Finance (Miscellaneous Provisions) Bill, 1956 ( Certified Money Bill )— Second Stage.

Question proposed: "That the Bill be now read a Second Time."

This Bill as the Members of the House are no doubt aware has as its purpose the stimulation, by tax incentive, of coal production, exports, new industrial buildings, new hotel accommodation and to make arrangements in respect of depreciation for machinery in certain cases, as well as to provide the legislative provisions necessary for the prize bond issue that I intend to make early in the new year and to which I have already adverted in public. I think it would be desirable to ask the Seanad to consider the provisions of this Bill as part of a more general picture and therefore I propose to make something in the nature of a review of that general picture into the framework of which I ask the House to put this Bill.

We must remember that over the past years we have had an endemic internal inflationary situation, in which we have always had endemic balance of payments deficits. During the shortage that existed throughout the world at the time of the last war that position was reversed because of the then international situation. It was reversed then because there were not sufficient goods for us to purchase from abroad. They were not available and consequently we could not get them. In considering this problem we must always remember that in Ireland we have not got a closed economy but a wide open economy. Very often when people are considering the economic problems which appertain to us they are inclined to assess those problems on the opinions they obtain themselves or obtain from other economists of what is occurring in other countries and the solution that has been found for those problems by other countries. Frequently they are inclined to overlook that those comparisons are of little use unless one is comparing like with like. The causes of economic difficulties and the remedies for those difficulties are entirely different in an open economy from a closed economy. It is essential therefore that we always ensure when considering our problems and comparing the manner of meeting them with the manner in which other countries have met theirs, that the circumstances which we are comparing are in fact alike.

We have had for many years, excepting the years of the emergency, a situaction in which we were not producing sufficient goods at home to meet the demands; we were not producing sufficient goods to meet the demands created by the level of money incomes of the community. In a closed economy, if that were the position it would have the effect of driving up internal prices. In our situation it did not have that internal effect, but the effect it did have was that we brought in from outside more than the goods which we sent out could pay for. In consequence we had, over the years, a continuous and endemic balance of payments problem. Up to this we have been able to meet the deficiency that arose in our pattern of trade and in our pattern of invisible items by three factors. Those factors are not now available and we must face the fact that their existence up to this concealed the real weakness of the Irish economy.

I have, of course, referred to those factors frequently during the course of the last year. The first factor was the Marshall Aid Loan Counterpart Fund which was expended completely before the end of 1951. The second factor was the spare external reserves of the commercial banks and the third factor was the spare external reserves of governmental departmental funds. Marshall Aid is completely gone. The spare reserves, both of the commercial banks and of departmental funds, have now been utilised to such an extent that the remainder are only sufficient, on the one hand, to meet normal trading operations which must be financed by the banks and in respect of departmental funds, to meet the reserve that must be held. Having regard to the fact that those three factors which operated up to this and which concealed, if you like, the real weaknesses of the economy, are no longer there, I would suggest that it is urgently necessary that we should get down to a rock bottom analysis of the causes of our difficulties and of the remedies that we should propose in order to meet them.

We must face the fact that one of the causes of the difficulties has been that our savings as a community have never been anything like high enough. It is essential we should all realise that it is only by building on a high savings ratio that we can make real progress. It is unfortunate, as I say, that in relation to our position we have not got here the high savings in relation to national product which we have in other countries. It is also an unfortunate fact that the less developed a country is, the more it is essential that it should set aside a greater proportion of its current income for the purpose of building up for the future.

If it does not set aside more than a developed country the result will be that it will fall further and further back in the race. We must, therefore, face that issue and make certain our people appreciate that there is here a vital need to step up our savings as a community and to ensure that we make real progress in the future by being able to build on the same sound basis that has been used as the rock in other countries.

If we take the position as it was last year, 1955, we find that our gross domestic capital formation, when considered as a percentage of gross national product, was somewhere around 15.9 per cent. It was only even at that figure because of the substantial external disinvestment last year. It was because of that external disinvestment, higher than in 1954 when the figure was 13.6 per cent., in 1953 when the figure was 14.9 per cent., or in 1952 when it was 13.1 per cent., but, notwithstanding that, it was very much lower than other countries which were forging ahead.

Western Germany, for example— and these figures are taken at constant prices over the years—had as its percentage in 1955, 25.6. In every year since 1949 it set aside out of its gross national product more than one-fifth as savings for future development and to ensure an expanding and a progressive economy. Every country that we can look at in Europe which shows any progress is in the same position. Britain is higher than we are in their savings ratio, higher even though they are a very developed community. France is higher again than we are. The Netherlands in 1953, 1954 and in 1955 were over 20 per cent., running up in 1954 to 26 per cent. They set that aside out of their national product towards gross domestic capital formation.

Sweden, Denmark, Italy and all the O.E.E.C. countries have an average far better than we have here. As I say, it is unfortunate that not merely is that the absolute fact, but also that we must accept the view that the less developed a country is, the more it has got to set aside out of its current resources if it is fully and adequately to develop itself and keep up in the international race.

Not merely is that so from a comparison at that angle but it is also a fact that other countries in Europe have increased the volume of their savings and capital formation far more than we have in Ireland. If we take the year 1949 with 100 as a base line we find that in 1955 the volume of savings in Western Germany was 228. In other words, they have more than doubled what they set aside out of their current income for future development. In Italy it was 177; in Britain it was 148 where they are setting aside approximately half as much again. In Sweden it is 145, the Netherlands, 140, Belgium, 135 and ourselves, 131.

Of all those countries we in that respect too are doing less to build up future development than the countries I have named, and, in consequence, we must, if we are not to fall further behind in the race, change that pattern. I am afraid we must also accept the situation that not merely are we in consequence putting less by for development in the future than other countries but that our national product is not rising as it should be.

If we take the countries published in the O.E.E.C. report, we find that we are very low down in that list in comparing the increase that there has been in our national product in recent years with the increase that there has been in other countries. It varies, as members of the Seanad can see upon looking at the report, from 20 per cent. down in our case to an increase of 2 per cent. That is perhaps an unfair comparison in one respect because it might be fairer to compare national product by per head of the population rather than by geographical entity, but even by taking the comparison per head of the population we still find that the comparison varies from 20 per cent. down in our case to 4 per cent.

That situation is not a happy one and it is one which a country suffers much worse when there is a sudden jolt to the economy as there was in recent times.

Even if the pattern that we had here were a satisfactory pattern, some of the things which have happened in the recent past would have caused us some dislocation; but when our pattern was as unsatisfactory as it was, naturally enough that caused even more dislocation.

In 1955, we had a switch, a turn from saving to spending. We had a drop in the amount saved by the community; it was very substantially reduced and indeed to some extent in certain ways there was a draw down on past savings. The total effect of that was substantial and was one of the basic causes of the balance of payments deficit of £35,000,000 in 1955.

I noticed also during the course of last week a reference in Cork to this problem at a Rotary Club luncheon. I noticed a suggestion was made there that the accumulated Budget deficits over the years were a substantial contributory factor in our difficulties. I would like to make it clear that I agree with that view. We must get out of the rigid line we have held here over the past 30 years. I do not think that in any part of that period there has ever been a deliberate budgetary surplus created for the purpose of meeting an economic difficulty of the moment. Other countries utilise that weapon and it would be silly and stupid for us not to appreciate that there might be circumstances in which it may be desirable that one would budget for a surplus for the purpose of avoiding inflation and the misery that would go with it, just as in other times it might be desirable that one should deliberately budget for a deficity.

We must get out of the attitude of mind that it is a rigid matter and we must appreciate that the method of financing our capital programme is something that must vary with the economic circumstances as we see them from year to year. It is undoubted that one of the reasons why we were in the difficulties in our balance of payments in which we were in last year was that savings dropped to the extent to which they did. They have somewhat recovered now, but members of the House can easily see from the comparisons I have made with other countries that we have a long way to go to be able to compete with them on equal terms.

The second reason for our difficulties in 1955 was that money incomes rose more than production and in consequence, as the result of a rise in money incomes not matched by production, we had a greater demand on external sources with which to make up the gap between our own production and the money incomes of the community. The obvious remedy to deal with that is to bring production up into line with money incomes. These measures—and other measures which have been announced by the Government—are a part of the effort to do that. I want to make it clear that until production is brought up into line with incomes, we must have stability in those incomes. If we do not have stability in those incomes until production has increased to meet the demand, then inevitably in our economy we will have more and more balance of payments deficits.

Political Parties on every side of the House accept the view that it is undesirable that we should run balance of payments deficits. They must. It is obvious that we cannot go on indefinitely buying more from abroad than we sell abroad because it would be like the ordinary household which was in the same position. I hope, therefore, that it will be fully realised through the community as a whole that the paramount thing at the present time is to build up production, to make production come into line with money incomes and that anything which would disturb that paramount need would not redound to the benefit of the economy.

The third reason why we had the unfortunate deficit of last year was the change which occurred in the terms of trade. I have mentioned this on several occasions but it cannot be too often stressed. It cannot be too often stressed because amongst other reasons it is a matter over which we have absolutely no control here in Ireland. We cannot possibly decide at what price other countries will sell us their goods; neither are we sufficiently large to be able to determine the price which we can obtain for our own exports. In recent years there has been a very substantial worsening of the terms of trade, a worsening which arose because both import prices had been going up and export prices had been going down.

Indeed if we take it in the form of the normal ratio of export to import prices, taking the post-war year of 1948 as a base of 100, we find that from 1953 that ratio has dropped from 105 to 98. That is a drop which is very serious indeed—so serious that if we compare the third quarter of 1956 with 1953, the worsening in our terms of trade, the higher prices that we have to pay for what we import and the lower prices that we get for what we have to export, would have meant on that basis in the first nine months of this year some £10,000,000 loss in our country's trading position. If we take even this year, the period January to October and compare it with 1955 we find that in that period import prices rose by 2 per cent. and export prices fell by 3 per cent. so that in fact the terms of trade disimproved by 5 per cent.

Comparing 1956 with 1955 imports of the same volume as we brought in in the first 10 months of this year cost us £2.7 million more than exactly the same imports would have cost at the same period of 1955. On the other hand as we know also to our chagrin export prices have fallen. Indeed if export prices had not fallen the value of exports this year would have shown no reduction. It was a lower export price that accounted for the reduction of £2.8 million in the first ten months of this year.

There is only one way in which we in our national situation can meet that, by producing more and when we produce more, having more in volume to export which will mean that we will get more with which to pay for imports. Everything therefore, it is clear, in the present situation turns on being able to get greater production. Particularly in these modern days production depends on capital development. The more science advances, the more mechanisation develops throughout the world, the more capital is required to get greater production. It is perhaps easy to understand that by this simple example. If we want to get half as much produced again there are two ways of doing it—one is that all of us work half as hard again and the other is that we apply our work more intelligently to produce the same result. In modern days it is the second method which would be successful.

To apply our work more intelligently means that we must get inanimate objects to assist us in that application and that again comes back to what I was saying about the necessity for capital to develop and to ensure that we get the best results from our labours. It is sometimes suggested that in capital development it is public expenditure that provides the real results rather than private expenditure. There must always be, of course, enterprises to which the private concern cannot aspire. The E.S.B. and Bord na Móna are clear examples of efforts in production that could not be operated in private hands, but we must at the same time accept and realise that it is on private development far more than on public development that our future will depend. We should also realise that private development gives far more employment over the whole economy than public expenditure. It is essential, therefore, that in any planning of what we intend for the development of the economy as a whole we should take account of the fact that there must be adequate funds for that private development, adequate funds which can only be made available by a greater savings ratio.

I know that politically the steps that were taken by the Government early this year at my instance to correct the deficit in our balance of trade and in our balance of payments inevitably were not popular. We made it clear several times why we deemed those steps necessary, but I am glad to be able to say that it is clear now that the steps we took then are having their effect in changing the very dangerous pattern that then existed, a pattern which if it was not then corrected would have meant that our Irish money would have been in danger of losing its valuevis-á-vis the outside world.

It was because we were determined to do what we could to prevent that eventuality and prevent a situation arising in which we ourselves would not be able to select the imports that we required, to prevent a situation in which others would be able to dictate to us the terms on which we could import what we needed—and not merely for consumption but also for raw materials for industries—that those steps were taken by the Government. It was vital no matter what difficulties they might create that they should be taken. If they were not taken there would be no solid rock upon which to build a sound and progressive economy.

In 1955 bank deposits fell by approximately £13,000,000. They were still falling in the first six months of this year. They fell approximately £9,500,000 in the first six months of this year. I am glad to be able to say that in the five months from mid-June—when the figures are taken—to mid-November they have already recovered the loss that there was in the first six months of this year and they now stand at £290.6 million, virtually the same as they were at the end of 1955, but of course still £13,000,000 below where they were at the end of the previous year. They were below that largely because of the factors to which I have already referred.

I am also glad to be able to say that thanks to the co-operation of the community as a whole with among other things the Savings Committee, small savings have started to show a more satisfactory picture. It is only the beginning of the turn and I do not want anybody to feel that it is a completely satisfactory picture—it is not— but for the first eight months of this financial year, from 1st April to 30th November, the amount of small savings available through saving certificates and deposits in savings banks shows an increase over the corresponding period in 1955. I hope and I believe that those figures indicate a growing awareness on the part of the public of the necessity to build up our savings and so get into a position in which we can compete on better terms for the future with other countries.

The House will also have noticed that the effect of those measures on our balance of trade has been substantial. The import excess which was running badly against us not merely in 1955 but also in January and February, 1956, has been brought under control. If we look at the figures for the five months from July to November we will find that the import excess was almost £18,000,000 less than it was in the same period of 1955 and, in addition, that it was £2,500,000 less than it was in the same period of 1954. If that position had arisen through an increase in exports it would, of course, be far more satisfactory. There has been a slight increase in exports in recent months— a matter of some £3,000,000 or so—but that is not enough to compensate for the alteration against us in the terms of trade nor is it enough in any way to enable us to buy the imports that we would wish to purchase. It has been necessary therefore, in order to protect that balance, that we should have quite a substantial restriction on our imports and that restriction is, in fact, reflected in the figures that were published last week.

I do not want to hide the fact that it is satisfactory that the measures taken by the Government have had that effect of bringing things more into line but I want to stress that it is essential that everyone would realise why our payments have come more into balance. They have come more into balance because of the measures that were taken but if those measures were cast aside without thought and too quickly, the result would be a reversal to the position which we had before Let me take the simile of a doctor with a patient who is convalescing. The patient hates far more obeying doctors' orders when he is getting better than he does when he is very ill and he is far more likely to kick over the traces when he is getting through to a period of convalescence.

We have got out of the worst trough in relation to our balance of payments deficit as it was in 1955 and in the early part of this year. However, we have done that on a basis of the measures taken and until such time as we can increase substantially our production to meet the imports we would wish to make some types of measures will be necessary. This Bill deals with the positive aspect. The restrictive measures that were taken and that had to be taken were the negative aspect. No member of the Government had any doubts whatever about the better way to meet our difficulties. The better way is to produce more.

Any effort by us to build greater production had to be made on a proper solvent basis. The measures that have been taken by the Government over the past 12 months have enabled us to build now for positive production within the four walls of solvency and this Bill, from the tax incentive point of view, aims to get that greater production. If we are not able to get it, there will be little chance of a progressive rise in our standard of living, of a progressive development for the economy as a whole. I believe, however, that once the need is fully appreciated throughout the country for greater production and for greater savings to enable more to be produced, there will be a response by the people as a whole to that need and, in that way, we will be able—provided we do not lose our heads—to finance the development that is necessary in the right way. I believe we will be able now on this basis to set about a cure for our problems.

The Bill itself, if I might come to it, deals, as I have said, with five different parts. In Part I, the only thing of importance to which I should refer at this stage is the fact that we are providing a new method of depreciation for machinery that is utilised either in conjunction with a mine or a quarry. The purport of that section is to provide that the depreciation allowance can be calculated in relation to the length of life of the quarry or mine where the machinery is being worked rather than to the length of life of the machinery alone. It could very easily arise that some expensive machinery would be erected at a mine and that the machinery itself would have a much longer life than that of the mine. Under the existing income-tax code, the Revenue Commissioners would have been bound to arrange the depreciation allowance on the length of life of the machinery even though for part of that life, the machinery would be standing idle because the mine had been worked out. This corrects that anomaly.

Part II of the Bill gives relief from income-tax and corporation profits tax to an extent of 50 per cent. in so far as additional coal is mined over that mined in a datum period. In this part of the Bill it is volume that we are considering—the volume of coal that is produced—and in so far as a company increases its production of coal over and above that of the datum year it ranks for 50 per cent. relief in respect of the profits arising from that excess. The datum year is whichever one of two years the company itself chooses— either the 30th September, 1955 or the 30th September, 1956. The company has the option itself of choosing whichever year it wishes.

Part III of the Bill deals with exports. Exports are so variable in character that we would not be able, in computing the concession we wished to make to stimulate further exports, on the basis of volume as is done for coal. In consequence, in relation to exports, calculation is made not on volume but on the value of the goods exported. Here again, the company concerned has the right to choose as its datum period either the year ending 30th September, 1955, or the year ending 30th September, 1956.

One of the reasons why I gave such an option was that it was quite possible a company could have had a freak contract in 1956 and the existence of such a freak would mean that its trading returns for that year would not be in accordance with its normal pattern. The provisions in this Bill mean that if a company increases its exports over the datum year it will rank for the concessions offered in respect of the proportion of its profits that its excess exports are to its total sales. That is a slight variation in the method of calculation from the basis originally announced but it has been made for the purpose of ensuring that where a manufacturer goes out and seeks an export market there will be an inducement to him to do so even though the ratio of profit in that export market may not be as high as the ratio of profit at home.

The concession is for manufacturers. It is for those who are producing or processing goods at home. It is done in that way because we want fundamentally to increase the amount of goods and because if we do increase the amount of goods we shall have more to export. In addition, we want to urge industrial manufacturers by every stimulation we can provide to seek markets outside the country, knowing that if they do so and if they increase the export of goods in their particular line they will get very substantial tax concessions in relation to those increased exports. The concession again here is 50 per cent.—half the income-tax and corporation profits tax normally chargeable. I think all of us must agree that is a worthwhile benefit.

Part IV of the Bill deals with industrial buildings allowance. It means that we are allowing now, for income-tax deduction purposes, capital expenditure after the 30th September, 1956, on a building or structure which, as is provided in Section 16, is an industrial building or structure. That concession is intended to stimulate modernisation and, as I indicated at the beginning of my remarks, it also includes the provision of additional hotel accommodation. In the past few days we have been reading assessments of the value of our tourist trade. While quite clearly one of the things we must do in relation to that trade is to extend the season, another thing we must do is to extend the accommodation available and Section 17 of the Bill lists the extension of hotel accommodation as being one of the things that rank as an industrial building for this allowance.

Part V of the Bill provides the necessary legislative machinery for the issuing of prize bonds. I do not think there is much I need add to what has already been said in relation to a prize bond issue. I hope to have it early in the New Year and I believe that the issue will form a useful addition to the existing measures for the encouragement of savings. I hope the issue will appeal to a large section of the community. There are considerable demands by the public from time to time for opportunities to win substantial sums of money and I think it would be a pity if the State did not take advantage of that demand, particularly in present circumstances.

However, I want to stress very definitely one aspect of the prize bond that is different from an ordinary lottery or gamble. The prize bond scheme is founded on the basis that the investment in the bonds will always be there. It is founded on that fundamental difference from a gamble. In the case of a gamble when you lose you have lost not only your chance of a prize but you have also lost your stake. Prize bonds are not in that category. The intention is quite clearly set out that the investment will remain in the scheme for as long as the investor wishes and that at any time he may, in accordance with the administrative procedure we will announce in due course, request the repayment of his investment. But so long as it is left in the scheme he will have, not interest, but the chance of winning a substantial prize. I think it is a good encouragement to saving and I hope it will be so accepted by the public.

Those are the five points covered by this Bill. A detailed explanation of any section should, I think, wait over for the Committee Stage. I want to present the Bill to the House as part of a general picture that was announced by the Government at the beginning of October of the steps they deemed necessary urgently to increase production and achieve results such as I have mentioned here to-day. I want to present the Bill to the House as part of the acceptance by the Government that, while restricive measures may be necessary to curb the economy, the real remedy lies in increasing and expanding the goods we produce and the services we give here at home, that if we increase and expand production then, by that increase, we will have more available to export. Particularly under Part III of this Bill, the stimulation is given by means of the very substantial tax concession involved to ensure that those who are in the position of being able to do so should be urged to go out and do what is a really vital national task.

Támuid tar éis ráiteas an-leathan d'fháil ó'n Aire Airgeadais indiu, ráiteas atá i bhfad níos leithne ná téarmaí an Bhille atá ós ar gcóir. Dar ndóigh, ní h-aon locht é sin mar is ceart ó am go h-am do dhaoine údarásacha mar an Aire Airgeadais ráiteas den tsórt san a thabhairt dúinn ach n'fheadair an é ar ócáid an Bhille seo ba cheart dó é dhéanamh mar tugaim fé ndeara nar thug sé aon ráiteas mar é do'n Dáil nuair a bhí an Bille seo fé dhíospóireacht sa Tigh sin.

Is maith an rud é, ámhthach, go bhfuil sé de chead againn focal nó dó a rá i dtaobh stáid na tíre fá lathair, fé mar a dhein an tAire féin é. Do dhein sé síos fada ar stáid na tíre ach nílim chun é leanúint ar fad ins na rudaí a dúirt sé agus, rud eile, b'fhéidir go bhfuil rudaí airithe a dúirt sé nar béinn ar aon aigne leis na dtaobh.

Deir se go bhfuil leigheas sa Bhille seo ar chuid, go h-áirithe, des na fadhbanna atá ag déanamh buathardha do mhuintir na tire fá láthair ach tá sé i gceist an bhuil an réiteach ceart aige ar na deachrachtaí sin, agus go deimhin, is mór iad na deachrachtaí san. ‘Se tubaist an sceil e, ar shlighe, nach raibh a leithéid sin de ráiteas le fagháil againn i bhfad níos tuisce, ní h-amháin ó'n Aire Airgeadais ach ós na h-Airi eile atá i n-éineacht leis sa Rialtais mar i dtosach na h-aimseare, nuair a bhí an tAire ag iarraidh a mhéar do chur ar chuid des na fadhbanna so, bhí Airí eile an Rialtais ag gabháil timcheall na tíre á rá nach raibh aon rud bun os chionn, go raibh ag éirighe go geal le cúrsaí na tíre agus nár ghá do mhuintir na tíre aon chorabhuais a bheith ortha mar gheall ar chás na tíre.

We have got a very comprehensive statement from the Minister for Finance on the economic state of the country to-day and anybody listening to the Minister would be justified in saying that he has painted a rather dismal picture of the whole economic situation. It is encouraging, however, to find that the Minister is now facing up to the realities of the situation. When I say that, I do not want to convey that he has not already touched upon some of these problems that he has mentioned here to-day, but the unfortunate part of it is that, while he was endeavouring to do so, other Ministers of the Government were going around the country comparatively recently telling the people that there was no cause whatever for alarm, that everything was rosy in the garden.

I am inclined to think that if the Ministers of the Government at that time had put their heads together and worked in unison and admitted then that the position developing in the country even at that time was one that should cause grave concern to the people, it would have obviated some at least of the difficulties, but, instead of that, instead of facing up to that position, they went about the country making contradictory statements as to what the position was.

We have got the real picture from the Minister for Finance to-day and, as I said at the commencement, the picture is not by any means a rosy one. We certainly have a lot of leeway to make up as regards increasing the output of the country, both from farm and factory, and I think that in all these discussions the emphasis should be placed on increased output from agriculture. I must confess that I am surprised that that is not the aspect of the problem to which the Government is paying special attention. We have all heard from time to time about the advisability of increasing agricultural output. Even the Ministers of the Government have been telling the people the great necessity there is for that, but, while we have certain grandiose measures being introduced in other directions, there is little or nothing being done by the present Government to increase agricultural output and I assert that that is the basic consideration in this country, that unless we get increased agricultural output, it will be very difficult to solve our economic problems in a satisfactory way.

When I say that increased agricultural output should be our first consideration, that does not mean to say that we should neglect the industrial arm. In my opinion, the two things should go hand in hand, but there should be more consideration given to agricultural output than to anything else.

The Minister referred to the problem of our adverse balance of payments. He said that was a continuous and endemic problem. I do not agree with him at all in that. The adverse balance of payments has not been a continuous problem. As Senators may remember, it was a problem in 1951 but in subsequent years it largely disappeared. We have it reappearing again now in a very serious form. While it is satisfactory to note that there is some little improvement in the position, nobody can say that the Minister or the Government has succeeded to any great extent in grappling with that very serious problem. Whatever little improvement has occurred is due, in my opinion, almost entirely to the Special Import Levies introduced by the Minister.

Now the question to put before the Seanad is: would the little improvement that has been effected in the adverse balance of payments position compensate for the enormous increase in the volume of unemployment? That question must be posed to the Minister and to his Government. In my view it will take a great deal to compensate the people for the ever-increasing volume of unemployment, not to mention the ever-increasing volume of emigration. These twin social evils have reached proportions never before reached in this country and, when we talk about an easement in the balance of payments position, we must also bear in mind that that easement, satisfactory though it may be in a limited way, is offset by the increasing volume of unemployment and emigration. In his statement to-day the Minister did not make one reference to any of these things. I think Senators will agree with me that they are most important considerations.

The Minister mentioned the great need there is for savings. Everybody interested in the welfare of the country will agree with him on that. Savings are one of the ways in which we can strengthen the economy of the country as a whole. We can strengthen our economy not only by encouraging our people to save but by encouraging them to spend wisely at the same time, whatever little they have to spend. What encouragement has been given to our people to save? I am afraid our people are rather sceptical to-day about the whole position, especially those who saved in the past. Remember, it is the people who saved in the past who will be likely to save in the future. Many of those who saved in the past and put their hard-earned savings into National Loans, especially certain of the National Loans, find now that their hard-earned savings have depreciated to a great extent, an extent they never anticipated. That is not very encouraging. That will not encourage people to engage in the savings campaign now advocated by the Minister.

Investment in National Loan, once regarded as gilt-edged security, is gilt-edged no longer. That aspect of the matter should engage the attention of the Government. Steps will have to be taken to restore confidence to the people. More than anything else, the people want confidence, confidence in the policy of the Government, confidence that an enlightened policy will be pursued and a reassurance that, if they invest their money as they are advised to do, they will get a proper return for that money. I would like the Minister to give special attention to that aspect of the matter.

The Minister made no reference to-day to the grave problem of unemployment. We have to-day a figure of 74,000 unemployed, a figure never before reached in the history of this State. We have no figures for emigration but it must be conceded that the volume of emigration to-day has exceeded anything that has gone before. People have been exhorted by the Minister to work harder, that being one of the cures for the present adverse situation. No doubt, it is a good thing to advise people to work harder but sometimes people find that, when they work harder, they do not get any corresponding return or reward for their labour. Indeed, it has been the experience of the agricultural section of our community that, the harder they work and the more they produce, the poorer the prices they get.

There is no better example of that than the present turkey situation in the country. That is an example of increased production in accordance with the advice of the Minister. What do the people get in return? They have to sell the produce at a loss—at a dead loss at that. These are aspects of the situation to which the Minister and the Government should turn their attention. I have mentioned the question of the present bad market for turkeys only as an example of what people will get sometimes when they produce more.

There are other fields of activity where the very same thing has occurred. If the Government could sit down and think of some plan—be it a three-year plan or a five-year plan—in accordance with which they could guarantee prices for the farmers of this country they would be doing a good day's work. I am aware that the prices of some items of agricultural produce are guaranteed. As regards the rest of the market for agricultural produce from year to year it appears to be very uncertain.

To come back to the Bill before us, I must say it has a good many sides to it. It is decided apparently to make provision for relief from taxation for people concerned with coal mining, and to give relief from taxation to exports, provided, I take it, that the profits involved will be utilised for the development of the industries concerned, and that none of them will go into the pockets of the shareholders of these industries. There are also allowances for industrial buildings and there is provision for the creation and issue of prize bonds by the Minister for Finance.

Apparently this measure is to be regarded as a temporary device, more or less to meet the difficulties of the present situation. I suppose it is as such that the members of the Seanad should approach it. The criterion that should guide us in considering this measure is whether it will provide the necessary remedies for the economicmalaise that has overtaken the country in recent times, or whether it will go any worthwhile distance towards relieving the people of the country from the economic blizzard that has blown into every household during the past 12 months or two years. That is the question.

I must say that while this measure may go a certain distance, I feel it will fall very short of being a real solution for the many economic and financial problems that face the country to-day. As I have said, there is provision in the Bill for the giving of certain tax reliefs to the coal-mining industry. While that is a provision to be welcomed, at the same time I have certain reservations about it because it appears to me that these provisions will operate in a rather discriminatory manner and that people engaging in coal-mining in the future will have advantages over those already operating such a business.

I do not know if that is a proper thing to do but, as the Minister has said, his idea is to expand the business. However, in endeavouring to expand the business in this way, I feel he is not treating those already in that business very equitably. I am also wondering whether, in relation to the development of the resources of this country, the Minister and the members of the Government should not pay more attention to our peat resources. I wonder what consideration they have given to that aspect of the position.

I submit that our peat resources are very important and are deserving of more attention than they seem to be getting from the Government. After all, the bogs of this country are widely scattered. Turf is a product upon which we have had to rely to a great extent formerly. We may have to rely on it again to a great extent and I think one of the measures of the Government should be to develop the bogs of this country. They should regard that as a worthwhile and proper field of activity in which to invest capital.

I regard any capital utilised for the purpose of developing the bogs as being soundly invested. In the Dáil when this Bill was under consideration there was reference to manufacturers and exporters. There is some confusion in my mind as to what the position will be as between manufacturers and exporters. The Minister has already referred to the important rôle that exporters of manufactured goods can play in the policy that he has put before us to-day. I do not know what tax concessions will be forthcoming for exporters of manufactured goods from this country. I think it was Deputy MacEntee who raised this point in the Dáil. The Minister for Finance then undertook to consider it before the Bill came before the Seanad. I wonder if the Minister has given it full consideration now? I should like to hear from him, when he is replying, what consideration he has given to it and what decision he has reached in the matter.

I have already referred to the special import levies. I was not inclined to deal with these at all until I heard the Minister. They entered largely into his statement to-day. There are many people in the country who cannot understand the reason for the imposition of these special levies on certain articles. The Minister speaks about the necessity there is for increasing output, but, in my opinion, some of these import levies would have the opposite effect. While the Minister is advocating an increase and, through this Bill, giving assistance with one hand, he is doing quite the reverse with the other. Some of these special import levies have the effect of reducing the standard of living of our people. For instance, nobody can understand why special import levies should be put on such commodities as bananas, oranges and fruit of various kinds, things which are badly required in the country, especially by young people. I do not wish to go into this matter any further. This debate could be a very wide one, but I do not want to widen it any further. We shall probably have something to say on the Committee Stage of the Bill.

In the first place, I wish to congratulate the Minister on the very clear and convincing statement which he has made regarding the state of the country to-day. His exposition was, I think, unmistakably correct and I agree with everything he said. One point which he brought out, which has been denied by Senator Kissane, is that the events of the last year were led up to as a result of a long period of unbalanced budgets and unbalanced external payments. I think there is no question about that. As I said in the debate on the import levies, it was only the accident of the war which prevented the events of last year coming to the surface much earlier than they did.

The Bill before us is part of the attack on the adverse balance of payments, which has been the central problem in our economic life in the current year. The improvement which has taken place in the balance of payments is undoubtedly very largely due to the vigorous action taken by the Minister and by the Government. As the Minister said, some of his actions have been unpopular, but the treatment for a sick patient is very often unpleasant for the patient. I think the Minister must be congratulated on the success of his measures so far and must be supported in the further measures which he now proposes to take. I quite agree with him that the fact that the patient is becoming convalescent should be no reason for letting up on the treatment. Actually, it is a reason for intensifying the treatment. The patient is now stronger than he was and is able to bear possibly even more unpleasant treatment. The principal thing is to get the patient cured, because, if the patient is not cured, the financial and political consequences for the country will be serious in the extreme.

I do not wish to repeat what I said in the debate on the levies. I feel, however, that it is necessary to say that the situation requires a whole combination of fiscal and financial measures, all of which will reinforce one another. The joint effect of all these measures is considerably more than the effect of them individually added together. I also feel we must draw a distinction between the short-period and the long-period problems. I entirely agree with what the Minister said to-day, that, in the long period, the correct thing to aim at is the expansion of production and of exports. By doing that, it will be possible to restore equilibrium in the balance of payments at a high level and not at a low level, much as, in the case of an individual living beyond his means, the ideal method of making his income and expenditure balance is by earning more, not by spending less.

This Bill will make a modest contribution to that long-period solution. The taxation concessions in regard to exports will, no doubt, stimulate the production of exports, provided that they are accompanied by a number of other measures. The Bill by itself will not do very much. If the Bill is fitted into a general policy aiming at increasing industrial production, it will do its share in the group of measures which has to be taken in this very difficult position.

In order to expand industrial exports, the first thing that must be done is to expand production, and to expand production in an efficient manner, not merely to expand production for its own sake or even for the sake of giving employment but to expand it in such a way that the products can be sold in outside markets, that they are competetive and good. In that regard, I should like to pay tribute to the excellent work which is being done in this country by the Institute of Management which is doing a great deal to improve productivity in industry to-day.

In addition to the efficiency which is based on education, in the broadest sense of the word, there is also need for adequate capital facilities. Industry must have access to ample supplies of capital at reasonable rates. There must also be provision for the marketing of products abroad. It is no use producing unless one can sell and in this respect the work of C.T.T. is relevant. That organisation should be congratulated on the good work it has done. What I am trying to point out is that, if this Bill is fitted into a suitable industrial policy generally, it probably will help. Its contribution would be modest, perhaps negligible, unless the other parts of the industrial policy were vigorously pursued.

The question of agriculture is outside the scope of this debate but to neglect agriculture in a discussion of this kind would be to discuss Hamlet without mentioning the Prince. In the long run, it is the expansion of agricultural production and exports that must be relied on to balance our payments at the high level at which one wishes to balance them. Even assuming that the industrial policy is vigorously pursued on all its fronts, it will be some time before concrete results are achieved. Meanwhile, the short-period problem of restoring equilibrium in the balance of payments at some level, even a low level, must not be neglected. For a Government to keep its eyes fixed on the distant future to the neglect of the immediate future could have very dangerous consequences.

I would go so far as to say that, if the short-period problems are not faced and solved, the long-period problems may be incapable of solution. If the balance of payments is allowed to get out of hand and not vigorously attacked, as it is being attacked, this year or next year, the long-period programme of investment in agriculture and industry might prove impossible. Our foreign reserves might be depleted to a dangerous level and confidence in the future of the currency and banking system might be undermined, and, as the Minister hinted, we might even be driven to the undesirable course of devaluing the Irish £. If anything like that should happen, foreign investors would be very slow to play their part in the expansion of Irish industry. Therefore, I think the Government should—I am not suggesting it has not done so but I am simply emphasising it—do whatever is necessary to restore equilibrium in the short period, even at a low or inconvenient level.

This Bill, as I said, is mainly a longterm measure. The longer it is in operation, the greater will be its effect. In that respect, it is unlike the import levies which are in their very nature temporary and which, I hope, will be soon reduced, if not discontinued. They are essentially emergency measures which should be temporary. Indeed, if they are continued long enough, it can be said that they have failed. They are essentially a sort of shock treatment. If the patient is not able to dispense with them very soon, they are not producing the desired effect.

At the risk of wearying the Seanad, I would like to repeat what I said earlier this year when dealing with the levies. Merely to reduce imports by the rather brutal method of levies and to increase exports by subsidies is not in itself a cure for the evils from which the country is suffering, because these measures, the reduction of imports and the subsidisation of exports, simply attack the symptoms and do not attack the disease. It cannot be sufficiently emphasised that in this country the adverse balance of payments is a symptom of an internal inflation and that, unless that internal inflation is dealt with, the external balance can never be healthfully restored. The symptoms can simply be concealed and that concealment may be dangerous and may do more harm than good. To cover over the crack in the wall with wallpaper may conceal the fact that the crack is widening.

I had prepared certain remarks on the inflationary condition of the country, but everything I was going to say and more has been said by the Minister. Therefore, I do not think it is necessary to go over the same ground again. The fact is that themalaise from which the country is suffering is well understood by all the experts who study it. There is unanimously agreed opinion among the financiers and economists about what should be done and the difficulties in carrying that out are political rather than financial and economic.

I was going to refer to the report of the O.E.E.C. on Irish conditions where the realities of the country's position are very clearly shown, but the Minister has already gone over that ground fully and I do not wish to take up the time of the Seanad in repeating what he said. The central point of the argument in the O.E.E.C. report and in the Minister's opening statement is that in this country the volume of consumption together with investment is outrunning the volume of saving. That is the cause of inflation, and, until that lack of equilibrium between spending and saving is cured, disequilibrium will continue, although the symptoms may be plastered over by import levies. Until production is expanded, money incomes and money expenditure by private people and public authorities must be pruned down.

Why is production lagging when we have so many willing workers?

I would prefer to continue the argument which I am trying to develop. Perhaps we will discuss that on some other occasion. As I was saying, as long as investment is outrunning saving, there will be internal inflation and that is what this country is suffering from, as the Minister said. The cures are easy to preach, but perhaps rather difficult to practise, but at least everybody knows what should be done. It is mainly a matter of courage on the part of the Government and of co-operation on the part of the people. Investment, of course, should be reduced as far as possible to equate with current savings and the reduced investment should be concentrated on productive rather than on social problems and on export industries rather than on industries catering for the home market.

I welcome the setting up of the Industrial Investment Council. This board was advocated in the Banking Commission report 18 years ago. That recommendation was neglected by successive Governments until this year. It has now been set up and I congratulate the Minister on setting it up and on the excellence of the personnel whose co-operation he has obtained. The country should certainly derive great benefits from the deliberations of that body. I hope that the first fruits of its labours will appear in the Capital Budget which the Minister has promised to introduce in the spring. I have no doubt that in that Capital Budget investment will be directed towards productive rather than social purposes and that as far as possible priority will be given either to industries which are producing exports or, what is equally important, industries which are producing substitutes for imports. In that connection, I agree with Senator Kissane that the development of our turf resources has great possibilities and I hope that capital priority will be given to that excellent purpose in the Capital Budget.

The Minister had a great deal to say about the necessity of expanding saving. He gave figures to show that saving in this country is low compared with that in other countries. He argued that comparatively undeveloped countries should have a greater and not a smaller fraction of their national income. Therefore, it is the duty of the Government to increase the volume of saving, if possible by encouragement, but, if necessary, by coercion. The Government has power to impose saving on a community and in the circumstances that power should be used, if necessary. If the current saving of the community is not sufficient to finance necessary investment, foreign capital coming from abroad could help to fill the gap. In so far as the gap is not filled in that way, I think that a planned and judicial draw on our accumulated external reserves could be justified in the short run in order to finance desirable investment.

I must congratulate the Minister on having attempted the experiment of the premium bonds. I advocated them for many years in the Seanad. This year, the Minister used as an argument against them the fact that they would compete with the Hospital Sweep. If they compete with the Hospital Sweeps, that might tend to shift investment a little bit from social to productive purposes. Many people believe that hospital building has gone far enough. Therefore, if the gambling instinct of the country could be switched out of building hospitals into more productive investment, it might not be a bad thing. I think the Minister will probably find that the premium bonds in the early stages will not attract a great deal of new saving. I think they will probably attract old savings and that during the first few months savings will be taken out of places such as the Post Office savings bank and even the new Savings Loan and transferred to premium bonds. That, I believe, has been the experience in Great Britain and will be the experience here, but when the money has been attracted out of less gambling types of savings into the premium bonds, then the bonds will begin to produce new savings, which might be quite considerable.

I do not wish to go over all the ground covered by the Minister and covered so frequently in the Dáil and Seanad this year. I simply wish to repeat some elementary truths—platitudes, if you wish—which cannot be sufficiently repeated. I think it is the duty of the Dáil and Seanad to support the Minister in the course he has undertaken. He has shown courage and consistency up to the present. If he has support for his programme I have no doubt at all but that in the course of time equilibrium will be restored at a high level. But courage, consistency and perseverance are necessary.

The country must be prepared to endure certain unpleasant experiences in order to recover its ultimate health. If the correct policy is not pursued in the short run and if we are buoyed up with mirages about great expansion of production in the future, while the current balance of payments is allowed to lag badly from year to year, the long period programme may prove incapable of realisation. The penalty of failure to face up to the present situation would, in the long run, result in an increase in emigration and an increase in unemployment and would be a serious blow to the financial credit of the country and even—I think this cannot be sufficiently emphasised—a danger to our political independence. The country which loses its external reserves and which ceases to be a creditor nation and becomes a debtor nation is not only financially but politically a great deal weaker than it was.

In the programme of correcting the adverse balance of payments the present Bill may play a modest part. It is conceived on correct lines and, if it is accompanied by the correct measures, in the industrial, financial and fiscal fields, it may play its part in expanding production and restoring equilibrium at a high level. It is for that reason I would commend this Bill to the approval of the Seanad.

From what we have heard from the Minister, I take it that the main purpose of this Bill is to stimulate, by State contrived incentive, coal mining, exporting in general, industrial building and the lending of money to the Government. I would agree with those Senators who congratulated the Minister on the clarity of his survey of the situation, but I am afraid I do not agree with him as to the solutions he recommends.

I was also glad he gave a wide survey on this, the first of two not dissimilar Bills, because the next item on the agenda deals with grants to new industrialists. I was glad he dealt with the whole situation in a pretty wide way which I think ought to save time when we come to consider the second of these Bills. I would agree with Senator O'Brien in congratulating the Minister for making it quite clear that this is part of a general policy, that it is a counterpart, if you like, of the import levies which endeavoured to cut down our imports, and that a large portion of the concern of the Government in introducing this kind of Bill is to set up our exports and, consequently, both are aimed at righting our balance of payments situation.

The Minister gave us certain figures about Irish capital formation and quoted, I think, the figure 15.9 per cent. as representing Irish capital formation in regard to our gross production. As against that, he quoted a figure of 25.6 per cent. in respect of West Germany. I admit that makes us look rather backward and hesitant, but I wonder if it is quite fair for the Minister to choose West Germany? He has given us figure for other countries. I hope to mention those presently.

Quite clearly, the whole purpose of West Germany since the war has been that of building up industries which were smashed to pieces. I think it would be to be expected that their problems of capital formation would be very much bigger than those of almost any other country in the world. Certainly, they would be much bigger than those of any country which was more or less destroyed by war.

In relation to the figure in respect of West Germany quoted by the Minister, could he tell us how much of this capital formation or new capital investment was State supplied? How much would the German capitalists supply or how much was supplied by the State? When a decision is made to reconstruct in Germany, how much of that reconstruction or building up of industry is planned, run and invested by the State?

If I understood him correctly, the Minister took the year 1949 equal to 100 as the base year and gave figures in respect of the 1955 amounts set aside for capital formation. The figure of 228 was the German figure and our figure was 131. That did not seem to me to be so very bad if we compare our country with a country like Belgium which is generally regarded as a pretty go-ahead industrial country and the figure for which was 135 or even with a country like Holland, with a figure of 140. It is only when the comparison is made with the bigger industrial nations that we find we are lagging behind.

I should not be surprised that a small nation like Sweden with a socialist Government would be very high up with a figure of 145, but within the conditions, private enterprise and non-State planning, I do not think you could say that the Irish figure was as bad as all that.

I must have failed to make the point clear. The figure 131 here is as high as that because of foreign disinvestment.

I think the Minister quoted a comparable figure for 1954 which was less. I am not suggesting that Ireland is very high, but it is not quite as low in comparison, and taking other factors into consideration, as has been suggested. The Minister rightly said that our national production is not increasing. Why is it not increasing? Senator Hickey asked that question and while it would not be fair to ask an individual Senator to answer the question, I think it is fair to ask the Minister to answer it.

What is going wrong? Why is our national production not increasing? I say that the reason we are not increasing our national production is that we are, in a real way, failing to plan. We introduce a number of patchwork and temporary tinkering measures, but we are afraid to plan our economy in an overall way. We are content to tinker with a most imperfect, second-rate, capitalist machine which, as the Minister is now showing, is not working well.

I would like to see us in a position here to plan production, to plan the use of our resources, to plan employment and the employment of credit in particular, and to plan distribution— all on the basis of what is primarily needed by our community here as a whole and forgetting the superstition that what brings back profit to some private interest must necessarily, by that fact, be more worth while from a community point of view, than what brings smaller profit, or even no direct profit at all. It is obvious that if you cannot make a case for planning for a community as a whole of things that do not show a direct profit, it would be wrong to consider building hospitals or roads or things of that sort which do not show a direct profit, even if it can be shown that they are necessary for the health and wealth of society as a whole.

We are told that, under the capitalist economy, if a business is profitable, it is so because it satisfies a public need and if it is not profitable, that is so because it is not satisfying a public need. I would grant objectors to that phrase that there is a fallacy there, because of course a profitable business may be so because it supplies the need of the people who command the money, who create "the effective demand", as economists call it.

If we accept this theory, that profit in a business is merely an indication that that business is satisfying a public need, are we not entitled to ask, in relation to certain businesses which are not making such a profit and which are requiring crutches such as are provided by this kind of Bill, and so on: "Why are they not making a profit; is it because they are not supplying a need?" In other words, if private enterprise—about which we talk a lot and in praise of which we talk a lot—needs this kind of crutch from the State, what has happened to the spirit of self-reliance about which there is also a good deal of talk? What has happened to the moral fibre of the individual industrialist, the individual capitalist, the individual trader and so on?

We are asked here in this Bill to introduce State interference into these businesses, not for the benefit of the consumer or the public or the community, but for the benefit of the industrialist, the businessmen, the owners of the mines, and so on. I would agree with what Senator Kissane said that perhaps this type of thing might be more welcome if it were for agriculture and, I would say, for the private agriculturists, although I believe a great deal of public planning can be done in agriculture also. I would welcome it more readily than for the private industrialists, who apparently are getting weak on their feet. I have no hope of weaning the Minister for Finance from capitalism to socialism.

I am glad to hear the Senator say that. He might not go with the Senator.

I do not claim even that I have made any progress with him.

Or anywhere else, either.

I recognise that he sees how badly the capitalist system is working out and I think he has given a very clear picture of it. He shows that our production is not high enough, that it is not increasing; he has shown that we are exporting our labour power, which is an astonishing thing to do; he has shown us we are short in savings and investment. We know, as indicated in the Dáil the other day, that the 1938 £ is worth only 8/2 now. We know that. We know we have failed, not merely to use the labour of the people who go away, but failed to use the labour of the 74,000 unemployed. We are all agreed that the capitalist system is working badly in this country.

The Minister thinks that, by this kind of measure, it can be bolstered or propped up in the semblance of working, but does the Labour Party believe that? I would like to ask the Labour Senators do they feel this kind of Bill, propping up a decaying system, is the Labour view of the way in which Ireland's future is to be planned? I would be astonished to hear that view expressed at a Labour Party Congress and therefore, since Senator Hickey put the query as to why production was not increasing, I would like to put the question to Senator Hickey: does he think this Bill constitutes the Labour answer to the question? I should be very surprised if it did.

Under Section 7, in regard to incometax relief for coal-mining interests and so on, I should regard this as a very cumbersome mechanism for encouraging increased production of coal, easier production of coal or more profitable production of coal. I should like to ask the Minister whether these coal mines are an economic proposition. That is the question usually asked in this kind of economy: are they an economic proposition? If they are, why are they not being developed by the well-tried powers of private enterprise? Why are they not making a success of it? If they are not an economic proposition, we still have two choices. They can be dropped, we can close them down, if they are not an economic proposition. Why should we subsidise, as a State, a private, uneconomic business? We might either close them down or take them over, as was done in Britain, with great success, to prevent certain mines being closed down.

With great success? Is coal-mining a great success in Britain?

The National Coal Board has prevented the closing down of many mines which were petering out under private enterprise. The apparent overall failure, if you like, in certain fields is due to the fact that the community is carrying mines such as this for the benefit of the community, not for the benefit of the private industrialist.

And the community are paying well for it.

I should like to see this being done here for the benefit of the community in the future. Senator Burke is quite happy to have the paying done, provided the paying is into private pockets. Which will this Bill do? We were told frequently in this House that we must have self-reliance. The Minister for Health told us, as reported at column 1353, Volume 46, that it would be dangerous in this House to allow State interference to "supplant individual effort". He said further, as reported at column 1357:—

"The idea of self-reliance is fundamental to it. Its eventual aim is to help people to help themselves. I am confident that most of those for whose protection the Bill is designed will agree with the principle of self-reliance."

These people are the people in the upper income group and they are welcoming, according to the Minister's colleague, self-reliance and the spirit of self-reliance in relation to national health. I do not know why they do not recognise the value of such a spirit in relation to coal-mining, exporting or any other capitalist production. Apparently, there they welcome the spirit of state interference also and ask what else could you do with the coal mines, besides giving them subsidies.

I was glad Senator O'Brien mentioned that this kind of thing is in fact a concealed subsidy. We could, of course, encourage, as some Senators said, the use of native fuel, the use of both coal and turf. I noticed in the Dáil the other day it was mentioned that recently £68,750 was spent by three named Government Departments on imported fuel, representing some 8,923 tons. When you see a figure like that, you feel there are other measures and other steps which could be taken to help our home fuels, as opposed to the kind of imports that, in one capacity at any rate, the Minister seems opposed to.

In Section 8, we have reference to corporation profits tax excess. This excess profits tax, which the companies engaged in coal-mining will have to pay, is to be reduced by 50 per cent. I seem to remember—I think in 1948, in the Dáil—the Attorney-General referring in pretty strong terms to those who were making excess profits under this type of calculation and warning them that measures might have to be taken if profits continued to be exorbitant. The measure taken here is to cut by half the kind of tax we are putting upon them.

I notice that at the Insurance Institute the other day, on the 12th December, as recorded in the daily Press of the 13th, the Minister for Health said that there was too general a tendency to expect the State to cope with problems that formerly had been regarded as the responsibility of the individual. I am afraid that is precisely what this Bill is asking us to do, asking the State to come in and cope with the problems of the individual.

I should now like to say something about Part III which deals with the question of exports. I do not think I shall be contradicted when I say in capitalist terms, that when a foreign State makes a financial concession to producers in order to permit them to export more cheaply, very soon we, on the receiving end, refer to that as a form of dumping or subsidised exports against which we tend to fight. I remember when the suggestion was made that cheese from the Netherlands was in some such way being made cheaper for export, there was this talk of dumping and yet this is precisely what we are trying to do with our exports. When our own country does this kind of thing—subsidises exports —it is called "reducing the unfavourable balance of trade". Of course, it does not go quite so far as the case of dumping, but I wonder is it an entirely healthy practice?

I shall turn now to this question of allowing industrialists engaged in new industrial building to take one-tenth— I think it is—off the expenditure, that is, to make an allowance of one-tenth of the money that has to be deducted in charging profit or gains in trade. That is dealt with in Part IV. The Minister tells us that includes hotels. It has been made apparent by various spokesmen lately that we need more hotels, but I would ask the Minister why it is, in a private enterprise economy where we are told there is a demand for hotels, that demand cannot be supplied by the ordinary mechanism of supply and demand? What is wrong with our capitalists that they are unable, through private enterprise, to put up the money and to build the hotels we need? Why is it that they have to be given subsidies and helps for all these things, even for such things as hotels where everyone recognises there is a demand for them? Yet, we have to give them State doles in order to help them to get on their feet and build hotels.

I shall say something about Part IV which deals with the prize bonds. I notice the Minister did not refer to the British Chancellor of the Exchequer, although he might have recognised the debt there, because, of course, we are following here pretty closely the inspiration of the British Chancellor of the Exchequer who found that not enough money was being subscribed to Government loans and so decided to couple them, as far as he could, with a kind of State raffle. That is what the Minister is doing here.

We were told by the Minister for Health, as reported at column 1352 of Volume 46, that in relation to health:—

"The adoption of the example offered to us by Britain...would, in my opinion, be a poor tribute to our ability in this country to solve our health problems by means more in accordance with our national traditions."

Of course the fact is we very frequently follow Britain and I do not see in this particular instance any good reason why we should not.

In fact, Britain followed us because the Taoiseach announced he was going to do this long before Mr. Macmillan.

I am very surprised at that, and in that case I should address my remarks to the British Chancellor and say I am very sorry he did not pay tribute to the Irish Government, if not to the Minister for Finance—because I think the Minister for Finance will recognise that the British Chancellor was a little quicker off the mark than he was.

The Minister has told us that one of the things we must do is work harder. Many people tell us that. Presumably we must work harder for the same money. That point was taken up by Senator Kissane. But if you are to ask investors to invest money and more money for the same rate of interest or even for a lesser rate of interest, you are told you are quite unrealistic and that you cannot expect to get money, but apparently you can expect workers to work harder for the same money. That is precisely the same thing. I am suggesting that our economy is geared principally for the satisfaction of the investors, the industrialists, the capitalists and the owners and not sufficiently for community needs.

I do not believe we can, by this Bill, produce, as the Minister says, a really planned economy. I do not believe it can be done by injecting sums of money into a dying capitalist body which is now apparently so feeble that it cannot stand any longer on its own feet. I should like to see us use our labour-power, not export it, or maintain it in idleness, but use it for the production of quite a number of the things that we do need—I do not want to give a catalogue at the moment. I would say I am very strongly in favour of doing things by community planning for the community benefit, not by the giving of community financial hand-outs as recommended in this Bill for purely private benefit.

Commenting on the Minister's speech and on this Bill in general I think it is necessary to correct an entirely false impression Senator Sheehy Skeffington appears to have taken from it. He has dwelt at considerable length on the subsidisation contained in this Bill. There is no subsidisation whatever. In that also Senator professor O'Brien is entirely wrong. What we have at present, or what we have had, is a vicious system of taxation. The Minister is trying, in a very modest way, to remedy that in certain respects. Our system of taxation tends, and always has tended, to curb individual enterprise. It has tended to restrict effort particularly in the direction which is most desirable, that of entering in a competitive way into world markets. If some little tax relief is given to people going into the open to compete in world markets, I think that is desirable and I do not think there is any sense or meaning in describing that as a hand-out to anybody.

In one respect I would congratulate Senator Dr. Sheehy Skeffington—he is more courageous than many of the Socialists in this country. There are a great many confirmed Socialists who would turn pale at the idea of being described as Socialists. They are Socialists none the less, but they dare not, and will not, publicly express their belief in that doctrine.

The Minister's speech in introducing this Bill opened up the whole field of our economic position and in fairness I would say it was a rather courageous speech. The Minister is fortunate in that he is dealing here and in the country at present with an Opposition Party which is fair and reasonable. If the Minister were a Fianna Fáil Minister, and made the speech which the Minister has made to-day, there would be howls to heaven all over the State declaring that he was spreading gloom and depression and that he was holding out no hope whatever for the country. Dismal and gloomy, however, as was his speech, it was fairly realistic. It emphasised what was wrong in our economy and, while the measures he contemplates are not in any way adequate to meet the situation, at least it is well to know that the Minister realises that this State is in a precarious position.

Before the House adjourns for tea, may I say that, if the House meets to-morrow, it seems to be the general view that we should meet at 11 o'clock in the morning? We can settle that later on, but I just want to mention that that seems to be the general view.

I think that that would suit the majority of us.

Is it the intention to take the Statute of Limitations Bill, if we meet to-morrow?

I mentioned earlier to-day that it is not intended to take the Statute of Limitations Bill or the Married Women's Status Bill until after the Christmas recess.

Business suspended at 6 p.m. and resumed at 7 p.m.

The Minister's speech covered the whole economic position of the country over the past ten years. In 1947, the nation was at a turning point. The emergency period was drawing to an end and the supply position was beginning to be relieved. There was an urgent need for the development of a sound economic policy. The then Government issued warnings that the situation facing the country was grave, but nevertheless there were great opportunities before us. Under proper leadership and direction, the country could have advanced at that period. Unfortunately, somewhere along the line, we took the wrong turning, and, instead of pursuing a policy of increased output and balanced trade, we allowed ourselves to be deceived into believing there was an easy time available for everyone without any hard work and without any curbing of expenditure. In fairness to them, I will say we were led to believe that by amateurs in the political field. They led the people to believe that they could raise their standard of living without any apparent effort. It is clearer than ever to-day, particularly from the Minister's comprehensive speech, that the people were cruelly misled.

Then the Senator was misleading the people.

The country was misled into believing that we could have a higher standard of living without any real effort being made to increase our total production. It is clear now that the Minister for Finance realises that that cannot be done—it is not clear whether other Minister realise it— and that if the people are to have a higher standard of living and if we are to try to cope with the problem of rising unemployment and rising emigration, very serious efforts will have to be made to increase our industrial and agricultural production.

I am completely at variance with those who have said that this is an attempt to subsidise certain industrial activities. There is no subsidisation whatever. What we have is an effort to mitigate some of the hardships involved in our system of taxation. For that reason, we support this Bill, but we support it with reservations. In the first place, it is only touching the fringe of the problem. This Bill provides a certain amount of relief for a certain number of people engaged in export. It might be well to ask the Minister what does he envisage as the total cost to the State of the reliefs that are given? Would it not be possible to go a step further and give relief on all exports of manufactured goods? There seems to be an inherent injustice in giving relief to a certain section—those who will be able to increase their exports over the next few years. There are people who have increased their exports over the past few years and who may have done so to the limit of their capacity. They may not be able to achieve further increases and they will be left out of the scope of this measure and will not receive any tax relief. In addition, it is relevant to say, as has been said by others, that the main hope of making our economy solvent is the expansion of agricultural exports and, as a certain measure of relief is being given now in regard to manufactured exports, would it not be possible for the Government seriously to consider a similar measure in regard to agricultural exports?

It is extraordinary to find, on the threshold of a new year, widespread depression and discontent in the agricultural industry. The repetition of appeals for increased production makes people in agriculture violently angry. If one appeals for increased production to a farmer's wife who has reared a big flock of good turkeys and sold them at 9d. or 1/- a lb. last Thursday, as the majority did, she will probably present the appearance of an angry turkey.

The same is true about tillage. As relief has been given in this Bill, it would be relevant to ask why, on the eve of a new year, no assurance has been given to farmers as to what they will get for their main tillage crops next year. These are questions which we cannot refrain from asking. Our economy is so dependent upon the expansion of agricultural as well as industrial production that it is tragic that farmers, at this stage of the year, are not able to forecast how they will be treated in regard to the prices of their main tillage products.

I do not want to curtail the Senator in his speech, but he realises what the title of the Bill is. I do not want a full-scale discussion of every aspect of agricultural production. If I permit the Senator to go there, somebody will want to follow.

I know, but I think other Senators have referred to this matter to the same extent as I have and I do not intend to go any further than they have gone. It is to be hoped that the measure of relief given here will be extended to our main industry.

I was saying, Sir that in many respects there are shortcomings in this measure. The Minister would have been well-advised to have taken, perhaps, a bolder stand in regard to the tax relief. We must consider to what extent direct taxation has acted as a curb on private enterprise. There are people in this country, and even in this House, who would suggest that private enterprise ought to be terminated completely, but anyone who has seen, as many of us have seen, public enterprises in operation, will admit that they have not shown themselves capable of any very high standard of efficiency and most of us still believe that, while it is necessary and desirable that certain productive enterprises should be run by the State, the main contributors to our productive achievement are those engaged in private enterprise, those who own and work their own farms or factories. The Minister is right to give some relief in the matter of direct taxation, but I think he is wrong in not going a little further in that direction.

The people who increased their output over the last four years, and particularly those who increased their output over the last five or six years, and now reached maximum production are entitled to be considered. It may not be possible for the Minister to amend this Bill at this late stage, but the concessions given in it should be extended to cover exporters other than those who will manage, we hope, to increase the total of their exports over the next few years.

I do not think that the same considerations apply in regard to the concessions to mining. If a concession is given to new mining enterprise, it is equally desirable that a concession should be given to older mining undertakings. I do not suppose many of us know a great deal about mining, but even one with a very limited knowledge of the matter would know that mining does not tend to become cheaper as it is extended. The opening of a mine may involve some expense, but very often, in the early stages, particularly in the case of coal, the deposits are found more readily than when the mine has been worked to a considerable extent. For that reason, the old established enterprises are as much entitled to relief as the newer ones.

With regard to the development of coal production, nothing should be left undone. Having regard to the importance of fuel in industry and in the life of our people, nothing should be left undone to develop to the fullest possible extent within the next few years every available deposit. I heartily approve of anything that can be done in that respect. As other Senators have pointed out, bog development should receive urgent consideration at the moment, not only in regard to the production of solid fuel but with regard to processing turf for such purposes as the production of some substitute for motor and tractor fuel. That matter should be given earnest and serious consideration. Most people realise that complete dependence upon outside sources for tractor and motor power is undesirable. I understand that it is technically possible to produce from turf gas suitable for internal combustion engines. That is something to which attention should be directed.

Every resource of the nation should be developed to the fullest extent. The industries I should like to see benefiting under this Bill are those engaged in the processing of foodstuffs for export. There should be a wide field for development there. The products derived from milk, meat and other agricultural raw materials should be developed to the fullest extent. I hope this Bill will confer some benefit on those industries.

With regard to the Minister's decision to institute a new system for raising money through the medium of Prize Bonds, that experiment is worth trying, at any rate, though I do not think that anyone could hold out too great hopes of that scheme having any very substantial effect on State finances. The position at the moment is rather desperate. Most people recognise that. The financial position of the Government is extremely difficult. Every expedient will have to be adopted to secure more money for capital purposes.

There were many opportunities over the past ten years to do something substantial in relation to capital development for the purpose of increasing our real wealth and our exports. Many of those opportunities were neglected. Many were lost. Opportunities lost do not always return. It is clear now from the Minister's statement that the Government will have to face a very difficult period. I was astonished to hear the Minister say that he recognised that deficit budgeting was a bad thing, though there had been a certain amount of it. He conveyed the impression that he was favourably disposed to budgeting for a surplus. That was an extraordinary statement on the part of the Minister because, a few years back, the main charge that he and his colleagues made against their opponents in office in 1952 was that they budgeted for a surplus.

In actual fact they did not budget for a surplus at that particular time. They budgeted merely to balance their accounts, but the charge was levelled that they budgeted for a surplus of £10,000,000. The Minister says now that that might have been a good thing. He says now that it might be a good thing for a Government to budget for a surplus in the future to avoid having to add, I take it, to the existing burden of deadweight debt and, if possible, to reduce that burden and also, perhaps, to take up some surplus money, which might otherwise be spent on consumer goods, and put it to some productive use. That is an extraordinary change on the part of the Minister in relation to financial and economic policy.

Without exaggeration, it might be said that the Minister in his speech to-day has trampled underfoot every philosophy of the Government of which he is a member and all the policy preached by his Party over the past ten years. Since there is now a substantial measure of agreement in relation to the steps to be taken to rectify the position, gloomy and morbid as was the Minister's speech to-day, there is nevertheless some hope for this State.

Someone posed the questions: What is wrong? Why have we not increased production? Why have we not made any real use of the opportunities available to us over the past ten years? Remember, the past ten years were years of opportunity as compared with the previous ten years, which were years of emergency, years in which supplies were not available. Why has there been that failure to grasp the opportunities that offered? It is a comforting thing to find public representatives here searching for an answer to that question. It is not a question which can be answered simply by saying that the State should take over and run everything. I do not believe the State is capable of doing that. I do not believe it has the personnel with sufficient experience to run every business in this country.

That is not the answer. The answer is that it must be got home to everybody that the situation is serious and that it is possible for the people to save the situation by exerting to the full their capacity for work, their initiative and their enterprise. If that is done, then we shall make some progress. A step in that direction is taken in this Bill in relation to direct taxation relief, but that step should be carried a bit further. The relief should be widened in scope in relation to direct taxation on productive enterprise. Those who are engaged in productive enterprise, be it agriculture or industry, should be given the maximum amount of immunity from the tax gatherer's activity, and particularly so in relation to those producing for export markets.

I should like to see an effort made, as far as it possibly lies in the Government's hands, to cut down imports from countries which are not making exchange purchases from us. I do not think there is any justification at present for dealing with countries behind the Iron Curtain. There is very little prospect of building up an export trade there. Government action should be taken to discourage and, as far as possible, to terminate the purchase of goods from those countries.

On the other hand, we should do everything possible to extend our exports to the countries on which we rely for imported raw materials. These are the directions in which we should be aiming our policy. It would be a good thing if these facts were recognised. It is a good thing that most people nowadays realise that we cannot go on exporting our population at the present rate and that we cannot go on carrying 75,000 unemployed people on our shoulders. People must be employed regardless of what drastic changes have to be made in order to provide that employment. This Bill does provide a change, but it only goes some distance in the matter of tax relief. It will be welcomed if it is accompanied by a similar measure of relief and encouragement for agriculture which must remain the main plank in our efforts to make this country solvent.

First, I should like to congratulate the Minister on the very able survey he made of the country's economic situation. As far as this Bill is concerned, I propose to confine my remarks to Part III. Part III includes the section dealing with exports. The effect of it appears to be that if during the next five years a company exports more than it did in either of the years 1955 or 1956, it will receive a rebate of the tax on the profits it derives from the excess. I commend the principle of encouraging exports by tax relief, but I do feel that Part III of the Bill is most inequitable to those who are already exporting.

I find it difficult to understand why a company which through its own volition had the courage and enterprise to enter the export trade, should be placed in a worse position than one which up to this was satisfied to reap a harvest solely in a protected home market. This, I am afraid, will be the case under the provisions of this Bill. A company which has been exporting will receive taxation relief only on the amount by which it increase its exports whereas a company exporting for the first time will receive taxation relief on all its exports. That does not seem to me to be equitable.

One can take a simple example to demonstrate the inequity. Take companies A and B. In 1955-1956, company A exported £100 worth of goods and in 1957 increased that to £150. It will receive relief in taxation on the profits earned on the additional £50. Company B heretofore had solely traded in this country but now decides to export. During 1957 it exports £100 worth of goods and it will receive relief on the profits derived from that £100. In other words, company A though it exports 50 per cent. more goods than company B will receive taxation relief on £50 less.

If one takes another case of two companies manufacturing the same type of goods. One of them is trading both at home and abroad, is working to full capacity and consequently is not in a position to increase its exports. The other company, which is in the same type of business and heretofore has traded only at home, decides to sell its goods abroad. It will be able to accept 20 per cent. less gross profit and retain the same net profit as the company which exported all the time. The reason is that that company receives taxation relief on its exports whereas the company working at full production is unable to increase its exports at all.

It may be argued that a company which is already exporting is in a good position to increase its exports. I think that view is fallacious and that often the reverse is the case. There are various factors affecting the situation. In the first place, large amounts of working capital are required to finance stocks of raw materials, goods in the process, finished goods and goods in transit and also debtors. There are many difficulties, chief amongst which is that capital is scarce and not easy to come by, whether it is fixed capital or loan.

A further point is the ability to increase production. Obviously the production of any plant has a definite limit. Where an export trade is carried on with plant designed to meet a small home demand, it is most improbable that there would be any surplus capacity in order to increase its production for foreign markets. Consequently, the amount of benefit such a company will derive from this measure is limited, if any. Of course it may be argued that any taxation legislation is inequitable in that it confers benefits on some and hardships on others. It usually depends on the time when action is taken.

For instance, a company with which I am connected recently completed a large new building. Had that work been postponed for a year, it would have received a rebate of taxation on 10 per cent. of the cost of that building. In the case of initial allowances, for which provision was made in the recent Finance Bill, the same situation applies: it largely depends on when the plant was ordered, when delivered and when paid for. In future, companies will probably build further factories or extend existing ones. Similarly, in the case of initial allowances, companies will buy more plant, but, in the case of this measure, I feel existing exporters will, in all probability, be unable to increase their output and may never derive any benefits from this measure.

Originally, this Bill confined the standard year to 1956. However, the Minister introduced an amendment in the Dáil extending the standard year to 1955. I think that is a very small concession. I do not think the Minister went far enough because I do feel a grave injustice has been done; I do not think companies which have shown enterprise in the past have been given due recognition for the work they have done and the risks they have taken. The Minister could do various things. He could extend the relief to all future exports and, therefore, encourage not only those who are exporting but also those who propose to commence to export. He could extend the standard year to any of the past five years, but, since an amendment to this effect was rejected in the Dáil, I cannot see that suggestion being adopted. He could give tax relief on, say, 25 per cent. of the profits derived from all exports, such relief to be increased by 50 per cent. in so far as the exports exceeded those of the standard year. The Minister is aware of all the facts but I am not and, therefore, it is impossible for me to suggest a proposal which would be fair and at the same time workable. However, I do feel that unless the existing concessions to exporters are widened very considerably the existing exporters will feel they have been unfairly treated and may suffer from a sense of frustration which will not contribute to an increase in exports. I hope the Minister will reconsider this matter before the Committee Stage. It may well be that from lack of time we will be unable to introduce an amendment, but I would suggest an opportunity for an amendment will arise when the Finance Bill is introduced next spring.

Táim ag rá le fírinne go bhfuil an méid atá beartaithe a rá agam ar an mBille seo ráite cheana féin tamall ó shin nuair a bhí Bille na nDleacht os ár gcomhair agus tá mórán de na tairngireachta a rinne mé an uair sin tagtha amach fíor. Maidir leis an méid adúirt an tAire tráthóna d'fhéadfainn a rá gur mó atá mé ar aon-intinn leis ná mar bhíos ar aon-intinn lena chairde i rith na cainte anseo. Tá de locht agam ar óráid an Aire gur thug sé dúinn eolas atá againn cheana féin, eolas atá ag muintir na hEireann le tamall maith, ach nár chuir sé lena gcuid eolais. Is maith an méid atá déanta aige agus a inseacht do mhuintir na hEireann go n-aithníonn sé an dainséir ina bhfuil an tír agus na nithe a mheasann sé a bheadh riachtanach leis an tír a chur ina ceart. Pé scéal é, is dóigh liom nuair a léifidh na daoine óráid an Aire amáireach go mbeidh mí-shástacht níos mó orthu leis ná mar bhí orthu cheana leis féin agus leis an Rialtas.

Beidh siad mí-shásta leis gur inis sé dóibh an droch-chaoi a bhí ar an tír agus nár inis sé dóibh an tslí chun é sin a leigheas. Sé an aidhm atá ag an mBille seo an scéal seo a leigheas agus tá súil agam go néireoidh leis an mBille sa méid sin. D'impigh duine de na Seanadóirí a bhí ag caint tráthnóna ar an Seanad agus ar an Dáil aontú leis an Aire agus cabhair a thabhairt dó chun an Bille seo a chur chun críche. Is féidir leis an Seanad a bheith sásta—chomh fada is a bhaineann sé leis an taobh seo den Tigh agus na daoine sa Dáil a bheadh ar aon-intinn linn-nach mbeimid ar deireadh san iarracht sin.

I would much rather go on speaking in Irish for the reason that it comes easier to me. Perhaps it would be just as well if I did not say anything at all because I am afraid most of what I have to say I said already a short time ago when the levies Bill was before us. As far as the Minister's speech is concerned, I am much more in agreement with the Minister than I am with some of his friends who spoke here this evening. If I find myself so much in agreement with the Minister, I think it is mainly because of what he did not say and what needs to be said.

The aim of this Bill is good. It is to try to hold the standard of living that we have been able to enjoy for some time past, and that if that standard must fall, we will hold it at as high a level as we possibly can. The Bill may go somewhere towards achieving that, but a Bill is not enough. An Act of Parliament is not enough, and I am afraid that we will get little more than an Act of Parliament. I pointed out when the matter of the levies came before us that it was the easiest thing in the world to impose the levies. We talk about the courage that is required to impose them. There may be something in that. It was an easy matter to impose the levies, but that was only the first step. If we had acted sanely, that would not have been the first step. The imposition of the levies would have come only after we had done something more positive, something more constructive. However, since the aim of the Bill is to try to save the economy, to that extent I welcome it.

Inherent in the Bill is an effort to adjust this problem of the balance of payments. As I said on this matter previously, if the levies we were imposing did not rectify the balance of payments problem, then it would be hard to see what would rectify it. The balance of payments has not been always unfavourable. Senator George O'Brien, referring to the Banking Commission this evening, told us that the Banking Commission of 1936 had warned us as to what had been happening, but, by and large, for many years we had been doing pretty well. We had been saving as a result of our balance of payments position, but what Senator O'Brien and the other people will have to take seriously into account is what happened since 1938.

Nothing in this country has been normal since 1938. Since the date when it was made clear to us that there was going to be a war nothing has been normal in regards to our economy. We had the war years and we had a couple of years after the war when conditions were even worse, and we have had a very uneasy peace for some years past. I think that, when all these things are taken into account, a very high tribute must be paid to the Governments in office then that they were able to man the economy as they did. Considering the position in which we were and considering all the inherent weaknesses in our economy, I think that no tribute is good enough or high enough. The balance of payments and the balance of trade problem is a very acute one in recent years, but I think in fairness to the Minister's predecessors in office that acknowledgment must be made of their achievements during the years they were in office, following the term of the first Coalition. I think it is a wonderful achievement that they were able to overhaul the balance of trade and the balance of payments position to the extent they did and to hold the economy as steadily as they did.

One of the things that disappoints me most about this Bill is the manner in which the Minister has avoided referring to the very unpleasant features that have developed recently in the economy. Senator O'Brien this evening made reference to the curing of the patient. He thought it was a good thing that we were on the way to curing the patient and he thought we should continue to give the patient some more injections, whether he liked them or not. I am wondering are we curing the patient. I am wondering whether, with unemployment standing as it does at between 74,000 and 75,000, we can afford to sidestep this question.

A figure of 75,000 unemployed is a very big figure. I note that trade union officials have in mind the possibility of a figure of 100,000 in the New Year. Some of that unemployment may ease off towards the summer but we can reflect on what the cost would be to the nation, direct and indirect, if these people remain at home. If the unemployed alone were each to get £1 per week during their unemployment, what would it mean? One can see that it would amount to well over a quarter of a million pounds a month. It would amount to between £2,000,000 and £3,000,000 a year. Allowances will be considerably higher than £1 and taking into consideration their dependents, who must be provided for, the loss could well run to £5,000,000, to £6,000,000 in the year. If they leave the country, the burden is eased, but the curse of the problem at the moment is that men are leaving. It is bad enough that we should have been losing, as we have been losing for so long, the unskilled workers but now the trouble is that we are losing the skilled workers.

I will make this confession with regard to emigration, that it was seldom I ever thought of it, except in terms of the West of Ireland. Living there among these people, meeting them and knowing their difficulties, it can be readily understood that my emphasis in discussing this matter would be on the western seaboard. Very recently, however, I had an experience in the working class areas of Dublin, an experience that frightened me. On going into a house, I would find that where there should be five voters, three of them were away, and, on inquiring about these people's occupations, I found that generally they were skilled workers or, if not skilled, they were semi-skilled workers.

We are losing them at the very time when we need them. The establishment of a corps of skilled workers is a very slow process. We know, too, what legislation in the past has meant in destroying, or almost destroying, Irish industrial tradition and the terrible task we have in trying to re-establish that tradition now after all the years, after all the encouragement that we have given towards building up a strong, efficient and highly skilled corps of workers. To see these people drifting away now with no reference being made to that problem is almost sickening.

It has been asked here why we have not been making progress in this matter of industry and economic expansion. I think that one of the greatest factors retarding industrial expansion is the policy of the Government. I think that needs to be said. It is all very well to introduce Bills and convert them into Acts of Parliament, but a great deal more than that is required if we are to ensure that we will get industrial expansion. We want consistency in the statements of the members of the Government and something more than words is required and something more than has been done here this evening, telling the people what they know already and know only too well. What we want to know is what is going to be done about it and done within a reasonable time.

The Minister has referred to this question of saving. I agree with him, and we endorse everything he says with regard to the advisability of impressing on the people the need for saving. There is some evidence that saving is on the increase, but I hope that it is not at the expense of capital. I am aware of people whose stocks have been realised and these people are either not able to take up new stocks or are unwilling to take up new stocks for fear of the future. Saving of that kind is commendable to an extent, but I would rather see saving of a more orthodox kind.

That brings me to one of the questions arising immediately out of the Bill—how to get savings. I am sorry that Senator Sheehy Skeffington is not here because there are a few things that he should hear. I believe that there is not enough incentive for people to put capital into business. There is not enough incentive for people to save. I know that the rate of interest very often is not a very important factor in inducing people to save. There are large elements in the community who save, not because of the rate of interest or of the rate of profit. There are other factors working to cause them to save, but if many individuals are indifferent to the level of the rate of interest, it does not follow that the rest of the community is indifferent because if some people save for social reasons they entrust their money to somebody else and that somebody else must be very particular with regard to the rate of interest they get on the money entrusted to them for saving.

I believe we are not doing half enough to encourage people to go into business and make substantial profits. I can quite understand that there will be instances, say, where the protection is of a very high degree, where, in fact, an industry may be given a virtual monopoly, where there is very little risk and where, either by direct ordinance or by a gentleman's agreement, it would be made clear to the people involved in the industry that the rate of profit should be kept to a reasonably low level.

I think that in most businesses there is a considerable risk and if they are to save and work to save the only way to encourage them is by making it worth their while to save. I think we ought to consider reviewing the whole question of our taxation in regard to profits but, above all, I think it is important that where a business decides to withhold profits from its shareholders, which is enforced saving, and where it decides to use these profits as capital for the further expansion of the business, that type of profit is certainly entitled to special consideration in regard to income-tax.

I want to mention a point now lest I forget it and it has to do with this matter of banking policy to which reference was made this evening. I make an open confession that I have little fault on the whole to find with Irish banks. I think that too often are they criticised. I think they deserve a bouquet for the very efficient manner in which they have run the banking business of the country but we ought to remember with regard to the banks that, generally speaking, there are two types—the type that predominates here, the ordinary commercial bank and the type of capital bank familiar on the continent—theBanques des Affaires—Capital Banks.

We have some examples of it here. The Industrial Credit Company and the Agricultural Credit Corporation would be examples of a capital bank. I should like to see that type of bank developed and expanded. There would be some hope for the country if we gave some thought to the development of strictly capital banks but, arising out of the present policy for which I do not hold the banks responsible, I think that in industry, the small units particularly, are getting into very serious difficulties.

I could give an instance of a business which must close down—I see no hope for it; it is a useful little business— for the simple reason that, in the first instance, the increase in the rate of interest has made things just unbearable. Changing conditions and their need for credit sent them to the bank and the bank refused so that between the rate of interest and the curtailment of credit in this particular case that business must go out. There is no hope for it.

It must be a thrill for people who are dealing with large corporations, who are pretty well independent of the banking system and who have abundant reserves of their own but I may say that it is a very serious matter for the small men. It will be an awful pity if the small men are driven out of business. We are not giving half enough attention to the small unit of industry in this country.

Go into any town or meet people interested in development. Discuss the possibility of an industry. Unless the industry is capable of giving employment to 1,000 people they have no use for it. Our minds are simply warped. Because of our proximity to the British and American economies, we think only in terms of large-scale corporations, large-scale organisations. That is—I must have said it before— one of the reasons why I would like to see people interested in industry and trade unionists interested in their problems go to the smaller countries of Europe to carry out their studies rather than go to Britain and the United States in the way they are doing.

I am not saying that we have not a good deal to learn from the experience of both Britain and the United States, but I think we would have a good deal more to learn by studying conditions in the smaller countries on the continent. I do not know how it can be done here, but I would make a plea with people connected with banking, with the Department of Finance and the Department of Industry and Commerce that they would keep very much in mind the problem of these small businesses that are, as I say, running into serious difficulties because of the conditions we have allowed to develop. By and large, I think we can truthfully say we allowed them to develop. We could have done a good deal to prevent them if we had a mind to do it.

Senator Sheehy Skeffington raised a question—a quite proper question on the occasion—as to why the Government must come to the aid of industry in this country. I am thinking of the general principle. I think there are a few reasons and I hope that Senator Sheehy Skeffington, if what I say comes to his notice, will make some inquiry into the points I want to suggest to him.

The first thing we have to remember is that 200 years of tradition have been against us. People say that the Irish people hark back too much to history. I remember hearing a very eminent ecclesiastic declare that Americans never learn history; that the English learn history and proceed to forget it and the Irish learn history and never forget it. All I can say is that I disagree with him on the last. We seem to study history all right and have an odd crack as a result of it but we do not seem to learn the lessons we ought to learn from history. I do not think we study history half enough. If our workers and employers alike learned history we must do things differently from the way we are doing them. Legislation was against industry in this country; legislation encompassed the destruction of industry in this country.

Even within the memory of quite a number of us here, the conditions under which Irish industry worked made it impossible for it to succeed. Coupled with that, we had the fact— on the admission of the British Commission, on which I do not think there was even one Irishman—that in less than 100 years from the passing of the Act of Union we lost £300,000,000 through over-taxation. Do you think that as a people we could escape the consequences of these things? While, like the rest, I am willing to have my crack at farmers and other people for not doing more then they do, when I come to reflect on things I have to say to myself that we ought not condemn them for being as bad as they are, that really they are entitled to some little compliment for being as good as they are.

The question of hotels was raised here this evening. Provision is made here for the erection or enlargement of hotels and the Minister wants to encourage that. I shall come to the Minister in a second, but Senator Sheehy Skeffington does not seem to realise the risks that attached to the hotel business for a very long time. He does not seem to realise the risks that attach to the hotel business, even at the present time, due to a variety of circumstances. He does not realise that getting capital is a matter which involves considerable sacrifice for most people, for the vast majority of people. He does not seem to realise the risk which attaches to capital. He does not seem to realise that if a man saves £10, £50 or £100 and decides to put it into a business, he parts with his money for all time. He will get a share certificate. What does a share certificate mean? It means no more than this—a gentleman's agreement that those to whom you hand your capital will do their very best to hold it intact for you and give you some little reward for it in the meantime. There is a very great risk attaching to business, even businesses which are quite substantial, which have good names attached to them and good directors sponsoring them.

I want to draw the attention of the Minister to this with regard to the development of the hotel industry, and it is important in this debate, not merely because of the reference to buildings but because, as he pointed out, of the excellent results we are witnessing from the tourist industry in the last 12 months or so.

In County Galway, the County Vocational Committee—I do not think I need offer any apology for mentioning that committee as often as I do when discussing matters in this House— decided to try to help the people of the west of Ireland into some kind of an industry. We tried to use the vocational and technical education service to train people for the hotel industry. After quite an amount of difficulty, we got permission to buy a hotel which came on the market. The idea was to convert it into a technical school for the training of young men and young women for the hotel industry. All I can say is that our passage was not an easy one. I was shocked to read of a certain Minister, attending a certain function in County Mayo recently, declaring that the Government would see to it that money was provided, that there would be no stoppage in the provision of money for educational purposes.

I can say that in County Galway, with that enormous Gaeltacht area there, an enormous congested area within the county, where we are doing our very best to give technical and vocational education, we are being stopped at every hand's turn. That Minister turns round and says there will be no stoppage on the provision of money for education purposes. I hope the Minister will remember what I am saying and see to it that he will help us to develop our scheme and so do something towards bettering the tourist industry in the country. That is not to say that the industry, in the service it provides, has not reached a very high standard. However, we all agree that there is a good deal of room for improvement.

On the question of saving, the question of working harder has been raised. I agree with the Minister that we need to work harder. If he were to expand what he had in mind a little, I think we would be in thorough agreement; but Senator Sheehy Skeffington does not seem to appreciare what this means, what is implied in working harder. What it really means is, not perhaps that we lose more sweat on our job, not that we have to work so many hours longer— though indeed that may be essential— but it means using our talents in a more orderly manner. It simply means working on a more scientific basis than that upon which we have been working. In that connection, I want to endorse what Senator O'Brien said this evening by way of compliment to the Institute of Management. That Institute, when it has got a few years of a run, will bring about a very great and very desirable change in Irish methods and in methods of production.

What we need is to use our talents in a more scientific manner. What does that mean? It means, in the first instance, higher education, higher education in the universities and higher education of a general technical and vocational nature. How is that need being met? I have no authority to speak for the university, but all I can say is that the provision there on the technical side is miserable enough. I am thinking of my own school, where two of us have to try to cater for about 200 students. We want these people to go out into business; we encourage them to go out into business; we want to equip them as thoroughly as we can.

The technical training for these people is of a very wide nature. One can see the difficulty that the university has in providing the education which is essential for these young people, on the provision which is made for it. What is true of my own school is true of the other schools catering for trade and industry—the engineering schools and the chemistry and physics schools.

In the vocational system, I am witness of this, that if a teacher goes, we cannot employ another teacher in his stead, for the simple reason that the provision allowed us for technical education has been cut down. We want higher production, we want efficient production. I suggest that we are preventing that by many of the methods we are adopting. We want better machines. There is again the question of the levies. Though the Minister will say he has not interfered with certain capital goods, nevertheless, the levies are working out in this way, that they are bringing about a deterioration in the efficiency of much of the gear which is used both in industry and in commerce. We must think of better health conditions for the workers. If workers are not healthy or happy, anyone who has experience of a factory will know what happens. They will know that if workers are grumpy or discontented for some reason, the effect is bad and if the conditions under which they are working are not good it is clear that the whole productive organisation will be adversely affected.

With regard to external trade I want to join in the compliment that is being paid to Córas Tráchtála. That bring me to two things, and one of those is that we do not realise what it means to try to get into the foreign market. I have had experience—what is calledciall ceannaigh—of being associated with a business that tried to get into the export market and which got into it, but having got into it, we found we lost everything we put into it. It is one thing to get into the export market; it is another to get into it with the right people, people one can trust, people who will handle your business for you in a proper bona fide manner and not leave the position in the end that they have possession of the goods—which they may have sold —and you have nothing.

I have a reason for mentioning these questions. There are all these problems of customs formalities and legal difficulties in foreign countries. One of my reasons for mentioning this is to bring home to Senators and to the country what the men who are trying to enter the export markets are facing. I am mentioning it also to reinforce the point that has been made by Senator Guinness that the men who, at the instance of Córas Tráchtála and at the instance of the Government, faced these risks, the people who have pioneered in the foreign market, should now be given some consideration as they might well be given under the terms of this Bill.

A good deal of play was made by Senator Dr. Sheehy Skeffington with regard to Socialism. I think that certain branches of industry likely to be developed, and capable of being developed with regard to certain parts of the country, should be tackled by the State corporations. I am all for private enterprise, and I accept the constitutional position of private enterprise as far as possible, but it private enterprise is not rising to the occasion, then the State should come in and supplement it. I do not rule out, and I think it is only a fool who would, the advisability of placing State companies or corporations in charge of certain activities. I should not like to see the Minister close his mind to that.

There are many other points arising out of the Bill and the discussion to which I would like to refer but I have kept the Seanad unduly long, I am afraid. Admirable as this Bill is, it is not enough. In fact, I have come to the conclusion that if anything worth while is achieved by the Government it will be achieved in the way that the cow killed the hare, that is, by accident.

I never heard of that one before.

These problems of over hauling the balance of trade and the balance of payments and of providing new capital should all be kept under review. If I were to devote myself entirely to theories I would leave it at that, but unfortunately I am out among the people. It is all very well in the lecture room to propose this and that, but when you come out you meet men out of employment, men who ask: "Will you give me my fare to England?" You meet men in business, uneasy with regard to the future. You see that lack of confidence that is creeping in like paralysis everywhere. You meet farmers who are troubled when you ask them about increasing production and they wonder if you are in your sane senses, considering that the prices of most agricultural produce tend to fall.

I am suggesting that it is time the Government woke up to the fact that the people know for quite a long time all that the Minister has been saying here this evening. They know it very well because they have learned and are learning in the hard school of experience. What they want to know is: What will be done about it and done about it in a reasonable time?

Mr. Douglas

As far as possible I shall attempt to confine my remarks to the actual contents of the Bill and I hope to be fairly brief. I should like, first of all, to comment on the rather hasty way in which this Bill passed through the Dáil and reached this House, because it has made it quite difficult for the business and industrial communities to consider the Bill and have time to make recommendations or suggestions to the Minister. For example, the Dublin Chamber of Commerce arranged a meeting on Friday last to consider this Bill. I attended the meeting to find that the committee had not even received a copy of the amendments which had been tabled in the Dáil for the Report Stage and, in fact, the committee was quite unaware that the Bill had passed through all its stages in the Dáil.

I am not to be blamed for that.

Mr. Douglas

I think the Minister has missed the point. These bodies do subscribe for all publications of the Dáil and Seanad and can only consider them when they actually receive copies. I attended that particular meeting with copies of the Bill as passed in Dáil Eireann and with copies of the amendments tabled on the Report Stage, but nobody else at that meeting was aware of the amendments submitted. Dublin Chamber of Commerce, like many other non-political bodies, is most anxious to co-operate with the Government. They are anxious to have an opportunity of considering Bills of this kind and making suggestions to the Ministers concerned as to ways in which the Bills might be improved. I think it a pity that a Bill of this kind—and to take an even better example, the Industrial Grants Bill—should be rushed through Parliament without giving an opportunity to people outside Parliament to consider them.

I was glad to hear the Minister say that this Bill is only part of the general picture of the plans which the Government announced in October. While I welcome the provisions of this Bill, I am afraid I am rather in the position of Oliver Twist, holding out my plate and asking for a little more. I must join with Senator Guinness in his appeals in connection with Part III of the Bill. Part III of the Bill provides for a small amount of temporary relief from income-tax and corporation profits tax for certain selected industries. I suppose even small concessions of this kind are welcome, but I cannot understand why Section 11 has been so framed as to penalise companies which, during the past five to ten years, developed a substantial export trade which has now, or in recent months, owing to the acute international situation, reached a peak which is unlikely to change while world conditions continue as they are.

Take, for example, the case of a particularly enterprising firm engaged in developing their export business since the end of the second World War or, as Córas Tráchtála has been mentioned, since 1952, when many firms were able to take advantage of the facilities offered by Córas Tráchtála. In these two cases, the peak year of their export trade could easily be the year ending on the 30th September, 1955. If this should be so, their enterprising efforts receive no recognition whatsoever in this Bill. In fact, as Senator Guinness pointed out, the less efficient industries in our community are being offered an inducement to develop an export business, while the more efficient firms are being given a kick in the pants for being so enterprising in the past. I think it is well for the Seanad to realise the extent of the income-tax concessions which are being offered by Part III of this Bill as it exists at present. I think possibly the best way is to take an example.

For example, if an industry's profits, as adjusted for tax, for the year 1957-58 amounted to £50,000 on a total turnover of £500,000, and £100,000 of this represented export sales, as compared with export sales in the standard period amounting to £50,000, then the amount of income-tax and corporation profits tax rebate would be about £1,187, which may be made available for capital expenditure.

In my example, I have assumed a net profit of 10 per cent. on turnover and the amount of tax rebate would approximate to 2 per cent. of the increase in export turnover. The average rate of profits on home and export trade is, in fact, considerably less than 10 per cent. on turnover and the tax rebate will probably cost the Exchequer closer to 1 per cent., rather than 2 per cent. of the increase in export turnover. With that in mind, I would ask the Minister to consider the points which were so ably put by Senator Guinness. I would ask him to consider seriously between now and the Committee Stage whether some further small concessions could not be allowed in Section 11 of the Bill in relation to the standard period.

The Minister mentioned that he had introduced an amendment in the Dáil to give the choice to an industry of either the financial year ending 30th September, 1956, or the financial year ending 30th September, 1955. He gave reasons and mentioned that there could be a case where there would be a freak trading year and that to confine it solely to the year ending 30th September, 1956, might be unfair to certain industries. I would say that even two years is not giving a fair crack of the whip to many industries which have been developing exports over a longer period. I suggest that, in addition to the two dates specified, industrialists should have a further choice of selecting the most favourable year, from their point of view, of any of the five years ending 30th September, 1956, or of taking an average of profits of any two or three consecutive years commencing from 1st October, 1947—in other words, over the past ten years. As can be shown from my example, I think the cost to the Exchequer would not be very much more than is provided for in the Bill.

Did the Senator mention a turnover of £50,000 on increased exports?

Mr. Douglas

Having £100,000 as the total out of £500,000.

Mr. Douglas

Yes.

And £50,000 is the increase in exports?

Mr. Douglas

Yes. May I now turn for a second to the definitions under Section 10 of Part III of the Bill? A definition is given of "goods." I wonder if the Minister would also consider including certain services in the category of "goods and services" which are covered under Part III of the Bill. I am thinking in particular of the insurance companies of this country. As far as I can see, they gain no benefit whatsoever under the provisions of Part III or any other part of this Bill.

It is well to remember that the Irish insurance companies were urged to engage in the export market and, I understand, have done so with a considerable measure of success. I am told that the net premium income for 1955 of the five Irish companies transacting fire, accident and marine business was approximately £3,000,000, and that very close on 60 per cent. of this income was derived from foreign sources. In other words, during 1955, these Irish insurance companies exported insurance to the extent of approximately £1,800,000.

I understand that the rather spectacular results achieved by Irish insurers within a short space of six years —I think they can be called "spectacular"—have not been achieved without incurring considerable financial outlay in establishing branches or agencies in various parts of the world and in the development of foreign business generally. It should also be borne in mind that Irish insurance sold abroad does not involve the importation of any raw materials whatsoever, and that it does not take up any of the valuable shipping space.

I think that if the Irish insurance companies are to continue to play their part in developing these exports and in earning foreign currencies which are so badly needed for our economy, some provision might be made for them in this Bill so that they also would enjoy some of the benefits of relief from taxation where they are involved in capital expenditure.

Senator Ó Buachalla dealt extensively with the remarks made by Senator Sheehy Skeffington. I do not intend to say very much about his speech. I find it exceedingly difficult to understand Senator Sheehy Skeffington's attitude towards business and industry. I have listened to him on many occasions in this House and I am sorry he is not here now so that I could say in his presence that I have come to the conclusion that he believes that he alone is entitled to a fair income and a fair standard of living and that all other citizens of this country should survive on considerably less, supplemented by whatever generosity a Socialist Government might be prepared to give them in free services. He does not seems to think that private enterprise is entitled to any credit for efficiency or to any congratulation that the system has survived at all under our most difficult existing system of taxation. I think Senator Ó Buachalla dealt with many of the points Senator Sheehy Skeffington raised far better than I can.

Part IV of the Bill deals with the industrial building allowances. I have no criticisms of or comments to make on that section, except to ask a question which was posed to me by a member of the committee at the Chamber of Committee meeting. It does not make it very clear if office buildings which may be absolutely necessary for the development of an industry for exports—the actual office sections of a factory building, for instance—would be covered under these industrial building allowances. In many cases, it is exceedingly difficult to extend a factory or to alter existing buildings without providing additional accommodation, either for office staff or maintenance staff. It has been suggested that the Minister might possibly make it clear whether the proportionate cost of that section of a new building would be excluded for the purposes of this section.

Part V deals with prize bonds. I listened with interest to the Minister's explanation of their purpose and to the fact that he did not consider them quite such a gamble as, shall we say, the Sweep. I was brought up with very strong views with regard to the evils of gambling. I have always felt that any form of gambling, whether it be in the form of prize bonds or of a Sweep ticket, or even of a lottery at a Church fair, was not in the best interests of the community. I have always felt that lotteries of this kind, in particular the Sweepstake and prize bonds as will be established under this Bill, are only creating a desire in our citizens for something for nothing and giving them the feeling that they may get a sufficient amount of money to enable them to take it easy for the rest of their lives. I believe that is wrong, but I recognise that most of the citizens of this country do not share what some may call my rather narrow views. I hope Senators will forgive me for expressing them here. Of course, I do not intend to take any further action but I would like to be recorded as feeling that this idea is morally wrong.

In conclusion, may I again say that, although my remarks are chiefly critical of the Bill, I welcome it because I feel it is a recognition by the Government that industry has been suffering for a long time under very difficult circumstances and that it is absolutely essential for us to develop our industries and exports, if we are to survive in this modern world.

There is just one point I forgot to deal with. In the Dáil in answer to a question of Deputy Lemass, I think, the Minister mentioned the question of the export of raw gypsum. I was asked to-day to ask the Minister whether, as he promised in the Dáil, he had further considered the question to see whether or not the export of raw gypsum could come under Part III of the Bill. It is perfectly true that a great deal of our raw gypsum is processed here and the manufactured article will therefore obtain benefit under the Bill; but in order to maintain and increase those exports of processed gypsum, it is desirable that a certain quantity of our raw gypsum should be exported at the same time.

The other point that comes into the same category is whether anybody engaging in the export of shellfish will also be able to benefit under Part III of the Bill. I am afraid the only answer I could give was that it seemed to be in the same category as raw gypsum. I am sure the Minister will be able to answer me on that.

I want to be very brief on this Bill. First of all, I would like to congratulate the Minister. I think he has shown imagination and initiative and is tending towards some kind of new departure which might help this country in what is undoubtedly an extremely difficult position. There is one point which has occurred to me and I have mentioned it before. I may be wrong but I am convinced that the Control of Manufactures Acts represents a real obstacle placed by legislation in this country in the way of the development of industry.

In my profession, I have a good deal of experience of industries started here by Irish people and by industrialists coming from abroad. I think that by far the great majority of the new industries set up here seem, for one reason or another, to get their impetus from abroad. I have known one case myself in which people who had been thinking of setting up an industry here were deterred from doing so by the existence of these Acts. Naturally, I more than fully appreciate the motives that lie behind these Acts, which are to try to protect Irish interests, but, in my experience, it has been very easy to get around the Acts and, in practice, I am convinced they have done nothing except to prevent industries being set up here which might otherwise have been set up.

This is a matter to which the Government should give a great deal of attention. There have been various efforts made both in the United States and on the Continent, in Germany, Holland, Sweden and elsewhere, to induce industrialists to come here. My experience has been that, after we have gone to a great deal of trouble to try to induce them to come here, they find themselves faced with the difficulty of the kind of legislation that has to be faced here, and in certain instances at least they have turned away. I think the whole of this subject of the Control of Manufactures Acts requires very considerable thought and a great deal of careful investigation. At present they are preventing industries being set up in this country. That is the principal thing I got up to say.

As regards the prize bonds, I do not quite understand why they should not carry interest. As worded here, it would seem to me that the intention was that they be non-interest bearing securities. The Minister looked at me and I thought I might be making some mistake. It does seem to me that there would be much to commend some form of security which would give some low rate of interest and possibly not such large prizes. I know that in France there is fairly popular a system of post office savings more or less which gives small premiums but all the time gives a small rate of interest. I think that might be more attractive.

There is only one other small point I should like to mention. Perhaps it is really only a question of drafting. It is in regard to the industrial building allowances. Sub-section (2) of Section 16 provides that if such a building, when it comes to be used, is not used as an industrial building or structure, the tax is to be reclaimed. It is not at all clear to me from the Bill as it is drafted what is meant by "when it comes to be used". Does it mean that, if the building is used as an industrial building at the time it is built, the concession is made, but, if after a year or two that its purpose is changed, it is not made? I suggest the Minister should consider that.

I should like to support the remarks of Senators Guinness and Douglas as regards the income-tax incentive to factories or firms which have created an export business in the past. I think it is not fair to them, having built up an export business and possibly having brought it to its maximum, that they should get no reward in the way of incentive. I fully appreciate that the Minister is giving an incentive and that what he wants is to get more exports; but it does seem rather hard luck on those who have done a good deal in the past that they should not share in the reward.

I wish to deal with only two points in connection with Part III. As the Minister is aware, there is a considerable amount of handcraft goods exported from the congested areas, particularly from West Donegal. Those goods stand high in the list of commodities which are exported from this country. They include tweeds, handmade garments, handmade string gloves and linen goods.

Donegal has pioneered for quite a number of years in that field and, through the industry of the cottiers over a very wide area in the west of the county, the value of the goods, which are of a luxury nature, which are exported from that area represents a considerable contribution towards the reduction of the balance of payments deficit. Quite a number of these producers are in a small way. They are not corporate bodies. They are individuals or they run a business in partnership. It would appear that under Section 10 of this Bill these people would not derive any benefit because of the fact that they are not a company and it would be necessary for them to form a company at the earliest possible date, which possibly would be somewhat expensive, before they can qualify under this Bill. I would ask the Minister, when framing his next Finance Bill, to consider the desirability of allowing these individuals to come under its benefits.

Quite a number of tweed manufacturers, for instance, send their goods to the city where they are manufactured into garments or they are sent to an exporting firm. It would appear, again, that those people cannot benefit but that, instead, the exporter who has manufactured the goods into garments will be the person who will benefit and I feel that that benefit will not be passed on to the tweed manufacturer. When one considers that these people are competing against Gaeltarra Éireann, which not only is a non-profit-making industry but is carrying on with a substantial deficit, and when one considers that the private individual has to pay taxation in many different forms and death duties, it seems to me that it is only fair that such people should benefit to some extent under this Bill.

I am at one with the Minister that on private development, rather than public development, the future of the country depends. I feel that most boards are run uneconomically, that there is too much supervision, too much unnecessary paper work and that if a private individual had all the benefits and all the money that is spent by the State board he would be able to produce much more efficiently.

In connection with agricultural products, the Minister has told us that import prices have risen by 2 per cent. and export prices have fallen by 3 per cent. As our principal exports are agricultural, it would appear that the farmer is getting the worse end of the stick at the present time and I therefore feel that the question of improving the lot of the farmer is one that should be considered first in any relief that can be given if we are to improve the national economy.

Senator Hickey and Senator Sheehy Skeffington posed a rather important question when they asked: "Why is production not increasing?" I am sure the Minister will be able to offer some explanation as to the reason for that. I feel that it is due largely to the fact that the small farmer, who has to carry to such a tremendous extent the rest of the community on his back and whose costs have increased to such an extent, is being put out of business to too great an extent. Unless the small farmer can be induced to produce more at an economic price, the standard of living of the country will fall still further.

I am certainly not in agreement with Senator Sheehy Skeffington when he suggests that if businesses were under State control they would be more efficient or that there would be a better return to the community. The terrific productivity of the United States and many countries in Europe is based on a private economy. When one considers that, for instance, Gaeltarra Éireann and private individuals are in competition, that one has to be run at a profit as against the other and when one considers that in England the nationalised coalmining industry, to which Senator Sheehy Skeffington referred, is not the success that, say, the steel industry is in that country, one can quite easily see the tremendous advantage which a private industry has over one which is under Government control or financed by the State.

In the other House reference was made to the desirability of a merchanting organisation. I feel that a good deal of expense could be saved to exporters if goods were channelled through one organisation which had all the contacts necessary in the various countries to which we export.

Our economy is based to a large extent on the farmer and the produce of the soil. The farmer has to bear too great an expense and we are living beyond our means as far as the primary producer is concerned. I feel, for instance, that there are far too many motor cars assembled in this country, far too many radio sets of different types and far too many electrical gadgets such as washing machines. All those different assemblers have their main agents and their subagents scattered throughout the country and the various agents must carry stocks of all the particular types of cars or radios, as the case may be. If the number of those commodities was cut down substantially, a considerable saving could be effected.

The Minister, too, should advert to the question of the quantity of films imported and the amount of money we have to export in order to pay for these films. I am wondering if it would not be a good idea to put these on a quota basis. I have no idea as to the exact amount of money involved, but, judging by the queues outside cinemas all over the country, the amount must be pretty considerable.

There are many matters to which attention will have to be directed and many sacrifices will have to be made before this country gets back on to an economic basis. The Minister has suggested that a considerable improvement has taken place in the last five months in relation to our balance of payments. As was pointed out, however, there were substantial stocks built up in 1955, stocks representing at the time an increase of approximately £13,000,000. Those stocks are being depleted at a fairly rapid rate. One has only to go into a shop to be told that this commodity is still at the pre-levy price, propaganda to encourage the potential customer to buy. It will be some time before those stocks will be replaced. Consequently, the improvement that has taken place neither represents nor gives the true picture of the position brought about as a result of the imposition of the Special Import Levies.

Senator O'Brien said that levies are a shock treatment and they are, therefore, of a temporary nature only. If, as the Minister has also pointed out, levies are of a temporary nature only, then it is obvious that, when we return to the pre-levy stage again, we will find our economy once more in a precarious and dangerous position. I agree that most of the levies were desirable. They represent one of the few ways in which the public can be brought to their senses in relation to the vast expenditure that was taking place. I hope that this Bill will have the desired effect of substantially increasing the quantity of goods produced for export.

I was interested in many of the statements made here and, not least, in the statement made by the present occupant of the Chair. Senator Ó Bucahalla said that there is not enough incentive for the people to work and that there is not enough incentive for the people to invest money. I am wondering if that is what is really wrong. I am afraid it is not. I would like to pose two questions—I think that is more satisfactory than beating around the bush—and I would like to hear the Minister reply to them. Is our productive capacity to be restricted to the purchasing power available or should purchasing power be expanded so as to provide full employment?

Having listened to the speakers here this evening, I am inclined to think that they all fought shy of what really matters, that is, who is in control of our money and credit? The Minister says we must produce more and Senator Ó Buachalla says we must produce more. Does that not sound very ridiculous when one remembers that there are 73,000 odd workers compelled to sign on at the labour exchange, prevented from producing anything? I am anxious to hear someone get down to this fundamental fact quickly rather than beat around the bush and make long speeches, which mean nothing in the end.

I thank the Senator.

I am not being one bit personal in this matter. I am tired of hearing and reading every day that we must produce more and that we must do our work more efficiently. Goodness me, when was this country, or any other country, so prepared and so well equipped to produce goods in abundance as we are to-day? We are paying 73,000 potential workers in our labour exchanges, preventing them from producing anything. Why, then, talk about the need for more production? Why insist that we must produce more?

Is it not a fact that when somebody stops buying, somebody stops selling? Is it not a fact that when somebody stops selling, somebody stops producing? Is it not a fact that when somebody stops producing, somebody stops working? When somebody stops working, is it not a fact that somebody stops earning? When somebody stops earning, is it not a fact that somebody stops buying? Is that not the vicious circle in which this country finds itself now and in which it has found itself for years past? Can anybody deny that?

What is preventing us from breaking that vicious circle? Is it not because the people who are in control of our money and credit have restricted that money so as to enhance its valuequa money? Where is the use in talking about this problem of increased production, interest rates and so forth? I have sympathy sometimes for any Minister for Finance who has to sit here and listen to all the arguments from this Senator, that Senator and the other Senator. Senator Ó Buachalla complained that the Minister is not doing sufficient. I submit that none of our Governments has touched on the really important issue since we got political power here and whatever economic control we have. It is because we have not faced up to that situation that we find ourselves in the position in which we are to-day.

I cannot understand all the points made by Senator Sheehy Skeffington. I think one of his points was that, when anyone talks about the State coming in to do what is necessary for the community, hands are raised in horror at the idea of State interference in private enterprise. It is said that private enterprise is the only thing which will save the country. But, here, we have everybody crying out now, even the Opposition, clamouring for the income-tax concession and all the other concessions.

Is it not a fact that up to 1947 £4,000,000 was collected in excess profits tax from the industrialists of this country? After that year it ceased to operate. Now we are to give industrialists further concessions. It is a regrettable state of affairs that any Minister or any Government elected by the people should go to industrialists and ask them to give money to run industry. I must say I have a very different conception of an economic system to that of some of the Senators who spoke. An economic system should provide for the needs of the people. At the moment we are unable to produce enough clothing, to produce enough food, to build enough houses to meet the basic needs of our people. We are unable to provide these needs because we are not in control of our money and credit. The sooner we get down to that fundamental fact the better.

Most of the things I wanted to say have already been said. The Minister's statement was frank, clear and lucid and I join with the other Senators who congratulated him on it. I think he has made a proper diagnosis of the country's ills. The problem now is to find the remedies. I am disappointed that neither in the Bill nor the Minister's statement is there mention of agricultural production. The time is ripe for the farming people to know what is expected of them in 1957.

This Bill is little consolation to the women who reared their turkeys during the year and for the men who raised the bullocks. Every member of the House is aware of the position with regard to turkeys and bullocks. The people engaged in these two industries are fairly depressed and badly need a tonic. We are told to work harder. There is no need to give that advice to the farming community. In one of the worst harvests in living memory more wheat was delivered to the mills than in any other year from a similar acreage. At the moment the beet growers are engaged in harvesting a bumper crop in weather conditions which are appalling. When we ask people to work harder in this country we can leave out the farmers and their workers.

I am in agreement with anything that can be done to stimulate production but I believe that money spent in developing agriculture would give better results than capital put into anything else. It may be that the Minister is preparing another Bill dealing with agriculture. If so, that would be very good news for the country. If such is the case it is time to let the people know about it. The Minister for Agriculture has called a meeting of the Consultative Agricultural Council but I am told there has been no talk of increased agricultural production or of how to go about it.

Senator Hickey dealt with the causes of our low agricultural output. I am afraid I was unable to follow him as closely as I would like but I am sure that the remedies he suggested should be welcomed by the House. I am sure that if they were put into practice they would bear good fruit.

The Minister did not give us any clear outline of the prize bond scheme. People down the country will be asking us about them. Frankly I must say I do not know much about them. I would have liked to have heard how soon they will be available, how the scheme will operate and what the prizes are likely to be. People are very interested in them. I would not be surprised if the scheme were a success. I understand that under the Industrial Grants Bill £2,000,000 is to be spent on encouraging industry. I do not grumble at that but I think that agriculture is being forgotten and neglected. If something is not done soon about it, the country will suffer as a result of such neglect. It would appear from circulars issued recently that the Land Project has ceased to operate. As many people are anxious to know what the position is, I hope the Minister will deal with that in his reply.

Very briefly I should like to say that Senator Hickey is perfectly right in his diagnosis of the present situation with which the country is faced. The only thing that will save this country is large scale financial investment in primary productive industries. I also agree with what has been said in favour of further investment in agriculture. I believe there should be large-scale capital investment in both afforestation and agriculture. Senator Hickey is correct in saying that we have never taken proper control of our own finances. If the Minister denies that I would ask him why it is that this country is the only one in the world that has written into its statues that it will maintain parity with sterling. Even Australia and New Zealand find it sometimes advisable to have their currency below sterling. Why are we so firmly anchored to sterling that we maintain parity? It would suit us to have our currency sometimes above and sometimes below parity.

Would the Senator not develop his argument and tell us which he thought would be better— undervalue or overvalue?

I will not step into the Minister's shoes. It is not for me to heal the situation. I am not Minister for Finance.

When the Senator makes a comment he is surely under a duty to suggest what is wrong. I suggest the reason he does not is that he does not himself know what he would offer us as a solution.

That is not an answer to my question.

The Senator is avoiding the real issue.

In introducing this Bill the Minister gave us a very comprehensive survey of the economic difficulties which have, in smaller or greater measure, affected this country during the past 25 years. The effects of these were hidden or masked, as Senator O'Brien suggested, by the war of 1939-1945 because we were compelled to save during that period and were not allowed to buy the things we wanted to buy. We have here a free open economy and I think many of the people who spoke here to-day about social credit failed to realise that fact.

I did not hear anybody speak of social credit.

An Leas-Chathaoirleach

Senator Burke is entitled to discuss social economy.

He said people here referred to it.

Many people have spoken recently about pumping a lot of credit into the economy and they are quite entitled to suggest that as a remedy, but I believe that unless our country is closed and almost a wall built around it we cannot do that. The fact is that we are able to bring in a lot of outside goods and we are not paying for them by producing here. For example, if we build a lot of houses here, unless we can export some of those houses we cannot pay for the goods that will be imported by the people who are building the houses.

One of the reasons why the Minister deserves commendation upon bringing in this Bill is amply illustrated by a small paragraph that appeared in the November volume of theIrish Beet Grower. The article is not signed but it is the principle article in this paper, and it says:—

"Productive investment will create employment, and failure to invest will reduce even the present level of employment. On an average, every £1,000 soundly invested in industry will provide a permanent job for somebody."

The article then goes on to stress the necessity of investing money in agriculture because it is a thing on which we all live. The article says that on the average it takes about £10,000 to employ a person in agriculture while it takes only £1,000 to employ a person in industry. If we are to employ the people in this country quickly—and the need is quickly—the Minister was quite right in bringing in this Bill immediately.

What is wanted more urgently in any economy than coal or heat? The countries of the world that are successful industrially and economically are the countries that have oil, coal or energy in some form. America has it in superabundance; so has that bursting, active West German economy. West Germany has coal in superabundance. Belgium has coal, and even Holland has a considerable amount of coal; so has Britain. If the Minister can encourage the opening up of coal mines and other types of mines in Ireland by the giving of tax concessions he is doing a very good job.

There is more coal in Ireland than is generally realised. One of the reasons it has not been mined is that a century or so ago it was possible in Ireland to exploit only coal-mines that were on high ground. Many of our coal measures at Limerick and places like that are below sea level and it would be difficult to get a run-off. However, with present coal-mining methods —coal-mining methods that are available in this century—it will pay to work these mines, and they probably would have been worked, were it not that very cheap coal came in here from Britain. I will not comment on the way it was obtained but it came in here from Britain to the benefit of the people of this country because they got the coal very cheaply. I am not suggesting we should ask Britain to produce it again by the same method because we could get it cheaply.

There was a lot of play by Senator Sheehy Skeffington on the merits of the free enterprise or, if you like Socialistic economy, but I would like to tell you what happened in South Tipperary in relation to coal. In 1940, the then Minister for Industry and Commere rightly decided to do something about the coal-mine in Ballynonty in Tipperary. He brought over a Scot named McGluckey and he started to raise coal at Ballynonty. The duff and slack from that mine were used to run the beet factory at Thurles and the good anthracite was used for household and other purposes. About the year 1948 it was decided that, as most of the useful coal in Ballynonty had been raised and that the pit was not suitable, a mineralogist named Wilson be employed, and he suggested that the Government might consider using coal at a place called Copper. Twenty thousand pounds or £25,000 was required for the purpose of that survey and using coal to see if it was suitable. The then Minister for Industry and Commerce agreed after a deputation from that area approached him to have that money spent, and coal was procured.

During 1953, when the Minister who had started the coal-mining at Ballynonty in 1940 was back in office, he decided to sell the mines. The mines had been losing money for some considerable period and were a drain on the Exchequer. An Irishmen who had worked at coal-mining in England came back and purchased those mines. He has raised three or four times as much coal as was ever raised in the Slievardagh coalfield. The coal is being better produced, better screened and better presented than ever it was before. The miners are probably getting twice the wages and are enjoying better conditions than they ever enjoyed before. That is a private enterprise undertaken by an Irishman in an inland county in Ireland. It has been an outstanding success, and I want to put it on record because all of this glib talk about what happens in faraway places.

I read in the LondonTimes during October that the condition of Soviet agriculture is appalling. That is outside the scope of this debate but I want to mention it because there has been talk about our agriculture. Our agricultural output has gone up at least 30 per cent. during the last ten years. I recently discussed this matter with a young farmer who had spent almost 12 months in America farming in the mid-western States. He was working with Germans there, who work from dawn to dusk. He knows agriculture, both in this country and in America, and he said it is his honest opinion that when the farmers were very badly off in the thirties the figures they were giving were often bolstered figures. When people are badly off in a peasant society they are inclined to hide that from their neighbours. That is a well-known fact and I believe the statistics on which we are basing our plans for agriculture should have been very much lower. You may be certain that that is so.

If you ask any Civic Guard who takes statistics he will tell you that, when times are bad, people are inclined to put a little bit on and when they are good they are inclined to reduce the amount. They do not want people to think that they have too much. It may be a form of protection from the old days when they wanted to hide it from the landlord. When the cows were dying in Loop Head people would not tell their neighbours what their losses were and it was only when Department officials want down to investigate that the correct figures were known.

The mine to which I referred earlier was sold, I believe, by public auction.

It was indeed. Read the Official Report of the Dáil debates.

Anyway I am not entering into any Party politics on this matter. It was not sold during the period in which the Party which I support had any responsibility. The fact is that the man to whom it was sold made an outstanding success of it.

Debate adjourned.