asked the Minister for Finance if the liberalisation of the movement of capital within the EEC is working satisfactorily; and if he considers, in view of the recent rate of inflation that the general restriction on the outward movement of capital from Ireland to £250,000 per project in any one year is still sufficient, notwithstanding provisions whereby applications can be made for larger amounts.
Ceisteanna—Questions. Oral Answers. - Inflation Rate.
41.
I refer the Deputy to my reply on 10th July, 1973, to a similar question from him. I am satisfied that the position is still satisfactory from this country's point of view.
42.
asked the Minister for Finance the positive proposals he has to combat the present rate of inflation.
The present inflation is largely a reflection of external factors which, as I have stressed in my budget statement, it is not possible for us to avoid because of our open economy. So far as domestically generated inflation is concerned, it will continue to be Government policy to deal with this through price control measures. These measures have been strengthened and are now being rigidly enforced.
Is the Minister seriously suggesting that the only possible approach by the Government in regard to stemming domestic inflation is through price control measures, unsuccessful as they have been?
Do I understand Deputy Colley to be referring to external inflation?
Domestic inflation.
I understood the Deputy was referring to external inflation which is now operating at a level seven times greater than in 1972. As to the several methods of combating inflation, they have been dealt with and outlined in detail on many occasions in this House. They are about twice as stringent as they were a few years ago.
And three times as ineffective.
There is one way and that is to apply the Fianna Fáil way—to stop importing, to run down the economy, to have massive unemployment. That is not a sensible policy.
Might I point out to the Minister that in his reply he stated that as regards domestic inflation the Government were operating strictly on price control? My question to him was whether he thinks this is the only contribution the Government can make to control domestic inflation. Did he ever hear of fiscal and monetary policies designed to do that? Is it not obvious from his reply that what he has said about his two budgets has been quite true and that the real reason for the inflationary nature——
The Deputy is now making a speech.
He does not know that he can use a budget to combat inflation.
What Deputy Colley is suggesting is that we would deflate the economy.
I suggested no such thing.
It would be completely contrary to the advice given by every reputable independent international organisation which says that the worst possible——
Nobody asked that question. Why does the Minister not answer the question put to him?
If Deputies ask questions they ought be grateful when they get replies.
We ought to get answers to the questions we asked, not to imaginary questions which we did not put.
Would the Minister say if the situation where a stone of potatoes, ex-farm in Donegal, which costs 10p and is retailed over the counter at 30p, is due to outside inflation, domestic inflation or to Government inaction?
It would appear to arise from the operations of the market. I can assure Deputy Cunningham that as a consumer at the high price I would naturally be personally interested in seeing the profit margins and the market improved. If I can now reply to the question put by Deputy Colley, which was interrupted by him while I was giving the answer, the advice which is given to all EEC member nations is not to endeavour to deflate themselves out of the present situation.
I should like to ask the Minister is it not true that the reason the Government are taking no positive action on inflation is because they have a vested interest in increasing inflation to seven times what it was three years ago?
That is not a question. The Deputy is engaging in an argument.
Like most things, the Deputy knows that this can be treated with a grain of salt.