andMr. McQuillan asked the Taoiseach the total foreign capital investment in the Republic during 1960, 1961 and 1962, and the amount of this capital which was invested in productive capital projects.
Ceisteanna—Questions. Oral Answers. - Foreign Capital Investment.
16.
The information available in connection with foreign capital movements is shown in the capital account of the Balance of International Payments Statement. The Statement covering the years 1960 and 1961 was published in the June, 1962, issue of the Irish Trade Journal and Statistical Bulletin. The Statement for 1962 will not be available for some time. The inflow of foreign capital may appear in the Statement under a number of headings but it is not possible from the available information to give a reliable estimate of the total of such inflow or its allocation to particular uses.
Is the Taoiseach in a position at this stage to state in connection with the inflow of foreign capital what percentage of that capital goes into the purchase of land and business in this country and what proportion goes into investment in machinery and other purposes?
As the Deputy has just been told, it is not possible to segregate on that basis the information available.
If it is not possible to segregate on that basis, does the Taoiseach then take that figure, whatever it may be—£12,000,000, £13,000,000 or £14,000,000—in as capital assets and use it in relation to the balance of payments?
No.
Is it not a fact that this is a hidden asset?
It does not come into the balance of payments.
Of course it does.
It is urgently necessary, from the point of view of balance of payment considerations and the preservation of our net external assets, to determine if these capital movements are of an annual recurrent kind or if they represent purchases of land and property here which are not likely to appear indefinitely in the annual receipts and which are, therefore, concealing a deficit in the balance of payments and which, if they stopped, might present us with a very grave crisis in which we would be bereft of substantial assets which have already been sold.
The Deputy is correct in assuming that the deficit in the balance of payments is becoming a matter for concern. It is not a critical issue at the moment because there has been no loss of external reserves. So long as money is coming in here to set up industry, or for similar purposes, it must come in eventually in the form of goods and will appear as such in the trade statistics. To that extent this capital inflow is an explanation of the gap that appears on invisible trade.
Suppose it is, in fact, coming in for the payment of land and is appearing as a credit balance?
No matter how it comes, capital can only come into the country in the form of goods or services. That is an elementary fact.
It only comes in in the form of money on deposit to the credit of holders in this country, and subsequently invested by us in external investment. Our net external investment may remain stable, but that is not due to the influx of capital which is of a reproductive character in our economy.
The Taoiseach has stated that capital can only come into this country in the form of goods.
Into any country.
If that is the case, are we not depending to a great extent for a solution of our balance of payments problem on emigrants' remittances, which amount to about £18 million, and which come in in the form of postal orders, money orders and cheques from Britain? If that is looked upon as capital, as far as our balance of payments problem is concerned, it is utilised to help our position. Surely the same position obtains with regard to the inflow of capital from foreign sources? Is it not a fact that a great deal of this money that the Taoiseach describes as "goods" is money coming in and used for the purchase of Irish land and property? Irish land is now going up in value because of this spare money coming from Germany and other countries.
The Deputy is making an argument. He is not asking a question.
The inflow of money for the purchase of land is a very insignificant item.
How does the Taoiseach know that if he is not able to break down the figures?
Because I read the newspapers and I see there is no such problem.
Can the Taoiseach state what amount of foreign capital comes in in the form of goods for the purpose of setting up industries here?
All capital comes eventually in the form of goods.
Is the Taoiseach serious or is he trying to bluff the House with a statement of that nature?
It is elementary.
It is pure cod and the people on the opposite benches will find out when the hot money starts going out. That will not be so elementary.