I move that the Bill be now read a Second Time.
I regret that it is necessary to approach the Dáil to continue the powers granted under the Supplies and Services Act, 1946, for another year. I had hoped that three years after the end of the war it would be possible to abandon the exceptional powers conferred on the Government by this Act Unfortunately, although there has been some improvement in the supply of various goods the position has not improved to such an extent that supplies are sufficient in all cases to meet present demand. Therefore it would not be possible to abandon rationing and controls in the case of a number of commodities as derationing would inevitably lead to some persons being unable to obtain minimum supplies of essential foods and possibly to increases in the cost of these goods with a corresponding increase in the cost of living.
Even where supplies are abundant at the moment, it is necessary to have regard to the disturbed international situation, with its possible repercussions on future supplies. This entails building up of reserve stocks and the retention of controls so as to ensure that reserves are not dissipated.
In some cases a world shortage of goods exists but even where there is no such shortage difficulties arise in connection with the purchase of needed commodities. Most surplus goods are in the hard currency areas and, in view of our limited supplies of such currency, we must take steps to confine our expenditure to goods which are absolutely essential. Accordingly even if world supplies of a particular commodity are plentiful it may be necessary to restrict consumption here so as to avoid expenditure of hard currency which is required for goods which are essential.
In addition to direct control of goods it is necessary to retain the powers in connection with price control. There have been certain reductions in the world price of a number of commodities, but in many instances prices continue to be greatly in excess of the level in 1939. The existing wholesale price index is 233 as compared with 100 in 1938, and the import price index which was 89 in 1938 is now 238. It is evident, therefore, that the general price level continues to be abnormally high and that the danger of inflation exists. If control were discontinued in relation to profits and prices the likelihood is that prices would advance still further and that the economic structure of the State would be endangered. Any further increases in the cost-of-living index which is 80 per cent. above 1939 must be avoided if possible. The increase is attributable very largely to the increase in the price of imported commodities over which we can exercise no direct control, but a certain proportion of that increase is also due to internal causes.
The Government is determined to resist any tendencies which will have the effect of increasing the cost-of-living. An increase would have the effect of depreciation in the real value of salaries and wages and would, in all probability, give rise to further demands for increases in wage levels which would again lead to further increases in price levels. In all these circumstances I can see no prospect of being able to relax price control for some considerable time to come. The experience during the prolonged period of Orders made under the Emergency Powers Act indicated that in many cases the Orders made to meet emergency conditions were suitable for incorporation in permanent legislation. Many of the Emergency Orders have now been made permanent by legislation and all Departments are at present examining the situation to see what permanent legislation can be promoted which will incorporate Orders that are required. In due course the proposals will be laid before the Dáil in the form of Bills and full opportunity will be available for discussion. There will still, however, remain large numbers of Orders which are only required to meet conditions of a temporary nature and so long as these are required, it will be necessary to ask the Dáil for the powers contained in the Supplies and Services Act.
I think it would be desirable at this stage to give the members of the Dáil some indication of the position as regards the more important goods which are subject to rationing or control. There is no prospect of supplies of petroleum products improving sufficiently in the near future to warrant a decision to remove controls. It is certain, indeed, that it will be necessary to maintain these controls for a considerable period ahead. In addition to the currency problem the principal factors contributing to this situation are insufficient refining capacity in the producing countries and a shortage of tankers. It must also be taken into account that there has been a steep increase in the world demand for petroleum oil products and there can be no doubt that this increase will continue. In our own case the estimated present annual demand for petrol on the basis of our full requirements would represent an increase of 33?% on our consumption in 1938. The increases in the case of kerosene would be 30% and in the case of fuel oil 400%.
The possibility of abolishing tea and sugar rationing is kept under constant review in my Department but I consider it would be inadvisable to take this step at present, having regard particularly to the international situation. Apart from this consideration there is some difficulty in purchasing the types and qualities of tea ordinarily used here, due to an increased demand for tea throughout the world generally, the fact that the Indonesian gardens from which we normally drew about 18 per cent. of our supplies are not yet in full production and that the current year's Indian tea crop was smaller than anticipated.
Supplies of tea in stock and in sight represent approximately one year's supply at the current ration rate or 11 months normal supply, and I feel it is desirable to maintain stocks at least at this level for some time as a reserve against possible contingencies.
The grounds for maintaining sugar rationing are somewhat the same. The world sugar position has not yet returned to normal and, having regard to currency difficulties, it is unlikely that we will be in a position to import a greater quantity in the year ending 30th June, 1949, than in the year ended 30th June last. As the stock of sugar on hands, including home production in the current season and purchases abroad which I have authorised, will only just enable distribution on the present basis to be maintained until the commencement of the 1949 home production season in November, 1949, I do not consider I would be justified in removing the present controls on distribution.
It is estimated that 500,000 tons of wheat would be required at the present extraction rate if bread and flour rationing were abolished. The consumption under rationing is 430,000 tons. The wheat crop this year will, it is hoped, amount to 250,000 tons and 100,000 tons of foreign wheat have already been imported. Additional imports of 112,000 tons are also expected. The total of 462,000 tons will be sufficient to maintain the ration on the present basis for the next twelve months and give a small carry-over for the next cereal year. It would be possible to purchase enough wheat to abolish rationing altogether but again this would involve the use of hard currency.
The production of creamery butter for the current year is estimated to be 560,000 cwts. which is not sufficient to provide a 60z. ration over the whole year. There has also been some reduction in the production of farm butter, but while the supply prospects give reason to hope that it will not be necessary to reduce the ration, I am afraid it will not be possible to consider the abolition of butter rationing for some time.
Soap is produced from imported vegetable oils which is subject to international control. The allocation to this country is much below our prewar imports and, consequently, rationing is necessary in order to ensure a fair supply to all consumers.
Owing to supply difficulties, it is necessary to continue the restrictions on certain commodities and exports of many of these goods are only permitted under licence. The Control of Exports Order, 1940, is kept under constant review and commodities are removed from it from time to time according as the supply position justifies. A review has recently taken place and I am glad to be able to announce to the Dáil a number of commodities which are now free from any export control. The main goods are biscuits, carpets, carpeting, floor rugs, cider, canned fruit and jam, leather manufactures other than footwear, paper, cardboard and manufactures thereof, other than wastepaper or printed matter, porter, beer and ale, and wine excluding imported wine. There are a number of less important items and they are readily available to anyone who requires them.
Because of supply difficulties in other directions it will be necessary to retain control over certain other goods, but on the basis of the existing position, it will be possible to give export licences to commercial exporters in the case of the following goods: Jams, marmalade and fruit jellies, rubber manufactures, pipes for smoking and sugar confectionery.
I should say that all the orders made under the Supplies and Services Act are kept under constant review, and, as the necessity for their continued existance ceases, they are withdrawn. During the last year, orders relating to the control of clothing, textiles, footwear and fuel have been revoked, as well as numerous other less important orders which imposed controls on various types of goods. Restrictions of any type, no matter how necessary they may be, are vexatious to the public and generally restrictive of business and commercial enterprise, and we are as anxious as anyone else to get rid of these controls. Whenever the supply position makes their continued existence unnecessary, they will be revoked. An annual list is published showing the orders which are still in force.