This debate was very interesting. It started off in a highly political vein and ended up more on the cultural side, which I suppose was a turn for the better on the whole. Senator O'Donovan again compared the figure of expenditure of 1956 with that of the present time. I think Senator Ó Ciosáin was right in saying that we should, first of all, find out what was expended, not what it is proposed to expend. As he pointed out, if there is a deficit in budgeting it makes a difference and that should be taken into account. After all, we have tried to balance the Budget and for that reason the comparison taken is not altogether fair. However, there are reasons for these increased expenditures to which I shall refer in a few minutes.
Another point made by Senator O'Donovan was that when the first Coalition came in in 1948 they were able to abolish certain taxes imposed by the Fianna Fáil Government. I have often heard that stated by Fine Gael speakers but I always thought it was greatly to the credit of Fianna Fáil because they had overestimated their expenditure. As a matter of fact the expenditure did not reach the amount they had estimated and we would have had a surplus at the end of this year if the same rate of taxation had gone on. Contrast that with the last year the Coalition Government were in office. When Fianna Fáil took over it was alleged by a number of Ministers of the former Government that they had deliberately written down the Estimates which were there and they were told they could bring in a Supplementary Estimate if necessary to make up any deficit there might be. There was much less fraud on our part than theirs in that particular instance.
The Senator made the point that Sligo is a good Fianna Fáil county and has not much tuberculosis. I do not know what the inference is or whether in the next census we should put down two questions: "What politics have you?" and "Have you any T.B.?" and see how they correspond. We could speculate a lot on matters of that kind. I do not think the attack on C.I.E. was fair. Senator Murphy dealt with that point and I do not want to go into it in detail. I suppose all of us think we could manage C.I.E. better than it is being managed but we can find no fault with the presentation of the accounts. I am not an expert but these accounts come to the various Departments and, if there was anything wrong, my attention would have been drawn to it. As far as I know, therefore, the accounts were properly drawn up and present a fair picture of the position.
The Agricultural Credit Corporation were also referred to by Senator O'Donovan. In that case it was laid down in the Table for capital expenditure, under sources of income, that £500,000 for the Agricultural Credit Corporation would be found from internal sources, which was correct according to Senator O'Donovan's figures. It did take in £500,000 and let it out again. It is also said that £500,000 would be required from outside sources. The usual sources which one can call to mind are the banking and insurance companies and the stock issuing houses. It is usually the banks who do those things, although sometimes it is the insurance companies. As a matter of fact, negotiations are going on at the moment with the banks for £500,000, so again, as I say, there was no great fraud about it. The Agricultural Credit Corporation may not have lent as much as we had thought they would but that was due to the fact that the ordinary joint stock banks lent considerably more to the farming community than in previous years.
I jotted down a few figures which I have here. In 1955, the amount lent was £15.8 million; in 1956, £18.5 million; in 1957 and 1958, it was about the same; in 1959, there was a big jump to £26.2 million; and in the year ending 31st March, 1960, it was £30.9 million; so that actually in the years from 1955 to 1960, the amount of money lent by the joint stock banks was doubled. That was one of our aims when we were considering the question of agricultural credit. I remember meeting representatives of the joint stock banks and representatives of the Agricultural Credit Corporation and it was more or less accepted by the banks that they would continue to do business with the farmers, and if they were not in a position to do more business than they had done in the past, it was agreed that the Agricultural Credit Corporation would be there as a lender if you like, or a last resort, and that if a farmer failed with the joint stock banks, he could turn to the Agricultural Credit Corporation. It is not surprising, therefore, that the Agricultural Credit Corporation are not doing as big a volume of business as we hoped they would do.
A question was raised with regard to the Shannon Free Airport area. The employment there, it is true, is not very big but that project is in its infancy. Six companies have actually started there now. At the moment the employment is less than 100, but it is estimated that by the end of this year, the number will be 650, and it will be considerably higher at the end of 1961. Four more fairly big companies are negotiating to start, and I think one has made the final arrangements to start there. On the whole, therefore, I think we should accept that the project of the Shannon Free Airport has borne very good fruit indeed.
With regard to capital, they have got by now from the Minister for Finance almost £500,000 and from other sources another £500,000—that is, the companies. As regards the £500,000 given from the Exchequer—I should not have said the Minister for Finance because some of that money may be by way of grant and so on—there will be rents coming in. The Department of Transport and Power will provide a factory and rent it. With regard to the rental charges, I cannot promise that in every case it will be an economic rent or, in other words, that the rent will be sufficient to give a full return on the capital spent, but there will be some return, at least, on that money going out from the Exchequer.
Senator O'Brien devoted a good deal of his speech to inflation which, of course, as we all know is a danger that must be watched by every Government because it has very bad effects indeed. The Senator also spoke about the State absorbing so much in its capital programme that it might leave the private sector short of capital, as he said. It must, of course, be admitted straight away, that whatever the Government take out by way of taxation or otherwise, or whatever they raise by way of loan or otherwise, is taken out of the pool, as it were, and less money is left behind for the private sector.
That is the immediate effect of money taken by the Government for current expenditure or capital expenditure but on the other hand, we must remember that when money is taken by the Government, it goes back into the economy in every case. It goes back sometimes, of course, in current expenditure by way of salaries, wages and so on, but in many cases, it goes to help private enterprise in various grants, subsidies, and so on, in helping private enterprise to finance itself and carry on. The real question, therefore, which we must consider is whether public spending of the money is necessary, first of all, and, secondly, whether it will be more advantageous to the community than if the money were left there available to the private sector to develop its economy.
There is no doubt, of course, that some public spending, whether on current or capital side, is necessary in the interests of the community generally—everyone will agree with that, I am quite sure—first of all, to preserve what has had to be preserved since the Governments first started and must still be preserved today—law and order. As well as that, there are services now which are absolutely essential from the point of view of the welfare of the people, such services as health, social welfare, housing, and so on. It might be argued that we are not spending enough, or that we are spending too much on these services, but I think no one will argue that they should be cut out completely.
There are many headings under which Government spending is necessary and, as I say, the only thing we have to decide is whether we are taking too much and injuring private enterprise by taking too much. Some people may argue—and I think Senator Burke was quoting from people who do argue—that we are not taking enough. However, the Government have to be careful not to take too much, and I suppose every Government think they are not taking too much because they have weighed up what they think is absolutely necessary, and what must be financed, and every Government will always think they did not take too much but only what was necessary.
Not only must the Government watch the interests of the private sector but they must also watch the balance of trade which is affected. In the past 20 or 30 years—it was hardly thought of by any country before that—that has become a very important, in fact the most important factor, in the bringing in of a national Budget. By disregarding that and by disregarding the balance of payments, disaster is sure to follow. That is what happened in 1955-56, and it brought the big financial crash at that time, which led, in turn, to very drastic remedies being applied, followed in turn by restrictions of credit and a very severe blow to the economy generally.
It has happened, if we go back to the 30's, that the Government did not take enough. Private investment was not absorbing the money and the Government did not go far enough in taking up money for capital with the result that the spare money went abroad to find a return. The use of that money was lost to this country. That is a question that has to be kept in mind. We should not be too careful about keeping capital expenditure down. We might go too far in that direction and lose to some foreign investment the savings of the people.
Every Government try to keep down current expenditure and they believe they have done the right thing in whatever current expenditure they propose to carry on. The same might apply to capital expenditure. We have been trying to convert more to capital expenditure that would give a return so that some return would come in to us for the money spent. That is something that is very necessary because the debt goes up every year and the service of the debt is going up also. If we could get a capital expenditure which gave a good return, the service of the debt would not go up. We have the E.S.B., telephone capital and Bord na Móna where a return is coming in. On the other side, we have the more social expenditure such as housing and so on where the return for capital is very small indeed.
I do not think we have run up against inflation in this country. As I said on the last occasion when I spoke on this matter in this House, the honest test is the balance of payments. Inflation means that we are living beyond our means and if our balance of payments is running all right, it means that we are making ends meet. That is a rough test as to whether inflation is becoming dangerous and so far as that test is concerned, I do not think that we have any cause to worry unduly. I do not say that we should be complacent. It is a matter that should be watched carefully all the time.
Senator Ó Ciosáin came back to the situation now as compared with three or four years ago and I am glad to note that he referred to the expenditure rather than to the Estimate because it is the expenditure that matters. Some Senator mentioned that the expenditure is now £26,000,000 higher than it was in 1956. I wonder if any Senator could make a suggestion as to how that expenditure is to be substantially reduced? I know that any Senator could make suggestions on small matters here and there but how many of them could make suggestions on matters that are really worth while?
Social welfare expenditure in this Estimate is £6,000,000 higher than it was in 1956. Education is £5.6 million higher. No Senator here, judging from the tenor of the speeches we have heard, would make any suggestion to reduce the amount we are providing for education. Agriculture is £4.9 million higher, although I am not sure, if we take current expenditure, whether it is much higher than it was in 1956. That figure takes in figures below the line and I have not had time to separate them.
There are two other main sources of expenditure. One is the service of debt which goes up by almost £2,000,000 every year and I think that it went up a little more in the year under review. Then there is increased remuneration. Since 1956, we have had two wage increases and they would amount nearer to £4,000,000 than to £3,000,000. Those are the big items and when you consider them, there is not much left. Any Senator could tell us to cut out so and so but other Senators would also tell us to put in so and so and I do not think the difference would be very big.
Senator Murphy said that it was confusing to look at the salaries payable in the Book of Estimates. It confuses me, too. When I am talking to my own officials about some increase, they talk about a man on the £557 mark. That was his remuneration 20 years ago and his salary now is probably up to about £2,000. In the next Estimate, the salaries will appear as they actually are. They will be the consolidated scales from now on and they will make more sense to members of the Oireachtas generally.
I agree entirely with Senator Lenihan in his remarks about the economy of the small farmer. I do not see how a small farmer with ten or 15 acres can make a living for himself and his family on the lines of the big farmer, in cattle, wheat, barley and so on. There is not enough income to be got out of a ten-acre farm in that way. Their only hope is in intensive farming, particularly on the horticultural side. I agree with that and we should be very grateful to the Sugar Company for carrying out the pilot scheme in the processing of fruit and vegetables. From any report that I have got of the experiment, I think they are likely to show success and that there is much to be done in that way throughout the country that will help small farmers.
The only way to help small farmers is some project in which there is manual labour. The big farmer does not want that type of work. Fruit growing and the growing of certain vegetables are the things that really suit the small farmer. If the Sugar Company's experiments are successful, they will provide an income for the small farmer. Senator Cole said that small farmers can get a good income from going into pigs and suggested that we should help them in every way to do that, but the only help we can give them is to help them to sell their goods at an economic price. If, as a Government, through our various Departments we can get over the technical processing of these vegetables and fruit and then find a market, everything will be fine.
Senator Barry raised a point which I must say was rather new to me. He said some manufacturers who built up a business on the home market, now that they have grown bigger, are more interested in the export market and are rather indifferent to the needs of the home market. I have not heard of such a case but I am not disputing what the Senator says. I am sure it is true. I should like very much indeed to hear of a case or two of that kind.