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Dáil Éireann debate -
Wednesday, 16 May 1956

Vol. 157 No. 4

Committee on Finance. - Resolution No. 10—General (Resumed).

When the House adjourned last night I was dealing with the new taxes which the Government are proposing in order to bring in extra revenue. I had dealt with the impost on tobacco and cigarettes and the tax on oils, the increase in the price of matches, the extra charge on the betting tax, the extra tax on table waters, not forgetting, of course, our old friend, the dance tax. As Deputy Briscoe rightly pointed out, all those taxes can be deemed to be an impost on the young of the country; and as Deputy Briscoe said, it can be described as a kill-joy Budget.

The Minister and the Government also hope to gain from the special imports levy and in gaining in that direction, they are also going to create a considerable amount of unemployment. A considerable amount of unemployment has already set in in the distributive trades in Dublin and it is now spreading to the country towns. I wonder is this the final Budget for the year or, as happened last year, are we to have a succession of supplementary Budgets? Are we to have a Budget with every move? Will the Minister now tell us what he proposes to raise by the flotation of a public loan, apart from what he proposes to raise from revenue and other taxes? I think the people are entitled to know. The people who pay the piper have a right, at some stage, to call the tune. That is an old saying and a true one.

As was announced in the Budget, we are to have a further supplementary tax on postal charges. Any Deputy in this House will tell you the cost at the moment of sending a telegram down the country. Not alone are we going to have an increase on those charges, but we are going to have an increase in the telephone charges as well, and this will be reflected in cross-Channel calls. In addition, of course, the allowance of 200 free calls per year which certain subscribers got hitherto will be cut down to 140 so that we have austerity in all directions, and the people who hoped to kick the pants off austerity when in opposition are now imposing restrictive measures in all directions.

As I said last night, Labour are on the sideline cheering on the game. We got the announcement in the Budget that the dole was to be increased. It read well in the same paragraph or in the paragraph lower down: "Dole Up—Cattle Down"——

Who told the Deputy the dole was up?

Are we going to have an admission from the Government that that £300,000 was thrown in as a sop in order to stem the criticism which will arise from the rising figures of unemployment? Is it not a fact that the Government recognises vaguely that we are going to have a wave of unemployment?

Deputy Cunningham said——

The Deputy will take his medicine. He is like a ventriloquist reading his own speeches without moving his lips. That is what Labour will be busily engaged in doing.

I am trying to get agreement between Deputy Cunningham and the Deputy before the Deputy goes any further.

It will cost the Deputy too much.

Are we serious about the future prosperity of the country? As I said last night, and I repeat again——

The Deputy should avoid repetition.

It is necessary——

It is not necessary or allowable.

Some of the things said over there will not be repeated again.

I bow to your ruling. Can we get recognition from the Government that they now realise the serious situation with which we are faced? We have various trade union leaders—although the Parliamentary Labour Party do not altogether seem to agree with their own followers— talking about high prices. Here is a quotation from one of them which he made on the 12th February, 1956. He said:—

"As a result of the last wage increase the immediate effect on prices was so sudden that every advantage which the worker gained was almost immediately taken away. It had now been decided that, if that loss or failure to receive any satisfaction from the last wage increase was to be considered, at least it should be done so by people who would be able to have some form of agreement which would not allow the same thing to happen again."

Who said that?

A trade union leader on the 12th of February, 1956.

Would the Deputy tell us what the trade union leader said in regard to the standstill Order on wages?

I have also a quotation from a booklet issued recently by the Associated Chambers of Commerce. They are entitled to have their views considered as well as the views of the organised trade unions——

Where does the Deputy come in? Between the two?

That is where the Parliamentary Labour Party falls—between two stools.

I am not moving between two stools and I hope never to indulge in that game in politics because it is a very dangerous one. I am quoting from page seven of this booklet which was issued by the Associated Chambers of Commerce. It says:—

"The continuing rise in prices has caused serious hardship to a large section of the community who have suffered a severe reduction in their standard of living——"

The Deputy is quoting from Fianna Fáil——

If the Deputy does not want to make his own speech will he at least listen?

The Deputy need not worry; I will make a speech.

If the Deputy does not want to listen to me, can he not at least listen to his own followers in the trade unions down the country?

The Deputy should be allowed to make his statement without interruption. All Deputies are entitled, and should be allowed, to speak without interruption.

The quotation goes on:—

"In many cases incomes are fixed by contract or convention and are thus not easily adjustable to rising prices. Pensioners and widows on fixed incomes are particularly affected, but the range of inflation-vulnerable persons extends far beyond these classes and includes a large number of self-employed business and professional people. In fact, the hardships of inflation are borne by the weaker sections of society who are without redress as they have no political bargaining power."

That is the rub. The poorer sections are without redress because they have little political bargaining power. They cannot buy votes. They cannot sell votes and they cannot promise votes. The man who set out to stabilise prices most in the 1954 Election was the present Tánaiste but on the Supplies and Services Bill here in this House he admitted his failure, and the failure of the Government, to control prices. He even went so far as to say that he would not bring in any legislation at the moment to deal with prices although permanent legislation was visualised during the period of office of the Fianna Fáil Government. Deputy Lemass, when Minister for Industry and Commerce, had promised to bring in legislation to deal with the matter.

By standstill Order.

The Minister for Industry and Commerce sees no hope of coping with the spiral of rising prices. He can do nothing about it now when he is in a position to do it but, from every platform in the country, and from the Opposition Benches of this House, he condemned Fianna Fáil about rising prices. He made specific promises in every by-election that he would deal with the problem if he was returned to power. Now that he is returned to power, he is doing nothing about it. He used to say that Fianna Fáil were afraid to control prices because they had too many friends amongst the big manufacturers. What has happened in the meantime to change the Minister's mind now that he has the power to do something about it?

When we come to talk of monetary matters, or capital development, it would appear that the present Government are going to demand something in the region of £37,000,000 for the capital side of their programme. I want to ask the Government a fair question—where do they think they are going to get that £37,000,000? Are they going to adopt the shock tactics of guns before butter, of compulsory saving, or are they going to leave our economy and our people free to save?

They have nothing to save.

They cannot save because they have nothing left to save.

It is bad enough to have you crying alone, but when you are crying on one another's shoulders it is the devil altogether.

When the Minister brings home the bacon and gets the one more cow, one more sow, and one more acre under the plough about which he is always talking, he can interrupt me. Under present conditions it looks as if the Government are going to fail in their effort to get that £37,000,000 and it follows then that they will fail on the capital development side of their programme. The failure of the recent national loan was one indication of that, if an indication were needed. In June, 1954, when Fianna Fáil handed over the office of Government here to the Coalition, Deputy Lemass warned them that they were being handed over a sound economy. Therefore, it can be taken that, in 1954, the credit of the nation was good. It enabled the Government to obtain a loan of £20,000,000 which was fully subscribed. The future progress of capital development seemed reasonably secure at that time. What happened during 1955 to bring about the change we have witnessed? What happened to reverse our position from a favourable one to an unfavourable one? That is a fair question for the Government.

As I said, we are now faced with poverty at home and abroad. We are in debt abroad and struggling to balance a Budget at home. We have rising unemployment figures and rising emigration figures. We have shaky finance, rendered more complicated still by a shaky Government. It reminds me of a quotation from Lord Melbourne who said:—

"Ponder, pause, prepare, postpone, And end by leaving things alone, In short, to earn the people's pay By doing nothing every day."

Fianna Fáil have had a lovely cry and now I hope they feel the better of it but when they reach the stage, not only of crying all over us, but of crying over one another, it becomes positively painful. Deputy Carter is as well entitled to express his view of the state of this country, as he sees it, as any of the rest of us, but a man can allow his outlook to become so distorted by political disappointment as to render him incapable of reading the figures that are laid before him. Deputy Carter professed to deplore the increase in unemployment in the distributive trades precipitated by the policy of the inter-Party Government.

I have got before me now the industrial analysis of the live register for the most recent date for which it is available and that shows that, in respect of the distributive trades, there are 188 fewer people unemployed in the distributive trades than there were this day 12 months and there are 323 people fewer unemployed in the distributive trades than there were a month ago. Now I cannot persuade Deputy Carter to see a minus when a minus is there, if he wants to see a plus; but I think the House, or at least Deputy Carter's colleagues in the House, notably Deputy Cunningham, who has a didactic function, should take Deputy Carter aside and say to him: "When there are two lines crossing at right angles that means ‘plus' and when there is one horizontal line that means ‘minus', and when the horizontal line is there you take the bottom figure from the top one, and when the two lines are crossing at right angles you add the top line to the bottom line, and the result is what we call ‘addition'". And at the next lesson, Deputy Cunningham can go on to say: "When the two lines are crooked like this ‘X', that is multiplication." But until he has learned subtraction and addition we will not trouble Deputy Carter with multiplication. Now Deputy MacEntee——

Did he go off the lines too?

He did not. God bless him! I read his speech of the 9th May, 1956, and, for old acquaintance' sake, I turned up the speech he made in 1928, and, believe it or not, Deputy MacEntee is saying in 1956 word for word what he said in 1928.

Could the Minister not go back further?

In 1928 the total Budget of this country——

Could the Minister not go back further?

I could not for he was not in the House then.

He was in some more useful place.

Those were the days when he was praying to God to wither his right hand if he ever took an Oath of Allegiance. And then in 1927, he came in and took it with a mental reservation——

He never took it.

——and he intervened in the Budget debate in that year. The total Budget that year was £26,000,000. Deputy MacEntee said:—

"These figures which I have recited show you that we are at present overtaxed. We are not only being overtaxed directly by the Government but we have also to meet an additional burden in the sum of £2,900,000 which is paid each year by way of land annuities to Great Britain."

Now that is Volume 23, column 528 of the Official Report. Deputy Cunningham wants to know did Deputy MacEntee go off the rails? Not a bit of it. In 1929 the Budget amounted to £24.3 million. At column 926 of Volume 29 Deputy MacEntee said:—

"Expenditure must be cut down. That is quite clear from the figures I have put before you. Economies must be secured. I want to guard myself against misrepresentation, and I mean by that, not economies secured by the curtailment of the social services, but economies secured by more efficient administration. There should be economy in every service which does not yield a due and proper return for the mass of the people who have to pay for it. There should be economies in the Army and in the Civic Guard. As regards the latter, possibly there should not be economies in their scales of pay but rather in their numbers. There could be economies in the trimmings and trappings of the State and the Executive. These must be further and ruthlessly sought. Let there not be a mere skimming of the surface, taking only the scum of waste, a mere saving of £172,000 where at least £1,000,000 is required, but to change the metaphor, a paring of waste and extravagance remorsely to the very bones."

Would anyone say that Deputy MacEntee has changed his form in the last 28 years? In 1930, the Budget amounted to £26,000,000.

A Cheann Comhairle, is this in order?

It is painful all right.

It was Deputy Cunningham who asked for it. He asked me did I think Deputy MacEntee had gone off the rails and I was reassuring him. Not at all. He is in the same old groove that he was in 30 years ago and that he will be in, please God, 30 years from now. I look forward to him staggering in here on a pair of crutches as I come in on a crooked stick——

Crooked is good.

——and doubtless he will then be saying in 1986 what he was saying in 1928 when the Budget was £26,000,000. At column 1101 of Volume 34 of the Official Report, Deputy MacEntee said:—

"After such a recital, people may well ask what they have to hope for from this Government. The price of butter may go down. The farmers may be beggared and impoverished, but the giddy whirl of governmental extravagance must go on and taxation, so long as the Minister remains in office, remains at its present high level. The Minister's speech was a confession, not only of material but of mental and moral poverty. As previously, the Minister refused to face up to the facts and to set them plainly and truthfully before the people."

Oh, no. Deputy MacEntee is right in the same old groove that he was in 30 golden years ago and his gloomy prophecies of 1956 are just as likely to be fulfilled as were his gloomy prophecies in 1928.

Now, the plain truth is that Fianna Fáil is hoping and praying that some unforeseen disaster will overtake this country so that they may be justified in all their gloomy prophecies. Do they think that we have forgotten that the leader of the Fianna Fáil Party had the impudence to go down to Carrickmacross and warn the voters of this country there that, if they did not vote for Fianna Fáil, Ireland was doomed?

Was he not right?

And he was shocked when I said "Doomed be damned," and he has been hoping and praying ever since that, because the Irish people perpetrated the unspeakable sacrilege of believing that this country could survive one hour without his supervision, they should meet with doom and ruin. I do not doubt that the decent man is himself bewildered by the fact that they have not met with disaster because his political domination has been terminated.

I want to warn the Fianna Fáil Party again to-day that the essence of wisdom is to realise the truth of aphorism. Surely there are few members of the Fianna Fáil Party who have not heard it said that the wish is father to the thought. Are they thinking of impending doom because in their hearts they want it for their own political vindication? I would suggest that the Fianna Fáil Party should examine their consciences because, remember, they are making no insubstantial contribution to the economic difficulties of this country by running around, clapping their hands and crying "Panic" and "Havoc" and "Woe." Can you picture the reaction of a crowd in Longford to the spectacle of Deputy Carter clapping his hands like an old woman at a wake, groaning and moaning: "We are going to be destroyed. What is going to happen to the country? There is bankruptcy and ruin awaiting us."

The Minister did that himself years ago.

Indeed, I do not think so.

The Minister groaned.

I do not believe I did; but, if I ever did, I am sure Deputy Childers rebuked me for my wailing. Very well. Surely there is wisdom in the aphorism: "Physician, cure thyself." If Deputy Childers could diagnose my complaint and rebuke me for it, if he now finds himself affected with the same disease, will he consume his own pill and administer his draught to his colleague in Longford, Deputy Carter? Would anybody stop for a moment in the midst of all this dreary catalogue of woe and look around him? Is there a country in Europe where a man can have a better life than he can have where we are?

The Minister did not always say that.

Myself and mine were saying it before Deputy Traynor was ever heard of, and were fighting to preserve it before Deputy Traynor was ever heard of. I do not like to give Deputy Traynor a short answer but he must not offer me impudence across the floor of this House because I will not take it from him.

The Minister is the only one entitled to do that.

I do not want to be rude to Deputy Traynor. I am not casting any aspersions on his standing in the country but he must not attempt to do it to me or I might say things which I would much prefer not to say. Look around the country. I do not deny we have problems. Of course we have. We have balance of trade problems of a formidable character but are we the only country in that position? Is Australia not restricting by physical control her imports? It is not a question of imposing a duty; it is a question of telling the Australian people they cannot buy certain categories of goods on any terms because the balance of trade situation of Australia prohibits it. Is New Zealand in that position? Is New Zealand not faced with far more stringent controls than are at present operating here? Is Denmark in that position? Is Holland in that position? Is Sweden in that position?

The Minister for Lands will tell us when he comes back.

Possibly Deputy Cunningham is so utterly unsophisticated that he does not know, but he should not be throwing his weight around in Dáil Éireann on topics of this character until he has informed himself. If we look about the world, we will find that countries with far greater resources than we at the moment dispose of, have balance of payments difficulties, and I have not mentioned Great Britain. These countries do not go around running one another ragged with lamentations and woe but all sides get together to try to produce the output that will restore their balance of trade and enable them to buy freely in the markets of the world the goods which their people want to purchase.

There are worse disasters that can overtake a people than that, for a limited time, the scope of their choice in foreign markets should be restricted. We can get along without a great many articles that are imported, if we have to, and suffer no serious loss. There is no need to get into a panic of excitement if balance of trade difficulties for the moment embarrass us, but there would be cause for alarm if it appeared that the Government refused to recognise that situation and to deal with it. But have we not? Have we not restricted hire purchase to suppress excessive spending? Have we not heavily and severely restricted imports of unessential goods? And we can do more, if we have to do more, and we will do more if we have to do more, but why should we crucify our people unnecessarily?

There can grow up in a community a sudden masochistic desire to impose upon our own people suffering and woe in order to avert some future peril, until you suddenly discover that the remedies now proposed are infinitely worse than the worst the future could possibly bring. Surely it is the height of folly to invoke misfortune on your community out of all proportion to the necessities of the time? What may be necessary to do, to bring the balance of payments situation of this country into balance, will be done but prudently and in that degree requisite to achieve its purpose, not in panic, not without calm and judicial appreciation of the magnitude and the nature of the problem that we have to master.

I want to turn to Deputy MacEntee's speech where he led off for the Opposition on the subject of the Budget. At column 182, Volume 157, No. 2, of the Official Debates of the 9th May, 1956, Deputy MacEntee says this:—

"When the first Coalition Government took over in 1948, this country had emerged successfully from all the perils, difficulties and dangers of a second world war and it had emerged from those perils and dangers as one of the most credit-worthy countries in Europe. This was a State at which even our opponents, if you like so to describe our separated countrymen in the Six Counties, were looking with keen appreciation as businessmen. This was a State which was able out of its own resources and out of its sense of human obligation, to help the depressed and devastated countries of continental Europe."

There is no doubt whatever that out of our relatively slender resources we made a minuscule contribution to alleviate the sufferings of our neighbours. It was made in so far as our resources permitted us to make it, but it is something on which I think it is unnecessary unduly to dwell.

It is quite illusory to imagine that in 1948 this country was in a state of radiant prosperity and that Fianna Fáil handed it over to us in this state. This is a fact that is only too often forgotten but so long as I am here it will not be forgotten for long. In 1948 —and here is the very heart of our problem—this State was handed over to the incoming inter-Party Government with fewer cattle on the land of Ireland than at any time since 1847, with fewer sheep than at any time since 1847, fewer pigs than there were in 50 years, and the land of the country was in such a state of dereliction that the cattle on it were dying of starvation, manifested through aphosphorosis, through a lack of lime and phosphates in the soil.

That was the condition of this country when it was handed over to the inter-Party Government in 1948 and that is the point of departure from which we had to build up this country.

And to reduce the agricultural output by 2 per cent.

I am going to deal with that. Statistics are queer things.

More than statistics are queer.

Deputy MacEntee has a daring, brazen face because at column 184 of the same volume he says:—

"That change was due, as I have said, to the fact that Deputy MacBride, as he now is, Minister for External Affairs as he was then, ousted the then Minister for Finance and went in and took charge of that Department, virtually, or imposed his policy on that Department. It is from that day that the free spending of the United States loan began."

The fact is that when we left office we left in the Treasury of this country £24,000,000 sterling of the Marshall Aid loan. Does anyone deny it—£24,000,000 sterling, unhypothecated, in the Department of the Minister for Finance in 1951? Within 12 months every single shilling of that was gone. Does anyone deny it?

Here you have this master of the brazen face declaring that there was unprecedented spending of the Marshall Aid moneys under the inter-Party Government, the man who himself spent £24,000,000 in one 12 months. Mark it well, it is that self-same man who, in the murderous Budget of 1952, detonated the spiral of inflation with which his Government and our Government have been struggling ever since. It was the abandonment in 1952 of the very effort to keep stability in prices that detonated the cycle of inflation that has pestered us ever since and which we are now struggling to control. It is on our success or failure in restoring the stability that Deputy MacEntee, by his 1952 Budget, destroyed, that the economic future of this country depends. Deputy MacEntee —and this I regard as bad administration and bad statesmanship—says at column 187 of the same volume:—

"We had the unpleasant task of imposing taxes in 1953, but we were also going to secure economies. The proper way to do the job is to go to the heads of the Departments and say that if they are not able to cut administrative costs substantially within the next 12 or 18 months, then they are not the men for the job."

Is that the way to get co-operation or to get efficient service from servants, private or public? Is the waving of the axe over the heads of those who serve the most effective way to get the optimum service? Of course it is not, but I think Fianna Fáil have the illusion that it is. They believe in strong government. They believe if you cannot get them to do what you want then make them do it. They believe in the bull-dozers that break down farmers' gates, in the Guards to line the farmers' ditches and in the fields of inspectors to enforce the will of the Department of Agriculture.

They do not believe in creating £62,000,000 of a trade deficit. Would the Minister put that in his pipe and smoke it?

The exact relevance of the Deputy's interruption for the moment escapes me. Before I turn to examine it more closely I should like to proceed with my examination of Deputy MacEntee's pronouncement on behalf of the Opposition. Here, I think, is disservice to the national interest, when Deputy MacEntee, at column 187 of the same volume, says:—

"He told us what, of course, is public property, that the national loan is a dismal failure. I do not say that at all in any spirit of complacency. I think it is a disastrous thing."

Deputy MacEntee knows as well as anyone in this House the reason for the failure of the national loan. The reason for the failure of the loan was that, the day it was issued, the British bank rate was fixed at a rate for short term borrowing higher than we were offering for a long term loan. Deputy MacEntee knows that within the same week three Government loans failed in London because they were issued at the same terms. Is not that so? But none of these other countries was heard to tell of this fortuitous change of the London money market that it represented a clear indicator of their imminent dissolution. All of them knew their issues had just fallen on a unpropitious day and they shrugged it off as the experience many other States have had of meeting an unfortunate situation in the British markets or the world markets.

If that risk were not permanently there why do Governments arrange for the under-writing of their loans? What is the function of an under-writer if it is not to provide against just such a contingency as arose on that occasion? Is there an honest member of the Fianna Fáil Party who does not believe what I am saying is true? Is there an honest member of the Fianna Fáil Party who does not know that if the British bank rate had remained at the 4 or 4¼ per cent. at which it was when the loan was contemplated that that loan would have been subscribed? Is there an honest member of the Fianna Fáil Party who does not know that in the same week three other loans failed on the London money market?

I did not think the Minister thought there was such a thing as an honest member of the Fianna Fáil Party.

I did not say there was. I was very circumspect in framing my observations. Let us come down to tin tacks. I am told there has been a 2 per cent. decline in the volume of agricultural production. Will any rational citizen of this State tell me who weighed the volume of agricultural production in this country at 2 per cent.? Did they weigh the cow? Did they determine how many bonhams every gravid sow in Ireland was going to have? Did they weigh the corn? Did they weigh the grass? Did they measure the quality of soil? Did they examine the stock on the land? And having made their calculation, how did they do it with such exact precision that they can tell us that the total volume of agricultural output in this country was 2 per cent. less than it was last year? Who made the calculation and how was it done? Come now, is there a housewife in Ireland who knows whether the volume of her family's consumption of provisions was 2 per cent. greater or 2 per cent. less than it was last year?

What was it?

Here is another calculation, and "you pays your money and you takes your choice". We must remember that all matters in regard to the balance of trade are spoken of in terms of value. We are told that we have an adverse trade balance of £35,000,000. Gross agricultural output in 1954 is estimated at £180.89 million with a decrease in the stock on the land of £3.1 million worth, giving you a net value of gross agricultural production after allowing for changes in the stock of live stock on the land, of £177.79 million. In 1955, the year in which we had the reduction of 2 per cent., gross agricultural output was £184,000,000 estimated, with an increase in the stock upon the land of £5.7 million, giving a net figure for the gross output, taking account of changes in live stock, of £189.7 million as compared with £177.79 million for 1954.

Now "you pays your money and you takes your choice". You may, if you want, like Deputy Carter, to caoin the country and its early prospective dissolution, shake your finger and say: "There has been a reduction of 2 per cent." Deputy de Valera threw himself into a passion of indignation and said it was a really outrageous thing that there was reduction in the agricultural output of 2 per cent. Shall I bring in a brass band to proclaim that the true figure for the value of agricultural production has gone up from £177,000,000 in 1954 to £189,000,000 in 1955 and that in the last year of the Fianna Fáil Government it had gone down from £180,000,000 to £177,000,000?

The weather.

The weather!

That is right, the weather.

Since I became Minister for Agriculture, if the rain falls it is the Minister for Agriculture who brought it down, but if the sun shines it would have shone in any case; but while Deputy Walsh is Minister for Agriculture if the rain falls, it is a case of "God help the poor fellow; you would not blame him for the weather". If the sun shines it is "Gloria in excelsis for the illuminated policy of Fianna Fáil". Come, let us end this fraud.

Will the Minister stop defrauding the public?

I state the facts, and let Deputies judge for themselves on these facts. And if we are to have facts, let me recall that in 1947—and we had bad weather then, of course—we had the lowest gross output that we had for years and years and years. And then, when the bad weather was over— whether we are to associate that with the disappearance of Fianna Fáil or not, I do not know—but with the advent of the inter-Party Government——

The sun shone.

Well, when you examine the figures, I think there is substantial evidence to suggest that is true. In 1948, gross output, taking into account the changes of live stock, was £124,000,000; in 1949 it was £135,000,000; in 1950 it was £136,000,000; in 1951 it was £145,000,000; in 1953 it was £180,000,000, and then it went down in 1954 to £177,000,000. In 1955 it was £189.7 million, but the statisticians say that the gross agricultural output is down by 2 per cent. —"you pays your money and you takes your choice". Those like Deputy Carter clasp the 2 per cent. to their bosoms and cry havoc and let loose the dogs of despair. If you are of a more cheerful temperament you will say: "Though this gives no ground for complacency, it certainly is in the right direction and if we keep pressing forward on these lines we have reasonable prospects of deliverance from the problems that confront us at the present time."

I want to say a word—and I make no apologies for detaining the House— about the general lamentation that "We have too much to pay for the service of debt", and that "we are plunging into debt", and that "we owe money to this one and that one, and what have we for it?" Should we not be bemoaning our sad fate? Come, let us examine the facts. We are in debt, and I am proud that we are in debt; I think every penny of debt that we have undertaken has purchased us a rich reward. I would not undo the expenditure of one penny of it. I like to think of the children that did not die because we built the hospitals to cure them. I like to think of the children who did not lie in cradles in tenement houses in Dublin with bugs falling on them from the ceilings of the rooms in which their parents lived because we built them houses and tore down the tenements.

I am Minister for Agriculture and I am talking of the slums that we tore down in Dublin. I can remember a period before many of the younger Deputies were here, a time when old Deputy Tom Kelly—may the Lord have mercy on him—spoke from that seat and he told a story with which I was familiar, for I was born in the middle of the slums in North Great George's Street, adjoining Gardiner Street. He told a story of visiting the poor in the tenement rooms of this city when the mothers of those children regarded, it as a first charge upon their exiguous incomes to buy a half-yard of butter muslin. For what purpose? To spread it over the upper half of the baby's cot so that the bugs from the ceiling would not fall on it and eat it in its cradle. I remember that being described—and truthfully described—in this House.

I myself remember setting out, when I was preparing to read a paper in the Law Students Debating Society in 1931, to make a survey of housing conditions in this city and I remember in a house in Henrietta Street finding, in one room, a grandmother dead in the bed and her daughter having her baby in the other bed and the family were waiting for the undertaker and the midwife to come to attend them at the same hour, in the same room, on the same day. I remember another room in Henrietta Street in which I found a father and a mother and their daughter and her husband and four children—all living in the one room.

Am I to weep and wail to-day if we borrow money to make an end of that? Am I to repine and groan because we have got to meet the debt charges on the capital expenditure requisite to terminate that condition? I do not consider it unproductive spending. I am proud of it, and I well remember when I was in those benches inveighing against this evil and saying to the Government of that day that, if Germany were involved in war, if Britain were involved in war, if France were involved in war, if the United States were involved in war, there was no question of providing the money to repel the enemy and to conquer; but when our own people are being eaten by bugs in tenement rooms, when they are living in a degree of destitution and poverty in tenements, of which we are sorely ashamed when a foreigner has to comment on them, we are told to spend money on that is unremunerating borrowing and it cannot be contemplated. I think it can; I think it should. I think we were right and I cheerfully bear the burden whatever it may be and I say that no rigour in the economic life of this country would justify our having left those people where we found them.

Fianna Fáil started the housing.

Anything in our programme that is of value Fianna Fáil, of course, claim to have started it——

We certainly started the housing.

But if they did, why are they weeping and wailing and crying "Woe" because we have to meet the debt charges of the money we raised between us to do these things? I did them, and we did them with our eyes wide open and we are not sorry. If we found our people in those circumstances again, I would do it again.

That deals with the unremunerative expenditure. I remember when Deputy Childers was Parliamentary Secretary to the Minister for Local Government. I think I do him no injustice if I say that it was from his brilliant intellect there sprang the thought of the autobahn. Does he remember telling us——

I never used the word.

The Deputy never used the word; I am using the word. But it was he who told us of the necessity immediately after the war of wide roads, sweeping straight through the countryside.

No such thing.

I think I will find the reference. I am not at all sure that we have a clear conscience about that. I think there is a hell of a lot of public money spent on main roads at the present time which is a burden around our necks. If anybody wants to make anything out of that they can lump it. I think we are spending too much money on the autobahns, and the straighter the autobahns get, the more people seem to be massacred upon them. That is the kind of unremunerating expenditure which I think might be examined with a jaundiced eye.

Now let us examine some of the rest of the debt and ask ourselves what have we for it or, if we brought home external assets, what have we got in exchange? I would like to remind the House—perhaps Deputy Childers would give us the benefit of his opinion upon it—that there was an estimate made in 1949 of our total external assets and they were fixed at a figure of approximately £450,000,000. What is the figure to-day? Is there any reduction in our total external assets? I doubt it. I believe, if our total external assets were accurately estimated, there is no reduction in the figure of £450,000,000, but we must bear in mind that its purchasing power may have diminished and we have undertaken certain external liabilities as well. Let us make no disguise of that. Now let us see what did we get for it.

Do I exaggerate if I say that the live stock on the land of Ireland to-day is worth £25,000,000 to £30,000,000 more than it was in 1948? We will have rehabilitated, or will have in the process of rehabilitating, at the end of this calender year 1,000,000 acres of Irish land. What is that worth? I do not think I am unreasonable if I say that, of that 1,000,000 acres, the vast bulk of it was virtually non-productive seven years ago. What is the capital value of that 1,000,000 acres? You may say it would sell for £50,000,000 sterling; on the other hand, we estimate that the increased output of that land is not less than £10 per year per acre. Its rental value is certainly increased by that sum. That is to say, land for which you might have got £1 or £2 for conacre, rehabilitated is easily set to-day for £12 or £14 an acre. If you take it on that basis, then its capital value is £200,000,000 sterling; if you take it on its market value, shall we say £50,000,000, and taking a middle figure, £100,000,000.

When Deputy Carter weeps and caoins about our woeful plight does he set off that 1,000,000 acres of Irish land against the assets that we have no longer in London? I know that Deputy Carter's grandfather, when he was doing his part in the land war to get the land for the people, would have rejoiced to think that the total acreage available for the farmers of this country would be expanded by 1,000,000 acres. What is happening to Deputy Carter's generation that he regards such development as an event calling for woe and lamentations? Does he not think it is good to invest our assets in the land of Ireland? Of course, it is good to have a superabundance in reserve over and above what we require for investment in the land of Ireland; and the greater that superabundance the better. Are we to starve the land of Ireland and let it go derelict in order to have the miser's joy of counting and heaping up our accumulated savings in the stocking behind the feather bed?

The total value of the work done under the farm buildings scheme since 1948 amounts to £8,000,000 sterling. Were we wrong to help the farmers to repair the farm buildings on which our live-stock industry depends? Were we wrong to help the farmers to build the houses in which to store the barley that I now want them to grow to feed their pigs in order to displace our imports of maize, barley and milo from dollar sources? I think we were right. Tell us, if you think we were wrong, and let us look at the matter again.

Over 90,000 acres of permanent forest have been planted since 1948. We are planting at the rate of 15,000 acres and more per annum and we have plans to go on doing that. Are we wrong? Would it be better to stop planting? If it would, we could put £1,500,000 or £2,000,000 a year into Treasury bills in London. Let the Fianna Fáil Party tell us if we are right to plant the trees or let them tell us if they want us to stop planting and to put £2,000,000 a year into British Treasury bills. We can do it. If that is what Parliament wants, Parliament has the right to order us to do it but they will have to find another Government. We believe that forests planted in our own country, to give employment to our own people, and to be used, when they mature, for our own requirements are better than the collection of even the £5 2s. per cent. that is at present available for British Treasury bills maturing in only three months. Who is right?

It is true that we have spent £12,000,000 in installing telephone services. We have spent £34,000,000 on the development of rural electrification and the supply of electricity. It is perfectly true that we have provided over £7,000,000 for development by Bord na Móna. It is also perfectly true that we have built up a fleet of 30 ships through Irish Shipping. Are we wrong to do that?

That is all a great tribute to Fianna Fáil.

I do not give a fiddle-de-dee if it is a tribute to my foot. All I am asking is, if the investment was well made and if the investment of our money into these things was good, what the heck are you mawing and blawing about now?

The Minister for Finance was blawing.

I read from Deputy MacEntee's speech in 1956 the same words he used in 1928. Let us ask ourselves: are we on the right road? I think we are on the right road and I think it is a good thing that these investments have been made. However, I think we have got to bear this in mind—that to do these things, and to go on doing them the way we want to do them, we must get capital from the savings of our own people. There is the hub of this whole problem. If this Parliament wants to determine who, when, and whether these things should be done, the only means by which we can make these decisions freely is that our own people, from their own savings, will make available to their own Government the capital required to develop their own country. If we are forced to look for that capital from foreign lenders, those foreign lenders will claim the right to tell us what, when or whether we invest in the development of Ireland.

This also must be made clear—that if our own people want us to carry on providing employment for our own people, in our own country, to develop our own country, that means that out of their existing incomes they must provide the money necessary before spending on some of the things that they would like to buy. They are not being asked to abandon that spending power. They are being asked to postpone it and to save for the time being until the national income catches up and provides additional resources to carry out the programme to which we have put our hand.

If we all tell our people that simple truth I do not doubt that our people will make the contribution we ask of them. It is not impossible. It does involve some self-discipline and some temporary self-denial but they do it in the assurance that the expenditure they forgo to-day will inure to their own personal advantage in ten or 15 years' time when the loan they make matures. It will ensure that we can go on doing these things in order to make our country better than it is. If our own people do not provide the money out of their own savings to do these things, there is nowhere else that we can get the money to do them consistent with the sovereignty which we insist on maintaining for the Republic which we elected to declare in this island.

That is the only limit and the only scope. If all of us will agree that we will undertake the explanation of these things to the people, the people will respond and give us what we want but if the principal Opposition concerns itself with the denigration of its own country and throws doubt on the wisdom of what we are doing, we shall fail. There is nothing easier to vitiate than credit and there is nothing easier to undermine than trust. It is up to Fianna Fáil to stop all this dispute and to cease telling our people not to save, on the grounds that it is no longer worth saving, and not to lend to their own Government for national work. If they do not wish to do that, they can stop all this. They can create a situation in which those who want to work for Ireland must seek their livelihood elsewhere. It is a terrible responsibility to undertake any such assignment.

Is there a single member of the Fianna Fáil Party who honestly subscribes to Deputy MacEntee's loud proclaiming of his doubts as to the viability of this country? If there are any who heard him, with respect I beg of them to remember that he was thumping the same desk, making the same prophecy, proclaiming the same gospel of woe 28 golden years ago. And we have not gone yet. Indeed, we are a great deal better off to-day than we were on the morrow of his entry to Dáil Éireann.

I want to say with emphasis now what I said at the beginning—what I have said at the beginning of every speech I have ever made here or elsewhere in the country: in the last analysis everybody in this country, whether he lives in town or city or in the countryside depends for his standard of living on the land and on those who get their living from the land. It is on the output of our land that all our hopes and all our ambitions are ultimately founded. I do not believe in theoretical approaches to the resolution of our problems. I have a pragmatic mind and, if I want to see an increased output from the land, my concern is one to persuade and facilitate those who are on the land to get that output.

How then should I go about that? Deputy de Valera said that we seek to restrict that output because we will not give the farmers the inducement to produce. What does he mean? Does he mean that we are to double the price of everything produced from the land? Does he? Or is he just engaging in a dishonest wangle? Let him come down to tin tacks. When he says that we do not give the farmers the inducement, does he mean that we are not giving enough for wheat? Does he mean that we are not giving enough for milk? Does he mean that we are not giving enough for barley? Does he mean that we are not giving enough for pigs? Does he mean that we are not giving enough for cattle and for sheep? And, if he does not, what does he think we ought to give? He can tell us.

Before he derides us with restricting agricultural production for want of giving sufficient inducement, let him tell us what is sufficient inducement. But let him not resort to the old device of declining to accept the responsibility of saying what, in his heart, he means. So long as I am not in office, he means, do not produce: tear down, if needs be, by tearing down the State itself. That is what he means. Yes, that is what he means when he makes that allegation, when he makes that statement as Leader of the Opposition: we are restricting agricultural production because we will not give the inducement. Let him tell us what he does mean by inducement. Is not the clear implication of his words that the farmers are right not to produce if they do not get more? But he does not go on to say: "And I will tell you how much more and I will tell you where to get it."

Are we to give 2/6 a gallon for milk, ?, 2/-, 1/9, ?, 1/7, or what? What is sufficient inducement? What are we to give for barley? Is it to be £3,50/-, 45/-, £2? What does he mean? At what level is he prepared to throw his weight behind the campaign for increased production? Of course, we can get increased production if we charge our people twice the price for everything. But where would we end? Would we not end by making a desert of the country and destroying our own capacity to earn and to maintain this State of Ireland? Remember, without viability we cannot be free. If it is true that from the land of Ireland comes the income of us all, must that land not be exploited and developed so as to produce profitably? Profitably! Profitably! Does the Leader of the Opposition, who says by implication. "Do not produce until your monetary reward is higher" not disgrace himself when he does not go on to add the level he considers just?

Come now. Let us enter into council on this matter. What does the Leader of the Opposition say? There are farmers in this country, according to the costings, producing milk for liquid production at 9¾d. a gallon and there are farmers whom it costs 1/9¾ to produce milk. What price is fair for these?

We are guaranteeing a minimum price, and it is a minimum price, of 40/- per barrel for feeding barley. Most of this barley is grown in the well-to-do counties of the East. They produce it for the relatively poor farmers of the West. Are we fixing a price which is fair both to the growers and to the feeders? If the Leader of the Opposition does not think so, perhaps he would tell us now what price he thinks would meet these requisitions better than the arrangements I have made.

We are paying 72/6 a barrel for wheat. Is that a price at which an efficient farmer can make a profit? I think it is. We are guaranteeing a minimum price of 235/- per cwt. for the grade A pig and, to do that, we pledge the Exchequer and we levy the home consumer. Should we do more, or does this not represent an adequate insurance for any man, who desires to produce pigs in this country, to go forward courageously and produce them without limit or restraint?

We cannot guarantee a price for beef in the world market but we have secured that, in so far as we send store cattle—forward stores or just stores—to Great Britain, they are so linked with the price payable to British farmers that they can never fall below that price; and we cannot expect the consignee to whom we send our cattle to pay us more than he pays his own. We have done the same for sheep and lambs. Now, it is for the farmers; and I believe we can trust them. I know we can trust them if they are not confused by varying counsel.

I am asking the Opposition to tell them, as we tell them, to increase production in the confidence that they can best so serve themselves, their families and their country. When it comes to helping them to do that, again I have a pragmatic approach. I am sick and weary of arguing as to who should control what. All I want is that there should be at the elbow of every farmer in the country, who wants him, somebody who will help him to use his land to its best advantage and get from it its maximum return always provided he leaves it in the autumn a little better than he found it in the spring. I am prepared to see that help vouchsafed by anyone who will give it with this assurance that, if no one else will, I, as the Minister for Agriculture, will provide it. In relation to that simple purpose of bringing to the farmer's gate the help he wants and must have to get his maximum return from the land, surely in any rational Parliament all the world over, a Minister for Agriculture might expect the help of all? Have I got it? Has there not been a thousand irrelevancies and hares raised, a thousand base motives attributed, a thousand cod philosophies canvassed in order to abort the success of that simple purpose?

I gladly adopt the saying which Deputy Cunningham seems to despise. It is the foundation of my agricultural faith: one more cow, one more sow, one more acre under the plough. Of those none is more important than one more cow. Again I agree with Deputy Colbert—and he is a Fianna Fáil Deputy—when he said the heart of this matter was the grassland of Ireland, that if he wanted one more cow, the only way he could get it was through the improvement of the grassland of Ireland. I entirely agree with him in that. He is right and if the cattle of this country are to be made economic the mainstay of their production, maintenance and finishing must be grass growing, in hay and ensiled.

I am asking the farmers of this country to increase the number of their cows and to improve their grassland for cattle. If we could get in our time one more cow, one more sow and one more acre under the plough—cows, pigs, barley and skim milk—we could resolve all our present economic problems. If we go on taking our people out of the slums, making those who live on the land a little better than they were, trying to provide employment for all we can in town and city, then this is no mean country. It is a land the people of which will never know riches and perhaps never know power, as it is understood in the world in which we live to-day, but it is a country in which men and women can be very happy and raise a Christian family better than in any other country in the world. It is a land to which those who have left it can look back with pride as a country that has remembered and truly distinguished the things that really matter.

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.

This has been a very curious debate on the Budget this year. It has been hard to follow exactly what are the criticisms by the Opposition concerning the financial arrangements made by the Minister for Finance. In so far as I have been able to follow the debate, it appears to me that the main criticism of the Opposition has been levelled against increased expenditure. We have heard them use the same argument outside the House. I want to point out to Deputies the fact that increased expenditure over the last two years has come under six principal headings. First of all, there was the increase in the butter subsidy which is costing £2,000,000 a year more than under our predecessors. Secondly there have been increased social welfare benefits —increased pensions last year and increased general benefits this year. Thirdly, there were increased health services both this year and last year. Fourthly, civil servants, members of the Garda Síochána, teachers, and members of the Defence Forces have been given increased payments. Fifthly, there were increases in pensions to retired officials, and, sixthly, increased cost of service of the State debt.

These are the six headings under which expenditure has been increased during the last two years and I would like to find out from the Deputies opposite which, if any, of these they would challenge and which of them would they say should not have been incurred. Outside this House, in some of our newspapers, and by some members of the public in responsible positions, criticisms have been levelled against the increased Government expenditure. As I have said, these increases come under six main headings and I want to say I am in agreement with the decisions that have been taken by the Government which have resulted in the increased expenditure under these headings because I believe they have brought benefits to many sections of the community who were in need of assistance.

There is, in some quarters—it is to be observed on the Opposition Benches and it is to be observed outside this House—a sort of fetish which makes a reduction in Government expenditure an end in itself. I want to say that, if the economic situation permitted it, I would like to see greatly increased Government expenditure on many things, for example to increase pensions still further, abolish the means test for pensioners, raise the school-leaving age. All these things are desirable and would bring about the necessity for increased Government expenditure. It is a very narrow view of our problems here to think that reducing Government expenditure is an end in itself.

As I say, the economic situation is something that has to be taken into account when deciding what expenditure can be incurred, but given a more favourable economic situation than we have at the present time, I am in favour of increasing Government expenditure on many things which will benefit the people of the country in the manner in which I have indicated. One of the principal features of this debate so far has been the general agreement about the economic situation which this country is facing. This economic situation does present a curious dichotomy. On the one hand you have the inflationary symptoms of the cost of living, of a low level of capital investment and a high level of unemployment and emigration, and the fact that the resources of the State are not being utilised to the full. I want to say that last year we achieved a record in employment, and for the average figures last year there was a record achieved in the number of persons engaged in employment here. That is something in which legitimate pride can be taken, but it is still not good enough. We still have over 6 per cent. of our insurable workers, on an average, unemployed, and we must try to reach the level other countries have been able to reach, and until we do so, I do not think we can be satisfied with our national progress here.

Side by side with the unemployment which we have, the low level of capital investment, the rather inflationary symptoms with which we are now all familiar, the rising prices and wages, increases in bank loans and advances and a similar decline in deposits and a large deficit in the balance of payments last year, it is generally agreed that the cause of the inflationary symptoms was the greatly increased monetary demand last year which was not matched by increased production. The result was we imported more goods and there was no corresponding increase in our exports to balance the increased imports. I do not think we should forget that steps have been taken by the Government to remedy these inflationary forces without exacerbating the deflationary forces which exist underlying the situation. The import levy has been imposed mainly on goods of a not directly productive nature. The expenditure on consumption has been taxed and it is hoped that such taxation will also assist in reducing non-essential imports like cigarettes and petrol.

It should not be forgotten that portion of the current revenue namely, the import levy, has been, in fact, used for capital purposes when it could well have been used for current purposes. The Government has instituted a savings campaign and has brought out savings bonds of a more attractive character than formerly. It does seem to me that recent figures indicate that the steps that have been taken are tending to remedy the situation and the trade returns for March have shown that the trend has been arrested. I think we must take into account, too, the fact that a large amount of expenditure last year was in regard to stock-piling because stocks had run down in 1954 and had been replenished in 1955, and that will not recur this year. For these reasons, it does appear to me that in the near future the balance of payments problem which we faced last year will come into proper alignment.

In the course of the remarks which Deputy Childers made, he referred to the necessity for long-term thinking on our economic problems. I agree wholeheartedly with the necessity for doing this, but I approach these long-term problems in a rather different way from that of Deputy Childers. I want to say that when the economic situation improves, as I think it will improve shortly, steps must be taken to review the situation between the banking system and the Government. In particular, I want to suggest two lines on which the relationship between the Government and the banking system should be reviewed. First of all, I think that the banks should finance Government capital expenditure as they do in other countries. It is to be noted that in Britain 75 per cent. of the assets of the British banking systems are in fact Government debt. If the Irish commercial banks finance Government capital expenditure as banking systems do in other countries I think obvious benefits will accrue. It seems to me that it is now generally appreciated from the experience we have had in the last few years that our market cannot bear the issue of large-scale Government loans every year and in order to finance our capital investment programme, which is so necessary, resort must be had to the banking system.

Secondly, it is possible to borrow from the banking system at a lower rate of interest than has to be given to genuine savers when national loans are floated each year. Thirdly, if resort is had to the banking system, more capital will be available from the public to private borrowers. One of the effects of the manner in which Government capital expenditure has been financed over the last few years here has been that all available capital or a great portion of it has been taken up in Government loans or in loans floated by semi-Government organisations and the amount of capital available for private borrowers to draw on has been reduced very considerably. That is the first action which, I think, has to be taken to bring a more realistic relationship between our banking system and the Government in this country.

I think that the Central Bank should have greater control over the operations of our commercial banks, and that the Government should have greater control over the Central Bank. There is no developed community in the world which permits its commercial bank to operate a credit policy uninfluenced by Government direction, and that is the situation we have in Ireland at the present time. It is true the Government can exhort the banks to a credit policy which it thinks necessary for the economic needs of the country, but it has no power other than exhortation and it seems to me that we must bring our banking system into line with that operated in other countries. There are various methods of doing this, of giving more control to the Central Bank over commercial banks, of making the commercial banks maintain certain minimum cash balances with the Central Bank, of making the Central Bank operate the power of rediscounting bills and granting advances to the commercial banks, and of giving the Central Bank power to issue notes against Irish Government securities.

I think the situation in Ireland has changed very radically in the last 20 years or so, since the Banking Commission was making its report, and changed very significantly since the Central Bank Act was passed in 1942. In order to bring our country into line with conditions in other countries, I think amendments of the Central Bank Act are necessary and, indeed, overdue at the present time. Deputy de Valera, speaking on this debate yesterday, referred to the evils of borrowing from the commercial banks; and it must, of course, be appreciated that there are certain economic results from such a policy. But I think it can be operated with safety in this country, if the savings campaign is operated at the same time on a greatly extended scale.

It does seem to me that the key to our economic development in the long term is in greatly increased capital investment in the country. We have made progress in this country over the past few years; we now have a considerably higher rate of capital investment here than we had, say, seven or eight years ago. But, when compared to a country like Denmark, for example, it is still at a regrettably low level. We cannot get the employment which we want; we cannot raise the standard of living of our people which we desire; we cannot make the revenue more buoyant so as to make possible greater expenditure by the Government, and, for example, reduce the school-leaving age and reduce means tests, until our revenue is more buoyant and until the existing rate of taxes brings in a higher yield. This state of affairs can be brought about if we have greater business activity in the future. To my mind, the key to it lies in the commercial banks and in the rate of interest at which they are prepared to lend to the Government.

I say these things looking to the future, and, I think, to the near future. I appreciate that the economic situation over the last few months does not make possible such a change of policy as I have indicated, but the trends which are now demonstrable, I think, show that in the near future our exports will recover, the greatly increased imports which we had last year will be reduced, and an opportunity will come to expand the economy on the lines which I have indicated. Only in that way can we bring about a condition of full employment, only that way can we hope to reduce emigration, and only that way can we bring about the increase in agricultural and industrial production which, it is now generally recognised, is the only method by which we can have the higher standard of living to which our people are entitled.

The opening paragraph of Deputy MacEntee's Budget statement in 1952 indicated that measures were to be taken to deal with the situation which had then arisen. The matters which were to be remedied included, amongst others, a large deficit in our balance of payments. It is true to say that the opening statement by the present Minister ran along somewhat similar lines. In Volume 130-131, which dealt with the debate then, the present Minister, who was then Deputy Sweetman, was reported as saying that the result of that Budget would be to create a deflationary tendency in the country. Deputy Dillon, when speaking to-day, said that, as a result of the policies adopted in 1952 which created inflation, the present Government and the Fianna Fáil Government since 1952 have been grappling with a balance of payments problem and with an inflationary problem. That is typical of the Coalition Parties and the Coalition Ministers. They cannot agree, and a lot of our trouble to-day is caused by the contradictory views expressed by different Ministers. A good deal of the mess in agriculture to-day is caused by the Minister for Agriculture and the Minister for Industry and Commerce expressing different views and propounding different policies.

We find that the present Government, the present Ministers and the Coalition Deputies, are very loud in their praise of the Minister for the steps he has taken. One would think that it is the first time in this country that we have experienced a large deficit in our balance of payments. The fact is that, in 1951, we had a deficit of a similar order and whereas it is good to-day to superimpose taxes, and heavy taxes, on commodities which were then taxed and in respect of which there has been no reduction in taxation since 1952—we had the same commodities in 1952 and added to those are similar punitive taxes—they are deemed to be all right to-day because they are introduced by a Coalition Government. They were not all right then. Taxation of a lesser degree was not all right then although we sought to remedy a situation which was in every way similar to that which exists to-day.

The only difference between the situation in 1952 and the situation to-day is that the situation in 1952, which began to operate in the first year of Fianna Fáil's return to office, was caused by the Coalition Government of 1951. It operated during the Fianna Fáil term of office. To-day we have, unfortunately, similar evils existing created by a Coalition Government with remedies applied by a Coalition Government, the very same remedies that were applied in 1952.

We have the Minister for Agriculture appealing to the Fianna Fáil Party to assist and not to sabotage the efforts which are being made to deal with these ills, while in 1952 we had every device known to the various Coalition Parties brought into operation to break down the then Government. They were successful, very successful. The Minister for Agriculture to-day said that the Fianna Fáil Party was hoping that any loan for which subscriptions would be sought during the year would not be forthcoming. That is not true. Yet that is the same Minister who said in 1952 that any broken-down banana republic, anywhere in the world, could find £10,000,000 at 5 per cent. It just shows the absolute irresponsibility and dishonesty of the present Government.

The Minister for Agriculture also said that Deputy de Valera, when speaking yesterday, tried to sabotage the effort which was being made by the Government to get increased production from agriculture. He said that Deputy de Valera indicated yesterday that there was a falling off in agricultural production because suitable incentives were not being offered by the Government. The Minister for Agriculture said that Deputy de Valera should indicate to the Government how much should be paid for milk, how much should be paid, for wheat and how much should be paid for barley. I am saying, now, and it was said by Coalition speakers when they were in opposition, that that is the Government's job. It is the job of the Minister for Agriculture, now that he is considering the price which will be paid to the farmers for their milk, to decide on an equitable price. That is the attitude which was adopted by Coalition speakers when they were on this side of the House.

It is the duty of the Government and the duty of the Minister for Agriculture to make up their minds what the price should be and it is the duty of the Minister to seek from the Government authority to pay that price. He cannot run away from his responsibilities as Minister for Agriculture. If it is the policy of the Government to get increased production from our farmers no Minister for Agriculture can run away from his responsibilities in that regard. It would be very convenient for the Minister for Agriculture if Deputy de Valera were to say that we should pay 1/6 or 1/9 or 2/- per gallon for milk. Then the Minister could say: "Do not blame me; blame Fianna Fáil." He is not going to have it that way. He is going to make up his own mind as to what the price should be for all commodities produced on our farms. He is going to be the one responsible. He is the one who must seek governmental sanction in any action he may take in fixing prices. If there are any consequences, good or ill, of that action, it is the Minister for Agriculture, and the Government, who must take those consequences, be they good or evil.

The arguments used in 1952, which were based on the fact that higher taxation was being imposed, indicated that the Coalition Parties then were of the opinion that that taxation was being imposed for the purpose of preventing people from spending, although it was said that there was no need to prevent the people from spending. It was said that there was no need to curb expenditure and that the taxation was imposed to penalise the Irish people. It was said that there was a credit squeeze.

We have heard Deputy Declan Costello saying just now that up to now the Government in this country could not interfere with the banking system. He said that they could not command or direct the banks to take any action, that they could say to the banks that a certain action should be taken, but they could not compel the banks to take that action. Yet a few years ago every speaker stated here categorically that there was evidence to show that the then Government compelled the banks to restrict credit. Nobody will deny that that was stated here.

Yet, we have Deputy Declan Costello, who when on this side of the House in 1952, said that there was a deliberate order imposed on the banks, the effect of which was that credit became harder to get and became more expensive, saying to-day that the Government should have some power to control the issue of credit and the rate of interest. He said that such a system had not operated in this country so far but that it should operate. That is the type of argument we get. By some strange mesmerism a man's mentality changes when he leaves this side of the House and goes over there. That is not absolutely true: he must be a Coalition collaborator before that can happen.

The Deputy will change his mind, too, in four years' time.

Four more Budgets like this will change a lot of people's minds. Actually this is the fourth Budget this year. We do not have to wait four years to get four Coalition Budgets. This is our fourth this year. We had two last week. That is not bad going. One of those two was for £500,000. The import levies imposed earlier in the year will bring in in a full year £3,000,000. These are all good attempts at Budget-making and they will bring in the money; but, no matter how quickly the money comes in, the present Government seems to go through it. This year expenditure has increased by £13,000,000 over and above last year. As well as that, they have to find another £37,000,000 for capital development. Luckily enough for them, the import levy will produce £3,000,000. The increased revenue from increased postage rates, telephone rates and parcel rates will bring in £500,000.

These, of course, are not designed to hit the poor man; there is no tax on necessities; none of the increased taxes will create unemployment; they will not put up the cost of living in any way: all these statements are fallacies of the first order. One knew immediately by the questions Deputy, McQuillan asked that he intended to vote for the Coalition Budget. He asked:—

"Am I assured that these taxes on petrol, and so on and so forth, will not affect the farming community, will not interfere with farm prices or the price to the consumer?"

He was assured that they would not. Of course they will. The price of petrol will hit, among other consumers, the farming community. It will hit the consumer of farm produce because if the middleman finds that the petrol for his lorry or his van which brings his cattle to the fair or his produce to the market costs an extra 10/- or £1 per week he will pass that extra cost on to somebody else. He will not suffer. The result will be that we shall have higher costs both in farm produce and in manufactured articles. That will mean another round of wage increases and that is one of the factors which will help to create a further round of increased prices.

We were accused in 1952 of creating a credit squeeze and ordering the banks around. Comparing now with 1952, what we have now is much more serious than a credit squeeze. What we have now is a credit freeze: the money is not there to be found. The Minister for Agriculture said to-day that it was no wonder the recent loan was not fully subscribed because a few days after its issue the bank rate increased in England; and that was the only reason why it was not fully subscribed. But that was not the reason why the Dublin Corporation loan was not fully subscribed. What was the reason? It was not Fianna Fáil propaganda. It was not Fianna Fáil trying to sabotage anything.

It will be difficult for any Government, this or any other, to find £20,000,000 or £25,000,000 in the current financial year. What the reason for that is, I do not know. There is no doubt that no matter who looks for it, whether it be the Government, a business firm or any other concern requiring credit, it will be difficult to find it, no matter what the rate of interest may be. That will affect business generally. There is a credit freeze. Now we are not accusing the Government of creating that or ordering the banks to create it. But the Government should do something about it. Deputy Costello said that the Government should have some say in the issue of credit and the rate paid. I am inclined to support that because it might help to remedy a position which is holding up development. This credit squeeze is creating unemployment, and causing emigration. If the Government can step in and have a say in the operations of the banks and credit facilities generally, that will be all to the good if it remedies the position.

One serious aspect of the Minister's Budget statement was the fact that £500,000 would be taken from the Road Fund this year for capital purposes. Now we have three types of roads, main roads, county roads and roads leading into fuel and food producing areas. In the past the latter have been neglected with the exception of some small sums made available for roads leading into bogs and fuel producing areas. Instead of taking that £500,000 out of the Road Fund and shoving it into capital development of one kind or another that money should be shoved into a new programme whereunder we could build or rebuild, construct or reconstruct roads leading into bogs and food producing areas. During the emergency a good deal of work was done along those lines because it had to be done.

We are very close to finding ourselves up against another fuel emergency because of the increase in the cost of imported fuel and the decrease in quality. Instead of raiding the fund the money in the fund should be directed to a programme of reconstruction of existing bog roads and the making of new roads into undeveloped bogs, so that when the fuel crisis does hit us, at least we will have the preliminary preparations done and will not have to tackle a job of that magnitude in such a short time. It is with regret, then, that we look at this raiding of the Road Fund by the Minister. It is insufficient to cover the class of roads which I have in mind even if the Road Fund in toto were diverted to roads into fuel and food producing areas.

There is one item to which I would like to draw the attention of the Minister. It deals with the import levy, which did cover a number of items which, I think, it was not the intention of the Government or the Minister to cover. I note that since the import levy was imposed he has amended it to a certain extent. One amendment did take away parchment paper for wrapping butter and margarine, which by accident was caught in the net. Another thing which has been caught and no remedy taken to free it from the provisions of the import levy, is newspapers printed and published in the Six Counties and imported here.

There are obvious reasons, which the Minister well knows, why we should in this country of ours have free intercourse between North and South. It has been the practice of all previous Ministers of all Parties to aim at having that free intercourse between North and South whether it be industrially or agriculturally. The Minister for Industry and Commerce has done it, the Minister for Agriculture did the same, in the Foyle fisheries, the G.N.R., and so on. Here we have the Minister now setting up a barrier in the Press, one of the most vital aspects of our intercourse with the Six Counties, where there should be free entry, or at least equality of taxation in the entry, of northern newspapers. When they are printed or published in the Six Counties they should be allowed freely to circulate here, as our Irish papers published in the Twenty-Six Counties are admitted freely into the Six.

It is setting up a new barrier which did not exist heretofore. One might think it a rather small thing, but it is not. For instance, in the case of one newspaper, which is published three times per week, the operation of this 1d., or, rather, ¾d. of a duty per paper amounts to over £2,000 per annum; and in the case of another weekly paper it amounts to over £200 per annum. The Minister's argument is that if an impost or levy of 5 per cent. was placed on all newsprint coming in for our own papers here in the Twenty-Six Counties it would not be fair not to have an increase in the case of Six-County papers. With that I agree. We do not want any special concessions. We do want the same, and a 5 per cent. levy would be agreed to and welcomed by any of these papers coming in. But I must tell the Minister this, that in the case where the existing levy which is applicable to British papers has caught up the Irish papers produced in the Six Counties, where it amounts to over £2,000, a levy of 5 per cent. would amount to £113. So it is easily seen, therefore, that the levy is not something imposed to level things up, and I think there is a very strong case to be made for its abolition. It includes not only Nationalist papers but Unionist papers as well.

I am not advocating that just Nationalist papers should be covered. I am advocating that all types of newspapers, including weekly or bi-weekly papers, in the Six Counties should be admitted here, provided that the only additional impost would be a levelling up addition which would not give them that 5 per cent. advantage over our papers here. Sin an méid a bhfuil le rá agam.

I think that it is generally recognised it was incumbent on the Minister for Finance to introduce a Budget this year which would take due consideration of the financial and economic difficulties which face the country at the present time.

Hear, hear!

It called for a dual purpose Budget—one designed in the first place to collect the additional taxation that was necessary to meet justifiable expenditure, and, secondly, that it should be a Budget designed to bring into operation the necessary corrective measures in relation to our adverse balance of payments. I do not propose to traverse the ground that has been already covered by spokesmen on this side of this House, and, indeed, by spokesmen on the other side of the House, in justification of the measures that were necessary in the interests of the country as a whole. But I would like to place on record that since the Budget was introduced here last week all of us have had an opportunity of returning to our constituencies and, by our ordinary local contacts, feeling the pulse of the people whom we endeavour to represent here. Quite candidly and quite honestly, I must say that, contrary to the forecasts of Deputy Lemass, I found no indication of the shock and disappointment that he told us would face us on our return to our constituencies.

Notice taken that 20 Deputies were not present; House counted, and 20 Deputies being present,

I was saying, Sir, that contrary to the forecasts of Deputy Lemass, in my constituency at any rate, I found no indication of the shock and disappointment that he forecast, and that undoubtedly he hoped for. I would not attempt to pretend that a tax such as that of 5d. on the packet of 20 cigarettes is welcome news to a wage or salary earner of any description. But I say that the average working class man is a reasonably intelligent individual and I have found from my contact over the last week with the people in Cork City whom I endeavour to represent here, that the general consensus of opinion seems to be that taking everything into account, taking the financial and economic difficulties of the country into account, and indeed taking into account the gloomy and doleful foreboding of Fianna Fáil spokesmen, I found that this year's Budget is generally accepted by the people as a good Budget.

I have some contact with the trade union movement and I find that trade unionists generally are quite willing to pay 5d. extra on their package of cigarettes and meet an extra 5d. which will be called for in September when the Minister for Social Welfare introduces his amending Bill, with 5d. extra on their weekly insurance stamp. The extra payments will be accepted by trade unionists because they regard the payment of 5d. on their cigarettes and 5d. on their insurance stamp as a very good investment for an increase of not less than 25 per cent. in social welfare benefits.

It is all very well for people like Deputy Bartley here last night to mention "a slight increase in social welfare benefits". As Deputy Kyne pointed out, it is the largest increase in social benefits that this country has witnessed so far. None of us would attempt to say that a 30/- unemployment benefit, or sickness or disability benefit, is adequate. The Government does not say that. But we say that the best recognition of that fact can be illustrated by giving an increase of 6/- on the 24/-. We cannot forget—the people I endeavour to represent do not forget—that this Budget brings a higher standard of living to 21,500 people who depend for an existence on disability and sickness benefit, and similarly 30,000 of our unfortunate unemployed people will also receive increases, and 20,000 windows and orphans. That cannot be dismissed by Deputy Bartley or anybody else as "a small increase in social benefits".

I cannot forget that in recent months the provisional united organisation of the Irish trade union movement— representatives of the Irish Trades Union Congress and the Congress of Irish Unions—went on a deputation to the Minister for Finance and asked for 25 per cent. increase in these benefits. They asked the Minister if he found it possible to do that, would he not put the tax on foodstuffs; would he find the moneys necessary by increases elsewhere than on foodstuffs. As a responsible trade unionist, I cannot do other than congratulate the Minister, who did exactly what the spokesmen of the trade union movement asked him to do. That is in strong contrast to the reception received by deputations of trade unionists when the Fianna Fáil Government were in power. We know the manner in which they dealt then with the country's economic difficulties. When they wanted extra money, they slashed the subsidies. That was their cure.

They said to the wage earner: "You will pay more for your flour, you will pay more for your bread, you will pay more for your butter, you will pay more for your sugar." That is in strong contrast to the attitude of a Government that says: "We think some of our underprivileged people who are dependent on social welfare benefits should have a higher standard of living, and because of that we are asking the rest of the citizens of the country to pay more for cigarettes, petrol, betting and dancing."

As a member of the Labour Party, I can see that unless we went insane altogether, the only choice we can make between the advocates of these two separate policies is to say that we support, and continue to support, a Government that will do something, that has done something and will continue to do something, on behalf of the underprivileged people of our community.

This is undoubtedly a housewives' Budget and, lest I might be challenged as not reflecting the reaction of the working classes when I say that, I should like to place on record the statements made in a report in the Cork Examiner of Saturday, May 12th. The headline to the paragraph is “Budget welcomed by Cork Workers Council”; “Cork meeting congratulates Mr. Sweetman”. For the benefit of the people on the opposite benches I might explain how the Cork Workers Council is constituted. I should like to say that this is a council to which there are affiliated 30 separate trade unions operating in Cork City. They include butchers, bakers, boot and shoe operatives, plumbers, carpenters and other organised trade unions in the City of Cork. It is a non-political and non-sectarian organisation and indeed there are delegates coming to that council who do not disguise the fact that they are supporters of the Fianna Fáil Party. More power to their elbow for their views, but this workers council in their wisdom on the Thursday night after the introduction of the Budget congratulated the Government on what they regarded as a housekeepers' Budget. “I think it is only right that this workers council should congratulate the Minister for Finance on the Budget,” said Mr. George Kavanagh, vice-chairman of the council. I simply mention that matter to prove that it is not just my personal opinion when I say that this is a Budget readily acceptable by the working class people of this country.

This Budget has been described this afternoon by Deputy Carter as a "killjoy" Budget. Maybe it is a "killjoy" Budget. I do not think it is but, even if it were, I am still prepared to support a "kill-joy" Budget which provides benefits for the old age pensioners, widows and orphans and for the sick and disabled. When the former Taoiseach, Deputy de Valera, was speaking in this House yesterday I listened very attentively to him and noticed that he said something which was very disturbing from my point of view and which I am sure will be carefully noted by trade unionists and Labour people in this country. He was referring to our increased national expenditure. He did say that he would be slow to call a halt to any of the present schemes but that, if he had to do it, he certainly would not call a halt to any of the productive schemes. Then he raised the question of social welfare and indicated that perhaps we had arrived at the stage when we would have to say to ourselves that there could be no further increases in social welfare until the country righted itself financially and economically.

I remember Deputy de Valera being challenged in this House on a Statement he had previously made at a Fianna Fáil Ard-Fheis two or three years ago. It was quoted against him that he then said it would be dangerous to increase social welfare benefits at that time. He denied that he said that and I for one at any rate will accept his denial. But while I accept that, I must say I was present in this House last night when he said something similar and it is quite clear to me that if a Fianna Fáil Government were in power to-day, instead of the inter-Party Government, a deputation from the Congress of Irish Unions and the Trade Union Congress would have had very little hearing if they went to that Government looking for social welfare increases. That is the reason why the Labour Party are participators in an inter-Party Government—because we know the trade union movement can go to the leaders of that Government, put their case to it and, if their case can be met, they know it will be met.

Deputy Carter, when speaking here this afternoon, referred to the recent meeting between the Taoiseach, and the Minister for Finance on one side and the spokesmen of the Provisional United Organisation of the Irish Trade Union movement and the Federated Union of Employers on the other. Deputy Carter indicated that the trade union people went there and asked that prices should be frozen. We in the trade union movement do not deny that now, and always, in the past, it has been our policy that prices should be frozen.

We would much prefer that there would be a genuine stability in wages and prices rather than have the vicious spiral that has existed since the war years with the trade unions endeavouring to secure increases for their members after prices had gone up. We make no bones about the fact that, in the interests of our members, we would much prefer that a situation of stability was reached whereby wages will not go up and we will have a guarantee that prices will not go up. That is in strong contrast with the views of a former Government who during the war were most efficient in freezing wages but made no effort to freeze prices.

The one criticism I have to offer is that the Minister indicated that there is to be a new tax of 1d. per gallon on fuel oil. I am aware that this tax will be remitted in the case of diesel oil used for buses and, consequently, the case cannot be made by C.I.E. for an increase in bus fares. I know, however, that this tax of 1d. per gallon on fuel oil applies in full to the use of fuel oil in diesel rail cars and diesel electric trains. I do not propose to be an authority on this matter but I have some knowledge of C.I.E. I am conversant with its problems and I have been told that this new tax will cost C.I.E. something in the region of £25,000 or £26,000 a year. I am sure we all realise that C.I.E. has turned more and more to dieselisation as an alternative to steam-powered engines because of the prohibitive cost of coal. C.I.E. has been urged by this and the previous Government to turn over to diesel oil and they have been going ahead with that programme of dieselisation. It does seem strange that, in doing that, they should be called upon to pay an extra £25,000.

We are all aware that spokesmen of the Government, traders, and trade union leaders have gone almost hysterical urging the G.N.R. not to close certain sections of their lines. They have been urged by the Minister for Industry and Commerce to do as C.I.E. are doing and to turn towards dieselisation as a solution for their financial problems. It is very poor encouragement to the G.N.R. to find that our transport system, which has turned towards dieselisation, should receive a further impost of 1d. per gallon on the fuel oil which is used for the rail cars and diesel locomotives.

On its last financial year, C.I.E. suffered a loss of £1,700,000 and recent salary and wage awards, as well as extra costs, appear to call for a sum in the region of a further £1,000,000 in this financial year. One would have thought that it would tax the resources of the Board of C.I.E. to meet these formidable bills without putting any extra imposts on them. I would like the Minister in replying to inform the House what motivated him in that particular connection.

That is the only criticism I have of the Budget. I will conclude on the note that, while this Government is in power and while the Labour Party is associated with it, I hope we will always be in the happy position of receiving such a favourable Budget.

It is rather unusual but not unprecedented in this House on the introduction of the Budget and on the debate to find Deputies speaking favourably, but of course the inevitable severe criticism must also appear. No matter how enthusiastic a person may be, he must have a doubt in his mind when he congratulates the Minister for Finance on introducing a Budget which inevitably carries with it an increase in the cost of living. That has inevitably happened here since the start of our State, and, undoubtedly, will go on for many years to come. It does indicate the resiliency of our people, and the enthusiasm of the followers of the Government for the time being, that they are prepared to face up to hard realities, show reason for the heavy increases that may be applied to the unfortunate taxpayer and give him encouragement to grin and bear it.

The big problem underlying this Budget, and the fear that somehow or other has come into the lives of our people here for some time back, seems to be this difficulty over money. Money seems to be too scarce and not equal to meet the demands on the people for their ordinary expenditure. Those who wish to make a protest against that point out that our tastes have become too expensive and that our cost of living is beyond our means. Undoubtedly, that is a solid argument. The remedy there seems to be to restrict our tastes and to reduce our cost of living to what we can afford to pay. However, that is easier said than done.

It is easy to say we have too many motor cars in this country—and nearly everybody would agree with that— but it is always the other fellow's car which is not necessary; it is never your own. I can sympathise with the Government's attempt to deal with some of the problems with which we are confronted. The petrol tax will undoubtedly lead to an increase in the costs of those engaged in commerce in different ways, and the consequent increase in the cost of living will, in turn, apply generally to the whole community. But if the crisis is as serious or nearly as serious as responsible men from both sides of this House seem to indicate it is, then it is necessary to do something to prevent the collapse which must be nearly approaching. Petrol is an important product which has to be bought and paid for in dollar areas at very expensive rates. It is good business to restrict the purchase of goods in an area where the value of our money is at a serious discount. Similarly as regards cigarettes. I might not like to do without myself, but I would like if the community as a whole would do it. That is the position.

I do recognise, and must accept as serious and well founded, the statements made by the present Ministers and by ex-Ministers in this House. Both sides are responsible people and both sides are honest. Here I want to draw attention to a thing that happened this evening and about which I, personally, was very sorry. The Minister for Agriculture, speaking in the House, referred to the Opposition Party, of which I am not a member, as saying that the cost of living was going up, that depression was setting in and that the confidence of the people of this country was not there to subscribe to loans issued by the Government. That implies a sort of mentality which, I think, the Minister should not have mentioned. There is no such thing as petty dishonesty, petty intrigue and undermining of public affairs. I have yet to meet in this country a Minister, or any other group of Deputies here, who had not an honest, clean outlook and who was not most desirous, of all things, to see that the country would do well. It is not right to talk of sabotage. The Minister should not have expressed himself in that way but should have remembered he was speaking of men who had offered their lives for this country, and had given, beyond all doubt, service of more than ordinary sacrifice. An implication like that is contrary to the feelings of our people and I wish that the Minister would see his way to withdraw that implication. It is not good, it is injurious to the Parties and individuals in this House and it is injurious to the country as a whole.

To come back again to this problem of how to meet our debts, personally, I have no fear of them. Of course, it is easy to be complacent if you have not much to lose. But during the years gone by, I have seen great wars take place and expenditure incurred on a colossal scale. Nobody believed for a moment that those debts incurred over the last 30 years would ever be repaid. If that be the case, personally, I have no fear at all, if we are in debt, which we are not. We are a creditor nation, and I believe we might be better off if we were in debt and let the other fellow carry the responsibility. If it comes to a question of our people having to expend money to provide themselves with the ordinary necessities of life, plus some luxuries, personally, I would resist any infliction of pressure which would prevent that. We want our people to enjoy themselves. All this talk of saying that we are insolvent and that we are bankrupt is not going to do us any good. It will not ensure our position in the world to carry on as we have been doing in recent months bemoaning our fate and saying that we are bankrupt. The danger from that should be evident to everybody.

We have proposals frequently made to cut down the cost of living and the people's expenditure. That is easier said than done. Forty years ago there were very few motor cars on the roads but look at the number there is now. Motor cars have become an essential means of transport for many people and it is no use telling our people to dispose of their motor cars and to get back to the transport facilities of 40 years ago. The proposal has also been made that we should increase production but how is production to be increased? If we do increase production, and if we send double the quantity of our goods to the foreign market to which we can export them, we are going to get a lesser price for them. There is not much attraction in that. The only way in which we can improve ourselves by increased production is to get that increase in production without any additional cost. If the Government had a plan to do that, I would be prepared to accept a lesser price for our products and to carry on in that way. Such a plan would also help us to reduce the cost of living to our own people.

The Minister for Agriculture would say that he has increased the productivity of the soil by drainage and by increasing artificial manuring. To an extent he is quite right, but what about the one important feature on which alone the stability of this country can be maintained—what about the population that works the land? Let the Minister for Agriculture and the Minister for Lands say that they have done everything to improve the soil. That may be, but what is the attitude of the Government to emigration? The people who work the land are leaving the country and that is the reason our production is going down. We are producing less goods for export and for home consumption because our people have left the country in their thousands each year. What plan has the Budget for dealing with that problem which is fundamental to all our problems?

I do not say that this is the fault of the present Government, or of any Government, but it is the fault of a policy that has brought us to this present state. In the West of Ireland and in places such as Kerry, the small farms are being left derelict. Governments promised, when they got control of office here, that they would bring up these small farms to a fairly economic level so as to encourage families to remain at home—but have they done so? The policy of the various Governments has in fact deliberately eliminated all possibility of the small farmer and the middle class farmer being able to live in the West of Ireland. It is no longer possible for a farmer on a small farm of poor land to bring up a family and maintain it.

In these parts of the country we are going back to the ranching system. Large tracts of land have lost their owners who have fled from the land. Large tracts of land are now lying waste. The Minister for Lands has introduced a purchase scheme whereby the Department of Forestry can take over these lands and plant them. That is all right in a sense. But what is the possibility of employment in these places and what is to become of the towns built around these places? Where we had a teeming population around these towns 30 or 60 years ago, the land is now lying derelict.

Is it not obvious that the ruin of the population in the poorer parts of the country is the ruin of the country itself? The fact that production is going down is due to the fact that the policy of the different Governments has been the drawing and the driving of the people from the land. In former years the people lived on these poor farms. They lived on them and produced food for export and their families lived and worked on these farms. If they got any encouragement, they would continue to work and produce and we would now have much more goods for export. Instead of having more to export our own people now require less of our produce because they have left the country.

Having made that contribution, I would go on to say that in no part of the Budget is there any plan to remedy that situation. The land in these areas which formerly maintained a teeming population is now derelict and I would again ask: What about the towns that were built up in these districts? What about the money that the State poured into the building of these houses? That money is all gone. That has been waste of public money, a criminal waste of public money. You have towns standing out now like nightmares. One would think that when you are going to spend public money you would expect some reasonable return from it and that the State would gain as a result. There was no plan made in the building of these houses. Lovely houses were built and water supplies provided but there was no provision made for the employment of the men and women who went to live in them.

You have the same situation in Dublin to-day and you are still carrying on in the same way. Ten years ago I pointed out that it was a foolish thing to continue to build in Dublin unless you had a guarantee of employment for the people who were going to live in the houses but still the building goes on.

There is only one thing on which we can depend to prevent the crisis with which we are threatened and that is the price of cattle. If the price of cattle should crash, we are all lost and the structure of the State will collapse. There is no longer any other source to which we can apply for relief. In the old days, the small farmer and the middle farmer produced pigs. They produced eggs, hens and other classes of poultry and sold them. All these things are gone now. None of them exists to-day. In the old days, the farmer was able to buy and sell at a cheap rate and was able to struggle out a living. He bought maize meal at a cheap price and fed it to his hens and pigs and cattle and could then sell in a cheap market. In that way he was able to keep his family going. He cannot do that to-day. The feeding stuffs for these animals are not now available to him.

That is now left to the man whose land is suitable and on whose land modern machinery can be used to do the work more cheaply than it can be done on land where heavy machinery cannot be used. But we in turn have to pay excessive prices to the man with the good land on which he can grow grain successfully, prices out of all proportion to the sum at which we can sell our finished goods. Consequently we are being driven out of business in the interests of the larger farmer. Where is the policy there?

The same thing is true in the case of drainage. Vast sums of money were made available for drainage. Rivers were to be cleared so that the water could flow freely to the sea and leave a dry sod on which to walk. We contributed our share on the basis of population and, indeed, more than our share, towards that drainage. What happened? We were told that our land was too poor to justify the expenditure of a large sum of money and our land would have to wait while other land, good land, which could not be left idle was brought back into cultivation at once.

The attitude of this Government, and past Governments too, to the West of Ireland is outrageous. You are criminals and you have successfully contributed to the demolition of our homes and the emigration of our people. One day the country will wake up to what is happening. One day the story will be written, as it was written of Cromwell when he invaded and gave our people a choice of hell or Connacht. There is no choice left now; the Government is taking the latter resort and driving us to hell.

People have asked me for my opinion on this Budget. Nothing good can come from people who have not got a conscience, who have not got a proper outlook and who will not view the situation in a sympathetic light and do what justice demands. Keep our people at home and provide them with employment. If the Government does that, it can look for support and sympathy at a later date. Hitherto that idea has not prevailed, however much we may try to pretend it has. It really looks to me as if the Ministers in the different Parties are too generous, too big and too soft hearted to be in charge of practical things.

All they can do is promise to increase social services. I am not one bit opposed to the man who said that it was dangerous to proceed on those lines. If we cannot get the things we want by paying for them, then it would be better for us to go without. We seem to be obsessed with our own importance and our value in government to the nation and we are prepared to pit one section of the community against another in providing social services with money that those who contribute it can ill-afford. Where is the sense in raising hopes when we cannot fulfil those hopes. We want a change of heart even more urgently than we need a change of policy. Deputy Costello seemed to carry some hope in his message this evening. He said that the banking system did not meet the requirements of the State. Evidently the Government is thinking of making such changes as are necessary. If the banks are responsible for sending thousands of our young people into emigration every day, the sooner they are evicted the better it will be. It is a pity that that situation was not remedied years ago and the remedying of it now should not be delayed too long.

Deputy Maguire referred to one, Oliver Cromwell. I would like to quote from Cromwell's speech to the Rump Parliament, otherwise known as the Long Parliament, on 22nd January, 1654. I think the words are very appropriate now and I would ask the Minister, the Parliamentary Secretary and the supporters of the Government to bear them in mind. The quotation expresses the sentiments of the ordinary man in the street in his attitude to the present Government:—

"It is not fit that you should sit here any longer. You shall now give place to better men."

For God's sake, go.

Praise God, Barebones!

The Government will shortly be celebrating their second birthday but I do not think there are many people who will be enabled to wish them "Many Happy Returns." No doubt the people will be glad to give them the two candles; but, otherwise, I am afraid the wishes will not be father to the thought. I am sick and tired of listening to quotations as to who said what and when.

Even Cromwell.

Listening to some of the speeches here one would conclude that the electorate is mentally deficient.

Some of them are.

It is quite obvious after Leix-Offaly that they are as wide as a gate. There were 23,560 votes and 5,000 of those were Fine Gael. It may be all right for the Fine Gael Party to salve their consciences and say that is the way things are in Leix-Offaly and Fine Gael voters would not come out and vote for the Labour candidate. But the result of that election was a vote of "No Confidence" in the Government. I was convinced when the result came out that the Taoiseach would immediately dissolve the Dáil. I think certain members of the Government were in favour of that move. However, they are still there and I believe now that the Government have every intention of staying on as long as they can, clinging to office.

You may be certain of that.

The Deputy is getting away from the Financial Resolution.

What about the Dublin election?

Or the Dingle Peninsula?

As a matter of fact the Dublin election was just as great a defeat as Leix-Offaly.

What about the Dingle Peninsula?

The less we say on the Dingle Peninsula the better.

What about the Budget?

The Government reminds me of a dangerous cross-roads where we have political traffic lights— the red to stop, the green to go on but the amber—that is what the present Government is constantly facing, as I have often said here—the valley of indecision. They cannot make up their minds on anything, as a matter of fact. They could be classified as the "Forever Amber" Government—and that was banned too. When very important decisions are made by a doctor, the patient is usually consulted, and surely after such a vote of no confidence, and after this Budget, the Government should go as the doctor and consult the patient, the electorate, and go to the country. They know in their hearts and souls that in the foreseeable future there will never be a Coalition Government again. We, Fianna Fáil, will be back in power, and it is not 77 members we will have. We will have 80.

The Deputy should now come to the Financial Resolution.

Why did you not come in and vote against the Budget the last time?

I hope sincerely that the Deputy will not suffer from any illness and have to take cognisance of those facts.

There were not 11 of you ill.

When the Minister was speaking on the national loan on the 4th May, 1955, in the Budget he boasted that a loan of £20,000,000 was successfully floated. His words on that occasion were:—

"The effective yield to redemption was 4½ per cent., the lowest rate for a national loan since 1950. Housing authorities and organisations such as the E.S.B. and Bord na Móna, whose interest charges are related to the Exchequer borrowing rate, have also benefited from this reduction in the cost of borrowing."

There is a great difference now in the attitude of the Government and its supporters after the failure of the National Savings Loan, which, indeed, as is usual, the Leader of the Opposition and the supporters of the Opposition did all in their power to make successful. We had a loan issued, we all know, at the highest rate of interest in the history of the State, and the failure of that was due not so much to the fact that money was not available as to the fact that the public had lost confidence in the Government.

Is it not quite obvious that when the Government took over from us on the 2nd June, 1954, and shortly afterwards floated the loan, they had found the country in a most buoyant state? No one will deny that, not even Deputy O'Leary. The deficit in the balance of payments was down to the negotiable figure of £4,500,000 and, as the Minister stated in his Budget speech, last year the deficit was in the region of £35,000,000 and in the first number of months for this year it was running at the rate of £6,000,000—in other words at a rate of £72,000,000 for a full year. As I stated, that, indeed, was a vote of no confidence, and one would have thought it would shake the Government or shame them into doing something, but it had no effect, and it is only after two years in office that the Minister has wakened up to the fact that something will have to be done about the cost of Government expenditure.

At that time, in his speech on the 4th May, 1955, the Minister also stated:—

"The lower level of interest rates thus established is desirable for the stimulus it affords to investment and national progress. It was for that reason particularly gratifying that the Irish banks, in recognition of the national interest and in spite of the difficulties it caused for them, refrained from raising their lending rates when the Bank of England rate was raised in January and again in February last."

Will the Deputy give the reference, please?

That is the Minister for Finance speaking on May 4th, 1955, in this House.

What is the reference?

The Deputy will get it in the appropriate volume. I have indicated it.

I submit that the Deputy is not entitled to make what he says is a quotation without the reference.

I have indicated it there for the Deputy.

The Chair is satisfied with the Deputy's explanation. It is sufficient reference.

When Fianna Fáil was in power, the rate of interest was criticised by every section of the present Government, the Parties in the Coalition groups. To refresh their minds of that time I would like to quote Deputy Norton, and I will give the reference in full—Volume 130, column 1553—on the interest rates. Deputy Norton was speaking on the 4th April, 1952, and no doubt if he were on this side of the House he would have repeated this speech to-day. He said:—

"We have had a fall in house building, as revealed by statistics issued by the Department of Local Government and as confirmed by those who are members of the Dublin Corporation.... On top of that, in a situation of that kind which is pressing down the standard of living of the masses of the people, we find the banks are allowed to increase their charges for interest, which ensures that no matter who else suffers in the country, the banks are going to get away with increased charges for interest. This is happening at a time when the masses of the people are being told that they must eat less, consume less and bear burdens which are not to be put on the banks or the wealthy corporations which are well capable of taking the impacts resulting from the measures taken to solve whatever problems have to be met to-day."

Deputy Norton is now Tánaiste, Minister for Industry and Commerce, and I fail to see how he, or Deputy MacBride for that matter, can go into the division lobbies and support a Government who have allowed the interest rates to gain the level which they have. We, on this side of the House, have always maintained that there are outside factors which control borrowing and interest rates. We have never tried to make political capital of that, but, unfortunately, the Government supporters know the criticism they levelled at us when we were in power and when we sought a loan at 5 per cent.

They come along now and seek a loan at the highest rate of interest in the history of the State, but the serious aspect of it was the complete failure of that loan. As I say, it is fantastic to see Deputy MacBride support a Government, and vote for a Budget and a Government who will do these things to which he is so opposed. Deputy MacBride has spoken in this House and written articles and letters to the newspapers on various matters connected with the interest charges paid by Governments. As reported in Volume 150, column 992 of the 6th May, 1955, Deputy MacBride had this to say:

"To my mind, the most important development which has taken place in the economic life of this State since its establishment was the action of the Government in ensuring earlier this year that our bank rate was not increased. That was the first and practically the only step this State has ever taken towards achieving economic independence."

Hear, hear!

I have no doubt that it would be suggested that had the Fianna Fáil Government been in office when the bank rate was increased in Britain, the bank rate here would likewise have been increased.

Hear, hear!

There might not be so much "hear, hear," when I am finished with these boys. Deputy MacBride chose the words "action of the Government in ensuring." Is the Deputy now maintaining that it was the action of the Government, in view of the fact that the Minister for Finance admits that it is something over which he has no direct control?

Is Deputy MacBride still of opinion that the Minister for Finance went down to the bankers, held a gun to their heads and said: "You are not to follow the bank rate in Britain," so that Deputy MacBride could say: "Good man, Mr. Sweetman; that is the right policy"? What has happened to the Minister since? What is the reason for the change? If action was taken then, why is it not taken now? Perhaps Deputy MacBride will enlighten us later on. Perhaps he maintains the Minister should have ensured by some Government action that the rate of interest would have remained as it was and not again have followed the British bank rate.

Did it follow the recent increase in Britain?

From what we see in the public Press, it appears that the bank rate in this country is about to increase again.

Of course it is.

I have quoted Deputy MacBride and no doubt he appears very willing to enlarge on his outlook on this matter. I have this question to put. I could give quotations from the Minister for Education, Deputy MacBride, Deputy Costello, Junior, and the Tánaiste whom I have quoted previously. Surely, a Leas-Cheann Comhairle, the time has come for the younger members, at least, of the Coalition group to wake up to the fact that they are being codded? No doubt some of them entered political life with ideas, but I am afraid they have been disillusioned on that side of the House, and disillusioned by their elders, particularly by the Minister for Agriculture.

Replying to the then Minister for Agriculture, Deputy Dillon made that famous statement of his to the House on the 1st December, 1953. He was criticising the interest rate, which was not as high as that paid on this Government's last loan. The present Minister for Agriculture said:—

"Why did we ever go to the country to seek a loan at 5 per cent.? The most abandoned banana republic in South America could raise money at less than that..."

Am I, a Leas-Cheann Comhairle, a member of an abandoned banana republic? If I were a member of an abandoned banana republic on the 1st December, 1953, what, in the name of goodness, kind of republic am I a member of now?

One without any bananas—no bananas.

I would say one of sour grapes.

The Parliamentary Secretary got enough sour grapes in Leix-Offaly to last him for a long while. The Minister for Agriculture was not satisfied with his quotation, because evidently he remembered what he had said back in 1952. He always seems to pick December for making fantastic statements. "If winter comes can spring be far behind"? Speaking in this House on the 4th December, 1952, he said:—

"I can assure Deputy Dr. Browne that the day of borrowing at 5 per cent. has gone, and gone for ever."

A Deputy

And so is Deputy Dr. Browne.

How now, Dr. Browne, and how now, Deputy O'Leary; it is "gone for ever"? Or had Deputy MacEntee's appalling Budget created all this hedging? Remember, the date was the 4th December, 1952, long after the damage had been done by the appalling Deputy MacEntee. However, remember, the Minister for Agriculture was in good company. He had the Minister for Education, Deputy Mulcahy. Deputy Mulcahy was good. He waxed eloquent. "The latest blow," he said, "that the Minister has struck at our economy is the launching of a £20,000,000 loan at 5 per cent."

We got the £20,000,000.

You spent £24,000,000.

What did the present Government get? They got "sweet Fanny Adams," to borrow an expression used by Deputy Lemass on a previous occasion here. But the Taoiseach entered into the controversy. There was no controversy in the eyes of the Coalition speakers—no, no, they went all over the country and there is no doubt about it, they fooled the unfortunate gullible people. I think some people believed Deputy Briscoe was getting a cut out of the Government interest rates.

Deputy Costello, the present Taoiseach, betook himself to Athy, and is quoted in the Leinster Leader of 8th May, 1954. This was just before we got the hammer and he said: “An instance of the kind of Government that Fine Gael will not have is the high rate of interest paid for their borrowing by the present Government. There will certainly be a change of policy here”. Of course he was right —but the change was in the wrong direction. As I said, and it impressed me deeply, my description of the Government is this: if the Government would give us the red light, the people of the country would halt. If they would give us the green light, we would know to go ahead. But we are in a valley of indecision. They cannot make up their minds for a year before they go forward. So it is the amber Government—“Forever Amber.” That was banned and this Government will be banned too. The Minister for External Affairs, speaking in this House on the 6th May, 1955, said: “We said when the loan was floated at 5 per cent. that it was bad financial policy and bad economic policy”. Does the Parliamentary Secretary, whom I see nodding his head, now agree?

Absolutely.

Yet the Coalition floated a £20,000,000 issue at 98½ on the interest rate of 5 per cent. What has the Parliamentary Secretary to say about that? They are very quite now. The Minister for Social Welfare decided to take a little interest in this matter too and according to the Enniscorthy Echo the Minister for Social Welfare made an extraordinary statement when he said: “The difficulty seems to be that the money is not available”. The Labour Party did not seem to be very troubled about that at all; the Minister for Social Welfare said that the money should be made available by the Government and under its control the Government should have power to create and control credit.

Then in Letterkenny the Taoiseach, according to the Irish Times, said on the 26th April, 1954, that he was opposed to large loans at an artificially high rate of interest and he favoured rather private capital investment. As I have stated, the Tánaiste was concerned in this question too. On May 5th, 1955, when they were basking in the reflected glory of what they had done on the banking institute in this country and visualising Mr. Sweetman driving down in a State car to the court of the Bank of Ireland—where he announced to the various banking interests that the time had come when something had to be done by Government action about high artificial rates of interest—As had something to say. As reported in Volume 150 of the Dáil Debates at column 879 on May 5th, 1955, the Tánaiste expressed himself in this way:—

"The Government because of its stability; because the people know its policy; because the people know it can be trusted, is able to borrow money at a lower rate of interest than that at which the Fianna Fáil Government was able to borrow it in 1952 and 1953."

That was the Tánaiste's idea and at least he was consistent. In Volume 130, exactly 20 volumes earlier, we have him saying——

You must have the whole library there.

As reported in Volume 130, column 218, of the 21st March, 1952, we had the Tánaiste speaking. There was some interruption from Deputy Major de Valera and Deputy Seán Collins had something to add.

The Tánaiste then asked Deputy Major de Valera:—

"Is the Deputy suggesting that we can only get loans provided somebody pays 5 per cent. on them?"

Deputy Major de Valera replied:—

"I am serious. Where is the money to come from ultimately? You cannot just go on printing bank notes. We would like to hear the Deputy on the financing of such things."

Deputy Norton, as he then was, said:—

"I am afraid that Deputy Major de Valera has shown a rather shallow approach to this whole problem of agriculture. I do not propose to waste any more time on him."

The Tánaiste then went on to give a dissertation. He was speaking on the Estimate for Finance and he went on to speak about agriculture. You might as well have Deputy Briscoe talking about agriculture as the Tánaiste.

This does not arise on the Financial Resolution.

I am referring to what the Tánaiste said on this occasion and I am trying to impress on the House what his attitude was.

The Tánaiste then said as reported in the same volume at column 219:—

"If the small farmer has not got money he can procure it by borrowing. Clearly he can only borrow from the State and the State should and could raise the money and lend that money to the farmer. It can go further and lend that money to the farmer at a nominal rate of interest."

Has the Parliamentary Secretary to the Government anything to say about that? The Tánaiste further said:—

"Other countries have done the same thing and if they can do it why cannot we? The State can do anything it wishes. It can borrow money at a certain rate of interest and lend it to the farmer at a lower rate of interest and repay the difference out of State funds. There is nothing, however, to prevent the State creating money for the purpose of lending it to the farmer and when the farmer repays the money the State creation of the money is cancelled."

I can assure the Tánaiste that when the honest Irish farmer gets his hands on the Labour Party they will not have much more talk. There will be a repetition of what happened in Leix-Offaly.

In his first Budget the Minister for Finance used a famous cliché about "increased productivity." I would like somebody on the Government side of the House to tell us exactly what they mean by "increased productivity." Let us take the specific case of the dairy farmer. The Minister for Agriculture has urged the dairy farmer to go in for increased productivity. He used again the old catch cry of "One more cow, one more sow, one more acre under the plough", but there were never fewer cows, sows or acres under the plough than there are at present. At the same time as the Minister for Agriculture was urging the dairy farmer to increase productivity he tells him that the has priced himself out of the export market and out of chocolate crumb. In spite of what Major General Costello says to-day, and while the Minister for Agriculture is urging the dairy farmer to increase production, we find in the Estimate for his Department that he has reduced by £1,000 the provision for subsidising creamery butter, should that be necessary.

The Government have failed miserably; they do not know whether they are coming or going. Fortunately, the public have at last woken up to that fact—at least, the people they misled in the last election. Undoubtedly, the Government have not given any indication of what they are going to do in connection with the question of State expenditure. The Minister for Finance does give four lines to it. After two years the Minister for Finance now wakes up to the fact that he might set up a type of commission to investigate the whole administration of the Civil Service. Last night, Deputy Finlay used some figures, which he corrected later—it is very easy to make a mistake in these figures and I am not referring to that—in which he attempted to point out that the Government had 3,000 fewer civil servants.

In actual fact, the figures are that, in 1947, there were 31,179 civil servants in this country. Then the Coalition took office, and at the end of the Coalition period, we had 33,975. These figures are taken from a reply given to a parliamentary question and they are in the Dáil Debates. In 1948, the figure was 32,171; in 1949, 33,472; in 1950, 33,975. In regard to 1952, we were back again at the time. The first available figures for the 1st January, 1954, were given by the present Minister in reply to a question by Deputy Jack Lynch, and they showed that, on that date, there were 33,657 civil servants at a cost of £14,000,000. Therefore, from January, 1939, to January, 1952, the number of civil servants in this State has, in fact, increased by 9,800.

I tried to obtain from the Central Statistics Office to-day the figures as on the 1st January, 1955, and on the 1st January, 1956, but they were not available. However, they are available to anyone who will go through the Book of Estimates and add up, as I have done, the numbers in every Government Department, established and unestablished, and he will arrive at an approximate figure. In fact, he will arrive at the actual figures, if his addition is careful. I have arrived at the figure that there were approximately 294 established civil servants in 1955 more than there were in 1954, and approximately 250 unestablished civil servants. This would mean, in fact, that, in one year, the Coalition Government have increased the Civil Service by some 500, and the Estimates for 1956-57 show a provision for nearly another 300 in excess of that figure again. So that there is no question about it that the Government is not serious in its efforts to reduce expenditure at the top.

I wonder would the Deputy say do these figures include people like postmen, forestry workers, Gardaí and soldiers, or is it exclusive of those?

The source of my information, as I say, is that I have gone for several hours through as much information as I could possibly get in regard to established and unestablished officers of the State.

Would it include foresters, for instance?

There is quite a big number in the Department of Lands, but actually it is rather noticeable that there is not a very substantial increase in the Department of Lands so far as the number of workers is concerned. In fact, it would be a matter for congratulation if the number of workers in the Department of Lands had increased, but, unfortunately, that is not the position.

One could speak at length on this question of Government expenditure and one could go through the Estimates and point out the various things which possibly could be reduced. I think it is a most serious problem to confront any Government at the present time, and so serious is it that I would like to quote from the Irish Independent. It is not usual for anyone on this side of the House to quote the Irish Independent but I suppose the devil quotes Scripture for his own purpose.

In Volume 150, column 999, Deputy Seán Flanagan is reported as having said:—

"On the 2nd October, 1954, in a leading article headed ‘Two Major Problems', the editor said: ‘What we feel bound to stress is that the great majority of those who returned the present Government to power were mainly influenced by the assurance of strong measures to cope with both the cost of living and the alarmingly high rate of State expenditure.'"

Certainly that is a departure from some of the previous leading articles in the same newspaper and, if I might say so, they were very constructive remarks by the editor at that time.

On the 12th May, 1955, just a year ago, in Volume 150, column 1411, the Taoiseach is reported as having stated:—

"It is on those principles we intend to continue operating. That is clearly stated here in our policy. We will eliminate extravagance. So far as possible we will cut public expenditure and by a suitable production policy, and not just mere talk about production, we will bring about a situation whereby the national income will be increased and the real wealth of the country will be increased. We hope we will be able to reduce taxation and yet get a better revenue yield; and that better revenue yield will help us to reduce taxation still further and, at the same time, give to our people those benefits we wish to confer on them."

That is a most contradictory statement in so far as it is completely at loggerheads with the recent Budget statement and the first Budget statement of the Minister for Finance.

Let the Deputy give us his own mind now.

We then had the Taoiseach on the cost of government and he also got back to his pet point of the effect of high interest rates on borrowing by local authorities.

The Taoiseach got back to that again a column later when he said:—

"Was it by chance that when the Minister for Finance floated his loan last autumn at a lower rate of interest than that which obtained when the former Minister for Finance, Deputy MacEntee, floated his loan, that that loan was fully subscribed? The response to that loan showed that the country had confidence in the Minister for Finance and in his policy. It showed also the determination of this Government to reorientate downwards the cost of Government borrowing. It underlined the distinction between the policy of the Government and the policy of the last Government.

"The last Government acted on the policy of dearer money. We demonstrated by a reduction in the rate of interest on that loan, which has proved so successful and which has gone to a premium since, that this country was creditworthy and could get better terms from the public and the people did give their savings to this Government at a lower rate of interest than they were prepared to give it to the last Government. That was an outstanding tribute, from the people who lent their savings, to the present Minister for Finance and to his policy.

"That policy of keeping down prices, keeping down both the cost of government and the cost of living, was also emphasised when we took the decision, in conjunction with the banks, not to increase the bank rate here this year. It was emphasised that we would deal with these matters by reference to our economy— we weighed and tested them by that and by nothing else."

The Government, indeed, ought to be ashamed of themselves. We, on this side of the House, have consistently agreed that it is outside sources which govern the rate of interest to a very large extent. However, in the final analysis, it is the man in the street who proves or disproves the fact that a loan is not successful. The greater proportion of a public loan, outside of the banks, the insurance companies, the other big bodies, is subscribed by the smaller man, the man who subscribes £500 and upwards. The failure of the loan to succeed, as the Leader of the Opposition said, was a very regrettable occurrence from the point of view of the future economy of the State, but when it did fail, and fail in such a fashion, it was time that the Government should have resigned and not wait for Leix-Offaly to give them a decision also. They had a political and a financial verdict of the people of the country.

I could speak on Government expenses all day. I am glad the Parliamentary Secretary to the Minister for Finance is present. I was hoping to have got in for Vote No. 9 for his Department.

It is a pity you did not.

It discloses a very important feature. If this is any criterion——

Have a go at it now.

If this particular item is any criterion of Government expenditure it is no wonder how the spending and the control of money generally by Government Departments is carried out. In Volume 166 Deputy Blaney put down a question——

The Deputy may not discuss that.

The Deputy proposes to give an example of Government expenditure and to quote one particular instance.

If Deputies were allowed to give small examples like that, we could go on for ever. The Deputy admits that he failed to raise the matter on the proper Estimate so he cannot be allowed to raise it now.

We had a building of 375 sq. feet erected——

If the Deputy is allowed to raise that question, others will seek to discuss similar matters.

This is very ungrateful of the very people who asked to have this thing done.

A couple of rooms cost as much as a drawing room of Buckingham Palace.

It was built to facilitate the Opposition.

We put it up for tender and did it cheaper ourselves.

Deputy O'Malley is to get back to the Financial Resolution.

You want something else out at the front gate now.

There are some points which I would like to bring to the notice of the Minister and which are non-contentious. One of them is the tobacco tax. Would it be possible to give vouchers for tobacco to the old age pensioners? It would not cost very much. The loss of revenue from the old age pensioners would be negligible. Would the Parliamentary Secretary bring that matter to the notice of the Minister?

I have not a clue about it, but I will look into it.

The Parliamentary Secretary may not have a clue about it, but a lot of old age pensioners will not have an ounce of clue or any other sort of plug out of it. Five pence an ounce to them is a very heavy impost.

The Parliamentary Secretary has received representations from the taxi drivers of Dublin. It is not for me to make representations on behalf of that body but, generally speaking, the hackney men throughout the State are in a very bad way and would it not be possible to give them a basic allowance per month? They are in a frightful situation—and the Parliamentary Secretary knows it well—since the drive yourself cars came into operation. They are fighting for their existence and many of them have gone out of business. The Minister should consider giving them a basic allowance of 100 gallons per month and anything in excess of that could be paid for at the full rate of duty. I raise these few matters in the hope that the Minister will give them consideration particularly in view of the fact that the loss of revenue to the State will be very small indeed.

Generally speaking, the Book of Estimates shows that there is an increase under the majority of the headings. There is an increase in nearly every single item. I think I have quoted sufficiently to show that the Government will now have to revise its policy. Someone could have interrupted there, as people are so fond of interrupting, and asked: "What would you have done?" It is not for us to answer that question. The people over there are the Government and it is for them to say what should be done. It was very clearly stated by both Deputy MacEntee and Deputy Lemass that no further increases in taxation would take place after 1953.

It lay lightly on the land at that time.

One of the solutions put forward by the Taoiseach, the Minister for Finance and the Minister for Defence to remedy the dire straits in which we found ourselves was private enterprise. The Tánaiste, speaking in this House, as reported in Volume 130, column 212, said:—

"One has only got to look at the import figures in order to realise the enormous quantities of imports which are still coming into this country... Many of the defects, from the standpoint of not having these commodities produced at home, have been due to a pathetic reliance on what is called private enterprise to produce these commodities. We can see clearly now, having given the experiment a trial for 30 years, that private enterprise will not go into the manufacture of these commodities unless it is assured of dividends from the start. That is not possible except in rare instances. The State will have to find other and more efficacious methods of establishing industries to manufacture the goods which are imported unless, of course, we are perfectly satisfied to sit down here for another 30 years and see what the volume of these goods will be 30 years hence."

"Unless the State is prepared to come in and use its powers up to the limit to assist in the establishment of industries at home... we will be talking of industrial development here for the next generation."

That was the Tánaiste's and Minister for Industry and Commerce's idea of private enterprise on 21st March, 1952. In May, 1954, he and the Labour Party criticised private enterprise and gave promises of what they would do; and the first point on the Labour Party programme was the nationalisation, if you please, of the flour milling industry, so very dear to Deputy O'Leary's heart.

And the Avoca mines.

One of the first questions I put down in this House was to ask the Minister for Industry and Commerce if it was his intention to nationalise the flour milling industry. I got one single word by way of reply: "No". Speaking here again in March, 1952, the Minister for Industry and Commerce, Deputy Norton, said at column 214:—

"Cement is a commodity that obviously ought to be nationalised. Cement should be made available to our people without their having to pay the ransom they are paying in the form of dividends to-day. Why should not flour milling be nationalised? Why should the milling of flour to produce bread for our people be a source of substantial remuneration to those who lend money to the flour milling industry? I would nationalise flour milling to-morrow if I had my way."

So would I.

The Tánaiste has his way now as Minister for Industry and Commerce.

Time enough yet.

Who has his way over there? No one seems to know who actually is what. In my opinion there was one very significant occurrence in relation to the Budget. The Minister for Finance referred very briefly in his Budget statement to increased social benefits. Is it correct that the Minister for Finance refused to announce here the increase in social service benefits as Fine Gael Minister for Finance and left it to be announced next day to the people by a Labour Minister?

Left it to the Minister concerned.

Left the announcement, awaited eagerly by the people, to be made by Deputy Corish, Minister for Social Welfare. Is it a fact that at this long drawn out Cabinet meeting the Minister for Finance threw up his hands and was going to pitch the whole lot to hell, so to speak?

Or to Fianna Fáil.

Is it true that a compromise had to be arrived at? Is it true that the Minister for Finance said the Labour Party would no longer hold the gun to his head and, if they did not like it, they could lump it and that it was his opinion that they should go to the electorate and declare a general election and, if they had any conscience, they would? Are not these things true? Was not the Taoiseach in favour of a general election as well? Were not the Taoiseach and the Minister for Finance in favour of holding a general election on the night Leix-Offaly was declared?

Suppose the Deputy comes now to the Financial Motion.

I would like to quote.

What was that the Deputy said about quotations generally when he started?

It is by repetition I am trying to drive it home. I am not allowed to repeat, but I would remind the Parliamentary Secretary:—

"That's the wise thrush; he sings each song twice over,

Lest you should think he never could recapture,

The first fine careless rapture."

At column 268 of Volume 131, 23rd April, 1952, the present Minister for Finance, then Deputy Sweetman, said:—

"What has outraged the country is the cynical disregard by Fianna Fáil for their election promises—the cynical disregard by them of the statements and the speeches which they made in this House prior to the last general election and during the three years of the inter-Party Government's régime. They are now in the position of having been hoisted with their own petard. They campaigned around the country during the whole of last May and they got their canvassers in every town, village and rural area to say that, if Fianna Fáil were the Government, there would be a reduction in the cost of living. The leaders were careful not to say too much in that respect from the public platforms."

Then the Minister for Finance stated, and I throw these words back at him:—

"If the members of the Government, and the Taoiseach himself, are sincere and honest in saying that they believe the people will stand behind them in this Budget there is a way in which they can test that belief without very much delay."

I would like to say that the Labour Party are very worthy representatives outside.

There is never more than one of them in the House.

The shadow Minister for Finance, Deputy O'Leary. Deputy James Larkin makes very eloquent speeches and gets reported quite appreciably in the national papers, but he makes very few speeches of any consequence in this House. He made a rather important one when he addressed the Dublin Regional Council of the Labour Party on 10th February of this year. He said, speaking about the Party he supports:—

"The inter-Party Government will soon be two years in office, but it has not yet put forward any major proposal for basic changes in economic or financial policy."

Then Deputy Larkin, who goes through the Lobby to support this Government, went on to say:—

"The urgent need for action is clear to all, particularly in view of the banks' decision to increase the bank rate, the crisis in the building trade as a result of financial conditions, and continuing difficulty in securing adequate financial facilities for much needed industrial and agricultural employment. The workers' living standards are being imperilled."

That was Deputy Larkin's attitude outside the House, but here it is very noteworthy that he is silent in his support of the Government.

The other matter I want to refer to is that in the Estimates for Local Government there is, in spite of the avowed intention of all sections supporting the Coalition Government to speed the housing drive, a sum of £25,000 less for the provision of new and reconstructed houses. It is no answer to say that in certain specific areas the housing position is nearing a solution. There is £25,000 less in the Estimate for that Department. This is very ominous, and never for a great number of years were there so many unemployed in the building industry as there are at the present time. We had the Tánaiste—I have no doubt as to his sincerity—going to the United States of America to seek industry for this country.

To raise the wind.

Or to attract industrialists to come here. I have no doubt whatever that he considered what he was doing was in the interests of the nation and a matter which should occupy his attention. But while he was away looking for new industries the greatest industry in this country, giving the most employment, was collapsing. That is the building industry. A very great percentage of the skilled tradesmen have departed for Britain and elsewhere, and will be lost to us for ever, due to the Government's policy, or lack of policy, and their indecision with particular respect to the question of granting financial assistance to the Dublin and Cork Corporations.

That figure of £25,000 which mainly goes towards the reconstruction and grants for new houses by private individuals might be acceptable to a certain extent, perhaps, but when we come to the huge item of assistance for housing authorities in the solution of housing of the working classes there is nearly £1,000,000 cut by the Minister for Local Government and by this Government. I beg your pardon, the actual figure in the cut in the grants to local authorities is £100,000. It is a decrease of £99,995 for the year 1956-57.

Has any grant been refused?

Dublin Corporation

Ask Deputy Briscoe.

Deputy Briscoe, no doubt, will be well able to see to the affairs of the Dublin Corporation.

Deputy Briscoe failed to discuss that matter before and I suggest that Deputy O'Malley should not try.

Deputy Donegan asked what he deemed to be a most pertinent question: have any loans been refused?

That is administration pure and simple.

I submit that it is financial policy of the Government.

By repeating "financial policy" at intervals does not make a speech relevant. If, as the Deputy says, grants are not being paid that is pure administration and cannot be tagged on or in any way related to the Budget.

On a point of order. I should like to ask the Chair to rule on this. Legislation is apparently part of Government policy, and if the Government has refrained from introducing legislation to make such payments legal——

The Chair is not going to rule on a hypothesis for anybody.

Legislation is there.

The Chair is not going to rule on hypothesis.

This is not hypothesis.

Deputy O'Malley on the Financial Resolution.

If the Parliamentary Secretary, Deputy O'Sullivan, took a little advice from his leaders at times the position of the country might be better.

The Parliamentary Secretary might not be so discourteous or unmannerly.

I would seek better advice than yours if I were looking for it.

The question I would like to raise is the position regarding the increase in cigarettes and petrol, which has been passed over very quietly by speakers on the Government side of this House. Do they forget that beer is costing the public more since they came into office, that cigarettes have previously been increased and that, in fact, this is the second increase to the man in the street?

What about wages?

We will come to that in a second. We are dealing with tobacco and beer now.

The Deputy wants to get you off prices. She is a great authority on them.

I want to keep him on prices.

Deputy Mrs. O'Carroll would not get me off anything.

How right you are.

Deputy Larkin, in Volume 130——

By way of indication to the Deputy as to the attitude of the Chair: the Deputy is making extensive quotations. A Deputy's speech is his own contribution to the debate, and not a series of quotations.

Am I to take it, Sir, with respect that I am not entitled to quote at length?

I did not say that, but the Deputy has quoted three or four times since I came into the Chair.

Where, Sir, with respect, is the line of demarcation?

That lies with me. We will not have a series of quotations with nothing more.

It is very uncomfortable material for the Government.

If the Deputy means that as a suggestion that the Chair is favouring the Government, he will withdraw it immediately and unreservedly.

I will withdraw it unreservedly, and I will withdraw from the House, in disgust.

I am afraid that I will probably be considerably duller than Deputy O'Malley. On the Budget proper, there is not very much that I wish to say. It was obvious that the increases in social welfare benefits, the increases in wages and salaries of State employees, were bound to lead to an increase in taxation. Likewise, it was inevitable in the present situation that the general administration costs should rise and accordingly the Government were faced with the task of raising additional revenue. The Budget is a tough Budget, a tough Budget inasmuch as it had to provide for the additional moneys to meet the increases in wages, and to meet the increases in social welfare benefits. But although it was a tough Budget, the method of raising revenue, I think, was probably the most equitable one that could be found. Naturally, it is never popular for a Government to have to increase taxation.

There continues to appear in the Budget, or rather in the Estimates, a number of anomalies, anomalies which have persisted for a very long time. Possibly the most striking one is the continuance of a very high rate of expenditure on roads. When I say a high rate of expenditure on roads, I mean a high rate of expenditure on roads in comparison with other types of productive investment. We spend approximately £10,500,000 on our roads, as compared with £1,500,000 on forestry. I think that that probably arises from a long-standing misconception that road work provides additional employment. We should have realised by now that the amount of additional employment provided by road work is negligible. The labour content in road work is small and it is a pity that there is not a better assessment of the labour contents of different public works.

I have, I think, on a number of occasions asked the Taoiseach to seek to have a comparative analysis made of the labour contents which exist in the different types of public works undertaken by the Government. An analysis of that kind would be useful to have. It would enable the Government and this House to examine the capital expenditure programme of the Government in relation to employment and to the return on expenditure.

Probably the most welcome thing contained in the Budget statement was the announcement by the Minister for Finance that he proposed to have a careful examination made of the efficiency and the cost of Government administration. I hope that this announcement was not merely a pro forma announcement, but that it is an indication that the Minister for Finance and the Government intend seriously to examine the whole position of Government administration in the country. I have no quarrel with the number of civil servants that are employed by the State. They probably are necessary. I am far from happy, however, as to the efficiency of the Civil Service machine generally. I think that the time is long past when we should have had a thorough examination of the administrative machine of Government. The Civil Service machine, I think, is defective in many ways. The system of recruitment, the system of promotion within the Civil Service, the system of responsibility in the Civil Service, while possibly necessary in some respects, leads to a great deal of inefficiency. I hope that the Minister for Finance in carrying out his examination of the administrative machinery of Government will examine it from that point of view as well as from the point of view of economy.

I cannot help feeling that one of the serious dangers, one of the serious problems, that face democratic Government in this State is the continued unchecked growth of bureaucracy. Apart from the fact that this unchecked growth of bureaucracy is in itself damaging to the democratic concept of Government, it also leads to a very considerable degree of inertia. Before it is possible to get anything done, a proposal has to pass from one Civil Servant to another, from one file to another, and considerable delays occur—delays that lead to inefficiency on the one hand and that are also fairly costly from the point of view of public administration. I hope the indication given by the Minister for Finance is a serious one and that he intends to tackle this question energetically, with the energy of which he is quite capable and that he will not allow any other considerations to delay or to make him relent in his decision to carry out this overhaul of the Civil Service machine.

Turning to the Budget statement generally, in so far as it relates to the economic position of the country, there is nothing new in the Budget statement. Due to the lack of a definite economic policy on the part of both the Government and Fianna Fáil it is not surprising that the Budget statement should not contain anything very new or positive. It was largely a repetition of many of the usual tags that emanate from the Department of Finance. Members of the Opposition have criticised members of both the Labour Party and Clann na Poblachta for supporting the present Government. The reason, as far as I am concerned and as far as Clann na Poblachta is concerned, is a simple one. We are not in agreement with everything the Government does, and possibly we have been criticising it more for the things it does not do, but we regard this Government as being a much better Government than Fianna Fáil would have been in similar circumstances. It is quite a simple attitude which I think is easily understandable.

I have no doubt that had there been a Fianna Fáil Government in office and had Deputy MacEntee been the Minister for Finance he would have attacked the food subsidies and intensified his pursuit of a deflation policy. We had experience of that before. Furthermore, as far as the Opposition is concerned, it is very hard to detect from their speeches what is their real policy because they speak with two completely different voices. However, I am not going to go into long quotations but I think anyone who has read the speeches of the different members of the Front Bench of Fianna Fáil in the last year or so will realise that there is a wide chasm which apparently exists amongst the leaders of the Party in regard to economic policy.

Notice taken that 20 Deputies were not present; House counted, and 20 Deputies being present,

Before passing from that aspect I should like to refer briefly to the employment position. In the midst of the atmosphere in regard to the economic position of the country generally, there has been a tendency to overlook what, to my mind, is the most important indication of the economic position and that is the employment and the unemment position in the country. Indeed, many of the speakers from the Fianna Fáil Benches have, both inside and outside this House, painted a completely untrue picture of the position in regard to unemployment. The position was that in May, 1953, we had 81,000 unemployed in the State. We have 63,000 unemployed this year. That is far too high a figure but I think it is well that these figures should be appreciated.

How many were there last year?

We had 62,000, but when Fianna Fáil was in power in 1953 we had 81,000. When the inter-Party Government was in office in 1951 we had brought that figure down to 54,000.

How many were there in 1949?

In 1951, when the inter-Party Government were in office, it went down to 54,000, but by the time the Minister for Finance in the Fianna Fáil Government pursued his deflationary policy in 1953 it had gone up to 81,000. I think it is well that these figures should be remembered. Unfortunately, some members of this House are seeking to mislead the people in regard to these actual figures.

You are doing your best to do it.

I do not know if Deputy Derrig is challenging the accuracy of the figures but, if so, he can look them up himself.

The difficulty I find in discussing the Budget statement and the economic policy generally in this House is that both the Government and the Opposition seem to lack a definite economic programme or a definite economic policy. In addition, there is a lack of an objective appraisal of the causes for the balance of payments difficulties. Very largely, we have been going on very false premises. The first fault I have to find is that the adverse balance of trade situation which we are experiencing is nothing new. We have always had an adverse balance of trade except in exceptional circumstances. The balance of trade position from our point of view is structurally adverse.

It is only in times of war, in times when we are unable to obtain supplies we require, that we have a favourable balance of trade. That does not in any way minimise or retract from the very real problem which faces our economy but I think it is necessary that we should realise that the adverse balance of trade which exists, and has existed for the last few years, is not new. It has always existed in our economy. What are the causes for the present balance of trade difficulties? The main cause I feel is that there has been a complete lack of objective analysis or appraisal of the various factors that have led to the increase in the adverse balance of trade.

I think there are roughly four causes. There is, firstly, the fall in agricultural production, and a fall in agricultural exports as a result. I am far from satisfied that the tentative explanation put forward by the Department of Agriculture is the correct one. Only in the course of the next few months will it be possible to assess whether the fall in agricultural exports has been balanced by an increase in the holding of cattle in the country.

Did the Deputy read the trade returns?

I wish I could be as certain as Deputy Corry.

Did the Deputy read the statistics given by the Statistics Branch?

I have read all the statistics and they would indicate that there is a higher cattle population in the country than ever before. I am not quite certain to what extent these statistics represent the actual position in the country. We will have to wait a few months before coming to a definite conclusion that the fall in cattle exports has been offset by an increase in the cattle population. That is a matter which will come to light in the course of the next few months. The fall in agricultural exports and the fall in agricultural production generally is a separate problem. The problem undoubtedly requires to be dealt with, and dealt with objectively—much more objectively than we have ever attempted to deal with it.

That is only one of the factors. The second factor which contributes to the increase in the adverse balance of trade arises from the increase in wages, social benefits and other earnings. This is a factor which very few of us have cared to face but it is essential to face it. Any increase in wages, social welfare benefits and earnings, will inevitably lead to an increase in consumption and to an increase in the adverse balance of trade under present circumstances. Take the simple example. If you give an increase of 5/- a week in wages or social welfare benefits, at least 50 per cent. of that increase will be spent on goods that will have to be imported. In many cases, particularly if the increase is given to the lower income groups, it means an additional packet of cigarettes in the week, for which the tobacco has to be imported, or it means an additional pair of nylon stockings or some clothing or some material that has to be imported.

I think you can take it as axiomatic that, certainly as far as the first 10/- increase in wages is concerned, 50 per cent. of it is spent on the purchase of commodities that have to be imported; and to that extent, therefore, any increase in wages, any increase in profits or any increase in social welfare benefits, does affect the balance of payments position. That is one of the equations we have to face. As far as I am concerned, I do not think it matters very much, provided the Government and the Parliament have a definite economic programme and plan to deal with the situation which results from that increase in the adverse balance of payments position.

The third factor which contributes to the increase in the adverse balance of payments position arises from increased industrial employment. While I think there certainly has not been an increase in agricultural employment —there probably has been a marked decrease in the course of the last year —there has continued to be an increase in industrial employment. Again, the higher the number of people employed is, the more they will spend and the greater proportion of the money they will spend will inevitably be spent on commodities that have been imported. Therefore, you have to face the situation that the more people you employ, the higher will be your rate of imports. That is inevitable. The higher the wages, the higher the import rate will be. Those are two inevitable factors and two inevitable rules of our economy. I think we are inclined to ignore those rules in considering the general economy of the country. They are not new rules; they are rules which have been there ever since the State was founded and they will continue to be there until we are capable of increasing our own production to a much higher rate than we have been able to increase it so far.

The fourth factor which has led to the present situation is the unsatisfactory terms of trading. It is true that terms of trading have not been particularly unsatisfactory in the course of the last year, but they are endemically unfavourable to us originally, by reason of dual prices and various political reasons of that kind.

I feel that it would be useful to the House and to the country generally if a proper analysis and appraisal of these four factors were made, so that we could relate them to the exact increase in the adverse balance of trade position. Obviously, in that situation, there are two alternative remedies that can be followed. You can either cut down consumption, or you can increase production. If you want to cut down consumption, you can do it quite easily by reducing wages, reducing the standard of living of the people, and creating unemployment. The higher the unemployment figures, the better it is from that point of view. If you maintain unemployment at a sufficiently high rate, then the overflow of unemployment will emigrate and will cease to be a liability on your economy. That is one way of dealing with it. It is the way of dealing with it which, I think, has been pursued so far by the Central Bank and, I feel, by the Fianna Fáil Party, in the course of its last few years in office. You can in that way achieve a beautiful balance sheet, but it is the type of balance sheet and the type of policy which, I think, has laid the foundations for the growth and development of Communism in Europe in the earlier part of the century. I doubt if any responsible person will, on analysis, advocate the pursuance of that policy.

The other alternative is to increase production. Here, again, I think that most of our Parties have been somewhat unrealistic in dealing with this question. We all agree that production has to be increased and we all talk about the necessity for increasing production but beyond that we do not seem to be prepared to pursue any active policy in regard to it. I would like to give full credit to the Minister for Industry and Commerce for the attempt that he has been making, and which I hope will be successful, to bring about the creation of new industries here. In that connection, also, I think it is necessary to point out that there has been quite a substantial increase of industrial production in the country and in industrial exports. From that point of view, the industrial development aspect of our economy has been reasonably satisfactory. The rate of progress has been too low but at least it has been progressive.

The outstanding side of our economy is the agricultural side. There seems to have been no progress and, in fact, there seems to have been retrogression. What are the requirements for increased production? It seems to me that there are two requirements as far as agriculture is concerned—in the first place, increased investment in agriculture and, in the second place, better technical services and better land utilisation. That is where I am inclined to criticise the policy of the Government, particularly in regard to the question of investment. If investment is essential in order to ensure increased production, surely investment in agriculture should be encouraged, and not discouraged by imposing credit restrictions or increasing rates of interest.

Here, again, let me say that I am quite satisfied that the policy of the present Government has been a much more liberal policy in regard to the credit squeeze than the policy which would have been pursued by the Fianna Fáil Government if it had been in office. But I feel it is hardly logical to talk about the urgency of increased production if, at the same time, you are to pursue a credit restriction policy, if you are to pursue a credit squeeze at the same time.

Here, again, I want to give full marks and full praise to the Minister for Finance for the action which he took which resulted in the banks not increasing the bank rate on the first occasion on which it was increased recently. I am sorry he was unable to maintain that line in regard to the second increase in the bank rate which took place in England.

Perhaps the Deputy will tell us why?

I do not know. I am not in the Government. I assume that the banks put on a considerable amount of pressure and used a lot of arguments which may have had some weight or may not have had some weight. Not knowing the arguments they used, I am not in a position to express a view on that. I would have been much more satisfied had the bank rate not been raised. As Deputy MacEntee has thought fit to interrupt me on that issue, I can say that I have no doubt whatever that had he been in office, the bank rate would have been raised twice, judging from the attacks he made on the Minister for Finance when he took action to prevent the banks raising the bank rates.

I said that the Minister's gesture was a temporary one and a futile one.

The Deputy went much further. He made a full-blooded defence of the banks and said that it was outrageous to use any pressure on the banks to prevent them from raising the bank rate. Does the Deputy wish me to turn up his speech, because I read it very carefully?

Quote it. What I am really interested in is why the Minister surrendered instead of taking the advice of the Deputy.

The Minister did not consult the Deputy. He may have had reasons of his own. I do not know what reasons were advanced to him. From the point of view of the national economy, of our own development and of increased production, it would have been much better if the bank rate had not been increased. Whether the Minister was left in a position where he had discretion to increase it or not I do not know.

If production is to be increased we must be able to secure a higher rate of investment in agriculture. We can only do that if there is a sufficiently liberal credit policy pursued by the Government and by the banks. I do not know whether the Minister for Finance remembers the very constructive speech made by the Taoiseach on this matter at the Fine Gael Árd Fheis in February, 1953. Dealing with this very question of increased agricultural production, the Taoiseach, in the course of his speech, said: "The big factor in increasing agricultural production in Ireland is the utilisation and creation of improved capital facilities with steady interest rates." That is a perfectly sound statement.

Coupled with the need for increased credit facilities for the farming community is the question of improved land utilisation and improved technical facilities. If I may do so, though it may not be strictly within the confines of this particular debate, I would like to express my regret at the tremendous delays which have occurred in reaching any finality in regard to the proposed agricultural institute. I think it was as far back as 1949 or 1950 that I was able to secure the consent of the American authorities to the utilisation of the Grant Counterpart Fund for this purpose. Now this money has been available ever since 1950. We are now in the year 1956 and, beyond many controversies and many paper plans, we are still no nearer to the achievement of this institute, so essential if we are to secure an increase in agricultural production. I do not blame the Government or the Minister for that. If the Government is to blame, it is only partially to blame for it. Undoubtedly, many other interests have succeeded in confusing the issues and delaying the actual formation of this institute.

The Deputy may not discuss the institute in detail on the Financial Resolution.

It was by way of an aside. In dealing with the question of increased agricultural production, there are two essential requirements: firstly, added investment in agriculture and, secondly, added technical facilities. It seems to me that in regard to both of these we are making very little headway. The policy of the Government in regard to credit facilities, particularly for agriculture, has not been sufficiently progressive. While I blame the Government to a certain extent for that situation, I realise that the direct responsibility really rests with our banking system and that it is nearly impossible under modern conditions to influence and direct the economy of a country so long as credit and banking remain the prerogative of a small monopoly responsible to no one. That is the position of our present banking system.

That is not true.

It is a small, noncompetitive monopoly responsible to no one and with, apparently, a very slight sense of national responsibility. Looking at the figures of the commercial banking returns for the December quarter, 1955, one finds that our so-called Irish banks invest in Irish Government investments only £17,000,000 whereas they invest in British Government investments £115,000,000. I merely mention that to indicate the measure of national responsibility which this small, noncompetitive monopoly displays.

Again, may I refer to the views put forward by the Taoiseach in the same speech at the Fine Gael Árd Fheis? I refer to it because I think it reflects the true position and I hope that, by referring to it, that may possibly remind the Government that there is an important task to be fulfilled in this field. Dealing with the banking system the Taoiseach said:—

"At the present time it is purely a monopoly although it has the appearance of being a private enterprise system. It reacts entirely in its policy to the policy from time to time pursued in Britain, a policy which is dictated by the British Government for British purposes related entirely to the conditions in Great Britain."

Further on, the Taoiseach went on to say:—

"The British Government induced the British banks to raise the bank rate and withdraw credits for the purpose of creating unemployment and discouraging production over a wide field of British industry in order to divert both capital and men to armaments and to their heavy industries. The Irish banks applied the same policy here, where conditions are quite different, where there is no rearmament and very little heavy industry. A system such as this cannot continue. Irish banking institutions can only flourish on Irish prosperity. At any rate they cannot continue to be used to take the savings of the Irish people to bolster up an outside economy, however vital the prosperity of that economy is to our external trade."

I think the time has come when the Government should seriously consider either extending the powers and functions of the Central Bank so as to enable it to issue credit and govern the credit policies of the commercial banks or take control by starting a commercial bank or by acquiring one of the existing commercial banks. There is nothing new or revolutionary in that. I think we are probably the only country in Europe which has not got a central bank which issues credit or which, at least, governs the credit facilities of the other banks. Our banking here is a most fantastic anomaly, an anomaly of an Irish banking system which invests mainly outside the country. It is completely noncompetitive and wasteful. In most towns in the country we have up to four or five banks, all of them imposing a policy of restriction in regard to credit. If the Government are not prepared on their own initiative to take these steps may I suggest that the time has come, and, indeed, is long past, when it would be desirable for them to set up a new banking commission to review the functions of our banking system in regard to credits?

In that connection I should like to draw the attention of the House to a report which was prepared by a number of American experts, businessmen and economists, at the request of the Government through the E.C.A. I do so, not because it says anything new, but merely because, being a report prepared by foreign experts, it may carry possibly more weight than my views with the House or with the Government. I am quoting from the Appraisal of Ireland's Industrial Potential which was prepared at the request of the Government in 1952. It says on page 20:—

"There is a similarly close linkage with the British financial system. Ireland's currency is directly tied to Great Britain's. Although the basic treaty with Britain provided that a separate and independent control over currency and banking should accompany the status of political independence, a banking commission appointed by Ireland's Minister of Finance in 1926 advised that the Irish currency be tied to the pound sterling with 100 per cent. reserve coverage and this arrangement adheres to the present day.

"This 1926 commission further considered the establishment of a Central Bank and decided that it was not feasible to do so at that time. When Ireland's Central Bank was constituted in 1942, it followed the established precedent of investing its Legal Tender Note Fund primarily in British Exchequer bills, with the rest of the 100 per cent. coverage provided by gold bullion, British legal tender currency and sterling balances on deposit in Great Britain or Northern Ireland.

"The manner in which legal tender notes in Ireland have been covered by investment of external assets is indicated in Table 21.

"The fact that the Central Bank has made no use of its statutory power to invest its legal tender reserves in Irish Government securities has handicapped the development of an active domestic capital market in Ireland which is one of the country's primary needs. The emphasis on complete liquidity that has led the Central Bank to invest so heavily in British Exchequer Bills at interest rates of a little over 1 per cent. as against long-term British Government securities with, perhaps, a 2 per cent. higher yield has represented an annual revenue loss to Ireland of, perhaps, £500,000.

"The commercial banking system of Ireland, as well, has shown a similar tendency to operate in a fashion that channels Irish deposit funds into the British capital market rather than retaining them in Ireland for domestic use, although this may reflect the choice of individual investors rather than bank initiative."

Might I interrupt the Deputy? I feel that in discussing the banking system the debate has been unduly widened, and that it should be raised on a separate motion rather than on this Financial Resolution.

Yes. It really arose as an extension of the discussion of credit policy and of the question of credit restriction, which, I think, has been discussed already in the course of the debate; but I appreciate that to go into it in greater detail would widen the debate too much.

I regard these matters as vital, as, if we are agreed that the essential requirement is increased production, we must automatically take the steps necessary to increase production, namely, we must ensure a high rate of investment in our own agricultural and industrial potentials. I think, too, that possibly the Government and the Minister for Finance would be well advised to pay more attention to the view of international economists and international bodies that have been dealing with economic questions in Europe. It has been urged by them in recent times, recent months particularly, that the existence of deflationary pressures should not be allowed to reduce the rate of investment in agriculture and in industry. The same tendency on the part of different banking systems shows itself in different countries—the tendency to restrict credit, to impose a credit squeeze. The general view is that a credit squeeze, if it affects the rate of investment, is damaging to the economy; and in addition to that—and I think this is a very important thing to bear in mind—it is generally accepted by all responsible economists and by all responsible international economic bodies that credit restriction or credit squeeze will primarily affect the rate of investment rather than the rate of consumption.

There has been a great deal of discussion in the course of the last two years on these questions, and the unanimous conclusion reached by the O.E.E.C. and by the Economic Commission of the Council of Europe, as a result of fairly detailed study of that particular problem, is that credit restriction will primarily affect the rate of investment to a much higher degree than it will affect the rate of consumption, and therefore, by imposing credit restriction or credit squeeze you are really preventing investment, and not affecting very much the rate of consumption. Therefore, when it is a question of dealing with consumption, particularly consumption which results from imports, the best protective measures to adopt are direct measures against the imports, such as import levies or purchase tax.

What it seems to me we lack mainly —and this applies to both sides of the House and to the country as a whole— is a concrete economic programme. Ever since the State has been set up our economy has drifted under the influence of different economic theories and political considerations, but there has been no consecutive economic development programme followed. There have been partial programmes initiated, but there has been no overall consecutive economic programme pursued.

Our economy faces a great many serious problems, the structural defect in our balance of trade, the highly-abnormal and endemic rates of unemployment and emigration. These are huge problems that can only be dealt with if there is a constructive and definite economic programme planned over a period of years. Surely it should be possible at this stage to get a sufficient measure of agreement in this House to set up a national economic council, which would be charged with the task of formulating a ten year programme, a ten year programme which would not be deflected by political considerations. Such a programme would require to plan the annual rate of investment which was required for agriculture and the annual rate of investment required for industry. It should have definite targets to achieve in regard to both employment and production and also to secure a phased increase in national income.

Unless that is done, unless we can secure acceptance by all Parties in this House of a concrete, definite, economic programme over a period of, say, ten years, we shall continue to drift from year to year and to adjust our policies merely in the light of political considerations or in the light of temporary emergencies, as we have been doing for the last seven or eight years. I think the time has come when we should grow up and we should do as other countries—should agree on at least certain definite objectives. I think the trouble is that very often we do not even realise the extent of the problems we have to face, or if we do realise it, we tend to run away from them, or pretend we have illusory remedies for them.

I was glad in that connection to find a measure of agreement, at least, between the Minister for Agriculture and Deputy Lemass. The Minister for Agriculture is in favour of a five-year agricultural plan. Deputy Lemass is in favour of a five-year economic plan generally. At least, we have reached a stage where there is agreement as to the need for a plan. May I say that I think five years is far too short a period? Might I appeal to the Minister for Agriculture, who is here in the House and to Deputy Lemass, to extend their planning ideas into a much longer period than five years? I hope they will both persevere in the formulation of plans, but instead of having two or three different plans, I would rather see an economic council charged with the formulation of a plan. I feel that, to a certain extent, formulation of a plan of this kind is more a task for economists than for politicians. Politicians no doubt are necessary. It is necessary no doubt to consult them in regard to formulation of a plan of this kind, but it is essentially a task for economists.

In conclusion, I want to say one or two words in regard to savings. Again, in regard to savings, every succeeding Minister for Finance comes to the House and talks of the importance of savings but very little has been done. Again, I think there are some changes in the economic position of the world which are not taken into account. Naturally, with the extension of social welfare, the urge to save is reduced. You cannot get the same rate of savings as you got before. In addition to that, I think that our system of taxation does not lead to savings. On the contrary, it leads rather to the dissipation of savings and if savings are to be seriously encouraged, it would be necessary to alter the existing system of taxation radically.

It would be necessary to substitute, I think, more of a purchase tax, to tax purchases rather than to tax income. In that way you can provide an incentive to savings, but it is useless to keep on decrying the lack of savings, without facing these particular problems— without realising, in the first place, that the incentive to save which used to exist prior to the coming into effect of the welfare State has now ceased to operate, and that it is necessary to replace that incentive by a new incentive. The new incentive, I think, can be secured by altering the system of taxation. However, that is a much larger problem which I cannot possibly discuss now.

Could the Deputy indicate the main lines of the changes that he would suggest?

I do not think so on this discussion. I think it is worth thinking about. It is worth realising that the normal incentive to save which existed up to ten or 15 years ago has ceased to exist.

That is commonplace but we want a constructive suggestion.

I have been making one, if the Deputy would listen. I have been suggesting that one of the methods of replacing incentives to savings which used to exist would be to gradually transfer taxation to purchases rather than to income. In that way you would create a new incentive to savings which is lacking now, particularly in the situation where your money is continually depreciating. In connection with that, I wish Deputies of the House and newspaper writers and economists would remember this. We talk of this inflationary situation. First of all, we continually misuse the word "inflation" We use it on the one hand to describe a situation in which prices are going up in relation to the availability of goods, and, secondly, to describe a situation in which our balance of payments position is getting more difficult. The simple definition of inflation is that you have too much money chasing too few goods. That is the definition of the state of our economy at the present time. I am afraid I have been rather long and rather diffuse, but I felt I would just like to give these few views on our economic policy.

Many speakers have given their views on this Budget and a number of Fianna Fáil Deputies have given their definitions of it. I agree with the Minister's definition that this is a realistic Budget. I think it is also a courageous Budget. I think, in fact, that it is a Budget on which there has been very little disagreement in this House. I do not think that the Fianna Fáil approach to this discussion has been effective. In so far as criticism was concerned I think that the Fianna Fáil Party believe that in the Budget proposals which the Minister has put to the House he has approached the problems which confront this country in both a realistic and a courageous manner.

The Minister in his Budget statement pointed out the problems which confront the country and I think he summarised the dangerous tendencies which have become apparent in this country under five headings: that the balance of trade deteriorated; that savings dropped, despite the fact that there was an increase in money income; that consumption was outrunning production; that it was becoming difficult to raise adequate capital for national and local development and, finally, that there had been a fall in the deposits in commercial banks. The Minister made it clear that some of these tendencies which we are now facing had only become apparent in the last quarter of last year. He had already introduced certain proposals to deal with the unbalance of payments when he introduced the import levies some time ago, and the hire-purchase restrictions. In an effort to deal with the drop in savings he also introduced his proposals regarding the issue of new saving certificates, and the fourth measure, if it could be so described, to deal with the situation is the implement which presents itself to the hand of every Minister for Finance, and that is his annual Budget.

Deputy MacBride referred towards the close of his remarks, I think it was in reply to Deputy MacEntee, to the desirability of taxing expenditure rather than income. I think that Deputy MacEntee will agree that the Minister in this Budget has taxed controllable expenditure rather than income. During the course of this debate there have been, naturally enough, certain comparisons between the present Budget proposals and the Budget introduced by Deputy MacEntee in 1952. I may have a few remarks to make on that later, but for the moment I want to assert that, in fact, the Fianna Fáil Party are hard put to criticise the present Budget proposals or to disagree with the steps which the Minister has taken.

Deputy O'Malley when speaking this afternoon made the claim that it was not for Fianna Fáil to say what they would do; that the present Government was there and it was the responsibility of the Government. I do not disagree with that and I think the Government have faced up to their responsibilities in a cool, collected and courageous way. There have been no panic-stricken measures or anything of that nature, but I want to remind Fianna Fáil Deputies in particular that their deputy leader, Deputy Lemass, went on record only a couple of months ago as giving his views and, I presume, the views of Fianna Fáil on what the Budget proposals should be. He spoke in Mallow and was reported in the Irish Press on Wednesday, 14th March last under the heading, “Lemass Analyses National Economy”. In a sub-head in that report we are told that: “Our general aim will be to discourage consumption of non-essential goods which have to be imported”. I do not think there is any disagreement with regard to that.

I think the Fianna Fáil Party will accept that the proposals which the Minister has introduced in the Budget, the earlier proposals which he introduced by way of import levies, and even the hire purchase restrictions were aimed at securing that objective. What I find interesting is to compare that speech which Deputy Lemass made in March last with the Budget statement of the Minister. I think any Deputy reading Deputy Lemass's speech would have preferred that Deputy Lemass should have made this speech reported in the Irish Press of March 14th last, as his contribution to this Budget debate. I think Deputies would find in that speech the reason why we are claiming here that there is very little that Fianna Fáil could find to say against the present Budget proposals.

Deputy Lemass, and I am quoting from the speech to which I have referred, said that it would be necessary to lighten some existing taxes and raise others. He went on to say: "The taxes to be raised would be those which are bound to reduce the consumption of non-essential imported goods and the taxes to be lightened are those which are found to be restrictive in production." I think it will be agreed by the Deputies opposite that the two main imposts in the present Budget are fully designed to reduce consumption of non-essential imported goods and to that extent, in any event, I take it that Deputy Lemass will agree with the Budget proposals. I do not know whether Deputy MacEntee has stepped down in the ranks of the financial hierarchy of the Fianna Fáil Party and now differs from Deputy Lemass or not, but I assume that Deputy MacEntee with his experience, and his grasp of financial matters, will also agree with these proposals in the Budget.

I am waiting to hear which of the taxes were reduced.

I am talking about the taxes which were imposed and the objective which can be attained by these taxes. I will deal with Deputy MacEntee's point in a minute. Deputy Lemass went on, in his speech, to deal with economy and the necessity for cutting down expenditure and said: "The case for cutting down expenditure must be decided on the same basis. It must be clear that the disadvantages to the nation will not outweigh the saving."

I would like to refer Deputies to what the Minister had to say in his Budget statement in column 28 of the Dáil Debates of the 8th May. The Minister made it quite clear in his Budget statement that he was approaching the matter in the light of examining anything that had to be cut down. At column 29 he refers to a statement he made on the Vote on Account and says:—

"I made a comment that it would be shortsighted to seek a way out of our present difficulties by cutting down such investments as will yield early returns in terms of increased output of saleable goods."

Again, we find Deputy Lemass, before he found himself in the position of chief spokesman of the Fianna Fáil Party against this Budget, expressing the same idea as was expressed by the Minister in his Budget statement; and I think it was a very sound idea as expressed by Deputy Lemass; and again, I believe that is one of the reasons why Fianna Fáil find it difficult to criticise this Budget.

Deputy Lemass, later in this speech, referred to food subsidies. I propose to dwell on the topic of food subsidies for a while but, for the moment, I just want to let Deputy MacEntee and other Deputies of the Fianna Fáil Party know what Deputy Lemass had to say with regard to the question of food subsidies, within the framework of a speech dealing with his views on what Budget proposals should aim at. He said:—

"Fianna Fáil has given a great deal of consideration to the possibility of introducing changes in administrative methods to secure a full return of work from public officials. Food subsidies must be accepted as likely to remain a permanent feature in the Estimates unless a very steep fall in the cost of living should take place, and that is not very likely, to put it mildly."

The Minister, in his Budget statement, made it quite clear that, as far as this Government were concerned, even a difficult budgetary situation was not going to be used as an excuse for further interfering with or reducing the food subsidies.

Deputy Lemass, in March last, when he was speaking in Mallow, had come to the point of view that food subsidies must be accepted as likely to remain a permanent feature in the Estimates. I think the House will welcome that expression of opinion from Deputy Lemass. It is not so very long ago since, in the atmosphere of Deputy MacEntee's 1952 Budget, Fianna Fáil Deputies, including Deputy Lemass, were expressing a somewhat different view with regard to food subsidies. I have a quotation here from a speech made by Deputy Lemass in this House on the 3rd April, 1952. which is reported in the Dáil Reports of that date at columns 1299-1300. Deputy Lemass then said:—

"I do not know if Deputies have ever considered these food subsidies to be a permanent arrangement. They were certainly never introduced—"

Is it in order for the Deputy to make a speech based on Press quotations?

The Deputy is quite in order so long as the quotations are not unduly long.

The Deputy has been a quarter of an hour.

It seems to me that the Deputy is trying to blame this Budget on Deputy Lemass.

I do not know whether or not these quotations are embarrassing to Deputy Davern. They were not intended to.

I can assure the Deputy we are very proud of them.

I am simply expressing a certain measure of agreement with a speech that Deputy Lemass made recently, which I believe was a very sensible speech, a very sound one and which, to my mind, shows a large measure of agreement between the proposals which Deputy Lemass would have put into effect and the proposals put into effect by the present Minister for Finance. But there are certain points of difference.

Is the Deputy angling for an invitation?

I am leaving Deputy MacEntee out of it for the moment, but I dare say we will manage to get to the 1952 Budget before we finish. I was referring to Deputy Lemass's view, as expressed in March last, with regard to food subsidies, when he said:—

"This must be accepted as likely to remain a permanent feature in the Estimates unless a very steep fall in the cost of living should take place, and that is not very likely, to put it mildly."

I hope that Deputy Lemass's views will be accepted by the Fianna Fáil Party and I hope that the Fianna Fáil Party have now reached the conclusion that they were wrong to interfere with the food subsidies and that, as far as their future policy is concerned, it is not going to be based on removing the remaining food subsidies or reducing them. I hope that Deputy Lemass speaks for the Fianna Fáil Party in expressing that view.

Would the Deputy tell us why he did not restore them?

That is not very difficult. However, if Deputy Davern does not like to hear the views expressed by Deputy Lemass, he might prefer to listen to Deputy Childers.

I can assure the Deputy that they are always most palatable.

If Deputy Lemass's views, which I have just quoted, are palatable, I wonder will Deputy Childers' views, as expressed in this House in March, 1952, be quite as palatable? On the 10th March, 1952, at column 2313, speaking on the Vote on Account, Deputy Childers also referred to this question of subsidies. He threw out a suggestion. He said:—

"Subsidies work out at 2/- per head of the population per week. I feel it is absolutely true to say that there are large groups in the community not in need of children's allowances or of subsidies. I simply mention this as a fact which the House should study and examine in considering our whole economic problem."

Deputy MacEntee had something to say about food subsidies in April, 1952, when he made clear the then Government's decision that they were satisfied that incomes generally had advanced more than the cost of living and that, as essential foodstuffs were no longer scarce, there was now no economic or social justification for a policy of subsidising food for everyone.

I take it that the Fianna Fáil Party have not got over that and that they agree with the view expressed by Deputy Lemass in Mallow when he was speaking there last March. I hope so. The present Minister has made it clear that, as far as this Government is concerned, notwithstanding the difficulties which they found themselves facing in drawing this Budget, they were not going to interfere with subsidies.

I just want to refer to one other matter which, I think, may be of interest in Deputy Lemass's analysis of the national economy in his statement of what the Budget proposals should aim at. He said:—

"There is another principle which should determine the form of the Budget and that is that the number of taxes should be kept as low as possible and reliance should be placed on a few substantial taxes for the great block of revenue, i.e., income and inheritance taxes."

There I see one of the sharp disagreements between Deputy Lemass's outline of what the Budget should be and the Budget as introduced by the present Minister.

Deputy Lemass's view was that the Government should keep the number of separate taxes as low as possible, that reliance should be placed on a few substantial taxes and one of the substantial taxes suggested by the Deputy was income-tax. I think the Minister was quite right to avoid any further increase in income-tax. I think that the present situation is one where, in looking for increased preduction, it would have been extremely unwise to increase income-tax.

Is the workers' insurance contribution not a tax increase?

Is that not what Deputy MacEntee wants?

Answer the question.

I take it that Deputy MacEntee agrees with his deputy Leader's views as expressed in Mallow when he suggested that we should work out a few taxes and go in heavy on those taxes and that one of those taxes should be income-tax.

Answer the question.

The increase has not been put on the income-tax.

There is another 5d. out of the workers' pay packet.

Is it not a good investment?

I do not know whether Deputy MacEntee intends that interjection to be taken seriously or not. Is it Deputy MacEntee's view that you can give things for nothing, that the Government can just shell out?

That was never my view. That used to be your view.

What was the point of Deputy MacEntee's interjection? The fact of the matter is that the deputy Leader of Fianna Fáil has stated, in his outline statement, that one of the taxes on which reliance should be placed is income-tax. I am saying that I am glad that, in his Budget proposals, the Minister avoided any increase in income-tax.

The Deputy is reading the Irish Press anyway. It will have a good effect on him.

Deputy Lemass, when he spoke after the Minister for Finance on the 8th May, said that there was an increase of £8,000,000 approximately to be found out of ordinary revenue. At column 46 of the Debates of the 8th May he referred to waste and extravagance. He said:—

"This leaves £8,000,000 to be accounted for. What happened to it? Where has it gone? In waste and extravagance."

Later on he says:—

"There has been no expansion in the public services worth talking about £8,000,000 has gone in waste."

Deputy Davern apparently still follows his Leader. I want to put this question to people like Deputy Davern. Do they believe that it is waste and extravagance to pay decent wages and decent salaries to State employees and do they quarrel with the increases that have been given? Are they not aware that in that figure of £8,000,000, to which Deputy Lemass referred as having gone in waste and extravagance, there is a sum of £2,500,000 representing pay increases to State employees? It is not simply to civil servants alone.

We have converted you too.

Will you take on a new job now and try to convert Deputy Lemass? Deputy Lemass referred to £8,000,000 as being gone in waste and extravagance. That £8,000,000 is made up of a number of different items. One of them is a sum of approximately £2,500,000 for pay increases to civil servants and other employees of the State. There is about £1,250,000 to pay for the health services. Is this waste and extravagance or part of the waste and extravagance referred to by Deputy Lemass? Does Deputy Davern agree with him there? Does he consider that £1,250,000, which makes up part of that £8,000,000, as waste and extravagance?

Deputy Lemass worked wonders when he got Deputy O'Higgins to read the Irish Press.

There is £340,000 in that £8,000,000 for relief of rates on agricultural land. I wonder would Deputy Davern go around Tipperary North Riding or Tipperary South Riding, I never know which is which, and tell the farmers there that that £340,000 is waste and extravagance because it is going for the relief of rates on agricultural land?

Who introduced that item at first?

I am not saying who introduced it.

Progress reported; Committee to sit again.
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