asked the Minister for Finance if he will make a statement on the worsening balance of payments position; and what remedies he intends to take to deal with the situation.
68.
Ceisteanna—Questions. Oral Answers. - Balance of Payments.
67.
asked the Minister for Finance if he will make a statement on the present economic position with particular reference to the balance of payments position.
69.
asked the Minister for Finance if he will state for the year 1969 (a) the total exports from this country, (b) the total imports, (c) the adverse trade balance and (d) the deficit in the balance of payments; and what action the Government intend to take to correct the trend in the national economy.
70.
asked the Minister for Finance why he did not take steps earlier to deal with inflationary trends; the reason for the sudden imposition of new restrictions which will impose undue hardships on trade, business and cost of living; if imports from Britain have vastly increased and Irish exports to that country been reduced; if as a result unemployment is likely to take place; what proposals he has in mind to deal at once with a situation of this kind; and if he will make a general statement on the matter.
71.
Dr. Browne, Mr. M. O'Leary
andDr. O'Connell asked the Minister for Finance the immediate causes of the deterioration in the financial situation which have created the need for the recent emergency credit and hire purchase restrictions.
72.
asked the Minister for Finance if he is aware of the serious effects the recently announced restriction on hire purchase credit will have on our economy; and if he will take the necessary steps to ease this situation.
73.
Dr. Browne, Mr. M. O'Leary
andDr. O'Connell asked the Minister for Finance if he is aware that hire purchase restrictions must inevitably lead to a considerable increase in redundancies and unemployment in Irish industry; and, if so, if he has any alternative plans for meeting these contingencies.
74.
asked the Minister for Finance if he is aware of the very serious hardships caused to business people and other borrowers because of the restrictions on bank credit; and if he will make a statement on the matter.
75.
asked the Minister for Finance why restrictions on hire purchase and goods rental just announced were not announced initially in Dáil Éireann.
76.
asked the Minister for Finance if he is aware of the growing increase in the value of British imports; and what action he intends to take to remedy the situation.
77.
asked the Minister for Finance if, having regard to the alarming worsening in the balance of trade between this country and Britain over the last three years, he will take realistic measures to rectify the situation
78.
Dr. Browne, Mr. M. O'Leary
andDr. O'Connell asked the Minister for Finance whether the fact that the financial situation has deteriorated significantly will militate against this country being considered a nation with an economy sufficiently strong to merit admission as a full member of the EEC.
I propose with your permission, a Cheann Comhairle, to take Questions Nos. 67 to 78 together.
Total merchandise exports in 1969 amounted to £370 million and total merchandise imports to £589 million, giving an import excess on visible trade of £219 million. It is too early yet to have firm figures for the outturn of the balance of payments but the deficit is likely to have been of the order of £60 million.
On a number of occasions before the recess I told the House that deficits of this magnitude could not be allowed to continue indefinitely. I indicated that I would take whatever steps were necessary to ensure that steady growth of the economy was not hampered by excessive demand pressures. Recent hire purchase figures and other indicators of consumer spending, combined with the continuing pressure for income increases in excess of what the economy can bear, have necessitated the taking of measures to damp down demand. These have taken the form of a moderate tightening of hire purchase and instalment credit controls as a supplement to the restraint of bank credit which has been in force over the past few months. They were imposed by ministerial order as provided in the relevant legislation.
In regard to bank credit, the pressures on the economy which led to the issue of the existing credit guidelines by the Central Bank have not abated and, consequently, it would not be appropriate to relax the guidelines.
The new hire purchase restrictions do not represent a sudden reversal of policy. I have repeatedly made it clear that corrective action would be taken when called for.
The list of goods covered by the restrictions has been carefully compiled with a view to minimising the effects, if any, on employment. Furthermore, many of the goods to which they apply are imported. While the deposit and payment periods fixed will have a moderating effect on consumption, many of the industries concerned should be able to compensate for this by increasing exports and I hope our industries will avail of these opportunities to the full.
As regards our trade with the United Kingdom the position is that we had a deficit of £24 million in 1966 followed by a surplus of £8½ million in 1967 and a deficit of £22½ million in 1968. The figure for the whole of 1969 is not yet available but in January-November, 1969, the balance showed a deficit of £61 million compared with a deficit of £16 million in the corresponding period of 1968. The increase in the import excess over the three years was not confined to trade with the United Kingdom. Our trade deficit with other countries increased from £104 million in 1966 to £141 million in 1968 and from £129 million to £139 million from January-November, 1968, to January-November, 1969. It must be remembered that the overall trade figures have expanded greatly and the increased deficit should be considered in the light of this increase. The overall trade balance is the major item in the current balance of payments and the measures I have mentioned are aimed at redressing the balance of payments by achieving a significant improvement in the trade position.
I am satisfied that the economy is fundamentally sound and capable of achieving satisfactory growth and that the present temporary difficulties could not be regarded as implying any reflection on our ability to accept the obligations of full membership of the EEC.
Will the Minister agree that we are in the position we are because of a mistake by the Government; that the position is of the Government's own making and is due to the fact that they introduced a favourable Budget last year to win the general election?
Hear, hear.
Would the Minister say——
Is the Minister going to answer that question?
Bíonn cead cainte ag fear caillte na h-imire.
An é sin an méid atá le rá agat anois?
Would the Minister give us figures for the trade balance between Britain and this country since 1966?
I shall have to send it to the Deputy. I have not got the figures here.
Is it not true that since the Anglo-Irish Free Trade Agreement we managed between 1966 and 1969 to turn a credit balance into a debit balance?
I have not got the figures here.
But the Minister knows this, as a member of the Government.
The figures would show this but I want to ask a slightly different question. The Minister gave a figure of £219 million for excess of imports. In addition to that he talked about demands for incomes in excess of what the economy can bear. May I ask how much of this excess of £219 million of imports came from purchases by the ordinary wage-earner? How much? Has the Minister any idea? I have a fair idea.
It can be figured out that the more income there is, the more purchasing there is and the more import purchasing there is.
I have a specific view that the ordinary wage-earner purchases very little of the imported goods because he cannot afford to. The bulk of his income goes on clothes and food which are made here and on his house rent.
I think the Deputy went a little astray. He talked about income. This covers every income, not just the poor wage-earner as he says himself. While there is extra money in incomes there will be extra imports.
Would the Minister not agree that the whole tone of his reply fails completely to convey to the House the extreme gravity of the situation that has been created by the Government's mismanagement of the economy over the past year to 18 months? There is throughout it a tone of complacency, a suggestion that the action the Government are now taking, which is described in minimal terms, settles the matter, as if that is the end of it. Would the Minister not agree that the reply misleads the House and that this country now faces a very critical situation which has no parallel for many years back?
I think the Deputy is trying to say that if he were in office he would impose restrictions much more stern than this.
What I am trying to say is that if we had been in office we would not have managed the affairs of the country in the last 18 months in the way they were managed. We would not have created the situation created by last year's Budget.
(Interruptions.)
The evidence is there
I think the Deputy is trying to say that if they were in office they would control wages and I have already explained to his predecessors before he came to this House that this is silly kind of talk.
The Deputy made no reference at all to wages, as the Minister is aware.
The implication in the Deputy's supplementary question is that certain action by the Government could control the costings of our manufacturers. I think the Deputy would like to suggest what he would do but we are not doing it.
What I was speaking about was the control of the economy by budgetary measures in the light of the excessive increase in incomes.
The only total mess of the economy was made by the Opposition.
When the Minister reaches that level, we know——
(Interruptions.)
Question No. 79.