I have not heard all the speeches made in the course of this debate. I have heard some of them and I have read excerpts in the newspapers of many others. By and large, there has been a reasonably sensible approach and a reasonably constructive criticism. In introducing a Budget of this nature, the present Government did not think for a moment that it was going to meet with the acclaim of the people as a whole. I use the word "acclaim" advisedly, inasmuch as I feel that, even though there are hardships, there is a large measure of approval of the action of the Government. There permeated many of the speeches of the Opposition a sensible approach and a mild form of approval, to say the least of it, of the removal of the food subsidies.
Deputy Costello, not only in his contribution here but in his radio address outside, speaking for himself and, I presume, for the Fine Gael Party, seemed to accept that the subsidies would have to go sooner or later. He did suggest—and this is as far as he did go—that were he given the task of framing this Budget or a Minister under him, an examination of the food subsidies would have had to be undertaken and that, very likely, if I interpret him correctly, there would have had to be a considerable reduction in food subsidies.
Before I came into the House, the food subsidies had been introduced, in the supplementary Budget of 1947. At that time, I remember reading the very sharp and severe criticism by Deputy Norton on the introduction of the food subsidies. His criticism almost amounted to a vehement denunciation of them. It was accepted then that the subsidies were introduced as a temporary measure only, in order to curb what appeared to be a very sudden rise in prices, following which there were likely to be such demands for increased wages as would result in a serious inflationary position.
I think it is a fair statement to say that the subsidies were then—apart from the denunciation of Deputy Norton—accepted as something necessary for the moment, but only as a temporary measure. Accordingly, it was accepted that the subsidies must be reduced and ultimately abolished in the interests of the country. I am speaking of subsidies as a social measure, as a means of trying to equate among the different sections of the community the impact of sudden increases in prices or of even gentle increases. I think it is the opinion that the subsidies operated unfairly from the point of view of the taxpayer and of those whom they were designed to assist.
There can be no contention that subsidies should not be in existence for people who do not need them—for people with big incomes and other means of support. They were fundamentally meant to assist people who would feel acutely the rise in prices. It was found, no doubt after very mature consideration, that a system whereby only those who really needed food subsidies would benefit by them and that those who did not need them would not was very difficult to design and it was decided to make the subsidies of general application.
Had I spoken yesterday, I would have, at the outset, commented on Deputy Costello's assertion in his opening remarks that the Budget was not concerned in any detail with one penny piece of debt left behind by the inter-Party Government. I note that a leading article in one of the daily papers this morning takes up that point. Deputy Costello went on to say that his Government left office with everything paid and provided for. I do not know with what degree of sincerity Deputy Costello made that assertion. I usually value what he says as being considered and as being as accurate as he finds it possible to make any contribution.
I should like Deputy Costello to examine that statement vis-à-vis the position as the incoming Government found it. There was almost £6,000,000 short in revenue in the financial year that has just closed. There was an increase of some £5,000,000 in the general Supply Services Estimate. There was £1,500,000 increased provision for the Central Fund. We admit there was some compensation, but the net deficit in revenue was some £9,000,000. In the light of that deficit, I find it difficult to understand why Deputy Costello made the assertion he made.
I should also like Opposition Deputies to contemplate for a moment the undertaking given on their behalf by the then Tánaiste and Minister for Industry and Commerce to the bakers when they, at his behest, awarded increases in wages to their operatives. They did this on his undertaking that they would not suffer any loss in the long run—that the increases in wages would be made up if they were prepared not to increase the price of bread. If that meant anything, it was a firm undertaking by the then Tánaiste on behalf of the Government to make up the bakers' losses.
The present Government accepted Deputy Norton's undertaking to the bakers as a pledge by a Government to be honoured by whatever Government was in power as a continuing obligation. Unfortunately, in the financial circumstances, we found it impossible to recoup in full what was due to the bakers under that undertaking. As a result of that undertaking and in fulfilment of Deputy Norton's promise to the bakers, the present Government had to find £250,000 which was not in any way provided for in the Estimates prepared by the outgoing Government before they left office.
There was also the question of the arbitration award to secondary teachers announced on 19th January by the outgoing Government and which involved in the current year the payment of a sum of £500,000. That sum was made up of £250,000 to cover arrears, a non-recurring commitment, and a similar amount to cover the increased cost of living. In the light of these items, it is difficult, I repeat, to understand how Deputy Costello can claim that the Budget was not concerned in any detail with a penny piece of debt left by the inter-Party Government, that they left office with all debts paid and provided for.
There were commitments and obligations facing this Government when they took office. One of the decisions that had to be taken related to an increase in premiums on motor car insurance, an increase amounting to some 20 per cent., involving, I should say, on the average motorist an annual increase in outgoings in respect of car maintenance of from £3 to £5. That claim by the insurance companies was examined by the Advisory Body some 12 months ago, but the outgoing Minister for Industry and Commerce had not taken a decision on it. It had been kept there without any decision being made on it, possibly without any examination, by the outgoing Minister for Industry and Commerce.
The Minister for Industry and Commerce has been criticised wrongly for permitting the increase which was recommended to Deputy Norton. I do not know the figures in relation to premiums paid by motorists compared with the actual payments made in respect of accidents and the commitments arising out of them but I do know, in the case of one small insurance company, that their entire profit in all branches of insurance— workmen's compensation, fire, theft, public liability—was more than eaten up by what they lost on payment of claims on motor policies. I do not know whether or not that was of general application but I assume the Prices Advisory Body had regard to such factors when they advised Deputy Norton, the then Minister for Industry and Commerce, that a 20 per cent. increase was justified. That was one of the other obligations which the outgoing Government failed to face up to.
Then there was the report of the Capital Investment Committee—also set up by the former Government. That report was available to the members of the outgoing Government. I have no doubt but that some, if not all, of them were well aware of its contents. The three leaders of the Opposition Parties have, since the Budget, been criticising Fianna Fáil to the effect that during the course of the general election campaign we did not make specific reference to the question of the retention or the abolition of food subsidies. I suggest it was the duty, in honour, of the members of the outgoing Government—who, again, knew the contents of the report of the Capital Investment Committee in relation to food subsidies—to inform the people that, having regard to the present financial situation, such a report was made by a responsible committee set up by them.
It was not for Fianna Fáil to anticipate nor could it be held that we were in a position to anticipate what the finances of the year would be like at its close at the end of March. The outgoing Government must have had a good idea of them from their advisers. Fianna Fáil could not have been in a position to anticipate that some £9,000,000 would have to be found in the current year to at least attempt to balance the Budget.
I am convinced the outgoing Government knew the recommendation of the Capital Investment Committee in relation to the abolition of the food subsidies. I am fortified in this by the speech made here—entirely out of tone, I suggest—by the outgoing Minister for Industry and Commerce on the occasion of the nomination of the Taoiseach.
One would have thought that, even on that occasion, his contribution in the debate would have been on a much higher level but, several times in the course of his short speech, he challenged the incoming Taoiseach as to what Fianna Fáil intended to do in relation to food subsidies. That indicated to me very clearly that Deputy Norton knew there was a very serious recommendation by the Capital Investment Committee when he made these challenges from this very position in this House. It was a speech entirely out of tone with the type of debate we expected on that day and it stuck out like a sore thumb to the extent that, since then, everybody is convinced that Deputy Norton knew, and well knew, the recommendation in relation to food subsidies.
Deputy Costello said—and I think everybody will agree with him—that the outgoing Government had a difficult year just before they left office. I suggest that that difficulty was largely of their own making. They made Utopian promises to the people during the 1954 General Election and at practically all the by-elections that preceded it. They deluded the people into the belief that the statements made by the members of the 1951-54 Fianna Fáil Government as to the condition of the State's finances and the balance of payments were so much poppycock and that if given the opportunity of going into Government as a Coalition or inter-Party group, or whatever they were going to form, they would prove beyond yea or nay that Fianna Fáil were only trying to adopt a hair-shirt policy in order to penalise the people for putting them out of office in the period 1948-51.
The second inter-Party Government was a very short time in office when they fully realised the rectitude of the policy Fianna Fáil preached between 1951-54. In various ways, even though it meant eating their own words in many respects, they tried to implement Fianna Fáil's policy but unfortunately their implementation of it came too late.
The 1952 Budget—which was much more heavily denounced and decried by Opposition speakers than is the present one—was practically adopted by the incoming Government in its entirety. Not one penny of the extra taxation imposed in that Budget was restored to the taxpayer and, of the amount by which the subsidies were reduced in that Budget, only 5d. was returned to the purchasing public by way of restoration of subsidy on butter. Generally speaking, that Budget which was so wrongly denounced was adopted in its entirely by the incoming Government. As well as that, having examined the facts for themselves, they accepted the statements Fianna Fáil had been making in relation to the balance of payments and the serious position into which the country would get itself if such a situation were allowed to continue.
We are told that Fianna Fáil secured office this time by making promises to the people, by telling the people that there was no question of increases in prices, that there was no question of a reduction in food subsidies. Deputy T. F. O'Higgins went to great pains to prove that it was a matter of Fianna Fáil propaganda during the general election campaign that food subsidies were not to be removed. He quoted extracts from a statement made by the Minister for Industry and Commerce some one and a half or two years ago. Far from promising that food subsidies would be retained, I think in the last election, Fianna Fáil concentrated on telling the people, so far as they could, that the position was very serious and one that would require the united effort, not only of the Government but of the people, in order to overcome it. In short, not only in the General Election but in the by-elections which preceded it, practically all of which were won overwhelmingly by Fianna Fáil, we told the people that the hay-ride was over and that the time had come when the Government and the people together had to face up to changing circumstances and realise that no longer could there be expenditure from Government sources, unless there was a corresponding increase in production to maintain the standard of expenditure and the standard of living that such expenditure was giving.
We asked the people—and I suggest if any of our election literature is available, I can be borne out—to come down to realities, but apparently before the change of Government, a strong element of the inter-Party Government were not prepared to face up to realities. They were not prepared to face up to difficulties, some of which I have already mentioned. They were not prepared to take decisions which obviously would bring further contumely on their heads. Ultimately, they left office under circumstances largely similar to those which attended the break-up of the first Coalition, trouble from within.
I suspect that if the inter-Party Government wished to remain in power such trouble as arose then through the defection of Deputy MacBride and his Party from the inter-Party Government could have been overcome. In fact, even with the defection of the three Deputies to whom I have referred, the Government, on the motion of no confidence that was put down, would have been able to remain in power, had they so desired; but, as was the case with the previous Coalition, they grasped the occasion of internal strife and dissension and left office, leaving their successors with many of the problems, which the Coalition had largely brought on their own heads, unsolved.
I think it would be unfair, and certainly far too partisan for me to suggest that the inter-Party Government, or the more responsible elements of it, on realising that there were difficulties, which to a large extent they had got themselves into and which possibly to a lesser extent world conditions had got them into, decided that remedial action should be taken. In fact, some remedial action was taken in the imposition of the special levies by which it sought to reduce the deficit on the balance of payments. These levies were admirably successful, but unfortunately, the levies were a double-edged sword because they contributed largely to the unemployment problem.
When Fianna Fáil assumed office, we had to face the problem of deciding whether the levies should be retained or abolished, and we decided that those which so far as we could see in the short time at our disposal were just and put there in the interest of the country should be allowed to remain, temporarily at any rate, and that those which could be removed without affecting the economy and with the hope of stimulating the economy should be removed.
In that connection, it was decided to remove the levy on goods which could be described as raw materials for productive enterprises, and, by doing so, the Government denied itself an income of £1.7 million in the coming year. It might have been more or less.
Also, by doing this, the Government stimulated employment and production and the question immediately arises: in the light of events, would the inter-Party Government have maintained these levies producing £1.7 million?
Deputy Costello, in his radio speech, said, I think, that the Government deliberately threw away as a means of revenue, be it revenue for ordinary revenue purposes or for capital purposes, that £1.7 million, but the possibility was there of removing these levies which were a tax on production and a limitation on employment, or of removing them and easing the budgetary problem. I doubt if, on contemplation and full examination, Deputy Costello would not have acted as the present Government has acted in that respect. It must be remarked that in imposing some of these levies, at any rate, the last Government sailed rather close to the wind——
Notice taken that 20 Deputies were not present; House counted, and 20 Deputies being present,
