I move:—
That it is expedient to amend the law relating to customs and inland revenue (including excise) and to make further provision in connection with finance.
Those Deputies who were members of the last Dáil will remember that the leaders of the Parties which now form the Government put forward then in this House last March the reasons why we felt that an immediate general election was desirable. A general election inevitably means disturbance of the economic life of a country. Businessmen, if they are able to do so, naturally defer decisions. There is uncertainty and instability until the people have made their choice. Those were some of the reasons why we wished, in the interest of the community, to have an immediate election to cut the period of uncertainty to the minimum.
The previous Government were not prepared, however, to accept the course we then advised and, accordingly, that dislocation and instability continued for almost three months up to the time when the new Government was formed on the 2nd June. I am afraid that the unnecessary suspense has left its mark both on the country and on the revenue of the Government. Tax revenue, for example, when compared with last year, was down in the first two months of this financial year, that is, for April and May, by £1,750,000. Even allowing for the reduced balances carried in on 1st April, there was a drop of £1,250,000 in the current collection of taxes.
This Government has, however, now been elected with a clear mandate from the people and with a substantial majority in this House. The decisiveness of the people's verdict and the assurance of that majority in the Dáil will, I hope, make it clear to everyone that we can look ahead to a period of political stability—political stability which, as everyone realises, is one of the requisites for economic stability and progress.
The present Taoiseach made it clear also in March that there was another reason why an immediate election was then desirable. We were approaching the commencement of a new financial year—the period when the Government of the day must introduce its budgetary proposals. In modern times, the Budget expresses not merely the manner in which revenue will be collected and services paid for but also the economic policy of the Government of the day. We pointed out then that by deferring the election, the new Administration would be deprived of the opportunities which the framing of a Budget presents. That was the position in which the Government found itself when it came into office two weeks ago. We inherited a situation which it was too late to change. Two months of the financial year had gone and obviously the year would be far advanced before Ministers had an opportunity of making a thorough study of the problems facing them in their respective spheres of administration. By then it would be too late for different financial proposals to have real operative effect in this financial year and the inevitable delay would merely add to the uncertainty and dislocation of business and retard that recovery which the very stability of this Government will bring.
The Government has, therefore, decided that it has no option but to adopt for this year the proposals of my predecessor and, accordingly, the Resolutions which have been circulated and the Finance Bill which follows merely carry those proposals into effect.
At the same time I should inform the Dáil that a rigorous examination of the Estimates for the Public Services prepared by our predecessors has already commenced with a view to the elimination of extravagance and waste and to the securing of a better return for the expenditure of public moneys.
We hope and believe that, in that way, and under our policy of economic expansion we will be able in time to achieve our objects as a Government.
I stress the phrase "in time" because it will clearly take time for our policies to operate and for their success to become apparent. The Government, however, does feel that it is essential that something be done soon to ease the burden of the cost of living, particularly where it falls most heavily.
While it is right that the best possible provision should be made for those members of the community who are unfortunately suffering from sickness or disease, it is wholly illogical at the same time to allow the health of others to be endangered by undernutrition. Few will deny that one of the articles of food of highest nutritional value—particularly for children— is butter. It is the common experience of each member of the Government that the high retail price of butter is one of the principal causes of anxiety to people everywhere, not merely in the cities and towns but also in the rural areas. The poorer people and those with large families find it particularly onerous. The provision of enough butter for her children is almost invariably the greatest single source of worry to the mother of a family when she is considering the purchase of her weekly food supply. In recognition of the importance of butter in the people's diet and to bring about a reduction in the cost of living as part of its social policy, the Government proposes to lower the price of butter by 5d. per lb. as from the 23rd August next.
I need hardly stress how substantial is this contribution now being made by the Government. It represents a reduction of 10 per cent. in the present price and it will enable the housewife to provide more butter for her family or of course if she prefers, she will have more money available from the saving to make other purchases. It represents a reduction in the cost of living that will be felt in almost every home and it is one that will lighten the load of the household budget where it weighs most heavily. This concession will cost £1,250,000 in the current year and the Government is taking firm steps to meet that cost in the manner I have already indicated. The appropriate Supplementary Estimate will be introduced by the Minister for Agriculture in due course. I should add that this will reduce the price of butter to its approximate external economic level and the butter subsidy, therefore, operates to cover the gap between the price at which butter is produced and the price at which it could be bought from abroad.
Having regard to the magnitude of that concession, it is the maximum that can be made at present. In one newspaper there was a report that there would be a Supplementary Budget in the autumn. If believed, that would cause some dislocation in certain trades. I must make it clear therefore that such a suggestion is entirely without foundation. So that traders and others may plan what purchases they should make and what stocks they should carry, I should state there will be no Supplementary Budget and no further concessions, remissions or impositions during this financial year.
The Government is also committed to the payment of the portion of the arbitration award for civil servants which was not implemented by the previous Government. That commitment, which covers the Army, the Gardaí and teachers as well as the Civil Service, will be honoured, but until the full examination of the commitments left to us by our predecessors has been completed, I cannot indicate the probable date of payment, but it may be taken that it will be prior to the expiration of the current financial year. I must, however, indicate that we have taken over no legacy such as that acquired by our predecessors on the 13th June, 1951. When they acceded to office, they had no less than £22,500,000 ready and available in cash in the Marshall Aid Loan Counterpart Fund to carry on the capital programme.
We are not in the same easy position. There are no similar funds available for us in the Marshall Aid Loan Fund, or elsewhere. On the contrary, in order to meet immediate capital commitments, we will have to obtain accommodation. The difficulties of that situation by comparison with 1951 are at once apparent. It is essential, therefore, that a real drive to expand savings should be commenced and that it should have the active co-operation of every citizen and particularly of those bodies in close contact with the community. In that way our people can help to complete the capital development programme. At the same time, we shall take due care to ensure that private enterprise has adequate access to the capital market for the funds so vitally necessary for the fullest commercial and industrial development. As that development progresses, and with wise and prudent handling by the Government of national affairs, we are confident that the resources of the country will be adequate to provide a reasonable living for town and country alike.