Let me say America, where the Minister for Agriculture, on his own admission, wasted a month. Is there any Deputy opposite who does not suspect that if the Revenue Commissioners had estimated that the yield of tax returns this year would be £1,000,000, £2,000,000 or £3,000,000 less than £75,000,000 the Minister would not have gone back again over the Book of Estimates and have found a few more items amounting to £1,000,000, £2,000,000 or £3,000,000 for which he could justify borrowing on the same grounds? Is there any Deputy opposite who suspects that if the Revenue Commissioners had been in the fortunate position of being able to tell the Minister for Finance that the tax revenue would be £1,000,000, £2,000,000 or £3,000,000 more, the scope of State capital expenditure on these items would be contracted by that amount?
I want to discuss this matter very seriously on the basis of two points. Can it be done at all? What will be the economic consequences of attempting it? The Government are going to borrow this year, in accordance with the proposals of the Minister for Finance, some sum in excess of £30,000,000. It will be at least £31,000,000 and possibly more. It is obvious that that cannot be done by any methods, even the methods suggested by the Minister for Finance, without serious consequences. It is a question in my mind whether it can be done at all by any method, but we know that the effort is going to be made; we know that the Minister for Finance has, in fact, now no alternative but to proceed along the road he has mapped out, regardless of the consequences.
He knows there will be risks. So far as the records of the House are concerned, he will be able to point to them and show that he realised the risks he was incurring and that he warned the House, although those who heard him read the statement did not notice any emphasis on the warning, that the programme set out for the Dáil, the policy which he outlined for the Government, could not be carried out at all unless certain conditions were fulfilled. On page 40 of his statement he mentions the risks in the technical terms which he used throughout his whole statement, technical terms which we have to translate into terms which the people will understand. He refers to the risk of inflation. I suppose most Deputies understand the term, but for the ordinary member of the public inflation is something you do with a balloon. What the Minister means is that the course he is now going to follow will occasion a risk that prices will rise. I am now quoting his words as they appear on page 40 of his statement:—
"Apart from increasing the burden on the taxpayer, an unduly rapid rate of increase in the State debt may have other undesirable consequences which it must and will be the aim of the Government to avoid."
One is the risk of inflation. The second — and I hope that Deputies who have made it their business in this House to establish themselves as the custodians of the social conditions of the workers will note the nature of the gamble they are being asked to undertake — is the further risk of a lowering of living standards, the level of consumption, the amount of food that our people may eat, the amount of clothing they may be able to buy; in fact, all the things that make up the standard of living may be reduced by reason of this departure in financial policy upon which the Government has decided. The contraction of normal development, the dislocation of employment, the denial of opportunities of new employment which may be occasioned also by this departure in financial policy—all these risks are there, according to the statement of the Minister for Finance.
The Government may proceed with this policy and find that it can be done; but if, on the Minister's own assumption, circumstances arise in which the policy cannot be followed at all, then the risks are greater still, because they include the risk of a complete economic collapse which it might take generations to recover from. We know, however, that the Minister for Finance has committed himself to this policy of borrowing in order to defray the cost of certain supply services. If he finds that he cannot proceed with it, either because of its effect upon prices or upon the standard of living, or its effect upon normal private investment, or for any other cause to which he referred, he will have to trim his policy. What part of it will he trim?
These supply services which are to be financed by borrowing will be carried through. It is the normal and beneficial capital investment to which no reference appears in the Book of Estimates at all that will have to be curtailed and restricted and we will be left in this position that we will be creating mainly dead-weight debt and not, by reason of any capital expenditure undertaken, adding one iota in a direct sense to the national income.
We got figures yesterday in relation to the national income. According to an estimate, which we were warned was provisional and subject to revision, the national income, valued in devalued pounds, in 1949, was £350,000,000. The Minister for Finance made some adjustments and alterations to that figure; he added on customs and excise duties, subtracted subsidies and then added some figure which represents an estimate for expenditure upon depreciation. He added in the trade deficit for good measure and got a total of £405,000,000 which, he said, represented the pool from which all expenditure of any kind undertaken by the Irish people was made last year.
Let me protest here against the inexplicable and inexcusable delay in producing from the Central Statistics Office estimates of national income and expenditure, equivalent to those published for the years prior to 1945. There can be no rational explanation offered for that delay. Before I ceased to be Minister for Industry and Commerce and in charge of the statistical office the office had reached a stage in preparing estimates for subsequent years which would have permitted the publication of figures. However, their objection to publication of them at that time was mainly on the ground of professional pride. The unexplained items which they were anxious to break down into more understandable parts were, in their view, unduly high, and, while I agreed to postponement of publication while they made that effort to interpret the statistics available to them, I did not contemplate that three years later we would still be with only a rough, provisional estimate, subject to revision for the national income in last year. I make that complaint all the more emphatically because the Minister gave us yesterday an estimate of the expenditure of our people last year upon consumption goods which I find myself unable to relate to any corresponding figure published in respect of earlier years. However, we will take the Minister's figure.
In last year, according to him, the people of this country had from all sources, including the liquidation of external assets, £405,000,000 to spend and of that £405,000,000 they spent £354,000,000 on consumption goods, on food and clothing and so forth, leaving a balance of £51,000,000 which the Minister described as gross investment, that is to say, the total expenditure upon new capital undertakings, upon additions to stock and including the increased value of work in progress. I want the House to note that figure of £51,000,000.
During the course of the debate upon the Vote on Account I suggested to the Minister for Finance that this capital programme which he had outlined could not be undertaken, that there was not available from the savings of our people for investment in Government loans the amount of money that he proposes to borrow. He assured the House that not merely was the amount of money available for investment substantially higher than the figure he gave but that it had been for years past of the order of £70,000,000 a year and he added—I am quoting from column 2513, Volume 119, No. 19 of the Dáil Debates:—
"There has been no appreciable change, no change for the worse, in the finances of the country."
Now, either that figure was wrong and the Minister based his financial proposals for this year upon a wrong figure or else there has been revealed, since that figure was prepared, a change for the worse in the finances of the country.
The cost of living has risen more rapidly than the national income and the amount that is available for investment purposes of all kinds is now substantially less than it was "for years past." The likelihood that the Minister based his decision and secured the assent of his colleagues to that decision on a wrong figure cannot be ruled out. The tactics of members of the Government have always been to overcome the immediate difficulty of parliamentary debate by any device, including the device of giving the Dáil inaccurate information, and to leave the resulting problem to be dealt with when it arises. However, having been challenged, the Minister in his Budget statement gave us a figure. The total amount in 1949 available from all sources for new investment of all kinds was £51,000,000, half of which came from the current savings of the people and the other half, in the form of a deficit on external trade, through the realisation of external assets. Now the half which represents the savings of our people represents all the savings available, including all the profits of every business concern that were not distributed.
During the Vote on Account debate I referred the Minister to a statement of the Central Bank in respect of the year 1948 that in that year the amount of new capital known to the bank to have been raised from the public did not exceed £16,000,000, of which by far the greater proportion was subscribed to public loans. When I suggested in the course of that debate that the current savings of our people available for Government investment or for private investment, for capital formation of any kind, did not exceed £24,000,000 or £25,000,000, the Minister for Finance scoffed at the suggestion. As he himself told the House yesterday, if private capital outlay is to be maintained then the amount which the State is proposing to invest this year, whether it be invested in productive enterprise or in the Budget deficit, can be secured only in one of two ways, either by a reduction of the level of consumption of our people, leading to greater saving, or by enlarging the trade deficit, leading to the repatriation of external assets. The Minister admitted that there was no gain in promoting increased State investment at the expense of private investment. Most of us would regard that as a disadvantage, but it is clear that if he attempts to draw off from the amount available for investment this year any sum approaching half the total amount he intends to borrow, not merely will he stifle normal private enterprise but he will force this country into a position in which all private enterprise will cease and in which any new development in industry or agriculture must inevitably proceed under State auspices.
I have said already that the Government, in ignorance, are leading the country into a form of cockeyed Socialism, and I, for one, believe that more beneficial results will be secured if the Government goes avowedly for a Socialist policy, controlling all forms of economic activity, controlling all investment and taking all the responsibility for the economic consequences of its acts.