I move:—
That a sum not exceeding £18,190 be granted to complete the sum necessary to defray the Charge which will come in course of payment during the year ending on the 31st day of March, 1955, for the Salaries and Expenses of the Department of the Taoiseach (No. 16 of 1924; No. 40 of 1937; No. 38 of 1938; and No. 24 of 1947).
The total provision in respect of the last financial year was £28,440. This year's Estimate, therefore, shows a net decrease of £1,050. Most Deputies are aware that the debate on the Taoiseach's Estimate affords an opportunity for discussion on and consideration of Government policy in action during the previous year and consideration of how that policy may be expected to operate during the course of the succeeding year.
I think it will be obvious to Deputies that, in existing circumstances, it would not be either proper or expedient for me to deal in any great detail with the policy of the previous Administion. That policy has been subjected to considerable discussion over the past few years and to a detailed examination and criticism during the recent general election.
In the year 1950, when I was head of the Government, I inaugurated a practice in connection with the moving of this Estimate for the Taoiseach's Department by which I made an economic survey of the results of the Government's policy during the preceding year. I do not think I should be expected now—nor do I think Deputies would expect it of me—to give a detailed economic survey of the policy of the last Administration or even a survey of the policy of the present Government. I hope, however, to resume next year the practice which I inaugurated in the year 1950 and, in order that Deputies may be facilitated in assessing the statistical background to the annual review of Government policy and its results, I have requested the Director of the Central Statistics Office to endeavour to have the Statistical Survey published some weeks before the date on which the debate on the Taoiseach's Estimate will be taken.
I do not intend to give any general outline of Government policy or to review the economic background of the last financial year or to indicate economic trends for the future. I intend to restrict myself to a very brief outline of some of the main aspects of the present economic position. From time to time it has fallen to my lot to direct public attention to what I conceived to be one of the main obstacles to economic recovery, and that was the lack of public confidence in the capacity of the Government to devise and put into operation its policy. There was a feeling of insecurity during, perhaps, I might say, the last six years, a feeling that Governments were unstable, a feeling that there would be political changes, and a feeling that the Government had not the time or the opportunity to plan on a long-term basis so as to secure effective financial and economic results from its financial and economic policy.
I think I am entitled to say that, in present circumstances, public confidence has been restored and that there is a feeling that there is no longer political instability or governmental insecurity. We have emerged from the recent general election with a clear mandate from the people and we have in this House the strength of a clear and strong and stable majority. I feel that people now are going about their affairs and conducting their businesses free at last from the worry of political insecurity and in the knowledge that a Government has been formed that has strength in this House and strength derived from the mandate of the people to carry on its policy, and that that Government has been given time to examine the position, to consider the economic facts, the economic trends and the financial difficulties and to put into operation its policies on a long-term basis.
We have no illusions about the difficulties confronting us or the nature of the tasks to which we have put our hands, but we do feel that we have now been given strength and stability and that the people have given us time within which to consider the position and to put into operation our policies and to devise them on a long-term basis. We appreciate the manner in which the public have received our advent to office and we feel that the public have shown by their attitude that they understand the serious nature of the problems confronting the Government and the difficulties they have to overcome.
I think it is proper that in this connection I should refer to the statement recently made, the helpful and responsible statement recently made, on behalf of the largest trade union in this country to the effect that in existing circumstances its members would not press for wage increases. For the success of our policy we require time and, above all, we require the co-operation of every section of the community. We feel that we will get that to a large extent and we feel that the statement I have referred to is an indication of the strength of the support and co-operation we will get from the public as a whole.
I have stated that the outline I propose to give this evening will be short and will be confined to two or three main aspects of the economic position. Normally national income statistics would provide a natural starting-off place for such an outline as I propose to give, but, unfortunately, it will be some weeks before the figures of national income for the year 1953 will be available. However, the indications and the material at our disposal at the moment show that in the year 1953 the national income was of the order of £420,000,000 to £425,000,000, as compared with an unadjusted figure of £404,000,000 for the year 1952.
Most of the increase in national income during the last year reflected increases in price, and it is probable that in real terms the national income did not increase or increased only to a negligible extent. Probably one of the reasons for the failure of the national income to expand was that while gross agricultural output increased net agricultural output showed a very slight fall. That was due to the fact that agricultural input increased and this increased input, to the extent that it took the form of fertilisers and lime, was, of course, a wise investment for the future and in accordance with the policy that we advocated and put into action during the years 1948-1951; if maintained, it should help to raise agricultural output and real national income in coming years. In this respect, we have lagged far behind other Western European countries which, since 1948, have increased their real national income in some cases by as much as 50 per cent., compared with a moderate increase of one-sixth in our case. We have a stationary population and a virtually stationary real national income; it is difficult to disentangle cause and effect, but it is obvious that the deadlock must be broken before any significant progress can be achieved. We believe that we have a policy that can break and will break that deadlock, a policy based on the wise investment of capital, and I insist in this very brief survey on the necessity for increasing the real amount of national income because that objective forms the basis of our entire policy of reducing taxation and of increasing the real incomes of the people. By increasing real national income we can secure what we secured before, increased revenues from the same or lesser taxation.
The two main components of national income are agricultural and industrial production. In 1953 the volume of gross agricultural output increased by some 3 per cent., a small but welcome expansion, and that expansion is further evidence of the success of the policy inaugurated in 1948. The volume of gross agricultural output is now about 6 per cent. above the pre-war level. Any tendency to self-satisfaction on this score must be tempered by the realisation that the general level of agricultural output in Western Europe is 20 per cent. greater than pre-war while in individual countries the percentage increase is much greater. This Government is convinced that there is considerable scope for further increases in this country, and one of our major tasks will be to help the farmers to secure these increases.
One of the ways in which Governments can help farmers to increase agricultural output is by guaranteeing prices, and, particularly in relation to wheat policy, an indication has been given in the debate on the Estimate for the Department of Agriculture in the last few days by the Minister for Agriculture of our policy in that regard. But that such a course is not without danger is well exemplified by what is happening in this case of Irish wheat. The area under wheat this year is estimated very approximately at 460,000 acres. Yields per acre have been increasing substantially in recent years, but, even discounting any further increase this year, it is estimated that 460,000 acres will in a normal year supply us with up to 90 per cent. of our wheat requirements, a much higher percentage than ever before.
Dried Irish wheat costs up to £10 a ton more than foreign wheat, and the differential is likely to increase rather than decrease since the tendency is for the price of imported wheat to fall. The total annual excess cost on the basis of 460,000 acres is in the neighbourhood of £4,000,000. This is the cost to the country of a native wheat policy based on the present guaranteed prices. The high acreage achieved this year gives rise to other problems, as, for example, the handling, drying and storage of the crop, the suitability of a grist containing 90 per cent. Irish wheat, and the question of our obligations under the International Wheat Agreement. A point worth stressing is the fact that in the main it is the large farmers and the people who have taken conacre who have obtained the greatest benefits from the high profits which can be made from Irish wheat. In many cases these high profits have been made by tearing the heart from the land by a policy of quick cash returns. I fully realise that this is a difficult and controversial subject, and I do not wish the Dáil to draw any false conclusions from my reference to the matter. It is well, however, that we should realise the problems created by the present policy. These problems will not be solved by ignoring them.
The problems which face us in the industrial sector are less complex though not necessarily less difficult. Here, too, production has increased, but all that was done in 1953 was to recover the ground lost in 1952. Unless industrial production constantly expands no economic progress takes place—in fact, during every recorded peace-time year except 1952 statistics show such increases in this country. It is, therefore, merely in accordance with previous experience that the production of transportable industrial goods should show the maintenance of such an upward tendency.
Taking the two years 1952 and 1953 together the rate of progress is the lowest recorded for any two years since the war; and so, while it is comforting to know that industrial production is increasing, it is all too plain that considerable further progress will have to be made if the ratio of industrial employment to the total persons at work is to be increased from our abnormally low figure of 20 per cent. to the average Western European figure of over 30 per cent. Progress along these lines and the maintenance of a prosperous agriculture are our only hopes of curing the running sores of emigration, unemployment and under-employment.
Since October last, there has been some improvement in unemployment. Nevertheless, unemployment is still at a disturbingly high level. In the year 1953 almost one out of every ten insured persons was out of work. Making all allowances for the extent to which the live register includes persons unemployable or temporarily unemployed, the fact remains that the unemployment percentage is far too high. While it is perhaps dangerous to oversimplify, and while it is necessary to substitute for the policy of work merely for work's sake a policy of wealth creation, it is nevertheless true to state that the figures of unemployment taken in conjunction with emigration serve as a measure of the success or failure of economic policy in this country. I can assure Deputies, the House in general, and the country as a whole that the unemployment problem is very much in the mind of the Government, and that our constant object will be to work towards a solution of the problem both by encouraging private enterprise and by implementing a programme of productive State capital investment.
In recent months references have been made to the disimprovement which is taking place in our external trade. This first became noticeable towards the end of last year but has been accentuated in the opening months of this year. The trade statistics for the first five months of this year show that the import excess was almost £6,000,000 greater than in the corresponding period last year. Several factors have contributed to this result; the large stocks built up following the outbreak of war in Korea have been exhausted, and in addition, the revival of industrial production after the collapse in the year 1952 required an increasing flow of imported raw materials and semi-finished goods. The substantial reduction in import prices from their post-Korean peak has come to an end, and the tendency is for import prices to be very slightly higher than last year. Factors which caused a substantial but temporary increase in the export of certain goods are no longer operative.
In 1952 and 1953 the balance of payment deficits were small and easily financed. It is clear that unless present trends are reversed the deficit this year will be substantially greater. The increase in the balance of payments deficit must be considered against the background of all the causal factors, not the least of which in the circumstances of this country is the extent to which the increased deficit is accompanied by a corresponding increase in the rate of domestic capital formation. It is unfortunately one of the defects of our statistical machinery—nor are we alone in this— that information regarding gross capital formation does not become available until some time after the year to which the information relates. Fortunately, at this stage, the import excess has by no means reached unmanageable proportions, and, while I am not to be taken as assuming the mantle of a prophet in this hazardous field, may I venture the opinion that we are not likely to be faced with any crisis before the end of the year? Again, as I said in 1951, our balance of payments situation is a problem; it is not a crisis.
The ordinary citizen may find the balance of payments a somewhat abstruse concept. He is more interested in matters which affect him immediately and directly, such as the price of consumer goods. We have heard a good deal of talk in recent months about the stabilisation of the consumer price index, but the index has been stabilised at too high a level for people's incomes. The Government are committed to reducing the cost of living in relation to people's incomes, and this result can be achieved either by reducing prices, or, while maintaining prices, by increasing incomes. Not the least of the benefits which would result would be the establishment of a firm and lasting base for the revival of personal savings. It is only when prices are stabilised in relation to incomes that people will really respond to a savings campaign. Expressed as a percentage of national income, savings are far too low and substantially below the level which can and must be reached, if economic progress is to be achieved.
This is not an academic matter or a question of thrift for thrift's sake. It is agreed on all sides that only by increasing productive investment can we hope to break the deadlock of a stationary population, high unemployment and emigration. While we can draw, in part, on our external assets to finance the increased investment, such a course is dangerous, unless it is supported by a high level of savings which alone can afford a firm and lasting basis for increased capital formation. The Government realise that mere exhortations to save are not enough and they intend to take energetic steps of a practical nature to achieve increased savings at all levels, so that the country may be in a position to finance that policy of wealth creation which alone can provide an expanding economy and really profitable employment for our people.
As I emphasised at the outset, our aim is and must be to increase real national income, to stabilise prices in relation to incomes, to reduce the burden of taxation, to provide increased incentives to save. It will be the Government's aim to ensure that the necessary proportion of the increased investment will be taken by private enterprise. These are the problems which must and will be faced and solved in the coming years.
