It is indicative to me of the situation to which the country has been reduced that Fianna Fáil Deputies have attempted to work themselves up to some stage of enthuasism for this Budget and more particularly that the type of speech made by Deputy Haughey should be founded upon the rather meagre proposals contained in it. It was stated with regard to a person in charge of the affairs of Malta that he said he prepared a scheme for the betterment of that country which he could put into operation if somebody would give him £100,000,000. It is a significant figure and reminiscent of the Tánaiste's plan. The comment made afterwards, when he propounded his plan for spending the £100,000,000, was that it was a sort of apocalyptic vision the radiance of which was very bright but the details of which were sunk in obscurity.
Another vision of this country which has been brought before those who deal with economic matters in Paris, where delegates sometimes go to consider the circumstances that may arise if there is a free trade area and we have to take our place in it, is by no means radiant but the details are formally marked. It adds up to the fact that it is considered there are four undeveloped countries in Western Europe and we are marked with Iceland as two of them.
Deputy Haughey congratulates the Minister on all the schemes introduced for getting credit for the State without the necessity for national loans. In his reply, would the Minister tell me which of these schemes is the product of his brain? How many of the schemes that are now being used as devices for getting people to lend money to the State without the necessity for national loans have proceeded from the Government he represents?
Deputy Haughey gave a radical idea —Deputy Casey referred to it—with regard to factories. I understood him to say his proposal was that each of our towns should build a factory and get a progressive industrialist to come along and put something into the factory. If that is the brightest idea emanating from one of the best speakers, so far, from the Government benches in this debate, I should like to hear the Minister's comment if that proposal were carried out even to a limited extent in the country.
I wonder if Deputy Haughey would stop there at the building of the factories? There is no question of machinery and plant. A difficulty arises also about the town in which you would provide the factory. It is still more difficult to install the plant and machinery for the industrialist who might be tempted by the fact that the State had built some sort of a building called a factory.
There is an interesting booklet entitled Seven Republics in Search of a Future. Our new book would be entitled Thousands of Factories in Search of an Industrialist. The Deputy cited the building of something in the way of a shack in which the factory would be housed.
Some Fianna Fáil Deputy wanted to know why there was any complaint about the 2/6d. a week for old age and other pensioners. The only complaint I heard in that regard was that the sum offered is inadequate in the circumstances in which it has been brought about. Deputy Haughey said that an Opposition Deputy remarked that the Government were shamed into giving the 2/6d. Deputy Haughey then asked, in effect: "Is it not a good thing to have a Government that will yield to shame or to a shameful position?" It is, of course. However, one must look behind what there is at present and see how it was that the plight of the old age pensioner was such that shame reduced the Government at the moment to give the 2/6d. described by Deputy Casey as equivalent to 1d. per meal per day to the pensioner.
The cost-of-living index figure is the test. When one considers it, and how it has been increased by Fianna Fáil direct action, it must further be remembered that the cost-of-living figure at the moment is based on what might be called "subsistence allowances." Many years ago, when the cost-of-living figure was introduced, it included many items which have since been cut out in the compilation of that figure. It included items such as tobacco and drink—items which gave some solace to people. But, in 1947, when the then Fianna Fáil Government had in mind fiercely to increase the taxes in these two respects, it was necessary, in relation to any demand that might arise for more wages owing to the increased figure, to cut out these items and include only items described as "essential commodities." The figure by which this 2/6d. is judged is a figure based on subsistence allowances which never did allow for anything in the way of an improvement in the standard of living. The old cost-of-living figure included commodities which were not regarded as essentials but as quasi-essentials.
We have reached the level in the present cost of living figure at which even the Government were shamed into giving the 2/6d. to the old age and other pensioners—whatever it may be worth as against the new demands for wages which are bound to be made, and, when granted, will raise the cost of living still more. The cost of living index figure does not mention the cost of living of a great majority of people in this country. It should be remembered in that connection that when a Budget has to be considered it should not be considered in the light of a Budget that has not increased taxes. The customs duties, as they are estimated for the year that has ended, were round about £45,000,000. They brought in £1,000,000 more. They are estimated to bring in £1¼ million next year. One of these days, I shall ask the Minister to provide me with details of how that extra £1,000,000 arose in the year that has ended and how it is believed that revenue from customs duties will rise by £1¼ million in the year we are in.
Deputy Haughey says there were comments that the Minister, as he put it, "fiddled with the figures." I do not know that any complaint has been made other than that the Minister has definitely made these arrangements to give away £2½ million which he has not got. He has played with the figures at least to that extent. He allows himself £1½ million for over-estimation— that is a net figure. I wonder does the Minister feel that that over-estimation contains all the items likely to be met during the year, or has he any apprehension whatever as to Supplementary Estimates? If so, will he give us what his gross estimation is and let us know what subtractions to make from that, by way of Supplementaries, which he thinks he must meet?
With regard to this over-estimation the Minister went on to say:
"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 over-estimation to £2½ million so as to make £1.2 million available for relief of direct taxation."
Those are good sentences and were well pronounced but what do they mean? That is just simply a gamble with regard to £1 million. I think he is gambling with £2½ million and I would like the Minister to say if there is any other Estimate he will have to meet during the coming year.
There is a more sober estimate made by the Revenue Commissioners—the estimate of receipts and expenditure. I always understood that one of the ways of measuring the buoyancy of the economy as between years is to look at what is the estimate of increased yield by way of direct taxation, and the increased yield is put down by the Revenue Commissioners at half a million pounds in the next year. Half a million is what they think is likely to emerge from a more buoyant situation in the year ahead but, in addition to that, the Minister assumes there will be another £1 million. Perhaps he would explain how it is that his view is more optimistic than that of the Revenue Commissioners, or whether there are any signs whatever in the three months that have passed, as to whether any better estimate should be made, or whether the Revenue Commissioners were unduly pessimistic or conservative in the case of the estimate in the White Paper.
The other matter which Deputy Haughey complained of, as meeting with criticism on this side of the House, had regard to the special levies. As far as I am aware the only matter complained of in that connection was this. Two years ago the Minister, in order to prepare the ground for the removal of the subsidies, had to pretend that the Budget was in a very weak deficit. Speakers from this side of the House urged that if there were to be any new ways of getting money the special levies, instituted in the first instance for capital productive work, should be turned over to ordinary revenue. All the knowledgeable economists on the Fianna Fáil benches protested against that. They said that the levies were introduced for the purpose of providing capital and they should not be diverted to ordinary revenue. The only point that occurs is that if it is now possible to take the revenue coming from the special levies and look on it as current revenue, why was that not the position a year ago, or two years ago?
If the Minister would adjust himself to the old time situation he would find, as Deputy Sweetman said here, that the deficit that occurred in the Budget he left would not be anything like the figure put forward as indicative of the deficit the present Government alleged, and would be something of the order of £1? million. As Deputy Casey said, Deputy Haughey spoke very much like an accountant on certain matters in reference to the fillip to the economy that is going to arise from the giving away of £2½ million. The Minister, on his own confession, has still to get £1 million of that, and the best he can hope for at present is £1½ millions. We had the accountant's view with regard to the multiplier effect of £2½ million spread over the economy, and I want to get this into its proper setting.
In 1957 the Minister counted on a saving from the food subsidies of £7 million. There were other savings he was to get, but leave those out for the time being. There was increased taxation in 1957 at the time when the Minister was definitely robbing all the people who required the food subsidies for their economic sustenance. There was £7 million saved on the food subsidies and taxation was increased by £2.9 million. There was to be £1 million and a bit from tobacco, a bit more than half a million to come from beer, £1¼ millions about to come from petrol and a small fraction from oil, but it all added up to £2.9 million—that is, in addition to the looting of the food subsidies.
Would Deputy Haughey tell me about the multiplier effect of that taxation last year and how did he get such a great result as he depicted from the fact that £2½ million of that £2.9 million is now being given back, all the while reserving any comments with regard to the £7 million deducted from the food subsidies? If there is a multiplier effect of such tremendous advantage with regard to the giving away of £2½ million, will he equate that to the bad situation that developed, multiplied by whatever the multiplier is, of increased taxation of nearly £3 million last year—£3 million that was extracted from the people after they had been made pay the £7 million which used to be provided by the State in food sibsidies?
I go back a bit further to the Budget in 1952. At that time the gross savings on food subsidies was £6,668,000. Between the years 1952 and 1957 the food subsidies were costing £13? millions. Those were taken away and the people had to fend for themselves and get substenance elsewhere. In addition to that, in 1952, one shilling was put on income tax, bringing in £900,000. Tobacco was taxed to bring in £5½ million, beer to bring in £2? million, spirits to bring in £1 million— nearly £9 million between those three taxes and, in addition to that, petrol and oil were to bring in £1½ million and income tax £1 million. That was an extra amount of £11¼ millions increased taxation at a time when savings to the extent of £6? millions were being made on food subsidies. For these two Budgets the subsidies added up to £13? million and they have now been cleared off to the Book of Estimates.
Increased taxation to the amount of £11¼ millions was put on in 1952 and £3 millions was put on last year. Was there anybody to talk about the multiplier effect of that on industry, and what was really to be the results on the unfortunate people who had to bear these extra taxes put on tobacco, spirits, and everything else and who were deprived of the food subsidies at the same time? They had to look for that money elsewhere and, to a certain extent, they got it through increased wages which, developing again, caused increased costs. But the State was saved in its Book of Estimates having to provide the £13,000,000 which used to be provided.
People will ask, and will ask again and again, what has become of that saving that has disappeared from the State Budget. Where is the good effect that has come to us from any easing of our lives elsewhere? We have been told about this £2½ million. How is it divided? The proprietors of dance halls are to get something; the proprietors of cinemas are to get something; the promoters of boxing tournaments in the open air are to get something; and greyhound racing is somehow to benefit to a small extent. Outside that, half-a-crown is to be given to the old age pensioner. No explanation has been given as to why it was considered necessary to give that this year; simply, there it is.
Last year, we were told there was to be an allowance for compensatory benefits of a very small amount indeed. Last year, it was argued that, whatever they might be, these supplementary benefits would be sufficient to make up to the old age pensioner what he had suffered by the cutting away of so much of the food subsidies as were left to be cut away last year. There has been no explanation, other than shame, as to why it was found necessary to give the extra half-crown this year. Shame, of course, has been widespread throughout the country and has found expression in the speeches of many people of different denominations and different types regarding the shocking condition to which those who depend on the State for mere subsistence had been reduced.
Then there are two remissions or alleviations by way of direct taxation. One is in regard to surtax. For the future, surtax is to start at the £2,000 limit. The whole concession will cost £160,000. In addition to raising the point at which surtax comes to be paid, there is the extra matter that the personal allowances will be permitted as deductions from surtax, whereas previously they had not been. I want the Minister to tell me—in the course of his reply or perhaps in answer to supplementary questions—what is the division of that £160,000? First of all, I want to find out, if the £160,000 refers only to this year, what is the cost of this so-called remission in a full year. Secondly, I should like to know how the sum is divided as between the saving to the community by the point of entry for surtax being raised from £1,500 to £2,000 and how much is attributable to the running of the personal allowances to all others who pay surtax starting from the £2,000 level.
The Revenue Commissioners' reports classify incomes for the purpose of surtax. Out of 6,676 who paid surtax in the year 1953-54, 2,400 were persons who were classified as having an income of between £1,500 and £2,000. The total income on which those people were assessed was £4,000,000 and the total tax assessed on that was £1¾ million. There must be some way of dividing out the saving of £160,000 between those who are no longer open to surtax and those who still are. The figures are not easy to make a calculation on, but it would seem to me that less than a third—more nearly a quarter— will go to the people who are entirely relieved of surtax. It is quite clear that when you go to the upper limit, people whose incomes are above £5,000 or indeed above £10,000, there will be very much more relief for the people in the higher brackets for sur-tax purposes than for those who are getting £1,500 and who are being put off assessment level. They were paying at the rate of 9d. and there are so many ninepences saved. I should like to get the calculation of what that amounts to in a year.
I shall take that as a lead to another matter. Income tax is to be reduced by sixpence in England. The calculation has been made during the course of debates in the House of Commons that there are 18,800,000 taxpayers in England and that, of these, 12,000,000 odd have an income of £750 a year, a little over £15 a week or less. Of these 18,800,000 income tax payers, it is calculated that 12,000,000 would receive £50,000,000 in alleviation and that the other 6½ million with incomes over £750 would collect between them £116,000,000. In other words, the people who were on low-level incomes up to £750, being a numerous body, would get a bigger relief per head. Although very small in comparison with those in the higher brackets, they would get a bigger relief per head.
I should like to find out from the Minister if any such calculation can be made with regard to this community. I do not know why it has always been that the Department of Finance refuses to estimate the number of people who are assessed to income tax. The Commissioners find it possible to classify the incomes of those chargeable to surtax. There is at least an estimate; I have seen it. It can be estimated how much of the taxpayers' income flows from the different groups in the community. Based on such a figure as £750 and £1,500, I should like to find out how much relief—or what is regarded as relief—from the reduction of sixpence in the standard rate will come to the benefit of the small taxpayer, the numerous class, and what it will mean to them per head. Take £750 and £1,500 and the people above that. Indeed, the greatest part of this will inure to the benefit not of the small persons but to a great extent to the benefit of the man with the big income. To him the main part of this relief will go.
I have noticed two companies whose accounts have been paraded in the last couple of weeks. Both of them are monopolistic concerns. One of them indicated that their gross profits had risen this year from £600,000 to £800,000. They had to pay considerable tax on that. The relief to them, of course, will be very big. In the other concern, the profits had risen from a couple of hundred thousand pounds, I think, to almost double. I am speaking of gross profits. Again, they were salted very heavily as far as income tax was concerned, but they will get enormous relief from this. The shareholders, who got very big dividends in the last two years, will get as individuals a correspondingly bigger return than the small struggling person. The family man, struggling with all sorts of difficulties, will get very small reliefs, whereas the big person will get tremendous reliefs.
I have talked about the visions that some people have of this country. I want now to compare two things and I want to try to find out wherein truth lies as between these two. The Taoiseach addressed a message on St. Patrick's Day to Ireland's friends. He felt that our friends abroad would want to know how Ireland stood. He said:—
"...here at home we are looking forward hopefully to making substantial progress towards achieving the national objectives at which we have been aiming over the years."
The friends of Ireland were given then a dissertation on the Irish language and Partition, and all the other matters to which we are accustomed to listen in addresses to our exiles.
He came then to more concrete matters. He thought that one of our objectives was to give employment and a reasonable standard of comfort to the greatest number of people; a second was to establish as many families as practicable in economic security on the land; and a third, to promote social justice and use the strength of the nation as a whole to bring aid and support to the weaker sections. These are three great concrete aims. Bring aid and support to the weaker sections! The voices raised on many public platforms drove the Government in shame into giving the half-crown. That is giving aid and support to the weaker sections.
To establish as many families as practicable upon the land: Table XII of the Economic Statistics has been referred to already, and it will be referred to again. It shows that the labour force, which includes people working with their families, in agriculture, forestry and fishing has dropped from 496,000 to 420,000 between 1951 and 1958. There are 76,000 fewer people occupied on the land to-day. Take the figures for earlier years. In 1926 there were 652,000 people occupied on the land. To-day there are 420,000. In other words, there are 230,000 fewer people occupied on the land to-day as compared with 1926. In face of that, the Taoiseach can tell us in his St. Patrick's Day message to the friends of Ireland that his aim is to establish as many families as practicable in economic security on the land.
The first aim was to give employment with a reasonable standard of comfort to the greatest number. Deputy Casey spoke about the pamphlets that went through every constituency in the election of 1957. He referred to the 100,000 new jobs which were to be created over a number of years so that our people could work in their own country. Table XII shows all the various classes in which people get money in return for their services. As between 1951 and 1958 there was a drop of 10,000; as between 1956 and 1958 there was a drop of 31,000. In 1955, which was supposed to be a shockingly bad year, a year in which everything was going to the bad and the country was drifting to ruin, there were 1,181,000 people in employment. To-day there are 1,131,000 people in employment—50,000 fewer people occupied in 1958 as against the year that was regarded, and there was propaganda along these lines, as one of the worst years this country ever had.
The objective is to give employment with a reasonable standard of comfort to the greatest number. One remembers the barrage from Fianna Fáil when the food subsidies were removed and it was said that the workers would naturally seek to get in wages what the State had taken from them by way of subsidies. We were told we were engaging in a conspiracy to defeat the plan on foot to provide employment for a greater number of people—if only that greater number so to be employed would put up with a lower standard of living and not look for any increase in wages to meet the increase in the cost of living. Notwithstanding that, the Taoiseach, on St. Patrick's Day, spoke of the objective of giving employment with a reasonable standard of comfort to the greatest number. He did not dare to expose the skeleton in the cupboard and say that what the Government tried to do was to reduce the standards of living, the level of subsistence, and not merely the standard of comfort for a lower number of people getting employment in the country. As to bringing people on to the land in economic security, he failed to say that the number who used to be able to live on the land was down by one-third as compared with 1926.
The Taoiseach went on to say: "The success so far achieved gives us reasonable grounds for confidence in the future, even though complete success might be tedious and difficult." The success so far achieved is reduced numbers in employment, with a lower standard of living. Those who depend upon the State for justice fail to be maintained by the State. Their condition has been so reduced that there was shame brought upon the Government by the many who spoke of the dire straits to which these people had been reduced. Yet, the Taoiseach speaks of that as the success so far achieved.
Further details flowed from the Taoiseach: "Our rivers have been harnessed, our bogs utilised for the production of power and fuel. Our mineral resources are being surveyed and exploited. Our hillsides have been planted with tens of thousands of acres of forestry. Our harbours have been developed and equipped. Drainage schemes for our large rivers have been undertaken." Just ponder on those details for a moment.
Our rivers have been harnessed. The great white elephant of old! Our bogs have been utilised for the production of power and fuel. When did that start? The War found us wanting in any native fuel and it was at that late hour and not in 1932, when Fianna Fáil first got control of the country's resources, that that development started. It is really only since the War that our bogs have been used for the production of fuel; the fact that they are being used for the production of power adds to our cost.
"Our mineral resources have been surveyed and exploited." The first Vote granted in this House for mineral exploration was granted at the demand of the present Minister for Industry and Commerce. I do not parody him when I say that his explanation to this House was that there were many mistaken ideas about the mineral wealth of this country and he hoped that by the time we had expended the £750 or the £1,000—whatever it was—we would have proof that there were no minerals in the country. It was in that hopeful mood he set out to have our mineral resources surveyed and exploited.
As to our hillsides being planted, I remember the time when Deputy Blowick, Minister for Lands, inaugurated a programme increasing the acreage to be planted year by year. He met with nothing but discouragement and sneers from the people who now sit behind the Government. We were told, in particular, that afforestation west of the Shannon was impossible. When certain estates were bought down there for the purpose of plantation we met again with the greatest discouragement. All that is now transformed and disguised in the Taoiseach's St. Patrick's day message into "a tens of thousands of acres of forests" which have been planted.
"Harbours are being developed." We shall get an indication some of these days as to how that harbour development has speeded up and under whose auspices. Drainage schemes for large rivers have been undertaken— with great reluctance by Fianna Fáil and by ourselves when in control, with great enthusiasm, because we thought that was work that could be beneficial to those who tilled the soil and lived on land. Later, of course, we had reference to the beet factories, one of the three great white elephants, when his people were critical of things.
He speaks then of "what we have achieved" as a source of wonder to those who remember the conditions here a generation ago and says that "we hope to go forward steadily until all our aims have been achieved". That note has been echoed, of course, by quite a number of his followers. The Minister for Lands, speaking at some dinner on 3rd April, referred to the "signs of change for the better" and he went on, in a way typical of the criticism we are accustomed to hear from him in the House, to say that the Government would gladly pay anyone a premium of £1,000,000 for any short-term project to end emigration, the direct effect of which would not create a serious balance of payments crisis by a process of stimulating demand for imports.
In the various athletic sports that I have been able to enjoy occasionally in my lifetime, a prize is usually put up and anyone who wins that prize three times gets it as his own. I do not know why the Minister for Lands is offering £1,000,000 now because surely the Tánaiste must have won that prize at least three times in the past 20 years. Surely—I can get the quotations if necessary—unemployment and emigration could be ended by the Fianna Fáil plans and the plans would not even have to be put into effect because when they got going and got industries started, they would have sufficient jobs! They would not have enough people to fill the jobs and would have to call the emigrants back. They had two plans. There was the first plan which would give us 100,000 jobs in five years and which of course would mop up not only the surplus population of unemployed but would certainly prevent also the greater part of the emigration.
That was the Minister for Lands—"the signs of change are there for the better" and £1,000,000 for anybody who can give a project to stop emigration and not cause a balance of payments crisis. It is apparently being done at the moment, as we shall see.
In the course of his speech last night the Minister for Lands ventured to say, with regard to the cattle business on which it is now agreed the whole of our fortunes depend, that Fianna Fáil were never against it. I take that as a sample of the standard of his speech in respect of accuracy. We need not go back to the British market "being gone and gone for ever," and that it was "like children crying for the moon to try to get it back." The phrase was used that "It has taken 100 years to build up that market in Britain, but please God, it will not take so long to break it down". Despite that, the Minister for Lands referred last night to the matter of the cattle trade "against which Fianna Fáil never had any objection."
Earlier, in March of this year, the Minister for Lands at a Fianna Fáil convention in Mullingar, reported under the headline taken from the Irish Times, “Cynical Pessimism Diminishing”, produced this gem. He said that once again the Taoiseach was proving that his team could produce more new plans for spurring the economy than had been forthcoming in the life history of any other Party. Plans are grand things; the results are in Table 12 of Economic Statistics. The Taoiseach is to be congratulated because his team can produce more plans to spur the economy than had been produced in the life history of any other Party!
Again, in March, the Minister for Lands was speaking at a dinner in Manchester of the National Bank and referred to the N.F.A. Heifer Retention Plan linking other bank credit, the Government plan for fertiliser subsidies and other items to improve the livestock industry as constituting the most massive programme of agricultural expansion since the foundation of the State. I want to examine that in more detail later on, but the bank credit and the N.F.A. Heifer Retention Plan amount to this, that the banks are now going to lend to creditworthy farmers—and there is a good deal of the note of interrogation about that phrase—moneys that may be repaid over a number of years at 5¾ per cent. That is regarded as one of the points in "the most massive programme of agricultural expansion since the foundation of the State." The phrase is very much the same but it is just a different type of sentence when, speaking on the Vote on Account here, he said: "Never in the history of the country had there been a greater marshalling of aids to encourage industry than there had been in the last two years". Then, of course, the Tánaiste has to tell us that economic recovery has begun and all that is necessary now is to press on with our plans and that "any relaxation of effort now could defeat our whole purpose. This has to be the year of acceleration."
The Minister for Finance speaking at the Insurance Institute said that all the available information pointed to a resurgence of economic activity. I want these to be remembered because I want to examine what has happened in the way of economic activity and how it outcrops in employment and the cost of living here.
Finally at a dinner, a Fianna Fáil celebration reported on 3rd of this month, the Minister for Finance said that this country was now solvent for the first time. The banks were inviting farmers to apply for credit—that is, on the banks' terms—and there was a very big change in the attitude of the banks from their attitude two years ago. There was no longer any credit squeeze; there was an expansion of credit through the commercial banks because of confidence in the economy at present. That is one picture: I turn to another picture. On the Vote on Account, I said I had seen two editorials phrased in much the same way. One spoke of the position of the country this way—this was a year ago—"The shadow of unemployment grows darker every day; the population is steadily dwindling; emigration is threatening the existence of the race; people are eating into their savings and their capital. The external trade has been somewhat redressed, but this is largely due, on the one hand, to the cattle exports which are enjoying a prosperity that nobody can say will endure, and, on the other hand, to illusory benefits from other agricultural exports which are artificially maintained by costly subsidies."
The second editorial was in these terms. It spoke of a speech made by the Taoiseach some time earlier and said: "This is perilously near trifling with the country's interests. The man who is trying to make a living, the man who is bringing up a family, the housewife who is daily faced with the problem of making ends meet, are all much more concerned and very properly and urgently concerned with bread and butter. They look around and see young men and women fleeing the land. The farmers are desperately and courageously endeavouring to put their husbandry on a sound basis. The businessman is watching the wolf approaching his door because of the oppressive demands of the national tax gatherers and the local rate collectors. The cost of living remains an economic nightmare. The building trade is depressed, and unemployment is driving whole families out of the country."
I do not think those descriptions were too pessimistic of the country as it was at the time. What relief has come to it since then? How much relief will come to the country from the 2/6d. to the pensioners or from the sixpence off the income tax, the main benefit of which will, as I have said, accrue to those on higher levels?
It must be remembered, as against all this, that a Christus Rex Congress took place in Kilkee this year in the month of April. Would anyone reading the papers brought before that assembly get the picture that Deputy Haughey thinks is so clear of the prosperity that we are enjoying and the greater prosperity that we are likely to enjoy?
One priest read a paper on "The Responsibilities of Capital and Labour" and the most striking phrase is given a headline "Unemployment Is A ‘Moral Evil'". Speaking about labour and capital, he said:
"That there were times in every industry when redundancy and unemployment became unavoidable was readily conceded, but too often one found that the wages bill was the very first item of expenditure to be reduced. Surely, he said, it was private profits and not the workers' wages which should be sacrificed first. Unemployment as a remedy, should be adopted not as a first solution, but rather as a last resort. One felt that during an employee's illness the employer could show a more human touch. He thought that where at all possible the differential between the amount of National Health benefit and the normal wage should be paid for at least a month or six weeks. This was not a duty binding in justice but there was also a law of charity from which the realm of industrial relations could not be exempt."
In that regard the industrialists throughout the country did not get a lead from the Government during the time when they were removing the subsidies on food. There was a great commotion from the Government benches that nobody should urge the workers to seek any improvement in their position through wage increases and we were told that to encourage people to go to the Labour Court or to arbitration courts of different types was a conspiracy against the progress of the State, which progress could only be made if wages could be kept at the same depressed level.
Another speaker at the same conference spoke in these terms:
"Another problem they would have to face more practically was that the abolition of poverty was a requisite for proper living. Poverty was most obvious and most harmful in the family. Many would still plead that our voluntary associations were sufficient to relieve the poverty which we have. He would suggest that they were not; and besides, there was to-day many families who suffered from inadequacy of income and who could never hope to be considered by voluntary charitable associations. Inadequacy of income faces many families to-day and in the present circumstances extensions of statutory social services in the fields of health, welfare, education and housing seemed the only practical way to overcome with speed, the pressing financial stress that faced many hardworking and thrifty families."
It was not the choice obviously he would like to give but it was the only choice. One can read into this lecture that it was the only choice open in the circumstances. He spoke of inadequacy of income as being:
"almost a thing of the past in England, and poverty, at least the worst kind of poverty had been splendidly overcome. This at least prepared the ground for good living—if viewed correctly and with responsibility. It provided not a freedom from want merely but a freedom for living and the opportunity to develop spiritual values which we all knew to be real living ...The test for democracy today was not political freedom but economic freedom... Pope Pius XII spoke of ‘Social Wages' i.e., that the obligation of society as a whole to supplement wages in certain groups, by contribution to the ‘wage' in subsidies, grants-in-aid, welfare."
He made a plea at the end that something should be done for the agricultural labourers who contribute greatly to the national economy.
The theme of the Christus Rex Congress was poverty in this country, poverty which these reverend gentlemen had found to such an extent that when they gathered together, they expressed their feelings in these papers, and I have referred to only two.
The Bishop of Cork has been criticised here for some of the statements he has made, but he did say this—and I want to repeat it because it has been proved by recent events and more particularly by Economic Statistics to be completely true—on 18th March: that out of the total population there were less people working and more emigrating than at any time since the Famine.
"Relative to the total population there was less work and more emigration than at any time since the Famine."
The Bishop went on:
"Worse still, those who could and should put these things right accept this catastrophic and unnatural state of affairs with the fullest complacency and regard as a crank anyone—like himself—who even calls attention to it."
"I leave it to God and history" he said, "to judge as between them and those who place emigration in the forefront of Ireland's unsolved national problems."
He later deplored the flight from the land and said that the Irish countryside was "becoming depopulated at a rate almost equal to that of the famine years". One-third of those who occupy the land do not use it and that gives the background for the type of statement that the rural areas are "becoming depopulated at a rate almost equal to that of the famine years".
I have one other excerpt from the newspapers. The Rev. Canon R.J. Kerr, Rector of St. George's Church, Dublin, preaching in Christ Church Cathedral on 15th March and reported on 16th March said:—
...There were almost half-a-million people in this country suffering from grinding poverty and in many cases slow starvation.
"The Church, because it is the Church of Christ," he said, "must of necessity concern itself with unjust and deplorable social conditions, such as unemployment, bad housing, malnutrition as a result of poverty and so on. The very fact that we profess belief in the doctrine of the incarnation should urge us to be actively concerned with the bodily as well as the spiritual welfare of other people".
He summed up the situation as it appeared to him in this way:—
"The unemployed—at present the figure was about 80,000—and their dependants were not receiving sufficient to keep body and soul together in the way of unemployment benefit and unemployment assistance. The 150,000 old age pensioners received miserably insufficient benefits".
The old age pensioners are now to receive an increase of 2/6d. a week. At a meeting of the Dublin County Council, reported of 7th March this year, a representative who I understand is a Fianna Fáil representative on the Dublin County Council said that he knew families of the middle income group who were in the underprivileged class and were unable to have meat more than once a week as a result of the rates demand by the Dublin County Council.
These are the two pictures which the Taoiseach wants our friends abroad to be presented with as to how Ireland stands but I have quoted the viewpoints of people with differing views from different walks of life and the picture they paint is not exactly the rosy one Deputy Haughey would have us believe is the true one.
I turn now to another expression of our position as shown by our representatives who go to Paris dealing with the Free Trade Area. I have in my hands a blue book issued by the British Stationery Office "Negotiations for a European Free Trade Area" It is mainly a compilation of documents which have passed between the Council of the O.E.E.C. dealing with this matter and the various authorities which have been established. Ireland stands out in this report as one of the four underdeveloped countries in Western Europe. The four are: Ireland, Iceland, Greece and Turkey. The special conditions of each of these four countries are mentioned in this booklet. At the beginning, our situation in general is mentioned with that of the others. It sets out:—
At the outset of the discussions it was decided to make a separate study of the situation of each country which wished to be so examined. It was difficult to draw up any general code until special provisions were made for countries in course of development within the area which would not merely fail to benefit but it would be positively harmful, arresting their development and thus widening rather than narrowing the gap between the more and less developed countries.
In a short time Western Europe would be divided into two camps. Quite apart from considerations of politics or altruism, Western Europe cannot afford to allow within her boundaries the existence—much less the extension—of underdeveloped areas.
Then there comes the warning that if these underdeveloped countries are approached in a sympathetic way, they will, so to speak, have to play ball with the rest of the community.
"The other countries cannot be expected to sign blank cheques and they will expect that, in exchange for favourable treatment, the countries in course of development will adopt definite obligations under a time-table laid down in advance."
At page 34, paragraph 10, it says:
"The case put forward by Ireland for special treatment in respect of the Free Trade Area may be briefly summarised as follows. The present exceptionally heavy emigration of the active population is a matter of serious concern. Despite this emigration, however, unemployment in the towns and underemployment in the countryside remain substantial, while there is much scope for an increase in agricultural production, agriculture is not able to provide greater employment than at present. (Some further loss of workers from the land may, in fact, be inevitable.)"
Therefore, having reduced our people on the land from 652,000 in 1926 to 429,000 last year, all our delegates at Paris can say for the future—perhaps I should not say this but it is an extract indicating their point of view and it has not been countered—is that some further loss of workers from the land may be inevitable. The paragraph continues:
"Greater industrialisation (and a corresponding increase in the present low level of investment) is therefore necessary if Ireland is to provide work for its citizens on a more adequate scale. Hence the view is taken that protection is essential to the development of the economy, not only to facilitate the setting up of new industries, but also to enable those industries which have been established in the past decades to consolidate and expand. A special problem for Irish export industries is the extent to which shipments to Britain may be affected by the gradual elimination of the tariff advantages which they enjoy in that market vis-á-vis Continental countries.”
In relation to the operation of the Free Trade Area and its effect on this country, paragraph II states:
"...The Irish authorities, however, feel a difficulty in accepting definite obligations immediately since they fear that the implementation of these obligations might have a catastrophic effect on their industrial structure and level of employment..."
Then a series of conditions are set out to which this working Committee thinks this country should accommodate itself if it is to get any alleviation against this feared catastrophic effect on our industries. Towards the end of the book, at page 231, there is this statement:
"Industrialisation, on the other hand, is somewhat hampered by lack of natural resources. Much of the surplus rural population is able, at present, to find employment outside the country."
That is a new way of describing emigration.
But emigration on the present scale —which still leaves unemployment at about 10 per cent. of the insured population—itself raises considerable difficulties for the Irish economy, discouraging domestic investment and draining off types of manpower which are particularly important from the point of view of industrial development.
That is not exactly the picture Deputy Haughey tried to give us today. In fact I wonder would our efforts to have ourselves described and classified as an undeveloped country be helped or to any extent impeded by the sort of ráiméis Deputy Haughey talked to-day. There is no way of reconciling these two points of view. We should recall our delegates and put them into another mood to express themselves if what Deputy Haughey said is correct, that this country is not merely enjoying prosperity but is likely to enjoy greater prosperity almost at once.
I have spoken already of the attack on wages made in 1957 and last year I cannot say that this mood has left the Government. We are back again tramping around the old circuit. Again the cost of living has increased. Budgets come and go and give no alleviation to any worth-while extent to a great number of the people. Those who are left out start a new round of wage claims and no doubt the Government will scrounge a little benefit by having these demands resisted for a little while, or only deal reluctantly with them, thus giving some little relief to a hard-pressed Government in a bad year.
I wonder have the Government yet realised how bad was their attitude with regard to wages. In England there was the same struggle where the view was held that it was a bad choice to bring about economic stagnation by moderating wages. The Economic Editor of the Sunday Times says:
"...This attempt to moderate wages by means of economic stagnation is a highly uncertain business."
At a later period the same Economic Editor wrote:
"...society threatening itself with depression in order to bring organised labour to book..."
That, of course, was the attitude of mind prevailing in the Government Benches away back in the days of the standstill order. It prevailed in 1947 but did not get expression because although the legislation was drafted it was prevented from going through by the change of Government. Certainly it was the prevailing mood in 1952 when the fierce Budget of that year lowered the standard of living and an attempt was made to prevent people getting any alleviation from the depression in which they were put. It was obvious again in 1957 and 1958, and the exponent of it was the man who speaks most of all the Government people, the Minister for Lands. He is reported on the 7th February, 1958, as saying:
"Irish people for the next 20 years would have to accept a more modest standard of living until production increased..."
Twenty years apparently was the period in which the Minister then saw production increasing.
However, he sounded an ominous note in his speech at the Wicklow Chamber of Commerce. He spoke of one thing which is constantly recurring in his speeches in regard to emigration. He told the Irish Country-women's Association in the last week that Scotland has suffered more from emigration than this country has and more or less says we should accept Scottish conditions. This is what he said in his speech reported on the 7th February, 1958:—
The population of Scotland had barely increased in 20 years and had declined in rural areas.
But one of the major factors to be faced in this country was this:—
...capital was beginning to flow back into the undeveloped areas of the world because industrialists looked for more loyal and hardworking operatives and more reasonable costs of production.
My mind goes back to elections that were fought in England over what was called coolie labour. Industrialists are looking to the undeveloped areas of the world—and we are one of those— because you can get more loyal and hardworking operatives there. The trade union presumably is not as strong in the undeveloped area and in addition to that you get more reasonable costs of production. That is followed out at great length in this except from the Minister's speech.
The report continues:—
...wages, salaries and profits must be kept at a level which allowed for the extra freight costs and the fact of Ireland being an island not in the main stream of European commerce ... The best production might have to be reserved for export.
That is a theme the Minister for Lands is constantly harping on—that this country has a great chance if we can keep wages low, cut down costs, have coolie labour, have no nonsense about Labour Courts or Arbitration Boards, keep people in a depressed condition, send the best of what we produce away and charge at home more for the least good material which we keep for our people, the residue of production. That, however, is not a view that will prevail very long. The Minister for Lands shows signs of extricating himself from the difficulty caused by those old speeches.
Last night, the Minister for Lands was in a lyrical mood about overproduction. It is through that, that this pamphlet on Economic Expansion will be approached. Let me again get this setting. We have got a pamphlet on Development. Deduced from that, we get a programme for economic expansion. We have heard many speeches from Ministers telling us that this programme has been put to such effect that there is a surge of optimism and a better surge of production.
The effect of the Economic Statistics book, and all that, has to be considered. There are two pages in Economic Statistics which have always to be kept in mind. Table 10 deals with the price index number. It shows that the cost of living figure—and that is the subsistence figure—is steadily rising. Table 12 deals with the labour force, the number of people at work in the main branches of economic activity, with the all-over reduction as between 1957-58 of 10,000 people and of 30,000 as between 1956 and 50,000 as between 1955.
We are constantly being told by members of the Government that emigration is on the decline and that unemployment is on the decline. If the people are not emigrating and if they are not, while remaining at home, classified as unemployed, what are they doing? There was an old pantomime song long ago "Where do the Files go in Wintertime?" Where are the people who are getting off the unemployment list and who are not going on the emigrant ships? What are they doing at home, because the unemployment figures are down on the figures I have shown?
Last night, the Minister for Lands, Deputy Childers, said that in 1958 a total of 38 enterprises with a capital of £4,000,000 was started. Another 12 factories were now in course of construction with a capital of £2,000,000 and another 12 would start with a capital of £2,000,000. In yesterday's debate, he had 38 enterprises with a capital of £4,000,000 starting. A question was asked either of the Taoiseach or of the Tánaiste with regard to this £4,000,000 capital for factories or business established. The Tánaiste was asked to say what programme or what permanent employment was likely to be given by it. His figure was between 2,500 and 2,900. I shall take the average figure of 2,700. So that £4,000,000 capital expenditure puts 2,700 people at work. That is the £4,000,000 enterprises already started. Then the Minister for Lands speaks of the other 24 factories with another £4,000,000 capital. That is a tot of 62 establishments with £8,000,000 capital and, on the Tánaiste's figures, that will give employment to 5,000 people.
This picture with regard to economic expansion looks to a £50,000,000 provision for what is called "additional or new capital works". Multiply your capital by £8 million in these three sets of factories the Minister for Lands referred to and you get £48,000,000— nearly £50,000,000. Multiply the people employed—2 x 2,700 x 6 and you get 32,000. Supposing it all comes off, and that is very problematical, and you get £50,000,000 embarked on new enterprises in this country, what is it really giving us? The State will not have caught up on those who have left employment as between 1956 and 1958. If that works out, you might get back then 1,163,000 people who were employed two years ago. That will be the result of all this hullabaloo about capital expansion and the capital development programme for it.
It is in that connection, and with that preamble, that I want to attend to one part of this programme. First of all, it is wrong to call it a "programme". Years ago, when I was in the Department of Finance, I used to be asked: "When will you bring in social welfare legislation?" Various people who had been Ministers and who were on the Opposition benches told us about the Bills they had left behind them. If they meant legislative proposals, they had not left any. That was soon shown. The word was changed and they said they had "plans" and "programmes". The present Minister for Finance said later that there were none but that he was gathering together a certain amount of actuarial calculations and that, on foot of these, plans could have been made and programmes could have been developed. I feel that that word ought not to be applied here.
There are no plans. There are many statements to the effect that there appears to be room for the spending of a certain amount of money under certain headings but there is no programme, there is nothing in the way of a direction, there is nobody to entrust with the job of seeing that private enterprise will be encouraged. Take say, the amount of credit that either the Industrial Credit Company or the Agricultural Credit Corporation may put at their disposal. There is no programme. There is nothing in the way of an outline. No target is set. There is simply set out that under certain headings there appears to be room for the expenditure of certain moneys. Tots are then made and the total is arrived at. The first remark that has to be made about this is that the last page, Appendix 2 of the so-called "programme", is said to be inclusive of the additional expenditure projected in Appendix 1.
When I took at all this I see that there is to be a figure of £220 millions. That is a tot, that is the capital investment by public authorities—by either local authorities, public authorities and by State sponsored organisations' borrowings. That is £220,000,000 in Appendix I, and that would mean a capital programme of about £44,000,000 per annum. The capital programme that the Inter-Party Government had in 1955-56 was £43.5 millions and in 1956-57 it was £44.5 million. It was cut down in 1957-58 and cut still further in 1958-59, but one must relate that expenditure. There must be a relationship to people who were occupied at work in 1955-56 and 1956-57. I shall take the years 1955-56 and the years 1956-57. In 1955 there were 1,181,000 employed and in 1956 1,163,000 employed, and that was on a capital programme of over £40,000,000 a year. Let it be realised that this programme for expansion does not include a penny piece over and above the capital programme we had for the years 1955-56 and 1956-57.
There has been a cutting down of that capital programme in 1958 and 1957 with results that are showing in the employment figures, and that is one of the matters that is not being attended to in connection with this alleged programme. First of all, there is no programme, as the word is properly used and, secondly, if there is, supposing all these moneys are spent, I think it is back again to the employment situation, and only to that situation, in the years 1955-56 and 1956-57.
How much of this money is likely to be spent? I shall take Appendix I first. Credit is to be provided through the Agricultural Credit Corporation for five years at a total of £7½ million, and credit is to be provided through the Industrial Credit Company of £17½ million. What has the Industrial Credit Company provided annually? Take an average for a number of years and tell us what has the Agricultural Credit Company provided?
In the Second Appendix there are these figures for credit and expansion: £11,000,000 is to be made available for the Agricultural Credit Corporation, £20,000,000 for the Industrial Credit Company and £2½ millions for hotel improvement. That is a total of £33,000,000 but the spending of that £33,000,000 depends on private people, people who own hotels and who, for some reason or another, want to expand in industry and agriculture. It is only if private people want this money that this credit, placed at their disposal, may be taken up and it is only if that amount of credit, £33,000,000 over five years, is taken up that you might get a programme approaching that of the inter-Party Government in 1955-56 and in 1956-57, but this is a matter than can be debated at a later stage.
There is one comment that has been made on it by the Association of Chambers of Commerce of Ireland who made submissions to the Minister for Finance, dated 29th January this year, which submissions they have circulated to Deputies. They call attention to the fact that the volume of industrial production is only 4 per cent. over that of 1953 and it is still below the level achieved in 1955. In their comment at the bottom of page 2 they state:—
The total amount of the Public Debt, as at 31st March, 1958, was £347.7 million; other capital liabilities represented a further £65.5 million and State Guarantees outstanding amounted to £85.5 million. Thus the total, actual and contingent, liabilities of the State at this date were £498.7 million. These liabilities are partially covered by "assets" which were taken into account in the Finance Accounts at a figure of £230.1 million. But it must be emphasised that in some cases these "assets" are merely book figures not represented by tangible assets.
Then they deal with this charge which is a matter that the Minister for Finance must face.
"This matter of State liabilities is of particular moment in view of the White Paper recently issued by the Government. The capital programme mentioned therein envisages the expenditure of £220.4 million over the next five years. If this programme is financed by borrowing."
—that is "if" of course—
"the total amount of Government indebtedness would be increased by almost fifty per cent. and the State's aggregate liabilities would be greatly in excess of the present national income figure. At this stage it is not possible to comment on this programme in detail."
That, I think, is exaggerated. The indications are that all the money is not expected to be borrowed but even though some may come from direct State sources there will still have to be an interest and sinking fund. One looks further to find information from the Minister as to what will be required for the service of the debt incurred in a variety of ways by the State if this programme of £220,000,000 is carried out in the next five years. If, in fact, that brings us only to the point that we get back to the employment figure of three years ago, it seems to me it is going to be a tremendous expenditure without any firm idea of what the result is to be either by way of employment of greater productivity in this country.
We are told of the great future that lies ahead for agriculture. In that connection I should like to make a last comment. There are great aids for industry in this country. At least, the Minister for Lands said last night that in the whole of Europe there could not be found any better facilities for industry than are given in this country by the present Government. That is a complete exaggeration but let it be accepted that there are aids in the form of remission of rates, exemptions from taxation on profits on exports, and certain exemptions for plant and machinery. However, I do not think those are as good as they are in the North, in the Six County area, but still they are things that are given. Against that it is recognised that the future of this State depends on agriculture and, in the main, depends upon cattle. It is an amazing victory for common sense to have that recognised now by Fianna Fáil.
The basis for the future lies there but what is being done for agriculture? You have remission of rates, exemption from profits, allowances for plant and buildings to industry, particularly to industries that are exporting, but a great part of our agricultural productivity is always for export and most of the hope for the future is founded on a tremendous expansion in the exportable surplus of agricultural production. What is being done for agriculture? We have plans and the Minister for Lands spoke of the N.F.A. Scheme applied to all the banks but what are our banks doing?
I take one reference to the National Bank Scheme published on the 9th March this year with regard to the construction of cow byres:
"Applications for loans on the basis of £20 per cow will be considered from any credit-worthy farmer of sound integrity, whether an old or new customer, for the construction of a cow byre, with the repayments spread over ten years by half-yearly instalments with interest at the ordinary rate on the reducing half-yearly balance."
Another and lengthier report of what they want to do is to be seen in the Irish Independent of the 25th March, which states:
"Loans sanctioned will be subject to normal interest rates (at present 5¾ per cent. per annum) and to reasonable security in each case."
Farmers get a certain amount of money by way of relief in rates on agricultural land but even that has been questioned by advisory committees advising the Government. Nothing is given to the farmers for allowances covering plant and buildings and there is no question of a reduction on any profits the farmers might make on increased exports. He shot into the banks, the banks who believed so much in the agriculture of this country—at least one bank has held itself out as offering good credit terms to the farmers.
Credit? Five and three-quarters per cent., if there is some security and if it can be proved—in the phrase the banks have always used as a standard by which they can block down development and by which they have for years blocked down development—that the scheme is a credit-worthy scheme. And those who determine whether it is a credit-worthy scheme or not are the banks themselves. For this great industry of ours, on which our whole hopes depend, all that can be offered is credit. If a farmer likes to go into debt and put on himself the burden of paying a bank 5¾ per cent. after giving some security, one bank, if the scheme is considered credit-worthy and the farmer a person of integrity, may give him permission to pay the bank 5¾ per cent.
I have often talked about this matter of bank interest. It now arises in a very acute way. What is the 5¾ per cent. interest required for? Is it a risk payment? If there is any feeling of risk, 5¾ per cent. is absurd; it would not pay. What is the risk? That cattle will not be bred here or that, if they are bred, they will not be sold in England; or that some fierce epidemic will devastate the cattle in the country? It cannot be classified as a risk payment. What is it? Is it a service payment? A service payment for a scheme that is regarded to have the best prospects open to this country? Everywhere we turn we are told we are not supplying as much to the British market as we could supply, that there will be a bigger demand than ever and that there will be few competitors. In those circumstances the banks want 5¾ per cent. to assist in the production of more cattle in this country.
I feel the banks should be asked to justify that. In fact, all the banks should be asked to join together in a scheme in which credit, at some rate which would merely be for the administrative costs, would provide extra money. All the banks should be encouraged, even commanded, to do that and if they do not do that, the Government will adopt a certain financial scheme whereby the Bank of England was put under the Treasury. If the prospects are so alluring and good—and on the agricultural side they appear to be good—it is nothing short of a crime for the banks to give such little assistance to the scheme. They hold themselves out to the public as benefactors because they are giving interest at the ordinary rate of 5¾ per cent. to people who are supposed to be in the best position the farmers of this country have ever been in.
