When progress was reported last Thursday I think we had reached a fair measure of agreement on all sides of the House that it was necessary to provide from taxation sufficient moneys to meet our current expenditure.
Committee on Finance. - Resolution No. 5—General (Resumed).
Debate resumed on the following motion:—
That it is expedient to amend the law relating to customs and inland revenue (including excise) and to make further provisions in connection with finance.—(Minister for Finance.)
On a point of order —I thought perhaps Deputy Allen would refer to the matters he raised at the end of last Thursday's session. I do not want to take the Deputy short, but now that he is resuming the debate where he left off and has had time to consider the matter, does he still hold that what he said was true?
Surely the Chair has nothing to do with that.
Does the Deputy wish to say anything more?
I am merely giving the Deputy an opportunity, if he wishes to take it, to correct himself gracefully as his colleague did just now.
Deputy Allen must be permitted to make his statement in his own way.
Three untruths as regards Wexford County Council.
Is that so? Of course the former Minister denies the fact that managers and members of local authorities from June of last year onwards, were at their wits' end to know where they would get the moneys to finance their ordinary current expenditure because of the fact that Departments of State failed to advance either loans or grants to them——
I deny categorically what the Deputy said—that any county council had cheques dishonoured.
——and that they were told—there were circulars go leor on this point—to apply to their treasurers for overdrafts. I said that, and I said——
The Deputy said a lot of other things that are not true.
I deny that I spoke any untruths in this House. In the course of my remarks I said also that in areas in this country paying orders of local authorities were refused by their treasurers and I was questioned very severely on that. Possibly Deputy Sweetman may enlighten us when he gets up to speak about incidents that took place in that connection. I shall say no more than that, but if he wants further details I shall give them to him.
Give them to the House.
If the Deputy wants further details, he was very emphatic in denying that in the last year——
And I still am. No such paying order was dishonoured.
The Deputy was very concerned with one particular incident and he got things put right——
No such paying order was dishonoured.
——by a very sudden advance to a particular local authority from a State Department.
Name it.
That is all. Let the Deputy get up and deny it.
Deputy Allen on the Resolution.
When I was so rudely interrupted a few moments ago by the Deputy I was remarking that we had a substantial measure of agreement that it was through taxation we had to raise sufficient money to pay for ordinary current expenditure. I do not think that is denied by anyone. We had also reached agreement that last year Deputy Sweetman's Budget did not balance to a very considerable extent and that he was forced— I suppose reluctantly—to pay for current expenditure out of borrowed moneys. That brought about the chaos that existed in local authorities throughout the country when they had to reduce building activities and restrict other activities—the giving of loans and grants and everything else. Such action caused considerable unemployment.
He spent capital moneys which should have been spent in making advances to local authorities to build houses and do other works. That is what brought about the serious situation and entailed a lot of unemployment last year and in the early months of this year. It was due to Deputy Sweetman's current Budget—it did not balance and he had to borrow money to pay the salaries of the Guards and the Army and so on. That is admitted on all sides of the House. It is not denied.
But it is denied.
It is not denied, even by Deputy Sweetman.
The Deputy told me a minute ago that I was interrupting him. Now he wants to know why I am not interrupting him. He wants it both ways.
No one will mind Deputy McGilligan, or what he will deny. One day he will come to the radio on the eve of a general election and tell the State employees he is going to give them £2,000,000 if he gets in.
£2,000,000?
He will tell them also that there is £20,000,000 in the Exchequer and that if there was a good man in his job he could save it.
I want that quotation badly. Would the Deputy be asked to produce the quotation? I deny using that phrase. Surely the rule is that when a matter is denied the Deputy who asserts it must produce the quotation? Is that not the rule?
That is the rule, that the Deputy must produce it.
If the Deputy wants the proof, he probably has it in his file in his bag.
I have the real quotation here, not that one.
I am not bound to give quotations at all, good, bad or indifferent. I will not be tied down to making any quotation. The Deputy's Government——
Interruptions.
The Deputy will not get in on that trick at all.
If a Deputy makes a statement respecting another Deputy and that other Deputy denies the statement, the Deputy must either withdraw it or prove it by producing the document.
I have not the proof available to me here. I suggest——
Then the Deputy is withdrawing, is he not?
I suggest, a Cheann Comhairle, that we send for a record of Deputy McGilligan's broadcast which he made on the eve of the general election in 1954.
The House has not any machinery by which that can be done.
That is what I am referring to.
I take it the Deputy is withdrawing the statement?
I am referring to that broadcast, but for the purpose of order in the House we will let it pass.
Withdraw unreservedly.
We will get proof enough before this debate is over.
Either withdraw or verify.
When the 1952 Budget was brought in here, there was a Fianna Fáil Government in office at that time and Deputy McGilligan had a lot to say about there being £10,000,000 too much raised in that Budget. There was one thing about which we had agreement in this House last week, as a result of the debate, that there is no £10,000,000 in this Budget being raised by these moneys this year. There is no £10,000,000 too much.
About £7,000,000 this time.
There is no £10,000,000 this time.
About £7,000,000.
We will be delighted to hear the Deputy, because there is some financial wizard wanted at present.
Sure, he is in the Government.
We were looking for a wizard all last year and would have been delighted to meet him. The local authorities throughout the country were at their wits' end to pay the salaries and wages for many months in the last financial year and they would have liked to meet this financial wizard, Deputy McGilligan or anyone else available to them, who would provide them with funds. There is no doubt about that.
We fully realised that the Government which was in office here 12 months ago left the Government meetings with bleary eyes, after considering for hours and hours how finance could be made available to meet all their problems and all their commitments. They failed to do so; they turned in the end to the easy way and used up the capital moneys which had been raised for the purpose of giving employment in house building and various other interests in which local authorities were engaged, in paying grants and things like that.
We remember the nightmare there was here in this House and every member of a local authority listening to me knows the nightmares there were in all local authorities down the country last year, because of the Budget failing to balance and because of the scarcity of money. That was due to the fact that the Government were not prepared to come in here like men, in October or September or July of last year, with another supplementary budget and raise money by taxation when they knew hey had not sufficient to meet their commitments. These are all well-known facts. People have not such short memories as the Deputy may think in regard to the situation.
We agreed also here last week, a Cheann Comhairle, that the last Government left office because they could not carry on any longer. That was a well-known fact.
Because we had not a majority.
They had a majority in this House.
We had not. We lost it.
We will get whatever it is they call it that the children learn their numbers on, for Deputy Rooney, and let him count them up. We will get that. We got agreement on that.
So far we have not found agreement on anything.
The financial state of the nation was low under the direction of that Government because they failed to meet their liabilities and therefore they had to levy taxes because they could not get any agreement in what way they would raise the necessary money. It was well known for 12 months before they left office, that things were going bad and seriously bad.
We have a lot of talk about the bread and butter subsidies and their removal and the serious burden about to be put on the community at large. I will admit straight away there are sections, poorer sections of our people, in the low income sections, who will be affected. But it must be remembered—according to returns of the consumption of beer and spirits tobacco, betting, cinemas and dances and everything else—we are by no means a poor country and we are not poverty stricken, anyway. In some recent year, on what would be considered to a certain extent luxuries— desirable, if you like—we spent a total in taxes, without considering the value of the commodity itself, of £40,250,000 on beer, wine, spirits and tobacco. That was over £40,000,000 and I suppose there was another £20,000,000 in the value and the selling of those commodities. Therefore, it could be considered to be £60,000,000 which our community spent in any one financial year in recent years—on beer, wine, spirits and tobacco. They paid that for them. They paid a lot more. Some of our people, a very small section of them, I do not know what the numbers may be, are entitled to have a "flutter" an odd time if they like, laying a few bob on their fancy, whether on the racecourse or down the town, and they actually laid £17,000,000. This country which cannot afford, according to some of the Deputies over there, to pay the cost of production for butter or flour, were able to pay up to £60,000,000 for beer, wine, spirits and tobacco and they laid £17,000,000 with the "books". That is a considerable sum of money for a small country of 3,000,000 people or fewer.
They paid in cinemas and dances in 1955, according to the last available figures in the Statistical Abstract, £1,341,000 and I suppose that was about 5 per cent. of the charges, so I suppose it would amount up to £6,000,000 or £7,000,000 altogether for cinemas and dances. Therefore, the total amounts to over £80,000,000 in one normal year, which we spent on entertaining ourselves in one form or another—all legitimate and all desirable, if we can aflord it.
We turn to the other side of the picture for a moment. On a rough estimate, in a normal year, we pay about £15,000,000 for creamery butter, consumed in this country, and about £15,000,000 to £20,000,000—I cannot get the exact figure—for bread and flour. It is said that it is £20,000,000. I doubt that. Taking those figures, we pay £35,000,000 for the two staple articles of food and we spend about £80,000,000 on the other luxury or semi-luxury commodities. Is it seriously suggested, taking the country as a whole, without reference to the poor, that, when we are able to spend over £80,000,000 on these luxury commodities, we cannot spend less than half that on bread and butter? The poor are always with us. There will always be those on a low income as there always have been. We hope that will not apply always.
Where is the argument leading the Deputy?
I want to go on to argue further.
That you can put another 2d. on the loaf?
I want to go a little further and suggest that what the people will be asked to pay for bread and butter this year is the actual cost of production in our own country. If anyone on the far side of the House can suggest that there should be economies affecting those growing the wheat and producing the bread or producing the milk and manufacturing it into butter so that these commodities will cost less, it is up to him to say so. Will anybody suggest that the people, taken as a whole, are entitled to eat the bread and butter that is produced by Irish labour at less than the cost of production, while, at the same time, we are paying over £80,000,000 for luxuries? That is not the total.
There was a lot of play here by Deputy Norton and some of the Deputies on the front Opposition bench, Fine Gael Deputies, with the £250,000 the Minister proposes to give to the bakers. Over the week-end, somebody down the country suggested to me that it was far more decent to give that, when the commission, appointed by the Minister for Industry and Commerce, presided over by a most eminent Supreme Court judge, had recommended it, than to do what the former Government did. The former Government advised the master bakers to pay increases to their operatives and when the master bakers asked how they could reimburse themselves, the suggestion was that they should take a slice off the end of the loaf, make the loaf a bit smaller, that people would never feel it and would know nothing about it. That was the suggestion. It was the meanest type of suggestion that ever came from a Government Department. They dare not increase the price of the loaf by one halfpenny, but they suggested taking a slice off the end of it, that it would not matter a button, that the people could eat a bit less.
Will the slice be added now?
That is the question.
A meaner suggestion never came from a Government Department. Last year, some things happened that never happened before in this country. Children's oranges and lemonade were taxed to try to balance the Budget.
The oranges are the same price now.
Such a tax never existed before. Oranges and lemonade were taxed in order to balance the Budget.
It had nothing to do with balancing the Budget.
What price are they now?
The former Minister for Finance, 12 months ago, introduced a tax on mineral waters.
Not to balance the Budget.
I challenge the Deputy to prove it.
It was, of course.
Even with the tax on mineral waters, the Budget was not balanced. Oranges, I grant, came within the luxury category and they were taxed later on in the year in order, moryah, to get the capital moneys to build houses and to do other public works. That is what the tax on oranges was for. That did not succeed either. Not a single penny of the moneys that were got out of the special levies was to be used for any purpose except capital purposes. Considerably more than the amount the special levies produced was used for current revenue purposes last year. There is no doubt about that.
An effort was made in the last fortnight in this House to renew the campaign that was started after the 1952 Budget. Nobody knows better than the Government that left office a few months ago the damage that campaign did to this country. They led the campaign and the country reaped the whirlwind. They can start the campaign now, in the same way, if they like, start telling the people they are unable to buy the bread and butter produced in this country by the farmers and farm workers. They may get votes by that method, but I do not know. If the people are fools, they will vote for them.
They are liable to do anything after what they did the last time.
The Deputy will have to speak a bit louder; I cannot hear him. As I have said, we have reached a certain measure of agreement, with the exception of Deputy McGilligan. I am sure that in a few moments he will set out to prove that there was £8,000,000 too much in this Budget. I think he said that the Minister could do with £8,000,000 less. I hope the Deputy will be able to prove to the Minister's satisfaction that he can do with £8,000,000 less. I am sure the Minister would be very glad to have £8,000,000 to pay for some of the services that are called capital services, many of which, to my mind, should be financed out of ordinary revenue.
The £8,000,000 Deputy McGilligan has in mind is the £8,000,000 deficit in the Budget last year, which had to be met by borrowing and had to be taken out of the capital moneys that should have been available in order to create employment. There was an unemployment situation last winter and spring, a considerable amount of which is still continuing, as compared with 12 months ago, two years ago or any number of years ago, arising out of the mismanagement of the financial affairs of the country.
I think there was a substantial measure of agreement also on the fact that during their three years of office the previous Government were 95 per cent. responsible for the inflation which was created. An inflationary situation was created by putting into circulation nearly £30,000,000 more than there was in circulation when they took up office. Goods were not produced in this country to meet that figure and consequently goods had to be imported. It is on record that some £24,000,000 to £25,000,000 was spent on foreign goods. Let Deputy McGilligan deny that.
If the Deputy means the round of wages, I deny it.
Any way the Deputy likes—the subsidy on butter, the subsidy on tea, the rounds of wages or other factors the Government were responsible for. After each round of wage increases that the workers got, and their directors know it quite well, people were put out of employment. It is unfortunate but it is true.
Does the Deputy want wages cut?
That has happened down the years and the only people whose numbers were increased were those in sheltered employment and who could not be got rid of. The numbers of people engaged in industries outside the control of this House and outside the control of local authorities were reduced every time there were increases. The cost of Government services has become so high now that it is agreed on all sides of the House that, unless they can be cut seriously in the very near future, we will be unable to maintain our present standard of living—those who have a standard at all, and their numbers are getting smaller each year.
Everybody wants to see the standard of living maintained, but let everyone remember that those who are maintaining their standard of living at the present time are maintaining it at the expense of further people becoming unemployed and of further emigration. That, I think, will not be denied and the sooner we give serious thought to it, the better. The members on all sides of the House have a very serious responsibility in this matter. There is no trouble in the world in starting a campaign to tell the people that the cost of their food is too high and that the Government are responsible. That does not get the country anywhere. It drags the country down further and prevents it from making the progress that everybody wants to see it making.
The suggestions of Deputy Costello and Deputy Dillon in regard to taxation alternatives were childish in the extreme.
Has the price of oranges gone down? Why not take down the price consequent on removing the levy?
The tax on radiograms or on motor cars and some other things should not have been removed. The total bagatelle would not pay the wage of a corporal's guard.
It would pay the butter subsidy.
It is no wonder that this country got into the mess it is in because of the childish minds of the Deputies opposite. It was an unfortunate thing for the country that, even by a combination of groups, they got a majority and were able to do such an injury to the nation. I will take only the two periods of the two Coalitions, without reference to other periods in the last 30 years. They did injuries to the country in every possible way and because of their policy they put a burden on people such as will remain for the next 40 to 50 years on the backs of posterity.
They thought that they would never see the end of all the capital moneys and the external assets that were accumulated—and we were giving money to wage a war in some part of the world at 1 or a 1/2 per cent. At the same time, we were charging our own people 5 per cent, or 6 per cent. if they wanted to build houses. Was that campaign not carried out by the Fine Gael Party? On the last occasion when Fianna Fáil were in Government and had to seek a loan at 5½ per cent., we were told that our credit was so low that it was only a banana Republic that would have to pay such a rate of interest. The last Government, no matter what rate of interest they offered, got very little money and all the loans they floated were failures.
That is not true.
Unfortunately, it is true. It is no satisfaction to anyone on this side to have to say it. The higher the credit of a nation the better it is for everyone in the nation. The election of Parties to form a Government that mismanages the affairs of the nation and brings down its credit is unfortunate. That is bad for everybody in the country and it is the people who are depending on employment which is created out of public moneys who are hit first. There are many thousands of such people in this country. That has always been the position and they were hit severely in the past 12 months.
The Government who have left office were responsible for pushing up the ordinary current expenditure by £20,000,000 in three years. This Government has taken over that baby and they must find the money to meet that expenditure as best they can. Nobody on the opposite side will suggest that £8,000,000, £10,000,000 or £11,000,000 could have been raised by any alternative taxation which would not create further unemployment and prevent developments and improvements in industry and agriculture. Can any of the Deputies opposite show how those millions could have been raised this year without injuring the State or its people in a more serious way? By the removal of the subsidies on bread and butter, the people are being asked, not for patriotic reasons, to pay the price for those two staple commodities which they cost to produce from the land of this country.
That is all they are being asked to do; they are being asked to pay the full cost of commodities produced within the State. They are not imported commodities; they are not commodities on which taxes are being paid. The people are being asked to pay the full cost of production of commodities which Irish men and women are engaged in producing—bread and butter. That is all that is being asked of the people in this Budget, in connection with the food subsidies. Perhaps the Opposition Parties would prefer to continue their campaign of dragging the country into the mire as they nearly succeeded in doing in the three years just past.
The speech of Deputy Allen must be a record low even from the point of view of the man who has just delivered it. I do not know if he himself realised the theme of his speech. It appeared to me to lead to two different conclusions. The first of these was the suggestion that it was reasonable this year to take off the food subsidies and to make, as he says, the people of the country pay the full cost of production of the affected commodities, even if his argument led to the putting on of a couple of pence on the loaf of bread and a couple of pence on the pound of butter.
He had an argument about the amount being spent by certain people on amusements, on drink, on tobacco, on dancing and gambling and says: "Is it not ludicrous to say that people who pay money for those things cannot pay the full cost of production of butter, flour and bread?" He also gives the usual Fianna Fail viewpoint with regard to wages—that any favouring of increased wages to the wage earning community is a campaign that is meant to bring this country into the mire and will result, according to the Deputy, in the country being brought into the mire.
Deputy G. Boland, when Minister for Justice, said there were certain things which Fianna Fail wanted to prevent, among them increases in wages. They would have prevented such increases had they got a majority in 1948. They are now heading towards the development of the same policy and Deputy Allen, I think, represents better than any other Deputy in the House, the mind of Fianna Fail in regard to these two things.
He has an amazing knack of calling things that have been hotly disputed "agreements". He says there is agreement about the fact that there is a serious situation. I disagree entirely. He says we have reached agreement that this £9,000,000 must be raised by the methods employed by Fianna Fail. I disagree entirely. He says there is agreement that it was the fifth round of wage increases and other moneys put into circulation that led to the imbalance of payments. I disagree completely. That is demonstrably false. He says there was no other way out of the difficulties confronting the country than by saving this money by the withdrawal of the food subsidies. I suggest that as far as the present Minister is concerned, on the financial side nobody had an easier time in the presentation of the Budget.
The year 1955 was a troubled year and the measures taken in 1956, which were then described as totally inadequate to meet the critical situation that existed, have fully proved their worth. The situation in which the Minister finds himself, starting from the first day of the present year, is that the balance of payments difficulties had been completely solved and that the deficit of £14.4 million equated itself in the first three months of the year. That had the effect that on the 1st of April this year the imbalance of payments had been rectified.
The Minister also finds himself in this advantageous position. The terms of trade as between imports and exports against this country last year represented something over £7,000,000. Accordingly, if the terms of trade could be got back again to the 1955 basis-and for a time that was likely—the Minister would not only have the balance of payments corrected but would have a balance of £7,000,000 in his favour in the international account. In those circumstances it is ludicrous for a Minister to speak first of all of the amazing difficulties in which he found himself; it is worse for him to say that there is no other way, and that no other way has been pointed out to him, for getting the £9,000,000 except by the taxes on beer, tobacco, petrol and diesel oil and by the hacking of the subsidies.
First of all, the former Taoiseach, Deputy Costello, and at least four other Deputies who spoke from this side of the House, did suggest that if the Minister wanted to get his Budget balanced this year without touching the subsidies, all he had to do was to divert the revenue derived from the special import levies over to the revenue side. A great part of his £9,000,000 would have been got in that way. Let us assume he wants £9,000,000. He himself suggested it was only £8,000,000, but £9,000,000 was the figure he mentioned in his Budget statement.
If the Minister can add £5,000,000, £3,000,000 and £1,000,000, arithmetically he surely has £9,000,000. The special import levies, at the increased rates of July, 1956, would certainly have produced £5,000,000. I suggest that these levies represented good revenue taxes. It is quite true that when Deputy Sweetman, as Minister, put on these levies he did put the revenue coming from them into a special fund which he said would be devoted to capital purposes. But, in the meantime, another of Deputy Sweetman's devices had proved a success—the matter which had been characterised as putting the State up for a great raffle by trying to get money from Prize Bonds. The Prize Bonds have brought in a significant amount of money and have provided a method of saving. In the circumstances, there is not the same necessity as existed in 1956 to hand over the revenue from the special import levies to a special fund for capital purposes.
As far as this side of the House is concerned there was definite agreement that £5,000,000 could be had by these methods without touching the food subsidies. As I have said, there is no reason why these moneys should not be devoted towards meeting the ordinary expenditure of the State. They are revenue taxes as proper as any put on in any country ever. There is nothing in their character or style to take away from their being good revenue taxes.
Last year, it is true, Deputy Sweetman, as Minister, put away these moneys into a special capital fund. As I have pointed out, there are other means of getting those moneys now and, if there are not, surely the great financial wizard in the Fianna Fail Party has his efforts decried. An amount of £100,000,000 has been given by Deputy Lemass as the amount that could be produced out of current savings and taxation to be applied by the Government in power for capital development purposes. If the Minister sticks to the £5,000,000 for the import levies, as I suggested was the proper thing, he has still to get £4,000,000. He himself said he would take £3,000,000 for general over-estimation, but he gives back nearly £1.95 million as a general allowance for Supplementary Estimates.
I suggest that he should take £3,000,000 net as the amount he would get from general over-estimation after allowing for Supplementary Estimates. I say that for this reason—the phrase has often been misquoted—that the economy has ready money to hand for any Minister for Finance, if he looks to get it. It has been the record over the years that, when Government Departments are asked to put up the Estimates for a particular year, they put them up to the highest point they can think of. These Estimates are generally screened and subjected to a definite examination in the Department of Finance after that. During the time I was associated with the Government, they were screened by a committee and that committee was able to take many millions off the Estimates which came in. The Estimates this year were not screened by anybody. They were the raw material put up by the Departments in the first instance and were not subjected to any investigation because the impending general election did not permit it.
These Estimates are more definitely inflated than any Estimates have been since this State was established. They are open to more cuts. The general over-estimation has been assumed to be £3,000,000 for years. If it was £3,000,000 in regard to Estimates subjected to considerable scrutiny, there is clearly much more money to be secured in regard to this matter of over-estimation than ever before. The Minister, accepting the £3,000,000 as the usual figure for many years in respect of general over-estimation, then says that £3,750,000 has been allowed for Supplementary Estimates so that this year in which the Estimates are more inflated than ever before and subjected to less scrutiny, he allows an extra £200,000 for Supplementary Estimates.
There has been no argument given as to why that figure was adopted. There is no reason why this year the £750,000, which ordinarily stands as the amount of money that might be expected, should be increased by £200,000. I seriously suggest that the figure which should be taken for general over-estimation, after allowing for Supplementary Estimates of the £750,000 type, should be £3,000,000, plus the fruits of the special import levies which give the Minister £8,000,000. There is a sum of £1,000,000 still to be got.
The Minister has given his calculations about economies. Leaving out the food subsidies he is to get £250,000 by stopping recruitment to the Civil Service; he is to get £.08 million by stopping expansion in the Land Commission; he is to get £.07 million by putting extra charges on people who avail themselves of some matters in regard to the health services; and he is to get the magnificent sum of £100,000, by careful scrutiny of the Estimates of the Department of Defence.
According to calculations that I have made for many years, the annual wastage in the Civil Service runs about 1,200 per annum, and it has been as high as 1,500. That embraces the people who go out on pension, people who die, the womenfolk who get married and the people who resign for various reasons. By merely stopping recruitment and allowing the wastage to cause a reduction in the Civil Service, the figure that could be taken is a minimum of 1,200 and it could be as high as 1,500.
The average wage in the Civil Service is about £550 per annum and if one multiplies that £550 by the 1,200 people who might be expected to retire from the Civil Service in a year, one gets savings in remuneration alone of £636,000. If one takes 1,500 people at the £550 per annum level, there is a saving to be made of about £800,000. I am speaking, as the Minister spoke, of remuneration only. There are a variety of other things in regard to the administration of the Civil Service which cost money. I have no doubt, even if the lower figure or an intermediate figure of 1,300 is taken, that there is easily £1,000,000 to be got. I am not promoting the idea that any single civil servant should be removed from his office; I am taking a position in which the annual wastage would be availed of and that there would be either no recruiting or very little recruiting to fill the posts of those who leave.
If the Minister were to accept £5,000,000 from the special import levies, £3,000,000 as being the amount of money he could easily expect as the fruits of general over-estimation, even allowing for Supplementary Estimates in the ordinary way, he could look for the £1,000,000 as between the wastage in the Civil Service and two other items. The Department of Defence should yield more economies than the miserable £100,000. It seems to me that if the developments that were in course of operation in the Guards were allowed speedy procedure, they would easily bring in between them another £250,000. I am taking the Army and the Guards together, so that even with considerable recruitment in the Civil Service, there is bound to be savings, if wastage is availed of and economies are made in the Army and the Garda. There is an extra £1,000,000 to be had. That would give the Minister his £9,000,000 which he says he requires, without touching the food subsidies or having to put any taxes on tobacco, beer, petrol or diesel oil.
I have yet to hear any argument from any person backing the Minister as to why those plans should not be availed of, instead of disturbing the whole stability of the country by attacking the food subsidies. If one accepts the meanness of spirit of Deputy Allen, who thinks that people are too well off—that was the argument to-day—in that people could afford to spend £80,000,000 on drink, tobacco and entertainment and gambling, the food subsidies should not merely be hacked, as the Deputy's colleague is doing, but we should be able to put an extra few pence on the lb. of butter and the loaf of bread.
I want to suggest to the Minister that he will not get, as a result of withdrawing the food subsidies, the figure he puts down in his table explanatory of the Budget. He takes the gross savings on the food subsidies to be £7.1 million. Then he hands back £1.95 million by way of social assistance payments. These have been criticised as not being sufficient to make up for the hardship that will be inflicted upon people in the lower income groups by the increased prices for bread, butter and flour.
In 1952, when the Minister's colleague, the Minister for Health, decided to make certain savings in food subsidies, the gross savings he put in his table explanatory of the 1952 Budget amounted to £6,600,000. He had to give back £2,750,000 for compensatory social welfare benefits. This year, he is taking £9,000,000 in a full year; but in this part of the year, he is taking £7.1 million and giving back only £1.95 million and we may measure the hardships put on the lower income group by that as being lower—only £6? million savings and a giving back of £2,750,000. This time, he is either definitely robbing the people for whom he is pretending to provide by these payments or his figures are incorrect and are put forward here in the pretence that they have been carefully considered and that this is the exact sum.
The other matter that has to be considered is this. In 1952, when only £6? million was the gross savings on the food subsidies, State personnel went to their arbitration tribunals. The Civil Service invoked the aid of the arbitration tribunal which dealt with themselves and those whose salaries were assimilated with the Civil Service got their increases in good time. These were civil servants, Garda, the Army and the teachers. As far as my memory goes, the amount which the State had to show them per annum as a result of the cut in the food subsidies was £2,500,000. In 1955, does anybody believe that all that State personnel will remain quiet, now that the food subsidies have been removed? I hope I will not be told I am attempting to foment another campaign for the civil servants to seek a rise. Supposing they do, has any calculation been made of the amount the State will have to bear annually?
On a point of order, might I ask if the Minister and Deputy Allen will adjourn to the Party Room for their conference? They have been at it now for the past 20 minutes.
There is nothing the Chair can say to that.
It is not a point of order.
Deputy McGilligan is very pious standing there.
There is such a thing as courtesy in the House.
The Minister says that savings are £7.1 million and he gives back £1.95 million and his net savings will be £5.15 million. Supposing the State personnel have to get their remuneration and allowances raised and that it costs no less than it did in 1952, when the cost of living by the reduction in the food subsidies rose by less than what it will rise now, the price of that will be, as I have said here to-day, definite instability in the country.
All these wage tribunals will be meeting again. The Labour Court will be resorted to. People may say to us that we on this side of the House are fomenting a campaign. That campaign is already on. It is not human to expect that one group in the community should agree to bear the whole burden of this year's fantastic Budget. I want to know what the Minister and his colleagues will say when they meet the trade union people and when it is pointed out to the Minister that it was he handed away the £5,000,000 that he could have had from the special import levies and that there was £3,000,000 which it is reasonable for him to take as general over-estimation. They will point out, as I have done, that there are other economies which would bring in an extra £1,000,000 by allowing certain economies to develop in the Army and in the Garda. How can the Minister, in view of the arguments placed before him in this House, ask one group of the community to bear the impact of the abolition of these food subsidies when these statements are paraded to the Minister by these people when he meets them?
I certainly would not like to be the person to sit down and argue with that element of the people who are going to be hardest hit by the savings in the food subsidies when they see that the bakers are going to be compensated by nearly £250,000. How, if they are anxious to see that employment is taken up again in the country, is it that the amount of money in the Budget for special employment schemes is increased by little more than £20,000 over the sum handed over to the bakers as compensation to them for moneys they have lost through increased wages? One would like to listen to the Minister and his colleagues in their deliberations with these people and in asking them to bear these imposts, while, as I say, bakers are given compensation of £230,000 and employment schemes are being increased by only £250,000.
In connection with the bakers, we were told that public faith was pledged. That was one of the chief falsehoods uttered in the course of the debate. There was no public credit pledged. The real situation was described by Deputy Norton. It was pointed out that the advisory committee's recommendation that payment should be made was carried merely by the casting vote of the chairman. The chairman used two votes and the Government of the time were made fully aware of that. In other words, it was not put forward as a really important proposal and there was certainly nothing in it to indicate that public credit had been pledged. It took the casting vote of the chairman to carry the proposal that the money should be paid in this way and that the payment should be made retrospective.
Deputy Allen made a great deal of pother about the reduction in the size of the loaf. Deputy Rooney asked would Deputy Allen and his colleagues put the slice back on the loaf, would they restore the loaf to the ordinary size, in addition to these compensations that are being paid to the bakers? They would have a better fund out of which to raise the loaf to its old status, if Deputy Allen likes to put that proposal forward.
I read in the papers that the Minister for Lands said the only argument he used against transferring the revenue from the special import duties to meeting the ordinary expenses of the State—he made the statement outside this House—was that they needed these moneys for capital development. How did they need these moneys for capital development? There has been a good deal of sneering talk about financial wizards. I have here a supplement to the Irish Press of October 15th, 1955. It has a big heading, “Full Employment—Lemass's Outline of Proposals.” Half way through this supplement, the Tánaiste says:—
"There is no doubt that there is available to finance the proposed capital investment programme resources which are well in excess of the £100,000,000 which may be needed and which are at present being employed in a way which yields the minimum of national advantage."
He goes on to say:—
"There is no need to entertain the idea of negotiating foreign loans to finance it or to anticipate difficulty in completing arrangements for the transfer of these resources as required."
He emphasises:—
"that it is an essential feature of these proposals that the whole of the additional investment expenditure to be undertaken by the Government must be financed without drawing upon current savings."
He said earlier in this supplement that this £100,000,000 is not to be derived from taxation. There is the financial wizard. In 1955, he had a plan to have a vast programme of new investment. In it there is a tabular statement in which he outlines in precise detail the investment of that extra £100,000,000 over seven years and this £100,000,000 was not to be derived from current savings or by way of taxation. There is money well in excess of the £100,000,000 which will be needed and which is at present being employed to the minimum of national advantage.
In October, 1955, this financial wizard decided there was no necessity to entertain the idea of foreign loans. The Minister for Finance now comes here with a programme to get £5,000,000 by taking away the subsidies on bread, flour and butter. Furthermore, he includes in his Budget statement the information that we are going to join the International Monetary Fund and the World Bank for the purpose, in the first instance, of getting technical assistance and eventually of negotiating loans with that international organisation. The Minister for Finance has made that statement in his Budget speech of this year although the financial wizard of October, 1955, decided there was no such necessity as he said there were capital resources available well in excess of the £100,000,000 which his tabular statement showed to be required over six years.
If a sum of £100,000,000 is there and if it can be diverted from purposes which are not yielding anything but the minimum national advantage and if that money can be taken rather than from current savings or as the product of taxes, why does the Minister for Finance not do something about it when all that is required in respect of his capital fund is £2.8 million? He says somewhere in his statement—Table 4—that the money will have to be got by loans, if the people will give the money, or, if not, by going to the banks, that is, the ordinary banks here. All that was required to obviate the necessity of their taking any money from the poor people by the removal of the subsidies was to find a sum of £2.8 million. Is that such an enormous sum of money to ask the financial wizard of the 1955 plan for full employment to get this year out of the £100,000,000 which he says is available for investment and is at present employed to the minimum national advantage?
Deputy Lemass, of those days, noticed other things. He noticed, in particular, that, with this vast injection of capital into the country, there might be a possible inflationary effect coming from the programme but that that would be met by the Government by modifying import restrictions or price control measures that would impose checks. At any rate, the inflationary matter was not a danger. He had that under control, too. He was a bit worried about wages. At the end of the third page of this statement, he said:—
"The problem of determining wage rates in full employment is likely to be one of considerable difficulty, as British experience indicates."
Then here he parted a little bit from his colleague, the present Minister for Health, who, many years ago in University College, Dublin, decided that full employment could never be brought about in this country because of the tendency there would be to look for increased wages.
The Tánaiste-Deputy Lemass of October, 1955-says:—
"In a private enterprise economy, with free wage bargaining, unemployment or the fear of it is a very considerable check on the upward pressure of money wage rates."
Therefore, he said, the one difficulty in this £100,000,000 plan was that when there was not the check of unemployment about, those who were in employment might look for increased wages and that, if wages were increased as high as a particular point, it might destroy the good effects of the £100,000,000 investment plan. However, there would be no great fear of that happening when only £2.8 million is required to meet the Minister's Table 4 if he were to divert the import levies and the fruits of those import levies over to his ordinary Budget and use these to meet the expenses of the State for the year.
I suppose that, before this debate is over, the Minister will ask us: "Has the £100,000,000 plan been accepted? Will it be put into operation? Why is it being delayed?" If this is such a critical year as the Fianna Fail spokes-man says it is and if one of the great difficulties, in particular, is to find capital moneys, is this not the year to make the first fumbling step for the £100,000,000 to be put into operation to provide something less than £3,000,000 out of the resources which the Tánaiste said are there at present and are being employed to the minimum national advantage?
As well as the falsehood of which I have spoken already, the Tánaiste, speaking in this debate, found it necessary to introduce some very courageous and bold falsehoods with regard to the levies. One understands the difficult and delicate situation in which he finds himself. He knows he has been criticised outside and inside this House, together with a colleague of his in that Party. That is an amazing thing. The benefits that should have been given to people by some modification in import levies accrue mainly for the benefit of people in motor car production.
I do not believe the Tánaiste's mind was swayed by that matter at all nor even swayed by the fact that he had a colleague also in the motor car assembly business. However, the Tánaiste is very well aware that he has been subject to criticism about that. He probably felt it was necessary for him to get some protection for himself in respect of that matter. Therefore, on the 14th May, 1957, as reported in the Official Report, Volume 161, No. 9, columns 1162 onwards, he told the Dáil that the difficulties that arose in connection with motor car importation came from the fact that, when the levies were put on, the Government of the time had made a mistake. He said they put the levy on motor cars and that the levy was in breach of the agreement made in 1948. That was a complete falsehood. The Tánaiste said that the representative of the British Minister for Trade very quickly knocked on their doors and talked about the provisions of the trade agreement. All he could assume was that the levy was put on by mistake.
When he was asked if he was aware that there was a notice in his office indicating that agreement, in association with the British Government through our ambassador in London, to these particular proposals had been secured, he said he did not know if it was true that that prior discussion took place or that there was any such notice. Then, at column 1164, the Tánaiste said: "In fact, it was not done".
Deputy Norton as Minister for Industry and Commerce was in charge of this matter at the time. He interrupted the Tánaiste and, in a counter interruption, the Tánaiste asked: "Is Deputy Norton trying to assert that he had prior consultation with the British Government before putting on this levy?" and Deputy Norton replied: "Our ambassador in London had". At that point, the Tánaiste said: "As the dignity of the Irish Parliament and the Irish Government in relation to England is involved in this, I will say no more about it for the present". There have been many days since in which he could have said something more about it. He could have found out if what Deputy Norton said was correct. He could have found out if there had been discussions in London, through our ambassador, with the British Government and whether or not there had been any agreement in regard to this country.
Is it again to be asserted that any objection was taken by the British Government to the continuance of these import levies? I am not talking about the mistake the Tánaiste may have made in changing the expression from "import levies" to "customs duties" and possibly putting himself into the hands of the British in connection with the breach of agreement. I cannot understand how the Tánaiste could have forgotten the improvement we made in 1948 on the arrangement he was responsible for making ten years earlier. His arrangement of 1938 was at least bettered to meet the circumstances that occurred in 1955.
The second Article of the Agreement of July 31st, 1948, is:—
"For the purpose of safeguarding Ireland's external financial position and of achieving and maintaining stable equilibrium in its balance of payments, the Government of Ireland, as and when they may deem it expedient, will prepare lists of those goods imported from the United Kingdom to which Article 5 of the Trade Agreement signed between the Government of Ireland and the Government of the United Kingdom on the 25th April, 1938, applies and the importation of which they may desire to restrict. The Government of the United Kingdom will forthwith consider such lists and agree with the Government of Ireland as to the contents thereof. The Government of Ireland shall thereupon, notwithstanding the provisions of the aforesaid Article, be entitled to impose on the import of the goods in question such quantitative restrictions or import duties as they think fit and as may be agreed between the two Governments."
That was not in the 1938 Agreement. It was brought in in 1948. It was brought in because—let us be frank about it—in those days the British were rather particular with regard to imports of our goods. They thought they might have to preclude on the balance of payments argument. The counterbalance was put in Article 2 which was brought in as a safeguard.
It gave the right and, in full accordance with Article 2, the Government to which Deputy Sweetman belonged asked the Irish Ambassador in London to see the representatives of the British Government and get that matter agreed. That matter was agreed. Notwithstanding that, Deputy Lemass, not knowing whether what Deputy Norton said was true or not, came here with this amazing falsehood to say it was a mistake to put that levy on motor cars and to say the British representatives had made their objections to it. The only excuse he could think of for the then Government was that they did it by mistake. That was a brazen effort to mislead the Dáil. On Thursday last, Deputy Norton gave him chapter and verse for his association with that matter. Deputy Sweetman can also add to that. The ball is now with the Tánaiste and the Minister for Finance to see to it that the false statement made on the 14th May is repudiated.
Notice the delicacy of the Tánaiste. Having started, or tried to start, trouble between the two parties, he then pulls out of the argument because he says the dignity of the Irish Parliament and the Irish Government in relation to England is involved. The dignity of the present Government is involved in so far as they tried to mislead the Irish Parliament by a concoction which the Tánaiste, if he had read it through, would have known to be untrue. If he did not read it, then it is gross negligence on his part.
We have at the moment a recurrence of the campaign which led up to the Budget of 1952, stressing that the country is in a desperate position. One Minister says it is a question of national survival; a second says the national coffers are empty; while yet another Minister tells us that one does not know where money is to be had. Do not forget that this is merely repetition. In 1947, the Minister for Industry and Commerce, also the then Tánaiste, made a speech at Letter-kenny which was a preliminary to the autumn Budget of that year. He spoke in these terms:—
"If there is an idea we are facing an easy time with more pay and less work, it is very desirable to kill that idea. We are entering on four years of most acute difficulty in which economic disaster will threaten on every side. Our only weapon of defence is our capability to work hard."
That was in September, 1947. A few by-elections took place and some time after that the change of Government occurred. In the spring of next year, instead of economic disaster threatening on all sides, it was found possible to reduce a lot of the taxes imposed by the autumn Budget of 1947. No economic disaster was either present or threatening us. The country was never as happy as in the years 1948 to 1951. There was not the remotest sign of acute difficulty.
The food subsidies were not being mentioned in 1947. At that time, the food subsidies were being granted in order to keep down the cost of living. Very heavy taxes were imposed on beer, spirits, tobacco, entertainments and anything the Government could think of. We were told that, unless these taxes were kept on, the subsidies could not be paid. We were told they were in equal balance. They required the subsidies-they were all out for subsidies in those years. It was unfortunate, but they had to put taxes on beer, spirits, tobacco and everything else to get the money for the subsidies. Several years later Deputy Lemass could say-we did not know what was in their minds in 1947-that they were budgeting for a surplus, that they were doing what Deputy Allen was aiming at in his speech to-day. They wanted to take purchasing power out of the people's control because they were afraid there would be a terrific inflationary effect if wages were increased and the people were allowed to spend more.
We know about the proposals there were for a wages standstill Order-proposals we found after the people rejected Deputy Lemass and his colleagues and allowed us to get in to ransack the files in Government Buildings. We found the proposals for the standstill Order in 1947. We know that was in the minds of Fianna Fail in 1952 and we know they would like to have it in their minds and to operate it in the present year. The food subsidies were talked of during the course of the election. The first sign that came from Fianna Fáil was from their headquarters. A notice was published from the Fianna Fáil headquarters that there was a rumour being spread by canvassers that Fianna Fáil, if elected, would cut the salaries of civil servants by 10 per cent. The announcement said there was no truth in this allegation. It was very precise. It is still open to the Fianna Fail evaders to say: "That is all right. We are not going to cut them by 10 per cent. That was all we promised not to do."
The Minister for Justice, as Deputy Traynor, spoke in his own constituency during the last election. He told us that, if there had been standstill Orders on the previous occasions, such Orders were designed to protect the workers' wages at the lower level. They were actually a protection for the worker. They kept their wages from going higher, but stopped them from going any lower. That excuse was never promulgated about the cuts in the previous year, but it was given out prior to this election.
The House has heard several times— and I do not intend to worry it again —about the Taoiseach's remarks down in Belmullet. He said there had been an attempt to frighten civil servants and secondary teachers by telling them that their salaries would be reduced if Fianna Fail got back. He said they had also been told they would have to pay more for their bread. He went on to weep about bread. What had been done in 1952 was done because nothing else could be done; but it was not done completely. The reason the subsidies were not taken off completely he said was that he was so conscious of how necessary such foodstuffs as bread and butter were to the poor people and they could take it from him that these subsidies would not be removed.
Of course, the Tánaiste was more open in his condemnation of people spreading rumours. He said that all sorts of unpleasant things were being threatened if Fianna Fail became the Government—cuts in the Civil Service, unemployment, higher food prices, lower wages and more besides. He said: "A Fianna Fail Government does not intend to do any of these things" and that phrase is fastened on by the new Minister for Defence, who said that neither did they do them. It was not their intention, the Tánaiste said, to cut food subsidies. It was not their intention but, of course, new intentions had to be formed in the face of new circumstances, and that is how the decision was taken to do what they had denied they would do.
The Tánaiste said:—
"A Fianna Fail Government does not intend to do any of these things, because we do not believe in them. How definite can we make our denial of these stupid allegations? They are all falsehoods."
Even after the election, when the Taoiseach saluted the people for giving him his victory, he said that now that Fianna Fáil were in power again the new march was on, they were "getting cracking" once more, and he asked for the support of everybody. He asked for the combined effort of every section:—
"Everyone who produces more—every farmer who gets more from the soil, every manufacturer who extends his business, every worker who does better and finer work, everyone who saves and invests his savings in private enterprise, or in community projects sponsored by the State—each will contribute his share to the winning of the final victory. One great combined and sustained national effort and the task will be done."
One thing that is notably absent from all this is an appeal to the lower-paid elements of the community to eat dearer bread and dearer butter and lend their effort by accepting dearer bread and dearer butter and not look for increased wages to meet the depression in their standard of living as a result of what was proposed and brought about in the Budget.
"We ask God to give us the strength and we will have the victory."
And the victory was to be achieved by the sustained effort of everybody. The bakers got a gift of £250,000. There was a further £250,000 for extra employment emergency schemes, but £5.1 willion was to be taken from the people who could least afford it because of dearer bread, dearer flour and dearer butter.
The Taoiseach did say at an earlier stage, years before, that one of the things our people would have to do, if they wanted democracy to survive and serve the national purpose, was to make up their minds that when it came to passing judgment on politicians, they would have to be ruthless with those who lied to them and who tried to degrade the political life of this country into a Party political game. In November, 1951, at a Fianna Fail Silver Jubilee Celebration at the Imperial Hotel in Cork the people were asked to pass judgment on politicians and to be ruthless with those who lied to them and tried to degrade the political life of this country into a Party political game. And that is the man who could say afterwards:—
"Oh well, we did not do much about food subsidies in 1952 and the reason why we did not do so much was because we knew how much poor people depended on bread and butter and we tried to make the blow as light as possible."
But this year food subsidies, such of them as are left, go and that after the Taoiseach saying at Belmullet that bread was not going to be made dearer while the Tánaiste told us that these suggestions were falsehoods and these things were not intended.
Deputy Allen was reminiscing to-day about the Minister for Finance in 1952. In 1952, when some millions were taken off the food subsidies because of the level of the finances, the Minister for Finance, Deputy MacEntee, said that salaries and wages had increased more than the increase in the cost of living and there was no social or economic justification for subsidising food. Deputy Allen had a few other comments to make. He said there was no justification for subsidising food for everybody; food was something which everyone who can should be expected to work and pay for; he wanted to see an adjustment to real costs. Deputy Allen asked:—
"What have you been asked to pay, those of you who have been asked to pay, after the food subsidy has gone? Merely the price of production in this country—the price of production to our farmers and farm workers of bread, flour and butter."
Deputy Allen adds: "Why should not we ask the people to pay for their flour and their bread?" The people are spending nearly £80,000,000 according to Deputy Allen's calculations, on betting, entertainment, drink and tobacco and so it is no harm at all to ask the people to pay these costs of production for these few items. Is that not reminiscent of the 1952 argument? People were too well off, Deputy MacEntee said in so many words, in 1952; salaries and wages had increased more than the increase in the cost of living. This year Deputy Allen thinks that some part of them can spend nearly £80,000,000 on these luxuries; why, then, cannot they be asked to pay the cost of production of bread and butter?
Of course, as I said to him, the argument goes too far. If this £500,000 is not there next year for the promise, which may or may not be carried out, to the industrialists—that £500,000 could be got by putting an extra penny on the loaf and an extra penny on the lb. of butter—Deputy Allen would have the same argument next year: "People are not reducing the amount of money spent on gambling, tobacco and drink".
Deputy Allen, in another phase of his argument, is of the opinion that it was the increased wages, the fifth round increase, and other things —subventions that were given and subsidies—that caused inflation and, in particular, caused the imbalance in our international payments. The Minister for Defence is on that line too. He took the same line as Deputy Allen did to-day about the conspiracy and the campaign to get wages increased. Speaking here on 15th May at column 1291 of Volume 161 of the Official Report the Minister for Defence said:—
"Because we succeeded in lessening the effect on the people who were less well able to bear it, particularly people with large families, there should not now be any necessity for increased wage demands by workers, arising directly from the Budget at any rate. It is very regrettable that the Opposition should attempt to negative the good effect which this Budget will have by making inflammatory speeches such as they have made here attempting to incite people to take action which they know would be to the detriment of the country."
Speaking at a Fianna Fáil cumann on 20th May, the Minister for Defence said:—
"The incentives provided for industry and agriculture will also have the effect of increasing investment in both these spheres. If demands for wage increases are pressed, however, they will obviously raise costs, reduce export possibilities and also the chance of full or increased employment which would otherwise be obtainable."
It is a pity the Minister for Finance did not think of that before he brought in his Budget proposals.
There is going to be another round of wage increases. It is impossible for this country to maintain standards, low as they are, unless there are increases in wages to meet the increased cost the Budget has put upon the people. That will happen and, in the end, the Minister will be left in the position that he will have shifted from public account the £9,000,000 devoted to food subsidies, so he hopes to gain a gross £7,000,000, giving back nearly £2,000,000 to those in receipt of social welfare benefits.
In my calculation he will give back nothing less than £2,500,000 to State personnel, to the civil servants, the Gardaí, the teachers and the Defence Forces and he will be left with a miserable gain of £2,500,000, which he could easily have got through the special import levies. He will put upon those who control agriculture and industry burdens of new costs by way of increased wages and he will, too, in the end, price us out of more markets in relation to commodities produced at home and in connection with which we are able to fill the market at the moment with the price structure we have.
In the end, then, he will have dissatisfied both the people who are getting these increased social welfare payments, because they could not meet the impositions put upon them, and the State personnel, since, no matter what arbitration he gives, any award made will not meet the charges the recipients of that award will have to meet because of the increases in the price of bread, flour and butter. This will be done without taking any account of savings or of the other way of getting money that has been pointed out, using the fruits of these import levies to meet ordinary current expenses.
I find in Deputy Allen, as he spoke to-day, the mind of his Party. Deputy Allen did say here quite frankly and openly that he was against wage increases. He said the fifth round of wage increases was wrong, that that increase in 1955 had caused inflation, had caused the imbalance in our international payments. The programme operated by Fianna Fáil is an old one. It has been in their minds since 1947. It was their philosophy in 1947. It was the background of thought behind their Budget of 1952 and it is recurring here. I do not know who inspired it or where this mood came from, but it grew in 1947, grew further by 1952 and shows no signs of weakening this year. It is a dangerous and unrepentant type of fanaticism which that Party has adopted from the conservative bankers in this country. They operated the banking report in a way which they are now apparently regretting, and are promising changes in that situation in the autumn. They did what the bankers told them in 1947, in 1952 and again this year.
Last year when there was no election and when they were speaking their minds freely we got exposed to us what their view was in regard to the country's situation, and remember that this comes from people after 15 years in office. Life was standardised in such a way that in 1947 when the health legislation came to be spoken of in this House it was promulgated that there were certain people in the country who could not be expected by their own industry or by any means under their control to provide one penny piece for the medical requirements of themselves or their families. The number of people included in that category was one third of our population. After 15 years under Fianna Fáil rule the standard of life had been reduced to the point where 1,000,000 of our less than 3,000,000 population were at the stage where they could not be expected to pay one penny piece for the medical or surgical needs of themselves or their families. Now in 1957 the standard of living, low as it is, must be reduced by the impositions in relation to bread, flour and butter.
Deputy G. Boland when speaking as Minister for Justice—I have often quoted this in the House—wailed that Fianna Fáil would have prevented certain things from happening if they had only won six seats in Dublin in 1948. He said in a speech printed in the Irish Press that the Guards, the Army, Civil Servants and teachers had all secured salary increases, that no doubt local authority employees would get similar ones and that eventually all the workers in the State would get similar increases in wages to meet the increased cost of various commodities. His statement was that that was what Fianna Fáil was determined to prevent and would have prevented if they had only won six seats in Dublin in 1948. That is the line that Deputy Allen has taken to-day.
In 1945 the Minister for Health, Deputy MacEntee, went to discuss at University College, Dublin, a paper upon full employment. I have his comments made there, as reported in the Irish Times of 9th May, 1945, and I need not quote them at length. His view was that full employment was something to which he could not agree. He would be very hesitant to give an affirmative answer to what the auditor asked as to whether full employment was desirable. The reason for it was, he said, that when there is full employment there are more jobs than there are workers. Workers will look for increases in their wages. The costs of production will go up. The worker will find he is paying a bit more and he will look for a bit more in the way of increased wages and in that way the whole structure of full employment will crash to the ground.
Deputy MacEntee was against full employment. If anybody might think that was an old view, let me point out that he carried that forward to 1952, this attitude of mind that people were too well off, and that, therefore, they could stand the hacking of the subsidies in that year. The Minister for External Affairs, speaking as Deputy Aiken in the summer period last year, disapproved of the increases that were given by the Arbitration Board to the Guards, the Army, civil servants and teachers, and the fifth round of wage increases that was awarded through the Labour Court. He objected to these salary and wage increases and blamed them for the balance of payments position. He said it was because we gave the £1,000,000, which he said was not legally owing, to the civil servants in back pay that touched off the fifth round of wage increases. He wanted to stop that increase, as Deputy Allen to-day would want to stop any further wage increases and bemoaned the one that took place in 1955.
The Minister for External Affairs was joined by the Minister for Health, speaking as Deputy MacEntee last year, in a statement on certain provisions of the Budget when extra payments were given to certain people who because of the depreciation in the value of money were not getting the same amount as they were previously in receipt of. When these increases were given and the increase to the State personnel, Deputy MacEntee then said these were, to use his own phrase, "chunks of inflationary expenditure". They were moneys that had been scattered through the country to people who could not give, and were not expected to give, any better contribution to the community. Therefore, he said they should not have been given.
The Tánaiste was against these increases also. When the Tánaiste produced his plan for £100,000,000 he tried to make up for his deficiency when he forgot agriculture by coming along with a new plan. The new plan had two things in it. The first was that he intended to have a compulsory levy on people's earnings, 5 per cent. to be levied on the earnings of everybody other than people who were unemployed in order to get the savings which he had despaired of getting by way of public loans.
The second was that he wanted to get some less cumbersome machinery for the dismissal of civil servants who were unsatisfactory. I never knew there was any very cumbersome machinery for getting rid of civil servants who were unsatisfactory. The situation has been for years that civil servants hold positions at the will and pleasure of the Government. The Tánaiste wanted to create the impression that he knew there were many of these unsatisfactory civil servants and that he could reduce the cost of administration by dismissing them only for the fact that there was this cumbersome machinery in the way of such a course.
The present Minister for Lands, Fisheries, and something else, had quite a number of plans. He wanted to end food subsidies by stages; he wanted to keep salaries and wages under strict control. He talked about our foolish plan of sending out as exports only what we had over after the people had satisfied themselves by consumption of what they produced. He thought we should make certain commodities so dear that the people at home would not be able to buy them and we would then sell them on foreign markets at subsidised prices.
He spoke of the fatuousness of keeping the best for ourselves. He thought we should do, as he said Denmark does —send the best away and live on residual matter ourselves. He spoke of the plans that he had; he said he had come back from abroad and that we ourselves would have to accept what all foreign countries had accepted, as well as these plans for eating the worst ourselves and sending the best abroad. He spoke of the European measures that he found in operation on a visit he made abroad in various countries. These were measures, he said, to check inflation and he enumerated them: import restrictions, abolition of food subsidies, compulsory savings, heavily increased taxation, credit restriction, building limitation and wage freezes. He said that these—some, if not all, of them—would have to be among the measures that would have to be taken here and adopted from these foreign countries who had taken such measures —some or all of them—to check inflation in their countries.
Import restrictions, abolition of food subsidies, compulsory savings, heavily increased taxation, credit restriction, building limitation and wage freezes— which of these have Fianna Fáil not intended to put into operation? They are all part of their programme, as far as I can see, listening to Deputy Allen. These were the plans that that group of Ministers I have mentioned had—in order, they say, to get this country out of this dangerous inflationary position and to rectify the unbalance that occurred in our international payments position.
The Minister for Defence echoes phrases of Deputy Gerald Boland. He wants to prevent wage increases. He describes as a conspiracy people agreeing that workers are entitled to look for wage increases. He spoke of inflammatory speeches made with the view of simply saying to the workers that if their cost of living increased in this way they were entitled to get some compensation for it. That, according to the present Minister for Finance, and echoing back to Deputy Gerald Boland, is what Fianna Fáil intended to prevent, and would have prevented, if it had only got those six seats in Dublin in 1948. They have got them now and plans are being prepared. We see some of them in the Budget and no doubt before long we shall hear more of the seven proposals of the Minister for Lands, and other schemes brought home from the Continent as instances of what European countries had found it necessary to do in order to prevent inflation in their cases.
Deputy Allen echoes these words of the people I have quoted, in respect of the troubles of 1955. He stated it quite definitely here to-day. He is a senior politician in that Party and he said it was the fifth round of wages in 1955 that caused the inflation and caused the difficulty in the balance of payments. I have said already in regard to that both of these statements are false, and demonstrably false. If anybody asserts that inflation was caused either by wage increases, subsidies or anything else, I want to know what it is he is speaking of. There may be inflation that is price inflation, but there has been no price inflation caused by anything happening here except by the Fianna Fáil Budget of 1952. That did cause inflation because it caused prices to rise. Other prices have risen but they have risen mainly through importation. We import inflation into the country because many of the goods we have to bring into the country have had their prices increased abroad, but it is quite wrong to say, and anybody who says it is saying it in the face of the most obvious fact, that outside the 1952 Fianna Fáil Budget there has been any price inflation caused here by anything done at home.
There is another type of inflation, an inflation which means that if you have an amount of money seeking for a quantity of goods and if those goods are to be provided from outside you may have more goods of that kind and a much bigger bill for materials that are brought in from abroad. Again, I want to insist that the inflation by way of inflation of imports, cannot be ascribed to the fifth round of wage increases. If anybody denies that statement I would ask him to consider when did import inflation start? Did it start from the fifth round of wages? It did not.
The inflation by way of increased imports was on foot before the fifth round of wages had started and certainly long before it had concluded. Anybody who accepts that must then ask: what was it that caused the greater demand for imports before the fifth round of wages had been started or had concluded? There is an answer for that, but something was occurring in this country prior to that fifth round which called for more imports from abroad and caused inflation of that type. It was not the fifth round, and it could only be said that the fifth round had any effect on the moneys in circulation in the country towards the end of 1955 while inflation of imports was in full swing long before that.
Surely it will be accepted when you are speaking of inflation, that it generally means that because new purchasing power is put into certain people's hands and the quantity of goods remains steady, there will be a bigger demand and prices will rise, but that it is not inflationary, if wages are raised to meet prices that have already risen and risen outside the impact of the new money on the articles that are being sought. That is what happened here. If wages are not raised to meet increased prices that occur mainly through goods imported from abroad then there is in process an operation which is a definite deflation programme in which people are expected to put up with less purchasing power than they had before but it is wrong to describe as inflationary this mere matter of rising wages to meet new costs when new costs are not attributed to new money in circulation.
For that reason, it is completely wrong to say that there was any inflation caused by the fifth round of wages. I also assert it is nearly as wrong to say there was any great trouble caused in the balance of payments because of the fifth round of wage increases. But something caused it. I have always accepted one statement that I got from the former Minister for Finance, Deputy Sweetman, coming from the records of his Department, that it was in the year 1955 that personal savings had fallen by £30,000,000; in other words people who had saved withdrew their money from savings, or people who were wont to save refused to save in their accustomed way. The result was that there was £30,000,000 more in the people's hands because of their not saving or withdrawing from savings, more than they had in the previous year, and it was that that was responsible for the inflation, such as it was, and for the unbalance in payments. That was rectified by the measures which Deputy Sweetman, as Minister for Finance, took, backed by his own Government. They had the effect, as I said at the beginning of my speech, that the balance of payments difficulties had been completely ended at the end of the financial year we have just gone through. At the start of this financial year, the position was that balance had been achieved and, if the terms of trade ran as much in our favour as they had, not in 1955 but in 1954, there would be not merely a balance but an actual credit, an actual balance to credit, of about £7,000,000.
However, between the mistaken views which operated on the making of this Budget and the failure of the Minister for Finance to recognise the other ways of getting the moneys required, he withdrew the subsidies and we are now faced with these proposals. I accept it that the Minister knew that the £5,000,000 was there in the special import levies and that his Budget could have been balanced, by the acceptance of the fruits of these levies in that way.
I know that the reason why that programme was not accepted was this mood which the Fianna Fáil members had on themselves, that wages were causing all the difficulty, that the increase in wages was causing the increased difficulty and that it was only when the standard of living was brought down by making them bear a greater cost, by letting them make less money according to the Fianna Fáil standard, that that position would be rectified.
There has been some talk in this House with regard to the handing over of money to the bakers. There was also a certain amount of anxiety expressed in the House about a movement that is on foot—and we can see it in the process, as it has become fairly obvious in procedure in recent months—where an attempt has been made by certain large milling units to buy up smaller mills and bakeries throughout the country. We are now apparently starting on that, or at least there is apparently so much anxiety about it, that the Government have been urged to take steps to prevent such amalgamation. One Minister, asked about it, said it was not his business, that it was not in his power to do anything about it.
Deputies who were not here many years ago might be interested to look at a Prices Commission Report published in 1934, Index No. P. 1418. In those days public attention was concentrated on the performance of the great firm of Rank and Company in this country. This commission, which was established by Fianna Fáil on their first entry as a Government, reported in this way. They said:—
"In that connection, the following facts afford an eloquent commentary—"
That is, on certain points which were being urged—
"Twenty-three milling units showed an aggregate net loss on business in 1930 of over £13,000. In 1931 they showed an aggregate net profit of over £379,000 and, in 1932, the aggregate net profits earned by 24 undertakings totalled over £263,000. These results included, of course, profits from maize-milling, etc., but arose chiefly from flour-milling activities. They were, in fact, the results of a costing system based on the least economic unit in the industry."
That was the foundation of the whole milling industry in this country under Fianna Fáil in 1932. They allowed a costing system to be built up based on the least economic unit in the industry. The excuse or argument used in those days was that you had to keep the mills from going out of production and therefore you arranged a price which allowed the least economic mills to remain in production and the rest built up the profits. The report goes on to say:—
"The recent flotation of Messrs. Ranks (Ireland), Limited, is even more eloquent. Concerns previously capitalised at a lower aggregate figure were incorporated in a new company with a nominal capital of £700,000 and it was possible for the promoters to make a successful flotation on the basis of a market value of £1,452,500. Their success in disposing of the shares offered to the Irish public for a sum of, presumably, £533,750, despite the fact that effective control over the company was not transferred with such shares, must have been largely due to the following assurances contained in their prospectus——"
There follows this quotation, then from Messrs. Rank's prospectus of 1932:—
"The amount required annually to pay the dividend on the 350,000 6 per cent. Cumulative Preference Shares is £21,000; on the basis of the average profits for the last three years the dividend on the said 6 per cent. Cumulative Preference Shares is covered more than seven times, and on the same basis the amount available for dividend on the Ordinary Shares, subject to reserves, is over 38 per cent."
That was the system established by Fianna Fáil in 1932. They established a costing system based upon the least economic unit in the whole flour milling industry in this country.
Now there is anxiety expressed by certain Fianna Fáil Deputies because it is thought that Ranks are swallowing up a lot of the smaller milling units in the country. It has been suggested to the Minister that that programme ought to be impeded. It was a programme which was directly led up to by them. Even when the 1934 Commission Report indicated that the flotation of the company, floated with a nominal capital of £700,000, was far higher than the aggregate of the capital involved in the business, and that with a £700,000 nominal capital they had floated their company on a market value of £1,450,000, these people are wondering why Ranks have grown so big that they can proceed now with this new scheme of theirs of buying up a lot of the smaller milling units. It is the fruit of the 1932 programme.
In 1932, there was at least this excuse, that whatever was done was done to prevent the small milling units being bought up, being swallowed up by these giant concerns. Now, when the Minister's attention is drawn to the fact that this programme has produced this result, he says it is not his business and he certainly is not going to interfere with private property, that they can deal with it anyway they like.
I have gathered from the newspapers that Fianna Fáil have said their programme has been completely renovated. Notwithstanding that, we are told it is the same old Party and the same old programme. One of the troubles in recent years is that in the first three years during which the Coalition Government was in office, it tried to do in three years what could easily have been spread over the 15 years during which Fianna Fáil were in office. We did try to do too much in too short a space of time. We found that after 15 years the standard of existence in the country was such that 1,000,000 people could not be asked to pay a penny piece for medical or surgical needs for themselves and their families. Even that, apparently, was too high a standard. That was the standard of 1947.
In 1952, the Minister for Finance of those days thought the people were too well off, that we advanced then to a stage where we needed a good deal of productivity. Productivity was not attended to in the years when money was cheap and was available—not the £100,000,000 the Tánaiste thinks he can get elsewhere. Money was freely available and it could have been used and was not used in those days. Anything which was used was used in respect of industry, to the complete neglect and detriment of agriculture. We are now to have an agricultural programme. We are told that in this Budget there is provision for a very big improvement in agriculture. I want to know where it is. I can see a certain amount for marketing proposals. What proportion of the whole budgetary proposals is the amount newly proposed for expenditure in agriculture?
We are to give attention to agriculture and try to get exports. We will be in the position at the end of the year that the only subsidy which the taxpayer will be asked to provide will be a subsidy to sell our butter, at a loss to ourselves, in England and possibly, if the wheat yield is as good as it is thought to be, we may have wheat to sell, but we will have to subsidise it if we are going to sell it abroad.
Finally, the Tánaiste has announced that the Central Bank has come under criticism and it is thought desirable to make some improvement in the structure of the Central Bank. That is going to come from the Party who set up the structure of the Central Bank. He objected to the aims that we on this side of the House suggested. We aimed at having in this country two things— that the volume of credit in the country and its direction should be under Government or State control. We were derided and we were told that that was gripping the people's savings and they tried to make it clear to the country that, in fact, we were robbing the banks and robbing the owners of these small savings. Now, apparently, we are going to get something of that type introduced.
Meanwhile—Deputy Allen referred to this—the old situation still is allowed to remain as it has been for many, many years, the situation in which there was money, many millions of money, available for investment in this country and not directed here because the banking system was entirely wrongly orientated.
The Minister for Lands talked about the economic illiteracy that prevailed in the Dáil. We thought the majority in this House should say where people's savings were to be invested and all that time the money was being invested abroad, mainly in England, and since 1946, in England, the Bank of England has been under the control of the Government in England. It was referred to in the House of Lords debate on the 7th March of last year. One of the members of that House said:
"...in view of the close association of the whole banking system with the finance of this country, I think that the Chancellor of the Exchequer should make personal contact with the heads of the joint stock banks. I am aware, of course, that under the Bank of England Act, 1946, he has, through the Bank of England, powers of direction to the joint stock banks. The actual words in the Act, which for those noble Lords who have forgotten them I will read, are these:
‘The Bank,'——
that means, the Bank of England—
‘if they think it necessary in the public interest, may request information from and make recommendations to banks, and may, if so authorised by the Treasury, issue directions to any banker for the purpose of securing that effect is given to any such request or recommendation.'"
In this country, where people recoil in horror from the thought that banks ought to be under the control of the State, particularly in respect of the amount of credit that may be allowed in the country or the direction of that credit to worthwhile and socially-good objectives and where people recoil in horror from the thought that in this country the members of this House or the members of the Government should have any such control, we freely send our money across the water to English banks who, under the 1946 Act, are under the control of the Treasury and of the Chancellor of the Exchequer in England. For years we have been in the situation where we would rather trust the Chancellor of the Exchequer in England than trust our own people and we have allowed our funds to go over to irrigate whatever requires any irrigation in England, by way of industrial development, by our moneys, under the direction of the Treasury.
For years we pleaded that, not even so radical a move as that, but some such move should happen here which would control all credit and that the volume of credit and its direction should be under the control of the representatives of the country. That was described as robbing the people of their investments, taking away the people's savings and there was a cartoon in 1952 depicting the then Deputy Sean MacBride, Deputy Norton and myself as the burglars in the bank vaults getting after the people's savings. Now, apparently, the renovation of Fianna Fáil policy will bring something of that nature about after all the years in which these moneys could have been invested here, the 15 years that Fianna Fáil were first in office, when with the aid of a decent banking system, all this money could have been applied to development and could have been done so easily, instead of the attempt having to be made, with the difficulties that have arisen, to try to do in two or three years what was neglected in the doing for all the previous years of Fianna Fáil.
If anybody desires to quote or to listen to any quotation, or misquotation, of a broadcast that I made on the eve of the 1954 election, I shall be happy to read what I actually did say. Deputy Allen made one of the usual misquotations. He is to get the quotation and to quote it here correctly. If he wants it, I shall give it to him. If anyone wants it during the course of the debate on the Finance Bill I shall read it. It is not the folly imputed to me.
What I did say was that there were several millions to the hand of a Minister for Finance who was anxious to get them and was able to look for them and I used that phrase for the reason that over the period when I was in the Department of Finance I knew well that when the Estimates came along from Departments they were exaggerated. When these Estimates were pruned down by some sort of screening process there was still more than what the Departments could spend. I remember saying that and it being put to me as a dangerous thing to say because I was almost challenging the Departments to spend the money they put in the Estimates as being necessary for their provisions during the year. Notwithstanding that challenge, year after year, there were savings that it was easy to make in the volumes that came from the Departments.
I never said £7,000,000; I said several million pounds. I went on further to say that if the saving of £20,000,000 which was so definitely desired by the people of the country were to be made, it could only be made by cutting out some of these gigantic Government Departments which I thought were extravagantly butting into people's lives and doing at great cost what the people could do at cheaper cost for themselves. I made no promise of saving £20,000,000. I said that if the £20,000,000 were to be saved, that was the only way to do it.
I see in these Budget proposals we are getting some economies by minor efforts in regard to civil servants, nothing like what could be got by merely using the ordinary wastage in the Civil Service itself, but, in any event, somebody's mind is turning at last on the Fianna Fáil side to getting the cost of Government taken down. There will be only pettifogging little economies unless the big gigantic Departments of State are overhauled and unless the work they are doing, as I think, extravagantly and needlessly, is left to the people to do themselves, and I think that they will do it at less administrative cost and in the end more cheaply.
In the end, when there comes to be a tussle, as there will be a tussle finally in this House, when things get really bad—and they are not bad now—this country will have to face up to whether all these extravagant proposals by way of Welfare State proposals are within the means of the country and whether, on the whole, it would not be better to have a proper wages policy and to allow wages to rise to meet the cost of living, to go in for a proper wages policy and then, given proper wages, ask the people to meet their own medical necessities, to meet all these other things that we are trying to give to them at very great cost to the State and in an extravagantly administrative way.
I believe that in England the mood is now changed and they are getting away from all these vast accumulations of benefits that they pretend to give free and without charge to the people and they are getting back to the better idea of letting people control their own lives and make their own future, giving them decent wages and letting them operate for themselves. It is a policy that we shall, of course, eventually follow and might have adopted seeing that the new policy is a bit better than the present one.
My remarks will be very brief. I have been listening to this debate for the past few weeks and have been amazed at the absence of speakers on the Fianna Fáil Benches. I admire them because this is a Budget with which the back-benchers of the Fianna Fáil Party are not in full agreement and for which they cannot make any sort of defence down the country. As a county councillor, I know that this Budget will cost every county council a very big increase for hospitals, mental homes, and so on and that councils may have to bring in supplementary estimates in order to meet these charges.
To be quite clear and honest, this Budget appears to me to be a rich man's Budget. It is a Budget which really affects only the poor people. Let us take bread, and only bread. We all know that bread is the main diet of the poor man. He cannot afford to have rashers and eggs in the morning; it is bread and butter that he has for his breakfast. Whether we like the fact or not, 80 per cent. of our agricultural labourers have meat only once or twice a week—bread, potatoes and butter are their staple diet. With the increase on bread and the increase on butter, Fianna Fáil have let down the people who actually support them. The vast majority of these people support Fianna Fáil. I have no hesitation in saying that some of them will support them again because we know that, in 1952, Fianna Fáil did exactly the same as they now have done, but there is an old saying: "Fool me once, shame on you; fool me twice, shame on me." It is possible that in time the working people of this country will realise that any statements made from Fianna Fáil platforms during elections are statements which will not be carried out.
One other point I want to make is that we shall have demands all over the country on behalf of the organised workers to meet the increases in food prices. There is, however, a vast body of people who are not organised. The agricultural labourer and the small farmer have no vast organisation to press for increases for them to meet increased food prices. I do not know whether the Agricultural Wages Board will grant an increase to agricultural labourers, but I hope they do. The small farmer has nobody to fight for increases for him. His ten stone bag of flour has been increased from 40/to 70/–. That is a vast increase for the average small working farmer who has nobody to fight his cause. No great service is given to him by way of pension or anything else. A great number of our small farmers are put in the middle-income group and if a small farmer has occasion to go into hospital to-day, he will have to pay roughly 10/– a day compared with 6/– a day during the past three years. Before we ever had a Health Act, a small farmer or worker could go into hospital and get a bed in a private ward for £3 to £3 10s. To-day, he has to pay £3 10s. for a bed in a public ward, and this under a new Health Act.
When this Government was formed, I was surprised to see that Fianna Fáil's previous Minister for Health was now Minister for Finance. I wondered if he would now put into operation all the recommendations which he made when he brought in the Health Act because I believe we never had to pay as much for hospital services in North Tipperary as we had to pay even before this increase came. It is all right for the Minister to say that he has instructed county managers or local authorities not to press for the increased hospital charges. We all know that once an order comes out, every county manager will press for this increased fee. Even the occupants of labourers' cottages, who now come within the middle-income group classification, will be asked to pay the increase.
Another point is that while there has been an increase in the price of a pint of stout or a bottle of stout, there has been no corresponding increase in the price of spirits. Whether we like it or not, we must admit that the pint of stout and the bottle of stout is the poor man's drink. I am told that often in Dublin it provides a lunch for a docker, along with a sandwich of bread and butter. I think this increase on stout will do a vast amount of damage to our malting barley trade.
Some years ago, when a pint of stout was only 10d., every barrel of barley sold in North Tipperary for 84/–. Some years ago, when the price of a pint of stout was 1/2 and the price of a bottle of stout was 7d. or 8d., the price of barley came down to £3 3s. because of the low consumption. With this extra 1d. and, in some places 2d., barley contracts will be reduced throughout the barley area. In North Tipperary, barley contracts have been reduced by from 18 to 30 per cent. The maltsters maintained that they had not sufficient sale for their malt and that they were not able to give contracts to those who grow barley. This increase is going to reduce the contracts still further.
Some speakers on the opposite side stated that this country was in a very poor financial state. I wonder how it is that it is always when Fianna Fáil come back into office that the country is on the verge of bankruptcy, that there is nothing in the cupboard, that we have pledged our credit abroad and that everything had been done to bring the country down? In their hearts, they know that the country is as sound now as it was for the past 15 years, but we are not honest in our politics. I believe that the day of love of country is gone and in its place we have got love of Party.
We should all throw our weight behind any honest Government which will tell the country where it stands and the best means of getting it out of its difficulties. We have people making promises from platforms about what they will do if they get back into office, about how they will give employment and look after the standard of living and then, within three weeks, the same people actually make a saving of £6,000,000 or £7,000,000 at the expense of the very people least able to afford it.
Various speakers from the Government side have said the money had to be got somehow. My belief is that the deficit could have been made up in some way other than by attacking the poorer sections of the community. We are told there was a sum of £140,000 given back by way of remission of stamp duty and by way of remission of taxation on racing. What about the house in the Phoenix Park and the embassies in Europe? We are to pay £1,000,000 for a new airport runway which the experts say will be a complete loss because jet aircraft will by-pass it. Restrictions on the import of certain types of motor cars, television and radio sets were relaxed. If the Government were sincere in saying this country was in serious difficulties economically, why did they begin by relaxing the import restrictions on these luxury goods? Had they decided to retain these restrictions, they might be able to convince the people of their sincerity. Even if these import restrictions brought in only £1,750,000, does their abolition not mean that the Government are not honest in their statements?
I do not want to be personal, but I believe the brain behind this Budget is that of the Taoiseach. I do not say that by way of a personal attack on a man for whom I have a great regard. However, I do believe that when the Taoiseach makes up his mind to do something, he will stick at it until he carries it out. I say that, having studied his career during the years. The Taoiseach got it into his head in 1952 that the people were spending too much. He then brought in a Budget that the people rejected. Now he has got from the people a stronger majority than he ever before enjoyed on the strength of promises that he would bring prosperity to the people's doors overnight.
Throughout the country, I saw Fianna Fáil slogans which said: "Housewives, get your husbands out to work; get cracking". Mind you, these slogans fooled a lot of people. They were meant to bemuddle and puzzle the poor unintelligent people in some places. In certain places, the people did fall for that propaganda. The Taoiseach, I think, set his mind on this in 1952. When he got his great overall majority in 1957, he said: "Now is my time to carry out the ideas I tried in 1952". If there was another election this year or next year, I do not believe Fianna Fáil would get the majority they now enjoy in the House because they definitely got in on false promises. I think the Taoiseach is honest now, however. Recently in Clare he made the statement that rugby football was the natural game——
This has no relevancy to the Financial Resolutions.
No, but I want to finish the argument I set out to make. I do not think it matters which game a man plays, whether it be rugby, soccer, gaelic or any other game. The point is that it is only now the Taoiseach divulges the belief which he must have had since 1913. Was it the safe position brought about by the big majority in the House that prompted the Taoiseach to divulge that secret of his in 1957? Because of his precarious position in the House in recent years, he may have been afraid to divulge this belief earlier.
I invite any Deputy from the opposite side to come down to Thurles, Nenagh, Borrisokane or anywhere else in County Tipperary and publicly defend this Budget. I invite them to get up on platforms in these places and tell the people why bread, butter, flour, tobacco and beer were increased in price. Deputy Fanning interrupted me——
I certainly did not interrupt the Deputy.
I thought it was the Deputy who interrupted. Perhaps I was expecting an interruption from him.
Perhaps the Deputy wanted to thank us for having helped him to get here.
There is no answer to the contention that this is a dishonest Budget, one which will directly hit the poorer sections of our community. It was well planned. The Government think you can take 15/– a week from the people this year, give them back 4/– of it in a couple of years' time and make them believe they are getting something. They are not far wrong in that because people tend to forget these things, but it will take a long time for some people to forget the effects of this Budget which has come as a shock to the vast majority of the people who know that the wealthier classes have been let off scot-free, while the ordinary worker and small farmer must bear the brunt.
The main argument in this debate has developed around the abolition of the food subsidies. Many Opposition Deputies suggested that the Government had no mandate from the people for their removal. That brings us to the question as to what mandate the Government got from the people. This country has been faced for quite a time, and is still faced, with a very serious crisis, the terrible twin problems of high unemployment and high emigration, the general falling-off in production, the dwindling of our external assets and reserves to a dangerous level and the all-round scarcity of money for any worthwhile new development and, indeed, for existing projects. These all add up to a very serious situation.
Apparently our people have been losing the urge for and the desire to save. They have been suffering from the terrible consequences of the doctrine preached by the Coalition Parties, of better times for all and a lower cost of living, without having to make any sacrifice or any great effort to achieve this very desirable state of affairs. In fact, an atmosphere of despair was settling upon the people. That was the atmosphere in which the general election was held.
Nationally speaking, the people recognised that things were in a very bad way, that the country was heading for disaster, that it would take a good strong Government to pull the country out of the terrible situation in which it was floundering and to start the fortunes of the nation on the upward curve. That explains the result of the election. That is why we are here in such numbers and why we have such a big majority. That is the mandate we got, namely, to take this country out of the danger it was in and to save it from economic chaos and disaster.
The Deputy's argument would be true if his Party had told the people beforehand how it proposed to take the country out of danger.
How could we tell them when we did not know where we stood?
From Iris Oifigiúil.
Deputy Costello did not tell them that. All he promised to do was to do his best.
The leopard does not change his spots.
You had a £6,000,000 deficit and you never told them about it.
The abolition of the food subsidies is an essential part of the financial policy enshrined in the Budget, a balanced Budget, and without their abolition it would have been impossible to have the financial foundation to carry out the broad, plain and unmistakable mandate we got from the people.
12,000 extra votes.
If, in ten years' time, the people were to exercise, as Deputy Dillon would suggest, their prerogative to go wrong again, and if, as a result, the Coalition Parties were able to form another Government, they would not put back the food subsidies. If any Deputy were so unkind as to remind them of all they said in this debate about their abolition, they would sit tight and leave them off because in the meantime, it would have been proved that the course that has been taken in this Budget of removing the subsidies was the right course to take and proved to have been the right policy. They would adopt the same attitude as they adopted when they came back after the 1952 Budget. They would do nothing about it, but leave the matter as it was. When they brought in their own Budget in 1955, it was almost a repetition of the Fianna Fáil 1952 Budget——
The £2,000,000 subsidy.
When these subsidies were first introduced, they were brought in as a very temporary measure—an emergency measure, if you like. I doubt that even then it was a wise course to take. There are many Deputies in the Opposition benches now who were very emphatic in their opposition to those subsidies. It is strange that they now appear almost to weep over their abolition. After reading the reports of what some of the Deputies on the Opposition benches at that time said against food subsidies, one must be pardoned for doubting their sincerity when they appear to be broken with grief over their abolition now.
Surely it cannot be held that it is good policy to continue helping the wealthier sections of the community to pay for their bread and butter. Surely it is not good policy to help anyone to pay for his bread and butter who is able himself to buy it. Does that not mean that such a person is getting and accepting a dole from the State? Surely it is more equitable to help the weaker sections of the community to pay for these commodities by sub-venting their incomes as much as possible. Is not that what the Minister has done in this Budget? Surely it was high time to call a halt to the spending of over £9,000,000 indiscriminately in doles on subsidies, particularly when we were so hard put to find between £8,000,000 and £9,000,000 to balance the Budget.
That brings us to the point which the Opposition Deputies have been dodging all along, the issue they have been running away from. Not one of them made a sound, serious suggestion as to how that £8,000,000 or £9,000,000 could be found.
Deputy J. A. Costello did.
They made tuppence-halfpenny suggestions — suggestions which, if carried out, would mean no material progress towards balancing the Budget but which would create more unemployment, or astronomical unemployment, as Deputy Dr. Browne said.
Deputy Norton assumed the role of a prophet towards the end of the general election campaign. He prophesied that Fianna Fáil would abolish the food subsidies. He omitted to tell the people that he was one of the privileged few who had got and read the report of the Advisory Committee which contained clear, reasonable, and well founded advice to abolish the food subsidies. Having read and studied the report apparently the impact on his mind of that report, and especially its reference to the abolition of food subsidies, was so great that he became prophetic and prophesied that Fianna Fáil would abolish them, if they came into power. He knew in his heart and soul that this was the only course a strong Government could take or would take in the circumstances, but he knew he would not be asked to take it and that he would not have the responsibility for taking it. He knew that someone would have to be hurt, but he came along when the deed was done, taking off his coat and shouting: "Show me the fellow who hit you." He was obsessed with his idea that the food subsidies would be removed and he knew it was certain that Fianna Fáil would be returned to power and that very probably a strong Fianna Fáil Government would be returned to power. He was conversant with the advice given in that report, but he did not say that.
Was it not equally clear to the Taoiseach and the Tánaiste?
That was a bit of shadow boxing by Deputy Norton. The country have summed him up.
He asked for an undertaking that the food subsidies would not be abolished.
Deputy Dillon mourns the fate of the ten-acre farmer who will have to give another 30/– for his sack of flour. Deputy Dillon, with all his knowledge of the farmers and of agriculture, forgot to say, or omitted to say, that the ten-acre farmer could have a half-acre of wheat and if he kept most of that crop—he would not have to keep it all—he would have ample to provide for himself and his family. If he did that, he would have to buy very little flour. Deputy Dillon may rest assured that the ten-acre farmer and the farmers generally, will accept and make whatever sacrifice is demanded of them in this crisis in the nation's interests. He may rest assured that they will show the same spirit now as they did during the economic war when they were called upon to make much greater sacrifices.
That is what we are paying for now.
They showed that spirit then and they refused to be stampeded into surrendering to the British.
What are the British doing now?
I believe that the Irish people as a whole will show the same spirit now.
Is this a British Budget, too?
I believe that the people on the Opposition Benches who think that the people will break now, as they expected them to break 22 years ago under pressure from the British, will be surprised. I believe the Irish people will show the same spirit now as they did then and I hope and believe that no section of our people will accept an invitation, from any quarter, to sabotage the great effort that has been so courageously started by the Minister for Finance in this Budget to save the country from economic chaos and disaster.
May I ask the Deputy a question? Did he at any time during the general election say that he would abolish the food subsidies?
The longer I have listened to the Budget debate, the more I am impressed by the words in Charles Dickens's work, A Tale of Two Cities: “It was the best of times; it was the worst of times. It was the season of darkness; it was the winter of despair.” It was the best of times and it was the winter of despair, so far as I can see, for the people of this country.
Better times.
Of all the proposals which have come before this Parliament since I became a member of it, there is none that shocked our people more than the recent Budget. We have statements made by Ministers up and down the country that people are living too well and eating too much. We would like to know from the Minister has the time come in this country when some body is to be set up to control our appetites and arrange our standards of living in this welfare State. Let me examine the position as I find it. In order to protect our standards of living and to rectify the balance of payments problem which appeared last year, the inter-Party Government instituted the necessary precautions, but they said that under no circumstances would they impose undue hardship on our people. They considered that the only way to do this was to impose certain levies.
To reduce consumption and put them out of work.
Those levies were imposed on cars, radios, television sets and cosmetics, and they brought in approximately £6,000,000. Those levies were causing no undue hardship on anybody. They were approved by practically every Party in this House and the only thing which Fianna Fáil did not agree with at that time was that the levies did not go far enough. Do they agree to that now, or are they objecting to it?
I do not think we said that exactly.
It was said. Read what Deputy Lemass said.
We did not say that.
You said it was inadequate.
Order!
I was merely replying to the Deputy who asked the question.
If the Deputy gives way to the Minister, it is all right.
The Deputy asked me to speak. He asked me to answer the question.
The Deputy has given way.
We may have said at some time that the Minister might not have gone far enough in his measures. We did not say he did not go far enough in his levies.
Would the Minister read what Deputy MacEntee and Deputy Lemass said in July last?
My impression is different from that.
Butter has been increased to 4/4 a lb.; bread has risen from 9d. to 1/1; the sack of flour has gone up from 40/– to 72/–. The price of cigarettes and tobacco has increased and also the price of the poor man's pint.
Many other increases will follow as a result of this Budget. Just consider what these increases will mean to the people in the country. Take the poor man. Take the small farmer. How will they meet this situation? What will the increases mean in our institutions, in our county hospitals, in our county homes, in our sanatoria? The result will be a further increase in the rates. Did the Minister or the Government foresee this dreadful imposition which has fallen on our people as a result of this Budget?
I welcomed Deputy Egan's courage in getting up here and speaking when so many members of his Party failed to contribute to the debate. He reminded me of a saying which we sometimes hear in this House, that is, of whistling when passing the graveyard.
"The boy stood on the burning deck."
Get a new record.
If the Fianna Fáil Party had a new record they would have played it before now. Apparently they have not and, therefore, they have been silent. There are some features of this Budget which I should like explained in more detail. A sum of £250,000 will be spent on the development of markets. In what sphere will that money be spent? The removal of the butter subsidy and the consequent increase of 7d. per lb. in the price will naturally mean that we shall have a greater surplus of butter than was originally anticipated. It must be admitted that, in order to enable us to compete with other countries, it will be necessary to subsidise our butter exports at the rate of 1/8 per lb. Is the £250,000 to be spent in that direction?
The Minister has also suggested that he intends to curtail the Civil Service which is costing us about £17,000,000. I have always found civil servants very competent, as is the case, I am sure, with every other Deputy, and I have no reflection to cast on them. Nevertheless, we feel the Civil Service is costing the nation too much, and, for that reason, I welcome the Minister's statement.
A sum of £160,000,000 is being spent on the services of 2,750,000 people. It is a ridiculous sum of money for such a small community. Surely it is about time some reductions were effected in that direction? The Minister and the Government should do something to ease the unemployment situation. A recipient of unemployment benefit is entitled to £3 1s. per week. I suggest that, by the expenditure of an additional £2 or £2 5s. per person, we could put such persons into productive work. It seems ridiculous that so many people are in receipt of £3 1s. per week while they are idle when so many of them would prefer to earn that money. The Minister should make some suggestion or recommendation in the very near future as to putting those people in employment.
Mention has been made of the Health Act and the Minister has recommended economies. The present Minister is the man who introduced that Health Act, in the first instance. I should love to hear him say he is considering scrapping that Health Act altogether because it is a dreadful burden on every county council in the country and the people whom it was intended to help find it more of a hindrance and a worry to them than anything else. The Minister should suggest to his colleague, the Minister for Health, the abolition of the present Health Act and the introduction of a new one.
In the course of the past week I met some people who were discussing the Budget. They pointed out to me that one effect of it is to increase the cost of living by £1 per week for a family of six. Surely that is a very heavy imposition? I wonder whether the Minister and the Government realised that such unpleasant consequences would follow from the disastrous increases? We know what happened in 1953 as a result of the 1952 Budget. I recommend the Government to go back to the country and receive from the people the same fate they received in 1953.
I shall try to be as realistic as possible and to dwell solely on what I believe the repercussions of this Budget will be on our community. In his introductory speech, the Minister paved the way in regard to the contemplated impositions. While drastic measures may require drastic remedies, I cannot for one moment believe that our country is in a worse position now than it was 12 months ago when the then Minister for Finance, without removing the subsidies or imposing extra burdens, brought about undoubted improvements whose benefits could be seen and felt in the course of the past financial year.
I know very well that the framing of a Budget is not the sole responsibility of a Minister for Finance. That responsibility rests on the Cabinet. They consider the problems which confront them and, by pooling their information, ideas and conclusions, finally arrive at a certain decision. The solution of these problems should, above all, be brought about with the least possible imposition on the people.
I hope the Minister will not take it ill of me when I say I honestly believe that neither much time nor much thought was given to the framing of this Budget and that the attitude was: "We have £8,000,000 odd here by way of subsidies. We will remove those subsidies—and to hell with the consequences." I will not refer to the statements made from public platforms by the now Ministers and the Deputies sitting behind them. If the people were gullible enough to be taken in by those statements and if they were lured to vote for Fianna Fáil by those statements——
What statements?
I can tell you this, my friend——
They are all falsehoods.
The Deputy should address his remarks to the Chair.
——I do not know your name. The Dáil will be dissolved before I know half of you over there. If the people were gullible enough to be led astray by statements made from Fianna Fáil platforms, they now have plenty of time to ponder the error of their ways. Every time they sit down at their kitchen tables and see the loaf of bread in front of them, they must realise the extra amount placed on the loaf by their vote. While the price of bread might fall lightly on a certain very small section of our people every member of the House must admit it will fall heavily, and very heavily, on the middle and lower income groups, who form the great majority of our people.
Think of the man on a small salary, of the working man earning his weekly wage, of the old age pensioner, of the unfortunate drawing £1 disability benefit, of those who do not yet qualify for an old age pension and are solely dependent on the good graces of the home assistance officer who can give them, at most, only 10/– a week. Think of the unemployed we have, of those who walked up to this gate only last week. If this Budget was meant to restore stability to the country and if stability can be brought back only by the privations which the Budget has inflicted on these people, then all I can say is God help Ireland.
Amen.
Let us come to the question of butter. Bread and butter go hand in hand. While we cannot do without bread, there are substitutes, or supposed substitutes, for butter. They have been and are being availed of. They have to be. To-day, with huge stocks of butter in cold storage, we are facing the greatest butter production year we ever had. We cannot sell what we have in cold storage. If we could, it would not be there. Then we have the new crop coming in on top of it. When it could not be sold at the old price, how will it be sold at the increased price? What will be the result? Is it not plain that, if the butter is to be sold, it must be sold at a reduced price? A reduced price for butter means a reduced price for milk. It is well known that the dairy farmers have increased their herds over the years. With a reduced price for milk, those herds will be reduced again. That means a reduced population of young cattle, and if our young cattle population is reduced, it means a reduction in the revenue of our number one industry in this country—the export of our cattle.
I am merely giving my views honestly to the House. I can see the writing on the wall, so far as the dairying industry is concerned. In spite of that, this House has been asking the farmers to work harder and produce more. Surely we do not believe for one moment that the farmers should turn themselves into the nation's philanthropists? Surely we do not expect that, at our bidding, they will plough and sow and dig and mow, for no purpose other than to feed the people of this country? If we want them to do that, surely we should give them some encouragement by way of decent prices for the goods they produce? If we give them that, it will encourage them to produce more and still more. Not alone that, but it will be an encouragement to their families to stay on the land with them. In that way, we will be helping to stem the flight from the land.
I am not taking up a political attitude. For the sake of the country, I hope that the predictions I have made here will never come to pass. We have the increased tax on petrol. There are very many who would not mind if petrol were 20/– a gallon. Those people are forgetful of the fact that petrol plays a big part in the life of the country. I cannot understand how this extra price could be put on petrol at a time of year when we are paying thousands of pounds to foster the tourist industry. It is supposed to be our second best industry. Surely there is no member of the House listening to me but must admit that 6d. a gallon extra on petrol, more than in England or Northern Ireland, must affect the tourist industry for the coming season? At the same time, we are throwing away thousands to develop that industry.
That poor man's pint! I remember sitting over there this time last year listening to abuse hurled across the floor at us because of the poor man's pint, not because we had put any increase on it but because we had not taken off the increase put on by a former Minister for Finance in 1952. Now we come to 1957 and it has taken a Fianna Fáil Minister for Finance once again to add still another 1d. to the pint. The rich man may have his champagne, his whiskey and so on, but we must always bear in mind that the pint is the poor man's beverage and, so long as he earns the price of it, he is as much entitled to that pint as the rich man is entitled to his champagne and his whiskey. That imposition was cruel. It was harsh. It was bad enough to increase the price of bread and butter but increasing the price of the pint is altogether outrageous. I hope the predictions I have made here will not come to pass, for the sake of the country, but I warn the House that there is a possibility of their coming to pass. We can only wait and see.
This Budget has been debated fully here for some eight or nine days and it is somewhat difficult to speak at this stage without the risk of repetition. However, I would be accused of a grievous sin of omission by my constituents in East Cork, by those who supported what is now the Opposition and by many also who supported what is now the Government, if I did not express their abhorrence at the action perpetrated by the Minister for Finance in the Budget he introduced some three weeks ago.
While there is some element of disadvantage in speaking three weeks after the introduction of the Budget when so many have said practically all that has to be said, there is too an element of advantage in intervening at this late hour. In the period that has elapsed since we have had an opportunity of seeing the effects of the budgetary impositions and hearing the people's views thereon. I want to put briefly before the House some of the criticisms I have heard.
I own a grocery, provision and bar in a provincial town. It is not a very big business and it is not a very small business either. I have had an opportunity in that business of observing what is happening and listening to the people's comments. To say they were shocked is to put it mildly. It is my belief that the housewives now have become indifferent in the matter of balancing their own budget and, if the present trend continues, I am afraid their morale will break. I have also noticed that the sale of butter has decreased over the past three weeks by anything from 35 per cent. to 50 per cent. and the sale of margarine has increased correspondingly. Is all the money that we have invested in the improvement of health and the improvement of our institutions here now to be negatived because of our putting that important essential, butter, out of the reach of so many of our people? That is an aspect that the Minister for Finance and his Government should seriously consider.
People are asking if the Minister for Finance had anything at all to say in the framing of this Budget. I believe that this Budget could truly be described as a Civil Service special. I am sure what really happened was that the Minister's financial advisers kept dangling this £9,000,000 deficit before his nose until he finally took the plunge and abolished the food subsidies.
I would remind the Deputy that the Minister is responsible for the Budget and not any civil servants, or combination of civil servants, or any Department of State.
It would appear then that the Minister wielded his 78-member Party and his big majority like a shillelagh, struck out at every source of income within his reach and left us with the terrible impositions that we now have to bear. Consider the position of the unemployed man, the unemployed man who was holding on for the next spectacular recovery plan promised by Fianna Fáil. He thought he would get a new start in life and he finds instead that he has to pay an extra 7d. on the pound of butter and an extra 4d. on the loaf of bread. Apparently the Minister and his Government think that an unemployed man and his family can exist, or subsist, on one loaf of bread and one lb. of butter in the week because the compensatory allowance was an extra 1/– per week for that unemployed man.
Those who are successful enough to own a motor car are under orders as a result of this Budget to leave the car rust in the garage because of the extra 6d. per gallon on the price of petrol. National policy seems to be: take the bus, scrap the car, denude the Road Fund and create still further unemployment.
There was one statement in the Budget that might be interpreted in its favour. That was the Minister's reference to the radical changes he intends to make in the Civil Service. He said we had 32,000 civil servants costing us £17,000,000. That statement was received generally as something that might be regarded as an earnest. How inconsistent it appears when twice since that statement was made in this House advertisements have appeared in the daily papers for the recruitment of still more civil servants. It is no wonder the people are growing a little uneasy about the burden of government.
I notice Deputy Corry is not here to-day. I had the doubtful pleasure of listening to him here about three weeks ago. He was one of the Fianna Fáil Deputies who had sufficient neck to come in here and try to defend this Budget. But he accused his own Minister in relation to the Civil Service. He told the House there were worse things in store and that next year's Budget would be worse still. I wonder has Deputy Corry forgotten the promises he made to the people of East Cork when he told them on different occasions during the election campaign that there was a brighter future in store, that the price of wheat would go up, the price of milk would go up and the price of beet would go up. I have a copy of an advertisement here which appeared in last Saturday's Cork Examiner: “Fianna Fáil Victory Dance at Dungourney Hall on Sunday, June 2nd, Chris Moloney and his Band, Dancing 9.30-2.30, Celebrate the victory with Senator Liam Ahern and Mr. M. J. Corry, T.D., who will definitely attend. We are going ahead—Will you come with us?”
I wish to make reference to that advertisement, first of all, in connection with the statement: "Celebrate the Victory with Senator Liam Ahern and Mr. M. J. Corry, T.D., who will definitely attend.""Definitely" is not a word that is very often used in that context I presume it is put in there for one or other of two reasons. It may be that the people of East Cork thought or knew that Deputy Corry was not used to doing the things he told the people he would do, and it may be put in to encourage them to come, that he was definitely coming. It may be used for another purpose, that, because the people, ever since the election, have got such a feeding up of the Fianna Fáil Party and this Government, the Fianna Fáil hierarchy running this dance thought that the crowd would be small and they had to use the word "definitely".
In any case, it concludes by saying: "We are going ahead—will you come with us?" We are going ahead and the people of the country know we are going ahead. I suggest that the Minister for Finance and the Government have put us ahead not only on the rugged path but on the rocky road. They have brought us to the verge of the cliff, the decline of which is so precipitous that if the Minister and the Government do not take stock, it may soon be too late to cry halt, much less turn around and climb back again.
I have already said it appears to me that this Budget was conceived without any serious thought. The Fianna Fáil Party, as Deputy Murphy pointed out, seem to be annoyed because we on this side of the House give views which the people expect us to give. I remember over the past two years that certain Deputies now on the Government side, never lost an opportunity of bringing in quotations, speaking here on all debates and even asking questions in an antagonistic and provoking way of the then Government. I refer to Deputy Neal Blaney, the Minister for Posts and Telegraphs, and Deputy Michael Davern who talked so much about the poor man's pint.
Fianna Fáil think we should now give them this Budget, that we should recommend it to the people. I say that any Party which takes credit for the rain must not be at all surprised if their opponents blame them for the drought. In regard to the overall position, I have been searching my mind over the past two years as to what has brought this country to such a state that the people are so over-burdened and discontented, and I have sincerely come to this conclusion, that there has been an infinity of political errors, which, being once adopted, become principles and unfortunately in many cases become law.
I do not wish to delay the House any further, but with your permission, Sir, before I sit down, I would make a reference to something I said when I came into this House two and a half years ago. I make it under the heading of economy. In this case, it would be an economy of words and money. I sat here three days last week and for a good part of to-day. I have listened to Deputies speaking at length, and it is no wonder that the Press and the public comment sometimes on the few Deputies who take an interest in the debates. When a person speaks for three hours it is not easy to sit and listen. I would suggest that it would be a good thing if we could make up our minds at the start of this session of the new Dáil to limit our speeches to a length that would keep us all interested. Then there would be more constructive ideas, and government would be better conducted and better carried out. What some Deputies lacked in depth, they gave us in length, and I make a special appeal that for this session we would all make a promise to say what we have to say as clearly and as concisely as possible, and thus give the country an indication that we are in earnest.
I would like to make some comments on the Budget, principally from a business point of view. When one comes to consider this Budget, one sees that it is produced in a framework of very difficult circumstances which this country is facing. It is, therefore, the duty of every Deputy to be as constructive as he can in this matter because we are in a time of great difficulty in Ireland and what we do now will vitally affect our whole economy, perhaps our very existence, and I feel we must do what we can to help in those circumstances.
I would have hoped that the Government, in its efforts to improve the national economy, would have done something towards alleviating the very heavy strain of income-tax at the present moment. Certain people are apt to think of income-tax as being a tax paid only by wealthy people. They forget that nowadays what are very often described as working people are paying income-tax. Industry pays income-tax and it is with that aspect of it I would like to deal principally this evening.
I mentioned the framework surrounding the Budget, and that framework is the one of the credit squeezes, shortage of money, decreased business, agriculture not increased, and high figures of unemployment. The Budget is usually used as a means not only of accounting for the nation's expenses, but of helping to improve the national economy and the health, happiness and livelihood of the citizens. We all know, and I need not labour the point, that we have tens of thousands of young people leaving the country every year. We all deplore it, and I am sure everybody, not only in this Chamber but outside, is anxious to see that flow of young people—and older people, too— arrested. One of the ways that can be done is by helping industry; the other is by helping and encouraging agriculture in every way.
In his Budget speech the Minister mentioned the concessions that had been given to firms engaged in export. Actually those conditions are very slight but I would like to have seen him give those concessions to industries which are not engaged in the export business. I do not want to be taken as decrying, even by inference, the necessity for exports. Of course the more exports we can get the better it is for the country generally, but there are also people engaged in various types of trade and commerce and industry and who are not engaged in any form of exporting and who are very unlikely to be engaged in exporting in the foreseeable future. We do not have minerals or metals—to take one group of articles—in this country, so that to build up an export business in that type of goods can only be done by exceptionally skilled firms. I wish them the best of luck.
As I say, it is a valuable contribution to our economy but there are many people—and this is the point I want to make—engaged in industry of a type which does not readily lend itself to exporting and yet those industries are of enormous importance in the total employment here. If they are not flourishing we shall have high unemployment figures and that is what is happening now. The whole building industry is in a very bad state at present. That is having its effect on other industries and trades and we have the sad fact that skilled men are obliged, through unemployment, to emigrate.
We have firms in difficulties and firms who find that they have to dispense with men in order to keep down rising overheads. I would have expected the Government to have made concessions to industry in that respect in this Budget. One way in which this could be done is in the tax allowance for capital expenditure. Under certain circumstances businesses are obliged to make capital expenditure but they have to do that out of money on which tax has already been paid. That, coupled with the fall in the value of the £, has placed a very serious burden on industry and production in this country.
We are not finding the necessary capital to improve our trade and manufactures or even to put industry into the position in which it could, perhaps, in certain circumstances, build up an export trade. That is something I would have expected the Government to remedy. Furthermore, as is well known, we have a tax system in this country which is designed for one of the greatest manufacturing countries in the world. We are very largely agricultural and we now find ourselves in the position that industry is being very severely handicapped on that account.
Many Deputies here represent rural constituencies and, naturally, the problems they deal with from day to day are those arising from agricultural matters; nevertheless, I think most of these Deputies will appreciate that what I am saying is not just talk of business people trying to rid themselves of burdens which they do not like. I refer to the desire of business people to be rid of burdens which should not be put upon them because, as a result of that, the industries here are not in a position to give the employment which they could, and would, give, if they were not faced with these appalling tax burdens.
I do not want to make a long speech, as Deputies have already heard a number of speeches; but I would stress again that it is only by encouraging agriculture and industry that we can get ourselves out of this position in which we have high unemployment figures and the export of young people. One of the ways to do that is to take the shackles off industry and encourage agriculture by every means in our power.
There are no shackles on agriculture.
I said we should take the shackles off industry and encourage agriculture by every means in our power. The shackles referred to industry. I shall close on that note. I do not think the Government showed any imagination or made any real concessions to industry in this Budget. They have not faced the real problems which lie in front of this country. The Budget should be used as an instrument for furthering social policy. At the present moment we as a Government certainly are living too extrava-gantly. There were many promises made during the elections and people faithfully believed, apparently, judging by the way they voted, that those promises about lavish expenditure would be honoured. They have not been honoured in this Budget. There-fore, regretfully I say that this Budget has made very little contribution towards alleviating the very real difficulties under which we are suffering at the moment. I believe we shall pull out of it, but we shall need all the help from the Government we can get and I am afraid we have not got it in this Budget.
The few remarks I shall make are quite impromptu. They are born of the fact that there was another demonstration outside Leinster House to-day. I am beginning to wonder what all these demonstrations are about. I am beginning to think that what has happened here over the last five or six weeks has not helped us as a Legislature to get down to the problems and tackle the root causes of demonstrations of this kind.
I do not have to defend this Budget. I am not going to do so. People more competent than I have made the case already. There is no point in reiterating what has been said several times already. What I want to say is that this Budget has been the most disappointing political experience I have had since I came into the House. The day the Government was formed, I left the House with a very happy feeling that a new age was dawning in Irish politics.
I admired the speech made by Deputy Costello when he became Leader of the Opposition. He said it was now agreed on both sides of the House that we had very serious problems to tackle. If that is so, I must ask him why it is that Fine Gael have come again with the same claptrap and nonsense of 1952, which was rejected by the Irish people. We cannot afford this nonsense, this talking in a vacuum about the problems of the Irish people, this blathering here at great length, trying to make a nation of whingers out of the people. That policy has failed. It is a policy which, as far as Fine Gael is concerned, only for Deputy Sweetman would have gone much too far.
I always admire the way Deputy Sweetman tried to face up to the very serious problem we as a country had to face. He had behind him a solid phalanx of people who kept on saying from day to day: "There is no need of this, it is all unnecessary and undesirable and we do not have to face up to it." We have Deputies now saying that we still have the liquid assets we had ten years ago and all this nonsense, as if this were not the only country in Europe which has a declining population, a declining population of working age, a declining labour force over the last five years, as if we had not all the problems which Deputy Dockrell, for one in Fine Gael, was brave enough to stand up and admit we have to face and try to solve.
As well as that, and over and above all, we must try to get over to the Irish people that the day has gone when the State, or any policy on the part of any Government in the State, can decide what way the country is going to travel. It is the people who will decide in the long run whether we are to solve these problems or not. It is these young men who, I believe, laid themselves on the road and on the footpaths outside Leinster House to-day, who will have the solving of those problems every bit as much as the Government which happens to be here in charge of the affairs of the State. We can only point the way; it is up to the people to decide whether they will travel that way or not.
All the plans, big and small, produced by our side, by Fine Gael, Labour and everyone else are based on the assumption and statement that the Irish people have the initiative, the energy and the goodwill to solve these problems. I am beginning to doubt it. I am beginning to doubt if these people who come along talking about unemployment and about not being satisfied with paper proposals any more, who want practical proposals based on something concrete, really know what they are talking about or want to provide a solution for the problems that we are facing. There are methods by which we can solve the unemployment problem, but they are methods used in Russia and not in Ireland. There are methods by which we can solve unemployment, which have been used in Germany and Italy. Do these people want those methods to be used and if so will they get up and say so?
In the meantime, why are Fine Gael sending up a solid phalanx of speakers, one after another, coming out with that claptrap again in 1957, that there is no need for "this unnecessary, this undesirable, this hairshirt Fianna Fáil Budget." We have been through all that before. When Deputy Costello rose after the election of Taoiseach, I thought we had finished with all that. Occasionally, someone like Deputy Declan Costello deals with the Budget in a sensible way by making constructive proposals. I suppose he will find himself on the mat at the next Fine Gael Party meeting along with Deputy Sweetman. Of course, I do not agree with what Deputy Declan Costello said about the Budget, because it is fundamentally based on the statement that we should retain the levies and treat them purely as taxation. When the levies were introduced by Deputy Sweetman, it was not intended that they should be used as a form of taxation: they were intended to be used for the purpose of reducing the adverse balance of trade, reducing imports and thereby reducing the gap between exports and imports.
The Taoiseach at the time, in December, 1956, was very proud when he was able to announce here in the Dáil that the levies had had the desired effect and had bridged a large portion of the gap which everyone admitted was too large. We now find Deputy Declan Costello saying he wants those levies retained for taxation purposes. I do not agree with him —but at least it is a constructive suggestion from the Fine Gael side of the House.
I heard nothing from the Labour side which would even suggest that anyone in the Labour Party realises that such problems exist in Ireland to-day. Do we have to go over them again? I do not think it is necessary. Anyone who has read, as I did, the report of O.E.E.C.—which of all things is a dispassionate report by impartial people who are looking at this country from outside—anyone who had bothered to read it, and in particular the chapter on the problems of this country, could not rise here, or certainly should not, to pretend that in 1957 we can tell the Irish people: "Everything in the garden is rosy; all we need do is put out those people; their hairshirts are unnecessary hardships; and we will look after you." We have had too much of that.
We must say to the Irish people— and I want to say to those young people who are lying outside on the road to-day—"what do you want us to do? Just come along and tell us." They ask that the Deputies talk to them. We will talk to them from here. We will talk to them anywhere. We will be glad to meet them any time. They are people who are supposed to have ideas. Let them tell us in what way we should solve these problems. We are not afraid to face them at any time, but, at least, let us tell ourselves, to begin with, that unless we do what Deputy Costello said we would do, that is, from both sides of the House, tackle these problems and admit that they are there, we will continue to be talking in a vacuum in this House and we will be going backwards instead of forwards over the next five years.
I know that the Budget was harsh, but it was less harsh than the sad experience of the debate on it in the Dáil. I know it was harsh, but these organised demonstrations were no help —organised, I should like to know, by whom, for what purpose, to what end and founded on what belief? It has been very disappointing and I hope that when Deputy Sweetman gets up to speak this evening as I am sure he will, he will bring some light into this debate from the Fine Gael point of view. Let him tell us what he would have done as Minister for Finance to balance the Budget. Let him tell us whether he thinks we should have tried to balance it at all or not. Let him tell us whether or not these serious problems exist, if Fine Gael want them to be solved and, if so, how.
Finally, will he agree with me when I say that, no matter what Government is in this House, the day of paternalism is over and should be declared to be over? We have gone, if anything, too far on social welfare and we must now tell the Irish people that the future of this country does not depend on the efforts of any political Party, Fianna Fáil, Fine Gael, Labour or anybody else, but on whether they have what we politicians presuppose they have, energy, vigour, initiative and goodwill. I do not know whether they have or not. If they have not, they have no future as a people.
I would be failing in my duty if I did not protest against this Budget. I came into this House on the votes of workers and unemployed in my town. This Budget is about the twentieth Fianna Fáil Budget presented here. On each occasion that we had a Fianna Fáil Budget we were told there was a crisis hanging around. That was a smokescreen so that Fianna Fáil could put the screw on to the last twist. This time we have been told that there is a gap to be bridged. We have been given figures by various Deputies. I think some of them mixed up the prize bonds with their figures.
This Budget is to be balanced on the stomachs of the poor and the unemployed, the unemployed about whom we hear so much from the opposite side of the House.
See what I was talking about.
I am not talking about some of the gentlemen who may have lain down outside this House to-day. Some of them never stood up in their lives, if it went to that.
There could not be many of them from the Labour Party, anyhow.
Not at all. I know these gentlemen, and the type they are, and I do not have to tell Deputies here. This Budget is the product of people used to six-course dinners, but the people of whom I am speaking are used only to one course of bread and butter. That butter is now being replaced by margarine and the people are lucky if they have that at all. Fianna Fáil told us in the past that the people were eating too much.
Notice taken that 20 Deputies were not present; House counted, and 20 Deputies being present,
We were told by Fianna Fáil that the people were eating too much. A Deputy from the opposite benches was in the States recently and he told the people there that we were drinking too much whiskey and he asked would they buy the whiskey and make the Irish people sober. That is the mentality we have to deal with. At the same time, Fianna Fáil were putting a penny on what they were shouting about, the poor man's pint. Deputy Corry, who is conspicuous to-night by his absence, was one who shouted about the poor man's pint to such an extent that I almost felt thirsty, even though I am a pioneer.
Would you like to have him in? We will send for him.
We heard the outcry in this House in the past when a penny went on to a packet of biscuits. We were told the people would starve, that the ladies could not have their 11 o'clock coffee in the restaurants and gossip over everything except politics and the way they affected them. Now we hear a lot of talk about the mandate that Fianna Fáil sought and got. They had a slogan—"Bread and work for all." We were told that the first thing the Government were concerned with was unemployment. I should like to know what proposals are before this House to settle the question of unemployment. We heard talk about the Lemass £100,000,000, but we have heard no talk about it since the election. That was before the election. I have it in black and white, if Deputies want it. We hear talk about democracy. The people are losing faith in democracy because of the cheap slogans that people have fallen for. That is why we have such a poor poll at every election. The people are sick and tired of this sort of stuff. That £100,000,000——
What is the quotation?
I could quote for a week and the Deputy might not like to hear it.
The Deputy is referring to something that is supposed to have been said. We should like to know what it is.
Here it is, by the big chief himself—"By their fruits you shall know them." This is not fruit.
There is not a levy on it now. That has been taken off.
It has been taken off rock 'n' roll records.
We have handed back £1,750,000 to the Jews in the city and to the hire purchase boys for television which the Minister said, if I may quote him from the newspaper of Monday, 27th May, "is a must." We must have television, and, at the same time, we must take bread off the tables of the poor people. We must have radios and, as I said before, "rock 'n' roll" records. Some of the gentlemen on the opposite side said that the levies were too little and too late. Still, it was not too late to take £1,750,000 out of the pockets of the taxpayers. What a false sense of values we have. In reply to a question I asked here in regard to what subsidy the Minister for Agriculture is paying on Irish butter in the British market, I was told that it was 1/3½ a lb., that is, 1/3½ a lb. for John Bull to eat our butter. I further asked him would he estimate our exports of butter in the coming year and he replied 6,500 tons. We have increased the price of butter in this country by a little less than half that 1/3½ so that John Bull can have enough. We are going to pay John Bull £1,000,000 to eat our butter, but of course we will have plenty of butter to export before the year is out.
But John does not want it.
No, but he is being paid to eat it. I do not want to get into the Bog of Allen any more. In regard to the increase in the price of bread, we had a threat in 1956 by the then Deputy Lemass. I quote him from "Truth in the News" and some of the Deputies might be able to read it from where they are. Deputy Lemass said: "Bread is going up". He said: "Norton will have to tell the nation that". That was on February 19th, 1956, and Deputy Norton did not tell the nation that. That was running through the mind of Deputy Lemass then and we know the mentality on that side of the House.
What about cutting the slice off the loaf of bread?
If the Deputy went outside the House to-day, some of the Teddy Boys, for whom I hold no brief, might have cut a slice off him.
Deputy Coogan, on the Budget.
Getting back to the Budget, I represent an area——
Not Teddy Boys, I hope.
No, we would not tolerate them.
Deputy Coogan is entitled to make his speech without interruptions. If Deputies do not wish to listen to him, they have the remedy in their own hands.
If they go out, I will ask for a House again. In my area, which is a tourist area, we have very many hotels which have accepted bookings over the past few months. This Budget is going to cause them a grave hardship and some steps should be taken to give them relief. Some steps should be taken to bring things to a pre-Budget level because these hotels accepted those bookings on that basis. I know they have been very badly hit. It is a matter for the Minister and I am just putting it to him to consider. There is not much more for me to say, because, no matter what I do say, the blister is on the backs of the people. Fianna Fáil have "got cracking" and the results will be shown only in an increase in T.B. That is how this Budget will be measured in the coming few years.
This Budget is a bad one not alone for the consumers and the farmers, but also for the wheat growers and the milk producers who were led by Fianna Fáil to believe that their conditions would be improved, if they were elected as a Government. It is clear that Fianna Fáil got no mandate for this Budget. They got their answer from the people when they introduced a Budget of this type in 1952. They were defeated in every by-election that took place after that time, until eventually they were forced to throw in the towel and have a general election in 1954 which gave the inter-Party Government a bigger majority than the present Government have at the moment. This Budget is the kind of Budget one would expect from the tired and lazy old Fianna Fáil Front Bench which has now introduced 19 or 20 Budgets.
It is strange that, on the average, the Budgets brought in by Fianna Fáil always created hardship and rarely created any kind of prosperity or improvement in the conditions of the people. It is strange that since we became responsible for our own affairs the Fianna Fáil Party have always been associated with hardships which were imposed upon the people by reason of their activities. The Minister in his speech put the cost of living up more in ten minutes than the inter-Party Government did in three years, since 1954. Fianna Fáil were put out of office in 1954 because they had put up the cost of living by over 20 points during the previous two years.
It is obvious that this Budget is going to cause a measure of destitution particularly amongst those classes in receipt of assistance. It is going to cause a measure of hunger among the poorer sections. It is obvious, if we are to be guided by the 1952 Budget, that unemployment will increase rapidly. In 1952, when the Budget was introduced, approximately 20,000 people lost employment in the succeeding few months. It is probable that this Budget will cause unemployment to the extent of 10,000 people, if we are to measure it by the hardships imposed in the 1952 Budget.
There is nothing in this Budget which shows that there is any attempt being made to improve the position in relation to either unemployment or emigration. The Fianna Fáil Party appealed to the unemployed people to give them support and have them returned in the recent election. The result of the general election shows that, in the whole country of 40 constituencies, the Fianna Fáil Party succeeded in getting only an extra 12,000 votes. It took me 10,000 votes to get in myself, and in the whole country Fianna Fáil got only an extra 12,000 votes. Now we have them with a large majority believing that they have a mandate to implement a Budget of this nature.
This is a tax on the appetites of the people instead of a tax on their pockets. It is obvious that the wage earners with the large families, the old age pensioners and the classes in receipt of assistance are going to find the difficulties imposed on them a very great strain. Fianna Fáil have always been two-faced with the people.
They have got away with it on every occasion. In 1951 they came in on a policy of which point 17 was the maintenance of the food subsidies and the control of prices. In 1952 a great part of the subsidies was removed and prices rose so steeply that by 1954 the cost of living had risen by 20 points. The price of the loaf of bread was increased by 3d. in 1952. Now there is another 4d. added, a total increase of 7d. on the loaf through the deliberate action of Fianna Fáil.
And a big bite taken off it by the Coalition Government.
The Deputy complains that the loaf shrank in size under the inter-Party Government. The Deputy's Party have now compensated the master bakers. I wonder will they put back the slice the Deputy talks about or will they just inflate the loaf? Anyway, it will cost 7d. extra, an increase put on by Fianna Fáil in the five years since 1952. Does anybody remember the harassed housewife the Fianna Fáil Party paraded up and down the country in 1952—the buxom lady with the furrowed brow and the silver hair? She complained that because the inter-Party Government gave an increase in the price of milk to the producers she found herself paying 2d. extra for her lb. of butter.
Of course the soft soap had gone up by ½d. in the £. She got a queer shock in 1952 when the Budget put up the cost of living by 11 points. Nowadays the lb. of butter and loaf of bread will cost approximately 5/5, and as compensation the recipients of social assistance are to receive 1/– a week. The greatest blow will be felt by the people in the rural areas who are now obliged to pay 1/– a stone extra for baking flour. Many of those families live on a diet of bread and tea, and the extra 1/– per stone will be a very severe imposition on them.
There we have the attitude of Fianna Fáil all the time. We remember that in 1951 the present Minister for Finance, then Minister for Social Welfare, told the old age pensioners that the country could not afford an increase of 2/6 a week on their allowances—that it would cost the nation £500,000. Now he gives nearly £250,000 to the master bakers while at the same time imposing higher prices on the consumers. Let us see what the results of the withdrawal of the subsidies in respect of bread will mean. It will have the effect of placing the wheat growers of this country in a position where they cannot expect an increased price for their home-grown wheat, although much of the preelection campaign was devoted to condemning the inter-Party Government because they refused to give to the wheat growers the price promised them by Fianna Fáil.
You said the farmers were getting far too much for it. We never said that.
We will see what the Deputy's Party will give the farmers.
We will not reduce it by 12/6 a barrel.
The Minister is now so opulent that he can give £150,000 worth of home-grown wheat towards the manufacture of animal feeding stuff. He says he can do that because there is the promise of a good crop this year. No thanks to him for that. The small bakers and millers of this country will also find themselves in difficulty this year. Already the big combines are buying up the small bakeries in order to get consumers into the heels of their fists.
Another effect of the increased price of flour is that small cakes which could be bought for 3d. each are now costing approximately 4½d. each. The people who bought these small cakes will now buy fewer or none at all because of the new prices. Notwithstanding all that, the master bakers were given £230,000 on a casting vote. This sum is to be paid retrospectively. In the meantime, the big bakeries were able to pay substantial dividends to their shareholders and to give increased wages to their staffs. That is the extra slice I heard Deputy Killilea talking about.
Then we turn to butter, the price of which has been increased to 4/4 per lb. It is reasonable to expect that milk producers will be the next to suffer as a result of these subsidy withdrawals. The subsidy of 5d. a lb. on butter made available by the inter-Party Government in 1954 was, in fact, a subsidy to the dairying industry to the approximate value of £2,000,000 a year. That has been withdrawn by a stroke of the pen in this Budget.
It is obvious that the creamery milk suppliers now will find themselves in economic difficulties in relation to the price that they may expect to get for their milk due to the cost of making creamery butter. As Deputy Coogan mentioned, we have a situation where we are subsidising butter for export to England at 2/10 a lb., while our unemployed people at home must pay 4/4 a lb. for it. It is obvious that this is the best stroke of business the margarine manufacturers have ever been handed. The withdrawal of the subsidy on butter will now encourage the widespread consumption of margarine because Irish people cannot afford to eat Irish butter. It is doubtful whether the taxpayers can continue to subscribe approximately 1/4 a lb. for butter exported to Great Britain.
The Milk Costings Commission set up by Fianna Fáil in order to confuse the farmers at a cost of £40,000 is now worthless. No matter what the Milk Costings Commission has decided, this Budget has ensured that milk producers will not get an increase in the milk they deliver to creameries. That, in turn, will affect the production of beef although in his Budget statement the Minister for Finance showed a strange conversion in favour of beef production. If the creamery milk suppliers are forced out of business—I believe this Budget will have that effect —we can expect a drop in our cattle population. In 1951 and again in 1957 when inter-Party Governments handed over office to Fianna Fáil, the cattle population had reached the highest levels in recorded history. I wonder what did the Creamery Milk Suppliers' Association think of the Government's action in withdrawing that valuable subsidy of £2,000,000 to the dairying industry?
I should like now to quote from page 18 of the Minister's Budget statement. He said:—
"The future of our cattle trade is so important that I am including provision for increased expenditure on the elimination of tuberculin cattle under the Bovine Tuberculosis Order, 1926, in those parts of the country to which a new intensive scheme does not yet apply."
That is a change of heart as far as the cattle trade is concerned when we remember the ravages of the economic war in this country which the Minister for Lands said was started by Fianna Fáil for the purpose of achieving a certain objective. We know the cost of that economic war to the country. Its loss to the country must have been something in the region of £400,000,000. We could do with that money to-day. Then we had the calf slaughter policy where the taxpayers' money was being used to reward farmers who brought the skin of a calf to the Garda station to prove that they had followed Fianna Fáil's teaching.
How did the Deputy escape at all at that time?
There is an answer to that one, too, but the question is not worth the reply. Due to all that nonsense in the 1930's, the people are now obliged to pay very dearly. When the slaughter of our cattle population was in full swing, we had the free beef scheme. People were given free beef because they could not dispose of it on the British market. Fianna Fáil were saying then: "Thanks be to God the British market has gone for ever." Now the Minister says that our cattle trade is most important.
In relation to the levies, I want to quote from page 4 of the Minister's Budget statement:—
"There has been a striking, and very welcome, improvement in the trade position in recent months but some further time must elapse before the continuance of that improvement can be regarded as assured."
That is a funny statement in the gloomy Budget the Minister presented to the House; it is a statement which gives promise of prosperity for the country. It is an admission by the Minister that things were in good hands under the inter-Party Government.
He continued:—
"Even with the levies in full operation our external payments have been barely in balance for the financial years 1956-57. Our capital shortage is still acute and the levies are a reliable and necessary supplement to capital resources."
Still, the Minister took away £1,750,000 in levies. In fact, these levies would approximately counterbalance the amount of the butter subsidy. However, in one stroke of the pen the Minister threw away that large sum and made the people pay more for their butter.
I heard some Fianna Fáil Deputies say across the floor of the House to-day that the levies had been removed from oranges. I wonder will the people who buy oranges be any happier. They are still paying the same price for oranges and what is the Government doing about it? They were very worried about the price of oranges. The price of sugar has also gone up by Fianna Fáil Order. In addition to that, the charges under the Health Act of 1953 have been increased. Hospital charges which up to the present had been 6/– per day have now gone up to 10/– per day. Before the introduction of the Health Act of 1953 people got absolutely free treatment. This extra burden is being imposed on poor people who must go into hospitals for treatment.
It will also mean that local rates will be affected. Corporations and county councils will now be obliged to make heavier contributions towards the health services under the 1953 Health Act brought in by a Fianna Fáil Government. In his Budget statement, the Minister gave a warning, apparently noted by Deputy Corry among others. He warned of the possibility of the withdrawal of the agricultural grant next year. This grant amounts to approximately £5,500,000 a year. Its withdrawal will be a heavy blow to the agricultural community.
It was indicated in the Budget statement that reductions were to be effected in our Army. In 1952, when Fianna Fáil were trying to hide the growing number of unemployed persons from the notice of the public, they put up large posters inviting all young men to join the Army. They got an extra 5,000 young men in who would be otherwise unemployed. It was a move to help the growing number of unemployed which resulted from the 1952 Budget. We have a statement now from the Minister in his Budget speech that he intends to reduce Army personnel and there was a question in the House last week about the dismissal of some 30 men at the Curragh.
Last week, we had some reference to Fianna Fáil's post-war policy. We remember very well much of the nonsense in which Fianna Fáil were engaged at that time. It was lucky the inter-Party Government came into office in 1948 and put an end to it. We remember their plans for new Houses of Parliament; we remember the imports of Dutch chocolate. There were ten years' supply of wet turf in the Phoenix Park, along with timber and African coal, and we remember the purchase of wheat at £50 a ton, at a time when our farmers were getting 50/– per barrel. We remember also the bus station controversy. That was all Fianna Fáil post-war programme. Those are some of their activities which the inter-Party Government found it necessary to stop. The wet turf and the African coal and timber were not paid for for seven years.
That does not arise in the debate on the Budget.
I am just relating it to the post-war policy that was argued between the Minister and a Deputy on this side of the House. We have also the scandal of the Paris Embassy.
What about the London Embassy?
This was the kind of extravagance which the people of this country hope they will forget in future. Let us remember that Fianna Fáil hold the record for registered unemployed. At one stage the number of registered unemployed persons in this country reached 146,000. On the other hand, the inter-Party Government has the record of the lowest number of registered unemployed persons.
If you had been long enough in office, there would have been nobody left in the country to be employed. They would have all emigrated.
That record cannot be denied. If the Deputy goes to the trouble of looking up the statistics, I am sure he will find it.
Under Fianna Fáil policy 500,000 people were obliged to emigrate and yet we had them whining last February about unemployment and emigration and pretending they had a policy to stop emigration and do away with unemployment. We have no evidence that the Fianna Fáil Party has any policy whatsoever, except the policy of hanging on, and they certainly will be able to hang on on this occasion with the majority which they have. I remember when the Taoiseach was challenged about emigration he produced figures for 1946 and 1947. At that time a man engaged in agricultural employment could not get a permit to leave this country. Other people had to get permits, but the agricultural labourer could not get a permit to leave the country for the purpose of going to work in England or elsewhere, so that the figures for emigration in 1946 and 1947 are false.
We remember the large posters of Fianna Fáil before the election: "Get the men to work". We do not see any evidence of it so far. We do not see any policy that will get the men to work, but we do see a Budget that is bound to cause unemployment, if we are to be guided by the results of the 1952 Budget. The people were asked to vote for stability, but it seems that they have voted for stagnation again. The miracle men asked for support to beat the crisis. What have they done since they came into office to beat the crisis? This Budget is obviously going to create conditions of stagnation in this country.
The trading position was improved remarkably under the inter-Party Government and its Minister for Finance, Deputy Sweetman. It is a pity that Fianna Fáil, just to please a few of these hire purchase people, decided to depart from that policy instead of following it out so that it would bear the fruits that it was expected to bear in this coming autumn.
I propose to conclude by asking the Minister to explain why the Fianna Fáil Party always have one face to show the public when they are in opposition and another to show the public when they are a Government. The leopard does not change his spots and the Fianna Fáil Party should have been sufficiently honest with the people before the general election to tell them they were going to complete their 1952 plan in 1957. In the Budget statement in 1952, the Minister for Finance at the time said he considered it was not advisable to abolish all the food subsidies. He indicated by that statement that it was an instalment of the Fianna Fáil policy. Of course, they found that it did so much damage in 1952 in the matter of unemployment and emigration, and a flop in business, that they did not go ahead with the abolition of the remaining food subsidies in 1953.
During the election campaign, they should have been honest with the people and should have told them they were going to pursue the policy which they embarked on in 1952 by taking away the remaining subsidies. These subsidies were part of the people's wages and it was very aggravating that the Minister, when he was taking away approximately £6,000,000 or £7,000,000 from the people by removing these subsidies, should ask them not to look for compensation; in other words, not to look for an increase in wages. It is obvious that the civil servants who have a cost-of-living bonus, and whose salaries are based on the cost of living, will be entitled to an increase in their salaries. People outside the Civil Service will also be entitled to an adjustment in their earnings as compensation for the increase of approximately five points in the cost of living.
Before entering on the general discussion about the matters that probably will be thrown up by this Budget and the Financial Resolutions, I want to mention one specific matter—a matter in regard to which I think the Minister for Finance will completely agree with me. Whether one may agree or disagree with the Report of the Capital Investment Committee, I think we must all pay tribute to the fact that these gentlemen, who undertook to sit on that committee and investigate the problems concerned, are busy people and that they were giving their time, their energy and a period that they could most usefully devote otherwise in the national interest. I say that and I further say that it should be accepted by every responsible Deputy, whether one agrees or disagrees with their conclusions.
Hear, hear!
In these circumstances, it was a disgrace to this House and to the Fianna Fáil Party, in particular, that Deputy Corry should have utilised this debate for the purpose of personally attacking the personnel concerned. If Deputies attack the personnel of committees such as that, attack people who give their time and their energy voluntarily to the consideration of problems of that sort, then we shall come to the day when no one worth while will be prepared to serve on such a committee. I hope the Taoiseach—the leader of the Fianna Fáil Party—who gives us lectures here from time to time about the way in which we should behave in public life will, on this occasion, give one of those lectures to Deputy Corry. However, those of us who know Deputy Corry regard it rather as an honour to be attacked by him than anything else.
This Budget and any Budget must be considered not merely as a mathematical exercise. It is not enough for a Minister for Finance to be good at figures. It is not enough to consider it merely from the point of view of bringing in a Budget in which the figures on one side of the page match the figures on another. If that were the only purpose of a Minister for Finance, it would be simple enough to get an adding machine to do the task. In case anybody may think that, in saying that, I am having any particular dig at the present Minister, I am not. The purpose of a Minister for Finance is much more than that. It is much more than merely calculating the figures on the revenue and on the expenditure side of the national profit and loss account and then producing a balance.
We must ensure that, in the presentation of a Budget, the Minister is shaping and directing the economic policy of the country as a whole at this time of the year. In passing, let me say that I do not at all accept the view expressed by certain Deputies—Deputy Wycherley, for example—that we are paying the higher public servants too much and that we are paying the Ministers too much. If Ministers deal with their tasks properly, then, in my view, they are paid quite the reverse—a great deal too little. If we do not pay the higher public servants an adequate remuneration we shall reach a position in which the best people will not be available for the public service. They will go into business and we shall have a service of mediocrities. That would be a counsel which would result in very grave damage to the national structure as a whole and one which I can only describe as coming from a person ansxious to bring everybody down to a lower level instead of trying to build up all levels to a reasonable basis.
The economic policy that any Minister for Finance must consider when he is framing his Budget must, I suggest, start on one fundamental which, in our circumstances at the present time and which, particularly, has been so for the past 12 months, is that we can have no progress of any kind unless it is in the framework of an external balance on our payments and receipts, visible and invisible. I suggest also to the Minister—I think he will agree with me— that it is absolutely fundamental to any ordered progress in our economic position that we should get that external balance. Indeed, he has given evidence himself of his view in that respect through his Budget speech though some of the actions of his Government are tugging the other way as hard as they can.
I think the Minister would also agree, probably, that it is much more difficult to attain that external balance than it is to alter, to shape or to mould our internal economic policy. Matters of internal economic balance are entirely within our own economic discretion and it is for ourselves to mould and shape them but, in relation to our external position, we cannot hope in any way to affect or influence the affairs of the world outside. No consideration of the position that existed in 1955, 1956 and indeed, in the first quarter of 1957 can be complete or accurate without taking into account the outside influences that were at that time working on our economy. I do not propose to-night to go over them all individually but I want to make it abundantly clear that, so far as I am concerned I put—not merely now but also during the whole of 1956—and the early part of 1957—the question of our external balance as the absolute essential towards which all our economic policy must be framed rather than any question of internal balance.
We are sometimes inclined to forget that, during the past four years or so, we have been suffering pretty severely, as a country, from the events that have been taking place in the world outside. I said on many occasions last year, and I want to repeat it again to-day, that any consideration of our problems at the present time and in the beginning of 1957 is entirely inadequate without taking into account the manner in which the terms of trade have worsened during that period. As a Government last year, having taken that worsening into account and having, in spite of it, surmounted those difficulties, we succeeded in getting the first prerequisite of any economic progress—a balance of our external account.
The Minister must remember and accept that when he came into office on 20th March the work had all been done in that respect to rectify the trend and ensure we were able to surmount the difficulties of the outside factors. Some people are inclined to forget exactly how grateful they were. Let me take, for example, the figures that were available for the last quarter —figures that, of course, are, I am sure, at the fingertips of the Minister. However, in case he might forget for the moment or not have time, shall I say, to remind the House of those figures, I want to quote them.
The other day, the Central Statistics Office published a memorandum showing the results of our trade during the first quarter of 1957. They were able to report that, in each of the 13 months since March, 1956, imports were less than in the corresponding months of the previous year. At the same time, exports were consistently higher than the corresponding months of the previous year and in nine of the ten months since June, 1956. Of course, in that, they are speaking in terms of value, not of volume. I think it was a significant result and a very substantial achievement on the part of the Government of which I had the honour to be a member, that it was able to bring about such a situation; but it is very much more significant and a far greater achievement when one remembers the manner in which international trade had moved against us during that period.
Take, for example, the first quarter of this year. On the figure which the Minister has, for the first three months of 1957, our imports, at £47.4 million, compared with exports at £32.7 million, show that we had a visible trade import excess of £14.7 million. Bear in mind that our imports were some 90 per cent. in volume of what they had been in the same quarter of 1953. We have heard periodically from members on the other side that, while we were acting to restrict our imports excess, we were doing so entirely and exclusively on the basis of restricting imports. If the Minister again turns to the statistical return issued by the Department of the Taoiseach, he will find that in the first quarter of this year, exports had increased in volume by 17 per cent. to 117 per cent. of the figure they were at in 1953.
One can show clearly from those figures that, not merely were we working on the restrictive measures necessary to achieve an external balance, but, in addition, steps had been taken to increase the volume of exports to a very substantial degree. At the same time, one may wonder why it is that, if our imports were restricted in that way and our exports increased in the manner I have mentioned, our import excess was still at the same figure. It is simply for this reason: prices have so moved against us since 1953 that what would have been an import excess of £8,000,000 in the same quarter at 1953 prices had gone up to one of £14,500,000 this year. It is perfectly clear that, if it were not for that adverse international trend, the effect of the increases in production for export and in the volume of exports would have been that we would have been able to support, not a restricted import list but rather an import list somewhat of the volume we had in previous years.
As I say, the previous Government were working on the basis that external balance was the first essential. They took the necessary restrictive measures because they believed that was the immediate necessity and because they believed that was the rock, so to speak, upon which proper economic internal expansion should begin. They also commenced those measures and, as the figures for the first quarter of this year show, were in the process of developing them when the responsibility passed from me to Deputy Dr. Ryan, as Minister for Finance.
I hope that, when he comes to speak in the Budget debate next year, the Minister will be able to show that he has not slipped backwards again into an external imbalance and that he will be able to say he has maintained the progress that I had been able to make along that ground. Unless he is able to say he can maintain that progress, he will not be able to get the confidence without which there cannot be any progress. Unless that confidence is abroad, there cannot be any industrial activity; there cannot be any expansion in our production and output; and indeed there cannot be any prospect whatever of our getting the savings we require to meet the development that must be undertaken if we are ever to move forward.
We had succeeded in obtaining that stability and in persuading the people as a whole that we meant business in relation to our circumstances. It is not necessary for me to remind members of the House of some of the things that were said by Deputies opposite when they were here, or to remind members of the House of the insidious rumours put out this time last year by enemies of this country that there was a danger of devaluation of the Irish £. We met those rumours and succeeded in proving beyond yea or nay, so that it was universally accepted, that so long as we remained in Government, it would be clear and beyond question that we would take every step necessary to preserve, in so far as we could internally, the value of the Irish £. We were able to persuade the people that was so, and, because we were able to do that, we brought about the situation, which the Minister can see from his statistics, that, at the end of 1956, there were increased bank deposits, voluntary savings were coming around and generally there was a feeling of confidence that the difficulties had been surmounted in that respect.
I want to make it perfectly clear that when I speak in that way about the protection of the value of the Irish £, making certain it will retain its value, I am equally sure that the present Government will take adequate steps, and I would be disappointed if they did not do so, should similar insidious rumours be sent abroad in the future. Positive assurances in that respect will, I know, be forthcoming from the Minister.
If we had not succeeded in ensuring that confidence last year, and doing so in spite of the Party political tactics used by certain members of the Fianna Fail Party, there would not have been any prospect of getting the drive for increased voluntary savings under way. That drive was beginning to show results in the first few months of this year.
Again, the Minister will agree with me when I pay tribute to the members of the Savings Committee and also to the film which the Minister and I saw the other day, a film for the purpose of making our people aware of the necessity for saving and aware, too, of the way in which their savings are used. Some money came out of the stocking into prize bonds. The real reason that the prize bonds issue was so successful was because we had engendered once more a spirit of saving amongst our people. The savings were there. I do not think the Minister will find that a national loan or prize bond scheme will be a success in future unless in the intervening period he can see a mood for saving amongst the people and, in fact, saving actually achieved. That evidence will be available in the bank deposits and in the Post Office Savings Bank.
If there is one thing this Budget will do, it is that it is certain to ensure that voluntary savings will decline substantially in the immediate future. It cannot be otherwise. The effect of this Budget will be in that direction. Any decline in savings, no matter who is sitting on the benches over there, will mean a depressing future and a depressing move in relation to that expansion of output on all sides, both from a State point of view and from the point of view of private enterprise, that must be undertaken if we are to get any progress at all.
I should like to hear from the Minister, when he is replying, exactly what proportion of the prize bond issue he thinks came out of what I might describe as the hoarded savings of the past. It seems to me, from the break-down of the amounts, that a great deal of that money must have been money that was kept in the house, money that was not in the bank, in the Post Office Savings Bank or a trustee bank but was held in the stocking, or in the pillow or in the case under the bed. The £2,500,000 approximately that was obtained in applications of up to £50 seems to indicate that that was the likely source of that part of the small savings in any event and, when one couples that with another indicator, the very small amount that was withdrawn from the Post Office Savings Bank, one is forced to the conclusion that a great deal of the money subscribed must have been money put aside and, so to speak, sterilised in the past. If the prize bonds did succeed in getting any substantial sum out of that sterilisation and into a position in which it can be put to work, then it certainly was well worth while.
I was particularly anxious to hear the Budget speech on 8th May in relation to the Capital Budget. I remember the various things that were said by the Fianna Fail Party during the general election, and subsequently. I remember particularly the leaflet: "Let's go ahead again," that they published in every constituency. Deputies will remember whether or not they had it in their constituencies, but, as far as I know, it was published in every single constituency throughout the country. I am pretty sure it was published, gratis, by the Irish Press as their contribution towards the campaign expenses of the individual Fianna Fail candidates in the different constituencies. One of the things stated in that leaflet was: “For this purpose and to provide a stimulus for the recovery and expansion of private business activity, Fianna Fail will increase the amount of capital expenditure by the State and local authorities.” Nice sounding words.
What exactly was the result in the Capital Budget introduced by the Minister? I was wondering whether that leaflet heralded a policy by the Minister for Finance in the implementation of which he would travel on what I describe as the "mad-cap road" of Deputy Lemass when he talked of his £100,000,000 plan. Thanks be to God, the Minister has not been that foolish anyway because that would certainly have brought us to complete ruin. If one takes the capital programme that has been put before the House by the Minister and compares it —and the Minister can compare it because he has in his Department a memorandum dated 4th January last made out by me and amended by me in only one respect thereafter, namely, the E.S.B.—he will see the Capital Budget that I was proposing to introduce and he can relate that to the statements in his election literature.
Unfortunately, I have not been able to ascertain whether the Minister himself in Wexford issued the same election literature. All along the road this Party, which came in with much vaunted ideas that they would increase capital expenditure all over the place, this Party that talked at every church gate about the manner in which I had restricted capital expenditure and how they would expand it beyond question, have come in here now and produced a Capital Budget based exclusively, and I challenge the Minister to deny it, on the memorandum that I submitted to my colleagues on 4th January last.
The differences are trifling. Here and there, there are small differences. There is an increase of £1.2 million in the allocation to the E.S.B. Why? Not for the purpose of doing more normal development. Not for the purpose of extending rural electrification, but solely for the purpose of paying off bank borrowings of the E.S.B., as I elicited in reply to a question addressed to the Minister the other day. In certain respects the Minister, who had promised during the General Election that he would bring in a Capital Budget for increased capital expenditure, has reduced the provision that I had indicated I was prepared to make, the provision that I would have made had the House sat again before the General Election.
One will find that there is about £1,000,000 in his provision for the Local Loans Fund but, as against that, the provision is £1,000,000 down in the voted capital services. One will find there is a decreased provision in respect of C.I.E. and that there is a slight adjustment in some other respects. But, no matter how the Minister may take his figures, the figures in relation to capital expenditure that he is proposing for the current year and about which I have heard some of the back benchers of Fianna Fail talk at great length in relation to a decision of the Minister for Local Government, as if they were making vast new arrangements and announcing vast new schemes, and making it appear that there are vast differences in their approach to this problem, one finds, when all comes to all, vide Table IV of the Financial Tables which sets out the figures of the Capital Budget, the Minister has done very little to alter them, practically nothing. So far as the table is concerned it runs at more or less to the same figure. But when the Minister analyses down the exact allocations in that make-up and compares them with mine he will find that in his allocation there is a smaller proportion for productive expenditure than there was in the proposals that I put to my colleagues when in Government.
I should like to make it clear that I appreciate the additional information that is made available on this occasion for the first time in the printed tables. It is a welcome innovation and one which I hope will be even further extended in the years to come. My programme was based on certain sums that were to be made available from the levies in support of that capital programme. The Minister in his Budget speech, and other Deputies supporting him, have entirely overlooked the fact that the yield brought in by the levies last year was a yield for only part of the year and that the amount that would have been available in support of the capital programme this year would, therefore have been greater.
The Minister is not correct either, I would suggest, when he says in his Budget speech that he has released £1,750,000 of these levies. He has released portion of the levies, yes, but another portion, in relation particularly to motor-cars and newsprint, he has transferred directly to current expenses. On the basis of last year's figures £230,000 would be the amount he has added to permanent taxation in that respect on the first item, and some £43,000 in respect of the second.
I do not understand the purpose of the Minister's action in relation to newsprint. He has made what was and was going to be, as I made clear, a temporary imposition by way of levy for balance of payments purposes on newsprint into a permanent customs duty. I want to know why and I hope the Minister, when he is replying to this debate, will explain clearly and specifically to the House why he has done so. Does he want the national newspapers and the provincial newspapers deliberately to restrict their size for the future? Does he want to ensure that there will be a permanent restriction in volume of that nature, or does he wish that the amount involved, now that it is a permanent charge, will be met by an increase in sale prices?
Did the Minister consider the effect that such a permanent charge is likely to have on the provincial newspapers, on the one hand, and what was his purpose in imposing it, if one considers the national newspapers, on the other hand? It is obvious to anybody that when that is being made a permanent charge now, it will remain as a permanent charge for many years to come, a charge in respect of which much more will be paid by one newspaper than another, that the newspaper that gives better value to its readers in the form of more pages will be paying a higher tax than the newspaper with fewer pages? Did the Minister consider the effect that would have on the daily newspapers, on one newspaper, for example, that has a great number of pages and another newspaper that has not got so many pages and will therefore be paying a lesser tax—and I will give only one guess to the members of the House as to what newspaper will be paying the lesser tax.
The Minister in his Budget speech said that the balance of our external payments is precarious. While believing that, while pulling, so to speak in one direction on the rope to keep that external balance, with the other hand, he is deliberately ensuring that the strands of the rope will be severed. Hire purchase debt contracted during 1956. The Minister has now abolished all the restrictions and we have a position now in which, up and down the streets of Dublin and elsewhere, advertisements are in every shop window of the firms who deal in this business: "No deposit and greatly extended periods." Let me add that that type of business, no deposit and vastly extended hire purchase terms, considered in period of time, means that the foreign firms can squeeze the home firms.
The home firms have not got the resources necessary to indulge in complete no deposit arrangements, or to extend repayments over a long period as can the foreign firms with their resources. The effect of that change by the Minister will undoubtedly be that business will go from some of the home firms dealing in that type of business to foreign firms, and it will mean, as hire purchase does mean inevitably, an anticipation of resources before the production is there to meet those resources, anticipation which, in the circumstances of our economy, can be met only by increased imports.
I do not understand either why the Minister at a time when he was saying that our balance was precarious, was deliberately permitting a situation, if not stimulating a situation, in which there would be greater imports of motor-cars and their assembled parts. Either one course of policy or the other is correct; both cannot be correct. The Minister cannot make the case that our external balance is still doubtful and, at the same time, logically wipe out hire purchase arrangements and stimulate increases in motor-car imports. Let me say, in passing, in that respect that I was the person, unfortunately, if you like, from the political point of view, who imposed the levy and I have no recollection, good, bad or indifferent, of any representation being made to me by the British Government, or anybody on their behalf, in relation to the trade agreement which was mentioned by the Tánaiste, and I would consider it strange that, if such representations were made, they were not made to the person responsible for the imposition of the levies.
I cannot help thinking that the Tánaiste is entirely wrong when he suggests that the imposition of levies on motor-cars in excess of £1,200 was a breach of the trade agreement. It was not, in my view. The balance of payments position was clearly covered there, and I do not recollect, as I say, any suggestion or complaint being made by anybody that it was such a breach; but it would have been a breach, once the Tánaiste wiped out the levy on motor-cars and transferred it to a permanent tax, and the representations to which the Deputy referred were possibly those which were made to him, consequent upon his own deliberate action.
I said when I was speaking immediately after the Budget that it was, not the economics of a madman, as I was quoted as saying—no matter what I thought of the Minister for Finance, I would not be as rude to him as that— but the economics of a madhouse, to be introducing this Budget at the same time as one was permitting free importation of luxury cars of that sort.
So far as the current Budget is concerned, we have heard a great deal about it in the House, and I do not propose to deal in detail now with some of its provisions. The Finance Bill will offer a better opportunity, but again I cannot help thinking and wondering how the welkin would have been made to ring by Deputies now sitting on the opposite side of the House if, for example, I had increased the price of tobacco by 2½d. and had granted only ½d. rebate in respect of the price of hard-pressed plug. I can see every Deputy opposite, no matter what the circumstances were in which that action had been taken, getting up with bitter salt tears running down his face at the thought that I had ventured to give but 1/2d. rebate for the old age pensioners. That is all the Fianna Fail Minister has done and, compared, for example, with the occasion when I found it necessary last year to increase tobacco prices, I made a very much higher percentage of the charge available by way of remission to old age pensioners and those who smoke hard tobacco.
Nor do I think it necessary at this stage to go into some of the tax concessions that the Minister has made, because, again, we shall have an opportunity of dealing with those on the Finance Bill. So far as those concessions are extensions of the principles that I enunciated either in the first Mining Tax Concessions Bill or in the second Miscellaneous Tax Concessions Bill of last November, I welcome them. I am still puzzled to know what is the purpose of the general remission for all securities issued since 1932, and particularly puzzled, when I remember how Deputy Lemass derided the extension that I gave to issues in that respect last year. He told us on many occasions that it was not worth a damn, that it was not of any use whatever, that nobody used these concessions and that nobody made application for them.
Apparently Deputy Lemass has now been converted to the view that my view then was right and that he was wrong. But I still do not understand why the Minister has given uncovenanted benefit in that respect to all securities since 1932 and, if uncovenanted benefit is being given that is not going to mean one penny piece if invested in industry, why that benefit did not go back to securities that were issued since the foundation of the State rather than that the Minister should have selected the first year only in which the Fianna Fail Party came into power.
That is the first year of the world.
I do not know whether the Minister proposes to come to the House with a specific resolution to join the International Monetary Fund or whether he deems it necessary to do that. He has announced his intention in that respect. The Minister knows I had started the steps that were necessary for him to announce that decision, that I had inquiries made as to what our quota would be and as to what would be the terms on which we would be permitted to join.
I am not suggesting that he must come to the House from the point of view of being subject to criticism from this Party. On the contrary, as I said, we set out along that line, but I hope that Deputies and people outside the House—and I saw one very stupid comment outside on the Minister's decision—will remember that joining the International Monetary Fund and the World Bank Organisation will enable us to get certain technical advice. It will enable us to get considerable assistance on technicalities and might enable us, in certain circumstances, to get production loans to carry us over on a short-term credit basis for development. But it would be disastrous, I think, if anyone felt that it would provide a panacea for all our ills and that it would provide that panacea to the exclusion of what we should do ourselves. It may assist us in certain respects but what we make of this country will be the result of our own efforts and our own resources and the wise or the unwise actions of any Government that may be in power.
In 1956, as I said some time ago, we were making considerable progress along the road to confidence and stability. I wonder if the Minister is ensuring that in 1957 he will get the same stability? If there is not stability, there cannot be ordered economic progress and the one thing that this Budget might do is jeopardise that stability. General MacEoin stressed a point that was made by the Minister when the Minister made it clear that he and the Fianna Fail Party were calling on the country to make the sacrifices that this Budget involved in a spirit and in a system in which there would not be compensatory increases for the additional sacrifices that the people would have to bear.
The Minister is perhaps better able than I am to judge whether those sacrifices will be accepted at his direction. We must remember that it is a very different proposition from the proposition that was made by the Capital Investments Advisory Committee or even by the trade unions, of having a surplus created on our current account for the purpose of getting an extended capital programme. That is not what the Minister was doing. If the Minister were doing that I think there might be much greater acceptance by the public of the need which he has said exists for these sacrifices, but the way in which the Minister has done it may result in our having the worst of both worlds.
It would be easy for me to say that people must be compensated. I think the Minister has made a mistake in his Budget in jeopardising the stability that the last Government and I established in 1956-57, but it would be a much greater mistake for the country as a whole, and one which would mean greater national difficulty all round, if we were now to fall into the error of other years and allow monetary incomes to exceed current production. On all sides of the House we must realise and accept that in the long run we can only achieve such a standard of living here as our current production will support and that if we try to run ahead of that, then, eventually-and sooner than may be anticipated-we shall run into difficulties on our external payments.
I think the Minister has produced a Budget that is tough and will undoubtedly bring hardship to many sections of the community, a Budget in respect of which the compensations for the poorer sections of the community are not adequate and a Budget which risks the stability essential to ordered economic progress being thrown aside. I hope it will not be thrown aside because if it is it will not mean that there will be any financial relief to the Exchequer. The sum total at the end of the year will be to worsen the problem with which the Minister stated he was faced. We will get back to the situation that existed in 1952-53, when the then Minister for Finance budgeted for Supplementary Estimates of £4,750,000 and when the Supplementary Estimates were the cause of the spiral in costs and wages he set off in that year, £9,253,000. If that is to be the effect of the Minister's Budget, then it is a sorry, sorry day that the Deputy and his Government walked over to those benches. It will have an effect which will be remembered for many a long year in this country.
The better way to go was along the road on which I had started, the way in which I had made it clear that I was going, to keep and maintain stability at all costs. For example, I met the representatives of the Civil Service and, with Deputy General Mulcahy as Minister for Education, the representatives of the national teachers, the secondary teachers and the vocational teachers. I told them that, in my view, the country could not afford to have any instability on that front. I told them that, in our view, it was absolutely vital, absolutely essential, that they would give, as I knew they would, the lead, a national lead, to the country and make it clear that they were prepared to give their quota to stability.
I gratefully acknowledge that the representatives whom I saw on those occasions did appreciate that, in the event of there being unstable conditions, not merely would we go backwards on our economic front but that the white collar worker particularly would be the class who would feel the pinch and feel the worst effects of any inflationary spiral which might be set off. I made it clear that I was not going to have such a spiral and that I would avoid it with every force at my command. I got co-operation on those lines and I am sure that that co-operation would have been forthcoming as long as that stability was maintained.
I hope the Minister will succeed—not for his own sake, not for the sake of that Party, but for the sake of the country as a whole. So far as the Minister, so far as that Party, is concerned, Fianna Fáil will always go down in this way: "Beware the Ides of March"—remember the 5th March, the day on which they were elected to govern. This is what is really outraging the people now—not the prices they have to pay, but the day on which Fianna Fail were elected, by a series of false promises, deliberately made to trick the people and the people know now that they have been tricked.
Deputy de Valera, as he then was, went down to Belmullet, and made it clear and even positive there that he and his Party stood for the retention of the food subsidies. Deputy Lemass went down to Waterford on the same day, mark you, to repeat the same thing, that the Fianna Fáil Party, beyond all else, stood for the retention in full of the food subsidies. Does anyone suggest it was a coincidence that Deputy de Valera, as Leader of the Fianna Fail Party, went away to the West to Belmullet and Deputy Lemass went to Waterford the same day and spoke more or less the same words; and that Deputy Traynor, as he then was, went to Doyle's Corner and said exactly the same thing?
Was that a coincidence? Was it not perfectly clear that they had met together and had decided that was to be the line to put to the people? We were told during the course of this debate that one of the reasons why they had to change their minds was the financial circumstances they discovered. They are all intelligent people—at least, they boast when they offer themselves as potential Ministers that they are intelligent people; and whatever his enemies may say about Deputy Lemass no one will deny his intelligence.
Week after week in every year for as long as I can remember, and certainly every week during the period that mattered, in Iris Oifigiúil, there is published, every Tuesday, the Exchequer Returns. On 29th January, the last Tuesday in January, there was given the last returns for January. They were there before the election campaign. They were available to Deputy de Valera, to Deputy Lemass, to Deputy Traynor and to the other leaders of the Fianna Fail Party. Anyone looking at these returns knew perfectly well that, quite deliberately, I had for example, in the end of November last, expended a sum of £1,000,000 out of balance for the purpose of alleviating unemployment, for the purpose of ensuring we would not go into a policy of deflation, that I was trying to offset the policy of earlier years by a policy of disinflation.
All the figures were there available to Deputy Lemass. He was able to see that expenditure had risen by £9,000,000. He was able to see that, excluding the special import levies, revenue had only risen by £1,000,000 and that, therefore, there would be a problem which the new Government would have to meet. If that was not enough, when I spoke at the Fine Gael Árd Fheis on 5th February, I made it quite clear, and deliberately made it quite clear, that there would be problems to be faced in this financial year. Notwithstanding the fact that Deputy Lemass knew that—and he did, because he quoted me during the course of the election campaign—Deputy de Valera, Deputy Lemass and Deputy Traynor, as they then were, deliberately went out to the electorate and told them they were not going to take these steps. They had all the information there, if they chose to look for it —and I believe they did, but I believe they deliberately decided to cod the people. It is that, that perfidy by Fianna Fail, which has the people so outraged and insensed by this Budget.
I should like to deal with a few small points raised by Deputy Sweetman, because they may not come into my general reply.
I could not do more than give a guess at the amount which came out of the stocking, as it were, for the prize bonds. The Deputy knows that secrecy is promised in this case and he could make as good a guess as I could, by seeing how much is in small sums, big sums and so on.
Hire purchase was dropped because it had become largely ineffective by the changes made before we came into office. We had to drop it or go back to the original plan of hire purchase, and that is possible any time.
I do not think I can be criticised so much for the higher price of tobacco, because the Deputy last year put 4d. a lb. on the old age pensioners, whereas I only put 2d. Therefore, the Deputy should not try to make out that he has a soft heart for the old age pensioners, if he thinks 4d. of an impost would be taken by them as better than 2d.
Why did you not take off 2d.?
It was a third of the imposition.
The Deputy made a point by the Bretton Woods Agreement. A separate Bill will be issued in connection with our joining the International Monetary Fund. I understand it could not be put into the Finance Bill, so a separate Bill will be introduced.
Is that because 25 per cent. of the quota has to be subscribed in gold?
It is not because of that that there must be a separate Bill. It is because the Bretton Woods Agreement comes into it and it could not be put in a Money Bill.
It would destroy the character of a Finance Bill.
I would say that we have a lot in common in this House. Listening to Deputy Sweetman and Deputy Costello, the Leader of the Opposition, and those whom I might call responsible speakers on the other side, there is no doubt that we have a lot in common, and it is well that we should advert to that fact first. We all agree that our object here is to secure a better standard of living all round. We all agree that that cannot be done, unless we have increased production in both agriculture and industry. It is obvious that if we have increased production in both agriculture and industry, the pool of goods for consumption, and so on, is higher and, there-fore, there is a better standard of living. I need not stress that any further.
That, of course, also will give more permanent employment, which we all desire. For that, we want capital. We all agree on that, too. Capital is necessary to provide the maximum production in both agriculture and industry. It is also necessary for State expenditure in State bodies such as the E.S.B., Bord na Móna, and so on, and, pending full-scale permanent employment, we all realise that we must do something to relieve unemployment, and money is necessary for that purpose.
I agree also with what Deputy Sweetman says, that the balance of trade must be maintained, but—and this is the point that some Deputies ignore—in order to have the maximum capital for capital purposes, we must balance the Budget. In fact, I think every Deputy who spoke from the other side, whether from Labour or from Fine Gael, said that we must balance the Budget, but, having stated that fact, he then proceeded to show how it should not be balanced. That would sum up the speech of practically every Fine Gael and Labour Deputy.
Nobody has disputed the figures I gave in the Budget speech. Nobody has disputed the figure that, having allowed for a certain increase in revenue in the coming year, having allowed for over-estimation, £3,000,000 —Deputy McGilligan in his speech to-day wanted me to put the £3,000,000 in twice—having allowed for that, once in my case, and having allowed for Supplementary Estimates, and so on, we arrived at a figure of £8,000,000 and we had to try to find that amount.
We disagree on a few things. Otherwise, this debate would not have taken up seven days. There was some objection to the 1d. on the pint of stout; there was very little objection to the tax on tobacco; there was a fair amount of objection to the tax on petrol; and I think I am not over-stating the case when I say that there was a fair amount of objection to the withdrawal of the food subsidies. I am not objecting to the Opposition opposing that. It was opposed by Members of my own Government in the beginning until they saw what the position was. The members of the Government to which I belong, at any rate, knew that the Budget should be balanced and when they saw that there was no other way of doing it, they agreed, but Fine Gael and Labour condemn it, although they see no other way in which it can be done and did not even suggest any way.
Oh, yes.
Nobody from Fine Gael or Labour suggested how it could be done from current income—it is current income I am talking about. It is all right to borrow to balance your Budget. I could do that the same as Deputy Sweetman did, but I did not want to. I wanted to balance the Budget properly from current income and, therefore, as current income could not be got, we had to reduce expenditure; in other words, reduce the Estimates.
I say that nobody from Fine Gael or Labour made the slightest suggestion as to how that £5,000,000 could be got if the food subsidies had been left there—nobody. They talked about capital items that could be brought in to do the job. They advised that borrowing should be done—borrowing for the Budget—which would put us back in the bad old days of the Coalition Government. We will not have it. We will not go back to those days. We will not have it. That is all.
I want to go on to another point. Deputy Costello made a reasonable speech. He had a difficult problem. He is an able advocate and he was pleading a bad cause, the cause of the Coalition. He did well as an able advocate and was reasonable and fair in his speech, but there is one thing he said to which I want to refer. He said it was decided at a meeting of the Government, on 2nd November, 1956, that the Estimates should not exceed £94,500,000, afterwards increased by £2,000,000 for C.I.E., that is £96,500,000 now. That was a decision of the Government. It was verified by Deputy Sweetman, former Minister for Finance, that that decision was taken. That means that every Fine Gael Minister and every Labour Minister agrees with that. I do not think an awful lot about the Coalition Government, but I cannot imagine that they would be so bad as to take a decision like that without knowing what they were doing. Surely to goodness, ten or 12 men will not sit down and say: "Reduce the Estimates by £5,000,000", without having some idea of how it will be done, at least a rough idea, and there is no use in any ex-Minister saying to me that they made up their minds to do that, without knowing how it could be done. No ex-Minister speaking in this debate, during the long speeches that were made—I think it probably holds the record for a Budget debate——
Nonsense; a short debate.
——gave us any indication as to what the cut would be on these published Estimates to amount to £5,000,000. None of them even gave us a suggestion of how £1,000,000 could be cut off, nor £500,000 nor £250,000. We had these Ministers in November, 1956, sitting down and solemnly making up their minds that they would take £5,500,000 off the published Estimates. To be exact, £5.66 million would have to be taken off. Will anybody tell me, even a backbencher of Fine Gael, who would nearly tell me anything, that these Ministers made that decision, without knowing how they were going to do it or how it would work out? If he does, remember, he will be telling the country that there was a crowd of incompetents ruling this country—which the people suspected already—who made Government decisions, without knowing where they were going. That is too much to expect. They did it anyway. They were going to reduce these Estimates to £96,500,000. I want to say again that the Labour Ministers agreed to this because I should like to have them included also lest there might be some come-back from them later on.
The non-capital Supply Services, the Estimates, amounted to £102.16 million. They were, as the House knows, prepared and published by the Coalition Government, but they were going to bring them down to £96,500,000, remember, according to a solemn decision of 2nd November, 1956. I learned that in this House. None of us went prying back over Government decisions for the past three or four years. We leave that to other people. We did not do it, but it was told to us in this House by the ex-Taoiseach and the ex-Minister for Finance.
How were they to get that £5,500,000? That is what I want to know. Remember that they had pledged themselves to do it. They pledged themselves to reduce the amount to £96,500,000. It is very strange that the former Taoiseach and Minister for Finance should have referred to this, without giving us some indication of what they had in mind. It is a strange coincidence that we reduced the non-capital Estimates by, first of all, taking out the food subsidies. Any Deputy can subtract the figures. We have £102,166 million and we subtracted £7.1 million for the food subsidies. Add £1.59 million for the social assistance classes and we get £97.02 million. We admit we did not do as well as the Coalition Government decided to do, but it is possible that if they had been doing what we did they might not have been as generous to the old age pensioners and would have arrived at the £96.5 million. By taking off the food subsidies and adding on social assistance increases we effected this economy. The Opposition have not told us how they were going to get that economy even to the extent of £500,000. It is an extraordinary thing that the figures should coincide. I think if I were addressing a jury now I would say that there was enough circumstantial evidence to hang a man.
The Budget has hanged the Minister.
If a man is standing trial for murder, he might have an alibi for the particular time, but the Opposition have no alibi whatever. They never suggested that they would take the money from any other source. They told us they would make this £5,500,000 saving, but they made no suggestions as to how they would do it. If they were to tell us even now how they were going to do it, I would plead with the Irish people to have mercy on them. Will they tell us, for instance, as one Deputy on the opposite side suggested, that they were going to do it by withdrawing the agricultural grant? They were going to do something and my guess is that they were going to do away with the food subsidies.
When Deputy Everett was speaking here on the Budget a few days ago—I think it was on May 21st—and making suggestions as to how we could balance the Budget without resorting to the withdrawal of the food subsidies, he mentioned a figure of £4,000,000 and said that he would save £1,000,000 on the President's establishment and £1,000,000 on the embassies. I am mentioning this merely to give Deputies an idea of Deputy Everett's ability to make up figures because a man who thinks he can take £1,000,000 from £50,000——
Quote Deputy Everett.
He never said £1,000,000.
I will quote it.
I was listening to him and he never said that.
Deputy Everett at column 1565, of the Official Reports said:—
"I would vote against maintaining some of our embassies abroad at the cost of millions of pounds and especially maintaining an embassy in the United States of America where the newly appointed representative to Ireland said it was in the interests of America to keep Partition in Ireland."
He would take £1,000,000 off the embassies. He then goes on to say——
On a point of order, I think the Minister ought to withdraw his allegation that Deputy Everett said he wanted to take £1,000,000 off the President's establishment.
I will quote that. At column 1566 Deputy Everett said:—
"Why do we need to retain—I am expressing my own views now—at a huge cost, the position of President? I am not saying anything against the present gentleman who holds the office and who fills the position with honour and credit. Why do we not economise in that direction and save another £1,00,000?"
I am quoting this only for this purpose. The total cost of the embassies is £320,000 and the cost of the President's establishment is £50,000. In the same speech, Deputy Everett said that he warned his constituents against a Fianna Fáil victory. Bread and butter, he said, would go up if Fianna Fáil should win the election and came back to power. Fianna Fáil would abolish the food subsidies and the people would have to pay 4/3 or 4/4 for butter. Note the figures. He said that the two lb. loaf of bread would be increased from 9d. to 1/1. He said that in Bray on 18th February and the figures are absolutely correct.
Why not?
When I was preparing this Budget, I got reports from the Departments of Industry and Commerce and Agriculture on bread and butter. I could not have made these tabulations out myself because they were most intricate and were worked out to such figures as .01674, and there were pages of them. I read the reports and accepted the figures. We know more about figures than Deputy Everett. We did not take £1,000,000 from £50,000.
That is quite unfair.
He could not have made out these figures himself and the only answer is that he must have got these figures from a Government source. Why did he get those figures from a Government source? Why did he get the exact cost of bread and butter, unless the previous Government had issued them for some purpose because, if he did it all himself, he would have said that the loaf was going to cost 4/6 and butter to cost 11/4. He must have got it from some Government source and the previous Government must have been responsible for issuing these figures.
Why did they issue them? Was it because they had something in mind? They were supplying Deputy Everett with figures of what the loaf would cost and what the pound of butter would cost, and they were also going to take £5,500,000 off the Estimates, and they do not say how or why they were going to do it. They will not give in that they were going to remove the food subsidies. If they would only agree now, I would recommend them to the mercy of the Irish people.
We are taken to task because we did not tell the Irish people that, if we came into power, we would abolish the food subsidies. We did not know the position. It is all right for Deputy Sweetman to say the figures were published each week in Iris Oifigiúil. A good student of politics like the Minister for Industry and Commerce probably does read that. However, it only states how much money has come in up to that date and what the expenditure is. There is no use in saying that the Minister for Industry or the Taoiseach had the information at that time. They had not got the information the Government had.
I was asked a question in Cushions-town by an intelligent man. I said that things were in a bad way. At that time I did not think they were in such a bad way. He had asked me what I would do if I were in the Government. I said to him that if I were appointed a receiver to try to bring a firm back on its feet I would first of all have to see the position. That was the answer I gave him.
I will bet the Minister has not gone back there since.
The Government knew in November that they would be obliged to reduce the Estimates by £5,500,000. We did not know that. That was not published in Iris Oifigiúil. That was a Government decision, a solemn decision which was quoted here by the former Taoiseach and the former Minister for Finance. Knowing they had made that decision, Deputy Sweetman said at the Fine Gael Árd Fheis: “We will have to increase taxation.”
I did not. Quote me correctly please.
If I did not quote the Deputy correctly I apologise.
That is the second time the Minister has given an incorrect quotation.
I did not say that. I shall give the Minister the quotation if he wishes.
If I am wrong I apologise. As I have said, we did not know that decision. The committee dealing with capital investment handed a report to the Minister for Finance on the 22nd January last. At that time the Government had decided to cut the Estimates by £5,500,000. They knew what the revenue was like, what the expenditure was likely to be. This report was presented to the Minister, recommending that food subsidies should be withdrawn and that the agricultural grant should be diverted to another purpose. The Minister was busy at that time. It was coming on to the election, but I feel quite sure that he saw the recommendation and that he told some of his colleagues what it was.
Why did he not publish it? Why did he leave that report in his desk and fight the election without telling the people that the report recommended the withdrawal of the food subsidies? We are blamed for not telling the people. Sure we had nothing to tell them. We did not know the Estimates were to be reduced by £5,500,000. We did not know what this committee had recommended. But Deputy Sweetman knew that. The other Ministers knew it. They went to the country, spoke to the people and hid all that information from them. If the Fine Gael Party were as determined then as they seem to be in the past two weeks not to withdraw the food subsidies, why did they not take the opportunity of publishing that report and of saying: "We will not adopt it"? Because, I suppose, they were thinking of the £5,500,000 they had to take off and what a beautiful recommendation they had got to help them in that plot. Off they went to the people and never said a word about the recommendations of this committee.
Because I knew the members of that committee would be blackguarded by everyone as they have been by Deputy Corry in this debate. I take full responsibility for making that decision.
I appreciate the Deputy's delicate feelings for the committee.
After all, he appointed them.
We did not know there would be a deficit of £8,000,000. But Deputy Sweetman was Minister for Finance and has the reputation among his own Party as being a good Minister for Finance. I am not denying that. Deputy Sweetman had a very good idea in February last that there would be a deficit of £8,000,000, yet he did not tell the people the Government would reduce the Estimates by £5,500,000. He kept the report locked away in his drawer. Why did he not tell the people what the report contained—the recommendation that the subsidies be withdrawn?
Why did the Minister tell them he was going to retain the subsidies?
I often admire the effrontery of the Fine Gael Party. My admiration is growing as time goes on.
It was only a recommendation. It need not have been adopted.
You did not reject it.
We want to know why you did not tell the people you would not accept it. Fine Gael, and particularly the former Taoiseach, have always regarded the food subsidies as being purely temporary measures. The Labour Party had the same idea as one will find if one reads what Deputy Norton said when they were first introduced. We are all in the same boat as far as that goes. Not one of us had any belief that food subsidies should remain for all time. We were all agreed they should be withdrawn at an opportune time.
We say this is an opportune time. In fact, we say this is the inescapable time. I suppose it is too much to expect that Fine Gael and Labour, who made such decisions before the elections, would agree with us now. Therefore we must go our own way. This £5,500,000 had to be found by us. The inter-Party Government saw, in November, 1956, that this money would be needed. We did not come to a decision until April but we came to the same decision as the inter-Party Government—that this £5,500,000 would have to be saved.
We could see no other way of saving that amount except on the food subsidies. Deputies opposite might like to tell us some time what they had in mind. It would be interesting to know how they would have saved that £5,500,000. The former Taoiseach and some of his colleagues including Deputy McGilligan say they would have used the special import levies to meet current expenditure. I should like to say that when the Minister for Finance brought in the levies, he put the following clause into the Central Fund Act of 1956:—
"(3) There shall be charged on the Central Fund, and issued in accordance with the directions of the Minister out of the Central Fund to the Fund, such sums as the Minister may from time to time determine as the sums equivalent to the Exchequer receipts in respect of special import levy.
(4) The Minister may apply the Fund for any purposes for or towards the cost of which public moneys are provided and which are conducive to the development or improvement of capital resources, and any such application may be on such terms or conditions as the Minister considers proper."
They were created as capital and if we had done what Deputy Costello and Deputy McGilligan advocated we would have had to change that Act. I am not saying that is impossible but it just gives the House an idea of the Fine Gael Party who this time last year passed an Act of Parliament to make them capital and they now come along and blame us for not turning them over to current expenditure,
I shall now quote Deputy Sweetman when he was Minister for Finance. The quotation will be found at columns 854 and 855 of the Official Report of the 20th March, 1956. He said:—
"I want to state clearly what Section 4 of the Bill means. Section 4 of this Bill provides that the Minister for Finance of the day cannot use the special import levies for the purpose of balancing ordinary current expenditure. He cannot do it under the law when this Bill is passed and enacted. I never intended to do it."
But he would not mind our doing it.
I never said any such thing.
I mean the Deputy's colleagues. Deputies Costello and McGilligan would not mind our doing it if they thought they would put us in a hole. Deputy Sweetman, as Minister for Finance, went on to say: "Luckily I had a fair idea of the depths to which certain Deputies in opposition might go in suggesting that I did intend to use it." Luckily, he had the foresight to see what Deputies in opposition would say about him if he used it for current expenditure. Now his colleagues Deputies Costello and McGilligan want to put us into the depths of using them for current expenditure. That was Deputy Costello's suggestion for balancing the Budget. Deputy McGilligan used that suggestion, plus £3,000,000 a year in respect of over-estimation together with the £3,000,000 already there because otherwise he could not add £3,000,000 to what was there already.
Deputy McGilligan more or less blamed me for raising up the Supplementary Estimates too high. I explained in my Budget speech why I did it, but I will tell the Deputies again. If they have any objection to a Minister for Finance trying to be honest, let them say so. In 1954-55, £750,000 was provided and £2,074,000 was spent. In 1955-56, £750,000 was provided for that purpose and £1,704,000 was spent. In 1956-57, £750,000 was provided and £1,162,000 was spent. This year I put it up to £950,000 to try, if possible, to make it a real figure to meet the Supplementary Estimates that would come along.
Deputy Costello also found fault with the provision of another £250,000 for employment schemes. That sum was provided in addition to what was already in the Estimate. I mention that because there were other Deputies on the Opposition side of the House who blamed me for not providing more. He also found fault with the provision for the bakers. There was a good deal of talk about that. I do not think I am the friend of any baker in the country. I do not think that I owe them anything. The case was put to me that they deserved this money. Deputy Norton says that he gave no undertaking to the master bakers.
The facts are that the bakers went to the Labour Court for an award in respect of wages and the master bakers said they would have to get an increase in the price of flour in order to give that increased wage. Deputy Norton says he gave no undertaking. The bakers gave the increase and it is very hard to understand why the master bakers would give an increase like that claiming they could not afford to give it unless they thought they were going to get an increase in the price of bread. That is all I can say about it at the moment. Is it not obvious that Deputy Norton thought the same, otherwise why would he come along a few months later and reduce the size of the loaf?
That was for the bakers' advantage and for nothing else. It meant that the baker got his 9d. for the loaf but the size of the loaf was cut down by one-eighth. If Fianna Fáil had been in office I am quite sure that, instead of doing that, they would have allowed the bakers to put up the price by a halfpenny or so and do it in an open way and not go behind backs like Deputy Norton did and reduce the size of the loaf. That was one of the trickiest things done in this country.
Is this for a bigger loaf now?
Deputy Norton reduced the size of the loaf by one-eighth. If we had come along now and reduced the size of the loaf by another one-third we could leave it at the same price and we could say like Deputy Norton that we kept the price of bread stable. Deputy Norton also said he had kept the price of sugar stable. He did, of course, but the increase was due on sugar and I suppose if he had remained there he would have gone on refusing to raise the price until he had got himself into the same mess as he got himself into in regard to the tea. You had Labour Deputies going round saying that the Minister for Industry and Commerce would not give an increase in tea. In the end he had to give in and allow the price of tea to go up by 2/– per lb.
Deputies opposite, in excusing their Government for anything that may have happened, always fall back on the defence that it has something to do with matters over which they had no control—in other words, world events. That may be a fair claim enough. Over the past few years there has not been the same economic upheaval in other countries as there has been in Ireland but when those opposite compare figures to show how well they have done they always compare them with the year 1947—a year following a world war when countries generally were recovering from shattered economies. That is a most unfair comparison but they persist in making it all the time but why not take the year 1956 with the year 1954, the last year Fianna Fáil was in office? If there was a good deal of talk about the 1952 Budget, I should like to instruct the Deputies opposite that if they study the figures they will see that the Budget of 1952 did the job. It pulled this country together and if they look at the figures for 1954 they will see that quite plainly.
In 1952 we had to clean up the mess created between 1948 and 1951 just as we are now doing in respect of the mess that occurred in the past three years. We had to bring in the 1952 Budget to do it. In 1951, before we did that our exports were £81.5 million. In 1954, before we left office, they were £115.3 million and in 1956, £107.4 million. We had the highest exports of all times in 1954 and that was as a result of the working of the policy behind, the 1952 Budget. It is time that the back benchers of Fine Gael became a little bit intelligent and found out what was the result of the 1952 Budget before beginning to criticise it. It is all very well to throw remarks around the House that this is the worst Budget since 1952 without knowing the policy behind the 1952 Budget. Deputy Sweetman said here to-night that the most important thing was the adverse trade balance.
Our external balance; that is not the same thing.
Our trade balance.
Our external balance, visible and invisible.
We shall take the whole thing together. In 1951, visible and invisible, it was £61.6 million after three years of Coalition rule—adverse, of course. In 1954, two years after the 1952 Budget, it was £5.5 million. It went down from £61.6 million to £5.5 million. The figures I have already quoted here show that was achieved by exports, not by cutting imports, because cutting imports is a prelude and a sign to cutting the standard of living. The balance in 1955 was £35.5 million and in 1956 it was £14.4 million.
With regard to employment, in 1951 there were 184,000 employed in manufacturing industry. In 1954 there were 189,000 employed and the figure went back to 187,000 in 1956. Do Fine Gael back benchers believe that? They certainly do not believe that if they listen to their front benchers. The year 1954 was the best year of all and the reason was the 1952 Budget. The number engaged in agriculture was declining all the time but the one year that remained constant was 1954 when the number engaged in agriculture was the same as in 1953. It was the first year for which we have figures to show that the decline in agriculture had stopped. Then the inter-Party Government came in and the numbers employed in agriculture went down again.
Why?
Because they came in, of course. Deputy Dillon quoted other figures. I should like to refer to them as figures as amended by Deputy Dillon. He gave us what he said was the highest number of cattle of all time. That may be. I do not know. It may be right but I want to say that while the number was higher over 1954 by 34,000, the number of cows and heifers in calf was lower by 8,000 so that it is questionable if it is going to be a continuous increase.
Certainly, with the elimination of calf mortality.
Perhaps the Deputy is right. Deputy Dillon did not quote pigs. It is a remarkable thing that when Deputy Dillon comes into agriculture, pigs go out. Pigs were down by 216,000 in 1956 compared with 1954 and sows were down by 18,000. If Deputies opposite would like to put all the figures together—exports, adverse balance, employment in both industry and agriculture, cattle, sheep, pigs and everything else—they could then make up their minds whether Deputy Dillon was right or not.
What was the consequent unemployment figure in 1954 following the 1952 Budget?
It was lower than it is now. Deputy Flanagan and others said the Coalition had left us a clean sheet. They left us first of all £6,000,000 of debt on last year's Budget, and moneys owing to every local authority in Ireland and, indeed, to many individuals. I do not know if it is hundreds, thousands, or tens of thousands who were waiting for their grants for farm improvement schemes and so on.
With regard to the Road Fund, Deputy Sweetman as Minister last year took £500,000 out of it. This year, I had to put £1,000,000 back into it. I not only had to put in £500,000, but I also had to put in the £500,000 which he took out as well.
It is suggested that there is inconsistency in some of our speeches or in some of our reasoning because we say it is unfair and wrong to be giving cheap bread and butter to people who are well-off and at the same time giving increases in children's allowances. When children's allowances were first brought in we did deduct the allowance a person got from his income-tax assessment allowance so that he was no better off if he was an income-tax payer. There were changes in the income-tax rate in 1946, 1948 and 1949 and there was no change made so far as children's allowances were concerned but, in 1954, Fianna Fáil brought in a Budget whereby a change was made in the income-tax code. Up to that, a person paying income-tax got exemption on £80 of income for the first child and £63 for other children. In 1954 that was made £85 all round and in 1955, under Deputy Sweetman as Minister for Finance, it was made £100 all round.
I am up against the fact that every Party in this House has agreed to the principle that the income-tax rate should not be interferred with so far as children's allowances are concerned. If we leave the lower and middleincome group aside, and go to the group above that, I think that the amount to be saved would not be very considerable. There is a difference in principle between giving a gift or subsidy, or whatever you like to call it, to the rich and to the poor alike, and giving a benefit to the big family as against the person who has no family at all.
There was a good deal of comment on certain of the import levies that were withdrawn. I am sorry Deputy Sweetman has now gone outside. I was going to quote Deputy Sweetman again. He was first to start this hare on the day the Budget speech was made here. He passed a remark about high-powered cars and Deputy Dillon also commented on that. Again, I do not mind the back-benchers, but Deputy Sweetman and Deputy Dillon I think were very unfair to pass remarks like that when they knew the facts. When these import levies were put on there were negotiations with the British Government and, in a letter from the United Kingdom Trade Commissioner here he said they would agree, provided the levies on those cars costing over £1,300 would be removed at the earliest possible moment, and that as soon as the levy was reduced or abolished for motor cars or motor car parts the levy on that type of car would similarly be reduced or abolished.
That is exactly what I said here half an hour ago. I said that, so long as you left my scheme there, it was all right but that as soon as you altered it the British Government had you. You changed it.
Surely the Deputy knew, after the Budget speech, that we had not left it there? Still, he started this talk about high-powered cars. Deputy Norton said it was not necessary to do it and that the British had not insisted on doing it. However, they had insisted that that levy should be withdrawn. What object do Deputies expect to achieve by saying that we are in favour of the big cars, and so on? I suppose that, in all, only a few dozen big cars come in here during the course of a year. Remember, too, that they are paying 22 2/9ths per cent., although neither Deputy Sweetman nor Deputy Dillon said so.
Motor bodies are paying 25 per cent. and the chassis are paying 20 per cent. It was explained at the time that there was a good deal of unemployment in the motor industry because of the uncertainty of the future. It was done in order to remove the uncertainty and to let the motor people go on with their business. It is all very well for Deputies to talk here about that sort of thing but I should like to know if they would meet the employees of the motor assembly industry and tell them they are in favour of the old scheme and put them out of their employment again.
The same thing too, to a great extent, applies to wireless sets, television sets, and so on. Deputies on the Opposition benches may laugh: it is easy to amuse them. They are paying 70 per cent., or £7 10s., on a wireless set and 50 per cent., or £5, preference duty if the set comes in from Great Britain. Do Deputies opposite think we should put more on it?
Sometimes we hear Opposition Deputies talk about the protected industries. Sometimes we hear them say that such industries are getting too much protection or are getting away with too much. Then they say, trying to appeal to the mob—the demagogic approach—that this Government is letting wireless sets in——
Television is a must. You ran away from the mob.
There is no "mob" in Ireland. That expression is an insult. The Minister should withdraw it.
Umbrellas—37½ per cent. and 25 per cent. Gramophones—33? per cent.
Rock an' roll records— how much? That shook you.
I am not prepared to answer that sort of silly nonsense. As far as I know, nobody here objected to reliefs given to industry. Deputy Norton, the leader of the Labour Party, said that as far as he was concerned the more done in that direction the better as the objective, naturally, is to get people working.
We are all in favour of permanent employment. This Government is doing something to promote it. Then the Deputies opposite appeal to the mob and say that we are giving something to the big industrialists.
There is no "mob".
Order!
There is not very much use in subscribing to the principle of balancing the Budget when, at the same time, you object to any plan for balancing it—that is, unless an alternative plan is given. I have been on to that point already. I have not heard anybody give any suggestion of real value. Any suggestions were of two kinds: (1) the silly suggestion Deputy Everett made about saving £1,000,000 out of £50,000 or (2) suggestions by Deputy Costello and Deputy McGilligan which amounted to balancing the Budget by borrowing. We cannot do that. As a matter of fact, I think the spokesmen from the Fine Gael and other benches would say that that would be wrong. The Budget should not be balanced by borrowing but by current income.
I have emphasised before and I will say it again—the other Parties have had seven days to talk on this debate and I want to say my say, too—that the Government have a policy and that the balancing of the Budget is only a part of it. In particular, the policy is to promote more production and to get more permanent employment and, in that way, to get a better standard of living for everybody in the country. I have emphasised also that all our capital resources will be required for success in that object and that capital cannot be spared to pay our current expenditure—to balance the Budget. I agree, therefore, that any suggestions that we should use capital to balance our Budget should be rejected.
We have a desperate situation to deal with. Remember that in the past two years, 1955 and 1956, approximately 98,000 people left this country. It is the highest figure since the famine. In addition, there were almost 100,000 people unemployed at the beginning of this year. It was a terrible situation. Deputies should give more thought to and take this problem more seriously. They should not merely think of the good points they are making which will suit them in the country afterwards, at an election or any place else. They should think of the problem and try to help to solve it as far as they can.
We have heard about the stability of the Coalition Government. We do not want that stability. That stability was coming there all right—stability in emigration, stability in unemployment, stability in doing nothing. We do not want that sort of stability and we are not going to have it. It is all right for Deputies opposite to say that they kept the cost of living, and so on, right. They did not, but they said so. That sort of stability was achieved by the process, all the time, of doing nothing and certainly not doing anything that would try to right the situation that was there—the big problems of emigration and unemployment.
The situation is very serious and courageous Ministers are necessary to deal with it. Of course, capital is one of the essentials to deal with this problem. We want capital for private enterprise. There is a lot of criticism about doing something for the manufacturers but I would point out that we are a private enterprise country. We are not behind the Iron Curtain. We cannot order capital into this or that industry. Private enterprise can get capital only by the profit incentive. People will not put money into a private enterprise unless they think they will make a profit. Therefore, we must make it possible for private enterprise firms to make a profit. The only way we see of doing that is to try to lessen the taxation on them.
We want capital both for private enterprise and for State purposes—the Local Loans Fund, housing, sanitary schemes, the Road Fund, E.S.B., Bord na Móna, telephone services, and so on. To allow the position to drift would be criminal. I am quite convinced—and I am sure the same can be said about many Deputies on the opposite benches, if they could forget the political advantage they could take out of this debate—we should not allow the position to drift but that we should do something to try to right it. We are taking that step. You may say it is wrong but, for goodness' sake, treat it in an honest way and help us or at least do not interfere with us in trying to solve this problem.
We have talked now for seven days. It is extraordinary to hear the members of the Fine Gael Party getting up one after the other and saying the same thing. What do they think they will gain? Will we solve the problem by every man making the same speech as the one before? If they were serious, would they not say "That speech has been made already. Let us sit down and see what we can do to solve the problem"? Is the object not obvious: "I have to make a speech for the local paper the same as the other fellow"? It is far more important for Fine Gael to have speeches in the local papers than to solve the problems of this country.
The Government, which has the responsibility of planning for the future, is in no way indebted to any member of the Opposition for a single worthwhile suggestion. There was not a single one in this whole debate. Could any Deputy opposite get up and contradict that——
(Interruptions.)
Certainly——
Unless the Minister gives way the Deputy may not intervene.
They talked for seven days advocating that we should balance the Budget, stressing the need for more production, the need for capital for that purpose and deploring the high rate of unemployment and emigration but condemning a suggestion that was made by this Government to deal with that problem. They think that by going on talking things will come all right. Seeing that they failed for over three years as a result of their policy of drift, would you not think that they would have contented themselves by saying they did not believe in our plan but were quite satisfied to sit back and let us have a try at it? But no, that would not suit.
Almost every Deputy on the Labour side said we were always talking about production, about people spending too much and about the people being too well off. They also mentioned the appeal I made in my Budget speech for people to take this Budget and try to carry on without compensating themselves for some time. They were appalled at all this. Yet they voted for the Finance Act last year after hearing this speech from Deputy Sweetman——
Quote it accurately now.
It is from the Dáil Debates of the 25th July, 1956, at column 1603. Deputy Sweetman said:—
"Stability of money incomes is essential. The measures which I have announced must reduce the purchasing power of incomes by raising the cost of certain imports. They will be rendered ineffective if there is any effort to compensate for this reduction in purchasing power by pressing for higher monetary incomes."
It was all right for Deputy Sweetman to say it—they went into the Division Lobby and voted afterwards—but when Fianna Fáil says it, there is a cry out to the Labour people all over the country: "Go for your increases of wages and embarrass the Government as far as you can."
Hear, hear!
Deputy Sweetman also said:—
"In the present serious situation we must all accept a temporary lowering of our standards as a condition of building them on a surer foundation."
They were prepared to accept "a temporary lowering" from Deputy Sweetman. If anybody from this side said the workers should lower their standard of living, there would be an outcry from Labour that Fianna Fáil thinks the Labour fellows are too well off. It was all right for Deputy Sweetman to say it. All the Labour men—there were a whole lot more of them there at that time—went into the Division Lobby and voted for them.
Deputy Sweetman went on:—
"Another round of increases in money incomes on top of those gained last year would be certain to price many of our products completely out of foreign markets. It would be certain also to aggravate our balance of payments difficulties and to necessitate a contraction in our plans for national development."
If I had read that quotation to the Deputies opposite, they would say I was reading my Budget speech again. When Deputy Sweetman made it last year they trooped into the Division Lobby afterwards. It shows what genuine Labour men we have in the House. It depends on who makes the speech, not on the speech or on what will be done.
Deputy Norton and other speakers— I shall be able to go on with this homily on much surer ground now seeing that Deputy Sweetman is with me —have forecast and even urged that organised Labour should compensate themselves against the removal of the subsidies by higher wages. The community must pay its way and the community to-day means the workers in the widest sense—those who draw wages, salaries or profits. If we continue to run a Budget deficit, the workers, as I have defined them, will not pay their way. That is exactly what Deputy Sweetman pointed out last year.
This Budget is an attempt to get things right so that we will pay our way. We can all count ourselves workers in the definition I gave—wage earners, salary earners or profit makers, as the case may be. If any section, whether wage earners, salary earners or profit earners, succeeds in getting more money without any increase in production, that extra money will be used to purchase goods. That will have the effect of increasing imports or decreasing exports and will also increase the cost of exports. That, in turn, will eventually lead to a deficit in the balance of trade. I do not think anybody can disagree with me so far. That will be followed by a credit squeeze and then we shall be back again as we were under the Coalition in 1955 and 1956 with more unemployment and more emigration.
If all concerned, instead of urging these measures they have so violently urged here, would turn their attention to reducing the cost of production, it would eventually make more production possible and lead to more employment and a better standard of living all round. Those who urge a general demand for increased wages and salaries must accept responsibility for the consequences. I do not want to exaggerate those consequences but it will be at least more difficult for the Government to solve the twin problems of unemployment and emigration. The Government may be embarrassed in implementing its programme but Deputies should make up their mind as to whether the embarrassment of the Government or the welfare of the unemployed is more important to them. I would ask Deputies to keep these facts in mind in casting their votes in this division.
Question put.
The Committee divided: Tá, 75; Níl, 57.
Tá
- Aiken, Frank.
- Allen, Denis.
- Bartley, Gerald.
- Beegan, Patrick.
- Blaney, Neal T.
- Boland, Gerald.
- Boland, Kevin.
- Booth, Lionel
- Brady, Philip A.
- Brady, Seán.
- Breen, Dan.
- Brennan, Joseph.
- Brennan, Paudge.
- Breslin, Cormac.
- Briscoe, Robert.
- Burke, Patrick.
- Butler, Bernard.
- Calleary, Phelim A.
- Carty, Michael.
- Childers, Erskine.
- Clohessy, Patrick.
- Collins, James J.
- Corry, Martin J.
- Cotter, Edward.
- Crowley, Honor M.
- Cunningham, Liam.
- Davern, Mick.
- de Valera, Eamon.
- de Valera, Vivion.
- Doherty, Seán.
- Donegan, Batt.
- Dooley, Patrick.
- Egan, Kieran P.
- Egan, Nicholas.
- Fanning, John.
- Faulkner, Padraig.
- Flanagan, Seán.
- Flynn, Stephen.
- Gallagher, Cohn.
- Geoghegan, John.
- Gibbons, James.
- Gilbride, Eugene.
- Gogan, Richard P.
- Griffin, James.
- Haughey, Charles.
- Hillery, Patrick J.
- Hilliard, Michael.
- Humphreys, Francis.
- Kenneally, William.
- Kennedy, Michael J.
- Killilea, Mark.
- Kitt, Michael F.
- Lemass, Noel T.
- Lemass, Seán.
- Loughman, Frank.
- Lynch, Celia.
- Lynch, Jack.
- MacCarthy, Seán.
- McEllistrim, Thomas.
- MacEntee, Seán.
- Maher, Peadar.
- Medlar, Martin.
- Moher, John W.
- Moloney, Daniel J.
- Mooney, Patrick.
- Ó Briain, Donnchadh.
- O'Malley, Donogh.
- Ormonde, John.
- O'Toole, James.
- Ryan, James.
- Ryan, Mary B.
- Sheldon, William A. W.
- Sheridan, Michael.
- Smith, Patrick.
- Traynor, Oscar.
Níl.
- Barry, Richard.
- Beirne, John.
- Browne, Noel C.
- Burke, James.
- Byrne, Patrick.
- Byrne, Tom.
- Carew, John.
- Carroll, James.
- Coburn, George.
- Coogan, Fintan.
- Corish, Brendan.
- Cosgrave, Liam.
- Costello, Declan D.
- Costello, John A.
- Crotty, Patrick J.
- Desmond, Daniel.
- Dillon, James M.
- Dockrell, Maurice E.
- Esmonde, Anthony C.
- Everett, James.
- Fagan, Charles.
- Finucane, Patrick.
- Flanagan, Oliver J.
- Giles, Patrick.
- Hogan, Bridget.
- Hughes, Joseph.
- Jones, Denis F.
- Kenny, Henry.
- Kyne, Thomas A.
- Larkin, Denis.
- Lindsay, Patrick.
- Lynch, Thaddeus.
- MacEoin, Seán.
- McGilligan, Patrick.
- McMenamin, Daniel.
- McQuillan, John.
- Manley, Timothy.
- Mulcahy, Richard.
- Murphy, John.
- Murphy, Michael P.
- Murphy, William.
- Norton, William.
- O'Donnell, Patrick.
- O'Higgins, Michael J.
- O'Higgins, Thomas F.
- O'Reilly, Patrick.
- O'Sullivan, Denis J.
- Palmer, Patrick W.
- Reynolds, Mary.
- Rogers, Patrick J.
- Rooney, Eamonn.
- Russel, George E.
- Spring, Dan.
- Sweetman, Gerard.
- Tierney, Patrick.
- Tully, John.
- Wycherley, Florence.
Tellers:— Tá: Deputies Ó Briain and Hilliard; Níl: Deputies O'Sullivan and Kyne.
Question declared carried.
This Resolution and the Resolutions come to by the Committee on 8th May reported and agreed to.