The purpose of this Bill is to continue for another year the powers conferred on the Government by the Supplies and Services Act, 1946. The main purposes for which it is considered necessary to retain the powers for another year are:—
Rationing of foodstuffs; rationing of petrol; price control; control of building; control of export of certain articles, and control of foreign exchange.
General consumer rationing applies only to butter, tea, sugar, bread and flour. The ration of butter was increased in April last to 8 ozs. per head per week. Stocks of creamery butter in cold storage are higher than last year, and no difficulty is anticipated in maintaining the ration at the present level. In the case of tea, sugar, flour and bread, rationing was first imposed on account of scarcity. It is true that scarcity no longer obtains, but it is necessary to maintain rationing in order to restrict the burden which falls on the Exchequer in respect of payment of subsidies. The price of these commodities has increased greatly as compared with pre-war. If these increases were passed in full to the consumer they would impose a very heavy burden on the poorer sections of the community.
In order to relieve consumers of the full import of these increases heavy subsidies are paid from the Exchequer, which, in the current financial year, will amount to from £9,000,000 to £10,000,000. The abolition of rationing would involve either the removal of subsidies or their extension to cover the full consumption, including non-domestic use. The removal of subsidies would mean an immediate and big increase in the cost of these articles of food. The extension of subsidies to cover full consumption would involve a very substantial increase in expenditure from State funds, and the Government does not consider that extra taxes should be imposed on the taxpayer in order to subsidise consumption above the ration levels for domestic consumers. The rations have been fixed on a generous basis which should be adequate for the normal consumer. Supplies of flour, tea and sugar have, however, been made available outside the rations at special prices for those who wish to purchase them.
Supplies of petrol are also adequate, but it has been considered undesirable to abolish rationing as yet in view of the fact that dollar expenditure must be incurred in obtaining our requirements. In view of the uncertainties of the dollar exchange position, the rationing is being retained as a precautionary measure though it is not anticipated that the flow of supplies throughout the year 1950 will be at a lower level than it was during 1949. The control has been greatly relaxed and its application at present causes little inconvenience to consumers. As from the 1st January next a further simplification in the ration system will take effect. Instead of quarterly books of petrol coupons, books of coupons will be available which will contain coupons for each of the four quarters of the year. This new system will reduce administrative expenses, and, at the same time, facilitate consumers.
At the outbreak of war in 1939, it was considered desirable by the previous Administration to exercise control over prices under the conditions of emergency by the powers conferred under the Emergency Powers Act rather than by the use of the machinery set up under the Control of Prices Act of 1937. These special powers of controlling prices by Order and arrangement continue to be exercised under the Supplies and Services (Temporary Provisions) Act, and it is necessary that they should so continue to be exercised. In the case of many goods the supply position has so substantially improved that it is either back to normal or almost back to that stage, but there are many essential goods which still continue to be scarce and the prices of which would tend to rise rapidly because of the scarcity if strict control were not applied. Controls by Order and arrangement under special powers are much more appropriate to cope with the ever-changing conditions which apply to these scarce goods. Consequently, the continuance of the special powers for a further period in respect of price control is necessary. The question as to whether a permanent form of price control should be introduced and as to what form such control should take is being considered, and proposals will be submitted to the Oireachtas when the Government, in the light of experience, consider that it would be advisable to alter the methods now being applied.
Senators will be aware of the need for continuing foreign exchange control. Under present international conditions our currency is not freely convertible into other currencies, and there is no likelihood that this state of affairs will end for some time to come. This applies particularly to the hard currency areas. It is, accordingly necessary to control issues of foreign exchange so as to ensure that our limited resources are used to the best advantage and for the general good of the community. To function effectively, exchange control must be comprehensive. Any gaps or weaknesses in the control are quickly discovered and loss or misuse of foreign exchange occurs which could have been used for the public good. It is probable that permanent legislation to control foreign exchange will be necessary to replace the temporary powers derived from the Supplies and Services Act of 1946. The preparation of such legislation, however, is very complicated and it has not yet reached such a stage that it can be introduced into the Oireachtas. Pending the enactment of permanent legislation, the control must still be operated, and the Government and the Minister for Finance must have power to amend the existing Orders so as to deal with changes in the situation as they arise.
It is still necessary to retain the power to control exports. This control has been relaxed to a considerable extent during the past year according as the supply position of different commodities improved. It is not possible, however, completely to abandon the control, which is a type of control in which a high degree of flexibility is necessary. Circumstances can arise in which shortages of certain articles may occur, and without the power to control exports there would be a danger that the country would be denuded of these articles. Even where goods are controlled, export may be permitted under licence. Senators will appreciate, however, that if export controls were abolished entirely there would be a risk of shortages at home.
Control of building must also be maintained for some time at least. Generally speaking, building materials are in ample supply, but supplies of certain important items, such as cement, are insufficient to meet all demands. There is no control over the distribution of these articles, but the building control has the effect, indirectly, of ensuring supplies for essential projects. The principal obstacle in building is the shortage of skilled labour. Without control of building there is a likelihood that skilled labour would be diverted to non-essential work and that essential work, such as the building of houses for local authorities, would be held up. The Control of Building Order was modified during the year by the removal of local authority and subsidy houses from the scope of the control. All other types of building which exceed a total cost of £500 or require the use of material costing £250 or more, still require to be licensed. The granting of licences is regulated so as to ensure that essential building gets priority.
While it is necessary to seek the retention of the powers conferred by the Supplies and Services (Temporary Provisions) Act, 1946, the Government realises that these controls impose inconvenience on the public and the business world, and has no desire to maintain these powers for any longer period than is absolutely necessary. Since 1946, and particularly during the last 12 months, it has been found possible to discontinue many emergency controls. It is the policy of the Government to abandon other emergency controls as soon as conditions warrant such action. The operation of each control is examined periodically with a view to seeing whether it can be abandoned, or, if not, whether it can be relaxed. As a result of such reviews it has been found possible in the last 12 months to abolish the rationing of soap and margarine; non-subsidised flour of 75 per cent. extraction has been made available, and flour and bread confectionery made from this flour removed from rationing; control of the distribution of kerosene and fuel oil was abolished; the rationing of petrol was relaxed to a very large extent; the Order restricting the use of bread and flour with meals in restaurants was revoked; restrictions on a number of other commodities were also revoked or modified; numerous classes of goods were removed from export licensing control, and the number of articles now subject to this control is less than half the number when supplies difficulties were at their worst.
As I have already mentioned, non-subsidised tea and sugar were made available for sale over and above the ration. For a long number of years no new entrants to the retail tea and sugar trade were admitted, but it was found possible during the year to modify the Order so as to permit new entrants to obtain licences. It is also possible for new wholesalers in these commodities to obtain licences.
It is also proposed to remove the requirement for a licence to import timber as from the 31st March next. Price Orders in respect of a number of commodities, including such articles as oatmeal, canned fish, rice, maize meal, paper, footwear and timber were revoked as it was considered that these articles were in sufficient supply to prevent the charging of excessive prices.
The list of Orders made under the Emergency Powers Acts and under the Supplies and Services Act has been brought up to date, and will shortly be on sale to the public at the Stationery Office. Although a large number of Orders has been revoked, the list is too long for me to read to the House. The Orders deal with a variety of matters too complicated to mention now, but if Senators have any specific questions to ask I shall give them the information they require when replying.
