When this debate resumed I spoke on the matter last night. I would like now in view of further information I have got since from the Minister's replies to-day to apologise to this House for wrong statements I made last night. I do not pretend to be a financial expert of any description, but I intimated that the spree of the inter-Party Government during the past three years cost the country £5,000,000 per year in interest and sinking fund. I want to apologise to the House for that in view of the figures I got now from the Minister for Finance, and inform the House of the unpleasant news that £856,000 per year must be added for that little spree they had. In addition to the £5,000,000 a year that the people will have to pay for the money you borrowed and spreed, they will have to pay £856,000 a year. The actual interest and sinking fund to be paid now, over the sum that was paid in 1947-48, is £5,856,166.
Committee on Finance. - Resolution No. 11—General (Resumed).
Will Deputy Corry please address the Chair and use the third person?
I apologise.
Use of the second person leads to continuous interruptions.
Having dealt with that blunder on my part—I have not the exact figures and I am sure nobody can blame me for that—I would like to get back to where we were last night with regard to Córas Iompair Éireann. I quoted last night a statement made in the House by Deputy Cosgrave, who was then Parliamentary Secretary to the Minister for Industry and Commerce. At column 2104 of the Official Report, 15th March, 1951, Deputy Cosgrave said:—
"I conclude by expressing the hope that the coming year will be no worse than the year the company has passed through."
That was on a Vote for £980,000 to cover their losses. A month afterwards, Deputy McGilligan comes along and, with an airy wave of his hand says— column 1903 of the Official Reports, 2nd May, 1951:—
"It is questionable whether Córas Iompair Éireann can in the immediate future attain a position in which it will be able to meet all its operating expenses and discharge as well the interest on transport stock. The board has a statutory duty—
‘so to conduct its undertaking as to secure as soon as may be, that, taking one year with another, the revenue shall be not less than sufficient to meet the charges properly chargeable to it.'
This duty will, I hope, be discharged with the utmost expedition."
He provided nothing for Córas Iompair Éireann losses last year. In reading the Official Report of the 2nd May, 1951, column 1903, I missed the storm that we had here last week and I did not notice in this report that any Deputy jumped up to know whether the forcing of Córas Iompair Éireann to meet their full liabilities by whatever means they could or, at least, as Deputy McGilligan put it—I do not like to misquote him—
"so to conduct its undertaking as to secure that, taking one year with another, the revenue shall be not less than sufficient to meet the charges properly chargeable to it."
would mean an increase in bus fares. We did not hear any wail or moan that time about the increase in bus fares which would be caused by compelling Córas Iompair Éireann to find that money. There was no talk then from Deputy Alfred Byrne about the extra 3d. or 5d. that the poor little children of Dublin would have to pay in the bus if this thing was done. There was complete silence then.
If that £1,800,000 which has now been found to be the Córas Iompair Éireann losses for the last 12 months, and which was unprovided for in last year's Budget, were put on to the bus fares and railway fares, I wonder what the increase would be in fares. We had complete silence then on this matter. Although the Minister for Finance at that time, Deputy McGilligan, knew very well that there would be a gap of well over £1,000,000 at least, no provision was made for that in last year's Budget and, therefore, that must go on with the other little items that I mentioned last night; that must go on to be found this year in addition to our usual housekeeping bill. The £1,800,000 Córas Iompair Éireann losses and £433,000 interest on stock make £2,000,000 odd more that should have been collected from the people last year and was not collected and was not even paid out of the millions of American loan about which Deputy Dillon informed us we did not know how we would spend it quickly enough before the 31st March. Even if it were devoted to paying their debts, there would have been some excuse. It was not so devoted.
I do not know exactly the position in regard to the £2,700,000 arrears of fuel subsidies. That, however, has to be found also. Apparently it was not found in last year's Budget. It has to be added in.
That, Sir, is roughly a total of £9,400,000 that should have been provided for in last year's Budget if the State were to remain on anything like an even keel. That must be found this year in addition to our ordinary housekeeping. Where is it going to be found? I know very well that if I were a member of a board of directors who had plunged the company into near-bankruptcy—as those people have done—and saw another unfortunate team here endeavouring to find the money to pay their debts, I would not have all the howling about how the money was to be found.
You would take control of things.
We have taken control.
Far from it.
Deputy Hickey is not plucky enough to keep his mouth shut. I wonder what is the exact amount of the bill represented by the little letters that I read last night that were sent out after the dissolution of the Dáil. I have not it now, but I hope to have, for the Deputy's information, next week, the amount of the money that falls this year on the ratepayers of Cork City.
What has that got to do with the Budget?
This is what it has got to do with it; we have had to provide in the Budget £855,000, or nearly £1,000,000, to meet portions of the money given by those letters—about one-fifth of it. The balance has to be found by the ratepayers of the country —£2,000,000 odd. This was an action which had the result, undoubtedly, of being on the border-line of bribery.
That is a very serious charge.
A Minister of a Government which had just announced its dissolution came along and dished out over £3,000,000 to local authorities to be paid to their officials a week before those officials were due to go to the polls. No doubt, our slender majority here is partly due to those letters which had the effect of working a little influence because of the £125 lump sum they placed into the local authority officials' pockets a week before the poll. I wish them joy.
The charge of bribery is a very serious one as between the officials and the Government.
What else is it? I always call a spade a spade.
Have some regard for the civil servants.
What regard had a Minister of State for anybody when, the day after the dissolution of the Dáil had been declared, he dished out this money I have mentioned to the local authorities.
Do you mean to say that civil servants were influenced or bribed by that action?
I am saying it was done for that purpose. To do them credit, all of them were not influenced, but many of them were, I am sure.
However, I would like to pass on from that nasty picture of what was done on the eve of an election. I have not heard from Deputies opposite, up to the present, any denial of the figures quoted by the Minister for Finance in this House, the figures which I have given, item by item, here to-day. I have not heard any denial of the fact that the Government then in office knew that these commitments would have to be paid. However, they made no provision for them because they were going to the country. I am wondering whether those Deputies opposite did, in fact, know that £9,000,000 and practically £6,000,000 extra interest which was piled on by them while in office had to be found this year—last year's money which was left unpaid, and the money needed for this year. Of course, the present Minister has a very simple way out. He could declare, like Deputy McGilligan: "I am not going to take responsibility for the decision of the arbitration court last year. I will leave the civil servants without their increase in pay of £2,600,000." That is the decision that was announced on the 24th May, a fortnight after the Budget had been introduced. The present Minister for Finance could adopt the attitude which was adopted by Deputy McGilligan towards the arrears of the Fuel Fund—£2,700,000. There was a glorious announcement the week before the election: "Civil servants, you are about to get £3,600,000. Local authorities, you are about to receive £2,000,000. Come along and vote for us." That is a grand picture, but the piper must now be paid.
We are hearing moans and groans and general uproar about the position of the unfortunate people just now. If that £3,600,000 had been provided for last year and paid, it would not have been necessary to put an extra 3d. tax on the "pint," it would just about fill the bill. Then we have that £1,000,000 which had to be put into this Budget as a result of the four letters I have mentioned. If those had been provided for in last year's Budget, it would not have been necessary for us to put an extra 6d. tax on the whiskey. I hope Deputy Hickey who is the financial genius of the Labour Party will think over this.
You are getting on fine. I find you most interesting.
If I said anything that is untrue I will be around here for the next fortnight waiting to hear Deputy Hickey contradict it.
You would not do anything like that.
We have had to find this year all those millions of pounds I have recounted which were left unprovided for last year. Unfortunately we will have to find the same amount for next year because the evil which men do lives after them. The present Minister for Finance, in addition to having to pay the £3,600,000 left unprovided for the Civil Service last year, has to pay the same amount this year. He has to find money for Córas Iompair Éireann losses. I do not know what was in Deputy McGilligan's mind when he made a statement to the effect that Córas Iompair Éireann would have to live up to their responsibilities. Perhaps he hoped at that time to induce Deputy Davin to take over control of the company. I feel sure Deputy Davin would not have made half the mess that is being made of the company at present.
I suggest now that it is time we trimmed our sails a bit, and that when we talk about subsidies, the time for subsidising as far as Córas Iompair Éireann is concerned is gone. If you put any body of men there and tell them: "Carry on lads whatever way you like, and whatever losses you may have at the end of the year I will pay them"—when you put a firm or an individual in that position it is an inducement to extravagance. It is a definite incentive to them not to look after their business.
Is that why the farmers are getting subsidies, because they do not look after their business?
Let the Deputy not draw me out.
I am only asking.
I am dealing now with the matters that are in the Budget, and with the £1,800,000 that is down here, and that I say could be put down at £10,000,000 or £11,000,000 when we take into consideration the stops and the obstacles that were put against private enterprise in the transport line in this country. Having stopped lorries and, in fact, every means of transport in this country in order to drive all transport into the hands of Córas Iompair Éireann, we have a position that would remind you of nothing but the Dáil restaurant. I suggest to the Minister for Industry and Commerce, who is in charge of transport, that he take very serious notice of this situation. I remember a few months ago here having to deal with a position in which this company were running six trains a day out of Cork City to Dublin for fun, most of them, because the passengers that are carried in the six trains could just as well be accommodated in two or three at the most.
Are you advocating to do away with all subsidies?
I am putting up a case for this £1,800,000 that the State must find for the debt you created last year and the £1,300,000 this year.
You want to do away with all subsidies? Is that agreed?
I have pointed out the position and I feel very strongly on the whole matter. I have not heard from either side of the House up to the present any suggestion or proposal for reducing that huge bill that is coming before us each year. There is being created a regular octopus to grasp the finances of the few who are working or producing in this country.
I asked the Minister for Finance a question here last week in regard to the number of civil servants in State and local employment. I received the reply yesterday to the effect that in the year 1939 there were 26,775 civil servants employed and on the 1st January, 1951, there were 35,287—an increase of 11,000 drones. If 26,700 civil servants were all that were required to run the country in 1939 what are the 11,000 more doing to-day?
Could that not be raised more properly on the Estimate rather than on the Budget statement?
It arises, Sir, on the ways and means by which this alarming sum that is before us can be reduced.
You cannot travel over all the Estimates in that fashion and discuss all the expenditure under the various Departments. The Civil Service comes under the Department of Finance.
I do not intend going further into it. I do not wish to have any man put out of his employment but I would suggest to the Minister that he should stop recruiting for the Civil Service and return to the 1939 figure.
Mr. Byrne
Is it right that the Deputy should call civil servants and working people in this country drones?
Very hard terms are employed in this House.
If I have said anything derogatory, I am sorry. However, I regret that Deputy Byrne was not here a little while ago when I was speaking. I did not hear him pleading last year when Deputy McGilligan announced that he was going to compel Córas Iompair Éireann to increase their charges last year.
The Deputy need not repeat his speech for the benefit of Deputy Byrne.
There are other matters with which we are seriously concerned. As far as we can judge, the method of collecting the dance tax was very expensive. I am suggesting that he find some other means of collection, for instance, a licence duty on the owner of the hall. In this connection, as in the cinema entertainment tax, I have in mind the health of our people. In 1947, we had some 90 odd patients in the sanatorium in Cork. At present, there are 387 and 96 on the waiting list. I suggest that that is largely due to the dance halls and the cinemas. That is proved by the fact that in 1943 the receipts from entertainments duty in respect of cinemas were nearly £387,000, while last year they amounted to £1,186,000. That is something that could bear an additional charge. Even if the additional charge had the effect of bringing in less revenue, it might help to halt the alarming and disgraceful position which we see in our towns and cities. Deputy Hickey is well aware that even in the middle of the day in Cork City, from about 2 o'clock onwards, we see a queue 200 yards long waiting outside a cinema to go into the pictures. There is something very unhealthy in a situation where, on the one hand, we have these long queues of people while, on the other hand, the agricultural community are unable to find the labour which they require.
I have heard Deputies from various Parties complain about the number of unemployed people in this country to-day. Do Deputies not think that there is something radically wrong——
Of course there is.
——when, on the one hand, you have thousands of men lined up at the labour exchange to draw unemployment assistance while, on the other hand, farmers throughout the country cannot get the labour which they require?
And there are lots of work to be done.
I feel rather strongly in regard to this matter. I was one of those who had to travel from school to school in part of my constituency for some 15 meetings during the past two months, taking the names of farmers who required labour for singling and harvesting beet, and who found they could not get that labour. While those thousands of men are lined up at the labour exchange—unemployed, mar dheadh—and drawing unemployment assistance, we have to go to Connemara to hire men who in the ordinary course go to Britain, and pay their fares down to Cork in order to get them to single beet. We have to go to Connemara to get men to do that work in Cork while, at the same time, we see men there drawing the dole at the labour exchange. There is something radically wrong and unhealthy in a State in which that condition of affairs exists. It might be said that these unemployed men in Cork cannot do that particular kind of work. I am a farmer and I have personal experience of these types of men. I remember that on one occasion at least when I had to bring them down to do pretty skilled work they did it and did it successfully.
What is the relevance of all this to motion No. 11?
The relevance is the bill with which we are presented; the means of rectifying the size of that bill as well as we can so as to prevent a recurrence of a bill of such a size every year. We want to lighten the burden on the producing population. We want our producers in this country to produce more. We do not want to have them held up in their production by the want of labour while, at the same time, thousands of men are unemployed in the country. I think that any Government should give serious attention to that state of affairs and endeavour to remedy the position.
I have another suggestion to make to the Minister as regards taxation. I asked for certain information in connection with the figures and the Minister very kindly gave it to me. I find that in 1943 the betting tax brought in £121,000; now it brings in £660,000. I suggest that this is a fiéld which the Minister might very profitably explore. I consider that this is a tax on the poor devil who goes into a bookie's office and puts a couple of bob on a horse but who has no money to go to the races and no money to go to the grand stand. The Minister charges 7½ per cent. duty on that poor devil's winnings. What is the position of the gentlemen who go to the races and who can afford to go to the grand stand and also of the ladies with the fur coats who go to the races? Their winnings are taxed at the rate of 2½ per cent. because they go to the races while the poor devil who cannot afford to go to the races and goes instead to the bookie's office must pay 7½ per cent. I suggest that that taxation procedure should almost be reversed. The ordinary city man who goes into a bookie's office invests 5/-, 2/6, 2/- or 1/- each way, but the gentlemen who go to Baldoyle and to other racecourses bet in £5, £50 and £100. Undoubtedly there is a wide field there for the Minister's activities.
The gentlemen who frequent the grand stands at these racecourses set out in their big swanky cars for race meetings in various parts of the country and bet in £20 and more. Those gentlemen can very well afford to pay 7½ per cent. or even 10 per cent. on their winnings. They can afford it much better than the unfortunate devil who is bitten by the betting bug but who cannot afford to go to the races and who invests a few bob in a bookie's office. If the Minister takes my advice in this matter his revenue from the betting tax in 1952, instead of being £660,000, will amount to a couple of million pounds. As a matter of fact, it would be as good as the sweepstakes to him.
I would further strongly suggest a very heavy tax on cosmetics. Is it any wonder that our young men remain bachelors when they see one of these ladies all dolled up and with £5 worth of paint plastered over her features? Is it any wonder that there is no inducement to a man who looks at a painted face to get married? I do not know how that face might look if it were washed. There is no use in expecting a man to go and take charge of that type of lady for better or for worse—mainly for worse. I certainly consider that there is undoubtedly a pretty wide field there in which the Minister could wield his axe and bring in some extra money to pay the debts of my dearly beloved departed friends opposite. I am sure that as far as those things are concerned, there is definite room for further taxation which could be used to relieve the burden which the people are bearing under other heads.
I regret to have held up the House so long. I think I have dealt with all the matters with which I intended to deal. I only hope that the people will not for many a long year be again afflicted with the gentlemen who came in here three and a half years ago and threw this burden on the unfortunate people of the country. Remember it is not alone a burden for this year; before people in this country can get one penny for themselves in future they will have to find, because of the activities of these gentlemen for three and a half years, close on £6,000,000 to pay the interest on the money that was borrowed to be squandered. The total amount of revenue raised from beer plus the total amount of the tobacco tax would not clear the debt that these people put on the country's back. Then they have the nerve, the cheek and the impertinence to come up here shouting and howling: "Oh, the poor people, and the Budget, the outrageous Budget of Seán MacEntee. Look at what the poor people have to pay." They have to pay because of the squandermania that existed in this country for three and a half years. They have to pay for Deputy Dillon's idea: "Oh, our only trouble was whether we would manage to spend the money from the American loan before the 31st March this year." He even boasted that he succeeded in spending £5,500,000 in an hour. Now the people must pay the piper and they will have to continue to pay for whatever period the loan runs—for 20 or 30 years. That burden is there to be borne by us and by our successors for the next 20 or 30 years as a result of the three and a half years' squandering craziness. In conclusion, I should like to say that I want to return on behalf of the people of this country grateful thanks to the local government officials of the country who did not swallow the bribe of £3,000,000, that would have to be paid—£1,000,000 by finding it here and £2,000,000 to be found by the ratepayers of the country—a bribe that was handed out a week before the election by the defunct Ministers or ex-Ministers opposite.
I think the Minister for Finance, as a result of the speeches made outside, some of the speeches made by the Opposition in the course of this debate and particularly the speeches made from his own benches, is fully aware of the very great severity of the Budget which he has introduced. A lot of the criticism made by the Opposition I consider to be extravagant but some of it was sound. I hope that, going through that welter of debate, he will pay attention to that part which, stripped of the virulence of political feeling, places in fairly true perspective the effects that this Budget must have on our people. Curiously enough I consider that one of the best analysis of the Budget was made by Deputy Norton. Some of the figures which he produced were particularly effective in showing the result and hardship that must fall on old age pensioners particularly, as a result of the provisions of the Budget. In listening to that speech and appreciating its good points, I could not help feeling how very sad it was for the country generally that Deputy Norton's performances in office had fallen so very far short of his professions in the Opposition Benches. However, I do not think that that detracts from certain points which he made.
I do not know if it is possible these days to introduce successfully a deflationary Budget. The Taoiseach, in answer to recent questions, pointed out that the cost of living must inevitably rise as a result of the removal of the subsidies. I think an inevitable sequel must be further wage demands. They must come and they must be expected and in order to obviate or mitigate hardship on the ordinary working people of the country, those demands will have to be met. Those demands will, therefore, mean increased prices and I do not see how it will be possible to avoid the very evil which I think the Minister intended to avoid by this Budget.
Certain questions have been asked outside the House and I wonder if I might put them to the Minister on behalf of the ordinary people, people who do not pretend to be economists. I am one of those. There are plenty of people who are quite prepared to give this Budget a fair crack of the whip if they could understand some of the reasons for certain of the impositions and the reasons why certain impositions were not made. I would be grateful if the Minister would let us know whether or not it would have been possible to produce a Budget which would have given a greater semblance of justice and a more equal distribution of the burden. Deputy Corry mentioned some taxes that he thought might have been imposed in addition to those already provided for in the Budget. He mentioned an increase in the betting tax and an increase in the tax on cinemas. Indeed, there are others to which he did not advert, and I would like to know if the Minister considered them. He may have had very good reasons for rejecting them.
There is one tax that I think might prove useful and that is a tax on tourists. I am well aware that that will immediately call forth the reply that we are trying to develop our tourist industry. One must however approach this matter from a realistic point of view. We know that many of the tourists who will come in this year will come because of the limitations imposed on continental travel. Would it not be possible to make provision for some form of poll tax or landing tax on these incoming tourists?
There are other taxes worthy of consideration. There is the corporation profits tax. There is the excess profits tax. There are luxury taxes which could be imposed. I think we are all anxious that our State should develop in such a way as to provide an equal opportunity for all our people in every grade of society. We are all anxious to see an improvement in social welfare. We are all anxious to have improved health services. Very few of us would object to the imposition of taxation for these purposes. Because of my experience with the Fine Gael Party, I think it is possible that they might be the exception. As far as I personally am concerned, I have no objection to the imposition of taxation provided the need is quite clearly defined.
What are the objections to a capital levy? In this Budget, the Minister has hit the old people very hard. That, indeed, is, I think, incontrovertible. These old people are coming to the end of their days. Many of them are living in very straitened circumstances. There are many of them in our county homes. There are many of them living quite alone. They will be hit very hard by this Budget. Those of us who are younger can accept the burdens imposed by this Budget and must accept them. I would make a special plea to the Minister to reconsider the implications of this Budget on the old who are, when all is said and done, a special charge upon us. It should be our greatest endeavour to cushion the aged against the impact of rising prices and the hardships which modern life imposes.
Why has the Minister not come down very much harder on luxuries and on the business community? Why has he not come down harder on those who can afford to pay more for their entertainment, who can cut down their horse racing and greyhound racing, their smoking and their drinking? These people can impose self-rationing. Bread, butter, tea and sugar are the essentials of life where the old people are concerned and from that point of view there is no doubt that this Budget will hit them very hard.
There were some very unrealistic speeches from the Opposition. If the Opposition wants to get political kudos and buy votes they need only go out on a platform and recite this Budget. It needs no comment. The Minister must have been fully aware of the implications behind it and his reasons for introducing it must have been very sound indeed because he must understand that it is an extremely dangerous Budget from the political point of view.
While there has been some objective and honest criticism from the Government Benches, I think that the Minister for Posts and Telegraphs will have to move a little away from that sliderule mentality he has developed towards human problems and the effect of cutting down on the necessaries of life. He has told us that we smoke too much. He has told us that we drink too much. I feel that the time is not far distant when he may tell us that we eat too much and, following upon that, he will tell us that our old people live too long and that is the reason why he is in favour of the elimination of subsidies. We must have an end once and for all to this approach to the problems affecting the daily lives of the aged and of the average man and woman in our society as if human beings were mere digits in some mathematical conundrum and as if by the process of addition and subtraction we could solve all their problems.
There are some points in relation to taxation generally about which the man in the street is striving to question the Minister. Why did the Minister not tax this? Why did he not tax that? Why did he tax nothing except bread and butter and the necessaries of life? Why hurt most the people in our society who are least able to defend themselves? I think it was Deputy MacBride who suggested that this very severe Budget is due to the fact that the Government has picked a quarrel with the American Government, or something like that.
At any rate, whether that is true or whether it is untrue, there is a general impression abroad that the Taoiseach —the Government—has decided to insist that we shall establish, without doubt, the economic independence of our State, and that this very severe Budget is necessary not only because of the immediate needs of the country but so that we may create a situation whereby we can be independent of any outside interference or any outside commitments. Again, that is the view of the man in the street. I would ask the Taoiseach, or the Minister, if that is so, and if he is trying to fight for the maintenance of our national integrity and independence, that all he has got to do is to tell our people that these serious and hard impositions which strike at everybody, from the youngest infant right up to the oldest amongst us, are imposed in order to maintain our independence and our national sovereignty as a result of the existence of our economic independence. If he does that, then I am quite certain that he will have, without any equivocation, any holding back, the whole strength and power of public opinion behind him in his intent to maintain our independence from any entanglements in the east or in the west.
Deputy Costello introduced a point which, again, has caused a certain amount of disturbance in the minds of the people. He suggested that the Minister is budgeting for a surplus in the region of £10,000,000. Now that is a very serious charge indeed. It is quite possible—I am sure indeed—that Deputy Costello made that charge conscientiously believing it to be true. I feel that the Minister in his own interests would be well advised to deal with that point by showing us that there is no question that this Budget, with all its stringency and with all the resultant hardship which will follow from it, has not been imposed as a result of his concern for indulging in some small political trick whereby the Government may get votes at a later election, be able to balance its budget and have a surplus to mitigate taxes and relíeve old age pensioners. That, indeed, if it were true, would be a very shabby and a very unworthy trick to play on our people. At the same time, the charge has lodged in some quarters and has done some damage. I would suggest that the Minister might reassure us that that is not so.
There is one other serious aspect of the Budget—serious defects in the Budget proposals or Budget statements—which, perhaps, the Minister felt he could not, or should not, deal with. Again, I feel that if he had done so it would have, to a considerable extent, cushioned the serious effect of the Budget. The point is this, that this Budget, or this serious deficit, is in my view a fairly normal result not so much of the three years of inter-Party Government or of the 16 years of Fianna Fáil Government, or of the previous period of the Cumann na nGaedheal Government, individually, but is the cumulative result of all three Governments. The fact is that we have pursued an economic policy that could only lead to this very serious position in our economy.
The Minister has not told us, he has not given us any idea or any plan even in broad outline, as to how he proposes to provide that a situation such as this will not recur in the coming financial year or in the next year or evermore, as far as the taxpayer is concerned. Has he, or have the Government, any plan in their minds for a co-ordination of industrial development expansion, under the able handling of Deputy Lemass, with an expansion of agricultural production, that will provide the State with that prosperity wherein it will be possible to provide some more of the money which is at present being asked from the taxpayer? Is there any real intention on the part of the Government to provide for full employment? How can the country be healthy, how can it have a healthy economy when there is— under the inter-Party Government the number of unemployed was 50,000 and now it is 70,000 odd—that considerable proportion of able-bodied men able to work and I think in spite of what Deputy Corry has said willing to work if work is provided for them? In addition to these, we have the usual current number of intending emigrants—20,000, 25,000 or 30,000. Again, they are able to produce wealth for the community, but they are lying idle, and worse than idle, drawing from the national purse, through no fault of their own, unemployment assistance or the dole or whatever it may be. Has the Minister, or have the Government, any comprehensive plan, even in broadest outline, for the absorption of those people into productive employment either in industry or on the land? It seems to me that we can never develop to a state of reasonable security, prosperity and economic independence until the Minister and the Government—whatever Government happens to be in power —are serious about the elimination of these very serious evils from our national life—unemployment and emigration.
There is another form of unemployment, in my view, to which I have referred recently in a number of questions, and that is the insistence on a continuation of manual labour to be used on road work and in the building of roads. I think that this is due to a neglect on our part to find productive employment for these men. I think it is quite wrong that a man who has been educated—and most of them are intelligent men anxious and preferring to do productive employment—should be employed digging holes in the roads and filling them up again when a machine would do the work just as easily. I know quite well that remark can be misrepresented. It has already been misrepresented by that great pseudo-revolutionary, Deputy Dunne, who accused me of disrespect to the road worker because I felt the road worker should be provided with proper employment. I do not think that I am particularly concerned with Deputy Dunne's opinion of me. We are all aware of that vocal and vociferous rebelly red robin who so rapidly became a quietly chirping pet canary when the vested interests opposed him and opposed a progressive measure in this House.
One of the closest friends whom I admire most happens to be a road worker and it is because of my interest in that man that I think it is quite wrong of us to accept that we shall continue this form of famine era unemployment simply because we are not getting down to reorganising the State in a proper way.
Again, I wonder if there is any attempt on the part of the Government to try to find some way of getting more money from the farmer. Plenty of Deputies here will no doubt object strongly to that proposition. At the same time I think it is unquestioned that the farmer does very well for himself even under this Budget. He gets the advantage of children's allowances and is not very seriously hurt by removal of subsidies on either the bread or the butter. He gets the annual advantage of paying little or nothing in income-tax. I wonder if the Minister does not consider that the problem is a sufficiently serious one, to merit inquiring into the fact that the farming community are fairly heavily subsidised out of the national purse in various ways.
What does the Deputy know about the farming community?
I know enough about it. There are plenty of grants by way of subsidies paid out of the national purse to the farmer. I think it is only fair that the farmer should make a fair contribution to the national purse and that he should take his share of the burden of running the country and running our social services.
This whole question of subsidies is, of course, a very complex and complicated one. I wonder if it would be possible for the inter-Party bloc or sections of the inter-Party bloc, who may be sufficiently courageous to give an independent opinion, to say what they will do or would do were they returned to power in a multi-Party Government about this question of subsidies? Would they restore the subsidies in full or in part? That is a fair question and I think they ought to be able to give a straight answer.
They have made a tremendous howl throughout the country on this whole matter. All right. That is a fair game. That is politics but at the same time it is irresponsible of the Fine Gael group if they suggest by this howl that they deprecate the removal of the subsidies and at the same time, were they returned to power, they would also remove them.
I can only gather in the House from listening to Deputy O'Higgins who interjected a remark in reply to Dr. Ryan, Minister for Social Welfare, and said that the only people who intended that the subsidies should go on indefinitely were Fianna Fáil. I may be drawing too much from that simple remark. If I am I apologise to the Deputy but it gave me the impression, as he was speaking for Fine Gael, that he did not consider the subsidies would be continued.
Some of the most impressive arguments which I heard against subsidies came from some of the members of the Fine Gael Party. At the same time, a lot of them seemed to hinge round an argument which I considered to be a specious one which is that you are providing cheap bread for the very rich person. If the rich person is paying taxes I do not see why he should not get some of the benefits of those taxes. In addition, I consider the argument largely to be like the one about the Connemara lady paying for the Fitzwilliam Square medical services, the old argument in favour of a means test. Our concern should be with what is the impact on the poor person or the person with limited means. If the other person happens to benefit I do not think you are justified in penalising the poor person in order to try and "get at" the rich one. At the same time, the removal of the subsidies will impose a serious hardship. I feel that the Opposition would greatly strengthen their case against the Budget proposals were they to make a clear, definite statement as to whether they would or would not remove the subsidies and reimpose the subsidies should they be returned to power.
I think the tax imposed on the licensed business is an acceptable tax. It has always struck me, as I said before, as curiously anomalous that the licensing trade has such a very strong hold on successive Governments and has exerted such a strong hold and such a strong influence in the making of policy here in Ireland. The Minister is to be congratulated on taking a stand in relation to this particular tax.
I find it difficult to understand how the Labour Party can justify their refusal to vote for the taxes of different kinds imposed. Are they against taxation even for the provision of social services? I can understand Fine Gael voting against them and I can understand the Sancho Panza of the Clann na Poblachta remnants voting against taxation. But I cannot understand the Labour Party, if they are to implement their policy of expansion of social services in different ways, voting against taxation. I think they have followed too closely the lead given to them by their Fine Gael mentors in the inter-Party Government.
Will the Deputy stand for the removal of the dance taxation?
I think the removal of the dance taxation was extremely foolish. I simply cannot understand it. I think it is a very foolish thing to have done. Politically also, I think it is a very foolish thing to have done. I think the Minister will come to feel that it is a very foolish thing. I do not see how it can be justified, but perhaps the Minister may be able to provide his own explanation. He will most certainly need it on the hustings, if the Opposition is worth a damn.
There are a few points by which the Minister could help to strengthen public opinion in favour of this Budget. One of the things is some attempt to make reality out of the prices tribunal. I have nothing to say against the members of the prices tribunal. They do their job extremely well within the powers given to them, but I think their powers are too limited. Recent inquiries before that tribunal, while carried out most conscientiously by the members of the tribunal, have proved completely ineffective by virtue of the obvious collusion amongst those seeking increases in benefit. There is the most recent example—I do not want to comment on it very much—in relation to an increase of insurance which was completely unjustified. But the prices tribunal are in a very difficult position because they are not in a position to call for confidential information from business houses. Another case is sub judice and I will not comment on it.
The people do believe, rightly or wrongly, that a lot of goods are overpriced, that a lot of industrialists are making too much. Everybody wants them to make a fair profit. Many of them are only taking a fair profit. But there are some of them, businessmen and industrialists, who are doing considerable disservice to the good name of Irish industrialists by their avaricious grasping of opportunities given to them by a society which will not gratuitously pry into their affairs. If it is shown, as I think it has been shown on a number of occasions, that this gentility on our part, if you like to call it that, is being exploited by these trade rings and the different organisations and industries, then this House should give the Government the powers to meet the needs of a properly functioning prices tribunal which can call for any documents it wishes and, on the information provided, make its decision. The prices tribunal was set up in a burst of exuberance by the inter-Party Government, probably with the best intentions in the world, but it is completely ineffective. If the Minister were to give proper powers to such a body, alter it how he wishes, it would help considerably towards the establishment of a greater sense of confidence on the part of the people in this Budget.
Naturally the backing of a Budget such as this has serious implications for all of us for which we are fully aware we will at a later date be answerable at the bar of public opinion. The public will accept the burden. As a race, we are used to hard times. As long as we feel that this Budget, with its impositions and its hardships, is necessary and that the Minister has exhausted every possible device known to his very able officials in the Department of Finance before he has touched, or felt that he has had to touch, the old people, then there can be no alternative but for us to accept it. My own view is that in the end we would inevitably in the inter Party Government have had to face such a dilemma. I believe that the plan was the introduction of the Social Welfare Bill, then an election, and then a McGilligan Budget the severity of which would make the Minister's production pale into insignificance with its harsh and cruel impositions on all sections of the community.
That is a piece of pure invention on the part of the Deputy.
I do not intend to try to compete in the art of invention with Deputy MacBride.
The Deputy does it naturally without any practising of the art.
Order, order! Deputy Dr. Browne.
I would require to be very seriously provoked before I would vote against this Budget and for the return of an inter-Party Government. My memory is not so short as the memory of the public possibly is. I do not intend easily to go back to Deputy Everett and Baltinglass, to Deputy MacEoin——
You were the one Minister who applied for more jobs than any other. I have your letters on my file.
——to Deputy MacEoin and the Legal Adoption Bill——
I kept your file.
——to Deputy Costello and the medical association and the sell-out of the mother and child scheme——
You have not been so hot since.
——nor do I wish to go back to Deputy McGilligan, the then Minister for Finance, who made the proposition that I should collaborate with my colleagues in providing a faked Budget.
That again is an untrue statement.
That has never been repudiated.
I repudiate it now. It is an untrue statement.
The reason I would not return that Government is that I would be failing in my duty to the people——
On a point of order. Are we discussing a Budget that would have been introduced in certain circumstances or a Budget which has been introduced and which takes £20,000,000 additional out of the people's pockets by way of taxation, on the one hand——
The Deputy is making a speech.
——and increased food prices on the other?
To pay for your spree.
I ask if we are discussing the Budget before the House or an imaginary Budget, which, in different circumstances, might have been introduced.
The Deputy, I take it, is relating one to the other.
I will conclude by saying that I concede this Budget to be a very serious Budget, with particularly serious implications for all of us. At the same time, I believe it to be the product of the minds of honest men. They may be wrong and they may find that they are wrong. At the same time, it has that germ of honesty of purpose which is a lot more than I could say for the Budgets I have known.
I should like very much to reply in detail to a number of the points raised by the last speaker.
You do not have to—he is in the net.
I hope, however, that, in the way in which I propose to deal with this matter, these questions will indirectly be answered. As I have already said, shortly after we came into office, we became aware of the fact that our fears in opposition were fully justified, and more than justified. Every sign and every indication we had were corroborated by the facts that we were able to establish definitely from figures as time went on. We saw very soon that there was not the slightest shadow of doubt that the Government was faced with expenditure far in excess of the revenues provided to meet it.
We tried to get the public to realise the situation. We knew that when the hour of reckoning, namely, the new Budget period, came, the public were going to get a rude shock. We did not get a shock to the same extent, because we had been following events fairly closely in opposition and were being prepared for the situation that had to be dealt with by the events from day to day and by the accounts from day to day; but when we tried to get the people to realise the situation the Opposition raised the cry that we were trying to frighten the people, that there was no such situation as that which we were describing and they warned us of the effect our statements might have on public opinion and public credit. They did everything that people who really understood the situation should not do.
We found when we came into office that a large number of Supplementary Estimates, amounting to some £11,000,000 odd, had to be introduced. Taking away the disputed amount in respect of fuel losses, there was still something in the neighbourhood of a sum of £9,000,000, for which the only provision in the previous Budget was £1,500,000. The result of it all was that when the Minister for Finance and the Government came down finally to consider the Budget for the coming year, it appeared that, comparing the estimates of expenditure of the previous year with the estimates of expenditure for the ensuing year, there was a difference of something like £20,000,000 and that the only offset to that was a possible increase of about £5,000,000 in revenue. When the closest estimates were made, that appeared to be the final result also. There was between anticipated revenue and anticipated expenditure a gap of £15,000,000 which had to be bridged.
That was no pleasant prospect for the Government. I remember that, in the pre-war years and even during the war years, we would have shuddered at the idea of having to meet one-fifth of that amount, knowing that it would have to be met by increased taxation. Listening to members on the opposite benches, one would think that the Minister for Finance was a sort of ogre, somebody who took sadistic pleasure in imposing hardships on the people. Why should a member of any democratic Government approach his task in that spirit? Everybody who has paid any attention to politics either here or in any other country, or who knows of politics even through books, knows perfectly well that the danger with democratic Governments is not that they will impose burdens on the people heavier than the people are willing to bear, but that they will not do their duty to the people and to the community in getting from the community the means necessary to run the services properly. That is the danger, and it was that danger that made the previous Government run away from their duty of providing last year for expenditure which they could have largely anticipated. It was not possible to anticipate to the nearest decimal point of a million the amount necessary, but it was possible to get a rough estimate, an estimate which can be provided by people who are expert in providing such information over a period of years, who have got the facts on which to base their judgement so that their estimates—guesses, if you like— are informed guesses and not stupid ones. The previous Government, by its failure, have left to us to do in one year a task which, if it had been divided over two separate years, would still have been a difficult task and would have presented to the Government that had only to deal with half of it a difficult problem.
As I have already said on other occasions, there was only one way of dealing with it—either reduce expenditure or increase taxation. There is, I think, general agreement in the House that we ought to meet current expenses from current revenue. We may differ on a particular item as to whether it is or is not proper to be met by current revenue—in other words, whether it is one which we would call generally a capital item or not—but there can be no difference of opinion that the £15,000,000 about which I have been talking is £15,000,000 that affects current revenue and current expenditure. We have excluded from it the £9.27 odd millions which the Opposition, according to their system, would class as proper to be met by borrowing. I can say this, that some of us believe that a considerable portion, which might even amount to one-half, of that £9.27 millions would not properly be met by borrowing. However, we excluded the £9.27 millions partly so that the differences here and the difficulties here might be met by direct argument on a common ground and partly because we fully realise that if you are moving in a car at 80 miles an hour or so you cannot take a right-hand turn and hope not to get upset. We realise fully that to deal even with the £15,000,000 is an extremely difficult task and will impose heavy burdens on the people. We do not object to the Budget being classed as a severe Budget. It is a severe Budget, so severe, as I have said already, that no democratic Government in its senses would dream of introducing it for the paltry reasons that have been suggested by the Leader of the Opposition. No Government would dream of introducing a Budget of that sort were it not that it felt that the national interest demanded that it should have been introduced.
I have said that I believe we are at one in regarding this £15,000,000, this balance, this difference, as affecting current expenditure and current revenue. We are also at one, I think, in the agreement—I have already mentioned it—that current expenditure should be met from current revenue.
It is no harm, perhaps, that we should think for a moment of the items that go to make up this £15,000,000 or £20,000,000. I will try to enumerate a few of them. There is, first of all, something like £3,750,000 made up between the increase in the flour and bread subsidy and the butter subsidy. There is something like £4,000,000 made up by the £2,000,000 on social welfare, the £1,000,000 in grants to the health services and £1,000,000 in old age pensions. There is another £3,000,000 in increases in salaries of civil servants, teachers, gardaí and so on. There is about £1? millions subsidy to meet the losses on Córas Iompair Éireann and Great Northern Railways. There is £1,000,000 for contingencies. There is, of course—I will have to refer to it later when I deal with Deputy Costello's points—the £2,000,000 increase in the service of the public debt. These are only some of the items.
Now, it is all very well for us here, for the Opposition and others, Independents, to cry out when Budget time comes along and when we are asking that the money to meet these services should be raised. That is not the time to cry out. Again it is one of the weaknesses of democracy that when the cry should come it does not come: it comes only when the commitment has been made and when the debts have been incurred and when the inevitable hour of reckoning comes. It is coming back from the riotous holiday to the sober everyday work. It is the morning after the night before. It is expressed well in the Gaelic: "is milis fíon, ach is searbh a íoc." We all like to provide good things, we all like to have splendid social services, we all like to see that the servants of the State are well paid, we all like to keep on our railway services. We all like to do these things and whenever there is a proposal made by the Government for an increase of any kind the criticism of the Opposition is always that it is not enough, that more should be provided. The very urge to be popular with one section or other of the nation influences both the Opposition who have no responsibility and very often even Governments who have responsibility and drives them to seek popularity for the time being and to hope that when the day of reckoning comes they will not have to incur the blame.
If we want not to have severe taxation, if we want to be in the position that when it comes to the day of reckoning we will be able to meet the reckoning, then the time to look out is when the proposals for the expenditure of public money come before the House. My own belief is, considering our means, that from this day on, from this time on, we will have to be careful. To me at any rate, looking at what was happening as we saw it when we got into the Government, it seemed that if we were to continue that pace for very long—and it would not even be very long—we would come to a very abrupt end which would mean the severest hardships, hardships for which we would not be easily able to find a remedy, for every section of our people. Our view was that while there was still time to change that trend we would change it even if we were defeated here in our effort to do so.
The question of the independence of this country was raised. It has not been raised in the way in which I want to deal with it. As far as we here were concerned and as far as I personally was concerned, we have been at one with a number of our colleagues on both this and the other side of the House in our aim to establish the independence of our people and we realised the extent to which political independence can be sapped by economic dependence. We want to do everything in our power to see that our people will not be reduced to the position in which they will have to go hat in hand to try to get from others things which they could produce themselves. There are things which we can produce ourselves; most of our needs can be produced here and as to the things which we want to get from outside we should be able by our efforts here to secure enough surplus to give in exchange for them. We do not want to see our position here so worsened that the reserves which give us this economic independence will be frittered away. On the current side we want to see to it that we live decently within our means and that we will strive so to bring it about that when we pass on we will leave things behind us better than we found them.
It has been suggested, if you please, that all this unpopularity which we are prepared to face was caused because the Minister for Finance wanted covertly to bring into the current account the capital items which, for the reasons I have stated, we have presented on the capital side for the moment, that is the £9.27 million. Is there anybody with any political sense in this country who would believe that? It was, of course, necessary to try to find a motive. The Leader of the Opposition is an excellent advocate well versed in all the arts by which the worst can be made to appear the better cause. He has tried to look for a motive because he knew instinctively that the jury of public opinion would be looking for a motive in this case. The only motive he could suggest was that the Minister for Finance was so wedded to an idea, if you please, this idea of the £9.27 million being treated as current instead of capital, that he was willing to bring himself and the whole Government into the political situation which we must face on a Budget of this sort. Nobody would accept that.
Of course, the first thing you do if you want to plead a cause well—I believe it is commonly understood by advocates and lawyers—is to convince yourself that your cause is right, for then you can go forth to battle with all the fervour of a righteous believer. Deputy Costello has mentioned six points and I do not think that a baby in politics would accept a single one of the six. I will try, as far as I can remember them, to deal with them. The first point was that we had underestimated the saving in subsidies by something like £2,000,000. Then he proceeds to work with averages to arrive at this underestimation. There is not a single teacher of averages in any national school who has not, in the teaching of them, to impress his pupils with the danger of handling averages and nobody who has opened a book on statistics will have gone very far before finding again that warning under a variety of headings. The danger the schoolmaster would have taught, the danger of introducing proportionality in matters of that sort——
It was the Minister for Finance who introduced the average of 1/6 being taken off 2/-.
Exactly, and because an average of that sort was introduced, instead of taking it on its face value as what it was, it is used to make calculations giving results that are millions of pounds out in a total of £15,000,000. If the Deputy waits I will meet these points. If you are going to take proportionality in time there must be some equality of flow before you can do it.
What does that mean?
If the Deputy is not able to understand that then he is too dense for me or anybody else to go into it——
Fraud.
When I say things I try to speak simply and do not get off in the ethereal air as the Deputy does from time to time.
We want an explanation in figures.
The Deputy will get an explanation in figures if he will wait for it.
I will wait.
Very well. You do not require figures to see that if a situation completely changes in the last three-quarters of a year from what it was in the first you will not get correct results by taking the whole year, dividing by four and taking that as the average.
We want figures.
You want figures?
That was an unfortunate change of Government.
You are getting figures and you will not take them; you are getting the principles that underlie the figures and you will not take them.
Figures we want.
The figures are these: in the portion of the year in which there will be reduced subsidies on flour and bread the situation is completely changed; you are losing in that three-quarters of the year the money you would have got in subsidy by way of the sale of white flour which is £1,000,000.
That is not the figure we are looking for.
The Deputy wants me to go over all the figures that the Department of Industry and Commerce and the Department of Finance put up regarding these things. I am giving the fact that the subsidy on white flour means a difference of £1,000,000. It brought £1,000,000 into the Exchequer which will not come in the new situation.
The subsidy on white flour brought in £1,000,000?
The subsidy on white flour in three-quarters of the year is more than £1,000,000. That is the overcharge.
Not the subsidy.
The overcharge brought a subsidy to a subsidy so to speak. It relieved the Exchequer to the amount of £1,000,000. Also there is to be a better flour for the three-quarters of the year. Instead of 85 per cent. extraction there is to be 80 per cent. extraction. That better flour is going to cost something over a third of a million.
Surely the people will buy less of it because of the increased price.
That is not the point; it is what we are losing; it is what it would have brought in. There is at once £1? million which Deputy Costello coolly ignored. In other words, he did not try to see whether the circumstances were going to remain the same, which would be essential in order that his arguments should be right. He lumps together bread and butter and tea. They vary differently. Suppose that this question was asked: A man has a house, the yearly rent of which we suppose he pays in a lump sum, just for the argument. He pays a yearly rent, say, of £200. He pays it, let us say, in November. Suppose the fuel and light for a year, say, the preceding year, have worked out to be £80. If you ask an innocent child, he might possibly tell you that, if that man left his house vacant for three months, you could get the amount that he had saved, or the amount that he would have to pay for the three-quarters, by simply taking a quarter of the whole. Of course, that would be absurd. Suppose it was under lease. You can easily see that the rent was a charge that he would have to pay whether the house was empty or not. The fuel charge would depend on the months. It would vary with the months. If he were away in the summer time, it is quite clear that he would not save a quarter of the total yearly cost, which would be obtained by simply dividing the £80 by four. The light and the fuel might not vary in the same way at all. It is possible that he would use a greater proportion of the light in the summer time, relatively, than he did of fuel, that the rate of fuel consumption in the winter time would be relatively more.
In fact, the question should not be put to us, to show in detail where our figures are right, but it should be put up to the person who proposes that short cut to a thing which in the nature of the thing has to be intricate. Dr. Ryan went through it in the case of butter, cold storage and so on, and indicated the influence of these things. These things cannot be worked out in a short rule of thumb.
Is the Taoiseach indicating that the subsidies cost less in the summer?
I am indicating this, that in relation, to the savings which Deputy Costello was talking about, in relation to our savings generally, he has made no provision for the fact that there was already a saving in the offset to the subsidy from the sale of the white flour, and that there is also a further expenditure ensuing from the reduced extraction, namely, that the Exchequer was losing on one hand and would have to pay more on the other. It is losing the subsidy on the white flour and it has to give more to the public, so to speak, and therefore will incur a heavier charge in the lower extraction of the better flour. These two items together amount to £1? million.
In this House, up to the present anyhow, when a Parliamentary Question is asked, we have not to go and give all the details by either the Statistical Department or the various Departments of State. It is given here on the authority of the Government as the best information that they have on the matter, the best information that can be got after the checks and rechecks and I can say honestly that whenever I have been concerned in regard to figures, when they come up to me I have, time after time, if ever I was going to use them, asked for them to be checked and rechecked.
Very wise.
It might be wise. Homer sometimes nods. Departments of State sometimes make mistakes. I am not saying that such things cannot happen. Most careful scrutiny sometimes lapses and you find sometimes mistakes occur.
They do.
But they are rare on the whole—rare. What I would have imagined would be the natural course is, instead of taking for granted that the mistake had been made, to ask a question: "Is it possible that this mistake had been made?" But, of course, it is very much better to assert, assert and assert again and, if you are proved wrong, reassert and pay no attention whatever to the way in which the mistake has been exposed. We will hear again, of course, that these six points are right.
Indeed you will.
I am sure I will, from the Deputy. I have not the slightest doubt that we will and, therefore, the implication is that the Departments of State that have furnished these mistakes to us, are collaborating with us to deceive the House. That is what it means.
Ministers can speak for themselves.
Ministers speak for themselves. We are speaking for ourselves and speaking after check and recheck and the figures that I have got are that the total savings were £6.668 million and, therefore, that, in fact, to the extent of the difference between that figure and £15.24 million, we are in this year subsidising food to the extent of over £8,500,000. So, when people talk of withdrawing the food subsidy, will they please remember that £8,500,000 is being distributed in subsidy at the moment?
Of course, those who do not want to see will not see and those who do not want to hear will not hear. If I were to produce the detailed figures of the Departments and furnish them here to the House, we would still have people who would say: "Oh, no, they are wrong. Our rough-and-ready rule will do it. We can tell how much the person would gain in three months by being absent on holiday from his house, say, for three months, by dividing the £280, which is the total amount he would have to spend if he were in the house, by four, and we will know at once what the gain is." That is the type of calculation we are asked to accept as representing the truth whereas, if you wanted to know the actual case, you would have to look at the man's previous year's accounts, as the Departments have done in dealing with this question of subsidies. They must look at the previous year's account, see how it varies from month to month, see how the charges come for payment. There has been no question on Deputy Costello's part of dealing with arrears that come from one year to another the corresponding arrears on one side balancing with the outgoing payments on the other side.
Would the Taoiseach be prepared to accept the accuracy of the figures on the example he gave of butter? Dr. Ryan's figures differ from those of the Minister to the extent of no less than £300,000.
Before I could commit myself to a statement of that sort, I would have to have the figures side by side.(Interruptions.)
The Taoiseach should be allowed to make his speech without interruption.
No person could deal with these complicated figures without having the various calculations.
That is our trouble. We have not got them.
At least you have the same information as you have for the same item in the Book of Estimates.
We have been given conflicting figures. One says £3,550,000——
The Taoiseach must be allowed to proceed without interruption.
I have said the basis on which Deputy Costello proposes to deal with that matter is a basis which is fundamentally wrong and can be shown to be fundamentally wrong. Only by an extraordinary accident could they be right. If a teacher got that answer and it was the right answer, and he saw that method of doing it, he would immediately suspect that the boy had cooked it. It is easy to present a wrong solution and ask a person: "Show me what is wrong in that?" I have myself on more than one occasion been presented with that device. It is a very common thing in, say, the trisection of an angle. It is necessary to search for hours to see where it is wrong before you find out the exact mistake that has been made. In problems of that kind you would have to go through every detail.
I have pointed out, to the comprehension of any ordinary person with intelligence, that if you included items such as were included in the case of flour and other items in the case of butter, you could see at once that only by an extraordinary coincidence could the answer that was given by Deputy Costello be right.
The next item that he spoke of was in regard to the social welfare services. He said that £3,000,000 was put down for that whereas the Minister for Health stated that the cost was only £2,000,000. He conveniently forgot or neglected to give the phrase in full: "Social welfare and other services." That is the one contingency item that there is in the whole Budget statement —"other services". We realise that you have the possibility, the likelihood, the extreme probability, if we are to take the past into account, that there will be some supplemental Estimates. One million pounds is a very modest provision for this. I hope that when we come to the end of the year we will not find that it is as inadequate as was the £1,500,000 which was allowed for contingencies or supplementary items last year. I hope that is clear to Deputy Mulcahy.
I will be talking to you about that later.
He will be talking about a lot but he will be unable to point out that there is any deception in that.
I want to link up the trisection of an angle.
We do not want to get back into those controversial topics. We have quite enough for the present. I hope that point has been dealt with. The next point Deputy Costello dealt with was that there should be £1.8 million for reserve stocks as there was in the previous Budget. He did not condescend to tell us why the provision this year for stocks should be precisely the same as last year. A great deal of our difficulty, we were told, was from stockpiling of various kinds. Why should the figure this year be the same as last year? Yet, of course, you must take some figure and it is considered good enough to raise a matter of that kind and bring it in without any explanation whatsoever.
Unfortunately I am not dealing with these matters in order as I would have liked, but I hope I will cover the five or six before I finish. The next was that there was no provision made for saving, that the experience in the past was that we could rely on savings of £1,000,000 or £1,500,000, or some such sum. Can we? Deputy Costello made one statement which was incorrect in that connection. He said that such a deduction was always made. It was not always made. When we were in Government we did make provision for that; when there was proper estimation and a proper attempt being made to make the Budget something of reality there was a practice of trying to allow for overestimation in that way. But what has been the result of the last couple of years? Has it been overestimation? I spoke at the beginning of the amount by which the Budget was unbalanced. Last year, leaving out the items that the Opposition, the former Government, wanted to have treated as capital items, actual expenditure was about £7,000,000 in excess of anticipated expenditure. That is, instead of having a subtraction for saving there should have been an addition for overspending. The previous year the figure was £1,500,000. Therefore, if you take these Estimates, by and large, the chances are that the £1,000,000 for contingencies is not enough. Therefore, it would be ridiculous, under such circumstances, to arbiments—which trarily take off a sum for overestimation. Of course, in the case of sums for overestimation and buoyancy of the revenue—another of Deputy Costello's points—you could write down a figure of £4,000,000 just the same as you could write down £2,000,000 or £3,000,000. In fact, in cases like this, you could write down anything you pleased and endeavour to justify it. Buoyancy of the revenue has been mentioned by Deputy Costello as one of the matters for which inadequate provision was made. The provision for buoyancy was, in fact, about £2.7 million. That compares fairly well with the £3.1 million estimation for buoyancy in the previous year.
It is very difficult to estimate precisely what way revenue will go. In the previous year there was a certain element that came into revenue by way of arrears of income-tax which helped to swell the revenue for that particular year. It was due to the bank strike and the consequential failure to pay income-tax, and it could be described as a windfall. Are we to budget on the basis of windfalls, or are we to judge the Budget on as accurate an estimate as we possibly can get?
All the points I have mentioned are without foundation. Let me now come to another point—overestimation for the service of the debt. The service of the debt is up by £2,000,000. It is up by £2,000,000 because of extra charges that come for payment or have to be met under that head. There are four or five of them. First of all, there is this one: Ways and Means Advances last year were regarded as temporary advances, advances that could be dealt with on the basis of temporary borrowing. We have gone beyond that and the funds from which these Ways and Means Advances are drawn will have to be dealt with on the basis of long-term borrowings, which means increased rates. Therefore, one item is the increased rates on these advances. Next, there is a loan in the offing, and a certain element of the interest on that loan will have to be provided this year. The interest on Marshall Aid is another item which falls to be met.
There is a fourth item. These four items taken together offset certain savings which are effected by the conversion. Even if one puts the savings on conversion as an offsetting factor, there is still £2,000,000, and that £2,000,000 has come from this side of the House with the same authority that any figure would be given here in reply to a parliamentary question. The other day, in reply to a parliamentary question, when I was giving figures for emigration, I was asked where were they published. There has been a practice since this House first sat that, when parliamentary questions were answered, the statistics so given were regarded as having been published. However, the amateur statisticians on the other side of the House are, of course, now not prepared to accept this basis. They are being given these statistics on the same basis which was always adopted, but, in their eyes, they are not right. They were quite right, however, when they were published in this manner by themselves. I am giving the figure given by the Minister for Finance in this House as the figure which has to be faced—the estimate of the anticipated extra charge that has to be met for the service of the public debt.
The Taoiseach did not mention the fourth one. He mentioned Ways and Means Advances, a loan this year, and Marshall Aid interest. He was going to deal with the fourth item, but he did not mention it.
The Deputy would help me immensely if he could give me the four items.
The Taoiseach said there were four heads, but he only gave us three.
The fourth is the annuity which has to be provided for the sum that we agree, for this year anyhow, is to be regarded as capital. The capital item is £9.27 million, and there is an annuity to be provided to meet that.
These are the four items, and even when one has subtracted the saving on conversion it gives one £2,000,000. I do not know whether I have omitted any item. If anybody tells me which one of Deputy Costello's points I have omitted, I will be happy to deal with it. There is not one of them which is justified. I have dealt with all these points at considerable length, and I am sure there are a lot of other things I have to say, but they will have to be left over. We have to meet a deficit of £15,000,000. When it came before us for consideration, as I have already said, we had either to reduce expenditure or to increase revenue. Neither is popular. It was "rogha an dá diogh" to us—the lesser of two evils.
We were responsible for introducing bread subsidies when in Government before. We introduced them as a temporary expedient to meet a situation which in 1947-48 we thought would be temporary. Earlier, we had introduced them partially, when there was a question of trying to prevent the cost of living from rising and of trying to maintain price and wage stability and general monetary stability. However, extraordinary things were happening in 1947-48 on account of the effect of demand for the goods which could not be obtained during the war. We thought that once that temporary situation was passed we would get back into a level situation again.
In order to keep down an increase in the cost of living we proposed to increase food subsidies. By this means we hoped to keep prices steady as we had in the earlier part of the war. Originally we thought we could limit the food subsidies to £2,000,000, but we had to go further. We thought that the best way of meeting this, and of getting the money that was required —it was a substantial sum—was from taxation of things that were less essential than food. When we did that what a different tune we had from the Opposition. Then, of course, the subsidies were a sham. They meant nothing. But the taxation was a reality and the taxation was the thing that was harped on. From every crossroads and every hustings we were denounced as people who were taxing the simple amusements of the ordinary man.
Then we were the hair-shirt people —the puritanical-minded people who could not be happy if they saw people enjoying themselves in any way. The fact that we were subsidising the food for the homes was a matter to be waved aside. Now it is quite the other way. These food subsidies have gone up from £2,000,000, which we thought might be the original ceiling, to £15,000,000. I have not asked for a recent calculation—I shall ask for it, now that it occurs to me—of the proportion of British expenditure which is devoted to food subsidies. They are sometimes held up as an example to us. A sum of £15,000,000 is a substantial proportion of our bill. I had a calculation in respect of British subsidies but it referred to the period before rearmament began and the rearmament programme may have upset the figure. At that time, we were subsidising food to a greater extent than they were in Britain. As I say, I am not sure what the position is at the moment by reason of the rearmament programme. I do not know whether or not our proportion is higher at present.
Whenever the question of food subsidies has been considered, the ultimate conclusion is that inasmuch as the payments have to be met by taxation, which is as universal as the benefit, what you are doing, in the main, is not redistributing income but, in actual fact, robbing Peter to pay Peter. It is not a question of robbing Peter to pay Paul; what you are doing is robbing Peter to pay Peter—and, in the meantime, there is the matter of waste in respect of the administration, and so forth. I do not say that that argument is a conclusive argument but it is an argument. We came to the conclusion that if there was to be any reduction in the services provided by the State for the individuals of the community the proper place to look for that reduction was in the food subsidies. It was a mere accident that they amounted to £15,000,000. You did not have to impose any taxation whatever if you cut out all the food subsidies. Therefore, if the attitude of the Government was simply that of cutting out the food subsidies we should have saved ourselves from the odium which attaches itself to the imposition of taxes on beer, tobacco and so forth. We should have saved ourselves all that odium simply by wiping out the food subsidies—and we should have balanced our Budget. But we did not do it. Why? We did not do it because we felt that the sudden change would be a very great hardship on certain sections of the community and that the greatest hardship would be in relation to bread.
Therefore, instead of cutting off all the food subsidies, and stopping at that, we left the subsidy, to a very great extent, on bread. We might have come down a little lower and left more of the bread to be subsidised were it not that we had to be very careful, if we were going to get the advantage of abolishing rationing, that the price of bread and flour would not be such that they would be a cheaper animal food than other available animal foods. We had to be very careful that the bread and flour would not be wasted by being given to animals so that we would be subsidising not human food but animal food. The authorities gave us the price of 4/10 a stone as the critical point at which flour would not be economical as an animal food. Roughly, that price corresponded to the charge of 9d. for the 2 lb. loaf. That was the position regarding the fixing of that particular point in relation to bread.
We wished to end rationing. We must get back as soon as we can, if possible, to normal conditions of living in this country with as little State regulation as possible. We felt that there was no reason why we should continue to subsidise tea and that the price of butter would have to be left to find its own level. This year, we are spending slightly over £8,500,000 on food subsidies—£8.572 million or something like that. Therefore, it will be seen that, deliberately, we did not go the whole way in respect of removing the subsidy on bread because we had regard to the poorer elements in the community. Not merely that, but also we had regard to the old age pensioners. We have proved successively on various occasions that the needs of that section of the community are as present in our minds as they are in those of any other political Party. Within the means of the community— with a full realisation that these moneys have to be taken out of somebody's pocket and that the number of rich people in this country is not so very great—we have had regard on all occasions to the needs of the old age pensioners.
I am tempted to speak further on this matter when we hear so much about taxing luxuries and the rich at this moment, but perhaps I should not do so. In this case we try to minimise the effect, on the old age pensioners and also on other classes, of the reduction of the bread subsidy, by increasing the rate of pension by 1/6 a week. We tried to come to the relief of large families by adding to the children's allowances. Instead of 2/6 for each child after the second, we have provided an additional 1/6, making the allowance 4/- for the third and subsequent children and in order to meet the case of families which are not large, we are allowing a payment of 2/6 a week for the second child. I do not want to say that these are anything more than averages; I recognise that the average is the mean between things above the line and things below the line and there will be people for whom the average amount will not be full compensation. We realise that, but we have got to get the money somehow and, consequently, we felt that that was the best provision that it was possible for us to make. If people feel that old age pensioners still want some further relief that will have to be considered separately. I clearly do not want in any way to be regarded as making any promises; far from it, because the trouble is that I believe that we should make no more promises about matters of that sort until we see how they will be provided for. What I am saying is that if this question has to be dealt with, it will have to be dealt with separately. It cannot be dealt with as part of this measure. We have gone as far as we possibly could go to meet the claims in this Budget.
There is one class in the community that has been ground between the upper and the nether millstone for a long time, that is those people who would be regarded as having moderate incomes now. They are called upon to pay to the full for everything they get. They are supposed to get no benefits from the State, except those that are universal, and they are supposed to pay fully as private families for whatever they have to get. The charges that fall on every member of the community have to be met by them. We felt that the reduction of the bread subsidy would be a matter of considerable importance for them and we tried to come to their aid by reliefs in income-tax. No single person who has at present a salary of less than about £900 will have to pay anything more than he was paying before. Many such persons will be paying much less, but no single person with a salary under £900 will be charged any more as a result of the new rates. That is obviously a relief, not for the rich but for that section of the community that has been ground down between the upper and nether millstone by State action for a considerable number of years past.
No person who is married and who has a salary of less than £1,069—I think that is the critical figure—will have to pay more in income-tax in the present year than he has been paying up to the present. No man with a wife and three children whose salary is less than £1,348—I think that is the critical figure in their case—will have to pay more in income-tax under the new arrangement. I hold that if we are to admit that the money has to be got, if we are to go on at all, we shall have to face the situation that whatever Government is in office ought to pay its way and see that the State pays its way. If we are to pay our way at all, we have to get the money and there must be hardships in connection with the raising of that money. It does fall severely on numbers of people, but I hold that nobody can fairly claim that this is a Budget designed for the rich. That is untrue, an obvious falsehood. We on this side of the House, from the time we came into public life, in all our actions have given proof of the fact that we were anxious for the welfare of the weaker sections of the community. We have constantly shown by our actions that we had that concern and what we have done in this case shows our concern for them because we have come to the help of the weaker sections. However, as I say, the money has to be found and we shall have to get alternative methods of finding, not small sums but substantial sums, if we are to deal with the situation.
A total of 170,000 out of the 188,000 income-tax payers in this country will not have to pay one farthing more as a result of this Budget: in most cases they will pay much less and they are getting reliefs under the new provisions. Is that something designed for the rich? Is it not quite evident that the 18,000 at the top will have to pay and bring in the extra money to the Exchequer that will come out of income-tax?
Before I leave that, perhaps I might deal with the idea that has been mentioned of the taxation of luxuries. Successive Ministers for Finance in Governments here and throughout the world have gone most carefully into this matter. One might almost say they have examined with a microscope ways of raising revenue either with the least unpopularity or with the least hardship to the community. The things that have been suggested here to-day have come to the minds of successive Ministers for Finance and they have generally been rejected for two or three obvious reasons. The amounts they bring in are not sufficient. The cost of collection is relatively too high and generally such taxes are not worth while. In order that a tax will bring in an appreciable amount of revenue it must bear on goods which are almost universally consumed and used. Taxes on luxuries have been mentioned. It has been suggested that we should tax fur coats and that type of article in order to limit imports. The total amount of revenue which accrues from such a tax would scarcely be worth the cost of collection. The revenue collected would not go any distance towards meeting the bill when one is talking in millions of pounds.
In order to reap sufficient revenue in present conditions we are compelled to tax the articles and commodities that are universally consumed and used. But in imposing such taxation we have to ensure that it bears as lightly as possible on those shoulders that are least able to bear the burden and, in order to do that, we have given some measure of relief. We have to do our best. It is not always easy to do one's best, since one can never be certain when proceeding on general rules that one does not perhaps bear a little too heavily on one individual or one small section and too lightly on another. All one can do, therefore, is one's best.
Successive Ministers for Finance have been driven back to these commonplace methods of taxation when they wanted substantial sums of money. Whilst we recognise that this is a severe Budget, it is at the same time a Budget designed simply and solely to enable us to meet our commitments and to pay our way as an independent State. Nobody who has objected to the removal of the subsidies is prepared to enlighten us as to how we can otherwise reduce expenditure. On what other forms of expenditure can we reduce? Are we to cut down on any one of these items I mentioned at the beginning in order to meet this bill of £15,000,000?
What about the dance tax?
£110,000 in a bill of £15,000,000.
Increase the tax.
When dealing with a revenue-producing commodity such as tobacco I assume that the Minister cannot get down to the smaller fractions. If he finds that he has got the revenue which he wanted and if simultaneously he finds that there is a tax to which certain objections were made, the question is should be impose that tax merely for the sake of imposing it? We have heard a good deal from the Opposition in relation to taxing amusements. If these are suggested as substitutes, may I point out first of all that the taxes on these were considerably lower in the past. If that is a good method of taxation and a lucrative method, why then did not the Coalition Minister for Finance turn his hand to raising revenue from these sources? If they are better methods of raising revenue, why did he not turn his hand to them? I have no doubt that if he had succeeded he would have been regarded as an excellent Minister for Finance. We tried the imposition of such a tax in a very simple and straightforward case and we found ourselves in the position that we could not carry out our policy. If there was such great virtue in taxing amusements why did not the previous Government when in office impose such taxes?
I can assure the House that we do not wish to tax too heavily and I think that my personal views in relation to these would be shared by most members of the Government and probably by the majority of the members of this House. It is not however a question of wishes. It is a question of the best means by which one can reap an effectively substantial revenue to enable us to pay our way.
I mentioned a figure of £110,000 in connection with the dance tax. I was wrong in that. When there is a remission for only a period of the year I think it is £110,000. I do not know whether or not more is collected in one period of the year as against another period and therefore I do not know whether the figures would be absolutely correct. I understand this remission will operate from 1st August next. In a full year it would be £140,000.
From the beginning the Revenue Commissioners have urged successive Ministers for Finance to get rid of this tax on dancing. It was represented to us that it was costly to collect. There were continual attempts at deceit and evasion in connection with this tax Many of us know that it is through the medium of dances that small local communities finance a number of projects of local interest, both cultural and utilitarian. Dances are about the only way they have of raising money to finance various local objects. I think at one time there was a rebate in connection with dances run for charitable purposes where the expenses were less than 30 per cent. of the proceeds; recently I think that was raised to 50 per cent.
Successive Ministers for Finance had been urged by the Revenue Commissioners to get rid of that tax because it was an unprofitable tax. Indeed, it was more in the nature of a demonstration rather than anything else. Because the revenue involved was so small and because of the attitude we had taken towards it in the past we felt we could justifiably drop this tax.
If the suggestion is that there are substitute taxes that we could impose we should be told what these substitute taxes are and the revenue they will be likely to yield. If any Deputy makes suggestions I shall have these carefully examined. I shall have the revenue bearing possibilities of any suggested tax examined and I am sure I shall be able to give quite reasonable answers to those who put up these suggestions. Deputy Dr. Browne referred to alternative methods of taxation. No doubt all these methods which have been suggested would not amount to more than £2,000,000 in any financial year. One must take into consideration then the cost of collection; in the long run the actual revenue might be very meagre indeed.
It has been suggested that we are budgeting for a surplus. We are doing nothing of the kind. My fear is that when the financial year closes and we come to balance our accounts, instead of having a surplus, we will in all probability find that there is a deficit. We will do everything in our power to ensure that that will not happen but one cannot plan ahead to meet every contingency that may arise and one cannot be absolutely certain that one will not have to bring in one or, perhaps, two Supplementary Estimates. As far as this Government is concerned, I can assure the House now that Supplementary Estimates will be very few because we are not in a position to meet further commitments.
We are not budgeting for a surplus. We are not working on any theory as to whether there is inflation or deflation, or which is the most to be apprehended. Indeed, I doubt if anybody could say with any degree of certainty whether we will have to face inflation or deflation. I can see tendencies in both directions and I have heard arguments which would lead one to conclude that we were approaching inflation one day and other arguments which would lead one to conclude that we were approaching deflation another day. If one put all the arguments down side by side in two columns it would be a very wise man indeed who could draw any definite conclusion.
We are told that we have been dictated to by the British Chancellor of the Exchequer. It is interesting to observe the ease with which British Chancellors can be quoted by the Opposition when it suits them and when they want to set headlines of a certain type. They do not then hesitate to indicate what is being done on the other side of the water.
I think our whole history as a Party is proof that we have been able at all times to take, and are taking, an independent line of action. As I had to say on one occasion, we are not, because the British happen to go upwards or heavenwards, going to go in the opposite direction just for spite and for the sake of doing something different. If they are sheltering from a shower, we are not foolish enough to sit out in the shower just because they happen to be sheltering from it. We do here the things which we consider right in our own interest. Naturally, we see what other countries are doing. Most of the difficulties which we have here are difficulties which are paralleled in other countries. It is sometimes very interesting to see an experiment in these countries, something which you think might possibly work here and to see how it turned out, to see how such an experiment, with the necessary modifications to meet our circumstances, would work here. We shall not be above examining the means which other nations take to shelter themselves from this universal shower and asking ourselves whether these are right or not in our case. I am not going to complain that there is any inconsistency in anyone saying: "Well, the Chancellor of the British Exchequer thinks so and so." I will admit that they have a much better chance of judging world trends than we have. Therefore, when there is a question of world trends, if I thought they were expressing exactly what they felt and that there was no special reason why they should say anything different, I would be inclined to look sharply if they indicated a danger threatening which would affect us.
It is suggested by Deputy MacBride that the real Government here is a conclave of bankers in Foster Place. Does Deputy MacBride believe that?
I believe that every single step advocated by the Central Bank in its report has been slavishly implemented.
I will use again the example of the shower. If there is a shower, and the Central Bank sees certain places of refuge from it and indicates these places and if common sense indicates the same places, does it follow that you are following the dictates of the Central Bank because you happen to shelter in the spots which they happen to have indicated? Surely it does not. That is not common sense.
Following that analogy, the Central Bank say that there is inflation which is the equivalent of the shower. The Taoiseach says that he does not think there is inflation.
I am only pointing out that there are times when common sense, when A, B and C, the average man in the street, will, from a set of facts, come to the same conclusion. If they come independently to that conclusion, surely you are not going to say that they are just following the leader. There are circumstances which suggest that everybody should follow a common course. If one is living beyond his means, whether it is the State or a private individual, in Heaven's name is there anything strange or wonderful in that person suggesting to himself that he should go and try to live within his means by cutting down his expenditure and increasing his income? Surely, there is nothing extraordinary about that. As I have said our Budget, as far as I am concerned, was not related to any ideas of inflation or deflation. I would have been very cautious if there were suggestions that it was simply to deal with inflation as such.
There are inflationary tendencies. If I am told that such and such is an inflationary tendency, I have got to close my eyes if I do not want to see it presented in a certain form. But I cannot help seeing it. I know, for instance, that if you have widespread capital expenditure in this country, wholesale capital expenditure—suppose you had that and that it was not immediately productive and not likely to be—surely you are putting out purchasing power in advance of the goods that were to be purchased, and you are creating an inflationary situation. That is clear to anyone, provided, I admit, that there is an understanding on the whole question of what is inflation. There are, I know, many shades of difference between people in their acceptance of that. But take it in its broad sense. It is generally accepted as meaning this, having more purchasing power than there are goods to meet the claims. That would have the effect of sending up prices and so, generally speaking, would have an inflationary effect.
Now there are inflationary effects. I see some deflationary ones too, a certain number of them. Therefore, my attitude as one member of the Government has been this. I am not going to go on any theories either inflationary or deflationary. Whilst I understand these things in their general sense and what they mean and what they mean to any observant person, I am confining myself and will confine myself to a very simple piece of work, namely, to make ends meet and to see that our income will meet our expenditure, to see that we have capital resources to enable us to do the development which I think ought to be done in this country and which. I think, is capable of being done. I will admit to anyone who may differ with me on this—the difference should not come from this side of the House or from the Labour people; it should or ought to come from the dyed-in-the-wool Fine Gael—I do not know what they are now—that I could not deny their contention that expenditure, even the large capital expenditure that we were contemplating ourselves in the past, would in the present world circumstances lead to inflation.
Therefore, the Government will be in the difficulty of choosing carefully its road so that, on the one hand, the necessary development will take place and that, as far as it is possible, employment, the end to which our greatest efforts should be directed, will be available for our people so that they will not have to emigrate. These are the fundamental things which we have got to aim at. I will admit that we have there the danger that, if we try to remedy the evil, we will introduce this other danger of inflation by over-capital development and over-capital spending.
Can there be inflation if there is always a sufficient amount of goods available?
Does the Deputy not know perfectly well that there are not sufficient goods available for all the things that we want in this country? Does the Deputy not know that perfectly well? What is the meaning of all these imports?
That is another matter.
It is not. If we were producing all the things that we wanted we would not have to import. Our policy is to try as far as possible to produce here the things that we have to import.
To come back to the conclave of bankers. Now, who are the bankers and who appointed them? My recollection is that the present chairman had been originally appointed Chairman of the Currency Commission. When we came into office and when the Central Bank Act was passed, our Government appointed him as governor of the bank. He had no loyalties anywhere except to this country. I did not agree with many of his views. I am perfectly certain—perhaps I ought not to say this—that, if his political views were canvassed at any time that I know of, he probably would not have supported our Government. From our point of view, he would have disagreed with our policy, but he has a right to have his own opinions, provided he behaved as a man with responsibility would behave. I am sure that judges with political opinions are able to give impartial judgments.
We have civil servants who daily advise Ministers in various ways. The Ministers can accept their views or reject them. If the Minister rejects the views put up by the heads of his Departments, his civil servants or his advisers in certain matters, they are supposed to carry out the policy of the Minister as well as human nature will let them do it. We do not expect people to be absolute angels and above human feelings but their duty is to carry out the Minister's intentions and directions as he gives them. If they do anything else they are not acting as proper public servants. Their duties stop when they have used all their powers of persuasion with the Minister to adopt what they think right.
When a Minister differs from them he ought to be rather careful. There is a constant danger for every one of us who are in office through public favour and through elections to do the popular thing, often at the expense of what is the wise thing and the right thing. The civil servant is not a candidate for public support. He is able to make an independent judgement. Although I have differed, perhaps, as much as any man is likely to differ from the opinion of advisers and public servants in the past, I have never done so without asking myself this question: "Am I sure that my judgment is not somehow affected by the fact that I have to stand in judgment before the people for what I do?"
I know that the theory of democratic Government consists to a large extent of going before the people who will consider you on your record. They will pass judgment upon you. That is your judgment and from that point of view you have to have regard to what the people think, feel and want. But there are times when the desire to win popularity can lead one to courses which are bad for the country and the community as a whole. I think, therefore, that the civil servant, as an adviser, is at least removed from that.
I would say that the chairman of the Central Bank may have views with which I do not agree, but they are honest views and he has stated them and given the reasons for them. If you want to disagree with his views, do not suggest there is a sinister influence at work. Do not suggest he is subject to some rulings of another country. I regard him, at any rate, as a competent honest Irishman. I say that in the past I did not agree with a number of the things in the Banking Commission Report which was set up in our time. I did not agree with it then and I do not agree with it to-day. As far as he was concerned, however, I believe that anything he thought and anything he said were done in good faith. I regarded his views as the opinion of an expert in his own line, one who is charged with the safeguarding of the currency here.
We are trying to see that the £ will keep its value, that our currency will be accepted here and that it will be stable as far as its international convertibility is concerned. These are the considerations that he has to deal with. I, therefore, believe that it is a most unfair attack on him, as an individual, to suggest—I will speak of his colleagues afterwards—that there is any ulterior motive in anything he said. What he said he regarded to be in the interests of the country and he is giving the best advice he can.
Is it not open to one to consider that that advice is against the national interest and treacherous to the national policy?
Do not say treacherous. What do you mean by "treacherous"? One is treacherous when one deliberately does a treacherous action. You cannot be treacherous by accident or unconsciously. If a person is treacherous he is treacherous consciously. I think it is a horrible word.
Not from the Deputy who used it.
I am used to it but I am in a position in which I can very well enter a defence for myself. It is a different thing for a man in a position which precludes him from a personal defence. He is not a banker, or at any rate he was not until he was made a banker in a very special sense. He has no axe to grind.
Let us take his colleagues. Who are they? I remember when we appointed William O'Brien as a member. William O'Brien was one of those men with whom I was very glad to be associated in the old days when the fight for independence was on. We lay beside each other in Richmond Barracks the night before some of the trials took place. He has been in the Labour movement and interested in the interests of labour all his life. I find it very hard to use language to express my contempt for any man who would suggest that he is a member of a conclave of bankers who are really the rulers of this country and ruling it for any interests other than those of the Irish nation. He was a Labour representative. He was put on as such, not as an official Labour representative chosen by Labour, but as a man who would see that public credit was directed for the good of the community as a whole and directed, in particular, towards safeguarding the interests of the working classes. Mr. Malachy Sweetman is a farmer who comes from a family which had some very creditable work to its credit in Irish life. Are we to say that he is a member of a conclave of bankers ruling this Government and the country for sinister purposes? He was put on to represent the farming interest.
Then we will take some of the economists. Professor Smiddy was put on because he had wide experience of economics in general, as he was a professor. He represented this country both in the United States and in Great Britain. He was chairman of a tariff commission which we had here. Probably there is no man who has a wider knowledge of Irish industry and Irish financial affairs than he has. He certainly has had an opportunity of adding tremendously to the theoretical and other work which he did as a professor of economics. Is he another one of this conclave of bankers? I did not agree with him politically. He was chosen by the Cumann na nGaedheal Party of the day to be our Minister in Washington and then our High Commissioner in London. He certainly could not be regarded as somebody who was conspiring with this Government to rule this country in the interests of another country. Then there is Mr. James Meenan, a young economist. He was put on by the previous Government.
I think that nearly every one of those I have mentioned was reappointed by the previous Government of which Deputy MacBride was a member. Is Deputy MacBride going to say that he consented to the reappointment of these people who were treacherously inclined? That is a bit hard to believe. In any case I do not know Mr. Meenan at all. I did meet him a few times. I do not think that politically he has the same views that I have. In any event, he was appointed by the previous Government and I think it was a good appointment. He was appointed because he was an economist and would naturally be specially interested in the economy of this country.
Then we have the Secretary of the Department of Finance. He has served under successive Governments from the Cumann na nGaedheal Government onwards. I never tried to find out what his political opinions were. I know that his appointment was made before our time. I have often had different views from his, but I do not believe that he has at any time had any motive except the welfare of our people. If I ever had, in my own mind, any fault to find with him—and I think I mentioned this before—it is that he is so anxious for the welfare of the country and its good repute and sound standing that he would feel responsibility for things which were really not his but the Government's, and that he would accordingly go to the greatest possible lengths to press his views on the Government.
That is a good fault, if it is a fault. But I have never found, and Ministers for Finance in our Government have never found, that when a decision was taken he did not loyally accept that decision and see that it was carried out.
I have mentioned six of the members of the Central Bank Board. Let me now come to the banking representatives. They are a minority of three. They represent the three commercial banks. I have told you on what basis the others were appointed. They were appointed because of their expert knowledge as economists or because they represented some important interest in the country, namely, labour and farming. The bankers' representatives, as far as I know, were reappointed by the previous Government. If they were the sinister body that Deputy MacBride suggests, why did he not see that they were got rid of?
If the Taoiseach will look at the files he will see that I did object.
If I were a member of a Government who were going to appoint somebody who was going to be a traitor to this country, I would not stand for it; I would break up any Government that would do it. That excuse will not satisfy anybody. The fact is that the charge is unfounded, that the charge is false, that the charge is one that should never have been made.
I did not say they were traitors to the country——
(Interruption).
Deputies
Order, order!
I insist on my right——
If the Taoiseach does not give way——
On a point of order.(Interruption). I did not use the word “traitor” in regard to the governor and directors of the Central Bank. I said the treacherous policy of this Government—the pursuit of a treacherous policy.
I hate to hear the word come to the Deputy's mouth. I do not want to attribute anything to him he did not say. I only wish it was not said.
A Deputy
He did not say it.
I am glad to be wrong. It was our intention that, as well as the experts, we should have labour and farming represented. Then there was Mr. Punch representing one of the banks. We were very glad to see him as one of the banking representatives because he was interested in the development of Irish industry. We felt that we had there a body on whom we could depend to carry out their fundamental duties properly. The other two banking representatives were reappointed by the previous Government. The truth is that no matter what Government were here they would probably reappoint those people because they were able to do their job, because they felt that they were people who would do their job properly.
Then in regard to giving their opinions in reports—that reminds me of what was said about tourism. You cannot go in two opposite directions and hope that people will make progress. I will admit that sometimes a brake is useful. As a rule, however, it is better to make up your mind in what direction you will go and try to travel in that direction. We want to develop tourism and we propose to do it. We do not want to stop it by putting any tax on tourists. When I was in the Department of External Affairs I remember that a lot of complaints were made about visas and things of that sort which stopped tourists from coming here. I do not think that a tax on tourists would be desirable. It is most important that we should develop the tourist industry.
With regard to the Central Bank, we believe that the people there are doing their duty. At one time when industry was developing I had the idea that the time would come when industry would be reasonably well developed and we would be no longer dealing with infant industries but established industries which had to get a certain amount of protection to save them from unfair competition from outside, that we should put up some independent body to examine the advantages and the special privileges given to them in the way of preference, etc., and see that that was properly used and that it was to the advantage of the community. When I was thinking along those lines, one of the things that naturally occurred to me was that that body should be an independent one, capable of furnishing an independent report which would not be influenced by political considerations of any kind. It would be very well for the public if they did have an independent body which would go into these things and examine them, a body having no political axe to grind, so that the public would have an impartial report on these matters. If the report was wrong the Government could not be affected by that, and could take whatever line it liked.
It would be a very useful and valuable asset for the community and for a democratic Government, bearing in mind the dangers it has to meet in the running of its affairs, that such a body should be in existence. We probably have not arrived at the stage in which it would be desirable to set up such a body. In the case of monetary control we have such a body, and it is only right that they should, in the performance of their duty—it is provided for in the Act—be able to call public attention to trends and give the necessary warning, as experts who spend their whole time studying the subject. They ought to be in a better position than the average member of a Government to know exactly what the trends are and to warn the Government and the people of the difficulties. That is precisely what the Central Bank has done in its report.
Beyond that, they have no power to do anything.
They have powers and they can exercise them in a certain way. I was in at the framing of the Central Bank Bill, and I know the circumstances in operation then. I know my own views in regard to it and I am aware that every power necessary in order that they should do their duty properly was given to them. I feel it a good thing for any democratic country that there should be some check on these matters. It is the natural desire of all political Parties to try to keep out of difficulties by manipulating the currency. This is a very, very serious danger, and it is most desirable that we should have an independent body to deal with trends in financial matters. Do you not think, placed in the position that we find ourselves to-day, that if we had control of the banking situation, we would not have been strongly tempted to avoid an unpopular Budget like this and have resorted to more easy methods of financing?
If you had control of the banking situation, we would trust you.
I am sure the Deputy would.
I would trust you just as much as those gentlemen who have control of the banking situation at present—the people who are responsible to nobody.
They are ultimately responsible to this House. The powers which they have have been given to them by us. They have all the powers they need to do their work, in my opinion. If this House thinks it desirable to give them further powers it can do so. I do say it is a good thing that there should not be easy methods of financing for a democratic Government.
I did not suggest that.
I have listened to the Deputy on this question of finance over a good many years. I do not mean to be insulting in any way but I believe that the Deputy is simply picking up catch phrases and that he has never really studied the matters carefully. That is my opinion and I am sorry to have to give it.
You are entitled to that opinion.
I am, and the Deputy can have his opinion about me. Deputy MacBride patronised me the other day in regard to my knowledge of economic matters.
The people in your front benches would act no less honestly if they were controlling the banks than do the people in control of the banking system in this country at the present time.
Does the Deputy wish me to be frank?
Yes.
If I were in the opposite benches and I saw a Government composed as the last Government was composed I would not give them power to have control of the finances of the country. That is the truth. I believe that from my heart.
That is interesting.
It is interesting. I have some experience in such matters and know something about what happened. Financial machinery of that kind has brought countries to ruin.
Look what they did with the Marshall Aid moneys.
What about the people who are controlling our banking system to-day?
In referring to the commercial banks, the Labour Party talks about nationalising them. I do not believe in that. I do not believe they would make any better success of them than was made of Córas Iompair Éireann.
What a comparison!
It is a good comparison.
Deputy Hickey should allow the Taoiseach to make his speech.
We must face the fact that there are strong temptations before a democratic Government to take the easy way out of their difficulties. We have difficulties in procuring money, and if we saw easier ways open to us, we would probably be tempted to avail of them. If such temptations faced us and faced others in the same set of circumstances, I do not believe it would be easy for other people to resist them. We would be able to resist them because we would be able to go out of this House in the morning and face the country. While we are here we are going to do our duty and we are in a strong position. There is no other Party in this House in a position strong enough to do it. Thank God, if we do nothing else, we will try to put the finances of the State on the sound basis in which we left them. The Central Bank has been attacked, and we have been accused of being led by it. The fact that the Central Bank suggests certain things, and that we are examining them from our own angle and our own view and that we decide that some of their suggestions are right, is no reason why it should be suggested, if we happen to take certain courses as a result of our own judgment, that we are necessarily being influenced by the Central Bank. We have read their views. We are aware of the dangers that they have suggested as lying ahead but, apart from general theories, we are at present engaged in something which is the common everyday experience of the ordinary man: "Live within your income. Make ends meet. Cut down your expenditure, or else increase your production."
It is suggested that we are following the Central Bank and that this Budget has been designed from the point of view of the disquieting position of our balance of payments. We have another fundamentally difficult question. It is the question of our balance of payments. It was said that the Minister for Finance's estimate was £69,000,000 or £70,000,000 some time ago; now, when the final returns are available, the amount turns out to be £61.6 million. The people who make those charges of incorrect figures know perfectly well how estimates are prepared. Why are we bearing the expense of a statistical Department and why are we keeping in the Department of Finance and in other Departments people whose sole task is to look after matters of that kind? If we are not going to believe them, would it not be better to cut out the expenditure and get rid of them? We are keeping them for a purpose, to give us informed estimates of what lies ahead and to keep accurate accounting of what has taken place in the past. One helps the other. The accountancy in the items of the past help you to get some sort of fair view of what is going to happen in the future.
I have an officer in my Department and when I ask him for certain details as regards statistical matters, he brings them to me. I question him and cross-question him and ask him to get some further information I want from other Departments, including the statistical Department. If, after all that, we present figures here, surely the members of the House who know how these things are done ought to accept the estimates as given in good faith. There is no attempt to cook these accounts, to cook this Budget or to cook any figures that we give.
Whilst I can make all possible allowance for mistakes, if a civil servant gave me a figure that was wrong, if I was misled or likely to be misled, I certainly would give him a talking to. There was in connection with this Budget a mistake, I think, in connection with the omission of a line in the typescript. In a case like that I would have said here quite openly that we could not afford to have mistakes like that occur. No political Party can afford that and it is not good from the country's point of view that it should occur. I should say that if any officer made such a mistake, he and those who would have checked over the item should be severely censured. I know things like that happen. It happened to a Minister in recent years. He was making a speech trying to prove that the balance of trade was altogether in our favour and he read his exports as imports.
That was Cumann na nGaedheal.
That sort of thing may happen. Excuses may be made for mistakes but these things do a great deal of harm. Civil servants ought to be aware of the danger of giving wrong information, and I am sure they are.
Estimates vary. What can a man do or a group of people do when making estimates? Before they get all the information they will give you a result on the information they have. If information comes in it will be given later. In the Statistical Abstract you will see notes—and again I would like to mention to the House and bring to their attention that the Statistical Abstract is the most valuable volume we have.
Deputies
Hear, hear!
They have to put down revised results. It simply means that information available at the time the statistics were compiled is included and the figures they give are the best they could arrive at. Later figures come in and they have to make allowances; but the percentage change is not very great.
I have a mental picture of trying to get the people in the opposite benches to see the situation that is facing us. In order to avoid facing up to their obvious duty, when we have a position which cannot be allowed to continue, they will turn right, left and centre and put their heads in the sand rather than look at it. In the attempt to do that, the Leader of the Opposition tells us that the Minister for Finance estimated several months ago that the external deficit would be £68,000,000 or £69,000,000; now it comes down to £61.6 million. It is a fairly big margin, I admit, but when you take into account the variety of items and the nature of the actual calculations that had to be made——
And the time of the year it was made—August.
Yes, August last year, it was not bad. I will admit, however, that you can for political purposes play with the situation. It is too much to expect that people would not do so. But it is not the essential part of the matter. If it were only £50,000,000 I wonder would Deputy Costello, when he was claiming that we were wrong, have spoken with the same confidence. It is certainly nearer to the £69,000,000 or £70,000,000 than it was to the £50,000,000.
The real thing we want to pay attention to is what it means whether it is £60,000,000, £50,000,000 or the present figure. The balance of payments deficit was £10,000,000 two or three years ago. The next year it rose to £30,000,000. There was a £20,000,000 increase, and of that £20,000,000 increase little more than half of it could be attributed to capital goods or to stocks, so that the balance was clearly money spent on consumer goods. That was an indication largely of an overflow out into the foreign market with money looking for goods. From £10,000,000 to £30,000,000 is a threefold increase. From £30,000,000 to £60,000,000 is double it again. We have six times as big a deficit in the past year as we had three years ago. As a result of these deficits we have cut down our sterling reserves by approximately £100,000,000. There is £100,000,000 less reserves to be used for the future for any purpose we may want them for. We have also lost the annual proceeds of that £100,000,000, which could be used and were used to purchase goods, goods for which we had not to export other things in return, goods which left us our reserves intact and gave us that annual income.
Surely reduction of these reserves for consumer goods is not a thing to be contemplated lightly. That is a thing which must make us sit up and take notice. I gave to the House already the position in regard to our external assets. I showed that they had been reduced from £225,000,000, which was the calculation of the net reserves which was made around 1949. They have been reduced in the last three years down to £125,000,000, which is now the amount of our net external reserves. Two years more of a deficit of that sort and we will have wiped them out. These reserves could have been kept and used for the future and could have remained as a cushion to keep us in the position in which, at any rate, we did not, like the British, have to cut down the food allowances to our people. They have been diminished now to £125,000,000 and in two years more, at a rate of deficit like the present deficit, they would all be gone and we would be changed from the position of a creditor nation to that of a debtor nation.
Does it make any difference whether we are a creditor nation or a debtor nation? We see the difference quite clearly in the case of Britain herself. Some of us who knew Britain in the early days of our lives and in our middle years know that it was hardly to be believed—by the ordinary person, anyhow—that she would be reduced in such a short time to the position in which she would not be able to purchase the food needed for her people. We do not want to be reduced to that situation, because those who are reduced to that situation are almost reduced to the position of beggars. The independence I should like to see preserved for our country is that we will not be in the position of beggars. When we are looking for equipment to defend ourselves or for wheat or for anything else which we may need I want this country to be in the position that we will be able to point to our assets and say that they are sufficient to cover our requirements.
I realise that the convertibility of our assets, and so forth, is another question. I am making full allowance for that matter and also for the views of those people who believe that we ought to use our assets to the greatest extent possible for the development of home production. Some of these schemes have high-sounding names— schemes that could be described simply, and schemes which were given simple names and which were carried out when this Government was previously in office. We have heard about the land rehabilitation scheme. That is a high-sounding title. The Fianna Fáil Government were not out for publicity or for propaganda and we called it the farm improvements scheme.
Oh, no.
There have been certain developments of it and certain extensions. The question is whether or not they are wise extensions. We intended to develop the farm improvements scheme to the point at which we would deal with the land which would give quick results. What we want at present is capital investment which will give quick results. We were out to get quick results first. That did not mean that as we got greater strength and more production we could not go on to these other things afterwards. However, first things first. Always, as a Party and as a Government, we have been in favour of capital development. But we have to get the capital. We shall have to get a substantial amount of capital this year. Last year the Government had to find £38,000,000 for development. How was that money spent? It was spent on projects which, for the most part, we had initiated—turf schemes, electricity development, and so forth. Now this Government has to get this money. How are we to get it? If we are prudent we shall try to get it from the savings of the people. We shall be slow to diminish our reserves unless we can definitely employ these reserves for productive purposes—either raw materials which are necessary, or plant, or for definite productive purposes—but not for consumer goods. If we are prudent we shall employ these reserves only on purposes which will yield something commensurate with the amount of goods that we are able to import with the dividends which we get from these investments at the moment. If the Fine Gael Party has genuinely been converted, and if, they believe in that policy, there is no need whatever to try and pretend that they have any opposition to it.
I have often heard talk about imagination: I think I have mentioned this already. I have heard it said that the people want a Government with imagination. Imagination is an excellent thing if it is governed by reason and prudence, but imagination can lead to rank growth. As I pointed out on a previous occasion, we find quite a number of people with imagination in the bankruptcy courts. We find quite a number of people with excellent imagination in the mental homes and we find quite a number of people with imagination even in our jails. Therefore it will be seen that imagination alone is not sufficient to enable us to do our work properly. We want imagination. We want to have the will to serve our country. We want to have the desire to develop it. We want to make homes here for as many of our people as we possibly can—happy homes and homes in which they will be able to lead comfortable and full lives. Whilst I believe that it is right that we should have a proper conceit of ourselves, let us not be extravagant in what we are talking about—not like the frog blowing itself into the bull. By making exaggerated statements we only make ourselves look ridiculous and ultimately we humiliate ourselves and humiliate the nation as a whole. With a proper conception of ourselves and our means and resources we can do great things. However, we shall only do the great things if, like anybody who wants to succeed in any enterprise, we carefully appreciate in advance the forces and methods and means at our command. If we are foolish enough to attempt something beyond our means then we shall quickly come to an end. That is what I foresaw in respect of the career of the inter-Party Government if they had remained many more years in office. I saw them being brought to an abrupt end over a cliff. Unfortunately, however, not merely would they go over the cliff themselves but they would bring quite a large portion of the nation with them. We were very glad to have an opportunity of trying to set things right before that should happen. I believe that there are Deputies on the benches opposite who, whatever they may think about us, are very glad that we are taking the appropriate steps to set things right.
Our capital investment will have to be proportionate to our means. We shall have great difficulty this year because the "small" savings amount only to somewhere in the neighbourhood of £7,000,000, while we are looking for about £36,000,000. There is a big gap between £7,000,000 and £36,000,000.
Out of pockets that are being emptied.
What did the Deputy and his colleagues do with the rest of that money?
They tried to spend it as quickly as they could.
What did you do with the £24,000,000?
It is being used in the same way as it was used before. Whether or not that is wise, I am not too sure. There are a lot of people in this country who have a false notion that that sum was in dollars—dollars to be kept to buy goods in America. It was not in dollars. The dollars had already been used to purchase goods— and these were the sterling equivalent.
$146,000,000 was spent by the previous Government.
They were spent, by individuals in the main, on the purchase of goods—wheat and maize and things of that sort that, necessarily, were imported. I said that that money was spent. Will the Deputy tell us how the money to meet the commitments could be got? He said: "Go for a loan". We have pointed out that in our opinion that that was not the time to go for a loan, when a conversion was going on, and when a previous attempt to get money from the Irish public got a poor response. We shall go for a loan this year, and we hope that we shall get from Deputies opposite the same help that we gave them in the past. Even when I was not a member of the House, when there was an external loan I did everything in my power, even though I did not agree with the then Government, to make that loan a success. If the people opposite do anything which tends in any way to interfere with the success of this loan they are doing an unpatriotic act.
That money is needed and, from every point of view, it is desirable that the loan should get a good response. It is suggested that, because we have faced facts by telling the people the truth and by trying to put our finances on a proper basis, we are jeopardising the chances of getting a good response to the loan. I do not believe that. I have always believed that, whatever temporary reverses truth may have, in the long run it will prevail, and I believe that our people, when they see they have a Government that is trying to do its duty as it sees it, will rally to the support of that Government. None of us likes to pay money out of his pocket for any purpose; it is much pleasanter to receive than it is to pay, but I believe that when our people see that they have to pay for these things —these social benefits and the rest— they will realise that the Government, in coming to them and asking them to meet these taxes and to make contributions to a loan, are acting as a Government that is trying honestly to do its work for the nation.
We shall have difficulty in getting the £36,000,000. I do not know how much of it the Minister will look for this year, but I hope he will get whatever he seeks. Can we hope, however, to continue year after year with all the capital development that awaits us? We are far from reaching the stage of capital development when we can say that we have arrived at the end. We are very far from arriving at the end. If we are to get to the end or near the end within our time, we must realise that the only way in which we can do that is by greater effort, greater industry, greater thrift and by making up our minds that if we want to achieve these things, it is something worth making a sacrifice for. We would not have reached the position in which we are to-day if people were not prepared to make sacrifices in the past.
Our people must be prepared to make certain sacrifices also in the future. All the Government can do is to indicate the direction and the goal. It is the community itself which must reach that goal and if the community wants to reach the goal—which I am glad members on the opposite benches are indicating now, as we had to do alone in the past—the community must be prepared to make the necessary sacrifices. If the goal is to be the development of our national resources to the full so as to provide to the greatest possible extent for as large a proportion as possible of the people who are born in the country, we shall succeed in achieving that end only if we are prepared to make sacrifices. These sacrifices can be summed up in not having extravagant notions, in not attempting things that are clearly beyond our means, but in adapting our means to the end and the end to our means. If we do that and are prepared to work and be frugal, to be industrious and thrifty, then we can look forward to a healthy development. If, on the other hand, we follow the course indicated by the preceding Government, in my opinion that will not lead us to the end envisaged and desired by all our people.
I have spoken at length and I have gone into the field as I see it. I do commend this Budget to your approval. I ask people who are inclined to think of the hardship it imposes to agree with us that there was no way out in the circumstances if we wanted to do our duty and present an honest Budget. As I say, I commend it to Deputies and I hope the House will pass it.
I would have thought that the House would have heard from the Taoiseach some more reasoned analysis of the position and that the House and the country was entitled to hear from the Taoiseach something in regard to the figures which had been put forward by the Leader of the Opposition. The only comment that was made by the Taoiseach in his speech to that effect was merely that the people were to trust him and to trust Fianna Fáil and that, so long as they did trust him, they were bound to be right. The fact is that since this Government came into power last July every single statement of major importance that they have made has been wrong. It started off with the Minister for Finance who led the merry dance— not of course the type of tax-free dance he is giving us now—on the 18th July last year. He came into this House then and started the scare that was taken up by other members of the Government and other members of the Fianna Fáil Party from that day on. The scare was started then and continued through the whole of last fall for purely Party purposes, regardless of any effect that it might have, regardless of the fact that once you start a scare like that you may not be able to control what you have commenced. The fake scare which was started and the fake crisis then commenced, in fact did a great deal to bring about much of the hardship and much of the difficulties that have been arising since. Really one would have thought that when the Taoiseach was speaking on the position disclosed by the Budget we would have been entitled to get from him some analysis in some detail of the figures and the reasons that are behind it, and exactly what it was intended that it would do, but as I say all that we got was the trite statement that they had officials, that the officials put forward honest views and that they gave these views to the House. Let me quite clearly and categorically——
That is not what the Taoiseach said.
That is what the Taoiseach said.
The Taoiseach said figures.
He said that and, so far as I am concerned, I regard the Minister for Finance and his colleagues as the persons responsible for these figures and any comment that may be made is not a comment on the honesty of any official or on the "wellmeaningness", if one may use that word, of any civil servant who produced the figures at the direction of the appropriate Minister.
The Taoiseach referred to it, in passing, and tried to pass it off but the fact is that, so far as documentary evidence was given since this Government took office, the main document paraded around the country and paraded around this House was the White Paper issued last October by the Minister for Finance, the whole purpose of which was to bolster up the Minister for Finance who, as the leader of the hunt, was raising the scare crisis and the fake crisis about which he waxed so vocal at that time.
The fact is that the estimate made at that time, nine months of the year having gone, was £8.4 million out; it was £8.4 million wrong in £70,000,000. I do not suggest that it was made deliberately wrong by the officials of the Statistics Branch who compiled it, if they did compile it, but I do suggest that to be wrong to the extent of £8,000,000 in an estimate of £70,00,000 renders it perfectly fair and perfectly legitimate for anybody to make the comment now that in this Budget, where 11½ months have still to run, the figure may be out in the same proportion as that estimate made after nine months of the calendar year had run their course.
Deputies and members of the Government, other than the Minister for Agriculture, whose views on arithmetic seemed to be so peculiar last night, can make their own estimate and find out what proportion £8.4 million is of £70,000,000. It is not a very difficult calculation. It is, however, a greater margin of error than 10 per cent. The margin of error which Deputy Costello, as Leader of the Opposition, suggested there was in the Minister's Budget is a smaller percentage margin of error than that in the figures the Minister put before the House when he introduced the White Paper last October.
The Minister was kind enough to circulate yesterday a new White Paper dealing with the balance of international payments proving that there was approximately an 11 per cent. margin of error in the figures he had previously published. If he was wrong in that respect he was equally wrong, again on his own showing, in yet another respect. In the early part of the fall of last year we remember how Deputies on the Government Benches said that the Budget that had been introduced by Deputy McGilligan as Minister for Finance would show a deficit of £14,000,000. That prognosticated estimate was subsequently reduced from £14,000,000 to £10,000,000. When that estimate was challenged the £14,000,000 suddenly became, even in the mouth of the Minister for Finance, only £6.7 million, showing a margin of error of 50 per cent. in the estimate that had previously been circulated to the House and to the country. Yet, we are now expected to accept blindfold the figures given to us in this Budget despite the fact that two major items have already been proved to be wrong.
And they have to stick in £3,000,000 worth of turf to get the £6,000,000.
I shall bring down that £6,000,000 in a moment. I have given the House evidence of the statistical estimated record of the Government. It is on that record of estimates, on which the Government has been invariably wrong in the last six months, that the Taoiseach has the hardihood now to come in here and say: "Boys, do not ask for details; we are surely right." The Taoiseach would have been better advised to accept the suggestion made by Deputy General Mulcahy that what the country wants is a White Paper showing the true, the accurate and the correct figures because each time a member of the Government speaks on these figures we have contradictions.
I do not think anybody will accept any figures that are put forward in these circumstances without very careful analysis. The House and the country is entitled to have all the information upon which such an analysis can be based. It is only by analysis of that kind that the true value of any estimate can be computed. At this time of the year no more than an estimate can be put forward in relation to receipts and expenditure in the current financial year. It is inevitable that a long period must elapse before anybody can state the absolute truth and before anybody can decide that receipts are as they were estimated to be or that expenditure is what it was computed to be. The only way in which one can justify any estimate is to put frankly before the people the basis upon which the calculations are brought out. In that way it is relatively easy for others to estimate from the information at their disposal and to decide as to whether their estimates or the Government's estimates are right.
The Minister divided his Budget speech under three different aspects. He gave a survey of the position as it exists. He gave a survey of last year and he gave survey of what he proposes to do in the current year. Dealing with the survey of last year, he took the estimates made up by Deputy McGilligan as Minister for Finance on 2nd May, 1951, and compared those with the actual position as it was on 31st March, 1951. With characteristic political dishonesty, he omitted many items that were relative to that comparison. When the Budget was introduced last May there were certain charges available for estimation. There were certain other charges that were not available for estimation, but in respect of which it was desirable to make some provision. The biggest of those was, of course, the increase in Civil Service remuneration.
If Deputy McGilligan had then provided any figure for the Civil Service remuneration that was at that time under arbitration it would clearly have been a pointer to the arbitrator, an indication to him as to the manner in which he was to base his award. Therefore the way that was adopted for the purpose of ensuring that there would be some fund there in excess of what appeared on the face of the tables to meet the arbitrator's award, without the necessity of giving a direct pointer to the arbitrator, was to exclude the excess carry-over that there undoubtedly was on the 1st April, 1951. The facts that have transpired since have shown clearly that Deputy McGilligan was right in that respect. But when the Minister came to make his computation on the 2nd April of this year he completely ignored all reference to that as well as in arriving at a Budget deficit of £6.7 million. That alleged Budget deficit was there after the Minister for Finance had gone round to every single Department, whipping it up and telling it that, no matter what happened, it was to put in before the 31st March every possible penny that would have to be paid.
It is clear, both from the figures in the Tables of Expenditure and in the figures published in Iris Oifigiúil since the 1st April, that every single penny of expenditure was rammed into last year for the political party purpose of making it appear that the 1951-52 Budget was not as it was intended it should be. If we look at the figures that have been given in Iris Oifigiúil every week since the close of the financial year we will find that expenditure this year is well below the expenditure of last year. Why? For the obvious reason that the Minister jammed into last year's accounts expenditure which should, in fact, have been left over to be paid during the current financial year, but expenditure which he wanted to include for a political party purpose. In last week's payments that difference, I think, came to something over £1,000,000. I have not had an opportunity yet of seeing this week's figures.
In addition to that, there was a Supplementary Estimate brought in for a fuel subsidy which, time after time in this House, Deputy Lemass had said should not be charged to any current Budget, but which should be included for the purpose of payment as a capital item—a capital item that we should consider was well worth while as one of the few things that we had to pay for getting through the last emergency. But, when we come to consider the figures that were put before us by the Minister in his Budget speech, we find that he included that fuel subsidy payment of £2.7 million as part of the current deficit that he alleges on last year. I have no means of ascertaining at this stage whether the total amount paid for the fuel subsidy was £2.7 million or whether it was in the total of £3.3 million that was included in the Supplementary Estimate introduced by the Minister about last Christmas. It may probably be, when the full details come to be published and see the light of day, that, in fact, the amount that is added in the balance and brought forward by Deputy MacEntee as Minister for Finance to upset Deputy McGilligan's Budget, is not £2.7 million but £600,000 of the £3.3 million.
We cannot tell that at the moment, but, even going on what the Minister has put forward, there is at once a reduction to £4,000,000 in the alleged deficit. In addition to that, we have the carry-over that was there for the purpose, amongst other things, of meeting and carrying the Civil Service award, which went back before the 1st April, 1951. The Civil Service award, as the Minister in his Budget speech suggested, went back prior to the commencement of the last financial year. In going back over that period, it provided, out of the 1951-52 Budget, a sum of approximately £350,000, which could more properly have been attributed to the year before. That has been included by Deputy MacEntee in his statement, that the Budget introduced by the inter-Party Government last year was not accurate.
Apart from those figures, I remember listening in the House before Christmas to a statement made about the subsidy required for Córas Iompair Éireann. That subsidy was inflated deliberately even then for the purpose of making it appear that there was a large Budget deficit. We were told in that speech that, not merely was there to be a provision for the deferred maintenance by charging it to the current year's Budget, but on that there was to be provision then made for future increases in the cost of stocks. According to the ordinary method of Government finance, these future increases would never be met until the year in which the payments accrued, but for a political Party purpose, and to try to prove what was not a fact, a sum of £800,000 was included in that Córas Iompair Éireann Estimate which was introduced as a supplementary before Christmas. I think the exact figure is £846,000. There was no reference by the Minister for Finance to that amount on the 2nd April.
When we come to consider the real genuineness, or otherwise, of the attack that was made by the present Minister for Finance from the moment he took over as Minister, it can be made perfectly clear, from the manner in which he deliberately and of his own volition added to the deficit, if such there was, that it was not genuine. If it was true that, when he came in on the 18th July, he knew there was going to be a deficit in the 1951-52 Budget, why did he add voluntarily of his Government's own accord another £400,000 at that time without making or attempting to make any provision whatever for it? If it was true that he regarded the financial position as so bad that there was bound to be a large deficit, why did he add the extra £400,000 to the subsidy included in the Department of Agriculture Vote without making or attempting to make any provision to recover that figure? It was done, of course, for Party purposes. It was done because the Fianna Fáil Party had to make some small gesture in one respect to the people whom they had deluded during the election campaign and during the campaign that led up to the election.
If one takes, as Deputy McGilligan did speaking immediately after the Budget, the various items that were added and analyse them, it will be found that instead of there being a true deficit on the 1951-52 Budget there will be, I believe, when we come to see the last analysis of the fuel subsidy figures, a very small surplus on that Budget. We cannot tell the exact fuel subsidy figure until such time as the Appropriation Accounts are put before the House. When we get those accounts, we will have an opportunity of analysing them in greater detail.
From my experience of business in the city—I am not speaking of my own personal experience but of my experience with those with whom I meet on every possible occasion—the feeling was that there was quite a deliberate policy adopted by the Government that there was to be no pressure before the 31st March for the collection of revenue. Everywhere I went I was informed by people that they found that in March of this year there was less pressure being put upon them for early payment of income-tax than there was in other years. I am quite satisfied that what must have happened, therefore, is that the Government must have indicated that so far as they were concerned they did not mind if revenue did not flow in as quickly as it might otherwise flow. All the indications in the city amongst business people were that from about the beginning of March there was less pressure than there normally would be, in any March towards the collection of tax. The effect of that would mean that income-tax would be well behind what it might be in other years. That would also bring about a position in which there would be a larger apparent deficit and a higher figure for the current year.
I think the Minister's statement was that there were more arrears of income-tax collected last year than in any other year.
The Minister's statement was that there were more arrears collected in April of last year than any year by reason of the bank strike.
The collection of income-tax was up.
And it would have been up a great deal more were it not for the Minister's policy.
That is nonsense.
I do not know what the position is in Donegal. I can only tell the Deputy what the position was in Dublin City. I want to try to avoid discussing the position in an area with which I am not familiar. Therefore, I shall keep to the area I know about. If the Deputy makes inquiry, he will find that the vast majority of income-tax is paid in Dublin City rather than in the outlying country areas. That fact is there. It is an unchallengable fact that in regard to the budgetary position of that year for Party purposes and solely for Party purposes, the Minister tried to make out that there was a deficit when, in fact, there was not.
In regard to what the Minister has termed "the economic survey", the Taoiseach, when coming near the end of his speech, suggested that it would be necessary to float a national loan in the near future. Every single member of the Fine Gael Party hopes that that loan, whenever it is floated, will be a success and that the country and the people as a whole will subscribe to it.
Our complaint with the Minister is that he did not do it long ago when he could have got the money far more cheaply than he can ever hope to get it now. We are confident that the security of this country is a good security in which people can safely invest their money. Not all the inefficiency and incompetence of the Fianna Fáil Government can prevent that. No matter how inefficient or how incompetent the Government are, it would still be good business for the people to put money in any national loan that is floated at any time, whether immediately or later on during the current year.
It is unfortunate that the Minister for Finance did not put that loan to the country on public issue at a time when it would have been done if there had not been a change of Government. We all know that before the inter-Party Government left office they sowed the seeds, made all the plans, published the advertisements and made known the terms of the Conversion Loan offer, an offer with a result which is going to mean that there will be a saving not merely in this year but for every year in the Vote of approximately £751,000 in interest and sinking fund.
That conversion was announced in the beginning of June before the change of Government and was a striking success. It was a success firstly from the point of view of what it is going to save the country as a whole; secondly, from the point of view of the number of those holders who converted into the new stock; and, thirdly, it was a success because of its accurate timing. It is because of its accurate timing that it redounds so much, as it does, to the credit of Deputy McGilligan as Minister for Finance. In regard to the four loans that were converted last June, the ultimate redemption will run as far as 1960 in the early cases and 1970 in the later cases.
It would have been quite possible for him to postpone the moment for conversion but with that true vision which he, as Minister for Finance, exhibited, he chose exactly the right moment and, as a result of his choice, this country is saving in the current year and will save in the years to come approximately £750,000. If the Government had shown the same vision in regard to their timing of the financial market, if the Government had shown the same vision as Deputy McGilligan showed in his conversion offer, if they had shown the same vision in regard to their flotation of a public loan, they would not now find themselves in the difficult position in which they undoubtedly are.
Last September a loan could probably have been floated to produce funds for productive development at a rate far lower than any loan can now be floated. It is due entirely to the fact that the Minister for Finance did not want, for Party purposes, to follow the line of Deputy McGilligan that he deferred the flotation of that loan and, in deferring it, lost this country the opportunity of taking advantage of the then interest rates which will cost this country, for the duration of whatever period the loan will be put forward, at least an additional 1 per cent. The Minister for Posts and Telegraphs is a great person for looking up statistics and making speeches with them. I think he cannot argue from his figures that since last September the rate of interest has not moved against us by 1 per cent.
The Minister is only thinking of the advice of any good stockbroker as against the Deputy's opinion.
The Minister had the opportunity and, unfortunately, he missed the tide. Having missed the tide, he is now trying to turn around and find some scapegoat instead of having the manliness to stand up and say that he and his colleagues were the people who let the country in for the additional interest that will undoubtedly have to be paid. It is that incompetence that has created a position now in which the Government will be forced to go to the country for a loan at a time which is not anything like as favourable as it then was.
It will have another effect also. One of the things that the Minister and his colleagues cried out to high heaven about on many occasions during the last four years was that the spending of Marshall Aid moneys in any form was bound to be inflationary in tendency and that there should have been an increase in the savings of the people. National loans are, of course, a way of mopping up savings that would otherwise be spent in the inflationary way about which the Minister and his colleagues were so fond of preaching. When they had the opportunity last August or September of issuing a loan for that purpose and preventing the injection of Marshall Aid funds in a purely inflationary way, on their own showing, they avoided doing it again, because, if they did so, they might be following the good headline set them by the inter-Party Government. That will cost the country heavily in the years ahead.
There is no use crying over spilt milk. The fact is that that opportunity has gone and that we must now look to the future and not to the past. So far as national loans for productive purposes are concerned, we on this side of the House will give the Government any help, any assistance, any publicity that we can towards ensuring that whatever moneys they seek for national development will be made available to them.
In his review of the current year's Budget, the Taoiseach posed the question more than once: Why would any Government introduce a Budget that was unpopular? But he did not answer one question categorically which has been asked not merely in this House, but all over the country: What was the intention of the Government in bringing in such a Budget? The Minister for Finance dealt with an economic survey in the beginning of his Budget speech and then dealt with the current Budget, but he did not relate that current Budget to the economic survey that he had made. The Taoiseach, like the Minister for Finance, did not state that it was to provide that there would not be further imports. He did not say that it was to provide anything more than a book-keeping method. He gave us a dissertation in one moment as to whether there was inflation and in another moment as to whether there was deflation. It was not merely a question of other people in the House not being able to understand whether he thought there was an inflationary or deflationary position. He admitted himself that he candidly did not know. If the Taoiseach is not in a position to state if there is an inflationary position, it seems extraordinary that such a deflationary Budget should have been introduced by the Minister for Finance.
Speaking the morning after the Budget was introduced, the leader of the Opposition made it perfectly clear that, in his view, unnecessary taxation was being taken out of the pockets of the people by this Budget for the purpose of creating an artificial surplus which next year, if the Fianna Fáil Party remained on that side of the House, they could take off and go to the country, believing that the public memory is short, and hoping that the public will only remember the remissions next year and forget the impositions of this year. I believe that that is unquestionably the policy at which Ministers were aiming.
One of the comments made in reference to that surplus Estimate in the Budget was in regard to the subsidies. As far as I can understand the figures put before us, the figure of £15,250,000 for subsidy in the current year includes the offset of £1.2 million mentioned by the Taoiseach earlier to-day as money coming in from the sale of white flour, butter wrappers, etc. If the subsidy figures mentioned by the Minister in his Budget statement are correct, then it means that the figures mentioned immediately afterwards by the Minister for Industry and Commerce have the effect, not of showing that the calculations made by Deputy Costello in regard to the subsidy were incorrect, but that Deputy Costello was even too conservative in estimating the excess that was being provided for.
As reported in column 1292 of the Official Reports, the Minister for Industry and Commerce gave as his reason for the calculation made by Deputy Costello of an unnecessary £2,000,000 being taken in taxation the fact that we were paying in the early part of this year up to 1st July last year's price for wheat and that after 1st July, in the period in which the new subsidy arrangements would operate, we would be paying a higher price and that in addition to that after the 1st July we would be paying for flour at 80 per cent. extraction instead of 85 per cent. These were the reasons which he gave. The Taoiseach did not deal with any reasons except that we were told to trust the figures he put before the people. Dr. Ryan said himself that he could not deal with the wheat or flour position because he did not understand it. Last year, after the 31st March, the total subsidies cost £12,500,000. This coming year they are estimated in the Book of Estimates to cost £15,250,000 after deduction of the Appropriation-in-Aid which appears in the Agricultural Vote.
If the Minister for Industry and Commerce is correct in saying that the higher price of next year's wheat harvest was one of the reasons why the calculation in regard to subsidies was wrong, then it would mean that we should compute an amount that would be spent in subsidy up to 1st July next not on the estimated figure for the forthcoming year in the present Book of Estimates but on the figure that was included for last year because his basis was that it was going to be on last year's costings we would be living up to 1st July. That would mean that for the first three months of this year our subsidies would cost us about £3.1 million.
It would mean that during the last nine months of the year, therefore, according to Deputy Lemass, the cost of the subsidies, when the higher prices were in operation, would be approximately £12,000,000.
Then the Minister for Finance came in and told us that the effect, in regard to subsidies, was a saving amongst the community of 2/- per head per week. Taking a population of 3,000,000 people and dividing that 3,000,000 people into £15,000,000, I agree that it would work out at about £5 per head, and £5 per head is practically the same as 2/- per week.
The Minister then went on to calculate that during the last nine months of this year there would be an average loss per head over the community of 1/6. If his first figure was correct— and I think it was—then equally his second figure must be three-quarters of the first, and not all the speciousness of the Taoiseach's arguments can prevent 1/6 being three-quarters of 2/-. It would seem, therefore, quite clear that no matter what payments are being made in regard to arrears or in regard to rate of flow, there are only two alternatives open to the House and to the Deputies in it, that either the calculation made by Deputy MacEntee that the cut in subsidy in his Budget of 1/6 a week was wrong or the statement that was made by the Minister for Industry and Commerce that the reason for the figure given by Deputy Costello being incorrect was that a higher price was going to be met in regard to wheat and flour during the latter part of the year and the extraction change in the latter part of the year was wrong. Both figures cannot be correct. We cannot possibly tell whether the Minister for Industry and Commerce is the incorrect person or the Minister for Finance, but it is quite clear, no matter how you take it, if you accept the position that there is to be a payment at the rate of 1/6 per head for our 3,000,000 people cut off from the 1st July to the 1st April, that if during that period the rate of subsidy is to be higher and if during that period the rate of repayment by the Exchequer is to be higher for the wheat coming in for the flour that is being ground, as the Tánaiste said, if the rate of subsidy is to be higher because of the difference in extraction, then it is quite certain that the saving of £6.8 million cannot be correct at the same time as is the statement that all that is being taken is the figure of 1/6 per head per week.
There is far more accuracy and far more logic in the figures put before us by Deputy Costello, which show that there is in fact a covert and a secret surplus of approximately £2,000,000 in the subsidy saving which the Government hope they will have available for next year for the purpose of bring in a surplus and hoping that the public memory will be short.
That statement is untrue.
I do not know whether Deputy MacEntee or Deputy Lemass is stating an untruth. All I know is that it is impossible for both of them to be accurate on these items.
If the Deputy took a course in statistics he could understand both Ministers.
The next question I want to discuss is the question of reserve stocks. Deputy Costello suggested that there was included in the current Budget an estimated amount for reserve stocks that were not going to be used during the current year. If the Fianna Fáil Party were honest and sincere in the barrage they kept up during the three years they were on this side of the House that there was a danger of international conflagration, then they would be laying in reserve stocks—and Deputy Costello in making an allowance for that stockpiling, did something that was very proper—if they believed the position was as they then stated it to be.
Last year in the Budget Deputy McGilligan made a specific calculation in respect of that. This year no such calculation is made but we have again from the Tánaiste a remark following Deputy Costello that the Government had included whatever provision they deemed was necessary for reserve stocks. The Tánaiste says that there is provision somewhere in this Budget for reserve stocks. I cannot understand where the provision is. It cannot be in the Estimates for capital services because the Estimates for capital services bear on the fly-leaf a statement as to what amount represents capital services within the meaning of the Volume of Estimates published in 1951-52. It is not in the Budget statement; it is not in the Tables analytical of that statement that was published at the time. Therefore, the only presumption can be that it is in the current estimates furnished to the House and submitted already partially in the Vote on Account that was passed on the 31st March. If it is there and if the Tánaiste was truthful when he stated that the Government have included provision in regard to reserve stocks, it must be in the current estimate and it must be that the Minister for Finance is unnecessarily taxing the community during the current year for those reserve stocks instead of providing that those reserve stocks would be paid for during the year in which they were being used.
The Taoiseach, in the course of his speech, poured scorn on the suggestion made by Deputy Costello that there was any over-estimation in the estimates before the House. Despite the effort the Fianna Fail Cabinet made to pay everything possible before the 31st March the total paid by various Government Departments fell short of the total of estimated expenditure and supplementary estimated expenditure by £3,800,000. The Government Departments, although they had the authority of this House, were unable to spend £3.8 million. Surely it is not unreasonable to suggest that they might be given a figure of £2,000,000 less than the estimated figure for the coming year. £2,000,000 is somewhere in the region of 2 per cent. The Taoiseach maintains that there is a necessity for a Budget of this severity, and if that is so surely it would not be too much to expect that a direction would go from the Government to the various Government Departments to the effect that, in the existing circumstances, each Department was to save 2 per cent. of the amount which had been put forward in the Book of Estimates. A saving of 2 per cent. would, to all intents and purposes, give the amount mentioned by Deputy Costello. Last year, in spite of all the effort that was made to spend £3.8 million was left unspent. This money could have been spent because it had been authorised by this House. All we suggest, and all Deputy Costello suggests, is that a Government which believes there is a situation which necessitates this Budget should instruct Government Departments that they were to save a mere modest 2 per cent. for the taxpayers of this country.
The position, as I see it, is that the Government are deliberately trying to make the position worse than it is, in pursuance of the policy commenced by the Minister for Finance on the 1st July last. In my view, they are trying to create worse scares. It is not the fact, and it would not be the fact, that the position called for a serious Budget which has outraged the country. What has outraged the country is the cynical disregard by Fianna Fáil for their election promises—the cynical disregard by them of the statements and the speeches which they made in this House prior to the last general election and during the three years of the inter-Party Government's régime. They are now in the position of having been hoisted with their own petard. They campaigned around the country during the whole of last May and they got their canvassers in every town, village and rural area to say that, if Fianna Fáil were the Government, there would be a reduction in the cost of living. The leaders were careful not to say too much in that respect from the public platforms. However, they had a good election propaganda machine. They left it to that election propaganda machine to do the dirty work, and I must admit quite candidly that it did the work most successfully. They certainly persuaded the people if there was a change of Government that, by a wave of a magic wand, the cost of living would be reduced overnight. Even Deputy Dr. ffrench-O'Carroll was persuaded that it was the big men of Fianna Fáil who were likely to cut the subsidies.
Deputy Dr. ffrench-O'Carroll was going to increase subsidies.
Deputy Dr. ffrench-O'Carroll was going to do all sorts of things. He had an election manifesto which he submitted all around SouthWest Dublin. I have it in my possession.
Would you like a copy?
I got it from a friend of mine, and I have it somewhere. It has a photograph of the Deputy—a flattering one. However, I am afraid the next time the Deputy has to go to the country and submit this photograph, while the photograph will be as flattering as ever, the people will not take quite as flattering a view of the statements on the inside.
We shall see.
We shall see. The Deputy will not be here to see.
Mr. O'Higgins
If the Deputy wishes to see, he will.
I was about to come to that. The people on the other side of the House were mesmerised by the claptrap perorations of the Minister for Finance at the end of his Budget statement. They are now suggesting that this is a great Budget—a Budget that is going to be good for the country. They have got the means of determining whether the Minister for Finance was correct in his last peroration at the end of his speech. They believe sincerely, and Deputy Dr. ffrench-O'Carroll believes sincerely, that this is a great Budget, and he believes that the people will vindicate this Budget. He has the remedy in his own hands. As I have said already, it is not even the amount which they are being asked to pay which outrages people but the fact that they now realise that they were codded by the Fianna Fáil Party who rampaged around the country during last May and announced that they were going to reduce the cost of living for the ordinary people, for the people of Cork as well as for the people in other places. That was untrue, and the whole election manifesto of Fianna Fáil was untrue, as the leaders of the Party were aware. There were certain Fianna Fáil Deputies and candidates at that time who believed what their leaders were telling them at private Party conferences to the effect that if there was a change of Government they would undo what, according to one of my colleagues in my own constituency, was due to the Korean War. The Tánaiste, immediately after he took office, said that the state of affairs was due solely to the Korean War. It is because of the fact that they had campaigned in that way that there is the present feeling of revulsion amongst many of the people who voted last June for the Deputies opposite.
Time will tell whether we shall get an opportunity of testing what the Minister for Finance stated at the end of his Budget speech. So far as we are concerned, we are quite happy and quite anxious that opportunity should come at the earliest possible moment. We shall get an opportunity—in a way which we all regret—of testing the position in East Limerick. But there is a way in which it can be tested not merely in one constituency but in many constituencies. If the members of the Government, and the Taoiseach himself, are sincere and honest in saying that they believe the people will stand behind them in this Budget there is a way in which they can test that belief without very much delay.
A logical argument was made in regard to certain figures in this Budget to the effect that unnecessary taxation is being imposed for the purpose of enabling the Party opposite to remain in power for a further 12 months, when, at the end of that time, they will remove that taxation, show that they have a surplus, and hope that the public memory is short. That may be good Party politics, but I submit that it will do the nation a lot of harm. The effect of this Budget will be more than merely the paying of the additional taxes that are imposed under it. It will mean substantially more unemployment and substantially more emigration. No matter what the Taoiseach may say, every aspect of this Budget is deflationary and every one of its effects is bound to be deflationary.
If, as Government statements allege, there is difficulty in regard to certain manufactures—a textile difficulty; a consumer resistance, if you like to use the word—then this is not the moment to enforce a deflationary Budget. If there is increasing unemployment, this is the time to utilise foreign assets for the purpose of avoiding it. It is no use to talk about the amount of goods that are imported as between capital goods and consumer goods. Obviously, if you are building a house the men who are working on it have to live and will buy consumer goods while they are putting up the house. The consumer goods that come in for the purpose of building up capital assets can be considered just as sound capital as many of the heavy industries that have been built up in other countries over a long period of years. It is inevitable that that must be the way in which a buildup will take place. Merely to pick out certain items of machinery and to suggest that those items of machinery alone are the only goods that are to be taken into account as capital goods is to work to an entirely false premise in any analysis of our import or our export situation.
The Budget speech of the Minister contains one very minute statement in relation to an amendment which it is proposed to make in relation to the 1947 Finance Act. It is an amendment in regard to the rate of stamp duty in respect of Irish companies and their subsidiaries. The suggestion was originally made by me to the Minister on the 31st October last in this House that as the provision had inadvertently been omitted from the Finance Act, 1947, it was causing some hardship. It is at least proper that I should gratefully accept the small concession that that amendment has now been included by the Minister. It is not a provision that means anything to the general body of taxpayers. It is simply that an oversight in the 1947 Finance Act is now being rectified and, it will not in any way hurt the revenue.
I want to refer to the statement of the Minister in respect of the purchase and production of wheat during the three years of inter-Party Government and also to the purchase of maize during that time. On many occasions in this House, and more often outside this House, we have heard suggestions that if Fianna Fáil had been in power during the years 1948 to 1951 more wheat would have been grown in this country than was actually grown. I think that city Deputies, such as Deputy Briscoe, genuinely believe that statement when it is made by their leader.
Yes, I believe it.
Lest it be not in the Library, though I think it is, the Deputy will be able to obtain from Deputy Aiken, the present Minister for External Affairs, a copy of the Estimate that was made by Fianna Fáil and submitted by the present Taoiseach, when he was Minister for External Affairs in the previous Fianna Fáil Government, to O.E.E.C. in 1947 in reply to the questionnaire which that body issued on the 23rd July, 1947. If Deputy Briscoe looks at the replies to that questionnaire he will notice that they are divided into certain parts. The first part refers to production. The second part refers to requirements and the third part is, therefore, the import deficit— being the substraction of one from the other. If Deputy Briscoe will take the figures that are included in that Estimate which was submitted by his leader to O.E.E.C. in 1947, and if he make the appropriate computation as between hectares and acres, he will find that during the régime of the inter-Party Government a larger area of wheat was, in fact, under production than the Fianna Fáil Government estimated in 1947. If Deputy Briscoe examines the figures of yield and production he will find, in the same way, that approximately 432,000 cwt. of additional wheat were produced at home as compared with the Estimate submitted in 1947 by the Fianna Fáil Government to O.E.E.C. If he wants to get the exact reference for the figures he will find them in the first place, as I say——
Is it not only natural that he would give a figure as low as possible on that occasion?
He will find the figures in the reply there and, secondly, in the report of the debates of this House on the 1st April. If the idea was to include in those returns figures as low as possible, then it would work out not merely in that regard but in other regards. In fact, when you come to consider the maize position, about which the Minister for Finance also had a lot to say, you will find, taking the average cost of maize for the years in question, that there was £19,000,000 less spent on maize during the years of the inter-Party Government than the Fianna Fáil Government proposed to spend in the same period.
That is not correct.
It is correct.
It is an assumption on which the Deputy is working.
It is a fact that a substantially smaller tonnage was imported during the years in question than was intended to be imported by Fianna Fáil.
Is the Deputy taking credit for the 1948 wheat acreage for which the preparations were made by Fianna Fáil?
I will take any year the Deputy wants. If we take the year 1950-51, the Deputy will find that in that year, under the Fianna Fáil estimate, it was proposed to have 247,000 acres of wheat and, in fact, there were 366,000 acres of wheat. He will find that in that year the proposal was that 144,000 metric tons were to be produced and sold to the mills and that the actual figure was substantially more. If he wants to take the figure in that year for maize, he will find the proposal was to import 600,000 metric tons of maize and that, in fact, all that was imported in the same period was 5,752,529 cwt., or approximately 280,000 tons.
Is it not a fact that he was making a good case for getting Marshall Aid?
If you are going to make a good case you would make it accurately on both sides of the argument.
You would err on the right side anyway.
The fact is that the Fianna Fáil Government went on record as putting these records before the O.E.E.C. authorities. So far as I understand now, the defence put forward by a member of the Government Party is that they put fake figures before O.E.E.C. I do not believe they did that. Bad and all as I think they are, I do not think they would be guilty of that. I believe that was a genuine and honest estimate made by them of the position as they anticipated it was going to be.
They were bound to err on the right side.
It is like the White Paper on the balance of external payments—the error is very large. If there was a trifling error one could understand it. One could understand an error in regard to yield, because they might wish to put it to the Marshall Aid authorities that our land had been run down to such a tremendous extent, that the yield was going to be frightfully low, but there was no case put forward as to why they were making an underestimate of the area that was proposed. The fact, of course, was that the tendency that was going to be shown was inevitably a proper tendency following the years of the emergency. What I do object to is, not that tendency but the fact that a fake attempt is being made to make capital out of what was a natural scheme and a natural flow, and that that was put forward at a time when they had an opportunity, if they so wished, of making different plans.
Deputy de Valera said at one meeting that he believed that the proper figure as regards tillage for the country was 3,000,000 acres. In fact as I say, his estimates to the Marshall Aid authorities was that in 1950-51 we would have an area of only 1,600,000 acres. That shows a very substantial difference. He mentioned the figure of 3,000,000 in his Gresham Hotel speech as the natural area, but he estimated for the Marshall Aid authorities a tillage area of 1,600,000 acres excluding roots, and root crops in this country have always occupied around 200,000 acres. The crops included in this estimate were oats, wheat, rye, barley, beet and potatoes. There was no estimate made for root crops such as mangolds and turnips which, as I say, would represent an additional acreage of 200,000 acres. That would give a total of some 1,800,000 acres so that you would have a deficiency of 1,200,000 acres on the area mentioned by the Taoiseach in the speech to which I refer.
I am not quarrelling with his suggestion that it is desirable to increase tillage production. What I am quarrelling with is the allegation repeated again and again by Fianna Fáil that the trend in the emergency was a trend that would not have been operative if they had been in the Government later. They clearly showed from their own memorandum that it was a trend that was to operate to meet the effects of the emergency when very properly the land had to be exhausted to provide for the needs of our own people.
We are here discussing a Budget that has caused more public controversy throughout the country than any Budget that was ever introduced. I can understand the Taoiseach and his Ministers saying that they do not want to test the feeling of the country in relation to something about which the country had not yet heard anything; but that argument does not hold good in regard to this Budget. All over the country, even amongst people who were staunch supporters of Fianna Fáil, one hears the same question: When will we get a chance to put them out? That is a question that the Government, if they were honest democrats, would answer by requesting the Taoiseach to go to the Park at the earliest opportunity to call on the President for a dissolution under the Constitution.
Deputy Sweetman has just said that this Budget has aroused keen interest throughout the country. The debate has been significant for one thing, and that is, that the Opposition have contented themselves with defending the actions of the Coalition Government and in particular the Budget which was introduced by them just prior to the dissolution. Despite the fact that this is an unpopular Budget and a drastic Budget, the people are taking a very keen interest in the debate here for the purpose of ascertaining for themselves whether this Budget was necessary or whether the country could have continued to carry on as the Coalition had been carrying on. There is no alternative.
Most of the Front Bench occupants in the Opposition have spoken in this debate. All the people have to do now is to decide whether this unpopular Budget is necessary at this time or whether we could have continued in the same manner as that in which the Coalition was acting. The people have heard many contradictory statements and they are no doubt confused by all the figures which have been given here on both sides. They are endeavouring to get out of their dilemma in regard to the divergent views expressed on this particular Budget, and in doing that they have certain incontrovertible facts to guide them. They can judge upon those facts, without recourse to mathematics, as to whether or not this Budget is necessary. They can decide for themselves without recourse to all the mathematics and all the arithmetic that has been served out here in the course of the debate.
We had two hours and 35 minutes of them this evening.
The taxpayer must of necessity probe into the facts and then decide which of the two alternatives presented to him is the better one. He can decide whether a Budget of this magnitude is necessary or whether we could have continued along the lines upon which the Coalition Government was working. He will not need to have recourse to statistics in order to find out what the facts are. He is aware that Marshall Aid, which this country enjoyed during the three years of Coalition Government, is no longer available. Not merely have we come to the end of our tether in that respect, but we must now start repaying that money got by way of loan.
Who said that?
These are the facts.
Who said that?
We gave a solemn undertaking to repay the Marshall loan.
Who said that?
The nation said it and the nation will honour it.
I hope so.
The people are painfully aware of the fact that there is a gap in our balance of payments and that our imports are exceeding our exports to an ever-increasing extent. They know that over the past few years there has been a serious diminution in savings. They know there has been a gigantic increase in the national debt. They know there has been an increase in consumption without any corresponding increase in production. They know that if we continue to dissipate our external assets at the rate at which they were being dissipated under the Coalition Government, those assets would last just two years more.
That is laughable.
Mr. O'Higgins
Is that the sort of stuff they are teaching you nowadays?
These are the facts that present themselves to the ordinary man in the street. They are facts which cannot be refuted and they are there to guide him in making up his own mind as to whether or not the drastic and unpopular proposals in this Budget are necessary. Having familiarised himself with these facts he can then apply the test of the ordinary housekeeping of his own family. He knows perfectly well that if a family fails to pay its way it cannot carry on. Any sane man knows that in such a state of affairs there will ultimately be serious consequences which will make the remedy, if not entirely impossible, much more difficult and might lead to the stage where, as the Taoiseach pointed out to-day, we would have to reduce, as they have had to reduce in England, the quantity of food available to our people.
That is a good comparison.
Anybody who has the interest of the State at heart has no wish to see that set of circumstances develop. The one question the average man in the street will ask himself is: Why should any Minister for Finance introduce such an unpopular Budget as Deputy MacEntee has introduced on this occasion?
Was he merely trying to commit political suicide if it was not necessary, or why should he do this courageous thing if it were not necessary? Any man of ordinary common sense will realise that no Minister for Finance would attempt to introduce such Budget proposals in this or any other country if they were not absolutely necessary in the best interests of the State. The public generally are well aware that some of those Budgets which we have seen in the past were presented merely for the purpose of pleasing them and of postponing the evil day and that eventually the day of reckoning must come. The attitude of the Opposition in this respect of failing to face up to unpopular decisions is comparable to the quack doctor who attends a patient requiring a serious operation.
Up Fianna Fáil!
The quack doctor administers a sugar-coated pill for the purpose of holding himself in the good graces of his patient. He tells the patient that he is going to be all right and that drastic action will not be necessary. He brings the patient along from day to day and from week to week until it is too late, and the patient then has to face a serious operation or die. The quack doctor is concerned merely with the popularity which he will get. He will try to ensure that his patient will be pleased with the treatment that he is meeting out to him. He will try to hold the patient and get payment from him as his doctor, but when the medical specialist comes along he will tell the patient candidly and frankly that his health is in a serious state and that a major operation is necessary if his life is to be saved. He will tell him that he must face that operation if he is to overcome the decline in his health.
In that simile, you have a comparison with the past Administration and the present in so far as the Budget in this country is concerned. We are not prepared to keep administering sugar-coated pills to the body politic in this country, or to keep telling the people that they are all right, that they can carry on, that they are wealthy and that they never experienced better times, and that a wave of prosperity has hit the country. We feel bound to give them the facts as they exist, and make known to them that drastic action is necessary if they are to be saved from a serious situation. It is pretty evident to every man in this State that a Minister who faces up to that situation, unpopular and drastic as it may be, is merely doing his duty to the nation, and that he is not courting political popularity for the sake of getting people to believe that he is to them a saviour or for the purpose of holding on in power.
The Minister for Finance, every member of his Government and every member who sits behind him on these benches are quite prepared to face up to the realities of the situation as well as to any consequences in relation to the Budget which he has put before the people.
Mr. O'Higgins
Hear, hear!
But we will not allow ourselves to be stampeded into any situation. We are perfectly confident that, in due course, the wisdom and the good sense of this Budget will manifest itself to the people of the country, and that we will get back on our feet when the country will again reach a sound state in regard to its finances. The people, too, will realise what a sound and a wise Budget this has been.
I know that the Opposition would not be living up to their past record if they did not make every possible use of this opportunity for propaganda purposes. It is only natural that they should try to exploit the situation to the fullest, irrespective of whether it is foul or fair propaganda, so long as they can try to break the grip which Fianna Fáil holds with the plain people of this country.
Mr. O'Higgins
The stranglehold.
We had a previous speaker, Deputy Sweetman, telling us that an effort was made to delay the collection of income-tax to prevent the revenue from being swollen so as to enlarge and magnify the deficit in the Budget. But he would not even go to the trouble of reading the Minister's Budget speech in which the Minister said at column 1129:
"Revenue, tax and untax, was then estimated at £81.1 million. It turned out to be £33.9 million, or £2.8 million more, mainly because of a rise in income-tax receipts largely due, in fact, to the collection of arrears carried over from previous years."
Not only did the Minister not issue instruction to those responsible for collecting income-tax to ease off in their demands, not merely did he not do that, but he actually collected arrears outstanding from the previous years. I quote that as an example of the small pieces of propaganda which the Opposition are ready to seize on to try to mislead the people by saying that the proposals in the Budget are unnecessary. I could also quote a Dublin Deputy—I see the Dublin Deputy in the House at the moment— who, in a conversation with people outside this House on Sunday week last, told them that the tax was removed off dance halls because a bribe was given to the Minister for Industry and Commerce.
Mr. O'Higgins
To the Party. Is that denied?
Of course, it is.
Order! Deputy Brennan should be allowed to make his own statement.
Mr. O'Higgins
Is that denied?
Deputy O'Higgins is constantly interrupting.
Mr. Brennan
If necessary, I will bring the witnesses, the people to whom he made the statement.
It is not usual to quote private conversations in the Dáil.
I agree with your ruling.
The Deputy should resume his seat.
It is a rather serious statement, and I think I should be allowed to finish the statement made by the Deputy, even though in conversation, to a number of people outside.
Private conversations cannot be checked or verified and should not be repeated here.
He said the Deputy is present.
We are not going to call witnesses. This is not a court.
Mr. Brennan
It was done for the purpose of creating a wrong impression. The same Deputy mentioned that one of the Opposition Deputies, whom he also quoted——
I suggest that the Deputy should pass from that. It is quite undesirable that private conversations should be quoted here.
I will report the incident to the Committee on Procedure and Privileges because if I were allowed to develop the little story I was going to give to the House the facts would reveal that there was a more serious suggestion—that a more serious charge was made.
It is quite undesirable and unusual to quote private conversations in this House.
Let him develop it outside this House.
The Chair will endeavour to conduct the business of the House.
It is only part of the campaign that was started and that has failed to stamped the people of this country into opposition to the Budget. The people have quite calmly studied the situation. They have already studied the facts as they exist and as I have put them before the House. They are quite satisfied that, in the best interests of this nation, the Budget, however unpopular or drastic it may be, was absolutely necessary. They know one further fact in addition to that which I have already quoted. They know that the things which have made a Budget of this type necessary can be laid at the door of the Coalition Government during their years in office. I do not hear any cries of "Up Limerick" now.
We do not hear any cries of "Up Dev" any place now.
His stock never was as high. Deputy Sweetman made various references to the cost of living and what Fianna Fáil had promised with regard to the cost of living. I have just as good a memory as any Deputy with regard to the election campaign and we certainly exposed what happened in a previous election by demonstrating the rise in the cost of living which had taken place in the meantime. We exposed a leading member of the Coalition—an indispensable member who had promised in the previous election that they could reduce the cost of living by 60 per cent. We hear a lot now being talked about the people being misled. If we exposed the increase in the cost of living it was for the purpose of exposing the fallacy in the promises made to the electorate on that occasion by one of the joint Leaders of the Opposition.
No member of this House, either on this or on the other side, is attempting to tell the people that this is a popular Budget, nor does any person in the community think for a moment that it was intended to be. The fact is that they know it is necessary, and because the facts before them prove it is necessary is the reason why all rightthinking people have looked upon it as a courageous step, that could only be taken by a strong Government that knew its own mind and whither it was going.
Some Deputies have criticised the various increases in taxation and the various reliefs. Personally, I think that any increase in tax at any time is unpopular for those who have to pay it, and I think that the increase in the price of butter, which is bound to come as a result of the subsidies being removed, will probably be felt the heaviest of all. I do think, too, that it will encourage the small farmer in this country to produce his own requirements in home-made butter instead of buying it from the national pool. It is a very costly item for him to have to buy. I believe that if it acts as an incentive towards achieving that result it will have done a very good thing, indeed, because I am afraid that it is not merely the town dweller who is buying butter from the national pool at the moment, but many of our small farmers throughout the country who could produce their own requirements in that respect, and thereby preserve the national pool to the extent where at least we would not have to import. It might even leave us in the position where we could export butter or, better still, chocolate crumb, which would help to close the gap in the balance of payments, which has so seriously widened over the past few years.
While the Budget may be unpopular and drastic, the people are prepared to face up to it, knowing it is necessary and in the belief that it will eventually, lead to a sounder economy, to a more prosperous nation and, above all, that it will enable the capital development programme to be proceeded with, which is bound to give more employment and create better times for all of us who live in this country.
Mr. O'Higgins
The speech we have heard from Deputy Brennan is a very good example of the old story of the frightened boy who whistled very loudly passing the graveyard. I know that Deputy Brennan and, indeed, other Deputies, who find themselves committed to support the budgetary proposals now before the House, have a very unenviable task to accomplish. The task being unenviable does not excuse some of the speeches which have been made.
To suggest, as Deputy Brennan has suggested, that the people back and support this Budget and at the same time to deny the people the opportunity of expressing that support, if they support it, seems to me to be an extraordinary contradiction in terms. There is an easy way of finding out whether the people share the exultation which Deputy Brennan obviously suffers from, and that is to dissolve this House and go to the country and ask the people what they think, because it is perfectly apparent to the country now that the Front Bench opposite, the Government elected by this House, represents no one except the 70 Deputies or so who sit behind them.
They are a caretaker Government and the entire country at the moment is marking time for a general election. I think that it is opportune that we in this House should, as vehemently as we can, express that desire for an election to the people we represent.
I find it difficult to understand how this Budget was accepted by the Government and introduced into this House as representing the financial policy of the Government in view of the policy and the policies the country was told the Government would follow and pursue. The country will remember—and the House, I trust, will recollect—that after the last general election, between 30th May and 13th of last June, there was an interregnum period in this country, a period in which a wish had been expressed for a continuance of the inter-Party Government but, unfortunately, that wish was open to be defeated by the action of certain sections and certain Deputies in this House. In that interregnum period the Fianna Fáil Party decided to do something in an effort to secure the fruits of office again for themselves and their friends, and over the signature of the leader of the Fianna Fail Party, Deputy Eamon de Valera, they issued a statement of Fianna Fail's 17 points for a new Government. That statement was not directed to the people of the country because the 17 points had never been discussed during the previous election. It was directed to the four or five votes they thought they might get to enable them to form a Government. They chose very well in composing these 17 points. Each point in the programme was intended to appeal to one or other of the whims that compose the political philosophy of Deputy Dr. Browne, Deputy Dr. ffrench O'Carroll, Deputy Cowan, Deputy Cogan and Deputy Flynn.
What bearing has this on the Budget?
Mr. O'Higgins
It has a considerable bearing. I suggest that I am trying to educate the House and the Chair by reminding——
On a point of order. Is it in order for a Deputy to reflect on the Chair? I understand that Deputy O'Higgins proposes to educate the Chair.
The Chair was about to ask Deputy O'Higgins to withdraw that remark.
Mr. O'Higgins
I certainly do and I am obliged to the Minister for reminding me of the slight irregularity in my speech. I trust now, with the assistance of the Minister, that I will be able to devote some time to him. I do not know whether the impression I got from the Minister's interjection, that he was anxious to avoid my continuing to discuss the 17 points, is well-founded. If the Minister's recollection is not very good, I may say that the 17 points were supposed to be what this Government in which he is now a Minister would do if elected. As I say, the 17 points were directed at these five independent Deputies. They were well directed. They were intended to appeal to some whim or fancy of some individual Deputy.
Of course, when they were framed it was fresh in the minds of the Fianna Fáil scribes who composed them that Deputy Dr. ffrench-O'Carroll was the man who stood firm for food subsidies and that he had been elected in SouthEast Dublin because he promised the people there that, if elected, not only would he maintain the existing food subsidies but substantially increase them. I have no doubt that that promise of Deputy Dr. ffrench-O'Carroll had to be considered when this policy was being drafted to enable this new Government to be formed. Therefore it was not surprising that one of the famous 17 points, point No. 15, dealt with Deputy Dr. ffrench-O'Carroll's pet subject of food subsidies. Point No. 15 was an undertaking that a Fianna Fáil Government, if formed, would make it its policy to maintain existing food subsidies and to control the prices of essential foodstuffs, and to operate an efficient system of price regulation for all necessary and scarce commodities. That promise contained in the 17 points was published in the Press of the 5th June last year. It was a clear and unequivocal assurance to the Irish people and to the five Deputies that any Fianna Fáil Government elected by this House would follow a policy which would ensure the maintenance of existing food subsidies and the efficient control of necessary and scarce commodities. That Government was formed.
We are discussing at the moment the first positive action taken by the Government then elected to put into operation the different proposals contained in the 17 point programme. While we are discussing that first positive action, we are also discussing the destruction of the solemn assurance contained in the Government's 17 point policy. Only nine months later, with callous disregard for their own word and for the signature of the leader, they are taking, and asking this House to take, positive action to abandon the existing food subsidies, and the only thing they can say in favour of their action is, "It is courageous anyway". It is courageous for a man to walk into a bank in Grafton Street and hold up the cashier, but it is not praiseworthy. Are we to be satisfied as representatives of the people that just because this action, to the mind of the dispirited Government back benchers, is a courageous one, therefore it is justified? I do not think that there is any parallel in democratic history for a political Party to disregard its solemn assurance to the people who elected it in a matter of major policy.
What about the people who elected this Government; not the people of Ireland, not the Irish voters, but the section who, intervening between the Opposition and the Government, put this Government in power? I assume the Government have no regard for their own pledged word, but what about the four or five Deputies who elected them? Are they going to disregard the policy they voted for and hope to see put into operation? Deputy Dr. ffrench-O'Carroll issued this clarion call to his constituency: "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." Is Deputy Dr. ffrench-O'Carroll so indifferent to his pledged word that he is now going to remain silent when action by him can give to this country a change of policy and a new Parliament?
I sincerely trust that the few words I am uttering to-night will help Deputy Dr. ffrench-O'Carroll to behave like a man, and I sincerely hope that what I now intend to say will teach the Deputy the foolishness of his action when, three weeks ago, he walked into the Division Lobby to vote for this Budget.
Will the Deputy tell the House if he is now pretending to act like a man?
Mr. O'Higgins
I do not know how to behave in any other way. I have never acted in any other way.
It is very tragic and nationally harmful that we should have in this House evidence of a betrayal of promise by a political Party. It would be all right and, perhaps, curable if this major departure from the policy the Government was formed to pursue ended in betrayal. Unfortunately, it does not. The present Minister for Finance has always played a very active part, as a member of this House, at the time of general elections. He likes to be the leader of the vanguard in the Fianna Fáil fight for votes. Unfortunately, at times, he says too much too often. During the last general election campaigned against those who sugDeputy MacEntee as he then was— campaigned against those who suggested that Fianna Fáil was going to tax beer and tobacco. He campaigned against the licensed trade, against Deputy Cowan and against the Deputies of the then Government for suggesting that Fianna Fáil might tax beer and tobacco. I recollect him speaking at Rathmines Town Hall on the 15th May, 1951. He is reported in the Irish Press as follows:—
"A number of persons in the licensed trade were spreading a rumour that Fianna Fáil, if returned to power, would reimpose the tax on drink which was imposed by the Supplementary Budget of 1947. There is no truth in such a rumour."
That is the statement of Deputy MacEntee as he then was. Now, as Minister for Finance he is asking this House not only to reimpose the taxes of the Fianna Fáil Supplementary Budget of 1947 but to increase them. He is asking the members of the House and the Irish people through us to accept his proposal as a sincere and honest effort at budgetary legislation for this country. The particular speech of the Minister's, part of which I have quoted, was not unadorned by pearls of his oratory. In the same speech he proceeded to deliver a homily to all candidates for election honours and to all politicians, budding or otherwise. He spoke as follows:—
"People in this election were being asked to decide whether politics in Ireland was to be a dirty game played by confidence tricksters who were prepared to promise anything to dupe people into voting for them. The pearl cast..."
Perhaps the Minister might care next time to finish the quotation. It is now time that we should bring these matters down to some reality. I have mentioned two matters contained in this Budget—foodstuffs and the taxation of beer and tobacco. A firm, unequivocal assurance was given on behalf of the Fianna Fáil Party, its supporters and fellow-travellers that neither would be interfered with if Fianna Fáil reassumed office.
When was that quotation given by me?
You were going to increase food subsidies.
Mr. O'Higgins
Deputy Dr. ffrench-O'Carroll is involved in the food subsidies. The Minister for Finance is involved in the food subsidies and in the taxation of beer and tobacco.
What about the "Nuncio"?
Mr. O'Higgins
With relation to the items I have mentioned, very callous, calculated action has been taken in complete breach of the solemn assurances given. That is not only tragic and undemocratic, but it is something which every Deputy in this House should vote against and work against. It is something which the people of this country deeply resent. It is said in defence of the Minister's proposals that, no matter what we may say against them, they are at least courageous. Of course, it is very easy to say a thing is courageous when you can say nothing else for it. Do the people opposite realise that they are doing something that is sweeping the people from behind them? That is exactly what is taking place. If, as seems clear, the Fianna Fáil Party, during the last general election campaign, by implication—I will not say it was any more than implication—promised to follow a policy at least of maintaining existing subsidies and of not taxing beer and tobacco and now proceed to follow a policy diametrically opposite to their implied undertaking, we are entitled to demand by what right this change of policy has been put into operation. The Minister's only right to speak in this House comes under God from the people of this country. By no other right does he sit here, and he has only got the right to continue occupying the position of Minister in this House for so long as he acts in accordance with the wishes of the people. He would be anxious to claim, I know, that the people sent him here. If he and his colleagues in the Government climbed the steps of Government Buildings by reason of the support given to them as a result of the policy which they impliedly made known to the people, and if they now depart from that policy and from the undertakings given, their right to continue as a Government ceases.
It is often common enough in Parliament in democratic countries when a Government seeks to do a thing, no matter what the Opposition may be, to say: "We have a mandate from the people to do this." That, of course, is to be expected in relation to all major matters of policy. There is no Government in any country that is entitled to follow a line of major policy if it has not got some form of mandate from the people to put that policy into operation. The contrary would be a direct negation of democracy. If the contrary rule were accepted we might find Parties, if elected by Deputies here, and having assumed government, putting into operation some policy that might be completely anathema to the people of this country. I am afraid that that situation is now upon us.
No one would suggest that a sudden removal of food subsidies which amount in one financial year to a sum of £15,000,000 is not a major change of policy. It is a very serious change of policy, so serious that no Government has a right to embark upon it unless it can clearly demonstrate to this House that it has support from the people to do it. Now it is futile for Deputies to be arguing as to whether or not people will support these budgetary proposals. We all have our own views on it; the Minister has one view; Deputy Brennan has one view; I have one view. There is only one way of finding out, of getting an unanswerable verdict, and that is the clear course of going to the people who sent us here and asking them for their view. The course which I suggest is a course dictated by political honesty and by democratic principle, the dissolution of the Dáil.
I do not know whether that course will be followed by the Government or not. If it is not followed I can see in the coming months a very regrettable situation growing up here. If the Government does not submit these proposals to the people of Ireland they will be convicted of one thing clearly: political cowardice, of being afraid of their masters, afraid of the people and, being convicted of that, they can no longer parade around this country calling themselves the Government of Ireland because they will cease to be the Irish Government. In coming months we will have conducting our affairs a group of politicians who are afraid of the people of this country, who are carrying out a policy of which the people do not approve, and certainly they are not entitled to lead the people of this country.
I do not think that is a prospect that can appeal to any Deputy in this House. It cannot appeal to Government Deputies or to individual Government Ministers. It certainly does not appeal to a responsible Opposition such as we are. I should hope that it does not appeal to Deputy Dr. ffrench-O'Carroll, Deputy Dr. Noel Browne or any other Independent Deputy. All of us can and should take pride in our democratic institutions. Although we may quite often differ in Party and on politics, nevertheless in between elections we always take a conscious pride in the fact that an Irish Government democratically elected through the people by the Deputies of this House represents, for as long as it is there, the people of this country. It will be a sorry day for Ireland if we can no longer say that of our Government, and there is no doubt that we will be unable to say that if, in relation to this important major matter, the Government shirks its responsibility of consulting the people.
It might have been all right if somewhere in some Government Minister's speech in the last election or in some of their propaganda which they distributed throughout the country, if somewhere in some of the masses of advertisements, speeches, letters and different documents issued by them, there was at least a glimmering of an indication that they were going to do this if elected. If they could produce even one line in any one document indicating the glimmering of this policy, then, at least, they would be able to argue they told the people they would do this. We all know they cannot do that. We all know the contrary to be the position.
Apart from the matters I have mentioned, the solemn undertakings given on 5th July last year, we all can remember the advertisements issued by Fianna Fáil in the last election. Right beside the photograph of Deputy Dr. ffrench-O'Carroll on one's Evening Herald during the election one could see the big Fianna Fáil advertisement of the harassed housewife. There she was at the end of the week biting her nails with the pile of bills in front of her left hand and the little pile of silver, her husband's wages, in front of her right hand; she was thinking of the increase in the price of coal, the increase in the price of margarine, the increase in the price of butter, the increase in the price of meat, thinking that it had all been brought about by the bad, bold inter-Party Government; right underneath that photograph of the harassed housewife there was the Fianna Fáil slogan: “Housewives remember, Fianna Fáil started the system of food subsidies”; and then appealed to the housewife to come out to vote for Fianna Fáil.
There is no Deputy in this House who does not remember those advertisements here in this city. Fianna Fáil secured dozens of additional votes in the city that they had lost elsewhere in the country, because the people sincerely believed Fianna Fáil in some way was going to follow a policy which would mean to the housewife next time a smaller pile of bills to meet at the end of the week. There is no doubt that the Minister for Finance's constituents, Deputy Briscoe's constituents, all of them, when they voted for Fianna Fáil in the last election, believed sincerely, on the solemn assurance of the Fianna Fáil Party, that they were going to vote for a policy which would mean continuance of food subsidies, better control of prices and lower prices for all.
There is no shadow of doubt about that at all. Neither is there room for argument as to why the people voted for Deputy Dr. ffrench-O'Carroll. They voted for him because they believed that they were voting for a policy of maintaining and possibly even increasing the food subsidies.
There was the small matter of a mother and child scheme too.
You have not got it yet.
It is coming.
It is being nursed.
I will bet you £5 that you will not get one without a means test.
Mr. O'Higgins
In these circumstances it is not unreasonable, speaking on behalf of the majority of the people of this country, that we should demand an opportunity to change the Government if that is the only way this policy can be changed. It is not necessary to emphasise the matters which I have mentioned. They are so obvious to all of us that their repetition only becomes tedious. Apart from the complete reversal of policy and the dishonest betrayal of the voter which this Budget seems to perpetrate, it would appear that the reasoning and the thought and the imagination behind this Budget leave much to be desired.
This Budget is aimed at a period of inflation in this country. Often speakers refer to inflation when they desire to sound learned. I do not want to sound learned. I have never been able to ascertain from any group of people when, in fact, an inflationary period existed in this country. I remember that at the beginning of 1948, shortly after the inter-Party Government took office, the present Tánaiste, now Deputy Lemass, stated one week that we were in the middle of an inflationary period and the following week he stated that we were in the middle of a deflationary period. It is obvious, therefore, that a considerable difference of opinion existed amongst the leaders of the Fianna Fáil Party as to when this peculiar situation existed. We all know what an inflationary period may mean to the country. Whatever might be said on behalf of those who argued, some time ago, that inflation did exist, I can see very little that points to inflation in this country to-day. Since June last, by reason of an apparently deliberate ministerial policy, there has been a trade recession. Credit has been clamped down on by the banks. Less employment is available to our people. There is less activity in the country. More people are leaving the country. All these trends certainly seem to point against an inflationary position. Accordingly. I find it very difficult to understand why, in such a situation, the Minister for Finance should seek to absorb excess money when there is no excess. I find it difficult to understand why he should try to restrict the purchasing power of the worker when the worker has no margin whatsover left over from his earnings. I find it difficult to understand why the Minister should seek to foist a policy of that kind on the country.
I do not think the Minister has made any effort to justify the philosophy which imbues this Budget. I do not think he has made a cogent case that inflation exists and that deflationary methods are necessary. I do not care what sort of a case he may make in that regard. From what I see in the counties which I represent, and from conditions which I know to exist, this is not a period in which deflationary action is necessary or desirable by the Government. On the contrary, this is a time when the Government should take action to restore confidence to the country and to business. More money should be put into circulation by enabling greater purchasing power to be available by way of wages, and so forth, to the people of the country. This is the time when there should be an injection of purchasing power into the country. This is not the time for sticking in the syringe and drawing out purchasing power. It is in that connection that I question the policy contained in the Budget.
It is necessary that we should examine what will happen if the proposals contained in this Budget are implemented. It will have certain immediate effects and it will also have certain effects which may not be apparent for some time. The immediate effects will be felt by the less well-off sections of the community—the working people and the vast majority of the people of the country. These immediate effects will mean a marked restriction in purchasing power, apart altogether from the question of the necessary expenditure on the foodstuffs that a family must purchase in order to live. As a result of this Budget the working family will have to devote a larger percentage of their wages at the end of a week to the purchase of goods which are urgently required to keep body and soul together. That state of affairs has been deliberately designed by the framers of this Budget. It is in keeping with the views and the philosophy contained in the Central Bank Report, namely, the reduction of purchasing power available to the worker by increasing the price he has to pay for foodstuffs, thereby lowering whatever margin he might have left at the end of a week. Consider the position of a worker even in this city who earns £5 or £6 a week when these Budget proposals are put into effect. He will have to pay more for feeding his family. He will have to pay more for butter, tea, sugar and bread. Obviously, he will have less money left over for clothes, or other expenses which might be likely to occur, or even for savings. That restriction in purchasing power will have another effect which will be secondary.
In the coming months the shopkeeper around the corner from where this worker lives will find, slowly but surely, that his turnover is decreasing. The worker will not be able to go in and buy another pair of socks for his son or his daughter, or a Confirmation outfit for them when they are being confirmed. Less will be spent because the worker will not have the wherewithal to expend. That restriction in the trade of the shopkeeper will, in turn, have a corresponding effect on the general business community. The shopkeeper will require less stock in his shops by reason of the absence of demand, and the producer will eventually find no need to produce as much as he did before. Because of that he will not have the same necessity to employ as much labour. Accordingly, slowly but surely, the restriction in the purchasing power of the worker generally will mean that more unemployment will be created. That, in turn, will lead to a further restriction in purchasing power and a further trade recession. That seems the inevitable result of this Budget.
I do not believe that the Minister for Finance would introduce a budgetary proposal of that kind unless he had examined carefully the consequences that would flow from it. I believe that the provisions of this Budget were arrived at only after the most careful and grave consideration, and accordingly I must assume that the Minister and the Fianna Fáil Party intend to cause further unemployment in this country. I must assume that the Minister thinks that it is in some way desirable from the financial point of view that unemployment on an increased scale should exist in this country for the next 12 months. That is the inference which logic compels one to draw from the Budget itself.
I know, and Deputies will recollect, that only some four or five months ago when the Supplies and Services Act was being debated in this House, the Leader of the Opposition, Deputy Costello, took certain steps to restore public confidence in the financial and economic structure of the country. When that Bill, now an Act, was before the House, considerable public anxiety had been caused by the Central Bank Report and the White Paper that had been issued by the Minister for Finance. In the Central Bank Report certain steps were suggested to the Government, steps which aimed at reducing the purchasing power of the community, cutting out the capital public works programme and subsidies, restricting bank credit and employment generally. Public anxiety was caused because proposals such as these should have been contained in a report issued from an institution such as the Central Bank. Because of that anxiety, because this Opposition felt a certain responsibility to the people of the country, the Leader of the Opposition, Deputy Costello, tabled what was, in effect, a motion of no confidence in the present Government by reason of its apparent acceptance of the Central Bank Report.
All of us will recollect that when Deputy Costello had moved the motion to refuse a Second Reading to the Supplies and Services Bill, the Tánaiste spoke on behalf of the Government. The Fianna Fáil Árd-Fheis was in session on the same day and while the Tánaiste was speaking in this House, the Taoiseach was speaking in the Mansion House, telling the boys in the Mansion House that the country was ruined and that the Central Bank Report proved it. At the same time the Tánaiste was saying here that the Central Bank Report and the philosophy behind it were anathema to him and to the Government and would not be followed in any particular. In that debate the Tánaiste on behalf of the Government informed this House and the country that they rejected completely the Central Bank Report with all its recommendations and philosophy and that on the other hand they believed the proper policy to be the energetic development of a capital works programme, as the one economic solution available to the country.
I recollect that in that debate the Tánaiste announced a capital programme for the expenditure of some £35,000,000. We are entitled to assume then that the Tánaiste in that statement was representing Government policy. We were entitled to assume that the policy disclosed in the Tánaiste's speech would thereafter be followed by the Government. We find, on the contrary, that in this Budget the Minister for Finance carefully and sedulously follows every recommendation contained in the report of the chairman of the Central Bank.
On a point of order. The Deputy has misled the Dáil The Report of the Central Bank is the report of the board of the Central Bank.
Mr. O'Higgins
I am afraid I did not catch what the Minister said.
I said that the Deputy had unwittingly misled the Dáil.
That is a ridiculous interpolation.
What did the Minister mutter?
What he muttered was not worth listening to. It was ridiculous.
Mr. O'Higgins
The position, in any event, is that the policy contained in the Budget discloses an acceptance completely of the recommendations in the Central Bank Report. The Central Bank Report recommended the abolition of subsidies because, as stated in the report, the abolition of the subsidies would make the workers pay more for food and thereby reduce purchasing power.
Is the Deputy quoting from the Central Bank Report?
Mr. O'Higgins
Actually I have not the report before me. I am giving what my recollection of it is.
Your recollection!
Quote the words.
Mr. O'Higgins
I would advise Deputy Briscoe not to challenge me because I can find the quotation. Let me state again what my recollection is.
The Central Bank Report recommended the abolition of subsidies because the workers will then have to pay more for the present-subsidised rationed commodities and thereby there will be a reduction in the purchasing power available to the workers. That was a desirable situation, according to the Central Bank Report. It was a desirable situation that the worker should spend more on living and that the worker should be more concerned with the problem of life rather than having any money for leisure of relaxation. According to the framers of the Central Bank Report, that was a desirable situation.
That also appears in it?
Mr. O'Higgins
Would Deputy Briscoe keep quiet?
Is the Deputy quoting the Central Bank Report or his interpretation of it? I will have an opportunity of replying to this.
Mr. O'Higgins
The recommendation in respect of food subsidies in the Central Bank Report has been accepted by the Minister for Finance in this Budget because the Minister for Finance and his advisers and the Government think it desirable that the worker should be more concerned with the problem of providing food for himself and his family and more concerned with the problem of life itself. From the financial point of view, they believe it is not desirable that the worker at the end of the week should have any money to rattle in his pocket. Of course, that is a well-known financial theory. It is a view which will be shared by those who are concerned merely with the problem of storing up £ notes and it is a view that will be rejected completely, I am sure, by Deputy Captain Cowan. Deputy Captain Cowan is certainly one of the Deputies here who has always pleaded that the worker is entitled to a fair crack of the whip and that his pint should not be taxed. We all recollect that Deputy Captain Cowan was elected in the first instance because of his opposition to taxation on what he described himself, to use his own phrase, as the simple luxury of the working man.
I hope that was not the cause of my election.
Mr. O'Higgins
It was, and it will be the cause of your defeat on the next occasion. I imagine that also would be a brand of philosophy which would not appeal to any responsible person who does not share the outmoded financial views which are merely relics of something that was acceptable in Victorian days. I know that the Minister for Posts and Telegraphs was pleased at one time to be coupled with the Minister for Finance as a Victorian ogre. I do not know whether or not that means that both of them are glad to accept all the views contained in that particular philosophy, but I think we should to-day have passed from the state wherein we regard the working man as entitled to nothing except the bare wherewithal to live. We should have passed far beyond that particular outlook. I would think that to-day the prosperity of any country should be measured not by the credit balance in the banks but on the standard of living available to the ordinary people. I would think that every Deputy here, and particularly Deputies like Deputy Captain Cowan, Deputy ffrench-O'Carroll and Deputy Dr. Browne, would share the view that our country's prosperity should be measured by the standard of living available to the ordinary working man.
Certainly.
That is exactly what we do stand for.
Mr. O'Higgins
Examine for a moment what Deputy Captain Cowan and Deputy Briscoe and Deputy Dr. ffrench-O'Carroll are being asked to vote for now by the Minister for Finance. Indeed, I do not know whether they will vote for it. Deputy Dr. ffrench-O'Carroll gave me some hope a short time ago that he might yet be a man. Here is what the Central Bank Report says:—
"Subsidies are not only a heavy burden on the Budget but also constitute a disguised addition to purchasing power, as the money saved through getting subsidised articles at a reduced price is set free for other expenditure. That can have a twofold adverse effect on the balance of payments by promoting an excessive demand for the subsidised articles, whether imported or domestic or exportable, and by facilitating an additional demand for unsubsidised articles."
Let us examine what that means—"facilitating an additional demand for unsubsidised articles."
That is not what the Deputy alleged was in the report.
Mr. O'Higgins
It means that the worker will have something over after paying his food bill at the end of the week because he can get articles subsidised at a rationed price, and with that something over he can then make a money demand for articles that are not subsidised. Therefore the rationing of articles facilitates an additional demand for unsubsidised articles. Let me tie that up with what I was saying to Deputy Captain Cowan in relation to the workers' standard of living. The standard of living of the worker consists of many things. It consists not only of the food he can buy but also of what he can afford to do with his leisure and the different small pleasures he can afford to give himself in his leisure time.
I take the same view as the Labour Party.
Mr. O'Higgins
May I take it then that Deputy Captain Cowan will join Deputy Dr. ffrench-O'Carroll in voting against this Budget?
No. Fine Gael was condemned by the Labour Party on Sunday very effectively. (Interruptions.)
Order!
Mr. O'Higgins
It is always interesting to hear Deputy Captain Cowan referring to his different associations with different political Parties. He is the greatest political grasshopper in the place. He has hopped all over the House from one political Party to another. He is now in Fianna Fáil and he will end his political life in Fianna Fáil.
It will be a long life.
Mr. O'Higgins
I trust the Deputy did not say a long life because that might indicate that we are not going to have an election.
There will be no election this year. Have I not announced that already?
Mr. O'Higgins
Would the Deputy tell the House if we may expect one next year? I move to report progress.