Before resuming, may I extend to the Minister for Finance a welcome back to the House and, I hope, a return to full health. During his absence, I am sure he had an opportunity to peruse the discussions that went on here last week. If he had, he must have been pretty well appalled at the contradictory statements made by his colleagues in relation to the economic condition of the country.
When I reported progress last Thursday, I was dealing with the difficulty which the House finds in examining State finances. The figure on the Book of Estimates is enormous. It is a record figure but, in itself, it is not the most suitable figure to compare with expenditure in past years because the Minister secured the co-operation of his colleagues in the different Departments in transferring back to the shoulders of the ordinary consumers a great deal of expenditure that is normally borne by the State.
The House will recall that having attained office in 1957, in one fell swoop, the Government abolished the food subsidies. For that reason, one would have expected that the figure on the Book of Estimates would have been reduced in each year since by £9 million. Some people thought that was extravagant expenditure for keeping down the cost of the necessaries of life and that by the abolition of the food subsidies in the way they were abolished, that amount of money would have been saved. Those people got a rude awakening in a very short time.
The House will also recall that at the time of the abolition of the food subsidies, it was indicated that they were being abolished for the sole purpose of reducing the level of national spending and easing the situation for the Exchequer. People who were critical of the reduction and eventual abolition of the food subsidies foretold the consequences of the Government's action. The partial removal of the food subsidies was reflected in each Department of State as well as at local authority level. Money had to be voted by the State and by local authorities to cater for the increased cost of maintaining the existing services and an increase had to be given to cushion State employees against the impact of the increased cost of living.
The ordinary consumer had to find additional money to pay for the loaf of bread, for the lb. of tea, and for other necessaries of life. He also had to find money to recompense State servants so that their standard of living would not be drastically reduced by the cost of living increase. The figure in the Book of Estimates snowballed as time went on until, in defiance of solemn assurances and categorical statements as to what the years would bring, the Government are now compelled to present this record bill to the people.
It is not alone in relation to food subsidies that the Government have succeeded in passing on to the consumer the impact of expenditure formerly borne by the Exchequer. The Minister for Posts and Telegraphs increased postage and telephone charges. Anybody in business knows when he balances his books the additional cost involved in these increases. The ordinary man in the street may not be too worried because he may not write many letters or make many phone calls but he must be aware that business people have to find the money to finance these increases in their costs of operation. Consequently, as has been the practice following an increase in costs of production, it is the consumer who has to foot the bill.
This year, the Book of Estimates is being examined in a situation where there is a deficit of £100 million in our trade position. The house will recall that at the time this Government assumed office, they had absolutely no problem in relation to the balance of payments, which was the result of the firm action of their predecessors, which was commented on by the present Taoiseach as having been successful and desirable action. Nothing has transpired outside the shores of this island since this Government assumed office which was in any way inimical to maintenance of that balance of payments position. If we have a deficit in the balance of payments, it is the administration of this Government that must be held responsible for it.
It is difficult for us to have to rely on governmental estimations of what is to come when we cannot get a true picture even in relation to occurrences over the past year. A great deal of consideration has been given to the question of the amount of money which is coming into this country from outside; how much of it is hot money; how much of it is being brought in for the purchase of Irish land by foreigners, and so on and so forth. For several months, we in the Fine Gael Party bombarded the Government with urgings at least to maintain a register of the aliens purchasing land in this country. Eventually, a register was created but it was too late to record the entire transactions in that respect over recent years. We have had a statement by the Minister for Lands that the amount of capital that came into the country as a result of the purchase of Irish land by aliens was not more than £500,000 and in the discussion on the Government White Paper, the Minister for Finance gave a figure of approximately £1 million. There is a substantial discrepancy in the estimates given by the two Ministers of a figure which should be readily available. If it is not available, how can anybody outside the Government estimate what is occurring in relation to transactions of that kind if the Ministers responsible give figures which are at variance to the extent of £500,000?
It is in that situation that we have been critical for some time in regard to this matter. The Leader of the Fine Gael Party and Leader of the Opposition has pointed out on a number of occasions over the past 12 months that there were indications that difficulties were arising in our economic position but very little heed was given to his warnings. The House will recall that in the debate on the Adjournment prior to Christmas, Deputy Dillon stressed that point and that the Taoiseach, when he came to reply, did not even avail of the time at his disposal to review the economic situation of the country. We were surprised at the brevity of his reply. In the spirit of festival geniality, he wished us all a happy Christmas and he raised the morale of his own Party by indicating that everything in the garden was lovely, that there was no matter of concern on the economic scene.
Consequently, the situation was complicated when the Taoiseach was compelled, within a month or so of the resumption of the Dáil, to introduce a White Paper. The Taoiseach has back-pedalled in respect of it but it was introduced for the purpose of bringing home to the people that it was necessary for at least one section of the community to tighten their belts, that the situation facing the country was not quite as rosy as it had been painted on the eve of Christmas by the Leader of the Government.
With regard to the balance of trade position, the Minister for Transport and Power gave us a lengthy lecture here last week on the evil of taking more out of the economy than the country can afford. He referred to activities of the Government and to the fact that there was a tremendous campaign for increased industrial and agricultural exports. Yet, there is a fall in exports. It may not be a great fall but it shows a change in the trend. We see this year a reduction in exports, despite the heavy imports which we were told were expressly for the purpose of bringing about an increase in exports that would make it possible for everyone to enjoy a higher standard of living.
Then there was another example of the habit which members of the Government, particularly their leader, have of treating this House with contempt, namely, having decided to take particular measures, denying that information to the House and waiting until Deputies had returned to their homes at weekends to learn over Radio Éireann, when we had a news service there, or to read in the newspapers, that the Taoiseach or some Minister of Government had gone to some banquet and had made an important statement which could very well have been made in this House.
The Taoiseach replied to the debate on the White Paper Closing the Gap but he did not refer to the fact that he had already prepared in his briefcase a speech which he would make to the Limerick Junior Chamber of Commerce meeting which, the Taoiseach told us last week, was synonymous with a Fianna Fáil cumann. He told us chambers of commerce and Fianna Fáil cumainn were one and the same thing. That is an extraordinary statement. I wonder what will be the effect on many young men who are engaged in business in this country and who are actively engaged in chambers of commerce to learn that these meetings are nothing less than political Party meetings?
The Taoiseach announced in Limerick, and in more precise detail later, that the budgetary system that we had was not enough to satisfy a Fianna Fáil Government in exacting from the pockets of the people the moneys required for expenditure and that it was the intention of the Government to superimpose on our existing tax structure a new system of taxation. Only a matter of weeks after, we were told that there was an inflationary trend in the country that must be halted if the economy was not to suffer severely. Could any statement be better designed to encourage spending and, in particular, spending on imported articles, than the statement the Taoiseach made at Limerick?
The immediate response, from the people engaged in the sale of articles likely to come within the scope of the Government's proposal regarding a sales or turnover tax, came by way of expensive advertisements saying: "Buy now; jump the gun before the Government get a cut at you. Buy now before prices go up." Was that a contribution towards easing the inflationary trend that we were told was developing? To me it was reminiscent of the advice given by the present Taoiseach when dealing with the tea situation during the war years and when he told the people: "Those of you who have money, buy tea and shove it under the counter. I am going to ration tea later on." The unfortunate poor old people down the country who were afterwards dependent on the quarter-ounce had to pay £1 per pound to blackmarketeers for the tea these people were advised by the Taoiseach to buy before it was rationed.
So now we have the consequences of the announcement made that at some later date the Government intend to introduce this additional taxation. This Party, in collaboration with the other Parties in the inter-Party Government, set up the Income Tax Commission. Their terms of reference were to examine the existing income tax code and bring it up to date and, if at all possible, substitute a system of taxation other than the one which fell too heavily on too few people. We were disappointed at the report of the Commission that it did not pinpoint an alternative and entirely new system of taxation that would be more equitable but, included in the report, and carried by a majority of only one was a recommendation that a sales or turnover tax be substituted for income tax.
In speeches made by the Taoiseach when he repaired to Limerick and in subsequent statements, the picture presented by the Government is that, despite the fact that we have buoyancy in revenue which exceeded expectations last year, despite the inflow of tax in that period, the level of expenditure proposed for the coming year and thereafter will be such that any additional imposition on the tax structure can only reduce consumption to the point that that revenue would not be forthcoming. So what was intended as an alternative to income tax is now to be superimposed on the existing tax structure and new methods are to be devised and implemented to take more money out of the people's pockets so that the Government can say that they are the great spenders and that they are the people well fitted to do it.
Last Thursday, when I was developing this point, Deputy Dolan interjected a remark about the inter-Party Government having spent the Marshall Aid moneys. Government speakers on this occasion seem very anxious to divert attention from 1963 and what may happen in 1964 as far as they can. They like to go back to dig up old controversies and distract the attention of the House from present day problems. Deputy Dolan did not say that the former Leader of the Party now in office confessed at Youghal on the occasion of a by-election in that constituency—which incidentally, Fine Gael won—after many months of controversy that £22½ million had been left and that he and his Government had disposed of it entirely within six months. Then, they have the nerve to get up and talk of the spending of the Marshall Aid money by the inter-Party Government. So much was said about the iniquity of the inter-Party Government spending that money that one would think immediately Fianna Fáil assumed office they would say: "Let us live up to principles we advanced while in opposition; let us hand back the balance of these moneys." Instead, that money came in very useful and was spent within six months.
This is characteristic of the present Minister for Finance who, like others in his Party, made full capital out of the difficulties here arising from the temporary levies imposed in 1956, levies solely intended to rectify the balance of payments and not a penny of which was intended to go into current revenue. That assurance was solemnly given by the Minister for Finance but we then had the present Minister for Finance assuming office and removing the levies, according to a bannerhead in the Irish Press but substituting exactly the same amount by way of import duty. I know of garage concerns where I live and of people who intended to purchase motor cars who were highly critical of the 15 per cent levy imposed at that time on car sales. These people, or some of them, purchased “Truth in the News”, the Irish Press, and read in heavy type: “Import Levies Removed.” That was wonderful news for the country, an immediate reduction of 15 per cent expected in car prices, but in very small type it was stated that there was to be substituted an import duty instead of the temporary levies imposed by the inter-Party Government to do a particular corrective job in regard to the balance of payments.
Last week, the Minister for Transport and Power claimed that all increases the House is being asked to meet are designed to increase production. We can recall in the past year when Ministers were in an expansive mood, attending dinners and banquets in an atmosphere of popping champagne corks and cigar smoke with nobody in front of them but people prepared to say "Well done" to everything that was preached to them, the impression was created that there was plenty of the national cake, that everybody must be happy and that every section should get everything they required. There was not much reference then to the type of restraint now creeping into Government Ministers' statements regarding increases designed to increase production. We had a Minister coming in and asking the House to vote the sum—not a large one—to increase judges' salaries. That increase was backdated in order to bring within the scope of it an individual who had already retired from State service. Was that to increase production? Can the plain people in the ranks, even in the Department concerned with the man on the beat, be blamed if they expected some better income for the work they were performing?
The Minister could say there was no case for the judges' increase on the basis of sheer necessity, that it was a status payment. When we embarked on giving out status increases, it was to be expected that the ordinary people would take into account statements repeated by Government Ministers that everything was going extremely well and that the country was in an ideal position to face up to any special charges on the community. We will examine in the course of this debate how well the country could afford it.
I referred earlier to some of the items which the Government succeeded in transferring from the Book of Estimates and which the people are now called upon to bear every day of the week. I referred to the food subsidies and to the increases by the Department of Posts and Telegraphs. There are others. We have had bus and rail fares increased. The users of buses here in this capital city of Dublin— this "rotten" city, as it was described by Deputy Corry last week—in company with the users of buses in Cork, Limerick and elsewhere have all had to pay increased charges for the use of the public services. The same can be said of the rail users. What was the purpose of these increases? We were told they were designed to eliminate from the Book of Estimates any charges arising out of the subsidisation of public transport. Naturally, if every time they purchase a ticket, these people are paying more for transport in order to eliminate the charge on the Exchequer, they would expect a consequent reduction in the Book of Estimates. It will be hard to explain to them why they have to pay twice.
The same may be said of social welfare contributions. It was a deserving and overdue development to give increased pensions to the workers of the country, but it must be said that the young workers and their employers will be paying increased contributions for many years to come. That is also a charge on the community. We can refer to the fact that to-day, despite the estimate that the Health Act would not involve more than 2s in the £ on the rates, we have the situation in which the Minister for Health found it necessary to increase health charges, even outside the scope of the £20 million it is now costing to operate the health scheme.
It was represented in the past in the area west of the city of Cork, extending to Bandon, Timoleague, Clonakilty, Skiberreen and on to Bantry, with offshoots to various other parts, that the railway line there would have to be abandoned in order to relieve the Exchequer of the cost of paying a subsidy to CIE. The people in that area would not be given a hearing. They would not be allowed to meet either the Minister or the directors of CIE, and their railway line was taken from them. Today that has impacted on every business in all that area in the form of higher transport costs. They found that the alternative road services substituted, which they were told would be comparable with the rail services, resulted in their having to pay considerably higher charges than they paid before the line was closed. The whole of that area has been to some extent classified as depressed, because in the opinion of the powers-that-be, there was no indication that there would be any future developments in the regions to bring a lucrative income to the public transport system.
When the services were taken from those people, they expected that, if the Government had no longer to come to the rescue of these non-paying lines, when the Book of Estimates was published, there would be a consequential reduction in the amount of money the State would have to find in order to maintain the railway system. Where is that reflected in the bill this year? It will be now brought home to these people that their service has been taken from them, that no substitute service has been provided in many instances, and, as well as that, they have to pay higher taxation than before. That is something it will be difficult for the Government to explain.
Reference has been made by members of the Government to the fact that, in their opinion, the emigration problem has been solved—that we have had such a diminution in emigration that it is no longer a great problem. We have the situation in which 250,000 of our people were exported in the course of five years. Last year, 67,000 went to England alone. May I quote as a reference for that a publication published by the British Government, Command Paper No. 1586? It shows that the number of persons from the Irish Republic entering national insurance in Britain were in 1959, 58,316; in 1960, it jumped to 72,962; and in 1961, there was a slight drop to 67,598. We cannot keep that up. The supply will not be there. Any of us who know rural areas will fully appreciate the falling off in the population in rural parts. Some of our small towns are feeling the brunt of it since there are fewer people to consume the goods they have to sell. In addition, in many small towns, there is no substitute for the employment that was expected to be created in the course of time. We find the workers leaving for employment in England and, worse still, in America, from which it is unlikely they will come back as readily as they may come back from Britain.
There is no cause for complacency in relation to the emigration problem. Deputy Meaney could bear out my experience. In fact, some of the people concerned would be more friendly towards his policy than towards mine. I know of two farmers who disposed of their holdings within the past week and left for America. They completely cut their roots in this country, at an age when one would not expect them to take such a drastic step. That step was taken in defiance of the Taoiseach's complacency last week regarding the wealth of the dairy farmer. These were two dairy farmers. They abandoned their farms and went to America. We have no indication that there is any diminution of emigration from rural parts, as we have been led to believe. In any event, it would have been humanly impossible to have maintained the outflow of boys and girls such as obtained during that five year period.
Statements are made from time to time regarding the amount of employment being provided for our people. There is a fact that should be repeated so that much of the ballyhoo will be removed from the outrageous claims regarding the numbers provided with employment. We welcome any opportunities that present themselves, no matter by what means, of guaranteeing our people new sources of employment in their own country. The whole idea of encouraging people with the capital, know-how and the markets to come in and start industries here was thought of originally at the time of the inter-Party Government and it was in complete contradiction of the policy enshrined in the Control of Manufactures Act introduced by a previous Fianna Fáil Government many years ago.
Nevertheless, we see some good flowing from some of the industries established by foreigners in the course of the past few years. We welcome these improvements but we must say that not in every instance has the result been as favourable as the amount of money and attention expended would warrant. There are instances in which we know that what is practically child labour is being employed by some of these concerns. It may be too soon yet to adjudicate on their intentions. It may be, as time goes on and as these employees become more proficient in their work, that their pay will be raised as well as their status. Nevertheless, some of these industries are not giving the type of employment to the heads of families, or giving the attention to their workers that is expected and which has been the habit of Irish employers over the years, with very little assistance from the State. It is to be hoped that the position will improve.
The fact that I want to put on record is that, despite the investment of so many millions by way of incentive to all and sundry to establish industries, the situation, as revealed in a reply to a Parliamentary question at column 894 of the Official Report for last week, is that the highest level of employment which this country has experienced occurred in 1954 when 507,000 were engaged on average in insurable employment. We note that that figure reduced last year to 486.6 thousand. These figures are available at column 894 of the Official Report and they are not figures that were pulled out of the air. They were provided by the Parliamentary Secretary to the Taoiseach who is responsible for the statistics section of the Taoiseach's Department. Consequently, I assume they will not be contested by any Deputy supporting the Government. That situation obtains in spite of the solemn assertion of the Leader of the Government who, when speaking on a famous occasion in Clery's Ballroom, guaranteed the provision of 100,000 new jobs.
