Dáil Éireann debate -
Wednesday, 26 Nov 1969

Vol. 242 No. 12

Appropriation Bill, 1969: Second Stage.

Minister for Finance (Mr. Haughey)

I move: "That the Bill be now read a Second Time".

This Bill is the annual statutory measure by which the Votes for the various Supply Services are formally appropriated. As Deputies are aware, it is normally passed through all Stages without Debate.

I would like, however, to direct the attention of Deputies to the fact that this year's Bill includes a section dealing with external borrowing. Deputies will recall that in September last the issue of a loan for 100 million Deutschemarks was successfully negotiated. It seemed to me prudent not to convert this loan into Irish currency immediately, as all indications were that the Deutschemark would be revalued upwards within a short period and I was anxious that the Exchequer should not lose as a result of that revaluation. I arranged, therefore, that the proceeds of the loan would be placed on deposit abroad, until the immediate question of the revaluation was settled. Events have justified this decision but at the time the Comptroller and Auditor General expressed the view that I was not entitled to take this action, and that conversion into Irish currency should be effected immediately. This amendment is intended to make it clear that the Minister for Finance may exercise his reasonable judgment as to when, in the interest of the Exchequer, it is appropriate that the proceeds of any external borrowing should be converted into Irish currency and paid into the Exchequer.

Mr. O'Higgins

It is not customary to enter into a protracted debate on the Appropriation Bill and I certainly do not intend to break that practice. At the same time, I must express agreement with the proposed amendment to section 4 of the Appropriation Act, 1965. Having read the Act, it appears to me to be necessary in any event. In other words, I agree with it. What it did in the events that happened was that while it was not possible to make a gain, it avoided making a loss. I think Deputies on all sides of the House will approve of this change. At the same time, it is well to remind the House that the authority to enter into foreign borrowing was first given by this House in 1965. At that time misgivings, with regard to the practice of entering into borrowing outside the State, were generally expressed.

There is no harm, when this change in the law is being proposed, to express again the misgivings we must all feel at the necessity which clearly exists for the Minister for Finance to borrow outside the country. Such borrowings obviously must be done with the greatest degree of care and caution because these borrowings are not like the National Loan which the Minister announced the other day. National Loans in effect, represent inside the community a borrowing from ourselves and each person who earns an interest on his investment in the National Loan earns an income and is liable to income tax and whatever appropriate payments result from it. In relation to this Deutschemark loan, the earnings on that loan are earned outside this country and the rate of interest we are paying, which is very high, is earned outside the country. Obviously, it is not the kind of borrowing that should be encouraged.

I do not want to widen this debate, and suffice to say that I hope between now and the conclusion of this session of the Dáil an opportunity will present itself for a debate to take place on the economic situation in this country. There are many people at the moment who feel very concerned about where we are going, people who can recall the warnings in the spring of this year given by the Minister for Finance to look at what is obviously happening around us at the moment. At this stage, when a national loan is on offer, it is perhaps not appropriate to have such a debate and for that reason I do not intend to turn the passage of this Bill into such a debate but I do express the hope that between this and the rising of Dáil Éireann for Christmas a full debate on the economic condition and state of the country will take place.

Mr. Tully

The temptation to try to widen the scope of the debate for the purpose of dealing with what Deputy O'Higgins has referred to is very great. Nevertheless, the procedure here has always been almost a formality. Therefore, I do not intend to widen the debate today but let me repeat what Deputy O'Higgins has said: can we have a debate as soon as it can be said that we are not rocking the boat— because I know that is what we would be accused of now—can we have a debate on the economic situation here because, in view of the various statements made, it would appear that it would be a very good idea?

Mr. Haughey

I will ask "himself".

Mr. O'Higgins

An fear mór.

Mr. Tully

Having mentioned that, may I say that the Minister, of course, was right in his decision about the Deutschemark? While, maybe there was no danger of getting his fingers burned this time, it is not a very wise thing to do to take a chance with foreign currency and I wonder what would be the reception by this House if, in fact, something had gone wrong and devaluation had taken place instead of the other and the Minister had had to explain why we had borrowed money which we had lost.

The other thing I should like to mention is this—again it will come up, I am quite sure before Christmas on the economic debate—the Minister must be seriously perturbed at the rates of interest, not so much being paid by the State, although that is an important matter, but, apart from that, the rate of interest which is being charged for money for capital purposes in this country. Can he or can the Government see any way in which this matter can be dealt with because, if they cannot, we will soon reach the stage where everybody will be, not an unlicensed money-lender, but a licensed moneylender; we will reach the stage where it will be usury—there is no other word where somebody will borrow £100 on a payment of £100 interest. It seems that we are heading in that direction. I hope the Minister may have some answers later in the year when we will be asking him very pertinent questions about this.

Dr. O'Donovan

Might I say that it has occurred to me—and this is the only remark I will make; I am not going to raise any other matter—to compare the sum in this Bill, £363,498,080, with the sum for ten years ago, 1959, £119,308,252. Ministers are constantly concerned about wages and this and that. Look at their own expenditure. Compare £119,300,000 with £363½ million for the supply services. I make the point, and do not want to make any comment on it, that the Government are outdistancing by a vast distance any possible fall in the value of money in their own expenditure. I would have no objection to it and no member of the Labour Party, certainly, would have any objection to it were it not for the fact that a great deal of it is so wasteful.

Mr. Haughey

I do not think I have anything in particular to say by way of conclusion. As Deputies have indicated, the passing of this Bill is customarily a formality and I have really nothing to add to my opening remarks.

Question put and agreed to.

Agreed to take remaining Stages today.