Committee on Finance. - Resolution No. 11—General (Resumed). – Dáil Éireann (14th Dáil) – Friday, 4 Apr 1952

Committee on Finance. - Resolution No. 11—General (Resumed).

Mr. Cosgrave

Prior to the Adjournment last night, I had been discussing the fact that, during the months preceding the introduction of this Budget, a case had been made by Government speakers to the effect that the debt created by the Opposition during its three years' period of office necessitated stringent measures if the Government was to put the country on a sound financial basis. I think it would be desirable to examine the finance accounts for the year 1938-39 and compare them with the finance accounts for the year 1947-48. That was a period during which the Fianna Fáil Government was in office. During that period, it will be seen from the Tables of Account No. 26 of the financial accounts for the financial year 1938-39 and Account No. 25 of the financial accounts for the financial year 1947-48, that the total deadweight debt in 1938-39 was almost £31,000,000, and in 1947-48 it had risen by over £16,000,000 to £47.291349 million. That was during a period when there was no constructive work such as the inter-Party Government carried out during the last three years. Nobody blamed the Government for the fact that it was impossible to build houses or impossible to construct hospitals, because it occurred during the war period, but it is significant that, during the period of almost a decade when the previous Fianna Fáil Administration were in office, no large-scale building programme, no capital development work of any magnitude, was being carried out, the deadweight debt increased by over £16,000,000.

It is true that there has been an increase in debt in recent years. Does anyone suggest that the house-building programme should have been postponed? Although, in the strict economic interpretation of worth-while assets, houses are not included, it is recognised that the social benefits which the country secures by a large-scale house-building programme outweigh whatever temporary economic-losses may be occasioned; in the long run by improvement in the health standards, by providing proper accommodation, by enabling our people to live in decent conditions, a substantial improvement in the health of the people is effected with the consequent reduction in the expenditure on hospitalisation and on health services.

It is noteworthy that, although the Estimates which were presented to the House contain a note on page iii that it was not proposed to designate "particular items in the Supply Services as ‘capital services and, therefore, proper to be met from borrowing'", and that it was necessary "to reconsider the validity of the description ‘capital services' in particular cases; that it is only in the context of the Budget that a full estimate of Exchequer outlay on capital and current account will be available", when the Minister came to present his Budget on Wednesday he dismissed the matter in a few short sentences. He said, on page 38:—

"I am by no means satisfied that all of the voted expenditure described by the previous Government as ‘capital' merits that description. Even if it did—and this is an important point—it is only if savings are available for the purpose that it would be unharmful in our present economic circumstances to borrow to meet such capital outlay."

Later in the Budget speech he announced the Government's intention of floating a loan for capital development purposes. Now the country is entitled to know whether the Government proposes to depart from the capital development programme initiated by the inter-Party Government and, if so, when they will make up their minds what items are properly designated under capital and what under current expenditure. He said they had not time to examine the problem and so decide which was proper to be described as capital and current expenditure. I do not think the country accepts that answer. I do not think that it is fair to mislead the House and the country by the note regarding capital services in the Estimate presented in February and then to dismiss it in a few sentences in the Budget speech.

It is, I think, nothing to be ashamed of—and the House and the country expected it—that when the war ended a large-scale house-building programme was initiated. We proceeded with careful plans under which the local authorities erected a large number of houses and under which facilities were provided for private builders. It is extraordinary that since the change of Government last June there has been a considerable drop in the number of houses constructed. The figures for local authorities have shown a drop and most serious of all the figures for Dublin City show that in the month of January this year there was a substantial drop in the number of houses constructed as against the month of January, 1951.

It is not sufficient to say that they propose to proceed with essential capital development and, at the same time, by an administrative action, prevent local authorities from proceeding with the necessary house-building programme. It is common knowledge what has occurred through administrative action, through procrastination and delay in coming to decisions in the Department of Local Government, through the confusion that has been created by ministerial speeches, that the restriction of credit has operated on the construction of houses by private enterprise. The fact that interest rates have been increased, that banks have notified their customers that overdrafts must be reduced, that a great number of builders and groups organised for the purpose of the Housing Acts into companies, have been obliged to reduce their overdrafts suddenly, has to the knowledge of every Deputy reduced the output of houses, created unemployment and delayed the work which was well in its stride and which in the short space of three years attained new records for house construction in the country.

When the Minister introduced his Budget he admitted that the revenue which the Minister for Finance budgeted for last year exceeded that which was originally anticipated. It is not sufficient for the Government to say that this imposition of taxation was necessary in order to bridge the gap, in order to pay off the debt, in order to meet the expenditure incurred by the previous Government. With regard to the Estimates presented by the previous Minister for Finance in May last, revenue was so buoyant that the sum anticipated was exceeded by £2,000,000. Remember, in presenting his Budget last year the then Minister for Finance could only provide taxes to meet the expenditure that he anticipated: the actual expenditure was carried out by the present administration. When the present Minister discovered, shortly after assuming office, that revenue would be insufficient to meet expenditure, it was his duty and responsibility to take whatever steps were necessary in order to provide an increase in revenue. It is significant that he had little to say on that aspect of the problem and that he mentioned that when Ministers made speeches drawing attention to this problem it was described as "creating a scare and creating uneasiness" and that if the Government had decided last year to float a loan the conditions created by the alarm which had been generated by their speeches would have prevented a loan being properly subscribed.

The present Government could have imposed taxation last July or last August. There were two precedents for that. The Supplementary Budget of 1947 was not for the purpose of meeting expenditure that had been announced in the original Budget but to provide subsidies for the essential foodstuffs which had suddenly increased in price. In the autumn of 1931, the then Government discovered that the estimated revenue which was provided for in the Budget of that year would be inadequate to meet the rate of expenditure then proceeding and a supplementary or second Budget was introduced. On this occasion, according to the Minister, the Government discovered shortly after they assumed office that expenditure was outrunning revenue and that it was obvious that there would be a deficit at the end of the year. In order to avoid the unpopularity of a second Budget the Government decided not to take remedial measures to meet the situation. They deliberately inflated the bill by adding a whole series of additional Estimates such as, for instance, a sum of over £3,000,000 for fuel losses. That particular loss was described by the present Tánaiste and Minister for Industry and Commerce when he was in opposition as one which should be funded and which should be regarded as part of the expenditure incurred during the emergency. In fact, he stated in this House that the Government could count itself lucky if they escaped with that liability. When the Government discovered that, as they allege, expenditure was outrunning revenue instead of taking steps to remedy the situation either by floating a loan or by providing for increased taxation they proceeded on the assumption that they could mislead the country and create confusion by inflating an expenditure that was already high. Every increased expenditure that could be discovered was added to the bill and a huge total of Supplementary Estimates was brought before the House. It is these Estimates and these increases—some of them paying for debts incurred during the previous Fianna Fáil Administration—that have inflated the bill and added the burden to the community.

It is estimated by the Minister for Finance and the figures for revenue prove it, that the estimated amount which the previous Minister for Finance expected would accrue from the taxes imposed in the 1951 Budget was not only realised but exceeded by over £2,000,000. When the present Government discovered, as they allege, that revenue was outrunning expenditure, they had a duty—if they were serious in their attempts to govern the country and to provide the country with a sound economy—to provide the necessary taxes in order that revenue would meet the expenditure that was then being incurred. But however important these questions are—however much discussion has been devoted to the problem of the capital expenditure programme and to the necessity for creating a favourable balance of trade—the real influence and impact of this Budget is in the way in which it affects the pockets of the people. This time last year, or a little later, the inter-Party Government increased by the small amount of 2d. a lb. the price of butter and they added a small increase to the price of petrol—only half the increase proposed in this Budget The Fianna Fáil Party and a number of their supporters—some of those who have since given their allegiance to them in this House—denounced the imposition and criticised the action of the then Government. They denounced the serious burden that was being placed on the housewives. That campaign culminated in a large-scale newspaper advertisement portraying a harassed housewife who was faced with the various increases that had occurred and who did not know how to make ends meet. If, this time last year, an increase of 2d. per lb. on butter—which brought the price from 2/8 to 2/10 per lb.—was regarded as excessive and as a burden that the people could not bear, what words can describe a rise from 2/8 per lb.—which was subsequently increased by the inter-Party Government to 2/10 and then further increased by the present Fianna Fáil Government to 3/—to 3/10 per lb., which will operate from next July?

Sugar has gone up from 4d. per lb. to 6½d. per lb. The two-lb. loaf has gone up in price from 6¼d. or 6½d., as the case may be, to 9d. Are these increases not greater than the whole rise in prices that occurred not merely since the inter-Party Government took office but in the years immediately preceding that, when the previous Fianna Fáil Government were in power? This Budget has been described as an intolerable burden, as unjust and unnecessary. Nobody suggests that if expenditure on essential public services has been incurred— and if these services are demanded by the people and it is decided to provide them—it is not necessary to impose taxation in order to meet these increases. The increases that have been imposed in this Budget exceed the payments which will be made either by the improvements that are proposed in the Social Welfare Bill or in other additional expenditure that has been incurred. The proposals in this Bill, as Deputy J.A. Costello pointed out yesterday, will add an additional burden of from £9,000,000 to £10,000,000 on to the people of this country. It is quite obvious that the Government has decided to continue in office for the remainder of this year, if they can, and are not prepared to face the electorate on the basis of this Budget. They have decided to let time ride in the hope that next year when the full effect of the operation of these taxes can be assessed it will be possible to repeal some of them. It is quite obvious that they are anxious to allow some time to elapse in order to try to consolidate their position and they are not prepared to throw the five beauties to the wolves.

Mr. Sweetman

There are only four now.

Mr. Cosgrave

One has already slipped overboard. They are not prepared to ask the electorate whether or not this Budget meets with public approval. They recognise that this Budget has no mandate from the electorate. They recognise that the Government prior to the election announced a 17-point programme, which, while it contained proposals to increase social services and proposals to increase children's allowances, was silent on the proposals to increase the price of butter, the price of bread, the price of sugar, the cost of transport, the price of beer and spirits and to raise income-tax.

I think it is a fair description of the proposals contained in this Budget and of the measures adopted under it to say that a rather shabby confidence trick has been played on the electorate. This Government was elected on the basis that it would increase social benefits. It was no part of their programme at the same time to increase the cost of essential commodities thereby adding to the increases that have already occurred since the change of Government last June.

Remember, these are recent increases. There was an earlier increase in the price of butter and an earlier increase in the price of milk, all of which have been added to the burden that, according to Fianna Fáil, the harassed housewife has to bear. When discussing this Budget last night I adverted to the fact that, when the full impact of these increases took effect next July, it is inevitable that there will be large-scale demands for wage increases. Apparently the Government has not adverted to that matter or, if it has, it has failed to express any view on the situation that will develop. It is inevitable that there will be the biggest trek yet to the Labour Court asking for increases in wages. It is not easy to see how trade, how business, how industry or any of the commercial sections of the community will be able to bear the increases asked for and the inevitable conclusion is that if employers are faced with demands for wage increases the only way in which they can meet them will be by a still further reduction in the numbers employed.

This Budget will create grave misery, hardship, want and unemployment. It is untrue for the Government to suggest, as the Tánaiste suggested yesterday, that the allowances that have been provided in relation to income-tax will offset any rise in prices. Butter, tea, sugar, flour and bread, will all increase in price and in return we are given the consolation of the Tánaiste's announcement yesterday that jam will be reduced in price; I suppose it is a fair assumption that cake and biscuits will also be reduced in price because of the reduction in the price of sugar to the manufacturers.

Mr. Norton

Shades of Marie Antoinette!

Mr. Cosgrave

It is difficult to believe that at this stage of the world's history, as Deputy Norton says, shades of Marie Antoinette should become a reality. That shows a cynical disregard of the needs of the people and a cynical disregard of the position in which the country finds itself. There is a blatant cynicism in the increase of 1/6 in the allowance made to old age pensioners to offset the increases in essential commodities. Does anyone seriously believe that 1/6 per week will compensate an old age pensioner for a rise of almost 50 per cent. in the price of bread, a rise of over 100 per cent. in the price of tea and of 25 to 30 per cent. in the price of butter?

I do not think the Government itself appreciates the magnitude of the problem that will result or the necessity which will be imposed on the workers to seek higher wages. It is an inescapable conclusion that this Budget will create the greatest need yet for a rise in wages since the rise in the cost of living started to manifest itself in the early stages of the emergency.

It is difficult to believe that the Government imposed these increased burdens without appreciating the problem which will be created for employers and employees by the substantial deterioration which must appear in the purchasing power of wages. We were told that the addition to the prices charged for our oil and petrol would not affect public transport. It is difficult to believe that the Tánaiste really meant that to be taken seriously. It may be that the loss will not be borne directly by Córas Iompair Éireann. It may be that it will have to be borne by the Exchequer; whichever way the effect is felt the public will have to bear it in the long run and the public will have to pay. Either the public will have to pay increased fares arising out of this proposal to increase the price of petrol or, alternatively, if fares are not increased, Córas Iompair Éireann will lose a great amount of money and that loss will ultimately have to be made good by the Exchequer. In either case, it is the public that will pay.

I think the House was seriously perturbed by the figures which Deputy Morrissey quoted yesterday. Anybody who has read this Budget speech and examined the figures therein contained cannot but be disturbed by the figures which Deputy Morrissey quoted and by the fact that, in the light of the figures given on page 50 of the Budget speech, the Minister said:—

"We may assume that petrol will readily bear an additional 1d, a gallon."

I need not go over the ground covered by Deputy Morrissey yesterday but when we discover an error of that kind and when the Minister decides in such an airy fashion to add a burden of an extra 4d. per gallon to petrol, it is reasonable for the House to ask how was this Budget really composed and what were the Minister's views when he decided to add this additional burden of 4d. per gallon on the assumption that a far greater number of vehicles had been registered than is, in fact, the case.

I do not think the House has been fairly treated. I do not think the country has been properly treated by the Minister's explanation last night that he will deal with the matter when replying. There should be an immediate correction of that situation: the correct figure should be given and the correct deductions to follow therefrom should be drawn. Nobody can seriously believe that any other announcement of the Minister's is worth any greater weight than his reference, at page 50 of his Budget speech, to the fact that petrol can readily bear an additional 4d. per gallon.

The Budget speech made some short references to increased production and to the hope that industry and agriculture would expand. One of the incentives necessary for an increase in production is that the burdens imposed on those producing, whether they be manufacturers, farmers or workers, would enable them to get a reasonable return for whatever added effort was put into it. So far as this Budget is concerned, there is no incentive to increased production because, even taking into account the increased allowances to certain income taxpayers, the net effect of the proposals in the Budget will be that almost over £1,000,000 additional will be secured from increased income-tax. What incentive then is there to manufacturers to increase their output? What incentive is there to workers? What inducement is there to those engaged in trade or commerce to expand output when they recognise that the fruits of that expansion will be subtracted by the demands which the Government make and by the increased taxes which will have to be borne?

As I said earlier, it is difficult to believe that the Government are serious when they suggest that we can expect an increase in production by the imposition of heavy additional taxation. On the agricultural side, everybody is familiar with the fact that the only inducement the farmers have got to produce more has been to cut the price of barley. All these factors will have their effects. It is obvious that the references which have been made in the course of the Budget statement to the desirability of increased production offer no real inducement to any section of the community to produce more. For the size of the country taxation is already extremely high. The burdens imposed in this Budget are proportionately greater, and proportionately bear more heavily on any section of the community than any of the Budgets, war-time or post-war, introduced in Britain.

I do not think that the circumstances in which this country finds itself justify the imposition on the people of the same measures of taxation as were adopted in Britain and it is significant that when the subsidies were reduced in Britain, substantial compensatory allowances were given. Here, nobody can really estimate what the net effect will be of the reduction in the amount of the subsidies, but the cursory examination of the figures which has been possible since the Budget was introduced would show that the outgoings, per family and per head of the population, in order to purchase necessary commodities, will be substantially higher despite the increase in income-tax allowances, in children's allowances and in old age pension. Anybody who has any knowledge of the food requirements of our workers, particularly anybody who is aware of the facts contained in the nutritional survey which was published some years ago showing that a great section of the community live mainly on bread and butter or margarine, will realise the great burden which has to be borne by the average family, when these two essential commodities rise so steeply in price.

The Minister for Industry and Commerce stated yesterday that when tea rationing is abolished, it is proposed to continue for the present the system of bulk buying by Tea Importers, Limited, and the reasons advanced in support of that decision were that the Government of India would regard it as an unfriendly act if we were to purchase either from any other source or from the London tea market. I think it is time to ask the Government when the people of this country will be considered. We have become very careful lately about not offending the susceptibilities of other Governments; we will take no action that will in any way embarrass them, with the possible exceptions of occasions when Fianna Fáil Deputies are free to criticise the Americans because of the acceptance of Marshall Aid. There is no justification, however, I suggest, for the proposal to continue to purchase our tea supplies in bulk through Tea Importers, Limited, once rationing has been abolished. The only justification for that system was that it was inaugurated during the emergency and for the specific reason that it was impossible to get tea through ordinary channels or to get shipping except through the recognised or authorised agents. The Minister did say that it was proposed to allow, through some arrangement with Tea Importers, traders who were in the habit of buying a certain quality of teas, to secure these teas through the auspices of Tea Importers, Limited.

When the decision was taken to abolish tea rationing, I suggest that it was only right that that decision should have been followed by allowing tea traders in this country to import tea from whatever source they deemed desirable. It is fantastic to suggest that because there is an export tax of, I think, 4d. per lb. in India, the public in this country should be obliged to bear that tax in addition to the already high cost which the withdrawal of the tea subsidy involved. The only justification for it is that the Government of India might regard it as an unfriendly act if we were to purchase tea elsewhere. Everybody in this House is anxious that we should retain friendly relations with the people of India with whom we have had long and intimate ties but our duties in this matter and our responsibilities to our own people impose an inescapable obligation on the Government and the House to see that tea is made available here at the lowest possible price. There is no valid reason for continuing to buy tea through Tea Importers, Limited; when it is possible to secure supplies of tea from other sources. I suggest that the decision to continue to import tea through Tea Importers, Limited, should be abandoned and that traders should be granted permission and freedom to secure tea from whatever source possible.

I said earlier that I believed this Budget perpetrated a confidence trick on the electorate. I believe that the Government, and the Deputies who support them, have no mandate for the imposition of these penal taxes. There is no justification for the increases in the cost of essential foodstuffs that will follow the withdrawal of the subsidies and there is no justification for the increases which have already occurred in tobacco, beer and petrol. We recognise, as everybody must recognise, that additional services must be paid for but when we have sermons preached about economy it is only natural that the country would expect that the Government would provide a headline in that respect by curbing its own wasteful expenditure. We were taunted yesterday by the Tánaiste on the fact that we had not put up any alternative proposals. When the Tánaiste was on this side of the House he laid it down that it was no part of an Opposition's duty to provide alternative proposals. It is no part of the present Opposition's duty to provide alternative proposals because the full figures and facts are not available to us. It is our duty to expose whatever fallacies, whatever incorrect assumptions, whatever false promises the present Budget or any proposals introduced by the Government are based on.

It is obvious that this Budget has been framed with the object of having no election this year. The Government hope to avoid the consequences of going to the country, and they are anxious that, if revenue shows the same buoyancy this year as it showed before, it will be possible to repeal some of the taxes next year. It is significant that, in the proposals introduced by the Minister, no suggestion has been made that these will result in drop in the consumption of tobacco or in a reduction of imports of any commodities from the dollar area. Some of the tobacco proposals are based on the assumption that consumption will be maintained in order to maintain the revenue. The increased tax on petrol is based on the assumption that there, again, consumption will be maintained, although quite a considerable quantity of petrol comes, or certainly did come, from the dollar area. Similarly, in the case of other proposals the taxes are not designed to provide for any reduction in consumption, but are being imposed in the expectation and hope that the present level of consumption will continue.

I do not know how Deputies justify the statements they made at the last election in respect of proposals they brought forward that they were in favour of maintaining food suubsidies or, in some cases, increasing them, when they are now prepared to support the burdens in this Budget. This Budget has been brought forward with a cynical disregard for the needs of the people. It has been brought forward as part of a political programme, part of a political plan, part of a carefully thought out scheme in the expectation that those who support the Government have decided to cling on in order to gain some time in which to try and consolidate their position, and in the hope and expectation that at the end of 12 months it will be possible to reduce some of these burdens, and that the Government, and more especially the Independent Deputies who support them, will be in a position to face the electorate and hope for a more favourable response than would be the case if they were obliged to consult their constituents now.

We do not believe that this Budget, and the increases in taxation set out in it are necessary. We believe that this Budget is unfair and unjust, that it will inflict unnecessary hardship and will create not merely unemployment but suffering and, in some case, want, and that it will create greater problems than the problems which it sets out to remedy.

Minister for Social Welfare (Dr. Ryan)

This Budget is being attacked by the Opposition principally, I think, on the point that we are taking too much money, more than we need, and in order to support that argument it has been approached from different angles by the various speakers. Deputy Cosgrave, for instance, mentioned the fact that his Government, when they were in power, had a very big capital programme, a thing which I have never been able to find myself. It was talked of and said that money was provided for it and that money was spent, but there is no sign of any results of that capital programme.

It is rather strange to hear a Fine Gael speaker talk about a big housing programme. I remember investigating this question of housing on many occasions. It is a fact that there was no house built in the rural areas for an agricultural labourer between 1914 and 1932. As a matter of fact, the then Minister for Local Government, Deputy Mulcahy, said in 1930 that it was uneconomic to build houses for agricultural labourers until the cost of materials and of wages had come down. Well, it is a great sign of progress in the country, and a great sign of the education of the political parties, when we have the Fine Gael Party now, in view of that record, getting up and talking about a big housing drive.

Deputy Cosgrave also said that we should have brought in a Supplementary Budget in July, 1951. I was under the impression that other leaders of the Fine Gael Party thought that it was not necessary to increase taxation even now, so there you have a difference of opinion. I do not object to that, because I think there is always room for a difference of opinion on these matters. But, at least, we can say that there is no conviction, no general conviction, that extra taxation is not necessary. Now, the reason why Deputy Cosgrave says this Supplementary Budget might have been brought in is because we want to spend money that had not been provided by Deputy McGilligan, and on items that were not contemplated by Deputy McGilligan when he was Minister for Finance— not covered.

Mr. MacEntee

Contemplated but not covered.

Dr. Ryan

That is what Deputy Cosgrave said. Now, the first and only example he gave was the fuel losses. There has been a fair amount of adverse comment here on certain fuel that was in the Phænix Park which deteriorated, and there was a big loss. Of course, it is typical of the Fine Gael Party, and also of the Labour Party, to talk like that about a thing that was found to be necessary during the emergency, that was to keep a stock of fuel in order to guard against the emergency, and then when the emergency is over, and when all is safe, they begin to talk about the fuel that was dumped in the Phoennix Park. We need not bother about that for the moment. The thing is that somebody has to pay for it, and if Deputy McGilligan and others take up that attitude—Deputy McGilligan said that he was not going to take responsibility for it—well, then, I think, that is a most extraordinary attitude for a Minister for Finance to take. Is it permissible for the Government that is here at the moment to say that it is not going to take responsibility for such-and-such a thing; that, for example, we are not going to take responsibility for the Marshall Aid and, therefore, will not provide for it?

If Ministers for Finance were to adopt that attitude it would be easy to balance the Budget. But we all know that it must be paid for. To put the matter aside by saying, "I am not going to take responsibility," and to adopt that attitude—to push it from the revenue side to the capital side— well, of course, that makes it a little bit easier for the time being to balance your Budget, but only for the time being. It was easy for the Coalition Government to balance the Budget on that basis over the last three years, but now we are reaping the consequences, because the various deficits have mounted up, and the various so-called capital expenditure has mounted up, and must be paid for.

It is time that some honest Government should make an effort and start to pay for that. That is why the Budget has been brought in. The Deputies opposite, according to their speeches, do not appear to like the Budget, though I am told that in private they are delighted with it because they think that Fianna Fáil will be thrown out over it.

Mr. O. Flanagan

Try out that.

Dr. Ryan

Deputy Cosgrave says that we added in everything we could think of in an effort to mount up this deficit. Deputy McGilligan knew, when he was bringing in his Budget, that increases were being given to the civil servants and that increases were to be given to the teachers and Guards. As a matter of fact, the increases last year amounted to £3.6 million. Unlike Deputy McGilligan, we do not say we are not taking responsibility for that. We take a sensible attitude. The money was paid. We are not adopting the childish attitude of saying we did not provide for that and that we are not taking responsibility for it.

The Coalition Government brought in a Bill a few years ago to nationalise Córas Iompair Éireann and a certain amount had to be paid out from the time we came in. Deputy McGilligan did not take responsibility for that although he was a member of the Government that brought in the legislation. He did not take responsibility for it. It was put on the long finger and pushed aside so that it would have to come in on the capital side when it got a bit too high to be dealt with on the current side. We had to deal with that £1.6 million.

Deputy Costello spent a short time in the Custom House between the time that Dr. Browne and myself were there and he authorised an increase in salaries to certain local authority officials. I am not finding fault with that but what I find fault with is that, under the arrangements that were there at the time, the Department of Health had to pay the increased expenditure of local authorities and that came to £850,000. Deputy McGilligan did not take responsibility for it. He does not take responsibility for those things. Because he does not take responsibility for those things they are pushed aside. If Deputy McGilligan had come back again he would have pushed them aside to the capital side and would not deal with them as current expenditure.

That is one way of dealing with a Budget but it is not an honest way. It was possible for a Government like the Coalition Government to go on for two or three years in that sort of dishonest practice but it could not go on for ever. Luckily they could not go on for ever.

Mr. O'Higgins

Would the Minister like to test it?

Mr. O. Flanagan

We will come to that later.

Dr. Ryan

Deputy Cosgrave made some remarks about an increase in the price of bread and a decrease in the price of cake and Deputy Norton spoke about the shades of Hamlet or Marie Antoinette.

Mr. Moran

And they are always sorry when it is over.

Dr. Ryan

Yes, they are always sorry.

Mr. O'Higgins

If there is an election Deputy Moran will not come back.

Mr. Moran

If I do not come back I will have a lot of help from your side. Anyway, I have a chance of getting a job from this Government like the Deputy from the last.

Mr. D.J. O'Sullivan

Deputy Killilea had to withdraw that remark before.

Mr. O. Flanagan

Deputy O'Higgins will not take a bribe of £4,000 as Deputy Lemass did.

An Ceann Comhairle

The Deputy has to withdraw his reflection on the Tánaiste.

Mr. O. Flanagan

Yes, but the Party still received the money.

Dr. Ryan

Deputy Costello, speaking yesterday, argued that the Minister for Finance could have saved £9,000,000 and stated that the Minister deliberately put on the £9,000,000 in order to pay for certain items above the line which his predecessor, Deputy McGilligan, proposed should be met by borrowing. Deputy Costello proceeded to name the items in regard to which he thought there was deliberate over-taxation. He said that the Minister for Finance, in stating that he did not expect to get more from the reduction in food subsidies than £6.6 million, was deliberately putting the figure £2,000,000 lower than it should be.

I should like to deal with that, because this is one of the instances where, as the Leader of the Party opposite, whether honestly or not I do not know, makes that allegation, we should show that he is wrong. In talking of the £9,000,000, Deputy Costello took a very simple way of calculating this, by taking the £15,250,000 and then taking one-quarter of that, which would be spent on subsidies during the first quarter, from the remaining three-quarters. The Minister for Finance had said that if the subsidies were entirely abolished, the consumer would be paying 2/- per week more for his rationed food, but that, under the system proposed by him, it would be 1/6. Deputy Costello argued that, of the three-quarters left, we would save three-quarters. I admit that it is a simple way of doing it. Perhaps a member of the Opposition could not be blamed very much for adopting it. Any boy at school, if he got the sum to do, would do it in that way and, possibly, would get the same result as Deputy Costello. I am quite sure that the Coalition Government, in managing their affairs, did their calculations in much the same way, because the results show that.

As a matter of fact, the subsidy payable, as provided for in the Estimate, in the financial year would be made up in this way: £9.28 million for bread and flour; £2.404 million for tea, and £3.550 million for butter. These are the net figures and include what you might call Appropriations-in-Aid. For instance, where butter is sold to caterers a certain amount comes back and that is taken off the butter subsidy. In the case of tea it is simple, because it depends on the day on which we remove the subsidy and for the remainder of the year there is no subsidy. If we remove it at the end of the first quarter, then it is fairly clear that we save three quarters of the amount provided in the Estimate. We are therefore saving £1.8 million on tea out of £2.404 million. In the other two cases, however, Deputy Costello's calculation would not be right. As a matter of fact, the savings will really be in the case of flour and bread, £2.710 million and in the case of butter, £2.158 million and that, with the tea which I have mentioned, makes up the total which the Minister mentioned in his Budget.

I want to deal with butter because I know a good deal about the butter position. During the time I was Minister for Agriculture practically all these regulations were made with regard to storage, etc., which now must be taken into calculation. It is estimated by the Minister for Finance that the saving on the butter subsidy will be £2.158 million but, according to Deputy Costello's calculation, it should be £2.670 million. Therefore, there is a difference of £500,000 between us. Are we justified in regard to that £500,000? I think we are and I propose to tell Deputies why.

In the first place, let us see how the butter subsidy works. When the butter comes in from the creameries the creameries get the subsidy upon it and it is sold at a certain price. But is it not obvious that there are always some arrears to be paid? The arrears to be paid on the 1st April actually were £.217 million. Take the first quarter, 1st April to the end of June. Butter will be either sold to consumers or stored. If the butter is stored by the creameries, of course the subsidy will not be payable at that time. But if it is not the subsidy will be payable. Anyway, the amount which will be paid out in subsidy during the first quarter will be £1.039 million.

There is also a subsidy on farmers' butter. It is not yet known whether that subsidy will be payable the whole year round or not. In any case, the figure I will mention will make no material difference as quite a lot of farmers' butter will be sold in the first quarter and the amount to be sold in the other three quarters, even if the subsidy ceases, will not make a material difference because the total for farmers' butter for the year is £.084 million—that is, £84,000—and even if it is found towards the end of the year that the farmers' butter subsidy is not necessary there could be only a saving of something like £30,000.

For years in this country we have cold-stored butter for winter consumption, because we produce more butter in the summer than is consumed. If creameries are selling butter for immediate consumption they get paid. I am speaking now of the situation when the subsidy is gone. The winter price will be the same as the summer price. If, therefore, they cold store butter they will suffer a loss. The result will be that no creamery will be anxious to cold store butter. The only way to regulate matters, to see that butter is properly stored and held over for the winter and to see that there is a level price for butter, both summer and winter, is to provide that someone must pay for the cold storage. That, as a matter of fact, was being done for years before this present subsidisation system came in in 1947. It was done by the Department of Agriculture. That will cost £.137 million or £137,000.

An estimate has been made of the production of butter in this country for the year, and it is estimated that we will have to import a certain amount of butter towards the end of the financial year. That will have to be paid for, distributed and so on, and it is estimated that there will be losses, as there have been in the last few years, on imported butter, to the extent of £.320 million.

It is an estimate based on last year's prices. I want now to deal with bread and flour but not in the same detail. I wanted to give details in regard to the butter to show that it had been very carefully worked out. I quite admit that any Deputy may say that the figure is too high or too low, but it is an estimate and that is all we can say. It is as good an estimate as we can make.

The total paid out on bread and flour is £9.28 million. Of course, if Deputy Costello was right in his estimate that £1.8 million would be saved on tea and £2.67 million on butter, then, according to his estimate, the saving on bread and flour should be £4.11 million. Actually it is £2.710 million. Now, as I say, I cannot go into detail in this case because I have not got the information. I did know the butter position. However, I do want to mention two items in regard to which any Deputy can judge for himself that there is at least some error in Deputy Costello's calculation when these two items are taken into account.

The first item is the white flour. There is a big price being paid for white flour at the moment and that came in by way of Appropriation-in-Aid against the flour and bread subsidy. Under the new arrangement nobody, confectioners or anybody else, will be compelled to take white flour. That subterfuge will be stopped and the ordinary flour supplied by the millers will be whiter than it is at the moment. It is, therefore, thought by the Departments concerned that there will be no income from that white flour in future. There will be no income in any case because if it is bought the flour millers can make it and sell it at whatever price they think is fair. There will be no income as far as the Minister for Finance is concerned.

Deputy O'Higgins mentioned the mother and child scheme. I should say that I have a certain amount of admiration for Deputies opposite to mention the mother and child scheme at all. However, as long as they have the check to do so we will have to listen to them. I have hopes that we may be in a position to spend more on health services than is actually provided in the Estimate. It depends on when the new health scheme will come into operation. When the Minister for Finance asked me was there any hope or danger—I suppose the Minister for Finance would use the word danger— that I would want more money under this head I said it was quite possible that I would. The Minister covered contingencies. We do cover contingencies in Fianna Fáil but Deputy McGilligan did not take such steps.

Mr. O'Higgins

You are only providing £400,000 for the mother and child scheme, and you have the support of Deputy Dr. Browne for this. We provided £750,000 for this scheme.

Dr. Ryan

I am going to spend more than £400,000.

Mr. O'Higgins

How much more?

Dr. Ryan

The trouble is that I cannot tell the Deputy exactly how much more. I cannot say whether the scheme will come into operation on 1st August or on 3rd August, and that would make a difference. We speak in millions of pounds. We have £3,000,000 as a cover, against Deputy McGilligan's £1,500,000. There are other contingencies to be provided for, such as stores. I know the Minister for Finance asked other Ministers, just as he asked me, "Do you want more? Are you likely to ask more?" I am quite sure the Minister for Finance could give the House a long list of contingencies that are covered by that £1,000,000. I feel there is not much to be said for the point made by Deputy Costello that we made no deduction for savings. His point was that we had probably estimated more than we would actually spend. What was the experience of the last few years? After all, I suppose any prudent Minister for Finance would have to go on his experience as well as, of course, using his own judgment. The experience was that in 1950-51 current expenditure exceeded the original estimate by £1,500,000, and in 1951-52, the year just gone out, that figure for excess expenditure was £7,000,000. Deputy Costello, having presided over a Government for three years and having, I am quite sure, taken an intimate interest in affairs during that time and in all the activities of that Government, was, I feel certain, quite well aware of these figures and of the fact that in 1950-51 the Estimates were £1,500,000 too low and that in 1951-52 they were £7,000,000 too low. He says the Minister for Finance made no deduction for savings in the Estimates. It would be a very brave man who would come to the Dáil, knowing the experience of the last few years, and say: "I expect to make a few millions by saving on under-estimation of revenue." It is quite true, of course, that any Deputy could say to me: "Look at such a Vote and look at this other Vote. The amount which was asked for was not spent." But I could ask them to have a look at such-and-such a Vote where expenditure exceeded the estimate and the net result was that the amount was over-expended in each of the two years.

At this point I am quite sure Deputy Costello added up all the amounts. He found £6,000,000 and he asked himself how he was going to make it £9,000,000. He said that the revenue should be written up by £3,000,000. It is a very easy way of arriving at a result if you put down everything you have got, subtract it from what you want and then say that revenue should be written up by that amount. In Deputy Costello's case, that amount happened to be £3,000,000. That is how he got his £9,000,000. That is how the Coalition did their business: "So much for revenue, so much for expenditure, add the result to the revenue and you have your Budget." That is how they carried on for three years, and they want us to act in the same way now. As a matter of fact, tax revenue was written up by the Minister for Finance by £1.6 million, and the non-tax revenue, which is a fairly easy item to decide, because it is a fairly sure income, was written up by £1,000,000. Last year this figure was written up by £2,000,000. Why should Deputies opposite, led by Deputy Costello, think that this year we will get £4,500,000 more than last year on the same revenue, while knowing that at the beginning of last year it was estimated that £1,500,000 only became £2,000,000? Is it that the people, in their joy and high spirits will drink more, smoke more and pay more taxes in every way? I thought the attitude of the Deputies opposite was that there would be less drunk, less smoked because "our friends are out" and we are in. Deputy Costello, in order to make his sum balance, says: "Why not write up that revenue by £3,000,000?" Then he got his £9,000,000. It is an easy way of getting a total and of proving his point that the Minister for Finance was putting on £9,000,000 unnecessarily in order, in a roundabout way, to pay out of revenue £9,000,000 which Deputy McGilligan had said should be paid out of borrowing.

Deputy Costello also said that we were putting on at least £500,000 more than we should to the increase in interest on the national debt. It has gone up from £4.3 million to £6.3 million. Why? For various reasons. In the first place, borrowings are high in recent years. Deputy Costello said that it was their practice to pay off their borrowings over a 30-year period. That is a fairly stiff annuity. Added to the interest, it comes to a fairly high sum when you are dealing in big money. This year we are in the position that we must start paying for the Marshall Aid money-money that our friends opposite spent. We have to provide £6 million this year for the first time to start to pay on Marshall Aid. That is a new charge that was not there before. Ways and Means have gone up by £30,000,000. All these things must be paid for and, in the aggregate, I am quite sure that the Minister for Finance will justify his figure when concluding this debate.

I want to say a few words now about income-tax. It has a very interesting history as far as the Fianna Fáil Party is concerned. In the Supplementary Budget of 1947 we proposed to put on 6d. in the income-tax. As far as I remember, it required a further resolution to implement it and when the Coalition Government came into office they did not move the resolution and it lapsed. I remember, during the election of 1948, hearing over and over again from the Labour Party and, I think, also from the Clann na Talmhan Party, but certainly from the Labour Party, that the cure for all our ills was the excess profits tax and an increase in income-tax. Well, they formed part of the inter-Party Government and they got their share of the government. Deputy Norton and the others dropped the 6d. on income-tax and never mentioned excess profits tax, and so they carried on. Now that they are out of office they begin to talk again about excess profits tax. Be that as it may, we have again imposed income-tax.

The Minister for Finance pointed out very clearly in his Budget speech that the lowly paid people would pay less income-tax than they paid in the past. I always thought that the Labour Party represented the lowly paid people. Evidently, from the way they voted recently in this House in regard to income-tax, they no longer represent the lowly paid people.

The Minister for Finance told us that of the 188,000 income-tax payers in this country, 170,000 would be better off. Now, it is fairly obvious, even if I do not go any further with the story, that if 170,000 of the 188,000 income-tax payers will be better off under the new income-tax arrangement, every worker, whom we always hear the Labour Party talking about—every white-collar worker and every man on a low scale of pay—will benefit under this new scheme. Despite that fact, the Labour Party went into the Division Lobby with Fine Gael—they need not always follow them—and voted against the new income-tax provision.

I shall deal with all these interruptions later. Whatever Deputy Norton may say about a general election or anything else, how can he justify following Fine Gael into the Division Lobby and voting against this new income-tax provision which will benefit the working man? How can he justify letting the lowly paid man pay more income-tax and saving the big corporations—because that it what it amounts to? I suggest that he did not think about it. He need not think now. All he has to do is to follow Fine Gael into the Division Lobby. It saves him the bother of thinking.

Take an unmarried person with £8 per week. I am quite sure the Labour Party have supporters who earn £8 per week. Last year, that person paid £42 5s. in income-tax. Under the new arrangement he will pay £33. Deputy Davin voted against that proposal. He need not think very much, either. All he has to do is to follow Deputy Norton. Deputy Norton follows the Fine Gael Party. Therefore, they have no thinking to do now.

There are, I suppose, people with children who vote for the Labour Party. Take a man and wife who have one child and who earn £10 per week —because, as it happens, you must go to £10 per week to get a man with one child who is paying anything. Last year that man paid £6 10s. in income-tax. Under the new arrangement he will pay £2 3s. Let us even take a married man who has one child and who is earning £14 per week. Last year he paid £48 15s. Now he will pay £34 10s. That is the provision the Labour Party voted against because they wanted to be in good company over there with the Fine Gael Party. Take the man with a wife and two children. He must now come to £12 a week before he pays anything. Last year he paid £6 10s. Now he will pay £1 10s.

Mr. MacEntee

You ran away from it. You dissolved and ran away from it.

It is one of the things he remembers anyway though he forgets a lot of other things.

Mr. Hickey

Do not boast about what we do for the old age pensioners. No side of the House can afford to boast about that.

Dr. Ryan

If I caught Deputy Hickey aright, I should like to agree with him. Nobody has done enough for them,: but we are doing as much as we can. I do not want Deputies to say that we are boasting about it. We are doing as much as we can, but I quite admit we are not doing as much as we would like to do.

Coming back to the question of taxation, nobody likes increased taxation, nobody wishes to impose it unless it is absolutely necessary. Deputies on the opposite side invite us to go to the country. They know these things are very unpopular, but no Government is going to do an unpopular thing unless it is necessary. The point is that the Coalition did not do it when it was necessary, and we have to do more to-day than would be necessary if they had done their duty when it was necessary. They added a huge sum to the national debt—I think £75,000,000. Deputy Cosgrave talked about the big capital expansion. I cannot see it.

Mr. Cosgrave

Do you not see the houses?

Dr. Ryan

I cannot see anything for it. When we were in office we built sugar factories, and we had huge housing schemes, but what did they do for the £75,000,000? Can any Deputy here show to me a new factory that was built in his constituency during these three years? Can anybody show anything that was done for production? Have the farmers produced more or has any factory produced more? Has any additional factory been built? Where is the production? Deputies opposite have been talking about the great production, but where is it? It is just imagination. A sum of £45,000,000 came from Marshall Aid, but most of that went out for wheat and grain.

The Party opposite are talking about production but they supported a Minister for Agriculture who only destroyed wheat growing. He went to the farmers during his first year in office and told them what a great market there was for oats and potatoes. He ignored wheat and got them to grow oats and potatoes, and when they had produced these crops there was no market for them. That was their contribution to production. They never said a word against a Minister for Agriculture here who destroyed production because they did not want to break up the Coalition.

Mr. Davin

How many calves did you slaughter?

Dr. Ryan

Mr. Norton

The Minister for Social Welfare made a brave effort by the use of large quantities of claptrap to try and deceive the electorate over the week-end as to the real purpose of the Fianna Fail Budget, but no amount of claptrap issuing from the Minister or any other member of the Government can conceal the fact that this is the most vicious anti-working-class Budget that has ever been introduced in the history of the Dáil. It is a melancholy reflection for the electors that we have here to-day a minority Government which got into office by a trick, which had no mandate from the people, using its minority position here to impose on the people the toughest Budget yet experienced in their history, because this is the toughest Budget the Dáil has ever seen. It is the toughest Budget the people have ever had to experience. It is worse than any wartime Budget we ever had. No Budget that was ever introduced was comparable to the document presented to the House by the Minister for Finance on Wednesday. It is a brazen attack by the Fianna Fáil Party on the standard of living of the masses of the people of this country. It is the masses of the people which will suffer severely as a result of the Budget which we are now discussing.

If one were to believe what the Minister for Social Welfare says, one would imagine that this was a popular Budget. The truth of the matter is that all these boys sitting there know perfectly well that this Budget has staggered the country. They are bewildered with the contents of the Budget and I will bet that not one of them this week-end will attempt to hold a public meeting to explain this Budget to the electorate. I know perfectly well that this Budget has demoralised them. They do not know where they stand or whether this is a Fianna Fáil Budget at all. In the last analysis this is a bankers' Budget which is being implemented in this House by the bankers who apparently have won the day with the Fianna Fáil Party. There is glee amongst the bankers to-day because of a Budget of this kind. There is glee wherever the hierarchy of the banking profession meet to-day. There is glee amongst all those who in the past three or four years have been deploring the fact that the workers' standard of living was increasing and that wage rates were increasing, those who have been deploring the fact that, in their view, subsidies on food were subsidies on wages and who thought that it was necessary to withdraw subsidies and make the workers pay the cold, hard, inflated economic prices for essential commodities such as tea, sugar, butter, bread and flour which were subsidised to the full during the three and a half years we were in office.

While we were in office for these three years, food subsidies stood there rocklike; never once was there the slightest reduction in the subsidies. We stood for the subsidies and we provided money for the subsidies because we realised that to cut the subsidies meant that you were depressing the standard of living of the masses of the people, that you were taking food off the kitchen tables, and that you were forcing the people into a position in which they could buy less and less food. It has been left to the Fianna Fáil Party to raid the food subsidies and the effect of doing so is to depress the standard of living in the houses of the workers, the small farmers, and the lower and middle income groups.

We knew, when we were in office, that the bankers wanted the subsidies cut; we knew that there were other agencies at work which wanted to cut the subsidies, and we knew it was their view that these subsidies should be cut down if not entirely abolished, but they appealed to us in vain for a reduction in the food subsidies. We held the subsidies in order to give the people the food they needed at a reasonable price, and to prevent them having to pay for these commodities prices which they were unable to meet, having regard to the general cost of living and the prevailing level of wages. What does this Budget do? It increases, at one stroke, the price of tea, sugar, butter, bread and flour, all at the one time, and the increases are substantial. Can anyone imagine the howl that would have gone out if the inter-Party Government had attempted to do this?

Mr. Cafferky

You would have a revolution.

Mr. Norton

Can anybody imagine what would happen if we had to increase even the price of tea or sugar? Can anyone imagine the crescendo of protests that would have risen from the Fianna Fáil Party if we had been guilty of this treachery against the ordinary consuming public of this country? But here, at one fell stroke, tea, sugar, butter, bread and flour are being sent sky-high without consultation with the back bench members of the Fianna Fáil Party. It is just their function to be led in, like Mary and her little lamb, to the Division Lobby to vote not for what they think but for what the managers on their Front Bench think is good for them.

Let us look at the articles which have been increased in price—tea, sugar, butter, bread and flour. Everybody knows perfectly well that if you go into a working man's house in the City of Dublin, in Crumlin, Walkinstown, Cabra West, Inchicore and Ballyfermot, or into the ordinary worker's home down the country—everybody who has any acquaintance with his method of living knows perfectly well that these commodities represent a staple article of diet in the ordinary working-class household. These commodities—tea, sugar, butter, bread and flour—represent for the ordinary worker his fish as well as they represent for him his meat. These are the commodities on which he lives almost for seven days of the week, and these are the commodities that have been selected for this vicious increase in price by the Fianna Fáil Party.

Everybody knows that, so far as the ordinary working man is concerned, the present price level and his wage standards do not permit him to enjoy a diversified food standard, as between one meal and another and one day and another. Tea, bread, butter and sugar represent a substantial element in his diet, and they are now being selected as the method by which more money is to be extracted from his pocket. Not only is he going to pay an additional price for the five commodities I have mentioned, but he is going to have the privilege as well of paying an additional 7d. for his cigarettes and an additional 3d. for liquor, or if he likes his half glass of whiskey, he will have the privilege of paying an additional 3d. on top of these other taxes.

Mr. Cafferky

6d.

Mr. Norton

6d. for a glass. That would exterminate him altogether. The most that the working man can afford is a half-glass, and that is going to cost him another 3d. The people that I am talking about never see a glass of whiskey except at a funeral or a wedding. A glass of whiskey is normally outside their range. They are going to be asked to pay higher prices for food, and they are going to pay additional taxes on certain commodities.

Let us go back now to 1947. In that year we were told that, because certain prices would rise, it was necessary to impose a tax on cigarettes, beer, tobacco and cinema seats in order to raise a fund which would be utilised to subsidise food prices. That was the Fianna Fáil policy of that year. Let us see how far Fianna Fáil have drifted from that policy. To-day they are allowing all these commodities, which they wanted to subsidise in 1947, to rise to the full economic level and at the same time they are imposing on the people still heavier taxes than they contemplated in that particular year. The position, therefore, is that this Budget is not merely the 1947 supplementary Budget but it is that in a more vicious form, because it takes more out of the pockets of the plain people than was even contemplated in the 1947 Budget.

This Budget comes at a particularly difficult time, so far as the wages of workers are concerned. During the past ten months the cost of living index figure has risen by 11 points. Now, on top of that 11-point increase, we are going to have substantially higher prices for five commodities which are staple articles of diet in working-class homes. The effect of an increase in prices over the past ten months, capped by these substantial increases which will take place under the Budget, will mean that the standard of living in the ordinary household will be substantially depressed unless the workers take immediate steps to ensure that they will get compensation for these rises in prices by means of another round of wage increases. One of the first things that is going to happen under this Budget is another round of wage increases by workers who for the past ten months have meekly borne an increase of 11 points in the cost of living index figure, only to see their restraint in that respect grossly abused by the Government, which is now clamping on them further substantial increases in food prices.

Where is that going to lead us to? That in turn will probably produce still higher prices but this Government is not concerned about that. Its main concern is to get rid of the food subsidies and it is apparently not concerned with the chaos and disorganisation which it will create in industry, agriculture, trade and commerce so long as this Budget can be balanced in accord with Fianna Fáil conceptions of finance.

Deputy Dr. Ryan, the Minister for Social Welfare, told us about the income-tax proposals in this Budget. The income-tax proposals in this Budget are just plain, unadulterated fraud so far as the majority of the lower paid workers is concerned. If the Minister thinks that these trifling, insulting increases in the form of concessions are likely to satisfy the workers he is making a bigger mistake even than I thought he was capable of. What is the position to-day?

Thanks to the increases in wages of workers in recent years, a very substantial number of them are now brought under our income-tax code. Even the single road worker is being asked to pay income-tax to-day on his lower standard of wages. Many other lowly paid workers are being compelled to pay income-tax to-day on a wage which now brings them within that category. But when we want to put a clear valuation on the wages which they are getting, let us advert to the information we got this week in reply to a parliamentary question which shows that it now takes in mid-February, 1952, £2 1s. 10d. to buy what £1 bought in 1939.

A man who had £2 per week in 1939 was not liable for income-tax. To-day, in order to get the same quantity of food, he will want to have £4 3s. 8d. That only gives him his 1939 standard of living but he is now liable for food, he will want to have £4 3s. 10d. This Government in this Budget will continue to make that man pay income-tax in 1952 although £4 3s. 10d. buys no more than £2 bought in 1939.

What is demanded by the lower and middle class workers of this country is that there should be a substantial increase in the personal allowance rebates under the income-tax code to allow for the shrunken value of money; that there should be a substantial increase in the rebate allowed for wives and that there should be a substantial increase in the rebate allowed for children. In doing that and in making these allowances, the Government would be doing no more than recognising the shrunken purchasing power of the £ compared with the 1939 level.

These so-called remissions of income-tax in this Budget are mere eyewash which will deceive nobody. The fact remains that large masses of lowly paid workers are still paying income-tax which they should not pay. Many of the lower income groups are entitled to-day, with rising costs of living and with the increases provided for in this Budget, to a substantial increase in the personal allowance, allowance for wives and the allowance for children. They are not getting any of these reliefs in this Budget. So long as they do not get them, their demand in that respect will remain unsatisfied and no dust throwing by the Minister for Social Welfare will conceal the fact that the Government is increasing their expenses by increasing the cost of foodstuffs while giving them no adequate compensation under the income-tax code.

I said earlier that this was a banker's Budget and all the people who are saturated with the banker's mentality will be pleased with this Budget from the standpoint that, in their view, it will make the workers pay more for their goods. It will do what they have been continually saying should be done, arrest what they call inflationary tendencies in a country which has an abundance of goods and at the same time an abundance of unemployment and emigration. Inflationary tendencies never, in fact, exist in a country where there is an abundance of goods and at the same time an abundance of unemployment and emigration.

But the bankers have had their way under this Budget and the masses of the people have lost. I hope the Fianna Fáil back benchers are pleased that in this matter they are on the side of the bankers who are rubbing their hands with glee that they persuaded the Fianna Fáil Minister for Finance to put this Budget through the House. The weight of this Budget—and nobody can attempt to deny it — falls heaviest on the working-class homes. Workers will have to bear the heaviest portion of this Budget. If there was a crisis of the kind envisaged by the Minister for Finance, then we are entitled to ask why wealth and privilege were not compelled to bear a heavier burden than is falling on them under this Budget. The greatest weight of pressure so far as this Budget is concerned is falling on the lowly paid people. They will consume less after this Budget. They will be able to pay less after this Budget because their standard of income does not permit them to take the impact of these higher prices without curtailing their expenditure and consumption.

Let us look at the Social Welfare Bill in the light of this Budget and against the background of this Budget and it discloses a very interesting situation. Under the Social Welfare Bill introduced by the Fianna Fáil Party the workers of this country were deprived of retirement pensions at 65. Next-of-kin were deprived of the death grant. Maternity allowance was reduced from £5 to £2 and the maternity attendance allowance was abolished. These valuable rights were enshrined for them in the inter-Party Government Social Welfare Bill, but they have been denied these rights under the Fianna Fáil Bill. Although they have been deprived of these rights, they are still compelled, contrary to the promise made by the Fianna Fáil Minister for Social Welfare, to pay higher contributions for substantially less benefits. Then the Minister told us that the reason he was going to charge them still higher contributions was because the State was going to pay the additional cost.

Let us look at the way the State is getting the money to pay the additional cost. We must bear in mind that the workers are getting less benefits for a higher rate of contribution. The State was to pay the additional cost, but the State proposes to pay the additional cost by getting the money out of the pockets of the workers, out of their wives' purses, by compelling them to pay higher prices for foodstuffs. The State is thus saving a substantial sum which is at present used in the subsidisation of food prices. What is the position? The Minister admitted it frankly. He said: "A certain group of food subsidies cost £6.7 million per year. I am going to give back £2.7 million of these subsidies in the form of grants to old age pensioners and increase children's allowances, but I am going to take the other £4,000,000 and put it back into the Exchequer." This money will be paid by the people who consume bread, butter, tea, sugar and flour. They will provide that money, and it is that money, got from the subsidies on tea, sugar, butter, bread and flour, that is to be used now to pay for portion of the social welfare scheme introduced by the Government. In other words, the dog is going to have the exhilarating experience of being fed and fattened on his own tail. That is what Fianna Fáil is going to do.

The issue, therefore, in the future is that the State will pay nothing towards the cost of the Social Welfare Bill. The employers will pay a slightly higher contribution, but the workers, by an increased contribution and by an increase in the price of food, will pay to finance the entire additional cost of the social welfare scheme. Does anybody attempt to deny that? Does anybody deny that the State will make a profit of £4,000,000 out of the food subsidies, that at least £3,000,000 of that will be used for social welfare purposes, and that the other £1,000,000 will be used for something else? The State will put no new money into the financing of the Social Welfare Bill; the workers will have the privilege of paying the entire cost. Therefore we have this situation. The workers will pay more and more for these five articles of food and they will get less social welfare benefits than we were providing. They will pay an increased contribution to get those benefits, and £4,000,000 will be scooped out of their pockets to pay the cost of the Social Welfare Bill—and this is supposed to be a Government which is concerned with promoting the welfare of the working class section of the community.

Let us analyse what was the promise made in regard to children's allowances by the Fianna Fáil Party in March last year. In the course of the discussion on the Social Welfare Bill in that month, Deputy Dr. Ryan, as he then was, promised that he would introduce increased children's allowances. It was very clearly understood that these additional allowances would be introduced and paid for without any tax on the people in the form of higher food prices. Now we see the novel method adopted by the Minister. He is going to give a man and his wife and two children an allowance of 2/6 per week. Where is he to get the 2/6? In order that one child may get an allowance of 2/6, that family of four will have to pay increased prices for sugar, tea, butter, bread and flour. They will have to buy these commodities at a substantially higher price. These four people will eat three meals per day. That means that they will get 2/6 per week to cover the increased cost of the food for 84 meals at the increased prices. The compensation they will get will be 2/6, paid once a week. That is what Fianna Fáil thinks is equitable compensation for the rise in prices.

Take the old age pensioner. That poor soul will get 1/6 per week under this Budget but that 1/6 will be got in the same way. He will find that the price of tea, butter, bread, flour and sugar has gone up. If he eats these commodities three times a day, that will mean 21 meals in the week which he will consume at a higher price, and he will get 18 pence at the end of the week to compensate him. In other words, he will get less than a penny a meal to compensate him for the increased price of tea, sugar, butter, bread and flour. That is the Government's standard of equitable compensation to the old age pensioner.

That takes no account, however, of the fact that the old age pensioner likes his smoke every day. His tobacco or cigarettes will cost him much more under the Fianna Fáil Budget. If he likes a little beverage before he goes to bed at night, who can blame him? Bigger stars in this firmament of ours have the same kind of habits and who can blame the old age pensioner if he thinks there is no supernatural prescription against his having a bottle of stout or a small whiskey. Under this Budget he will pay more for his bottle of stout and for his small whiskey, he will pay more for his cigarettes and his tobacco. Therefore he is to be given 18 pence to compensate him for the increased cost of 21 meals, plus the additional cost of tobacco and any liquor he may consume. In my view that is a patent fraud on the old age pensioners and anybody who goes to the trouble of analysing the facts and the figures must come to the same conclusion as I. What will the result of the Budget be? Can any member of the Fianna Fáil Party attempt to say that this Budget will not cause unemployment? I will wager that there will be a reduction of staff within a week in the shops which sell tobacco and liquor and that there will be a depression in these shops, whether they be situated in the towns, the cities, or in rural areas.

I will wager, too, that there will be less food consumed, because people will not be able to pay the new price for the commodities which they are getting to-day at rationed prices. Therefore, the public will consume less. That means they will buy less, resulting in less production and in less people being engaged in productive employment. According to the Government's figures, there are 10,000 more people registered as unemployed to-day than in April of last year, notwithstanding the fact that, during the last five months of 1951, emigration increased by 65 per cent., as compared with the last five months of 1950. Such is the position with regard to emigration, according to the figures supplied by the Taoiseach in this House recently. There was this increase in unemployment, even though 3,000 or 4,000 men have been recruited into the Army.

To aggravate this unfavourable position these new taxes are being clapped on. We wager that, as the months go on, the document issued by the Central Statistics Office, comparing unemployment figures for 1952 with those for 1951, will continue to show a rapidly increasing number of unemployed for this year as against last year. That adverse position will be brought about primarily as a result of the Budget proposals. What is the consequence of unemployment? The unfavourable consequence of it is increased emigration. Emigration increased in 1951, as compared with 1950, and it is increasing this year, as compared with the previous year. People will not stay here for the privilege of signing on at the employment exchanges under a Fianna Fáil Government.

Last year the Taoiseach went down to Galway to lament about the conditions under which Irish workers were housed in Great Britain. Since then more and more people have gone to be housed under the same conditions. This Budget will be an incitement to still more people to go to Britain to live under the very conditions which the Taoiseach condemned. They will have to go, because, as a result of this Budget, more people will be out of work and suffering will be more acute in this country than has been the case ever before. People will go to a place where they can get regular employment at decent rates of wages and where they can buy foodstuffs cheaper than they will be able to get them in this country under a Fianna Fáil Administration.

This Budget will also have the effect of depressing the standard of living of the low and middle income groups in this country. There is a certain sum in the wage pool which can buy a certain amount of goods. If the prices of goods are increased the wage pool will not be able to buy the same quantity of goods. Therefore, there will be less food in many households when this Budget goes through. Women and children will suffer. I hope that all those who are concerned with protecting mothers and children will realise that if they vote for this Budget they are taking food out of the stomachs of mothers and children, who will have less to eat as a result of this Budget. Dearer butter, dearer bread—the two essentials for growing children—will mean that there will be less of these commodities consumed. Is it the way to build a healthy race to make the essentials for the development of children so costly that they cannot be consumed in adequate proportions? What is the use of shedding crocodile tears about mothers and children if the very people who shed these tears flock into the Division Lobby to vote for an increased price of butter, bread and sugar, thereby ensuring that these essential foodstuffs are less liable to find their way into the homes of the workers in the same quantities as heretofore. This Budget means less food for practically the entire community because they will now consume less. However, the greatest hardship will be suffered in working class homes where there is no margin in the wages to pay higher prices for the essential commodities which will become operative as a result of this Budget.

It is apposite for us to-day to reflect on the situation which operated 12 months ago. At that time there were more Irish in Ireland than there are to-day. Thousands of people have left this country during the past 12 months rather than enjoy the Klondike prosperity ushered in by the Fianna Fáil Party. Ten thousand extra people who went to honest, decent toil 12 months ago are to-day going to the labour exchanges looking for their pittances. The whole country is in a welter of despair. Business has had a recession such as it did not experience for many a year. I feel we are entitled, in all seriousness, to say that, whatever sins the Irish may have committed in the past, they are certainly being adequately punished for them in 1952. This is the bleakest year the Irish people have had for 25 years.

Notwithstanding all these infirmities in the Government, it has the brazen audacity to impose on the people the toughest and hardest Budget that has ever been experienced by the people in the history of this Dáil. They have no moral or political authority to force a Budget of this kind through. There is one thing they ought to do, go back to their masters, the people, and tell them now that they are going to force this Budget through, and that they want a majority for it. Let the Taioseach go back again to the people and say that he wants a strong Government to force the people to pay higher taxes and higher prices for food, to cause more unemployment, to cause more emigration, and to depress the standard of living of the people still further. That is what this Government ought to do. It is sitting there under false pretences. It has no moral authority to impose a Budget of this kind on the people. What the Government ought to do before it is discredited any further is to dissolve the Dáil, go to the people, put the facts before them, and if the people only get a chance this Government will become an evil memory in about six weeks from this date.

Mr. Davern

You will be over there for the next four years.

Mr. Cogan

Deputy Norton appears to be very anxious for a general election but we know, and he knows, and I suppose that he knows we know, that 12 months ago he was dragged to the country against his will by the Fine Gael Party and forced to fight an election, not in his best attire but in his underwear, and not in his best underwear at that. He was dragged to the country against his will and against his most violent protests, because the Fine Gael Party had decided that the time had come to break the back of the Labour Party and that the time had come to wipe out the Clann na Poblachta Party.

Mr. Hickey

You gave a good hand to it, too.

Mr. Cogan

It is right and fitting that Deputy Norton, with his ranting and roaring, should wind up and conclude, as far as this week is concerned, the ranting and roaring of the Opposition Parties. Behind that ranting and roaring there is no sincerity, no political honesty; there is no real sympathy with the people in the country or real interest in this country's future. It was sought in the last two days to convey to the people that those who speak for the Opposition Parties are deeply sympathetic with the taxpayers and with the workers. But it was very significant to watch the reaction of the Opposition Deputies when the Minister for Finance was announcing the increases provided in this present Budget. Before the Minister was ten minutes on his feet, word had travelled through the Fine Gael and Labour Benches that certain increases in taxation were coming. We knew that they knew it because we saw——Notice taken that 20 Deputies were not present; House counted and 20 Deputies being present,

Mr. Cogan

No sooner did it become known that there would be an increase in the Budget for the present year than broad smiles began to appear on the faces of all members of the Opposition and when the announcement of increases was made by the Minister those smiles burst forth into happy laughter.

It deals with the debts they left behind them and with the problem of clearing up the mess which they deliberately left behind them. As I have said, they introduced a Budget on the very last day that the Dáil sat. That Budget was designed to help them to regain power in this country. It was designed to help the Fine Gael Party to break the back of the Labour Party, to wipe out the Clann na Poblachta Party, and to scramble back into power themselves. The poet Robert Burns said: "The best laid plans of mice and men gang aft agley." The best laid plans of the Fine Gael men and of the Labour mice went agley, with the result, I say deliberately, that we now have a responsible Government in office—a Government whose thankless task it is to clear up the mess which their irresponsible predecessors left behind them after three and a half years of liquidating the nation's assets. The present Fianna Fáil Government is trying to make provision for the nation's future and to preserve the nation's independence.

I think that perhaps the best way to convince the members of the Fine Gael Party who are now present that Deputy McGilligan, their own Minister for Finance, recognised that there was a problem to be faced would be to read an extract from his Budget statement last year. Apparently the Fine Gael Party are the only people who matter in the inter-Party set-up. I think Deputy Dr. Ryan said that the Labour Party meekly follow Fine Gael. I say that the Fine Gael Party meekly follow Deputy Dillon, and that Deputy Dillon follows the changes of the moon. Having mentioned that there was a deficit in the balance of payments, Deputy McGilligan, in his Budget statement last year, said: "The outlook for 1951 is, I fear, that the deficit may be even greater than in 1950. The present position on external account is by no means satisfactory, and if it continues to develop unfavourably the application of corrective measures will be called for." Deputy McGilligan knew perfectly well that the position could not improve because he had made no provision whatever, and had taken no steps whatever to bring about an improvement.

The Deputy has just informed the House that Deputy Morrissey told a deliberate lie.

Mr. MacEntee

He did not. He said "if".

A Deputy

It is a legal quibble.

Mr. Sweetman

It is true. It is a fact.

(Interruptions.)

An Leas-Cheann Comhairle

If Deputy Cogan made such a remark it should be withdrawn. The word "lie" should not be used.

Mr. MacEntee

May I put it to you that in fact what Deputy Cogan said was "if"—if Deputy Morrissey said such and such a thing to Deputy Sweetman, on that hypothesis then Deputy Morrissey told a lie.

(Interruptions.)

Mr. Cogan

I suppose it is not easy for them to listen to what is true and what they know is true.

(Interruptions.)

Mr. O'Higgins

From the point of view of the records of the House, I wonder would the Chair give a ruling? Has the Chair conceded the objection by the Minister for Finance to the Chair's ruling? If not, what is his ruling?

An Leas-Cheann Comhairle

I put it to the Deputy that if he used the expression it should be withdrawn.

Mr. Cogan

If I said anything unparliamentary I unreservedly withdraw it. These people are not concerned with rules of order. They are merely using the legal quibbles that they have been using all their lives. They do not want to hear the truth because they know the truth is bitter.

Mr. Dunne

Apparently the truth changes from year to year.

Mr. Sweetman

I asked Deputy Cogan to express his views once and he would not.

An Leas-Cheann Comhairle

Deputy Cogan should be allowed to proceed without interruption.

Mr. Cogan

It was a remarkable sight to see Deputy Everett trotting behind his new leader, Deputy Norton, to vote against relief for the workers in the income-tax provisions of this Budget.

An Leas-Cheann Comhairle

The Deputy should get back to the Budget statement.

Mr. MacBride

On a point of order, the Deputy has said that an attempt was made to bribe some person or persons. I respectfully submit that he should be asked to name the persons who attempted to bribe them and to forward the names to the Attorney-General so that a prosecution might be instituted for attempted bribery.

Mr. Cogan

It is a pity that the Clann na Poblachta Party is so infested with lawyers that they are incapable of doing anything except to indulge in miserable obstruction and wasting time. The Labour Party, as I said, voted against the provision in the Budget which provided for relief for the lower-paid classes in regard to income-tax. What their motive was I do not know. They also are very careful not to refer at all in any way to the measures of relief that are being provided under this Budget, particularly the increase in the children's allowances. I think that no more progressive measure was introduced into this House than the original Children's Allowances Act and I think it is very necessary and desirable that the allowances under that Act should be increased. It was also necessary and desirable that old age pensioners' allowances should be increased.

The Minister's predecessor flatly refused to give the old age pensioners an increase of 2/6 12 months ago, when he was requested to do so by four Independent Deputies. The then Minister was prepared to let the Social Welfare Bill go to pot. He let it fail rather than make that necessary concession to the aged and the blind. They talk now about 1/6 being inadequate, but 12 months ago they were unprepared to give old people the increase of 2/6 to bring their weekly pension up to £1 per week. They had the audacity then to go around the country suggesting that some of the Independents who demanded that 2/6 should be paid had voted against the provision of that increase.

It is a good thing I think that food rationing has been abolished. It is a good thing, above all, that restrictions, regulations and other handicaps should be removed in regard to the distribution of flour, bread, tea and sugar. Those restrictions and controls have led to much inconvenience and, in many cases, to injustice and hardship. We have bread being delivered down in the heart of the country by Dublin bakeries. We have all kinds of absurdities, and in many cases grave hardship on bakers in rural parts.

Mr. Sweetman

I am delighted that I can agree with the Deputy in that.

Mr. Cogan

Now I shall have to examine my conscience when I find the lawyers in agreement with me.

Mr. Sweetman

Exactly.

Mr. Cogan

I think it is a good thing that we have been able to abolish control and rationing in regard to a variety of foodstuffs. I am confident that, by settling the financial affairs of this country on an equitable basis, by bringing about a condition in which the Government of the country sets a headline to the nation by paying its way, we shall now begin to make progress in the right direction.

A good deal has been said about productive capital investment, etc. I think that during the past year many valuable steps have been taken towards productive investment in this country and that that investment must now go on at an accelerated pace. Not only must we have development of the tourist industry, the fishing industry and the provision of money for the undeveloped areas but we should have more development of every activity calculated to add to the nation's wealth and to the capacity of our people to pay by adding to the volume of our agricultural and industrial output, thus raising the standard of living for all our people. That is the hope that we who support this Budget have. We look forward with confidence to a marked improvement in our position so far as the economic and social life of the country is concerned. I move to report progress.

Progress reported; Committee to sit again.

Dáil Éireann díospóireacht - Friday, 4 Apr 1952