The Minister for Finance, towards the conclusion of his Budget Statement—as part of that conclusion—stated that the purpose of the Budget was to favour saving, to increase investment and to put a slight brake on consumption. I hope to demonstrate that none of these intentions or purposes is capable of fulfilment through the methods adopted by the Minister in this Budget. In fact, it appears to me to be quite plain that this year's Budget is the one acknowledged child of conservative finance and is, in fact, in its purpose and its intention, and in its effect, intended to be deflationary.
In listening to the Minister reading his statement, I was struck by the extraordinary conservative pattern which evolved as he went along. The method adopted by him in the reading of his statement last week brought me back to the years before the change in the form of presentation of the national accounts effected by the first inter-Party Government when they divided the national housekeeping into current account and capital expenditure. The Minister's way last week seemed the old way. You had a very slight indication of the economic situation of the country at the time the Budget was being introduced. You had the account of expected revenue and expected expenditure and how the Budget balanced or did not balance. If it did not balance, the deficit was to be provided in a certain way from certain taxation. You had proposals in this Budget for taxation to meet the provisions of the Budget, winding up with the conclusion to which I have referred. All that appeared to me to be quite conservative finance and it appeared to me on still further examination that the entire purpose of the Budget is deflationary and that it will not succeed in carrying out the declared purposes the Minister set out in his conclusion.
One of the things that has most disappointed the public—it is not only disappointment but a certain degree of wonder—is why it is that in view of the increased revenue which, year after year has been going up by millions of pounds, they have been able to read in the newspapers for weeks, if not for months, discussions on the Minister's problem—what sort of problem he had and what success he would have in the way of relief from or increases in taxation. They were taken through the figures that appeared from time to time, indeed very frequently, as to the condition of the public finances. They were told there were millions of money there for them to get something out of.
They found out that the revenue, the money that was coming in from taxation during the past three years, had each year increased steadily and they began to wonder what they would get. Both from the Budget discussion of last year and also from the figures produced in the newspapers this year, the public began to anticipate all sorts of benefits. The figures in Table V of the current Budget tables show that in 1962-63 the actual revenue for the year was £163.478 million. For the following year, it went up by nearly £21 million to £184.419 million, and the following year—this financial year just ended—the revenue went up to £208.350 million, an increase of nearly £24 million on the previous year.
The ordinary people, looking at that position, with the revenue from this small country through taxation amounting to £208,350,000, thought they were entitled to expect that some benefits would ultimately accrue to them, particularly having regard to the fact that Ministers, their advisers and economists, were stating most emphatically that this country was not merely on the high road to prosperity but had almost reached what could be, in the course of a few years, the peak of prosperity. The situation presented to the public, then months before this Budget, was that of a prosperous country, a small country yielding £208,350,000 in taxation to the Government, not to talk of local taxation and the amazing amount of money that has been extracted from the people through the instrumentality of that type of taxation.
The public generally thought they were in for a Budget this year which would give them great benefits. They have been gravely disappointed. If Deputies will cast their minds back to round about this time last year, when the Budget of last year was introduced, and when the Minister imposed for the first time the 2½ per cent turnover tax, they will remember the position. What was the position then presented to the people? The public, of course, resented the tax and that resentment was shown in various ways and in different directions. The Minister and his colleagues, here in this House and outside it, sought to justify the imposition of the tax on the grounds that it was the desire and the object of the Government to have a proper system of taxation as the, and I quote, "keynote" of the case made by Ministers and their colleagues behind them. That was the "keynote" referred to by the Parliamentary Secretary to the Minister for Lands, Deputy Lenihan, at column 594 of volume 202 of the Official Report:
This new method of taxation shows that the Government are very much alive to the necessity of reforming our taxation system and of ensuring that we have a balanced taxation system which will yield to the revenue the funds which will be necessary, I believe, to an increased degree for the various aspects of Government expenditure if we are to plan for the future.
Note the phrase "necessity of reforming our taxation system". In that connection, one must refer back to a phrase used earlier by him at column 590. He said:
It is obvious to anybody who looks at taxation figures in a realistic way that the traditional items of taxation have reached their limit in regard to further traditional taxation.
This was the backing the Government case had last year for the imposition of the turnover tax. It was a method they were adopting as part of their object in showing that they realised the necessity for reforming their taxation system and ensuring a balanced taxation system. In order to do that it had to be recognised that the traditional items of taxation had reached their limits.
No more taxation could be got from beer, spirits, petrol, or even income tax, according to the principles laid down by the Parliamentary Secretary. That was the case put to the public and the case was reinforced by the further submissions made here and elsewhere that this 2½ per cent tax was necessary, indeed essential, not merely for the purpose of getting a balanced system of taxation but also to provide funds which could no longer be provided by the old traditional system of taxation since that system could no longer be relied upon to produce year by year, over the years, a steady source of revenue which would enable the social and economic policies of the Government to be carried out.
We were told last year by the Government and their supporters that the purpose of the turnover tax was to enable the Government to carry out their social and economic policy. That was the justification given to the people last year for this tax and the people believed that, in this year's Budget, twelve months ahead, they would get benefits which would reconcile them to the taxation proposed to be taken from them under the turnover tax. In a not too ingenuous way, perhaps, I asked the Minister for Finance last year, when speaking on the Budget, would he give the House any indication of the purposes to which he proposed to apply the proceeds of the tax in the following year —that is, this year.
We were told last year that some £3½ million would be taken by way of taxation under this turnover tax when it came into operation and that, in the following year, which is this year, there would be some £10 million or £11 million secured. We know now it will be far more than the estimated £10 million or £11 million. It will probably be £12 million or £15 million. At all events, I asked the Minister how he proposed to apply the proceeds of the tax. He had a balanced Budget and he would have £5 million to £6 million, at a conservative estimate, the following year, and what did he propose to do with it.
I was bold enough to draw the Minister, knowing very well—in fact, I said so—that he would not answer the question. I gave him certain suggestions of my own as to how he could apply the proceeds of this vast amount of money available to him next year —that is, this year. I mentioned old age pensioners and public pensioners and, my own pet scheme over the years, the abolition of destitution. I put the question at column 408 and I said I thought the public were entitled to know. Deputy Sherwin interposed and asked: "Will it not go back in social benefits?"
Last year, I quite genuinely thought that when this vast amount of money became available this year the Government would be in a position to give very substantial payments to social assistance and other classes in the community, and that they would do so if for no other purpose more dignified or worthy than the purely political in order to sugar the pill and thereby enable the public to swallow it more readily. I genuinely thought that this year we would have quite large amounts given to unemployment, old age pensioners, social assistance classes generally, and that the balance of these millions now available would be used in furtherance of the policy adumbrated by the Taoiseach some time ago of going a little to the left.
That anticipation of mine was shared very largely throughout the country. Indeed, it was put to Fianna Fáil supporters as the justification for this tax in order to get from them their full support. Now there is disappointment at what we have to meet in this Budget. Far from there being any such wide distribution of benefits to those people who most require them, there is only a certain amount of money—a pretty large amount of money, I admit—distributed to farmers and a very small amount to social assistance classes.
While there is grave disappointment in regard to the additional taxation, which is always annoying, on petrol, tobacco, beer and by way of increased Post Office charges, there is even more annoyance and disappointment that what was held out to people last year as being an anticipation this year, benefits to all classes and particularly those classes who most need them, have not been brought about by this Budget. That, as far as I can diagnose it, is the feeling which is most prevalent in the country at the present time.
It is, of course, the ordinary procedure for the Minister, when he is meeting the situation facing him in the coming year, to find out what he can do with the resources he has. He will have to explain to the people why he is doing the particular thing he is doing. I have said that, listening to the Minister's introductory statement, I thought it had a familiar ring about it. It brought me back to the early days of this State up to the point in 1949 or 1950 when the system of public finance was changed in connection with the Estimates for Public Services. I heard and subsequently read what the Minister stated in true, conservative financial fashion, that there would be a deficit this year and that taxation in order to meet that deficit was unavoidable. That is the well-known expression that came from Ministers for Finance over the years: "We have a deficit. It would be wrong to leave that deficit unattended to. It would be bad finance and bad for the country. Therefore, there is no other way open to us but to have increased taxation."
There is nobody on this side of the House who will quarrel with the Minister when he says it would be bad finance in the circumstances existing this year to leave a deficit unattended to. There are occasions when a Minister for Finance should budget for a deficit. There are other occasions when the Minister for Finance deliberately, in circumstances where the country is prosperous, budgets for a surplus, for the purpose of doing certain things which economists and financiers occasionally—and sometimes, in my view, very wrongly—get Ministers for Finance to do.
The Minister for Finance says he is providing for a budget deficit and that the only way he can do it is by taxation. I join issue with the Minister for Finance when he says that additional taxation is unavoidable. I am convinced from a perusal and consideration of the Budget Statement that this was done deliberately by the Minister, not, as he said in one of the concluding sentences of the speech to which I have referred, to put a slight brake on consumption but to put a very strong brake on consumption. In his opinion, if the increased remuneration of 12 per cent, amounting to something like £40 million in purchasing power, were let loose, there would be grave danger of the finances of the country going all wrong because the money would be spent not in savings or upon essential goods but upon consumption goods that would bring no benefit to the country. By means of the taxation that is to be put upon the necessaries of life, the near-necessaries of life and perhaps some other things not necessaries of life at all, he will put a stop to spending by the people of the money they extracted last year.
The 12 per cent increase in remuneration was extracted—if I may use that expression without offence— both because of the increase in the cost of living and because of the increase or alleged increase in the prosperity of the country. The workers claimed there had been an increase in the cost of living but that was not the primary object of their demand for increased remuneration. They felt they were entitled to a share in the increased prosperity of the country to which they had contributed. The 12 per cent increase in remuneration was intended not merely to help them meet the increased cost of living but primarily, perhaps, to give them a chance of having something over and above what was the mere subsistence allowance for workers and public officials. They wanted to have something to rattle in their pockets at the end of the week or at the end of the month, something that had not to be handed out merely for necessaries to keep their families going without getting into debt. They wanted—and they were entitled to it, in my view—to have some little money, if the country were as prosperous as it was said to be, to spend as they liked, when they liked. They were entitled to spend it on consumption goods if they wanted to do that or to save some of it if they wished to do so. In this Budget that choice has been taken away from those people who got the 12 per cent and the Government are saying to them: "We will not let you spend it or save it as you wish. We will take it from you and spend it for you."
That is traditional, conservative, financial policy. That was done in the British Budget this year. The British did it openly and expressly but here the Minister did not say he was doing that. He said he was budgeting for a deficit. In various parts of the Budget speech he referred to risk to the economy—the word "risk" is used by him and repeated by the Taoiseach in his speech—of these increases in purchasing power being let loose on the economy. That had to be controlled and if it were not controlled then there would be increasing costs affecting our exports, increasing costs affecting our industries here in Ireland and an increase in consumption goods causing pressure upon our exports and an unnecessary increase in imports resulting in very great disruption to the economy.
There was a recurring note in the Minister's speech, as Deputies will find if they read it carefully, the risk to the economy caused by the injection into the financial system of this additional £40 million of purchasing power. The Taoiseach had the same thread running through his speech. The Taoiseach did say, however, that there was not much danger from an increase as regards our international balance of payments. I agree there is no necessity to get hot and bothered when it is found out that the international balance of payments is going a little bit high provided certain conditions obtain. That is what the Taoiseach said in his speech but the whole trend of the Minister's speech was that there is danger and risk. He did not say: "I intend to control it" except in one sentence to which I have referred when he said the Budget is intended to put a slight brake on consumption.
In the light of those facts I suggest to Deputies that it is not sufficient for the Minister to say that an increase in taxation is unavoidable. The onus is on him to prove that assertion. I believe that conditions require, and urgently require, that there should be no increase in taxation this year, and that the much-vaunted prosperity we are supposed to be enjoying will certainly be put in jeopardy by this Budget.
The Minister appealed to the workers to save. He said that is essential. The Taoiseach repeated what the Minister had said, that we should correct an adverse balance of international payments by savings. Everyone will subscribe to that doctrine. We have no reason to dispute it, having regard to the fact that we ourselves in our time set up the Central Savings Committee that is doing so much good and to which the Minister offered his thanks in the course of his statement.
The extraordinary thing—perhaps extraordinary is not the proper word; the amazing thing—to me is that the Minister emphasised again and again the necessity for saving and at the same time pointed out that last year small savings fell rather significantly below the estimated amount which it was expected to get from them. As reported in the Official Report, at column 1539, volume 208, the Minister said:
... the net increase in deposits, excluding interest, was only £2½ million instead of the £4½ million expected.
In those circumstances, small savings having dropped by £2 million last year, this year he says to the workers particularly: "You must save. I am doing my best to get the Central Savings Committee to make every possible arrangement so that you can save. Last year I asked you to save and you did not, but this year I am increasing the figure for estimated savings."
In my view, this year savings will be considerably less than the Minister anticipates. What incentive have the people to save now? A 2½ per cent turnover tax was put on last year. This year there is increased taxation, an increased cost of living, increased taxation on beer, which the Minister says is not essential, on tobacco which again is not essential, on petrol which is not essential, and on imported spirits which are certainly not essential. On top of all that taxation, we have an increase of £2 million for the Post Office which will percolate down even to those who do not post a letter or postcard, and affect them either in their wages or cost of living. How could they save in such a set of circumstances?
The real purpose of this Budget is to take from the people who have got this £40 million increase in purchasing power, their capacity to spend it or save it. What is the incentive to save when the more they save and the more they get in wages, the more taxation will be taken from them? There should be some incentive and, instead of increasing taxation, the Minister should have set up some scheme to educate the people who will have increased spending power on the necessity to set apart some savings this year, in their own interest as well as in the national interest. They had no incentive last year and none this year, and I do not think it will be any easy job to get from the people the additional amount of savings required to sustain the expenditure of this country particularly in the capital Budget, or to offer any prop to the balance of payments.
I have mentioned the Post Office. There is one significant phrase in the Taoiseach's speech which I want to emphasise and to which I want to refer Deputies. He spoke about what he intended to do. He said he intended to bring back the Fine Gael Party, and I think he included the Labour Party, to what he called realities. Last Wednesday as reported in the Official Report at column 1781, volume 208, the Taoiseach said:
Deputies in both Fine Gael and Labour appear to be perturbed about the announced increase in Post Office charges. I want to take them back to reality in this.
I am going to bring the Taoiseach back to reality now. Further down in the same column, the Taoiseach spoke about what Deputy Tully was alleged to have said and he said:
The principle that the Post Office should pay for itself and not be subsidised from taxation is not merely sound but as far as I know, has never heretofore been questioned in the Dáil.
I think it should be questioned now. What I want to emphasise at present is the principle the Taoiseach alleges is that the Post Office should pay for itself and should not be subsidised from taxation. That principle rests upon the fact, or the alleged fact, that the Post Office is engaged in a commercial undertaking, or a pseudo-commercial undertaking. If that is so, and if that is the principle that is to be applied, this country is entitled to know from the Minister for Posts and Telegraphs, and from the Post Office itself, that the Post Office is, in fact, being run, and can be run—which is perhaps more important—as a commercial enterprise. Before effect can be given to that principle, we should have some information as to whether it can be applied in existing conditions.
Leaving aside for the moment whether the Minister for Posts and Telegraphs will be able to come to this House and say: "We are running this as a commercial enterprise and can demonstrate that by giving the facts to the House and country," has any consideration been given to the efficiency of the Post Office services such as a commercial enterprise would expect or has any effort been made to effect economies while continuing to achieve efficiency? This House and the country should be satisfied, before these charges are imposed, that the Post Office is being run as a commercial enterprise. The Minister is not entitled to put on this outrageous charge of 5d. for a letter until the efficiency of the Post Office is demonstrated.
If it is not being run efficiently, the Post Office should be transferred to private enterprise and run as a private enterprise, and not as a Government service. If it were being run as a private enterprise, would its customers stand for the charges they are now being asked to pay in this Budget, and were asked to pay in previous Budgets? That is one aspect of the matter that has not been explained. That is bad enough, but let us look at what the Taoiseach said in the same speech. He goes on to say:
There is, I agree, an obligation on the Government to ensure that the cost of these services is not unduly inflated and the Minister for Posts and Telegraphs—
I want to emphasise this particular phrase—
—is now about to initiate a drive for economics in the Post Office.
He is now about to do it. Last Wednesday he started to do it. He had not done it last Wednesday. He had not done it before he was ordered to do it and before he decided to impose these charges.
The interpretation of the Taoiseach's remarks that I have quoted is that no effort whatever was made to see if economies could be effected in the Post Office service before these heavy impositions were unloaded upon the customers of the Post Office. Even on the day of the Budget, the Minister had not done it. He is now about to do it. He is only about to initiate them, according to the Taoiseach. He is now about to do it, now about to initiate.
In that set of facts, it is surely unfair to say that the public who use the Post Office services will have to put up with these impositions on the basis of the principle that the Post Office is a commercial institution when the first thing that should be done and that would be done in any commercial institution would be for the head of that institution to come here and to say: "Before we increased these charges, we had a very searching inquiry into the question of whether it was possible to reduce the charges or whether the charges were necessary and, if so, what?" It may be that because of the necessity to increase charges generally this can no longer be regarded as a commercial institution and that the taxpayer may have to come to its support. At all events, before these charges which are typified in their impact on the public by the charge of 5d on a letter can be justified, it at least ought to be the position that the Minister would come in here and say to the House: "We have seen and taken every care that this enterprise is being run as a commercial enterprise with all the efficiency that a commercial enterprise would bring to bear upon its activities. In that state of affairs, we found ourselves bound, because of conditions existing, to come to the conclusion that there is no remedy other than to increase the charges". Until that is done, these charges in their effect are entirely unjustified.
The Minister said that increased taxation was inevitable. I challenge that. I challenge it because, first of all, I submit that this Budget is really in its purpose and effect deflationary. It is intended to take away portion of the purchasing power from those people who got it last year. It is intended to take some of that £40 million that they got into their hands and put it into the hands of the Government so that the Government may spend it for them. That is unjustified in present circumstances in my view but, whether it is or not, that is what is being done. It is not being done because of the necessity to increase taxation. It is being done because by means of taxation—by that method—this portion of their purchasing power will be taken from the workers and from the public servants and from all the people who got the increase and it will be spent by the Government instead of by the people themselves. That is the purpose of the Budget. That being so, the onus is upon the Government to show why they had to increase taxation in order to meet the deficit. That was not what they were doing. They ought to have shown it, if the real purpose were, as the Minister said, that in order to balance the Budget taxation was unavoidable to meet the deficit. If that were the purpose of the Budget, then he ought to have shown that no other methods were available to him except the taxation he proposed. The burden is upon the Minister to prove that.
I shall indicate a couple of methods by which the Minister could have avoided if not the entire effect of this increased taxation then certainly a large amount of it. The Minister neglected to make any provision whatever for over-estimation in a Budget of this size and in a situation where the amount of money being asked for by public Departments is unprecedented in the history of this country. I think I am correct in saying it is the first time in the history of this State that that provision was not made. Certainly it has been customary over many years.
I remember in the year 1952 criticising Deputy MacEntee, the then Minister for Finance, for his failure to make adequate provision in his Budget by way of over-estimation and I proved it conclusively with figures that could not be contradicted. They are at it again this year. No proper allowance was made for over-estimation in the very drastic Budget of 1952 and there is none this year. The reason given by the Minister for Finance in his statement as to why he did not do it is, in my submission to Deputies here and, through Deputies, to the country, entirely unacceptable. As reported at column 1543 of the Official Report of Tuesday last, 14th April, 1964, the Minister gave his reason for adopting this unprecedented procedure. He said:
There are certain items of expenditure not provided for in the White Paper of which account must be taken.
Then he proceeds to give them:
Certain claims for pay adjustments distinct from the ninth round such as those of teachers and Post Office clerks have been the subject of conciliation or arbitration settlement.
That is the first—Post Office employees and teachers who have had some pending claims for arbitration or conciliation. The Minister does not give the slightest indication of the amount involved. He goes on to say:
Other claims and various minor items have also to be dealt with.
That is all he says—the claims of teachers and Post Office clerks which are subject to conciliation and arbitration agreements. There is no indication whatever, although the Minister must have figures, of what amount is involved. Then he goes on to make vague references to other claims and various minor items. What are the claims? What are the various minor items?
When the Minister was going to refuse to take account, in the interest of taxation, of something in the order of, to use his own words, from £2 million to £3 million that was available to him, one would think that in order to justify not taking account of that money available to him, in order to avoid that increased taxation, he would give some particulars of these other claims and various minor items. It is bad enough to ask the House to take, on his word—a mere ipse dixit—that there are these claims without giving any particulars or giving the slightest idea of the amount involved or letting the people in the country know the relationship between these claims which he says must be provided for and the amounts that he could save by deduction in the ordinary way for over-estimation.
He goes on to say: "I do not know what the extra liability will amount to." He does not know what it will amount to. He faces this country with additional taxation to the order of some £8 million or £9 million. When there is available to him what I believe will be £3½ million or £4 million for reduction in taxation, or to avoid the necessity for increased taxation, he says he is not going to take that into account. He is going to take no account whatsoever of that amount of money. He says: "I do not know what I am going to set against it. You can take it or leave it because it is the prudent thing to do."
I think we are entitled to say that he is neglecting to take into account one very significant source of revenue, or source of saving, if you like to put it that way, for the relief of the taxpayer, already overburdened. That is not an acceptable explanation at all but it does reinforce the submission he made to the House that this is not a deflationary Budget, because with the particulars given by the Minister, we can make our own estimate and will come fairly near whatever it is. Whether we are accurate, or nearly accurate, there has been a surplus on that available to the Minister, as against budgeting for a surplus, just as he is budgeting for taking the purchasing power off the £40 million.
That clearly demonstrates the Minister is not setting himself the task of trying to avoid additional taxation. I have been unable to find anywhere in this Budget statement reference to other methods to avoid additional taxation. The only statement the Minister makes is that further taxation is inevitable. He gives no reason for it. Over-estimation, the year before last, was £3 million, at a time when there was far less in the Book of Estimates. Everybody knows no matter how close the annual Estimates from the various Departments are pared and pruned, and no matter how much they are adjured to pare and prune them, they are unable to spend in the year all they find they want to spend. Experience has shown that there is a considerable amount available at the end of the year because of over-estimation.
I suggest there is another condemnation of the Minister's statement that further taxation was unavoidable. At least some of that taxation could be avoided. He could have given us some estimation of the amount he needed. The Minister could have made use of that extraordinary feature of public finance, the Exchequer balance at the end of the year, the little nest egg that has always been appropriated by the Minister for Finance. We were never able to find out for what purpose it was needed.
It was alleged we found it there when we went into office after a number of years. It is now stated it was £2 million for last year. When Deputy McGilligan was Minister for Finance he made use of that little nest egg. Another nest egg has been added to the public nest egg since Deputy McGilligan's time, and not being used. There is £2 million not being utilised. The only information I could get about what that £2 million was doing there was that it was alleged there might be a general election and there might not be enough money to carry on until a new Government were formed. At least some of that £2 million could have been utilised and not left lying there doing nothing.
The Minister, in the course of his Budget statement, said that he had taken account, in framing his Budget proposals, of the buoyancy of the revenue and also of the fact that there would be increased revenue this year, but he gave us no particulars of that. He said that increased taxation was inevitable. If that is so, then he ought to have given us some indication of how much he could allow for the expansion of the economy and also the amount of revenue due to the additional taxation on the turnover tax and because the 12 per cent increase would bring incomes within the grasp of the income tax authorities.
There is nothing about that source, which could have been at least explored with a view to seeing if it would not provide some method by which new taxation could have been avoided. There was not a single word right through the Minister's speech about economies in the public service. In the course of past years we have had Ministers for Finance carrying out all sorts of inquiries, including an inquiry on economies in the public service, but there was not a word about that at all.
There was not a word about whether it was feasible or not to have any economies whatever and not a word about whether it was possible to postpone expenditure until some better period. Any examination of that kind by Deputies will demonstrate the fact that this Budget was not intended to avoid increased taxation. It was intended for the purpose of capturing the purchasing power that was injected into the economy by the ninth round of wages.
I have already dealt with the Post Office services. At least there should have been an effort not to throw this very heavy burden of additional taxation on large sections of the people, thereby increasing the cost of living with all its consequences. There ought to have been a full scale investigation long before now into the question of whether economies could have been made without decreasing efficiency or doing away with jobs or that kind of thing.
I suppose I shall be most unpopular if I suggest—it is my own personal opinion—that I do not know why we spend so much on the roads of this country. I go down to Cork very frequently in the course of my business. We have vast expanses of country, large quantities of good agricultural land, taken over for the purpose of providing speedways for private motor cars and CIE trucks. Incidentally, CIE get away with it because they were for a long time pretending they were paying their way. Of course, they never took into account the fact they were putting buses on the road instead of trains— buses and lorries instead of goods trains on roads built and maintained out of the Road Fund.
Private motorists had been financing the commercial operations of CIE in an endeavour to bring the CIE revenue and expenditure into line. Do we want all those speedways? I do not know how many millions of pounds are being spent on roadways between Cork and Dublin. At first we had two-lane roadways laid down at vast expenditure of money. At least I thought we would have four-lane roadways in the direction of Cork instead of two, certainly between here and Kildare, that at least they would have done the four lanes at once, that they would not have started and done two lanes and afterwards ripped it up and done four lanes.
I do not know how many millions have been wasted on the roads. I am expressing my own personal view. I make no effort to have anybody else in any way committed to my view. In circumstances where additional taxation is being put on the people, which may disrupt the economy and which will certainly increase the cost of living and cause a lot of hardship, it would be a very good thing if a halt were made on the roads. There is not so much employment on the roads as there used to be. Machinery is being used to a vast extent for the purpose of creating the modern conditions under which these roads are made, and there is no necessity in any way to increase the amount of employment being given on the roads.
Why should there be this vast capital expenditure on the roads when we cannot get sufficient houses in the city of Dublin? I am still being accosted by my constituents coming to me in very great distress looking for houses. In that state of affairs, I find, for the purpose of these big trucks of CIE and for the purpose of keeping going at 70 mph or 80 mph on these speedways, millions of public money are being spent. Although it is called the Road Fund, it is really public money. It is the motorists who provide the money. Motorists, when they have paid the increased taxation on petrol and everything else, do not want to provide money to lighten the burden on CIE, who pretend that by stopping the trains they are doing a good financial job. There are some indications of the ways this should be done.
The Taoiseach and some of his colleagues put up this sort of thing as a smokescreen—"Are you in favour of expenditure, or do you want it cut down?" They throw out the allegation against this Party—I certainly withstand it with all the vigour I can command—that it is a conservative Party. As far as I am concerned, during all my association with this Party I have sought to prevent it from being a conservative or Tory Party. This allegation is thrown out in order that we may get the smear of being a conservative Party, willing to cut down expenditure. I have a quotation here which I do not intend to quote now, because time does not permit it. But we are faced with this: "Are you in favour of expenditure or not? If you are in favour of expenditure, say how you are going to get it by taxation." That is not the issue here. The issue here is: is this taxation necessary? I think I have at least demonstrated in a prima facie way that it is not necessary. I have demonstrated—and it cannot be controverted—that in no single sentence or half sentence in the course of the Minister's speech did he give any indication that he had endeavoured to find alternative sources to the taxation being imposed by the present Budget.
I have criticised this Budget on general principles. I should like to express my appreciation for the Minister for Finance of the five per cent increase he has given in the Budget to the pensioned public officials, who are suffering very severely from the fall in the value of money and the rise in the cost of living since they retired. I appreciate, having regard to the discussion which took place some months ago on the Bill dealing with this matter, that the Minister in this Budget at least gave some token of the fact that he sympathises with these people and gave practical expression to that sympathy by giving them even the small amount of five per cent. It will be taken by them as an earnest of his desire, when the occasion permits it, to give them further increases.
A rather half-hearted effort has been made to call this Budget the farmers' Budget. They got twopence in the gallon for milk. The Taoiseach in his broadcast spoke about how the people of this country were fairminded and how the people in the cities, who got 12 per cent would not grudge the farmers twopence on the gallon for milk—even though butter is going to cost 5/- per lb. and practically disappear from most of the tables of the workers, even though milk is also going to increase and even though meat is at such a prohibitive price that it is almost a luxury for the ordinary people. I speak from the point of view of an urban community, which I represent. They resent these things. It is very difficult for them to accept the proposition—a proposition which has been fundamental to the policy of this Party—that the farming industry is the basis of all prosperity in this country. That is very difficult for my constituents when they find butter disappearing off their tables, when they find the price of milk increasing and find meat almost becoming an unknown luxury except in its cheapest form. But when they realise—as I think they are beginning to realise—that the Minister for Finance did not make any effort to avoid this additional taxation this year, I think there will be very grave resentment at the provisions of the Budget and the imposition of the turnover tax last year.
In connection with his proposals to give additional money by way of rates relief to the farmers, I do not know whether the Minister for Finance read the First Report of the Capital Investment Committee that was given to us in times of far greater difficulty indeed from the economic point of view. That Report dealt with this very point of giving money back to farmers by way of rates relief. The Report is dated the 22nd January, 1957, and I am referring to paragraph 15. I shall not quote it but I shall give its effect. They recommended that moneys already given to farmers by way of relief of rates, or even moneys that might be talked about as to be given to them by way of rates relief, should be taken back and utilised not for relief of rates, but for productive purposes. Did the Minister for Finance or the Minister for Agriculture give any consideration to that?
Speaking as a city man representing a city constituency and the working people and the people in the various grades, higher and lower, in the Civil Service, I do not believe that kind of community would object to the farmers getting relief of rates if indications were that it was going to be of any use. But next year the rates will go up, and the year after, again and again. This will be swallowed up. It would be far better for the farmers and far better for the community in general if the Government had set themselves the task of finding out what is wrong with local government and finding out how it is there has been such a vast bureaucratic institution created throughout the country, dealing with what should be for a small country a comparatively small sum of money.
What is wrong that the rates are going up year after year? We know there is one thing wrong. Deputy O'Higgins of this Party has already dealt with the matter in a practical and very cast-iron fashion. I refer, of course, to the health services. May I, at this stage, also commend the Minister for Finance for taking away the liability of the Voluntary Health Insurance Board to income tax on its trading profits? The Board was prevented from making profits but by some strange manoeuvring of the income tax code, the company that was bound not to make profits found itself taxed and being made to pay tax on profits which they were supposed not to earn. Not merely do I pay tribute to the Minister for taking away that liability from them but I express appreciation far more because of the fact that he had the graciousness, if I may put it that way, to recognise the important functions which the Voluntary Health Insurance Board was fulfilling.
As justification for doing this, he mentioned the fact that the Board was giving a very important social service. Deputy O'Higgins with his knowledge as Minister in the Department of Health has evolved a scheme, proposals based on which have been subjected to expert examination from the financial and other aspects, and it can be demonstrated and, I think, has been demonstrated, that the scheme he has put forward will greatly relieve the rates. The basis on which he proposes to establish this company and the proposals he has, will greatly decrease the amount of money the ratepayers will have to pay. Ratepayers and farmers in particular are paying far more rates because of the increased and increasing demands for health services.
That was one thing that could have been done by Deputy O'Higgins. The Minister for Health never thought of doing that. He did not say: "We have a Committee established under order of this House considering proposals for health services and our aim will be to take the expense of that service away from the rating authority." Proposals of that kind would be far better, and far more practical from the point of view of relieving farmers of their liability for rates—which is what they want—than even the granting of millions of money each year under these proposals.
These grants may indeed prove elusive. It is rather like a cat chasing its tail, trying to get the expenses of the rates down each year while they continue to go up and up and the more you run after them the more they get away from you.
The last observation I have to make is on a point made by the Taoiseach in his speech, very near the end of it. At column 1791 of the Official Report the Taoiseach is reported as saying:
The most futile person is he who asks the petulant question: "Why was this not done long ago."
I commend the Taoiseach's advice to himself and to each of his followers, the Minister and various others who are always throwing remarks at Deputy Corish and various others on this side of the House asking why they did not do this or that when in office. That petulant questioning should be stopped in accordance with the principle enunciated by the Taoiseach. As the Taoiseach said:
Many things are possible for us today which were never possible before, and there are many ideas, born of our own experience or the experience of others, which were not known before.
Yet we had the Taoiseach and the Minister for Finance and other Ministers and Deputies throwing it at us; why did you not do it when in office? First, conditions are different and secondly, we were in office for only 6¼ years while Fianna Fáil have been in office for 26 years.