Because of the appearance in recent weeks of a variety of publications, official and non-official, dealing with our economic position and prospects, I may, perhaps, be excused for offering today only a very brief summary and for going on to discuss some major problems which must be solved if we are to maintain the satisfactory growth achieved over the past six years.
The publications to which I refer include the detailed analysis of the economy in 1964 and review of likely prospects for 1965 made available by the Department of Finance to the National Industrial Economic Council and published last week as part of the first progress report on the Second Programme for Economic Expansion; the Council's comments on this document; the usual Central Statistics Office publication “Economic Statistics”; and the annual survey of Ireland by the Organisation for Economic Co-operation and Development.
It is provisionally estimated that a growth rate of 4½ per cent was achieved in 1964 through improvements in both agricultural and industrial output. Agricultural output rose by about 4 per cent; for all industries and services there was a record increase in output of over 9 per cent. In industry and services the increase in total incomes was 13½ per cent, mainly due to the "ninth round." Agricultural income was 17 per cent higher as a result of larger output and a sharp increase in prices, especially of meat. The average annual movement of some 10,000 from agriculture has made it difficult to achieve net gains in total numbers at work, despite substantial annual increases in employment in industry and services. Last year, however, a larger net gain in employment was registered than in previous years. On the trade side, exports rose by £26 million and are now more than double the 1956 figure. Imports rose by £41 million and, despite a net improvement in invisible receipts, the balance of payments deficit expanded to £31 million, as compared with £22 million in 1963. An exceptional feature of the year was the rise of 6½ per cent in average consumer prices, caused more by internal than by external factors.
For 1965 my Department has ventured to publish for the first time an integrated set of economic forecasts. These indicate that a further 4 per cent growth of the economy is possible but, of course, this is far from saying that it is certain. A full recovery in cattle exports may be delayed until the Autumn. Because of this, of the continued operation, though at a lower rate, of the British surcharge on imports of manufactured goods, and a possible slackening in the growth of demand in other export markets, it was thought reasonable in making the estimates not to assume that exports would increase in 1965 as much as in 1964. On the other hand, a smaller rise in imports is expected, leaving the balance of payments deficit at much the same level. The trade figures for the first quarter of the year suggest that, while the assumption about imports may be reasonably valid, attainment of the export target will require a combination of more intensive effort and more favourable conditions.
Even this brief survey conveys a hint of the problems I wish to discuss. These problems are inter-related and as they all influence the balance of payments, which indicates the pressure we are placing on the resources available to us, I can best begin with some comments on this general economic indicator.
To recall briefly the course of events since 1956, we had over the years 1957-1961 inclusive virtual equilibrium in the balance of payments. In 1962 a deficit of £13 million was incurred, followed by a deficit of £22 million in 1963 and one of £31 million in 1964. We face a deficit of about £30 million again in 1965, indeed, a larger one, if the trade figures do not improve.
The external deficits of 1962-64 inclusive were more than covered by an inflow of capital. This inflow was largely, though not entirely, autonomous, in the sense that it represented voluntary investment by foreigners in Ireland—in industry, national loans, industrial securities, property development and so on. Last year, direct borrowings of $25 million were made in New York to help finance the Electricity Supply Board and the Air Companies. Because the capital inflow exceeded the deficits in the balance of payments our external reserves increased from the end-1961 total of £225 million to £242 million at end-1964. In the first quarter of this year, however, the reserves have borne the impact of the increase in the trade deficit.
Ireland's external reserves are, of course, still strong and we can draw comfort from the fact that the balance of payments deficits of recent years have, as the OECD and our own NIEC have pointed out, been associated with a rapid increase in gross capital formation. The ratio of investment to gross national product (GNP) has risen from under 15 per cent in 1960 to 20 per cent in 1964. Nevertheless, one must recognise the vulnerability of an expansion programme which is dependent on a continuation of a capital inflow of the recent unprecedented size. The NIEC has commented that "deficits of a higher order than at present would reduce the room for manoeuvre, especially if the capital inflow should weaken or if there should be an adverse movement in the terms of trade"; and the OECD concludes a balanced review of the situation in recent years by saying that
"...there is a limit beyond which it would be unwise to allow the current deficit to rise, if only because it would increase the degree to which the economy was exposed to change in external conditions. The Second Programme envisages a deficit of £12 to £16 million (in 1960 prices) by 1970; this would imply a rather sharp contraction of the deficit, and perhaps a sharper one than may prove necessary. Nevertheless, it would appear reasonable over the next few years to aim at a reduction from the present level".
A further consideration is that the capital inflow may be adversely affected by the measures recently taken in two of the principal capital markets, the United States and Britain, to restrict the outflow of capital. In addition, the recent removal, by Presidential Order, of our immunity from the United States interest equalisation tax makes it more expensive to borrow in New York.
It is, therefore, a prudent and reasonable aim of policy this year to avoid an increase in the balance of payments deficit over the 1964 figure. Indeed, some reduction would be acceptable if this proved compatible with a 4 per cent growth rate. These must be our guiding lines in budgetary and credit management.
This means that the Budget of 1965 should be so constructed as to result in a balance on current account while providing for the scale of public capital expenditure envisaged in the Second Programme. In the credit field, it must be accepted that the commercial banks cannot afford to expand credit as liberally as in recent years and that, in any case, it is undesirable that they should lend so much as to cause the balance of payments deficit to exceed the 1964 figure; at the same time, they should ensure that credit is available for productive purposes, especially those connected with the expansion of exports of goods and services. I understand that the Central Bank has had this matter under consideration and will shortly convey its views to the Irish Banks' Standing Committee.
The trend of prices, costs and incomes will also be of crucial importance for a continuance of steady growth of production and employment in 1965. So far as can be foreseen at the moment, it is improbable that external circumstances will lead to any significant rise in prices this year. If, therefore, we avoid a rise in internal costs and prices, we can achieve a measure of price stability which will aid our external position considerably, with very important consequences for increased output and employment.
The NIEC in a report earlier this year on industrial progress in 1964 expressed the belief that in the case of many Irish industries exports are barely competitive. In its comments on the Department of Finance's review of the economy the Council pointed out that a faster rise in employment than has heretofore taken place under the Second Programme could be achieved, amongst other ways, by using some part of the annual increase in productivity to reduce prices and thus make possible an expansion in sales and in new employment opportunities.
Our national aim in 1965, therefore, must be to improve competitiveness. Industrial adaptation is essential and urgent but the trend of wages and salary costs and the level of profits also require careful attention. There is a community of interest between the Government and both sides of industry in ensuring that, according as the benefits of increased national production are distributed, the distribution will be carried out in such a way that our domestic and foreign competitiveness will be improved. It is to the benefit of every section of the community that we should maintain a steady rate of increase in output and employment, through expansion of exports, and that we should avoid the balance of payments difficulties and the consequent "stop-go" which have had such disturbing and retarding effects in other countries.
Price stability depends on a correspondence between increases in incomes and national productivity and on adequate competition, rather than on any system of control. Experience in other countries has shown that price control, however extensive or intensive, cannot prevent price increases if costs are rising. There is also abundant evidence of the difficulties and disadvantages associated with a system of general price control. The Government accept the duty to act to counter unnecessary price increases where competition is defective; in recent months they have intervened in a number of such instances and the burden of proof will continue to be thrown on those who prima facie have raised prices unnecessarily.
A significant contribution towards easing the balance of payments situation can also come from savings. There was an encouraging increase in 1964, the ratio of gross savings to GNP having risen to 17½ per cent, as compared with 16 per cent in 1963 and 12 per cent in 1958. Investment also increased sharply in 1964, an investment ratio of approximately 20 per cent being achieved as compared with 18 per cent in 1963 and 12 per cent in 1958. The closer these two ratios—of savings and investment— can be brought together the smaller will be the deficit necessary in our external payments. Last year, rather less than one-sixth of total investment was financed externally. A further increase in domestic savings this year would enable this percentage to be reduced and ensure a continued upward trend in domestic investment without any enlargement of the balance of payments deficit.
Trade with Britain
The foregoing survey underlines the extent to which our economic wellbeing depends on ability to sell our products abroad in increasing quantities according as our production grows. Essential to the balanced expansion of our external trade are satisfactory terms of access to our principal markets. The import surcharge of 15 per cent imposed last October by the British Government, now reduced to 10 per cent, was a sharp blow to 30 per cent of our exports to Britain. This breach of our rights under the Anglo-Irish Trade Agreements was the subject of urgent representations in discussions between the Taoiseach and the British Prime Minister following which it was agreed that the two Governments should consult together about the possibilities of improving the permanent trading relations between the two countries. These consultations are still continuing and there are grounds for hoping that in the course of the next few months it will be possible to settle the main features of the new agreement. In the negotiations our principal objective will be to devise arrangements which will be conducive to the maintenance of a high level of trade and which at the same time will be consistent with ultimate entry into the European Economic Community.
EEC
It is still the intention of the Government to reactivate our application for membership of the Community as soon as it is possible to do so. While the past year has not afforded opportunities for any new initiatives on our part, there has in recent months been evidence of an improving situation which confirms the Government in their belief that the objective of membership of the Community by 1970 is still a realistic one.
GATT
Meanwhile, we are proceeding with our application for accession to the General Agreement on Tariffs and Trade (GATT). The slow progress in the multilateral trade negotiations, known as the Kennedy Round, has delayed the initiation of discussions with Ireland and other countries which are considering acceding to GATT. It now appears that discussions on the terms on which we might accede will commence this summer and that we may be introduced into the Kennedy Round negotiations in the Autumn. The Government consider it important that we should participate in these negotiations in view of their significance for international trade generally and of the fact that they represent a serious attempt to negotiate a multilateral lowering of barriers to international trade in agricultural products.
IMF
An important change in our financial relationship with the International Monetary Fund is taking place this year. Following a review of quotas the Board of Governors has decided on a general increase of 25 per cent and special higher increases for sixteen countries including Ireland. Our quota or subscription is increased from $45 million to $80 million.
There are now 102 members in the Fund and its capital exceeds $15,000 million; the pending increases will raise its capital to over $21,000 million. In recent years there has been much discussion among monetary authorities as to the adequacy and distribution of international liquidity, having regard to the rate at which world trade and payments are growing. Though a solution of this problem will eventually require the creation of a new international fiduciary currency, the raising of quotas will make a significant interim contribution in that the additional stock of gold and currencies in the Fund will be available for use in an orderly and controlled way.
The increase in our quota will involve a payment in gold of £3,125,000 which will be advanced by the Central Bank under the Bretton Woods Agreements Act, 1957. The balance of the subscription—£9,375,000—will be in Irish currency, mainly in the form of non-negotiable, non-interest bearing demand notes. The contribution in Irish currency which will be credited to the account of the Fund in the Central Bank will be called upon only in the unlikely event of Irish currency being required by other members for the settlement of their international payments.
In return for the increased subscription, Ireland will be entitled to a substantial improvement in drawing facilities and to an increase in relative voting strength in the Fund. The resources of the Fund are available to members, in proportion to their quotas, to tide them over short-term balance of payments difficulties. On the basis of our present quota of $45 million, Ireland may, in effect, draw automatically up to the equivalent of $11.25 million in currencies of other countries and, subject to certain conditions, a further $45 million. The revised quota of $80 million will increase these drawing rights to $20 million, and $80 million, respectively.
A consequential increase from $60 million to $85.3 million arises in our subscription to the capital stock of the International Bank for Reconstruction and Development, better known as the World Bank, which is linked with the Fund. The main function of the Bank is to provide financial and technical assistance for productive purpose for member countries, especially the less developed. Its resources consist of the subscriptions of member countries to the capital stock of the Bank and funds raised by direct borrowing in world capital markets. The increased subscriptions will facilitate the Bank in providing additional aid for less developed countries and our payments thus represent a real contribution to the economic welfare of such countries.
Our additional subscription to the Bank's stock will involve a payment of £90,000 in dollars and £813,000 in Irish currency. These sums will also be advanced by the Central Bank under the 1957 Act. The remaining 90 per cent of the increased subscription will remain at call and is unlikely to involve a cash commitment.
Relations with Northern Ireland
To complete this review, and before turning to the budgetary position, I should like to refer to the historic meetings which occurred earlier this year between the Taoiseach and the Prime Minister of Northern Ireland. They agreed that there was considerable scope for practical co-operation between the two areas and that the possibilities should be examined further. Since then, a number of meetings at ministerial level, as well as discussions at the level of officials, have taken place on a wide range of subjects. Further meetings and discussions have been arranged or are envisaged.
Already specific results have emerged. A joint committee has been set up to investigate the technical and economic possibilities of co-operation in the field of electricity. On the tourist side there has been a number of developments. It has been agreed to invite the Northern Ireland Tourist Board and Bord Fáilte to appoint a joint committee to consult on any improvements that may be desirable and practical to facilitate and encourage cross-border tourist traffic in both directions, on the improvement of tourist statistics and on promotional efforts. The joint committee would also make recommendations to the two Ministers on further measures of co-operation. The Minister for Transport and Power has authorised scheduled flights between Dublin and St. Angelo airfield near Enniskillen. The development of this airport will facilitate tourist traffic in the surrounding areas, including Donegal and Sligo. Four additional cross-border roads have been approved and four new customs posts opened. The requirement of a triptyque on entering Northern Ireland has been abolished.
These initial developments augur well for the new era of co-operation between the two parts of this island. As further discussions take place on the wide range of possibilities for co-operation, we can expect more developments which will, I hope, operate to the benefit of the people on both sides of the border.
2. CURRENT BUDGET
Outturn, 1964-65.
Revenue receipts last year were most satisfactory, exceeding the budget estimate by £3.9 million. Tabacco duty made a striking recovery from the setback in the early months of 1964, following the United States Surgeon-General's report.
Expenditure, however, was also greatly in excess of the estimates, with the result that there was a deficit of £4 million. There was excess expenditure on items such as rates relief and milk price supports, but the principal cause of that deficit was the high cost of pay settlements for the Civil Service, the Army, teachers, and the staffs of health authorities. The settlements involved were mainly eighth round adjustments, the cost of the ninth round having been provided for in the Budget.
Public services remuneration
As a result of the ninth round and other pay adjustments, the remuneration elements in Government current expenditure rose from £55 million in 1963-64 to almost £71 million last year. In this financial year it is estimated to be £72¾ million, or 30.4 per cent of total current expenditure.
The Government have accepted the various arbitration findings affecting pay in the public services and have used them as a basis for conciliation settlements for grades which did not seek arbitration. The process of settling the pay of so many individual grades has been a long one but, as my predecessor stated, it will have been worth while if it carries a measure of finality. When the present adjustments have been completed, the various grades will have been currently brought into proper relationship both with each other and with their outside counterparts.
The arrangements whereby pay claims are dealt with by a variety of conciliation and arbitration tribunals, which are under no formal obligation to take account of national economic considerations, or even of the repercussions of awards on comparable categories, involve serious risks not for the Exchequer only but for the whole economy. As matters stand, a status increase secured by any grade from one such tribunal can evoke appeals to the same or other tribunals from other classes on the ground that a former relativity has been disturbed and should be restored. This can obviously become a never-ending cycle, giving rise to a continuing increase in costs of Government. Grievances and unrest may persist amongst the classes concerned, despite large pay increases, and demands may be generated for corresponding increases outside the public sector. This is a major problem which must receive earnest consideration in the wider context of the amendment of the Industrial Relations Act.
The Government consider that the rates of pay now settled should stand unless and until there are substantial changes in pay outside the public service. There is no injustice in this for any class of State-paid personnel. On completion of current adjustments, all will have received liberal treatment, having had, since the beginning of 1963, a status or other increase as well as the 12 per cent ninth round. Any future general increase in the remuneration of such personnel should accord, in time and amount, with the terms of a national agreement.
The volume of public expenditure on remuneration is not determined by rates of pay alone. Continuing demands for new public services are also a problem in this context. Extra staff must be provided for many expanding activities including telephone services, schemes for the eradication of livestock diseases, and for economic and physical planning. With numbers and pay both increasing, it is more important than ever to pay attention to organisation and methods, work study and automatic data processing. These activities are being extended and developed within the Civil Service. The possibilities of using newer techniques such as operational research and cost-benefit analysis are also being investigated.
The work now being done by advanced automatic data processing in the Civil Service includes income tax assessments, Post Office Savings Bank accounts and telephone accounts. Other installations include the new mechanised system of paying teachers. A special team of automatic data processing experts has been recruited and trained. They are engaged full-time in studies related to the feasibility of extending the use of automatic data processing equipment, including computers, in the Civil Service. Already some of these studies have reached an advanced stage. The years immediately ahead should see big developments in the field of automation in the Civil Service, with substantial improvements in efficiency.
A comprehensive programme of staff training is being developed. It is notable that the countries in Western Europe which have made the most rapid strides in general development in recent years are those in which a great deal of time and attention is paid to the training and preparation of personnel in the public, as well as in the private, sector.
Budget, 1965-66
The White Paper entitled "Estimates of Receipts and Expenditure" sets out the basic figures of this year's Current Budget. Specific allowance has been made in the White Paper for the cost of pay claims which were settled between the preparation of the Estimates Volume and the end of March last and also for the cost of the temporary assistance for industry arising out of the British import surcharge.
The gap between revenue at present tax rates and current expenditure, as shown in the White Paper, is £3.53 million.
As the special assistance for industry is, I hope, purely temporary and non-recurrent, I think it reasonable to charge the estimated expenditure of £1½ million under this head to borrowing. I shall treat it as a "capital service" in order that specific provision will be made, through the Capital Services annuities, for wiping out the debt. The gap between revenue and current expenditure is thereby reduced to £2.03 million.
There are still pay claims in course of settlement and we may, as usual, expect to have to meet supplementary requirements under other heads before the year is out. I consider £3½ million a reasonable provision to make for these. This increases the gap to £5.53 million.
On the other hand, we would be justified, bearing in mind the growth in the volume of revenue and expenditure, in adopting a figure of £4 million as the deduction to be made this year for errors of estimation.
The amount which would then remain to be found, £1.53 million, would present no great problem. It would, in fact, be open to the Government and Dáil Éireann to stop there: to have what would be virtually a standstill budget by contrast with the position in various European countries where taxation has been heavily increased.
As matters stand, the combined capital and current budgets contain substantial additional provision for both social and economic services. For example, the provision for housing is £4.4 million, or 25 per cent higher than last year; for education it is £3.12 million, or 10½ per cent higher; and £1 million, or 5½ per cent, more is being provided for the health services.
At this point, therefore, the decision has to be taken whether new expenditure should be incurred which will require additions to existing taxation and, if so, for what purposes. We have to consider, on the one hand, our social obligations to the aged and less fortunate members of the community, as well as the adequacy of existing development aids, and, on the other hand, the need to avoid increasing taxation to an extent that would seriously affect the cost of living and disturb the economy generally.
Agriculture
It will be seen from Table II that current expenditure on economic services will be 10.6 per cent more this year than in 1964-65. In the case of agriculture, a further £400,000 must be provided for the recently announced quality bonus of a penny a gallon for creamery milk. This will bring the cost of the price support for milk and milk products to over £10 million and the estimated current expenditure on agriculture this year to £33.7 million —£3.6 million more than actual expenditure last year. The improvement in farmers' incomes in 1964 should continue this year. Beet, wheat and barley prices have been raised; cattle prices have increased and remain high; financial provision has been made to support fat cattle prices and pig prices are to be increased in the autumn. Also, the volume of agricultural production is expected to be higher this year. All in all, Exchequer expenditure for the benefit of agriculture will be almost £53 million this year, £34 million from revenue and £18½ million in the Capital Budget.
Social Services
There is general agreement on the desirability of increasing the proportion of national resources devoted to social services in the broad sense, including housing, education and health, as well as social insurance and assistance.
The projections of public expenditure in the Second Programme made allowance for an increase in net expenditure on current goods and services from 11.7 per cent of GNP in 1960 to 13.2 per cent in 1970. The bulk of expenditure on education by central and local authorities falls under this heading. To repeat the words used in the Programme, the intention was to provide for a relative increase in expenditure on education and on services of importance to the development of national resources.
The view has been expressed that the expansion of educational services could be fitted so easily within this allocation that room could also be found for bigger improvements in other social services. The question is whether the projection, geared to increased national production, which was made for social welfare under the heading of "current transfer payments" can be increased. It is, however, too early to answer this question.
There cannot be social advance except on the basis of economic advance and the more economic progress there is the more social improvement is possible. The whole purpose of economic planning is to achieve social betterment, to use the growth of national wealth to improve the living standards of all the people. Clearly the best way to do this is to provide for productive and permanent employment, to see that there are good housing and educational facilities, to extend the health services, and to improve the social benefits for those unable to provide for themselves.
Studies have been in progress on various aspects of social policy, including the lines of development of welfare services, but completion of these studies and consideration of the position of the welfare services in relation both to economic possibilities and changing social needs, are not possible until the shape of future policy on education, health, the training, retraining and placement of workers, urban development and other services can be more clearly determined.
There will, however, be no standstill in social welfare services pending the consideration of an integrated programme. The Government have expressly recognised that an increase in outlay on such services contributes to social justice and a more general raising of living standards and in this way creates a climate conducive to steady national development. Evidence of the Government's continuing anxiety to improve the situation is provided by the measures which have been taken in every budget in the past six years to increase social welfare payments. The Government feel with confidence that they have general support for giving an exceptional rise this year in these benefits. The estimates already provide £35.5 million for social welfare services. The proposals which I have to announce will cost the Exchequer another £5.7 million in a full year and £3.22 million this year.
It is proposed to increase the maximum rate of non-contributory old age, blind and widows' pensions by 10/- a week for persons whose annual means do not exceed £26 and by 5/- a week for others. The personal rate of unemployment assistance and the allowance for an adult dependant, both in urban and rural areas, will each be raised by 5/- a week; and, as regards insurance benefits, the personal and adult dependant rates, respectively, of old age and widows' contributory pensions, unemployment benefit, disability benefit and maternity allowances will be increased by 10/- a week.
As is customary, the increases in social assistance will take effect from the beginning of August and those in social insurance benefits from the beginning of January next.
The infectious diseases maintenance allowance for a married couple and the disabled persons maintenance allowance administered by the Department of Health will also be increased by 10/- a week from the beginning of August.
The proposed scheme for payment of unemployment assistance on the basis of a more favourable means test to smallholders in the Congested Districts will be introduced as from the beginning of next January.
Public Service Pensions
As already announced in the press, provision is being made for a further increase in the pensions of retired civil servants, national teachers, gardaí, members of the defence forces, military service pensioners and holders of special allowances and for appropriate recoupment of the cost of increases that may be given in local authority pensions. This increase follows on a recommendation by the Committee on Post-Retirement Adjustments in Public Service Pensions, under which pensions based on eighth round and pre-eighth round pay levels will be increased sufficiently to offset the increase in the cost of living from November, 1959, to February, 1964. Thus, civil servants who retired before 15th December, 1959, and whose pensions are, therefore, based on seventh round pay levels, will have their pensions raised to compensate for the rise in the cost of living between November, 1959, and February, 1964. The cost to the Exchequer of the increase, which will be effective from 1st August next, will be £400,000 this year and £600,000 in a full year. By granting this increase recommended by a representative committee, the fourth consecutive budget increase to public service pensioners since 1962, the Government have given very fair consideration to their claims.
Additional Taxation
These additional charges raise the budget deficit to £5.55 million and I propose to raise this amount by increasing the tobacco duties by the equivalent of 3½d. on the packet of twenty standard size cigarettes; the spirits duties by the equivalent of 2d. per glass; the petrol and oils duties by 3d. per gallon; the beer duties by the equivalent of 1d. per pint and the wine duties by 1/- per bottle, subject to allowance in all cases for the incidence of turnover tax.
Before deciding to increase these main revenue duties I took account of the current and prospective consumption patterns of the commodities involved. This year we are in the happy position that the yield from all these commodities has shown a marked buoyancy and it is clear that the increases I propose can be borne without serious adverse effects.
In determining the amount of the increase in the case of the tobacco duties I have taken into account intimations received from manufacturers that because of increased costs under various heads they intended to increase their selling prices in the immediate future and that the minimum practicable increase for cigarettes would be 1d. per twenty packet. Settlement of the duty increase at the level of 3½d. per twenty will mean that a retail price increase of 4d. can be expected. The tax increase adds about 4d. to the duty element in an ounce of pipe tobacco. I understand that the manufacturers intend to increase their profit margins by 1d. per ounce so that, in general, the retail prices would advance by 5d. per ounce. However, I am raising the existing rebate for hard-pressed tobaccos by 1d. per ounce and the price increases for these varieties, representing over 85 per cent of total production of pipe tobaccos, should not therefore exceed 4d. per ounce.
In the case of the oils duties, the increase will be offset for diesel fuel used in road passenger services by an increase of 3d. per gallon in the present rate of repayment of duty. Bus passenger fares should not, therefore, be affected. Hydrocarbon oils, other than petrol, will continue to be relieved completely from duty when used otherwise than as road fuel.
It is of course too much to expect that these additional taxes will be popular but they are proposed in the conviction that it is an urgent social responsibility to improve the lot of the less fortunate members of our society and I hope they will be accepted in this spirit. I would ask the man who takes a drink or smokes a cigarette to reflect that the slightly higher price he has to pay for his pleasure represents his contribution towards the relief of hardship amongst those who can rarely afford these luxuries. If, however, it is to be effective, and cause no economic or social harm, this contribution must be made out of his own pocket and not be reduced to an empty gesture by being made a ground for recoupment through an increase in wages or salaries.
Even with these changes, taxation in Ireland will still be lower than the average for Western European countries and Central Government current expenditure will bear the same proportion to national production as last year.
Miscellaneous
As a minor cleaning-up operation, I propose to provide in the Finance Bill for the abolition of certain excise licences which have outlived their original purpose and the trifling revenue from which does not justify their retention.
Also, arising out of the enactment of the Pawnbrokers Act, 1964, I shall move a Financial Resolution specifying the amount of excise duty payable on pawnbrokers' licences. The effect on revenue is insignificant.
Income Tax, Sur-Tax, Corporation Profits Tax and Stamp Duty
Deputies are aware that in November of last year the British Chancellor of the Exchequer announced that he would have a major change to propose in his 1965 budget, namely, that he would substitute a new corporation tax for the existing income tax and profits tax on companies. My predecessor, Dr. Ryan, at once wrote to the Chancellor expressing his concern about the effects this proposal might have on our balance of payments position and also on the arrangements, which go back almost 40 years, between our two countries for the relief of double income tax. In the course of his reply the Chancellor said he had been advised that there was no reason to suppose that residents of this country in particular were likely to be adversely affected by the change and that he would be happy to agree that there should be discussions at official level. In the circumstances I am hopeful that it will be possible to arrive at a solution satisfactory to Irish interests. The British proposals have now appeared in Finance Bill form and official discussions aimed at an appropriate revision of the double tax treaty will be held as soon as possible. The new British corporation tax is not expressed to come into operation until 6th April, 1966, and until that date, at least, the present double taxation relief arrangements will remain fully effective.
In fulfilment of announcements already made, the Finance Bill will contain provisions extending the period of operation of three of our industrial tax incentives, namely the exports relief, the mining relief and the double initial allowances for capital expenditure. The Bill will include two other incentive reliefs. It will provide for the writing off of capital expenditure by traders on scientific research in one year instead of over five years as at present and for relief from stamp duty in the case of schemes for reconstruction and amalgamation of companies.
The Bill will implement certain outstanding recommendations of the Commission on Income Taxation. First, it will provide that, where a business is carried on in partnership, each partner will be assessed to income tax separately on his share of the profits. This will enable partnership profits to be brought within the ambit of the system introduced in 1963 and known as "one taxpayer, one charge". Secondly, the Bill will repeal section 14 of the Finance Act, 1944, under which in certain circumstances the profits of a subsidiary company might be treated for purposes of corporation profits tax as profits of its parent. And thirdly, in certain cases where at present the decision of the Special Commissioners on claims for income tax relief is final, the taxpayer will be given the right to a rehearing by the Circuit Court judge and both the taxpayer and the Revenue a right of appeal by way of case stated to the High Court.
I might mention that I propose also to authorise Inspectors of Taxes to admit late appeals against assessments in appropriate cases—a power reserved under existing law to the Special Commissioners.
The Special Commissioners will be empowered, where they postpone or adjourn the hearing of an appeal against an assessment to income tax or corporation profits tax, to direct that a suitable payment on account should be made. They already have this power in relation to surtax.
To meet the requirements of "one taxpayer, one charge" in a case where property changes hands in a year of assessment, there will be a provision for apportionment of Schedule A and Schedule B assessments. The necessity to have regard to tax in preparing apportionment accounts will thus be eliminated. I also propose to terminate the provisions under which an occupier for the time being may be required to pay tax due by a former occupier. It will no longer be necessary, therefore, for a purchaser to protect himself by obtaining a certificate under section 6 of the Finance Act, 1928.
The "one taxpayer, one charge" system will be fully operative with the new provisions in the Finance Bill. Combined with centralised collection, the system is already producing considerable administrative economies; but, if the maximum benefit is to be derived from the change, it is essential that all tax be paid promptly on receipt of the Collector-General's demand. A section charging interest on overdue tax was introduced in 1962 and I hope it will not be necessary to take stronger measures. Public co-operation is important because there are now no local collectors of taxes to call on taxpayers.
Section 6 of the Finance Act, 1935, was introduced to ensure proper taxation of builders' profits and profits from speculative dealings in land. The section has been found to be somewhat defective and I propose to strengthen it. Financial Resolution No. 7 applies. Lands which continue to be used solely for agricultural purposes will not be affected by the new provisions.
The Finance Act, 1963, which imposed a general charge to income tax on profits from lettings of buildings and lands, included provisions to prevent avoidance of liability by the granting of short-term leases wholly or partly in consideration of premiums which in the normal course would not be taxable. My attention has been drawn to a number of other devices whereby what in reality is rent may be received in the form of a capital sum. I propose to insert in this year's Bill provisions to defeat such devices.
The Finance Bill will continue for a further three years the exemption from corporation profits tax granted to certain public utility companies and other concerns.
The Income Tax Bill, 1964, which was intended to consolidate the Income Tax Acts up to and including the Finance Act, 1964, was circulated in February last. It was indicated that the Minister for Finance would be glad to consider suggestions received up to 30th April, 1965, for alterations designed to perfect the Bill as a consolidating measure. The Bill, of course, lapsed on the dissolution of the last Dáil but I would like to say that any suggested alterations received up to 30th June, 1965, will be considered. When the suggestions have been examined, a formal consolidating Bill will be introduced covering also the provisions of the Finance Act, 1965, which will include some minor technical amendments of the code.
In his budget speech last year my predecessor said he intended to examine how the facilities provided by the Finance Acts of 1957 and 1959 in relation to covenanted subscriptions for research and for teaching the natural sciences might be modified so as to prevent abuse, while leaving an adequate, though temporary, incentive for such subscriptions. I am keeping this matter under review and may, indeed, have to withdraw the present privileges but I have decided to defer it for reconsideration next year.
Turnover Tax
It has been contended that the Finance Act, 1963, does not make it clear that turnover tax is payable on moneys received for goods and services supplied by clubs to their members. I propose to introduce a Financial Resolution, with effect from tomorrow, to remove any doubts in this connection. The Resolution will also confirm, again with effect from tomorrow, that tax is payable where some person other than the seller receives the proceeds of a sale.
The Finance Bill will contain a provision in regard to farmers who carry on a retail trade in their own produce. Under the law as it stands, such a retail trade comes within the scope of the tax only if carried on through a shop. This limitation has given rise to anomalies and the law will be amended to provide that, where retail sales by a farmer exceed £150 a month, tax will be payable whether the sales are made through a shop or otherwise. While the necessary Financial Resolution will be moved today the new provision will not come into operation until 1st August next.
There will also be an amendment of the provision under which persons who sell goods procured from non-taxable sources are not obliged to register and account for tax unless their receipts exceed £250 a month. There have been complaints from registered traders that the allowance of a tax-free limit as high as £250 has disturbed pre-existing patterns of trade in such commodities as fruit, vegetables and milk. There is evidence to substantiate these complaints and I propose therefore, with effect from 1st August, 1965, to reduce the tax-free limit from £250 a month to £150 a month in the case of goods procured from non-taxable sources.
Finally, I intend to provide machinery whereby an accountable person may appeal to the Special Commissioners of Income Tax in the case of disagreement with the Revenue Commissioners as to his liability to pay turnover tax in respect of a particular activity.
Death Duties
In response to various representations for some relief of the estate duty payable on small estates, I intend, in estates not exceeding £15,000, to grant an abatement of the estate duty on benefits to which the deceased's widow or children under the age of sixteen years succeed. The abatement will amount to £150 in the case of the widow and £100 in the case of each such child. I also propose to abolish the legacy and succession duties on benefits derived from the deceased by his spouse, lineal ancestor or lineal descendant.
Gifts made within three years of a donor's death are normally liable to death duties. I propose to extend this period to five years but, at the same time, to increase the exemption limit for gifts from £100 to £500. Also, gifts made in consideration of marriage are exempt from duty. To remove any doubts as to the scope of this exemption, legislation will be introduced expressly confining it to the parties to the marriage and the issue.
I have been impressed by complaints of death duty avoidance and I propose to bring in provisions to deal with the situation. The additional duty flowing from the anti-avoidance measures will, it is estimated, pay for the death duty reliefs. I might mention that the Revenue Commissioners will soon publish in one volume the Acts relating to death duties.
3. CAPITAL BUDGET, 1965/66
As in recent years, a separate paper on the capital budget has been published. The amount required for capital purposes in 1965/66 is almost £104 million. This is broadly in line with the Second Programme projection when allowance is made for price increases. Public capital expenditure last year came to £97.8 million, including £3.6 million for the purchase of the British and Irish Steam Packet Co. Ltd. This year's programme shows an increase of £4½ million for housing and sanitary services, £1¼ million for schools, and £2 million for industrial grants and credit.
The financing of this big programme of investment will not be easy. As I have already mentioned, the two great external sources of capital, Great Britain and the United States, have, in the light of their overall balance of payments positions, taken steps to restrict capital outflows. For us this means that for the current year even greater reliance than hitherto will have to be placed on home resources. As it is, the level of savings in this country, notwithstanding the big improvement of recent years, which owes so much to the good work of the Savings Committee, is below that of many progressive countries. It is not too much to hope, however, that the upward trend will continue with the growth in our national product.
Loan repayments, small savings and receipts of Departmental Funds are expected to realise £33 million, leaving a balance of £36 million to be found. Of this, £4.35 million will be paid by the Central Bank to meet our capital obligations to the IMF and World Bank to which I referred earlier. The traditional type of National Loan will be expected to make a large contribution and I hope for a substantial receipt also from a new type of security, the first issue of which I would now like to announce.
National Bonds Issue
The subscription lists will open next Monday, 17 May. The principal features of the new security will be:—
(1) It will be issued in units of £100 with no limit on the amount that may be invested either by any individual or in total.
(2) It will not earn any interest but will be repaid in 1977 with the addition of a premium of 50 per cent. This premium will not be subject to tax.
(3) One in forty of all bonds issued will be drawn each year for immediate redemption at the full maturity value of £150.
(4) The security will be a charge on the Central Fund, it will be a trustee investment and will be quoted on the Dublin and Cork stock exchanges.
I am hopeful that this new security will make a worthwhile addition to our range of investments and that it will help considerably in the financing of the capital programme. The substantial capital appreciation which can materialise long before the final redemption date in twelve years time should make it particularly attractive.
Decimalisation of Currency
The Government decided in principle in February, 1962, to adopt a decimal currency. A working Party was then set up representing the Central Bank, the Departments of Finance, Industry and Commerce, Posts and Telegraphs and the Revenue Commissioners, to advise on the appropriate time for adopting decimal currency and on the steps necessary to effect the change in the most economical way. The Working Party's Report will be published next week. Interested parties and the general public were invited to submit their views to the Working Party and they will now have an opportunity of commenting on the conclusions in the Report before decisions are taken.
4. CONCLUSION
The Department of Finance has been traditionally regarded both as the holder and as the watchdog of the public purse. It will continue in this necessary role. It is essential that a central agency of Government should see both that no unnecessary expenditure of public moneys is incurred and that whatever is spent is spent to good purpose. The Department has also been regarded within and outside the public service as a negative and even reactionary part of the State machine. Whatever truth there may have been in this in the past, it is certainly not true today, nor has it been true for many years. It is my intention that the modern, progressive role of the Department will become more pronounced. The work of economic programming, both for the year ahead, as exemplified in this Budget, and for a period of years, as exemplified in the Second Programme, will continue to be coordinated and developed by the expert staff of the Department. New techniques of economic, financial and personnel management will be studied and brought into operation. I want to banish forever the idea that the Department of Finance is the enemy of other Departments of State. I will encourage my Department to take initiatives in spheres that it might hitherto not have entered, to adopt an even more active promotional role, to associate with other Departments in the promotion and examination of new ideas for our further social and economic development, to be a Department of whose existence a wider public will be conscious throughout the whole year and not only at budget time.
This is my first budget and I think it can be fairly described as a social services budget. It gives expression to the view of the Government—and indeed to the widespread feeling in the community—that it is desirable at this stage of economic development to mark in a special way the conviction that everyone in the community should benefit from the steady upward trend in national prosperity. I think this has been achieved. The increases which are proposed in social welfare payments extend beyond a mere cost of living adjustment. They put those payments at a new and higher level. The other aspects of social development have not been neglected. Generous provision has been made for expenditure on education, health and housing. At the same time the budget, in the sums which are being made available for economic services, acknowledges the basic fact that our economic progress depends on increased production. In view of our balance of payments position, we must ensure the continued expansion of exports in order to sustain the improvement of the economy characteristic of recent years. If increased production is to give a faster rise in employment as desired by the NIEC and by the Government, it must be directed to export markets, and increased productivity must therefore be applied, in part at least, to reduce prices and promote competitiveness. These are objectives which, if vigorously pursued, will give us a satisfactory rate of increase in employment at rising real levels of income.
Following are the tables referred to in the Minister's Statement:
TABLE I
COMPARISON BETWEEN (i) BUDGET ESTIMATES AND (ii) ACTUAL REVENUE AND EXPENDITURE IN 1964/65.
|
Estimated |
Actual |
Estimated |
Actual |
||
|
£m. |
£m. |
£m. |
£m. |
||
|
1. Tax Revenue (excluding 2 and 3 below) |
173.01 |
176.61 |
1. Central Fund Services (excluding 2 below) |
35.54 |
36.15 |
|
2. Motor Vehicle Duties |
9.00 |
8.80 |
2. Payments to Road Fund |
9.00 |
8.80 |
|
3. Non-Tax Revenue— |
3. Supply Services (non-capital) |
170.59 (a) |
178.16 |
||
|
Post Office |
15.10 |
14.90 |
|||
|
Miscellaneous |
18.02 |
18.73 |
|||
|
4. Deficit |
— |
4.07 |
|||
|
TOTAL |
215.13 |
223.11 |
TOTAL |
215.13 |
223.11 |
(a) The original provision was £165.42m. to which was added £5.37m. in the Budget for agriculture, social welfare and public service pensions less £0.2m. grant to Road Fund.
TABLE II
MAIN HEADS OF CURRENT GOVERNMENT EXPENDITURE
£000
|
1959/60 |
1960/61 |
1961/62 |
1962/63 |
1963/64 |
1964/65 Provisional |
1965/66 Estimate |
|
|
Service of Public Debt |
25,566 |
28,374 |
31,113 |
34,374 |
38,156 |
42,848 |
47,633 |
|
Social Services: |
48,294 |
50,444 |
51,905 |
57,515 |
63,243 |
75,533 |
78,883 |
|
Social Welfare |
25,357 |
26,129 |
25,694 |
27,889 |
30,941 |
35,064 |
35,554 |
|
Education |
14,554 |
15,557 |
16,581 |
18,908 |
20,600 |
26,237 |
28,104 |
|
Health |
8,383 |
8,758 |
9,630 |
10,718 |
11,702 |
14,232 |
15,225 |
|
Economic Services: |
20,272 |
24,930 |
30,602 |
35,039 |
39,199 |
47,936 |
53,037 |
|
Agriculture |
10,137 |
14,058 |
18,893 |
22,320 |
23,966 |
30,139 |
33,322 |
|
Industry |
1,745 |
1,537 |
1,638 |
1,927 |
3,090 |
3,698 |
4,741* |
|
Transport |
7,449 |
8,289 |
8,905 |
9,422 |
10,729 |
11,990 |
12,784 |
|
Forestry and Fisheries |
941 |
1,046 |
1,166 |
1,370 |
1,414 |
2,109 |
2,190 |
|
General Services: |
24,800 |
26,235 |
28,113 |
30,612 |
33,431 |
41,221 |
42,643 |
|
Post Office |
7,560 |
7,846 |
8,834 |
9,694 |
10,092 |
13,449 |
13,866 |
|
Defence |
6,617 |
7,102 |
7,527 |
8,065 |
8,686 |
11,396 |
11,522 |
|
Justice, including Gardaí |
5,073 |
5,591 |
5,814 |
6,149 |
7,118 |
8,077 |
8,265 |
|
Public Service Pensions |
5,550 |
5,696 |
5,938 |
6,704 |
7,535 |
8,299 |
8,990 |
|
Other Expenditure |
9,135 |
9,718 |
10,595 |
11,108 |
12,433 |
15,576 |
17,089 |
|
TOTAL |
128,067 |
139,701 |
152,328 |
168,648 |
186,462 |
223,114 |
239,285 |
|
Remuneration included in above figures |
41,466 |
43,845 |
45,272 |
51,164 |
55,276 |
70,781 |
72,758 |
|
1959 |
1960 |
1961 |
1962 |
1963 |
1964 |
|
|
£m. |
£m. |
£m. |
£m. |
£m. |
£m. |
|
|
Gross National Product |
636 |
673 |
723 |
776 |
826 |
938 |
|
Current Government Ex- penditure as % of GNP. |
20.1% |
20.8% |
21.1% |
21.7% |
22.6% |
23.8% |
*excluding £1.5m. for temporary assistance to industry.
TABLE III
ROAD FUND
RECEIPTS AND ISSUES
|
RECEIPTS |
ISSUES |
||||
|
1964/65 |
1965/66 (Estimated) |
1964/65 |
1965/66 (Estimated) |
||
|
£000 |
£000 |
£000 |
£000 |
||
|
1. Opening balance |
45 |
— |
1. Normal road grants (a) |
8,326 |
8,725 |
|
2. Motor taxation, etc. |
8,801 |
9,400 |
2. Administration, etc. |
520 |
675 |
|
TOTAL |
8,846 |
9,400 |
TOTAL |
8,846 |
9,400 |
(a) Including payments on foot of previous years' allocations.
TABLE IV
CERTAIN RECEIPTS AND EXPENDITURE OF THE EXCHEQUER AND OF LOCAL AUTHORITIES
|
Exchequer |
Local Authorities |
||||
|
Year |
Revenue |
Non-capital Issues |
Expenditure from Revenue (a) |
State grants received |
Rates collected |
|
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 |
24,480 |
21,412 |
|
1960-61 |
138,839 |
139,565 |
57,885 |
26,476 |
22,058 |
|
1961-62 |
151,686 |
152,393 |
64,165 |
28,792 |
23,203 |
|
1962-63 |
163,478 |
168,335 |
67,379 |
32,725 |
22,776 |
|
1963-64 |
184,419 |
186,638 |
72,091 (b) |
34,177 (b) |
24,366 (b) |
|
1964-65 |
219,045 |
223,114 |
82,822 (b) |
40,811 (b) |
26,032 (b) |
|
1965-66 |
237,260 (c) |
240,785 (c) |
91,506 (c) |
47,477 (c) |
29,114 (c) |
NOTE:—(a) The revenue of Local Authorities comprises broadly rates, State grants and other receipts, e.g., rents, fees, etc.
(b) Approximate.
(c) Estimated.
TABLE V.—NATIONAL INCOME CLASSIFICATION OF ESTIMATES FOR SUPPLY SERVICES. £000.
This table shows how the expenditure and receipts provided for in the Estimates for Supply Services (excluding Posts and Telegraphs) are classified in the statistics of national income and expenditure published by the Central Statistics Office.
|
1965-66 ESTIMATES |
1964-65 ESTIMATES |
|||||||||||||
|
CATEGORY |
Dept. of Finance (incl. O.P.W. and Dept. of the Taoiseach |
Dept. of Justice |
Dept. of Local Government |
Dept. of Education |
Dept. of Lands (incl. Roinn na Gaeltachta) |
Dept. of Agriculture |
Dept. of Industry and Commerce |
Dept. of Transport and Power |
Dept. of Defence |
Dept. of External Affairs |
Dept. of Social Welfare |
Dept of Health |
TOTAL |
TOTAL |
|
Votes 1-20 |
Votes 21-26 |
Vote 27 |
Votes 28-34 |
Votes 35-38 |
Vote 39 |
Vote 40 |
Vote 41 |
Votes 43-44 |
Votes 45-46 |
Vote 47 |
Votes 48-49 |
|||
|
CURRENT EXPENDITURE: |
||||||||||||||
|
Subsidies |
— |
— |
— |
16 |
392 |
21,699 (a) |
330 |
2,628 |
— |
— |
— |
— |
25,065 |
23,450 |
|
Current transfer payments to households and private non-profit bodies |
93 |
15 |
— |
7,829 |
330 |
456 |
— |
12 |
695 |
— |
24,918 |
17 |
34,365 |
32,549 |
|
Current expenditure on goods and services: |
||||||||||||||
|
Wages, salaries and pensions |
8,897 |
9,721 |
570 |
17,233 |
3,714 |
2,517 |
567 |
1,335 |
9,899 |
568 |
1,630 |
424 |
57,075 |
54,879 |
|
Other |
4,707 |
825 |
184 |
689 |
1,360 |
2,198 |
1,561 |
642 |
2,307 |
348 |
711 |
86 |
15,618 |
13,887 |
|
Current transfers to the Central Fund, other departments and grant- aided bodies |
41 |
— |
— |
133 |
1 |
— |
189 |
2,372 (b) |
— |
— |
— |
— |
2,736 |
2,065 |
|
Current transfers to Extra- Budgetary Funds |
40 |
— |
— |
— |
865 (c) |
— |
— |
— |
— |
— |
9,754 (d) |
— |
10,659 |
10,157 |
|
Current transfers to Local Authorities |
12,765 (e) |
— |
2,568 |
3,493 |
40 |
608 |
— |
10 |
70 |
— |
276 |
14,360 |
34,190 |
28,168 |
|
TOTAL CURRENT EXPENDITURE |
26,543 |
10,561 |
3,322 |
29,393 |
6,702 |
27,478 |
2,647 |
6,999 |
12,971 |
916 |
37,289 |
14,887 |
179,708 |
165,155 |
|
CAPITAL EXPENDITURE: |
||||||||||||||
|
Capital grants to enterprises |
— |
— |
— |
— |
137 |
4,337 |
6 |
322 |
— |
— |
— |
— |
4,802 |
4,508 |
|
Capital transfer payments to households and private non-profit bodies |
4 |
— |
3,660 (f) |
1,269 |
267 |
29 |
— |
2 |
— |
— |
— |
500 |
5,731 |
6,000 |
|
Gross physical capital forma- tion |
7,342 (g) |
101 |
— |
76 |
1,854 |
106 |
— |
854 |
— |
— |
— |
— |
10,333 |
9,019 |
|
Loans |
— |
16 |
— |
27 |
45 |
— |
— |
— |
— |
— |
— |
— |
88 |
71 |
|
Capital transfers to the Central Fund, other departments and grant- aided bodies |
— |
— |
— |
— |
217 |
1 |
4,503 (h) |
605 (i) |
— |
— |
— |
— |
5,326 |
5,676 |
|
Capital transfers to Extra- Budgetary Funds |
6 |
— |
— |
— |
284 (j) |
— |
— |
— |
— |
— |
— |
— |
290 |
536 |
|
Capital transfers to Local Authorities |
— |
— |
1,017 |
118 |
61 |
1 |
— |
252 |
— |
— |
— |
32 |
1,481 |
1,227 |
|
TOTAL CAPITAL EXPENDITURE |
7,352 |
117 |
4,677 |
1,490 |
2,865 |
4,474 |
4,509 |
2,035 |
— |
— |
— |
532 |
28,051 |
27,037 |
|
TOTAL CURRENT AND CAPITAL EXPENDITURE |
33,895 |
10,678 |
7,999 |
30,883 |
9,567 |
31,952 |
7,156 |
9,034 |
12,971 |
916 |
37,289 |
15,419 |
207,759 |
192,192 |
|
LESS APPROPRIATIONS- IN-AID: |
||||||||||||||
|
Taxes on Expenditure |
74 |
2 |
10 |
— |
— |
81 |
88 |
5 |
— |
— |
— |
17 |
277 |
248 |
|
Land Annuities |
— |
— |
— |
— |
111 |
— |
— |
— |
— |
— |
— |
— |
111 |
105 |
|
Other Investment Income |
— |
— |
— |
— |
1 |
— |
— |
— |
— |
— |
— |
— |
1 |
1 |
|
Loan repayments |
— |
13 |
— |
18 |
18 |
47 |
1 |
— |
— |
— |
— |
— |
97 |
97 |
|
Miscellaneous current receipts |
1,164 |
121 |
10 |
102 |
653 |
377 |
15 |
1,420 |
153 |
10 |
26 |
10 |
4,061 |
3,628 |
|
Transfers from other departments |
34 |
— |
— |
— |
— |
1 |
— |
— |
— |
1 |
— |
— |
36 |
36 |
|
Transfers from Extra- Budgetary Funds |
210 |
265 |
117 |
123 |
71 |
30 |
8 |
— |
— |
— |
1,428 |
— |
2,252 |
1,924 |
|
Transfers from Local Authorities |
294 |
— |
40 |
7 |
— |
1 |
— |
— |
— |
— |
327 |
2 |
671 |
603 |
|
TOTAL RECEIPTS |
1,776 |
401 |
177 |
250 |
854 |
537 |
112 |
1,425 |
153 |
11 |
1,781 |
29 |
7,506 |
6,642 |
|
TOTAL NET |
||||||||||||||
|
EXPENDITURE |
32,119 |
10,277 |
7,822 |
30,633 |
8,713 |
31,415 |
7,044 |
7,609 |
12,818 |
905 |
35,508 |
15,390 |
200,253 |
185,550 |
NOTES
GENERAL NOTE:
The figures in the table add up to the net total of the estimates published in the 1965/66 Estimates Volume after allowing for the revision of the 1965/66 estimates for voted capital services referred to in the Capital Budget paper and excluding the estimate for Posts and Telegraphs. The reason for the exclusion of the estimate for Posts and Telegraphs is that, in the national income and expenditure accounts published by the Central Statistics Office, the Post Office is treated as a trading body and only its surplus of receipts over expenditure (with certain adjustments) appears as gross trading income.
FOOTNOTES:
(a) £934,000 deducted in 1964/65 and £414,000 deducted in 1965/66 for sale of cattle slaughtered under bovine tuberculosis eradication and brucellosis eradication schemes.
(b) Includes grant of £1,350,000 in 1964/65 and £1,847,000 in 1965/66 to An Bord Fáilte.
(c) Includes interest portion of liability under Land Acts which is treated finally as a subsidy.
(d) Payment to Social Insurance Fund.
(e) Includes £9,422,000 in 1964/65 and £12,500,000 in 1965/66—agricultural grants paid into Guarantee Fund and subsequently paid to Local Authorities.
(f) £2,000 deducted for refunds of housing grants in 1964/65 and 1965/66.
(g) £10,000 deducted for sales of property (Vote 9) in 1964/65 and (Vote 8) in 1965/66.
(h) Includes £4,500,000 grant-in-aid to An Foras Tionscal.
(i) Grants to An Bord Fáilte.
(j) Includes principal portion of liability under Land Acts which is treated finally as a capital grant to enterprises.
TABLE VI
GOVERNMENT EXPENDITURE IN RELATION TO AGRICULTURE FROM 1961/62
|
1961-62 £000 |
1962-63 £000 |
1963-64 £000 |
1964-65 Provisional £000 |
1965-66 Estimate £000 |
|
|
Subsidies of final products: |
|||||
|
Butter and other milk products |
4,698 |
3,168 |
6,038 |
8,130 |
9,788 |
|
Wheat |
1,150 |
1,540 |
600 |
135 |
— |
|
Bacon |
1,850 |
2,825 |
1,400 |
1,950 |
1,800 |
|
Carcase Beef |
— |
— |
— |
43 |
150 |
|
Grain Storage Grants |
— |
— |
307 |
— |
— |
|
Subsidies to reduce production costs: |
|||||
|
Ground limestone |
493 |
636 |
613 |
730 |
890 |
|
Phosphatic fertilisers |
2,215 |
2,382 |
2,739 |
3,000 |
3,125 |
|
Potash |
503 |
630 |
824 |
810 |
830 |
|
Petrol |
36 |
33 |
— |
— |
— |
|
Calved Heifer Grants |
— |
— |
— |
3,155 |
3,200 |
|
Drainage, land reclamation and general im- provement schemes: |
|||||
|
Arterial drainage |
1,083 |
1,617 |
1,795 |
1,665 |
1,668 |
|
Land Project |
2,064 |
2,109 |
2,214 |
2,230 |
2,346 |
|
Other drainage schemes |
5 |
— |
— |
— |
— |
|
Improvement of Land Commission Estates |
648 |
739 |
744 |
830 |
928 |
|
Other improvement schemes |
440 |
478 |
499 |
504 |
524 |
|
Gaeltacht and Congested District Schemes |
189 |
197 |
227 |
213 |
231 |
|
Elimination of disease, livestock improvement, etc.: |
|||||
|
Bovine T.B. |
8,970 |
6,472 |
4,660 |
3,200 |
1,610 |
|
Pasteurisation plant |
39 |
22 |
3 |
20 |
20 |
|
Brucellosis eradication |
— |
— |
— |
34 |
275 |
|
A.I., milk production and livestock improve- ment |
64 |
68 |
69 |
129 |
78 |
|
Administration of improvement and regu- latory Acts |
218 |
280 |
323 |
349 |
409 |
|
Grants towards farm buildings, etc.: |
|||||
|
Farm buildings and water supplies |
1,007 |
1,307 |
1,389 |
2,000 |
2,158 |
|
Poultry houses and equipment |
60 |
64 |
70 |
77 |
92 |
|
Forage Harvesting Equipment Grants |
— |
— |
— |
64 |
60 |
|
Orchard planting |
4 |
3 |
2 |
2 |
1 |
|
Education, research, advisory and technical services: |
|||||
|
Education |
478 |
452 |
498 |
655 |
716 |
|
Research |
623 |
767 |
985 |
1,202 |
1,513 |
|
Advisory services |
378 |
399 |
484 |
580 |
661 |
|
Rural organisations |
23 |
25 |
27 |
28 |
42 |
|
Technical services |
181 |
240 |
254 |
260 |
298 |
|
Departmental capital expenditure on land and buildings |
128 |
160 |
390 |
313 |
302 |
|
Land annuities: |
|||||
|
Halving of land annuities |
765 |
786 |
838 |
852 |
906 |
|
Bonus to vendors and other costs |
118 |
118 |
119 |
119 |
120 |
|
Relief of rates: |
|||||
|
Agricultural Grant |
5,839 |
8,530 |
8,955 |
11,197 |
12,500 |
|
Rural Electrification |
775 |
953 |
900 |
1,300 |
1,350 |
|
Capital for Agricultural Credit Corporation, Ltd. |
1,765 |
50 |
860 |
3,850 |
3,400 |
|
TOTALS |
36,809 |
37,050 |
38,826 |
49,626 |
51,991 |
NOTE:—Figures are net of appropriations-in-aid.
