When the House adjourned last night, I was referring to the Minister's speech and to the Government's call for the participation of all citizens in the solution of the situation which confronts the nation at the moment. The Taoiseach, speaking in Cork yesterday, stressed the seriousness of the situation and the need for the co-operation of the people as a whole in order to solve our problems. That was the theme I was debating when the House adjourned last night.
One speaker yesterday evening painted a very optimistic picture of the financial situation. Naturally, we are always very glad to be treated to a little optimism, but I venture to suggest that at the present time it is much more important that we should hearken to the Minister for Finance, who speaks on behalf of the Government and with full responsibility for what he says. It is all very well to be optimistic at the right time and in the right place; at the moment I do not think there is any reason for over-optimism until such time as we are a little further out of the wood.
That being so, I propose now to make a contribution to this debate to-day which may be slightly unusual inasmuch as one very seldom hears the side of business and industry, and the creation of capital coupled with the task of producing those goods and services for which the Minister calls. I make one appeal: I ask that anything I say here to-day will be received as a constructive effort divorced from any semblance of an attempt to hurt or harm anybody. I ask that anything I say be taken in that spirit.
Before the House adjourned last night, I said that I was glad to see that the Government was itself giving a lead in the present situation; the Minister has promised to cut down State expenditure this year by approximately £5,000,000—perhaps more. We all know that practice is better than precept and this is the right sort of lead to have from the Government, a Government which is asking the citizens to follow suit, each in his own particular way.
I mentioned last night that a number of citizens have already given some indications that they do not seem to think that anything is called for from them in particular. There is the idea that the problem is one for somebody else and already some groups are laying down impossible and unrealistic conditions precedent to their participation in the national effort. For example, public statements have been made since this situation arose by trade union leaders stipulating that, unless the Government controls prices and profits—we all know that both prices and profits are already controlled by several Government bodies—there will be no relaxation of wage demands.
Sometimes it seems to me that the least co-operation with the Government's efforts and the most criticism of the Government comes from certain persons who are nominally supposed to be supporters of the Government. Speaking in the Dáil at column 1604 of Volume 159 the Minister for Finance said, and he also said it here yesterday when introducing this Bill:—
"Another round of increases in money incomes on top of those gained last year would be certain to price many of our products completely out of foreign markets."
There is a direction from the Minister for Finance on the subject of wage increases. Now, in order to justify wage demands almost in advance, certain individuals to whom I have referred are already charging the Government with not keeping down the cost of living. It is clear to many people that, apart from outside causes over which the Government has no control, wages are the direct domestic cause of higher prices; in many cases, they are the only cause. The implications in these charges, therefore, is that it is profits that are responsible for higher prices. The fact is that profits are dangerously low in this country.
Incidentally, there is a lot of talk about profits but we never hear about the companies which make no profits and which never pay dividends to the shareholders from one year to another. As I mentioned before, I myself and friends of mine had the unhappy experience of investing quite large sums of money in Irish industry which were lost completely. Not a single penny was got by way of a return on them.
Profits in this country are dangerously low and, as a consequence, sufficient capital is not being built up or attracted to our economy. Again, I want to mention the Ibec Report because this report was commissioned by our own Government. We ought to have regard to it. On this very matter of profits, the Ibec Report says on page 84, paragraph 2:—
"Profits from manufacturing enterprises in Ireland in general have not been sufficiently high to attract domestic private investment upon a scale consistent with a vigorous industrial development in its initial stages, or to encourage the thorough modernisation of existing equipment needed to make Irish manufacturing genuinely competitive."
The profits have not been sufficiently high here to attract capital. That fact is referred to in the Ibec Report. Yet in spite of that, some elements are still proposing more restrictions, more taxation and more penalties of all kinds on industry and capital. The main reason I refer to this and that the Minister is asking for more production, both in agriculture and in industry, as a solution of our balance of payments problem and, in fact, of our whole inflationary situation.
I find it difficult to understand the mentality of some elements in Labour which continuously and consistently attempt to damage, discourage and discredit industry—the very industry upon which they depend for their livelihood and prosperity, the very industry which the community needs so badly. They are like people who are continually boring holes in the bottom of the ship in which they travel. Proposals to tax industry and profits are made in an attempt to justify wage demands. Rather than weaken the source of employment, would it not be far wiser for Labour in the long run to help build up a strong and healthy industry from which high wages could be justifiably expected and demanded rather than try to drag down the machine upon which they are depending for a living?
We will never get more production from industry and we will never get more money invested when an atmosphere which is antagonistic to profits prevails. When the Tánaiste went to U.S.A. last year, he found it necessary to stress the advantages and profits that would be available to American capital, if invested in Ireland. I fear that American businessmen will need more than words to convince them that this country offers a fair return for capital invested, especially in face of the Ibec Report which is the first thing that anybody who is going to invest money here will read.
How different is the outlook of American Labour which, while demanding the highest wages and best conditions of employment in the world, at the same time advocates and assists in every way in the making of high profits consistent with good value. I have heard the representatives of American Labour speak at the I.L.O. in Geneva. They know that it is only from good profits that good industries can be built which will produce good goods in large quantities. They know that those industries will pay the highest wages and give the highest standard of living to all concerned.
That is an enlightened outlook. In other words, build up the machine you are travelling in, provided always that it is not done at the expense of the community. That can be achieved. These misconceived anti-profits attacks will sabotage our whole industrial economy and national prosperity in the future. It is not surprising that there has been little or no response from American capital to the appeal by the Minister for Industry and Commerce, who invited American businessmen to invest their money in Ireland, when American businessmen know that Irish Labour leaders condemn and resist good profits, regardless of whether they are made through efficiency or profiteering.
The issues are confused. The Ibec Report also points out that. There seems to be an idea that there is something immoral in the making of good profits. That, of course, is wrong. Very often the best profits are made by the most efficient industry which gives the best value to the public. Very often an industry making no profits gives very bad service and is really a menace to the community, since it also gives very bad conditions in regard to employment.
An Irish Labour Minister for Industry and Commerce was, in fact, an ideal ambassador for us to send to the United States in the hope of getting capital for investment here, but I cannot help feeling that it was his own adherents who did not give him the right goods to sell. That is what happened. It would be a very good idea for workers here to invest their own savings in industry and commerce, including the banks—savings out of their own weekly pay packets and not, as is often advocated by some social thinkers, shares allocated to them for which they do not pay any real money, because, if they pay their money for their shares, money which they have saved in the hard way, they will realise the money value of these shares and how hard it was to find the money originally to start all companies and banks as well.
I should like to see the funds of trade unions similarly invested. There would then be an appreciation of the need for profits and a realisation of the inadequacy of present-day profits as a reward for savings invested in Ireland. There would also be an appreciation of who really owns businesses and banks and who finances both industries and banks in the country. This would in turn bring about the realisation that such institutions are private property and, as such, are not available to be controlled, used and abused at the behest of the State, as is often advocated.
We do not want our whole industrial economy to be like that of C.I.E. If C.I.E. were a profit-making concern, it would provide good and safe employment. Somebody said yesterday that it would not give good, safe, employment. At present it is a profitless company providing uncertain employment. It should give fixed steady employment without requiring all sorts of legislation to ensure its existence. Surely we do not want an economy like that?
It is often stated that private enterprise failed in regard to C.I.E. and that C.I.E. had to be taken over. It did not fail. When the G.S.R. was taken over originally, I made a speech on the subject, and pointed out that, private enterprise was never allowed to work since 1914 and the railways were practically taken over by the Government and a railway tribunal set up. Ever since that time, economic laws were not allowed to work on the railways. The railways were not allowed to translate their costs into prices. We would have nothing but C.I.E.s in the country if some of these people got their way.
Private enterprise starved of capital could not be a success at present. All the capital is going to State bodies and there is practically none left for private enterprise. There is too high taxation and the profits are too low. How could a private enterprise economy work on no capital, too high taxes and low profits? The only way you can build up capital is out of profits and there is no provision made in our taxation laws to allow anybody to build up capital because every liquid penny that any company has in hands is taken either by the collector of taxes or in wages. As I said, the same tactics that broke C.I.E. and destroyed private enterprise in C.I.E. can very well do the same in the little degree of private enterprise which we have in this country.
In the present situation, we are also being told that, no matter how difficult times are, the standard of living must be maintained. One would think that all one had to do was to say: "The standard of living must be maintained" and that it could be done by magic. It cannot. That is a very laudable and desirable aim and wish and one that is not confined to any one section of the community. There is no section of the community that does not want to maintain their standards of living and to increase them and to make them better, if possible. In fact, that is what the Government itself is trying to do to-day and is determined to do by the very action that is being taken at the moment. It is to restore our economy and to maintain our standards of living and to improve them. That will not be done for the State as a whole if only one group of the community are to keep all the best living standards for themselves, regardless of other elements in the community.
Unfortunately, there is also prevalent throughout the country a kind of idea on this point that the situation has nothing to do with certain people. They have an idea that everything can be solved in one of three ways. First, the banks—some people think that the solution to everything is in the banks. Others think there is a solution in the external assets that are always there and that will bolster us up, for ever in fact, and finally, that industry and commerce and business can absorb all sorts of costs and all sorts of impositions and still carry the baby and pay taxation and keep the whole thing going.
As I happen to be a director of a bank, I do not want to say anything here to-day as regards the banks that would seem to be using either inside knowledge or my position, but I do think that certain things should be said and, therefore, I shall avail of the Minister's own remarks in regard to the banks to show that the banks cannot be relied upon to get us out of our troubles to-day. They have already done their utmost in the matter and they have been left in a very difficult position.
The Minister in Volume 159, No. 10, column 1600 of the Dáil Debates, said:—
"It is not, I think, appreciated that, as a direct consequence of the balance of payments deficit, the commercial banks have lost nearly £50,000,000, or two-fifths, of their net external assets since January, 1955. It is essential, therefore, that any further sales of sterling securities, whether by departmental funds or by the banking system, in order to finance public capital outlay, should be avoided or at least kept to a minimum."
At column 1604, of the same Volume, he said:—
"While there has been some increase in small savings, deposits with the commercial banks have continued to fall."
Therefore, you have the position at the moment that the external assets of the commercial banks have fallen by £50,000,000, that the deposits are falling—and these are the stock-in-trade of the banks—and, therefore, the position of the banks is deteriorating all the time.
Incidentally, the Minister also mentioned in the Dáil the other day, in reply to Deputy MacBride, that the banks' investment in Ireland now has reached 70 per cent. So, if the banks have 70 per cent. invested in Ireland and their deposits are falling and their external assets have fallen by £50,000,000, we cannot look to the banks for any more help in this situation. I might add that it is frequently forgotten and not realised that the Irish commercial banks are privately-owned companies. They are owned by thousands of shareholders, big and small, communities and bodies of all kinds, institutions and small individuals. I happen to know that the vast majority are in the last category, that is, they are mostly small people holding small numbers of shares. In fact, anybody who examines the shares list of the Irish banks will be astonished to see how small the holdings are.
In the same way, the deposits in the banks are all the resources of small people, religious communities, institutions and individuals, and they run into many, many hundreds of thousands of people. So that, on the one hand, the owners of the banks are small people, holding in large numbers, and the deposits, that is, the stock of the banks, are held also by a similar kind of people. Therefore, for the State to do anything with the banks or to interfere with them in any way would really be raiding private property just the same as a house or any other property.
Apart altogether from the moral aspect of getting tough with the banks, it is most dangerous that there should be any talk like that because it can only result in frightening off depositors and, if depositors are frightened off and the banks are left short of deposits, the whole banking system, upon which we depend so much, can collapse.
As regards the assets, which some people seem to think we can lean on so heavily and for so long, the Minister, at column 1600, Volume 159, No. 10, said:—
"...most of these holdings (of external assets) belong to private individuals and institutions and are no more available for public capital purposes or for covering balance of payments deficits than houses or other private property."
Unless we turn ourselves into a communist or, at least, a very advanced socialist State, we have no right or reason to confiscate the property of private citizens to solve our public problems. The Minister was quite right when he said that many people believed that this situation would right itself. I might add that many people believe it can right itself without any effort on their part and, in some cases, in spite of their determination to avoid shouldering their fair share of the burden and, even at the present time, we still have people calling out for higher expenditure on social services, higher capital outlay and more impositions on this, that and the other. Somebody mentioned a capital levy on incomes of £500 and £700 a year. It sounds like somebody living in Cuckooland.
Year after year, in this debate, I have almost become boring on the subject of stressing the necessity for a national basic policy on the creation of wealth and a strong economy on which to build the prosperity of our country. I was looking at the Ibec Report again last night and it also makes this very point, that we seem to have no long-term policy or no long-term philosophy as to whether we are a socialist or a private enterprise State. One says we are the one and the other says we are the other, and we do not seem to know where we are going. The policy that has been pursued year after year of taking 6d. off the income-tax and putting 6d. back on the income-tax, of having investigations into prices here, there and everywhere, is not a policy.
I would also suggest that we are confused in other ways. We have very strong nationalism here and a very strong degree of a sort of socialism and socialist thinking. On the one hand, the nationalist streak is very much against the importation of foreigners or foreign capital or anything into the country. I suggest that that is wrong, that while we must protect our nationals to the full, we should be always open, ready and willing to bring foreigners in, for the know-how and for what they can give us and for their money, because we will never be able to have enough money to develop the country as we should, quickly enough anyway. On the other hand, we have the socialist mentality, a sort of envious mentality, which is prevalent in the country and which is preventing our own nationals from setting up and becoming strong and rich. Between the nationalists preventing people coming in and helping us and the socialists inside preventing our own people from becoming strong, we are between the devil and the deep blue sea.
We had a great opportunity of developing when we got self-government here after the Treaty. We all thought, in the Sinn Féin days, that we could develop something in Ireland that nobody ever saw before. Our idealists believed that we could develop an economy here that would be in conformity with our national philosophy and our Christian philosophy and our own particular needs. Unfortunately, it is only true to say that we have built up an economy that really consists of secondhand ideas from all over the world, particularly from England, with very little philosophy of our own apparent, economic or any other.
Critics of the inter-Party Government assert it is impossible to build up a satisfactory philosophy and a satisfactory economy with a Government composed of such mixed and diverse elements as those which compose this Government. This is particularly thought by the Labour side. They say: "How can you build with Fine Gael?" On the other hand, certain supporters of Fine Gael feel: "How can you do it with Labour included?" I think that is wrong. I believe that, from a Government composed of all elements of the community, we can get something solid and strong and lasting. If we could get such a thing within a Government, it would not be subject to the stresses and strains of a policy devised and set up by a strong party of one particular school of thought. I think such a thing could be done and that the Labour Ministers in this Government are in a position in which Labour may not find themselves again for a long time to come.
There is a wonderful opportunity for the Labour Party to sit down and work out a form of philosophy which will take into consideration the really deep problems of the nation in building up capital strength and money, and not influenced by the misguided ideas of socialists in other countries. I have met many people in the Labour movement, both in this country and abroad, and publicly and privately. Speaking to them privately, they are sensible about profits and so forth, but, when talking en masse, there seems to be a mass hysteria which follows Labour and socialists in other countries. I suggest that Ireland could build up a Labour Party that would be fully Labour in every possible way and have a sense of responsibility to our new economy in the light of our needs.
It is sometimes forgotten by the critics that there are four Labour Ministers in this Government. Anything said by the Minister for Finance in his speech in this debate is also their voice. It is not a Fine Gael or a Farmers' voice; it is an inter-Party voice in which they are just as committed as anybody else. In loyalty to the pledge given when this Government was set up, it is only right that they should back up the Minister for Finance in everything he is asking for on this occasion.
The Government has very clearly stated through the Minister—and the Taoiseach reinforced it, as did other Ministers—that our very existence as a State depends upon our building up savings in every possible way and by every citizen. It is from earnings that we can make our savings and it must be from work well done that we receive our earnings and profits. We want better work, better earnings, better profits and better savings. That should be a national slogan now and always and, in it, everybody is catered for. To achieve these objects, it must be made profitable and admirable to save. It must be recognised that those who work hard and save are more important than those who talk and spend. The concern of our public men in the future and of politicians and statesment must be for the thrifty and hard-working citizens. The voices of the thriftless are still to be heard loud and strong calling for the moon from the State. They must not be needed, I suggest. In future, rather must we cater for the hard-working and saving citizens upon whom our whole prosperity depends.
The Minister has made the position which faces us clear. He pointed out the road we should follow in order to put ourselves in the position of attaining prosperity for our country. I suggest that everybody should read and not only read but digest and act upon the request and admonitions of the Minister. What we need in this country is efficiency and hard work in agriculture and industry, coupled with savings all round—in a word, production and saving.