After listening to the Minister for Agriculture, I think that the people will be even more confused than they have been up to now in facing the present economic situation. The Minister for Agriculture has gone far to contradict a great deal of what the Minister for Finance said in his speech, in his warnings to the people and his description of the general financial situation as serious. In fact, we had a repetition from the Minister for Agriculture of exactly what went on in recent by-elections in which Ministers freely contradicted each other throughout the country, some describing the crisis as almost a plot of the commercial banks, others describing the crisis in mild but nevertheless definite terms, and the general effect being to confuse the people and to make them unaware of the difficulties they must face.
I must take up the Minister for Agriculture, Deputy Dillon, on some of the remarks he made about the people who served this country well. He suggested that we, all of us, are hoping for the ruin of the country in order that the Government can then be defeated and that we can resume office. I can assure the Minister that none of us would particularly like to face the situation which now exists and which has largely been created by the utterly false atmosphere spread through the economic life of this country by the Coalition Parties ever since the war and largely begun by the leader of the Clann na Poblachta Party, Deputy MacBride.
Our job as the Opposition is to compel the Government to do the right thing, if we can, by whatever moral force we have. It is an extraordinary thing that the Minister for Agriculture should have suggested that we are hoping the country will be ruined when every single Deputy on this side so far has shown a forbearance in speech in regard to the taxation imposed which was never shown to us by the then Opposition when we faced far more serious inflation created to a considerable degree by the Coalition Government. We never had any assistance from them at that time. We had nothing but a hurricane of nonsensical lies and sentimental drivel. We had nothing but months and months of clotted nonsense about the value of our external assets, nothing but months and months of lies about the economic problems we faced.
I note that the Minister for Agriculture now tells the House that we created the inflationary situation in 1952 with which they have been grappling ever since. What had we after the Budget in 1952? For months and months people were told by the very same persons who now occupy ministerial positions that we loved disinflation, that our 1952 Budget was a deliberate contrivance designed to squeeze everybody to the last ounce in order to maintain assets in Great Britain, that we were making everybody save infinitely more than they needed to save, that all the taxation was designed to remove the spending power from the people.
How will the people of the country ever understand the economic position in which they find themselves if a Minister of State gets up to-day in this House and says that the 1952 situation was created by us, and was an inflationary one, when we were told at the time that we were in a secret conspiracy with the British Chancellor of the Exchequer and that the visit of the then Minister for Finance to London was part of a secret conspiracy to perpetuate the British Empire and to ensure that there was a massive collection of Irish assets in Britain which the British could use to maintain our people in subjection?
So we were supposed to be inflationary in 1952. One of the reasons why the Government have not had so much success in the recent by-elections is the fact that the people are tired of this ghastly codology, this continual exaggeration, this vaunting of a particular form of policy one moment and condemning it the next. Whatever Deputy de Valera said in regard to inducements to farmers, everyone knows Deputy de Valera needs no defence in regard to his moral integrity. Anything he said in reference to general inducements to the agricultural section of the community was aimed at finding out whether the Government were helping them or not, whether they had enough confidence in the present Government to produce a sufficient amount, whether price levels were sufficient, having regard to present costings. Deputy de Valera was saying simply what can be read at any time in the official statements of the National Farmers' Federation. When the time comes this side of the House will have an agricultural policy which we hope will be much better than that of the present Government.
When the Minister for Agriculture referred to Deputy MacEntee and his warnings, he should have realised that he must give warnings that expenditure may be too heavy. There has been a continuous tendency in all countries in the world since the end of the war for Governments to spend more and more. There is one thing we do know and it is that, so long as the finances were in the hands of Deputy MacEntee, the administrative management and the credit of this country stood very high, and I do not think anybody in the present Government will contradict the fact that through the period of emergency the finances of this State were conducted admirably in spite of the difficulties met with by Deputy MacEntee and by the other persons who occupied the position of Minister for Finance.
I do not know whether I need say much more on the speech of the Minister for Agriculture. Of course we do not want the country to be ruined in order that the Government may be defeated. We want the Government to do their job, to have the courage to do their job and to try and compensate for their creating in the public mind in the last decade the idea that we could get everything easily by voting for the Coalition.
I hope the Government will be able to correct the position for which they are largely responsible and for which Clann na Poblachta are mainly responsible. They preached the idea that there was an infinite number of bank notes which could be printed, that there was an infinite amount of external assets which could be repatriated. Anybody who said you could not do it was pro-British or pro-Imperialist. We are reaping a rich harvest of all that nonsense preached to this country. If we have any melancholy consolation, it is to hear the present Minister for Finance suddenly admitting that the external assets of the commercial banks have reached a very low level and that the people of this country should save twice as much this year as they saved in 1955.
The Coalition Ministers, at least the Fine Gael members of them, have gone largely full circle in all these matters. There are, however, still inconsistencies. I do not know whether on a debate on the Budget I need refer to the fact that most of the schemes which the Minister for Agriculture wants to continue in the way of economic development and housing were started by Fianna Fáil. We now want to make sure that the people have enough confidence in the Government to ensure that there will be sufficient savings and that all these schemes can be continued. I never heard such a tribute to Fianna Fáil as we listened to quite suddenly in the midst of this declamation of denunciation. We heard the Minister praising schemes largely begun by Fianna Fáil, and which have been continued ever since. In 1944 we were responsible for planning the widths of arterial roads according to the potential density of traffic and other calculations. We foresaw the need 15 years hence for a wide road and instead of widening a road to a certain degree and later buying more land at greater cost to widen it still more, we calculated the necessary width of the road at the beginning and planned accordingly. The planning of the main roads under two Coalition Governments has gone on on the same principle.
The Minister for Agriculture indulged in his usual polemic on agricultural production increases. I was rather disappointed because on the Vote for the Estimate for Agriculture the Minister for the first time started with an earlier year than 1948 and he now has gone back to the old propaganda. I do not know whether we need to deal with it in detail. One has only to take individual years after 1945, after five years of war, and work out the figures for output in agriculture to find out that the increase is not nearly as great as that proclaimed by the Minister for Agriculture.
It is a dangerous thing to take individual years for increases or decreases in agricultural output. The Minister loves at one moment to give values of agricultural production which relate largely to a scarcity in beef and mutton in Great Britain and which has no relation to the work of any Minister here and to give volumes of production in agriculture in which one can take a figure for a particularly low year and compare it with one for a high year and boast that the increase was due to the Government in office. If the figure for 1945 is taken an entirely different picture is presented.
I should make it clear, in case there might be another by-election at some time, to contradict the propaganda that we wanted to stop the building of houses and that we regretted the erection of the houses that were built or the hospitals which have been built or the forestry or the land reclamation all originally started by Fianna Fáil, and mechanised by the Minister for Agriculture. Naturally, as Fianna Fáil is the progenitor of all these we want to carry them on, and if we are going to carry them on the country has got to be properly and efficiently run and the people must be given consistent ideas about production and not told one thing in one year and another the next.
The real truth about this country is that we have been living on a tide of rising prices since 1947 and taking advantage of the rising prices which have brought quite a measure of prosperity and which have altered the standard of living considerably. All the Government Parties have done their utmost since 1948 to prevent the people looking at the relatives of the situation; to prevent the people preparing their minds for the day when we would get competition, when we would cease to be in a seller's market; to prevent the people from considering what would be the savings required of them if the constructive campaign, largely Fianna Fáil in character, were to continue when trade competition was met; to prevent the people from demanding of every Government the inauguration of a plan which would provide for a situation when the rising tide of prices ended and competition began.
We have been living in an atmosphere of rising prices in which a great many people, including the present Government Parties, have been trying to persuade the people of this country to run the country like a bookie's office, and nothing more, always gambling and gambling that, sooner or later, the prices will always go on rising, that things will always come easily, that savings are not necessary and, as I have said, that is our biggest difficulty.
For example, I think it is part of the mentality that has been created by the Coalition, that when a crisis came in the export of certain vital commodities which began one or two years ago and which should have been a matter of most grave importance, the question of the gradual loss of our bacon market in Great Britain, the gradual loss of the chocolate crumb market and the failure to resume butter exports should have been subjects which required most discussion and should have been given more columns of comment in the newspapers. These things should have been debated in this House, but, largely thanks to the Coalition Parties, most of the debates were on the price of stout, on the price of cigarettes—not on these massive and desperately difficult problems of competing with the Danes and the Dutch in the English bacon market. That was never discussed at any such length throughout the countryside as were the price of stout, the price of tobacco and the price of bread. It is because of this that never since the war have we got down to the fundamental question of increasing the fertility of the land, of thinking of our production needs as being 100 per cent. greater than those needs were in 1947, of the necessity of increasing fertility, not by 5 per cent. or 10 per cent., but by 100s per cent. since 1947.
It is because the whole atmosphere of this country has been simply one of discussing current prices, prices of current commodities, current issues affecting the housewife, that we have never got down to this question of the need for increased production on a fundamental basis. Largely because of the atmosphere created by the Coalition the people of this country have been thinking of the price of a commodity and not of its production cost, or of how to reduce the production cost or of the profit made on it, and largely because prices have gone up and have been going up until a recent date, everything has been all right. There was no need to worry about production costs and everybody was made to think that that was the way it should be and that anybody who started to talk seriously about these matters, anybody who wanted to suggest that we could not go on in this way was a defeatist, or possibly in a plot to bring the British back to this country or to assist the British Chancellor of the Exchequer.
As I have said, hour after hour throughout the countryside the cost of living was debated, but we never had debated the fact that we have the lowest standard of technological education in Northern Europe or that our own agricultural community have fundamentally less knowledge of the principles of agricultural economics than any other country that competes with us in the British market. That kind of fundamental problem has never been discussed in this House because we were too busy discussing the poor man's pint and the poor man's pipe of tobacco. I think largely the reason has been that, under the influence of Clann na Poblachta, the Fine Gael Party took the lamentable step of trying to appear more advanced than Fianna Fáil, of trying to go to the left of Fianna Fáil and trying to prove that they could spend money more quickly, that they could do things more national in appearance than the development work carried out by Fianna Fáil. The only result has been that the people's minds have been fogged and that we now find ourselves in a financial crisis which has been clearly defined by the Minister for Finance during the course of his Budget speech.
The Fine Gael Party used to hold a normal position as a Conservative Party and used to question our development, question our expenditure, our building of houses and starting of industries. That position is now being reversed; we find the extraordinary position of the Fine Gael Party going around the country telling everybody that they do not need to make any personal sacrifices to build up this country, that the money is all waiting for them in Great Britain, that they can spend it and that our policy was one of self-appointed Puritans inviting the people to enjoy themselves less and to consume less. Naturally the people have been confused in the last ten years at seeing a Conservative Party trying to go left and seeing the ridiculous policy which has brought us to the state in which we are now.
I think that the people are sick of these crude attempts to please them; I think we had a clear evidence of that in the recent by-election. I think the workers of this country have been particularly disgusted by the promises that have been made to them, by the confusion and arguments that now exists within the Coalition Government about their position. We have had the most extraordinary statements made by Coalition Ministers in quick succession in the last few months in regard to the rises in wages and salaries that have taken place. There have been all sorts of different proclamations and the workers of the country are wondering whom they are to believe. We have had one Minister saying that the increases of £20,000,000 in wages and salaries have had the result of increasing imports; that because of every £1 spent, 10/- goes in imports, there has been no increased production for export in order to pay for the £10,000,000 worth of imports that have come in.
We have another Minister who says he does not believe the increases in wages and salaries have done any good or are likely to do any good, and who has asked the taxpayer in the same breath to pay £2,500,000 for wages and salaries of the State servants. He said in the same breath that he doubted if these increases would have any value, that they would be inflationary and tend to swell the volume of imports for which we cannot pay. We have had Labour Ministers going around the country, as they have been recently, telling the people that they had fulfilled their ridiculous and outrageous promises because wages and salaries had gone up, and that there was no harm in that. They did not say that those increases in wages and salaries will be caught up by inflationary effects, so that in the long run, unless the Government takes very strong and stern action, the value to the workers will be nil and unemployment will increase rather than decrease.
The workers would like to know who to believe, whether to believe the Fine Gael or the Labour Ministers. Is it or is it not the truth that the wages and salaries which they had been encouraged to get are in fact bad for the nation's economic life? I am quite certain, so far as the Labour Party is concerned, it has had a pretty rough time in the past few months and that it is going to have a still rougher time because the workers no longer believe that so long as they remain part of the Coalition Government things will be all right. The workers have no confidence and do not know who to believe or what is the real policy.
We have had ten appalling years of this kind of talk and it has brought us to the position where we are now. We had an election in 1948 in which it was freely alleged that all the difficulties that we had experienced during the war, such as increases in the cost of living, were due to the Fianna Fáil Government and that it could all be put right. You might say that this crisis largely started because of the promise made by the Clann na Poblachta Party in 1948 to reduce the cost of living by 30 per cent., if necessary, by subsidies. That was the trigger, that was the first shot from the gun, of the campaign that has gone on ever since and which has prevented us from getting down to brass tacks and considering the real economic issues. We had allegations of corruption and profiteering, all of which were disproved when the Government took office. In 1949, we had the beginning of the loose talk of spending our external assets. We heard the Taoiseach's address to the Institute of Bankers in which he announced with a flourish of trumpets that they were going to repatriate the external assets. These were going to come back to be used for national development.
The result was to give the public mind a feeling that the assets were almost inexhaustible or that, if anybody said they were not inexhaustible, they were not good Irishmen and were over-conservative. It all began with what appeared to be a deliberate decision of the Coalition Government in 1949 to start spending external assets, realising full well that the moment they started propaganda of that kind it would be bound to ricochet upon them. Once you tell a people there is something they can get with ease, which is there for the taking, it is only too easy to go on until you pass the point of discretion and pass the point of caution.
During all the period from 1949 to the present day, we have heard speech after speech from Minister after Minister of the Coalition, speaking of the external assets and giving the large figure, £400,000,000 sometimes and £500,000,000 at other times, clearly giving to the ordinary man in the street, who has no time or no opportunity or no desire to study economics, the impression that the whole of that sum was for the taking and that to deny it to the people was anti-national and pro-British. I myself have heard Minister after Minister speak during elections and mention that sum. Never once have I heard them mention our growing indebtedness to other countries—the fact that there was a debt which we have to defray, a debt which is sufficiently large so that the balance left is in the neighbourhood of £100,000,000. But of course one does not win by-elections and general elections by speaking of debts. You only win them—sometimes, not always, thank Heavens—by speaking of the amount you have in the bank. If you mention the debts, you are liable to get into trouble. I am glad the Irish people are now beginning to realise the difference between truth and dishonesty in these things.
In 1950 we had more nonsense. We had the beginning of the Korean inflation and a ridiculous attempt at a price freeze by the Minister for Industry and Commerce, who announced dramatically in the Dáil that he had frozen prices. The only effect of it was that people were unable to buy goods—those of them who obeyed the Order, a lot of them did not —and the prices of goods went up in the meantime. When they had to buy them later they bought them at higher prices.
During this period, a feeling was also inculcated into the minds of the people that the Government could absolutely control the cost of living —that they had the power to control price levels. It was convenient enough so long as the stabilisation of prices that occurred in this country and other countries as well between 1948 and 1950 continued; of course, it became very inconvenient later on. But then the Coalition Government were defeated, and we had to bear the weight of mounting world prices; they used the argument against us that we could control the cost of living, again giving the people of this country a false impression of how much a Government could do or what power it had.
Fianna Fáil took office in 1951 and we found that all was not well. We found a balance of payments position that was even more serious in value than it has been up to now. The moment we announced we would have to take care during this period of inflation, the moment we announced there was a deficit in the current Budget of £6,000,000 that would have to be defrayed some way or another from taxation, and that the money would have to be found; the moment we realised that the country had to exercise care, we had members of the Opposition Party boasting around the country of the money they spent. They said they would spend even more if they got into office, giving again the idea to the people that any kind of caution in borrowing money, in the repatriation of assets and in using foreign assets, was unpatriotic, dangerous, delusive and pro-British. Pretty heady wine for a people to hear a former Minister for Finance Deputy McGilligan say, as reported in the Irish Independent of the 20th May, 1951:—
"We do not want any depression. Mr. de Valera says I am spending money lavishly. I am. I will spend it for the people's benefit and will go on spending it."
That in the middle of an inflation, when the very Deputy as Minister in the course of his Budget statement completely contradicted himself by giving the only solemn warning he gave during his whole period of office, that we were in for a period of inflation, and the people were spending too much and that they would have to draw in their horns. As soon as he got out into the hustings he made public speeches with this appeal for lavish expenditure regardless of the consequences.
Then we had the attack on the Central Bank. We all of us, to some extent, share in that; let us be quite frank about it. I hope that, in face of the present inflation and in our present balance of payments difficulties, some Deputies in this House on the Government side will have the decency to pay a belated tribute to the directors of the Central Bank who predicted, as far back as 1951, exactly what has happened since. Their report of what was going to happen and of the dangers that confronted this State, in the light of what has occurred since, was quite prophetic.
The directors naturally did not expect that the Government of the day, whatever its complexion, should carry out all the recommendations, but it is a very interesting thing to note that what is being done now by the present Government is largely what the Central Bank counselled that the Government should do in 1951. With the exception of reduced Government expenditure, the other recommendations are part of the present Budget speech of the Minister for Finance—the proposal to use the emergency levies for paying capital expenses and so forth.
The warnings to the people about saving money and other statements made by the Minister were made in 1951 by the directors of the Central Bank, a group of conservative directors and conservative persons, because at that time they were able to predict that the boom in cattle prices would end sooner or later and that as soon as the terms of trading became unsatisfactory to us, this constant borrowing of money might have the effect of increasing imports to the point where it would become dangerous to the financial security of the country. I think it is about time that somebody paid tribute to them because we made it clear when we were in office that we did not intend to carry out all of the recommendations, and we did not.
As a matter of fact, even as far back as 1935 the Banking Commission report was excessively conservative in our view on this side of the House. They made statements of a kind which indicated that we had started on a certain line of economic policy, that unless the greatest care was exercised we might suddenly find, in spite of our credit-worthiness, in the position that we had used too many of our assets and had placed ourselves in a difficult position —that we had not been careful enough to ensure that there would always be a margin of reserve.
I might add that, if we had done everything that the Coalition Parties would like us to do in 1952, if we had listened to all the farrago of nonsense that was offered to us, the present Minister for Finance would be in a much more difficult position than he is in at present. He would not have merely a serious problem but he would have a serious crisis. It would have been almost impossible to maintain the value of sterling. Luckily for this country we resisted all the nonsense, and abuse, and propaganda—and by the measures we took then, we put the country into financial order. All the facts and figures of 1953 show that we were in a fair way towards proper financial control at that time. As I have said, if we had followed the advice given us then, the present Minister would be in an infinitely more difficult position.
During that time there were prophecies of insufferable woe for the people of this country. We were told that there were people suffering, and in misery, and that they could not have enough to spend, and yet in 1952, in the year of what the Minister for Agriculture called the disaster Budget, the consumption of the people of this country was only reduced in volume by between 2½ and 3½ per cent. At that time the people were told that they were suffering in misery, but in 1953 there was a recovery in consumption.
In the last of these ten years of Government since the war, we had the disreputable General Election of 1954 in which, I think, we reached the lowest point in our national life since we achieved independence, in which the largest number of lies were told and the greatest number of nonsensical accusations made in the seeking of office. The 1954 General Election was the climax of ten years of frustration in which it was quite impossible to deal with realities or fundamentals. When we took over in 1951 it took us a considerable time to correct the financial position and, from that time onwards until our defeat, we had to deal with a hurricane of abuse and misrepresentation. We lost office before we could attempt to get down to the fundamentals and to carry on with a policy of deep-laid reconstruction.
Now, however, at last we are all agreed on the facts. For the first time the Coalition Party have been forced to present facts with which we can agree. The only hope I can see is that at last they admit the difficulties and they present the facts and the figures on which we can both agree. If they were on this side of the House now, and we were in Government we would be told, as we were told in 1952, that we were confusing the public and that we were trying to protect the interests of the British Chancellor of the Exchequer. They would be solemnly reading out speeches made by Deputy MacEntee as Minister for Finance and speeches of the British Chancellor of the Exchequer and comparing their likeness and they would be saying: "Look how the Fianna Fáil Government is helping the British Chancellor of the Exchequer."
I am glad to say that we are more reasonable than that. We have not criticised the Government for the steps they are taking to meet the situation because they now admit the facts. We are not accusing the present Government of concealing taxation and overtaxing the country. We are not accusing the Minister for Finance of being in league with the British Chancellor of the Exchequer. We have admitted that the expenditure has got to be paid for and that is, at least, some advance in the history of our discussions on financial problems.
It is very easy for the Minister for Agriculture to talk as if we were in the same position as other countries. There is no other country in Northern Europe which, during the period of the last 18 months, has faced a problem of declining exports, halving of savings, extensive emigration, increased loans and advances by the banks and reduced deposits. They were none of them faced with all of these difficulties at once. In the case of the British people their trade has been constantly expanding and their exports constantly increasing. In our case our exports declined continuously in 1955. We can be forgiven if we regard that situation as serious, so serious that we can only encourage the Government to take what action they consider necessary to ensure that our credit will be safeguarded.
It is time to consider our position seriously. Whatever hospitals we have, and we believe in having them, whatever afforestation we have, whatever arterial drainage has been done, whatever land reclamation we have done, we have spent nearly £200,000,000 of savings. We have had an enormous emigration and we have only the same number of people employed in this country as we had in 1931 or 1932. It is about the same number. Our agricultural production is some 10 or 12 per cent. above the level of 1911 or 1926. That is a serious matter and it is no good for the Minister for Agriculture to say it should be glossed over.
It seems that all of us here in this House should realise that speeches and statements made in former years may stand in need of correction. There is need for a fundamental reconsideration of the whole of our policy. It is better that we should make proposals for the improvement of our position and that we should make an effort to see what went wrong. It is a good thing that at last the public has been driven into realising that in spite of our huge savings abroad we cannot now provide enough for our current constructive capital programme unless the people, as adjured by the Minister for Finance, manage to save twice as much this year as they did last year and only if our cattle and other exports increase. In my opinion, we can only largely increase our cattle exports by exporting this year the cattle that were held back towards the end of last year. That would relieve the commercial banks of some of their difficulties.
We did not succeed in changing the fundamental attitude of this country towards production during our three years in office. It was quite impossible to do that because people were impelled to discuss only those less important questions such as the cost of living and other matters. They were impelled to consider anything but a long-term programme. The whole political life of this country ever since 1948 has been based on thinking of life in short terms: what is going to happen to-morrow and not what is going to happen ten years from now; what the cost of the loaf will be to-morrow and not what the yield of wheat will be ten years from now and how high can we get it.
As I have said, there was a complete postponement of these things and our position was so difficult during our short period in office that we could not possibly be expected to deal with the situation in a fundamental way. All we did during that time was balance the Budget and stop the run on our foreign savings. The people saved four times as much in 1953, in what was supposed to be a year of gross depression, than they saved in 1951 when they were supposed to be having a wonderful time under the Coalition Government. They saved four times as much in 1953. We got the ship off the rocks into the open sea, but the campaign of vilification against us made it quite impossible for us to consider fundamental policy. Indeed, our position was insecure in this House and the only hope now lies in being able at some future time to have the kind of policy which can be planned ahead for years and which can gain the confidence of the agricultural community.
In fact it is quite obvious—let us be quite frank about it: we said we would speak constructively—that it may have been because of the hurricane of opposition with which we were faced that we have not left the present Minister for Finance a quite sufficient reserve. Indeed, if we had done so, the hurricane would have been worse; the criticism would have been more terrible and we would have suffered even more nonsense about our being in league with the British Chancellor of the Exchequer. It is possible that, if we could have carried through the inflation of 1951 in our own way and with a greater degree of consideration, we might have been able to improve the position still more. But in actual fact, as I have said, under the circumstances in which we found ourselves we did a great thing for this country in re-establishing the principle of the balanced Budget and in re-establishing the principle that our external assets should be used only for production purposes, reducing imports or increasing exports under certain conditions, that they have to be carefully guarded and are the most valuable reserve we have for preserving our independence and for ensuring that we have not got to go to foreign bankers in order to borrow money for the purpose of carrying out our normal trading.
The Minister for Finance has not been half frank enough with the people in connection with this credit squeeze. In the course of his speech, he referred to the emergency levy he imposed in order to reduce imports. He has not told the country what is his greatest aid at the moment. It is the commercial banks. The commercial banks are restricting credit widely and largely throughout the country for every purpose except seasonal necessities, such as harvesting and sowing, seasonal necessities for which money has to be advanced. But one can go to any bank manager and he will tell one that there has been a perfectly clear indication that external assets have gone down so much and deposits have decreased to such an extent that he has been ordered to reduce credit continuously in his branch: and that is going on all over the country. Now when credit is reduced and when credit is restricted, imports decrease and it is time the Minister for Finance told the people that one of his greatest aids has been the commercial banks and their restriction on credit.
I asked the Minister a question as to whether, having interfered in the bank rate, he had discussed with the banks the degree of credit restriction, and he denied having discussed any such thing with them. He said he did not discuss any such matter. It seems curious that the Minister for Finance, who, as I have said, clearly indicated that he wished to interfere in relation to the bank rate, would not have discussed with the banks too something which is far more important and far more serious, namely, credit restriction, its extent and its incidence.
I believe myself that we shall come to the day when there will have to be some sort of discriminatory rates of interest for lending money for various purposes. I am told there are many difficulties in that. I am told it is extremely difficult to distinguish one form of loan from another when it comes to deciding on a differential rate of interest. I think that is a perfect example of the fact that we have so far failed to examine the realities of our economic position since 1948 because of all these conflicts re costs of living, allegations of profiteering and other matters. We have failed in the ten years since the war to discuss and consider the problem of how we will provide long-term credit at low rates of interest to our farmers and how we will persuade our farmers then, if we offer it and they would like to use it, to accept it with confidence and use it.
The fact remains that all our competitors in the British market have a system of farm credit entirely superior to ours. I do not think that is the fault of the commercial banks. It is the result of a combination of certain historical circumstances. The fact that our commercial banks are used to a considerable degree to accumulate dowries or family settlements has made them savings banks to a great extent. But the fact that we have not debated that position here seriously at any time over the last ten years is a good measure of our failure to get down to the fundamentals of some of the most vital matters affecting our lives. As I have said, the Minister for Finance should be frank with the people and tell them about the credit squeeze, and the help it has given him in reducing imports.
I have dealt with the question of salaries and wages. As I have said, we would like to have the cleavage within the Cabinet quite clearly resolved. It would be good for the country to know exactly what the different Ministers of the Government feel about wages and salaries. Are they glad they went up or are they not glad? They are all speaking with different voices and the workers are confused. We know very well that the divisions within the ranks of the Government have prevented the kind of co-operation that should be possible in a State with such a very recent industrial history, such as ours, and without the memories of the industrial conflicts that occurred in Great Britain to prevent consultation between the Government of the day, the Federation of Employers and the trade unions from the very beginning of the inflation, the close consultation with such bodies in order to get some voluntary agreement, not now and not at the time of the Budget, but right from the time the Government took office and from the time they could be informed by any international agency in Europe that inflation was on its way.
The fact that there has not been that close consultation is due to the divergencies within the Government ranks. That consultation could have taken place. We have had evidence of that. Equally, we have evidence that nobody has even begun to discuss in any degree the problem of industrial productivity. There is not one-twentieth of the courses of study, councils for discussion on productivity in industry here such as exists in other countries in Europe despite the fact that we have not got, as I have said, the difficult industrial tradition of Great Britain for example. We have a very recent industrial history and there has not been half the collaboration between employers and workers, encouraged by Government, encouraged possibly by legislation and the formation of productivity councils, that there should have been in that regard.
Yet, it is vital to this country. Prices of a great many goods in this country are far too high as compared with similar products produced abroad, even allowing for all the differences in circumstances here and for higher production costs. But, of course, it is not so popular to talk about productivity councils as it is to talk about the increase in the price of stout and bread. The Minister for Finance lost the financial opportunity of a generation when he failed to cut expenses in this Budget. I suppose he failed to cut expenses because the Labour Ministers told him they would not like it. I am well aware that every Government has increased expenses and that every Government finds it difficult to reduce expenses because Government expenditure does good as well as harm; it gives employment as well as raising employment; it gives social benefits as well as mulcting the taxpayer. It is quite obvious that the psychological point was reached this year when the Government had the chance of cutting expenditure and setting an example to the people of how they could save.
Would it not have been a magnificent thing if the Minister had said in this House: "I am going to save even if it hurts some people and now I want the people of this country to save in order that we can go on with the reconstruction programme"? The Minister for Finance and his colleagues made a first-class political blunder. I think the people were prepared to be hurt a little in order to end this continuous rise in Government costs. I am speaking absolutely sincerely. Only economic historians will be able to tell whether we should not have done that when we were in office. When, some three years from now, the economic history of this country is written, it may be said that the Fianna Fáil Government in 1952 or the Coalition Government in 1949 should have put a greater halt on expenditure, that expenditure was too high a percentage of the total resources of this country, that when it reached the 25 per cent. of the whole income of the people and went beyond it, that was too much for a country of our temperament and character.
I am speaking quite frankly in this regard. Other people might give a different argument and say we should have insisted on keeping standards as far as possible as high as those available in Great Britain because of the flow of emigration. However, I think myself the present Minister had reached the point where he could have announced a Budget in which he cut everything except old-age pensions, widows' and orphans' pensions and children's allowances, cut everything of a non-productive character little by little and told the people: "We must save and I am saving." There would have been a brief outcry from various people but I honestly believe that the people were prepared to face that on this occasion, that the absolute limit had been reached. However, the Minister lost his chance.
One of the difficulties we face is that nearly all the deeply conceived plans for production increases give rather slow results. They do not give immediate employment and ever since large emigration started to Great Britain there has always been far more consideration given in this House to schemes for giving immediate employment, to schemes that would have immediate results rather than schemes of a long-term character, schemes that required careful planning in the future. Employment, of course, always comes from increased production. There are some schemes for increased production which take a long time in maturing and which, from that standpoint, are not popular, that are not election catch cries. Giving protection to industry is popular electorally but trying to create the right kind of management of new industries and trying to induce greater productivity and investigation of tariffs, for example, through the use of industrial consultants in a constructive sort of way, is not popular. That does not get votes so it is postponed although in the long run the effect would be to increase the total volume of employment and consumption at a rate which the people could afford.
The remission of taxation for plant renewal, giving encouragement to people to modernise their plant, examining taxation, knowing of the difficulties in getting back taxation that is remitted for such purposes, is not a popular thing to do. Therefore, the doing of it has been delayed ever since the war. I was hoping the Minister would be able to make a decision as a result of reading the report—which we have not had the opportunity of doing—on taxation. It is the sort of thing that should have been done a considerable time ago.
Farm building schemes, the land reclamation scheme, cash prices for crops, are excellent in their way for increasing production and they give employment. They are popular things but problems like the massive application of limestone, still desperately in arrears, on a far greater scale than we have ever seen, in an endeavour to catch up on the 12,000,000 tons of arrears which we were informed by the Department of Agriculture was the position, is not so popular a concept; yet, it is far more essential than some other Government schemes.
We need a complete reorganisation of the pig industry with all the massive problems involved of the most difficult personal kind such as entirely reorganising the method of distributing pig-feeding stuffs so that they can be bought by the pig feeder at the lowest possible cost. There is need for consideration in regard to the feeding of pigs, the modernisation of many of the bacon curers' plants, in regard to saving on miscellaneous costs, transport and so on, difficulties involving personal issues, involving vested interests—that kind of thing can be postponed because it is not popular. Now we have lost a large part of our pig trade to the Danes and the Dutch who are competing successfully with us on the British market.
It is difficult for a Coalition Government or for any Government to do any of these unpopular things when people are continually yapping about the price of stout, about the poor man's pint and the poor man's tobacco. Another example of a fundamental job is the replacement of uneconomic dairy herds, the whole reconsideration of cattle production in this country in relation to the demands of the British market, the devolution of the advisory work of the Department, much more close collaboration with farmers' organisations by the Department in order to get greater production. Those are the difficult jobs—the remission of income-tax for exports of other products besides mining products, even for a temporary period, knowing that money must be got and knowing it may mean the imposition of taxation on someone else. That is a difficult job, difficult to administer, involving difficulty in ensuring that there would be no evasion of taxation.
Those are the things we need to do in this country. Those are the things that have been deferred because of the less important issues that have been discussed. Would it not be a splendid thing if the Government, because of the savings that the people were able to make, had been able to spend in this year even more money on productive schemes? There is no spectacular increase in Government expenditure for increasing production. The Estimate for the Department of Agriculture is more or less the same.
Would it not be a splendid thing if an example were set to the country by the Government devoting, say, the tobacco tax to limestone instead of to current Government expenditure? Would it not be a splendid thing if the Government had done something similar in regard to the petrol tax and said: "Fertilisers in this country are more expensive than they are in any other country in Europe except Italy and Turkey and the Government will spend the petrol tax in reducing the cost of fertilisers, making them freely available to farmers, because we know that only by a quicker turnover of capital, by the more rapid fattening of cattle to 9 cwt. for a beast of two years, will we be able to expand the market for beef in Great Britain, that we are not going to spend the money for petrol on anything but subsidising fertilisers"? The country is in the mood for that kind of spirit which it has not been shown by the present Government. That is why we are bound to oppose this Budget, partly because of the inconsistencies of the Parties comprising the Government over the past ten years and partly because they have not got down to fundamentals.
Another example is that of providing the same education for the agricultural community here as is provided for the Dutch community since the war. I have made a complete investigation of the Dutch agricultural education. They have one of the highest yields for crops in Europe. They have an enormous production. They consist of people half of whom are of the majority religion of this country. They are united in their economic efforts. In Holland between 20,000 and 30,000 primary school children take elementary courses in agriculture which occupy two and a half days a week in the first year and one day a week in the second year. They are given a complete course in agricultural science, both practical and theoretical. The whole idea is that every person should be given a chance of acquiring agricultural science as a normal subject, just as normal as Irish, English and mathematics are here. One of the interesting things about it is that one-fifth of the time of the first year's course is spent on teaching Dutch, the idea being that the people must learn more of their own language in order to understand technical and agricultural science.
That is one of the vital things, the examination of which has been delayed in this country because of futile discussions on the cost of living. I have tried, as best I could, to illustrate the reason why we are facing these difficulties. I believe that the public are becoming aware of the real position. The public know they have been fooled, and badly fooled since 1948 by all this easy living talk and all these suggestions that have been made that the savings of lifetimes have been accumulated for the Irish people and that they are there for the spending. The suggestions have been made that no one need make any special effort to regenerate this country, whereas in in contrast, in order that we can enjoy the kind of life we would like our people to have, in order that en igration can cease, in order that from 14,000 to 16,000 of our people can be reabsorbed in employment, we need a complete fundamental scientific revolution in our economic life. Everybody knows that and when the Emigration Commission stated that production had increased largely on the larger farms and had decreased on the smaller farms they were proclaiming the truth that we have not studied the fundamentals in this country since the war.
Could anything be more illustrative of the whole political atmosphere here since 1947 than the failure to discuss co-operation? One hardly ever hears it discussed in this House. It is a difficult, a tricky subject but I think every single agricultural expert, the whole council of the National Farmers' Federation know that if the small farmers are to increase production as we all would like them to do sooner or later they can only do it by greater credit facilities and co-operative methods, and that co-operation in some form and for some purposes is absolutely essential. There must be co-operative effort if our production is to be increased by the 50 per cent. which everybody agrees should be the minimum. Not only people like myself speaking in vacuo declare this. It has been said by members of the National Farmers' Federation that the desire to have credit and the use of co-operative methods in farm production are absolutely essential factors in increasing production.
We have had very little discussion on co-operation in this House. It would be much better to discuss it for instance than to discuss the suggestion that Deputy Seán MacEntee was in a conspiracy with the British Chancellor of the Exchequer when he conducted a minor disinflationary move in 1952. Of course it is much easier to discuss prices than to get down to the really difficult fundamentals, although anything that we do can only be advice to farmers in order to encourage them. We can only stimulate their activities by means of grants and loans, Government guarantees and credit, knowing that we have to gain their confidence voluntarily and to gain their willingness to remain on a given course. All that is difficult because we must succeed in devising a policy which will achieve results.
Those are the problems which face us. I hope that all the nonsense we have heard since 1948 has been heard for the last time so that we can get down to realities. I have tried to speak in a constructive way. Were I speaking now as the Ministers of the Coalition Government when in opposition in 1952 spoke, the present Minister for Finance would be facing ten times the difficulties he now faces. However, we are not indulging in nonsensical statements in order to defeat the purpose of the Minister which, we hope, is the financial regeneration of this country.
The fact is that the people of the country know that the position is serious. We are not trying to prevent the Government from borrowing money; we are not trying to bring about economic difficulties for the Government when we say that never should the position have been reached where our people saved so little that we can be told the external assets of the banks can fall no lower without serious disruption. The Minister has expressed the hope that the people will save enough this year to enable him to go on with capital schemes without which there would be serious unemployment. We never should have reached that position and we never would have if we had not this discouragement and this lack of true patriotic feeling and of a true patriotic policy. We never would have reached the position had there been a Government lead in the right direction. It is because of the absence of such a lead that the Government are now facing these difficulties.