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Dáil Éireann díospóireacht -
Friday, 12 May 1939

Vol. 75 No. 18

Committee on Finance. - Resolution No. 10.—General (Resumed).

Debate resumed on the following motion:—
That it is expedient to amend the law relating to customs and inland revenue (including excise) and to make further provision in connection with finance.—(Minister for Finance).

Mr. Brennan

The gloomy future, which the Minister's Budget statement reminds us of, is in very acute contrast to his buoyant past. The Minister, when he came in here on former occasions to introduce his Budget, informed us that business was buoyant and that prospects were good. I must say that, as far as the present Budget is concerned, it is honest in that respect because it is a gloomy Budget, and does not forecast any great buoyancy or any great future. It has come rather as a shock, I am sure, to many people in this country, particularly the farming community and the members of it who supported the Minister and his Government in the pursuit of the economic war. It was felt by those people that there would at least be some recompense, some help for them, some relief after the economic war had finished. But what do we find? That not alone is there no assistance offered to the farming community or to the ratepaying community, but that money which is rightly theirs is being filched from them in order to balance the Budget. Stripping the Minister's speech of its verbiage, we find that in order to balance the Budget we have to plunder the Road Fund and the provision for unemployment, and take from the local authorities sums which, in law, they appear not to be obliged to pay. In addition, we have to borrow £2,000,000, and we have to find by taxation £1,169,000. Before we arrive at that we have a note of thankfulness in the Minister's speech that the beet crop last year was a failure. That is what the Minister's statement amounts to. In addition, the hope is expressed of a further administrative reduction in the relief of unemployment. On the whole, the Budget speech reveals a situation in the country which is not encouraging or comforting.

We had two speeches last evening from the Fianna Fáil Benches, one from the Minister for Education and the other from Deputy Corry. There are times when Deputy Corry is interesting, and there are times when he is crude. He was crude last night, but certainly to some extent, even though he was, he lifted the veil of gloom which the Minister's speech had spread over the House. Deputy Corry generally gives you some idea of what is at the back of the Fianna Fáil mind. He rarely makes a speech when that does not come out.

For instance, he told us last night— of course, he contradicted himself several times in the course of his speech—that he was glad the income-tax had been increased by a 1/- in the £. He said his only regret was that the increase was not much larger. In saying that he was betraying what has been a kind of background to the Fianna Fáil policy—that is, the creation of a class distinction in this country. The Minister, of course, knows that that is not good policy and he must keep his head up. But Deputy Corry, and people like him, keep the other end up, and, consequently, they carry the whole programme along.

The peculiar thing about Deputy Corry's speech was that even up to this time he does not appear to have learned anything from the past. He told us that the one thing that matters for this country is the preservation of the home market. That, according to him, is the one hope for the farmers. Of course, that is not the view of the Minister. As he said very properly in a recent speech, the future of this country depends on its exports. To take up Deputy Corry's argument, what are we importing into the home market for the agricultural community outside of industrial articles? The Minister for Agriculture was right the other night when he said that four-fifths of the cattle we produce are exported. I wonder what would Deputy Corry propose to do with those cattle. What about our pigs, our eggs and our bacon? Deputy Corry is of opinion that the whole future of the country is bound up with the home market in a country of less than 3,000,000 people.

Deputy Corry also spoke about beet, the growing of it and the price paid for it. On the very first page of his Budget statement, the Minister for Finance says: "If it were not for the fact that an unexpected and unlooked-for overplus of £562,000 on the Estimate occurred in the customs duty from imported sugar" and so on. That was the Minister's unexpected windfall. While Deputy Corry, perhaps, thinks that beet is a good crop to grow at a certain price, the Minister for Finance thanks Providence that the crop was not a success last year. That is the way we have to balance our Budget.

The Minister for Education in his speech last night said that he felt that the leader of the Opposition was leaning too much upon the Banking Commission, and that he did not know why that was so. He said that he did not think the Banking Commission deserved the consideration which Deputy Cosgrave was giving it. In view of a statement of that kind, coming from a Minister, does it not strike one very forcibly that the setting up of a commission by the present Government is a kind of joke?

Are we to lose faith in the present Agricultural Commission—if we ever had any faith in it? Are we to feel, no matter what report is brought in, that it is not going to influence the Fianna Fáil Government? Are we going to travel along in their happy squandermania way, irrespective of what is said in the report? If the report of the Banking Commission does not deserve consideration, I do not know what does. Nevertheless, the Minister for Education feels that there are other interests to be considered besides balancing the Budget, besides keeping down public debt, and, to that extent, that the report of the commission ought to be ignored. The Minister also referred to a statement made by Deputy Cosgrave that borrowing for unemployment was bad business. On the face of it, it is bad business. The Minister for Education does not think so. If we are to borrow for unemployment year in and year out, are we not creating a burden of public debt that is not being relieved in any way by the expenditure? I do not think the Minister for Education read the Budget speech or he would not have made such a statement, because he thinks that borrowing for unemployment might be indulged in, and that it was good business.

I think the Deputy must be under a misapprehension. What the Minister for Education said was that there was a difference of opinion on that amongst experts.

Mr. Brennan

His opinion was that it was good business. Is not that right? He advocated as an expert that it could be done and should be done, whereas the statement of the Minister for Finance was:—

"On the other hand, a great deal of over-spending took place upon certain recurring public services, like unemployment assistance, which ought to be and, if the public credit is to be preserved, must be, paid for out of revenue.

Notwithstanding that statement, at a later page of the Minister's speech we find that he is borrowing for unemployment assistance, and that he has increased the percentage of borrowing this year. How is he going to justify that? He cannot justify it in face of the previous statement. That gives us an idea of the type of balancing we have got in this Budget. The Minister for Education also stated that large contributions had been given by the Government towards the agricultural community in one way or another, and he mentioned that the farmers here had security, and could hand their holdings down to their families. I wonder if that is true, or if every farmer feels that it is. The Minister also expressed the hope that farmers would not accept ideas that were now floating around and would not follow a will-o'-the-wisp policy. There is a danger that they will follow a will-o'-the-wisp policy, because there is a precedent for it. I am sure many of them now regret the will-o'-the-wisp policy they followed in the last six or seven years. The Minister said he thought it would be a bad policy for the farming community, and for the people generally, to get the idea that there was easy money to be got here. When one thinks of Fianna Fáil propaganda in 1931-32, one wonders at the Minister making such a statement to-day. That was the time the people were promised easy money, and that was the time that the late Minister for Agriculture warned this House that if the people, and particularly the farmers, were promised or given soft money, it would be their ruination.

Fianna Fáil at that time wanted to be popular and had schemes of every kind to bring prosperity to farmers. What do we find now? Under the Fianna Fáil régime costs of production have gone up to such an extent that they have practically put farmers out of production. Rating costs and all outgoings have gone up, and now, when even Deputy Corry was hoping that the Minister for Finance would relieve farmers of road charges, money that was justly theirs, or that justly belonged to the Road Fund, is plundered by the Minister in order to balance the Budget. We have to face the position that farmers who were driven into the front line trenches and suffered and lost all in the economic war are to have no share in the victory. The Minister for Education said last night that one thing that had been entirely absent from the debate was any reference to the British market. I do not know why that statement was made. I will make a reference to the British market which has relation to Government policy and its reactions on the present position. It will show clearly the desperate conditions of agriculturists as a result of Government policy. In 1930 our exports to the British market came to £21,000,000, and in 1934, after two years of Fianna Fáil government, they were down to 6.3 millions. Since the settlement we have recovered and the figure now is 9.3 millions. That is as far as we have got. That position in the British market is not very creditable to Government policy.

The Minister also referred to the benefits that had accrued to farmers from the Pigs and Bacon Act. The Minister must have been asleep. I do not think anyone could say that benefits had flowed to the agricultural community from that Act. When we come to consider the implications of the Budget, we have increased income tax. Deputy Corry is very grateful for that, and regrets that the tax was not heavier. How is that going to react on the country? Will it have any reactions? After all, we can only get money from those who have it, and can only expect spending by those who are able to spend. Is not the present position bound to have the effect of contracting expenditure?

Is it not bound to take money out of circulation and, to that extent, affect employment? Furthermore, the more you take from people who have money and who are engaged in business, by way of income-tax and surtax, the less incentive there is for them to go on.

Then, we come to the petrol tax. The petrol tax, as the Minister for Finance rightly said, is not a luxury tax. Petrol, being in such general use at the present time, may be considered an ordinary necessity. The implications of dearer petrol are going to be reflected in practically everything. Shop goods are being conveyed by petrol-power. Turf is being brought home by lorries. Beet is being brought to the factories by lorries. The railway companies are now the biggest users of petrol in the country. We have at present a commission engaged in trying to pull together the remnants of our transport system and make it pay. In the midst of all that, we place a further charge upon it. The tax on tobacco may be justified as a luxury tax. Tobacco may be the poor man's comfort, and everybody else's comfort for that matter, but one can get on without it. It is not a necessity. I am not defending the tax but its reactions on the people of the country and their prosperity are going to be less than those of the other two taxes, much as we may deplore this tax.

When the farming community were obliged to stand the racket of the economic war, they felt that they would, when it was over, be entitled to redress. According to the report of the Banking Commission, we have 125,000 farmers in debt at the present time. What is being done for them? Is there any relief for them in this Budget? They are the producers of wealth. They are the only people, according to the Minister for Finance —and I am in agreement with him— who can get this country on its feet. The Minister for Finance said at a dinner some time ago that the whole future of this country depended on our export of agricultural produce. Some people were foolish enough to think that, with the setting up of this commission, the Budget would contain proposals for derating. Evidently, the Minister for Finance does not think that derating would be useful. The Minister for Education does not think it either, because he said so.

Deputy Corry does not think so. That shows the very short views people take in a matter like that. We had the Minister for Agriculture speaking on his own Vote a few days ago, and referring to derating. The Minister for Agriculture, evidently, thought that any relief offered to farmers by way of derating would assist only the larger farmers and that the smaller farmers would have to bear the burden. I admit that, at first glance, that would seem to be the case, but if we examine the matter more closely we must come to the conclusion that if we desire to do something for the industry which is the mainstay of the country, we must endeavour to touch the greatest proportion of land in cultivation—when I say "in cultivation" I refer to arable land.

Three-fourths of the arable land of this country is held by people whose valuations are over £30. You have Fianna Fáil, through the Deputy Corry type, always playing to the small man and hoping that the big man will go down. That does not lead us to prosperity. If three-fourths of our land is held by the bigger people, and if we want to confer some benefit on agriculture, we ought to try to relieve the higher-up people, because they happen to be the people who buy the stock of the smaller holders. The Minister for Agriculture thinks that, even if we did relieve the bigger man, it would not induce him to give a higher price for the live stock of his smaller brother because the export price will rule the price in this country. That is a very short and short-sighted view. Is it not as clear as noonday that if all the big men who are buyers of cattle from the small farmers were relieved of overhead charges, they could not alone pay better prices but they would have to pay better prices because they are in competition with one another? Does anybody think that they could form a ring? They have never done it and they could not do it. In my opinion, if the Minister for Finance wanted to confer some benefit on agriculture, he could not choose any other way to do it equal to derating. It would relieve the first man of his overhead charges and put him in a better position to earn profit on his business and pay higher prices for what he buys. It would put him in a better position to employ labour, too, and, on the whole, you would have a reaction towards better business and more prosperity in farming. The Minister for Finance and the Minister for Education do not agree with that.

They think, apparently, with Deputy Corry, that the best thing to do for the business of this country is to fleece the man at the top every time and feed the man at the bottom with dole. That is bad business—very bad business. If you want to establish prosperity, you will have to start with the people who count. When I say "the people who count," I mean the people who own the greatest amount of land, because any relief you can bring to them and any prosperity you can bring to them is bound to flow out. You cannot make the smaller farmer prosperous and, at the same time, not touch the big man. You have to proceed the other way. I myself am a small farmer. I hold no brief for the bigger farmers, but I have been engaged in farming all my life, and I know what the position is. I know that the small farmers are the rearers of live stock, and that the larger farmers are the people who buy from them. So that any relief you can bring to the larger farmer is bound to have its repercussions and reactions on the smaller farmers. In the same way, any depression that strikes the larger farmer is bound to react immediately on the smaller farmer. Whether we give derating or not, let us be clear on that matter.

The Minister told us in his Budget speech that the agricultural community were getting no less than £10,500,000. Are there any people on the back benches over there who believe that? I wonder how does the Minister calculate it? Why, £10,500,000 would be equal practically to our whole export trade. I should like to see that blazoned all over the country walls for the Minister's benefit. Speaking yesterday, Deputy Hickey, the Lord Mayor of Cork, said he would like to hear some suggestions for a better Budget. He stated that he had not heard anything of the kind, and the criticisms that were offered ought, in his opinion, to be directed in that way. As a matter of fact, Budget day is our annual survey of conditions in the country and the annual survey of prospects for the country. It is not for us, or for Deputy Hickey, to make suggestions to the Minister. The Minister has, I am sure, gone into everything in detail.

It is what the Budget discloses that worries us. What does this Budget disclose? It discloses that the Minister has had to go out of his way and utilise various devices in order to try to balance the Budget. He has had to raid funds which are not his, funds which, in fact, belong to the people; that is, moneys already paid in for road-making. They must be diverted in order to balance the Minister's Budget. That certainly discloses that all is not well. The Minister informed us that he has an increased Estimate for Unemployment Assistance and the relief of the distress. After seven years of Fianna Fáil government, is it not a poor commentary on the programme that was not going to leave a man idle in this country, that every Estimate that comes in must indicate a further increase for the relief of unemployment? What we have is an increasing Budget, and apparently increasing unemployment, with the result that more money has to be obtained.

How long can we stand that? How long can we continue to borrow for the relief of unemployment and for other things, with our position as it is? These are the things that worry us and I am sure that everybody in the House is genuinely worried over the state of affairs which this Budget represents. It is no pleasure to any man to gloat over conditions of that sort. Anything I could say would certainly not be as gloomy as the last two pages in the Minister's Budget. They indicate a very gloomy prospect. The situation seems to be this, that the Minister is putting his Budget across by saying to the people: "Well, there it is for you; it is bad; we have had to borrow in order to balance it; we have had to pilfer other moneys in order to balance it, but let us thank God that it is not a lot worse. If certain things happen it will be a lot worse and, looking into the future, I cannot see any hope." That is what the Budget represents. There is nothing in it to show that the Minister will be in a position to say, owing to certain activities, that he hopes for better things next year. There is nothing in it which would enable him to say: "Owing to certain possible developments, I hope to be able to lay something aside for next year." There is nothing like that.

He has told us that the alcohol factories are disappearing. We know they are. They may disappear out of the Estimates, but they will not disappear the same as some of the Minister's white elephants. Those are the things which have contributed to the present position and left the country where it is. It is no pleasure to us to say that, but that is just the position. The Minister's Budget statement gives no encouragement to anybody. There is nothing in it which would lead us to believe that we are going to have a better time next year or the year after. It is a sorry Budget and a very poor commentary upon the great programme which Fianna Fáil mapped out for the salvation of this country. To some of us it was evident that there was only one hope for this country and that was to keep agriculture in its old position and encourage it to develop along the old lines. What has happened? The figures I have read out are eloquent of what has happened to our export trade. We are in the position that other people have captured our markets and now we have to try to do something to get them back. How are we to do that? Are the Government offering any encouragement or any hope in that direction? They are not. The prospects are anything but encouraging.

This Budget, and I am sure there are Deputies who will agree with me in this, reflects the mentality of the Government that has produced it and, from what I can see, the present Government are becoming more and more conservative in their outlook, they are almost now as conservative as were their predecessors. Their predecessors did not accept any responsibility for the unemployed and in this Budget the present Government are disclaiming any responsibility for the unemployed. As a matter of fact, the amount for employment schemes, which are a very small substitute for the employment promised, is being reduced by £100,000. The amount for public works and buildings is being reduced by a similar sum. At the same time, the numbers of unemployed are growing every day. The position is much more serious now than it was on June 14th, 1938, previous to the last general election, when the Minister for Industry and Commerce, speaking in Dublin, said that unemployment was too high and the first task of the Government to be elected on the following Friday would be to utilise the resources available to deal with the problem, to find some plan to solve it. The resources to solve the unemployment problem are certainly not contained in this Budget and so far we have not seen anything of the plan.

That was immediately preceding the general election. Not very long after the general election there were £10,000,000 raised in this country, and it was not for the relief or the abolition of unemployment. That was how the outlook had changed from the time previous to the general election to a few weeks after it. Unemployment figures in this country are staggering. There is no doubt about that. In addition to that we have on record the fact that 78,000 people left this country during 1936, 1937 and 1938. They left because they could not get employment here. Had they remained in the country they would have created a stupendous problem. Side by side with that we have a large number of people living on home assistance.

In this Budget there has been no suggestion as to the amount that would be necessary or that is going to be necessary to solve the problem of unemployment, although in the Constitution we have it definitely laid down that provision will be made that every man able and willing to work will find the means of sustenance for himself and his family by means of work. That section of the Constitution has never been implemented although there was a great rush to implement the section of the Constitution which we were told was necessary to fill up the gap in our legislation. That section was implemented by the passing of the Offences Against the State Bill. It was all right to implement that section, but there was no question about implementing the section of the Constitution which lays it down that every man who wishes to work has the right to get work. That has not been done.

This Budget does not hold out any hope that the Government has any intention of dealing with the unemployment problem. On the contrary, the means which were most inadequate to deal with unemployment have been cut down in this Budget by a sum of £200,000. The item of £100,000 reduction in Public Works and Buildings was undoubtedly one means devised for the relief of unemployment. Yet, side by side with these things, there is provided a sum of £3,350,000 for Defence, or an increase of £1,256,515. Personally, I cannot see what defensive measures are going to be provided by that sum. If we are taking so much precautions to defend this country against a probability that may or may not arise, I wish to suggest, seriously, that we should take definite steps to prevent a calamity in our midst that is perhaps more serious. That is the calamity of the large number of unemployed who are or may be a menace to society in this country. Surely the Government cannot expect unemployment to go on and the unemployed people to continue as they are on the dole and on promises to get work. Something should be done to tackle that problem. It surely is a more urgent one than the defence problem.

Some criticism has been levelled at the Budget with regard to income-tax. After all I think that everybody knows that income-tax is one of the fairest taxes in any country. If one examines the Budgets of the past ten years it will be seen that the proportion or ratio between direct and indirect taxation, leans very strongly on the side of indirect taxation. Previous to this Budget taxes raised by direct taxation came to 29 per cent., and by indirect taxation 71 per cent. Now, even with the additional 1/- put on the income-tax the proportion is not so very much varied. I calculate that direct taxation will be about 31 per cent.

Would the Deputy think it might be less?

The Deputy evidently does not see the point of it.

No. The proportion of indirect taxation now is 69 per cent. I do not think there is very much to quarrel about that increase of 1/- on the income-tax. Reference has also been made to the majority report of the Banking Commission. That majority report has been rightly described as the most conservative production that this country has seen in the last 40 or 50 years. It goes right back to the Manchester School of Economics. There is there the fear that the Minister is developing along that conservative mentality. He seems inclined to accept some of the suggestions of that majority report and to implement them. On page 15 of his Budget statement he is recorded as stating that.

"Housing Acts, employment schemes, and the Land Acts, are still, and are likely to continue to be, active—a position which cannot but be regarded with uneasiness by the Minister responsible for the public finances."

That I think bears some resemblance to the statement in the majority report of the Banking Commission which says that works, housing schemes, land division and things such as these should not be undertaken by the State. What hope have we of getting rid of unemployment except by putting the unemployed into useful productive work, unless we have works like those financed by the State to which to put them? There has not been anything about that in the present Budget.

We are told that the farmers are the only producers in this country. I admit that the working farmers and the farm labourers in this country have a very low standard of living. But the unemployed have a still lower standard. That section of the community have a standard that is barely above the starvation line. A sum of 14/- a week is allowed for a man, his wife and six children; outside the boroughs that is the maximum amount given. It is very easy to compute that that works out at 2/- a day for eight people, that is 3d. a day for each. There is a charge that I am making against the present Government and that is that they have become conservative-minded. They regard that 3d. a day as an amount which salves their consciences with regard to the unemployed. The unemployed would prefer work, but we are told that the work is not there, although there are schemes of land division, land reclamation, housing and other things waiting to be put through. But we are told the work is not there. There is no indication in the Budget that schemes such as I have mentioned are going to be considered in the coming year. We have large sums devoted to schemes for defence, and we are told that there is no money for reproductive work of the kind I have described. In page 15 of the Minister's statement on the Budget we are told that Housing Acts are rather a drag on the public purse and on the State. We will be told, and Deputy Cosgrave has already told us, that these are putting an undue burden on the people, and that when he went out of office in 1931 there was no burden through housing placed on the people. I can tell Deputy Cosgrave that there is a very serious burden in the way of rents on those people who were housed under the 1931 Act. I know people who are paying as much as 5/3 on 11/- rent for interest on loan charges which were left as a legacy of Deputy Cosgrave's scheme of government as far as housing the people was concerned. I look at it from the broad point of view that it is as necessary to provide decent houses for the people—perhaps more necessary—as to build sanatoria or hospitals. Could not some of the money which is to be spent on hospitals be devoted to house-building?

It has been.

Very little of it.

Three millions of it.

You did not get much of it. Did you?

We did—a million and a half.

I have tried to point out that, from this Budget and the balancing of it, it seems to me that the whole problem in this country is one of money; money seems to be set up as a god in this country. Human beings do not count, although we style ourselves a Christian nation and a Christian State. We are to forget about the unemployed, and forget about the people who are living in the slums and under bad conditions, because the Banking Commission Report says it is bad policy to indulge in State borrowing for housing, or to indulge in State borrowing under the Land Acts. We are to forget all about that. We are to forget all about those people, and think only of those great economic principles. That is sticking out in this Budget. It is all over it. There is no regard at all for the condition of the people in this country.

The Minister for Education referred to the great things that this Government has done in the way of social services, and pointed to the millions which have been spent in that direction. But that is the very programme on which they were elected as a Government. That is the reason the Labour Party supported them in 1931 and 1932—to make them the Government of this country. The people of this country had got sick and tired of the way the previous Government had been treating them, and they did accept the Fianna Fáil Party's dictum that they were to concern themselves about the unemployed and the weaker sections of the community. How have they put that into operation? There is not much to boast about in a social service which allows 5/- a week as the maximum pension to a widow outside the boroughs of Dublin and Cork. That is not a social service about which to shout from the housetops. A social service which allows 14/- a week to a man and his wife and six children is not a social service about which we can boast. The principle is sound, but the money is not forthcoming to put it into effective operation. I could go over the whole list of social services. I might refer to unemployment assistance, "dole," as it is commonly called. People in this House have criticised the unfortunate people who have had to have recourse to the dole. What are they to do? Should they die of starvation rather than accept the miserable few shillings which would keep body and soul together?

The Minister for Education also referred to the fact that Denmark had repatriated her assets. We have millions of pounds of State money invested in Britain, and we are not showing any intention of repatriating any of it. I put some questions to the Minister for Finance during the past 12 months with regard to the amount of those funds, and I got answers varying the figure from £14,000,000 to somewhere around £29,000,000. In any case, there is a very large sum invested there, and we are told that it is for the stability and financial credit of this country. Of what use is that stability or financial credit to the unemployed man living on 14/- a week, or to the widow living on 5/- a week? If some of that money were repatriated, as the Minister for Education told us had been done in Denmark, and put into useful schemes of employment here, then it would be some good to the unemployed people of this country. In the amount which is invested in that way, if my memory serves me rightly, there is a sum of about £2,000,000 of National Health Insurance money, that is money which is provided for the services of the National Health Insurance Society. One would have thought that some of that money might be repatriated and invested in house building, clearing away some of the slums in Dublin and Cork. Would it not be a reasonable proposition for the Minister for Finance to put up to his Government that that money should be repatriated and used? That is not being done although we have before us the example of Denmark, and I think it is an example which is sound in this particular case.

We had rather severe criticism of the idea of borrowing to provide employment. It looked to me as if the people who made that statement did not know exactly what they were talking about. Surely the putting of people into productive work is a good investment? Surely if money is borrowed and invested in that way it should double itself? Look at the advantage it would be to the community. Surely people who make criticisms of that kind cannot be serious, considering the position of affairs in this country. If we put people into productive work, are we not adding to the nation's wealth and improving the financial position of the country? The money is not being handed out in extra dole. That is not the idea underlying the proposition to get money for putting people to work on useful schemes of employment.

Does the Deputy advocate borrowing for employment schemes?

No. I have no use for employment schemes.

Then the Deputy did not make himself clear.

I talked about useful work. I said to the Parliamentary Secretary and to the Minister for Finance here in this House that those employment schemes are only a ramp. They are simply a kind of excuse to get something for the unfortunate unemployed, although it is of no use to the community. I am talking about useful works. Anybody who looks around in this country will know what I mean by useful works. How many houses are required in the City of Dublin?

Surely the building of 30,000 houses is a very useful work? It would benefit the farmers and benefit the community in general.

Deputy Corry spoke about the home market. There are 100,000 people unemployed in this country. Look at the market you are losing there. Take Dublin City alone. It is calculated that the average amount of milk consumed over the whole city is 3/4 of a pint per day. How many people have no milk? If they had money to buy milk and to buy the produce of the land, would you not have a much greater market for our agricultural products than you have at the moment? Some reference has been made to the question of new industries. In 1926—I think those figures were given already—the net returns from those industries was £9,000,000. In 1936, the net return was £15,000,000. But in that time, while you had 50,000 more people employed, there was a reduction in the amount earned by those people. Many of the new industries have a system by which people are employed for a certain time and are then dispensed with. After that, of course, those people are useless for any other trade or industry. I think that is a matter that would also require some examination.

I referred to another problem in connection with unemployment in this country during the week when I asked the Minister for Industry and Commerce what steps he had taken, or intended to take, with regard to juvenile unemployment. Juvenile unemployment has grown to very serious proportions in this country and it is a problem that will have to be faced very soon. It is a problem that has shown itself in many ways within the last year or so. The solution of that problem of course must be part and parcel of a general scheme for abolishing unemployment in this country. At the same time, I think it is a very serious and increasing difficulty in itself.

Speaking generally on the Budget I do not see—and here is where I find fault with it—that it makes any provision for this great outstanding problem we have in our midst. It makes provision for an extra £1,350,000 for defence. I cannot see that you can put up any scheme of defence that will be adequate for this country unless you intend to make the island a second Gibraltar, and that would cost millions of pounds. I think that if money can be found for defence it could also be found for this problem of unemployment. It is a problem that will have to be faced up to in the very near future. No matter how you may try to stave it off by doles or relief schemes, it is bound to come up again in a very serious fashion. Eminent leaders of the Church have referred to it. They have tried to arouse the public conscience to a sense of the seriousness of the problem but, somehow, the public conscience seems to be dead on that matter.

The Ministerial conscience.

Yes. I do not say that anybody else has the real responsibility for it. It is certainly a serious problem and one that must be tackled on bold lines, but there is no provision for it in the Budget. Unless we are to have a Supplementary Budget later on, it looks as if the position were going to be allowed to drag on. The Employment Order is in operation now and it will knock a certain number off the list so that we shall have a lesser figure shown in the returns. The Parliamentary Secretary to the Minister told us also that he could put hundreds of men to work on employment schemes and that, in that way, he could show a fluctuation in the figures as if constant employment had been secured for these people. No definite plan has been produced to provide employment for these people.

The plan which the Minister for Industry and Commerce said he had 12 months ago has not yet been produced. The problem is even more serious than it was then. At the same time we are told in this Budget that £100,000 is to be taken from the money devoted to employment schemes and £100,000 taken from the money devoted to public works and buildings. For that reason I criticise the Budget because it does not go far enough towards providing a solution of these problems. I am not going to suggest in what way the money for that purpose could be found. That is a job for the Government. They have their experts and their financiers to direct them. I am pointing out that these problems are there, that they must be tackled and that, if they are not tackled, they will have very serious repercussions on the country as a whole.

Eamon O Ciosain

Badh mhaith liom a rádh go bhfuilimid lán-tsásta leis an tiochaid seo. 'Sé bhí in aigne an Áire gan aon éagcóir a dhéanamh ar ghnáthmhuinntir na tíre seo ná ar dhaoine bochta na tíre seo. Is maith an rúd é sin. Tá an-chainnt annso ag teachtairí ón dtaobh eile mar gheall ar an méid atá á chaitheamh againn ar an tír seo a chosaint. Deirim gur maith an rud é sin agus gur ceart an rud é sin. Tá's againn agus tá's aca leis thall go maith gurab é polasaí na neodrachta atá ar bun againn. Ní theastuigheann uainn chur isteach ná amach ar náisiúnaibh eile san Euróip. Teastuigheann uainn ár dtigh féin do chur in órdú agus ár ngnó féin a dhéanamh annso agus leigfimid dos na daoine eile a ngnó san a dhéanamh.

Chualamar a lán cainnte ós na teachtairí ar an dtaobh eile mar gheall ar scéal na Spáinne cheana. Do theastuigh uatha go gcuirimís isteach ar scéal na Spáinne. Níor theastuigh uainn-ne é sin a dhéanamh agus bhi an ceart againn. Do shocruigh muinntir na Spáinne a gcúrsaí féin chun a sástachta féin agus chun ár sástachta go léir, agus fágaimis annsin é. Acht, na rudaí at ag tuitim amach ar fúid na hEorpa agus ar fúid an Domhain go bhfuil costas orainn annso mar gheall ortha, ní'l aon smacht againne ortha. Dá mbeadh déarfaimís leo an t-easaontas do chaitheamh uatha agus dul go síochánta chun na neithe atá ag déanamh buartha dhóibh do shocrú acht, amr a dubhart cheana, ní'l aon smacht again annso ortha. Deirim leis, gurb'é polasaí an neodrachta atá ar aigne againn annseo. 'Sé mo thuairim gur cheart dúinn leanamhaint leis an bpolaisaí sin, acht ar eagla go gcuirfeadh aoinne isteach orainn annseo, b'fhearr dúinn bheith ullamh.

Having said so much in Irish, I now propose to proceed in English. I should first like to correct three mistakes which Deputy Linehan made last evening when he participated in this debate. First of all, he said that I interrupted him and had been interrupting him. In that he made a mistake, because it was not I who interrupted him—it was another Deputy. But I could not blame that other Deputy for interrupting at a point where he made what I call very foolish statements. The same thing was running in my own mind as was running in the mind of the other Deputy and, for that reason, I accept full responsibility for the interruption. For instance, he said, and some of the Deputies opposite also said, that because we did not clap and applaud this Budget when the Minister had read his statement to the House we did not approve of the Budget. Surely that is a childish remark for any responsible Deputy to make. I never thought it was necessary for a person to clap his hands and break into wild enthusiasm to show his approval of anything.

I approve of this Budget—every item of it—and, so far as I know, every Deputy in this Party approves of it wholeheartedly. Of course, I should say that it is not a cause of rejoicing to us or to the Minister to have to impose additional taxation, but it has to be done because of circumstances over which we have no control. We all know that a very dangerous situation exists in Europe at the moment, a situation out of which a major conflagration may occur at any moment. We sincerely hope it will not occur. Even though Deputies such as Deputy Hurley and Deputies on the Fine Gael Benches tell us that that is a matter of no concern to us, that we should mind our own business, and make no attempt to build up our defences here effectively, still we cannot accept that. We have a responsibility to the people of the country to defend our shores if necessary. Our policy is to be neutral if we can. But we have no absolute guarantee that that neutrality will be respected by other nations, and it is our duty to ensure if any aggressive outside nation comes along and attacks the shores of this country that it will not be done with impunity. If we did not do that I believe that we, as representatives with responsibility to the people, would not be worth the freedom we have won.

As I say, it is no pleasure to us to have to impose this taxation. But the money must be got, and I must say that in his endeavour to get the money required the Minister has done his job very well. I know of course that he has put 1/- extra on income-tax. The Labour Party do not complain of that, but it appears that some Deputies opposite do. Would it not be worse if we had to put an additional impost on tea and sugar? I have no doubt that there are some Deputies opposite, and a good many people in the country, who expected that there would be an additional impost on tea and sugar. That being so, it would not have been unnatural to turn to tea and sugar in order to get this additional money. But, because it is the intention and policy of the Minister and of the Government and of the Fianna Fáil Party to be fair and lenient to the poorer classes of the community, no additional tax has been put on tea and sugar. Because of that I can see enshrined in the Budget those principles which should characterise a democratic nation, namely, to be always considerate for the poorer and humbler classes of the people.

The salaried people are called upon to pay 1/- extra in income-tax; but I would say that, for the most part, salaries in this country would be about £200 or £250, and a person with a salary of £200 will only be called upon to pay something like 15/- or 15/6 per year in income-tax. That certainly will not break anybody, nor should it trouble anybody who has the interests of the country at heart, who understands the position and knows very well what the outside position is, a position as I said, over which we have no control, and who understands also that it is the duty of the Government to hold a watching brief and make whatever changes are necessary in the economy and defences of the country in the event of a major war.

I referred to the mistake that Deputy Linehan made when he thought I interrupted. He actually said that I had not read the Budget. I have read the Budget, and I can assure him that I listened to every word of the Minister's statement to the House. But I do not think the Deputy himself was here to listen to the statement—I think he came in late.

I must also say that a Deputy who attends regularly and in time in this House is in a better position to keep himself au fait with the provisions of the Budget than the absentee Deputy who came in late. The Deputy also said that I, and other Deputies like me, would not have what he called the pluck to stand up and defend the Budget. I can tell the Deputy that there is no need whatever to have pluck or courage to defend the Budget, because the principles to which I have already referred, the principle of fair play and the principle of leniency to the poorer classes of the community, will commend themselves to the people of the country no matter what I say, if I were speaking for a week.

Deputy Cosgrave in his statement described this as a popular Budget but a bad one. I wonder can a thing be popular and bad at the same time—can the two things be reconciled? Of course, I know what the Leader of the Opposition meant. He meant that the people would accept, at a certain time, a thing the remote consequences of which they might not be able to foresee, but what is that but a line of political thought that has been advocated and is being advocated in other countries—in other words that the people are not able to decide for themselves or are not able to look ahead? I can tell the House, however, from my experience all over the country, that the people are just as well aware of all those things and better aware, often, than we are ourselves, and that the moment a thing occurs they can realise its significance and foresee the consequences much sooner sometimes than ourselves foresee them. In other words, if Deputy Cosgrave's interpretation of things were to be accepted, and if he came to that conclusion and if other Deputies came to that conclusion, that the people should not be allowed to accept what they think they would like or what they think would be good for them, that would be a form of dictatorship. Surely, that kind of an outlook is not suitable to this country?

Deputy Cosgrave also made references to certain other things. He mentioned, for instance, the taxation per capita in other countries, and he drew a comparison between that taxation and the taxation in this country. Now, I have no reason to doubt the Deputy's figures—I suppose they are correct—but still it appears to me to be futile to present us with those figures without at the same time telling us what is the standard of living in those countries, what developments have taken place there and what developments are taking place in those countries, how those countries are progressing or going ahead, nationally, economically, culturally and socially. If he told us, for instance, what kind of schemes of land settlement are being carried out in those countries and what has been the cost of those schemes; if he told us whether they carry on drainage schemes on a large scale, or whether they carry on peat development of the type that you have at Lyracrompane, in County Kerry; if he told us what kind of schools and public buildings they have in those countries as compared with this country, then we would be in a position to assess those figures at their true value. Without having that information at our disposal, however, the figures appear to me to be of no use. You might as well make a comparison between two hotels, in one of which the tariffs were higher than in the other, and endeavour to show the high-tariffed hotel in an unfavourable light because its tariffs were higher than the other, while at the same time making no investigation at all or no reference to the types of fare provided in both hotels. However, I shall pass on from that and come to Deputy Brennan's contribution to the debate.

Deputy Brennan said that there was an air of gloom over this Budget—an air of gloom prevalent in the House. Well, if there is an air of gloom, it is not on this side of the House but on the opposite side of the House, and it might be that the gloominess we have seen over there during the course of this debate is due to the fact that the Minister has succeeded so well, in the difficult circumstances that presented themselves to him, in balancing the Budget of last year and framing the Budget of this year. Deputy Brennan also made the extraordinary statement that we are doing nothing for the farmers, and he proceeded to dispute the figures that are given here in this White Paper. It is here in black and white that the farming industry in this country is being subsidised to the tune of £10,500,000 as compared with less than £2,500,000 in 1931-32.

Out of public funds?

This is the table in connection with the Financial Statement. I have it here. This year, as Deputies can see, there is also a sum of over £600,000 being given by way of bounties and subsidies, and still Deputy Brennan comes along and tells us that we are doing nothing for the farmers, and he disputes, as I said, the accuracy of these figures. In other words, that is tantamount to saying that the Minister's officials in his Department would present him with false figures. Let us assess Deputy Brennan's statement and his judgment at their true values. He said, for instance, that three-fourths of the agricultural holdings in this country were over £30 valuation. As far as I can make out, there are not one-third of them of that valuation, nor one-fifth over £30 valuation, and still that is the Deputy who comes along and challenges the accuracy of figures that have been arrived at by experts.

Deputy Brennan also made reference, of course, to Deputy Corry's statement last night. I am sure that he interpreted it wrongly. I understood Deputy Corry to say, when speaking about the British market and the home market, that the home market was the best market to develop, and he emphasised that fact. That does not mean that he threw any aspersions on foreign markets, and I quite agree with him that the home market is very important and that we should do everything to develop it. Then, the Banking Commission has been referred to. Of course, we should all attach importance to the findings of the Banking Commission, but we cannot take up the attitude of believing that the members of that commission were infallible. They did not go about their task with the of infallibility, and the Banking Commission Report is being carefully examined, and whatever changes will seem to be necessary, practicable and advisable will be carried out, I am sure. We cannot accept the whole thing as it is, however, without questioning some things in it here and there, and there are different points of view in the country. For instance take this attitude of the Deputies opposite, that we are responsible for a policy of squandermania, as Deputy Brennan called it, while at the same time Deputy Hurley, in a statement right after Deputy Brennan spoke, said that we were too conservative. What, then, is the position? We must only take the middle line and try to strike a happy medium between the two kinds of thought, and that is exactly what we have been doing, what we are doing, and what we shall continue to do.

Derating has been referred to. I am totally opposed to a policy of derating, aside altogether from what one would call a Party attitude. Discussing the matter on its merits—or on its demerits—derating is not a good policy for this country. It would mean relieving the rich of their rates and conferring only a very small benefit on the poor.

Did halving the annuities not do that just as much as derating would do it?

That was a different thing. I have already pointed out that the vast majority of the holdings in this country are small holdings.

But if the large holding is to gain by derating, did it not equally gain by the halving of the annuity?

Derating would have a totally different application in my opinion, but, at any rate, we did a good thing for the farmers when we halved the land annuities.

And we will do a good thing for them when we bring in derating.

Why did not the Deputy and his colleagues take that attitude when they were in power?

We are taking up that attitude and have taken it up.

Did the Deputies opposite not oppose this policy in their time?

Different circumstances require different remedies.

What change has come over the situation?

Because we have had Fianna Fáil finance breaking the farmers. That is the difference.

That is the Deputy's argument.

And it is a fact.

So the position is that you do not give derating when you have Fine Gael finance.

Because the farmer had more money then, and was better able to pay.

As a matter of fact, I listened to the speeches made by Deputies opposite on the Estimate for Agriculture, and they made very little reference to derating at all. The majority of the Deputies completely omitted it from their remarks.

The Deputy has heard it before though, I think.

I have heard many a thing before.

I think a discussion on derating would have been out of order on the debate on agriculture.

The Deputy heard it on Fianna Fáil platforms.

I heard it on more than Fianna Fáil platforms. The first platform I heard it on was a platform of Cumann na nGaedheal, now Fine Gael.

Deputy Kissane must be allowed to finish his speech.

Deputy Brennan also said that the extra 1/- on income-tax would have the effect of stifling business incentive and that people would not be so anxious to carry on or to expand business. Income-tax in England is on exactly the same level, and nobody can tell me seriously that it has any effect of that type over there. He also mentioned that there are 165,000 farmers in debt in this country. Does he blame the Fianna Fáil Administration for that? Could he say how many of them were in debt before Fianna Fáil came into power at all? There were surely a good number of farmers in debt when, as Deputies will remember, the then head of the Government made a futile attempt to get the amount of land annuities being paid to England reduced by £250,000, which reduction he did not get.

Deputy Hurley said we should have a plan for the relief of unemployment. No doubt, the question of unemployment is a matter of grave concern to all of us, but it is a wonder that those people who talk about plans would not put forward some plan in respect of it. If they had the matter at heart and since it is the serious question they say it is, one would imagine they would spend their time in making recommendations to the Government, and in thinking out a plan which they could, logically, if it were a good plan, induce the Government to accept. In all probability, if we did have that plan, we would be accused by the Fine Gael Deputies of squandermania. That is all I have to say, Sir. I am very pleased with this Budget. It is a good Budget; it is a fair Budget; and it is a Budget that will not impose any hardship on anybody. The only people who pretend that it will impose hardship are the people opposite, but they do not believe it.

I intend to return in a moment to the interesting speech made by Deputy Kissane, but before I make any general remarks I wish to deal with one matter which Deputy Kissane referred to. I do believe that Deputy Kissane would not have made the remark he did make about another Deputy, if he had known the facts. He would never have accused Deputy, Lenihan of being an absentee Deputy, if he had known that Deputy Linehan was absent through illness and that his return to the House was, if anything, too early.

I did not say that.

The Deputy described him as an absentee Deputy.

He was absent from the Budget statement.

The Deputy spoke of absentee Deputies and the thing stands. Let me come now to the general Budget statement. Very nearly 200 years ago, a certain King of France, Louis XVI, seeing the revenue of France going down and the expenditure going up, made the cynical remark: "After me, let the deluge come." I am very much inclined to think that the attitude of the Minister for Finance and the entire Fianna Fáil Party is very much the same—after us, the deluge; let us bring in Budgets and deal with the national finances in such a way that they will just last out the few wretched years during which we are in power, and let our successors have the impossible task of putting this country right again. There is nothing in the Minister's speech from which one can infer or hope that any improvement in the finances of the country will come during his term of office. Since the Minister has been Minister for Finance, we have had a steady increase in taxation year after year, and we have, at the same time, a diminishing national revenue. We have no hope, while this Government is in office, of any diminution in our expenditure. If we are to judge the future by the past, as we must, we can see nothing, while Fianna Fáil is in office, but increased expenditure and seeing that their policy is to remain unchanged, we must expect the same fruits, that is to say, a dropping off, year after year, of national wealth. Where are we going to end? What hope has the Minister, what hope has any member of the Fianna Fáil Party, who looks to the future, of this country going anywhere else except into financial collapse? If we are going to go on as we are going, what is before us except the equivalent of national insolvency, and what is the future before this country except inflation of the currency, and that is financial bankruptcy? I cannot see it. There is no hope that I can see of any effort being made to make any kind of economy in regard to reckless expenditure but, on the other hand, we have a country that is daily becoming more and more impoverished.

I hear from Fianna Fáil platforms the cry raised very often: "Ah, but we have improved the social services." Have they? Let us take old age pensions. Have they increased old age pensions? My statement is the very opposite: they have decreased, and heavily decreased, old age pensions. Since the cost of living is at its present impossible figure, since that cost is being kept up artificially by having what ought to cost about 6/- costing the people 10/-, they are in effect reducing the old age pensions from 10/- to 6/-, its real purchasing power. In consequence, I absolutely deny that they have helped by taxation. If they want to help the old age pensioner, let them reduce the cost of living which they have been driving artificially up and up and up. They have run up the price of every single commodity that the poor have got to buy, they have taken bacon out of their reach, made bread almost impossibly dear, put up the price of clothing and practically everything else; and then they say they are benefiting the poor.

In regard to old age pensions the Minister anticipates this year. I gather from his Budget statement, that £60,000 extra is to be spent. Why is that? The law has not been altered. There is no reason why the number of old people should increase, and why is there going to be an increase, in the expenditure? It is perfectly obvious: the old age pensions are going to increase because the means of the people are going down and down and in consequence, the old age pensions must be raised in amount. What other possible explanation is there? I see none.

The increased number of settlements.

The increased number of settlements.

The Minister is getting so poetical, but, unfortunately, there is no reason to anticipate that there should be more this year than last year—they are not coming from a larger population. The population 70 years ago was not higher than the population 80 years ago; on the contrary, it was a lower population.

Deputy Kissane struck me as being rather amusing. I see here a very gloomy Budget, with very heavy increases in taxation. I do not think anybody could regard it as a reason for jubilation: I do not think even the Minister himself could possibly or conceivably deny that this is a very grave Budget for the country to consider. But we have Deputy Kissane full of delight and joy at this Budget. Well, Sir, Nero fiddled while Rome burned, and Deputy Kissane seems to think that Nero was a very admirable person to imitate and he will go and fiddle and fiddle, and I suppose that the rest of the Party will join in the chorus, singing of delight and joy, when they see the finances of this country in the position in which they are.

Deputy Kissane says that it is not our fault if we have to fortify ourselves against foreign invaders. Unfortunately, the Deputy has left the House, but I would like to know how our expenditure on military matters is going to keep out foreign invaders. I would like to ask him how the expenditure of a large sum of money in fortifying Lough Swilly is going to help our defences. What use will it be to fortify Lough Swilly or Cobh and leave Bantry Bay, Killary Bay and Blacksod Bay—or, for that matter. Dublin harbour—unfortified? Is it not perfectly plain that these sums of money are being spent, not for the purpose of defending the Irish coast and Irish harbours, but in order that the British Fleet should have safe ports of call during war time?

It is not the defence of the Irish coast, because if it were would one defend a place like Lough Swilly, with no towns near it? Could the entire sum not be spent rather in defending the City of Cork or the cities of Wexford or Waterford. Why Lough Swilly rather than Bantry Bay? Why Lough Swilly rather than Blacksod Bay? Simply because one suits the British Fleet and the others do not. When it is being fortified for the advantage of Great Britain, why Great Britain should not be asked to foot the bill is something which, certainly for my part, I cannot see.

The Minister, according to Deputy Kissane, has done his job very well. He has put an extra 1/- in the £ on income-tax—and that is doing his job very easily. I would has done his job very easily. I would venture to think that nothing requires less brain-work from a Minister for Finance or from the officials of his Department than to say: "We want money; we will put 1/- or 2/- or whatever it is on to income-tax." It does not require very great thinking or very great exhaustion of brain-power to arrive at that conclusion. There is nothing very ingenious and nothing novel about raising the amount to be levied on income tax. But I do agree to this extent, that, if further taxation has to be raised this year, I do not see how it can be raised otherwise than by an increase in income-tax. That is my personal view, at any rate. I remember it was only a couple of years ago that the Minister told this House that he had taken as much as he could from the rich and that, henceforth the poor would have to bear a larger share of the burden. He put a tax then upon sugar. Now the Minister has discovered that he has put upon the poor, not only as much as they can bear, but more than they can bear, and he has had to go back to the richer class which, a few years ago, he thought were fully burdened. The Minister has got no choice. It is not only that the necessities of life cannot bear more but, I believe that if there were a tax put on tea and an increased tax put on sugar you would have reached what the economists, that Deputy Kissane sneers at, call the point of diminishing returns.

I believe that if you put further taxation upon the necessaries of life you would have reached the point of diminishing returns and that the revenue you would derive from those taxes placed upon the necessaries of life, owing to our present impossibly high scale of living, would yield much less than would be expected.

Deputy Kissane made a very nice little mis-statement, as far as Deputy Brennan was concerned. Deputy Brennan, as no doubt he is perfectly well aware, stated that three-fourths of the arable land of this country was held by farmers over £30 valuation which, I venture to think, is correct. But Deputy Kissane very nicely twisted that and said that Deputy Brennan said that three-fourths of the land was divided in holdings over £30 valuation. In other words, he had mixed up the extent of the land and the number of people. No doubt 75 per cent. of the land owners are under £30 valuation, but the land is the very opposite.

We wandered then, under the guidance of Deputy Kissane, into things which seemed hardly to count. One of them was derating. I will only say, in answer to an interjection by the Minister, who came to the assistance of Deputy Kissane, that when a committee was set up to inquire into the incidence of poor rates and what should be done the position of the farmer was a very, very different position and the condition of the farmer was a very, very different condition from what it is to-day.

He was paying his full annuity then, and the prices for agricultural produce were low.

Does the Minister know the amount farmers had on deposit receipt then and what they have now? Is he aware that it has gone down by half? Does he know that some £75,000,000 has gone down to, I think, £35,000,000? Would Deputy O'Reilly, who knows a great deal about farming, get up in this House and say that the Irish farmers at the present moment are as well off in the year 1939 as they were in the year 1930? He could not. In 1930 who ever thought that there would be such a thing as a procession of farmers through the streets of Dublin?

Do you call that lot of playboys farmers?

Was that done wantonly, or was that done simply because they are finding things going so badly for them that they have to make a demonstration of some sort? There may be playboy farmers and there may be playboy Ministers. I certainly think that the number of playboy farmers, in comparison with the number of farmers, is possibly not at all as great as the number of playboy Ministers in comparison with the number of Ministers. I venture to think that, if a certain Minister, whom I will not name, knew his job as well as the average farmer knows his job, this country would be in a very much better and sounder position financially than she is to-day.

This Budget, according to Deputy Kissane, is a grand Budget. This Budget is a Budget to fill the hearts of the farmers, says a certain paper, because it is such a help to them. A certain Irish daily makes that statement. This Budget is a Budget which shows that, under the Minister's direction of national finance, this country is being bled to death. The Minister has done that with the Report of the Banking Commission before him. Deputy Kissane says they are not infallible. They are not infallible. No men are infallible, but they are the people, some of them of world-wide repute, who were picked by the present administration. You have their evidence. They advised caution. What do we get? We get this Budget, with its increase of income-tax. That is a necessity. I again say the Minister has to tax income. There is nothing from which he could raise his money otherwise. But, remember, income-tax is not merely taking money out of the hands of the present profiteers. It is not taking money merely out of the pockets of the gentlemen that are making very considerable incomes out of the Government policy, who are profiteering enormously, as some are. It is not from them alone or from them even for the major portion that income-tax is being taken. It is being taken from every businessman in this country.

Now, there are two classes of persons, the person who lives completely up to his income, and the person who keeps putting by. In the case of the former, if the income-tax is increased he either lowers his standard of living or else he gets into debt. The other person who has been putting by money, saving up capital to develop, amongst other things, this country—the farmer, for instance, who pays income-tax and who would put by money in order that the might develop his farm, when the income-tax is increased he has not got that money to put by, to manure his farm, to drain it or improve it. Similarly, if a merchant wishes to extend his business he puts by money to do it, but if the income-tax is too heavy upon him he cannot do that and he has to cut down his expenditure. That may mean that he will have to dispense with the services of persons hitherto employed by him. High income-tax prevents the accumulation of national capital, and in a country like ours that is a very grave thing. I am sure the Minister for Finance recognises that, and that it is with no pleasure that he increases the rate of income-tax. He must know that to increase it can have repercussions on classes of persons who are not paying income-tax at all. Deputy Kissane got up and made a statement to the effect that it was to the credit of the Minister that he had increased the income-tax. He said that he had done a good thing. I say, God help Fianna Fáil with that sort of financial ability brought to bear upon the problems of the country.

This is a Budget that ought to make everybody in the country sit up and have regard to the conditions here. I hope that the Minister, seeing the position to which he has brought the finances of the country, will make a complete change of front, and that, instead of plunging the country further into debt, he will do something to put it upon its feet again.

I admit that one of the main duties of an Opposition Party is to oppose. I do not know that I would qualify that in any way. I would not expect them to be constructive to any great degree. At the same time, I think it would be advisable, now that we all have had Parliamentary experience, that the members of the Opposition should use discretion in dealing with matters of this nature.

There are, of course, people who, by chance may pay attention to what is said. Before the settlement of the economic war a great many wild statements were made. I know for a fact that many young fellows and farmers suffered severely by paying attention to those statements made by members of had statements made by members of the Opposition Party to the effect that the value of cattle was going to run up by £5 a head. On the strength of such statements you had many young fellows and farmers buying cattle. In passing, I should say that we still have farmers who have credit. I do not think we ought to forget that. But, while many of our farmers still have credit, many others were induced by those statements to buy more cattle than they ordinarily would buy in the hope that by the time the economic war was concluded they would reap enormous profits. That did not happen of course. As a matter of fact, the members of this Party clearly indicated that that would not be the case, and it was not. As I have said, a great number of those people suffered severely. Human nature being what it is, they were encouraged by those wild statements to speculate in cattle. In the period of depression that followed they lost money and injured their credit. I am not going to say that it was the settlement of the economic war that brought about the depression. I never held that, and I think it would be wrong to say that that was the cause of it. The depression came about because we were in a downward trend. It continued, and the situation was befogged by statements made during the economic war.

This morning I was talking to some farmers down in the Country Meath. They said to me: "We do not mind what is being said up there; we read it in the papers, but do you think it is going to injure our credit or do us any damage?" Those farmers have credit, and, as I have said, there are many such still in the country, men who will get accommodation at any time from the banks. The banks have not dried up entirely as is sometimes stated. I do not think that statements of the kind that we hear from the opposite benches should be made. Personally, I do not mind them being made, but the Deputies who make them should use some discretion, because the people who control credit may be inclined to believe them to some extent. To be candid and honest, I think we should all use a certain amount of discretion in these matters.

Deputy Cosgrave said yesterday that this was a popular Budget but a bad one. I wonder what does that mean. As a rule, the Deputy's statements are well guarded. He does not make wild statements such as lesser members of his Party occasionally do. He is discreet in his statements. That, I suppose, is because of his experience. He knows what the reactions are likely to be if wild statements are made. But that is what he said: that this was a popular Budget but a bad one. I wonder in what way does he consider it bad. Suppose some person came along and read down the list of the services that are being provided by the State. Let me take old age pensions. Is it right to increase the amount under that head? In 1931 the sum allocated to this service was £2,702,318. In 1939-40 the figure is £3,506,000, and so on with the other services. Is there anything in that list that Deputies opposite would like to cut out?

Look at the amount for education and see if there is anything there that it would be desirable to cut. Is there anything that it would be desirable to cut in the development services? House-building also comes into the Budget. Is it desirable to cut down the money needed to build houses, or is the position to be left as it is? Most of the difficulties that we have to deal with, and for which finance has to be provided, arise now because they were not done in the normal way in the past. They have to be done now when times are not good here or anywhere else. All that is expenditure that cannot be avoided, and that is desirable. Many of the difficulties and the disturbances that have arisen in Europe were caused because people did not view the position in the way we are viewing it. Many countries in Europe are absolutely down-and-out. They are suffering from depression of the most venomous character, because they did not take the steps that we have taken. That may seem a strange statement, but it is a true one. The Opposition are entitled to oppose, but let them do so with a little discretion. I listened to Deputy Cogan saying yesterday that the farmers, belonging to whatever organisation he is in, stated that the Department of Agriculture should be done away with. That would save a good deal of expenditure, but I wonder if everybody would be agreeable to that course. Most of us are of opinion that the Department should be toned up and its educational side further increased.

Many people belonging to both political Parties talk freely on that subject, and they are satisfied that agriculture is a highly technical business, and that it is going to be more technical in future. Statements such as I have referred to do not appeal to the average farmer, who realises perfectly well that he must produce milk in a certain condition, that eggs have to be produced to a certain standard, and similarly with butter, so that agricultural production has become a highly technical business. I do not think wild statements get us anywhere. It would be far better that we should take a sensible view of the situation. If some Deputies on the opposite benches decided that these services, the bulk of which are social services, should be cut down would they find any support for such proposal? Not at all. Yet we sail calmly along talking about the farmers. One thing that is very distasteful is the attempt that was made to undermine whatever credit farmers have, by proclaiming their unfortunate position to the world. Everybody knows that large numbers of farmers are in a very unfortunate position. Mention was made of some 5,000 farmers, but I am sure the number affected is larger. I refer to farmers who were unfortunate during the war period and afterwards. At the same time, I do not think there is any use in pouring vinegar into their souls. It would be far better to try to remedy matters and to help them in some way. Large numbers of farmers in this country are men with credit and we should not damage their position. Let the men who can keep going be given every assistance. For God's sake do not publish the misfortunes of farmers who happened to be caught in a financial system that, I suppose, did not know where it was going, and over which they had no control. I think the position can be righted. These men cannot work under the conditions in which they were left. Instead of attempting to demoralise those who are working, many of whom are struggling energetically against big difficulties, we should not injure them in any way by making wild statements. In to-day's newspapers I noticed a letter from a firm of bacon manufacturers concerning some statements that were made here. I do not know who made the statements, but they did not seem to be statements in keeping with the dignity of this House. Is it not possible to stop them? These things should not be done, because they injure the credit of the community. In this case the firm were Irish bacon manufacturers. Why should statements that are not true be made if they defame people, and consequently injure the good name of the country? One would assume from some of these statements that we are a dishonest nation. I believe everyone should face up to the position, and criticise every single item, but while not expecting constructive proposals, I suggest that there is no necessity whatever to damage any section of the community.

One of the most remarkable things about the Budget, in my opinion, is the manner in which it was received in this House. Notwithstanding what Deputy Kissane said to-day when he accused Deputy Brennan of saying there was no enthusiasm here for the Budget, there was a remarkable absence—I will not say of approval, because I expect the majority of the Government Party approve of everything the Front Bench does—of the enthusiasm that we were wont to have when the Minister for Finance brought forward his annual Budget. It was the same thing to-day, inasmuch as an attempt was made by a Deputy to lead the applause, but he could not raise a cheer. To-day Deputy Kissane cast his eyes round the limited number of enthusiasts of Fianna Fáil present to try to get them to back him up in some measure of enthusiasm for the Budget, but he failed. The Deputy said that there was gloom on this side of the House. There is gloom outside this House because of the Budget. There is gloom also on the benches behind the Minister about the Budget. Deputies behind the Minister are so gloomy that there are only four of them on the Fianna Fáil Benches for the last half-hour to listen, even to members of their own Party, making some sort of defence for the position that necessitates this Budget. Two of the most prominent questions that will be discussed on the Budget concern agriculture and defence. I do not intend to say much about defence, but it is a godsend to the Minister. He is able to say when producing this Bill of £35,000,000 or £36,000,000 to the people that it is caused by the necessities of the European position. If he has, perhaps, to raise a share of the money for defence, the amount he is raising does not account for the financial burden that the people are being asked to foot, and does not account for the position into which the great bulk of the people have been put by the operations of this Government during the last six or seven years.

Reference was made to the economic war and its effects upon this country. There were different views on that, even amongst members of the Fianna Fáil Party. The Minister for Education said that they were tired of hearing about the economic war, that we blamed everything that had happened in the last four or five years on the economic war, and now that the economic war was over it was illogical for us to refer to it further as being the cause of the bill we are asked to meet in this Budget. There was a different view from another prominent and coming member of the Fianna Fáil Party—Deputy Childers. Deputy Childers held that we did suffer from the economic war and he added that we are still providing for the effects of it. It was, he said, provision for the effects of the economic war rather than provision for defence that had landed us into the mess in which we now are. The Minister for Education dwelt at length on the position of agriculture. I suppose it is necessary for some of us to follow him in that regard, even though we had a debate on the Agriculture Vote within the last week or so.

Some of the Minister's references to the speeches from this side call for comment. He quoted Deputy Cosgrave as saying that the young men were leaving the country because of the cost of production of agriculture, and he went on to review that statement and to say it was not true. He added that there might be other reasons, but he did not mention any of them.

He did mention the cost of production.

Yes. We are told that "there is a dislike for work among the young men of the country and we have got to change that outlook." That was one of the causes—that there was a dislike for work. Nobody likes work very much. The majority of people in this State, or in any other State, who have to work want to work as short hours as possible and get the largest wages they can for the hours they do work. It is because the unfortunate sons of farmers are compelled to work for nothing that they have this dislike for work which the Minister for Education said they had. If the Minister for Education or any other Minister or Deputy were placed in the position of an unpaid worker on a farm, he would quickly develop a dislike for work and go elsewhere where, if he had to work, he would get paid for it. The Minister went on to say: "If they do not go away, where are we to find employment for them?" We had that declaration from a prominent member of the Government last night. What a change! It is a pity that the Minister for Industry and Commerce was not at his side when he made that statement last night. He might have thought back seven years and remembered where, he was then of opinion, he could find work for them. I do not want to misquote the Minister for Education but, to my mind, he inferred that people must get it into their heads that the standards under which they are living must be reduced. If that is the only hope the Minister for Education can offer the unfortunate agricultural community, it would be better he had never spoken.

Deputy Childers was rather more sympathetic to the agricultural community than was the Minister for Education. Deputy Childers did believe that the people suffered during the economic war and are still suffering from the effects of it. He added, however, that if it were not for the political passion engendered in the discussions on the economic war, we might have come to recognise it as something similar to the crisis that occurred in the U.S.A. in 1929 or in New Zealand or other countries. Unfortunately, we cannot look upon it as a crisis similar to what occurred in America. Ours was a deliberately-created crisis. It was the result of a policy deliberately prepared and put into operation by the Government and they alone must accept the responsibility. We suffered for five years owing to that policy. For five years, tens of millions of pounds were taken out of the pool of agriculture. The taking out of these tens of millions necessitated the expenditure of numerous other million from State funds and in other ways to help the people for the loss of these tens of millions. Because of these two things, we have come to a stage when an annually-increasing Budget is necessary.

Deputy Childers, as I have mentioned, says that, except for Party passion, we might have looked upon the economic war as an ordinary crisis. Is it unnatural that, considering the conditions under which the great bulk of the people were forced to live in these five years, there should be vehement criticism, as there was, of the Government and its policy during that period? One Deputy said that we did not give the Government credit for the numerous things they did for the people during the five or six years that have passed. We did not extend to the Government any great credit for the attempt they made to cover up their own mistakes. They ought not to expect credit. We did expect them to make a larger measure of compensation for the losses they inflicted on the people than they did make. Our expectations are not yet fulfilled in that regard and there does not seem to be any great prospect of their fulfilment. We are referred by the Minister for Finance, the Minister for Education and practically every other would-be backer of this Budget to the tens of millions given to the farmers as revealed in that gem—Table 8.

They have the audacity to ask the people to believe that a sum of £10,000,000 has been passed on to help agriculture. What proportion of the £10,000,000 is coming out of the bills which the Minister is now presenting to us? The largest item is the provision for the wheat subsidy, £1,900,000. We have always argued that the sum that people generally paid towards the wheat subsidy was well over £2,000,000, but the Minister has now placed it at £1,900,000. It is not provided by the Exchequer, but it is one of the things that we derive from the ad hoc legislation of the Government. Do the wheat growers get benefits to the extent of £2,000,000? We are told that it is devoted towards that purpose. Will any Deputy who understands anything about agriculture be prepared to tell me that the wheat growers get £2,000,000 by way of benefit? There are about 200,000 acres of wheat grown in this country. Will any Deputy say to me that if the Minister for Finance or any other Minister declares that they will pass on £10 an acre to wheat growers, that they would not be prepared to accept it joyfully as something great from a benevolent Government? I know they would be glad to get it, but they do not get £10 an acre or anything like it; they do not get even £3 an acre. I do not want to get into an agricultural debate. If I did, I could definitely prove what I have said. Any Deputy who desires to go into the matter will ascertain that there is not £2 or £3 an acre to be got out of the growing of wheat.

If the Minister wants to help wheat growing properly he could do it at much less than £10 an acre, much less than £2,000,000. If he gave a direct subsidy he would get a lot of it grown. If the Minister would offer a direct subsidy to the farmers of much less than £10 an acre he would get a lot of wheat grown. He did not offer any subsidy except for a while, but he did make the people pay the subsidy through the nose or, rather, through their mouths, in their bread and other things. It was bad enough to mulct the unfortunate people through their flour and bread in order to find the millions for the development of wheat growing. Incidentally, a great proportion of that money went into the pockets of people who were benefiting on a greater scale under the Minister's development of the wheat industry. One would not refer to that matter so much if the Minister had not the audacity to put it in a White Paper as one of the things that in this Budget he is providing for the people.

The same applies to beet. There are 50,000 acres grown in this country, and if the Minister presented anything less than the £20 an acre that it would seem to be costing, he would have a lot of people growing beet. The Minister is not presenting £20 an acre, although he attempts to bamboozle the people into that belief. He is again making the unfortunate consumers foot the bill in regard to beet growing and sugar production to the extent of something like £20 an acre on the acreage grown. That £20 an acre is not reaching the growers of beet. I can say practically the same thing as I said about wheat. If the Minister were to offer a much less sum than £20 an acre he would get all the beet he wanted grown. Practically the entire sum of £10,500,000 that the Minister says is being given for the benefit of agriculture comes from every source but direct taxation. While we are on that subject, it might be of interest to some Deputies on the Government Benches to remember— and this brings it forcibly to our minds in connection with the advantages which the farmers of the country are supposed to be receiving from this beneficent Government—that to the £35,000,000 of taxation there ought to be added the many more millions that the people are indirectly bearing and which the Minister attempts to hide from them.

Now, let me say something as to the method in which the Minister proposes to find the money. During the past five or six years he has found it necessary to increase taxation. This year the sole defence which the Minister made in regard to his Budget was that there is an unfortunate development in other parts of Europe which necessitated raising our expenditure this year. The unfortunate situation in Europe has been a blessing in disguise for the Minister, because it has kept back much of the criticism that would have been levelled at him if it were not for the international situation. But the international situation need not have caused the people of this country the anxiety that apparently the Minister would like it to cause them. I think the Minister said we were spending £5,000,000 on defence—that we proposed to spend nearly £5,000,000 one way or the other. Even if we do, what contribution are we going to make to the defence of Europe? Might we not just as well have left it alone?

What contribution can we make towards the defence of this country by an expenditure of £5,000,000? So for as preventing any enemy who wanted to come in here, or attacking any enemy, is concerned, the expenditure of £5,000,000 would be just as effective as the expenditure of 5,000,000 halfpennies. The Government know that, but they have not the courage to say it. We could preserve our neutrality, if it has ever to be preserved, with our ordinary little Army, just as well as with the proposed extension of that Army. Either would be equally ineffective. I am not saying anything derogatory of our present small Army. They are perfect in their way, but as an effective machine to preserve this country, even if the proposed additions were made, they would not serve a useful purpose. For all the good we are going to get out of the millions we propose to spend, we might as well leave the money unspent. If this country is going to be preserved, much as I dislike saying it and bitter as it is to swallow it, we will have to depend for our integrity as a State, not on any Army that we can reasonably organise, but on the goodwill of our neighbour across the water.

The Government have taken out of the pool of wealth in this country in the last five or six years tens of millions of pounds. These millions have been taken out of the pool of agriculture, or rather if one puts it the other way, the Government have prevented those tens of millions of pounds from coming into the pool. But millions of pounds have been spent in these five or six years in trying to off-set the position created. In the name of goodness, how could it have been otherwise, and why should we not have arrived at the position which we have reached? But is it not time that there should be some effort made to resuscitate and fill the pool that is now empty? One would have thought that there would be some effort made to reduce the annual burden placed on the people, particularly on the people who have lost the greatest portion of their wealth in the five or six years of the Fianna Fáil Government.

Now I come to a few quotations of what was said in the House as to the incidence generally of taxation. We come to the point where the Minister proposes to tax the people in different ways. Deputy Childers told us the maximum we can eat into our resources without the danger of financial breakdown. Quite true. But in God's name, how long? The Minister himself on another occasion said that taxation and the general charges on the people went down to the very poorest of the people. In the Minister's beautiful phraseology—and nobody can phrase a sentence more beautifully than he can—

"The incidence of taxation is rarely restricted to those on whom it is imposed, for it is passed on in the general social scale until ultimately all the burden is transferred to the producer and wage-earners."

I offer the Minister's maxim to-day to the back benchers of the Government Party.

One would gather that in this matter of the increase of income-tax the Minister hopes that the country will believe that the incidence of that income-tax is only going to fall on the rich and that they will forget the maxim so beautifully phrased by him that any tax cannot be imposed on the rich or on any other section that will not be passed down and down the social scale until at length it gets to the man that Deputy Hurley represents. Of course it will. Every man who is in touch with reality knows it will be passed down. The Minister for Industry and Commerce knows it better than any man in this House and I am sure he regrets it more than any man in this House. The Minister is a shrewd man and he knows the probable—I will not say the possible— effect it will have on very many of the Minister's own pet activities.

Now I come to the petrol tax. Some of the Deputies appear to think it is only a tax on the rich. Of course they tell you that the incidence of that tax will not get beyond the rich. It will not be passed down and down the social scale until it reaches the poorest. They appear to think it will not have any effect on transport fares. Of course it will not have any effect at all even on the indirect cost of commodities! That will be the argument from the Government side. The argument is, of course, that merchants whose expenses are to be increased because of the increase in petrol and oil, will not pass on these increases. They think, of course, there will be no effort made to pass on that tax to the consumer. But does any Deputy really believe that? Does any one of the silent enthusiasts on the Minister's side of the House believe that? Not one.

We come now finally to the one tax that might possibly be called the poor man's tax, that is the increase on the duty on tobacco. Of course, it will not do to call the tobacco tax a poor man's tax. It is, therefore, to be called a luxury tax. It is a tax on luxuries. From what we can hear we may take it that putting a tax on the portion of tobacco that might be called a luxury is not to be regarded as putting a tax or increasing the tax on the poor man. But the cost of common shag or plug that the poor man uses is to be increased. The chances are that the increase in the price of tobacco is not to be limited to the 8d. a lb. that the Minister has put on it. I am quite sure that in some districts in this country, and I will not say the remote districts either, it will be found instead of a ½d. an ounce extra being put on the price of tobacco, as much as 1d. the ounce will be imposed on the purchaser. That is a commodity that has almost become a necessity for the working man. One may call tobacco, in the case of certain people, a luxury. I do not refer to well-off people who can enjoy their cigar or cigarette, but when one comes to the case of the working man down the country, or the small farmer with a holding of five or six acres of land who works 14 hours a day, one will find that the probability is that his only solace in this world is the pipe. Deputy Meaney smiles because he agrees with me. Bad and all as the Budget is we might have suffered it with satisfaction—perhaps I should not say satisfaction, for it would be impossible to suffer anything with satisfaction. What I mean is that we could have borne it if we could take into account and bear in mind what the Minister said at the end of his Budget speech. Here are his words:—

"Stringent and straitened as our position is, I believe that we can endure it so long as peace is maintained."

We can endure it! Stringent and straitened as it is we can endure it if peace is maintained. And if war comes or if there is any disturbance in Europe, God help you. These are the words of our Minister. If peace is maintained, "stringent and straitened as our position is," the Minister believes we can endure it. He is not certain that we can endure it. But "stringent and straitened as our position is," owing to his policy and the policy of his Government, there is a hope that we may be able to endure it, but only a hope. That is the prospect that this Budget offers us.

I am sorry I cannot congratulate the Minister upon his Budget. I do not think the old age pensioners will congratulate him either, because one of the sources of the old age pensioner's comfort has been his half-ounce of tobacco, and the tax on this will hit the very poorest. I am sure the ordinary employer will not congratulate the Minister because he will have to face more expense; the employee will not congratulate him because there will be less employment for him. The people of the country will try to curtail expenses and to curtail employment as much as they possibly can. The ordinary commercial trader in the country will not congratulate him, because his income-tax is now more than one-fourth of his income, while the tax on petrol will make it necessary for him to increase the price of every article he sells. The agricultural community will certainly not congratulate him because they will be very much disappointed at not having got some concession. We thought, perhaps, that the Minister would fore-stall the commission which is sitting at the present time, and allow us something off the rates, but, as far as we can see, the rates are increasing. Judging from the papers this morning the rates in Galway have increased by 2/9 in the £, and are now 27/9. If the valuation is increased I do not know where that will end.

I do not know what we are going to do with regard to taxation, but I think the last straw has been put on the farmer's back. I do not think he can bear very much more. The taxation is not only direct but indirect. We now have to pay almost 100 per cent. more for machinery and similar goods of that kind than we paid in 1914, due to tariffs. Owing to the economic disturbance the farmers have no capital left. Everyone is aware of the fact that before the economic war the farmers had large deposits in the banks, but those were withdrawn during the economic war. I do agree with my friend Deputy O'Reilly in some of his views, because I think there is a great deal of commonsense in them, but I do not agree with him when he says that the farmers who purchased cattle did so at the wrong time, in order to capture the profits which were to be made at the settlement of the economic war. The farmers who purchased cattle on that occasion were misled. They thought there was going to be a complete settlement, and that the cattle would be allowed into Great Britain and Northern Ireland free of tax. To a certain extent, they are allowed in free, but the cattle are earmarked going in so that they have to be kept at least three months in either Great Britain or Northern Ireland before they get the subsidy which the cattle reared in Northern Ireland get without any delay. Not only that, but the cattle going in from here get only 5/-, whereas the cattle reared in Northern Ireland or Great Britain get 7/6. That has a considerable lot to do with our farmers not getting the price they anticipated at the settlement of the war.

As I say, the farmers have not got the capital to carry on at the present time, and, notwithstanding what my friend, Deputy O'Reilly, says, the banks will not advance money to farmers. I have experience of dealing with them, and probably know as much about them as any other Deputy in the House, and I know it is impossible to get money from the banks unless they get some collateral security. The traders will not give credit to the farmers for the simple reason that they cannot get it themselves. The fact that we in this country have practically no bankrupts—we had not a bankrupt in County Cavan for the last four or five years—shows that the traders are not getting credit, and consequently the traders are not in a position to give credit to the farmers. It was suggested here yesterday that the remedy for that would be to have land banks under the control of the Government. I do not know whether the land banks would be as effective as the Agricultural Credit Corporation, but if they would not be of any more benefit than that I would say, "Do without the land banks." My experience of the Agricultural Credit Corporation is that unless a man had money to lend, and was willing to gamble on the prospects of being able to relend it at an advantage of 1 per cent. or 2 per cent., it would be very little use for him to make an application to the Credit Corporation. I have brought several cases to the notice of the Secretary of the Credit Corporation, and asked him to consider them. I have pointed out that those men were industrious farmers trying to carry on as well as they could, trying to educate large families, trying to pay their way and intending to pay their way, and yet their applications were always turned down. The fact of the matter is that at the present time I would not advise any farmer to make an application to the Agricultural Credit Corporation for the loan of money. We had a man in County Cavan some years ago who belonged to a certain organisation, and the saying was: "Give me 1/- and I will give you a farm." The Credit Corporation would say: "Give me 1/- and I will get you a deposit." They have to get a 1/- first of all before they will reply, but as a rule the reply is very unsatisfactory.

I think it is a sad state of affairs to find the Minister for Finance lamenting on the expenses we have had, and what may happen if we have a great war. Statements like that do not help the pessimists whom we have in the country, and we have a good many of that class. We have a good many people who will tell you that we cannot carry on under present circumstances, that the present rate is intolerable, that we are doing nothing but increasing the number of jobs and consequently the rates. I do not know whether very many of the Deputies here now will remember that in 1924 the British House of Commons was in something the same position as we are in at the moment. They found that their expenses were more than was reasonable. A commission was appointed to inquire into those expenses and see what could be done. I remember well that in this House in 1924 the late Deputy Bryan Cooper suggested that we should try and get another Geddes to cut down the expenses. At that time our expenses were millions short of what they are to-day. I would suggest to the Minister that we should try and get another Geddes' axe to cut down some of the enormous expenses with which we are burdened at the present time. Deputies who are members of the Public Accounts Committee will realise that there is a possibility of cutting down a lot of our expenses. I am sorry our Budget has not worked out better than it has, but I suppose it is the best we could do at the present time. There are many difficulties, I admit, but I think the Minister will find that the farmers are getting to such a position that they will not be able to pay their annuities, that they will not be able to pay their taxes or rates, unless something is done to help them.

This debate upon the Budget has proceeded since yesterday in an atmosphere of unreality. Nine out of ten speeches which were made from the benches opposite were similar to that just made by Deputy Cole, a speech in which in one and the same breath he deplored the imposition of new taxation and called for fresh expenditure. This State is a business concern, not a philanthropic institution. It has got to be run on business principles.

It is nearly time it was.

I did not expect to convince Deputies opposite of my point of view so quickly. I am glad they are beginning to appreciate the necessity for applying business principles to the problems of the State. They have not done so in their speeches here to-day. It is a business principle that we have got to pay our way. We cannot plan to spend what we are not going to get. Is that agreed? If Deputies are agreed on that we can proceed on the basis that this Budget must balance. Against every expenditure we plan to incur during the year we must get revenue. There is no possible main source of revenue except taxation, apart from the one or two minor sources of income which are referred to in the Budget statement. If we are going to spend more we must tax more. Is that not agreed? When Deputy Cole demands an increase in the Agricultural Grant he means that we must put more taxes on the people, or a section of the people, in order to pay out an additional allowance against agricultural rates to holders or occupiers of agricultural lands. There is no gold mine under Government Buildings to which we can go down with a shovel and dig up gold for the purpose of increasing the Agricultural Grant or giving more concessions to farmers.

Wicklow Gold!

He is back from America.

There is no other source of money except the taxpayers of the country and the taxpayers of the country can only pay us money to the extent that they produce by their own labours. If these facts are agreed —and I cannot imagine any Deputy getting on his feet to contradict them —then we can proceed to consider the Budget and the problems associated with the Budget, the problems of financing the country, in an atmosphere of reality that we have not reached yet. We have got to pay our way. It is essential that we must pay our way if we are to preserve the credit of the State. We must provide in the Budget for the ordinary recurring expenditure that is going to be met by revenue raised within the year. The preservation of the credit of the State is most important and the future of development of the State depends upon it. A great part of our future development depends on the willingness of people in this country to entrust to the State their savings or their capital for expenditure upon capital undertakings.

And the State is going to be the developing machinery.

It does not matter whether the State is going to undertake all the capital expenditure which the future development of the country requires or whether private companies or private individuals are going to undertake that expenditure. Unless there is confidence in the State, in the credit and the stability of the State, that money will not be available. It will be invested abroad in British concerns, in American concerns, or in South African concerns. It will be put into investments in other parts of the world unless we pay our way and make this State creditworthy. That is why we must balance the Budget and pay our way That is why we must put against every single item of expenditure upon which we decide a new tax to bring in the new money required.

We must live within our means.

Exactly.

Start on that point.

I prefer to start at the point I have chosen and which Deputies have been avoiding up to now. We have had the usual flood of talk from benches opposite characterised by one normal feature, the careful avoidance of facts. I do not know how Deputies can have the patience to listen to all that talk if they fully appreciate the business principles upon which this State must be run. We must run it as a business concern. We are here as the representatives of the shareholders in that concern, dealing with the annual balance sheet, the annual profit and loss account.

The shareholders of any business concern would not stand for a balance sheet of that kind.

If the Deputy will wait awhile I shall deal with that matter. I invite the Deputy to say how we are going to meet this expenditure other than by imposing taxation and getting revenue from taxation. If Deputies can tell us of a gold mine which we could appropriate for State purposes, from which bars of gold could be dug out for the purposes of financing all these activities of the State, it would be very useful. In the absence of any gold mine from which we can get these gold bricks for State purposes, the only source of revenue is production. We can only increase the tax-bearing capacity of the State if we increase production. The whole aim of Government policy, therefore, must be to stimulate production and in order to stimulate production it is necessary to appropriate for the purposes of the national Exchequer some part of the existing national income so that it can be wisely expended on common national purposes, that private individuals would not undertake. That is the whole basis of government.

No Government imposes taxation because it likes doing so. Deputies can take it for granted that there is no enthusiasm on the part of Government Deputies, or on the part of Ministers, to impose taxation on anybody, but we are faced with the obligation of finding in this year revenue from some source that will be sufficient to cover the expenditure that we contemplate will take place this year. That is the purpose of the Minister for Finance when he frames his Budget. That is what the Budget is for. The Budget is a statement of how the Minister for Finance proposes to get revenue that will meet contemplated expenditure. Any money that goes into the Exchequer comes out of it. It does not go into the Department of Finance for the purpose of being destroyed. It is not stored there in a tin box upon which the Minister for Finance sits and to which he refuses access to anybody. Every halfpenny that comes in goes out and it goes out for one or other of three main purposes: either to defray the cost of providing the machinery of government—the police, the courts, the Civil Service—which is necessary if ordinary life is to be maintained here; it goes out to finance social services, that is to say, services that we have created in order to protect individuals against, the possibility of destitution arising from old age, from ill-health or unemployment, from widowhood or orphanhood or some other cause outside their control, or it goes out to finance special schemes upon which the Dáil decides and which, in the main, are schemes for the benefit of agriculture.

Now, Deputies who, in the course of this Budget debate have suggested or urged that additional expenditure should be incurred either for the benefit of agriculture—that has been the usual suggestion—or for the benefit of the unemployed, for the benefit of some other section of the community or for some other national purpose, have surely upon them the obligation to say at the same time how the money required to meet that expenditure can be got, whether it can be got from a tax on sugar, a tax on tea, a tax on petrol or a tax on incomes or from some other source. It has got to be found in some way. It cannot be manufactured. It cannot be got by merely imagining its existence. We must take the cash in before we can pay it out. Deputies who are demanding that we should pay out this year more money than we are budgeting for must be prepared to face further taxation to meet that expenditure, if they are sincere. I do not think they are sincere. I think they have been talking humbug, and fraudulent humbug. I think they are trying to "cod" the people.

In this country there is one duty devolving upon the Dáil which is more important than any other, and that is to make the people realise what precisely the functions and the obligations of government are. In Great Britain they have had self-government for 700 or 800 years. In France and America they know by the experience of generations how government works. In this country we have not had the experience of a generation yet, and the people have not begun to realise fully that the financing of Governmental activities means taxation. There is, however, on the Government, and particularly on the Minister for Finance, an obligation to impose whatever taxation is necessary in the manner that will least interfere with the normal functions of business and press least heavily on the community as a whole. When we choose one tax instead of another, when we decide to put a tax on petrol instead of sugar, when we decide to put a tax on tobacco instead of on tea, or when we decide to tax incomes instead of putting a tax on some commodity of ordinary consumption, we do so because we think that is the easiest way of taxing the people, not because it is going to bring in any less or any more money, but because the total amount required will be got with the least difficulty from the point of view of the ordinary person by this means rather than by some other means.

Deputies have a right to criticise the Budget if they think the method adopted for raising the taxation required could have been improved. If they can suggest a form of taxation which will bear more easily on the people, we are prepared to consider their suggestion. If they think we would be better advised to tax tea and sugar rather than incomes, then they can put forward their reasons and we can consider them. One thing they must not say, if they are sincere about the fulfilment of their duties here, is that we should avoid that taxation unless they are prepared to submit suggestions to decrease the expenditure which, in their opinion, should be avoided. We can reduce taxation by reducing expenditure. We can go through the list of supply services, as they are called, note the various matters upon which it is proposed to spend some of the money, and decide that certain expenditure will be cut out altogether in this and future years. By so doing we can reduce the amount required to be taken from the people in tax revenue and thereby remit or reduce certain taxes. There is no other way.

If the Deputies will go through the supply services they will see that there are many of them that cannot be avoided. We must have a police force, we must have law courts, we must have the institutions which the Department of Finance maintains for the handling of national revenue; we must, I presume have a Department of Agriculture; we must, I presume, even have a Department of Industry and Commerce, we must have educational services; all these are necessary if government here is to have any meaning at all. We might save a little on these. We could reduce the salaries of civil servants and, possibly, reduce the number of civil servants. But the amount that would be saved in that way would not be very great, and the difficulty of discovering sources of economy along that route would be considerable. But I am prepared to agree, and I am sure the Minister is prepared to agree, that economies of that kind, if they can be procured, should be procured. That is the type of economy which occurs to everybody.

But, leaving aside these normal functions of government, and turning to the other purposes on which the national revenue is expended, we find that there are in fact many services upon which substantial savings can be made if we think it is good policy to make them. If we want to save £1,000,000 we can do so by sacking a clerk here and a clerk there, or curtailing the use of notepaper, or even by reducing the salaries of some of the officers of these Departments; we can save it on old age pensions; we can save it on unemployment assistance; we can save it on employment schemes; we can save it on the agricultural grant; we can save it upon a number of these services which have been instituted directly for the benefit of particular sections of the people. Our predecessors, faced with the situation we are faced with now, saved by cutting old age pensions. They thought it was better policy to reduce the amount given to the old age pensioners than to impose new taxation. We could adopt that course if we thought it was good policy, but we do not. We think the amount which we are taking from the people of the country for the purpose of financing these services is not excessive; that, in any event, these services are necessary; and that the imposition of taxation upon incomes for the purpose of financing these services is no more than a distribution of the national income so as to ensure that there will be a fairer relationship between the standard of living of one section of the community and another. Nobody here will suggest seriously that we should seek to balance this Budget by reducing unemployment assistance or old age pensions or widows' pensions. It has not been suggested. We could do it in that way; but if we are not prepared to do it in that way, we must be prepared to do it by imposing taxation. That is the one outstanding fact that Deputies opposite are trying to avoid dealing with in the course of the discussion.

In this particular year we have to impose new taxation. That new taxation is necessary partly because of an anticipated decline in yield from some of the existing taxes. We anticipate a smaller revenue from customs duties this year. It is to be expected that with the growth of industrial and other production here, the yield which we get from customs duties imposed for the purpose of protecting industries will decline. In so far as we are imposing new taxes for the purpose of making good the anticipated decline in customs duties or some other taxes, we are not increasing taxation; we are merely transferring the incidence of the tax from one source to another—the total amount received is not increased. But we are in this year budgeting for an increase of expenditure also, an increase of expenditure mainly on defence. It is the easiest thing in the world for Deputies to say, as Deputy Bennett said, that expenditure upon defence is no good; that the amount which we can afford to spend upon defence is so small that the defensive measures which will result will not be effective, and we should leave ourselves defenceless, because that is the essence of his proposal. If we should not spend £5,000,000 why should we spend £2,000,000? If £5,000,000 is not sufficient for effective defensive machinery £2,000,000 is insufficient; and we can afford to save the whole lot if we are prepared to leave ourselves completely without means of defence.

It is easy for Deputy Bennett, who has no responsibility, not even to himself, apparently, to make a suggestion of that kind. He has not to deal with the very serious problems which may arise if a situation develops in Europe such as is feared—a war situation. Does any Deputy seriously believe, having regard to the geographical position of this country, that the development of a war situation in Europe will not mean that this country will be defended by somebody? If we do not defend it somebody else is going to defend it. Do we want that? There may be some Deputies opposite who would prefer to see the British Army occupying this country for the purpose of defending it than that we should spend money for the doing of it ourselves.

That is what will happen with the £2,000,000.

We must, to the limit of our resources, adopt whatever means are open to us to avoid that possibility arising. I put this as a serious proposition to Deputies, and I ask them to consider it seriously: Is it not worth while going to the bottom of our pockets if necessary in order to ensure that a situation will not arise in which it will be obvious that we are incapable of defending this country?

Deputy Belton wants the British to protect us.

The Deputy who does has an opportunity to say so, and if he can get a majority in the House to agree with him we can save a certain number of million pounds which we are now allocating to defence. If we do not want that, if we want to see the defence of the country undertaken by ourselves and nobody else, if we want that defence to be at least sufficiently effective to make it impossible for any one else to say it is not effective, then we have to pay for it. If we have to pay for it, we have to impose taxation for the purpose of getting the money.

I move to report progress.

Progress reported: Committee to sit again on Tuesday.
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