Seanad Éireann debate -
Wednesday, 26 Mar 1958

Vol. 49 No. 2

Public Business. - Central Fund Bill, 1958 ( Certified Money Bill )— Second Stage.

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

Minister for Finance (Dr. Ryan)

The main purpose of the Central Fund Bill is to give legislative effect to the Vote on Account of £36,500,000 which was passed last week by Dáil Eireann. Section 2 of the Bill authorises the issue of that sum from the Central Fund. The sum of £8,055,637 which Section 1 authorises to be issued from the Central Fund, is the amount of certain Supplementary and Additional Estimates for the current year which were too late for inclusion in the Appropriation Act of 1957. Finally, Section 3 authorises borrowing by the Minister for Finance up to the total of these two amounts, namely, £44,555,000 odd.

The Estimates for the year 1958-59 total £110,002,220, of which £98,261,520 relates to non-capital services. The corresponding non-capital figure in the Estimates Volume for 1957-58 as originally published was £102,166,884. On this basis, next year's total for current services shows a reduction of £3.9 millions—or £3,250,000, if allowance is made for the fact that the provision for industrial grants will be treated as a capital service next year. It is true, of course, that in comparing the Estimates for the two years, one might have hoped for a reduction of about £6,500,000 to allow for a full year's saving on food subsidies, less a full year's provision for the compensatory increases in social assistance. The position, however, has been affected by the necessity to provide substantial sums next year to cover losses arising from the export of butter and bacon and the disposal of surplus wheat. These items alone will cost the taxpayer an extra £2,500,000 next year, despite the fact that producers are being asked for a contribution.

For seeking a contribution from producers, the Government has, of course, been criticised but not, I think, with justice. It should be remembered that the Government has a duty towards all sectors of the community and that it must endeavour to strike as fair a balance as possible between the claims of the consumer, the producer and the taxpayer. In the present case, the consumer is being left alone. The question was how the burden should be split between the other two classes. In the event, the taxpayer is being asked to bear the lion's share of the assistance which is being given to increased production and I do not think we could reasonably ask him to go further. Farmers' incomes rose considerably last year—a matter for which we are all thankful—but taxation has reached, over a wide field, the point of diminishing returns and is bearing heavily on initiative and enterprise. These were the considerations that guided the Government.

It will be observed that an extra £1,115,950, gross, is being provided for bovine tuberculosis eradication. The net additional charge on the Exchequer, when account is taken of receipts from the sale of cows slaughtered under the scheme, will be £489,250. I expressed the hope in Dáil Eireann that Deputies would lose no opportunity to impress upon those directly concerned the desirability, both in their own interests and in the interests of the country, of co-operating to the fullest extent in the eradication of bovine tuberculosis, and it was clear from the speeches made in that House that Deputies on all sides fully realise the vital importance of pushing ahead vigorously with this scheme. I know that I can count no less upon the support of Senators. Unanimity on this matter is in the interests of everybody, irrespective of Party or vocation.

A relief of £250,000 is afforded by reason of the fact that it is not necessary to repeat the provision which was made in the current year to assist the marketing of agricultural produce. The Estimates show a reduction of £222,000 in the amount provided for the ground limestone subsidy next year, but in fact, owing to the exhaustion of American Grant Counterpart moneys, the cost to the Exchequer of this subsidy will be more than doubled next year.

The provision for the farm buildings scheme and water supplies shows a reduction of £140,000, but, as I explained in the Dáil, this is more apparent than real, as there is likely to be overestimation of a similar amount in the current year.

In the Estimate for Industry and Commerce, the abolition of the flour and bread subsidy for the whole of next year affords a relief of £1.9 million. In furtherance of its industrial policy, the Government is providing an extra £100,000 for industrial grants.

The two railway companies dominate the Estimate for Transport and Marine Services, although the total provision for even these shows practically no change as compared with the original provision for the current year. An increase of £358,000 for C.I.E. is practically balanced by a decrease of £345,000 for the G.N.R. In the event, of course, a Supplementary Estimate of £2,000,000 for C.I.E. proved necessary this year. The 1957-58 figure for C.I.E. included non-recurrent provisions for repayment of a temporary advance and for various capital payments. Next year's provision is intended to be adequate to enable the company to pay all interest on transport stocks without seeking any advances from the Exchequer under Section 30 of the Transport Act, 1950.

Substantial supplementary sums were agreed for social services this year and when account is taken of these the provision for such services shows a decrease next year. Social assistance is down by only a nominal £1,000, but social insurance shows a reduction of £276,000, partly because payments of disability benefit this year were affected by an influenza epidemic and partly because it is hoped that the recent improvement in the unemployment figures will continue.

Post-war arrears of private housing have now been largely met, with the result that there is a decrease of £700,000 in the provision for housing grants.

In the Estimate for Public Works and Buildings, £161,200 less is being provided for new works, alterations and additions. Criticism has been made, in this connection, of the apparent reduction of £174,000 in the provision for national schools. The facts are that there will be a saving this year of £600,000 in the total provision in subhead B of the Vote for Public Works and Buildings. £350,000 of this saving will relate to national schools, with the result that expenditure on schools this year will be of the order of £1,200,000. By comparison, the sum of £1,400,000 for schools in next year's Estimate will provide for an actual expenditure of £200,000 over and above expenditure in the current year. An extra £264,000 is allocated in the Estimate for Aviation and Meteorological Services for constructional works, etc., at Shannon, Dublin and Cork Airports.

The Forestry Estimate shows a net reduction of £36,450 despite the fact that an additional £50,000 is being made available for the acquisition of land. As I explained in the Dáil, next year's provision will support the planting of an increased acreage and the reduction in the total cost is due to various steps taken to promote efficiency and economy.

Finally, I should, perhaps, mention that it is proposed to treat the provisions for the bovine tuberculosis eradication scheme and for industrial grants as capital services next year. The allocation in the American Grant Counterpart Special Account, from which expenditure on the former item has been recouped in recent years, is now exhausted and it has been decided to treat it henceforth as a capital item having regard to the nature of the scheme and to the fact that it must be concentrated in a short period of years. The moneys provided for Industrial Grants constitute part of the new capital invested in industrial production.

I think that the foregoing are the main items of interest arising from next year's Estimates and I commend the Bill to the Seanad.

Professor Hayes

It is not my intention to go into the financial aspects of the Bill, but rather to avail myself of an opportunity, which I have used on many occasions since 1942, of raising a specific point. In this instance, I should like to deal with the declared intention of the Government, through the Taoiseach here recently, with regard to a motion on the Irish language. On 30th January last, we debated a motion put down by Senator Baxter and Senator John O'Donovan on certain aspects of the Irish language problem, with a request for a comprehensive inquiry. The Taoiseach and the Minister for Education attended and neither of them, when speaking to the motion, dealt in any way with any of the matters raised by the speakers for the motion.

The motion itself was comprehensive. It was not put down in hostility to the language. It was not put down, may I say to the Minister for Finance, for reasons of economy. It was put down to see if we could take stock and to see whether better or more real progress could be made. Both the Taoiseach and the Minister for Education answered arguments made outside the House with which we had nothing to do. They did not deal with the arguments put forward either from this side of the House or put forward very cogently by Senator Ó Ciosáin on the other side. Finally, very late in the evening, at about ten minutes to eleven, the Taoiseach declared that it was his intention to set up an inquiry into the teaching of Irish in the schools. That has not yet been done and since the Taoiseach's salary is in this Bill, we have a right to discuss it now.

That declared intention of the Taoiseach does not meet the point of the motion and I should like to avail of this opportunity to say that we are quite dissatisfied with that conclusion to the motion which we put down. There is much more to be discussed than the schools. An immense burden has been laid upon teachers. We know that miracles have been accomplished by great skill and great enthusiasm in special cases. When we consider the circumstances under which a great many teachers have to work, we can see that it is particularly true that a great deal has been accomplished. Something might be done for the schools and teachers, but it was not the intention of the movers of the motion to criticise teachers. It is the results outside the schools which are disappointing. The motion was not an indictment of the teachers or of the Department of Education. Schools are not as important as we all thought they were. I thought it myself at one time. Surely we should have an inquiry and I should like the Minister, who is interested in this matter himself, to urge upon his colleagues that we should have an inquiry of a much wider nature than the Taoiseach suggested.

There is the question of preference for Irish in making appointments. One would like to know how it has worked out and whether it has accomplished anything at all for the Irish language. Has it led to reduced technical or professional efficiency, without a corresponding advantage to the Irish language? One would also like to go into the question of bilingual printing. One wonders if bilingual printing does anything for Irish. Another point which one wonders about is in regard to the printing of street names. Does the translation of Wellington Road into Bóthar Wellington do any good to anybody? I do not think it does. Then there are our attempts to use Irish names like Coláiste Móbhi. It is quite all right when it becomes Bóthar Móbhi, but then it becomes Móbhi Road, with the stress on the first syllable, which, of course, is quite wrong, because it is a saint's name with "Mó" as a prefix. It has, in fact, become "Moby Road", presumably harking back to "Moby Dick", and the whole intention is destroyed.

Similarly, when the corporation decided to have street names in Irish, the post office, which has always been a stronghold of Irish, had to draw the attention of the corporation to the fact that where street names were in no other language but the Irish language mistranslations were used so that it became almost impossible for them to deliver letters, so that we have not really made any progress on that front.

Similarly, I think, just as an this matter, the use of Irish titles in example of how misguided we are in English, like Taoiseach, Tánaiste and so on, is quite misguided, apart from whether we ought to do it or not. To think that to do that is advancing the cause of the Irish language is quite mistaken. It seems to me that those who govern us, and who have governed us for a long period, are engaged quite seriously in doing a job, the principle of which they do not understand. They are working away on certain assumptions which are demonstrably wrong, from the point of view of teaching, from the point of view of language study and from the point of view of the history of the development and decay of languages.

It is a complete delusion that legislation, Government Orders, demonstrations and pretence are effective. The Constitution gives Irish a certain status, but the Constitution is quite unable to make people use a language and keep on using it as the ordinary language. Legislation and Government Orders will not restore Irish. Indeed, it would be interesting to observe that legislation against Irish by the English in Ireland up to the 17th century was a complete failure in this country, and it did not prevent English people from learning Irish and using Irish.

Similarly, demonstrations are not of much use. If there was not a word of Irish spoken in this House, or in the other House, and if Irish was the common language of the bar, none of us who are interested in Irish need have any more worries. The situation would be splendid. However, the present situation is a very difficult one. If anyone speaks Irish naturally and spontaneously in this House, or in the other House, it is not possible for anyone in Ireland to take it down; it is not possible to see a script which in any way resembles what was said.

I want to make it clear that the Government proposal as set out in column 1566 of the Official Report of 30th January this year is not acceptable to those who put down the motion, and from the point of view of those who believe in Irish and want to see it making progress, it is not sound. I think my first meeting with the present Minister for Finance was nearly 50 years ago when I was a very young graduate and I met him when he was entering college. I met him for the purpose of giving him a grind in Irish. Perhaps I was not very successful, but, in any event, that period was the peak point in enthusiasm.

I should like to ask the Minister to see that an inquiry is carried out for the benefit of the Irish language itself, and not for any other purpose. After 36 years of an Irish State, and of efforts made by the State, in this matter, we should take stock of what has been done and of where we may have failed. There is hardly any guidance to be got from outside, because our problem is a unique one, but I think we ought to face it. The Government proposal does not face the problem. The Minister for Finance should see that an inquiry such as the kind we asked for is set on foot by the Government.

Professor O'Brien

The Central Fund Bill is one of the few occasions on which the Seanad has an opportunity of discussing financial problems and this debate is one in which the financial position of the country can be discussed in a general way. Individual Estimates are not, as I understand, relevant to the discussion, though I do suggest that, owing to the fact that the Estimates do not come before us as they come before the Dáil, a little more latitude should be allowed by the Chair on this matter than is allowed in the Dáil.

In my remarks, I do not intend to address myself to the general economic situation, though it is extremely difficult to disentangle the economic background from the financial superstructure that rests upon it. It is impossible to disentangle issues in agriculture, industry and trade from monetary and financial policy, but, in the few remarks I am going to make to the House, I shall attempt to confine myself to financial aspects of the economic situation which are relevant in this debate. Even in regard to public finance, the scope of this debate is limited. The question of taxation is not for this House. It will arise on the Budget. Therefore, I shall try, as far as I can, to confine my remarks to the financial aspects of the Estimates, in so far as they bear on monetary and financial policies, and shall avoid any question of taxation which we will discuss on the Finance Bill later in the year.

Looking at the Estimates, the first impression one gets from them is, of course, that the Estimate for Supply Services is £110,000,000. The Estimate for last year's Supply Services in the Book of Estimates was £112,600,000, but in the Budget certain adjustments were made in the estimates of expenditure, owing to the discontinuance of the food subsidies. This brought them to £106,200,000. When £2,000,000 had been allowed for social services to compensate for the rise in the price of food, the revised Budget Estimates last year were £108,200,000. Taking that figure, it is obvious that the Estimates for the present year represent an increase of about £1,800,000. I am afraid there is no getting away from the fact that this sum will be added to in the course of the year by Supplementary Estimates. It is inevitable that Supplementary Estimates should arise in the course of the next 12 months. Therefore, I suggest that, when we take Supplementary Estimates into account, we are entitled to assume that expenditure on the supply services in this country will be a good deal more than £110,000,000 in the coming year.

The first impression these figures give me is that the long upward trend in public expenditure still continues. Government expenditure on the Central Fund and supply services has grown from £85,000,000 in the financial year 1950-51 to £135,000,000 in the financial year 1957-58. If the national income had expanded proportionately, these figures would be tolerable, but the fact is that the national income, even in money terms, has not been increasing proportionately. Therefore, Government expenditure on the Central Fund and supply services has been increasing more rapidly than national income, and, while that has been going on, the Government has been extracting from the taxable community a larger fraction of its income every year.

I do not think that anybody will seriously question that Government expenditure has become unduly large, judged by any recognised standards of comparison. The fact is that the national income has not been increasing and the population has been decreasing, a matter which perturbs me. The national expenditure and the national debt have been increasing. I am afraid there is no escaping the conclusion that the financial superstructure in this country is becoming too heavy for the economic foundations which are expected to support it. This is the first conclusion which these Estimates seem to show.

The second conclusion is that the coming year will be a year of deficit in the public finances. Last year, the Government were able to save several million pounds by a reduction in the food subsidies. That saving, which at the time I thought was proper and justified, was based on the report of the Capital Investment Advisory Committee. There is no reason to expect that the Minister, in introducing his Budget next month, will be able to find an equivalent reduction in the Estimates to that which arose out of the reduction of the food subsidies last year, but Supplementary Estimates which arose this year will also arise next year. Therefore, in trying to forecast these Estimates on a realistic basis, I do not see any minuses, but I do see a good many pluses.

Therefore, I do not think it unfair to say that the total expenditure of the Government in the coming financial year will be a good deal more than the £110,000,000 which is in the Book of Estimates. How much more will depend upon the course of events, on world trade conditions, on our conditions and on the measures which the Government will take in regard to their financial policy. If we had any reason to hope that existing taxes would provide a large increase in yield, we could regard this prospect with equanimity, but there is nothing in the taxation picture to suggest that the yields of the existing direct or indirect taxes are going to be much more next year than this.

I am prepared to admit that, owing to the general revival of activity in the country, there may be a slight increase in yield, but I do not think there is any reason to believe that the increase in yield in taxes will be equal to the increase in expenditure. That being so, unless the deficit is to be met by borrowing, a matter to which I shall return, increased taxes will have to be imposed. I do not believe that those increased taxes will be imposed in the Budget because the Budget will be based on the Estimates, as we have them; but as the year goes through and as inevitable, inescapable Supplementary Estimates crop up, increased expenditure will become necessary.

It may be that the Government will feel coerced to introduce a Supplementary Budget in the autumn. In the absence of that, the increased expenditure, which, in my opinion, is quite inevitable, will have to be met from increased borrowing. That brings me to a matter upon which I feel bound to make certain observations which may not be palatable or popular in the country, but on which, at the same time, I feel it my duty to say something.

The public debt in this country has been increasing at an unduly rapid rate during the past ten years. The net public liabilities have increased by £260,000,000. This does not take into account Government guarantees which amount to roughly another £80,000,000. It is our experience, whenever any of us has acted as guarantor for a debt, that guarantees have a way of coming home to roost. Therefore, I think that the only honest method of estimating the liabilities on these guarantees is to assume that most of them will be called upon to be met sooner or later. Therefore, the public debt has increased by something like £300,000,000 in the course of ten years.

In the published accounts, there are assets set against this debt. Some of these assets are valuable assets, but without in any way impugning the honesty of the presentation of the accounts, I suggest that certain of the assets which are set off against the debt are not real assets in any strict accounting sense of the term. The repayments which are due from the local authorities and the Road Fund simply represent a right to impose future taxation. There are no assets there. They are simply rights to tax which can, we hope, in the future be exercised and in that way they may reduce the net Government debt. The increase in the indebtedness of the Government in this country is causing anxiety to many people.

In this connection, I should like to ask the Minister when the Oireachtas is to be shown the reports of the Capital Investment Advisory Committee. We had the first report last year, on which the Budget was based. The Minister stated in the Dáil that another report has been presented. I cannot help feeling that these discussions would be enlightened, if we had these reports before us. For all I know, other reports may have been presented since, but we do know at least that the second report has been presented. I think the Oireachtas is entitled to share with the Minister the benefits of the advice of this highly qualified committee. But, even in the absence of this report, there are certain things about the public debt which I feel can be said without fear of contradiction.

The first thing I want to say about it is in relation to a certain aspect of emigration which is not frequently stressed. The emigration recently has been at such a level as to reduce the population of the country. When the population of a country is falling, the per capita burden of public debt automatically rises; and if the public debt is rising at the same time as the size of the population is falling, the per capita burden of public debt is rising in a double manner.

In all the books on public finance, the example is always given of the load being proportionate to the strength of the shoulders which bear it. The example is given of a boy carrying a certain load, growing up and getting stronger shoulders and the load becomes proportionately less. If a country is growing in wealth and population and national income, it can carry a certain amount of debt which becomes proportionately a lesser load, but in a country with a stagnant national income and a falling population, the analogy, I am sorry to say, is the other one of an ageing person whose shoulders are becoming weaker. The burden of the debt, even if the gross amount of the debt does not increase, is increasing all the time. That is an aspect of the Irish population problem which I have not seen stressed in public controversy. It bears directly on the question of the burden of the debt that, in a country with a falling population, the per capita burden, even with the same amount of debt, is growing.

The Central Fund services in the present year amount to £9 per head of the population. £27,000,000 is the figure in the Central Bank Report for Central Fund services in the present year. As the population is under 3,000,000, that means that every person in the country is contributing, on the average, £9 a year to what is, for the greater part, the service of debt. With the growth in the debt and the fall in population, that figure will automatically increase until it becomes quite a serious burden.

The second thing I want to say about the debt situation is directly related to the first. It is that the increase in that burden will be greater in a period of high interest rates than in a period of low interest rates. Let us be quite clear about it. We are living in a period of high interest rates. Let us not deceive ourselves that the mere fall of 1 per cent. in the Bank of England rate will usher in a period of low long-term interest rates. The Bank of England 7 per cent. rate was a symptom of pressure on sterling on capital account. The current balance of payments in the sterling area was quite healthy all last year. The high rate of interest was meant as a corrective to weakening of confidence in sterling, entirely based on capital account. It was also partly, I think, a reflection of the world shortage of liquidity in international balances. If the liquid reserves of the central banks in the world as a whole had been higher, I think the corrective rate to re-establish confidence in sterling need not perhaps have been as high as 7 per cent.

These are matters which are far outside the debate before the House to-day. The only moral I want to draw from them is this. The recent reduction in the bank rate in England is simply a reflection of the fact that confidence in sterling seems to have grown again. It is quite possible that the bank rate may again be raised in the course of the present year. Anything in the nature of a deterioration in the sterling area balance of payments, anything in the nature of foreign fears regarding the future political stability of Great Britain would bring about an increase in the Bank of England rate. Therefore, the recent reduction in the Bank of England rate is possibly purely a temporary reversible act which certainly should not lull people into the idea that long-period interest rates are falling.

These are matters on which there is room for legitimate difference of opinion. The best opinion in the world to-day is that the long-term rate of interest will remain high. That is based on a number of considerations regarding the capital market all over the world. The long-term rate of interest reflects the relation between the demand for and the supply of capital. At the present time, the demand for capital is quite unusually high. The great investment necessary for raising the standard of living in the undeveloped areas is creating a large demand for capital. New types of techniques in the more advanced countries— automation, nuclear fission, the new inventions—are all creating a great demand for capital. The main industrial countries are still, unfortunately, spending a good deal on defence. Therefore, the demand for capital in the world to-day is unusually high.

At the same time, the supply of capital is not tending to keep pace with the demand. In many of the main industrial countries, high taxation is reducing both the power and the will to save. The Welfare State, in its various manifestations—social services, insurance against the vicissitudes of life—reduces the necessity for people to save voluntarily. Therefore, the demand for capital is rising at a time when the supply is not rising. That, in the ordinary way, would be accompanied by high rates of interest. However, there are other features in the world to-day operating in the same direction. The continuous inflation of the last 20 years has reduced confidence in the future of the value of money. The inflation is by no means confined to the sterling area. The purchasing power of the dollar has been and still is decreasing in spite of an American recession.

When the investing public becomes wise to the fact that their savings are liable to diminish in value, they will require a high rate of interest as a sort of insurance against depreciation. Until there is some sign of a reduction in the inflationary trend, interest rates will be higher than they would otherwise be.

Another factor keeping up interest rates is the very high direct taxation in many of the leading countries. The net return on investments to-day is very much less than the gross return and investors are becoming wise to this at last. They are thinking in terms of what they will really get on investments and not merely of what they will receive subject to handing a great deal back to their Governments by way of taxation.

A further factor which keeps interest rates high is one to which I have already referred in connection with the bank rate and that is the world liquidity situation. It is far outside the scope of this debate, but the fact is that the one commodity which has not been allowed to rise in price in the last 25 years is gold. Gold is still the basis of the reserves in the central banks of the world. That has created a problem which is quite outside the scope of this debate except in so far as it bears on the rate of interest.

I am suggesting that a great many factors at present combine to make interest rates high. It has been suggested that the American recession may reduce interest rates. Possibly it may. However, if it does, it will reduce them from a very high to a high rate. The days of 3 per cent. gross return on long-dated Government securities are gone forever. If rates of interest fall, it will be a fall from 6 to 5½ or possibly to 5 per cent. The relevance of that to this debate is that Governments, in a period of high interest rates, should avoid borrowing, as much as they possibly can and that no Irish Government in the near future can hope to borrow cheaply. Irish savings are very insufficient to meet the demand for capital in the country and foreign borrowing, even if it were possible, is undesirable.

There is a myth in this country that a large number of foreign lenders are willing to lend this country large amounts of money at low rates of interest. There is no foundation for that in fact. The international lending institutions have been charging very high rates of interest recently. The latest loans of the International Finance Corporation have been carrying interest at the rate of 7 per cent. The Irish Government cannot reasonably hope to raise money cheaply abroad even if it was desirable to do so; and, of course, it is highly undesirable, because for the Government to borrow abroad would impose on the country great difficulties in future repayments. The only way in which foreign loans could be repaid is by surpluses in the balance of payments, and we have sufficient difficulty at the moment in attaining a bare balance, without even hoping to attain a surplus.

I do not for a moment suggest that we should not seek foreign equity capital. At the present moment, we should do so; but I shall refrain from dealing with that further here, until we are dealing with the Control of Manufactures Bill, when that subject will be relevant. But I do suggest that for the Irish Government to borrow at fixed interest rates in foreign currencies, even if the loans could be obtained, would be highly imprudent and definitely against the best interests of the country. So that my second reason for criticising anything in the nature of an increase in the public debt is the high rate of interest, the shortage of Irish capital and the difficulties that would be imposed on the balance of payments if we borrowed abroad.

I now want to make the third point, and that is that borrowing at home could impose almost equal difficulties in our balance of payments. The external balance in every country depends on the country keeping a balance in its internal account. In this country in particular a disequilibrium in the balance of payments is a certain sign of internal inflation, and the only way in which internal inflation in this country is at all likely to take place is by deficit financing on the part of the Government.

I do not want to underestimate the importance of the recent improvement in the balance of payments. It reflects great credit on the administrations who have between them succeeded in bringing it about. But at the same time I want to make it perfectly clear that in my opinion we have no cause for complacency. In the present year we have attained a very slight, very sensitive and very precarious surplus. Our international payments are barely in balance and could be very easily unbalanced again. I do not wish to go into details, but everybody knows that the exports and prices of cattle in 1957 were both unusually high, and that the export of live stock at the present moment is only being supported by means of imports from Northern Ireland.

If there is any expansion of industrial activity in this country, which everybody wants, large increases of imports will be imperatively necessary, for this country will always require large imports of raw materials, capital goods and consumer goods on which to base expansion of economic activity. In the long run, the only way in which that large importation can be paid for is by expanding our exports, visible and invisible, of one sort or another. Therefore, it is a matter of extreme public importance that a mere temporary increase in exports such as has luckily occurred in the last year should not be taken as the green light to further expansion of imports, because it may be—I hope it is not so—that the flare up in the exports last year was to some extent really in the nature of a flash in the pan.

Of course, we still are a creditor country. We still could import and pay for the imports by our external reserves, but on that I want to make it perfectly plain that at the present moment every country in the world is trying to get equilibrium in its balance of payments. That is regarded as the first aim of policy in every country. There are some countries such as the United States and Germany which have such surpluses in their balance of payments that they have elbow room for a policy of independent internal reflation without immediate regard to the effect on the balance of payments; but even in those countries, if a reflationary policy were at any time to threaten the equilibrium of the balance of payments, it would, of course, be immediately stopped. Those are the lucky countries, but other countries in the world, without any exception as far as I know, are watching their balance of payments with very great care. They have no elbow room and therefore their internal policy is always directed towards equilibrium in the balance of payments.

In this country the reserves available for the payment of imports tend to be overstated in popular discussion. One hears of vast figures amounting to hundreds of millions of pounds, but one must remember that the greater part of our external reserves are in the possession of private individuals, that they are not available for payments by the Government, by the Central Bank or by the commercial banks and they could very easily, if confidence was reduced, elude the net of the Irish banking system altogether. The reserves in this country in Government accounts and in the banking system have been reduced to a low level. They have been slightly increased as a result of the good trading figures in 1957, and to the extent to which they have been increased there has been an expansion of internal activity.

It cannot be sufficiently stressed that, as long as this country wishes to remain in the sterling area, our external reserves remain the basis of our internal expansion. Any further draining away of our external reserves in order to pay for imports not paid for by exports would have a very bad effect on confidence, on credit and on the capacity of the banking system to accommodate its customers. I, therefore, suggest to the Minister that he should make it object number one of his policy to protect our reserves and to preserve equilibrium in the balance of payments.

As I said, if we had the reports of the Capital Investment Committee, we might receive some guidance on this matter. In the absence of these reports, I should like to refer to the Report of the Banking Commission, which was published exactly 20 years ago and which, curiously enough, seems more topical to-day than it was when it was written. I was a member of that commission and I use its report now as the basis of lectures in my college; and I am always impressed by the fact that that commission's report was written more for the 50's than for the 30's, that the dangers to which the Banking Commission pointed were dangers which are with us to-day. It showed an almost prophetic sense for the dangers of the future.

The Banking Commission stated that the danger to the balance of payments then was not caused by private overexpansion, but by a deterioration of the public finances, and that that deterioration of the public finances was leading to an expansion of imports not matched by an expansion of exports. If that was true in the 30's—as I believe it was—it is a fortiori true to-day. In the 30's, the Government borrowing was quite small, compared with Government borrowing to-day, the external reserves in the banking systems were very large compared with the external reserves to-day. Yet the Banking Commission warned the Minister for Finance of the day—to whom the report was addressed—that the public finances of the country needed to be put in order to avoid a further deterioration in the balance of payments.

For the benefit of Senators who, perhaps, have not read that report recently, I might name the paragraphs. They are numbers 354 and 355. In those paragraphs of the Banking Commission Report, it was insisted that Government borrowing should be confined to productive purposes. If that was true in the 30's, how very much more true is it to-day? By productive purposes is meant something rather narrow. Productive borrowing is borrowing which will create the assets which will repay the loan. The only true productive borrowing is self-sustaining borrowing, where the income of the assets will pay the interest and sinking fund on the loan. Any other definition of productive borrowing is misleading and should be avoided.

In the first place, productive borrowing does not mean borrowing for mere non-recurrent expenditure. We have discussed that here before and I will not refer to it again. I do not find any examples of it in the current Estimates. There was a time in this country when items of current expenditure which were not liable to recur annually were treated as capital expenditure and therefore fit for borrowing. There is nothing productive about that.

Furthermore, productive borrowing does not mean borrowing for the construction of durable consumer goods, of which the principal example is working-class houses. If public borrowing at a period like this is justified for housing which does not pay its own way, I cannot see why it should not be equally justified for furnishing the houses on hire-purchase terms. Durable consumer goods, however desirable they may be, are not productive investment, except in a very strained interpretation of that term.

Thirdly, productive investment is not the construction of mere amenities, however much we would like them and however much we should try to have them if we could afford them. By amenities I mean such things as hospitals and sanatoria—which in the very long run may increase the national dividend but in the short run are productive of dead-weight debt.

Fourthly, productive investment is not investment simply to make work, even if the work leaves behind it some useless, unwanted assets in the form of widened roads or something of that kind which have provided employment and done no other good. Finally, borrowing at a time like this is, above all, not justified to finance a deficit in the current Budget. Financing a deficit in the current Budget by borrowing at the present time would be a directly inflationary measure. The expansion of incomes not matched by an expansion of taxation would exert an immediate pressure on the balance of payments.

If it is assumed, as I ask the Seanad to assume, that equilibrium in the balance of payments is a desirable end, deficit financing based on borrowing would be an immediate threat to the securing of that end. There is another reason why the State should be very conservative in its borrowing in this country. I have already stated that there is a shortage of Irish savings. In recent years, the State has absorbed practically all the available current savings, leaving nothing for private enterprise. Private enterprise has been starved of finance in this country in recent years.

At the present time, many businesses are unable to raise capital in the Irish market simply because of the great demands, the overriding demands, of the Government. The result is that they are borrowing from the banks. Borrowing from the banks is expensive, it is inflationary and it is undesirable. As I said before, the problem would be largely solved by a large infusion of external equity capital—and that I hope to deal with when we are taking the Control of Manufactures Bill—but it certainly will not be solved by Government borrowing.

I wish to conclude by referring to suggestions which were made in the other House, that the future of the country depends on an extension rather than a reduction of Government activities. If what I have said is correct about the inflationary nature of Government non-productive borrowing and the shortage of capital for private enterprise, it must appear that I completely disagree with this contention. People do not realise, perhaps, that we in this country, although still an individualist country, have gone very far along the road to State capitalism, that a larger amount of our economic activity in Ireland is based on Government control or indirect Government control than in most of the countries of western Europe.

I am not quarrelling with that. Many of our enterprises such as Bord na Móna and the E.S.B. must have had Government support; but the suggestion that we lag behind in regard to the sphere of State investment is entirely contrary to the facts. I will not say this country has gone very far on the road to Socialism—I do not mean that—but it has gone very far on the road to State capitalism. The suggestion that the State should absorb more of the scarce capital in this country is simply tolling the bell which will doom private enterprise to a shortage of capital in the future.

The upshot of the remarks which I have made on this Bill is, in the first place, that the long-period trend in our finances is rather disquieting, that debt and expenditure have been growing, that the superstructure has become top-heavy in relation to the foundations. The prospect for the coming financial year is that of a deficit which will have to be met by additional taxation or by additional borrowing. Both these are evil. Additional taxation is burdensome and has a disincentive effect. Additional borrowing, as I have said, is particularly bad at a time when there is a falling population, a stagnant national income, high interest rates, a sensitive balance of payments and a shortage of saving. Therefore, the only conclusion to which I can come is that the Estimates are still unduly high and that further pruning of expenditure should be undertaken in the national interest.

This conclusion I know will be unpopular and unpalatable. If Senators find fault with me, I can only reply first, that it is the duty of economists to tell the truth, that the economist in relation to the country is in some way in the position of a doctor in relation to his patient, and that a good doctor will tell the patient the truth, however unpalatable.

Secondly, I think it is the duty of the Government, as I said last year, to use its political strength in order to do what is right and not what is popular. The present administration has a grave responsibility to future generations. It has a working majority. It probably will not have to face the electorate for a considerable period and therefore it should attempt to do what it knows to be right—to act on informed advice, rather than to do what will merely appear popular to the country.

Thirdly, if the Government does not do its duty, the Irish people can scarcely be blamed if they do not do their duty. What is their duty? I suggest that different virtues and different qualities are necessary in a nation in different phases of its history. In the 18th century in Ireland, I suppose, resistance to persecution and consistency regarding principles were the virtues which the people were supposed to practise. In the 19th century, we had great constitutional agitation. Nationalist parties of one sort or another never flagged in their efforts to secure the independence of the country. In the present century, we have had military manifestations. We have had various types of displays of force which have brought out qualities of courage which were very admirable at the time they were displayed. It may be now that, having secured independence for at least part of the country, the virtues which the Irish nation are expected to display are the less spectacular ones and the more humdrum ones—thrift, self-discipline, living inside our income. It may be that if we do not display them, and live beyond our income, we will go the same path as the individual who squanders his inheritance. A man who squanders his inheritance ceases to be a rich man, and becomes poor. By trying to do too much, by not making provision for the future, he very soon finds himself a prey to his creditors. Nations may be the same.

If this nationlacks self-discipline and thrift, if it squanders its reserves on present enjoyment and does not make sufficient provision for future production, it may find itself on its knees to other countries looking for credit. When that comes, its independence will have gone.

I suggest to the Minister that he has a duty to set an example in this respect. If the Irish Government does not set its house in order, it can scarcely complain if the Irish people do not set their house in order.

Pádraig Ó Siochfhradha

Is é seo an Bille is tábhachtaí a bhí os comhair an tSeanaid ón dtaca seo anuraidh. Níl Bille eile is tábhachtaí i ngnó an dá Thigh den Oireachtas sa mblian. Is é atá ann soláthar chun gléas agus inneall agus riarachán an Rialtais a choinneáil ar siúl; agus, ceangailte leis sin, tá oll-thionchar an Rialtais agus an riaracháin ar shaol na ndaoine, ar oideachas na ndaoine, ar thuiscint na ndaoine, ar chuspóirí agus ar riachtanaisí an náisiúin.

Ar na nithe sin, tá aon ní amháin gur mór mo spéis ann—ceist athbheochana na teangan náisiúnta, ceist athbheochana na teangan a bhain ó dhúchas leis an gcine seo againn, agus go bhfuil cead agus gríosadh an phobail ag Rialtaisí chun na cuspóirí a bhaineas leis a thabhairt chun críche.

Do thagair an Seanadóir Mícheál Ó hAodha don cheist sin, sa chéad óráid ar an mBille seo. Ar an bpríomhphointe a bhí ina chaint táim d'aonaonta leis. Do thagair sé do gheallúint a tugadh anseo, cúpla mí ó shoin, ón Taoiseach agus ón Aire Oideachais, nuair do ghealladar go gcuirfí fiosrúchán ar bun i dtaoibh gluaiseacht na Gaeilge agus athbheochaint na teangan, agus cúrsaí a bhain leo san.

Nílimse, ach oiread leis an Seanadóir a labhair, sásta le cúngú na geallúna, gur dócha gur fiosrúchán a bheidh ann ar obair mhúinteoireachta na Gaeilge i scoileanna agus i gcoláistí. Ní leor fiosrúchán teoranta mar sin mar níl in obair na scoile i leith na Gaeilge, dar liomsa, ach tús agus ullmhúchán le haghaidh na hoibre móire atá le déanamh i leith na teangan, in athbheochaint na teangan beo agus í bheith ar eolas ag na daoine i gcoitinne.

Dá bhrí sin, is díomá liom an teora chúng ba thuighthe againn ó chaint an Taoisigh agus an Aire Oideachais. Ba mhaith liom a iarraidh agus a thathant go leathnófaí ar fuaid leithead na ceiste ar fad an fiosrúchán san agus nach é amháin múineadh na Gaeilge sna scoileanna a bheadh i gceist ach go bhfiosrófaí gach dtionchar agus cumas agus gléas d'fhéadfaí a cheapadh faoi chumhacht an Rialtais agus a dhéanfadh leas do athbheochaint na teangan.

Mar a dúirt me, níl, dáiríré, in obair na scoileanna ach iarracht chun an pobal óg a chur in eolas na teangan, agus roinnt éigin cumais sa teangain a mhúineadh dóibh.

Tá ceist na gluaiseachta i bhfad níos leithne ná sin. Tá i gceist ann gnáthshaol an phobail, saol cultúrtha an phobail, saol spriodálta an phobail, a bheith faoi thionchar cinnte, a mhéid is féidir don Rialtas an treoir sin a thabhairt le dea-shampla agus le teaspánadh dúthrachtach iad féin.

Ba mhaith liom a iarraidh go leathanófaí an fiosrúchán chun léirmheas a dhéanamh ar gach beart d'fhéadfaí a dhéanamh a chabhródh le teagasc an phobail um an cheist agus a ghríosfadh an pobal chun gníomh a dhéanamh iad féin ar son na gcuspóirí sin. Ach beidh gá teagasc gan tuirse a bheith le fáil ag an bpobal san chun iad a chur ar an mbóthar chun an dícheall deontach sin a chur i bhfeidhm go tuisceanach agus go sochrach don teangan.

Dar liom féin, ta an tráth tagtha nuair ba chóir go mbeadh cuid éigin de ghnó Aireachtaí an Rialtais á dhéanamh i nGaeilge ar fad. Do luafainn an Aireacht Oideachais, Aireacht na Gaeltachta, agus cuid d'obair gach Aireachta eile, go mór mór an méid dá gcuid oibre a bhaineann le dúthaigh na Gaeilge agus leis an mBreac-Ghaeltacht. Is dóigh liom féin gur mithid go mbeadh an Aireacht Oideachais ar fad ag obair trí Ghaeilge agus go mbeadh sé le tuiscint agus le brath go bhfuil an méid sin d'obair an Rialtais dhá dhéanamh sa teangain náisiúnta, gan spleáchas do theangain eile ar bith d'aon chuid den phobal.

Táimíd ró-thugtha ar fad don lagbheart i leith na Gaeilge, agus rócháiréiseach ná cuirfimís dua ná trioblóid ar dhuine ar bith ar cheist atá chómh tábhachtach agus tá ceist na Gaeilge.

Tá obair ar siúl ag gach Aireacht eile den Rialtas sna ceantracha Gaeilge. Ní ceart go mbeadh aon chuid den obair sin dá dhéanamh ná dá riaradh trí Bhéarla sna ceantracha san; ach ní mar sin atá, agus is náireach an scéal é ná fuil, ar éigin, aon chuid d'obair riaracháin logánta dá dhéanamh sa Ghaeilge in aon chuid de na ceantracha san, mar a bhfuil an teanga náisiúnta fágtha agus gur mhaith linn na daoine a ghríosadh chun a ndílse féin a thabhairt dí agus leanúint dá cleachtadh i rith a laethanta agus i rith a saoil.

Ba cóir comhoibriú iomlán a bheith idir Ranna an Rialtais uile, chun cuspóir sin na Gaeilge, go dtuigeadh gach Aireacht go bhfuil sé ceangailte air féin a thionchar féin a chur le tionchar na hAireacht gurb í a chúram an Ghaeilge a tharrtháil, agus ná beadh a mbeart san bun ós cionn le beart lucht teagaisc agus lucht gríosta i leith na teangan.

Do luafainn, ní amháin an dearcadh atá i bhfad i bhfeidhm ar an bpobal i dtaobh dáiríreachta an Rialtais sa ngnó. Nach mithid anois, agus nár mhithid le fada, go gcleachtfaimís na hainmneacha cearta Gaeilge ar ár dtír d'úsáid go hoifigiúil agus gan a úsáid ach iad. Is eol dúinn a fhusacht a thagann an phobal isteach ar na nithe sin nuair is gá dóibh teacht isteach orthu. Do luafainn dhá ainm—Dún Laoghaire agus an áit go dtugaidís "Queenstown" air. Tá an dá ainm Ghallda a bhí orthu sin imithe nach mór ar fad anois as taithí ghnáthmhuintir na hEireann. Sin mar is cóir é. Ní heol dhom aon chúis ná déanfaí an rud céanna le gach ainm eile ar fud na tíre.

Professor Hayes

Cad é an mhaitheas a dhein sé don Ghaeilge "Dún Laoghaire" a bheith mar ainm ar an áit sin anois?

Pádraig Ó Siochfhradha

Ní aontaím in aon chor leis an Seanadóir Ó hAodha ansin. Ba ghníomh ceart an rud a deineadh nuair do hathraíodh na hainmneacha san, agus ba cheart sin a dhéanamh le gach ainm dúchais eile sa tír. Is le iomadú na nithe sin agus le iomadú na gcomhtharthaí sin a déanfar téagar agus toirt a chur in obair ghluaiseacht na Gaeilge agus a cuirfear i bhfeidhm ar an bpobal i ndiaidh a chéile go bhfuil an Rialtas dáiríribh agus gur cuspóir é athbhunú na Gaeilge, a caithfear a shroisint, cóir máir.

Tá lucht eile tionchair sa tír agus is dóigh liom féin gur mithid don Rialtas dul chucu agus a gcomhoibriú a éileamh ar son an chuspóra náisiúnta. Do luafainn an Eaglais. Do luafainn na nuachtáin. Do luafainn gnóthaí móra ar nós C.I.E. agus seirbhísí eile atá go foirleitheadúil ar fud na tíre ar fad. Is dóigh liom gur ceart a chur ina luí orthu san go bhfuil dualgas i leith na Gaeilge orthu chomh maith is tá sé ar an Rialtas nó ar Aireachtaí.

Ba mhaith liom go leathnófaí téarmaí an fhiosrúcháin seo atá le cur ar bun, go mbeadh plé ar cheisteanna a bhaineas leis an bpobal i leith na Gaeilge, go dteaspánfaí agus go ngríosfaí an pobal san ar mhaithe leis an gcuspóir náisiúnta, agus go mbeadh an pobal féin, de thoradh iarrachtaí an Rialtais agus lucht údaráis, gríosta chun gníomh agus chun dícheall agus chun dúthrachta.

Mr. McGuire

Recently, statements by Ministers no less than by business people and public men, have shown a realisation of the necessity for the expansion of our economy. Over the past years, the State has shown much activity in the development of industries of all kinds and the development of our economy in many different ways. I think it is fair to say that in the past, since 1932, at any rate, increasingly, the State has more or less taken the initiative and has appeared to regard itself as being the source of and the driving force for the development of our economy. That concept has been too exaggerated. Sufficient confidence has not been placed in the private enterprise section of the community at all levels, from the smallest man up to the biggest man.

I feel it is the State's duty to create a situation in which the citizens themselves can live their lives to the best of their ability, by hard work, imagination and all the other qualities which human beings possess. That is the concept of the Christian State, as distinct from the Socialist or Communist form of Government. It was pointed out by Senator O'Brien, and by several representatives of different bodies which came here from America at different times to comment on our economy, that we have developed here a very strong domination by the State over our economy. That has proved to be a very expensive form of economy and very often it has not given anything like the results expected from it.

We can point to certain activities which probably could not have been attempted by private enterprise. I refer to such enterprises as the E.S.B. and other bodies which are exceptions to the general rule. On the whole, they are monopolistic. Therefore, it is very hard to judge. If a monopoly exists and there is no competition, there is no way in which people can see whether it is economically run or not. It is not very easy to see whether these have really justified themselves and, perhaps, there might have been better ways of carrying out these activities, both from the point of view of giving a return for money and the general benefit of the country.

However, the Ministers have shown in their statements, especially the Minister for Finance and the Minister for Industry and Commerce, that it is time we directed our attention to leaving to the citizens themselves more responsibility for creating prosperity and employment in the country generally. Having said that, I should like to see both the Ministers and the Government itself take the necessary action to enable the citizens, individually and collectively in their private capacity, to make the necessary contribution to the national economy because I think we have gone as far as we can at present in the matter of State enterprises.

Some steps should be taken to develop the private enterprise economy. My own desire is to see private enterprise develop to the same degree as State enterprise has been developed. One has only to look at Western and Eastern Germany to see what I have in mind. Both Western and Eastern Germany started from the same baseline after the war. In this connection, there was a book, entitled Prosperity Through Competition written by Ludwig Erhard, Vice-Chancellor and Minister for Economic Affairs in Western Germany, which points out that in Western Germany the people relied upon competition and free enterprise. The result is that Western Germany has now got one of the most prosperous economies in Western Europe, with the highest standard of living for the workers. In Eastern Germany, there is one of the most rundown economies in Europe, with the lowest standard of living and with little or no freedom.

A Government policy can be either one of rule and riding the community or one of serving and assisting the citizens at all levels to exercise their freedom, their energies and imagination. All our Governments here, and all Parties, have always given expression to their ideal that the kind of State we should have is one in which there is that freedom in which a Government should perform only the function of creating the atmosphere in which people can live their individual and economic lives to the fullest possible extent. I believe that, over the years, our State has tried to do too much and too many things that the citizens could have done better for themselves. I suppose a lot of that was due to the fact that we are a young State, that we were in a hurry and that it was felt we could not wait long enough to build up the wealth, strength and savings necessary to carry on a private enterprise economy.

A private enterprise economy cannot come into existence overnight. It is only by slow, hard work and the accumulation of savings, achieved by hard work and put together slowly and carefully, that a private enterprise economy can function successfully. It is all the better for that. It is slow, but sure. It is based on solid ground. Eventually, it will lead to the accumulation of wealth, which, in turn, will lead to the production of the income necessary to give us a good form of life and a high standard of living.

During the 1940-45 emergency, it was inevitable that the State should take over a high degree of control. All sorts of regulations, in the difficult circumstances of that time, had to be made. However, there is a danger, always, with Governments—I suppose it applies to individuals as well—that once they get powers and controls, they are loath to let go of them. Therefore, it is only within the last year or two that many of the emergency controls, which were really kept on unnecessarily long, have been lifted. Some of them are even still retained in the permanent legislation. I rather regret that these controls were not thrown over in a more wholehearted way, because there seems still to be reluctance on the part of the Government, and the bureaucracy behind it, to let go of controls they never had use of before the emergency.

We find that, even in the Prices Act, certain controls are still retained. Although they are not very much, they show a mentality which the Minister for Industry and Commerce pointed out was inimical to people investing in this country in business enterprises because there was a feeling that there was antagonism to profit. Profits, and good profits, are the basis of successful business enterprises. I want to qualify that by a remark, which is obvious to any businessman, that big profits do not necessarily mean big prices. High profits can often and may be made in the competitive market by the person who can sell cheapest and with the greatest efficiency. In this country, there has been a tendency to equate profits with high prices. When anybody was said to make too much profit, that was meant to convey high prices.

If we are to encourage a private enterprise economy, there must be encouragement of high profits which must be got through competitive prices, not only on the home market but also on the export market. In that respect, I am glad a Bill is coming through in which business people in this country will be told that, in future, they will have to be more competitive, that they will not be safeguarded by unnecessarily high tariffs, and so forth. As a businessman, I welcome that step. Through it, we shall get the right kind of business and business people here.

If the situation arises that we shall have a successful private enterprise economy here, I feel the Government —all Governments here—must do much more to make business profitable and free—and I do not mean to give it licence. I have in mind reasonable freedom to operate and compete and make money and become strong and save and create capital which can be created only from profits, apart from savings.

We hear that there is not enough capital here at present and that the Government is supposed to be taking capital from private enterprise. I do not attach much importance to that. I do not think business people want to be allowed to get bigger advances from banks and pay rather high rates of interest. In other words, they do not want to be given the facility of getting into debt. They want to be allowed to retain in their businesses the profits they legitimately make and so to build up the capital which is their own savings and not be beholden to banks or anyone else. They are not under obligations which may, at any time, be pressed down upon them, if their own profits are translated into savings and into their own capital which, in the course of time, will reduce and wipe out existing overdrafts —which, unfortunately, are at present weighing down nearly every business in this country. Such overdrafts, under such a system, would, in time, be turned into credit balances which would be available as wealth, some of which could be invested in other enterprises outside the ones that have actually saved, and thus new enterprises and even the Government would benefit.

I should like to see such a step from the Government translated into the forthcoming Budget. If there is to be any change in taxation, it should be directed towards encouraging people to save so that, when they have saved, they will be protected from taxation in any form, either through high or confiscatory taxation in the private business sector or by such things as death duties which are murderous of life savings and completely opposed to encouraging people to save.

On the question of building up an industrial economy here, I think again, on this point, that the State's interference—which I know, up to now, has been necessary in certain things—has been carried too far. There has been much too much setting-up of artificial industries here purely for employment, political and perhaps even social reasons. These are secondary reasons. The primary reason an industry should be set up is that it should be an economic success. It should be allowed to function where it will most economically function.

There is not much use in giving an industry, initially, £20,000—I will not mention any part of Ireland in particular—and a protective tariff and saying: "For God's sake, give employment to 200 people in such and such a town," irrespective of the economic facts. It is a waste of money, frustrating and eventually it leads to failure and disappointment. There has been a lot of that type of thing. One of the difficulties about creating that sort of industry is that the wrong people get into it. They have not the "know-how." I suggest that the only kinds of people who go into a business of that type are (1) those who know nothing about it, or (2) those who have nothing to lose except the £20,000 which was given by the Government.

We are talking about exports now, and I am glad, because once we talk about exports, we are getting into the realm of reality in business. We may be able to force the people in their own country, under protective tariffs, and so on, to buy goods that are too highly priced or uneconomic, but we will not be able to do that on the export market.

While I am on the point, there seems to be a suggestion that the Government are encouraging exports by giving certain concessions to industries for exports. That is not a realistic policy. It is all very well as far at it goes, but it is axiomatic in business that you cannot do an export trade, unless you have a home market as well. They are interdependent and work together. If you have not a good sales market at home, you are not going to be in a position merely to export. The matter should be looked at in a broader way. Any concessions given will have to be applied on a broader field and given on the basis of extra concessions on specifically export trade, but you cannot merely give an incentive to the export side of a business. No business would exist purely on exports.

I hope to see in the forthcoming Budget some real incentive to saving and capital creation, the freeing of industry from unnecessary controls, and the establishment of a competitive market.

I should like to make some general remarks on Government responsibilities. Those responsibilities have been visible to us for a long time, but particularly in the past year. I would suggest that, although the Government cannot impose their will, for instance, on the wage structure, nevertheless they have a function and duty to state clearly and repeatedly what they believe to be the best kind of wage policy and expenses policy in the interests of the economy of the country. I can speak on that as President of the Federated Union of Employers.

I have had personal negotiations with the unions and I should like to pay tribute to the high-spirited and courageous way in which the trade union congresses last year entered into what has come to be known as the "10/- agreement". I purposely do not use the word "formula", because that is just my point. I am glad to say that on this occasion the Minister and the Government did come out clearly and openly on the undesirability of creating an inflationary wages and prices spiral, in the present state of our economy. That has been true for some years, but was particularly true this year. It is a great help to negotiators on both sides, employers and workers, if they can clearly point to the statements and stand of the Government in a situation like that.

The point I should like to make is that the arrangement made was not carried out in the spirit in which it was intended. The 10/- was merely meant to be a ceiling, and not a formula. The 10/- was supposed to be given only in cases where unemployment would not be created or prices raised, and the ceiling of 10/- was not to be exceeded in any case. It was envisaged that in many cases, in fact in most cases, there should not be any rise in wages at all this year. The employers made the preliminary case that we believed that, in view of what the Government had told us, there should not be a rise in wages this year. The attitude of the trade unions was that whether there should be a rise or not, there would be demands. We then said that if and when that happened, they should not exceed 10/-. No award should be higher than that and in lots of other cases awards should be lower, or there should be no awards at all.

I am sorry to say that the Labour Court has not always shown its responsibility and has in fact turned that arrangement of ours into a 10/- formula. It is handing out awards of 10/- automatically and completely upsetting all the work the Government initiated last year, and which we ourselves in our negotiations carried out over a long period and after much trouble. The 10/- side was the easiest side of the whole arrangement. It was the conditions surrounding it that took us three months of hard work several days a week to arrive at, and it only took a few minutes in other places to look at the 10/- and never look at the conditions under which the agreement was supposed to be implemented. I feel that the Labour Court seems to have been guided rather by expediency than by responsibility in many of its awards this year.

I have said already that it is part of the duty of the Government to inform the country of the economic situation and make people realistic about the economy under which we live, our ability to pay and so on. It is important to bring home to the citizens that there is no easy road to prosperity, that it will be achieved only through hard work and by savings. We have heard a certain amount of talk in the last few years, and there is still a little of it, based on the idea that, by some juggling with currency and raiding the banks and using other people's savings, the citizens can have a form of living and things they do not themselves earn; in other words, a large number of people seem to think that they can live on what are in fact other people's savings. That is just not so. Even people quite high up in our national life talk quite blandly about money as if it were something you turn out of a printing machine. The printing machine has been tried in other countries with ghastly results. Any steps we take in that direction will lead to the same hopeless situation, and the same results as have followed in every other country in the world where it was tried.

Nobody stands up to-day without saying what is obvious, and the Minister himself has said it, that this country is suffering at the present time from much too high taxation. It is definitely being bled beyond its strength by high and unimaginatively imposed taxation. I do not think that people think very much about this, that we have developed a most extraordinary system which is quite contrary to what any man would do in his ordinary life—that instead of our Government ascertaining how much the economy can afford each year in taxation, and then setting its expenditure programme accordingly, as is done in the United States and many other countries, we have adopted the improvident system of deciding how much we are going to spend next year and then turning to the unfortunate taxpayer and imposing the appropriate amount of taxation, regardless of the damage done to our economy and to our productive capacity.

I cannot afford to go home to my house and say: "I would like to spend X thousand pounds next year," and then start running round to get it, because I would not get it; but Governments in the past have always taken the line that they must have whatever money they want. We would be very wealthy if we had developed a form of life in which we had only to say what we wanted and then get it. The only way that could be done would be by having an Aladdin's lamp that we could rub and the money would be produced; in other words, wishing will make it so. This is very seldom referred to, but it is in fact the way we run our finances.

I should like to conclude by saying that I feel we have gone as far as we can at present in State and semi-State enterprises. They have filled a very important function in our lives, but it seems to me that they have tried to fill too many functions. I appeal to the Minister and the Government that they would now, as they have already said they would, turn their attention to the development of the free enterprise side of our economy. If we can strike a reasonable balance as between public enterprise and free enterprise here, if we can get everyone in the boat pulling his full weight, that is what we want, not to have some pulling too strongly and some not pulling strongly enough, producing inequality and a wobble. We have the same kind of wobble here to-day in our whole economic set-up.

I hope that when the Minister comes to frame his Budget, he will do it this time in a new and imaginative manner, so as to encourage savings, encourage the creation of capital and greater production for home and export markets, thus increasing the employment of our people and giving us a good standard of living.

Finally, I trust that our public finances will have regard to the size of our national economy and our national purse. We must realise that we can have only the standard of living which our income and our accumulated savings can pay for. Anything beyond this is merely an improvident creation of debts which must be paid for by harder work later on, if not now, or by much suffering in the future.

Eamon Ó Ciosáin

Ní mian liom mórán a rá ar an mBille seo, cé gur Bille é gur féidir mórán do rá air. D'fhéadfaí díospóireacht an-leathan a bheith againn air, fé mar is eol do Sheanadóirí.

Isé ceann des na fáthanna go bhfuilimse ag labhairt anois ná gur deineadh tagairt do cheist na Gaeilge agus don díospóireacht a bhí anseo againn cúpla mí ó shin mar gheall ar fiosrúchán do chur ar bun chun fháil amach an bhfuil an cuspóir ceart anseo againn fé láthair cun athbheochaint na Gaeilge do chur chun cinn. Maidir leis an fiosrúchán atá le chur ar bun ag an Rialtas, nuair a bhí an díospóireacht sin ar siúl againn do chuireas in iúl ná rabhas i gcoinne an fhiosrúchán sin, mar ná deineadh sé aon díobháil mura deineadh sé maitheas.

Dheineas tagairt do chúrsaí an tsaoghail, fé mar atá siad ag cur isteach orainn anseo maidir le athbheochaint na Gaeilge. Ach do bé cheist mhúinte na Gaeilge ins na scoileanna ba mhó a bhí ar siúl agamsa. Tuigim fós gurab iad na scoileanna agus múineadh na Gaeilge ionnta an rud is tábhachtaí— mar, muna dtugamíd eolas ar chaint agus ar scríobh na Gaeilge—ar an gcaint go mór mór—do dhaoine óga agus iad ar scoil, ní bheidh an bunús ceart acu ar ball. Ach ní hionann san is a rá nár ceart dúinn cúrsaí na tíre ar fad do mheas maidir le athbheochaint na Gaeilge. Tá rudaí áirithe gur deineadh tagairt dóibh anseo—ainmneacha sráideanna agus mar sin de. Cé gur tábhachtaí rudaí iad, is rudaí iad nach bhfuil aon smacht ag an Rialtas orra— nó ar aon chuma níl smacht díeach ag an Rialtas orthu.

Maidir leis an mBille seo atá os ár gcomhair, Bille an Phríomh-Chiste, tugann sé caoi dúinn imeachtaí na tíre fé mar atá siad fé láthair do scrúdú—go mór mór mar a bhfuil an Rialtas agus na Rannaí Stáit Rialtais ag cur díobh.

Ar ndó, d'fhéadaimís cur síos ar an ioliomad neithe a bhaineann le leas no aimhleas na tíre ar an mBille seo. Tá an oiread seo ráidte cheana ins an Dáil agus in áiteanna eile nach gá domsa dul siar ar na rudaí sin.

Inniu níor chualamar mórán trácht ar na rudaí a bhí ar siúl ins an Dáil— ceal oibre agus imirce agus mar sin de —agus teaspánann san go bhfuil fhios ag na Seanadóirí ná fuil aon locht le fáil ar an Rialtas fé láthair, ar an Rialtas atá istigh anois, mar gheall ar na ceisteanna móra tábhachtachta san.

Tá daoine ann, agus bíonn siad ag gearán, ach daoine iad san is dócha atá i gcoinnibh an Rialtais agus ba dhóigh le duine ar an gcainnt a bhíonn ar siúl acu gur le linn na bliana seo do thárla na neithe sin. Ní headh. Do bhíodar ann cheana. Is dóigh liom go bhfuil eirithe leis an Rialtas an taoide do chur siar maidir leis na rudaí sin. Má leanann siad ar aghaidh mar atá siad is dóigh liom go neireochaidh leó níos mó a dhéanamh chun leigheas d'fháil ar na fadhbanna náisiúnta san.

I wish to make just a few extra remarks in English. I have listened very attentively to the speakers who came on before me, especially. Senator O'Brien, who rightly made reference to the amount of our national debt.

Of course, there follows from that the increasing amount that has to be found each year for the service of that debt. He complained about the unprecedented increase in the national debt over the past ten years. Indeed, I agree with him that it was during that period that the national debt assumed very large proportions. Why that is so should be as clear to the Senator himself, and to all Senators, as it is to me.

I am afraid that the pattern in that respect was set ten years ago when the first Coalition Government came into office. Some of us who were there at the time, and who saw what was happening, complained of that very same thing. Some of us believed that there was too great a tendency on their part to borrow money. We described it as "promiscuous borrowing" and, as events proved, some, if not most, of that borrowing produced no worthwhile, lasting results. On the contrary, I am afraid that some of that money was borrowed to meet current expenditure.

Now, there were two things referred to in the Dáil above all others that were mentioned. Those were the balance of payments question and the balance in our national accounts. The two things were put side by side and I would like to mention them side by side, because I consider that if a Government proceed with their policy and do not take those two problems fully into account, they are going in the wrong direction. There were, of course, people who minimised the seriousness of the position regarding the balance of our external payments, but I think that in after years some of them at least saw the error of their ways and realised that a policy by which we would keep on purchasing goods from abroad, without the wherewithal to pay for those goods, was a policy that could not continue. If this Government did nothing but rectify that position and bring to the people a realisation of what I have said, I think they would have done well.

As I said, side by side with that, we have the balance in our national accounts, and of course that is equally important. It is very important that the Government should pursue a policy by which they would meet current expenditure out of current revenue. That has been stated before and it is no harm to state it again, because if current expenditure is not met out of current revenue, how is it to be met? Is it to be met by further borrowing of which Senator O'Brien rightly complained? I think it is a very false policy to borrow for current expenditure. It is good policy to meet our commitments as we go along from our own resources.

Senator McGuire mentioned that private enterprise should be encouraged and, of course, everybody agrees with that. It goes without saying that every encouragement should be given to people to carry on private enterprise on their own initiative. Sometimes it happens that private enterprise is not sufficient to meet the requirements of the times, and especially to provide the employment necessary for our people at home. Where it is found that private enterprise has not been sufficient in that respect, then it is only right for the State to come in and take a hand. For instance, if such bodies as Bord na Móna and the E.S.B. had not been set up by the State, what would the position be? Private enterprise could never cope with the activities in which they are engaging.

Mr. McGuire

I agree with you there, but the D.U.T.C. should not have been handed over.

Eamon Ó Ciosáin

There was another comment by the Senator with which I do not agree: that is that no industries should be set up, unless they are to be set up on an economic basis. If that were the case, there would be very few industries coming to the West or South West of Ireland and I am glad that the present Minister for Industry and Commerce did not come to that conclusion. On the contrary, he brought in legislation specifically for the purpose of setting up industries in the remote parts of Ireland and made provision for facilities that would not be available to intending industrialists who proposed to set up in the more populous parts of the country.

I, for one, think that that policy of the Minister for Industry and Commerce and on the part of the Government was a step in the right direction. Nothing that we say or do here should be calculated to discourage that policy. On the contrary, if there are any additional measures necessary to encourage the establishment of industries along the western seaboard, those measures should be taken, and I believe the people as a whole would be prepared to stand by those measures, even the people who live in the more populous parts and for whom the same facilities would not be available.

In regard to taxation, we all agree that it is high, but the question is how taxation is to be brought down. What suggestions have people to make for bringing down that taxation? We have often heard complaints of that kind before, but it is very easy for people to say that taxation should be reduced. It is not easy to point out in what manner it could be done, what services should be dispensed with or what services curtailed in order to bring about a decrease in taxation. On the contrary, it happens that politicians advocate more and more services, increases in the social services and in the State services generally, but when they are asked where the money is to be procured for that purpose, they are always silent. The Government have to take that into account. It was always one of the privileges of the Opposition to complain about high taxation, without pointing out what services should be done away with or curtailed, and it is also one of their privileges to advocate an increase in the social services and State services generally, but they need not tell the Government or anybody else how those increases are to be met——

Mr. McGuire

I suppose the Senator himself never did that.

Eamon Ó Ciosáin

But the Minister for Finance and the Government cannot follow that line. If there is taxation to be reduced or if there is any way in which it can be reduced, it is their business to find the way, and to suffer whatever unpopularity goes with it. If they decide themselves to increase the social services, or anything like that, they must also find the money.

Mr. Murphy

Rather than let the Minister in too early, I am forced to speak before my time. I remember when I was speaking on this measure last year, the Minister came in here very innocently disclaiming all responsibility, and giving the impression that once he could "get cracking"—a term we heard during the general election— the Estimates we could expect in future would be a very different kettle of fish altogether. I personally did not expect that the Minister had any magic wand in his pocket but I expected that like his predecessors, he would do his very best, and that there could not be very great differences between the best of these various Ministers.

At that time, I pointed out that the figures then becoming available showed that the balance of payments difficulties, about which we had heard so much previously, were largely reaching a solution, and that we could expect a small surplus in the figures for the year ending March, 1957. I was appealing to the Minister that, as the balance of payments difficulties had been solved, he should engage on a progressive, expanding policy rather than on a conservative policy. In his reply to the debate, I remember he said I was being too optimistic, and he could not have regard to my appeal to look at the special levies; but he was able to announce, some days later, that certain of the levies were being removed.

My criticism, in speaking on this measure this year, is that unfortunately the Minister has been too conservative, too long in his post, with the result that, as was disclosed in an answer to a question in the Dáil recently, there were approximately 24,000 fewer in employment in 1957 than in 1956. According to another answer, the balance of passenger movements showed that 54,000 people emigrated in 1957.

Eamon Ó Ciosáin

What figures are these?

Mr. Murphy

The balance of passenger movements, given in an answer to a question on 19th of March in column 358, Volume 166 of the Official Report. If the Senator would care to add the minuses and the pluses, he will get an eventual minus figure of 54,000, which would appear to indicate that 54,000 more people left the country in that year than came into it.

Eamon Ó Ciosáin

That does not follow.

Mr. Murphy

Those are the figures of passenger movements and they are roughly correct. Granted people might come in for Christmas and not go out until early in January, but those figures tend to balance themselves out year by year. That is the position, and I am sorry that the Minister is coming here with that bad result for the year's working.

My quarrel with the Estimates is not so much with the amount that is being looked for, but rather with the way the money is being spent. I feel that too little is being done to help the needy section of our community and too much is being wasted because of the lack of an intelligent policy. We find that the Estimates for social insurance are some £250,000 less than last year. There is also some small decrease in social assistance. I would urge upon the Minister the great need to assist the people who are in receipt of social welfare benefits and of social assistance. Following the removal of the food subsidies in the Budget last year, the Minister did promote legislation giving an increase of 1/- a week to those in receipt of social welfare assistance, to the widows, orphans and such people. At that time, I impressed upon him the need to do something for widows in receipt of contributory pensions and for people in receipt of unemployment benefit.

I think the Minister knows well that, in so far as the Labour Party are concerned, they are quite prepared to support him, and indeed urge him, to increase those benefits and the Labour Party are prepared to accept that that will necessarily mean some increase in taxation. I think it is true to say that the average worker, even though he might complain about increased taxation, would be willing to bear increased taxation, if he felt it was being given to his more needy colleagues, those unfortunate enough to be out of work, to the widows, the destitute, and so on. I would urge the Minister to look at that matter. It is a Budget secret but I hope that, when he comes to disclose his Budget, it will be found that he has given some increased benefits to these people.

The criticism I have with regard to the expenditure of money in the Estimates is largely in relation to the necessity for subsidising the export of butter. I remember we were told some couple of years ago that our balance of payments difficulty was largely due to the fact that the Argentine at that time were dumping cattle on the British market. Now, we proceed to dump butter on that same market—to compete in dumping with other countries. We have a surplus of butter which is a very good thing. It shows how well the farmers have been doing their job. Having a surplus of butter means that we have a surplus of milk, but are any of us very satisfied or happy that all our people, our younger people and our schoolchildren are, in fact, getting enough fresh milk? Are any of us very satisfied or happy that all the people in this country are, in fact, getting enough butter to spread on their bread?

In answer to another Dáil question— I hope Senators will accept this—the appropriate Parliamentary Secretary had this to say: The average consumption of creamery butter per head in 1956 was 29.6 lb. and in 1957, it had dropped to 27.2 lb.—a decrease of 8 per cent.—whilst at the same time, consumption of margarine went up from 4.8 lb. per head in 1956 to 5.1 lb. in 1957, an approximate increase of 6 per cent. That shows that consumption per head—and this cannot be challenged—of Irish creamery butter in this country dropped in 1957, whilst we have a surplus of butter and have had to spend money on subsidising the sale of that butter on the British market.

In those circumstances, the money— or some of it—would be much better spent in seeing to it that the butter found its way on to the plates of the people who, judging by those figures, had to cut their consumption of creamery butter in 1957. Efforts should also be made, in my opinion, to try to diversify the market. What I mean is that there is a surplus of milk in production which is largely going in now to butter and a certain amount of that butter is being exported. I wonder— I have not a great knowledge of the matter—has sufficient been done to try to produce more cheese or to try to find an economic market, both here and abroad, for Irish cheese and in that way use up some of the surplus milk in a market which would not need to be subsidised?

I know Senators will tell me that the butter subsidy is only part of the problem; that we get back the benefit in the live cattle which eventually come to be exported. I agree with that. I am not complaining that we have a situation whereby so much milk is being produced and so many calves are being reared that we have a surplus. My complaint is that it seems daft that we are spending our money to put butter on the plate and into the mouth of the British consumer, whilst our own people quite obviously have not enough butter.

We know that many of the schoolchildren have not enough milk to keep them healthy. I do not think there is any force in the argument that we must export butter to Great Britain, no matter how much it costs us, in order to maintain our place in the market there. The House knows that we did not export butter to Britain during the emergency years. Why is the argument being used that we must be on the market in Great Britain with our butter, that we should not allow ourselves to be priced out of the market, no matter how much we have to pay in subsidy and that our butter must be there? I do not think there is any great merit in that argument at all.

Tomás Ó Maoláin

Who said that?

Mr. Murphy

It has been used. I am sure I have seen that argument used by the former Minister for Agriculture. The Senator will probably agree with my criticism in that event.

Dr. Ryan

I do not think that even he used it.

Mr. Murphy

I should like to make some little criticism of what Senator O'Brien said. Here, as always, I rather dread disagreeing with the Senator, but he did seem to me to paint the picture rather too dull and gloomy altogether. He was referring to the burden of the national debt. He mentioned a figure of £9 per head per annum. It seems to me that he did not state the fact that money used to service the national debt was collected from the taxpayers, but it was being paid back largely to the same taxpayers or other taxpayers in a different form. It was money circulated within the Irish economy.

As well, of course, it is offset to some degree by dividends from money invested by the Government, by repayments of advances with interest, such as advances to Aer Lingus. In that respect, I was looking at figures which were given in Trade Union Information for June and July of last year. These figures were largely quotations of figures given in answers in the Dáil to parliamentary questions. It was stated then that the total Exchequer liabilities at the end of March were some £342,000,000. The gross charge for the service of the debt for 1956-57 was £19.6 million. Another answer showed that the direct return received by the Exchequer from the assets held against those debts was £7.1 million. In other words, for approximately £7 per head going out at that time, £2 was coming back by way of dividends, if you like to call them that.

Another point that strikes me in that regard is the promotion of Irish Shipping. We did see figures, I think, some time ago about the benefit to the Exchequer of Irish Shipping. We read that the taxation paid by Irish Shipping ran into millions and that there was a State promotion which has certainly benefited.

I urge the Minister to do something in the Budget in regard to the needy section of our community. A fair share of workers have already benefited by reason of the national agreement negotiated between the Provisional United Trade Union Organisation and the Federated Union of Employers, but it is up to the State to try to help the people who are not in employment and the widows and orphans.

When Senator McGuire spoke about this national agreement, I hoped for a moment he would criticise the Minister and the Government for their attitude to their own employees. To my sorrow, I saw he was turning to criticise the Labour Court for various recommendations which that court had made. It seems to me that a criticism like that could best be stated by the employers and their representatives when particular claims are being heard at the Labour Court. I suggest to the Senator, who is not here at the moment, that he should go to the Labour Court or send representatives of the F.U.E. They do go there and oppose claims. They should state their views and opposition there. It is rather ungenerous to come here and criticise the Labour Court for what they have done or to criticise the trade unions for getting some benefits under this national agreement.

Senator McGuire did not point out that the trade unions and the workers were, in fact, agreeing to sacrifice quite a lot. A 10/- increase to the bulk of the workers in this country, was not an adequate compensation for the increase in the cost of living since wages were last adjusted in 1955. It was only a partial compensation. The trade unions and the workers represented by the trade unions were agreeing to sacrifice an awful lot in the interests of the country, in the hope that this Government would be progressive and would put the economy on its feet, and that there would be no further increase in unemployment.

I mentioned the Government's attitude to their own employees. It does not seem very sensible that a Minister should bless the efforts of the trade unions and the employers to reach a national agreement on wage increases and then another Minister say to their own employees, who are generally badly paid, that, even if they proceed through the machinery and get an award for an increase, the Government will take action to ask the Dáil not to honour that award. I do not think that is quite good enough. It has shocked the trade union movement to find that, after that agreement was made, after the trade unions had made the sacrifice, another Minister in the same Government should announce this attitude to the associations representing the employees.

All I will say further on that matter is that, if and when these claims go through the arbitration machinery, and if an award is recommended by the arbitrators, I hope the Government will change their mind. It would be a terrible shock to arbitration and conciliation machinery in this country, if the Government were to take that attitude, in view of all the circumstances. Perhaps things will have improved by then. I think there are signs that the economy is beginning to pick up.

I will end, as I ended last year, by appealing to the Minister to have heart. Try to have a progressive economy. Do not be too downhearted about the position. I hope that, when we come to this Bill next year, there will be a substantial improvement in employment in the country and that the standard of living of our people will have recovered from the set-back it received in the past few years.

Mr. Lenihan

First of all, in discussing this matter, it might be opportune briefly to refer to the Estimates for public services, in principle, as they have been prepared for the year 1958-59. If one relates these prepared figures to the actual Estimates for the year 1957-58 it will be seen that we have a net decrease of £4.8 million. That, in itself, is a considerable achievement on the accounting side of this country's progress. The total figure for the coming year is roughly £110,000,000. Last year, the year 1957-58, the contemplated Estimates, as prepared by the previous Government, were £2,500,000 over that figure. There was a contemplated increase last year to £112,500,000. That was the Estimate which the present Minister met, on coming into office last March.

In order to avoid the evil which Senator O'Brien has spoken about— the evil of deficit budgeting, which was one of the major causes of the unbalancing of our international payments—the Minister decided to cut £6.5 million off that prepared Estimate which was waiting for him. He did that by abolishing the food subsidies. He did it in the interests of providing a balanced national account, so as to eliminate the evil of deficit budgeting which was one of the major causes of the unbalancing of our international payments. The result of that cut of £6.5 million in the original Estimate prepared by the previous Government was that there was a reduction to £106,000,000. However, during the year, there were various Supplementary Estimates necessitated in particular by the importance of preserving our butter and bacon markets abroad. The result of those supplementaries was that the total Estimate for 1957-58 was £114,800,000. The Minister has now come into this House with an Estimate for the coming year of £110,000,000.

Dr. O'Donovan

He will do better than that

Mr. Lenihan

This represents a very considerable achievement, that at least the trend of upward expenditure has been curtailed and, in fact, reduced and that the Minister for Finance can tell us that his Estimate for the coming year, at £110,000,000, represents a decrease of £4.8 millions on the total Estimates of the past year. On that score alone, there is congratulation due to the Minister.

Senator O'Brien has already said that there is at present no justification for deficit budgeting in this country. I disagree with him. I should like to emphasise the fact that, in certain circumstances, with an expanding economy and a growing volume of exports, there might be justification for it. There would be the justification of providing greater employment at home, if exports were growing and the economy was expanding. However, on taking office last March, the Minister was faced with the position that the economy, to put it mildly, had run down and we had reached a stage of near-bankruptcy in our national finances.

Even in that situation, there was no justification for deficit budgeting, and this year the same situation probably obtains, that we have to consolidate the gains of the past 12 months. Many people say they are mad about the way the £6.5 million of food subsidies went off in the past year, but apart from the necessity to balance the Budget last year, which was the first reason they were abolished, there was £3,000,000 extra spent on agricultural subsidies. There is a figure of £1,800,000 in the current Estimate for the elimination of bovine tuberculosis.

The main point is that the reason for the means taken to balance the Budget this year and last year is to prevent any repetition of a big deficit on our external account. It has, at last, after some years of false economic reasoning, been brought home to most thinking people in this country that the sine qua non of any real economic progress is a balance on our external account.

I do not need to elaborate on the chaos that followed the unbalance of £62,000,000 in 1951, and I will not elaborate on the stern measures taken by a courageous Government in 1952 to rectify that. I will not elaborate on the further chaos that followed the unbalance of £35,500,000 on our external account in 1955. It is well known now that the result of that situation in 1955 was that the Government had to jump the other way during 1956 and impose measures which caused a limited recession in that year, with high unemployment figures, which ran into the early spring of last year. The argument has been proved conclusively that the sine qua non of economic prosperity is the balancing of our external account. The measures adopted to obtain that balance were due to pursuing an honest budgetary policy.

I would not regard a balanced payments position as being an end in itself. It would be wrong to regard the mere balancing of our external account as an end in itself. At present, it is necessary to provide the basis on which we can consolidate in the future, but it is not the end. It could never be the end in a country like this which, unfortunately, is not providing the employment for our people within our shores that it might. Certain progress has been made in the past 12 months in regard to that. The figures speak for themselves. There has been a reduction of something in the region of 8,000 in the unemployment figures.

Dr. O'Donovan

6,000 last week.

Mr. Lenihan

There was nothing as drastic in recent years as the figure of 90,000, the gross figure of unemployment which existed on March 1st, 1957. Some progress has been made, though I do not regard a mere reduction of 8,000 as an end in itself, any more than I regard the balance of payments as an end in itself, but at least it is a step in the right direction. Having started off on the path of a balanced budgetary policy, and having achieved last year a balance in our international account for the first time in years, when our balance of payments showed a rough balance——

Mr. L'Estrange

Due to the export of cattle.

Mr. Lenihan

——having achieved that honest objective, Government policy, I am sure, will now concentrate on providing a greater volume of productive investment in this country to support a growing volume of employed people at home.

There is only one way in which that can be done. Unfortunately up to now any increase in the volume of State investment activity or in private investment activity has led to inflationary trends at home which have unbalanced the external account. That has been the trend year in year out over ten years. We have tried to rectify the balance of payments position, and caused more unemployment. The only obvious way in which that difficulty, that unfortunate swing, can be dealt with is to provide a growing volume of State and private investment in productive enterprises geared for our export market. It is as simple and crystal-clear as that. Only by a greater volume of State and private investment activity in exporting industries can we hope to provide the basis on which we can get anywhere to grips with unemployment and emigration problems.

Apart from the fact that export industries in themselves will provide more employment, there is the further fact that, with that growing volume of exports, the State and private interests can afford to indulge in the luxury of a greater volume of social investment. That goes back again to the point of the balance of payments at their present level not being an end in itself. It would be much better if we had more imports and more exports at a higher level. It is not a great achievement to have a balance of payments at a certain figure if the economy is static and not expanding. The objective should be to provide a higher level of imports sustained by a higher level of exports and vice versa. If we had a higher level of investment in exporting industries, that in itself would enable the State and the private sector of the economy to have greater and growing investments in more non-productive or social investments.

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

Mr. Lenihan

As I have said already, I do not think the mere rectification of the balance of payments and the provision of a balanced budget are ends in themselves of State policy. They are, however, in our circumstances at the moment, the necessary basis on which the State can embark on a policy of providing greater employment opportunities for our people here at home. That, in itself, can only come about by a greater extension of investment activity, so as to promote a growing volume of exports.

That is the problem which the Government have set about facing in the past 12 months and will continue to face for the next three or four years of office. I think its record in the past 12 months has been sufficient evidence of its desire to promote that end. In the Finance Act of 1957, we had provision for 100 per cent. income-tax remission on all profits made from new exports. That exemption would operate for a period of five years. It was a very welcome and unique step, taken by the Government within a month or two of attaining office, with a view to encouraging greater investment in the export industries in this country. That was a clear 100 per cent. remission of tax for a five-year period. Allied to that, there were very improved and increased depreciation allowances.

However, in my view, great though that move has been, it is not dramatic enough to make a sufficient impact on the risk capital in the world, particularly the United States, that we would like to attract here to encourage new export business. In fact, I do not think a five-year period is enough and I should like the Minister for Finance to consider—I am sure it has been mentioned to him before—extending that period to ten years. I do not think five years is a sufficient period in which to enable a business to make its plans, build up its business and consolidate in the export market. A ten-year period, instead of a five-year period, would be a greater inducement to risk capital to get into the exporting industries here.

In addition to the improved depreciation allowances and the income-tax remission which I have mentioned, the Government—through the Department of Industry and Commerce and particularly the Industrial Development Authority—have embarked on a vigorous promotional endeavour, particularly in the United States, to attract outside capital to this country. That endeavour directed towards prospective American investors is a very worthwhile one. The home market at the moment is pretty well supplied by the existing industries, and therefore any large inflow of American capital here will be directed towards exports to the Continent of Europe. In particular, the bait which we can offer is that such American capital can get inside the European Free Trade Area or the common market area in regard to its exports. There is a danger that such American industries as are already exporting to Europe would be precluded, unless they take the precaution of setting up plants inside the Free Trade Area.

The Department of Industry and Commerce has embarked on that promotional endeavour and is also concerned with setting up a free airport area around Shannon Airport. There was also speculation as to the possibility of a free seaport area in the same estuary.

The Control of Manufactures Bill, which will be before the Seanad shortly, is another evidence of the endeavour of the Government to move in the direction of promoting and encouraging greater capital investment in export industries. I think it has been pretty well accepted by all people that there is not the risk capital in our community to provide the employment opportunities that we would wish. That is the plain fact of the matter and my only criticism of this Control of Manufactures Bill is that it does not go far enough. I think it is a step in the right direction, but I would prefer to see it going further. There are too many restrictions in it and too many licence provisions, but it is a step in the right direction.

As further evidence of the Government's anxiety to further the export business, we had the announcement last Friday by the Minister for Finance of his intention to raise to £5,000,000 the amount which the Industrial Credit Company may guarantee by way of loan. That Bill, the Industrial Credit (Amendment) Bill, 1958, will be before us shortly and in it the limit is being raised from £2,000,000 to £5,000,000. The object is quite clearly to improve the Industrial Credit Company. It has already done very good work and has provided some £16,000,000 for industrial development since 1932. In raising the limit to the amount which the company may guarantee by way of a loan to £5,000,000, the objective is to have an investment agency whereby there will be greater investment in this country.

I think it is a heartening sign that £1,800,000 of that has been advanced by the banks. It is a very heartening sign to see that expression of confidence in the future of the country, that the banks have seen fit to advance £1,800,000.

Dr. O'Donovan

Nonsense. They had advanced it already. They only moved it down one niche on their balance sheet.

Mr. Lenihan

Senator O'Donovan is on his old hobby-horse again.

Dr. O'Donovan

I am on fact.

Mr. Lenihan

The plain fact is that for the first time the banks have done it. You were there in charge of the nation's finances and they did not see fit to do it.

Dr. O'Donovan

They have done nothing.

Mr. Lenihan

The reason why they see fit to advance it now, and did not see fit to advance it during the time the Senator was a Parliamentary Secretary in charge of this nation's finances, is that the banking institutions have plain, ordinary confidence in the country. Unfortunately, during the period 1954 to 1957, no responsible financial institution, such as an insurance corporation or a bank, could have any confidence whatever in the future of a Government who, on two occasions, failed to raise sufficient by way of national loan. On one occasion, only £8,500,000 was subscribed to a £20,000,000 loan—it was under subscribed by more than 50 per cent. The fact is that banking institutions and insurance corporations which lend money to people lend it on one thing only, that is, confidence. During the period of office of the previous Government. I do not think any banking or insurance institution would have lent 1,800,000 farthings.

Dr. O'Donovan

They are not lending the money now.

Mr. Lenihan

They are lending it for the first time since the formation of the State to the Industrial Credit Company, so that up to £5,000,000 can be advanced to the Industrial Credit Company by way of loan towards investment in Irish industry. That is further evidence of this Government's concern with furthering investment which can lead to further exports to provide for a higher standard of living and an expanding economy at home.

The Undeveloped Areas Act was passed in the Seanad some months ago, providing for another £2,000,000 by way of grant for investments in our undeveloped areas—more evidence of the Government's anxiety to improve investment at home. In that connection, there is one query which I should like to put, although it is not really the responsibility of the Minister for Finance. It arises out of the very poor operation of the Industrial Grants Act of 1956 which was passed by the then Minister for Industry and Commerce and which was to provide grants for loans outside the undeveloped areas. My information is that that Act, which was introduced with a lot of ballyhoo, has resulted in one grant being given, that only one grant towards industrial enterprise has been made under that Act which was passed in 1956.

I have read the Act and it is a badly worded Act and a badly drafted Act. I think that is the main reason why not more than one grant has been made under it, that the civil servants in An Foras Tionscal have difficulty in interpreting it. The answer is that when the famous policy of production was brought in with great ballyhoo and éclat in September, 1956, this Act was rushed through at the same time, and rushed through in such a fashion that most people agree it is a complete mess which nobody can interpret. The fact is that one grant has been made under this Act——

Mr. L'Estrange

What is the Senator talking about? Is it the £100,000,000 which the Minister for Industry and Commerce spoke about?

Mr. Lenihan

I am talking about the Industrial Grants Act, 1956, which was passed in a rush and was a very badly drafted Act.

Mr. Murphy

Amend it.

Mr. Lenihan

There is reason in that. We have also had the practical work that has been done in 12 months towards further investment and exports. We have the £5,000,000 advanced by the Industrial Credit Company, £1,800,000 of which is being subscribed by the banks and we have the Control of Manufactures Act which will be coming before us shortly. We also have the promotional endeavour in the United States to attract capital to our shores, and the 100 per cent. allowance on profits derived from exports. I think that any reasonable Assembly must agree that these are quite a few steps in the right direction, based on the secure foundation of a balanced Budget and a balanced external account.

Certain allegations have been made that the Government are not altogether concerned with the agricultural sector of our economy. Last year, in the Budget, £250,000 was provided towards setting up a committee to investigate agricultural markets. I understand that that committee has been working very actively in recent months and that there should be a report for the Government soon.

Mr. O'Leary

In five years' time there will be.

Mr. Lenihan

So Senator O'Leary says, but in view of the fact that we are assured of being here for five years, there is no need to rush through any half-baked legislation. We can be quite certain that due deliberation and attention will be given by the Government to any proposed legislation. That is the best of planning on a long-term basis and not merely embarking on expedients. The £250,000 allocated in last year's Budget is towards exploring the ways in which we can improve our agricultural marketing abroad.

Senator Murphy raised a point about the dumping of butter in Britain which I am sure is causing concern to the Government at the moment. To a certain extent, there is sense in what he says. Unfortunately, the Government were faced with a problem which arose very quickly, and they had to deal with it in the only possible way, by providing subsidies. For the time being, the only way the problem can be met is by providing subsidies to preserve the dairy industry and to provide calves for the cattle industry. I agree with Senator Murphy in this respect, that it is by no means a long-term solution to the problem.

Dr. O'Donovan

We will have the subsidy back again.

Mr. Lenihan

Will the Senator stop talking politics?

Dr. O'Donovan

That is a financial forecast.

Mr. Lenihan

I am attempting to put forward a rational argument on the Central Fund Bill.

Dr. O'Donovan

I am sorry.

Mr. Lenihan

I am sorry if my attempt at a rational discussion is inadequate, but the long-term solution to this question of a butter surplus must surely be to investigate the various ways in which milk can be processed into milk foods, milk juices and milk jams. I am aware that in Mediterranean countries, in Italy, Portugal, Spain and the South of France, there are large imports of milk juices and jams particularly from the Argentine, and I am told there might be some scope for channelling our milk production into that line of development. I recommend it as a possible line of development to Córas Tráchtála.

It is apparent that this indiscriminate dumping of butter in Britain is no good and no effort has been made to provide proper marketing, display and presentation of this butter as Irish butter. It is merely being dumped in bulk, without any attempt at processing, packaging and showing it as an Irish product. Faced with this immediate problem, the Government had no alternative but to increase the grant towards its subsidisation. I think the long-term solution is to seek ways and means in which milk can be channelled into profitable exports in the form of foods, jams and juices.

The Agricultural Marketing Committee could do very good work. There are other lines of agricultural exports that I do not think are being pursued vigorously, particularly the possibilities in fruit and vegetable exports, which seem to be very miserly. If they were linked with proper freezing and preservation plants at home, it would be a great improvement. It would be a great improvement for our small farmers, people of under £10 valuation living in congested areas, if there were some form of intensive agricultural development, such as fruit and vegetable growing.

Until now, these two industries were particularly dependent on marketing and the farmers engaged in such production had not a hope because of the unstable marketing, due to the perishable nature of their products. The only way that can be improved is by linking agricultural production in those lines to freezing and preservation facilities in the areas of production. That is a matter which I am sure will come before the attention of the marketing committee and I will not deal with it at any length.

One factor, which does not require any marketing to deal with at the moment with regard to exports abroad, is cattle. The people engaged in that industry seem to have a fairly good marketing machine in Britain where they have established contacts, but there was until recently—but there is not so much now—a grave danger of that industry getting into jeopardy, due to the incidence of bovine tuberculosis. That was a question that could be tackled at home and, undoubtedly, it has been tackled very vigorously by the Government. I think the previous Government shilly-shallied a lot on that problem.

Mr. O'Leary

They started on it.

Mr. Lenihan

We saw fit to bring in an Act giving the Government very wide and decisive powers to deal with bovine tuberculosis.

Mr. L'Estrange

That Act was prepared by the previous Government.

Mr. Lenihan

Apart from the Act itself, I am talking about what is being done under the Act. There is sufficient evidence of the Government's good intentions in that regard, in that the moneys available from the Central Fund in the Estimates for the elimination of bovine tuberculosis have practically doubled, and we are hoping to spend £1,800,000 on the elimination of this disease from our cattle. That is a very substantial investment, coming entirely from the Exchequer, which will be utilised in the next few months. I think the £3,000,000 which the Government spent over and above what it intended to spend on agricultural subsidies during the past 12 months is sufficient evidence of its good intentions towards the agricultural section of the community.

Senator Murphy made some reference to the subsidy with regard to milk, but I do not think his arguments would apply to the bacon subsidy. I think the bacon subsidy has justified itself. Though prices were lower some months ago, in recent weeks, they have shown a very desirable trend. I think the future of the pig trade is all right for the next few months.

Mr. O'Leary

Until July.

Mr. Lenihan

That is made possible by our Government paying an increased subsidy and securing a foothold on the British market.

Mr. L'Estrange

The deterioration started when the Government announced a cut of 5/- a cwt.

Mr. Lenihan

If that can be related to the policy of the Minister for Agriculture 12 months ago, I cannot see the argument. There is justification for the expenditure from the Central Fund of moneys on subsidisation.

In conclusion, I think, apart from the fact that the Budget has been balanced, that the external account has been balanced, the Government have shown their obvious desire to build up exports and to improve agriculture, with the result that, since the Government took office 12 months ago, there has been a restoration of confidence. What is needed in this country to-day is confidence and faith in the future, and I do say that, apart from politics, the worst disservice that anyone can do to the country now is to breathe the air of pessimism.

Mr. O'Leary

You did that for a long time.

Dr. O'Donovan

What about 1956?

Mr. Lenihan

Or to foster the notion that things are very black and are going from bad to worse.

Dr. O'Donovan

We will not do that.

Tomás Ó Maoláin

Will the Chair please suppress that jack-in-the-box?

Mr. Lenihan

Having escaped from the tower of incoherent Babel over there, the fact is that what is needed to-day from the Irish people is an act of faith in the future. Promises can be cut out of people's minds. That is the sole reason why we were elected with such a devastating majority last March. The Irish people saw that the only way decisive leadership could be given was to have one political Party in charge of the country's affairs——

Dr. O'Donovan

That is a mess of pottage; untruths, in other words.

Mr. Lenihan

And that Party is assured of support. The result of that will be that people can concentrate upon their efforts to improve the economy and forget about pessimistic witch-hunting, pessimistic sneers or prognostications about the future. Public men in all political Parties should help towards eliminating that pessimism by saying that this country has a future and is going from good to better.

Mr. Donegan

As long as the Senator is in, we are out.

Mr. Lenihan

The Government has given sufficient evidence of its good intentions in that respect during the past 12 months. This country has a real future and it now faces a challenge in the form of participation in the European Free Trade Area. It is up to us and the Irish people to face up to that challenge and dispel the pessimism.

Mr. Baxter

Quite frankly, if ever I heard a speech that would make one despair of the future of the country, that speech was made by Senator Lenihan. Such a speech coming from Senator Lenihan is in a way less pardonable as he is quite an intelligent young man, but he is unlike many of the young men in Fianna Fáil to-day. He does not come in with a fresh mind. One would think he was 60 years in Irish political life. He wants to create new divisions among the people when many people like him should be trying to seal off the old divisions.

I admit that from a political point of view he made quite a clever sort of speech. It was always so near the truth as to make it somewhat difficult to contradict, but it was not the constructive kind of speech that a young man like Senator Lenihan ought to set his mind to make in 1958. I say to him very sincerely that I think he had better think again.

I have spoken here—I do not speak very frequently—against the attitude of defeatism that we come up against. Senator Lenihan does more to create that attitude of defeatism by the sort of speech he made than anything else. When the Senator makes a statement which is not in accordance with the facts, he does more to drive the people apart than keep them together.

Mr. Lenihan

Such as?

Mr. Baxter

That is true. When the Senator makes a statement like that, does he not know what the obvious answer is? He makes a statement about the live-stock industry and what it is doing for the country, and, by doing so, he tempts Senator L'Estrange and others to get up and talk about the economic war. Why do we want to get back to that?

Mr. Lenihan

I did not say anything about that. Am I not entitled to talk about the live-stock industry?

Mr. Baxter

Yes, but look at the history of it. I am saying that because I believe the country is in difficulties. There is no use denying facts. In fact, I would say the country is in the doldrums. Something has got to be done to pull the country out of the doldrums. The Government has terrible responsibilities at the moment. All of us have our responsibilities, but if we want to find a cure, we have first to diagnose what the situation is.

I should like the Minister to tell us what is happening about the Agricultural Research Institute, when he is replying. That Bill was passed through the Oireachtas some couple of months ago. We had hoped to have some announcement before this. I should like to hear what is happening. We hope it has not been put on the shelf. I am very unhappy about the Government's attitude to the country's problems at the moment. I say the country is in the doldrums. It seems to me that the Government is also in the doldrums, particularly in relation to agriculture. I do not think the Minister or anybody on the other side of the House will deny that there is a feeling in the country that we are going to have a contraction in our economy.

Mr. Ahern

For goodness' sake, would the Senator cut that out? That is all codology.

Mr. Lenihan

There is defeatism for you.

Mr. O'Leary

Let the Senators not get vexed.

Mr. Baxter

I suppose I am in possession and entitled to the protection of the Chair? Anybody who wants to contradict me will have the liberty to say the opposite. I am saying what I think, and so long as I do that in parliamentary language, I hope I will be allowed to speak. I did not interrupt Senator Lenihan. We are going to have a contraction in our economy. I think you cannot cut prices without running the risk of having that result. I do not like that; I do not like to think of it.

I should like the Minister and his colleagues to tell the people to go on producing more butter, more wheat and more pigs. I should like them to tell the people to go on producing more from the land and get more out of every acre than they got last year, but not a single one of them is saying that. We heard phrases about an expanding economy. Senator Lenihan spoke about importing foreign capital to build up industries that will provide us with exports. Senator Lenihan knows more about industrial production than I do, or at least he ought to. He was brought up in close proximity to it.

You just cannot export the products of a new industry to a foreign country in face of competition from the natives of that country. You cannot do that right away. I do not know how it is going to work. I should like to hear Senator Lenihan and his colleagues expand on that matter. We have some experience in regard to exporting industries in Athlone and elsewhere, but if we are to bring people into new industries, we have got to train them and produce products for a foreign market. In those circumstances, what prospect is there of being able to send industrial products to England or other countries, unless we subsidise them in the beginning? I think that is a sine qua non. It is absolutely essential. I am for it and I would be prepared to support the people who would produce such a commodity for export to the foreign market.

With regard to pigs and butter, Senator Lenihan had a great deal to say about the balance of payments. Senator O'Brien dealt with that point. Senator Murphy dealt with it from another angle. I have here two figures. A total of £7,746,148 is the value of the butter and pigs we exported last year. We made preparations to export them last year by what we did in regard to our cows and sows the year before. There is a certain process to be gone through. You do not get the milk to produce the butter, unless you do something previously, and, innocent as Senator Lenihan is, he knows that, too. We are cutting these prices. We are cutting the price of milk; we are cutting the price of pigs. I should like the people opposite to answer this question: Do you want us to produce as many pigs and as much butter for export in 1958-59 as we did in 1957? Definitely, I do. What will you do about your balance of payments? Suppose you take away £7,000,000 odd, where will we find the other £7,000,000 that will pay for essential imports? We have industries that can survive only through products that come into the country which are paid for by our agricultural exports.

If we contract for the production of pigs and butter, our balance of payments will be in such a position that we shall have to go short of something. We shall have restrictions on imports again. In what manner will these restrictions operate? Accordingly, I say to the Minister for Finance and his colleagues that though the farmers are not pleased with them to-day, they should be told—and we should tell it, too—that this country can survive only by virtue of an expanding agricultural economy which will ensure that we will get more from every acre of land, that it will be better cultivated than it was in the past and that our volume of agricultural exports will be increased. That is not being done. I want it said as loudly and as long as it is necessary to do so, as otherwise we shall have a restricted economy. We shall have to restrict our imports. We shall have to do with less fertilisers or less machines for our farmers, or something like that. It is inevitable that we shall arrive at that stage.

I do not want any contraction in our economy. There is not a word from any Minister to-day to the farmer about his cows. They are not being told, as Senator O'Callaghan and I and others have said: "You must get rid of the 400 or 500 gallon cow and, instead, get an 800 or 900 gallon cow." I live not far from a bacon factory. I know how many of the small farmers in my county have slaughtered their sows over the past few months. Why? Because they are afraid of the future.

The whole basis of our agricultural economy is unsound and the attitude of mind of the farmers themselves is not sound. We have a change of agricultural policy. What is the net result? Farmers are in and out of production every few months. That is completely wrong and we must get away from it. I am very concerned about this matter because I cannot see how we can maintain equilibrium in our balance of payments, unless we can keep our agricultural export level at least up to that of last year. If we cannot do that, the outlook is not encouraging. Even as things are, the price of milk and butter is very discouraging.

Senator Murphy challenges the notion about subsidising our exported butter, and I think Senator Lenihan had the same tune to play. Suppose we had not the butter to export. Suppose we wanted a raw product for an industry. If we could not find sterling assets to sell, would we not have to send round the hat at home in order to get this raw product for the industry? That fact is not sufficiently recognised and the sooner it is brought home to the people who talk about industries in this country the better.

Senator Lenihan had a great deal to say about the activities of the Industrial Credit Corporation. Did he ever bother to examine the activities of the Agricultural Credit Corporation and to discover how much they have put into the land? Has he ever bothered to ask himself the question: "If we had put half as much into agriculture as we have put into industry, would the fields of Ireland be as they are to-day?" Senator Lenihan and others will learn that there is another side to the story which experienced men know of and are not afraid to speak of. Only by bringing the realities of the situation home to some of our young men will they learn. It is not good enough to serve up somthing from the political angle, believing you have given all the answers. You have not.

The country is in a queer frame of mind at the moment. I do not like it. There are unemployed, but I am not speaking about them now. I am concerned about the attitude of mind of the people who are leaving the country. I think it is pretty dreadful. Speeches such as that just made by Senator Lenihan do not help. There is a future in this country, but the people will have to make the future. They will not make it by the sort of speech we heard this evening from Senator Lenihan.

I could talk at length on something that is almost past history. I do not know whether or not Senator Lenihan ever had anything to say about the Milk Costings Committee. However, he knows that people talked a lot about it. With regard to the activities of that committee, apparently the desire now is to bury them in oblivion. When the late Minister for Agriculture came to my county he talked to our county committee of agriculture about the problem of that committee. I urged at the time that it would be a very difficult operation and said I did not know how they could establish the actual costs. The result of that inquiry now reveals that costs vary greatly per gallon from one place to another.

What did it all bring out? The people now in government know well the use they made of that inquiry before the committee brought out their findings. That is bad for the country. It is turning men's minds towards putting a faith in something outside themselves. That is something we must get away from. People's minds have been trained to look to the Government or to Parliament for everything. They have not been told that they must study their problems at home—that, if they can get help, counsel and education from the Government, they will get it, but that a lot of problems must be resolved by ourselves on our farms or in our industry or work or wherever we may be.

The problem in connection with local government is an all-absorbing topic at the moment. Some members of this House are also members of local authorities. Recently, we have all been having rather a difficult time in trying to handle the problem of increasing charges by local authorities to maintain what we regard as essential services. There is a much-debated Health Act for which nobody, as far as I know, now has a good word. I think no person who supported it, on any side of the House, wants to declare to-day that it is the product of his imagination. I am saying this as a result of my experience as a member of a local authority. We have been meeting two days on that local authority with, may I say to Deputy Lenihan, harmony and goodwill. He should see how some of his colleagues behave with us on the county council when we are trying to solve our local difficulties. It would be an enlightening experience for him.

I believe the Government should now give consideration to a reassessment of the whole problem of health services. I truthfully assert that, as far as I can see, they are not giving satisfaction to anybody. It is quite impossible to administer them impartially. I do not think it is being done in any county, despite the best of goodwill on the part of the administrators. I do not know what ought to be done about it. However, it is the considered opinion of all the people who have the responsibilty of administering these services that the Government ought to try to draw an all-Party committee together to study our health services, to see what alterations or amendments could be made in the present legislation and put it on a basis where we could be satisfied that whatever was done was done because it had to be done by the State or by the local authorities for the reason that if it were not done the health of many people unable to pay for services for themselves would suffer.

The time has come when we ought to state how many of our people are to have the services paid for them by the community, and what we can do to ensure that the people who can pay for the service themselves will do so. That will not be easily done. It is something that ought not to be made a political issue. I should not like to see the mind of Senator Lenihan being brought to play on that in this House in a partisan way. I am convinced that if he were to be on a committee, he is capable of making a valuable contribution in assessing the fruits that we are garnering now from the legislation of the past.

I do not think that any other branch of the service administered by our local authorities requires the same examination. I would urge very strongly on the Minister that some steps ought to be taken. I do not like to think that we are going to approach this in a partisan way. The country is demanding it, and every local authority has the same experience as we have in Cavan. If that is so, there ought to be no difficulty whatever about doing what I suggest.

Professor Stanford

The House, if I may say so, has shown up well in this debate. We have shown that we are a varied House. There have been speeches by experts in economics, by Party politicians and by vocational representatives. When I refer to Party politicians, let me emphasise that I intend no disrespect whatever. There is sometimes an unnecessary hostility or tension between the Party member and the Independent. We are all in this House generous enough, I am sure, to realise and to agree that the house of politics in this country has many mansions. There is plenty of room for the Party man, but there is room, especially in this Seanad, for the technical expert and for the vocational representative. The debate has shown very well that we can produce all of these. The country is enriched by that variety of political approach.

This Seanad is at its best when it produces that variety of approach. We have a common ideal. It is not simply, as many people might say, the welfare of the country. I do not think that this, frankly, is our single ideal. As I see it, the ideal of every politician, whether a Party man, a technical expert or a vocationalist, is this: the welfare of the country combined with the welfare of that section which he particularly represents. It is hypocrisy when people representing a Party or a vocational group or a science get up and say: "It is simply the welfare of the country that I am interested in." We must be frank. We want to balance the welfare of the country with the particular welfare of the people we specially represent.

I hope, then, that I will be forgiven if this evening for a few minutes I speak for the vocational group I happen to represent—teaching and learning, as a teacher and a learner myself. I should like the House to pay attention for a little while to the Estimates for education. By that I mean the expenses of the Department of Education of primary, secondary, technical and vocational schools, science and art, reformatory and industrial schools, the Dublin Institute for Advanced Studies and, particularly in my case, the universities and colleges.

An Cathaoirleach

The Senator will remember that it is only general policy which may be discussed.

Professor Stanford

I entirely appreciate that and I hope that I will keep within that framework. May I, however, say, with all due respect, that I am grateful to the Chair in the past for the latitude which he has allowed to some degree on this Bill? We do not have the opportunity of debating the Estimates in detail at this stage such as the Dáil has. Accordingly, although I know that the Chair does and must rule out specific small detail, I hope he will allow me to pay some attention to a considerable portion of the national spending. I take it that I am in order?

An Cathaoirleach

The Senator will remember that ample opportunity is open to him on the Appropriation Bill to go into details of the administration and policy of the Department.

Professor Stanford

The Chair, however, will also, I think, recognise that it will be some three or four months before we reach that stage and perhaps some of us might not be here for one reason or another then. Perhaps if I am very brief and not too specific, I may be allowed to continue.

An Cathaoirleach

That will be quite in order.

Professor Stanford

As a matter of general policy, let us consider how much of the total national expenditure goes on education. Here, I think successive Governments preserve some credit. There has been a gradual improvement in the proportion of the national expenditure allocated to education. As I see it, in 1949-50 about one-ninth of the total revenue was spent on education. Now, if my figures are correct about one-eighth is spent. That is a great deal of money and a most desirable improvement, but I should like the Minister, and through him the Minister for Education always to keep in mind a most deplorable contrast.

Let me emphasise it. Queen's University, Belfast, last year received a Government grant of approximately £1,000,000—slightly more, in fact. The total number of students at that university was 2,500 approximately. This means that they received a grant equivalent to £400 per student from the Government. Now let us consider the position of the universities in the Republic of Ireland in contrast. There are four colleges to be kept going. They receive altogether approximately £650,000 from the Government. They have over 9,000 students. The amount then per head of the students is approximately £70.

Now, we talk of removing the Border. We want to remove the Border and to make it appear to the people in Northern Ireland that it is desirable in their interests to join us and share our Government and our amenities. What attraction is there in the university world to move from the Six Counties where each student is subsidised to the extent of £400 a year to a State where a university student receives approximately £70 a year? It is an extraordinary contrast. I have gone over my figures. I could hardly believe it at first, but I believe it is a fact.

It is true that we cannot spend money which we have not got. But I would urge on the present Minister and, through him, the Minister for Education to keep in mind that glaring contrast, for such it is. If, as I am sure they do, they value the educational welfare of the country in general, that contrast must be gradually diminished—or else I really think that talk of removing Partition and raising our level to that of Northern Ireland is just futile.

I should like to spend a few minutes on one special part of our educational policy. It may seem at first glance a small matter or a matter of detail. I would urge that it is not a matter of detail, that it is one which intimately concerns the welfare of the country. It concerns scientific education in particular. Now, I am not a scientist; I am a classical man. My knowledge and interest in the sciences is small in a professional way. But I recognise with every intelligent citizen that the future welfare of the State is largely bound up with improvement in our scientific teaching and in our scientific knowledge. Anyone who refuses to recognise that is, to my mind, simply blind. The whole tendency of our technological era is towards more science, more scientific knowledge, more scientific research and more scientific teaching. If our Department of Education and our Governments neglect these, they are very seriously neglecting the future welfare of the country.

Scientific education affects agriculture, industry and almost all our sources of natural wealth. We have quite good scientific schools, and we have good science departments, as far as we can afford them, in our universities; but one essential instrument of scientific education has been consistently neglected for the past 35 years. I am charging the successive Governments with that neglect. I warn them that if they continue in that neglect, it will harm the country very gravely. I am referring to the building which lies just behind us here towards the south, the Natural History Museum. That building could be one of the main centres of scientific education in this country. As the members of the House probably know, it has very fine collections of geological specimens, zoological specimens and botanical specimens.

I hope the House does not think this is a matter of dry academic detail. It is not. That museum should be like many other respectable museums in these islands. I know in particular the museum in Glasgow and the museum of Wales—they are active and energetic centres of scientific education. Ours is not.

Let me say at the very beginning that it is not the fault of the officials in the museums. I say that with very great emphasis. Let me say, secondly, that the antiquities section of our National Museum is very well run, very well displayed and very well organised. That is for two reasons. There is a sentimental attachment naturally to the relics of our past civilisation, to the ecclesiastical sculptures and so on, and to the rich gold ornaments of our national heroes. This has all the national sentiment behind it. That is good. I should like to say here that in this section our national museum is worthy of our tradition. It is beautifully displayed, and every visitor who goes there must get a very fine impression of the country. This is because that section, and that section alone, has something like an adequate staff and something like adequate premises.

If you go to the other section, which is on the other side of Leinster House, cut off as it happens to be now by the interference of the Oireachtas because we took over certain parts of the museum and have never given them back, thereby depriving them of space—if you go to that other section you find just the reverse. In fact, it has not changed within the past 35 years in its general arrangements and appearance. It is out of date; it is entirely in adequate for the scientific education of the country. A museum of that kind should be able to do many things. It should be able to foster research; it should be able to interest the schools and send out scientific exhibitions and so on; it should produce publications. It should do something to influence industrial and agricultural policy. That is entirely impossible at the moment, through inadequacy of staff and through inadequacy of premises.

The Chair has been kind to me and I am not going to trespass on his indulgence, but I will say this and say it with the greatest consideration and the greatest emphasis. This valuable collection, which could be a most valuable instrument in our scientific education, has been deplorably and disgracefully neglected within the past 35 years, and the longer it is neglected, the longer the country will suffer. The reason is partly lack of money and partly lack of staff. Take one example. For this large organisation they have one typist—one typist who must do all the answering of letters, if possible, who must type all the labels for every specimen in the museum; and for that she receives, as the Estimate shows, the princely salary of something like £285 a year. I quote from memory. That is only typical of the whole situation. It is deplorably understaffed and deplorably short of space.

I would urge the Minister for Education, through the Minister present, to do something about this—and to do it himself, because it will not be done, unless he takes a personal interest in it. I would urge him, in the interests of the scientific education of this country, to examine the situation and, if necessary, to consult scientists. I could quote many of them who agree that the present state of neglect is deplorable.

As a matter of fact, there is a statutory board of visitors for the National Museum. They have given up in despair within the last few years because every year their recommendations for improvements were consistently ignored. That is a statutory body. It is not meeting now because they feel it is futile to meet. I insist that something must be done and that something never will be done, unless the Minister himself personally takes an interest in it.

If he and the Minister for Finance will intervene in this matter of national importance, I will make an offer. I would agitate to have statues of both of them put up beside Prince Albert and Dargan outside the National Museum. I do not know whether I will succeed, but if they do they will deserve the honour as much as Albert the Prince Consort and as well as Dargan. It is a serious matter. I will not emphasise it more.

This is perhaps a rash thing for a politician to say. I am not going to raise it again. I raised it last year and I raise it now. If I can help the Minister in any way by supplying materials I have plenty or by giving information, I shall be glad to do so. I simply hand it to him now as his grave responsibility with the Minister for Education to do something about this deplorable state of affairs.

There are two other brief matters left. One of them is a question which I shall ask twice a year in Leinster House as long as the Chair permits me, until I get a satisfactory answer from the Minister for Finance. What is the present state of the Royal Hospital at Kilmainham? On two or three occasions in the last few years, we were told that something was going to be done. Meanwhile, my information has been—I have no very recent information now and it may very well be that I am wrong—that the woodworm is steadily boring through the timbers and the ceilings are steadily deteriorating. I would ask the Minister very kindly to provide us with some information. What is the state of this magnificent historic building? Is it still deteriorating or have some definite steps been taken to check the dilapidation?

Finally, I have been criticising and now I want to offer one word of praise. It comes out in the Estimates and it is justified. We have all recently received a booklet called Opportunities for Industrialists, issued by the Industrial Development Authority. I should like to congratulate them and the people behind them on its production. Artistically and from the literary point of view in the widest sense, it is an excellent piece of propaganda in the good sense. There are no round towers and no shamrocks—none of that nonsense about it. It is up-to-date: it is fresh; it is artistic; and for that I say—and I know I am expressing the feelings of many colleagues to whom I have mentioned it—if my words can reach those responsible, “This is money well spent.” I thank you, Sir, for allowing me to continue.

Dr. O'Donovan

It is very difficult indeed to follow the various speakers to-night and I should like to say, first of all, that on this occasion I have certainly no intention of following Senator O'Brien in detail on what he has said. I might make one comment later on, if it comes in naturally with what I am saying.

I did think, looking at the debate in the Dáil, that there was an opportunity to reply to the Minister's final speech there. The Minister did not say very much when introducing the Vote on Account in the Dáil and I noticed he used the word "apparent" on a number of occasions to-day. Apparently, a lot of things are not what they seem to be in this matter. There is some apparent difference between what appears and what the reality is. I am very strong myself on this apparent difference, particularly in financial matters, between the reality and real economics and numerical economics.

I spent last night in an exercise from which I derived a considerable amount of amusement. Deputy Russell, in the Dáil, referred to the Minister's Budget speech and to the £250,000 the Minister was going to save on administration in the Civil Service. The Minister, replying on 20th March, said at column 672, Volume 166 of the Official Reports:—

"As regards these savings that I promised to make, I think I will be able to say in the Budget speech, when it comes along, that I did succeed in keeping the promise I made on that occasion in regard to savings."

Before I give my figures, I think the Minister will have to have a lot of things apparent, not to be what they are or that are apparently not what they may be, to succeed in dealing with that in the Budget, because I counted in this year's Estimates Volume the number of heads of staff that had been saved. As far as I could make out, the decrease in the numbers set out in the Estimate—one here, two there and so on, and a very big number in the Department of Posts and Telegraphs— there was a total saving of 540 heads of staff.

There were increases in other Estimates of 97—and I might be out a few because of a miscount—but to that 97, you would have to add 264 Garda pensioners. These were Gardaí who had retired and, despite that, there was an increase in the number provided for in the Garda Síochána of 33. In the ordinary Civil Service superannuation, there was an increase of 77. These figures for superannuation might well come about through the retiring of people and through not filling the vacancies. When you add in the Army, it is up by 33 and there are 103 Army officers put out on pension. When you summarise all these, you do not get very much of a difference, but again it can only be done in that way. I am not disparaging it.

In the Department of Posts and Telegraphs, I found in the engineering branch—and this is an old trick, but I do not use the word "trick" in any disparaging way; I will explain the sense later on—provision for an additional £50,000. There was an apparent reduction of 88 in the number of labourers in the engineering establishment and I took it that this was a way to put them back in. I estimated that instead of this reduction in the section as a whole in the engineering establishment, there was an increase. Taking them as having the average wage through the year, there would be 125 additional labourers provided for, so that in fact, instead of a reduction of 60, there was an increase of 65. Therefore, taking the numerical numbers, the Minister would be able to make a case that he had reduced the provision for the Civil Service by a couple of hundred heads.

Might I explain what I mean when I describe it as an old trick? When the cost of living bonus used be shown separately, if you had a sum of £30,000 which was difficult to handle, you stuffed it in under "cost of living bonus", and nobody noticed it there. But this £50,000 is quite obviously a provision for additional labour and, I take it, it might include supervisory staff like technicians. I have nothing against that if the Minister had but used a figure for it, because there was no similar provision last year. If he had but used any figure, say 100, I would have no objection to it.

I did a much more tricky job, even though I say it myself. I went to the Estimates Volume and compared the provisions last year, Department by Department, with the provisions for the current year. In regard to staffing, let us not forget that none of these staffs had any increase in pay yet. That will come later on in the year. The best the Government can do—and I am not disparaging them for doing it, it is their own business —is to hold up the Civil Service and they will not hold them up beyond 12 months. It will come for one reason or another, say, if something happens the £ in the autumn, or something of that sort, and that is just as likely to happen as anything else and the Minister will be faced with that for the second half of the year. He may protest, as his colleague protested, against the Dublin Corporation dustmen.

Without going into detail, the total of the extra moneys in the Estimates Volume for the Civil Service, the Army, the Garda and the teachers, that is, for State personnel, is approximately £650,000. What did the saving amount to? Would the Seanad be interested to know? The savings amount to £31,000. For the benefit of the Seanad I will detail the savings. I have a constructive suggestion to make the Minister when I am finished. The former Taoiseach, Deputy Costello, once said that, when he was Attorney-General, by the time he was finished with a problem, no one could complain that he did not give them a constructive suggestion at the end, and I propose to do that.

There has been a saving in the Department of the Taoiseach of £2,400. That was my own office, so at least I saved that much by being defeated in the last election. There has been a saving in the Central Statistics Office of £4,400, in the Comptroller and Auditor General's Office of £4,000, in the District Courts of £1,000 and in the Department of Local Government of £7,000. I was glad to see that last saving and it is not before its time. There was a saving in the Department of Lands of £12,000. I was glad to see that also, because at least it is a tribute to the Minister for Lands, who, as somebody said, has been a very busy man during the past 12 months. At least, it shows he has given attention to his own Department in that respect.

There is a saving of £1,300 on Transport and Marine Services and, in the Department of Social Welfare, of £12,000. That is not by any means negligible, though it is a big Department. In examining these figures, I have found that the Revenue Commissioners are looking for £57,500 more for staff this year than last year. I always felt that the Revenue Commissioners were a concern unto themselves. They were always able to say to a Minister for Finance: "If you do not do what we want, it will affect adversely the collection of revenue", and no Minister for Finance has been able to say to them: "I want an economy and will you see it is made?"

Might one suggest to the Revenue Commissioners that there is no sense at present in their system of having a customs and excise officer in every main town in the country? With modern transport, one man could attend to the duties at bonded stores by travelling to different towns on two or three days a week.

The Public Works Vote shows an increase of £31,000 for staff and I have an extremely adverse comment to make on that, because there is a reduction in the expenditure on public works and buildings this coming year of £200,000. Why is £30,000 more required for staff to spend £200,000 less money, at a time when the value of money has gone down because this work would be on contract and a lot of the contracts would contain a clause to cover the wages increase of 10/- a week?

Superannuation is up £67,000. This is not a great deal, but it must have engulfed a very large amount of the Minister's savings. The Department of Agriculture has an increase of nearly £80,000 and I could not have a great deal of comment to make on that £16,000 of the increase is to be spent on the bovine tuberculosis scheme. I notice, however, that the only research part of that Department which has not received substantial increases is the section dealing with university grants to University College, Cork, and University College, Dublin. These grants have not been increased since before the war except by amounts to balance the falling value of money.

Veterinary research is up £6,500. Johnstown Castle, which already receives double the amount of the Faculty of Agriculture in University College, Dublin, is to receive an additional £6,000 although it deals with soil science and nothing else. It is costing annually double the cost of the whole Faculty of Agricultural Science in the Dublin College and moreover has had £250,000 spent on it during the last few years to improve the building.

The Veterinary College has an increase for staff of £5,000. I will not go into this any more, but it is apparent that if you are under the direct control of the Department of Agriculture, you can get extra money for any purpose, but, if you are independent, no matter what job you are doing, no matter how big it is, you will not get any extra money.

The Garda Síobhána is up £140,000 and that includes the pensions. If my recollection is correct, pensions are provided for in the Estimate and not in the superannuation Vote for civil servants. I still think it is a very large increase this year and I do not know how it came about. I noticed all right that there is a provision for an enormous recruitment of new, young Gardaí to replace the men who have gone on pension. I might suggest to the Minister, though this is not my constructive suggestion, that he might arrange that the authorities would not recruit perhaps so many new Gardaí.

Primary education is up £87,000 and the Department of Education is up £12,000. I am glad to see that the amount provided for forestry staff is up £16,000, though the grants for forestry, for development and planting, are down substantially. I notice that the Minister in his speech put a certain interpretation on that, but I am not to be taken as agreeing with the Minister's interpretation.

Aviation and meteorological services are up £23,000 and the Department of Industry and Commerce is up £18,000, though, mind you, the Vote for the Department of Industry and Commerce was something like £8,500,000 when the bread subsidy was included. This year, it is something like £1,800,000, but despite that, the staff is up £18,000. Posts and Telegraphs, despite the big number of savings in heads of staff, is up £6,000 and wireless broadcasting is up £18,000. The civilian part of the Department of Defence is up £12,000.

As I have said already, the total of increases in cash for the Civil Service and other services, such as the Army, Garda Síochána and teachers, is up £650,000, though they have not got any compensation yet for the last round of wage increases. They will get that compensation and we all know that. Therefore, the Estimates of the Minister show instead of the saving of £250,000 that he promised last year, a loss on the Civil Service of £600,000 through increased costs.

What is my constructive suggestion? It would not do to forget it because it is intended to be a genuine, constructive suggestion. In the Department of Defence, you have two systems running side by side, the Army and the Civil Service. I appreciate that you want them there for certain purposes. On page 223 of the Estimates Volume, you will find in the soldiers' pay section a staff of approximately 90 civil servants and, above it, the pensions and accounts section, with a staff of about 60 civil servants.

My suggestion is this. The Department of Defence Vote this year shows an increase of about £40,000, though the provision for warlike stores— defensive equipment, as it is now called—is down by £160,000; yet the cost of the Department is up £40,000. I suggest for the Minister's consideration that quite an easy way to collect a saving of about £100,000 is to give these two pieces of civil administration over to the Army and, instead of having a staff officer, you can have a captain and, instead of a clerical officer, you can have a young lieutenant out of the Army itself.

It is obvious from the figure I have given in relation to defensive equipment that the Army is changing its nature. That is intended by me, at any rate, as a constructive suggestion for the Minister, that he should save £100,000. As a matter of fact, if he examines the question, he will find that the soldiers' pay section in relation, to the number of soldiers to be paid is very much greater than the corresponding section in 1938 in relation to the number of soldiers to be paid then. I think he might find other parts of the Army service that it would pay him to examine similarly. The Minister will, I think, find it extremely difficult to demonstrate in his Budget statement that he has, in fact, made this saving of £250,000.

The Minister in his speech went on then to say that there was a deficit of £5,000,000 in the Budget in the year 1956-57. That was quite right. That was more or less the figure I had myself. I might say this about it, and it is the only point in Senator O'Brien's contribution to which I want to refer. I think that this deficit in the current Budget was caused directly by the cut in the State capital programme, which had to be put into operation in August and September, 1956. It was an extraordinary thing that the cut intended to be put into operation was £6,000,000 and that it turns out to be a deficit in the current Budget. How could that happen so exactly? It was a coincidence.

It resulted in an undue degree of unemployment which necessitated a Supplementary Estimate of £1,500,000 and it resulted also in a considerable fall in the ordinary revenue from excise and customs—revenue from tobacco, beer and spirits—a very considerable fall in the revenue. There was a cutting back in the economy. You had the cut in the capital programme which turned out a deficit of £6,000,000 in the ordinary Budget. You might say that I would have had to borrow the £6,000,000 somewhere to enable me to have no deficit on my current Budget. I think it might have been worth it.

I want to take the Minister up seriatim on a few points he made. First of all, he suggested at column 678 of the Dáil Debates that Fianna Fáil had put up the price of wheat 27/6 a barrel in the past 12 years while the Coalition had cut it by 10/-. The Minister knows that is not correct.

Dr. Ryan

Of course, it is correct.

Dr. O'Donovan

The price of wheat was increased three times by the inter-Party Government—once by 5/- and twice during the régime of the second inter-Party Government. First, it was increased by 2/6 and on the second occasion, it was increased by 5/-.

Dr. Ryan

There was no 5/-.

Dr. O'Donovan

There was 5/- in December, 1956.

Dr. Ryan

There was not.

Dr. O'Donovan

There certainly was.

Dr. Ryan

I did not give it, so.

Dr. O'Donovan

There is a point I might make about that.

Mr. Donegan

Perhaps the Minister has bad wheat.

Dr. O'Donovan

I recollect the inter-Party Government increased the price by 5/-. There was then a decrease of 12/6. Subsequently there was an increase of 2/6 and then 5/-. In other words, the inter-Party Government neither increased nor decreased the price of wheat. Let Senator Lenihan wait and see what happens this autumn and we will see what happens to the 27/6 a barrel. The Minister is factually wrong on that.

I want to make another constructive suggestion. In the following column, the Minister went on to refer to what it would cost to subsidise butter to enable it to be sold at the same price as in England. He said it would cost £9,000,000. I expressed the opinion in a disorderly interruption, if I might put it so myself, that the Minister will find himself putting back the subsidy on butter. I believe that if he does not do it this year, he will do it next year. The export subsidy on butter this past year was about £3,000,000. If you had a consumer subsidy of 7d. per lb. which would bring the price of butter to 3/6 a lb. on the home market, you would sell the whole product, or very nearly all of it.

You might ask: What gain is that? There is a double gain in it. The consumption of butter was down 70,000 cwt. last year and it had to be replaced by margarine. That would not have to be imported. The margarine retailed at 2/7, and we are getting 2/6 retail for our butter. It is six of one and half a dozen of the other. We could use our butter at home. Certainly the subsidy of 7d. per lb. on 900,000 cwt. would cost just exactly under £3,000,000. The suggestion I make is that with the fall in the value of money indicated by the 10/- wage increase and a subsidy of 7d. a lb. you would sell the greater part of our production of butter internally here at the official price of 3/9 or an effective price of 3/6 or 3/7.

In fact, the year before last we sold 760,000 cwt. I might also add, as one of the Senators was so good as to point out, that you may not find this huge increase in the quantity of butter produced. There have been two or three remarkably fine winters. This past winter has not been quite so fine, but the previous two winters were remarkably fine and were in part responsible for this tremendous upward trend in production of butter. With the subsequent fall in the value of money—I think no economist would suggest the value of money will not continue to fall—you will find the production of our butter subsidised again. From an economic point of view, there is something to be said for it. I know there are differences of views about subsidies, but I am glad to say that I have the support of one very distinguished economist, Professor Pigou, of Cambridge, for my advice. I have also the support, I am glad to say, of Deputy Gilligan. I am not alone.

Dr. Ryan

Not of Deputy John Costello. He says it will never come back.

Dr. O'Donovan

If the Minister reads his speech again he will find that Deputy Costello was referring to the conditions created last year. It will come back. I am making that forecast to-night.

Why have we had all this furore about butter? A few weeks ago, I interested myself in making a calculation as to what the change in the price of milk would cost a farmer. I will call it ld. per gallon. There is some other little cost on account of the bovine tuberculosis eradication scheme. Let us take the ordinary dairy farmer, particularly in the less wealthy parts of the country—say Waterford, West Cork, Cavan, and so on—with ten cows. If he treated them well and got an average of 600 gallons a cow, the cut of 1d. a gallon would cost him £25 in 12 months. To that, we must add the increased cost of bread and butter to him and his family. I estimate that at £15 a year. That would make a total drop in the real purchasing power of his income of £40 a year. There is another way of getting at the confirmation of my £16. The increase in the cost of living is 6 per cent., representing £18. It is much of a muchness. I just take the bread and butter.

Let us consider the small farmer with ten cows. Assuming that he is a good farmer and that he is in the top third, according to the National Farms Survey, his cash income, net—according to that survey—would be somewhere between £300 to £315 a year. Therefore, he would be losing about 15 per cent. on that income. Nobody, in real terms, can take such a cut. I heard the Minister say last year on the Finance Bill that the 30-acre farmer is in difficulties, while the bigger farmer is doing fairly well. I agree. The reason the 90-acre farmer is in difficulties is that the ordinary industrial worker in Britain had an average wage last year of £12 a week which represents a cash income of £600 a year. It is all very fine to talk about being independent, that it is good to be a farmer, that it is good to look out on your own land and at your own cows and so on. It would take a lot of that to make up for a very large difference in income. Do not forget that the industrial worker to-day is not in the same position as was the case some years ago.

I noticed the Minister made one other slip in his figures. He spoke about the cost of living having gone up 11 points under the inter-Party Government and that now it has gone up seven points. Actually, it has gone up nine points—from 135 to 144. However, he was following the Taoiseach who said it had come down a point and then found——

Dr. Ryan

It came down a point in December. I do not like the Taoiseach to be put in this position. He was right.

Mr. Donegan

The first time he was ever right.

Dr. Ryan

When Senators can say nothing against the Taoiseach's integrity, they say he was wrong in his figures. Why do they say that?

Dr. O'Donovan

What the Taoiseach said was that he thought the cost of living was not now going up.

Dr. Ryan

And that was the position at the time.

Dr. O'Donovan

It has gone up since then.

Dr. Ryan

The figure came out a week ago.

Dr. O'Donovan

It relates to the middle of February. It came out before the Minister spoke.

Dr. Ryan

It came out the next day. I asked for it and they said it would come out "to-morrow".

Dr. O'Donovan

I am sorry; I thought it had come out. I want to make a point about it—a perfectly legitimate point. I would be prepared to say that the Minister would be entitled to make the play that the cost of living went up 11 points during the three years of office of the inter-Party Government. That occurred in a period when import prices went up about 12 per cent. However, in the first 11 months of office of the present Government, the cost of living went up nine points and that happened in a year when import prices were not rising at all the same way.

I am sorry I made the mistake I made a minute ago. I thought the figure was out and that the Minister made a mistake in his arithmetic. I was going to twit him about it. I think the Taoiseach was wrong when he said that the cost of living was not going up. I am not saying he was twisting anything. I am saying he was wrong in his facts.

Dr. Ryan

On to-day's figure, he was right.

Dr. O'Donovan

I thought the Minister had used the same figure.

Dr. Ryan

I used the latest figure we had.

Dr. O'Donovan

I understand now that the February figure did not come out until the following day. All I can say is that it was a bad figure to use if, the next day, it was shown to be two points out of date.

Senator Lenihan quite properly held up the Book of Estimates to show me £110,000,000 printed on the cover. In the year 1955-56, the inter-Party Government brought about a reduction of £2,750,000—about the same as this— but the inter-Party reduction was a genuine reduction because it was got by the Estimates Committee ploughing through the Estimates. This, in fact, is an increase of £4,000,000 on last year. You got £6,500,000 in subsidies and you only reduced the Estimates by £2,500,000 which leaves an increase of £4,000,000, quite obviously.

With the permission of the Chair, I now want to say a few words about the university grants, but I shall not go into details. I want to make a special case. It may be taken that I am in agreement, generally, with Senator Stanford's case. I want to make a special case. I do not know how it came about, but it is a fact that, of the colleges of this country, five university institutions get grants. There are three colleges of the National University and Maynooth College is attached to them, and then there is Dublin University.

I went to the trouble of making out what the public and endowment income of these institutions is per whole-time student. I am not making any point that the figure is too much, or anything like that, but I found that the income per Irish student from the 32 Counties to Trinity College was somewhere in the region of £160. I think that is the right way to approach it. In University College, Cork, the figure was somewhere about £120 per student; it might be £110 or some figure of that order. In University College, Galway, the figure per student was £80 to £90. For University College, Dublin—which in size and number of students equals all the others together—the figure is £70 per student. That brings them to the figures mentioned by Senator Stanford. I have included in the endowment income the income which Trinity College receives from Irish Land Stock.

Dr. Sheehy Skeffington

In calculating per Irish student, has Senator O'Donovan included the Irish students from the North of Ireland?

Dr. O'Donovan

I only think of Ireland as the 32 Counties of Ireland in this connection. I might say— which I think the Trinity representatives will appreciate—I regret I have heard they have not now as many students from the North because of the better facilities available in Queen's University, Belfast, than in the past. I always thought that the really wealthy people in the North sent their sons to Oxford or Cambridge, the professionals sent them to Trinity, on the whole, and the farmers and so on sent them to Queen's.

Professor Stanford

The Senator is under a misapprehension. Some of our students are sizars and are among the poorest of the poor: from the North, South, East and West. I was one of those sizars myself.

Dr. O'Donovan

That, of course, would be the case. I do not know how this position arose, but there should be a reasonable readjustment of these university grants, and I am not suggesting for one moment that Trinity College should be penalised. The first thing, in my opinion, is that they ought to be assessed on much the same basis as grants for secondary and vocational schools, whether it is for University College, Galway, or St. Patrick's College, Maynooth, if we take these as an example, where the average grant per student for lay education—mainly arts and not the expensive form of education mechanical engineering or anything like that— is about £150 or £160 per student.

I am not making a special plea in this. I am making a straightforward case that there is no use in telling me that University College, Dublin, will be able to exist with the continuous fall in the value of money and the enormous number of students—3,800 full-time students—without getting proper allocations of money. It has in it the only faculties we have in the country for certain matters. It has the only faculty of architecture, as far as I know, and to the best of my recollection, the only faculty of mechanical engineering, and so on.

I am not going to follow to-night the balance of payments controversy—it has been thrashed out—except to make just one point. There has been a great deal of play made—and the Central Bank and the Central Statistics Office are greatly to blame in this connection —that we have been spending £250,000,000 of our assets abroad in the last ten or 12 years. Our busy colleague, the Minister for Lands, has been busy on that topic also. Two years ago in Dáil Eireann, I gave certain information supplied by Dr. Geary, then Director of Statistics, which was never controverted, directed towards proving that in fact the use-up of our balance of assets abroad was nothing like this figure. Quite by accident, I came across something which tends to prove the point further, on Saturday. I do not propose to go into the detailed figures, but there is no evidence to the contrary. There is no evidence to contradict the proof beyond these calculations they make in the Central Statistics Office, and which are seized on so avidly by the Central Bank and also by the Minister's Department, which has a finger in the pie.

I might say this as a personal observation, that when I was leaving the Department of Finance seven years ago, one of the last things I told one of the most senior officials was that these figures were wrong. That was at the end of 1951, and he was the man chiefly concerned with their being issued at that time. I said: "I will not be able to prove it, until we have a full decade over." I regret to say that I should have written about it; but the decade is now over, and the proof is there—proof absolute that these balance of payments deficits are fictitious, that they are faked. I assert that, and I am prepared to discuss it anywhere in public with anybody and to say it in front of any jury with the director of the Central Statistics Office.

An Cathaoirleach

Is the Senator now making a charge against officials of the Department?

Dr. O'Donovan

I did not mean it like that. When I said that the balance of payments deficits were faked. I did not mean that. I meant that they got false results. I did not mean that they were faked or anything like that.

An Cathaoirleach

No charge is intended against any official?

Dr. O'Donovan

Nothing whatever. Might I explain where they went wrong —and at the time Dr. Geary and I had our discussion, he made the suggestion to me. They went wrong in one place when they debited to the account every year the profits of companies like Irish Shell, Caltex, and Esso, as if they were sent out of the country. When I got interested in it, I thought: "Will they show certain moneys coming into this country?" I did a cross check. Will you look around the country? Where will you see assets representing these moneys supposed to come into the country? I could not find them anywhere. I could find a few stud farms, worth a million pounds or two. When I sought what I thought might represent a large influx of foreign capital, I saw the petrol stations, and I said: "I had better check that one. They might amount to as much as £10,000,000. They are everywhere and we know that every one of them costs £10,000 or £20,000 around Dublin." I went to the companies and they told me that the information was not confidential, that they had imported no moneys to pay for those petrol stations, that they paid for them out of profits made here internally. Do not forget, though, that in the records of the companies those profits are charged up as if they were moneys sent out of this country. Of course, they are not ever sent out of the country. They are there in the petrol stations. That is the kind of mistake that can be made. When I say that the figures are false, that is the kind of thing I have in mind.

The Economist once every three or four months publishes a table of prices and money supply in Western Europe. It shows the total money supply in gold and foreign holdings. Last Saturday's number, for March 22nd, 1958, shows for the Republic of Ireland that, in the year 1948, we had $209,000,000. Taking $4 to the £, as it then was, that represented about £52,000,000. In the year 1956, the total was $234,000,000, which at the rate of $2.8 to the £1 would represent nearly £90,000,000. At the end of 1957, it was $258,000,000, representing exactly £90,000,000. What do they mean by gold and foreign holdings? It is defined here as holdings of the Government and the Central Bank at the end of the period. Do not forget that it does not matter what we have heard of our deficit in the balance of payments, the fact is that our holdings of foreign gold and exchange holdings have gone up from $209,000,000 in 1948, despite devaluation, to $258,000,000 at the end of 1957.

I am aware that there have been certain sales of British Government securities. Those sales were well advised. When I say that the balance of payments figures are wrong, I do not mean to say that there has not been some draw on these external assets. There is, of course. One drain was the £40,000,000 borrowed under Marshall Aid. There is this serious factual difference between the figures as prepared and the opinion which I have held for many years. I am inclined to think that our deficits over the past ten years must have amounted only to about £120,000,000, instead of being of the order of £220,000,000. That is a matter on which there can be no reasonable doubt. If you have a capital sum at the beginning of a period and spend a certain amount during that time, you can have only a certain sum left. If you have £500 at the beginning and you spend £200, you can be left with only £300. But if, in fact, you are left with £400, there is something wrong with the calculated estimate.

I should like to make one final point. Perhaps I have been speaking too long and I am grateful to the House for bearing with me. I should like to make a suggestion in relation to the speech of an Seanadóir Pádraig Ó Siochfhradha, that it would be very desirable that an advanced reader in the Irish language be prepared, somewhat similar to a reader which I had the pleasure of seeing about a month ago. This was a reader in English, and I understand there are similar readers prepared in other languages such as French and German. This reader was prepared in the United States by a Catholic committee. It contained the history of English literature from the beginning. It had a modernised version of Boewulf; it contained Chaucer's Canterbury Tales, in a modernised version, very like the one written by the Irishman, Nevill Coghill, which would give anyone pleasure to read as a bedside book. The reader I mention contains examples of English prose and poetry right up to the present. I do not see why a similar committee for a reader in the Irish language could not operate here. The Catholic committee I mentioned in the United States consisted of five people.

The setting up of the print of such a book here would cost some thousands of pounds, but the actual cost of a copy could be kept low. I know that there is extra money for Irish textbooks. I think it should be possible to get such a committee here. I do not like to mention names, though I am tempted to do so. Someone could write on medieval Irish literature, someone else could write on the 17th century, and so on. If there were a well-balanced committee, it could provide a reader which would be properly balanced, as has been done in these other countries. At any rate, it would solve one of the problems, which is a major one to-day, in relation to the Irish language.

I understand that to-day there is not in print even the medieval Ranns, the Measgra Dánta or the Dán-Fhocail that were such a pleasure to read. They are the same in matter and nature as the books concerned with the poems in Latin of the wandering scholars which Miss Helen Waddell has edited. The corresponding Irish poems are no longer available. These small Ranns of four lines are very interesting, but they are not available, being out of print. There is work in the Irish language at a reasonably high level—and I am not talking about research work at all; I am talking about the advanced stages of secondary education, or the early years of university education—which cannot be carried on in the absence of text-books.

I was a bit perturbed—though I may be wrong—by the wording of the extra provision for Irish books in the Estimate. It is the same wording— translations, Irish music and so on as in former years. I admit there is a provision of £1,500 for university text-books, the same as last year. I think it would be extremely desirable if such a reader could be prepared as I suggest. It would be a great help towards interesting the more senior students in the secondary schools in Irish in a way they are not interested in it at present.

Mr. Donegan

In assessing the amount involved in the Central Fund Bill, it is first necessary to devote some time to agriculture, and, in addressing my few remarks to that subject, I should like first to mention the bovine tuberculosis eradication scheme. I appreciate the increase in the amount to be devoted to this scheme by the Government and I hope that every farmer will go right ahead and endeavour as best he can to become the holder of an accredited herd.

There is no use in making political points on this matter. Before the ex-Minister left office, he gave instructions that the counties Galway, Mayo, Donegal, Leitrim, Roscommon, Cavan and Monaghan should become "intensive areas". That was publicly announced at the time. Since then, the present Government have gone ahead with this project. As yet, part of that area named is but a project, and all I would say is that the past Minister did his best with regard to it. The present Government show they are trying to do their best in regard to to it. I would ask them to strain every never and make every effort, and I would ask every farmer to do the same.

Export subsidies are a big bone of contention in agriculture to-day. We have included in this Bill large sums for export subsidies on butter and a sum for what amounts to an export subsidy—a price guarantee—on Grade A pigs.

The Continent of Europe to-day is a place where there is no real price for exportable agricultural produce. When I was speaking here the week before last, on a motion in regard to wheat, I instanced the price of feeding stuffs. At the present moment, France is unloading wheat at low prices; from outside Europe, we have the Argentine unloading, thanks be to God, soya bean meal, linseed meal and various high protein content meals for animal foods, at some £4 or £5 a ton less than they were making this time last year. I know that the Danes are dumping butter and pigs on the British market and it is in this pattern and in this context that we must look at our export agricultural subsidies.

The previous speaker has said that perhaps we have been too puritan in our approach to subsidisation of butter here at home. I have long held that view. I hold the view that everything has a price, that taxation, like everything else has a price, and when, over a period of ten or 15 years, you have subsidies, wage levels, price structure and everything else take on the shape and character of those subsidies. Wage levels take into account what a man pays for these subsidised goods. The cost of manufactured items is always worked out on the basis of wages. It shows up through the entire price structure in the country. I believe that once you have subsidised a commodity for a certain number of years, it is just in the same position in this regard as something which is being taxed.

I believe what Senator O'Donovan has said, that we have been too puritan, that the present Government have been too puritan in their approach, and, if they had not removed the entire subsidy on butter, more of it would have been consumed at home and less money would have been lost on its export. The difficulty about all that is where to fix the price. I believe that Senator O'Donovan fixed a fair figure when he said a subsidy of 7d. a lb. At that stage, I think the Exchequer would probably save money and the Minister would be well advised to examine that point.

Having digressed for a moment from the main matter I was discussing, let me get back to export subsidies. I would say that Irish agriculture is faced now with the Danes and the Dutch and, to some extent, the Swedes and the French, who are prepared to unload agricultural produce on the British market and, if possible, to exclude Irish agricultural produce therefrom. It was a matter for great jubilation in Denmark that Ireland lost its traditional market for butter in Britain. It is known now that ten years ago when we were not exporting butter to Britain, when during the war, to our great shame and degradation, we were on a ration of butter, the Danes were rejoicing that the Irish had left the market, and rejoicing over what it would cost them to retrieve it. Now we are in a position when we can retrieve it. Again, the cost is magnified, and I will refer to the speech of another Senator who said that there had been three very mild winters and that means cows going out on grass and stronger calves. It means more milk in the spring and more milk in the summer. The result is that we have a magnified necessity for agricultural subsidies.

I think the Minister should not approach this on the basis of a 12 months' balance, on the basis of a book that has to be closed at the end of the financial year. He should approach it in the sense that we have got back now a very small slice of the British market and should hold on to it, and refuse to let the Danes or the Dutch take back that very small slice which we were able to get back by our own efforts and by the efforts of the farmers.

In yesterday's papers, there was a report of a question asked in the British House of Commons regarding our subsidising the export of butter. The answer was that the matter was so small that it could not matter less, that the quantity of butter which we put on the British market amounted to 3 per cent. of the total butter on the market and that the Minister concerned was not going to bother his head whether we were subsidising it or not.

Everything has a price and the way to get the farmers to increase their output of butter, upon which depend our export of cattle and the balance of our entire economy, is not to reduce their price of milk by 1d. per gallon. As I say, the present situation is magnified. Politically for the present Government, it may be best that that is so, if it transpires that we have harder winters and that there is less butter for export—pray God there will be far more—and it may then be possible for the Minister to relent without spending any more money on increasing the price of milk to the farmer. I think it is a mistake and he would be well advised during the year to reconsider the decision and replace that 1d. per gallon removed from the farmers.

The farmer is entitled to the entire Irish market for wheat. If he is not in a position to supply that market himself, if the quality of his produce is such that he cannot hope to have an all-Irish loaf, then he is entitled to as much of it as he can factually get. There is no point in going over all this much-travelled field again, but included in the Book of Estimates there are figures for the disposal of surplus wheat, and therefore it is relevant to discuss how it could otherwise be disposed of. I thought that the Government might do something about the suggestion I made here a fortnight ago —that the first step they must take is to set up a 20,000 barrel milling test.

An Leas-Chathaoirleach

I should like to draw the Senator's attention to the fact that the motion on wheat is still under discussion by this House. If that motion is to be continued, it is not open to debate here.

Mr. Donegan

I was not discussing the matter with reference to the motion; I was merely discussing it in regard to the disposal of surplus wheat. The Minister for Industry and Commerce mentioned this matter in the Dáil yesterday and he mentioned that a 50 per cent. Irish loaf would increase the cost of the loaf by 100 per cent. I should like to say—and I am glad to say it 24 hours later—that that is dangerous, damaging and wholly and absolutely incorrect. The Minister does not know what he is talking about. It is something that is dangerous and damaging to the Irish wheat growers and something about which the Minister for Industry and Commerce knows nothing, because if he did know anything about it, he would be dishonest, and I will not suggest that he is dishonest.

There are various figures included in the Book of Estimates for the provision of capital for new industries and it is often very difficult to find out exactly what the Minister has in his mind in this respect. It is natural that the physical, ordinary procedure of getting these new industries going necessitates quite a certain amount of, if not secrecy, reticence. I was interested in the Irish Press of last Monday in which, on page 1, there were various headings of what I would call Budget pointers, which is, of course, a direct reference to the Vote we are discussing, on how the Government intends to promote industry in this country. On point 1, it said:—

"Dr. Ryan stated in the Dáil that industrialists may proceed with their plans, that no worthwhile prospects, particularly export prospects, need be frustrated by lack of necessary capital."

Further on, it said that the banks had agreed to provide fresh capital for the Industrial Credit Company.

Every politician signs his death warrant, dives into the river and is lost for ever when he criticises commercial banks. I suppose, since I have done nearly everything else wrong, I may as well do this. Have the commercial banks gone mad? Do they realise that they are putting the ordinary decent commercial firms to the very pin of their collar? Has the Minister realised that there is a credit squeeze going on and that firms, notably the firms which employ male labour at full wages and which have to meet that bill every Friday night, and have met it for the past 50 or 100 years and will meet it for the next 50 or 100 years, are pressed very hard? It is insisted that their overdraft shall be reduced and they are constrained to employ fewer men and are prevented from carrying out the expansion which they know their business would profitably allow.

Instead, the Minister has suggested to the commercial banks—mark you, that is where he is looking for the money—that they provide £1,800,000 for new industries before they look after the old ones. I think it is absolute economic madness. I should like to inform the Minister that throughout this country there are firms employing ten, 20 or 50 workers which are pressed to the limit of their capacities, with their directors making a choice between emigration, duodenal ulcers and coronary thrombosis. He is going to take this money from the "kitty" they use, this £1,800,000 for the Industrial Credit Company. Has he no other means of financing it? Can he not float another national loan or does he want to float another half-national loan instead of a full one and hope for the best?

In the list of Budget pointers we have the speech made by the Minister for Industry and Commerce in Sligo. I do not know what political line I am taking now. I am taking what I think is an honest one, that is, that the position west of the Shannon has got to be reviewed again. We want to put industries where there is the greatest unemployment and where there is no development, but, remember, we are no longer the only pebble on the beach. At the present time, an industrialist going into the North of Ireland can walk into a ready-made factory, waiting for him, built to suit any industry that might come within a very wide range, without cost to himself, and is required to pay only a nominal rent to the Government there. He will even get a factory built for him wherever he wants it. I suggest that here we need a complete and absolute reappraisal of the situation. We have to be honest with ourselves.

I should be happy about this Central Fund Bill if there were included in it any suggestion of a proper agricultural policy. There is not. In the statements the various Ministers have made in regard to it over the past fortnight, has there been any pointer to show the farmers that in a falling, false European agricultural market, they are to be given a policy upon which they can base their future efforts? There is no pointer or suggestion to that effect. It is a kind of stop a hole here, stop a hole there, and it goes on blindly.

If the Minister for Finance gives us a policy, or if any other Minister outlined a policy, or if we saw in these Estimates the least vestige or outlines of a policy, we on this side of the House would be only too willing to build it up and not pull it down. The Minister can be assured that would be our approach, but we must criticise, if we find there is not enshrined in this Book of Estimates such a policy. At the risk of repetition and reprimand, I say that the Irish farmer is entitled to 100 per cent. of the market for Irish bread and wheat.

It is not extraordinary that last year a figure of £250,000 was included in the Book of Estimates for agricultural marketing. We had constant repetition by the farming organisations of the need for proper agricultural marketing, and very proper repetition it was. We had a parrot-like repetition by the Minister for Lands in Dáil Eireann, on every possible opportunity, on the virtues of a good agricultural marketing organisation. The implication that the Fianna Fáil Party were going to do something about agricultural marketing when they became a Government was obvious. It had to include that £250,000. The Marketing Committee did nothing. It was started late in the year, it was composed of an eminent body of men— I see one of them present—and they are now sitting down to see what they can do, but I think some sum should have been included this year for agricultural marketing. I suggest to the Minister that this is a bit which he must take between his teeth.

If our Irish bacon and butter is not gaining a premium on the British market, it is not for want of quality. I say, without fear of contradiction by any honest man, that we are as good producers of butter and bacon as anybody in Europe. If we are not getting this premium, if we are not getting top prices, if we are suffering the stigma of getting the lowest prices or the next lowest prices, then it falls upon us to do something about it. I suggest to the Minister that during the year he bring in a Supplementary Estimate, take one city in England, put Irish butter and bacon in every shop in that city, advertise on the hoardings at any cost and see what happens. Let him do that in one English city and he will find the results of good agricultural marketing organisation. The deletion of that £250,000 this year from the Book of Estimates is, of course, nothing short of political fraud.

There is no figure in this Book of Estimates to look after the increase in the number of cattle on the land that must come, if our Irish agriculture is to be wholesome, prosperous and in a position to carry the country as it must. I freely admit that I am not satisfied with the increase in the number of cattle on the land from 1947. That increase was roughly from 3,900,000 to 4,500,000. Any agriculturist, any farmer and anybody who has the mildest contact with the land of Ireland knows the revolution in technique, and the revolution in husbandry, that has come about since the end of the war, whether in better fertilisation and better seeds, making it possible to carry many more cattle than at present are being carried on the land.

I believe the Minister knows very well that, in the grain areas particularly, the limiting factor on the numbers of cattle kept on the land has consistently been, and is at the present moment, the lack of capital to pay for them. I suggest to him that what is wanted, and what he should bend his energies towards, is the marketing of cattle at an earlier age, better husbandry, better feeding and a greater number of young cattle kept on the land, especially in the tillage areas. I would also suggest to him that the export of store cows and heifers from this country, and the export of milch cows and heifers, is disastrous.

The last figure I have for what I think is a normal year—I would not care to take 1957 because prices varied and fluctuated to such an extent that we had a greater average of cattle exports in 1957—is the figure in respect of the last average year—1956, in respect of the export of store cows and heifers, and it is 131,324. In the same year, the export of milch cows and heifers was 6,401.

I suggest that the Minister knows, as I know he knows and as I know, more cattle could be kept on practically every farm in Ireland if the capital was there to keep them. Those store cows and heifers and those milch cows and heifers were sold for money, and, but for the fact that the money was needed, the farmers would have held them, mated them and bred more cattle to export at a later date with greater profit to themselves and the country. There must be some sort of provision, however it is made, to see to it that this situation does not continue.

I would refer the Minister to a figure that would have appeared in this Estimate, but for the change of Government. That would be a figure to implement the statement made just before the change of Government that small loans for cattle were to be afforded to the small farmers so that they could keep their heifers or their cows and raise the level of livestock on their farms. I suggest that included in this Book of Estimates should have been a goodly sum for that purpose.

If that policy decision of the Fine Gael Party on October 6th is properly construed, it envisages far more. Indeed, the Front Bench of that Party at that time were thinking in terms of far more than small loans for small farmers. The whole pattern of grain growing, for instance, had been crystallised at that stage. We had for the first time ever—this is not politics; these are cold, solid, hard facts—a surplus of wheat in 1954. That was based on a certain provision in the grist. We are now moving towards a different situation, but let us leave that out for a moment. There is a surplus of wheat and there is a reduction in price, and how the present Minister can handle that situation he is entitled not to say. His predecessor—

An Leas-Chathaoirleach

The Senator cannot discuss that matter now.

Mr. Donegan

Anyway, the position was that by October 1956, the whole thing had crystallised. We wanted the production of grain and at the same time we wanted an increase in the number of cattle on the land. If there is no figure for small loans for small farmers in the present Book of Estimates, then I challenge the Minister to take another step. When he issues his national loan this year, let him say that a fortnight afterwards he will issue an agricultural loan on the same terms for the provision of fluid capital for the keeping of more cattle on the land. If the people understand what that means, I think they will know how much they want to give him for the general implementation of his financial policy, particularly in relation to capital objects, and how much they want to increase the stock on the land and, therefore, increase their own prosperity.

There is no pointer in this Book of Estimates to show that there is any change in industrial policy in this country. Industrial policy in this country is as tight as a closed fist. We have the control of Manufactures Acts, which we cannot discuss to-night. There is a 33½ per cent. protection—a very good thing in certain cases and not so very good in other cases. You have various Ministerial Orders making a complete maze of regulations, all of which tend to regulate our industry, send it walking up narrow lanes with high hedges and leave it sitting behind high walls with little contact outside.

In the sort of world which exists in 1958, we have to forget about that. We have to loosen it up. There is nothing in this Book of Estimates to show that the present Government have the same views as the previous Government and are prepared to loosen it up. If the Minister does not do that, I put it to the House that no matter what effort he makes and no matter how much he convinces the directors of the commercial banks that they should give money for industry, and no matter how much is spent on creating new industries, it will be found that the figure for employment in industry in succeeding years will decrease rather than increase.

We have got to loosen it up. The Minister has made no contribution whatever in his Book of Estimates. I suppose this is not the place or the time to suggest legislation which would loosen up our agricultural set-up and give it the injection it requires. The Minister knows what I am after and nobody knows it better. I suggest to the Government that all the old clichés should go by the board. The throwing of mud at Fine Gael, Fianna Fáil, the Labour Party or the Independents should be forgotten. There should be a completely new outlook on industry and agriculture.

I suggest that the basis of all future prosperity is a healthy agriculture. Instead of decreasing prices for pigs, as will happen in July, if the Minister does not remedy the matter, I suggest it would have been wiser to do battle in respect of the very small amount we have to export at the moment, in order that the hold we have in the European and British markets can be retained. That would be better than to reduce prices, discourage farmers and thereby retard production.

Agriculture, though improving, is still sick. There must be elasticity. The Minister must see that although the increase in the number of cattle is spectacular, it is not anything like our potential. He must give through the Book of Estimates next year or the Supplementary Estimates during the year, the fillip that is required in industry. He must see to it that the whole matter of the provision of jobs is viewed, not in a narrow but a broad context. Regulations that say "You have got to have an industry here" or "You must do this or do that", and so on, are archaic, out-dated and antediluvian and it is the responsibility of the Minister to loosen up the whole affair.

I submit to him he should forget all about Party. He and his colleagues are now accepting a great challenge at a time when the future is only becoming apparent. There have been two phases: (1) the phase after the war and (2) now, a recession in certain lines and a new approach which may result in free trade, though I think it will not. Whatever the outcome, it is up to the Minister, and I wish him good luck. I only hope that a lot of what appear to me to be old Party principles will be forgotten in his work.

Dr. Sheehy Skeffington

I was struck by one thing which the last speaker, Senator Donegan, said, in reference to the fact that he sees no alteration at all in relation to agriculture or industry in this country arising out of the Estimates as they appear before us. I have listened for nearly six hours to this debate, and I have not really heard very much suggestion from either side that there should be any kind of large-scale change in attitude towards our national economy. It seems to me to be a case of continuing along the same old lines, although everybody seems to be getting increasingly dissatisfied with the result produced by these old lines.

When I look at the various Parties and listen to their speeches, I am reminded of the early days of the three-dimensional cinema. At that time, when one went into the picture-house, one was given a pair of coloured glasses. Unless you used these glasses you could not distinguish things properly on the screen. My pair of coloured political glasses must not have been delivered because I find it difficult, I might say increasingly difficult, to distinguish at all between the main Parties in this country and in this House.

I should like to quote, from a Seanad debate of some three years ago, an extract from a speech by the late Senator Hawkins, whom we all admired and respected. He was speaking on the Central Fund Bill in 1955 and the portion of his speech which I want to quote is to be found in the Official Report, Volume 44, column 957. This was the first Central Fund Bill of the second Coalition Government. Referring to the then Minister for Finance, the late Senator Hawkins said:—

"The Minister has indeed been very brief in introducing this measure to us this evening—so brief that I have a feeling that he must have misread some of the script and particularly the most important script that he should have read for us and for the people generally. That script should contain some reference to the many promises that were made—the reduction in taxation, the reduction in the cost of living, and the easing of the unemployment and emigration position. The people throughout the country are anxious to have such a statement. The events of recent years have shattered confidence in democracy and democatic Parties and particularly in the promises and statements made even by the leaders of those Parties at election time."

I gave the name of the speaker before I started. I suggest that, if I had not given his name, Senators would have found it hard to guess whether this was a Fianna Fáil Senator talking about a Fine Gael Minister or a Fine Gael Senator talking about a Fianna Fáil Minister. I find it, then, increasingly difficult to see the difference between the two Parties—the Fianna Dee and the Fine Dum.

There has been a lot of talk here to-day about rushing back into the past. One Senator rushes back into the past and another rushes after him and tries to pull him back into the present. I suggest that the reason why they have this tendency to rush back into the past—the economic war, the slaughter of the calves, and so on—is that, in those days, there was a difference between the Parties.

Mr. Burke

Certainly there was.

Dr. Sheehy Skeffington

If you want to make a speech in which your aim is to score political points, you have to rush into the past, because, to-day, there is no practical point of difference. Therefore, you find Senators in the main Parties devoting large portions of their speeches to what used to happen simply because they cannot devote very much time to pointing to particular differences now existing between the Parties.

In the speech by the late Senator Hawkins from which I have just quoted, he mentioned four points which seemed to him to demand immediate attention in March, 1955, from the then Minister for Finance, Deputy Sweetman, in the Coalition Government, which had been in power at that time for just over nine months. The four matters which the late Senator Hawkins then thought required urgent attention, and which he was astonished to find more or less not referred to in the Estimates were: (1) a reduction in taxation, which he had been expecting; (2) a reduction in the cost of living, which he had been expecting; (3) an easing in unemployment, which he had been expecting and (4) a lessening of emigration, which he had been expecting.

We now have a Fianna Fáil Government with an overall majority. I suggest that, on these various points —about each of which I intend to say something—we have no indication in these Estimates that there will be the slightest difference in Government attitude and policy from that to be expected if the Coalition Government were in power instead of Fianna Fáil.

Has there been any suggestion that there will be a reduction in taxation? On this point, I should like to make it clear that I am not one of those who believe a reduction in taxation is, per se, a good thing. I believe taxation must always be related to the services that are required. Senator McGuire said we should find out how much money we can raise by taxation and then decide what services we can afford. That is one point of view. I would prefer to ask what are the necessary services and then to see how we can raise the money by taxation. I do not believe in asking for a cut in taxation for the sake of cutting. That would be a false economy. I am out of sympathy with the attitude sometimes displayed by ratepayers' associations that, if they can save sixpence or a shilling on the rates, they are, therefore, doing a good job for the county. I am prepared to say that many county councils which fail to reduce the rates may well be providing a better service in the county than those who produce a cut in the rates, simply for the sake of cutting, and without adverting in the slightest to what must be given up, if they cut.

If, for instance, in relation to taxation, we were to set out to cut taxation, and to cut, say—to take one example—expenditure further on the building of primary schools, if we were to cut it down to the point where schools were becoming obsolete even faster than we rebuild them. The present situation, as revealed in the Dáil, is that they become obsolete only just about as fast as we rebuild them. The number of obsolete schools remains about the same—somewhere over the 800 mark—and we build just enough to replace the schools that are falling down. If we were to cut expenditure further so that schools would become obsolete even faster than we rebuild, we would be cutting expenditure, admittedly, and might be able to save taxation, but we would be doing so in a criminally stupid way. Therefore, as I say, I am not to be taken as being in favour of cutting taxation merely for the sake of cutting.

But if there is to be an increase in taxation, I should like to have demonstrated the Government's intentions in relation to the taxes thus increased and the necessity for them—in other words why must they be increased, and how the product is going to be spent.

It is true that if one increases particular taxes one may actually lessen the individual yield if they are increased too much. We had an example of that in the taxes on whiskey not so long ago. If you put the price up too far you get a change in public buying-habits, and the revenue from the increased tax, I think I am right in saying, was less than the revenue on the lower tax. But even there I would be inclined to say that such a thing as a reduction in the absorption of whiskey, though there might be some loss of revenue, is undoubtedly of some community benefit. The same would apply, I think, to the taxation of other luxury or semi-luxury articles; cigarettes, for instance——

An Leas-Chathaoirleach

Does the Senator not think that he has gone far enough on that line now? The House will be discussing taxation on another occasion.

Dr. Sheehy Skeffington

I bow to your ruling, Sir. I will content myself with that one example of the general principle of increasing or reducing taxation. Personally, I feel that a case might well be made for increased taxation, but I should like to hear how the result is going to be spent.

The second point that was made in this House urgently by Fianna Fáil when they were in opposition, was the necessity for a reduction in the cost of living. They were very irritated with the Coalition Government when they were introducing their first Central Fund Bill that there was no reduction in the cost of living. When Senator Hawkins spoke in March, 1955, the cost of living figure was 131, the base being, of course, 100 in 1947. By February, 1957, before the Coalition went out the cost-of-living figure had gone up to 135. It now stands at 144. I think, therefore, that I am justified in saying that the cost of living has not been reduced, either by the Coalition Government or by the Fianna Fáil Government. If there were a reversal to-morrow you would have the Fianna Fáil Opposition demanding a reduction in the cost of living from the Coalition Government or the Fine Gael Government or whatever Government was in power. Nevertheless, in March, 1955, when the speech I quoted from was made, the cost of living was 131, and it has risen since then some 10 per cent. in just three years.

The third point was unemployment. I do not have to emphasise the fact that neither the Coalition Government nor the Fianna Fáil Government has been able to reduce unemployment effectively. I am not suggesting that they had no desire to do so. I am just judging by results.

The fourth point was the question of emigration. Everybody knows that emigration, which had been running for some time at something like 40,000 Irish workers per year being drained out of the country, has now reached the position when the figure is nearer to the 50,000 mark.

Therefore, I feel that we are entitled in this House to say to both big Parties and to all Governments in recent years: "You have not realised those four points about which you spoke so loudly in opposition." They have signally failed to produce any results when they were in power.

Senator McGuire has told us where he thinks the solution lies. It lies, he says, in private enterprise. He indicated that that was going to be the saving of the country. But I should like to ask: what has been stopping private enterprise all along? This is not a Socialist State. This is not a planned economy. It is not a State in which we plan and decide production targets, and the rule goes out from Government bodies calculating what is needed and then deciding to use our supplies and our labour force to produce that. It is in the hands of private enterprise. What has been stopping private enterprise, that it has not delivered the goods? What does Senator McGuire want? Does he want the few small areas into which the State has gone to be handed over to private enuprise? Is that what he means to say about it? People who talk about State enterprise like C.I.E. frequently forget that the transport system C.I.E. took over, as far as the railways were concerned, was largely bankrupt or obsolescent at the time it was taken over. Do we seriously suggest that if we hand over Bord na Móna, C.I.E. and the E.S.B. to private enterprise that will be the saving of the country?

Senator O'Brien has told us that if the State "absorbs any more of the available capital" that will "spell the doom of private enterprise." Those were gloomy words, calculated to frighten us. But supposing it were to be the doom of an inefficient, overprotected, and over-privileged private enterprise, might it not be a good thing? Perhaps this kind of private enterprise we have is a luxury we can no longer afford to pamper in the way we have been doing. I would suggest that we have in the country from the point of view of Government several contradictory attitudes. We would like to see, we are told, private enterprise untrammelled by State interference, rugged, individualistic, independent, standing on its own feet. But of course we would also like private enterprise to be protected by State tariffs. We would like it to be quite independent, but at the same time to be protected to the extent of 75 per cent. tariffs on what it is trying to produce; while we would like it to be untrammelled, we want to be carefully wrapped in cotton wool.

We would like private enterprise standing on its own feet and asking for nothing from anybody; we would like to see it in the international field competing with and outselling all its competitors, and we would like to think of our industries as being comparable with the industries of other countries. We would like, in fact, to tempt foreign investors to come into this country and freely to build enterprises here, but we would at the same time like the benefits of such enterprises to be reserved as far as possible to Irish owners and investors. They have to be 51 per cent. Irish nationals, or else only 10 per cent. of their production must be for the home market, and so on. We cannot talk now, to-night, I suppose, about the new amendment to the Control of Manufactures Act which we are going to debate soon, for the purpose of allowing the foreigner come in just a little bit more.

Debate adjourned.

The Seanad adjourned at 10 p.m. until 3 p.m. on Thursday, 27th March, 1958.