Seanad Éireann debate -
Thursday, 27 Jul 1961

Vol. 54 No. 15

Appropriation Bill, 1961 (Certified Money Bill) —Second Stage (Resumed).

Minister for Finance (Dr. Ryan)

Senator O'Donovan, in opening the debate, talked of expenditure over the past ten years. I still find it hard to reconcile a figure he gave of £70 million. However, when I go over it, maybe the Senator will be able to let me know later where I am wrong. Expenditure was £90.4 million in 1951/52 and £131.7 million in 1961/62. That is not more than £40 million over the whole ten years. I do not know, therefore, where the figure of £70 million could come from.

For the past four years, from the time this Government came into office, the increase has been £25 million. With that, I find that capital items in the Supply Services account for £10 million. Therefore, current expenditure would be up by about £15 million over these four years. Senator O'Donovan made the point that we should add to that the fact that we saved £9 million on food subsidies. Against that, there was a compensatory expenditure of £2 million under social welfare heads.

Another point made by Senator O'Donovan was that we had the advantage of falling import prices. I do not think that is right. Taking the index as 100 in 1953, I find that the import price index in 1956 was 106.1 and for 1960 it was 106.6, so that actually there was no saving, as far as either national or Exchequer finances are concerned. There is, however, an advantage to this country on the export side. Taking again the exports of 1953 as 100, the figure, in 1956, was 95.9 and in 1960, 102.2. These were just a few figures to which I wanted to draw Senator O'Donovan's attention. I am sure he will point out if I have misquoted him.

Dr. O'Donovan

I will, indeed.

Dr. Ryan

Right. Then we may have an opportunity of dealing with the matter again.

Mr. L'Estrange

The figure fell from 114 to 107.

Dr. Ryan

Coming to the Common Market, which I find took about three-quarters of the time on this debate, I have not very much to say, but I should like Senators to realise that the Ministers of the Government were cognisant of the implications of the Treaty of Rome before the decision was taken. We were interested both personally and as a Government and were aware that the country also was interested in the unity of Europe which is the political implication of the Treaty of Rome. Indeed, had we felt otherwise, we would not have considered the economic aspect of the Treaty. I know that in public speeches and pronouncements and in this debate, more stress was laid on the economic side than on the political side, but that was because the political side was taken for granted and the economic side was of more controversial interest, let us say.

We naturally had to assess the interests of this country before coming to this decision that we would in certain circumstances apply for membership, not only on the political side but on the economic and social sides, because all these aspects have to be taken into account before we seek membership of the Common Market. The only decision we announced was that if Great Britain should apply for membership—because that appeared at that time to be imminent—we also would apply. We felt it necessary to make the preparations for application in case Britain should apply so that our application would be considered by the six countries involved when the application of members of EFTA was considered. That may be a wise decision, to have it considered at the same time, or it may not, but on the whole we thought it better to have our application in time.

The position, of course, is that most of our trade is with Great Britain but if we take groups of countries after that, our trade with the European Economic Community, the six countries, comes next. We have much more with them than with the EFTA group and therefore it would look, from the economic point of view anyway, that the sensible thing to do would be to go in with the Community, if they are all in together. Therefore, there was no great difficulty in making up our minds on that particular contingency but Senator Quinlan was wrong in assuming that we had decided that if Britain decides not to go in, there will be a new position to be considered. If Great Britain does not go in and the EFTA countries go ahead with their programme, it would look as though over the next ten years tariffs would be gradually lowered within these groups but raised against us and that at the end of ten years, we would be more or less isolated. We would have to consider our position very carefully, therefore, if Great Britain decided not to join the European Economic Community.

I made a few notes as a result of recent debates as well as this one and I would like to give some figures on the economic position of the country now compared with four years ago, as it may be the Senator's last opportunity of making some comparison between now and then. It was mentioned in the debate that the number of people in work had gone down very considerably over those four years. First of all, let us take the figure published from time to time. This, however, is a net figure and I am not making any comparison except to say it is the highest so far. The number of males in insurable employment in January, 1961, was 437,673 and the number of females in July was 215,993. That is a total of more than 653,000, which as far as I can ascertain is the highest figure we ever reached in insurable employment.

Take for a comparison the number in employment given in the statistics produced each year at Budget time. The number in employment under the heading of agriculture, fisheries and forestry was, in April, 1954, when the previous Government came into office, 460,000. In April, 1957, when they left office, it was 433,000, a reduction of 27,000. When the present Government came into office, the number was 433,000 and in April, 1960, the latest figure available, it was 413,000. It went down by 20,000, therefore, in agriculture, fisheries and forestry, the reduction in their three years being 27,000 and in the four years of the present Government, 20,000. On the non-agricultural side, all other things such as services and industries, the figure went down, between 1954 and 1957, by 22,000 and, between 1957 and 1960, by 4,000, a very big improvement indeed. Actually, during the three years of Coalition Government, 49,000 people lost employment and during the four years of the present Government, 24,000 went out.

Mr. L'Estrange

What about all the small farmers who are not insured?

Dr. Ryan

The Senator cannot listen to the facts. He had better study the facts when I have finished. In the last year for which we have figures, that is, from April 1959, to April 1960, the reduction on the agricultural side was 7,000 and the improvement on the industrial side was 7,000, so that we actually maintained employment over that year. That was the only year since the war—during the war, I think employment was maintained—that we have this record except for 1954, which, as I pointed out here before, was the achievement of the Government of that time, after three years when the position had been cleaned up by the Budget that was brought in in 1952. It required a drastic Budget of that kind to clean up the position, but we got what we wanted and in 1954 we actually increased employment.

Mr. L'Estrange

We got a change of Government.

Dr. Ryan

I am talking facts and the Senator had better try to interpret them as best he can. On the manufacturing side, we have somewhat later figures, because these figures produced at Budget time are produced from the previous April or June. From March, 1959, to March, 1961, on the manufacturing side, we had again improved employment by 5,000 people and if we take all industries, including the manufacturing side, it is 6,000, so that the good trend is going on at the moment.

I need hardly draw attention to the unemployment side because the figures are published from week to week. However, it is no harm to put on record that in the three months, January to March, 1957, that is, before this Government took over, compared with the three months of 1961, the average improvement in the unemployment figure is 31,000. In other words, it was cut by one-third during that period and it now stands at the lowest figure it ever stood at. I mentioned this question of unemployment only last week and somebody said it was easy to cut unemployment when emigration went up. I went to some trouble to go back over these figures on emigration because I was fairly satisfied that they were not unfavourable, as far as we were concerned. It would be as well for Senators to know the facts about these emigration figures because if we know the facts, we may be able to do something about emigration. We are not going to do something about emigration by putting our heads in the sand and by thinking that there was no emigration under Fine Gael and that there was under Fianna Fáil.

Mr. L'Estrange

You were to cure it.

Dr. Ryan

We are curing it.

Dr. O'Donovan

I thought we were not going to get figures until the census was out.

Dr. Ryan

I am taking the figures of the inward and outward movements of sea and air traffic, which are the figures taken between each census. The Statistics Office often tell us that they cannot give reliable figures except at census time. These figures are quoted against Fianna Fáil and I want to give the figures from 1st April, 1954, to 31st March, 1957. According to these figures, 150,214 people left this country in that period. That is the net outward movement by sea and air—an average of 50,051 per year. That is the Coalition's record.

Mr. L'Estrange

Has the Minister included in that figure all the times Singer went to the Continent?

Dr. Ryan

I am quoting exact figures. Senator L'Estrange is getting very uneasy. He will be able to go out before I quote the really good ones. For the four-year period from 1st April, 1957—we came in in the last week of March—it was 156,000. That is in four years compared with 150,000 for three years under the Coalition, so that our yearly average was 39,029. That is an average of 11,000 per year better than the Coalition were able to give us.

Mr. L'Estrange

It was still very bad.

Dr. Ryan

I am not saying that our figures are satisfactory, by any means, but we are making every endeavour to bring that figure down and down. As I say, we should study the facts, see what they are, see what the trend is, and then if the Opposition would help us in this matter, we might be able to do even better than at the moment. They are not helping us by saying that the emigration figures were higher during the past three or four years than during the Coalition period. If we leave out 1957, which I think is reasonable, because we could not be expected to stop the momentum of emigration that was there—it had gone from 50,000 to 60,000 and it was 60,000 when we came in—our yearly average would be 32,000 as against 50,000.

Dr. O'Donovan

Better and better.

Dr. Ryan

I am taking the three years 1958, 1959, 1960. 1961 will be much better, as I shall show.

Dr. O'Donovan

Always the future.

Dr. Ryan

1961 so far is much better, not the future at all. The future certainly will be better because the trend is there. It is the six monthly figure which has been taken, from November to April. The reason it is taken up to April is that Easter is sometimes in March and sometimes in April, and people come in at Easter and go out again. We must take up to the end of April to give a true figure of one year compared with another.

Starting with that six monthly figure in 1954/55, the outward figure for the Coalition was 12,885. It then improved somewhat, but it was bad in 1959/60, but not as bad as under the Coalition. In 1960/61, that is, for last winter, we actually had a plus figure for the first time ever and instead of people going out, 3,000 came in during that period. I am not talking about the future; I am talking about the past, and the figures are showing a trend. It is quite evident that during the next five years, when I have no doubt this Government will be carrying on, we will be reaching a figure that will be less than the natural increase in population and we will then begin for the first time since the Famine to build up——

Dr. O'Donovan

No, from 1948 to 1951, the population went up.

Dr. Ryan

No.

(Interruptions).

Dr. Ryan

No, not from 1948 to 1951. I admit it did go up during the war because people could not go out.

Dr. O'Donovan

The war was over in 1946.

Dr. Ryan

When the war was over they went out and the Coalition came in.

Dr. O'Donovan

They went out in 1951 and the trouble started again.

Dr. Ryan

Let us take the true figures. We will not comment further on them, except to say that under the Coalition it was 50,000 per year and under Fianna Fáil it was——

Mr. L'Estrange

70,000.

Dr. Ryan

Under Fianna Fáil, the figure was 32,000. Even though I quote the true figures, I am quite certain that Senator L'Estrange will go down to the chapel gates and say that 200,000 went out in the past three years. I have heard Fine Gael Deputies and Senators say that they were very conscious of their duty as a Government to keep down the cost of living and that they made a great attempt to do it. The cost of living figure in February, 1954 was 124; in February, 1957, it was 135, up 11 points; in 1961, it was 149. In other words, it went up 14 points in four years.

Mr. L'Estrange

You said you would reduce it.

Dr. Ryan

Do not mind what we said. Although it is not exactly just like the emigration figures, it is better than the Coalition effort, because if we had gone at the Coalition rate, we would have gone up 15 points. The cost of living went up by 14 points during those four years but we have in every way possible compensated all the classes by increased benefits or increased wages. The social welfare old age pension has gone up by 25 per cent. as against an increase in the cost of living of 14 per cent. Industrial wages have gone up by 26 per cent. against an increase in the cost of living of 14 per cent. The agricultural wage increase varies from 1.4 to 3.2 per cent. above the cost of living increase. With regard to the agricultural price index, Fine Gael propaganda is never based on fact but on talk as to what happened under Fine Gael and what happened under Fianna Fáil.

Mr. Carton

That is what you are at now.

Dr. Ryan

I am giving the figures.

Mr. Carton

We gave the figures, too.

Dr. Ryan

I am giving statistics now. Let me repeat that if the Fine Gael Party are anxious to improve matters in this country, the way they can do that is to base their estimates on facts but they do not like facts. Let us take the agricultural price index of 1953 equal to the base 100. That year is the year which is referred to in the country as the "black year of 1956". The figure then was 91.8. In 1960, it was 101.6. It is 10 per cent. better than it was in 1956. The latest month quoted is April, 1961, when it was 104.8.

Prices are one thing and output is another. The net output in 1956 was £143.5 million. In 1960, it was £156 million, so if you take either the price index or output, you will see that agriculture is considerably better off than it was in 1956. The volume of output would give much the same result, though not as good, for the prices are better now than they were then.

Whilst prices have been improving and output going up, the numbers of livestock in this country have been improving also. If we compare January, 1957, which was two months before this Government took over office, with January, 1961 we find that cattle have increased from 4,022,000 to 4,241,000; sheep from 2,560,000 to 3,106,000; and pigs from 741,000 to 944,000. I made an observation before which was not accepted by the Opposition that, if you looked at the graph for the number of pigs in this country, you could always know when the Coalition Government were in office because the number of pigs always appeared at the lower end of the graph.

Farmers, if they are to farm well, must use feeding stuff, fertilisers and seeds. Taking the year 1953 as equal to the base 100, we find that, in 1956, the figure for feeding stuffs is 102.7. In 1959, it was 120.1. For seeds it was 102.8 in 1956 and, in 1959, 120.5 The figure for fertilisers was 115.6 in 1956 and 178 in 1959.

It is quite evident from these figures that the farmers have confidence in their own industry and that they are putting more and more into the purchase of feeding stuffs as a long term programme and a great deal more into fertilisers. We can expect to get a bigger output from the farmers in the future years than they gave in the past.

Let us take production in industry. Again taking the year 1953 as equal to the base 100, we find that, in 1956, it was 103.6 and in 1960, it was 120. That again shows a very big increase, indeed, in production on the industrial side. All these figures show that we may expect a very much bigger volume of production, both in agriculture and industry, in future years than we got in the past. It should make it easier for any Government to carry on.

With regard to the balance of payments, we went down £55.4 million for the years 1954, 1955 and 1956. Since then, we went down £1.3 million. As regards Budgets, when we assumed office early in 1957, the Estimates for the various Departments were prepared by the outgoing Government. In fact, the book was printed at that time, and it was handed over to us to deal with. The next thing I, as Minister of Finance, had to do was to get an estimate from the Revenue Commissioners of what the income was likely to be on the level of taxation at that time. When I compared those two figures, I found I had to cover a deficit of £11 million. I do not know how the Coalition Government, if they had come back, would have faced that figure.

It was a desperate figure to face. The only way it could be faced was to remove the food subsidies, which gave us in that year a saving of £6 million. We had to impose extra taxation of £3 million and to put over £2 million down as estimated saving for the year. In fact, we did not go half far enough because we found ourselves with a deficit of £5.8 million so that if we had foreseen what the true estimate was going to be of both spending and saving, we should have calculated the deficit on the bill as handed over to us by the previous Government as £17 million, because that is actually what it amounted to. The country had been going badly, because the year before that there was a Budget deficit of £5.9 million. We took it over, as I say, and had a deficit of £5.8 million, but every year since then, we have been balancing the Budget and there is no further difficulty as far as that is concerned.

Mr. Carton

As far as we can see yet, anyway. When we see the figures, we will probably prove you wrong, too.

Dr. Ryan

We balanced the budget.

Mr. Carton

You promised not to remove the food subsidies, but you did so.

Dr. Ryan

Yes, indeed; we removed the food subsidies, which went one-third of the way to meeting the deficit at that time. I could not put on more than £3 million extra taxation because, as I explained already, if you put a penny on the pint, it produces so much but the next penny will bring in only half of that and you cannot go very far in the way of extra taxation because it is a declining figure all the time. I thought that we would make savings and so on, but we still had a deficit of £5.8 million, which showed that there was no buoyancy in the revenue at that time because the country was more or less in despair and we could not get revenue out of the people.

Dr. O'Donovan

There was no inflation.

Dr. Ryan

But when the country was put on its feet, then we were able to balance our Budget for the past four years.

Mr. Carter

Sweetman's pills did a terrible lot of damage.

Dr. Ryan

National income for 1959 was 4.7 per cent. above 1958. It was an average of between one and two per cent. for many years before that, and that was the first year we got away from the sort of dragging our feet in the economic way, and we got up to a fairly decent figure, just almost the average for the western countries of Europe.

Dr. O'Donovan

Tell us how you did it.

Dr. Ryan

We did it, first of all, by giving the people a bit of confidence that it could be done, and the people did put their confidence in this Government because they knew that they were going to put things right, and they had none in the Coalition, and rightly so. During that year, we climbed up the ladder amongst the European countries and actually did better than some of our very wealthy neighbours like Belgium and Great Britain, and Switzerland, which is not our neighbour so closely. The 1960 figure over 1959 was five per cent. but I have no comparison for any other countries as yet, because as far as I know the OEEC report for 1960 is not written yet.

Coming back to the total tax receipts, Senator O'Donovan painted a picture amounting to extravagance and high taxation, but actually as far as tax receipts are concerned, if you take 1955-56, the tax receipts were 18.3 per cent. of the gross national product; in 1956-57 they were 18.9 per cent; and last year 18.5 per cent., so there we are doing a bit better.

Dr. O'Donovan

It is still up there.

Dr. Ryan

We are not taking as much as the Coalition were taking from a poor country, but a little less.

Dr. O'Donovan

More.

Dr. Ryan

The Coalition were taking it from a poor country. We could afford to take more. We have not very many figures for this year so far, but as far as revenue is concerned, we have figures to 22nd July, and revenue received by the Exchequer was £40 million, within a thousand pounds, for those 16 weeks, that is £2½ million better than last year, which is very good indeed for less than one-third of the year. As I said before, you do not get revenue unless people are fairly well off. You do not get income tax unless people are earning, beer and spirits tax unless people can afford to buy beer and spirits, and tobacco tax unless people can afford to smoke. The fact that we got more from tobacco, beer, spirits and income tax means that people are better off than they were.

Mr. Carton

Or that they have been driven to drink.

Dr. Ryan

Some of us do not take very much driving. As regards imports and exports, for the first six months, we have figures showing that imports have increased by £20.3 million and exports by £16 million. I gave a warning, if I remember rightly, to the Seanad, while dealing with the Vote on Account, that I did not expect the balance of payments figure to be as good as last year. So far, I am right in that forecast. For the first six months, it is £4 million worse than last year, but, however, it may not be the final result when everything else is taken into account, and we do not know, either, how imports and exports may go for the rest of the year.

Dr. O'Donovan

June was better.

Dr. Ryan

Yes, but June is in that figure.

Dr. O'Donovan

Yes, I know. I am just giving the Minister a point. He would not give us any.

Dr. Ryan

I said the first six months. I merely want to point out that I have to give the case as it is. With these few words, I finish on the Appropriation Bill.

Professor Hayes

The election is nearly over now, I suppose.

Question put and agreed to.