Skip to main content
Normal View

Dáil Éireann debate -
Thursday, 26 Jun 1952

Vol. 132 No. 12

Ceisteanna—Questions. Oral Answers. - Sterling Assets.

asked the Minister for Finance if he will state if it is Government policy to repatriate sterling assets; and, if so, what steps they are taking or propose to take to effectuate such a policy.

The policy of this Government regarding the repatriation of sterling assets has been stated repeatedly over the past 25 years. As far back, for example, as April, 1928, Deputy Lemass, when speaking on the general financial motion (Dáil Debates, Volume 23, column 549), said: "We cannot acquit the Government of the Saorstát of a large share of responsibility in maintaining that unequal and unbalanced burden of taxation which has brought about this general stagnation in trade. They have declined, and persistently declined, to make any concessions in the matter of the collection of income-tax on incomes derived from investments in Irish industries. It is generally recognised that one of the main difficulties of Irish industries is the difficulty of inducing the owners of capital to invest it in Irish concerns". In my 1932 Budget and subsequent Finance Act first steps were taken to put this policy into force, as I said at the time, "with a view to encouraging our own citizens to invest their capital in Saorstát industry" (Dáil Debates, Volume 41, column 1504).

The subject has again been dealt with in recent weeks. I would refer the Deputy to the Taoiseach's speech on the 23rd April (Dáil Debates, Volume 131, No. 2) and to the passage in the Budget statement of the 2nd April, in which I said:

"We can advance in wealth and income only if our current savings are adequate to meet a high level of investment and if our external resources are used solely to raise that level higher still".

I pointed out in that speech that, as a result of the increased consumption in recent years and the corresponding decline in saving——

With people eating too much and living too well.

——additions to internal assets had been made largely by drawing on external investments and by incurring external liabilities. In reply to the Deputy's interruption, the farmers did not produce milk for 1/- a gallon, as he wanted them to do. In 1951 there had, indeed, been an actual reduction in national capital because there was no net current saving and even the maintenance of existing domestic assets had to be provided for in part at the expense of net external capital.

These facts clearly showed that the external capital of the community was being largely dissipated for consumption purposes instead of being used to supplement the domestic capital development made possible by current savings.

I, therefore, emphasised that it was the Government's aim "to stop the waste of our external reserves and confine their use to the promotion of national development beyond that for which normal current savings would provide". I said: "If we are to achieve this aim it is not enough that personal savings should be increased. Of no less pressing importance is the restoration of a reasonable budgetary balance because Budget deficits and non-productive capital expenditure, financed by putting new money into circulation, generate additional personal spending and have a most disturbing effect on the balance of payments."

The deficit in the balance of payments measures the extent to which external assets must be realised or external liabilities incurred in order to maintain the community's scale of expenditure for current and capital purposes. In reply to another question by the Deputy on to-day's Order Paper, I express my views on the question of the extent of the deficit in the balance of payments for the current calendar year.

You did not.

The Deputy has not a balanced mind to understand the balance of payments anyway. Assuming the recent recovery in personal savings continues, that spending on consumer goods from abroad is further reduced, and that the increase in exports is maintained, I expect to see in time the achievement of the objective in relation to the use of external resources which was set forth in the Budget speech.

Mr. O'Higgins

Can the Minister now state whether it is the Government policy to repatriate sterling assets?

The Deputy does not seem to be aware of the fact that the Coalition Government's use of the phrase "repatriation of external assets" was merely a euphemism for covering up their inflationary spending here in an inflationary period. It was "passing the buck", spending the money and leaving somebody else to pay their debts.

Mr. O'Higgins

Would the Minister cease "passing the buck" now and tell the House what is the Government's policy in relation to the query raised in Question No. 16? Is it or is it not the Government's policy to repatriate sterling assets?

That is just impertinence.

The Tánaiste is telling the Minister to be careful.

I am saying that I would not tolerate impertinence from Deputy O'Higgins or anybody else.

Deputy O'Higgins does not seem to be aware that his leader, Deputy J.A. Costello, came in here in 1948 after coming back from London and did a "holy roller" act. He groaned and complained about the fact that we had expended a few millions of the £146,000,000 that had been built up during the war years.

Mr. O'Higgins

My question is still unanswered.

We do not have to answer questions like that because the people know the record of the Coalition groups in that regard.

Nevertheless, the Deputy is entitled to an answer.