I think this is a very serious matter which should be approached and dealt with on its merits. There is nothing so pleasant as to give. That is true in the case of a private individual and it is far truer in the case of a Government. It is very pleasant to be popular and to be held as a good fellow. We would have liked to have been a good fellow to with the servants of the State. We had nothing but good to say of them. We were in a very peculiar position when we came into office. We took over machinery of State which had been built up during the time in which there was bitter conflict here in this country. The individuals who came into the public service, the Civil Service, the Army, the Gardaí, were recruited by our opponents. It was built up by the Government that preceded us at a time in which there was bitter hostility to us. But we came into office and I can say that we got loyal service from every section of the State services.
I should therefore have been more than pleased to give to the servants of the State any moneys that we felt it was just to give them or that we felt the community could afford. The only barrier to our liberality and to our desire to be liberal was the public interest and how the public interest was best to be served. We were said to have repudiated the agreement.
We acted fully within our rights according to the agreement and as an arbitrator, as has already been suggested, between the section of the people who have to pay the taxes and the people to whom their money is to be paid in compensation for their services. When the agreement was being made it was made with very definite provision in it to try to safeguard the interest of the community and to enable the Government to act as the final arbiter in regard to those interests. It was definitely provided in black and white what was to happen when an award was given by the arbitrator. Precisely because it was not thought to be in the public interest that there should be moneys paid beyond the amount that was coming in during the year, provision was made by which a Government was able to exercise its discretion; if it was unable within the revenues provided in the year to meet any back portion of the award it has not to be paid. Even though increased taxation to an enormous amount had had to be put on in order to bridge the gap in 1952 to meet current expenditure by current revenue we faced the position. We knew perfectly well-and it required courage on the part of the Government to take the action—what the political reactions and the reactions of people who did not wish to pay increased taxes were going to be, and the effect upon the political fortunes of our Party. We did what we considered to be our duty in the public interest and that was to try to make revenue equal expenditure and it was for that reason that we had to meet that gap of £15,000,000 by imposing taxation.
The present Taoiseach talked arrant nonsense from this side, and he knows he talked arrant nonsense, when he said we were taxing for £10,000,000 more than was necessary. Everybody knows that no Government in its senses would attempt to do it. Of course when the accounts for the year came in not merely had we not £10,000,000 too much taxation but we had, I think, £2,000,000 of a deficit which had to be met by borrowing.
When we were considering the award we were anxious to meet it, but when we looked at the situation we saw that at the time there was danger of a deficit, as it proved to be ultimately, and we felt that we would not be justified, unless we brought in a Supplementary Budget to deal with it, in borrowing for what was obviously current expenditure. The Minister was asked did he think it should be paid this year out of current expenditure? He will not answer. It will only be an extra item in the deficit if it is a deficit. As I said already, nothing is so pleasant as to give; nothing is so pleasant as to be hailed a good fellow. We had to deny ourselves that pleasure. The present Government is not going to do it. I will not say they are not entitled to do it. They are entitled to do anything that they think is right in the public interest, and they can undoubtedly back up their doing it on this occasion by saying it was one of the issues of the election. Very well, I, for one, will not vote against it on that account—if they put it to the electorate, as they say they did. They are able to point out that when this matter was first raised here in the Dáil they said they were going to reverse our decision. It went to the electorate and they can certainly justify themselves now in paying it. If the people who have to provide the money in taxation have any complaint they can make it against themselves very largely because if they do not want things like that to be done then they should exercise their rights at the poll and by their vote see that those who are going to do it will not get the opportunity.
I agree, therefore, that the Government can say they are entitled to do this on the basis that they presented it as part of their programme, and I have nothing further to say on that. All I do say is that a Minister for Finance who is doing his duty by the country and a Government that is doing its duty should see that this item is regarded as an item of current expenditure and should come out of taxation instead of being borrowed. If we are not able to pay it this year they should see that it is provided by revenue from the next year. That is the proper way of doing it. I have made it clear that if the Government want to pay this they are entitled to do it, but any suggestion that we as a Government broke an agreement is not true. We kept strictly to the agreement and these powers were put into it deliberately and accepted by the Civil Service. They were put in to safeguard the needs of a Government in cases such as that to which I have referred.
Now with regard to this question of arbitration in general, during most of my public life I have tried to suggest that conflicts of various kinds should be resolved by peaceful methods. Whether they are international or other conflicts that are involved, one of the methods is arbitration. I was in favour of that system. I believe that peaceful arrangement of disputes, whether they be industrial or other, by means of third party arbitration is in general a desirable procedure. Why did we not earlier apply it to the Civil Service? The reason has already been referred to here, that in one sense the Government is itself an arbitrator. It is not private moneys that it is dealing with. It is money it had to get by way of taxation. The only check there is on Government expenditure, on being the good fellow to everybody, giving higher benefits in every direction, is that they have to go and get that money out of other people's pockets. When that procedure of taking the money out of their pockets comes to take effect, those out of whose pockets the money is being taken will object and those who put their hands too freely into those pockets will not be allowed to continue in office. There is no other check.
If there is a period of five years' administration the temptation is that the Government in the earlier period of their office are likely to be much more extravagant than they are later because the hour of judgment is a little bit further off. However, if the Government does want to do its duty and be honest and fair between the different sections of the community it has to consider whether the means are sufficient to enable them to do the good things which they desire to do. If they allow some third person to come in and decide that matter for them, the third person has no idea very often of the difficulties there are in getting the money that is necessary to meet commitments of various kinds, and the effect of increased taxation upon the welfare of the community.
When I was in the opposite benches I have said that one of the most important things for the future benefit of the country was to try to put a stop to increases in taxation and to try to diminish the level of taxation if it could possibly be done. A third person who has not got the material at his disposal or if it is not his day-to-day business as it is the business of Ministers of Government, may not be alive to all these implications and it is very easy for him to take a one-sided view of the matter, to think only of the fact that a certain section such as the servants of the State should be paid more. He does not take into account at all the reactions that will occur from providing these increased amounts. I think £2,400,000 additional taxation every year was involved in that award apart altogether from the retrospective payments involved here. We accepted that and said: "All right. We have got to meet that claim for the civil servants and we will have to put on every year in the future a sum of £2,400,000 extra which will have to come from the people by way of taxation following that award."
The arbitrator may or may not— I am talking about Mr. X who is brought in to arbitrate on these matters—be fully alive to all the consequences of this and even if he is aware of them he may lean in one direction and there is nobody to call him to account. He is never going to be called to account. But the Government is going to be called to account. It is the Government that has to bear the responsibility of taking the judgment. Therefore it was a very serious matter for a Government to agree at all to the idea of arbitration. It was agreed to, however, as possibly being the lesser of two evils. Discontent in the Civil Service would be an evil that would be very serious from the public interest point of view. But there were clauses there to meet objections and one of these was that the award would be one which would relate to the future, which the Government could act on. The other was regarding the amount to be paid in a particular financial year and what we did was, that we looked at our accounts and said we feel we cannot pay this particular portion of it relating to this current year but we will take measures in the new Budget to provide the money that will be necessary for the coming year. That is the truth of the position.
As far as arbitration is concerned, I do not think if the present Government were going to enter into an arbitration agreement that they would leave out these claúses on which we operated. I do not think they would and if they did, I would say from this side of the House—as we said from the other—that they would be wrong, that they would not be doing their duty. The present Minister for Agriculture adverted to this situation apparently, according to Volume 103, an extract from which was read out here to-day of a speech of his, that they would be abrogating their functions, giving up their position as the body that was going to determine what was going to be the taxation—at least as far as the controlling majority would determine it. Well, then, arbitration has been accepted. I do not know what the present position is, whether the present Government is going to alter these terms. We acted within the terms, and we believe we acted in the best interests of the country. We would like to be as generous as we could, and, as far as the present Vote is concerned, I think the present Government is entitled to do what they propose to do because they can claim, whether rightly or wrongly, that it was part of their published policy and that they got a majority in this House.