I think the situation arose quite recently in connection with the buying of buses in a more fully assembled condition. I accept the fact that it was probably impossible for CIE to carry out the work here at that stage but I want to make the point that I am not satisfied that there is a mechanism there for dealing with that. In other words, I should like, in the case of any substantial contract being placed by CIE or any other State company outside of the country, that some State Department, perhaps the Department of Finance or else the Department concerned, like the Department of Transport and Power, should have first of all to OK the placing of that contract outside.
If I may briefly give the effect of this. If CIE could have something done, whether it was building coaches or buses, outside, at a cost of £500,000 and if it cost them £600,000 to do that in their own works or to give the contract to some Irish contractor to do it, the difference between the two is that CIE are worse off by £100,000; their balance sheet would show that and, therefore, as a company they should not have done it. On the other hand, if we look at the national balance sheet, which is far more important, the starting of an activity here which produces £500,000, when it is reported on in the national income at the end of the year would have magnified and would show at roughly about 1.6 times that amount, say, at £800,000, and the tax yields would be up, due to the fact that the national income was up and the tax yields would in the average recoup about 25 per cent of that, so there would be £200,000 more in the Exchequer due to that activity.
I submit that it is self-evident that it is in the national interest that a job should be done here which costs £100,000 more but generates £200,000 additional taxation. In other words, even if the State has to foot the bill for that additional £100,000, there still would be a residual £100,000 left in the Exchequer.
I am not satisfied that there is any mechanism here to show how the impasse can be got over. Where the Minister OK's the incurring of this increased expenditure by CIE as being in the national interest, perhaps at least a step towards it might be if CIE in their report at the end of the year could list expenses such as these which were occasioned by CIE acting in the national interest rather than in the smaller company interest and where they could show in their balance sheet that due to the manufacture of so many carriages at home, there were increased costs of so much and therefore this part of the loss is a legitimate charge against the national expenditure.
We are providing £2 million and it must be provided for those cases where CIE are acting in the national interest because where CIE are acting in competitive capacity, as in the haulage of goods for private firms and so on, they are given the haulage of these goods solely because they are able to quote a price under what the companies estimate it would cost themselves to do it and therefore there is no reason why we should subsidise it.
Again, take travel. Large cities and so on are more than self-sufficient in that the receipts cover the expenditure on buses and so on but we would all agree that it is reasonable that in sparsely populated regions, there is a certain social obligation to provide at least a minimal service and we would not object in the slightest if we saw in the CIE balance sheet so much made out as being legitimately chargeable for providing this social service for these regions, just like the ESB balance sheet shows the loss they reckon they incur on rural electrification. There could be a segregation of accounts. If in the CIE balance sheet we could be shown where a large portion of this £2 million went, we would be far happier and CIE would feel that they were justified by being able to show that their expenditure was incurred in the national interest, like the building of certain vehicles here when they could have got them ready-made from abroad at lesser cost.
All these things are highly desirable. In the absence of the committee which Senator McGuire advocated here and which many of us have advocated on many occasions, at least CIE should be encouraged to segregate their accounts as far as possible and to try to segregate as far as possible the commercial from the social side—the obligation to maintain this minimal service for our people.