Contrary to what might appear to be a very generally held view, politicians are human and, consequently, being human, we find it difficult to avoid speculating upon what would have been the reception which we would have got had we, when we were in Government, introduced the Budget proposals introduced by the present Minister for Finance. We have very painful recollections of the efforts we made last year to grapple and deal with the very great difficulties that confronted the country economically and financially at that time and the lack of help we got from the present Government who were then in opposition. But human or not, we have got to realise now that all of us have a job to do—to co-operate to see that the country gets back as quickly as possible to the highest measure of economic activity attainable. We shall have Budgets of this kind imposing heavy imposts year after year until we are able to get increased and increasing economic activity particularly in the export market.
The first comment I wish to make upon the Minister's Budget is to emphasise the fact that the Budget is not concerned in any detail or to a penny piece with any debt that we of the inter-Party Government left behind us. We left them a clean sheet after a very difficult year. Everybody knows what the country went through last year. Everybody knows that the revenue did not come up to expectations and that expenditure had to be increased beyond what was thought possible 12 months before. Everybody knows that in addition to the difficulties caused by our own internal affairs here we had difficulties over which nobody here could have any control impacting upon us from abroad.
Towards the end of last year, when things looked not so dark, even if not brighter than they had been some months before, we could see some light ahead, but we were met with the impact of the Suez operations. The Minister did not—perhaps he could not cover every subject or every topic in his speech—advert to the difficulties caused towards the end of that period by the operations in and around the Suez Canal.
There was the dislocation of trade, the increase in the freight charges, the lack of petrol, the difficulties of getting essential oil, the increases of prices accordingly and consequent unemployment. We lost revenue through forced rationing of petrol and oil. Unemployment was created and we lost what is not, perhaps, realised, £1,000,000 on the motor vehicle duties, as appears from the accounts now, in the proceeds of the Road Fund. Notwithstanding all that, notwithstanding that revenue did not come up to expectations because of those matters and others as well, we were able to leave office towards the close of the financial year with all debts paid or provided for and leave in addition a very substantial sum available from the Prize Bonds issue. That issue would have been completed in our time and before the end of March had it not been for the General Election. The Minister was gracious enough to acknowledge the debt in that regard to his predecessor, the Minister for Finance in the last Government.
At all events, that is the clear position. We had provided for all the debts that had accrued. We had cleared all the deficiency. We had given the Prize Bonds issue and left a very considerable amount of money available for the carrying on of the essential services for the next financial year. That was not a bad piece of work in all the circumstances and having regard to all the difficulties. It is gratifying—I paid tribute to the Minister on the radio talk he had the other night—that the Minister did not seek, as some of his colleagues did seek before the Budget speech, to suggest in any way that our present difficulties were caused, occasioned or were in any way traceable to the action of the last Government.
We had a very difficult job to do and at least we have some satisfaction in knowing that we did it well. We left our successors the money from the Prize Bonds issue and, in addition, we left the position that the balance of payments difficulties which had so exacerbated our economic and financial difficulties last year were solved and solved to a very considerable extent on a permanent basis. The figures produced this morning give further evidence of the success of the efforts we made. That is not a bad position for the present Government to have inherited. All debts were paid, nothing was left behind us and there was an issue of prize bonds that was not merely a success but gave promise of further success in future issues of that character. The position of the adverse balance of payments was rectified and the economy was placed on a sound, financial basis.
We had made every effort last year to stimulate small savings and encourage investment in Irish enterprise. We had set up a Savings Committee and had made propaganda efforts through radio talks and in other ways. All our energies were directed to securing an increase in small savings. The Minister for Finance in his Budget speech recognises the vital importance to our economy, and to our Capital Budget of an increasing flow of small savings. I regret that in his speech he made no reference to the efforts his predecessor made to stimulate those small savings and that he made no reference to the efforts of the Savings Committee who voluntarily gave their services to the furtherance of a vital national campaign. They did not in all the circumstances do too badly.
Everybody knows that the maintenance of an expanding capital Budget for the purposes of increased productive employment depends essentially upon our own savings. We knew that and we were fully alive to it. For that reason, we endeavoured in and out of season to stimulate the savings of our people. The record, in spite of the facts that the year was so bleak, that there was so much unemployment and so much financial and economic dislocation, is not at all bad.
The records that have been disclosed in the papers circulated with the Budget show that in the year just ended-a bleak year, one of the hardest years ever experienced by the country, a year which followed a year when our small savings had been dissipated in a most unexpected and even up to the present inexplicable fashion —small savings and prize bonds up to the end of the financial year amounted to £5.26 million. That included £1.65 million in savings bank deposits, £2.36 million in savings certificates and £1.52 million in prize bonds. That was not a bad effort. It is not the whole of the story. Having endeavoured to stimulate small savings in those black times and very adverse circumstances, our successors have the benefit of our efforts, and they are welcome to it because it is in the interests of the country. The success that followed those efforts is demonstrated in a most striking fashion by the fact that in the space of just one month-since the beginning of the financial year—the present Government have entered into possession of nearly half the amount of the small savings which they estimate they will secure in the following 12 months.
In Table 4 of the Tables in connection with the Financial Statement dealing with the Capital Budget, it is estimated that small savings and prize bonds will realise £8,500,000 during the coming 12 months. Having recognised the vital necessity for an increase in small savings, the Minister said he thought there would be some increase in small savings. The estimate is £8,500,000. It is gratifying to learn that and we take some pride in our part in securing the result that, in accordance with the particulars published in Iris Oifigiúil of 7th May last, the amount of money received between 1st April and 4th May in savings certificates and prize bonds—leaving out deposits in the savings banks— amounted to £4,515,000. That means that over £4,500,000 of the small savings the Minister has estimated at £8,500,000 have been gained in the first month of this financial year—I suggest as a result of our policy. We are gratified and personally I am gratified that the Minister finds himself in that position. It is essential for the development of the country that that movement should be encouraged and brought to greater activity than even at the present time.
It may have been an oversight that the Minister did not put more emphasis on the necessity for small savings and did not, particularly, indicate to the people the steps he intends to take to stimulate such savings. I hope no significance is to be drawn from the fact that he paid no tribute to the voluntary work of the Savings Committee. I hope it was merely an oversight or that, due to the pressure of all the things he had to say, he overlooked it. It is vital, in the interests of the country and in general, that every effort should be made to increase small savings.
I hope the proposals of the present Budget will not prevent the acceleration or the increased pace of small savings. I fear that some of the proposals will militate against the success of the campaign to get people to put aside a little more than they did before. The increase in the cost of living that will result because of the inevitable increases in the costs of various essential commodities will undoubtedly, I am afraid, have an impact on small savings which are so vitally necessary for our development.
There is another matter which I think I should draw to the attention of the Minister and the House because it is of some significance. The Minister did not, I think, give a true picture of the financial affairs of the country, when we handed over the reins of office, in what may not, perhaps, be a very important respect but which still is a respect that ought to be recognised as having some significance. In the opening paragraph of his Budget speech, he referred to a deficit on current account of £5.95 million and indicated that, of that deficit, £4,500,000 arose because revenue failed to come up to expectations. It is of some significance that the actual proceeds of the import levies over the period during which they were in operation amount to £4.275 million—in other words, the short-fall in the revenue expectations almost equals the proceeds of the import levy.
It is obvious that, by imposing the import levies, ordinary taxation was affected, but, at all events, the one practically balanced the other. If, instead of having the £4.275 million, the proceeds of the import levies, put into the capital account, we had taken that into revenue, there would have been very much less of a deficit in the financial operations of that very difficult year. For good and sufficient reasons, we decided to put that sum into capital account.
I have some observations to make in dealing with the proposals of the present Budget and the suggestion by the Minister for Finance over the radio that those who criticise the Budget or the Budget proposals would have a greater value attached to their criticism or comments, if they made alternative suggestions. The main proposals of the present Budget, so far as public discussion and public impact are concerned, are in connection with the total abolition of the food subsidies. I fully realise from my own experience in Government that the existence of that £9,000,000 or £10,000,000, the proceeds of taxation that went towards the subsidisation of food, was a standing and permanent temptation to any Minister for Finance to lay his hands on it. In a sense, it was easy money; in a sense, the total abolition of those food subsidies proposed in the present Budget is an easy method of solving a fiscal problem.
It may be that, in solving that fiscal problem of balancing the Budget, the Minister and his colleagues may run into political difficulties. Nevertheless, the grasping of that £9,000,000 or £10,000,000, the proceeds of taxation which went towards the subsidisation of food, was the easiest method of balancing the Budget. It did not presuppose the deep and anguished consideration that would have to be given to cutting the various supply services and perhaps even the Capital Budget of the forthcoming year in order to balance things out.
As has already been pointed out by Deputy Sweetman, the former Minister for Finance, on 2nd of last November, we took and recorded a Government decision to the effect that the total sum for supply services for the forthcoming financial year should not be estimated in the Book of Estimates for more than £94,500,000. To that sum, as Deputy Sweetman said, must be added £2,053,000 for transport services which arose subsequently. That was how we intended to approach the problem last year. It does not fall to me or to any of my colleagues on this side of the House now to indulge in retrospective conjecture as to what we would have done had we remained in office after the last general election. I do not know what we would have done, but we did not get the chance of taking the steps we had proposed as far back as last November. At all events, whatever might or might not have been done, it is not true to say, as has been said, that the Government could do nothing but indulge in total abolition of the food subsidies.
There were many other possibilities open to them. Those possibilities might have been difficult. I admit they might not merely have involved political sacrifices for the Government-and they can well bear them now, having regard to the size of their majority and the possible length of their term as a Government—but they might have had repercussions upon, say, unemployment or development, but these sacrifices might have had to be made in present circumstances. The point I am making is that this was not the only method open to them. There were many other methods, and the Government has on its own responsibility taken the step of balancing the Budget—and this Budget is the sole responsibility of the present Government-by means of the total abolition of food subsidies.
The Minister for Finance said—and I think the Taoiseach repeated it—that it was not for any reason of economics or of economic theories that this method was adopted, but because the method was necessary in order that the Budget should balance. I may remark in passing that all of us, as the Minister himself said, agree upon the principle of balancing the Budget, whether the current or capital Budget, but a Government must do something more than merely balance the Budget. The Budget is an instrument of economic force and economic policy and it is somewhat difficult to see—and I think it is a fair comment to make upon the proposal to abolish totally the food subsidies—what economic consequences of a beneficial character other than merely balancing the current Budget can emerge from the total abolition of the food subsidies. I agree that no Government can hope to borrow money from the public, from banking institutions or from anywhere else, unless they adhere rigidly to the principle of balancing the Budget.
There were three courses open to the present Government in connection with this matter of the food subsidies: they could have abolished them, as they have done; they could have partially abolished them, or they could have declined to touch them, as we did. They grasped the nettle, and there are many unthinking people who said that it was a good thing that the food subsidies were gone, that they were out of the way now and that no Government would again have to be bothered with them, or to go through the troubles and trials the previous Government went through, or perhaps even the Government previous to that went through, in connection with those food subsidies, I think, when it is pondered upon and the consequences that may flow from the total abolition of food subsidies are fully considered, the social and economic dislocation that may result from their abolition will far outweigh any advantages that may be secured. I doubt, having thought about the matter, and looking at the best side of these proposals, that the Government and therefore the taxpayers, will gain by the way of net advantage through the abolition of these food subsidies any sum greater than £2,000,000, and the consequences, to which I shall very shortly advert, may be such as to make very dear the purchase of that £2,000,000.
The Government could have abolished these subsidies in stages. The food subsidies were imposed by the Fianna Fáil Government in 1947; they were reduced by the Fianna Fáil Government in 1952, somewhat increased in 1953 and 1954, and have now been totally abolished by the same Government. That is roughly the history of these subsidies. The Taoiseach is reputed to have had at least perhaps a slight fondness for the teachings of a gentleman named Machiavelli——