establishment of this State, it was necessary for him, as apparently it was necessary for Mr. Butler in Great Britain, to bring in his Budget in the first couple of days of the new financial year? Mr. Butler may have had good and perhaps grave reasons for rushing the introduction and passage of a Budget in Britain under completely different circumstances. Why did Mr. MacEntee, our Minister for Finance, bring in his Budget three or four weeks earlier than any Budget was ever introduced in this country? Will the Minister for Finance also explain why it is necessary here—I am not denying that it appears to be necessary in Great Britain—to increase the interest charges on all classes of loans automatically with the decision to do so in Great Britain? Will the Minister tell the House and the country, if it is not a British manufactured Budget, why was it necessary for him to slash the subsidies for the introduction of which in the first instance Fianna Fáil are supposed to be responsible? Why was it necessary for him to slash the subsidies in the same manner as they were slashed in Great Britain under completely different circumstances there as compared with circumstances here?

On the eve of the last general election, 29th May, 1951, many costly advertisements were published by the Fianna Fáil Party in our daily papers. One of them read as follows: "Fianna Fáil began the system of food subsidies to keep down the cost of living by reducing the price of essential foods." Now we have the subsidies for which they claim credit for the purpose of keeping down the cost of essential foods being slashed by the Minister responsible for the payment of this advertisement. It was admitted here recently by the Taoiseach in reply to a question that the cost of essential commodities will go up by roughly 10 per cent. How can the Minister defend his share of responsibility for that advertisement in the name of Fianna Fáil published one day before the people voted in the last general election and his action now in presenting to the House something which is quite the opposite?

We will have a young innocent Deputy, and I pay him that compliment because I do not think he has fully grown up yet politically, Dr. ffrench-O'Carroll, supporting the Minister in slashing the subsidies. What did he say on the eve of the last general election? Amongst other things he said in an election address and in an advertisement which he issued, after elaborating on the value of the subsidies—nobody knows better than he or Deputy Dr. Browne, and medical men generally, the value of cheap good food to the poor people: "If elected by you I promise to focus attention constantly on the cost of living and to press for increased subsidies on food and essential commodities." I suppose—I may be wrong in this and I will apologise after the division if I am wrong — that the young innocent Deputy Dr. ffrench-O'Carroll who issued that election address will support the Minister for Finance in slashing the subsidies to the detriment of the poorer sections of our people.

Another thing that our Minister for Finance felt obliged to do in order more fully to copy the financial policy of his British godfather was to level down the travelling allowances. I do not suppose that affects a high percentage of our people, but it is one of four or five policy points in the Minister's Budget, which appears to have been copied from the Budget of his political godfather, Mr. Butler, the British Chancellor of the Exchequer.

The Minister in his speech summed up the situation by appealing to the people, the poorest as well as the richest, to cut consumption by 10 per cent. Cut consumption and their standard of living and the costs of essential commodities by 10 per cent., for what purpose? It is quite clear that the purpose behind this Budget in cutting consumption and cutting one's standard of living by doing so is to save more money, not for the purpose of developing our own national and natural resources, but for the purpose of building up higher sterling assets in Great Britain. If the majority of the members of this House support a policy for the purpose of accumulating savings in order to ensure greater external assets in Great Britain and cutting our standard of living to provide more money for Great Britain at nominal rates of interest to enable her to carry out a policy of rearmament while we here support a policy of neutrality, then there is something very radically wrong, and I want the Minister to deal with all these matters when he comes to reply.

The only other livewire supporting the policy enshrined in this Budget, apart from the members of the Government who have spoken in this debate, is the editor of Irish Industry, the man who claims authority to speak for the Federation of Irish Manufacturers. In his laudatory article which every member has received, and I suppose read, he opens by saying: “In our view the Budget is both courageous and realistic.” The workers, especially those of them who have young families to support, will know much more about that after the 1st July and during the weeks that follow. He goes on to say——

Is the Minister responsible for that journal?

"Living on our income means living or attempting to live at other people's expense. It is just a variant of ‘something for nothing'. To achieve that purpose," he goes on —the purpose behind this Budget; he is apparently in the confidence of the Minister—"he has removed almost all subsidies so that all must pay for what they buy and not expect others to pay part of the price for them. Whatever temporary value subsidies had when introduced at first, they have lost that value long since and have become a huge incubus on the nation."

How is the Minister responsible for what appeared in Irish Industry?

It is quite evident that the Minister had a very friendly private interview with the editor of Irish Industry or, on the other hand, that the editor of Irish Industry has the confidence of the Minister for Finance.

The Deputy can pin on the Minister for Finance only what he says himself.

You were not here a few moments ago, Sir, when the Minister for Lands quoted from every economist, real and imaginary, in the world.

That is not so. I quoted from an official publication.

On a point of order, is that accusation in order?

I am not going to give way either to the Minister for Lands or the Minister for Finance. I am making my own speech.

I do not think that to say that the Minister has quoted from every known economist could be called an accusation.

I am not going to be browbeaten by the Minister responsible for the production of this brutal Budget.

I think the Deputy can pin on the Minister only statements for which the Minister himself is responsible. I do not think that the Minister has any responsibility for what appears in this journal unless the Deputy can prove that he is responsible.

I am sorry you were not here, Sir, when the Minister for Lands made his usual filibustering type of speech and quoted extensively——

From last year's Budget.

In order to prolong the agony, he read ad nauseam from all the economists of the world, real and imaginary. He told us about conditions in France, and he wants us on this side of the House to accept it from him that conditions here are comparable with the conditions in France and also comparable with the conditions prevailing in Great Britain. Nobody outside this House, and I hope very few inside this House, will swallow that kind of argument. That is the kind of argument—and I would ask the younger Deputies to read the records if they do not believe it—that the Minister for Lands has been introducing on every occasion in favour of the Budget while Fianna Fáil was in office—whether it was directed towards the slashing of subsidies or any similar policy. We know what an expert filibusterer the Minister is. He is put up to do this kind of stuff every time the Government is in a tight corner and when they have nobody else at the time to do what he is capable of doing—competent filibustering. He says also here——

The Minister is responsible only for what he says himself.

Surely it is in order to quote documents other than those for which the Minister himself is responsible?

The Minister is responsible only for what he says himself.

Am I not entitled to quote what is being said in his favour by a great personal friend, a political friend?

Does the Deputy suggest that every magazine and paper in this State may be quoted from? The Minister is responsible for what he says himself on behalf of the Government?

Goodness knows, that is enough responsibility to carry at the moment. For that reason I bow with great respect to your ruling.

That is the only responsibility on him.

The Minister for Lands, ignoring for the time being the Minister for Finance and any other Minister who may be speaking here, appeared to think that there is something criminal in a policy of repatriating our external assets for the purpose of using them for national development here at home. Nobody on this side of the House, as far as I know during the period of office of the inter-Party Government, suggested that all the external assets should be repatriated, although I believe that with devaluation facing us at that particular period and still threatening, it is far better to get something for all our external assets than to wait for further devaluation and get nothing for them. At any rate, the policy behind the Budget is one of compelling our people to save in order to invest that money in another country, a country admitted by its own patriotic statesmen to be on the verge of bankruptcy. How many Deputies will go down and stand up at the chapel gates next Sunday and advocate that policy, if it is the policy of the present Minister and his colleagues in this Government?

There has been a good deal said here to the effect, and it is no harm to repeat it, that this is a bankers' Budget. There is not a shadow of doubt about that. The Minister for Finance has no more control over fixing the price of money in this country than the man in the moon. It is well known on this side of the House, at any rate, that the chairman and certain other members of the Central Bank, if not the members of the Central Bank as a whole, submitted to the inter-Party Government Ministers the very same kind of proposals as were submitted to the present Minister for Finance and which are enshrined in this Budget. What did the previous Government do with these proposals? The Minister for Finance must have it at his finger-tips.

He must have records on his Department files to prove that what I am now suggesting is quite true. Will he deny that his predecessor and the members of the last Government received similar proposals from the chairman of the Central Bank and turned them down and rightly turned them down? If they had not done so, they would not have got the support of the members of the group for which I am now speaking. That is an historic fact. The Minister can get information as to the rejection of these proposals. Deputy Dr. Browne can get it. Deputy Dr. Browne knows perfectly well that the report of the chairman of the Central Bank and those other members of the bank board for whom he spoke came before the inter-Party Government when he was Minister. I challenge Deputy Dr. Browne to say what happened on that occasion. Having regard to the fact that he disclosed confidential Cabinet correspondence on another occasion and that is one thing that does not stand to his credit, will he say now what happened in the Cabinet when these proposals were considered at the Cabinet meeting?

Charges of violating secrets of the Cabinet should not be made against any Deputy.

I have great respect for what you say, but it is an historic fact and a most unfortunate fact that Deputy Dr. Browne took it upon himself to reveal the correspondence between the Hierarchy and himself and to publish it without the Taoiseach's authority. Will he deny that?

I will deny it. I had the authority of the Taoiseach to publish it and the Taoiseach himself admitted it.

Deputy Dr. Browne has denied the charge that Deputy Davin has made. Deputy Davin must withdraw that charge.

Further, I have a copy of the correspondence that he himself revealed to the public.

It is usual in debate to accept a statement of a Deputy as being true.

For that purpose only, and with respect to you I accept it with these qualifications.

Press me harder and you will get more than you bargained for.

I understood Deputy Dr. Browne to say that, when proposals, similar to the ones that were accepted by Fianna Fáil—the policy being the same—were submitted to the members of the inter-Party Government and rejected by them, that he was a member of that Government.

It is a fair challenge for one politician to make to another. The Deputy can keep his tongue in his cheek or answer it if he likes.

It is obvious that Deputy Davin is still suffering from the Labour Party conference, and is still sore.

I want to tell the Minister for Finance that when I meet his political touts inside our Party I will deal with them.

Deputy Davin on motion No. 11.

Do we not know perfectly well—I do not know whether it affects other Parties in the same way as ours—that what Deputy Larkin said the other day was perfectly right, that whenever the Government want to beat down the Labour Party, or any other Party, that is giving them a run for their money, they send their political touts into the trade union and Party meetings to create all the contention they can, and I suppose—I cannot prove it—they are paid out of the Secret Service funds.

On a point of order. I am the Minister responsible for the expenditure of Secret Service funds. The Deputy has alleged that improper use has been made of these moneys. Now that is a very serious charge. I suggest that it should not be permitted and that the Deputy must retract it.

The Deputy has said that funds voted by this House for the Secret Service funds have been misappropriated. That was the gist of his statement.

Misappropriated? Not at all.

Used for purposes other than the purposes for which they had been voted. Does the Deputy withdraw that statement?

With great respect, I did not use the word "misappropriated".

I have not the exact words, but that is the sense of what the Deputy said.

I was making a personal statement.

The Deputy alleged that those persons whom he suggests have been sent in to disturb Labour Party meetings have been paid out of Secret Service funds.

I said "possibly" and I repeat it.

No, Sir. I must protest. The Deputy cannot be permitted to make a suggestion of that sort.

I have asked the Deputy to withdraw the statement.

What am I to withdraw?

The Deputy is to withdraw the statement he made in regard to the utilisation of Secret Service funds—the improper utilisation of Secret Service funds.

The words I used were— and in fairness to me I call for the shorthand note—"possibly paid out of Secret Service funds".

The Chair will rule on the sense of what was said without having regard to the script. The Deputy has said that there was an improper use made of Secret Service funds. Now Deputy Davin will withdraw that statement.

In deference to your wishes, I withdraw it.

It is my ruling.

Why was it necessary to pay anybody?

Why did you not make that charge at the Labour Party conference?

Deputy Davin is entitled to make his statement without interruption. I will see that in future he is allowed to make his statement without interruption.

We have had a few extraordinary speeches from Ministers, some of them delivered in the country and some of them delivered behind closed doors at comhairle ceanntair meetings. We have here a priceless exhibition in one of these speeches, one of the many speeches made by an understudy, the principal understudy, of our present Minister for Finance, namely, Mr. Childers. Mr. Childers, in dealing with the criticism of the Budget which so far has been delivered from this side of the House—he is reported and I am sure correctly reported by his own paper, the Sunday Press— said this among other things at a meeting of the South Longford Fianna Fáil Comhairle Ceanntair. This was how he concluded his harangue in favour of the Budget against its critics:—

"This is the real argument. Are the people prepared to pay an insurance for the preservation of their financial independence, already so desperately limited by the pattern of national trade and the complex state of the world?"

I do not know, and God only knows, what he means by that. Perhaps his senior colleague in the Cabinet, the Minister for Finance, will explain to the House when he is replying what is the meaning of that particular portion of the speech delivered by Mr. Childers on the 6th April last.

Now, we had some extraordinary admissions made by the Tánaiste in connection with this Budget when speaking at length in this House on the 3rd April last. Dealing with the charge made, and it appears to have been properly made, by Deputy Costello in regard to the framework of this Budget, the over-estimation and the additional taxation that is being imposed as a result without any justification, the Tánaiste said, when dealing with the question of the margin of error:—

"At this time of the year it is not possible to calculate to the last penny the probable cost of a variety of Government services or the probable yield of a number of taxes. However, our experience suggests that the margin for error is not much more than 5 per cent. one way or the other. Even if we assume that it is in this year as great as 10 per cent...."

There is an implied admission, if not a very candid admission, that there is here in this Budget an over-estimation involving additional taxation to the extent of probably up to 10 per cent. Is not that a very serious admission to be made?

On a point of order. The Deputy is purporting to quote from the Official Report. I say that he is not quoting correctly. He is misstating what is in the report by pretending to read it.

On a further point of order, I am not pretending to read. I have read word for word what is in it.

Let me decide the first point of order. A point of order has been put to me in respect of what Deputy Davin has been reading or purporting to read. I have no means of deciding whether Deputy Davin has read what is in the book that is in his hand or not, and I have no method of ruling on the matter.

If I give you the report, would you?

I am not going to undertake that. It is not a matter of a point of order.

I hope you are not going to allow this jack-in-the-box Minister for Finance to be jumping up constantly interrupting me. I can assure you that I have read the quotation word for word and had not finished reading when the Minister for Finance was allowed to interrupt. I will not sit down any longer to listen to the Minister for Finance making bogus points for order. I was quoting from Volume 130, No. 9, columns 1290-91. I had not finished the quotation when this jack-in-the-box Minister for Finance was allowed to stand up and interrupt me. I will not be interrupted any more by the Minister. I am entitled to make my speech in my own way and if the Minister does not want to listen to it let him go outside or go down to College Green and explain this Budget.

Dear, dear!

Or the Minister might go to Rathmines Town Hall, where he would get a good hearing. The old ladies are very fond of him. I do not want to be misunderstood. I mean politically. I was reading, Sir, when I was interrupted by this jack-in-the-box Minister for Finance——

On a point of order. Is it in order for a Deputy to refer to a Minister of State as a jack-in-the-box?

It is quite undesirable.

I assert it is a proper parliamentary expression in the circumstances.

I have not called the Deputy to order. The Deputy should proceed.

I hope I will have the pleasure of meeting Deputy Davern in his own area.

The Deputy is quite welcome.

Just as my name is not the same as that of Deputy Davern neither is my outlook on this subject the same.

The Deputy will please proceed with the statement.

Will the Ceann Comhairle get this little jack-in-the-box Minister for Finance to remain quiet?

Might I suggest to the Deputy that this expression is quite undesirable and inappropriate in this Parliament?

Might I suggest also that there is a rule about repetition?

The Deputy does not know where he is.

I do not want to delay the House unnecessarily. I wonder if our old friend, Deputy Corry, could be kept quiet.

Evidently the Deputy misunderstands my duty.

I was dealing with the statement made by the Tánaiste, Mr. Lemass. Of course, it is an old trick of the Minister for Finance to interrupt and hold up people. Does my half-brother, Deputy Davern, wish to make an observation? If he does, will he make himself a little bit coherent?

Is Deputy Davin making a statement or not?

During a previous discussion on this Budget, the Tánaiste, dealing with the question of the withdrawal of subsidies, said at column 1298 of Volume 130, No. 9 of the Official Debates:—

"The additional payments they will receive——"

These are the people who will have to bear the increased taxation.

"——will very substantially exceed the additional charges they will have to make."

Further down the Tánaiste goes on to say:—

"The Minister for Social Welfare will introduce forthwith amendments to the Social Welfare Bill designed to increase the old age pension and the unemployment assistance payments so as to ensure that the beneficiaries under these schemes will be no worse off either in July next."

Does anybody suggest that the additional allowances which are to be given to the old age pensioners will compensate them for the increases in the cost of essential commodities brought about as a result of this Budget?

On the question of subsidies and the withdrawal of subsidies which are provided for in this Budget, it is no harm to refer the Deputies who did not read the Fianna Fáil programme or who, perhaps, did not understand it, to that portion of the Fianna Fáil programme dealing with this question and which was submitted to the electorate in their name at the last general election. The programme was published on the 5th June and portion of it is as follows:—

"To maintain subsidies and control the prices of essential foodstuffs and the operation of an efficient system of price regulation for all necessary and scarce commodities."

That has gone by the board inside 12 months from the date they issued that programme. How can the Fianna Fáil Party face the people and defend the way in which they have repudiated the election address that was issued in their name as part of the 17-point programme which was published on the 5th June last?

I daresay that no matter what may be said by Deputies on this side of the House in discussing and in criticising, I hope, on their merits many of the matters contained in this Budget there is going to be no change of heart or mind. Nor will there be a change of vote on the part of the Fianna Fáil Deputies. No matter what we say on this side of the House, the members of the Fianna Fáil Party will vote as they are told if they have to go into division lobbies at the crack of the whip of the Party.

Did the Deputy not vote against subsidies in 1947?

I wonder where the Deputy was then? He was a small boy going to school, and he has not grown up since in so far as the contents of the Budget are concerned.

The Deputy voted against subsidies.

I have realised that so far as this Budget is concerned it is useless criticising it even in a constructive way and that we will never be able to make a convert out of Deputy Gallagher. The only way he will be converted in regard to the bad things that are contained in this Budget is when he will be converted by the people of the constituency who were so foolish as to send him to this House and vote for a production of this kind.

And I put a Labour man out.

I listened with interest to Deputy Derrig, the Minister for Lands, defending the Budget. During the week-end both the Minister for Lands and the Minister for Agriculture were down in Kilkenny. I am sure that they heard what the people of Kilkenny had to say about this Budget, what it has brought to Kilkenny, and what the present Government has brought to Kilkenny. For the past six months, the textile industry in Kilkenny is at a standstill. Likewise, in portion of the constituency, the boot and shoe industry is at a standstill. Where the industry was working overtime for two years before that, for the past six months now the people in one part of my constituency have been signing on at the labour exchange. In fact, I was asked to find out whether that industry had closed down altogether since the Fianna Fáil Government came into power.

The same applies to other industries such as the building trades. Since the present Government came into office, the people have lost confidence. The foundation of one house has not been laid by private persons in Kilkenny since the present Government came into office. The only building that is going on at present is that undertaken by local authorities, and for the first time, I suppose, for three years you have men in the building trade signing on at the labour exchange. All that is the result of the loss of confidence in the Government.

The Minister for Lands, Mr. Derrig, stated that the previous Government followed Britain when it devalued the pound, but the present Minister for Finance has followed Britain in his budgetary proposals. I feel that this is not the time when people should be over-taxed. People were expecting a slight increase in the price of tobacco, beer and other things but they were not prepared for anything like the increase which has come about under this Budget. The result is that the textile industry is in a bad way. The boot and shoe industry is much the same.

We had another very thriving industry in Kilkenny, namely, the brewing industry which has also been hit badly by the Budget. The result is that a fortnight after the Budget eight or ten men were let off. Worse still, stocks are piling up. Apparently, the people will not pay the extra price for the beer and consumption will be very much reduced. I expect that our brewing industry in Kilkenny, which is one of the leading ones in the country, will be able to survive, but there are other brewing industries in the country which cannot survive. They will not feel much obliged to the Minister for putting this impost on the people. People are not able to afford it.

The people should not be overtaxed at this time when there is unemployment all over the country and a trade recession brought about by the present Government owing to the restriction of credit. The Government ordered the banks to restrict credit and a great part of the present trade recession or stagnation is due to that. The Government also gave permission to the banks to raise the interest rate to 6 per cent. The Minister for Finance stated that the reason for that was that he did not want to have the deposits of the Irish people transferred to banks in England in order to get a higher rate of interest. But although he has allowed the banks to raise the rate of interest to 6 per cent., he has not suggested that the banks should give the same rate of interest on deposits as the banks in England give. In England the banks give 2 per cent. on deposits, whereas our banks only give 1½ per cent.

As regards the food subsidies, it is not fair to increase the price of bread to the extent to which it has been done. The Minister for Industry and Commerce stated that we would have cheaper biscuits as a result of this. The ordinary people are not interested as to whether biscuits will be cheaper or not. They want cheaper bread. The Minister for Lands stated that bread was being used for animal feeding. I am in fairly close touch with the bread trade and I can assure him that in Kilkenny at least no bread is being used for animal feeding. People there only come in for their weekly ration of bread. We all know that there was a surplus of bread in Dublin, but whether it was used for animal feeding or not I do not know. If the Minister for Lands knew his constituents in Kilkenny better he would not say that they were using bread for animal feeding and that for that reason the price of bread should be raised all over the country.

Sugar has been decontrolled and the price has gone up. That will be a boon to the manufacturers of sweets. The manufacturers, apparently, will be subsidised this time to the extent of about £2 per bag of sugar. The ordinary person will now have to pay 6½d. per lb. for sugar, whereas the sweet manufacturers, instead of paying 9d. per lb., will now get their sugar for 6½d. per lb. It is hard to see why the manufacturers should now be subsidised.

As to cigarettes, the Government some time ago allowed the manufacturers to increase their prices by 1d. per packet of 20. Under the Budget, they are now being given a further increase of 1d. That increase of 2d. on a packet of 20 cigarettes will, I am sure, amount to an increase of about 20 or 25 per cent. on the net cost of their product. The Imperial Tobacco Company already is paying a dividend of 32½ per cent. With this further subsidy from the Minister I am sure they will be able to increase that to 35 per cent. or possibly 40 per cent. so far as the Irish trade is concerned, anyway.

Tea has also been increased in price. Some people who could afford to buy off-the-ration tea, sugar and white bread will now come into their own. That section of people who can afford to buy these things will now get a reduction, while the ordinary man who finds it hard to buy bread will have to pay an increase of 50 per cent. The Minister also announced that it was proposed to reduce the extraction from 85 per cent. to 80 per cent. Nobody objects to the 85 per cent. bread. The Minister has been talking about spending dollars on imports. Is he not going to spend more dollars on imports of wheat owing to this? He will have to import much more wheat from America now to produce the same quantity of flour with the 80 per cent. extraction as was previously produced with the 85 per cent. extraction. What is his idea in talking about imports and then increasing them in this way?

In defending the Budget the Minister for Lands left one thing severely alone, namely, the dance tax. He did not defend the abolition of the dance tax. Everybody knows why that tax was abolished. If the Minister was genuine in his outlook and was looking for something to tax he should have taxed the sporting fixtures and the luxuries and not the bread and butter of the people. There is plenty of money spent at sporting fixtures. I saw in the papers that on three days' racing on Easter Saturday, Easter Monday and Easter Tuesday there was a turnover of more than £100,000 on the totalisator. Is not that something which should be taxed rather than the people's bread, butter and sugar? If he wanted anything to tax the Minister should have turned to the luxuries and the sporting fixtures, such as race meetings, which are packed with people every week. When he was finished dealing with these, then he could come to the people's bread and other things if he still had not got enough.

We believe that the Minister has imposed over-taxation this year at least to the extent of £10,000,000. We think that is a very grave wrong on the country. The Minister for Industry and Commerce expressed the opinion that the recession in trade would pass over in a few months. Will this Budget help it to pass over? Will it allow the people to have money to buy goods? If they have any money, this Budget will take it from them. In striking the rates this year, the members of the local authorities, owing to the unemployment which exists, were trying to keep the rates down as low as possible. What did the Minister for Finance do? For political reasons, in order to try to show that the inter-Party Government had not been doing their duty, he came along and over-taxed the people so that in the coming year he may be able to reduce the taxes and face the country. The Government have lost the confidence of the people. They should not wait until next year to have a general election. They should have a general election immediately and let the people decide which side should take office at the present time.

When I was a little boy I was told there were such things in this country as banshees. Whenever I heard a cat crying I came to the conclusion that it was a banshee. But I never imagined at that time to hear such wailing of banshees as I have heard from the other side of the House for the past weeks. They are wailing and casting gloom over the country because they are presented with an honest, fearless Budget which they were afraid to produce themselves although they knew perfectly well that it was necessary to do these things. They knew perfectly well that they had come to the end of their tether so far as borrowing is concerned.

They had come to the stage in this country when they knew they had borrowed to the extent of putting not only the nation's economic independence but her political independence in pawn. We will not put either the nation's economic or political independence in pawn by refusing to do something that may be unpopular.

We have heard a good deal of wailing from Deputy Davin. He is in bad humour to-night and I do not blame him. He got a pretty good chastisement during the week over his association with the Fine Gael Party and because he allowed himself and his Party to become satellites. He certainly got what I would term unduly hard criticism; otherwise Deputy Davin would be a very genial man.

What about the Minister and his new pal, Deputy Cowan?

Poor Deputy Davin is in pretty bad humour to-night and naturally if we all got a little chastisement of that kind we would perhaps be the same. He suggested that there was no comparison between Britain and ourselves. "Britain was in two wars", said Deputy Davin. He forgot, of course, that this nation had 700 years of war and that every Commission that was ever set up, the latest I think in 1908, decided that this country was overtaxed to the extent of £300,000,000. Therefore, I think that when he says he has more sympathy for Britain than he has for this country he is allowing his sympathy to run at the wrong side of the Irish Sea. Now, again, he states that our external assets amounted to £500,000,000.

On a point of order, is this Deputy suffering from loss of memory? I said between £400,000,000 and £500,000,000.

That is not a point of order.

The Deputy should not exaggerate.

If my memory serves me correctly £500,000,000 was stated by Deputy Davin. That is not correct. I heard £400,000,000 was the estimated amount of external assets in 1948, but I can assure you that Deputy Davin's associates have been taking some of them in quite a ready fashion. They have taken no less than £150,000,000 of our external assets, with that kind word they use "repatriation" of external assets.

I told Deputy O'Sullivan before that he was hanging up his stocking for Daddy Christmas during that period and I hope the next time he hangs it up he will not slip off the chair. I will give Deputy O'Sullivan another warning: Walt Disney might be around again and he should be careful. The external assets were reduced by £150,000,000 with the result that to-day our external assets are worth in or around £130,000,000.

Again Deputy Davin said that this was a banker's Budget. Perhaps he does not know who owns the Irish Independent and the Irish Times. I wonder has he read them and has he got any reason at all for their outbursts against the Budget. Mind you, the people who run these two newspapers concerned are the people who control banking interests to an extent in this country.

The Irish Times was your friend in the last election.

The only thing I can assure Deputy Davin of is that banks have always in the past, they will to-day and in the future, given plenty of money to people who do not want it. We have heard a tirade from Deputy Dillon. I wonder what would taxation be in this country if the people had agreed to Deputy Dillon's suggestion some years ago when he wanted to get us into the war at the time when the German and British air forces were at their height. What would happen then? Our cities and towns——

On a point of order, I submit that this is entirely unrelated to the matter under discussion.

I am endeavouring to make the Deputy realise that.

Is the cost of the last war included in this Budget?

It is obviously the aim of the Opposition as far as it is possible to judge them, to create an atmosphere of uncertainty in the country.

It is there already.

They want to give the impression that we will have an election to-morrow or next week. If those ideas circulate you are not going to have the return to trade overnight that Deputy Crotty was so anxious about. I am certain again that the reason why the Independents who voted for this Budget incurred the berserk fury of the Opposition is that they have made certain that this Government will continue its term of office for the next four years. That is why they are very critical of those people who have voted for us.

That is your hope anyway.

It is our certainty. It is quite easy to criticise something that perhaps may appear unpopular but to stand up to what is unpopular is the test of men in this or any other country.

Deputies

Hear, hear!

And those men who speak up like men and realise that the nation has a soul and realise that the men who died for this nation if they had survived, would not care whether it was 1/2d or 1/6d for a packet of cigarettes or 1/2d or 1/3d for beer—

Up Tipp!

I differ from Deputy Davin in the fact that 82 of my comrades who died for the Republic are lying in cemeteries to-day.

Deputy Davern should keep to the Resolution.

We did not hear even one constructive word of criticism from any of the Deputies opposite. Not even one of them had the courage to state as much as one item that should be taxed other than the commodities concerned. Racing was suggested by one Deputy.

What about dancing? You are a good dancer.

Deputy Davin was dancing to another tune a few minutes ago and he should not be so brimful of that sort of tirade again. In small towns like mine with about 3,000 population, it is impossible for any section of the community, whether they be Fine Gael, Labour, Clann na Poblachta or anything else, to run dances without the prospect of losing money. That is the first reason. The second reason is that it was costing too much to collect the tax. The third reason, and I think it is the greatest of all, is that there was too much evasion of tax. Regardless of how the officers acted, there is no doubt that people were getting under the wire by all sorts of fraudulent methods. It is better a thousand times that we would do without a tax of that kind rather than encourage or force our people to be guilty of any type of fraud.

We are told that it is a bankers' Budget, but people forget that the small investors who, up to now, had been getting 1 per cent. in the bank can now invest their money in Post Office savings certificates to the limit of £1,000. If my memory serves me well, the amount which could be so invested was in the region of half that up to now. This is not a bankers' Budget, because there is no doubt about the fact that the small investors are going to transfer their money from the banks to a place where they can get a greater percentage for it. Therefore, I feel that that in itself is a good argument against the statement that this is a bankers' Budget.

It is a dancers' Budget.

We condemned the dual price system, because it meant that the poor person with a meagre income, who would be existing, to a great extent, on tea, butter, sugar and such like goods had, of necessity, to purchase unrationed tea at 6/6 a lb. and unrationed sugar also. That has been happening to a great extent, in the towns and cities. The dual price system meant that the people with plenty of money could buy all the food they needed just as if food were unrationed, and that the poor people could only afford to buy the bare ration. In my view that is a state of affairs that should not be allowed to continue and, personally, I am delighted that subsidies are finished. They served their purpose during the war period when incomes had to be kept down and prices controlled. Surely we are not going to have war measures in existence for ever.

Let us get back to normality and give the shopkeepers an opportunity of putting their wares in the open market in competition with other towns, villages or establishments, as the case might be. When that position comes about I believe we will definitely have more stability in business. Anybody who is accustomed to the rationing system knows perfectly well the shopkeepers of the country have had a pretty difficult time for the past 12 or 13 years since rationing was first instituted. It was necessary to introduce rationing. Otherwise, it would mean that the poor people would not be able to procure any food because the people with the money would be able to buy it all up and store it. Therefore, rationing was the only feasible system.

We have heard a good deal of pious statements about the Budget and its effects on the cost of commodities for our institutions. It is dangerous to be making statements of that kind without having examined them properly. Let me remind the Deputies opposite that there are hundreds of old age pensioners in every institution in this country who contribute roughly two-thirds of their pension towards their upkeep in the county homes. Up to the advent of Fianna Fáil, no person who entered institutions of this kind was entitled to receive an old age pension. Therefore, they were a burden on the State. Their contribution now towards their upkeep in the institutions of the country oversteps by ten times the effects, if any, that this Budget will have on the cost of maintaining the county homes and other institutions. As it is, with the county homes, so also is it with our hospitals, where insured people are now contributing £2 12s. 6d. per week towards their upkeep. That is a contribution to the ratepayers which I hope and trust they will appreciate. I hope we will hear no more of these dishonest, foolish statements about the cost of the institutions of the country being increased as a result of Fianna Fáil's expenditure.

Where did you get the £2 12s. 6d.? It is £4 now.

I said that £2 12s. 6d. was being paid for an insured person to the hospital.

What figure?

£2 12s. 6d.—52/6. Is that clear enough? We hear that this Budget proposes that we should spend less money on afforestation. That statement is, of course, also false— deliberately false—with a view to causing uneasiness amongst the workers engaged in that job. The truth is that £100,000 more is going to be spent on afforestation this year than was spent last year. Therefore, I would say to the Deputies opposite, regardless of the political kudos or of popularity, either personal or political, that it is bad form for them to go to either public or private meetings and make false charges and to cast gloom, as they have done in many cases, over the country and say that it is never going to recover again because we are going to put a couple of pence extra on the pint and on the packet of cigarettes. Money spent on cigarettes, shout and whiskey is money over which every person who spends it has control. He can do exactly what he likes in this regard. However, he has no control over commodities like tea which we have to import. He has control over the items taxed in this Budget, and he can decide for himself how much he is going to spend on them. I think this financial crisis should be faced with a greater purpose of honesty. The Opposition should face matters of that kind with a determination to help out and not in the manner in which they have faced it. No matter what wailing the Opposition may do, we are going to prove to the country that this Budget will save the nation's finances while we are in power, and for many years afterwards. They might get back to power in 50 or 60 years' time when the present generation have passed on and the country has forgotten the hopeless mess in which it was left a year ago. They can go round the country wailing like the Banshee, but we will be here like men to support anything that is honest and anything which will save this nation from financial chaos. It might suit certain people that we should have chaos in this country, but I believe that the majority of our people will give fair consideration to this Budget and look at it in the way honest Irishmen should look at it, despite the criticism and the many dishonest utterances that have been made in connection with it.

The people who are now in Opposition are the people who are responsible for doubling our national debt, almost. They borrowed £40,000,000 and we are going to pay back £83,000,000. The Opposition cannot deny that they borrowed £40,000,000 from America. We are going to pay back £83,000,000. The first payment—£600,000—will be made on 1st July: in a full year it will amount to about £1,250,000. The inter-Party Government borrowed and the Fianna Fáil Government pay. Let us at least be honest about that. The present combined Opposition Parties should admit that they brought this country to the brink of disaster and, in making that admission, they will help to clear their political and financial conscience.

For some years past an expression has come into common use in Britain in relation to her efforts to surmount her difficulties— the expression "for export only". I contend that when they came to frame their financial policy for the coming year and when Mr. Butler introduced his Budget in the British Parliament the application was "for export also". In the present Budget we see several inclusions which are identical to those included by the British Chancellor of the Exchequer in his Budget. That slavish imitation in respect of the British Budget is completely unnecessary in this country.

During the past ten months certain Ministers have attempted to create an artificial crisis in this country. These attempts have now been supplanted by a real crisis—one which was sponsored by speeches made on several occasions by the present Minister for Finance, the present Minister for Posts and Telegraphs and the present Tánaiste. It will be noted, however, that these various Ministers could not determine among themselves whether, in actual fact, it was a crisis, whether the crisis had arrived or whether it was nothing greater than a "difficulty".

On a previous measure, the Tánaiste, Deputy Lemass, completely repudiated —as a result of the cogent criticism that emanated from the Opposition Benches—the Report of the Central Bank. It is extraordinary, however, that we see proposals in this Budget in connection with the very matters which the Tánaiste completely repudiated when he was referring to the Central Bank.

In the autumn of 1947, the Party which is now partially in office introduced a Supplementary Budget which imposed extra taxation on our people. Luckily enough, the people had an opportunity, shortly after the imposition of these extra taxes, of expressing their views, and they did so in no uncertain way. Fianna Fáil found themselves in Opposition. One would be inclined to admire their courage, now that they have been returned to office, in again imposing extra taxation, though this time under different circumstances. When the Supplementary Budget was introduced in 1947 the Irish housewife was told that even though her husband's cigarettes and drink were being taxed, in addition to cinema seats whenever they went to see a picture, it was all being done for a very good purpose. The housewife was told that it was essential to pay for the subsidies to keep down the prices of essential foodstuffs. What is the position to-day? Not alone have these former taxes been re-imposed— and re-imposed to a greater extent than before—but, at the same time, the food subsidies are practically abolished. What effect will the dual blow have?

While the Fianna Fáil Party were in Opposition they asserted that they had an alternative to the dual price system which was operated by the inter-Party Government. We heard Deputy Davern refer to the dual price system as an unfair system. That was a system under which certain off-the-ration foodstuffs were made available to the people at the economic price. Let us cast our minds back to the time before the inter-Party Government took office. During the emergency, our people had to pay very much more than they paid under the dual price system. I can recall cases where unfortunate working people had to pay as much as 25/- and 30/- a lb. for tea. We now know the alternative which the Fianna Fáil Party had for the dual price system. Their system is one price only, but it is a price which it is beyond the capacity of the people to pay. We consider that in every instance it is unfair.

We hear that it was desirable to remove the sugar subsidy. As Deputy Crotty pointed out a short while ago, the greatest benefit from the abolition of this subsidy will go to the manufacturers of commodities which are not absolutely essential. Fry-Cadbury, Limited, have a tremendous chocolate crumb concern at Rathmore. Consider how they will benefit from the abolition of this subsidy.

No doubt there are people in this House and in the cities and towns of this country who will not suffer greatly as a result of the withdrawal of the bread subsidy, but it will have a serious effect on the hard-working and poorer sections of the community. I wonder if the Minister for Finance ever saw a farmer's wife come out of a bakery with all the bread which she has to purchase for her household or if he has any idea of the amount of bread which she has to send out to the workers at the threshing, and so forth, or I wonder if he has ever seen the amount of butter which her husband has to bring home from the creamery throughout all the year. All these hard-working people rely to a great extent on bread and butter to keep them going during the day. I am not thinking now of the people who can have bacon and egg for their breakfast and a four-course lunch with a bun or half a slice of bread when they are eating their soup. I am thinking of the dockers and the road workers and those people who take their lunch with them in a bag when they leave in the morning and do not get home until after 6.30 in the evening. These people depend on a bread and butter diet to keep them going during the day, and they are the people who will suffer most from the abolition of the bread subsidy. Apart altogether from the injustice which the removal of the bread subsidy imposes on that section of our community, we claim that the present Government have no mandate whatsoever to do these things.

Deputy Davin read out for us a portion of the election manifesto of Deputy Dr. ffrench-O'Carroll, an Independent Deputy who supports the present Government. Prior to his election to this House, Deputy Dr. ffrench-O'Carroll found tremendous fault with the Fine Gael Party because they did not increase the food subsidies. No doubt, his attitude had a certain effect in his election to this House. In his manifesto, he said: "I am opposed to the inter-Party Government because I believe that the Fine Gael Party will not increase the food subsidies." In consequence of the last sentence of his manifesto, wherein he stated that he would lose no opportunity of bringing his influence to bear on the all-important matter of the cost of living, Deputy Dr. ffrench-O'Carroll was sent to this House by the lowerpaid people in his constituency to look after their interests.

The Taoiseach has told us in this House that the effect of the withdrawal of the food subsidies will be to increase the cost of living by 10.2 points. What will be the result of that? What will be the effect on the employment position? It was bad enough before the Budget, when there was an increase of some 11,000 or 12,000 in the number of unemployed as a result of the election of this Government. During the régime of the inter-Party Government there was an increase in the number engaged in industrial employment. Now there is a slump in industry and business and to-day business is facing difficulties that it never had to face before. At every turn the business man is faced with increases— an increase in the stamp he buys, an increase in his telephone calls and an increase in the running of his car. Some of the effects of this Budget are being felt now but other effects will follow indirectly next year from the impositions in this Budget.

It is wrong to withdraw the subsidies. Very few citizens will be able to consume the same amount of butter in the future that they consumed in the past. Some of my constituents are gravely concerned at that prospect because the price in the future will be such as to make butter prohibitive in many an Irish home. My constituency is a butter-producing constituency and my constituents are gravely perturbed. I am sure that Deputies like Deputy Dr. Browne, who are solicitous for the health of our people, appreciate the fact that the consumption of butter increased very considerably during the inter-Party Government's term in office. I am sure he and they must realise that this colossal increase in the price of butter will have the effect of considerably reducing the amount the normal family can afford to buy.

Is the Deputy advocating a reduction in the price of milk?

I am not advocating a reduction in the price of milk and I am glad the Deputy has reminded me of this. I can see in this yet one more obstacle placed in the way of those farmers who are looking for an increase in the price of milk because the cushion that existed between the producer and the consumer is being destroyed. Ten months ago the people in the dairying counties gave a mandate to the inter-Party Government to support Deputy Dillon in his policy of improving agriculture. Now the cushion has gone. Since this Government came into office production costs have increased considerably. Deputy Corry, who has given us such excellent support since the Government was elected, said that the 1d. increase that was given had been absorbed by the increase in wages and the increase in feeding stuffs. The dairy farmer is faced with another bad blow under this Budget. Wages have increased again and no doubt the agricultural labourer will seek a still greater increase in the near future as a result of the 10.2 per cent. increase in the cost of living. He will be perfectly entitled to seek that increase. Deputy Cogan will appreciate that the farmer will find himself faced with a very difficult problem before this year is out. The Minister for Agriculture, when he was in opposition, advocated a price of 1/6, 1/8 and even 2/- a gallon at one time for milk. There is good reason to believe that Deputy Davern's solicitude for the dairy farmer will be fully justified in the next few months when the well-documented demands of the creamery milk suppliers will have to be met by the Government.

Reverting once more to food subsidies, during the general election campaign there was not a single canvasser for the present Government who intimated to the voters that the Government intended to strike this blow or that they intended to abolish the dual price system and implement a luxury price for everybody. Had that been made public there is no doubt we would to-day have a very small Fianna Fáil Party in opposition in this House. They made it quite clear in their election manifestos that they supported subsidies. The Minister for Finance in his own constituency assured the licensed trade that far from doing anything which would be hurtful to their interests he would ensure that no such thing would happen.

I said nothing of the sort.

That will be proved before this debate closes.

I said nothing of the sort. I know what I said.

Coupled with the withdrawal of the subsidies we have in this Budget yet another attack on the working classes through the medium of taxes on the simple luxuries of the working man. Some Deputies have been solicitous in the interests of those who consume intoxicating liquor. No doubt the luxury classes will be able to get round these taxes by taking their cocktails and their wines. Will the docker who goes for his pint escape? Some Deputies seem to think that those who drink stout and porter do so because they have a lot of money to spare. That is not true.

In my constituency there is one essential industry in relation to agricultural production. I refer to ground limestone. I would appeal to members of the Government travelling to Limerick from Cork to pause for a moment on their journey and look at the cloud of dust rising out of the works where these men are engaged and see for themselves the conditions under which the men work. These men need a drink to combat the conditions under which they work. Does the Government realise the effect this impost will have on their earnings? Is the Government aware of the effect already showing itself in the employment given to those engaged in the brewing industry and in the retail liquor trade because of the heavy taxation imposed under this Budget?

I know a small concern in the South of Ireland which during the few short months of the operation of the taxes imposed under the supplementary Budget in October, 1947—taxes which went nowhere near the taxes imposed under this Budget in their intensity and operation—kept some men on in employment. They found work for them whitewashing walls three and four times during these three months because the employers did not like to dismiss them. They kept them on in the hope that something would happen, as it eventually did, whereby they could continue them in employment, but their employment is now in jeopardy again as a result of this Budget.

There is no doubt that in the City of Cork during the past week—and Deputy MacCarthy, Deputy McGrath and the Parliamentary Secretary to the Government must be well aware of it— many men who were employed in bars in the city have been dismissed. I am sure that the same conditions, possibly accentuated to a greater degree, affect those who have been employed in the licensed trade in Dublin. Consequently we shall have an addition to the increasing numbers of unemployed since the present Government took office. There will be a swift acceleration in the figures. In the towns and villages people engaged in the licensed trade are extremely badly hit by this measure. It is not for me to say that these people and their families are assets in these little roadside communiries or small towns. I know them in my own town and I know that they and their families contribute in a large measure to the atheltic and cultural life of the town. Now they see nothing for their sons and daughters at home and they can only allow them to join the increasing numbers seeking employment in Great Britain—numbers which have vastly increased since the return of Fianna Fáil to office.

We have also to face an increased tax on petrol—a tax which is general in its application because we can get no assurance that bus fares will not be increased. The money must be found somewhere to pay the increased costs thrown on Córas Iompair Éireann as a result of this tax. What of the man in the country town or village who is engaged in transporting goods from a port or from the city? What of the man who is now using a jeep to convey his milk to the creamery, and who tries to economise on the time devoted to transport of other articles, so as to have more time for the production of goods which are so essential if we are to reduce the gap in our balance of payments? These people are all affected by the tax on petrol and the Minister adds a final softening blow by telling us that before long he intends to increase the taxation on these vehicles. There is no doubt that the people generally are very much affected by these taxes which deal a death blow at those who are actively participating in production and who intended to develop still further the work in which they were engaged. The farm labourer, the man working on the road, and the man working in a factory, all are affected.

One thing about the Budget is that it has been extraordinarily general in its application. There is only one small class not adversely affected, namely, the ballroom proprietors. I do not agree with Deputy Davin about the losses which the imposition of the dance tax imposed on certain organisations in the rural areas. I know, now that the tax is removed, it will be practically impossible to get a dance hall to run a dance for any purpose whatever beyond the purpose of filling the pocket of the proprietor of the dance hall. These men of course must be recouped for their very fine subscriptions to the Fianna Fáil funds in the last election. They must be recouped for the active part which they took in trying to secure the return of Fianna Fáil at the last election. We saw evidence of the active part which they took in the letters read out here earlier in this debate, and in the letter which was addressed to the Tánaiste by the Dance Hall Proprietors' Association. We saw that a sum of £250 was donated by one ballroom proprietor to their funds. Will that be related to the effect which the abolition of the tax on dance halls will have in certain rural areas?

In my own constituency, two young men endeavoured sometime ago to avail of the little protection which Deputy McGilligan afforded to dance halls in rural areas. At that time there was not the same restriction on credit as has arisen since, and they got money to build a dance hall. They could not, however, build it while the inter-Party Government were in office, because of the restriction on luxury building, because materials were being diverted to more essential buildings, and also because of the fact that all the skilled labour available was required for housing. However, since the present Government came into office they were able to proceed with the erection of the hall. Needless to say, they would not have done so if they knew that within ten months they would be called upon to compete with the big commercial ballrooms in Killarney and Cork. We think it very unfair that lads such as those should be involved in difficulties by the action of the Government in abolishing the tax on dance halls generally. The protection which Deputy McGilligan gave to isolated districts was a gesture directed towards improving social amenities in these backward districts in order to keep people on the land. We are being constantly told, even by Deputies from the centre of the city, of the dire effects which the flight from the land is having on the general economy of the country, but, notwithstanding that, we see the little concession that was granted by Deputy McGilligan to people in the more remote areas being swept away by the present Government. In addition, certain organisations such as Macra na Feirme and charitable societies were given tax-free facilities. They could run dances without having to pay taxes. The little advantage which they enjoyed in that way is now taken away from them, and they will have to compete on equal terms with completely commercialised dance halls. People who cannot buy sufficient bread, butter and tea because of the removal of the subsidies and people who will be put out of employment as a result of the implementation of this Budget are now offered the doubtful consolation to dance to their hearts' content in tax-free dance halls.

When this Government was formed a programme was read out in this House and certain Independents who supported the formation of the Government seemed to be extremely sincere in their belief that it was the intention of the Government to implement that 17-point programme. I wonder, before they vote further in support of this Budget, will they direct their attention to Item 15 in that programme? A detailed statement of Fianna Fáil objective issued by the Fianna Fáil Party on the 4th June, 1951, and published in the Irish Press on the 5th June, 1951, states that in accordance with its election pledges and national policy it would proceed at once to carry out its general programme. The programme consisted, as I have said, of 17 points, and point 15 read as follows:—

"To maintain subsidies to control the prices of essential foodstuffs and the operation of an efficient system of price regulation for all necessary and scarce commodities."

Here, also, is the answer to the challenge which the Minister for Finance threw across the floor to produce evidence of his promises to the licensed trade. This is an extract from the Irish Independent, dated 16th May. 1951:—

"Mr. MacEntee, speaking at Rathmines Town Hall on 15th May, 1951, said: ‘A number of persons in the licensed trade were speading the rumour that if Fianna Fáil were returned to power taxes imposed on drink in the Supplementary Budget of 1947 would be reimposed. There is no truth in any such rumour.'"

That quite obviously refers to last year's Budget and to nothing else.

I am afraid you will have to face the licensed trade with a more convincing reply than that.

I faced them before and I owe very little to them. They did not buy me, anyhow.

The ballroom boys did.

When the Minister, his colleagues and the back benchers of the Party went to their constituencies within the last few weeks the people no doubt made their opinions known to them, because everyone realises that at this moment, as a result of this Budget, there is greater unanimity of thought than there has been for many a long day. The people are unanimous in their opinion that one thing is desirable, and that is an immediate general election.

Who told you that?

There is no doubt about it. We tested it well over the last week or two. The people, if given the opportunity, will undo the wrong which these few Independents did when they voted this Government into office. They did that, despite the fact that they had been reviled in the Irish Press and by the present Fianna Fáil Ministers during the election campaign. Nothing could be hard enough to say then about the Independents, but this Government got into office on their backs. Now, not only the people of Wicklow but the people who returned Deputy Dr. Browne, Deputy ffrench-O'Carroll, not to speak of Deputy Peadar Cowan, desire the opportunity to undo that wrong. So do the people of South Kerry who returned Deputy Flynn, the one-time eject of the Fianna Fáil Party, who was insulted again last week by the Minister for Social Welfare. No doubt the people returned him because of the fact that he went forward as a very good supporter of the inter-Party policy They would like to have the opportunity now of recording their opinion of his actions since he came back to this House.

There is not a Fianna Fáil Deputy who can stand over the campaign which he carried out during the last general election. Everywhere we went, the crying problem was the increase in the cost of living under the inter-Party Government. In the City of Cork, the increase of 2d. per lb. on butter dominated the whole campaign in that city. Everywhere we went, we were met with the picture of the harassed housewife which appeared in the Irish Press and in other newspapers. We had all that costly advertising shown to us. I wonder what would her expression be like to-day if she were photographed? I think it would certainly reflect much more misery than that which was on that poor lady's face at that time.

We are only expressing the opinions of the people at the present moment when we demand that this Government would give them the opportunity of recording their opinions on the taxation which it is now proposed to extract from them by the black hand which brought in the supplementary taxes of 1947. The people desire the opportunity to record their opinions on the guarantees which were given to them by Fianna Fáil that they had been converted by the chastisement which the people had given them in the spring of 1948: that they had been converted to a policy which would not ever do again the terrible things they did in 1947. At least at that time they produced some kind of excuses. They said they had to impose taxes on the luxuries of the working man because money had to be provided to keep down the price of food with subsidies. In this Budget there is a double blow to fall on the households of the country.

There is no doubt but that the housewife, when preparing her budget and in trying to balance it, will have to be more particular in the preparation of her figures than the Minister for Finance was in the preparation of his Budget statement. She will hardly make the same mistake as the Minister for Finance did when he gave us the figure of the number of driving licences instead of the number of vehicles taxed in support of these added impositions on the motorists of the country. That was a glaring mistake for the Minister to bring into this House. God help the housewife if she were to make a similar mistake in her little budget. She has to try to make ends meet on the wages which her husband brings in.

She has to ask herself, what will be left at the end of the week to clothe the children and to keep them in normal health by giving them sufficient food to eat. Of course, we have been told that we are actually living beyond our means, that we are wearing too much clothes, living far too high and that we must tighten our belt. Well, at least it can be said of the British Government that, before they asked their people to tighten their belts, they gave them a very good earnest by the action of their Ministers who reduced their own salaries. That was a very good gesture to make to the people of Britain before asking them to live under more strenuous circumstances than they had been living in the previous year.

This Government has not given any such gesture to the people here. We have had no indication that they intend to economise in Government spending. We see economies all right in the cutting of expenditure under the Local Authorities (Works) Act and in the case of afforestation. I know, of course, that, in regard to certain items, expenditure will be increased by this Government, but there is definitely no sign of any inclination on the part of the Government to offset by economies the colossal bill which they are asking the people to pay this year.

This Budget was well described by Deputy McGilligan, the former Minister for Finance, as a butchery of the taxpayers. There is no doubt that was not too extreme a term to apply to the action of this Government. I am simply repeating what is being said in every household in my own constituency and through the country that the people are itching for an opportunity to undo the wrong which these few Independents inflicted on them when they voted this Coalition Government into office a few months ago. If given the opportunity, the consumers in Dublin and Cork will unite with those in the rural areas in support of an inter-Party Government which brought such a measure of prosperity and peace to the country during its brief term of office.

When the Party opposite were here as a Government I remember describing them as "a lodger who came into town and took a furnished room." In the first week, in order to pay his way, he sold the chair; the following week he sold an old table; the week after he sold the dresser; later he sold a few more things, and he wound up by selling the bed. The Deputies opposite know that their Government sold the bed before they left. One would expect from such a dissolute body of directors, if one may call them that, as we had running this company as a Government for three and a half years that, when their successors came in and endeavoured to pay the debts which they had left unpaid. at least they would, have the decency to shut their mouths while we were trying to find the money to pay the debts. That is the least we might have expected from them. What is the reason for this infliction on the people of this country? There is one little item of £855,000 for health services. In regard to that I will be told, I suppose, that that was not known to Deputy McGilligan when he introduced his Budget on the 2nd May last. But there is something else which occurred on the 4th May, and I would ask the gentlemen over there, who talk about corruption, to listen to this. The day after they handed in their gun the following letters were sent to the public authorities of this country: Circular letter E.L. 4/51, dated 4th May. 1951, from the Department of Local Government; circular letter H.A. 8/51, dated 7th May, 1951, from the Department of Social Welfare; circular letter No. 32/51, dated 4th May, 1951, from the Department of Health; and circular letter No. 34/51, dated 17th May, 1951, from the Department of Health.

Those are very interesting documents. The ratepayers of Cork and of every other county are paying this year 1/8 in the £ in their rates for those four letters. The ratepayers of the 26 Counties are paying over £2,000,000 in their rates for those four letters which were sent out after the Dáil had dissolved—the purchase price for the influence of the officials of local authorities in the election. I am glad that the large majority of the officials of the local authorities were not to be purchased by a few Deputies opposite owing their seats to the price that was paid in those letters.

In circular letter EL 4/51, of the 4th May, 1951, it is stated:—

"Sanction of the Minister may be presumed ..."

That circular continues:—

"...As from a date not earlier than 1st November, 1950, the rate of temporary allowance to officers permissible under paragraph 2 of the circular letter in question may be increased to a rate not exceeding 20 per cent., the total annual rate of any increase not to exceed £250."

Under that circular letter the county manager and assistant county manager in Cork got an increase of £250 a year and—for Deputy Hickey's information —the city manager as well, and a gift of £125 into his pocket a fortnight before the election.

What date did the increase take place from?

The 4th May, 1951.

From what date did the increase become operative?

Immediately after Deputy Hickey's corporation met.

But what——

Just take it. This is coming out now.

I am loosing for information.

What date? "A date not earlier than the 1st November, 1950."

Notice taken that 20 Deputies were not present; House counted and 20 Deputies being present,

Where are all the Deputies on the far side?

When I was interrupted I was being asked by Deputy Hickey what was the date of this letter.

There are only two Fine Gael Deputies present and one Labour Deputy.

The date to which the back payment was to go was the 1st November, 1950. This letter was issued from the Department of Local Government, Custom House, Dublin, on the 4th May, 1951. Six months' back pay on £250 increase in salaries for city and county managers amounted to £125 per man.

Poor old Ireland!

Poor old Ireland! God help her with the likes of you. If the Deputy had any shame, which he has not, it is far away from here he would be. Here is the letter from the Department of Social Welfare, Lord Edward Street, Dublin, dated 7th May, 1951:—

"I am directed by the Minister for Social Welfare——"

The Minister for Social Welfare was Deputy John M. Costello.

John A. Costello.

I beg the Deputy's pardon. This was Deputy Norton's contribution. It deals with the payment of a bonus allowance to superintendent assistance officers and assistance officers. The letter goes on to say:—

"I am to state that he approves of the proposal to increase, as from a date not earlier than the 1st November, 1950, the salaries of these officers by 12½ per cent. Where a proposal for an increase has not already been submitted by a public assistance authority, the Minister will be prepared to consider favourably a proposal on the foregoing basis. Mise, le meas, J.J. O'Sullivan. To each public assistance authority."

Those are the little missives that went out. For fear there may be a rift in the lute, I have here the letter from Deputy John A. Costello. It is dated the 4 Bealtaine, 1951, and is as follows:—

"I am directed by the Minister for Health to state that he has considered representations which have been made to him by certain local authorities and by interested trade unions and professional associations"—

Sure, they were all on the job—

"in regard to the remuneration of certain employees of local authorities and to state that he will be prepared to sanction, with effect from a date not earlier than 1st November last"—

the same old date—

"the payment to local authority staffs (other than persons remunerated on a fee basis and agricultural workers"—

He did not forget the agricultural workers. No. They were not going to receive anything—

"tradesmen and other employees whose rates of pay are related to local or trade rates for similar types of employment) in respect of whom he is the appropriate Minister of a temporary bonus not exceeding £60 per annum in lieu of the existing bonus of 11/- per week, or a temporary bonus at the rate of 20 per cent. in lieu of the existing bonus of 7½ per cent. (subject to a maximum increase on present remuneration of £150 per annum) as may be appropriate, with suitable adjustments to cover the cases of part-time employees and persons whose remuneration is partly in cash and partly in kind... Mise, le meas, P. Ó Cinnéide."

These are the dispatches which arrived at the South Cork Board of Public Assistance for consideration within a week of the election on the 23rd May, 1951, when every Deputy and every county councillor would be busy on the hustings. Can Deputy Hickey deny that after the Dáil was dissolved these letters were sent out to every local authority in this country? These letters cost the South Cork Board of Public Assistance and the ratepayers £15,800.

There was some dancing when these letters went out.

The Cork County Council officials were to get £17,000 as a result of these letters; the sanatorium officials £12,000; the mental hospital officials £18,000; the North Cork Board of Health officials £12,000 and the West Cork officials £8,000. In all they got £82,800 to divide between them at the expense of the ratepayers of Cork County and at the expense of £1,000,000 on this Budget.

That is good propaganda.

These are the facts and I challenge any Deputy over there to deny that these are the letters which I received as the Chairman of the South Cork Board of Public Assistance. It is not alone the debt which that dissolute body, the former Government, left after them that the people have to face. They also have to face an increase of £2,000,000 in the rates over the country.

That is very impressive.

They spent £39,000,000 of internal loans and £40,000,000 borrowed from the Yanks. Where did that money go? How much of that was given to the Cubans for the foreign sugar? How much was given for the muck which Deputy Dillon brought in from Iraq? Will they tell us where that money went? After 23 years of native Government in this State the repayment of the principal and interest on the national debt amounted to £3,200,000 a year. After three and a half years of the inter-Party mixum-gatherum it is now £8,187,000 a year. After 23 years of a Cumann na nGaedheal and a Fianna Fáil Government it was only £3,200,000, but that body in three and a half years increased it by £5,000,000 per year. Then they have the impertinence to come in here and talk and moan about the poor and about the people whom they robbed in order to carry on here. If I owed £500 or £600 and some fellow said he would pay my debt I would not worry very much where he found the money. The next item in this bill is £3,600,000 for the increase in the salaries of civil servants. That increase was given as the result of an arbitration board set up by the inter-Party Government.

I suppose that was wrong also.

Is there anybody who will say that Deputy McGilligan on the 2nd May last year, when he was Minister for Finance, did not know that arbitration board had made an award which would put £3,600,000 on the people? What provision did he make for it? Deputy Dillon told us, "Our only trouble was how we could spend the American loan before the 31st March". He could have used it to pay off the Government debts but he did not. That legacy was also left, because on the 2nd May, when Deputy McGilligan was speaking from the Government Benches, he knew that it was his last day here, that he would be here no more as Minister. Therefore he left this little legacy of £3,600,000 after him.

You would not like to quote the Minister for Justice on the civil servants?

Then there is another little item of £1,800,000 for Córas Iompair Éireann losses. When introducing his Budget on the 2nd May, Deputy McGilligan told us that Córas Iompair Éireann would have to live up to their responsibilities in future and balance their budget and therefore he was not providing any money for them, even though the Government knew that the losses would be there. On the 15th March, 1951, Deputy Costello came into this House looking for a sum of £980,000 for Córas Iompair Éireann losses. Deputy Costello said then, as reported in column 2104 of the Official Report —I want to be fair to him—"I conclude by expressing the hope that the coming year will be no worse than the year the company has passed through". Therefore, he knew that these losses would be there, but no provision was made for them.

I move to report progress.

Progress reported; Committee to sit again to-morrow.
The Dáil adjourned at 10.30 p.m. until 3 p.m. on Wednesday, 23rd April.
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