I listened yesterday to the speech of the Leader of the Opposition and I could not help admiring the persistence with which he attempted to maintain an impossible position. Last year he tried to make it appear that we were imposing taxation to the extent of some £10,000,000 unnecessarily. We asked why should a democratic Government that is dependent for its existence on popular support seek to impose unnecessaryburdens upon the community, to impose taxation that was not necessary. We pointed out that the temptation is always the other way. The Deputy who has just spoken referred to the competition that there is between Parties to promote schemes that have popular approval. If that be so, why should any Government impose taxation that is not required?
The only attempt at an answer to that simple question was that we were putting on extra taxation, huge taxation last year in order that we might have the satisfaction of taking it off this year, that we wanted to have an election Budget for the year and that taking off taxation would be very popular.
Now we come to the end of the year and we can ask who is right. Estimates, after all, are estimates. They are good or bad according to the experience and ability of those who make the estimates. We have State officials who have many years' experience in the financial transactions of the State, who have a great deal of experience in making estimates as to the outcome of taxation and the extent to which either anticipated revenue is realised or anticipated expenditure is incurred.
Members of the Opposition on the front benches have had experience of Government also and they know the care with which the Minister for Finance and the officials go through Estimates to try to reduce them and to arrive at the nearest estimate they can of what is likely to become the actual outcome. We pointed that out last year and we said that the contentions of the Leader of the Opposition could only be true if we were to assume that these people, these State officials, were all out in some conspiracy with the Minister for Finance to deceive the Government and to deceive the Dáil and to deceive the country. We felt that there could be no sincerity really about the contentions that were being made because those who made them knew exactly, as we know, the processes that precede the presentation of the Estimates.
However, we have gone from the region of Estimates, probabilities and possibilities in regard to last year. Weare now down to certainties, the record of actual transactions. Is it suggested that these accounts also are cooked? These accounts will go for audit very soon before the Comptroller and Auditor General and his staff, who are independent of the Government, who are functionaries of this House. Is it suggested that these accounts are not a true record of the transactions that have taken place?
The Leader of the Opposition seems to suggest that we do not know whether we have a deficit or a surplus on the year's transactions. There is no doubt whatever about what the position is. The recorded transactions show that there is a deficit of some £2,000,000, not a surplus of £10,000,000, caused by the fact that revenue has been short of anticipation or estimate by £1.8 million and that expenditure has exceeded what was anticipated by £0.2 million, the two together making up the deficit of £2,000,000. That is a fact which we must all accept.
The Minister for Finance and the Government can be attacked, if the Opposition chooses, for not having made provision in the only way they could properly make provision for current expenditure, by producing the requisite amount of current revenue by taxation. That would be a fair line of attack, that in fact we have not balanced our Budget, that the Budget presented last year did not give us a balanced account at the end of the year. When this talk of a surplus of £10,000,000 was indulged in last year, I said that my fear was that we were not making sufficient provision and that in the end we would probably have a deficit. Everything pointed to the fact that there was no likelihood whatever of a surplus.
We are told that we would have had a surplus were it not for the Supplementary Estimates introduced during the year. It is true that a number of Supplementary Estimates were introduced during the year. They were Supplementary Estimates on the current account side, which came to £8.8 million or, let us say, £8,750,000. As has been mentioned in the House this morning, these Estimates were provided for to the extent of £5,750,000.Actually, provision was made to this extent for these Estimates. There was £3,000,000 which was not anticipated and for which money was not provided directly. That £3,000,000 of additional expenditure was met largely by the fact that there were savings in other directions.
We were told last year that there was overestimation, that we could count on some millions of pounds, because when you have a large number of items as we have in our Estimates, there is a likelihood that there will be quite a substantial saving. We do not deny that. I pointed out, however, that our experience in previous years pointed to the fact that any such savings were eaten up by supplementaries, and that is exactly what happened last year. When Deputy Costello gave figures when he was trying to make up what he described as £10,000,000 of unnecessary taxation, we pointed out that it was necessary not to take these savings into account inasmuch as they would be required, as experience had shown, to meet supplementaries.
This coming year, if there are to be, as there are likely to be, savings on all these items in addition to any economies which can be effected, these cannot be taken into account unless we make up our minds determinedly that we will put a stop to supplementaries except those which are foreseen and provided for in the Budget, or that we will make an exception only in cases of vital necessity where there is an immediate productive possibility. What is the sense in trying to look towards the year in advance if during the year we encourage expenditure for which provision has not been properly made? It is a senseless procedure to have supplementaries to the extent which we have had them in recent years.
The Leader of the Opposition asked how is it, if you had a deficit in the past year and taxation rates remain the same—that is what I understood his argument to be—you are proposing to meet higher expenditure this year unless you have a concealed surplus for the past year? The answer is very simple. It is expected that, even with the present rates of taxation, there will be an increase in revenue of £5,000,000. There is an increase inexpenditure of £3,000,000. The £5,000,000 increase in revenue will meet that and cancel the deficit of £2,000,000. There is nothing extraordinary in it.
The position we are faced with in the present year is that we must watch our step very carefully in regard to incurring new expenditure. We are determined that taxation will not be increased if we can help it. We have reached a level as high as our present production will warrant, and if there are to be further increases in expenditure these increases must be justified by an increase in production.
The Leader of the Opposition went into detail and I would be quite prepared to follow him in detail if I thought there was anything to be gained by it and if I thought that he would admit when facts are presented to him that he was mistaken. We had controversies last year. We produced the figures and we proved our case, but we proved it in vain. Even though we proved our case as clearly as anything could be proved and showed that the Leader of the Opposition was mistaken, our efforts proved quite useless. He spoke, for instance, about a sum of £1,000,000 that had been taken into account and he claimed we were charging £1,000,000 more than we required in connection with health services. It was shown to him quite clearly that he was mistaken in his interpretation of that matter and that that £1,000,000 was for contingencies. It was £1,000,000 out of the £5,750,000 that I mentioned a few moments ago which was provided to meet the possibility of Supplementary Estimates arising during the year.
He spoke, too, about an increase in the interest charge on the national debt. If he looks the matter up he will find that, whilst it is true that the amount put to interest is less and the amount put to sinking fund is greater, the two taken together amount almost exactly to the figure given for the servicing of the national debt. I have dealt with the £2,000,000 that he spoke about in connection with savings. I have pointed out that we could not take that into account last yearbecause experience had shown that it would be eaten up by supplementaries. He spoke about reserve stocks. The fact is that there has been no addition to stocks during the year.
One could take the various items detailed by him one by one and show that he is wrong, as we showed that he was wrong last year. It is true, as he pointed out yesterday, that there were additional savings in the case of the bread and flour subsidy. That was due not to a reduction in consumption, because the reduction in consumption was very, very small—I think it was something in the region of 1 per cent. —but was due mainly to a diminution in transport costs and some other items of that kind. In all the matters that he put forward the only one in which there was anything like substance was the point relating to food subsidies. In respect of the £2,000,000 about which he talked, that turned out to be something like £0.6 million due to circumstances that could not have been foreseen and for which allowance could not have been made because they were accidental in their nature. There are certain things that one cannot anticipate. For instance, one cannot anticipate milk yield because it is influenced by many factors, including weather; one does not know how weather will affect it.
There are a number of things completely outside our control and they cannot be taken into account in advance for a particular year. If one estimates one must try to keep on the safe side in one's estimation. Last year we were told we were accountants. It is very important that we should keep the national accounts properly and attend to them carefully. What is wrong in that? Why should criticism be levelled against us because we tried to be accurate accountants? Why should we be criticised because we were careful with our accounts, analysing them and interpreting them in the way in which accounts should be interpreted and analysed?
We considered the balancing of our Budget of tremendous importance and, if there is one charge that can be levelled against us as a Government, it is that events have proved that wehave not, in fact, succeeded in balancing our Budget and that there is a sum of £2,000,000 which should have been met from current revenue that will now have to be met by borrowing. We do not want that to occur. It is all right to borrow for certain capital expenditure but one should never borrow for ordinary housekeeping expenses. On our first Budget we set ourselves out to ensure that current revenue would meet the items of current expenditure.
Let us come now to the other problems we have to face. In the coming year I believe that we will do better. I believe that this time next year we will, in fact, have a balanced Budget, but the only way in which we can achieve that object is by doing what the Minister for Finance has indicated we must do; that is, to effect the necessary economies and the necessary savings. We are all at our best when it is a question of providing facilities and providing services: "Is milis fíon ach is searbh a íoc." In other words, it is pleasant to drink wine but it is bitter to have to pay for it. If we do not want the bitterness of having to pay for it, then we must restrain our drinking.
Let us come now to another task we set ourselves and see how we fared in achieving our objective. We set ourselves the task of trying to secure a balance in our international payments. To use the phrase used by the Leader of the Opposition, when the adverse balance was only some £30,000,000 it was "truly alarming." The pretence was that these deficits simply represented repatriation of external assets, the suggestion being that all that money was going towards building up our capital resources and that it was spent on capital projects. It was nothing of the kind, and an analysis of the increase for a number of years past would show that not one half of the increases in the deficits in our balance of payments represented capital coming into this country. It was used for consumption.
We have heard a good deal about savings. There were no net savings at all practically in the year in which thedeficit was £61.6 million. We were simply, to use the ordinary expression, living beyond our means. In that sense we had a standard of living that we could not ordinarily continue. We might continue it for some time but, if we continued it for any lengthy period, we would find ourselves faced with disaster. We do not want to become a debtor nation if we can possibly avoid it. We have certain advantages in maintaining a creditor position and we ought to try to keep that position to a reasonable extent.
We have never been against using our external reserves for capital purposes. In the early years from 1932 to 1938 we were blamed by those who took a more conservative view than we did of finance because we were using these reserves. We were using them in the main for capital purposes. We still believe they should be used for capital purposes and they can be used over a long period for all the capital development it is possible for us to undertake. We had this £61.6 million of a deficit—an alarming deficit. It is very easy to look back and to be a prophet after the event. It is very easy to look back now on the events of the past 12 months. It is very easy when you are in a boat to set your course and row for land and when you arrive to say that you would have arrived at land anyhow, that you had a fine wind behind you and if you had allowed yourself to drift you would have been taken by the wind right on to land without any effort of your own. It is very easy to look back when things have happened and say exactly what should have been done and what should have been foreseen.
Looking forward last year, the Minister for Finance felt that unless he took action and set his course very steadily for a certain objective, while we would not have a deficit to the extent of £61.6 million, we would have a large deficit in our balance of payments. As was pointed out here already this morning, we had a sharp upward curve from a £10,000,000 deficit to £30,000,000 and to £61.6 million. It was not easy to change that trend. The Minister thought that if it was let alone and not interfered with, thatparticular position would continue so as to give us, if not a deficit of £61.6 million in this year, a considerably high figure. At the beginning he was inclined to think that, left without any corrective steps being taken by the Government, it would amount to some £50,000,000.
The Minister for Finance is wise to be on the safe side. When you are looking at what is likely to happen it is not a bad frame of mind to anticipate the worst and to hope and work for the best. It is possible that when he said £50,000,000 he was rather too pessimistic. It might have turned out better but he could not be sure of that in advance. To come down from £61.6 million, considering the upward curve, to £50,000,000 would have been making a considerable allowance for improvement. But he did not stop at that. He and the Government made up their minds that they were going to take such corrective measures as lay within their power. They took these corrective measures. They set their course for a definite point on land—for a definite objective—namely, as quickly as possible to reduce that deficit and, if possible, to wipe it out altogether. He has not succeeded quite in doing that but he has brought it down from £61.6 million to £9,000,000, which I think is the estimate which he mentioned yesterday for the year that has just ended. To do that is no small achievement.
Fortune favours the brave, and fortune favours those who take right measures. In this case it did, anyhow. Certain things happened which could not then have been foreseen —price changes and so forth. Certain things could not have been foreseen and we were favoured to the extent that the deficit was brought down to £9,000,000. One might feel that a great deal had been done had the figure been brought down to £20,000,000, £25,000,000 or even £30,000,000. One would feel that no bad work had been done at all if the figure had been reduced to half. Fortune favoured us—no one would pretend otherwise—and it has come down now to about £9,000,000.
What is the position for the future inthis regard? The Minister for Finance has warned us, and rightly so, that we must not hope that the favouring wind —if I might use the simile—that helped us in the past year will continue. We should not expect it to continue. It may be more difficult in the coming year to secure a balance of the magnitude concerned. A deficit in the balance of payments which was not excessive would not disturb us too much, particularly if that deficit could clearly be related to increased capital investment. It would not disturb us too much if it could be related to development projects here, if it could be related to repatriation of assets in the right way, if it could be related to the prudent repatriation of assets, of which the Leader of the Opposition is in favour. We are all in favour of it, and we were in favour of it, I think, before the Leader of the Opposition was in favour of it.
The Opposition talk about their policy. I have been watching that policy very carefully. I was watching it very carefully when it was in operation from these benches. I was anxious to see what new things they were going to do for the nation. I was anxious to see what this extraordinary combination of Fine Gael and Labour was going to produce for us. I remember a time when Fine Gael were pointed at from the Labour Benches as being a reactionary, decadent and deserted Party. Labour evidently gave it some sort of transfusion. I was anxious to see what would be done for the nation. What did I find? I found that they were very clever at getting new names for old ideas, for old projects. To cover up the fact that they were taking over a Fianna Fáil programme— and operating it not always too well— they had to get names to disguise what they were really doing. They were talking about a capital programme. What was done by Fianna Fáil from the start but working on a capital programme?
In the White Papers which we issued after the war, in which we outlined what we intended doing, we set forth a very large investment programme. They make a great point of separating some capital items in the Book ofEstimates—listing them separately and calling them capital items. That was usually done at the time of the Budget by the Minister for Finance. It was an old practice to point out that there were certain voted moneys which were expended on capital purposes. There is nothing new in that except the mere segregation, but you would think something extraordinarily fundamental and vital had been done in the country's economy and finances because they separated certain items and listed them in the Book of Estimates instead of listing them in the Budget.
It is true the amount has increased very rapidly since the war. That was mainly due to the fact that there were certain projects anticipated by us following the war. I would not mind if the Minister for Finance would agree to segregating these items in the Book of Estimates. If it had been possible to get agreement as to what were capital items I would not object to it as a mode of presentation, just as I would not object to a number of changes which I think should be made in the presentation of our accounts generally. It is a matter of presentation, however; there is nothing fundamental about it. The thing that would be fundamental would be if we had refused or were against a capital development programme and they were in favour of it. Now, apparently, as a result of the transfusion from Labour, we have both sides of the House in the position that, whatever else they may disagree about, they do not disagree as regards capital investment and the capital programme. The only thing is that we want to relate means to ends and that we do not want to have a flight to-day and a crawl to-morrow. We want to try to plan a head so that we can keep a set course at a reasonably even pace.
We are asked what is our policy. It is the same policy which gave the new and reconstructed houses which we see throughout the country to-day; the policy—initiated by us and continued during the period of office of the Opposition—under whose stimulus and support every third inhabited house has been constructed. It is the policythat gave us the Turf Board and the development of the natural resources we have in the bogs; the policy that gave us the power plants in the bogs producing the fuel which helped to save us during the war period. It is the same policy that has given us the power houses on the Liffey and the Erne and will soon, I hope, give us power houses on the Lee and some other rivers. It is the policy that has put our aeroplanes in the air and our ships upon the ocean; that saved us during the world war which devastated Europe and many other places outside Europe.
It is the policy that has given us thousands of workshops and factories in this country, that has increased the number of people working in industry from 110,000, as it was before we came into office, to double that number to-day. It is the policy that has given fair social security to our people; that has looked after the old people, the widows and the orphans; that has given us the very many hospitals we see throughout the country and will I hope enable us to reach the position in which the best that medical science can bring will aid anybody that may be afflicted in this country.
We now stand for a continuation of that policy, of pushing ahead more rapidly, if possible, that policy in the region of productive endeavour, the utilisation of our resources in men and materials. That is the policy for which we stand, the continuation of that policy. We are told that it has not succeeded in various respects. That is true. We have not arrived at the end of our journey; we have not arrived at our final objective. Originally we set out before us three or four main objectives which we used to classify as: national, securing the complete independence of this nation as a Republic—we have achieved it so far as 26 counties are concerned; the utilisation of our man power and our other resources to the full, so that there would be here a decent livelihood for every Irish man and woman prepared to do their part and work here. We have not fully succeeded in that. We had before the war brought down emigration considerably,to perhaps one-third of what its previous dimensions had been. The war brought a new situation. There were inducements of various kinds to our people to go across to the neighbouring island—higher wages, the difficulty we had in regard to raw materials and other matters here. These difficulties intervened and changed that ebbing tide to rather a flowing one.
Again, however, it is well that we should know the truth in regard to these cases and not be misled by propaganda on one side or the other, either in pretending it is more than it is or less than it is. Let us have the truth. It used to be said here in 1946 and 1947 from the opposite benches that the tide of emigration was greater in those years than it had been for a century, that since the Great Famine years emigration was not as great as it was in the years 1946 and 1947, the last years we were in office. Now again we have the figures. These charges were of the same class as the pretences last year that we were aiming at a surplus of £10,000,000. The truth is revealed by the figures, that in the year 1946 the net emigration was only 3,000, one of the lowest figures on record. The net emigration in the next year, when we were again accused, was 10,000. The Coalition came in and we did not hear about emigration from the members who then occupied these benches.
A commission, if you please, was set up—a commission that did not report in their time and has not reported yet. I do not want to find fault with the people engaged on it but we said then, and we say now, that the best cure for emigration—although it is very difficult to get a complete cure—is to do one's best to stimulate industrial and agricultural activity so that those who want to live here may do so in reasonable comfort. That is the cure for it. You do not want a commission set up to find it, and no commission will cure it entirely or cure the drift from the land to the cities which has taken place, unfortunately, in most other countries. However, although that policy will not cure it entirely it cando a great deal to slow up these tendencies and to check them.
We should aim at reducing emigration. What happened when the Coalition came into office? The figure was 3,000 at the time we were accused of exporting young people. The figure was 10,000 in 1947, the last year we were in office. What happened when the Coalition came into office? The figures from the Statistics Office, which were given here before in this House, show that the emigration in their first year went up to 28,000; in the next year to 34,000; and the last figure we were given by the Statistics Office was 41,000 with certain margins of error— considerable margins of error. We will be told, because there is no parish in the country to which you can point out of which some people have not gone, that emigration is going on at an accelerating rate. Unfortunately we have now no means of obtaining annual emigration figures by means of which statements of that sort— that there is an acceleration in the rate of net emigration—could be disproved.
I have been considering whether we can get accurate figures, but the cost of a census is very great and nothing less than an actual census, it seems to me, can now give you figures that can be completely relied upon. If we are to have arguments about these matters, let us have arguments based on figures accepted by the experts who are in charge of the collection of these figures. One of our aims was to bring emigration, which is a terrible drain on the country, to an end. We have not succeeded in that aim. I hope that we shall succeed in stopping this tide of emigration which has been flowing for a considerable time and which was flowing at an accelerated rate up to the time for which the figures were last available, 1950.
I do not think it would be of profit to the House to continue any further. The debate, so far as I have heard it, has been very disappointing to me. I know the natural tendency there is to try to get out of anything which does not redound to one's credit, the natural tendency to refuse to admit that youwere wrong, but the Leader of the Opposition should not, like the bellman in the Hunting of the Snark, expect us to believe that what he tells us three times is true. Mere assertion gets you nowhere. There has been nothing in this debate from the other side but assertions, which are not based on any real facts, in regard to the aims of the Budget. In the past year, a fairly good job has been done. We have made an honest and courageous effort to try to put the finances of the country on a sound foundation. I think we have got them on a sound foundation and our main purpose now must be to see that they remain on that secure foundation, namely, that we shall balance current expenditure by current revenue.
So far as capital expenditure is concerned, the mere mention of that would set me off on another speech because the suggestion from the opposite side has been that we have been cutting down on capital investment and capital development. There is no truth in that. In fact the amount provided by us last year was greater than in any preceding year. The only way in which you can have a sensible capital programme is to see that it is a programme which can be sustained. We will reach a point which we think is a limiting point as far as our capacity is concerned, that is, capacity for continuance over an extended period. We have no new blueprints of a programme but we have, instead, a programme as is shown by the achievements of the 16 years we were formerly in office and the continuance of these achievements during the period we have been in office since. We have set our internal finances and international finances on what we regard as a sound foundation and the firm determination of the Government is that they shall remain on that sound foundation.
