In last year's Financial Statement I described 1959 as a year of progress and development. The Economic Statistics issued last week show that this description can be applied with equal force to 1960. The rate of growth of 3 per cent. in gross national product in real terms in 1959, itself contrasting favourably with an average annual rate of 1 per cent. over the previous decade, has been followed by a rise estimated provisionally at 4 per cent. in 1960. The progress achieved in 1960 confirms that the 1959 advance was not exceptional; indeed, the results for these first two years of the Programme for Economic Expansion, together with the indications for 1961, show that a progressive expansion of the economy has now got under way.
Until recently for various reasons we made a poor showing by comparison with most other European nations. This position was changed in 1959, when the increase in our real output, though not exceptional by European standards, was, at any rate, above that of the highly industrialised countries of France and Belgium. The 1960 figures are likely to show that we have maintained this not too unfavourable position; we may, indeed, have moved up the scale a little. While we have not yet reached the 5 per cent. annual rate of growth which has, on average, prevailed in the more advanced countries since the war, we are now near enough to this figure to strive for it with every hope of achievement. This will require, amongst other things, greater saving for productive home investment. As pointed out in the report on Ireland recently published by the Organisation for European Economic Co-operation, the necessary further growth of investment must not be hampered by an excessive rate of expansion of consumption if overall balance is to be maintained.
Capital Formation and Savings
Gross fixed capital formation increased from £85 million in 1959 to £92 million in 1960, mainly because of increased investment in machinery and equipment. There had been a big rise in stocks in 1959, estimated at £21 million, of which £11 million was in respect of a growth in livestock numbers. Stocks rose by £6 million in 1960, the increase being entirely in industry and distribution as there was actually a slight fall in livestock on farms. Savings last year were roughly the same as in 1959 but, as stocks rose much less, monetary savings were substantially higher.
Balance of Payments
Not alone was the increase in real output higher last year but the balance of payments deficit of £8.7 million in 1959 was reduced to less than £1 million, despite a deterioration of about 2 per cent. in the terms of trade. Thus, taking the period as a whole, there has been equilibrium in our external payments during the past four years, whereas from the end of the war until 1956 there was an unrelieved series of deficits.
The most significant element in last year's improvement in the balance of payments was the rise of £22 million or 17 per cent. in exports. This enabled our external accounts to be balanced at a higher level of activity. Imports rose also but not to the same extent as exports. They increased by £14 million or 6½ per cent., the increase consisting in the main of raw materials and goods for further production. Industrial goods made the main contribution to the rise in exports, increases in exports of metals, textiles, clothing and petroleum products being noteworthy. A number of the new industries established in recent years helped in this expansion. The major part, however, was played by older firms, built up initially with the help of protection on the home market and in many cases using domestic raw materials. Those manufacturers who have shown enterprise and initiative in developing an export trade deserve every commendation. We look forward to more of our industrialists following their example.
Agricultural exports contributed to the improvement in the balance of payments in 1960, although not quite to the same extent as industrial goods. The decline in live cattle exports which had been a feature of 1959 was reversed in the second half of 1960, and, despite lower prices, total exports of live cattle for the year amounted to £33.6 million or £3.6 million more than in 1959. A marked shift in exports took place from store to fat cattle, an increase of £9.4 million in fat cattle being accompanied by a decline of £5.8 million in stores. Exports of carcase and tinned beef increased by £2.8 million to £15.6 million, while butter, bacon, mutton and lamb also showed substantial rises.
Basis for Export Expansion
A broader and stronger export thrust is the chief means of achieving greater national prosperity and diminished emigration. In a world in which tariff barriers are being lowered and competition is becoming keener—not less for those who are for the time being outside the new trade groupings than for those within them—producers and exporters cannot afford to neglect any aids to increased efficiency. Wider use of the technical assistance and other facilities provided by the Government is essential and the most careful attention should be given to improvements in methods and techniques both of production and marketing. In some industries structural change, ranging from rationalisation and specialisation to amalgamation, may be called for as, perhaps, a necessary means of ensuring progress in the years ahead. The OEEC report on Ireland to which I have referred emphasises the importance of maintaining the competitiveness of our industries. It states that "as the most dynamic sectors of Irish industry in recent years have been oriented towards production for export, it is important to maintain their rate of growth. To achieve this over a long period Irish goods will have to be competitive in price and quality, in particular as tariffs are being progressively reduced in Europe in the framework of the European Free Trade Association and the European Economic Community".
International Trade Relations
In considering the prospects for the continuing expansion of our exports, particularly industrial exports, we must have regard to the effect on our position in the British market of the establishment of the EFTA and of any eventual coming together of the EFTA and the EEC. Britain's membership of the EFTA entails the gradual elimination of the tariff advantages on industrial products which we enjoy in the British market as against exporters in the EFTA countries. This process has been accelerated by the recent decision to bring forward from 1st January, 1962, to 1st July, 1961, the second tariff reduction in the EFTA, the effect of which is to bring to 30 per cent. the internal tariff reductions in that group. While the programme of tariff reductions in the EFTA does not extend to agricultural products, there is provision in the Stockholm Convention for bilateral agreements covering trade in such products between member countries.
Britain has not yet undertaken any tariff reductions in favour of the EEC countries and we still continue to enjoy in the British market our original preferences over those countries. This position may not continue unchanged. It is to be expected that there will be an exchange of tariff concessions between Britain and the other EFTA countries, on the one hand, and the EEC countries on the other, in the forthcoming general round of tariff negotiations between the Contracting Parties to the General Agreement on Tariffs and Trade (GATT). Secondly, we must face the possibility that sooner or later some settlement may be reached involving the progressive elimination of the British tariffs on imports from the EEC countries.
It will be realised, therefore, that our exporters of industrial goods may expect to face much greater competition in the British market in future. They have shown in recent years that they can compete successfully with British manufacturers. They must now prepare for greater competition in the British market from exports of EFTA and eventually of EEC countries. Developments in relation to trade in agricultural products are more difficult to predict because the common agricultural policy of the EEC has not yet been settled, nor is any definite view possible of the position of agriculture in whatever general arrangement may eventually be made in Europe. While the Government are watching developments closely with a view to securing favourable terms for the participation of Ireland in any such arrangement, there can be no doubt but that in Europe, as elsewhere, we shall have to adapt ourselves to trading conditions which will be shaped largely by circumstances outside our control.
While on the subject of foreign trade, I may perhaps refer to the Organisation for Economic Co-operation and Development which is being constituted out of the OEEC. The aims of the new Organisation are to promote economic growth and employment and expand trade. It is the hope of all member countries that the new Organisation will continue the excellent work done by the OEEC and we shall endeavour to make a worthwhile contribution to its success.
GATT is an international body which is assuming increasing importance in the field of trade. The Government informed the Contracting Parties last August that they wished to discuss the terms on which we might accede to the General Agreement. Preliminary discussions took place last November and arrangements were made for the continuance of these discussions during the forthcoming round of tariff negotiations.
Industrial Production, Employment and Earnings
To turn now from external trade to other aspects of the economy, we find the outstanding feature of 1960 was the increase in industrial production. The output of manufacturing industries rose by 7 per cent in that year. This rise in production is attributable to an increase in numbers at work, to a rise in output per person engaged, as well as to the coming into being of such concerns as the oil refinery with high net output per worker. The number of persons at work in transportable goods industries in the December quarter of 1960 was 162,100 or 4,700 more than a year earlier and was the highest yet recorded. The increase in employment was not commensurate with the rise in output, part of which seems to have been due to the taking up of slack in industry. The volume of output per worker in manufacturing industries rose by 4½ per cent in 1960 as compared with 3½ per cent in 1959. This gain has been reflected in the higher real earnings of workers. Average weekly earnings in the December quarter of 1960 were 7 per cent above the figures for the last quarter of 1959, in contrast to a rise of less than 3 per cent in the consumer price index over the period. As it is likely that most of the slack has now been taken up, future comparable rises in output are likely to require the employment of proportionately more workers and may not provide so much room for advances in real wages.
Unemployment and Emigration
Along with the increase in employment, there has been a substantial fall in unemployment. Numbers on the live register of unemployed in recent weeks have been 10,000 to 11,000 below the figures for corresponding dates last year. Critics have sought to belittle the economic advance that has been made by pointing to the high level of emigration. It is unfortunately true that far too many of our people are still going abroad, for economic or other reasons. When the results of the 1961 census are available, we are likely to find that emigration was heavy in the past five years. This should not, however, cause us to think that the problem is insoluble and that the economic and social policies of successive Governments, directed towards providing an acceptable livelihood in Ireland for more of our people, have been a failure. Emigration figures cannot be looked at in isolation; they must be associated with the unemployment returns, since both are, to a large extent, aspects of the same problem. If we take the last four years, we find that the number on the live register in February, 1961, was over 30,000 less than in February, 1957. Many new jobs have been provided and new industries have been established which will give more employment in the near future. Last year for the first time since 1954 the fall in agricultural employment was fully offset by a rise in employment elsewhere. This year should see a substantial rise in industrial employment; as I have mentioned, even at the same rate of expansion of output as in 1960, it is likely that the increase in employment will be greater. It is gratifying to know that we have again reached stability in the working population. Let us hope that the favourable trend may continue without interruption until the population as a whole shows an increase.
Agricultural Production and Incomes
The improvement in national output in recent years has been widely shared; wage and salary earners generally have made considerable gains. While the income of farmers is rising, they have not fared as well as other sectors, and this despite the special emphasis given to agriculture in the Programme for Economic Expansion and the raising of State aid to agriculture over the past few years from £20 million to £25 million a year. There are two main reasons for the slow rate of growth in the agricultural sphere. In the first place, special factors have operated to hamper expansion. For three years in succession, farmers have suffered setbacks caused by unfavourable weather conditions. Added to this are the temporary difficulties arising out of the elimination of bovine tuberculosis in Britain and the measures necessary to eradicate it here. Secondly, because of the general conditions affecting agricultural development, results as immediate as those which have been evident in industry cannot reasonably be expected from the Programme for Economic Expansion. There are many good signs, including the increased use of fertilisers, the construction of many new farm buildings and silos, the larger herds of cattle and sheep than in 1957, the rise in pig numbers, the increased use of credit, and the establishment of new industries to process agricultural produce. With this improvement in potential and with the present volume of State assistance, a substantial expansion of output should be realised.
In 1960 there was a recovery in live cattle exports, a larger export of beef, greater production of milk and increased output of pigs. The 6 per cent. increase in net output, taken by itself, raised incomes by £5 million as compared with 1959. A further £11 million increase in cash incomes was realised because, in contrast with 1959 when some of the output of livestock was retained as an addition to herds, in 1960 the higher total production of livestock was fully disposed of. Total cash income of farmers, therefore, was actually £16 million greater in 1960 than in 1959. Cattle stocks are still high—they were reduced last year by only £½ million—and, as the export demand for cattle and beef is good, an appreciable rise in agricultural income may be expected in 1961, given normal harvesting conditions.
Prospects for 1961
We may now turn for a few moments to the more general prospects for 1961. The indications of buoyancy in the economy at present suggest a further substantial advance this year provided there is no serious international setback. Commentators appear to be in general agreement that this is now unlikely, since both the United States and British economies are showing signs of recovery and, unless something untoward happens, will move forward in 1961. All going well, national production should continue to increase at a high rate this year. On external account there is every likelihood that both agricultural exports, in particular cattle and meat, for which good markets exist at the moment, and industrial exports will continue to expand. However, imports will probably rise noticeably also, partly because of the bad grain harvest last year and partly because of the demand for equipment and raw materials for our expanding factories. It is possible that a small deficit may emerge but this need not cause concern. Finally, employment and incomes should rise in line with the increase in production. On the whole, we may look forward to another year of progress.
II. CURRENT BUDGET, 1960-61
Outturn 1960-61
There was a deficit last year of £730,000. Expenditure on the Central Fund Services was exactly in line with the budget estimate. As revenue was £1¾ million above the forecast, a shortfall of even £¾ million on the Supply Services would have made good the allowance of £2½ million for errors of estimation. Savings on various services were substantial. They were more than sufficient to meet all supplementary requirements but not enough to yield the net saving of £¾ million needed to produce a balanced budget. The deficit might, indeed, be attributed to a single unexpected item—the payment of £830,000 to mitigate the effect of the bad wheat harvest.
Looking back over the last three years, however, there is no cause for disappointment. The surpluses of 1959 and 1960 outweigh the deficit of 1961. I need not reproach myself for the deficit of 1957-58. The Government entered office in March, 1957, and had to take the financial and economic situation very much as they found it. The measures taken in 1957 to bring revenue and expenditure into line and to revive economic activity could not be fully effective at once. The record of the three years which followed is, however, sufficient testimony to the success with which not merely financial balance but economic expansion have been achieved.
On the financial side, the cause for satisfaction is all the greater because in the past three years the Exchequer has given reliefs in direct taxation— apart altogether from export tax reliefs—which now cost about £3 million a year. Though some indirect taxes have been increased, the reductions have been more significant and the net effect has been a relief of some £1½ million a year in indirect taxation. In all, therefore, the taxation reliefs of the last three years involve an annual revenue loss of over £4 million. During these same three years significant improvements have been made in social welfare and other services and remuneration generally has been increased. The fact that the budget has been balanced has also meant that over the three years a total sum of £26 million has been effectively allocated from revenue to the redemption of public debt.
Expenditure and Taxation Levels
I would like to add a few words on the level of State expenditure and taxation in relation to national production and to the position in other countries. State expenditure chargeable against revenue rose by 8½ per cent. in the last three years whereas the value of national production increased by 12½ per cent. The rise in State outlay has, therefore, been more than matched by the rise in national production. Exchequer tax receipts, excluding road tax which is applied directly for the benefit of road users, have remained consistently at between 16 and 17 per cent of national production over the last three years. The proportion of gross national product at market prices taken by taxation of all kinds in Ireland is about 23 per cent. An article in the current issue of the review published by the British National Institute of Economic and Social Research compares the tax burden in sixteen Western European countries and four others, the United States, Canada, Australia and Japan. It shows that in only five of these countries was the proportion of gross national product taken by central and local government taxation lower than it is in Ireland.
III. CAPITAL BUDGET, 1960-61
Details of capital expenditure last year are given in the Tables that have been circulated to Deputies. Public capital investment, at a total of £50½ million was short of the budget estimate of £54½ million. The estimation as a whole can, however, be considered reasonably close in view of the magnitude of the sums involved and the special difficulty of predicting accurately the course of capital expenditure.
The direction of public investment as far as possible into productive channels, combined with the tax incentives given in recent years, is playing a large part in raising national production. This should be borne in mind when the growth in national debt and in debt service charges is being considered. In fact, the net charges in respect of the public debt have remained a fairly constant two to three per cent of gross national product in recent years. It is not unreasonable to expect that in the years ahead that ratio may decrease because of an accelerated advance in national output. To this advance, public capital expenditure, not only on directly remunerative projects but also on drainage, improvement of farm buildings and water supplies and other less immediately productive services, will, I believe, make a significant contribution. Needless to say, capital expenditure will continue to be most carefully scrutinised so that, particularly at this period of high interest rates, no increase will occur in the national debt which is not fully justifiable as contributing to economic and social progress.
IV. CAPITAL BUDGET, 1961-62
Capital expenditure is expected to reach £55.3 million this year. Table VI of the Financial Tables classifies the proposed expenditure under the headings in the Programme for Economic Expansion. It will be observed that all the specific headings, except transport, show increases over last year. These increases total £8.6 million. The provision for Agriculture (including Agricultural Credit) has reached a new peak. For the three years 1959-60 to 1961-62 the total comes to almost £36 million, which is more than double the corresponding expenditure in the previous three years. When account is taken of the various other provisions, such as rates relief, fertiliser subsidies, price supports and advisory services, State aid to Agriculture now exceeds £25 million a year.
For Industry, in the form of grants and credit, there is also an increased allocation as well as an extra £650,000 for share capital for Irish Steel Holdings. This major development is progressing rapidly and the firm plans a total capital expenditure of £1¾ million this year.
Industrial development has recently made remarkable strides. In 1960, 45 firms of more than £10,000 capital commenced production or extended their activities. The aggregate capital involved was some £8 million, and employment potential is estimated at 5,000-7,000. At the end of 1960, there were 30 new factories being built, involving a total capital investment of about £13 million with an employment potential of some 5,000 people. The extent of foreign participation proves that the taxation, grant and other incentives offered are producing the desired effect—an influx of foreign capital and technical competence which will play a helpful part in Ireland's industrial expansion.
Capital expenditure on tourism will be more than doubled this year. This third main sector of the economy has also benefited from the general improvement in economic conditions. I am glad to say that here again the incentives granted have resulted in an unprecedented rate of hotel building, modernisation and conversion.
An additional £900,000 is being devoted to fuel and power development. The Electricity Supply Board has found it necessary to expand its generating plant because of an upsurge in demand due to industrial development and higher domestic consumption.
The steadily increasing demand for telephones which is reflected in the increased provision under that heading is another pointer to industrial and commercial development and to rising standards of living.
It is also necessary to provide more capital for Radio Éireann for the new television service. The commencement of this service during the year will, as Deputies are already aware, involve the introduction of a licence fee.
The provision of £3.24 million for ports, harbours and airports shows an increase of £1 million. The total provision for the Shannon Free Airport Development Company Limited is £1.33 million, of which almost one-half is for housing of managerial and industrial personnel of new industries at the airport. This brings the provision for housing generally to £10 million, which is £1 million more than was spent last year. Other building and construction work, including schools, sanitary service, and hospitals, shows an increase of just over £1 million. While on the subject of building works, I should mention the new Building Agency which has been set up to assist in providing houses for industrial staffs and certain public officials and also the programmes recently approved by the Government for the provision of accommodation for Government staffs at present unsuitably housed and for Garda Stations. In carrying out these programmes regard will be had to the desirability of maintaining a stable level of activity in the building industry. It is important to avoid the creation of peaks of intense activity which might be followed by slack periods for many workers.
One of the most significant features of recent years is the extent to which it has been possible to reshape the public capital programme. In 1957-58, some 40 per cent. of public capital expenditure was devoted to building and construction—mainly to housing. For the current year the corresponding figure is 27 per cent. By contrast, less than 14 per cent. of the public capital programme was devoted to agriculture, forestry and fishing in 1957-58; this year the figure will exceed 25 per cent.
So far I have been dealing with the principal increases in expenditure. Apart from a negligible reduction of £60,000 under the "Miscellaneous" heading, only Transport shows a decrease compared with last year. This is due to the fact that two of the three undertakings which are grouped together under this head require less money. The air companies need about £4¼ million less while the requirements of C.I.E. have been reduced by £½ million. The sharp decrease in the needs of the air companies is not unexpected because, as I explained to Deputies last year, the provision in 1960-61 contained two exceptional items: £4¾ million to complete the purchase of transatlantic jet aircraft and £655,000 to acquire shares in Aer Lingus from British European Airways. A large part of the fall in estimated capital expenditure of C.I.E. is due to the fact that last year's expenditure was inflated by a carryover from 1959-60. The third undertaking for which provision is made under the heading "Transport" is Irish Shipping Limited, which requires an extra £850,000 to acquire new tonnage.
A substantial volume of public investment is planned for 1961-62 but not, I believe, more than national savings can be relied upon to finance. Intelligent investment, at the highest sustainable level, is a necessary condition of sound and rapid national progress.
V. FINANCING OF CAPITAL EXPENDITURE
The resources which were availed of by the Exchequer to meet capital requirements in 1960-61 are set out in Table III of the Financial Tables. Table V shows the resources expected to be available towards the capital requirements of the Exchequer this year.
Last year's National Loan brought in £14.8 million, which, as in the previous year, was the largest single contribution towards the financing of the capital programme. The Loan was for £15 million nominal of which £3 million was reserved for certain life assurance offices and for departmental funds under my control. The balance of £12 million which was available to the public was over-subscribed by more than £3 million. An exceptionally large number of small investors supported the Loan and this naturally affected the net investment in the savings banks, savings certificates and prize bonds. The net receipt of £6½ million from these sources was, however, reasonably satisfactory.
From public issues of Exchequer Bills an additional sum of nearly £4 million was raised. I feel sure that this attractive form of short-term investment will receive growing support.
Departmental Funds contributed £10.6 million to the financing of the capital programme as compared with the budget estimate of £8 million. There was a heavy public demand on the Stock Exchange for Irish Government securities and Departmental Funds made large sales from their portfolios. The financing of our capital requirements was completed by borrowing £3 million on Bills from the commercial banks.
This year's capital programme is bigger than last year's and, to enable it to be carried out, greater support from the community will be needed. It is essential that we provide from our own resources, if at all possible, the finance required for national development. The level of savings is still rather low here by the standards of progressive countries and an early and sustained expansion is desirable.
The Savings Committee continues to do very useful work in the promotion of savings. Its energies are directed principally to the stimulation of small savings through the savings banks and savings certificates and, in particular, to the organisation of savings groups in factories and offices. The nation's thanks are due to the members of the Committee for the voluntary help so generously given.
The current issue of savings certificates, which has proved so attractive, is now on sale for five years, and there are many who already hold the maximum permitted number of certificates. As a general incentive to a higher level of investment in savings certificates, I have decided to raise the limit on the maximum holding of any individuals from 1,000 to 1,250 one pound units.
On 1st December next the 3¼% National Security Loan, 1956-61, is due for redemption. Some £5 million is outstanding. To facilitate holders of this stock who may wish to reinvest, I propose to make a conversion offer in conjunction with a National Loan later in the year.
VI. CURRENT BUDGET, 1961-62 —INTRODUCTION
Before I come to the details of the current budget for 1961-62, I have a few general observations to make.
Fiscal Policy
First, it is clear from the survey of the economic position and prospects that, fortunately, it is not necessary to use the Budget to curb excessive consumer spending or other adverse forces. The aim must rather be, while continuing to avoid inflation, to increase, if possible, the momentum of our economic advance. It is, of course, also necessary to keep our finances in good order so that, while still paying our way, we may be enabled by revenue buoyancy resulting from increasing prosperity, to reduce rates of taxation. The Programme for Economic Expansion indicated that fiscal policy would be guided primarily by the need to encourage production and saving and, in particular, that the aim of the Government was to create conditions permitting as soon as possible of a reduction in direct taxation. Such reductions were made in the Budgets of 1959 and 1960.
Secondly, it is appropriate to refer to the various recommendations of the Commission on Income Taxation. The first report of the Commission, which recommended the introduction of a Pay As You Earn scheme, has already been the subject of legislation. I may say that the scheme is working well and I would like to express my appreciation of the co-operation and goodwill which were forthcoming from employers and employees alike. Three further reports have since been published. The views of the Government on the recommendations they contain require to be set out in greater detail than is possible within the compass of a Financial Statement. For that reason a White Paper has been prepared which deals not only with the outstanding published recommendations of the Commission but also with death duties and some other aspects of direct taxation. The White Paper is being issued this evening and copies will be circulated when I conclude.
Since the White Paper went to press I received two further reports from the Commission, one relating to tax simplification and the other to co-operative societies. I have not had an opportunity yet of studying these reports. They are being sent for printing and will be published in due course.
I propose, at this point, to indicate very briefly the conclusions set out in the White Paper on the second, third and fourth reports of the Commission:
With regard to the second report—
(i) The principle of "one taxpayer, one charge" is accepted. Electronic equipment which the Revenue Commissioners expect to be delivered about September, 1963, will enable the new system to be brought into operation for the income tax year 1964-65.
(ii) The recommendation that a separate return should not be required for surtax purposes is accepted. Effect will be given to this in the Finance Bill and the new system will operate from 1962-63.
(iii) The principle that the settlement of a taxpayer's liability to income tax and surtax should be effected in the same office and as a single operation is accepted. Work on surtax will be decentralised to local income tax offices next year.
(iv) It is not proposed to alter the basis of assessment of income from residential and other property let for non-business purposes before control under the Rent Restrictions Acts is substantially relaxed or abolished.
(v) The recommendation that Schedule A tax be not charged on owner occupied residences of a valuation not exceeding £30 has not been adopted for reasons explained in the White Paper.
On the third report, though the principle of taxing spending rather than earning and saving is re-affirmed, it is considered that the introduction of a purchase tax, as recommended by the majority of the Commission, at rates sufficient to make good the revenue loss involved in a reduction of income tax by 2s. in the £, would not be desirable on a general view of the social and economic implications.
As regards the fourth report, the Government have decided not to change the present method of taxing the ordinary farmer.
The White Paper mentions my interest in two matters, on which I shall consider the views of the Commission, namely, whether it would be desirable to alter the basis of income taxation by separating the taxation of company profits from the taxation of personal incomes and whether profits taxation should be placed on a current year basis. It also reports that the Revenue Commissioners have made considerable progress with the work on consolidation of income tax legislation but that this will not stand in the way of further reform or simplification.
On death duties, the White Paper describes the rates, incidence, yield and cost of collection of the duties, the various arguments for and against their retention and the principal reliefs available. The policy recorded in the White Paper is that the existing system of death duties should, in principle, be maintained subject to such modification as may be necessary from time to time on social, fiscal or economic grounds.
It is also reported in the White Paper that the Revenue Commissioners are preparing a comprehensive publication containing all the statutory provisions relating to stamp duty.
Pay, Organisation and Recruitment
A third general matter to which I wish to refer is the importance of remuneration as a constituent of public expenditure and the consequent necessity for careful control over personnel numbers and costs. Remuneration of public servants, teachers, Army and Garda Síochána is estimated to exceed £40 million this year, accounting for more than a quarter of total outlay.
As regards costs, it must, of course, be borne in mind that rates of pay are for the most part fixed by conciliation and arbitration machinery and that a significant influence is exercised by the level of pay in outside employment. Public service remuneration follows, rather than sets the headline for, pay trends generally.
Numbers are kept under strict review but I am forced to the view that expectations of large reductions are unrealistic. When there is a public demand for the speeding up of bovine tuberculosis eradication and the extension of the telephone system and other services, it is inevitable that staff numbers will tend to increase. However, Deputies may be assured that, even if increases under certain heads are unavoidable, a constant effort is being made to keep costs of administration to the minimum consistent with efficient service to the public. Special attention is being given to the introduction of mechanisation where it is feasible and economical. An electronic calculator is already in operation in the Post Office Savings Bank and plans are well advanced for the acquisition by the Revenue Commissioners of the electronic equipment to which I referred in dealing with the reports of the Income Taxation Commission. Apart from mechanisation, the services of outside industrial consultants are retained for certain specialised investigations, such as the re-organisation of the Central Engineering Workshop in the Office of Public Works. Organisation and methods studies proceed continuously in all Departments. Training courses are being conducted to keep officers abreast of developments and to stimulate further advances.
The re-organisation of certain general service grades, to which I referred in last year's Financial Statement, was put into operation on 1st July, 1960. The grades are those of staff officer, clerical officer, shorthand-typist, typist and writing assistant and the re-organisation has simplified the staffing structure in this large sector of the service. The scheme was extended to analogous departmental grades in the Office of the Revenue Commissioners on the 1st January, 1961. The changes being made, although they are extensive, are gradual and their effect will be assessed at the end of a four-year term.
The scheme foreshadowed in my speech last year for sending some of the leading candidates at the open executive officer competition to attend nominated University courses at State expense was put into effect at the last competition. Five out of the first ten candidates at the written competition were selected as a result of interview by the Civil Service Commission and are now attending first-year courses in Dublin, Cork and Galway.
The changes designed to make the administrative officer grade more attractive were followed by a welcome increase in the number of candidates. While the last examination did not produce enough qualified candidates to meet our full requirements, keener competition was secured. The attractions of this grade are now considerable and I feel sure that increasing numbers of qualified candidates will be interested in this opening to a career in the Civil Service.
VII. CURRENT BUDGET, 1961-62— DETAIL
The White Paper of Receipts and Expenditure shows that current expenditure, as compared with last year, is up by £4.8 million. Of this increase, Supply Services are responsible for £2.3 million and Central Fund Services, including the Road Fund, for the balance. The main factors in the increase in Supply Services were explained in the context of the Vote on Account. Service of debt is, as usual, the principal cause of the increase in Central Fund Services. The buoyancy of revenue resulting from the growth of national output is, however, expected not merely to cover fully the increase in current expenditure but also to narrow almost to vanishing point the deficit which appeared last year. Taxes on incomes and profits make the main contribution to the revenue increase.
While the deficit, on the White Paper figures, is a mere £210,000, this is not the end but only the starting-point of my budgetary scheme. I consider it necessary and desirable to do four things in particular in this budget: first, to ensure that social welfare beneficiaries share in the improvement in national income; second, to give greater help to farmers to increase production on an economic basis; third, to make an appropriate provision against the contingency of Supplementary Estimates; and, fourth, to lighten the burden of direct personal taxation as an incentive to earning and saving. So that sound budgeting may continue, all this cannot be done without some increase in indirect taxation.
Social Welfare
The benefits available under social insurance have been improved and extended and a new contributory old age pensions scheme was introduced last January. As regards social assistance, old age and blind pensions have been increased by a total of 4/6d. a week in the period since 1957 while in the case of unemployment assistance the weekly rate for a person with an adult and two child dependants has been increased by 9/6d. In the same period a more liberal approach has been adopted in relation to child dependants in social welfare schemes generally by the extension of payments to cover all children and not merely the first two. It is now proposed to increase as from 1 August, 1961, the rates of non-contributory old age, blind and widows' pensions by a further 1/6d. a week. The personal rate of unemployment assistance and the allowance for an adult dependant in both urban and rural areas will also be increased by 1/6d. a week. In line with these increases the married persons' allowance in the old age pensions contributory scheme will be increased by the same amount.
The position of social assistance recipients with dependent children deserves some special recognition and, accordingly, it is proposed to increase the child dependant allowance payable under the unemployment assistance and widows' (non-contributory) pensions schemes by 1/- each for the first and second child and by 1/6d. for the third and each subsequent child.
The Minister for Social Welfare also proposes to introduce shortly legislation providing for an easing of the means conditions in regard to unemployment assistance.
The cost of the foregoing proposals will be £600,000 this year.
Farmers
I propose to allocate an additional £825,000 for assistance to agriculture, of which £600,000 will be a charge against this year's revenue. The original estimate contains a provision of £1 million for the marketing of dairy produce. As milk production so far this year is at a high level and the export price for butter is depressed, I consider it a necessary precaution to increase the provision in the Estimate by £300,000.
Although ground limestone is very cheap there has been a falling off in its use which is difficult to understand and disturbing in its implications. The use of lime is vital if the full benefit is to be obtained from the application of phosphates. As the reduction in the subsidy on transport has been stated to be the main factor in the decline in purchases of ground limestone, I am providing an additional £200,000 towards transport charges.
As a further incentive to the greater use of fertilisers, the subsidy on potash is being increased by £1 a ton. This will cost an additional £100,000 this year.
It is intended also to increase by about 50 per cent. —at an estimated cost of £225,000—the grants for the erection of cow byres and for the reconstruction and repair of farm buildings generally. Grants for piggeries were recently increased and are not, therefore, affected by this proposal. It is hoped that growing advantage will be taken of these aids to increased production, under improved conditions, of livestock and livestock products.
From the point of view of encouraging greater and more economic production, the Government consider that the most beneficial thing to do for farmers generally with the finance available in this Budget is to allocate extra money for limestone, potash and farm buildings.
Provision for Other Supplementary Estimates
While I do not expect that Supplementary Estimates on current account will arise this year to the same extent as last year, I consider it would be imprudent not to make a sizeable provision against the probability that some supplementaries will be unavoidable. I am, therefore, including £1 million for this purpose.
The additions to current expenditure which I have proposed under the three heads of Social Welfare, Farmers, and other Supplementary Estimates amount to £2.2 million and increase the deficit to £2.41 million. This might be eliminated by a deduction of £2½ million for errors of estimation but, while there would then be a balance, the fourth desideratum I mentioned earlier could not be realised and any idea of reliefs and adjustments would have to be abandoned. Some additional revenue is, therefore, needed.
Tobacco
The smallest increase in indirect taxation which will give a worthwhile sum without undue hardship is an extra penny on the packet of twenty standard size cigarettes. I propose, therefore, to increase the main rate of customs duty on leaf tobacco by 1/9d. a pound, with corresponding increases in the other rates of duty. For pipe tobacco the increase in the duty element will be slightly over 1d. an ounce except in the case of hard-pressed tobacco where an adjustment in the rebate will limit the rise in the duty element to 1d. an ounce. The increase in tobacco duty is expected to yield £930,000 this year.
Adjustment for Errors of Estimation
I am encouraged both by the good performance of income tax last year and by the present rate of growth of national income to hope that I would not be taking an undue risk in raising the allowance for errors of estimation this year to £3 million, particularly as I intend to apply this extra £½ million towards stimulating individual enterprise and production. The total sum available for reliefs is, therefore, £1.52 million.
Income Tax, Surtax and Corporation Profits Tax
Much has been done already to reduce the incidence of taxation on industrial and commercial profits. All the recommendations of the Committee of Inquiry into Taxation on Industry have been implemented. In addition, the standard rate of income tax has been reduced. Further tax benefits have been granted for exports of manufactured goods, for production of minerals and for export industries set up in the Shannon Airport area. The encouragement which companies receive to increase their exports could not be greater since it is a 100 per cent tax exemption. Where taxation does fall on company profits, it is not high by European standards. The total cost of the reliefs mentioned now runs into several millions and, so far as they are not already being passed on to the investors in our industries, they will ultimately emerge as a benefit to them. These reliefs are also helping to make more capital for expansion available to industry both by reducing the amount of taxation on retained profits and by enabling more attractive prospects to be held out to investors. Capital for industrial expansion is further assured through the operations of An Foras Tionscal, the Industrial Credit Company and other agencies.
In reviewing direct taxation, therefore, it is reasonable to adopt the line that this year the main advantage from any reliefs I can provide should flow to individuals. I have stressed in a previous Financial Statement the importance of the human factor in relation to the development of the economy, and the desirability of encouraging not merely those exercising directive and managerial functions but workers generally to give of their best in raising the level of production. I am also conscious of the fact that one of the principal causes contributing to the buoyancy of the revenue in 1960-61 was the successful launching of Pay As You Earn. It seems but just that some of the fruit of this scheme should go to the individual taxpayer.
In 1959 the rate of income tax was reduced from 7/6d. to 7/- in the £. I propose to lower it further this year by 8d. to 6/4d. in the £, a lower rate than has obtained for over twenty years. This reduction will mean that, where tax deductions under P.A.Y.E. were made at 5/3d. in the £ for 1960-61, a new rate of 4/9d in the £ will apply for 1961-62. To allow time for reprinting of the ready reckoners for employers, deductions will continue at the old rate until 15 May, 1961. On the first pay day after that date tax liabilities will be adjusted on the tax deduction cards and the new rate will be given effect as from 6 April, 1961.
As I propose to provide that corporation profits tax paid will no longer be admitted as a deduction for income tax purposes, relief so far as companies are concerned will not extend beyond those with profits of less than £52,500 a year. Such companies represent, however, a very high proportion of the total number. Small companies, i.e., those with profits of less than £2,500 a year and not, therefore, liable to corporation profits tax, will enjoy the full effect of the reduction in the rate of income tax. Companies with profits between £2,500 and £52,500 will get a gradually diminishing relief. A company with profits of over £52,500 will bear an increase which is virtually insignificant—only £79 where the profits are £100,000 and £329 where the profits are £250,000.
The cost to the Exchequer this year of the reduction in the income tax rate is £1,200,000.
It is desirable to extend the relief for earned income but this year I cannot do more than raise the income limit to which this 25 per cent relief applies from £1,800 to £2,000. This will cost £80,000 in the current year.
I also consider that a reduction in the number of surtax rates is desirable to simplify this tax and facilitate its eventual merger with income tax. There are at present eight rates, ranging from 1/6d. in the £ on the first £1,000 of chargeable income to 8/6d. in the £ on chargeable income over £18,000. I propose to reduce the number of rates to three and to make the charge 2/6d. in the £ on the first £2,000 of the chargeable income, 5/- in the £ on the next £3,000 of the chargeable income, and 7/6d. in the £ on the balance. So that the simplification will not involve an increase in taxation for any individual, it is necessary to lift the starting point for surtax from £2,000 to £2,500. These proposals will apply to surtax payable on 1 January, 1962, and will cost £100,000.
I also propose to provide in the Finance Bill for the following further items in the field of income and profits taxation. They can all be met within a total cost of £20,000.
Social Welfare Contributions
The Bill will contain provisions for allowing, as a deduction from taxable income, the proportion of the contributions of employees under the Social Welfare Acts which is attributable to widow's pension, orphan's allowance and old age pension. It will also provide that these benefits will be regarded as earned income for income tax purposes.
Dependent Relative Allowance
Under the law as it stands the dependent relative allowance is not granted where the annual income of the dependant exceeds £80. If the income limit were maintained at this figure, claims for persons drawing the contributory old age pension of £2 per week which came into force on 6 January, 1961, would not be admissible. I propose to raise the income limit for relief purposes to £110.
Housekeeper Allowance
A man separated from his wife and not maintaining her, who employs a housekeeper to look after his children, does not qualify, under existing law, either for the married allowance or the housekeeper allowance. I propose to provide that housekeeper allowance will be granted where such a taxpayer qualifies for child allowance and requires the services of a housekeeper to care for the child.
Mining Relief
I shall also include a provision in the Finance Bill in fulfilment of the promise I made last year to extend to open-cast mining the mine development allowances which may be granted under Section 6 of the Finance Act, 1946. The extension will cover expenditure incurred on or after 6 April, 1960, and will apply to the mining of all minerals scheduled to the Minerals Development Act, 1940.
It has come to my notice that a mining company might refrain from claiming development allowances under the 1946 Act during a period in which its profits were relieved from tax under legislation enacted in 1956 and, having saved up allowances in this way, claim them after the period of relief had expired. It was never intended to provide a double benefit of this kind. I propose to rectify the position.
A financial resolution will be necessary.
Exports Relief
Section 30 of the Finance Act, 1960, was designed to prevent abuse of the extensions under that Act of the tax reliefs on exports. I propose, and this also requires a financial resolution, to make the section applicable to all claims for tax reliefs on exports.
Death Duties—Small Estates
When the exemption limit for estate duty was raised last year to £5,000, the former 1 per cent. and 2 per cent. rates of duty on small estates disappeared. The minimum rate became 3 per cent. applicable, as previously, to estates between £5,000 and £7,500, while estates between £7,500 and £10,000 attracted duty at 4 per cent. I propose to re-introduce rates of 1 per cent. and 2 per cent. The new rate structure will be 1 per cent. on estates from £5,000 to £6,000, 2 per cent. on estates from £6,000 to £7,000, 3 per cent. on estates from £7,000 to £8,000, and 4 per cent., as at present, on estates from £8,000 to £10,000. The rates for estates in excess of the latter figure will remain unchanged save for a reduction in the rates for large estates, to which I shall now refer.
Large Estates
It has been argued that high rates of estate duty exert an adverse effect on the attitude of wealthy persons towards living here. Indeed, the complete abolition of death duties has been advocated in order to attract wealthy foreigners. Complete abolition is not a practicable proposition, as the White Paper on Direct Taxation explains, but it is possible to test the validity of the argument by seeing what will be the response to a reduction in the higher rates of duty. If by this means, wealthy persons were encouraged to settle here in greater numbers, the benefits might well outweigh the loss of revenue. They would spend their capital and enterprise would doubtless find outlets in this country, with a consequent increase in employment. A useful additional incentive would also be given to well-to-do persons now domiciled here to repatriate foreign assets. Since a substantial reduction can be made in our highest rates of duty at comparatively little cost to the Exchequer, I have decided to lower to 40 per cent. the rates of estate duty applicable to estates exceeding £100,000, which at present range from 41 to 53 per cent.
These reliefs will cost the Exchequer an estimated £45,000 this year.
Gifts to the State
Under existing law there is no general exemption from estate duty of gifts to the State. Exemption is confined to gifts of chattels such as pictures, prints, books and manuscripts which appear to be of national, scientific or historic interest. All property given to the State will be exempted by a section which I propose to include in this year's Finance Bill.
Gifts with Reservation
Gifts made within three years of the donor's death are, with certain exceptions, liable to estate duty. Gifts made outside the three year period are also liable if the donor retains an interest in the property or if he obtains some benefit, continuing for his lifetime, connected with the gift. For instance, if a father gives his farm to his son, retaining a right of residence and maintenance, the entire farm is liable to estate duty even if the father's death took place many years after the transfer. The law as it now stands causes hardship where the recipient of the gift has been virtual owner of the entire property for a long period. I propose to introduce relieving legislation under which, where the donor dies more than three years after making the gift, the charge to duty will be confined to the value of the benefit accruing to the recipient on the donor's death. This principle will also be applied in relation to trusts ended more than three years before the life tenant's death where some benefit was reserved to the life tenant.
Tax Avoidance—Gifts
Various tax avoidance schemes in relation to gifts inter vivos, as they are called, have been devised. For example, if short-dated securities are given as a gift and they are redeemed before the donor's death, the subject matter of the gift, namely the securities, then no longer exists. The beneficiary has instead the redemption moneys which, not being the subject matter of the gift, are not at present liable to duty. I propose to bring in provisions to counter this and kindred tax avoidance devices. The legislation will contain complementary provisions covering interests in settled property ended within three years of the life tenant's death. One of the financial resolutions will relate to this proposal.
Payment by Trustees
Section 30 of the Finance Act, 1941, was enacted to prevent tax avoidance by the termination of trusts prior to the death on which they would normally have ceased. The section provides that, where the life tenant of settled property disposes of his interest three years or less before his death, the property remains liable to estate duty. The trustees of settled property are responsible for the payment of estate duty but, in the case of settlements terminated in circumstances giving rise to a claim under Section 30 of the Finance Act, 1941, some doubt exists as to whether the last trustees are liable for payment of duty on foot of such a claim. The Finance Bill will contain a section to remove this doubt. A financial resolution will be necessary in this case also.
Wills Act, 1837—Relief
The general rule under the Wills Act, 1837, is that a legacy fails if the legatee predeceases the testator. An exception is made in the case of a legacy to a child of the testator who predeceases the testator but who leaves issue living at the testator's death. It has been held that such a legacy is, to take the simplest example, liable to estate duty as part of the estate of the testator and also as part of the estate of the child who predeceased him. I propose to bring in amending legislation to provide that duty will be levied only on the testator's estate as if the property were given directly to the living beneficiary.
Amendment of Aggregation Provisions
Finally, with regard to death duties, the point was made in the debate on the Finance Bill last year that, because of the increase in the exemption limit for estate duty from £2,000 to £5,000, exemption might apply in certain cases to property totalling as much as £15,000 in value. This situation arises because certain subdivisions of property, based on the distinction between settled and unsettled property, may under existing law constitute separate estates, each of which would be entitled to exemption if it did not exceed £5,000 in value. I propose to introduce legislation, which will necessitate a financial resolution, to aggregate the deceased's unsettled property, whatever its value, with any property settled by him.
Stamp Duty on Receipts, Cheques and Other Bills of Exchange
The twopenny stamp duty on receipts for £2 and upwards and the ad valorem duties on certain bills of exchange are troublesome and time-consuming for traders and others. I propose, with effect from 1 August, 1961, to repeal these duties and, by way of compensation to the Exchequer, to apply a flat duty of threepence to all cheques and other bills of exchange drawn in the State. Provision will be made to avoid the inconvenience which would be caused if it were necessary to affix additional stamps to bills of exchange coming from abroad. On the assumption that advantage will be taken by the banks of the composition arrangements provided in Section 57 of the Finance Act, 1958, these changes will not affect the revenue either way this year. The gain in future years may be of the order of £40,000. A financial resolution is required.
Stamp Duty on Purchases of Land
The Government have had under consideration the question of acquisitions of agricultural land by non-nationals, and the desirability of exercising more control over these transactions. It has been decided to include provisions in the Finance Bill to strengthen the existing 25 per cent stamp duty legislation so as to bring within its scope certain procedures which at present enable, or may enable, non-nationals to acquire land without incurring liability to the duty. In particular, I have in mind purchases of land by pre-1947 companies with non-national shareholders.
At the same time, it is necessary to have regard to the legitimate needs of persons who come from abroad and benefit the economy by setting up industries or otherwise investing here. I do not propose, therefore, that the higher rate of duty should apply henceforward except where it is necessary for social purposes. It will not apply at all in urban areas or to land which is to be used for industrial purposes and, where it does apply, the Minister for Lands will have power in suitable cases to authorise the granting of exemption.
The amendments of the law which I propose will be incorporated in the Finance Bill and will affect pre-1947 companies as from today. Provision will be made for the furnishing of declarations or statements to the Revenue Commissioners, and there will be stringent penalties for failure to disclose information.
Special Import Levies and Other Duties
Turning now to customs and excise matters, I shall deal first with the special import levies. During the year I received further representations from traders and from foreign Governments for the reduction or abolition of particular levies. The balance of payments difficulties which led to the imposition of the levies five years ago have, I am glad to say, now disappeared. In the intervening period the levies have been reduced in number to fourteen and the annual yield is down to roughly £1 million. In present circumstances, however, we cannot afford either the loss of revenue or, in some cases, the loss of protection which abolition of the levies would involve. I also consider that this form of taxation of less essential goods is not inappropriate at our present stage of economic development. The Government, therefore, have decided that, in general, the levies should be converted into permanent duties at approximately the equivalent of the combined existing rate of levy and of permanent duty where such applies. Effect is being given to this decision by an Order under the Imposition of Duties Act which will come into effect tomorrow. The Order provides for some relaxations. I might mention, in particular, that the new consolidated rates of duty on canned fruit will be lower than the present combined rates of duty and levy on these products.
I have had representations from various quarters for the removal of the revenue duty on musical instruments. It will be recalled that the special import levy has already been abolished. It would not be feasible to withdraw the duty completely since it affords protection to certain home manufacturers. The Order I have mentioned contains a licensing provision so that, in future, musical instruments may be imported without payment of duty where a licence is granted.
The transformation of the levies provides an opportunity to simplify the present complicated structure of the customs duties on motor vehicles. A separate Order has been made under the Imposition of Duties Act which, from tomorrow, introduces a revised and simplified scheme of customs duties for motor vehicles. I would like to make it clear that this does not involve any new taxation. What is being done is simply to spread the existing tax load more evenly over the whole range of motor vehicles and parts so that the overall yield from the revised duties will equal the present combined yield from ordinary duties and levies.
Copies of these two Orders will be circulated as soon as I conclude. The net loss of revenue involved by the various changes will be £70,000 in the current year.
Finally, provision will be made in the Finance Bill for the abolition of the duty known as Customs Entry Duty. The requirement that a 6d. stamp should be affixed to every customs entry in respect of each separate description of goods shown on the entry was designed to achieve administrative economy by discouraging importation of goods in very small quantities. In present circumstances the duty has ceased to serve any useful purpose and the small yield of £7,000 a year does not justify the continuance of this now unnecessary complication in the clearance of goods through the customs. The cost will be £5,000 this year which, added to the costs I have already given, completely absorbs the £1.52 million available for tax reliefs.
VIII. CONCLUSION
As this is my last budget before the general election, it is natural that I should conclude with a brief review of the main developments in the economy in the four years I have been Minister for Finance.
In March, 1957, when the Government took office, it was faced, as I said earlier, with a difficult economic and financial situation. National income and production had fallen in the previous year. Unemployment was high. Credit was scarce and there was a serious budgetary deficit. In general, the balance of payments crisis of 1955-56, though it had been brought under control by corrective measures, had caused a setback to economic development.
My introductory remarks this afternoon gave some indications of the extent of the progress made since 1957. National production has been increasing in the past two years at a much higher rate than before. The expansion and diversification of production have led to a sharp upturn in exports. Employment in industry has never been so high or unemployment so low. Savings have increased by over 50 per cent. since 1956. External accounts have been kept in balance over the years 1957 to 1960 as a whole and, in consequence, the national progress made has been achieved without loss of external reserves. The contribution of foreign capital to the establishment of many of our new industries is a welcome sign of confidence in the country's potential for development.
All our problems, of course, have not been solved. On the debit side must be placed the still high level of emigration and the slow and unsteady growth in agriculture. Signs of improvement are, however, already appearing. Last year, enough new jobs were created outside agriculture to offset the decline in the numbers engaged in agriculture. The improvement in agricultural potential provides a firm basis for expansion. Generally, with the new sense of purpose and direction given by the Programme for Economic Expansion, there is widespread confidence and progressiveness which augur well for the future.
The public accounts have been in balance over the three financial years 1958-59 to 1960-61 despite additional expenditure and taxation reliefs. We have been able to meet additional expenditure on necessary public services because revenue has been carried upwards by the rise in national income. Tax concessions to encourage increased exports have been extended and improved and the importance of the human factor in economic development has been recognised by substantial reductions in direct taxation, especially income tax.
On the capital side of the account, our annual expenditure has been raised to a level higher than ever before and has been reshaped so as to give greater emphasis to productive projects, both in industry and agriculture. Besides increased aid to private industry and for tourist development, substantial sums have been made available for air transport, industrial credit and shipping. In the agricultural sector, very large amounts have been allotted to eradicate bovine tuberculosis, to improve farm buildings and water supplies, to reduce the cost of fertilisers and generally to promote increased production on all farms, small and large.
The advances I have mentioned relate to the economy as a whole. How has the individual fared over the past four years? The answer is that there has been a general rise in the standard of living based on a real increase in national production. Despite the removal of the food subsidies, wage and salary earners are now substantially better off than they were in 1956. The position of the social assistance groups has been improved.
I think it can be said with ample justification that the record of achievement over the past four years is one of which no Government need be ashamed. Not alone has there been a satisfactory rate of expansion in the period I have reviewed, but the foundations have been soundly laid for further progress.
Following are the Tables referred to in the Minister's statement:—
TABLE I.
COMPARISON BETWEEN (i) BUDGET (APRIL, 1960) ESTIMATES AND (ii) ACTUAL REVENUE AND EXPENDITURE IN 1960-61.
Estimated |
Actual |
Estimated |
Actual |
||
£m. |
£m. |
£m. |
£m. |
||
1. TAX REVENUE (excluding 2 below) |
106.72 |
108.43 |
1. CENTRAL FUND SERVICES (excluding 2 below) |
24.65 |
24.65 |
2. MOTOR VEHICLE DUTIES |
6.00 |
6.46 |
2. PAYMENTS TO ROAD FUND |
6.00 |
6.46 |
3. NON-TAX REVENUE— |
3. SUPPLY SERVICES (non-capital) |
108.48(a) |
108.46 |
||
Post Office |
9.65 |
9.70 |
139.13 |
139.57 |
|
Miscellaneous |
14.26 |
14.25 |
4. SAVINGS AND OVERESTIMATION— net deduction from expenditure (b) |
2.50 |
— |
4. DEFICIT |
— |
0.73 |
|||
TOTAL |
136.63 |
139.57 |
TOTAL |
136.63 |
139.57 |
(a) Original provision was £105.88m. to which was added £2.60m. in the Budget for agriculture, pay awards, social assistance and other services.
(b) The Budget provided for a net adjustment of £2.5m., by way of deduction from expenditure, to allow for errors of estimation. The actual outturn represents a net adjustment of £1.77m. as follows:
£m. |
|||
Increase in Revenue Receipts |
2.21 |
||
Savings on Supply Services |
0.02 |
||
2.23 |
|||
Less Increased expenditure on Central Fund Services (payments to Road Fund) |
0.46 |
||
£1.77 |
|||
TABLE II.
PROGRAMME OF CAPITAL EXPENDITURE, 1960-61—OUTTURN.
(Budget estimates in brackets.)
£ million.
Objects of Expenditure |
Expenditure |
Sources of Finance |
||||||
Public Funds |
Internal Resources |
Other Sources— e.g., Banks, Insurance Companies, Stock Issues |
||||||
1. Voted Capital Services |
18.49 |
(17.58) |
18.49 |
(17.58) |
— |
— |
||
2. Local Authorities (a) |
8.94 |
(8.94) |
7.29 |
(7.53) |
0.09 |
(0.10) |
1.56 |
(1.31) |
3. National Development Fund |
0.27 |
(0.36) |
0.27 |
(0.36) |
— |
— |
||
4. Electricity Supply Board |
5.57 |
(6.74) |
0.97 |
(1.00) |
3.75 |
(2.90) |
0.85 |
(2.84) |
5. Irish Shipping Ltd. (a) |
1.11 |
(1.45) |
0.65 |
(1.10) |
0.37 |
(0.35) |
0.09 |
( — ) |
6. Bord na Móna |
1.84 |
(2.00) |
1.84 |
(1.50) |
— |
— |
(0.50) |
|
7. Córas Iompair Éireann |
1.69 |
(1.25) |
— |
1.29 |
( — ) |
0.40 |
(1.25) |
|
8. Air Companies (a) |
5.54 |
(6.37) |
5.28 |
(5.62) |
— |
(0.45) |
0.26 |
(0.30 |
9. Telephone Capital |
2.10 |
(1.75) |
2.10 |
(1.75) |
— |
— |
||
10. Industrial Credit Co., Ltd. |
2.52 |
(3.50) |
2.00 |
(2.20) |
0.52 |
(0.30) |
— |
(1.00 |
11. Agricultural Credit Corporation, Ltd. (a) |
0.80 |
(1.00) |
— |
0.48 |
(0.50) |
0.32 |
(0.50) |
|
12. Shannon Free Airport Development Co., Ltd. (b) |
0.77 |
(0.56) |
0.77 |
(0.56) |
— |
— |
||
13. Bord Iascaigh Mhara |
0.15 |
(0.24) |
0.15 |
(0.24) |
— |
— |
||
14. Bord Ghaeltarra Éireann |
0.04 |
(0.10) |
0.04 |
(0.10) |
— |
— |
||
15. Irish Steel Holdings Ltd. (c) |
0.40 |
(1.75) |
0.40 |
(1.65) |
— |
(0.10) |
— |
|
16. Radio Éireann |
0.10 |
(0.50) |
0.10 |
(0.50) |
— |
— |
||
17. Miscellaneous |
0.23 |
(0.28) |
0.05 |
(0.09) |
0.18 |
(0.19) |
— |
|
TOTAL |
50.56 |
(54.37) |
40.40 |
(41.78) |
6.68 |
(4.89) |
3.48 |
(7.70) |
(a) Sums raised for repayment of borrowing of earlier years are not included, viz.,
£ million |
||||
Actual |
Estimate |
|||
Irish Shipping Ltd. |
0.70 |
0.70 |
||
Local Authorities |
0.35 |
— |
||
Agricultural Credit Corporation, Ltd. |
0.80 |
0.60 |
||
Air Companies |
1.00 |
1.00 |
(b) The total capital expenditure was £0.88 million, of which £0.11 million was defrayed from voted moneys and is included at 1. above.
(c) The total capital expenditure was £1.10 million, of which £0.70 million was defrayed from voted moneys and is included at 1. above.
TABLE III.
CAPITAL BUDGET, 1960-61.
This table indicates the amounts which were required from public funds for capital purposes and the manner in which these amounts were raised.
(Budget estimates in brackets).
£ m.
Resources |
Requirements |
||||||||
1. Capital repayments available for re-issue— |
1. Advances required for Capital Programme (Table II) |
40.40 |
(41.78) |
||||||
Exchequer |
1.30 |
(1.24) |
|||||||
Local Loans Fund |
2.42 |
(2.33) |
2. Exchequer advances to enable repayment of bank accomodation by— |
||||||
3.72 |
(3.57) |
||||||||
2. Capital Fund |
0.44 |
(0.45) |
|||||||
Irish Shipping Ltd. |
0.70 |
(0.70) |
|||||||
3. Small Savings and Prize Bonds— |
Local Authorities |
0.10 |
( — ) |
||||||
Savings Banks |
2.86 |
Air Companies |
1.00 |
(1.00) |
1.80 |
(1.70) |
|||
Savings Certificates |
1.34 |
||||||||
Prize Bonds |
2.23 |
3. Borrowing to meet payments under Finance Acts, 1953 (S. 16) and 1954 (S. 22) |
0.23 |
(0.02) |
|||||
6.43 |
(12.00) |
||||||||
4. Departmental Funds— |
4. Borrowing to meet payments under Bretton Woods |
||||||||
Investment income and sales of securities |
10.61 |
(8.00) |
Agreements Act, 1957, International Development Association Act, 1960 |
0.30 |
(0.25) |
||||
5. Balance found by— |
|||||||||
(a) Increase of Exchequer Bills in hands of public |
3.87 |
5. Redemption of 3% Transport Stock, 1955-60 |
2.92 |
( — ) |
|||||
(b) Increase of Exchequer Bills in hands of banks |
3.00 |
6. Borrowing to meet deficit on Current Budget |
0.73 |
( — ) |
|||||
(c) National Loan |
14.79 |
7. Casual increase in Exchequer Balance |
0.07 |
( — ) |
|||||
(d) Other borrowings |
3.59 |
||||||||
25.25 |
(19.73) |
||||||||
TOTAL |
46.45 |
(43.75) |
TOTAL |
46.45 |
(43.75) |
TABLE IV.
PROGRAMME OF CAPITAL EXPENDITURE, 1961-62—ESTIMATE.
£ million.
Objects of Expenditure |
Estimated Expenditure |
Sources of Finance |
||
Public Funds |
Internal Resources |
Other Sources, e.g., Banks, Insurance Companies, Stock Issues |
||
1. Voted Capital Services |
20.97 |
20.97 |
— |
— |
2. Local Authorities (a) |
10.00 |
8.38 |
0.07 |
1.55 |
3. National Development Fund |
0.20 |
0.20 |
— |
— |
4. Electricity Supply Board |
6.50 |
1.00 |
4.00 |
1.50 |
5. Irish Shipping Ltd. (a) |
1.97 |
1.50 |
0.07 |
0.40 |
6. Bord na Móna |
1.80 |
1.30 |
— |
0.50 |
7. Córas Iompair Éireann |
1.25 |
— |
0.62 |
0.63 |
8. Air Companies (a) |
1.35 |
0.45 |
0.90 |
— |
9. Telephone Capital |
2.50 |
2.50 |
— |
— |
10. Industrial Credit Co., Ltd. |
3.50 |
3.20 |
0.30 |
— |
11. Agricultural Credit Corporation, Ltd. (a) |
1.02 |
0.25 |
0.50 |
0.27 |
12. Shannon Free Airport Development Co., Ltd. (b) |
1.12 |
1.12 |
— |
— |
13. Bord Iascaigh Mhara |
0.22 |
0.22 |
— |
— |
14. Bord Ghaeltarra Éireann |
0.04 |
0.04 |
— |
— |
15. Irish Steel Holdings Ltd. |
1.75 |
1.75 |
— |
— |
16. Radio Éireann |
0.88 |
0.88 |
— |
— |
17. Miscellaneous |
0.24 |
0.09 |
0.15 |
— |
TOTAL |
55.31 |
43.85 |
6.61 |
4.85 |
(a) Sums to be raised for repayment of borrowing of earlier years are not included, viz., Irish Shipping Ltd. £0.03 m., Local Authorities £0.10 m., Air Companies £0.75 m. and the Agricultural Credit Corporation, Ltd. £1.13 m.
(b) Total estimated capital expenditure is £1.33 million, of which £0.21 million is being defrayed from voted moneys and is included at 1. above.
TABLE V
CAPITAL BUDGET, 1961-62
This table indicates the amounts which it is expected will be required from public funds for capital purposes and the manner in which these amounts may be raised.
£ million
Resources |
Requirements |
||||
1. Capital repayments available for re-issue— |
1. Advances required for Capital Programme (Table IV) |
43.85 |
|||
Exchequer |
1.10 |
||||
Local Loans Fund |
2.43 |
2. Exchequer advances to enable repayment of bank accommodation by— |
|||
3.53 |
|||||
Irish Shipping Ltd. |
0.03 |
||||
2. Capital Fund |
0.46 |
Local Authorities |
0.10 |
||
Air Companies |
0.75 |
||||
3. Small Savings and Prize Bonds— |
Agricultural Credit Corporation, Ltd. |
0.39 |
|||
1.27 |
|||||
Savings Banks |
3.50 |
||||
3. Borrowing to meet payments under Finance Acts. 1953 (s. 16) and 1954 (s. 22) |
|||||
Savings Certificates |
2.00 |
0.25 |
|||
Prize Bonds |
2.50 |
||||
8.00 |
|||||
4. Departmental Funds—Investment income and sales of securities |
9.00 |
4. Borrowing to meet payments under Bretton Woods Agreements Act, 1957, and International Development Association Act, 1960 |
0.26 |
||
5. Balance to be found |
24.64 |
||||
TOTAL |
45.63 |
TOTAL |
45.63 |
TABLE VI.
PUBLIC CAPITAL PROGRAMME, 1956-57 TO 1961-62.
£ million.
1956-57 |
1957-58 |
1958-59 |
1959-60 |
1960-61 |
1961-62 Estimate |
|
1. Building and Construction: |
||||||
(i) Housing |
11.66 |
10.76 |
6.53 |
7.78 |
8.76 |
9.55 |
(ii) Sanitary and miscellaneous services |
2.34 |
2.40 |
1.78 |
1.21 |
1.72 |
2.00 |
(iii) Schools |
1.65 |
1.33 |
1.42 |
1.71 |
1.32 |
1.73 |
(iv) Hospitals |
1.70 |
0.94 |
0.26 |
0.28 |
0.24 |
0.28 |
(v) Other building and construction |
0.50 |
1.17 |
0.23 |
0.40 |
0.47 |
0.87 |
TOTAL |
17.85 |
16.60 |
10.22 |
11.38 |
12.51 |
14.43 |
2. Ports, Harbours and Airports |
0.42 |
0.42 |
0.91 |
1.55 |
2.24 |
3.24 |
3. Tourism |
— |
— |
0.02 |
0.07 |
0.09 |
0.20 |
4. Agriculture |
4.67 |
4.00 |
5.48 |
10.98 |
10.56 |
11.52 |
5. Agricultural Credit |
0.35 |
0.42 |
0.65 |
0.84 |
0.80 |
1.02 |
6. Forestry |
0.99 |
1.11 |
1.14 |
1.31 |
1.49 |
1.53 |
7. Fisheries |
0.16 |
0.16 |
0.17 |
0.30 |
0.20 |
0.24 |
8. Fuel and Power |
11.33 |
8.69 |
7.60 |
7.45 |
7.40 |
8.30 |
9. Telephones |
1.65 |
1.15 |
1.45 |
1.35 |
2.10 |
2.50 |
10. Transport |
6.79 |
7.83 |
6.27 |
4.80 |
8.34 |
4.57 |
11. Industry |
— |
— |
0.54 |
1.14 |
1.71 |
2.94 |
12. Industrial Credit |
0.25 |
— |
2.81 |
2.08 |
2.52 |
3.50 |
13. Radio Éireann |
— |
— |
— |
— |
0.10 |
0.88 |
14. Miscellaneous (including the National Development Fund) |
1.21 |
0.79 |
0.63 |
0.66 |
0.50 |
0.44 |
TOTAL |
45.67 |
41.17 |
37.89 |
43.91 |
50.56 |
55.31 |
The figures for 1959-60, 1960-61 and 1961-62 do not include amounts of £2.03 m., £2.85 m. and £2.01 m. in respect of repayment of bank borrowing.
Under Head 1 the figures for 1959-60 and 1960-61 are provisional; those for 1956-57, 1957-58 and 1958-59 are based on audited figures of borrowing of local authorities.
In addition to the expenditure on housing under Head 1, £0.25 m. in 1960-61 and £0.56 m. in 1961-62 is included under Head 2 in respect of housing development by Shannon Free Airport Development Co. Ltd.
TABLE VII.
VOTED CAPITAL SERVICES.
1960-61 |
1961-62 |
||
Original Estimate |
Expenditure |
Original Estimate |
|
£000 |
£000 |
£000 |
|
Vote 9—Public Works and Buildings |
|||
Subhead A |
21 |
15 |
21 |
,, B (part) |
1,760 |
1,306 |
2,100 |
,, J. 1 |
19 |
22 |
23 |
,, J. 2 |
640 |
625 |
780 |
,, J. 4 |
— |
— |
— |
,, K (part) |
324 |
298 |
290 |
TOTAL |
2,764 |
2,266 |
3,214 |
Vote 29—Local Government |
|||
Subhead E.2 |
2,095 |
2,295 |
2,400 |
Vote 37—Universities and Colleges |
|||
Subhead B (4) |
— |
— |
30 |
,, C (3) |
5 |
5 |
— |
,, D (4) |
10 |
10 |
45 |
TOTAL |
15 |
15 |
75 |
Vote 40—Forestry |
|||
Subhead C.1 |
185 |
185 |
130 |
,, C. 2 (1), (2), (3) and (6) |
1,403 |
1,303 |
1,398 |
TOTAL |
1,588 |
1,488 |
1,528 |
Vote 41—Fisheries |
|||
Subhead D.8 |
2 |
2 |
1 |
,, D. 9 (part) |
6 |
5 |
2 |
,, E. 1 (part) |
39 |
39 |
19 |
TOTAL |
47 |
46 |
22 |
Vote 42—Roinn na Gaeltachta |
|||
Subhead C (1) |
150 |
136 |
181 |
Vote 43—Agriculture |
|||
Subhead E. 3 (C) |
11 |
15 |
14 |
,, K. 6 (C) and (D) |
696 |
731 |
760 |
,, K. 7 |
2,171 |
2,171 |
2,278 |
,, K. 8 (B) |
1,750 |
1,732 |
1,900 |
,, K. 11 |
3,454 |
4,962 |
5,380 |
,, K. 13 |
50 |
— |
50 |
,, M. 6 |
40 |
— |
40 |
TOTAL |
8,172 |
9,611 |
10,422 |
Vote 44—Industry and Commerce |
|||
Subhead H.2 |
85 |
32 |
100 |
,, H. 3 |
60 |
60 |
100 |
,, K. 1 |
500 |
272 |
650 |
,, K. 2 |
475 |
295 |
500 |
Purchase of Shares (Irish Steel Holdings, Limited) |
— |
700 |
— |
TOTAL |
1,120 |
1,359 |
1,350 |
Vote 45—Transport and Power |
|||
Subhead C (part) |
16 |
13 |
21 |
,, E (part) |
116 |
104 |
240 |
,, F. 1 |
30 |
24 |
8 |
,, F. 2 |
512 |
439 |
460 |
,, F. 3 |
370 |
244 |
390 |
,, F. 4 |
450 |
342 |
450 |
,, G. 4 (part) |
132 |
110 |
210 |
TOTAL |
1,626 |
1,276 |
1,779 |
TOTAL |
17,577 |
18,492 |
20,971 |
TABLE VIII.
EXCHEQUER STATEMENT FOR YEARS 1959-60 AND 1960-61.
Revenue and Other Receipts |
Total Receipts into the Exchequer from |
Expenditure and Other Issues |
Total issues out of the Exchequer to meet payments from |
||
1st April, 1960 |
1st April, 1959 |
1st April, 1960 |
1st April, 1959 |
||
to |
to |
to |
to |
||
31st March, 1961 |
31st March, 1960 |
31st March, 1961 |
31st March, 1960 |
||
REVENUE |
£ |
£ |
EXPENDITURE |
£ |
£ |
Customs—excluding Special Import Levy |
39,969,000 |
43,370,000 |
Central Fund Services |
31,108,340 |
28,407,365 |
Customs—Special Import Levy |
1,038,000 |
1,586,000 |
Supply Services |
126,949,240 |
118,385,981 |
Excise |
30,189,000 |
24,236,000 |
|||
Estate, etc., Duties |
3,213,000 |
2,994,000 |
TOTAL EXPENDITURE |
158,057,580 |
146,793,346 |
Stamps |
2,742,000 |
2,640,000 |
|||
Income Tax (including Surtax) |
27,999,000 |
23,559,000 |
|||
Corporation Profits Tax, etc. |
3,284,000 |
3,031,000 |
OTHER ISSUES |
||
Motor Vehicle Duties |
6,456,000 |
5,912,000 |
ISSUES UNDER THE FOLLOWING ACTS:— |
||
Post Office |
9,700,000 |
9,150,000 |
Local Loans Fund Acts, 1935-57 |
4,760,000 |
4,450,000 |
Sundry Receipts |
14,249,495 |
13,377,578 |
Turf Development Act, 1946-59 |
1,403,000 |
958,000 |
Telephone Capital Acts, 1924-60 |
2,100,000 |
1,350,000 |
|||
TOTAL REVENUE |
138,839,495 |
129,855,578 |
Irish Shipping, Ltd., Acts, 1947 and 1959 |
1,347,427 |
1,931,301 |
Insurance Act, 1953 (Sec. 2 (4)) |
287 |
7,631 |
|||
OTHER RECEIPTS |
Sea Fisheries Acts, 1952-59 |
150,850 |
190,580 |
||
Trade Loans (Guarantee) Acts, 1939-54 |
24,073 |
30,218 |
|||
REPAYMENTS, ETC.:— |
Air Navigation and Transport Acts, 1936-59 |
6,277,000 |
1,698,540 |
||
In respect of issue under:— |
Electricity (Supply) Acts, 1927-58 |
966,000 |
1,136,426 |
||
Electricity (Supply) Acts, 1927-58 |
630,005 |
570,148 |
Shannon Free Airport Development Co., Ltd., Act, 1959 |
775,000 |
393,000 |
Turf Development Acts, 1946-59 |
227,735 |
186,627 |
|||
Sea Fisheries Acts, 1952-59 |
33,916 |
27,556 |
Bretton Woods Agreements Act, 1957 |
246,400 |
1,646,091 |
Insurance (Intermittent Unemployment) Act, 1942 (Section 47 (1) ) |
— |
38,000 |
Industrial Credit Acts, 1933 and 1959 |
2,000,100 |
1,500,537 |
Grass Meal (Production) Acts, 1953-59 |
30,007 |
— |
|||
Gaeltacht Industries Act, 1957 |
561 |
— |
Gaeltacht Industries Act, 1957 |
40,000 |
40,000 |
Trade Loans (Guarantee) Acts, 1939-54 |
20,339 |
121,408 |
Finance Acts, 1953 (S. 16) and 1954 (S. 22) |
230,000 |
— |
Insurance Act, 1953 (Section 2 (4) ) |
16,134 |
— |
Broadcasting Authority Act, 1960 |
95,000 |
— |
Tourist Traffic Acts, 1939-55 |
62 |
59 |
International Development Association, Act, 1960 |
53,996 |
— |
Road Fund (Advances) Acts, 1926 and 1948 |
358,871 |
345,737 |
Irish Steel Holdings (Ltd.) Act, 1960 |
400,000 |
— |
Road Fund (Grants and Advances) (Temp. Provisions) Act, 1959 |
15,533 |
— |
Road Fund (Grants and Advances) (Temporary Provisions) Act, 1959 |
200,000 |
200,000 |
1,303,156 |
1,289,535 |
21,099,140 |
15,532,324 |
||
MONEY RAISED BY CREATION OF DEBT:— |
ISSUES FOR REDEMPTION OF DEBT:— |
||||
Ways and Means Advances |
29,450,000 |
26,650,000 |
Ways and Means Advances |
18 735,000 |
20,890,000 |
Exchequer Bills |
93,500,000 |
47,250,000 |
Exchequer Bills |
86,250,000 |
44,000,000 |
Bank Advances |
2,500,000 |
9,800,000 |
Bank Advances |
2,500,000 |
9,800,000 |
Savings Certificates |
3,209,000 |
3,225,000 |
Savings Certificates |
1,870,000 |
1,785,000 |
Telephone Capital Acts, 1924-60 |
2,100,000 |
1,350,000 |
Prize Bonds |
1,961,000 |
1,738,000 |
Prize Bonds |
4,190,350 |
5,788,710 |
3% Transport Stock, 1955-60 |
2,925,000 |
— |
6% Exchequer Stock, 1980-85 |
14,788,245 |
— |
Other Borrowings |
5,952,000 |
3,650,000 |
5¼% National Development Loan, 1979-84 |
— |
11,829,475 |
|||
Other Borrowings |
9,545,384 |
7,137,000 |
|||
159,282,979 |
113,030,185 |
120,193,000 |
81,863,000 |
||
TOTAL RECEIPTS |
299,425,630 |
244,175,298 |
TOTAL ISSUES |
299,349,720 |
244,188,670 |
Balance in Exchequer on 1st April, 1960, and 1st April, 1959 |
531,328 |
544,700 |
Balance in Exchequer on 31st March, 1961 and 31st March, 1960 |
607,238 |
531,328 |
TOTAL |
299,956,958 |
244,719,998 |
TOTAL |
299,956,958 |
244,719,998 |
TABLE IX
LOCAL LOANS FUND
CAPITAL RECEIPTS AND ISSUES
RECEIPTS |
ISSUES |
||||
1960-61 |
1961-62 (Estimated) |
1960-61 |
1961-62 (Estimated) |
||
£000 |
£000 |
£000 |
£000 |
||
1. Opening balance |
16 |
— |
1. Loans Issues: |
||
2. Capital Repayments |
2,442 |
2,463 |
Housing, Sanitary Services, etc. |
6,834 |
7,753 |
3. Exchequer Advances |
4,760 |
5,850 |
County Homes, Hospitals, Dispensaries, etc. |
182 |
250 |
Vocational Schools |
167 |
250 |
|||
Harbours |
5 |
30 |
|||
2. Repayment instalment on moneys raised |
30 |
30 |
|||
3. Closing balance |
— |
— |
|||
TOTAL |
7,218 |
8,313 |
TOTAL |
7,218 |
8,313 |
TABLE X
ROAD FUND
RECEIPTS AND ISSUES
RECEIPTS |
ISSUES |
||||
1960-61 |
1961-62 (Estimated) |
1960-61 |
1961-62 (Estimated) |
||
£000 |
£000 |
||||
£000 |
£000 |
1. Normal Road Grants (b) |
5,767 |
6,202 |
|
1. Opening Balance |
— |
— |
2. Special grants under the Road Fund (Grants and Advances) (Temporary Provisions) Act, 1959, for roads affected by the closure of railway lines and by particular major industrial undertakings |
400 |
400 |
2. Motor Taxation, etc. |
6,469 |
6,650 |
|||
3. Grant (£200,000) from the Vote for Local Government and Advance (£200,000) from the Central Fund |
400 |
400 |
3. Special Road Grants (financed from the National Development Fund) (a) |
43 |
2 |
4. National Development Fund grant (a) |
43 |
2 |
|||
4. Administration, etc. |
263 |
270 |
|||
5. Repayment of Advances (c) |
439 |
178 |
|||
6. Closing Balance |
— |
— |
|||
TOTAL |
6,912 |
7,052 |
TOTAL |
6,912 |
7,052 |
(a) Unissued balance from previous years' allocations from the National Development Fund to the Road Fund. No allocation was made in 1960-61
(b) Including payments on foot of previous years' allocations.
(c) (i) Advances were made to the Road Fund under the Road Fund (Advances) Acts, 1926 and 1948, of £2,286,000 in 1948-49 and 1949-50 and of £900,000 in 1957-58. The final instalment (£287,600) of the former amount was repaid on 1 March, 1961. The latter amount (£900,000), together with £35,634 funded interest to 28 February 1958, is repayable by a 10 year annuity of £125,600 which began on 1 March, 1959. The principal outstanding on March, 1961 was £707,541.
(ii) £200,000 was advanced in each of the years 1959-60 and 1960-61 under the Road Fund (Grants and Advances) (Temporary Provisions) Act, 1959. The first advances is repayable by a 10 year annuity which commenced on 1 March, 1961, the amount payable in 1961-62 being £26,534. The balance outstanding on 31 March, 1961 was £184,466. The repayment arrangements in respect of the second advance have not yet been settled but an estimate of £26,000 is included in the 1961-62 issues column for repayment of principal and interest.
TABLE XI.
STATEMENT SHOWING CAPITAL LIABILITIES OF THE STATE ON 31ST MARCH, 1960, AND 31ST MARCH, 1961, AND ASSETS HELD ON THOSE DATES.
On 31st March, 1960 |
On 31st March, 1961 |
|
£000 |
£000 |
|
LIABILITIES:— |
||
Money raised by issue of securities: |
||
3½% Fourth National Loan, 1950-70 |
3,446 |
3,429 |
3¼% National Security Loan, 1956-61 |
5,096 |
4,867 |
3% Exchequer Bonds, 1965-70 |
19,348 |
19,006 |
3½% Exchequer Bonds, 1965-70 |
25,479 |
25,012 |
5% National Loan, 1962-72 |
16,648 |
16,633 |
4½% National Loan, 1973-78 |
20,153 |
19,736 |
4½% National Loan, 1975-80 |
17,707 |
17,266 |
5% National Savings Bonds, 1971-81 |
19,031 |
18,242 |
5½% National Loan, 1966 |
6,418 |
5,781 |
6% National Loan, 1967 |
19,356 |
19,222 |
5½% Exchequer Stock, 1971-74 |
14,428 |
14,247 |
5¼% National Development Loan, 1979-84 |
18,656 |
18,403 |
3% Transport Stock, 1955-60 |
3,240 |
91 |
6% Exchequer Stock, 1980-85 |
— |
15,647 |
Exchequer Bills |
15,750 |
23,000 |
Savings Certificates (Principal) |
24,384 |
25,720 |
Prize Bonds |
14,362 |
16,592 |
Ways and Means Advances |
100,837 |
111,291 |
Dollar Borrowings under United States Loan Agreements |
39,466 |
38,930 |
Under Telephone Capital Acts, 1924 to 1960 |
15,970 |
17,418 |
Other Borrowings |
7,037 |
10,630 |
406,812 |
441,163 |
|
Capitalised liabilities:— |
||
Under Land Acts, 1923 to 1953— |
||
Advances for Costs Fund and State Contribution to Price (including deficiencies in Land Bond Fund arising from revision of annuities) |
15,647 |
15,825 |
Under Housing (Financial and Miscellaneous Provisions) Act, 1932— State contributions capitalised |
34,745 |
36,041 |
State contributions towards loan charges of local authorities for sanitary services capitalised |
3,976 |
4,360 |
Annuity under Damage to Property (Compensation) (Amendment) Act, 192 |
3,594 |
3,523 |
57,962 |
59,749 |
|
TOTAL GROSS LIABILITIES (see note below)* |
464,774 |
500,912 |
ASSETS:— |
||
Repayable advances: |
||
Electricity Supply Board |
63,392 |
62,773 |
Local Loans Funds |
93,664 |
98,424 |
Road Fund |
1,266 |
1,092 |
Industrial Credit Co. Ltd. |
— |
600 |
Purchase of Creameries |
1,334 |
1,362 |
Bord Failte Eireann |
9 |
9 |
Bord na Mona |
14,363 |
15,973 |
Bord Iascaigh Mhara |
1,013 |
1,130 |
Bord Gaeltarra Eireann |
40 |
79 |
Radio Eireann |
— |
95 |
Under Finance Acts 1953 (Sec. 16) and 1954 (Sec. 22) |
469 |
699 |
175,550 |
182,236 |
|
Shares of Sundry Undertakings: |
||
Agricultural Credit Corporation, Ltd. |
300 |
300 |
Comhlucht Siuicre Eireann, Teo. |
500 |
500 |
Industrial Credit Co. Ltd. |
4,499 |
5,899 |
Aer Rianta, Teo. |
3,699 |
9,976 |
Ceimici, Teo. |
496 |
496 |
Irish Shipping, Ltd. |
6,931 |
8,279 |
Alginate Industries (Ireland) Ltd. |
29 |
29 |
Irish Assurance Co. Ltd. |
90 |
90 |
Colucht Groighe Naisiunta na hEireann, Teo. |
396 |
396 |
Shannon Free Airport Development Co. Ltd. |
393 |
1,168 |
Irish Steel Holdings, Ltd. |
300 |
1,400 |
Min-Fheir (1959) Teo. |
— |
30 |
Payments under Bretton Woods Agreements Act, 1957 |
4,104 |
4,350 |
Payments under International Finance Corporation Act, 1958 |
119 |
119 |
Payments under International Development Association Act, 1960 |
— |
54 |
21,856 |
33,086 |
|
Balance held on sundry Funds and Accounts: |
||
Exchequer Account |
531 |
607 |
National Loans Sinking Funds |
4,489 |
7,469 |
Savings Certificates Reserve Fund— |
||
Principal Reserve Account |
3,770 |
3,808 |
Capital Services Redemption Account |
1,076 |
1,907 |
National Development Fund (Winding-up) Account |
1,195 |
925 |
Capital Fund |
252 |
252 |
Savings Certificates Account |
117 |
117 |
Proceeds of Dollar Borrowings under United States Loan Agreements— |
||
Balance on American Loan Counterpart Fund |
41,042 |
40,985 |
52,472 |
56,070 |
|
TOTAL ASSETS£ |
249,878 |
271,392 |
*When considering the Liabilities Statement at 31/3/61 alone it should be borne in mind that there is double reckoning in the totals to the extent of £49,850,000 representing the investment in Ways and Means Advances to the Exchequer and in Exchequer Bills of the proceeds of dollar borrowings the balance in the National Development Fund (Winding-up) Account and of part of the balances of the National Loans Sinking Funds and the Savings Certificates Fund (Principal Reserve Account). This is offset in the Assets Statement where the balances on the American Loan Counter part Fund, the National Development Fund (Winding-up) Account, the National Loans Sinking Funds and the Savings Certificates Fund (Principal Reserve Account) include the Funds' investments in Ways and Means Advances to the Exchequer and Exchequer Bills.
TABLE XII
STATE DEBT BALANCE SHEET
LIABILITIES |
31st March, 1960 |
31st March, 1961 |
ASSETS |
31st March, 1960 |
31st March, 1961 |
£000 |
£000 |
£000 |
£000 |
||
Outstanding Public Debt as per previous |
Liquid Assets (as per previous table)* |
5,111 |
6,220 |
||
table* |
417,412 |
451,062 |
Repayable Advances and Shares |
197,406 |
215,322 |
Telephone Capital Acts, 1924-60 |
15,970 |
17,418 |
|||
Pre-1922 Advances to Local Loans Fund |
6,285 |
6,285 |
Transition Development Fund |
6,635 |
6,635 |
National Development Fund |
6,604 |
6,874 |
|||
Sinking Funds and Interest, etc., thereon |
62,377 |
70,212 |
Other Voted Capital Services |
110,995 |
128,787 |
United Kingdom (Capital Sum) Act, 1938 |
10,000 |
10,000 |
|||
Capital Fund |
8,568 |
8,978 |
Insurance (Amendment) Act, 1938 |
1,034 |
1,034 |
Dail Eireann Loans (Internal and External |
1,025 |
1,025 |
|||
Property Losses Compensation paid in Stock |
1,579 |
1,579 |
|||
Land Bonds (State Liability) |
15,647 |
15,825 |
|||
Subsidy under Housing (Financial and Miscellaneous Provisions) Acts, 1932 (capitalised) |
34,745 |
36,041 |
|||
Subsidy under Sanitary Services Schemes (capitalised) |
3,976 |
4,360 |
|||
Subsidy for Rural Electrification |
4,036 |
5,002 |
|||
Annuity under Damage to Property (Compensation) (Amendment) Act, 1926 |
3,594 |
3,523 |
|||
Discounts on National Loans (net) |
2,004 |
1,885 |
|||
Issue under Great Northern Railway Act, 1953 |
2,250 |
2,250 |
|||
Liability for Transport Stock assumed under Transport Act, 1958 |
9,889 |
9,889 |
|||
Budget Deficits |
61,858 |
62,584 |
|||
Other Items |
284 |
284 |
|||
£ |
494,642 |
536,537 |
£ |
494,642 |
536,537 |
*Excludes double reckoning to the extent of £47,362,000 and £49,850,000 at 31/3/60 and 31/3/61, respectively, in respect of Ways and Means Advances to the Exchequer and Exchequer Bills from the American Loan Counterpart Fund, the National Development Fund (Winding-up) Account, National Loans Sinking Funds and the Principal Reserve Account of the Savings Certificates Reserve Fund.
TABLE XIII
TABLE SHOWING, OVER A SERIES OF YEARS, GOVERNMENT REVENUE AND EXPENDITURE AS WELL AS EXPENDITURE FROM REVENUE OF LOCAL AUTHORITIES AND RATES COLLECTED.
Year |
Revenue paid into Exchequer |
Exchequer Issues for Central Fund and supply Services (excluding Voted Capital) |
Expenditure from Revenue of Local Authorities (a) |
Amount of total in Col. (4) derived from Government sources |
Rates collected |
(1) |
(2) |
(3) |
(4) |
(5) |
(6) |
£000 |
£000 |
£000 |
£000 |
£000 |
|
1951-52 |
83,905 |
91,470 |
34,630 |
16,320 |
12,720 |
1952-53 |
95,919 |
98,467 |
36,700 |
17,410 |
14,239 |
1953-54 |
102,803 |
104,655 |
41,560 |
19,600 |
15,987 |
1954-55 |
106,728 |
108,479 |
44,263 |
21,248 |
17,041 |
1955-56 |
111,675 |
112,237 |
47,783 |
21,887 |
17,746 |
1956-57 |
117,664 |
123,859 |
51,076 |
22,393 |
19,700 |
1957-58 |
122,921 |
128,803 |
51,022 |
24,717 |
20,077 |
1958-59 |
126,410 |
126,250 |
53,062 |
23,666 |
20,561 |
1959-60 |
129,856 |
128,682 |
55,104 |
22,480 |
21,412 |
1960-61 |
138,839 |
139,565 |
58,174 (b) |
24,755 (b) |
22,280 (b) |
1961-62 |
144,158 (c) |
144,368 |
61,964 (c) |
26,321 (c) |
23,183 (c) |
NOTE:—(a) The Revenue receipts of Local Authorities comprise broadly Rates, Government Grants and Other Receipts, e.g., rents, fees, etc.
(b) Approximate.
(c) Estimated.
TABLE XIV.
TABLE SHOWING STATE AID TO AGRICULTURE FROM 1957-58.
1957-58 |
1958-59 |
1959-60 |
1960-61 |
1961-62 |
|
£000 |
£000 |
£000 |
(Provisional) |
(Estimate) |
|
£000 |
£000 |
||||
Subsidies of final products: |
|||||
Butter and other milk products |
3,210 |
2,025 |
56 |
2,350 |
1,000 |
Wheat |
641 |
1,859 |
372 |
834 |
300 |
Bacon |
787 |
400 |
300 |
850 |
550 |
Bacon factory Grants |
— |
— |
— |
— |
50 |
Subsidies to reduce production costs: |
|||||
Ground limestone |
718 |
457 |
297 |
236 |
380 |
Superphosphate (home produced) |
148 |
202 |
252 |
367 |
350 |
Phosphatic fertilisers |
— |
507 |
1,784 |
1,764 |
1,900 |
Potash |
— |
— |
— |
195 |
430 |
Petrol |
40 |
40 |
48 |
44 |
35 |
Drainage, land reclamation and general improvement schemes : |
|||||
Arterial drainage |
629 |
719 |
1,037 |
1,045 |
1,220 |
Other drainage schemes |
63 |
108 |
90 |
60 |
5 |
Improvement of Land Commission Estates |
612 |
638 |
673 |
618 |
716 |
Other improvement schemes |
619 |
464 |
450 |
434 |
456 |
Gaeltacht and Congested District Schemes |
161 |
171 |
205 |
205 |
208 |
Elimination of disease, live-stock improvement, etc. : |
|||||
Bovine T.B. |
569 |
1,283 |
5,122 |
4,965 |
5,415 |
Pasteurisation plant |
76 |
247 |
29 |
39 |
30 |
A.I., milk production and livestock improvement |
75 |
56 |
49 |
54 |
69 |
Administration of improvement and regulatory acts |
274 |
185 |
183 |
192 |
271 |
Grants towards farm buildings, etc. : |
|||||
Farm buildings and water supplies |
801 |
750 |
795 |
801 |
835 |
Poultry houses and equipment |
37 |
33 |
44 |
60 |
63 |
Orchard planting |
3 |
3 |
4 |
4 |
5 |
Education, research, advisory and technical services: |
|||||
Education |
304 |
378 |
358 |
410 |
481 |
Research |
231 |
232 |
389 |
526 |
596 |
Advisory services |
302 |
308 |
319 |
333 |
376 |
Rural organisations |
20 |
23 |
18 |
21 |
21 |
Technical services |
152 |
158 |
148 |
155 |
196 |
Departmental capital expenditure on land and buildings |
73 |
53 |
71 |
130 |
196 |
Land annuities: |
|||||
Halving of land annuities |
707 |
722 |
732 |
745 |
763 |
Bonus to vendors and other costs |
117 |
117 |
117 |
118 |
118 |
Relief of rates : |
|||||
Agricultural Grant |
5,507 |
5,520 |
575 |
5,665 |
5,759 |
TOTALS |
19,342 |
20,019 |
21,890 |
25,386 |
25,072 |
NOTE:—Figures are net of appropriations in aid.