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Dáil Éireann debate -
Wednesday, 15 Apr 1959

Vol. 174 No. 3

Financial Statement. - Budget, 1959.

1. CURRENT ACCOUNT, 1958-59.

Two years ago, when introducing my first Budget, I emphasised that we could not allow any of the capital needed for productive purposes to be drained away in meeting deficits on current account. I said that the immediate and most essential task was to stop this drain: that done, we could direct our attention and our resources to the fundamental problem of economic development. The accounts for the year just ended show that this first objective has now been achieved. The Current Budget for 1958-59 was balanced—indeed, showed a small surplus—in contrast with the deficits of roughly £6 million incurred in both 1956-57 and 1957-58. We can now apply ourselves with greater confidence to the tasks that lie ahead.

The details of last year's outturn are available to Deputies. Despite the large supplementary sums needed to support wheat and butter prices, Supply Services expenditure exceeded the budgetary figure by only £96,000. In fact, current expenditure on the Supply Services was £1.4 million lower last year than in 1957-58. Though taxation was not increased, revenue exceeded our expectations. Lower short-term interest rates led to a small saving in the Central Fund Services. The net effect of all this was to justify —and more than justify—the allowance of £1½ million for errors of estimation.


On the capital side it will be seen from the tables that expenditure last year fell short of expectation, mainly because the capital earmarked for local authorities was not fully taken up. Total public capital expenditure amounted to £37.8 million compared with the budget forecast of £40.3 million. Capital outlay by local authorities fell £4 million below the estimate but variations under other heads reduced the shortfall to a net £2.5 million.

There were various reasons for the drop in expenditure by local authorities last year. In many areas housing needs appear now to be almost fully met. Building work on hands was held up by the wet weather which prevailed during the summer and autumn. While the demand for Small Dwellings loans exceeded expectations in the Dublin City area there was a fall in the demand in other parts of the country.

The sources from which public investment was financed in 1958-59 are shown in Tables II and III. Table II has been expanded to give more information. I hope that Deputies will be facilitated by this and other improvements in the Tables circulated.

Total public investment in 1958-59 came to £37.8 million. The capital available to public bodies from sources other than the Exchequer was £13 million which left a balance of almost £25 million to be financed by the Exchequer. There was gratifying public support for the capital programme through the National Loan, Exchequer Bills and small savings, including Prize Bonds.

It was only to be expected that the receipts from Prize Bonds would not continue at the high level of the first year after their introduction. Nevertheless, the intake from the last three half-yearly issues has been most satisfactory. The total net receipts last year were £2¼ million. The success of the Bonds naturally affected to some extent the support given to the traditional forms of small savings but, in spite of this, the net receipts from Savings Certificates and the Savings Banks, at £2.7 million, showed an increase of £2 million over 1957-58. Taken together Prize Bonds, Savings Certificates and the Saving Banks brought in £5 million of new savings in 1958-59.

The public issues of Exchequer Bills, which were initiated in June, 1957, have proved so successful that the amount of the quarterly issues has been raised progressively from the original £2 million to £6 million. The further step which is now being taken of converting the issues from a quarterly to a monthly basis should prove an added attraction to investors. The discount rates at which Bills are being taken up, in common with other short-term interest rates, fell considerably during the past year. The close correspondence, to which I referred last year, between the average discount rates on our Bills and on British Treasury Bills has continued.

As will be seen from Table X the increase in 1958-59 in the outstanding public debt was £15 million. The net annual increase in debt service charges associated with the growth in the public debt in a major obstacle to the reduction of taxation. This problem has been underlined in the introductory part of the White Paper on Economic Expansion, where the Government have undertaken to strive to reduce the effective burden of taxation by, amongst other things, moderating the growth in net debt service charges. This has to be achieved, in our circumstances of inadequate total investment, not by reducing public investment but by devoting a much higher proportion of it to productive purposes.

In this context, too, the balanced budget of 1958-59 is a cause of satisfaction as it means that the sum of £9 million of sinking fund charged against revenue was properly and effectively applied to the reduction of the public debt. This is a point to be remembered against the complaint that no effort is made to redeem deadweight debt.


During the debate on last year's budget it was suggested that it would assist Deputies if the economic statistics which were included in 1957 and 1958 in the Tables in connection with the Financial Statement were circulated separately in advance of the budget. As this was done in the paper issued a few days ago, I shall refer now only to the main trends disclosed by these statistics and to the economic prospects, as I see them, for the year ahead.

The drop in agricultural production last year, which caused the net fall in national output, was due entirely to the bad harvest. With reasonable harvesting conditions this year, agricultural production should more than regain the lost ground, especially in view of the gratifying increase in breeding stock and young cattle recorded at the livestock census in January last.

Production and employment in industry rose in 1958. Compared with 1957, output in manufacturing industries increased by 4 per cent while employment was 2,000 higher on average. Though the unemployment figures for recent weeks are running about 5,000 less than a year ago, they are still much too high and it is the aim of Government policy generally to increase employment as rapidly as possible. We are not, of course, the only country suffering from a serious unemployment problem. Indeed, in many countries the situation worsened during the past year in contrast to the improvement achieved here simultaneously with a fall in emigration.

The trade figures are a good indication of the improvement in our economic affairs. There were two years in the last decade—1951 and 1955— in which our imports exceeded the £200 million mark. In each of these we incurred large, insupportable deter ficits in our balance of payments. In 1951 the deficit was £61 million and in 1955 £35 million. We are now in a position to afford imports of £200 million a year and the reason is that exports, which were only £82 million in 1951 and £111 million in 1955, reached £131 million last year.

There has been some disimprovement in our trading position in recent months. In January, imports were exceptionally high and exports were well below average. The February trade returns were somewhat better, although the deficit was higher than in the corresponding month of 1958. Imports have been enlarged by exceptionally heavy purchase of foreign wheat to make good the deficiency in home supplies. They have also included some non-recurring items of a capital nature, such as equipment for the oil refinery at Whitegate. On the other side of the account, exports of cattle, which were rather low in January and February, are likely to expand in the coming months in view of the increased numbers available and the favourable market prospects. This expansion should offset, so far as consumer goods are concerned, the effect of higher imports on the balance of payments.

The economy has gained ground generally. The forces of inflation seem to have been pushed back. Prices have been reasonably steady for some time and, though savings have declined, the balance of external payments has not been seriously impaired. Productive home assets have been built up. External reserves have benefited from a capital inflow which indicates external confidence in our economy. Current revenue and expenditure have been brought into balance. The banks and other lending institutions have made special arrangements to meet the growing demand for agricultural and industrial credit for productive purposes.

All this should stimulate and sustain us in our efforts to achieve a big increase in national production over the next few years. These efforts may involve some strain on the balance of external payments in the interval between capital investment and the resulting increase in production but the economy seems now to be sufficiently healthy for such a risk to be taken. If we had not the courage to run a limited, temporary risk for sound long-term ends—and the resolution to correct any really adverse trend in good time—we could not hope to make the maximum progress in increasing production and reducing unemployment and emigration in the years immediately ahead. At the same time, we must see that we do not overspend for current purposes or waste in any other way the capital we must use productively if we wish to raise our living standards permanently.

Having assessed as carefully as possible the economic forces likely to operate on the balance of payments in 1959, I am satisfied that it is appropriate to frame this year's budget on the basis of an increase in State capital expenditure on the one hand and, if at all possible, the provision of some incentives to initiative and effort on the other. I believe that increased investment, important though it is, does not by itself hold the key to the solution of our problems. More important still is the human factor—the will of our people to work for their own and the country's betterment and their efficiency as organisers, producers and salesmen. The human factor, indeed, is the main driving force in the process of economic and social advance.


From the White Paper of Receipts and Expenditure issued last Friday it appears that, at existing tax rates, revenue little more than suffices to meet current expenditure in the year ahead. Before considering the prospect further, I am obliged by promises made, not only to our own citizens but to foreign Governments, to review one rather important item of revenue, the Special Import Levies.

Special Import Levies.

Last year I brought the revenue from the remaining levies into the Exchequer as a current item and, in fact, their yield of £1.8 million helped to balance the budget. While they are important as a source of finance, I am obliged by the circumstances in which they were introduced to consider the levies primarily as a check on imports of less essential goods. The two aspects—revenue and import control— cannot, however, be divorced. The support which the levies bring to the balance of payments is not to be measured solely by their direct effect on imports; it is enhanced by their influence on individual attitudes towards spending and saving. Their direct effect itself is not inconsiderable at a time when imports are showing a tendency to rise and the balance of payments is probably no longer in surplus. Neither from the balance of payments nor from the financial viewpoint, therefore, can we yet afford to abolish the levies completely.

Moreover, I am convinced that the objective of economic expansion is better served by giving any tax reliefs we can afford this year mainly to ease direct taxation. This accords with the principle, enunciated both by this Government and the Opposition, that whatever taxation is necessary should, in the circumstances of this country, fall more heavily on expenditure than on income.

At the same time, I would like to show that the periodic review of the levies is not an empty ritual and that, so far as our general position permits, the policy of relaxation will be pursued.

Following a comprehensive review, the Government have made an Order under the Imposition of Duties Act which, as from tomorrow, abolishes a number of levies and reduces most others, leaving the full levy on only a short list of less-essential goods from which the bulk of the revenue is derived. Thirty-five items are completely freed and, where reductions are made, the rate of reduction varies from one-third to one-fifth. In a few cases the levy has been replaced by a protective duty. The details are too lengthy to specify now; copies of the Order will be circulated as soon as I conclude. The net loss of revenue in 1959-60 is estimated at £220,000. I can promise no further review until I come to frame next year's budget.

Adjustment for overestimation, etc.

The effect of this adjustment is to leave a revenue shortage of £131,000 on the White Paper figures. I am, however, encouraged both by last year's experience and by the general economic trend to anticipate a more favourable outcome than is foreshadowed in the White Paper. Without any real risk, I can obviously repeat last year's allowance of £1½ million for errors of estimation. I shall come later to the consideration whether I might not justifiably go further this year in order to give a fillip to economic expansion.

An allowance of £1½ million for overestimation, etc., would leave me with £1,369,000 in hands. In deciding how this limited amount should be applied, I propose first to meet the most pressing of our social obligations before considering other propositions, however desirable they may be from an economic standpoint.

Pension etc. Increases.

I have received many representations to ease the lot of old age pensioners and I am glad to be able this year to show my sympathy for them in a practical way. Most old age pensioners are unable to fend for themselves or to increase any small private means they may possess apart from their pensions. I have decided to increase the maximum rate of pension from 25/- to 27/6d. a week. The increase—which applies also to blind pensioners—will be effective from the 1st August next.

There will be a similar increase of 2/6d. a week in the maximum rate of non-contributory pension for a widow and in the Unemployment Assistance rate for a married man with a wife or other adult dependant.

The cost of these additional benefits is estimated at £883,000 in the current financial year.

I would also like to do something this year for the older group of public service pensioners. These comprise pensioners from the Army, the Garda Síochána, retired National Teachers and Civil Servants as well as pensioners from the service of local authorities. Those pensioners who retired many years ago have suffered a substantial reduction in the purchasing power of their pensions because of the fall in the value of money. This has caused anxiety and distress to the rather large number whose pensions are relatively small. I think that all will agree that pensioners who gave long and loyal service to the State in their different spheres deserve special consideration. Within the limits of the sum at my disposal, the best that I can do for these various State Services pensioners is to increase by 6 per cent the pensions of those who retired before 1st November, 1948, and to increase by 4 per cent the pensions of those who retired between 1st November, 1948, and 31st October, 1952. The increase for the second category will be subject to the condition that no pension will be increased beyond the amount of pension for similar rank and service granted to a person who retired after 31st October, 1952. These increases in State Service pensions will be effective as from 1st August, 1959, and will cost £58,000 in the current financial year.

I also propose to increase by 6 per cent. the Military Service Pensions paid to those who did military service for the nation during the troubled years 1916 to 1923. The cost for eight months of the current financial year will be£23,000.

The cost of the foregoing concessions in the current year will be £964,000. Certain necessary reliefs in Entertainments Duty will make a big inroad into the balance available.


All Deputies have already been made aware by cinema interests of the basis of their claim for a reduction of duty. During the past year I have had their position subjected to detailed examination. From the results it is clear that early relief is essential if the future of this industry is not to be put in jeopardy. The cinema is an important medium of entertainment and relaxation for a large section of the community and provides extensive and valuable employment. I propose to include in the Finance Bill a new reduced scale of Entertainment Duty for cinemas which will come into operation on 1st August next and will cost £150,000 in the current year.

Broadly, under the new scale admission charges up to 8d. will be tax-free in future, as compared with the present limit of 5d.; there will be a reduction of 1d. in the duty element in inclusive prices up to 1s. 9d., a reduction of 1½d. at prices between 2s. Od. and 2s.7d. and a reduction of 2d. at prices from 2s. 9d. upwards. As the relief is designed to benefit the cinema industry, reductions in prices should not be expected.


Cine-variety entertainments now survive in only one Dublin theatre. These shows are taxable in the first instance at the same rates as ordinary cinemas but where the "live" show constitutes not less than 25 per cent. of the whole a repayment of 50 per cent. of the total duty paid is allowed. It is clear that the demand for this type of entertainment continues to decline, whereas the costs of stage shows are rising. Unless relief is given, there is a real danger that cine-variety entertainment may become a thing of the past. Apart from other considerations this would involve the disemployment of the considerable permanent staff and the loss of a valuable platform for Irish variety artists and musicians. The form of relief I propose, therefore, is to raise the rate of repayment of duty for this type of entertainment from 50 per cent. to 75 per cent. The necessary provisions will be included in the Finance Bill to operate from the 1st August next and the cost this year will be about £10,000. I may add that the claim for this relief has had the strong support of the Dublin cinema trade generally.


In the case of dances also, I am satisfied that the introduction of a lower scale of tax is imperative. I propose to exempt from tax admission charges up to 2s. 6d. and to reduce the duty element in inclusive charges from 4s. 6d. upwards by 2d.; at prices between 2s. 6d. and 4s. 6d. the reductions will vary but will not in any case be less than 2d. The new scale, which will be included in the Finance Bill, will operate from the 1st August next and the cost this year will be about £25,000. I hope these changes will enable many semi-philanthropic groups to run short dances at charges which will be free of any duty.

Under existing law full relief from Entertainments Duty is allowed for entertainments promoted for charitable, philanthropic or educational purposes, provided that the expenses of the entertainment do not exceed 50 per cent. of the takings. I have had strong representations to the effect that many voluntary charitable organisations are nowadays deterred from holding dances—a traditional means of raising funds—because they fear they cannot fulfil the expenses requirement. Accordingly, I propose to include in the Finance Bill a provision, limited to dances only and operative from 1st August next, raising the limit to 60 per cent. of the takings. As the object is to facilitate the holding of dances which otherwise would not be held any cost involved will be trifling.

Greyhound Racing.

Greyhound racing is liable to Entertainments Duty whereas greyhound coursing and horse racing are not. This difference in treatment which is of many years standing was justified in the past by the practical consideration that greyhound racing was in a position to support the burden of the duty whilst greyhound coursing and horse racing were not. More recently, the growing appreciation of the potentialities of the greyhound industry has led to the setting up of Bord na gCon, one of whose functions is to protect and foster the breeding and export of greyhounds. That body has represented that retention of the Entertainments Duty on greyhound racing is prejudicial to the development of the industry. I accept that view and, as the racing season has already opened, I propose to abolish the duty as from tomorrow, 16th April. This will cost £20,000.

Professional Boxing

Indoor professional boxing tournaments are seldom held in this country because the incidence of Entertainments Duty acts as a strong deterrent. Such tournaments are, however, quite popular in other European countries. Those concerned with the promotion of tourism in this country believe that international professional indoor boxing tournaments held in connection with An Tóstal would prove a tourist attraction. I am satisfied that there are good grounds for acceding to the request for exemption from duty, particularly as the yield is negligible. I propose that the exemption shall have effect from tomorrow, 16th April.

Rural Entertainments.

Section 16 of the Finance Act, 1954, provides duty concessions for entertainments held in rural areas depending on the size of the local population. The Act also provides that increases in population revealed by a census will not affect liability to Entertainments Duty for a period of two years from the date of publication of the census. Marginal increases in population in some 20 small towns revealed by the publication of the 1956 census have the effect that entertainments held in these areas would in the ordinary way become liable to Entertainments Duty with effect from November next. I am satisfied, however, that this would be unduly burdensome and accordingly I propose to provide in the Finance Bill for an extension of the period before liability to duty is incurred from two years to four years.

Revision of allowance for overestimation, etc.

The cost of the Entertainments Duty concessions comes to £205,000 and if I confined the adjustment for overestimation to £1½ million I would now have only £200,000 in hands for other tax reliefs. I am, however, satisfied that at the present critical stage in our development programme the taking of a limited budgetary risk in order to reduce direct taxation is fully justifiable. I believe that a reduction in direct taxation would stimulate productive enterprise and, by encouraging saving, provide additional resources for expansion. The economy needs this tonic and, in the confidence that national output will be raised and the revenue base ultimately strengthened, I am increasing my allowance for overestimation to £2½ million so as to make £1.2 million available for relief of direct taxation.

Income Tax and Sur-Tax.

Measures taken in recent years by both Governments have eased the burden of direct taxation on industry. In the three years since 1956 effect has been given to all the recommendations of the Committee of Inquiry into Taxation on Industry with two exceptions. Moreover, important concessions, which had not been suggested by the Committee, have also been given, notably for exports of manufactured goods and for production of minerals. The exports tax concessions can mean for new export industries complete tax exemption for ten years, while export industries located at Shannon Airport may enjoy complete exemption for twenty-five years. The annual value to industry of the various reliefs granted over the past three years is already of the order of £1 million.

Other measures have also been taken to help industrial expansion. The moneys placed at the disposal of An Foras Tionscal and the Industrial Development Authority for industrial grants have been increased and the Industrial Credit Company has been guaranteed ample funds to provide credit facilities.

Obviously, these measures would be greatly reinforced by a general reduction of taxation on industry.

Our efforts to promote industrial expansion could not, however, be fully successful if we were to overlook the point I emphasised earlier, namely, the importance of the human factor. Unfortunately, the incidence of taxation at present can be a serious disincentive to individual effort. It can and does militate against managerial, executive and professional ability being fully applied to the raising of the levels of production and employment. It also adds to the comparative attractions offered for such talent outside the country. In Britain, for instance, reductions in the burden of income tax and sur-tax as well as the raising of salary scales have been responsible for a steady improvement in recent years in the net income of the salaried classes and their position now contrasts more than ever with that of the salaried classes here. A lightening of income taxation, sur-tax as well as income tax, is necessary to improve the position.

It is, I think, important also to indicate to workers generally, since their cooperation and enthusiasm are vital to our efforts to improve our economic position, that we appreciate the burden which income tax represents in their family budgets. The concessions which I am now about to announce, coupled with the decision already made public to proceed, as soon as possible, with the introduction of a suitable scheme of P.A.Y.E. will be evidence of that appreciation.

I have decided that the most effective stimulus I can give, both to individuals and to companies, is to reduce the standard rate of income tax. I am, therefore, proposing that the standard rate be reduced by 6d. to 7s., the 6s. rate be reduced to 5s. 6d. and the 3s. rate to 2s. 9d. These changes will cost just over £1 million this year.

I am also proposing that the starting-point for sur-tax, which was fixed at its present figure of £1,500 when money was worth much more, should be raised to £2,000 and that the income tax personal allowances be granted for sur-tax as well as for income tax. The rates of sur-tax for taxable income above £2,000 will remain unchanged. The effect will be that the starting-point for sur-tax for a single person will be £2,150, for a married couple £2,310 and for a married couple with two children £2,510. The cost will be £160,000 this year as the reliefs will apply to sur-tax payable on 1st January next.

Tax comparisons.

Comparisons are inevitably made between taxation here and in Britain. I might, therefore, point out that the effect of the reliefs I have just announced will be that so far as individuals are concerned, the standard rate of income tax here will now be 7/- in the £ as against 7/9d. in Britain. Certain allowances are higher here and sur-tax rates are lower. A significant result of this is that, virtually throughout the whole range of income up to £5,000 a year, the weight of direct taxation on individuals will now be lighter here than in Britain.

The combined maximum rate of income tax and corporation profits tax payable by Irish companies will now be 8/4d. in the £ as against a maximum combined rate of income tax and profits tax in Britain of 9/9d. in the £.

Depreciation of Buildings and Other Industrial Reliefs.

I mentioned earlier that all the recommendations of the Industrial Taxation Committee had now been implemented except two. These are the granting of a 2% annual wear and tear allowance for capital expenditure on industrial buildings and the granting of an obsolescence allowance where plant or machinery is not replaced. It is my intention to provide in the Finance Bill for the implementation of both these recommendations with effect from 6th April, 1960. Capital expenditure incurred on or after 30th September, 1956, on the construction of industrial buildings (including hotels) already qualifies for the initial 10% allowance.

In the case of expenditure incurred before that date, there will, in lieu of a 2% deduction, be an annual allowance of an amount equivalent to one-third of the annual value of the industrial building or hotel for Schedule A purposes. Harbours will be brought within the scope of the relieving provisions. A further relief, also effective from next year, will be that capital expenditure incurred on dredging and certain site preparation works will be eligible for initial and annual allowances.

Provision will be made similarly for a tax allowance in relation to capital expenditure incurred on the acquisition of patent rights; and, as a corollary, the seller of the rights will be charged to tax on the sum realised on their sale.

The repairing of foreign ships in Irish dockyards is a form of activity which I have decided should be encouraged by the grant of tax relief on the same lines as the reliefs granted to companies engaged in the export of manufactured goods.

The statutory formula for calculating tax relief on exports may give a distorted picture in the case of certain dutiable commodities such as tobacco and alcoholic beverages where the home sales carry a duty element while export sales are duty-free or qualify for drawback of duty. I propose to remedy this in the Finance Bill.

The Finance Bill will provide relief in respect of the expense incurred in recruiting and training local staff before a new industry commences trading. The estimated cost to the Exchequer this year will be £15,000.

The relief from income tax and corporation profits tax on profits from new mining operations for "non-bedded" minerals is limited to companies commencing to trade within the period of five years from 6th April, 1956. It has been represented to me that, in areas where development is not sufficiently far advanced or where little or no exploration has yet been carried out, this restriction would operate to preclude the grant of relief. Accordingly, I propose having the time limit for the commencement of trading extended from five years to ten years.

Child Allowance—Apprenticeship.

I shall be introducing provisions to apply to children over 16 undergoing apprenticeship the relief already available for children receiving full-time education at an educational establishment.

Purchased Life Annuities.

On the Second Stage of last year's Finance Bill in Seanad Éireann I indicated that I would deal this year with the question of tax relief for purchased life annuities. I have now decided that the portion of these annuities which may be regarded as representing the return to the annuitant of capital laid out in purchasing the annuity should be relieved from tax; and the necessary provisions will be incorporated in the Finance Bill. The cost to the Exchequer this year will be of the order of £10,000 and this exhausts the sum available for reliefs.

Amendment of Double Income Tax Agreement with Britain.

I have already explained in a public announcement that an amendment of the double income tax agreement with Britain has become necessary in connection with the legislation enacted in both countries to combat the device known as "dividend-stripping". The new agreement will be scheduled to a Financial Resolution which I shall be moving today. Further amendments of the Agreement may become necessary, on a reciprocal basis, from time to time to deal with methods of tax avoidance.

Stamp Duty.

I propose to simplify the rates of duty on policies of marine insurance. The changes proposed will have no material effect on the yield of duty.

Tobacco Duties.

I propose to raise the rates of duty on leaf tobacco but let me hasten to say that this time the increase has been devised in agreement with the manufacturers generally, that it does not involve any effective increase whatever in the taxation of this indispensable source of revenue and that the retail prices of tobacco products will remain entirely unaffected. My present proposals will, in fact, involve neither gain nor loss to the Exchequer.

I will explain. Over a number of years past my predecessors and I have had representations from tobacco manufacturers for a revision of the system of collection of tobacco duty. At present tobacco duty is paid daily by manufacturers as they receive unmanufactured tobacco from bonded warehouse. A considerable time, perhaps up to two months, elapses before they recover the duty from their customers in the prices of their finished products—cigarettes, pipe tobaccos, etc. The annual yield of the tobacco duty being in excess of £25 million it will be seen that a very substantial amount of capital is permanently tied-up in duty. This has been a cause of concern to the manufacturers.

Their request hitherto has been for a simple deferment of the payment of duty. Their case had merit—brewers, for example, are allowed about five weeks' deferment—but was resisted on the grounds that it would involve a reduction in revenue receipts in the first year of operation. The scheme now contemplated surmounts this difficulty. Ordinarily, manufacturers will be allowed to defer the payment of duty on leaf received in any month to the end of the succeeding month but there will be the important exception that the duty on leaf received in the month of March must be paid on the last day of that month, so that it will be brought to account within the same financial year.

While, however, the annual receipt of tobacco duty will thus remain unaltered, the Exchequer will be deprived during most of the year of the use of moneys which it has had heretofore and resort to temporary borrowings will be necessary. The manufacturers recognise the force of this point and have agreed to an increase of 2½d. per lb. in the rates of duty on leaf tobacco in order to recoup the Exchequer for the cost of servicing such borrowings. The rates of duty on manufactured tobacco will not be altered. The new scheme will operate from the 1st May next. I should add that deferment of duty payments will not be compulsory. Any manufacturer who prefers not to avail of the scheme will be allowed a rebate of the additional duty of 2½d. a lb.

Hydrocarbon Oils.

While not strictly a budgetary issue, there are impending changes in the duties on hydrocarbon oils which, because of the importance of this source of revenue, I think I should mention here. They derive from the welcome fact that the Whitegate refinery will shortly come into production. I should say right away that these changes will not involve any effective alteration in current levels of oil taxation nor any changes in retail prices of petrol, diesel or other oils.

At present we import our requirements of petrol, diesel oil, etc., and our oil revenue comes from the appropriate customs duties. In future, however, crude oil will be brought duty-free into the Whitegate refinery and our revenue will come from the excise duties attaching to the refinery products. The current excise duty rates are 2d. per gallon lower than their customs counterparts and, accordingly, to preserve the revenue they must in the near future be raised by 2d. per gallon. This will be done at the appropriate time by way of an Order under the Imposition of Duties Act, 1957.

To fulfil an undertaking given to the refinery sponsors, it will also be necessary to increase the customs rates by one penny per gallon above the new excise rates. To avoid administrative and other difficulties, however, this step will, in agreement with the refinery authorities, be deferred until stocks of imported oils are exhausted and Whitegate is in a position to meet full home requirements—probably next autumn—when a further Order will be made.

The Finance Bill will include miscellaneous provisions designed to remedy omissions and defects in the excise law relating to oil.

Cost of Government.

Before I turn to the position on capital account, I would like to refer to a particular aspect of the cost of Government. There can be no public services without the necessary personnel to provide and administer them. Pay must, therefore, be a large element in current expenditure. As a recent Supplementary Estimate indicated, the sum which had to be found by taxation to meet the cost to the Central Government of the Civil Service, the Defence Forces, Garda Síochána and teachers—national, secondary and vocational—in the year just ended was of the order of £34 million, excluding the cost of industrial staff. It may be of interest to give the constituents of this figure:

Civil Service

£17.0 million

Defence Forces

£3.3 ,,

Garda Síochána

£3.6 ,,


£10.3 ,,



£34.2 ,,


Of the Civil Service figure of £17 million, £5.5 million went to pay the main Post Office grades, such as Post Office clerks and postmen, who numbered about 13,500 out of a total non-industrial strength of some 30,000 There were 2,500 officers in professional, scientific and technical grades whose pay totalled £2.3 million and some 4,000 in the remaining departmental grades throughout the service who were paid in all £2.8 million. In the general service, grades below Higher Executive Officer comprised 9,400 persons with a total pay of £4.8 million. The grades of Administrative Officer and Higher Executive Officer cost £0.6 million and higher administrative staff just under £1 million; these categories combined numbered 960.

The total of £10.3 million for teachers included certain pay increases operative only from 1st September, 1958. The corresponding figure for a full year would be £10.6 million, divided between the three categories as follows:—

National Teachers

£7.9 million

Secondary ,,

£1.5 ,,

Vocational ,,

£1.2 ,,

Secondary and vocational teachers, of course, derive part of their remuneration from sources other than the Exchequer.

In my Budget Statement last year I announced that the views of Heads of Departments had been sought on proposals for reorganising the Civil Service structure. The views received showed marked differences of opinion as between Departments. Discussions followed with Departmental representatives to narrow down the area of difference. Following on these discussions, the original proposals, modified as a result of the Departmental exchanges, were forwarded to the staff. The proposals are at present being considered by the various Staff Associations.

It is proposed as soon as the staff are in a position to present their views —which will, I hope, be fairly soon— to meet under the conciliation machinery and deal with these proposals. I anticipate that the staff will have a valuable contribution to make towards framing a structure suited to our needs. Quite apart from the question of reorganisation, I can assure Deputies that every effort continues to be made to ensure maximum efficiency and economy in the public services.


The public capital programme for the year ahead conforms under most headings to the projection in the White Paper published last November. Table V—a new table—is designed to facilitate comparison with the White Paper figures. There are, of course, some differences since account has had to be taken of more up-to-date estimates and of new developments. As a result, the public investment now proposed for 1959-60 exceeds the White Paper figure by £3½ million. Net requirements for building and construction are down £2 million but there are increased provisions for shipping, transatlantic air services, electricity and forestry.

Although the estimate for building and construction is below the White Paper figure, it shows an increase of £3 million as compared with actual expenditure in 1958-59. Provision is made for an increase in grants and loans for housing. The 1958 Housing Act widened the scope and amount of grant and loan assistance for private housing, particularly for works of reconstruction, repair and improvement. Small Dwellings loans for the purchase of older houses are being resumed. Provision is also made for an advance of £200,000 to the Road Fund, the counterpart of a grant of the same amount from the Vote for Local Government, towards defraying the cost of improvements to roads affected by railway closings and new or increased industrial activity. There will, therefore, be an extra £400,000 available this year for grants from the Fund.

Local employment should also benefit from the increased provision for arterial drainage (£300,000 more than was spent last year), from the increase of £590,000 for construction works at Shannon and Cork Airports as well as from the additional £230,000 which is being provided for the building of National and Vocational Schools.

The White Paper was concerned to a large degree with ensuring that the inevitable decline in local authority housing would be offset—and if possible more than offset—by increased capital expenditure yielding a more direct increase in production. This year's Budget not only enlarges the provision for public investment but provides for as great a shift towards expenditure of a more productive nature as is immediately feasible.

The action taken to give effect to the White Paper is evident from the tables before the Dáil. The provision of £1¾ million for fertiliser subsidy is accompanied by a net allocation of £1.8 million for the intensification of the drive to eradicate bovine tuberculosis. There is no greater national need than the successful completion of this programme as quickly as possible and certainly within the next five years. Fisheries and tourism receive a capital allocation of £540,000. An extra £160,000 is being provided for telephone development making the total for this service £1.6 million. In other respects also the figures reflect the action which is being taken to carry out the programme, including the legislation enacted last session to permit of an expansion of activities by Irish Shipping Ltd. and Bord na Móna. Further legislation will deal with the extension of the operations of the E.S.B., Bord Fáilte, An Foras Tionscal and the Industrial Credit Company, with the financing of the Shannon Free Airport Development Company, the establishment of Córas Tráchtála as a permanent State agency and exploration for oil and natural gas. The organisation of the Institute for Industrial Research and Standards is being reviewed and the Productivity Committee mentioned in the White Paper is now in being.

In the field of credit the full provision envisaged in the White Paper is made for the channelling of capital into industry by the Industrial Credit Company. I am glad to say there is every reason to think it will be fully required. In the case of agriculture, arrangements were recently announced which will, I believe, ensure that the aim of the White Paper is realised, namely, that agricultural development no less than industrial development will be assured of adequate capital. Credit is now available on reasonable terms and without too many formalities for sound projects designed to increase agricultural production. The allocation for credit to be provided direct by the Agricultural Credit Corporation exceeds the White Paper figure. Again, there is every reason to expect that it will all be required. The Corporation is doing much more active business notwithstanding the recent increase in bank lending to farmers. It would not surprise me— indeed it would please me greatly— to see a total increase in credit for agriculture, through the Agricultural Credit Corporation and the Banks, of some millions of pounds in 1959-60.

These few remarks do not, of course, cover all projects. They are intended merely to give a general outline of the capital expenditure proposed in the coming year and its relationship to the White Paper. I might add that, in addition to State aid by way of loans and grants for commercial and industrial development, the provision of industrial capital is being facilitated by means of statutory guarantees. The guarantees which have enabled St. Patrick's Copper Mines Ltd. to borrow over £1.4 million for their operations at Avoca are an outstanding example. This is yet another way in which the State is cooperating, not alone in the development of the country's economic potential, but also in the provision of a significant amount of employment.


This Budget helps forward the programme of economic expansion published by the Government last November. The reduction in direct taxation is an encouragement to every individual and to every business enterprise to add to their own and to the national income with beneficial effects on employment. Industry and the hotel trade will be further helped by the new relief in respect of buildings. Increased manufacture for export already enjoys the greatest possible relief—complete exemption of the profits from tax—for a clear 10 years' period.

For agriculture, the provisions made implement the White Paper proposals; in particular, large sums are allotted for the eradication of bovine tuberculosis and for increased soil fertility. Both agriculture and industry are assured of all the capital needed for productive purposes on reasonable terms. All the other aspects of national development—including tourism, fisheries and forestry—receive added support. The public investment programme as a whole is enlarged beyond the White Paper projection. At the same time, the most urgent social welfare needs are being met as far as possible. Through its increase in development expenditure in agriculture, industry and other fields, its encouragement to individual and corporate enterprise, its stimulus to increased employment and its support for the weaker sections of the community, to-day's Budget will, I believe, make an effective contribution to national progress.

I must say that the opening words of the Minister's Budget statement, for sheer brazenness and political dishonesty, beat anything ever produced. The Minister started by saying:

The current Budget for 1958-59 was balanced—indeed showed a small surplus—in contrast with the deficits of roughly £6 million incurred in both 1956-57 and 1957-58.

On the basis that the Minister estimates that the Budget for 1956-57 showed a deficit of £6,000,000, on the basis that his own Budget for 1957-58 showed a deficit of £6,000,000, his Budget of last year showed not a surplus of £159,000 but a deficit of £4,394,000.

It is very easy for a Minister for Finance—and I shall have something additional to say about this later on— to come in here and suggest that the year that has just closed has shown a surplus on revenue when he has caused that surplus by transferring from capital account moneys which were received for capital, and by, on the other side, on the expenditure side, putting off to the "never-never" by borrowing proposals, commitments which were in previous years met from current account.

In his 1958-59 figure the Minister took credit for £3,080,000 which was received in 1956-57, and was taken not to current account but to capital account; £1,788,000 shown in the White Paper is the proceeds from the special import levies; £692,000 for the switch from levies to customs duties made by him prior to the 31st March, 1958, and estimated by him in reply to a question by me at Col. 19 Vol. 167 of the Official Report. Again, in the same volume, in relation to the April, 1958 switch from levies to customs duties the Minister gave an estimated figure of an additional £600,000.

In addition to that, in order to arrive at the closing figures of last year the Minister did what his Fianna Fáil predecessor, Deputy MacEntee, described as robbing the till; he took out of the till money for current revenue, money in the hands of the Revenue Commissioners. I am sorry the Minister for Health has so little influence on his colleague the Minister for Finance that he has not been able to prevent him from doing what he himself described as "robbing the till."

In addition, last year's figures included a sum of £500,000—that is as near as I can get to the figure at this stage—which is a repayment of a capital debt due by a foreign Government, a sum which clearly should not have been put to revenue but which, by any canon of finance, should have been applied on the capital side of our accounts. More than that, the Minister took two other figures of £200,000 and £450,000 and transferred them in the Estimates volume from current estimates to capital estimates. In other words, he decided to borrow to the extent of £650,000 sums that had been carried before on income.

When all these figures are added up —and there can be no doubt about these figures; indeed I challenge the Minister to contradict them—the total comes to £4,553,000 and deducting the £159,000 which the Minister mentioned it is clear that last year's Budget on the basis that he himself has taken in the first paragraph of his Budget speech, was not in surplus but in deficit to the tune of £4,394,000. One could, of course, say that it was wrong in the earlier years to put these sums to capital account, but the Minister has himself in his own speech chosen the basis and it is perfectly fair, therefore, to say that it is fraudulent to that extent. In 1957-58, I might add that, on the Minister's own basis of estimation—not on my basis; but on the basis that he has taken for 1956-1957—the deficit in 1957-1958 was not £6,000,000 but £6,572,000.

If you transfer income which has formerly been treated as and brought in to credit of capital account, and transfer that into current account and, at the same time, take moneys that had previously been met out of current revenue, and as has been done in this year's Estimates to the extent of £900,000—take that and transfer it from income expenditure to capital it is very easy to get a balanced Budget. That can of course produce an election Budget—if one can call the referendum an election.

So far as I can gather from the figures—it is not easy to check the exact figures as one gets them from the Minister—£2,750,000 by way of special import levies, and the duties substituted for them has been taken out of capital this year for the purpose of producing a nice result. In addition to that, £900,000 has been switched from income to capital on the other side, a difference of £3,700,000 without going into the question at all of the over-estimation by which the Minister has made the figures further out of line and further out of balance. It is not for me at this stage to discuss whether or not it is right that certain items should be put to capital or to current account. It is the Minister himself who has chosen the basis and, on his own basis, those are the figures which I challenge him to deny or to show are incorrect in any way on the discussion on the General Resolution.

Following requests made to him the Minister this year published a book on economic statistics before the Tables issued to-day. I am glad he took that advice. I congratulate him on having done so. I am glad to see that, when he was publishing the economic statistics, they were expanded somewhat more than had been the custom in recent years and I hope that expansion will be continued in the years ahead. It is only in respect of the publication of those economic statistics that the Minister is due any plaudits. They tell an appalling story, a story of stagnation which has been growing worse and worse for the past year, a story which shows the necessity that our economy should get a shot in the arm.

Let me take the Tables one by one. In relation to the balance of international payments in Table 1 the outcome on the current side is of course satisfactory. It is satisfactory to note an improvement of £13 million in the terms of trade. Speaking in this House on a previous occasion I told the Minister that if the terms of trade worsened in any way against this country, we would not hold him in any way responsible for anything that might occur as a result of that worsening. The terms of trade are something that are quite beyond the power of any Government that we might have here at home. This year he has been saved in relation to the balance of payments by an improvement in the terms of trade, by an enormous improvement in the external prices of the things we have to buy and at the same time in the things that we have to sell elsewhere.

Indeed, if one considers the balance of payments table and compares it with the surplus in 1957 of £9.2 million and the equilibrium that there was on the Minister's own admission in the financial year 1956-57 when the terms of trade were worse for this country the achievements of this year are quite different from what is shown in this statement now and not nearly so satisfactory.

Let me pass on from that to the monetary situation. The improvement in the net external reserves of the commercial banks is just exactly balanced by the figure given for "other capital transactions". I do not know what these are but I intend by means of question to ascertain what they are. One cannot comment on that improvement until one knows what exactly the £14.7 million that it is suggested have been brought in represent.

The volume of agricultural output shows again a decrease last year. I admit part of that decrease is accounted for by the harvest weather, but let us look at the only return available to us now in relation to current agricultural output since 1st January, that is, in respect of pigs. Up to 4th April, 1959, 71,277 less pigs have gone into the factories, a reduction of some 20 per cent.—not a very satisfactory achievement in regard to agricultural production under this Government and arising directly because of the order made by the Minister for Agriculture last year bringing down the floor price of grade A bacon. We told him at that time that it was bound to have that effect as soon as the bonhams then to be born were coming to the factories at full growth the period naturally being approximately a year before they would be ready.

In relation to Table 6, we see a progressive decline: From manufacture, the improvement in the first quarter of 1958 was 6.5 per cent.; in the second quarter, 4.1 per cent.; in the third quarter only 3.1 per cent. and in the last quarter only 1.9 per cent. That is surely a sign of a decline rather than a sign that would justify the complacency the Minister showed when he spoke down the country last Sunday.

However bad all that pattern may be, the pattern that is disclosed in relation to the national product in Tables 7 and 8 is really disturbing. Gross national product, in terms of real prices, in 1958 was 2 per cent. down on the previous year, at 526 compared to 538. It was down last year even on the 1956 figure when we had the Deputies opposite going around the country wailing "crisis" at all times. It is the results shown for 1958 in Table 8 (b) that really make clear the disastrous effects of this Government's administration in the period from March, 1957 up to December, 1958, in consequence of which the economy does now need a shot in the arm very badly.

Table 9 shows that the volume of savings dropped in 1958 to £45,000,000 from £60,000,000. Table 10 shows clearly the immense advantages the Government obtained from improvements in the terms of trade: 83.7 per cent. when they took over office in March, 1957 and 97.5 at the end of November, an improvement of 14 per cent., an improvement with which the Government had nothing whatever to do and with which no Irish Government can ever have anything to do. Looking at that Table you see a drop in import prices of 10 per cent. from 117 in February, 1957, to 107 in November, 1958, and, in spite of that, as a result of this Government's handling of our affairs, the internal consumer cost-of-living index has risen from 107.7 in February, 1957, to 116.9 in November, 1958, and, as we all know, in February, 1959, it went up still further.

Let us now turn to the question of employment, the question on which the Tánaiste, Deputy Lemass, speaking at the time of the last General Election said he wished Governments to be judged, the advice which was placarded on every hoarding: "Wives, get your husbands back to work". According to Table 12, the total at work in 1958 was 10,000 less than in 1957 and 32,000 less than in 1956. Is that a record of which Fianna Fáil have any reason to be proud? It seems one with which they are not really concerned.

Let us come to Table 15, the last Table in these economic statistics. In each of the months of October, November and December last year the percentage of unemployed to those working was higher than it was in 1957. It was not much higher, I agree, but does that not show an appalling trend in the wrong direction after 19 months, as it was then in December, of Government by Fianna Fáil? As the White Paper has disclosed as a result of the mismanagement of Fianna Fáil the country had got into such a state of stagnation that it was essential that there would be in this Budget something to generate it again. However, I suggest it would have been far better that that generation would have arisen as a result of proper economies in administration, and of well-defined economies in public expenditure rather than putting off on the never-never system the payment for services that were formerly carried on current account and now are to be paid for out of borrowing, and transferring moneys that were going into capital account to meet current items of revenue and not merely that but doing it by the method to which the Minister has referred on page 23, by an artificial increase in over-estimation.

Last year in his Budget speech the Minister went to a great deal of pains to show that in relation to net over-estimation, that is to say, the amount of over-estimation included in the Book of Estimates less supplementary estimates that might come in course during the current year, the trend had been down all through the years and that we could not safely take more than £1½ million. This year he has taken, not by any system of logic but purely because he wished to have an election Budget, an additional £1 million, and brought the figure up to £2½ million.

Records show that over the past years, and particularly with Fianna Fáil, there are bound to be supplementary estimates of more than £1,000,000 each year. That means, therefore, that he is experimenting with a sum in excess of £3½ million for over-estimation which has never been reached in any year going back year after year. The highest that was ever reached was when we in the inter-Party Government in the first year of our term in 1954-55 took the inflated Estimates of Fianna Fáil and tore them asunder. It was only brought in then at a figure of £3,163,000 and there was no hope whatever of that figure being reached. I can only hope the balance will be obtained by an increase in the buoyancy of the revenue though that is not the basis on which the Minister makes his calculations.

I want to describe that method of adding £1 million there for over-estimation to the figure taken last year in defiance of all the records, of all the returns, for previous years, as a deliberate dodge merely to produce a Budget that would appear to be satisfactory to the ordinary people. Accepting, as I accept, that, as the result of Fianna Fáil administration over these past two years, as shown in the economic statistics, it was necessary that the economy should get a shot in the arm, the Minister has given it that shot by certain of his reliefs. The reduction in the rate of income tax is one that is clearly desirable. In fact, it was made imperative, absolutely essential, if we were not to lose revenue from income tax by the change in Mr. Amory's Budget in England the other day. The Minister need not take any credit at all for that reduction because it was perfectly obvious that, if we did not reduce it here, there would be a transfer of capital which would mean that he would probably lose more than the amount taken off the revenue by the proposals he has put forward.

Naturally, we agree that the old age pensioner who, as the Minister says, has often to live alone and in circumstances in which he cannot do anything to assist his sustenance, should get something additional, particularly in view of the fact that the old age pensioner who lives to a large extent on tea, bread and butter felt, more than anybody else, the harsh impact of the 1957 Budget introduced by the present Minister.

It was inevitable, too, that the Minister had to safeguard his revenue by giving some relief to the cinemas. If he had not done so he would have put himself in the position of seriously jeopardising one of the geese that lay golden eggs for a Minister for Finance.

The other changes in the Budget are smaller changes and it will require some further time to examine their exact course. May I say also that I particularly agree, and advocated last year, that in view of the balance of payments position the special imports levies should be varied? It is satisfactory that even after 12 months, the Minister has accepted the advice given to him on that occasion.

This Budget has been produced by the Minister for Finance on the basis of transferring capital income to revenue, of transferring income expenditure to capital account, to borrowing, of making a guess and a leap in the dark to get over-estimation that is entirely unwarranted and it is obviously produced to cod the electors at the forthcoming Referendum and Presidential election. I hope that, when the people come to cast their votes, they will remember that even though certain benefits may have been given by Fianna Fáil in this Budget it also crystallises, reinforces and reimposes the higher price for bread of 4d. on the loaf which was imposed by the present Minister for Finance in 1957; the higher price for butter of 6d. per lb. imposed by the present Minister for Finance in 1957; the higher price for flour of 2/8d. per stone imposed by the present Minister for Finance in 1957 and his then imposts of 2d. on the package of 20 cigarettes, 1d. on the pint and 6d. on petrol. All these impositions by Fianna Fáil are crystallised in this Budget.

As well as that, we find that this Budget has been balanced by ensuring that the farmers will get less for their wheat; less for their Grade "A" bacon; that they will have fewer pigs to send to the factories and that they are getting less for their milk. If these facts are remembered as well as the others, the verdict will not be what either Fianna Fáil or the Taoiseach hopes it will be.

In my long experience in this House, I have never seen a Budget introduced in circumstances such as these. It is quite true that this is not an ordinary Budget. It is not merely a Budget representing a declaration of the fiscal and economic policy over the next 12 months, but it is also the Taoiseach's address for the referendum and the Presidential campaign all rolled into one. All the cuteness, cunning and craftiness of the Taoiseach is bursting through these 42 pages.

The Taoiseach thinks this Budget will serve as a very useful bit of propaganda. He thinks people will forget his past sins of commission and omission. He thinks they will believe—simple people as some of them are—that the abolition of P.R. will immediately transport them into a heaven on earth and that with the Taoiseach in the Phoenix Park, everything will be pleasant thereafter. You do not need to put the microscope on this Budget to see that it is full of omissions and that, in fact, the Minister for Finance has skilfully managed to give us a few little concessions here and there, a few embroidered concessions, a few little gifts here and there, which will be dressed-up to-morrow in the Government official organ, the Irish Press, seeking to give the people the impression that this is a heaven-sent Government and that all their problems from toothaches to corns will be cured by the introduction of this Fianna Fáil Budget.

Sober people will ask themselves what this Budget will do for the man at the employment exchange. Some people will ask themselves whether they should proceed with packing their bags and looking for a job in England. Others will wonder what the effect of all this will be, so far as the availability of employment is concerned.

Not once in the whole 42 pages did the Minister attempt to say what this Budget means in terms of the number of additional people who will get employment. Not once did he mention that matter in a Budget in which those who want to frolic on a dance floor have got their share of prominence; in which those who want to back slow greyhounds have got their share; in which those who follow the exciting art of punching one another have got their share. All these have found a place in this Budget in which there is not a single line as to what it means for the unemployed man with a wife and kids who does not know where to turn for a job to keep them. There is not a word of assessment in this Budget of the future position of tens of thousands of persons, many of whom draw a maximum of only 61/- per week to try to feed seven or eight members of a family for seven days of the week. There is no assessment of their position at all. It is because no attempt is made in the Budget to ascertain what the future national development is to be that I think the Budget is intended to mislead and to deceive.

One thing about the Budget is that it provides one with an opportunity to make up one's mind on which side of national prosperity one stands. Reading the Budget and listening to the applause from the Government benches, one gets the impression that this is a land flowing with milk and honey and every kind of economic happiness. That is according to the speech of the Minister for Finance. But, if one reads the speech of the Tánaiste when he attends the meeting of O.E.E.C. in Paris, one is told that this is an underdeveloped country, so underdeveloped that we are to be bracketed with Iceland, Turkey and Greece as the four countries in Europe which cannot accept the rules of the new economic club called the Free Trade Area.

Would the Deputy, as Minister for Industry and Commerce, change that?

I am making my speech and I will make another one later and I hope the Minister for Education will be able to contribute also.

It is a fair question.

When you are in Dublin listening to the Minister for Finance, everything appears to be rosy and happy but when you go to Paris and read the speech of the Minister for Industry and Commerce everything appears to be gloomy and miserable here and we cannot play the game with the other people in the club. This Budget enables you to have a choice. You can have an each way bet—prosperity at home; poverty abroad. Fianna Fáil do not know where we are. We are in the middle of that perplexing situation.

There is nothing whatever in this Budget which indicates the effect it will have on the unemployed people. In that respect it is a fair assessment to say that the Government are completely complacent as regards the methods they believe they have adopted in order to deal with the problem of unemployment. What are the facts? After Fianna Fáil have been in office for over two years, there are still more than 70,000 persons registered at the employment exchanges as unemployed. If you remember their wives and dependents you get some picture of the large number of people affected by unemployment. Remember, also, that that is the figure for unemployed persons notwithstanding the fact that there is an Employment Period Order current at the present time which deprives others of registering. The fact that there are 70,000 people registered as unemployed today out of our insured population means that there are between nine and ten per cent of our insured population registered as unemployed. There is no other free democracy in Europe which has an unemployment figure which represents nearly ten per cent of the insured population. We have it. We have it even under a Budget which seeks to give the impression that everything in the garden is rosy.

And you had 20,000 more.

Silence is a policy which I strongly commend to the Minister for External Affairs. He has not achieved fame by his pronunciamentos in recent weeks. A period of quarantine would be highly desirable.

What about the 20,000 more that you had?

The Minister tried to redeem himself last Sunday.

Suppose I ask the Minister about the emigrants that he was going to bring back in 1932? Where are they? They are in New York.

You had 20,000 more unemployed.

Deputy Norton should be allowed to make his speech without interruption.

The Minister for External Affairs is interrupting.

The Punchin Lama. He thinks he is in Tibet.

I told the Minister he would get into trouble.

That is not trouble.

We have the worst unemployment problem in the free democracies of Europe. There is no other free democracy in Europe that has such a high percentage of its population idle but we have got it and we have it in circumstances which indicate that the Government do not realise the necessity for drastic measures to put people to work.

The Government have been quite silent on the question of the cost-of-living index figure. Not a single word about prices appears in the 42-page Budget speech notwithstanding the fact that out of the 200 items which comprise the cost-of-living index figure over 150 have increased since Fianna Fáil took office. Thanks to the Fianna Fáil Government, we now have a higher price level than we had at any time in living memory.

We are told that old age pensioners are to get an increase of 2/6d. per week, as a maximum. I am very glad they will get that but it seems little more than a crumb having regard to the low income that old age pensioners have to-day and the high cost of living with which they have to contend. It is an economic truism that everybody's standard of living has increased above the 1909 standard and that every section of the community have had their standard of living raised since 1909 but the fact is that old age pensioners to-day are living on the 1909 standard because it takes almost 25/- to buy what the low pension of 5/- bought in 1909. Old age pensioners are now to have their pension increased to a maximum of 27/6 per week. That is substantially less than the old age pensioner in the Six Counties or in Britain gets. When one considers the cost-of-living index figure, one finds that, since the 1957 Budget, food prices alone have increased by approximately 20 per cent., so that if old age pensions were to be increased to keep the pensioners in line with their pre-1957 Budget standard of living they should get, not 2/6 per week more, but 5/- per week because 5/- per week would be necessary to compensate them for the increase of 20 per cent. in food prices alone since 1957.

I notice that the increase in the old age pension is not to apply until August next whereas the tax reliefs to boxing and to greyhound racing apply as from to-morrow. I cannot understand why it could not be arranged that old age pensioners would get their increase as from to-morrow with the boxing or greyhound fans or even in preference to them. Apparently, the increase which will be given to old age pensioners under this Budget is something which has been got out of the Government because of the widespread public demand that old age pensioners should get some increase to compensate them for their rather dismal economic lot.

We have to remember, of course, that these concessions are being given by means of an anticipated surplus on this year's Budget and by increasing the amount allowed for over-estimation. The latter was a very slick move, the purpose of which is to make money available which, in fact, is not there or will not be there at the end of the year. By putting an additional £1,000,000 to the amount allowed for over-estimation you can create the situation in which you appear to be giving concessions. You can give these concessions and it will not be discovered until the end of the financial year that you never had the money to give away. That will not matter, the Presidential election and the vote on the Referendum will then be over, and when explanations have to be made the Taoiseach is always near at hand to explain, to give what the best excuse is in these difficult and complicated circumstances.

What the people have to remember is that in 1957, under the Fianna Fáil Budget, £9,000,000 was saved for the Exchequer by abolishing the food subsidies. Even if it is allowed that some of the money was given back by way of trifling increases in social welfare benefits, it has never been denied that more than £5,000,000 which was previously utilised for the maintenance of the food subsidies found its way back to the Exchequer. Now the people are given only a tithe of the amount taken from them by the abolition of the food subsidies in 1957. They are getting back a small instalment of what they then sacrificed.

Better circumstanced people are getting back the bulk of the concessions in this Budget; the generality of the people who suffered heavily and bitterly because of the abolition of the food subsidies will continue to suffer under this Budget. For them high prices will remain. For the unemployed man neither his benefit nor his prospects of employment will be in any way improved. For the man who, because of long continued unemployment, is forced to make the heartbreaking decision of leaving his family and seeking employment elsewhere, this Budget provides no substantial relief or prospect of relief. It will be consoling for those who like to dance and for those who like to box. It will be consoling for those interested in the speed of greyhounds, but in general it will make no substantial contribution to the main economic difficulties confronting the nation which will remain with all their rigours clearly discernible after this Budget has been discussed.

I always looked upon the Minister for Finance as the ablest man at putting a thing over in this House. No doubt the day the Taoiseach appointed him as Minister for Finance he did a very wise thing. To-day, when introducing this Budget you could not compare him with anything but what one would call a very merry man because whatever little concessions are given in this Budget are given to cinemas, cine-variety, dances, greyhound racing and professional boxing. Therefore there is no doubt that the Minister must be a man who is a very sporting type. There is also a slight concession of 2/6 per week—from next August, as Deputy Norton pointed out—to the old age pensioner, but I want to ask the Minister what good are those concessions, in what way do they compensate for the £9,000,000 formerly taken away, which resulted in increased prices for bread and butter for the workers, the farmers and the small shopkeepers?

I want to know what concessions there are in this Budget for the farmers, for the workers on the land, or for the small shopkeepers. Actually there are none. The Minister for External Affairs indicated when Deputy Norton was speaking that unemployment has gone down, even though there is a greater percentage of our people unemployed than in any country in the world. I want to tell the Minister the reason it is going down. If the Minister will look up a reply given to a question asked in the British House of Commons on the 14th November, 1958, a Parliamentary Secretary, Miss Edith Pitt, in a written reply said—

In the period from the 1st January to October 31st 1958, the number of people arriving from the Irish Republic who applied for National Insurance cards for the first time was 40,497.

In the first ten months of last year, 40,497 of our people left this country and, if there is a slight reduction in the number of unemployed, the reason is because they have left the country. When the Taoiseach was asked a question about the number of people who emigrated for the past twelve months his reply was that he could not tell, that "they are coming and they are going". But here is a case where 50,000 people in the first ten months of last year, who had never before applied for insurance cards in England, left this country. That is the reason for the slight reduction.

The Minister in his Budget statement had the cheek to refer to the fact that emigration is declining. Of course it is declining. It is declining because the people have nearly all gone. They are going now at the rate of 50,000 in ten months. What hope is there in this Budget for the working man? What compensation is there for the £9,000,000 taken off him, in a manner which increased the price of bread, butter, tea and other commodities? What consolation is it to him that the people can dance more cheaply? What consolation is to him that people can go to the dogs to spot "the dark one" and that some concessions are given to the cinemas? No concession whatsoever is given to the man on the land.

I do not know where he got the information but the Minister in his statement said that there was an increase in the numbers of live stock. Let me tell him that such is not the case. A few days ago a publication was issued by, I think, the Department of Agriculture, which showed that there was a falling off this year in the live stock population. Let me tell the Minister, and the Government, that when that tendency is manifested, and the tendency is there, it is a bad day for the revenue of this country. What has a farmer got? He gets less now for his wheat than he got two years ago. He is getting less for milk than he was getting two years ago. The important section of the Land Rehabilitaion Scheme and the Local Authorities (Works) Act which were most useful to him are wiped out entirely.

The question of detail would relevantly arise on the General Resolution and not at this stage.

Even the contribution to the Rural Improvements Scheme to make a road into his house is increased. That is the work of this Government. Nothing has been given to the man on the land. Nothing has been given to the worker in this Budget and nothing has been given to the small business man. Reliefs have been given to dog-racing, dancing and cinemas and there is a reduction in income tax and sur-tax. That may be necessary. I know nothing about it, thanks be to God. My view is that the people who pay income tax can afford to pay it, but no concession whatever is given to the small farmer, the worker and, as Deputy Norton says, the man on the labour exchange. He has not been relieved one penny in regard to the price he has to pay for a loaf of bread, a stone of flour, an ounce of tobacco or a packet of cigarettes. He has been given nothing to help him to support his wife and family.

Is it any wonder that in the first ten months of last year, 50,000 of those people had to go? I know it. Homes are closed up and whole families have emigrated, but they need not go now because the fellow who goes to dog racing is all right. Taxation is to be reduced in respect of dancing, cinemas and income tax, but there is no concession whatsoever for the people who produce, who work and pay all the taxes in the country—the workers and producers.

Of course, we will see a great hullabaloo to-morrow in the Irish Press in regard to the extra 2/6d. for the old age pensioners, but it was only to-day, in reply to a Parliamentary Question that Deputy Desmond who asked the Taoiseach to state the present value of the £ sterling as at January, 1914 and February, 1938, was told that the present value of the £ compared with its 1914 value was 4/3d. The old age pensioner got his 5/- from the Government in that year, but from 1st August next, he will get the increase of 2/6d. The Irish Press will blow that up. They will tell the people what a great Government we have. At one time, it would have been said it was an election Budget and the next thing that would be said was that the Taoiseach would run up to the Park. He intends, if he can, to go there for good now. The only thing I can say is that he is leaving after him a Budget which is of no use whatsoever to anybody. The extra 2/6d. to the old age pensioner is of no use. As for the other proposals, they are not concessions at all. The old age pensioner has got to realise that the pound is worth only 4/3d.