When the House adjourned last Thursday I was dealing in some detail with the attitude of the Irish Trade Union Congress towards the Budget and in view of statements that have been made over the week-end I think it only fair to repeat that, although we disagree with many of the criticisms made by the Irish Trade Union Congress in their efforts to state the case of the workers as graphically as possible, we have one point of agreement in regard to that statement. We compliment the framers of the statement for not having confused the minds of the workers by suggesting that the Budget is faked. To my mind, it is of very great importance that an organisation which has such authority as the Irish Trade Union Congress should have made it clear that they accept the genuineness of the figures. Thus workers can make up their minds as to what they think about the Budget without having in the back of their heads the conception that maybe there should be a surplus of £10,000,000 or that there should be added receipts of £10,000,000. It makes it so much easier for them to debate on the question.
Committee on Finance. - Resolution No. 11—General (Resumed).
It will be just as easy to debate when these things are cleared up about the £10,000,000.
Deputy Mulcahy knows that the whole of that question has been dealt with at considerable length by Ministers on this side of the House. He does not really wish me to make a third declaration on it. The Minister for Social Welfare and the Taoiseach have dealt with it. I have not brought the facts here but if Deputy Mulcahy wishes a further statement made, no doubt some other person will, before the close of the debate, repeat at wearisome length the absolute facts with regard to that £10,000,000.
We would assure the Minister that we are prepared to listen to the most wearying performance and to go to the most wearying labours to get at the truth and the facts about these figures.
It is interesting to note, in any event, that the Trade Union Congress disagrees with Deputy Mulcahy in that. They have accepted a statement that the Budget is presented fairly. They have, equally, through the Labour Party instructed the Deputies of the Labour Party that they must not automatically vote with Fine Gael any longer.
Surely we may ask the Minister here to speak for himself and for his Government and to leave the Trade Union Congress and Labour or any other Deputies in this House to speak for themselves.
I reserve my right to make comment on any body, particularly one as important as the Trade Union Congress.
Anything that may help to obscure or muddy the air.
I thought over the week-end that it might possibly be advisable to give some further figures which would be of interest to those who represent the Trade Union Congress and to obtain a statement showing how the income-tax receipts have been arrived at. I got the following information from officials of the Department of Finance, which are approximate figures. As a result of the imposition of taxation under the present Budget for the current financial year about 6,000 companies will pay £900,000 more in taxation; about 7,000 surtax payers will pay £650,000 more in taxation, and about 11,000 persons below £1,500 but who have small families, etc., will pay £100,000 more in the current financial year, making a gross total of £1,650,000 of income-tax. Against that, the people of modest means referred to by all sections of the House as numbering 170,500 will receive reliefs of £867,000, leaving a net total to be secured to the Exchequer of £783,000. I suggest that that is an illustration that we have gone as far as we can to make those who can afford to pay to contribute sufficiently and at the same time to safeguard the position of the many artisans and people of modest means who will get reliefs under this Budget.
Even the surtax payers.
I dealt with that on the last occasion. If the Deputy wishes me to repeat the facts about surtax payers, I think I indicated that, in the aggregate, all the people in this country who have incomes of over £1,500 a year will pay this year in income-tax and surtax 53 per cent. of their income. We, in our wisdom, think that is an adequate figure, as I mentioned on the last occasion I was speaking. What it amounts to really is this. If we choose to take the Budget and make it a gross figure and include the gross amount received by way of taxation and then subtract the reliefs, we get a fair idea how far the not numerous and richer sections of the community are making a contribution. The gross amount that we are securing is nearly £19,000,000. It is made up of items of £14,500,000 by way of taxes on drink and tobacco, and reduction in subsidies, and £4.17 million in taxation from the increase in income-tax of 1/- in the £, the petrol tax, and the spirits tax. The two items of £14,500,000 and £4.17 million represent nearly £19,000,000. We have afforded reliefs in income-tax of £.86 million, £2,750,000 by way of social welfare allowances, and the very small relief of £.1 million on dances, making a total by way of reliefs of £3.7 million.
I do not think that the Irish Trade Union Congress are correct in saying that the better-off section of the community are not paying their full contribution. They are paying, as I have already said, £4,000,000 out of a gross of nearly £19,000,000. Nearly £4,000,000 is being given by way of reliefs, which are made up of income-tax relief, social welfare allowances and other oddments. I do not think that that is an unfair way to distribute taxation. In fact, I think it is reasonable.
I do not want to leave the question of our attitude towards workers to go without comment. A tremendous effort is being made throughout the country to lead the workers to believe that the present Government has deserted them. We have at all times received the support of a very great majority of the workers in this country. The Fianna Fáil Party would not have succeeded if they had not followed us and accepted our policy. Occasionally they may have been worried as to our actions, but those who had even temporarily deserted us saw their error and came back. They realised in the long run that we had the interests of the working community at heart. In 1934, when there was world depression, the workers were told that we were ruining the country. During the last war they were told that we were imposing appalling penalties upon them, but at the end of the war it had to be realised that we were one of the happiest countries in the world. In 1948 they were told that, if only a different Government were elected, the cost of living would come down with a crash and that mulitudinous profiteers would be prosecuted. When another Government did take office nothing of the kind happened. At the present time the workers are also being told that the Fianna Fáil Government is imposing tremendous burdens on them but, provided they are given time to consider the present position and not stampeded by crank propaganda with regard to the Budget, they will continue to support us.
We hear constantly Labour members giving the impression that wages only rose when the inter-Party Government were in office, and that we were opposed to the idea that workers' wages should rise. I think it is just as well to remind members of the House of the facts in regard to wage increases. I do not think some members of the Trade Union Congress appreciate how much wages did, in fact, rise during the former period of our office. I secured figures, some of which were available at the time Deputy Costello was Taoiseach, and I intend to give the House some idea of how industrial earnings increased over various periods. Average industrial earnings in industries producing transportable goods increased from the year 1939 to 1946 by 40 per cent.; they increased another 30 per cent. from the time the wages standstill Order ended in 1946 to the year 1948; they increased by 18 per cent. from the period 1948 to 1951. No one can suggest that wages did not increase during the period that we held office.
Is the Minister speaking of earnings or of wages?
Earnings. If the Deputy wishes to have the figures for wages, I can give him those also. They show that there was a substantial increase during the war years right up to 1948. There is nothing to suggest, from the figures available since that we did not play our part in the increased remuneration of the worker.
I am only looking for clarity.
If the Deputy wants industrial wage rates, I can give them to him.
I just want to know whether the Minister is giving earnings or wages.
I was giving the average industrial earnings during the period from 1939 to 1951. The figures for wage rates show approximately the same order of increases and indicate that the position was satisfactory in regard to that matter also.
Over the week-end, it was apparent that some people had misunderstood some of my observations in regard to the proposals made by Deputy Dr. Browne, which were worthy of consideration, namely that, if we found it necessary to have a burdensome budget, we should have sought taxation from the three principal forms of entertainment, namely, betting, dancing and cinemas. In view of the fact that I was misunderstood, I had better clarify the position as far as I can. We have not figures for expenditure on amusement for any year later than 1949 in this regard, and they were prepared by the previous Government. These figures show that in that year the people of this country, exclusive of tourists, only spent £4,000,000 on all forms of amusement, whereas £40,000,000 was spent on drink and tobacco. Probably the amount spent on amusement has increased since then. The tax from dancing in a full year would amount to £140,000, and the cinema tax and the betting tax totalled £2,000,000 in the last financial year.
I am sure Deputies will agree that one could hardly increase entertainments taxation by more than 25 per cent. without causing all sorts of adverse developments. Even if one did so the taxation collected would only amount to an additional £500,000. Deputies will readily appreciate that that could not have an ultimate effect on the Budget even if that amount was used for maintaining some food subsidy. As Deputies are aware, we are not abolishing food subsidies, as has been suggested all over the country; we are continuing to spend £8,500,000 on subsidies. Deputies can readily work out that if additional taxation on entertainments, to the extent of 25 per cent. was imposed, it would have the result of reducing the cost of bread by something roughly between 1d. and 2d. per head per week. Therefore, it is not a material factor in connection with the Budget. Deputies can work out for themselves what the effect of leaving the tax on dancing would be. Roughly, it would amount to 1d. on eight pints of beer. It, too, could not affect the Budget, and it should not be used by Deputies in this House in this form: "You have taken off the subsidy on butter, totalling £3,000,000 and you have taken off the tax on dances, totalling £140,000 in a full year." This year the tax will amount to £100,000. Demands of this kind are ludicrous and are misleading those people who have not the time or the inclination to study the figures. People are going around this country, in their thousands, murmuring to themselves: "They are taking the subsidy off butter. It is going to cost 3/10 per lb., but they are allowing people to be free to dance." The whole thing is ludicrous, and Deputies know it to be so. If the tax on dancing amounted to £1,500,000, we could worry about it then. Deputies can work out the figures for themselves, and they cannot but arrive at the conclusion to which I have come.
Would the Minister give us figures showing the amount of money Fianna Fáil got from dances?
The Minister should be allowed to make his speech without interruption.
I have already dealt with the very high consumption of drink and tobacco in this country over a number of years. I got from the Department of Statistics the actual increase in consumption of drink and tobacco since 1949. I valued it at the 1949 prices. I noted that the actual tourist trade was a little lower in 1951 than it was in 1949. I asked that the tourist expenditure be substracted from the consumption of drink and tobacco by our own people. I found that, whatever way we might look at it, consumption of drink and tobacco since 1949 has gone up by something in the order of from £3,500,000 to £4,000,000 in the year. It will be noted that that happens to be very nearly the same as the £3.9 million net saving on subsidies, after granting reliefs. It can be said with a certain amount of truth that if those who drink and smoke feel the burden of this Budget and choose to go back and spend roughly what they spent in 1949 on drink and tobacco they will save at least a good part of the increase in respect of subsidies. Deputies can get these figures for themselves. They can get the increase in consumption and value it at the 1949 price. It has gone up by nearly £4,000,000. The increase is about equal to the extra cost of food resulting from the removal of some of the food subsidies and from the payment of increased children's allowances and old age pensions. Although this is a burdensome Budget and certain sections of the community will feel its effects for the time being, nevertheless we have to have regard to the facts and I think that that is an interesting point upon which Deputies can ponder.
I next want to deal, though not at great length, with the suggestion that the steps we are taking to balance the Budget and to avoid an excessive drain upon our external assets have been taken solely because we follow blindly the lead of the British Chancellor of the Exchequer. That is a ridiculous suggestion. The Taoiseach made a very valuable contribution to this debate in regard to the position. He pointed out that if there is a shower of rain and if you shelter under a tree under which someone else is also sheltering, you are not necessarily copying the other person.
I should like to give the House some further information in respect of the steps which we are taking under this Budget. I think we should get away from the idea that only two countries in the world are affected by the present situation — Great Britain and ourselves — and that we have blindly copied their method of dealing with the problem. I got some information——
From whom, was it from Rab Butler?
Will Deputy Keane be good enough to allow the Minister for Posts and Telegraphs to address the House without interruption?
I should like to ascertain from whom the Minister got the information which he proposes to give the House.
I will give the Deputy the information he is seeking. It comes from an article in the Economist of the 15th April. The Economist is a very responsible journal — neither of the Right nor of the extreme Left. It is a journal which propounds what might be called centre party economic views. The information I am giving relates to New Zealand and to the fact that in the six months ending 29th February, 1952, the value of imports into New Zealand exceeded the value of exports by £32,000,000. It will be seen, therefore, that the Government of New Zealand are having their own adverse trade balance difficulties. The article goes on to say that this is taking place just at a time when New Zealand should be building up her overseas assets in order to finance her trade. Deputies may remember that before the war New Zealand always had difficulties in regard to her adverse balance of payments. She was always in pawn to the British Government. She was always having to seek loans to finance her imports.
During the war years—exactly as in our case — New Zealand built up a very large reserve so that at the end of the war Britain owed her money. Irrespective of any question of defence or of defence expenditure, but solely because the world is in the same state as New Zealand and we are they now find themselves in precisely the same position as ourselves. With a very adverse trade balance, New Zealand is proceeding to deal with the problem by making a very drastic cut— £25,000,000—in her imports in one year. The article goes on to point out that they are going to face difficulties in regard to that matter: that the restriction of imports through the licensing system carries with it its own difficulties. It implies that if New Zealand had taken steps earlier to deal with such a situation the side effects might have been avoided because now there will be difficulties in regard to employment-giving schemes and so forth because of the Government's decision to make a serious cut in respect of a wide series of commodities. What we have done is to refrain from purchasing tobacco during the current year in the hope that the Budget will effect a reduction in our very adverse trade balance.
Are they doing that by picking the people's pockets?
This article deals with the adverse trade balance condition. New Zealand has had to take some restrictive action in order to persuade its farmers to produce more for export and to reduce imports.
What is the restrictive action?
I have not the figures by me at the moment. However, I consider that I have a right, if I so choose, just to mention the adverse balance of payments.
The Minister implied that they were going to cut imports by £25,000,000 in one year but that it was difficult to do it in a direct way. Will the Minister give us some further information in that respect?
The Deputy will have to be patient. Evidently he does not like this information.
I am not getting the information. That is the trouble.
He thinks they should get the money from the air.
Can the Minister for Posts and Telegraphs tell the House how the imports are being cut?
Take, for example, the position of Denmark in November, 1950.
Why is the Minister changing over to Denmark now when he has not given us the information we have asked for in respect of New Zealand? Let us continue, for the moment, with New Zealand.
Let us consider the position in Denmark before the Danish Government embarked on very heavy defence expenditure. For the first nine months of 1950 the Danish Government had a deficit of £53,000,000 in their balance of trade. That was the position over two years ago. The population of Denmark is 4,200,000 persons. The Danish Government decided, by much more drastic means than we are employing, to reduce consuming power in Denmark. They increased taxation by no less than £44,000,000—and they included in their increased taxes a bachelor tax, if that is of any interest to Deputy General Mulcahy.
I am grateful for any information which the Minister may give us either in regard to New Zealand or Denmark.
That action had a very considerable effect on the Danish people. The then Government was in office with a very small majority. Their action had strong political repercussions but the Government remained in office because the people realised that in the long run it was essential to do unpopular things.
May I ask the Minister a question?
You will get a dissertation from the Minister. He is a very good hand at it.
The Minister should be allowed to make his speech without interruption.
Does Deputy Dr. ffrench-O'Carroll want to ask me a question?
Do not——
Deputy Keane might allow the Chair to intervene some time.
When the Minister is giving us these figures in regard to the balance of payments will he also give us the average wages and the relevant figures for social security benefits?
On a point of order. While the figures the Minister is giving the House may be very interesting, would it be out of place for the Chair to ask the Minister to tell us something about the Budget which is before this House for discussion, and to come home from the Antipodes?
The Chair does not propose to direct or instruct any Deputy on how to make his statement. The Minister for Posts and Telegraphs is entitled to make his statement in his own way without interruption except when a Deputy rises on a point of order or when the Minister gives way to an interruption.
I should very much like to hear our own business being discussed. I am not interested in the affairs of Denmark or New Zealand. I am interested in my own country.
I cannot permit the Deputy to continue.
While I admit that a corrective should not come from the Chair in respect of a speech such as that which the Minister for Posts and Telegraphs is now making, does the Chair not consider that it should give advice?
The Chair advises Deputies to cease these interruptions.
What about our own country? Never mind about foreign countries.
As I understand it, the interruptions were due to the fact that I am doing my best to tell the people of the country that a socialist Minister for Finance in Norway and a semi-socialist Minister for Finance in Sweden — I do not know what you would call the Danish Government but they are not people of a right-wing character — had to take similar sorts of action as a result of a crisis for which neither they nor we were responsible. I am telling the people that they should not be misled by statements that they can make any decision they wish, as though there were no other decisions being taken in other countries all over Europe even by left-wing Governments. If Deputies are going to interrupt because they object to hearing that, I cannot help them but I am going to tell the House the facts. The suggestion has been made——
Are you not ashamed?
Am I to be subjected to this continuous interruption?
I have cautioned some Deputies that they must cease interrupting and I shall not repeat that. I shall take the remedy provided for me by Standing Orders.
May I say that any intervention of mine was because the Minister was withholding information which I thought the House should have? Let the Minister carry on now without any further intervention of mine. I was merely inviting the Minister to supply the information he was pretending to give the House.
I was only trying to do another thing but in the absence of a quorum I am afraid I cannot allow the Minister to proceed.
Notice taken that 20 Deputies were not present; House counted, and 20 Deputies being present,
Deputies apparently dislike hearing about foreign countries but I have a few more observations to make on that subject. I might point out further that, in spite of the defence policy of members of the Atlantic Pact Organisation, most countries face increases in their civilian expenditure, as well as having to incur heavy commitments on account of defence and they were forced to take the same kind of action as we adopted. I find, for example, that apart from a large defence expenditure, the cost of the civilian budget, exclusive of defence in Norway, went up by 17 per cent. in one year, 1950-51. I find that the cost of running Denmark went up by £12,000,000 in one year. All of these countries were trying to deal with the same problem as ourselves, they have all been fighting inflation in one form or another and they have all been driven to some kind of defensive action. I have told the people in this House and in the country at large, not to be under the impression that we are alone with Britain in taking this peculiar action.
I next want to deal with an observation made by Deputy Dillon who implied that under some kind of arrangement made between his Government and the American Government we could accumulate balances of sterling here which would be equivalent to repaying the American Government, the idea being that the American Government might, in some way or other, use these sterling balances for their own transactions with Great Britain. I just want to make it quite clear to the House that during the course of the negotiations at one point some representative of the E.C.A. did suggest on the 27th July, 1948, that arrangements might be made that repayment would be effected in sterling and that the sterling balances would accumulate here for use by the American Government in their transactions with Britain. The last Government made it perfectly clear in cablegrams which they sent to the Irish Ambassador in Washington that they intended to repay the loan in dollars and that they would not have any suggestion that the Americans should have here sterling balances which they would use as they desired. In fact, the Minister for External Affairs in the course of a memorandum on the 8th June, 1948, said that the suggestion from E.C.A. of an arrangement for the repayment of dollar loans in Irish currency should not be followed up. He said: "It is better that loans should be frankly dollar loans subject to convertibility."
The position is that under the agreement made with the American Government we commence paying interest on the Marshall Aid loans at 2½ per cent. on December 31st, 1952, and we commence paying back the principal on June 30th, 1956. Provision is being made in the Budget as part of the debt service for over £600,000 for interest next year. The full sum would be £1,200,000. It is a very large sum of money. It is equivalent, as Deputies may remember I said in the course of my speech on Thursday, to 1½d. on the pint of stout and it will have to be paid for many years. When we start making repayments of the principal the burden will still further increase. I wanted to make also some observations in regard to one matter which I think should be of interest to the country. The debt service has increased by roughly £7,000,000 since 1947.
Increased by £7,000,000?
The annual debt service has increased to that order. Deputies will realise that if this goes on——
Has the Minister the figures for the service of the debt showing that increase of £7,000,000?
If the Deputy wishes I shall get him the actual figure. I have not the actual figure, but anyway it increased last year.
By how much?
By £2,300,000. I have not the actual figure here.
Why does it become £7,000,000 now?
From last year to this year it increased by £2,300,000.
The Minister is evidently talking about an important matter without caring what his figures are.
If it goes on increasing by that amount——
I want to protest against the Minister continuing to talk about an important matter in relation to which he has not got the figures. He has stated what is absolutely and utterly wrong.
The increase in the debt service is £2,300,000.
Why did you say £7,000,000?
I was referring to a number of years back and I told the Deputy I now have the correct figure for just one year.
Surely the total amount being paid this year is not £7,000,000.
The Deputy knows very well that if I happened to be sitting over there I could have had the figure given to me correctly immediately. I am now giving the Deputy the increase this year as compared with last year and I say that it is sufficiently large to necessitate our taking steps to ensure it does not continue at that rate unless production increases. If every year we have to pay away this £1,000,000 or £1,500,000, or £2,000,000 increase in debt service with no increase in production and the yield of taxes grows far bigger than it is at present we shall be paying away a very considerable sum in taxation alone for debt service. I think that should be quite clear to the Deputy.
The Deputy is talking about a most important subject without knowing the slightest thing about it. The Deputy should leave it until he gets the correct figure.
I think we should warn the people that that kind of policy cannot continue. I dealt with the whole question of the Budget in the course of my observations last week. I shall conclude by saying that we are the last people on earth who wish to impose taxation unnecessarily. We intend to carry on with our schemes for capital development, many of which were devised by us prior to 1948, at a pace that we can afford. We hope that agricultural production will increase sufficiently to enable us to improve upon the speed with which we carry out these projects. We believe we must remain a strongly creditor nation, and we cannot allow a situation to continue in which we are faced with an adverse trade balance to the tune of £61.6 million per year.
We intend to undertake the difficult task of carrying on the capital programme by making certain that there will be some reasonable restraint in the amount of our adverse trade balance. If the Deputies work out the figure as devised by the Minister for Finance they will find that we anticipate this year an adverse trade balance of some £40,000,000. That is only a hazard or a rough guess based on the reduction in the expenditure for tobacco together with what we think will be the reductions in our imports from the European Payment Union area. It is still a considerable strain on our external assets and it is just as well to relate that figure of £40,000,000 to the known amount of assets which still remain and which we can control directly or indirectly.
The latest figure we have, I think it deals with the first quarter of 1952, is something in the region of £213,000,000. That is a figure for assets that we can see and whose nature we know and for which we can formally account. There is in the commercial banks £109,000,000, in the Central Bank £67,000,000 and held by post office depositors £37,000,000 making a total of £213,000,000. It is not a question as to whether one is a socialist or a conservative or as to whether one believes in a communist policy or a conservative policy. It is quite obvious that an adverse trade balance in the region of £40,000,000 in relation to that reserve of assets indicates that the position will have to be very securely safeguarded in the future. We will have to ensure an expansion of agricultural production if we intend to carry on with our work. We must make quite sure we have a reserve for trading purposes.
I think it should be made very clear to the people that the pattern of our trade altered very materially in 1951. In 1947, before there was any question of Marshall Aid, we managed to accumulate a very big surplus of trade with Great Britain. We sold little to any country except Great Britain and we received from her in tourist expenditure an amount in excess of what we imported by about £24,000,000. We were in a position to say to the British — we did not of course put it that way—that she owed us £24,000,000 on balance for our trade with her in the sterling area and "You will now go and spend that in countries from which we are importing large quantities of goods and to whom we export relatively little." At the same time we had to divest ourselves of external assets to the value of £30,000,000 during that year.
In 1951 the position was that for the first time since the war we had no net surplus whatever in the sterling area and the whole of our adverse trade balance was in respect of non-sterling countries. As Deputies know, the amount was £61.6 million, an amount which we discharged by the sale of external assets. That compares with the approximate figure of £420,000,000. —I think it varied between £400,000,000 and £500,000,000 according to different statements of the Chancellor of the Exchequer — for the whole of the sterling world owed outside the sterling world. Anybody can realise that our contribution towards that total indebtedness of the whole of the sterling world of £61.6 million over £400,000,000 is a very considerable proportion. We would have to safeguard our economy in our own interest and along with other countries such as New Zealand that are making cuts in their imports. We would have to make some contribution both in our own interests and in the interests of the sterling world generally and we contemplate at a rough hazard that the adverse trade balance at the end of this year will be in the order of £40,000,000.
I think Deputies will agree that those who are wedded to the policy of getting rid of external assets as fast as they can will have to admit that we are getting rid of some of them. If we are allowed to develop our programme and our people continue to have confidence in the economic strength of our country, we hope that our exports will expand more than our imports and we can correct that gross disparity in our balance of trade and continue importing the commodities we require.
I suppose Deputies will agree that we should sell our external assets if we can thereby increase production or reduce imports. There are certain forms of expenditure, such as that on semi-luxury articles and on raw materials for industries not connected with either housing or hospitals and certain consumption goods, the import of which is not absolutely essential. To waste our external assets on goods of that kind is very undesirable. There is then a borderline group of commodities such as housing materials which we import using our external assets to do so; these commodities do not increase production and we shall have to exercise some care in relation to their import.
We intend to carry on with our national construction work provided that the people understand the position and provided that we are not constantly misquoted by people endeavouring to pretend that we are overconservative. We all believe in national development. We are not ancient Victorian Conservatives. We must have regard, however, to the fact that it is very important that we should remain a creditor nation. Any Deputy who studies the economic history of countries which have constantly had to make sudden drastic cuts in imports because they "scraped the barrel" will find they suffered disastrous consequences followed by widespread unemployment. We want to continue our programme and import only such things as will never compel us to make any really drastic cut or stop some really vital project. We want to continue doing our work and giving employment in every possible way while at the same time safeguarding the national economy.
I hope I have made that position clear because some of us have been called Victorian ogres and other unpleasant names. We believe in the future of this country and in its development. We have more ideas for the development of the country than, I think, any other Party, and if we are allowed to carry on the Government of the country in an honest and a proper way, we have no doubt that all the plans which we have in mind can be continued, if production is increased, and if the terms of our trade remain reasonably satisfactory.
This debate has gone on now for a number of days and a good deal of criticism, on the part of the Opposition to the Budget, has been made. I would ask the indulgence of the House if I may go over, briefly I hope, some of the main points which the Opposition have made against this Budget because I feel it is important that the criticisms which have been made of the Budget and of the Government's financial policy should be stressed so that the people will realise the opportunity which they may have in the near future of changing the policies which are at present operative in Government circles.
Before dealing with what I consider to be the main trends and the main themes which are contained in this Budget, I would like to make three brief references to some of the statements that were made in the Budget statement by the Minister for Finance. One of the statements which he made contained certain implications which, as far as I have been able to find, have not been pointed out in the House or elsewhere. I refer to the interesting revelation which he made at column 1134 in which he stated very clearly and explicitly that the Opposition last year had, by its tactics, stopped the Government from bringing in a Supplementary Budget. Now, I would like to read to the House portion of what the Minister said. It was this:—
"When the attention of the Dáil was directed to the seriousness of the situation"
—the Minister is there referring to the serious budgetary situation last year or, rather, to the situation which he described as serious—
"the existence of the problem was denied and Ministers were accused of scaremongering and of panic. These circumstances alone made it quite impossible either to float a loan or to raise the necessary finance by imposing taxation."
What can that statement mean other than that the Government last autumn were hindered by the Opposition's tactics from bringing in a supplementary Budget to raise the necessary taxation? Now, we made our position abundantly clear in the House and in the country. We made it known that it would be wrong, in our opinion, and unnecessary in our opinion to bring in a supplementary Budget last autumn. If the Government believed that we were wrong in that attitude and that they should have raised taxation last autumn, this is nothing but a confession of great weakness on their part. It is a confession that the Opposition gained a singular victory in stopping the Government at that time from bringing in a supplementary Budget.
It was unnecessary, we believe, on the facts of the situation in the autumn of last year. It is unnecessary to go over the figures which we gave then by which we argued and proved, I think conclusively, that it was unnecessary to bring in a supplementary Budget last autumn. All I wish to point out is, that if the Government believed that a supplementary Budget was necessary last autumn, then they should have brought it in here. This statement of the Minister for Finance, that the tactics of the Opposition forced the Government not to bring in a supplementary Budget, is a confession of the greatest weakness which the Government could possibly show.
I would also like to salute, in passing, another victory which was gained by the Opposition in the economic discussions which have taken place over the last nine months. I refer to the conversion of the Government to the propriety of borrowing for the capital items referred to in the supply services. The last Government was attacked by every form of propaganda for its borrowing policy. It was vilified and it was said that it was putting the country in pawn because it said that certain items, amounting last year and this year to over £9,000,000, were items which should not be raised out of current taxation but which should be met out of borrowing.
As I have said, these criticisms were levelled against the last Government and have been levelled against it since these economic discussions commenced last year. We put down questions, and we asked the Government time and time again to state what items were wrongly borrowed for and what items should be met out of current taxation, but we never got an answer. The Minister for Finance in his Budget statement admits the propriety of borrowing for capital items for supply services. Therefore, I think it should be put on record that the inter-Party Government has scored yet another victory in these financial discussions, and on the propriety of its financial policy in regard to borrowing for capital items for supply services. That is admitted at any rate on paper, and it is admitted by the Minister for Finance in his Budget speech. But we cannot help wondering if the conversion has, in fact, been a real one. When we examine the figures for taxation and the figures of expenditure there is a suspicion, amounting almost to a certainty—which is legitimately entertained by the Opposition — that, in fact, what the Government are doing is financing the capital items of the supply services out of current taxation.
May I refer to the third item in the Minister's Budget speech? I regard this as an item of a very poor and very cheap Party political propaganda, one which should not have been contained in the Budget statement, I refer to the peroration in the Minister's statement in which he draws the inference that the last Government had started on a borrowing policy from foreign countries, a policy which, in fact, might have disastrous results for the country, a policy which his Government was not going to follow. Now the line indicated by the Minister for Finance in his speech has been followed very vociferously by the back benchers of his Party. We have had some of the less responsible and, indeed, some of the more responsible back benchers of his Party, talking about the fact that the inter-Party Government's economic policy was going to mean the economic dependence of this State.
Deputy Vivion de Valera is reported in the Irish Press on the 29th April last as making a statement on this. The statement is headlined: “Independence is at Stake: Debts Mean Dictation.” He went on to say:—
"The economic independence of the nation was at stake and if the Coalition drift were allowed to continue even its political independence would be in jeopardy."
That is a line of criticism and a line of propaganda which I regard as cheap and mean. It has no justification on the facts. Either the Government and the Fianna Fáil Party are attacking the inter-Party Government for its past borrowing policy, namely borrowing by the American loan, or they are attacking that Government for some future item of policy which they allege exists. Not one spokesman from the Fianna Fáil Party attacked borrowing from the Americans when Marshall Aid was first offered. If it was wrong to do it, why was it not said so at the time? If the Government is not referring, when it criticised this borrowing policy of the last Government, to the loan from the American Government, to what is it referring? Is it referring to some future loan which was going to be raised by the inter-Party Government? If the existence of such a policy is to be found on any minute in any Government Department or any statement made by any Government spokesman or any resolution passed by the Cabinet, let them produce it and let them show that it was the policy of the inter-Party Government to borrow from abroad after the American loan had been finished. Unless they can prove that that policy was in existence, it is quite clear that the statements they are making are merely cheap political propaganda, trying to stir up political prejudices in this country. They have, in fact, no foundation in fact.
I regard the principal motif running through this Budget statement to be the serious situation in our balance of international payments. This is the motif which has been running through the economic discussion which has taken place in this House over the last nine months all the time. Deputies do not need to be recalled to the statements of the crisis that we were facing, the statements that this country was facing a situation near to desperation and all the speeches made by the Ministers last summer and autumn indicating the parlous condition that this country had got itself into.
It was alleged at the time that the country had got into this condition as a result of the spending spree of the inter-Party Government. As a result of that, it was alleged, the deficit in the balance of payments was of such great magnitude that something had to be done about it. Practically the whole first portion of the Minister's speech, before he came to the financial charges, as such, which he introduced in his Budget, was directed towards the serious situation and the deficit in the balance of payments.
I have given figures here in the House before and I think I will give them again because I do not think that sufficient stress has been given to them in these discussions. I do not think that the Minister and the Government have fully understood the figures for the deficit in the balance of payments because what the Government has been doing, what ministerial statements have been showing is that the Government is equating deficits in the balance of payments with drawings upon external assets and they have argued that if there is a deficit in the balance of payments of £61.6 million as it was last year that there is ipso facto a reduction in external assets to that amount. That is not correct.
The Taoiseach in his recent statement in the House made that point. In Volume 131, No. 2, column 246, the Taoiseach, after dealing with the serious situation in our balance of payments over the last three years, is reported as saying:—
"As a result of these deficits we have cut down our sterling reserves by approximately £100,000,000. There is £100,000,000 less reserves to be used for the future for any purpose we may want them for. We have also lost the annual proceeds of that £100,000,000, which could be used and were used to purchase goods, goods for which we had not to export other things in return, goods which left us our reserves intact and gave us that annual income.
Surely reduction of these reserves for consumer goods is not a thing to be contemplated lightly. That is a thing which must make us sit up and take notice. I gave to the House already the position in regard to our external assets. I showed that they had been reduced from £225,000,000, which was the calculation of the net reserves which was made around 1949. They have been reduced in the last three years down to £125,000,000, which is now the amount of our net external reserves."
I say to the Taoiseach and the Government that those figures are not correct. I would ask the Government to look at page 6 of the report of the Central Bank of Ireland and I would ask them to look at the balance of international payments particulars for the year 1951 which was recently produced by the Central Statistics Office. They will see there that the manner in which the deficits in the balance of payments has been financed over the last year was not by reduction of sterling assets to the amounts of the deficits as such but by drawing on the American loan and by the import of capital into this country.
The figures for the deficits in the balance of payments for the four years, from 1947 to 1950, amount to £89,000,000. That deficit was financed not by drawings to the amount of £89,000,000 on our external assets but by dollar indebtedness amounting to £36.7 million and by an inflow of foreign capital amounting to £51,000,000 almost equalling the £89,000,000 of the deficit over those four years. It is almost certain from the figures — although there is no definite certainty about such figures — that there was no reduction in our sterling assets during those four years. In fact, the figures for the interest on those external assets went up and would indicate that the external assets during that period were increased and not decreased.
Last year, probably for the first time, there was a reduction in external assets. Last year's deficits in the balance of payments amounted to, according to the latest figure, £61.6 million. Again, that was not financed by drawings on sterling assets to the amount of £61.6 million. If the Government look at this balance of international payments they will see that that deficit was financed by dollar indebtedness, by dollar grant and by inflow of capital to the amount of £24.1 million and the very most there was of a reduction in sterling assets last year was £37,500,000. I think the figures will clearly show that in the last five years the sterling assets have not reduced more than £40,000,000 at the very most.
As against £135,000,000 by the Taoiseach.
No, as against £100,000,000 by the Taoiseach.
He treated the question like the Minister for Posts and Telegraphs treated the payment for debt.
The point that the Government has been making on that whole question of the balance of international payments has been the great and drastic withdrawal and dissipation of sterling assets over the period of the inter-Party Government and last year. I say that they are basing their whole case on a misconception of what has happened in regard to the balance of international payments. In point of fact we had anything over £400,000,000 of sterling assets after the last war. A distinguished economist, Rev. Father Coyne, estimated those assets at over £500,000,000 but even allowing those assets to be £400,000,000 they have still been reduced by a figure not more than £40,000,000.
I say that there is no need for crisis talk as regards our external reserves. There is no need for this deflationary Budget to try and remedy that situation. As I said before, the Minister for Finance built his whole case, his whole Budget statement round this serious crisis and a deficit in our balance of payments. Then he proceeded to go and show what he regarded as the manner in which that situation could be remedied. He specifically eschewed the use of import controls. He specifically stated that the Government regarded it as right and proper to introduce a system of import licences or import controls. He said the Government regarded as vital a reduction in the import of consumer goods and a reduction of consumption in the State.
Then he came to deal with his Budget and the financial changes that he brought into our economy. Deputies are entitled to ask what was the connection between the first part of the Budget statement, in which the Minister demanded that consumption be reduced, and the second part. If the Minister was serious in regard to the necessity for the reduction of consumption in the State, what should the Minister do? Surely he should endeavour to see by means of the tax mechanism that consumption was reduced. Surely he should try to reduce the subsidies. Surely he should try to take purchasing power out of the hands of the people by means of increasing taxes on luxury and semiluxury goods and by making it more difficult for the ordinary consumer to have enough income available to spend on imports. That is what the Minister did. The Minister has increased the price of basic food commodities. The Minister has largely increased the amount of taxation to be taken out of the pockets of the consumer. The Minister has ensured by his Budget that in the coming year people will consume less. The Minister is going to keep his balance of payments, by hook or by crook, in equilibrium or near equilibrium this year.
What will be the cost? We know already what has been happening in the last nine months. We know that unemployment has gone up by 12,000 since this time last year. The latest figure for emigration, as shown by the issue of travel permits for those seeking employment abroad, shows that emigration has gone up by 80 per cent. There is no need to be a business man to know of the trade recession which has hit every industry and business and employment throughout the State. These are the natural and ordinary and expected consequences of a deflationary policy. These are the consequences of reducing consumption by taking purchasing power out of the hands of the public. The Minister will solve his balance of payments problem all right; he will ensure that it will be below what it was last year.
The Minister, however, will have other problems on his hands. He will have rising unemployment, rising emigration and trade stagnation. The great difference between the Opposition and the Government is in the hierarchy of values. We all recognise that the balance of payments is a problem. We all have been stressing for years the vital necessity of increasing exports, particularly agricultural exports. The Party to which I belong have been preaching this for many years, long before the present Government saw the light in regard to agricultural exports. We have always stressed the vital long-term necessity of being able to export agricultural produce and the produce of secondary industries, if they can possibly be developed, so that we can enjoy a higher standard of living by importing more from abroad. We have always appreciated that a higher standard of living here means greater imports, that greater investment by the State ipso facto means greater imports and more consumer goods. If the State carries out a policy of large-scale investment, it is bound to mean an increase in employment. It is bound to mean, as it did, a reduction in emigration. It is bound to mean more and better wages and, consequently, more consumer goods required.
Before the change of Government last year, the previous Government met the economic situation and saw that what the country needed was a greater injection of purchasing power, a greater expansion of capital development in the country. They realised that by developing their capital investment, as they did, it would mean a much greater deficit in the balance of payments. Recognising that such a deficit in the balance of payments would come about, they deliberately expanded their capital projects in order to give employment and stop emigration.
We put in our hierarchy of values the ending of emigration, the provision of full employment, the provision of houses and hospitals, harbour development, land reclamation and telephone development. We put all these things before settling the deficit in our balance of payments because we believed that the problem to be met in regard to the balance of international payments is a long-term problem and that we should not allow ourselves to be obfuscated by a problem which can be solved over a long term if proper economic policies are continued. It is not a problem which should stop the national development of this country.
That is what the present Government are doing. They have got it into their heads that the deficit in the balance of payments is an A1 priority to be dealt with before everything else. I ask Government Deputies to examine the figures which I have given, figures which are in the Report of the Central Bank and in the recent White Paper issued by the Statistics Office, and see that our external reserves are still intact; that there are many hundreds of millions of them still there; that in the last four or five years we have been drawing on them only to the extent of about £40,000,000, and that we can still afford for many years to come to run a deficit in the balance of payments.
I ask the Government to realise that there are more important things than righting this deficit in the balance of payments, that there are 12,000 more unemployed to-day than there were last year because the Government are trying to right this deficit in the balance of payments. Emigration has gone up by 80 per cent. for a similar reason. If the Government wish to right the deficit in the balance of payments, all they have to do is to cut down their investment programme. By their investment programme, the Government are increasing the deficit in the balance of payments. They are providing employment which will mean an increase in consumer goods. The Government are increasing this deficit by their own policy. If the Government were serious, they could stop it by merely cutting down investment.
The clear-cut choice, as I see it, is whether the country is to have a policy designed to end unemployment, to rehouse the people, to build hospitals, to increase production on the land by means of land reclamation; whether the country will have the large-scale capital development which it had experienced under the inter-Party Government or whether it will right the deficit in the balance of payments. We believe that the deficit in the balance of payments can be allowed to run for a period of years still to come without doing any great harm to the community, and that we can see that over a period of years our agricultural and other exports are expanded so that in the long term we will be in a position to right the deficit in the balance of payments.
I should like to refer to the capital Budget which the Government have introduced in their Budget this year. The Minister for Finance has stated that the Government propose to spend £35.92 million on capital projects in the coming year. I welcome this change of front by the Government — if it is a change of front — in regard to the capital investment programme. I am sure most Deputies can remember the first speech made by the Minister for Finance when he dealt with financial matters after the change of Government. The House will, no doubt, remember that one of the principal problems then troubling the Minister was, what he termed, the unwieldy capital Budget of his predecessor. The capital Budget which we introduced was for £35.92 million, and he described it as unwieldy. In my view, I believe we were right in thinking that at that time there was going to be a reduction in capital investment by the Government, that all the specifics mentioned by the Central Bank did not only include increased taxation and reduction in food subsidies but also a reduction in capital investment by the State, and that all these suggestions were going to be put into operation by the Government. I am wondering if the Government has changed its ideas with regard to capital investment. They no longer refer to an unwieldy capital Budget. It is very strange to see the Minister for Posts and Telegraphs referring in this House to the increase in the charge for financing the public debt while remembering that, at the same time, the Government are themselves increasing the national debt. We have been criticised for the increase in the national debt charge over the last few years.
The Minister for Posts and Telegraphs gave the House extraordinary figures showing the increase in the debt charge since 1947. Unfortunately I have not got with me the figures for the interest of the servicing of the public debt for the year 1947. However it may interest Deputies to know that the total amount to be spent on interest for the servicing of the public debt for this year is £6.4 million. The Minister made an extraordinary statement to the effect that the servicing of public debt has gone up by £7,000,000 for 1947. The amount spent between 1946 and 1947 by way of interest for the servicing of the public debt was £2.4 million. According to the estimates given for this financial year it has gone up to £6.4 million. That is an increase of £4,000,000. The Minister gave the wrong figure to the House to-day. I do not know whether he did it deliberately or whether it was an error on his part. It is wrong, at any rate, that the Minister for Posts and Telegraphs should come into this House and give a false figure as to the increase in the service of the public debt — a figure which is believed by his own back benchers. We do not believe the figure of £6.4 million for expenditure on the interest on the public debt for the coming year to be a legitimate figure; we believe it is inflated. If the Minister is worried about the increase in the service of the public debt, why are he and his Government taking steps to ensure that the interest on the debt is going to be increased? Surely, if the Government is bringing in a capital investment programme of £35.6 million and believe in capital investment of that scale, that is going to increase the interest on the public debt. The Government themselves are deliberately increasing the charge on the public debt. Because of their own policy for many years to come the charge on the public debt will go up. The Government cannot have it both ways. They cannot criticise us for expanding the interest on the public debt because we expanded capital investment and still come along and expand capital investment themselves, thereby increasing the charge for the service of the public debt.
In my view, the increase in the interest on the public debt which took place during the inter-Party Government's term of office was infinitely smaller than that stated by the Minister for Posts and Telegraphs here this afternoon. I do not believe any great harm is being done to the community as a result of the increase in the cost of servicing of the public debt each year, because the public debt and the interest on it were created as a result of Government expenditure on houses, on hospitals, on telephones, on electricity development and on all the items of the capital investment programme. If one wants the capital investment programme to be increased, it follows automatically that there will be a corresponding increase in the service of the public debt.
As I say, the amount provided for the capital investment programme this year is £35.9 million. The Minister, however, made what must again be regarded as a very extraordinary statement when he told the House he did not know how he was going to get all the money required. It would, indeed, be very strange if the director of a company came before his shareholders and informed them that the company was about to spend £20,000 in the coming year, that he was only able to procure £10,000, and did not know where he was going to get the rest of the money. However, that is exactly what the Government has done with regard to the capital investment programme.
I feel that unless the Government changes its present financial policy and present financial views, there will be nothing like £35.9 million spent. The Minister stated that the £35,000,000 was to be made up as to £6,000,000 from small savings — the Post Office Savings Bank and the sales of savings certificates—as to £1,000,000 from income from social insurance funds and as to what he hoped would be £10,000,000 from a national loan. That is £17,000,000 in all, but there is a gap of £18,000,000. He did not know how that gap was to be closed. He stated that if the public did not lend more than £10,000,000 the capital investment programme would be in jeopardy; that the £18,000,000 gap is going to be cut down; that, in fact, the Government were only going to finance an investment programme out of what they could get in small savings, from the income from social insurance funds and from the national loan. It is not necessary to go over again the failure of the Government to go for a national loan last year. They were criminally negligent in that respect. If they had gone for a loan they would now have the American Loan Counterpart Fund for capital investment. However, they had to draw it for investment last year, and the Government are now seeking to finance their capital investment programme from methods other than from the counterpart fund. I sincerely hope that this loan will meet with success when it comes off. I hope the public will subscribe to it to the greatest possible degree when it is floated.
I feel sure that as a result of the Government's financial policy, and as a result of the great drop in the money market due to the unwillingness of the public to invest at the moment, the Government will not succeed in getting much more than £10,000,000; that, in fact, this year only £10,000,000 will be made available from the public, £7,000,000 will be forthcoming from small savings, leaving a gap of £18,000,000. Are the Government going to cut down on the capital investment programme, and going to be satisfied this year with £17,000,000? Are they going to cut down on items of capital expenditure and, if so, on which ones? A large proportion of capital investment is directed to housing, to telephone development, to electricity development, to land reclamation, to harbour development and road development. Which of these items is going to be cut down? Are all these items good in themselves? Are they things upon which money should be spent? In what manner then are the Government going to choose that certain items should get the axe because money is not available?
I think it is extremely strange to have the Minister for Finance saying here that he hopes to spend £35,000,000, but showing that he has in all only £17,000,000 available to spend on these items. I realise full well that the amount of drawing on the sterling assets under the direct control of the Government to finance capital investment here is limited. There cannot be an unlimited drawing from those assets. They amount approximately to only £40,000,000, and they cannot be reduced completely. However, they are there, and there is no reason why they could not be reduced further, and I hope the Government will not allow any of its capital investment projects to be put in jeopardy because of failure to draw to some extent, at any rate, on these external assets under the direct control of the Government.
There is one source of financing a capital investment programme which has not been mentioned here and which has not been alluded to by the Government. I refer to borrowing from the banks. I would be in favour of direct Government borrowing from the banks in order to finance this alleged deficit which is going to come about between the amount available for expenditure on capital projects and the amount of these Government projects as set out in the Government statements. If there is a deficit I think it would be wrong to cut down on any of those items because the Government has not got, or says it has not got, the means of financing them. I believe that what is physically possible is financially possible and that the development of this country should not be stopped for lack of money. The Government should be able to raise the necessary money for these capital projects which does not come direct from the public from the banking system.
I do not think the Government spokesmen or anybody else could point out any banking system in the world which has such a small proportion of its own Government securities in its investment portfolios. I can see no reason why the Irish banking system could not co-operate in the development of this country by increasing its holdings of Irish Government securities. If there is any deficit in this capital side of the Budget, if there is a short-fall of the amount available direct from Government funds and from the public, I consider that the Government should raise the money, first of all, by drawing on sterling assets, and, secondly, from the banks.
I do not consider that the Government has answered the Opposition's criticism of this Budget when the Opposition has said that this is a deflationary Budget. Our arguments have been strengthened to-day by the Minister for Posts and Telegraphs. The Minister for Posts and Telegraphs referred to the large-scale taxation in the Scandinavian countries and in New Zealand and pointed out that these countries were facing the problems which we have to face and by their tax mechanism were working out a solution. "The general effect of these Budgets is to reduce imports.""They are," he said, "fighting inflation." How does a Government avoid inflation and how does a Government reduce imports, except by a budgetary surplus? That is what the British Government has done and that is what most European Governments have done. They have budgeted for a surplus and brought about a reduction of purchasing power so that people will consume less, so that imports will be reduced and so that the inflationary pressure, which is regarded as of supreme importance in this country, will be lessened. The effect of Mr. Butler's Budget was designed to be deflationary. The effect of the Budgets of the many European countries, Belgium, Holland and the Scandinavian countries is directly designed, as the Minister for Posts and Telegraphs has said, to reduce inflation.
This Budget by the present Government is one which is designed to reduce inflation in this State — a deflationary Budget. We regard that as the wrong remedy brought forward at the worst possible time to remedy a situation which is non-existent. Our situation here does not require deflationary measures. Our situation is one which necessitates increased and, if necessary, inflationary financing by the Government. As long as we have an unemployment problem, as long as we have an emigration problem, as long as there is a need for capital in the country, we cannot say we have an inflationary problem here. The Government have admitted — they did not admit it when they were in opposition but they have admitted it since — that the rise in prices is due largely to the rise in import prices, over which we have no control. The deflationary steps taken by Governments in Europe, particularly England, are designed for a problem which is completely different from ours. I do not see in any way how a deflationary policy could stop the rise in prices in this country, because our rise in prices is largely due to the rise in import prices.
I consider the Government are applying the wrong remedy, applying a deflationary remedy towards a non-existent situation. We have no inflationary pressure here. We have rising unemployment and emigration. We have trade recession rampant throughout the State and those are not safe circumstances in which the Government should take deflationary action. I believe the Government are taking the wrong remedies and are applying the wrong financial policies. They are budgeting for a surplus and reducing purchasing power in the State. They are going to cut down on their capital investment programme because they do not want to finance it by what they would call inflationary methods. These policies are wrong and I believe that the policy of the inter-Party Government was the correct one, one in which the economy was allowed to expand by the injection of purchasing power produced by the State. I believe that the State has a positive function in the economic life of the country. It is a sign of weakness that, as the Taoiseach has said here last week, he does not know whether there is inflation or deflation in the country at present, and the Government is not taking any action one way or the other. It is the duty of the Government to take action one way if it is an inflationary and another way if it is a deflationary period. I am of opinion that we are entering a deflationary period when an increase in purchasing power in the State is vitally necessary, when the Government, by its policy, should ensure that unemployment is reduced and emigration is brought within manageable lengths.
Policies designed towards those ends should be introduced and not a policy designed towards remedying the deficit in our balance of payments. Very shortly, the Government will have great problems on its hands. If we should have a change of Government, the new Government will have very great problems on its hands because of the change in the momentum of the State financial policy. I fear that we shall have rising unemployment, rising emigration and rising wage demands. Who can criticise the unions now for demanding wage increases? There will be an increase in the cost of living. There will be a large-scale trade recession and there will be a reduction of investment in this State. The ordinary people who will have to suffer these additional hardships will also have the bitter thought that these hardships would be unnecessary if the correct financial policies were put into operation.
During the course of this debate we have heard a lot of talk from Government spokesmen on the subject of high finance and on our internal and external assets. Very few Government speakers have said anything about the direct effects which this Budget will have on the people throughout the country. In my opinion, no proposals which were ever introduced in this House have staggered the people of this country more than the proposals contained in this Budget. Apart altogether from putting a drink or even a smoke beyond the range of the ordinary people of this country — the workers, the small farmers and the business people, who are the backbone of the nation — this Budget puts some of the essential foodstuffs, which every family requires weekly, beyond the reach of many of our people. Knowing the difficulties which many of our people who live in remote and isolated parts of this country have to contend with, I do not know how they are going to find the wherewithal to meet the extra costs which are imposed in respect of almost every commodity of an essential character.
The Tánaiste mentioned that it is now possible to end the rationing period. I believe that statement is incorrect. Instead of doing away with rationing under this Budget we are commencing an era of intense rationing. No matter what the Government may say, many of our people will not be able to pay the high prices for their requirements of essential foodstuffs.
The peculiar thing about this Budget is that it is being put into operation by a Party who have persistently made political capital out of the cost-of-living issue. At every crossroads during the general election we saw Fianna Fáil posters on which "Cost of Living" was printed in big letters. There was no inkling in any of these posters that if the Fianna Fáil Party were returned to office they would reduce the subsidies on foodstuffs, and that they would reimpose the taxes which the inter-Party Government had removed when they took office in 1948.
I have here a sample of the type of document which the Fianna Fáil Party submitted to the people of West Cork during the general election. I have no doubt that somewhat similar documents were submitted to the electorate in other constituencies also. The matter of the cost of living receives prior place on this document. The prices which obtained in respect of 16 commodities in 1947 were compared with the 1951 prices. In many instances the increases were insignicant, but nevertheless during the general election campaign the Fianna Fáil Party made political capital out of these increases. The cost of living was the main plank on which they fought the general election. Anybody, on reading this document, would reasonably infer from it that if the Fianna Fáil Party were returned to office they would reduce the cost of living. I wonder, if there should be a general election before the end of this year, whether the Fianna Fáil Party would consider the preparation of a document similar to this one, and compare the 1951 prices of these 16 commodities in question with the 1952 prices.
The dishonesty of the Government's policy has been made very apparent by two or three speakers to whom I have listened. It has been made very apparent by the Taoiseach himself and by the Minister for Posts and Telegraphs. If I remember correctly the Taoiseach said: "To me this Budget is no surprise. We knew that the country was mismanaged during the period of office of the inter-Party Government and that that mismanagement would come to an abrupt end if we were returned to office. We knew that we should have to act as responsible people and put an end to the irresponsibilities of the inter-Party Government and put things in order." It is only natural to assume, therefore, that when this document which I have in my hand was issued to the electorate of West Cork, on behalf of the Fianna Fáil Party, the Taoiseach and the Minister for Posts and Telegraphs knew very well that they had no hope in the world of reducing the cost of living or even of holding it at its then level. It is obvious that the Taoiseach and the Minister for Posts and Telegraphs knew very well what would happen if they were returned to power. Nobody can come to any other conclusion but that both of these gentlemen are dishonest, and I, for one, believe it.
The Deputy should not make that statement in reference to Ministers.
Their statements.
The Taoiseach and the Minister for Posts and Telegraphs mentioned that it was no shock to them to find how the finances of this country were after the irresponsibility of the inter-Party Government. They knew that very definite action would have to be taken.
It is not dishonest to say that.
They knew they would have to bring the country, as they said, "back to an even keel". Why did they not make these admissions to the people last May? They have admitted that, during the general election campaign 12 months ago, they knew that these steps would be taken but nevertheless they sent out this dope on the cost of living issue to the people. That definitely makes them dishonest and I have no hesitation in calling them dishonest.
The Deputy will withdraw the statement that the Taoiseach, the Minister or any Deputy in this House is dishonest.
I do not think the Deputy referred to them personally. He said that the statements they made were dishonest.
The Deputy will withdraw the statement in regard to the Taoiseach or in regard to any other Minister who has spoken.
I withdraw. I believe as a result of these dishonest statements that Fianna Fáil succeeded in securing election even as a minority Government but I am sure that many people throughout the length and breadth of the country, even in Deputy Cunningham's constituency, have since on many occasions bewailed their action and the fact that they were so deluded as to vote Fianna Fáil into office. I feel that they have no choice except to bewail that action until such time as they get an opportunity of rectifying the position, and I have not the slightest doubt that when that opportunity is afforded them, the Fianna Fáil Party will be almost obliterated.
We have had ample evidence of the incompetence of this Government from the first year they took office in 1932, and their recent bungling of the affairs of the country is only in accordance with what one would expect from them. The most recent burden they have imposed on the country is only what one would expect as a result of that incompetence. To give one instance of their incompetence, we had a statement by the Minister for Agriculture on the 23rd April that we were now in the middle of the wheat-growing season. I am sure if any other Minister for Agriculture made such a statement, that April 23rd was the middle of the wheat-growing season, he would not remain long in office after that. That is only one sample of the gross incompetence of the present Government to deal with the affairs of the people. I believe they have no clear knowledge of the people's needs. They seem to be completely and entirely cut away from the average man and woman in this country. They are associating only with people in the higher circles, people whom this Budget will not affect very severely.
So far as the drink and tobacco taxes are concerned, the people have only themselves to blame for the reimposition of these heavy taxes. Everybody remembers what took place in 1947 when Fianna Fáil were last in office. I do not want to be taken as encouraging excessive smoking or drinking on the part of any of our people, but at the same time it must be remembered that there is a tradition amongst our people when they meet at a fair or a market, or after a hurling match or a bowling match, to take a few drinks and enjoy themselves. I say that no Government has a right to place such enjoyment beyond the reach of the ordinary people of the country. So far as smoking is concerned, if a man is working in a field there is no doubt that a smoke or two will induce him to remain a few hours longer at his work. To many people it is the only source of comfort. Fianna Fáil are now endeavouring to remove these two essential comforts from the ordinary people of the country.
I do not know whether that action was dictated by the fact that neither the Leader of the Government nor the Minister for Finance smokes or drinks himself, but if it were dictated by that fact, I believe that they should not judge the general needs of the people by their own requirements. I think these impositions — 3d. on a pint of stout, 3d. on a half-glass of whiskey and 7d. on a packet of cigarettes — are most unfair. Publicans throughout the country are very dissatisfied with this Government. Many of them who are entirely dependent on their public-houses for a livelihood have reason to bewail the fact that Fianna Fáil again got the chance last May to administer the affairs of this country. I think it very unfair that these people should have their livelihood almost taken away from them. The new taxes are bound to result in wholesale unemployment so far as publicans who employ labour are concerned.
This Government and its spokesmen since the Budget was introduced, have done a lot of "blowing" about internal and external assets. They have many apologists up and down the country but I must say they are losing even some of their henchmen. We hear a lot about the mismanagement of the inter-Party Government. I am not so long in public life but I remember the election campaign of 1948 fairly well, and I remember hearing these same gentlemen mention that if any Government but a Fianna Fáil Government were elected, the country would be doomed for ever. One would gather listening to their statements that if another Government were elected the heavens would fall, the clouds would burst or some great disaster would befall the country. The people, however, elected another Government and what did we find? One of the first actions of the new Government was to remove the increased taxes on drink and tobacco, taxes which have now been reimposed by the present Government. The working man, the small businessman and every citizen of the country who wished could then smoke at a reasonable cost.
As a result of the work accomplished by the inter-Party Government during their three and a half years in office, many families who hitherto never had a hope of living in a comfortable house are now housed in comfort and decency. The inter-Party Government also introduced many productive schemes which were of immense value to the people generally. They gave the people an opportunity of obtaining productive employment, an opportunity which is being denied them by the present Government. That denial of employment has resulted in 12,000 more people being added to the unemployment list in the last 12 months.
It is quite evident from all the prophecies made by Fianna Fáil in regard to what would happen if they were not returned as a Government that they regarded themselves as a sort of heaven-sent Party to rule this country. I am quite satisfied, as a member of the Labour Party, that if Fianna Fáil had not been returned to power instead of having 12,000 more people on the unemployment register, there would have been no increase in unemployment and we would have a lower figure this year. I am further satisfied that people would not have to pay 2/- a st. more for flour, 2/8 more per lb. for tea, 2½d. more for a loaf, 7d. more for a packet of cigarettes and 3d. more for a pint of stout. I think these cruel impositions which the Fianna Fáil Government have placed on the people are a terrible scandal and that there can be no justification, good, bad or indifferent for them. If they were honest with the people in 1951 and told them that they were going to reimpose these taxes and that they were going to remove the subsidies, I wonder would they be the Government of the country to-day?
We have heard a lot about compensatory measures, that the old age pensioners, for instance, would get 1/6 per week more. Is that any compensation for raising the price of the "half-one" from 1/6 to 1/9 or for increasing the price of the bread, flour, tea and sugar that these old age pensioners will have to use? I think, so far as that section of the community is concerned, that it would have been much more helpful if, instead of increasing the old age pension by 1/6, they allowed the subsidies and the taxes to remain at the old level and reduced the old age pension to 15/-.
Fianna Fáil never did anything for the old age pensioners despite the efforts of the Minister for Posts and Telegraphs in trying to make us believe last Thursday that they were responsible for practically lifting them up into heaven. Having regard to the present abnormal cost of every commodity, 3/- per day is not a sufficient allowance for them and instead of getting an increase of 1/6 they should get at least 10/-.
Another alleged compensatory measure is the increase in children's allowances. The compensation provided by that measure will not be sufficient either, since an increase of 1/6 could not possibly offset rising prices. The people in the country will not swallow that. I do not know on what figures some Deputies have based their calculations but I do know that an extra 1/6 per week will not compensate for the rise in prices.
Yet another compensatory relief is the removal of the tax on dancing. I need not go into that in detail. I heard the correspondence read by Deputy S. Collins — correspondence that passed between the Deputy Leader of Fianna Fáil at the time and the secretary of the Association of Ballroom Proprietors. It is quite obvious this relief was given because of the support offered by these people to the Fianna Fáil Party during the election campaign last May. I suppose it is only reasonable to assume that, in order to help in building up Party funds, Fianna Fáil get the use of these ballrooms free of charge for their monthly or their annual dances.
It is outrageous that a Government should increase the tax on drink and tobacco and withdraw the subsidies on essential foodstuffs while at the same time removing the tax on one of our most thriving entertainments, dancing. The operation of the tax did not hinder dancing in the slightest degree.
Every Deputy is entitled to put forward his own view. Deputy Dr. Browne had many comments to make on the Labour Party in particular, and the inter-Party Government in general. It seems very significant to me that it took Deputy Dr. Browne three years' association with that Government to find out that they were the twisters he now alleges some of them were. It is equally significant that three years is the term required in order to qualify for a ministerial pension. I do not know whether or not it was with a view to qualifying for that pension that Deputy Dr. Browne held out so long.
There is more than one ministerial pension.
That is the position.
That has nothing to do with the motion. The question of pensions does not arise.
All the same it is significant.
Other people waited for three years to introduce the Social Welfare Bill.
The Social Welfare Bill would have been introduced earlier, but it was held up by Deputies such as Deputy McGrath. Deputy McGrath will have a difficult task explaining this Budget to his constituents. I have been speaking to his supporters during the past few weeks, and it will take all his powers of persuasion to sway even a very small fraction of them again.
There are people sitting alongside you who will have a lot more trouble.
I would like the chair to give a direction. Is a Deputy entitled to suggest that another Deputy retained his position as a Minister for the purpose of securing a pension?
May I point out that the Deputy did not say any such thing? He suggested it was significant that the period was three years.
That is as good as saying it.
Do not put into the Deputy's mouth something he did not say.
The Chair has already pointed out that the question of ministerial pensions does not arise on this motion.
Are they not included in this big Bill?
Deputy Murphy on the motion.
I am not as well versed in governmental procedure as other Deputies may be, but I understand it is not proper that Cabinet secrets should be betrayed. I believe Cabinet deliberations are regarded as secret and just because Deputy Dr. Browne fell out with his Cabinet is no reason for his even partially disclosing these deliberations. It is significant that he held out until such time as he qualified for £300 per year pension.
That is a reflection that should not be made on another Deputy and the Deputy will withdraw the statement.
I withdraw it.
Would the Chair tell Deputy McGrath that he is not the Leas-Cheann Comhairle?
On a point of order. Deputy Davin has cast a reflection on the Leas-Cheann Comhairle.
What I suggested, Sir, was that you should tell Deputy McGrath that he is not the Leas-Cheann Comhairle.
On a point of order. Did Deputy M.P. Murphy's remark apply to the whole Cabinet?
That is not a point of order. Deputy M.P. Murphy on the motion.
When I was at school we were taught that all our hatred should be directed towards England and that America was our best friend. We were taught that every endeavour should be made to foster the closest co-operation between this country and America. It now appears that Fianna Fáil policy has changed completely in regard to that policy.
Now, instead of maintaining friendly relations with America we have to be very careful. We are to maintain our economic independence of them; we are not to accept any gifts, loans or help which are given to us. We all know that the United States of America is the richest country in the world, and at the present time is helping most of the European countries. I cannot see for the life of me why we cannot avail of that help just as other countries are availing of it. As I have said, we maintain, and have maintained in the past, that America is "the greater Ireland beyond the seas". We know very well that many of the principal men in America, holding key positions there, are of Irish descent. Even if we take the American Ambassador to Ireland, his grandparents came from my own constituency. Are these the type of men who will take advantage of us — our own kith and kin, men of our own blood? I cannot see what justification there is for that line of policy, that we are no longer to avail of the help which America offers to us, that we are to maintain our independence of her and that she is more or less dangerous. Now, it appears it is the so-called ancient enemy that we are to take advice from—the enemy that we slaughtered our calves for and impoverished our farmers.
We saved ourselves £100,000,000.
Now we are to turn in the other direction, to our ancient enemy for advice as to how we will manage our affairs.
The farmers still vote Fianna Fáil.
Try them again.
Very few farmers in my part of the country vote Fianna Fáil.(Interruptions.)
Deputy Murphy should be allowed to speak without interruption.
On a point of order. I would like to draw attention to the fact that Deputy Killilea apparently came into the House to start his running, fire of interruptions against Deputy Murphy.
I never said a word against him at all.
From statements made from the Ministerial Benches, one could only gather that the present Government is no longer anxious for maintaining close relations with America. They are of opinion, from whatever information they have, that we have to be very guarded and watchful of them, in case they would take advantage of us. We are to keep independent of them and have no more co-operation with their policy. But, as regards our nearest neighbour, England, we are to adopt a different policy. Instead of being any way doubtful about her, two of our principal Ministers went across there, hat in hand, to look for what information and advice they could get. I believe they got some advice such as that this is the type of Budget that would suit the Irish people. It is a poor thing that we have reached that state of affairs, that we should go to our so-called ancient enemy for advice as to how to manage our affairs.
Now, during the course of his speech on Thursday and to-day the Minister for Posts and Telegraphs roamed all over the world. He explained conditions in Norway, Switzerland and in almost every country. He explained everything to us, with the exception, of course, of what effect this Budget will have on the ordinary people of this country. He compared the prices obtaining for foodstuffs in those countries and in Ireland. I think it was most unfair to make such a comparison. We all know very well that most of those European countries are going through a hard time and have a hard struggle to make. We know that they have suffered immensely, economically and otherwise.
We know that they have not yet built up their economies as a result of the great disaster that befell them. We know, too, that they have to strengthen their armies and that they have big commitments in an effort to try and ward off another war. They are afraid that another war may, unfortunately, be coming. We have no such commitments in this country. Fortunately for us, we did not enter the last war. There was no need for us to do so, and we did not suffer very much so far as economic standards are concerned. Therefore, I do not see why the Minister for Posts and Telegraphs should have made that comparison in regard to prices here and in countries such as England and France which suffered so much during the last war.
So far as the Budget is concerned I and I believe the vast majority of the people feel that we can claim, without being in any way uncharitable, that the impositions in it are the severest that have ever been placed on the Irish people by any Government. This Budget is definitely bound to bring a trail of misfortune. As Deputy D. Costello pointed out, when the increased prices come into operation next July we are bound to have demands for increases in wages; we are bound to have demands for this, that and the other from almost every section of the community. The Budget is definitely going to have an adverse effect on the ordinary pursuits of every person in the State. The sooner the Government give the people an opportunity of giving a verdict on this Budget the better. As other Deputies have pointed out, it is only right that on an issue of such vital importance to the people, the Government should, at the first available opportunity, put this Budget before the tribunal of the people and abide by their verdict. If they do, I have not the slightest doubt as to what the verdict will be. I believe the verdict will be a sound one and a good one. I have no doubt but that it will be a verdict to wipe Fianna Fáil from the position they occupy, and that it will be for the betterment of the country when they have been wiped out.
I listened to almost all the speeches that have been made here since the Budget was introduced, and I have read carefully any which I did not hear. I did that because after hearing the speeches of the Opposition I felt very confused. I thought that, by reading speeches which I did not hear, I might get to understand some of the policy proposed by members of the Opposition. I was rather glad this afternoon to listen to Deputy D. Costello. He gave some indication of what the policy of Fine Gael was. That policy seems to be merely to go on borrowing, not only from the banks here, but to realise whatever external assets we require. I was, however, a little bit puzzled by that statement because I had gone to the trouble of reading a statement on last year's Budget by the then Minister for Finance. In comparison with the speech made by Deputy Costello, Deputy McGilligan would seem to have a totally different idea. His speech indicated quite clearly that the new difficulties we were encountering were due to the using up of our external assets. At column 1882 he took occasion to refer very definitely to that when he said: —
"This is the appropriate point to introduce the term ‘inflation'. The classical definition, in popular language, is ‘too much money chasing too few goods', and, therefore, driving up prices. In our circumstances, the definition might be reformulated as ‘too much money attracting too much imports', since over-spending by the public and the State is able to find an outlet in purchases from abroad financed not from income but from past accumulations. In a state of normality we should be able to live on our income, and indeed save enough of it for capital purposes, not only to maintain but actually to increase our production and, therefore, our standard of living.
It is still proper and eminently reasonable to draw on our external assets if thereby we speed up the process of capital development at home. What is abnormal and, if it persists, can be seriously damaging, is to use up our external resources for consumption purposes."
Further on he states:—
"Only if the gap in the balance of payments is narrowed so that external disinvestment is balanced by additional home investment — rather than by excessive consumption — can we be satisfied that as a nation we are making ends meet and not wasting our past accumulations. One of the great benefits conferred by the possession of external assets is ability to ride out periods like the present of exceptional difficulty and stress, but this external mass of manoeuvre is the mainstay of our economic independence."
Who is the Deputy quoting?
Deputy McGilligan in his Budget speech of last year. I think that statement is an awkward one for the Opposition at the present time.
Ah, no.
They have not adhered to that nor did they co-operate with him after he had made that statement. What they did was to go to the country without any defeat in the Dáil and come back.
What you are going to do now.
The reason for that was because there was definite disagreement with Deputy McGilligan on that. The reason I say that now is because our young friend, Deputy Costello, has made a definite statement that a definite part of their policy to the people is to go on borrowing. Is not that the policy of the Party opposite — to keep on borrowing? I wonder what would be the finish of that? There are some Deputies on the other side who remember, I am sure, the results of the first world war. There are quite a number of people, especially farmers, who have not forgotten it.
Nor have they forgotten the economic war either.
Do not mind that. I am talking about the first world war.
The Deputy took part in the first world war and we did not.
Nobody is denying that. We do not need you to tell us that. There are many farmers who still remember with deep regret the results of that war.
Hear, hear; because of the banks.
Because of the banks? Is not that correct?
Yes.
How did that collapse take place? Was it a gradual collapse or did it come suddenly? That collapse came suddenly and I believe that the former Minister for Finance is quite right when he makes the statement that we should be prepared for all eventualities. We may be prepared at any time within the next year or two to have a very serious collapse —a thing which follows every war and borrowing will not improve it.
What, in the name of Almighty God, has the economy of that period to do with the present Budget? We were then part and parcel of the British Empire.
The Deputy is quite entitled to make the contrast he is making.
God forgive him.
I should like to hear the Deputy and I should like to hear about the banks.
I hope the Deputy is permitted to be heard.
He believes it is the truth. I will allow him that.
A Deputy
He speaks the truth.
He is an honest Deputy.
We are going through a period that will possibly do more harm than the period after the first world war. I think we should try and pay our own way but for the last three or four years we have been living on borrowed money.
Living beyond our means, you said.
It is not true to say that we are living on borrowed money.
The greater part of the money we used was borrowed money.
Who borrowed it?
We did not.
Fianna Fáil borrowed it.
No. Fianna Fáil's policy was against borrowing. If they got a grant they would have taken it.
You missed the tide there.
Why?
You did not comply with the regulations.
There were no regulations.
The Deputy ought to be allowed to make his statement. Some of the Deputies interrupting made their statements. The Deputy is entitled to make his.
He is making a bad job of it.
The Party opposite have indicated to the House no other policy but that of borrowing and continued borrowing. I wonder where shall we finish if that takes place?
I heard Deputy Murphy, like many other Deputies, making the statement that this Budget was a cruel one. I wonder is there anybody opposite or any person in the country who believes that we would introduce a Budget to punish the people?
This is the second time you have done it. You did it in 1947.
Nobody believes we would deliberately introduce a Budget to punish the people.
We are vote catching.
Nobody can say there is any vote catching but there is a very high degree of honesty in the policy we are pursuing. We are not afraid. We are courageous and I am sure that the people will be thankful for that. As a matter of fact, I met quite a number of people who agree on one matter and that is that we must make a sincere effort to pay our debts. If we do not do that any credit we have goes and any credit we may expect in the future goes. We cannot live without a certain amount of credit. Therefore, it is essential that we should face up to the difficulties and up to the insincere criticism from the Opposition and meet our liabilities. It can be done and it might be much easier to do it this year than next year or the year after. It is essential that it be done at once.
There is some talk throughout the country about dances and dancing and why not tax the dancers. Many reasons were given as to why that should not be done. The main reason was the difficulty in regard to the cost of collecting the small amount of money that could be collected, some £120,000.
£140,000.
It is a comparatively small amount of money when we were talking here of millions. In answer to a question here to-day we find that there are 1,285 dance halls in the country. It would take a fair amount of supervision to collect the stamps and the duty in those halls.
It would be much easier to collect it by cheque.
Where is it collected but in the dance halls?
The difficulties of collecting would be enormous. Not only that, but as far as I know, in the County Meath, quite a number of those halls belong to the clergy and are used for parochial purposes, church building, school building and other charitable purposes.
That type of dance was free of tax.
The only alternative to the stamp duty is to tax on the cubic space of the hall. There would be great difficulties in doing that, because, even halls in which the cubic capacity would operate, are very often lent for educational and cultural purposes. In fact, they are very often lent to Fine Gael, Fianna Fáil and Labour to get up dances to raise funds. For all that could be got out of the tax, I do not think it is worth making the attempt. Very many people ask: "Why do you not put a tax on dance halls and cosmetics?" Others say: "Why do you not put a tax on bicycles?" All these would be very difficult taxes to collect. They are taxes which would not give a result without a good deal of expense. In fact, they might not be worth the expense of collecting them.
There was also a good deal of talk here about bank credit. When we had the discussion here on the Central Bank statements were made by Opposition Deputies (1) that the Central Bank had no authority to make these reports; (2) that they were wrong. We had the same thing said about the White Paper which was issued. Now we have the same thing said about the Budget — that it is miscalculated. I wonder what has happened to the civil servants that they make all these mistakes now? That is an extremely weak argument to use and one which is very unfair to civil servants. It was also stated that we ordered the banks to restrict credit and that that was the cause of a lot of depression and loss of business.
The banks are our bosses rather than we being their bosses.
It is the business of the banks to decide whether they will or will not restrict credit.
That is an admission.
Mr. O'Reilly
In the recent debate on the Budget the statement was made by an Opposition Deputy, as reported in column 129 of the Official Report: "The Government ordered the banks to restrict credit and a great part of the present trade recession or stagnation is due to that. The Government also gave permission to the banks to raise the interest rate to 6 per cent."
Who made the statement?
Deputy Crotty on last Thursday. That statement is rather unfair. The Government did not order the banks to restrict credit. What really happened, as far as I can find out, is that the banks had given a good deal of credit to drapers. Someone in the previous Government believed that we were going to have a war immediately and that it would be advisable to get in as much stocks as we possibly could. Drapery goods were the principal ones brought in. The drapers brought huge quantities of goods into this country and got credit to do it to the extent of £25,000,000, £26,000,000 or £27,000,000. These included a good deal of fabrics and manufactured goods. The result was that the banks said: "We will not give you any more money to buy goods."
The fact was that unemployment was increasing rapidly and the banks decided that they would not give any more credit to bring in any more goods. That is the only restriction of credit that the banks put into operation. It was perfectly right to do that, because the bulk of the unemployment which Deputy Murphy spoke about is due to the fact that too much manufactured goods were brought in here. Deputy McGilligan, when he introduced his last Budget, adverted very strongly to the fact that we were buying too much goods abroad.
I hope that this Budget will be a success. Every effort is being made to minimise the effects on the people in general. The people can hardly expect to get out of the trouble we have got into too lightly. I hope that borrowing will not be developed here and, if there is an election, I hope that the people will have the common sense to return Fianna Fáil——
Will you give them a chance?
——at least until such time as the debts of this country are paid off.
What about Deputy Cowan?
And Deputy Dr. Browne?
You do not want them put out, do you?
Order, order!
No matter what Government comes in here, the finances of the country will have to be put in order. If that was not done in this way, we could not do it by internal borrowing. I do not think that you will be able to borrow any very large sum internally. If you cannot borrow here, where are you to borrow?
I am surprised at you. We are not bankrupt yet.
We are not bankrupt, but we are not a rich country. We are not as rich as people assume. That assumption is a dangerous one. There is no use in assuming that money can be got every time it is wanted. The Coalition Government had a try at that and the result was not very satisfactory. That was not because the people had not any confidence in the Coalition, but possibly because the money was not available. Suppose we did accept the policy of the Coalition Government and used up all our external assets. Suppose we had debts to meet abroad and we had no external assets to draw upon. The only way to meet these debts then would be by borrowing. Where would you borrow? If you could not get the money here, you would have to borrow outside and, if you borrowed outside, I wonder what would happen. I hope this country will never borrow any more outside, because the country that borrows money from another country sells its soul, its body and everything else.
Everybody will admit that this is a bad Budget, in every respect. Even the speaker who has sat down has tried to defend it with untruths, with false premises. Therefore, we must examine it in a reasonable way and see exactly what are the bad parts of it, what will be the results of putting it into effect, and, generally speaking, what effect it will have on the country.
It is a bad Budget for the reason that there is no necessity for it to be so harsh. That has been quite clearly established. There is extra taxation for capital expenditure which should normally be carried on a capital expenditure programme. It is a bad Budget for the people; it is going to impose very grave hardships upon every section of the community. Any Budget that does that is not good. It is a bad Budget for the Government because, even from their point of view, it will affect them seriously. It is bad even for the Opposition, because the Government start to blame the Opposition for everything that they think is bad in it. Listening to Fianna Fáil speakers in the House and listening to them and reading their speeches down the country, we would come to the conclusion that there was no truth whatever on this side of the House, no honesty whatever and that all the truth and all the honesty were on that side.
A Budget that creates unemployment, a Budget that makes less food available for the people, for a married man, his wife and family, a Budget that imposes hardships of that nature on the people is a bad Budget and no Government worthy of the name of a Government should impose it. Why should they impose it if there is any other alternative? What I want to know is what steps the Government are taking to examine the alternatives?
The inter-Party Government during its term of office had a system of taxation, and when the Minister for Finance presented his Budget he provided a certain amount for the year in which he would collect it by ordinary revenue. At the end of the financial year it was found that over £6,000,000 more came into the Exchequer than he budgeted for. The charge is made against him: "You forget. You did not budget for so-and-so; you did not budget for this, that and the other." When you sit down to examine these things they say he left out, you then find he very properly left out some of the items because they were capital expenditure.
This Budget has done so much damage to the parliamentary institution that a number of people, Fianna Fáil supporters, I admit, are under the impression that there was something terribly wrong and are prepared to slander, libel even, any person who puts up the assertion that Fianna Fáil could be wrong in any way. It is a foolish statement to suggest that there is no restriction of credit, that the banks are not restricting credit. I come from a country constituency and I am personally aware of restriction of credit, which will do untold damage. I shall give one or two examples that came to my notice. In one case a man bought a farm of land. He had £9,000 of his own. He was paying £11,000 for the farm he was buying. Before the speech of the Minister for Finance and the Central Bank Report, he went into his bank and asked for £5,000 additional capital, that is, to pay expenses and to provide stock, etc. He was told to go ahead, and after the Central Bank Report and the financial statement by the Minister for Finance he had bought the place. When he went into the bank they told him: "No." They asked him was he not reading the papers, was he not aware that a serious situation had arisen. That man had paid £2,000 deposit on the purchase of the farm and that £2,000 is in jeopardy because he has been unable to raise the money since.
In another case, a man in the seed potato trade who was accustomed to getting credit without restriction from the bank for that particular purpose, got a notice from the bank in February last when he was just buying, telling him that he could not get the credit as usual. I went with him to the secretary of that particular bank and pointed out that he had not been refused facilities last year or the year before or any other year. What was the change this time? There was a restriction of credit. I pointed out to the official that even this Government was interested in the production of more food, the production of the wherewithal by which the people of this country could live and that interference with this man, who was credit-worthy, would damage that particular type of work. I am glad to say the bank gave him credit the next day, but the point I want to make is that if he had not someone to go with him that businessman would have been pushed under the table and his cheques would be returned marked "R.D." I could go on giving instances like that. Then we are told blandly by the Fianna Fáil Government that there is no restriction of credit. Of course there is. Even putting 1 per cent. on the bank rate, to make it 6 per cent., is a restriction of credit.
All that has been brought about in my opinion by the Central Bank Report and the report of the Minister for Finance in his White Paper. A Budget that puts difficulties in the way of progress by the people is a bad one. We are told here that the Government of this country is copying Britain. In their Budget they are only copying them to a certain extent, but they are not doing what the British are trying to do. The British Government and the British people are engaged in an armaments race. It is necessary for them; it is a matter for themselves and not for us to interfere or comment on. They consider it is essential that armaments should be produced at any cost. The result is that credit is restricted to certain industries so that the employees will be compelled by force of economic circumstances to enter essential industries.
In other words, it is a direction of labour, although that is not actually stated. We have not that problem here. We do not want to create unemployment here for the purpose of forcing boys into the Army nor for the purpose of pushing men off their farms. As a matter of fact, we should be trying to do the direct opposite—inducing the people of the country to stay on the land and earn a decent livelihood thereon. As I said in this House, during the discussion on the Vote on Account, the defence of the country will only be in danger when there is hunger in Ireland. We are aware that in the past poverty drove people who would otherwise never do it into accepting soup. If the Irish people are reasonably well off, they are unpurchasable. The Irishman dreads hunger most of all. Therefore, the endeavour of any Government in this country should be to see to it that the economic development and the economic life of the country are strong and able to meet the requirements of the people of the country.
The British have a big finance problem to face, but the extraordinary thing is that they owe money all over the world. Yet Deputy M. O'Reilly thinks that that is a bad system. The British have borrowed from everybody. They succeed in getting the money at the cheapest possible rate. They are getting it from us to-day at the cheapest possible rate. If the Government of this country wish to borrow money they have to pay a fairly high rate of interest on it, as compared with the rate at which the British Government can borrow money, to either the commercial banks or the Central Bank on short-term loans. Why should this country be short when they have plenty? That is only the miser's game. I never yet knew a miser to die who did not leave a hoard in a bag. His only reason for keeping the money in the bag was in anticipation of the day he might need it. He could not bear to spend the money and had to hoard it up. I admit that that is rather extreme.
This is a bad Budget for that as well as for other reasons. It will create unemployment, and will force the people to eat less, to drink less milk, and to buy less clothes. For what purpose? The reason is that we will have more to export. In my opinion that is the only thing in the Budget which is going to meet what every one of the Government supporters are talking about — the adverse trade balance. The trade balance is going to be lessened by forcing the people to eat less, to drink less, and to buy less clothes and boots, so that they will be compelled to save and be unable to buy the goods they require. That is a very serious situation. The health of the people of this country is not as high as it should be. The result is that a previous Fianna Fáil Government, the inter-Party Government and the present Fianna Fáil Government have been busily engaged in the building of hospitals and in taking all the steps necessary for the treatment of tuberculosis and other diseases but, in particular, tuberculosis. Does not everybody know that tuberculosis increases when people are under-nourished? As a result of this Budget undernourishment will be on the upgrade and there is a danger, at any rate, that there will be an increase in the numbers of patients in the various hospitals. Is not that alone a ground as to why this Budget should be declared to be a bad one?
I do not wish to stress matters too far, except to say that I deplore the fact that the Government attacks the Opposition and says that we were bankrupt and spent too much money. Deputy O'Reilly said a moment ago that we cannot go on borrowing. He asks where are we going to get the money? The Minister for Finance announced in his Budget speech that he proposed to borrow £38,000,000 this year, or at least the greater part of it. He does not exactly tell us what he is going to do with the money. Anyhow he appealed to the Deputies on this side of the House to assist him so that the loan which he intended to float would be a success. We will gladly do so. However, Deputy M. O'Reilly gets up and says that we are not going to have any more borrowing. Is not that a very foolish statement? We are told that the compensations in this Budget will be sufficient to cover all the hardships.
I remember the late Mr. Justice Geoghegan, as Deputy for Longford, during the economic war making a speech in Castletowngeoghegan and saying that the compensations which Fianna Fáil offered outweighed the disadvantages. He started off telling what the advantages were—the retention of the land annuities, and so forth. On the other side he put down, I must admit in a very clear and distinct way, what the disadvantages were. He then said: "If you consider that the disadvantages outweigh the advantages you are entitled to vote against the measure. I submit to you that the advantages outweigh the disadvantages and I say you should vote for it." Everybody is aware that, as regards this Budget, the disadvantages outweigh by far the advantages and that the people are being made to suffer unduly. They are then told that the reason for it is due to our actions when in opposition, and that if we had not acted in a certain way these sacrifices would not be called for. Now this sort of propaganda is highly dangerous because it begets a lack of regard for the people on both sides of the House — those in Government and those in Opposition.
The question of over-taxation is clearly established. There is no need for a great number of taxes. I maintain that taxes to the tune of £10,000,000 more than is required are imposed. The Taoiseach, of course, tries to make out that because he says a certain thing is true everybody else is wrong. He even goes so far as to say that nobody except himself can add. It is rather strange that a small straw can show how the wind blows. The Minister for Posts and Telegraphs, speaking at the Athlone Comhairle Ceanntair on Saturday last, is reported in the Westmeath Independent as making strange statements to the effect that it was necessary to impose this taxation for this 12 months; that if everybody did what Fianna Fáil wanted them to do, at the end of 12 months taxation could be reduced; and that if we can put the country on the road to greater production everything will be right. That sort of thing lets the whole of the Fianna Fáil plans out of the bag. In other words, it lets the cat out of the bag. This is done, I regret to say, for the sole purpose of discrediting their predecessors in office.
The Budget is a thing of shreds and patches. The Minister for Finance took a bit of it from the Chancellor of the Exchequer in Britain; he took some of it from the Central Bank Report, and his own White Paper is its basis. The Tánaiste said that the Central Bank Report presented a set of facts, but he also said that that did not mean that the Government would accept them. Yet, the first thing this Budget does is to accept that portion of the report relating to food subsidies and so forth, so that they are reduced and in some cases completely removed.
Deputy O'Reilly says that we are poor. Anybody who reads the statistics report of the bank balances, the Central Bank balances, the amount held in savings certificates, the amount held in the post office savings bank and the amounts held in the various funds will say that surely we have ample resources in this country and that when the Minister for Finance wants to borrow for capital purposes there is no reason why his loans should not meet with success.
It is argued that the Government should not have taken off the dance hall tax. I subscribe to that view. Government spokesmen say that the tax is infinitesimal. That is a very strange remark to make. Deputy O'Reilly said that, when we are talking in millions, £120,000 means nothing. A sum of £120,000 would meet every existing claim for an I.R.A. pension. It would meet the claim which is made in justice and equity by teachers and others who resigned before a certain period and who are not now getting certain benefits. A sum of £120,000 may not mean anything to people like Fianna Fáil when they are talking in millions, but to any one of us £120,000 or £140,000 is a very substantial sum. From my experience as a Minister or even as an Army officer long ago, I know that if you put forward a proposal which will involve expenditure to the amount of £120,000 you will have to argue very hard, and it will be pointed out to you that the giving of that sum of money would involve extra taxation and that it cannot, therefore, be sanctioned.
We are told that the approximate number of dance halls in this country is 1,200. If there are 1,200 dance halls in this country and if 20 per cent. of them subscribe an average of £100 apiece to the funds of a political Party it will reach the nice little figure of £24,000. That is no small consideration. There is nothing that the Minister nor the Government could do, once that document was made public, to shed themselves of responsibility in that matter.
I started off by saying that the Budget was a bad one — even for Fianna Fáil — and that every effort to justify it is only making it worse. If the Fianna Fáil Deputies on the back benches were told now that they were free to vote as they wished on this Budget and that how they would vote would not affect their Party affiliations or damage any member of their Party, I wonder how they would vote? I wonder if they would vote for this Budget or whether they would vote for the policy which was operated by the inter-Party Government? I believe that, without a shadow of a doubt, every one of these Fianna Fáil Deputies would troop into the Lobby and vote in favour of the policy operated by the inter-Party Government — that is, if they were perfectly satisfied that they were not letting down their Taoiseach or somebody else in their Party and that they were free to exercise their own judgment in the matter.
The Fianna Fáil spokesmen are trying to whistle up their courage in this House so far as this Budget is concerned. This Budget is not a good Budget and it will do damage to a great number of people in the country. It will create unemployment. The Government spokesmen say that they regret having to present this type of Budget but it is absolutely necessary. I say that this Budget is not necessary. For the sake of argument, let us suppose that the situation is bad — which it is not. Let us suppose that the situation is such that there will be unemployment and hardship, a cessation of house-building activities and a cessation of our capital development. Assuming that such is true — which it is not — should any Government in charge of a country not take steps to ensure that such a state of affairs will not be allowed to continue? Would it not be the duty of any Government, no matter what the consequences, to devise a plan of capital expenditure or of borrowing — or some other plan — to surmount that particular difficult phase of the life of the nation?
The Fianna Fáil Government say that we must retain our sterling assets and, because of thát, they impose this hardship on the people. They glibly say: "We do not do this cheerfully. It is not our will or wish that we should impose this Budget." Of course it is. The Government are protesting too much. There is nothing in this Budget except an attempt to meet, by negative action, what the Government asserts to be the big problem — the balance of payments. There is nothing in this Budget to meet that problem except the collection of money that normally the people would spend on the purchase of goods. The Government have deliberately taken the decision that they will do the spending — not the people who earned it. I always felt that when I earned money I had as good a right to spend it as anybody else. This Government says that our people are spending and drinking too much.
In Athlone a few days ago the Minister for Posts and Telegraphs said that out of every pound earned by a worker in this country 2/6 is spent on drink and tobacco. I do not accept that view. There are people who may spend considerably more out of the pound than 2/6, but the Minister for Posts and Telegraphs puts it in such a way as to make one think that out of every pound earned by the workers 2/6 is spent on drink and tobacco — and he said that that must stop. Is it not a great blessing that we have the Minister for Posts and Telegraphs to tell us that? However, if the workers want to spend 2/6 out of their pound on a pint or tobacco or cigarettes, are they not entitled to do it? What sort of dictatorship is it that says to them: "You must not do that; we are going to take money off you by taxation so that you will not have it to spend"?
I assert that it is not in the interests of the country that the Government should try to establish that every statement made on this side of the House is untrue or nonsensical. Of course, it is only in keeping with the propaganda that was carried on during the life of the inter-Party Government when Fianna Fáil supporters said to Labour: "The country is being run by Fine Gael," while they said to Clann na Talmhan: "Labour and Fine Gael are running the country." Again to Clann na Poblachta they said that it was the other Parties that were running the country.
To each Party they said it was the other Parties that were running the country. It may have been sound political tactics, but it was untrue. They could not imagine a body of Irishmen, such as the inter-Party Government was composed of, coming together to work in the interests of the country. The inter-Party Government showed for three and a half years by their co-operation with one another that there was a body of men in this country who could put country above Party or above their own selfish interests. The Fianna Fáil Party has no intention, as far as I can see, of going to the country at present.
They are afraid of their lives.
It would be a stepmother would blame them. You could not blame them for not going now. I think there are some members of the Government, however, who do possess a sense of decency and responsibility. Yet, knowing the situation as they do, they were told by their own back benchers that this is a dangerous Budget, and that it is going to do damage. They were told at their own Ard Fheis that they must not drop the land rehabilitation scheme or the Local Authority (Works) Act, as it would be an unpopular thing to do. Although the Minister for Posts and Telegraphs and the Minister for Finance allege that there was a spending spree by the inter-Party Government, not one member of the Party opposite will say which of their schemes is to be dropped. The minute you challenge any one of them on any item of capital expenditure, they will say: "Oh we have that in the Book of Estimates; it is still going on."
I submit with all due respect to the Government that they should avail of the opportunity, before the Finance Bill becomes law, to go to the country and take the views of the people. If the people want the Budget they have a right to have it. It has been said by people on this side of the House that the Irish people have the right to do wrong if they so wish. They have that right, and if they want to re-elect this Government they are entitled to do so. I think they would be making a mistake, but when they have come to a decision, if Fianna Fáil again get office—and I do not think they will— members of this Party will support that Government while it is in office. We shall accept the right of that Government to bring in and put through any legislation it may think necessary, while exercising our right to criticise that legislation. I submit, in conclusion, that it is not our responsibility at this stage to say to the Government what our policy is beyond what was indicated by our acts while we were in office. It is not our responsibility at this moment to say what tax we will take off and what tax we will put on. There is only one thing I will say; no tax will be removed because of a subscription list headed by an item of £250.
Judging by Opposition speeches both inside and outside the House, it would appear that most Deputies on the opposite side have decided to sacrifice constructive and sensible discussion of the Budget to a petty and senseless attempt to stir up feeling amongst the people against the Budget for political ends. Many Deputies have gone out of their way to relate what can be described as an up-in-arms attitude on the part of the people. Only the other night in Dublin at his Budget meeting, Deputy MacBride is reported as referring to the wave of indignation by which the people have received the proposals in the Budget. I am a Deputy to whom, thank Heavens, my political opponents are very frank and I want to say that, as far as practical people in my constituency are concerned, they continue to maintain an Oriental calm, confident in the knowledge that no Government would do a thing like this for fun and with a shrewd suspicion that, on taking office, the Government discovered a grave position to exist in our finances —a desperate disease which called for a desperate remedy. Deputies generally have indulged in a tornado, shall I say, of resentment and indeed of incitement but because of the inexorable effect of facts and figures produced from this side of the House, that tornado, like all such freak storms, has blown itself out, and is now, judging particularly by the speeches this evening, almost a barely perceptible zephyr.
A good omen for the East Limerick election, is it not?
What I regard, however, as the main chink in the Opposition armour is the complete absence of any constructive suggestion as an alternative to the solution put forward by the Government in connection with our economic problems. They may, of course, have something up their sleeves, but I am afraid it will have to stay there. I hope it is other than that this Government should follow the example of its predecessors — sink its head in the sand, and attempt to convey to the people and convince them that everything in the garden was lovely. Judging by the speeches so far, I am convinced that the longer this debate lasts, the more people will become aware of the hypocrisy underlying their arguments. Indeed it is now apparent that the degree of honesty underlying the criticism is on a par with the scurrilous use of the Coady family by the official organ of the Opposition. Is it any wonder that quite recently in His allocution to foreign journalists His Holiness had occasion to refer to the moral obligations attaching to the profession they represent?
Address your remarks now to the Sunday Press.
Is it any wonder that He dealt with their representation of facts in the profession to which they belong? Of course one could hardly expect that the Holy Father would ever dream that His admonitions in that regard might possibly apply to holy Ireland.
I have always regarded the various Parties, even when they were on this side of the House, as incompatible with one another. The exception that proves the rule has been thrown up in this debate by their frantic and concerted clutching at the political straws provided by this Budget. If it is any consolation to them, we intend to stand or fall by this Budget, and stand we will.
You will probably do both.
We will stand, not on false promises or make-believe but confident that the people, once they know the facts, will decide that we have no alternative.
But to put them out.
To those Deputies who pretend that they are gasping for an election and to the many others who are afraid of their lives there will be one I would say: "Relax, there will be none."
Now you are talking.
From the point of view of your own Party, that is the most soothing thing you have said to-night.
An attempt has been made to make capital out of the abolition of the dancing tax.
The only people who will make capital out of that are the proprietors.
As everybody knows, it is a gamble for any club — social, cultural or political — to run a dance at the present time. I will admit that a more opportune time could have been selected to abolish a tax on dancing. It is a gamble to run a dance nowadays and until such time as the lordly dance bands decide to accept a moderate percentage of the takings I am afraid it will continue to be a gamble. I hope I am not putting any bad ideas into people's heads.
Before dealing with the abolition of the subsidies it might be relevant to recall a somewhat similar furore created by the Opposition on the occasion of the introduction of the Supplementary Budget in 1947 and their promise during the subsequent election in 1948 to remit these taxes if returned to power.
And they were remitted.
To their credit, let it be said that, on their return, they did remit the taxes but they spent the next three and a half years kicking themselves in the pants for having done so. Fianna Fáil did not introduce that Budget in 1947 for mere amusement. It was inevitable that, shortly after coming into office, the Coalition cupboard would be bare, and bare it was. Then in a frantic search for revenue the Government of the day decided on the two-price system for flour, followed by the two-price system for butter, tea and sugar. Needless to say, they selected essential commodities in the full knowledge that the taxes in the Supplementary Budget in 1947 were specifically introduced in order to ensure that these essential commodities would be kept at a low price. The fact of the matter is that for the past four years the people have had no idea of the cost of living.
They will have no doubt about it now.
They have a good idea of it now.
The cost-of-living index figure has been based on rationed commodities. Now this pernicious and sinister two-price system will come to an end, and so will the headaches of the various business people in the country. Paying a fictitious price for the rationed commodity and a fancy price for the unrationed commodity, people at the present time have simply no idea of what the real cost of food is.
They will soon know.
They will, and it is about time that they did know. When food subsidies were introduced in 1941 they cost something over £1,000,000. When that figure reaches, as it would have reached in this year, the staggering sum of £15,000,000 it is time to sit up and take notice. There is only one cure for a malignant growth, and that is to remove it.
You will be put out of your Party if you say much more like that.
Incidentally, that was the prescription recommended by the Lavery Commission to the last Government, the Government that appointed that commission to investigate whether or not food subsidies should be dropped. That was the prescription they offered. Why was it not made up? It was not made up, because doing the right thing would have entailed unpopularity and the Coalition Government was invariably found with its wishbone where its backbone ought to be. Even if the Coalition Government were still in power, they would find themselves presented with the same position as that with which the present Government finds itself faced. Would they have the courage to deal with it in the same way? Would they have the courage to tell the people that the times must be regarded as normal and that food subsidies are only justified in time of war?
I do not intend to reiterate the various commitments that have to be met under this Budget. I do not intend to enumerate the various items to which the last Government committed the country and for which they made no provision. I do not intend to dwell on the legacy they bequeathed to the present administration.
Would the Deputy name a few of the items?
I do not propose to dwell on the Coalition's "easy way out" policy of borrowing more in three years than we borrowed in 16 years, coupled with the fact that they squandered at the same time — at least it has mysteriously disappeared— $128,000,000 of Marshall Aid. It is very significant that the very people who created the mess are loudest in the denunciation of our attempts to clean it up. It is only natural that the people should be asking themselves how it is that a country which stood high amongst the creditor nations of the world should have drifted so rapidly into its present unsatisfactory financial position.
When we consider our adverse trade balance we must look for the cause, and naturally our two main industries must enter into our calculation. Industrial production in this country not only has not reached the stage where it can supply the needs of the country itself, but it is obvious that many years must elapse before it can have an appreciable effect in reducing our adverse trade balance. For that reason we must consider how we have got on in the domain of agriculture. In that connection it would be interesting to enumerate some figures from recent agricultural statistics. These figures present a very painful picture of what has been happening in this country during the last year as a result of the policy of the last Government. They show that our wheat production has gone down by 84,333 acres; that the area under oats is down by 35,400 acres; root crops are down by 17,600 acres; milch cows are down by 19,000; heifers in calf are down by 33,000, pigs by 86,900 and poultry by 2,300,000. That is a sad commentary on the Dillon dream of drowning Britain with eggs. There is the clue to our present financial position. It is obvious that unless our agricultural production is doubled in the near future we will find ourselves in the red.
We admit that nobody can deny that this Budget is of unusual hardship perhaps as compared with former Budgets, but nobody will deny that fairly generous provision has been made to safeguard the extra cost to those sections of the community on whom that extra cost for food might bear most. Of course, you will always have a type of people who, egged on shall I say by the incitement of certain politicians, will grouse at having to pay the real cost of food, quietly ignoring at the same time the extra benefits allowed for in order to enable them to pay for these foods. However, these are the Oliver Twist type of people who are never satisfied, and who are never done asking for more.
We do not deny that it is a Budget which calls for a certain amount of sacrifice as compared with former Budgets, but one thing about it is that it enables us to make ends meet. Then it is not a sacrifice, it is a duty. One great thing about it is that nobody will have to tighten their belts any longer which is the position obtaining with our English neighbours who have been suffering so long, and who show signs of having to suffer longer, with a patience and a heroism which must command unstinted admiration.
These are the conditions, however, which we are trying to avoid, and these are the conditions which we have steered clear of so far, thanks to the wisdom and courage of the Government that was in power at the time of the outbreak of the last war. These are the conditions which, with the help of the same Government, supported by the cheerful shouldering of the burdens of this Budget by the people, we hope to continue to avoid. No doubt it is a small price to pay if by so doing we achieve that degree of financial stability which is so essential to our economic progress and without which economic progress is impossible. If we are not prepared to endure this little degree of austerity, and if we are not prepared to ensure that the sacrifices of the past are not wasted, well then let us cease talking about our political independence and the unity of the country. Without economic independence we cannot make ourselves politically independent. Everybody knows that.
There is one thing I am convinced of, and it is this, that had the Coalition Government remained for another two years in power, by the end of that time we would have relinquished our position as a creditor nation. The Opposition speeches would lead one to think that the Government derived a sadistic pleasure in presenting this Budget to the people, but to any levelheaded person it must appear obvious that it required an unusual degree of courage, apart altogether from the fact that it was a grim necessity, to present this Budget to the House, particularly in the position in which we find ourselves in the House.
I wonder what that means.
We never visualised any political advantage from succeeding the last Government. On the contrary, it would have been to our advantage to leave them in office in order to clean up the awful mess which they had created.
And to the country's advantage, too.
But, in assuming the responsibility of taking office, we at least succeeded in saving the country from another two years of reckless incompetence and squandermania: We could produce a popular Budget, but we on this side of the House preferred to be popular by doing the right thing for the people, even though by doing so we antagonise certain sections of the community. The time has arrived when the people must decide——
Hear, hear!
——and make a choice. They must either decide to pay their way or revert to the fool's paradise of Coalition make-believe. I am confident that if given the opportunity the people will demonstrate the confidence in the Government which asks them to make this little contribution in order to ensure the political and economic freedom of the country.
I must confess that the Taoiseach showed much more political wisdom than I would have given him credit for a week ago. He spoke about a Budget having to be balanced by hook or by crook. The crook side is confined to the Front Bench opposite and the hooks are like Deputy Maguire, who believes this is necessary and who believes that we have left debts behind which he has to clear up. He believes there is a vast amount of American aid to be paid for this year. Will he tell me of one debt left behind by us?
Hear, hear!
Let him speak. Will he tell me of one debt left by us?
What about the deficit of £10,000,000?
Do not mind him.
Will he tell me about one debt in the present Budget that is due to me?
You left nothing but debts.
You are making up your own Budget and you have your own freedom.
I made my speech. You make yours.
I know the Deputy has made his speech but I am only asking for enlightenment when he says he is paying for our debts. He talks about squandermania. With regard to Marshall Aid, we spent £14,000,000 worth of dollars. We left £26,000,000 worth of dollars but Deputy Maguire's Government has spent £26,000,000 worth of dollars. If that is what he calls squandermania I might agree, but he has wrongly based the epithet. He has directed it against the wrong person. There is no doubt that the plan in this Budget has not yet been revealed. I hope to do my best to show what the real plan is to-night. The plan, so far as the Party is concerned, is clear. The Government would have a particular line of reasoning and then they would put that across, hiding the facts from poor deluded followers like Deputy Maguire.
Deputy Maguire thinks that our political independence depends on our cutting the subsidies. I wish he would develop that in the town of Monaghan to see how many supporters he would have after it. This Budget is based on two points. There are two points of reasoning behind it. The first is the statement made in the Central Bank Report read by Ministers before the Central Bank Report was published, and repeated by them after they had read it, and taken up by some of the less intelligent of their followers.
"This country is living too well. We are all living too well." That does not mean people with mink coats or people in high-power cars, or people to be found in the fancy restaurants in Cork and in this city, because they are not hit in this Budget as a special class. It relates to everybody, the old age pensioner, the service pensioner, the civil servant, the Guard, the Army man, the teacher, the industrial worker, the agricultural workers, farmers who own their lands, and the industrialists of the country. They are all living too well. They have all too much money to spend and are spending it. Is not that the thesis? And because all those have too much money to spend and are spending it goods are called for from England and other countries, so that this vast gap is caused which causes Deputy Killilea so many sleepless nights in his own county and Deputy Maguire in his. They cannot sleep at night thinking of the balance of payments. I do not suppose they would know a balance of payment if they met it in the street, but it is an annoyance to them.
That is one thing; the whole community is living beyond its means and living too well, with two notorious exceptions, the dance proprietors who are obviously at the end of their tether and the manufacturers of tobacco to whom this Budget has given a present of £1,333,000. Excepting these two, the dance proprietors and the manufacturers of tobacco, everybody else in the country is living too well and has too much money to spend, and insists on spending it. Because of that and because the country is not supplying the goods they require, we have a vast import of goods, across the Border and from England, and there is this terrifying gap in the balance of payments. In addition to that is the policy that I believe was definitely and deliberately adopted by members of the Government, but not revealed to members of the Party, and that is the policy that is known as budgeting for a surplus.
Last year I was asked to adopt that same policy. That advice came to me from people who have very good standards by which to give advice. They advised me that I should not balance merely in the sense of providing enough revenues to meet current expenditure. It was put to me—and it was very good advice:—
"The Budget is not simply an exposition of how we propose to make ends meet. In modern times it is recognised as the most effective instrument a Government has for shaping economic policy. That is why we have in the Budget statement an analysis of current and prospective economic conditions. This survey would be the merest padding unless the budgetary proposals were consistent with the conclusion about economic policy to which the analysis led. In Britain, U.S.A. and elsewhere the proposals are devised to correct whatever is shown to be amiss in the economy. The British Chancellor yesterday introduced proposals directed towards achieving a surplus over current expenditure of £39,000,000, and this because his interpretation of conditions forced him to the conclusion that if resources were to be directed to the proper uses without inflation, the public must be made yield up more purchasing power than is required to cover all current Government outlay."
Is not that the present budgetary proposals, forcing the public to yield up more purchasing power than is required to cover all Government outlay?
I was told last year:—
"The public and the Government between them are spending more than the nation can afford..."
Is not that the phrase that has been repeated by the Central Bank and by the underlings of Fianna Fáil since the Central Bank Report was published?
"... What is the remedy? It is either to curtail spending — by both the public and the Government — or to induce or force the public to yield up more purchasing power to provide what the Government needs to maintain its spending on capital and current account."
My attention was drawn to the fact that:
"... The 1951-52 capital programme will be at least as big as last year; the Estimates point to its being bigger. Can we hope to get much more money in savings even with a vigorous campaign?"
The view was expressed that it was doubtful if a savings campaign would yield the money. The conclusion to be drawn was that the only correct way of meeting the difference is from taxation. The advice I got wound up this way:—
"In the light of the interpretation which must be placed on current economic conditions, taxation to produce a surplus on current account towards financing the capital Budget is a necessary gesture to orthodoxy. Without it the Budget as a whole can be criticised as failing to face up to facts."
Would the Minister for Finance produce to me the corresponding memorandum which I have no doubt was presented to him this year with a request that he should also budget for a surplus, that it was not sufficient for him merely to balance to meet current expenditure out of current revenue but that he must withdraw purchasing power from the hands of the public? If that purchasing power is spent there is no way of preventing the big amount of imports required, these imports which caused a deficit in the balance of payments.
That was very good advice; taken by a certain standard, it was impeccable. It was advice which, of course, did not appeal to me. It was advice which I did not regard as sound in the circumstances as I saw them, and I did not adopt that programme. That same advice has been given to the Minister and I am certain the Minister has accepted it.
I said last year that I would have none of that. I did, however, go on to inquire — supposing I had to budget for a surplus, about what surplus would be considered a good one? There was never any great conflict about that. It varied up and down by several millions. When I began to consider the sources from which that might be derived, they fell back on what is now before the Dáil — beer, tobacco, whiskey and petrol. These were certainly suggested to me. It is remarkable that last year nobody dared to suggest to me cutting the subsidies, even though I was asked to budget for a surplus.
I did inquire in those days what was the tremendous liking for taxes on, say, tobacco and beer. I said that I might possibly understand the economic reasoning that was at the back of the suggestion for these taxes, but I wanted to see if those who were advising it spoke the same language as myself. It was clearly put to me that when you tax beer and tobacco you do not mean to drive the people off drinking or smoking. The taxes would fail in their effect if that were the consequence. You want the people to continue smoking as much, or nearly as much, as before. You want them to drink as many, or very nearly as many, pints as before. Then you have the ideal situation from the angle of the people who finance in that way, because if more money has to be supplied for beer and cigarettes so that people may drink the same and smoke the same amount, there is less money in the wife's hands for expenditure on food or on boots, shoes, clothing and domestic appliances, and that is what is being aimed at.
Do not let anyone in this House be caught with the suggestion that the taxes on beer and tobacco are intended really to penalise the people for drinking or smoking to the extent they do. The intention is that they shall continue.
If they can increase their smoking and drinking, it would be most beneficial from the Minister's viewpoint. Not merely would he get extra revenue, but there would be less money in the hands of the wife to spend what her allowance is expended upon — the necessities of the house, the food and the drink, other than beer, the boots, shoes, clothing, furniture and the equipment of the house. That is what is aimed at here. Nobody should make any mistake about it when he sees in the paper circulated in regard to the Budget nearly £4,000,000 taken away from the food subsidies. I am taking the Minister's figures for the time being rather than the calculation of Deputy Costello. A sum of £4,000,000 almost is deliberately deducted from the moneys to be spent on bread, flour, tea, sugar and butter.
You have to go to the other side of the account to see that £8,880,000 is to be subscribed this year by the people who will drink beer and whiskey and smoke cigarettes or tobacco. Where is that money to come from? From the allowance that the wife gets from her husband. The amount that is being exacted from the wives of the country in regard to food and the payment for food is not £8,800,000, it is almost £13,000,000. The exact figure is £12,790,000. That is the aim of the Budget. We are all living too well, according to the Central Bank and to the Minister for Finance. We are all living too well, according to every Deputy who supports this Budget.
Every Deputy who walks into the Lobby to support it is signing on as accepting the view that the people are too well off and that the Minister is entitled to take from their foodstuffs, their apparel and furniture nearly £13,000,000 in this year.
It is good to get a corrective to that view. The Department of Health had a series of national nutrition surveys made, mainly in the years 1946 and 1947 and the reports were published in the years 1948 and 1949. One of them deals with farm workers' families. I am picking out now the part that I want to have as a corrective against the view that we are all too well off in this country. The farm workers' families are dealt with in the fourth paragraph in this way: "Broadly, simple meals of the ‘bread and spread' type were commoner in the poorer families and were to some extent replaced by cooked meals as income increased." In the large and the small towns also the survey report was: "In the poorest families surveyed in both large and small towns, more than half the total meals of the week consisted of ‘bread and spread' and the frequency of this kind of meal fell steadily as more money was spent on food." In connection with the farming families the summary says: "About one-third of all meals taken consisted of simple meals of the tea and bread and butter type; about one-half of all meals were cooked." In the congested districts it says: "A high proportion of the total meals eaten consisted of simple meals of the tea and bread and butter type. When from 40 per cent. (in spring) to 50 per cent. (in autumn) of total meals were of this kind, the monotony of the dietaries must have been marked." In regard to the Dublin investigation the summary states: "Among the poorer and larger families, a high proportion of the meals consisted simply of ‘bread and spread,' the proportion decreasing amongst the well-to-do and smaller families. Thus for children under 14 years, 44 per cent. of all the meals eaten were ‘bread and spread' in slum families, 36 per cent. and 18 per cent. respectively, being the comparable figures for artisan and middle-class families."
Do those excerpts indicate too high a standard of living in this country? Do you want to cut the bread of the people who are living in that way? There is an advertisement current in the country which says that you cannot take two poached eggs and a glass of milk to a football match or some place like that, but you can take a bar of a particular type of chocolate. In the old days, when Ministers were hard up, they clinked the coins and took a bit off them. If the coins were made of valuable metal, the clippings gave the Treasury a receipt. It is proposed to finance the social services in this country by taking a bit of the piece of the bread and by taking a little bit of the spread or the butter, if it is butter. You can get the same effect, if you increase the price of bread and the price of butter and if, in addition, you increase the price of flour, tea and sugar and bring about conditions in which the man of the house has to exact from his wife a certain amount more money because his smokes and drinks will cost him more.
You do very nearly get the position by going to every small disheartened family in this country and by taking a bit of the loaf and a bit of whatever butter they are getting. That is all being added up to give the Minister the moneys with which he has to meet the grave conditions of this country. I suggest that the facts are as I outlined them here last year when things were not nearly as bad as they are pretended to be now. I was told that financial orthodoxy demanded that not merely should the country be able to meet current expenditure, but that there should be £6,000,000, £7,000,000 or £8,000,000 of a surplus. Is not that the Minister's policy? I believe it is. However, it had to be changed because, of course, if that policy were presented, even to the enthusiastic camp followers of the Party, it would not go down. The Party could not face its constituents and say: "We destroyed subsidies not because it is necessary but because financial orthodoxy demands a surplus". Yet, a surplus has been sought. It is quite easy to do so. You do not have to show a surplus. You under-value your revenue and over-estimate your expenditure, and in that way you can get a gap.
Every speech made so far defending this Budget has contained the phrase: "There is a gap. In fact, not merely is there a gap, but a gap of £15,000,000". I deny that. Deputy Costello, choosing a series of items, put before this House six particular matters for which, as he said, £10,000,000 was in dispute and was unnecessary. One can argue at length on this point. I say to the House that it is much easier to accept those figures if you believe what the Minister was advised to do, and that is to budget for a surplus this year and then cloak it by pretending that there is a deficit, and that he has got to get this money to meet it. May I put this as a fortifying argument to what I say: Supposing I am wrong and that the Minister is merely getting £15,000,000 extra because he requires it to meet that amount of debt, and that, in fact, having gathered that money in he is going to spend it again, how is that going to affect the balance of payments? If the sum of money is being circulated as before by being taken from the people and being spent by the Government, in the end it is going to mean that the same amount of money will call for the same importation of goods, and that the balance of payments will not be mended. That situation could be mended if you take from the people £15,000,000 worth of purchasing power and do not spend it, but keep it in reserve.
If the Minister's carry-over is not the £2,000,000 that I left him, but £9,000,000, £10,000,000 or £11,000,000 which he has prevented the people of this country from spending, the balance of payments ought to show some corresponding improvement because of the fact that the people have so much less purchasing power in their hands. Deputy Costello says: "Why not allow for buoyancy of revenue?" We have the rejoinder from the Tánaiste: "Do you not think that the Revenue Commissioners know how to estimate what taxes are going to bring in?" I do not criticise the Revenue Commissioners. They know their work perfectly well and have great experience in these matters. There is a great deal of statistical information available to them that is not available to Deputies of this House and which is not, to a great extent, even open to Ministers. Let us examine what they did in recent years, without in any way criticising them. This time last year they informed me that the yield from the then taxes would give me £3,000,000 more than the year before. In fact, they gave me £6,000,000 more than the year before. The year before that again they told me that I would get £1.1 million more than on the previous taxes. In fact, I got something between £2.3 million and £2,500,000 over their increased estimates. On many occasions I have had discussions with the Revenue Commissioners on these matters. It was explained to me that the statistical information did not allow any better or closer estimate than was given to me. My answer was that I did not worry, because I had plenty of money. I was giving reliefs during all my time in office.
I was not making any imposition on the taxpayer. However, I did say from time to time: "If things get tight we will have to examine your estimates for yielding much more closely, but for the time being everything is all right." I was very happy in this because if the commissioners underestimate the yield of taxes, the Minister has a surplus at the end of the year. If the yield from taxation is overestimated the Minister is faced with a Supplementary Estimate halfway through his period. It was much more comforting to have the Revenue Commissioners in those days, when money was easier and revenue more buoyant, estimate low if the result far outstripped expectations than to have the reverse practice. Of course, if you are in the mood to budget for a surplus and yet do not want to call it a surplus and want to pretend that there is a deficit, the easiest thing in the world for the commissioners is to say: "That is grand. Keep your estimate from showing much buoyancy. You are up by £1,000,000." The Minister should have included that £1,000,000 when last year's increase was there and when there were no conditions in the country to indicate, as far as the tax we paid last year is concerned, any depression and when buoyancy was still continuing. The statement might easily have been made by the Minister: "Why give me an extra £1,000,000? Why not £3,000,000?" However, the reality showed last year that you did not want £3,000,000. Your attitude is that you have to pretend there is a deficit. Deputy Costello estimates that there is £3,000,000 for buoyancy. We shall have to wait and see the fulfilment of that estimate. However, I believe it will be fulfilled. Anybody with a mind towards research can go through the commissioners' proposals with regard to taxes and the yield of those taxes and can compare them with the estimate for receipts and expenditure, the Budget statement and the financial papers. They can pick these things out for themselves and they will note that every year since 1948 the position has been that the Revenue Commissioners increased the estimate of the yield of taxes on the over-taxation basis every year over the previous year, and that each year the reality far outstripped their second estimate, even the increased estimate.
Deputy Costello moved to another point and spoke about the economies which must necessarily fall on each financial year. Here there is a mixture of thought. People say: "What about the Supplementary Estimates?" I am speaking of Estimates over and above Supplementary Estimates. The supplementaries are not met by the increased yield. Some part of the economy will go towards meeting those, but even meeting the supple-mentaries year by year for four years there have been economies of the order of £2,000,000 on the average. Deputy Costello's figures were carefully considered and I may state that Deputy Costello's figures were worked out not by people who thought they had spotted an over-estimate here and there but by people who considered from the reasoning that was at the back of the Budget, and from the speeches made here, that the scheme was to budget for a surplus, that the surplus had to be hidden and shown as a deficit.
That is not very fair to Deputy Costello.
It explains how he arrived at those figures and is an explanation that he will accept from me because I know it to be the correct explanation.
He thought of a number, doubled it, trebled it and then said it here in the Dáil.
We are accustomed to that sort of facetious comment from the Minister.
The Minister has been very quiet up to this.
These six items mentioned by Deputy Costello were worked into the investigations because, in reading the Minister's speech, it was seen clearly the philosophy that was behind the budgeting, budgeting for a surplus, taking money out of the people's hands and then, knowing that the poor goms in the Party could not be expected to put that across, on the constituents, the matter had to be dressed up as a deficit and the figures arranged to that extent.
Deputy Costello took out one other item — he put it at £1.8 million— reserve stocks, advance purchases. It is incredible that there are no advance purchases in this year's Budget. I think it has been admitted that there are. Where are they? Why are they not picked out? It is perfectly proper that payment for this year's goods which are not brought into use until next year should be charged against the accounts for the year in which they come into use and not for the year in which they are bought. We showed last year £1.8 million for that type of purchase. There is something in this year's accounts covering these advance purchases, but, of course, it suits the Minister looking for a surplus. It is better to pretend there are none and to charge up next year's goods as if they are proper to be charged in this year's accounts and that makes a reduction of a still further amount.
There is also the matter of social security payment. Deputy Costello's figures show that there is £1,000,000 to spare. There is a phrase used in the table explanatory of the current Budget which states that the amount provided is for proposals for a Social Welfare Bill and for other current services. Let us see what the other current services are. There is, for instance, interest on the national debt. It is £2,000,000 up since last year; £600,000 of that is said to be due, and is due, to Marshall Aid. What about the £1,400,000, that is, the sum of money which is appropriate to a loan of £35,000,000 on a 4 per cent basis? There may be other arrangements made about annuity payments and amortisation payments, but, in any event, there is £1,400,000 added to the charge for the national debt by the people who are so fond of speaking of the extra amount that was added by the inter-Party Government to the national debt, and this year they are adding interest charges to the amount of £1.4 million. That may, of course, be partly appropriated to the loan which the Minister has again gulled his supporters into believing he is going to look for, but, of course, he has no intention of doing that.
These figures of Deputy Costello may chip here and there, say, £500,000 over-estimated in one place and a £500,000 underestimated elsewhere. The only one of those figures about which there has been any attempt at analysis by way of correction is in connection with the butter matter. Deputy Dr. Ryan, the Minister for Health, proceeded to speak of that the other day as a matter about which he knew a lot. He says there is £500,000 between Deputy Costello's estimate and his own, and so there is. The Minister gave a series of calculations. I am sorry he is not in the House, but in any case, there are two points he says make the difference. One is that there is an arrear of £217,000 to be paid in respect of butter subsidy which was, so to speak, earned by the end of the last financial year, but had not come in course of payment at that time. I do not know how many months it covered but, no doubt, we will get that information by way of parliamentary question. However, I am entitled to ask will there be any arrear at the end of this financial year? Are we taking on a payment covering 13 or 14 months, because if we are the £200,000 ought to be left aside? That figure which the Minister added in to make up this difference of £500,000 was £320,000 which he says is the sum which will be required to pay for imported butter towards the end of this financial year. His calculation of £320,000 in respect of that is based, according to himself, on what has happened in regard to previous importation. That to me seems incredible.
Again we are going to introduce New Zealand butter into the country at the end of the financial year. We are going to introduce it in some unspecified quantity, but whatever it will be the costs of buying and handling it are going to mean to this country a loss of £320,000. That is based upon the comparison with what happened with imported butter in recent years. Surely the Minister has forgotten in that calculation that the butter that was previously imported had to be sold under its cost; in any event that the subsidy, so to speak, had to be paid on it.
The butter that will come from New Zealand to this country at the end of the financial year will be sold at 10d. a pound extra. The calculation on the meagre figures that I have has enabled me to make an estimate that there ought to be a saving, a profit, of £80,000 instead of a loss of £320,000. Those are the only figures the Minister has given by way of correction to what Deputy Costello has said, and those figures are not satisfying. Those figures lead me to the conclusion that Deputy Costello's £500,000 in respect of those particular items was correct. The other items can be discussed when we come to the Finance Bill, and I hope we will discuss them with more information supplied by parliamentary question.
Let us, in any event, accept for the time being the Minister's view that there is something serious in the situation and that he has to meet certain disadvantageous factors in a certain way. I should have imagined that it would have been impossible for a Minister belonging to the present Government to say that he was making proposals of what are called a social welfare type costing, with other current services, £3,000,000 in the current year and then to bring forward proposals to tax the butter, the flour, the bread, the sugar, and the tea to such an extent that he would save £6,660,000. He says he is giving back £2,750,000 of that. In any event, he has a net saving of £3,918,000 to meet social welfare proposals and other current services of £3,000,000. I wonder if the people who were so vocal about free-for-all services realise what freedom there is in these services now? Their bread, flour, butter, tea and sugar are being taxed —I am using the word advisedly: nobody could explain to the community that the taking away of a subsidy is not equivalent to a tax. They are being taxed to the point that, even after certain compensatory benefits, they will yield from their breakfast tables and their bread-and-spread meal at whatever time of the day it is taken not merely the £3,000,000 that social welfare demands but also £900,000 which is saved for mother and child services if they are introduced this year.
If mother and child proposals, costing an extra £900,000, do emerge this year, remember the money to finance these free-for-all services is being taken from bread and flour and butter and tea and sugar. We in this House are supposed to meet constituents and to talk to them about the benefits of social welfare and to close our eyes to the hardships being imposed by the savings on the food subsidies. No more cynical proposal has ever come before this House than the proposal by way of what we call social welfare benefits to dole out £3,000,000 this year and to save from the food of the people nearly £4,000,000. That is what is being done and that is the scheme that is being approved of and voted for by anybody who supports the present financial proposals.
This matter of the subsidies has occupied the attention of very many people from time to time. A very eminent ecclesiastic in this country who, since he delivered the lecture in 1946 that I am going to refer to, has become a Bishop, spoke of the necessity of equating this matter of subsidies to what he called a living wage. Attempting to synopsise what that lecturer said, I think one could say that this proposal would have his agreement: that subsidies are, to a certain extent, vicious because they hide money and prices from having their proper effect and make you live in the land of make-believe. The ecclesiastic was not unmindful of the fact that wages were supposed to be based upon a cost-of-living figure and that the cost-of-living figure was kept down because of the subsidies given to the people. I think I am correctly stating his view when I put it this way: that he might be in favour of the removal of subsidies if the wage rates of the country could be raised to meet the difference. That is not the present proposal.
This Budget opened with an exhortation to the people to remember that their wages had now reached the point where they were in advance of the increase in the cost of living and there was an admonition to people not to look for more wages. Everybody knows that as a result of this Budget there will be an immediate surge with regard to wages. Those who have the industrial power will no doubt use that power and wage rates will be lifted to meet the new conditions. That may make things quite happy for those who have that power. What about the people who are living not on wages but on some small subventions such as people out on pensions? Are their rates to be raised to meet the new conditions? We know that arbitration for the Civil Service has been held up. It looks as if it has definitely been done away with and it is one of the things that Fianna Fáil would have prevented if they had power in 1948. We know that teachers, Guards and Army personnel depend upon the Civil Service rates. They are not going to get a chance to have their wages increased to meet the new conditions brought about by the withdrawal of the subsidies. Then some other Government will succeed and we shall have another painful process of readjustment. There will be new Civil Service arbitration. They will be given what an arbitrator thinks will be due to them and after that will come the matter of the wages of Guards, people in the Army and teachers. Then there will be another move which once more will deal with the pensioned classes. Meantime very bad suffering will have been caused and houses will have been broken. The education by civil servants of their children will have been postponed or they may make do with something less than what they think their status in life ought to enable them to give their families. That will be brought about in answer to a doctrine that financial orthodoxy demands that we should budget for a surplus.
I want to make my point again that I have already glanced at. People have said here that the saving in food subsidies is very hard indeed and is causing grave hardship but they approve of the taxes on tobacco and beer with a much lighter heart and sometimes make a distinction by saying that the beer tax is not so bad but that the tobacco tax is very hard. I want again to emphasise that the taxes on tobacco and beer and, to a certain degree, on spirits are not meant to penalise the people who are drinking or smoking. It is a method of extracting from the purchasing community £8,880,000 so that they will not have that amount of money to spend on food or clothes or whatever appliances they may get for their houses. When you are thinking in terms of the reduction of the purchasing power in relation to food, Deputies of this House should not fix their attention merely on the grabbing of this almost £4,000,000 through the subsidies. We must add that £4,000,000 to the £8,880,000 and arrive at the figure I have previously mentioned, £12,790,000, which this House is being asked to take from the community not to prevent them from spending it on beer and tobacco — they are invited to spend it on these things— but to prevent them from spending it on food or on apparel. If we have less to spend on food we shall have more food to export to Britain and that will help to correct the balance of payments. If we have less to spend on clothes, less clothes will be called in from Britain and, to that extent, the balance of payments will be corrected. If there is less money to help to refurnish the house— to buy an odd carpet or utensils or a bit of furniture — and if it would come from Britain, there will be less money to call for that from Britain and, again, the balance of payments will be corrected to that extent. This is all in answer to the assertion that the situation in the country demands that so much purchasing power should be taken out of the hands of the people.
Then we come to the proposals with regard to capital development. When winding up his Budget speech on the 2nd of this month the Minister for Finance talked about the money he thought he might get by going to the public and the money he thought he could get by small savings and departmental funds. At column 1154 of the Official Report of the 2nd April, 1952, the Minister for Finance, winding up his Budget speech, is reported as follows:
"But this year we must ask for much more, for if we were to raise only £10,000,000 in this way, we should still be £18,000,000 short of realising our capital programme. Here we come to the hard core of our problem which is that if we do not get a considerable proportion of that remaining £18,000,000 from the investing public, a large part of the capital programme will be in jeopardy. The final determinant in the matter is the fact that we must not attempt to finance the public outlay by means which would damage our economy, perhaps irreparably."
Is there anybody in this House so young, so inexperienced, so foolish as to believe that the Minister wants to borrow £18,000,000 or thinks that he is going to get it? I do not believe it. He has told us that he could not go to the people looking for money last year because he did not think they would give it to him. He says that in the most illogical series of references because in the first part he refers to the amazing success that attended the conversion loan. Then he tails off by referring to the failure of the Dublin Corporation loan. Within any year of the last ten a Dublin Corporation flotation would have been comparatively unattractive. People have no great conceit of Dublin Corporation money. The conversion loan was, however, a success. It may be that the conversion loan was arranged before the Minister came to hold his present position and was carried through before the wailing and the weeping had any effect on the people of this country. Still it was paraded in the Budget speech as a tremendous success. The Minister then said that he expects to go looking for more money this year. Money claimed for a conversion loan is not money looked for in the ordinary way as a national loan.
The money that came from the conversion loan was money invested in national funds that was about to be refunded and was looking for a new home and new investment, and investors got it when the national loan was offered to them. I said that I intended to do that conversion loan a year before. I met a committee of bankers at a time when I had that in mind. As far as I remember, the banking advice that was given to me was that I should run the conversion loan and the new national loan with very little difference in time between them. They thought that one would aid the other. The present Minister, not through his own efforts, secured a marvellous response to the conversion loan but he was afraid to meet the people for the other loan he would require, and that, I think, he would have got last year. Now he is telling us that he is looking for £37,000,000 or £38,000,000 and that he thinks he can get up to £18,000,000. He says that they will have to look to the investing public for that and that if they do not get it the capital programme goes. To whatever extent they do not get it, he says, the capital programme fails to that extent. The Minister does not want that money. The Minister does not believe he can get it. The Minister's plan with regard to this Budget would be frustrated if he did get it and spent it. If, again, the plan which I have outlined as being before the Government is the correct one, they must take purchasing power out of the hands of the people. If they raise £38,000,000 and spend it they have not succeeded in taking the money out of the hands of the people. If they can raise £18,000,000 and spend £8,000,000 they have done a good job from the point of view of taking money out of the hands of the people. If they can budget for what is really a surplus and pretend that there is a deficit, then they have not this £10,000,000 or £15,000,000 to play with; there is so much taken out of the hands of the people and so much left to improve the balance of payments situation.
The following sober comment — sober at least from the point of view that it appeared in that part of the paper— appeared immediately after the Budget was introduced in the investors column of the Independent of the date 7th April of this year:—
"To say that the market has been flabbergasted by Mr. MacEntee's Budget is an understatement. The food price increases were regarded as disastrous in that they must result in a spate of wage increase demands. Production costs will then soar and selling prices with them."
The article continues:—
"Where the tax ‘lightning' has struck in expected places it has struck with a vicious fury not envisaged by even the most pessimistic."
Later on the article comes to this point:
"The prospect of the Government looking for a further large loan has left this section of the market in a state of nervous anticipation. It is doubtful if a public offer of even £1,000,000 would attract full subscripition unless the terms were made very attractive. In order to raise any larger sum under existing conditions, even a 5 per cent. offer of reasonably short date would have no guarantee of success. The Minister mentioned a figure of £28,000,000 as his requirement. How much will the public be asked to subscribe?"
The Minister, as I said, does not want the money. He will rejoice if he goes for a flotation of £10,000,000 and gets £3,000,000 or £4,000,000 because that means that the warning he has given will be put into effect, and that the capital expenditure has to be cut down by the difference. That is really what is at the back of this Budget.
I want to conclude, as I began, by saying that the whole reasoning in connection with the present financial proposals is that this country is too well off, and I want it again to be remembered, when this is said, that there is no question of a certain section living extravagantly. It is the whole community, all the people, who are attacked in the Budget — the old age pensioner, the recipient of unemployment insurance or unemployment assistance, the people with families, the workers in different categories.
They are all being attacked because they are all being subjected to the same criticism: "You are living too well, living beyond your means; we are going to reduce your means to bring you to the point at which we think you should be put". I excepted from these categories two classes — the dance hall proprietors and the manufacturers of tobacco. The dance hall proprietors — I am emphasising it is not the dancers but the dance hall proprietors — are to get a present to the extent of £140,000 in a full year. Deputy Maguire thinks that in recent years the tax was yielding very little. I suppose the last deputation I received as Minister came from the dance hall proprietors. After I had listened to some of the wailing from them, I sought certain advice from those who were competent to advise me. I asked how far had the tax yielded the anticipated revenue, and the answer I got was that year by year the anticipation of revenue had been raised by the Revenue Commissioners because the tax had been so successful. I queried, on the point that always cropped up in these arguments in regard to the dance tax, that some Minister for Finance was supposed to have said the tax was wasteful, because it took a lot of money to collect it. I was told that that was the case when very small dances were taxed, but that since I had made a certain concession to them in an earlier Budget that no longer held, and that the cost of collection compared very favourably with the cost of collecting income-tax. Finally, the case was put to me that dance halls were yielding revenue but that the proprietors themselves were starving and their childen were in a desperate plight because they could not get the money. I asked the Revenue Commissioners had they any figures to show whether or not this group of people were mixed with other groups. I did not ask for individual calculations. How were they faring? They were faring better than ever. The dance hall proprietors are doing very well on a tax that was yielding all that was expected of it. A tax in which the cost of collection was nothing out of the ordinary has now been handed back to the dance hall proprietors.
In the most casual way in the Budget we are told that the Minister for Industry and Commerce was convinced that the tobacco manufacturers required 1d. of this new tax for themselves. A tax of 1d. on tobacco yields £1? million in a full year. One of the beneficiaries under this tax will be the great Imperial Tobacco combine. The last return from that combine in England showed they were only able to pay a dividend of 32 per cent. but they had hopes of getting back to their two to three years' previous dividend of 35 per cent., and the £ shares were selling at £5. They are the objects of our benefactions at a time when the old age pensioner and all the rest of the people are being hit in the way I have described. There used to be an old rhyme.
Would the Deputy be good enough to develop that?
I shall let the Minister develop it. There used to be an old rhyme:
"Please put a penny in the poor man's hat;
If you have not got a penny, a ha'penny will do;
If you have not got a ha'penny— God bless you."
The Government will get a lot of prayers from the dance hall proprietors and the tobacco manufacturers this year. It is not halfpennies or pennies; £1? million is the yield from ld. on the packet, and £140,000 is quite clearly the yield that will be handed back to the dance hall proprietors. We are giving away something close on £1,500,000 between these two. The total of the extra money given over a number of years to old age pensioners does not top the million mark.
Long years ago, when the present Minister for Health was asked, as Minister for Social Welfare, to accept a motion giving an increase to old age pensioners, he had to refuse it because it would mean £500,000 of State money and he said the State could not afford it at that time. That was in 1947, in the month of October, when £11,000,000 extra was about to be raised under the new taxes in the autumn Budget of that year. One must take in contrast, then, all the people who will suffer and all the people who are being taxed, because it has been declared in relation to them that they are too well off and their purchasing power must be clipped; and the only people for whom the Government has any sympathy or any tenderness in its heart are the dance hall proprietors and the tobacco manufacturers.
These taxes are not merely harsh and cruel; they are unnecessary. The present Minister for Finance has not accepted the advice given to me last year and, no doubt, given to him this year. It would not require a two-hour Budget speech to remake the finances of this country. To my mind, at least £9,000,000 could be remitted straight away. If there is any question in relation to getting the rest, there is a suggestion I willingly pass on. It is well known that there is a vast amount of money in this country illegally acquired during the war. It has never been subjected to income-tax. Last year, in England, at the time of the introduction of the last Labour Budget, provisions were introduced into the Finance Act, enabling the Inland Revenue authorities to apply to the banks, and imposing upon the banks the necessity of replying, for information as to deposit receipts and money on deposit receipt on which income-tax had not been paid. Howls went up from all the Conservative journals. It was a breach of secrecy. It was opening the door to the police State, and the next thing would be the Inland Revenue authorities coming in and looking at everybody's accounts. It was one of the fundamental rights of English life that bank accounts should be sacred. The Budget passed and a new Government of a Conservative type subsequently came into office.
Did they repeal that? They dare not do so. The amount of money that was driven out into the open and forced to pay the tax that had been withheld was so great that no Government could afford to withdraw that little device. If that little device applied here, it would drive out quite an amount of money that is on deposit or kept around the house. If there is a critical situation and £3,000,000 or £4,000,000 are urgently required, that could be got quite easily without the slightest trouble and with no hurt to anybody except profiteers and those who have got away with a certain amount of loot. It would give all the money required to get over a couple of critical years. What do we do? We prefer to tax the old age pensioner and the bread and butter and tea and sugar and flour, because of a philosophy that our people are living too well and that we must reduce their standard of living and ensure that they have not the means to live as well as they are living.
Deputy McGilligan has treated the House to his view of the Budget. He told us that he does not believe that this country is living beyond its means. He does not believe we are spending too much. He does not believe we are importing too much. He says we are raising too much revenue. We know that the Budget introduced last year was an election Budget. In that Budget Deputy McGilligan, then Minister for Finance, talked about the gap in the balance of payments. He said:—
"Only if the gap in the balance of payments is narrowed so that external disinvestment is balanced by additional home investment — rather than by excessive consumption — can we be satisfied that, as a nation, we are making ends meet and not wasting our past accumulations. One of the great benefits conferred by the possession of external assets is ability to ride out periods like the present of exceptional difficulty and stress, but this external mass of manoeuvre is the mainstay of our economic independence."
Deputy McGilligan as Minister for Finance and as a member of the Opposition are two entirely different people. Sitting on these benches he sometimes spoke as a responsible person. On that occasion he pointed out that unless we decreased our home consumption and imported less the country would be faced with a very serious situation. Further on in that same Budget speech Deputy McGilligan, Minister for Finance, said:—
"Making all allowance for the exceptional conditions now obtaining it is to be feared that we are not producing and earning enough to pay our way. The implication is obvious. We cannot have both consumption and capital development on the present scale unless we save more and produce more."
That was Deputy McGilligan just 12 months ago. He pointed out the dangers inherent in our then consumption, our low production and our heavy capital disinvestment. Speaking about Córas Iompair Éireann, the baby of the Coalition——
What?
Córas Iompair Éireann, which they had nationalised sometime previously and which they expected to pay its way, was put in the hands of responsible people, and according to the Coalition, it would be made pay its way from that on. Every possible power that could be thought of, and that the company would need in the future, was given to it by the Coalition Government. Deputy McGilligan, speaking here 12 months ago as Minister for Finance, said:—
"Part of the uncovenanted increase was due to the purchase of reserve stocks of £452,000, but the main causes were the persistence of Córas Iompair Éireann losses and the heavier burden of bread subsidies."
In coming to conclusions about the financial statement last year, and in telling the House how it was made up, he said in the course of his statement:—
"As already announced, the Social Welfare (Insurance) Bill provides increases in old age and blind pensions and further substantial modifications of the means test, and a beginning must be made this year to meet these and other expenditures of social security. A mother and child scheme, which will come into operation in this financial year, necessitates outlay greater than the sum already in the Estimates. A Bill now before the House envisages increased grants for the Tourist Board. I have, therefore, decided that I should add at least £1,500,000 to the estimates of expenditure, not indeed to be on the safe side, but as a minimum precaution."
Deputy McGilligan said he did that as a precaution. He did not think that he would want the £1,500,000. He believed he could finance the Social Welfare Bill, which had got a Second Reading in this House previous to the Budget. He thought also that he could finance the mother and child scheme which the Taoiseach of those days had guaranteed to the Minister for Health, and had given him the green light to go ahead with a £3,500,000 scheme. He was going to finance all these things out of the Budget which, as Minister for Finance, he laid before this House about this time last year.
Deputy Norton had estimated that the extra cost of the Social Welfare Bill was going to put a burden of over £7,000,000 a year on the taxpayer, while Deputy Dr. Browne had estimated that his mother and child scheme was going to cost annually over £3,000,000. But only £1,500,000 was provided in last year's Budget to cover all these, and to cover the additional old age pensions. The Minister for Finance of that day went on to say:—
"I must utter a warning against any facile assumption that this provides me with the reserves into which I can dip to meet the demands that are being pressed upon me from various quarters."
The Minister there gave a warning that new and further demands were being pressed on him, and said that the Budget gave him no reserves. He went on to say:—
"The £1,500,000 must be regarded as being already fully committed, and any additional expenditure must entail corresponding increases in taxes or other charges."
We all know, and the country knew at that time — it was pointed out in this House by the members of the then Opposition — that, when Deputy McGilligan introduced his Budget last year, he was budgeting for a very serious deficit. The people knew that if the mother and child scheme was to come into operation last year, or if the social welfare scheme, with additional old age pensions, was to come into operation fully last year, as we were told it had been planned by the Coalition it should, that would have meant another extra £10,000,000 of taxation as a minimum. That is well known.
The Budget that was laid before the House then provided for a tax revenue of £73,000,000 and a non-tax revenue of £10,700,000. We found, at the end of the year that, with no mother and child scheme, and no social welfare scheme, except the old age pension portion of it which this Government put into operation, there was a deficit on Deputy McGilligan's Budget of £6,680,000.
Since this Budget was introduced three or four weeks ago, every known device has been availed of by the Opposition, not only in this House but in the country through the Press organs which support them, to prevent the Government of this day, if they could manage it, from being able to raise the necessary finances to carry on the services of this State. I believe that we are all agreed on this, that, with a democratic Government, this House is in duty bound to provide whatever Government may be in power with sufficient funds and resources to carry on the services which this House authorises it to carry on. That statement, I believe, will not be questioned from any side of the House. I think it is an absolute tragedy that, in this year of 1952 — a campaign has been waged since 1948 on this matter — a Government should be hindered in asking Dáil Éireann or the people of the country for sufficient moneys to carry on the services of the State, services which the House has determined are absolutely necessary.
Who has carried on that campaign?
The Opposition are carrying on that campaign.
That is not true.
They are organising vested interests outside this House, and they organised them in 1948.
Do not be talking nonsense.
They are being strongly organised to prevent in every possible way the Government from getting the necessary funds to carry on the services of the State.
To prevent the Government from fleecing the people. Put it that way.
I say, with the full sense of responsibility, that an undermining and a damaging campaign is being promoted in the country and is being carried on. It has been carried on by that Opposition against the right of the Government elected by the people to raise sufficient taxation to carry on services which this House demanded of it, and authorised it to carry on. There is no doubt about that.
Nonsense.
There is that undermining campaign. I want to say this to Deputy Morrissey whom I have always looked upon as a rather sensible person when he was not speaking as an absolute out and out rabid politician, that if any portion of this Parliament campaigns to organise any vested interest in this State, whatever it may be, to try to break the elected Government by its strength and because of the fact that the Government, as it is entitled to do under the law and the Constitution, seeks to raise taxation in a certain way — that campaign, if carried on long enough, can be as serious and as damaging to the Government as such campaigns have been in democratic countries in Europe over the last 50 years. Deputy Morrissey knows that.
I do not. I know that the Deputy himself does not believe it.
Well, Deputy Morrissey knows it.
Nonsense.
If any groups — it does not matter even if they are outside this House — can be organised because of their finances and their strength to break a democratically elected Government, whatever Government it happens to be, then on the day that can happen it is going to be damaging to democracy and to the institutions of the country. It is going to do serious damage to the whole of the institutions of this State. That campaign, as I said before, is being waged and has been waged in the past. It is going on now continuously since 1948.
By whom?
By the chief Opposition and their satellites in this House.
That is untrue.
That is absolutely true.
If that is going on the Deputy should expose it.
I did before in this House. I have spoken in this House and outside it. The matter has been adverted to and has been shown to be true in very many respects.
Who are the vested interests? What are the powerful organisations? Name them?
Deputy Morrissey is well aware——
Name them.
—— of that campaign.
I challenge the Deputy to name them here and now. He cannot do so because they do not exist.
The Deputy is fully aware——
No, I am not.
——of the campaign that is being carried on by vested interests outside this House to break the elected Government in regard to taxation.
Will the Deputy name them? Has he the courage to do it?
The Deputy is making unfounded charges.
He does not know what he is talking about.
I am talking with a full sense of responsibility, and if I am getting under Deputy Morrissey's skin it shows quite well that he is well aware that what I say is true.
You are running away from it. Name the organisations.
You are well aware of that fact.
I am challenging the Deputy to name them. The Deputy is making outrageous charges and is running away from them.
I will name them all right.
Do it.
I want to emphasise that this is an effort to deny democratic Government in this country and that is a dangerous line.
The Deputy has said that several times. Repetition is not allowed.
I think it is necessary to emphasise it, because it could not be emphasised too often.
I think it is a wrong thing to say without mentioning the persons responsible for it.
It is an absolute fact.
It is not.
Who is the Deputy saving, anyway?
The Deputies can examine their own consciences.
Do not save us.
They can examine the logical conclusions that that policy is going to lead to in the end.
It is not we who are on trial in this Budget. It is you.
It is you who are on trial. This Budget became necessary because of the mismanagement of the financial affairs of the State and because of the spending spree of the Government that sat in office for three and a half years. That is why the present Budget has become necessary and for no other reason. They left a deficit on last year's Budget of £6,680,000 notwithstanding the fact that the revenues due in the year brought in more than what was estimated by Deputy McGilligan in that Budget. It cannot be denied by Deputy Morrissey or by any person on the opposite benches that there was a deficit on last year's Budget——
There was not.
——of £6,880,000.
Do not believe everything you hear the Minister say, for goodness' sake.
I certainly believe him, and I have good reason to believe him. No member of the Opposition has got up to prove otherwise. There were several items that came due in the course of last year for which not a single 1/- was provided in Deputy McGilligan's Budget. One very large item was the award of the Civil Service Arbitration Board of over £3,000,000. The Coalition Government, when the Budget was introduced last year, knew that that award was coming. They also knew what that would mean if they intended to honour their bond in that respect. They had made a bond with those organisations that whatever the award to the Civil Service would be they would honour it, but not 1/- was provided in last year's Estimates for that.
The Fianna Fáil Government honoured the commitments of their predecessors within a month or so of taking up office and provided over £3,000,000, not one penny of which was provided for in the Estimates.
£2,000,000 of which was left to them by their predecessors.
Not 1/- was provided in last year's Estimate towards that extra £3,500,000 for the Civil Service, the Army, Gardaí, primary and secondary teachers and other State servants.
Deputy McGilligan said he had £1,500,000 for the mother and child scheme that was to come into operation during the course of the year notwithstanding the fact that the Taoiseach previous to that had given authority to his Minister for Health to go on with £3,500,000 during the last year.
Who told you that?
It is a well-known fact. It is on the records of this House.
What is on the records?
That the Minister for Health had been authorised by the Taoiseach to go on with the preparation of a £3,000,000 mother and child scheme.
Who said that?
Deputy McGilligan the then Minister for Finance, adverted to it in his financial statement on the Budget last year.
A Deputy
When are we going to get the mother and child scheme from the Fianna Fáil Government.
You will get it when it comes. You will not have Fianna Fáil running away from it the same as the Ministers of the last Government did. They threw their colleague to the wolves.
That is the proper description.
Well said.
To the wolves.
That is the truest word you have said since you started.
You are not very flattering to the Minister for Finance.
They gave him every encouragement to get on with his scheme but when the scheme came to a certain stage they got cold feet. No Minister in a democratic Government was ever treated in such a fashion as the Minister for Health was treated in the last Government.
If we are going to have a discussion on this it will be grand. How does the Deputy know how the Minister was treated?
I am fully aware of it. No Minister of State in any Government in any democratic country in Europe was ever so treated.
The alleged treatment of a Minister in a previous Government does not arise out of this.
Deputy McGilligan, as Minister for Finance at that time, in the course of his statement said: "A mother-and-child scheme which will come into operation in this financial year necessitates a greater outlay than the sum already provided in the Estimate." Is that not an indication that the Government had decided to finance that scheme although they provided no money for it? They provided no money for the Social Welfare Bill or for the increased old age pensions. They provided no money for the increases that were visualised at that time. They provided no money for the Córas Iompair Éireann deficit or for the Great Northern Railway for which Deputy Morrissey had responsibility for a considerable period during the Coalition Government. That Government were not unaware when Deputy McGilligan introduced his Budget last year that there was a deficit on the working of Córas Iompair Éireann for the previous year.
They were not unaware of the fact that £500,000 was due to the stockholders of that company who had been guaranteed in the legislation passed by this House that they would be paid by the Government if Córas Iompair Éireann could not meet the amount out of its own resources. They were fully aware of that, but not one shilling was provided in the Budget last year to meet that deficit on the guaranteed stock which was guaranteed by the Oireachtas of this State. Not one shilling was provided for the increased old age pensions which they boasted so loudly about during the general election. No money was provided also for the Social Welfare Bill. But, within six weeks of taking office, the Fianna Fáil Government provided an additional amount for the old age pensions. Every increase in old age pensions since the Cumann na nGaedheal Government left office was given by a Fianna Fáil Government.
Why did the Deputy vote against the proposed increase in 1947?
When Deputy Blowick took office in the last Government, the old age pensioners were getting 15/- a week.
They were getting 10/- a week and 2/6 outdoor relief.
They were getting 15/- a week and the Minister for Social Welfare at that time introduced a Bill to continue the 15/- a week. He did other things in that Bill which I do not propose to go into. It is no harm to mention in passing that he increased the amount to be paid by the workers on national health insurance stamps, but he did not give them one shilling extra in sickness benefit.
On the total yield of Deputy McGilligan's Budget, the Minister for Finance this year was faced with an extra expenditure of at least £6,750,000. But the 1916 men who formed the majority of the members of this Government were mindful of the social policy and directives of the men of 1916 and they introduced a Social Welfare Bill which they intend to implement and the Minister for Finance has provided money to implement that Social Welfare Bill.
By removing the food subsidies.
He has provided the money——
He has not.
——to implement that Bill from the 1st July next when it becomes law. He has provided to cover it fully.
By removing the subsidies on food.
He has provided in his Budget for sufficient funds to increase sickness benefit from 22/6 to 50/- per week after the 1st July next. He has also provided sufficient money in the Budget to increase the unemployment insurance benefit from a maximum of 36/- to 50/-. He has provided over £1,000,000 over and above what was given to the old age pensioners last year. He has provided up to £2,000,000 extra in the Budget for children's allowances.
Will any Deputies on the other side of the House say that they will vote against this Budget because they do not want this Government to get sufficient funds to implement the Social Welfare Bill, to give increased children's allowance, increased old age pensions, increased sickness benefit, increased unemployment benefit? Is that one of the main reasons for their opposition to this Budget? Is their opposition a smokescreen to cover the great benefits which are being given to the workers, to the wage-earning classes and to the lower income classes in this country? Will Deputy Morrissey, Deputy Blowick or the Labour Party stand up and say that the white collar workers who are paying income-tax should not get the income-tax reliefs given to them in this Budget? Will any of them tell the House that they will not give these reliefs to the salaried workers whose income-tax is being reduced as a result of the Budget?
You are only "codding" yourself.
Will any Front Bench Opposition Deputy say that he does not want to give those reliefs to the lower salaried income-tax payers? All these things are being given in this Budget. To my mind, this is a good social Budget. It is giving better social services to the lower-paid workers generally. It is giving increased social services, increased sickness benefits, better old age pensions, better children's allowances and lower income-tax for the lower-salaried workers. Many other benefits are being provided for in this Budget. Are the Opposition attacking this Budget because they know that it is drawn on sound national lines? Without seriously injuring the interests of any section of the community, those who need assistance and improved benefits are being provided for in this Budget. Is that the reason for the attack which has been made on it and for the undermining which is going on?
A great frontal attack has been made because the food subsidies are being reduced. We are all long enough in this House to remember that when food subsidies were first introduced in 1941 by Deputy Lemass as Minister for Supplies, when wages were pegged down by a standstill Order and prices were pegged down, the Labour Party and the Fine Gael Party opposed these subsidies. It is on the records of this House, and I will not waste time reading their speeches at that time. They opposed giving the bread subsidy in 1941.
We did not.
Deputy Norton voted against the Fianna Fáil Government at that time when they introduced the bread subsidy. He talked about beggaring the workers of the country by giving them a bread subsidy of that kind. Deputy McGilligan talks about the food taxes, and nobody knows better than Deputy McGilligan that this nation could not go on paying over one-sixth of its total revenue in food subsidies.
Mr. O'Higgins
Why did you not include it in your 17 points?
We will add it to your points. A large number of the Opposition has spoken. We had the Leader of the Opposition and the shadow leader. Deputy Costello is the leader and we will call Deputy Mulcahy the vice-leader. Deputy Morrissey also spoke——
Give the people the chance and they will soon tell you.
Deputy McGilligan spoke and most of the other Front Bench members. Deputy Blowick spoke in his usual loud tone.
Am I loud?
Not one leading member on behalf of the Opposition has said: "If we get back into office we will put on these food subsidies again." Not a single one of them has said that. I challenge them to say that they will take the taxes off drink, off tobacco, that they will again reduce income-tax. Let them stand up and say it instead of talking about the general election and everything else. This is the place to make responsible statements about what their policy will be. This is the proper time to make it, not when the next general election takes place.
When is it going to come?
No member of the Opposition, not even a member of the Labour Party said anything on those lines. They got into a strait-jacket before. This Budget which was introduced by the Minister for Finance a couple of weeks ago is a Budget that would have been introduced by Deputy McGilligan in the Coalition Government last year, and well they know that. The reason they could not do it was because they got themselves into a strait-jacket in the 1948 election and they dared not raise any taxation in any direction. They knew they were budgeting for a deficit last year. There was no money for social welfare, mother and child, or any other services which would fall due to be met. There was no provision in the Coalition's last Budget to pay the civil servants the extra money they had guaranteed they would pay. They were in the strait-jacket that they got themselves into and it fell to the lot of the Fianna Fáil Government to try to pull the country out of the mess in which the Coalition had put it during their three years in office. They were afraid to come to any section of this community and put the extra taxation on them that was necessary to carry on the ordinary services of the State. It fell to the lot of the Fianna Fáil Government because they had the courage, the foresight, the ability and further, they had the people of the country behind them.
Mr. O'Higgins
Show us a bit of courage.
They have an honest Government in power to-day. They gave the Coalition Government their answer when they got an opportunity last June. Although you had brought in a deficit Budget, although you promised them a mother-and-child scheme, social welfare scheme and made many other lavish promises, the people were not such fools to believe you. They gave the Coalition Government their answer at the polls last June and to-morrow they will give the same answer.
Tripe.
Mr. O'Higgins
Try it on.
We heard a lot of howls on many occasions from those benches because there was to be a general election. They howled during the dozen general elections since 1932 when the Taoiseach found it necessary to go to the country to get a further mandate. The Opposition howled every time and said these general elections were not necessary and on every occasion except one, when we did not get a clear majority in 1948——
Or 1951. You got no clear majority in 1951.
But we got the largest majority of any organised political group in this country, almost double what the next largest group got in the country in every single election in which we went to the people, and the people are sound judges.
Mr. O'Higgins
Try it again.
The present Government is an honest Government and all the groups, like those Coalition groups, represent a dishonest Government.
You are a Coalition Government now.
Mr. O'Higgins
Do not make Deputy Cogan and Deputy Dr. ffrench-O'Carroll blush.
Deputy Dr. ffrench-O'Carroll and the other Independent Deputies are quite capable of dealing with the main Opposition Parties there. Let me say in passing with reference to those Deputies that it was because of the fact that these Deputies withdrew their support from the Coalition Government this time 12 months that you had last year's general election.
We are not discussing general elections. Let us keep to the resolution.
There was a reference to those Deputies.
The Deputy should be sufficiently astute not to be drawn into such a discussion.
I like to try to educate them as I go along.
And you are succeeding.
They stood as Independent Deputies against the Coalition Government, and the Irish people elected them in the constituencies for which they stood.
Motion No. 11.
They have every right to support this Government if they wish to do so because the people gave them no mandate in the last general election to support the groups over there. They are absolutely free to do what their own judgment tells them is best for the country.
Be very careful. A vote is being taken to-morrow night. Do not tread on their corns.
Yes, the vote will be taken and we are not one bit afraid of it.
The weather is bad now.
We had over the three years good times in this country when we had plenty of money. We had over £40,000,000 of Marshall loan money that was provided for the Government at that time, and every penny of it was spent before this Government came into office.
Mr. O'Higgins
That is not true.
All those dollars had been spent in purchasing American goods, goods from the dollar area. Before this Government took office every dollar had been spent and, of the £42,000,000, less than £3,000,000 was spent on capital goods. A great deal of it was spent on buying wheat because the Minister for Agriculture at that time was opposed to producing wheat in this country. He was opposed to any tillage crops and we spent a considerable amount of that money in buying wheat. We owe for that bread we ate for the last three years still, and this is the first time in the history of this nation that the people of this country have been eating bread that was bought with borrowed money.
Is that the wheat that cost £53 per ton?
That bread has not been paid for. A Minister for Finance in a Fianna Fáil Government has to provide money in this year's Budget to pay the interest on the first instalment of the loan. A short time ago in this House we heard Deputy Dillon saying that when he was Minister for Agriculture in the Coalition Government he could not spend the money fast enough. He said that, one evening in his office, inside two hours, he spent £5,000,000 buying coarse grains and maize meal from America. The position is that the people of this country are eating bread which was paid for with borrowed dollars. In fact, we have not paid for the bread yet. The pigs were fed with imported feeding stuffs, resulting in our people eating bacon paid for by borrowed dollars. That bacon has not yet been paid for. It is the first time in our history that we did not pay for the food we ate. Nevertheless, we hear about the great financial, social and agricultural policies of the Coalition Government. The position is that the inter-Party Government and the Minister for Agriculture in that Government did their damndest to prevent the Irish farmer from growing wheat or any kind of tillage crops. Theirs was an antitillage and a pro-grass policy. Good grass is a good proposition in any country, but good tillage is better. The present Minister for Agriculture is advocating a policy of increased tillage, and he is not ashamed of such a policy. That is the only sound, national policy as far as this country is concerned, because if we can persuade our farmers to grow from the land of this country sufficient food to meet both the needs of our people and our animals, we will not find our nation in debt to a foreign country for those essential needs. The policy in this regard carried on by the inter-Party Government was a disgraceful one.
We heard quite a lot about all the schemes launched by the Coalition Government—schemes with highsounding and fancy names such as the land rehabilitation project. More money was squandered on this project during most of the years of the previous Government's régime than was spent over many years by Deputy Dr. Ryan, when Minister for Agriculture on a humble scheme known as the farm improvements scheme. The land rehabilitation project and other schemes are being financed in the present year not by means of Marshall Aid, because that has all been spent by the Coalition, but as a result of moneys provided in the Budget recently introduced.
As I said before, this Budget is a sound one. It was drawn on sound lines. It is an indication to the producers of this country that, if we are to maintain, as is our desire, social services at their present level, we must step-up both the production from the land and industrial production. There is one thing which worries me, and it is that, unless these two sources of production are improved, there is a danger that our present standard of social services will be in jeopardy. This Budget will do more in that direction than anything that has happened in this country for a great number of years. It shows the way to industry, and it is a guarantee to the industrialists of this country that, if they invest money in industry, produce more, give more employment and make a little money because of their efforts, they will not find themselves in the strongest-walled gaol of the country.
How could a country make progress when we had Ministers in the previous Government warning the industrialists of this country that, if they dared to make money, the proper place for them was the strongest-walled gaol of the country? At the present time, those who are prepared to put their energies, their abilities and their capital into industry in this country have an assurance that their efforts will be fostered in every possible way. They had no such guarantee during the régime of the previous Government. The farmers of this country are now aware that, if they till their land and give full employment, they will not be locked up by the Minister for Agriculture. A sound, sane, national policy designed to give a fair return to all those engaged in agriculture has been put into operation by the present Minister for Agriculture and the Fianna Fáil Government. The farmers of this country realise that, if they set out to improve their land by better manuring and decide to produce more, they have a Government in office who will provide them, as far as lies in their power, with a fair price for all the produce they can provide.
You would not give the half-holiday to the workers.
There is also an assurance that work will be made available for agricultural labourers and that they will not be leaving the land at the rate at which they were leaving it during the term of office of our predecessors, when there was no confidence in any kind of farming in this country except grass farming. If a farmer was a tillage farmer he was looked upon with disdain by the previous Government. They had no use for him. Many thousands of agricultural labourers lost their employment due to the agricultural policy of the Coalition Government. However, due to the policy put into operation by the present Government, many thousands of agricultural workers will get back their employment again in the very near future.
Will you give them their half-day?
Will the Deputy stop chirping up there in his nest? He is a great man for production.
I asked you would you give them their half-day?
Every man I employ gets a half-day, and that has been the position for quite a long time. Maybe that is news to you.
I know well enough now.
Much comment has been made in this House on the withdrawal of the food subsidies. Some of the subsidies have been withdrawn and others have been reduced. I believe that, in the end, that action will prove of great advantage to increased production in this country. A situation existed in which many sections of the community were under the impression that they were paying huge subsidies to other sections.
People in our towns and cities were under the impression that they were paying millions in subsidies to our farmers. They were under the impression that agricultural produce was being heavily subsidised when, in fact, the contrary was the case. No subsidy whatever was being paid on any item of agriculture produced in this country. Not one shilling out of £15,000,000 paid in subsidies was a subsidy to agricultural production. All that money was devoted to reduce the price of butter, bread, tea and sugar to the consumer and not a penny of it went into the pocket of the farmer.
We must not forget that the bread subsidy has not been totally removed. The Minister is providing a subsidy of £8,500,000 this year to keep the price of bread below the economic price. The butter subsidy has been removed. When the farmers of this country come to realise that the consumers have to pay 3/10 a lb. for butter I believe they will set out to increase butter production, and in that way help to provide it at a lower rate. I believe that the butter subsidy was damaging in the extreme from the point of view of increased butter production. Therefore I consider that the removal of the butter subsidy is sound national policy. I wish to point out that the farmer is getting the same price for his milk this year as he was getting last year, though the consumer will have to pay a few pence extra in respect of the ½lb. of butter. The consumer will have to pay 5d. extra per week on the ½lb. of butter as a result of the withdrawal of the butter subsidy.
A great many town and city dwellers in this country believed that they were paying a wheat subsidy to our farmers when, in point of fact, the contrary was the case. The reason for the increase in the price of bread after July next is that portion of that subsidy will be withdrawn. The city dweller will be more pleased when he comes to appreciate fully the fact that the farmer must get a certain price for his wheat if he is to be allowed to remain in production. When the farmer comes to realise that the town dweller has to pay more for his bread he may increase his production in an effort to decrease the cost of bread to the town and city dweller.
It is a sound policy to reduce the subsidies and endeavour to get the country back on the pre-1941 basis, when subsidies were first introduced. In no country in Europe, with the possible exception of our nearest neighbour—and we do not know what their policy may be in the future— have subsidies become a permanent part of Government policy. Food subsidies were first introduced during the second world war. We in this country paid very little subsidies between 1941, when they were first introduced, and 1947. I think that the figure was only a matter of £2,000,000 or £3,000,000 a year during that time. It has never been part of the permanent policy of a nation to subsidise food. I think it would be much better policy that workers should get a wage sufficient to enable them to buy food at the price it costs to produce it economically in the country.
The reduction in the food subsidies is a big break all at once when we consider that in previous years one-sixth of our revenue was devoted to food subsidies. We must bear in mind the fact that the Minister for Finance is providing over £8,000,000 this year for food subsidies. As a long-term policy, whatever Government might be in office in this country must aim at getting rid of the food subsidies, so far as lies within their power, because in many respects they are wasteful. The flour and bread subsidy was wasteful in the extreme. About 30 per cent. of our population are able to pay any price for bread and yet these people were getting cheap bread at the expense of the workers of this country. The workers of this country and the lower salary classes were paying to provide cheap bread, butter, tea and sugar for people who could well afford to pay any price for these commodities. I believe that, within a short time, all sections of the community would be far better off if the rationing of foodstuffs were abolished and if the subsidies in respect of most of them were withdrawn. I believe that, in the long run, the people of the country would be far better off and that prices and wages would adjust themselves.
The ordinary sensible people of this country realise that this Budget is severe on all sections of the community but that nevertheless it is sound. They appreciate that, just like the private individual, this State must pay its way. They realise that if we are spending money on Government services of any kind we should not have these services unless the community are prepared to pay for them. If the Government believes that the nation is unable to pay for these services then these services should not be in operation. If the community want certain services they must pay for them: there is no other way of having them. I would not object to the Opposition's making political capital out of this Budget if they would indicate which of the social services which are now in operation, or which are proposed in present legislation, should be dropped. If, as they allege, we are unable to pay for these social services then some of them should be dropped. The Leaders of the various Opposition Parties should indicate to the Dáil which, if any, of the social services they want dropped.
It is very simple. Control the banks.
We will put you in control of them.
I mentioned before the need for higher production. I think that is one aspect of the Budget that deserves more consideration from all sections of the House than it has got. There are some matters at any rate, on which we might get agreement in advance and one such matter is that the paramount need of the country is increased production both from the land and industry. If we can get agreement on these fundamentals, we can join in trying to formulate an agreed policy and as I say it is absolutely essential that we should get increased production from the land and industry.
There has been a good deal of talk about capital investment. We are providing considerable sums of money for the most needed semi-social services. I used the term "semi-social services" advisedly. We are, for instance, providing houses which, while they will pay high dividends in the matter of health, will bring no dividends back to the Exchequer for the capital invested. These houses are absolutely necessary, and the State must provide for the housing of the people at whatever the cost. Again, we have capital investment in electricity development. Electricity has increased our industrial output beyond anything visualised many years ago, but a good proportion of the money expended in developing electricity— probably 20 or 30 per cent. — is a social investment that can never increase the wealth of the community to any great extent. Probably 70 per cent. would be a remunerative investment, but 30 per cent. or perhaps more would not.
In what way?
In the matter of rural electrification, providing the lines for lighting dwellings in the country. That would be the social end.
Would there not be a saving on dollars in oil?
It would be a social investment anyway, and I fully approve of it. This Government has provided, and will provide so far as the resources and the savings of the people will allow, for full development of electricity, housing, telephones, and any other service likely to promote the interests of the country. I want to suggest to the Minister for Finance that he should turn his mind during the course of the coming year, and before the next Budget, to the necessity for some capital investment for the development of agriculture. I think agriculture needs considerable capital development, not in the direction of draining the worst land in the country or taking stones out of Connemara, which is all mountain, but in the matter of providing lime, manures and other things of that type. There is need for much greater capital development in agriculture than has taken place in the last 20 or 30 years. Anything the Minister can do — and he has done very well in this Budget — to encourage the farmer who has capital to invest his savings in the land will be serving the interests of the community as a whole.
What good are loans at 6 per cent. from the Agricultural Credit Corporation?
Money can only be provided at the prevailing rate for any purpose — for housing or anything else. If we had to provide subsidies to cheapen the rates for borrowed moneys there would be serious objection to it. They can only get money at the rate prevailing. I do not know that any section of the community can get it cheaper than at the prevailing rate.
Local authorities can get it cheaper.
I want to draw the Minister's attention to the necessity for greater capital investment in the land of the country in future. We have invested in industry in many ways and I suggest that we would get a good return for our capital if more of it were invested in the land. I have no doubt that the present Government will turn its attention to that in time when housing and other kindred pressing matters have been fairly well covered. We have had a great deal of leeway to make up in the last 30 years. We were left an impoverished country and we had to devote a large proportion of our capital investment towards the provision of housing, electricity and other matters of that kind. That policy was initiated many years ago by the Fianna Fáil Government and it is being carried on by the present Government and quite sufficient moneys are being provided for it.
Deputy McGilligan talked a lot about the poor man's pint and the poor man's smoke. I have met many people up and down the country since this Budget was introduced. I met many who were not political supporters of mine and discussed the Budget with them. Every fair-minded man agreed, working men and others, that if increased revenues were needed to carry on the services of the State, both tobacco and intoxicating liquor could bear an increased charge. I have not yet met an individual — and I say this honestly — who has said to me that if these two additional taxes were needed for increased services——
It must have been pioneers you met.
——he was not quite prepared to pay these increased taxes.
I quite agree with many of your statements but this is one thing on which I cannot agree.
Then we shall agree to differ.
You hit the nail on the head when you spoke about the necessity of capital investment in agriculture, but when you say that people did not object to paying 1/2 for a pint I do not believe a word of it.
Is the Deputy making a speech?
I do not object to a man taking a pint of beer or taking a bottle of stout if he feels like it, although I do not take one myself. I should like to point out, however, that in 1939 the ordinary bottle of stout was 6½d. or 7d. It is now 9d. That is the popular drink that most people look for.
And the old half-one.
As a consumable commodity it has increased less in price over the years than any other consumable commodity in this country. It has gone up from 6½d. or 7d. pre-war to 9d. All types of food, clothing, footwear and everything else have gone up considerably more than that. Lately I came across a very interesting little item. In the Evening Herald of 8th March of this year there is a report of the annual meeting of the licensed traders, a very reputable body indeed. The Chairman, Mr. Madigan, said at that meeting that as compared with 1950 the figures for the year 1951 in relation to the consumption of liquor showed an increase under all heads; beer was up 34,000 standard barrels.
I understand that there are about 30 gallons in a standard barrel. Spirits showed an increase of 69,000 proof gallons over the previous year. Wine showed an increase of 54,000 gallons; cider an increase of 87,000 gallons and aerated waters 338,000 gallons. We must have had a dry summer and a desperate thirst. Those figures clearly show that there was a boom in the trade during the last year. That statement was published before ever the Budget came out, and I am sure the man who made it knew what he was talking about. We do not object to that, because anyone who likes a drink is entitled to get it. That is my opinion, at any rate.
This Budget is a sound Budget. It is an honest Budget. It shows quite clearly that the nation, like the individual, cannot live on borrowed moneys. The nation must pay its way. If people want social services and a better standard of living they must pay for them. The only way in which a Government can provide these things is by raising taxation from the people.
Many members of this House are also members of local authorities. Local authorities have to prepare an annual budget and estimate expenditure for the coming year. As prudent men, they carefully consider these estimates and they proceed to tax the ratepayers in their particular area. The rates may increase by 1/-, by 2/- or by 5/-, as the case may be. A solemn resolution is passed to the effect that the rate in the particular area for 1951-52 will be x shillings in the £. They issue a warrant to their rate collectors, a warrant which has the force of law, to collect from property owners whatever rate they have struck. No ratepayer can challenge that rate. There is no furore at the cross-roads. There are no organised groups or vested interests to prevent the local authority raising the sum the law allows them to raise.
On the other hand, when the supreme Government asks Dáil Éireann for sufficient funds to pay for the services that Dáil Éireann considers should be put into operation, a large section of the House sets out on an organised campaign to prevent the elected Government raising sufficient moneys to carry on the services of the State. That is a dangerous policy. If that continues no Government will ever dare to try to raise the taxation that may be necessary to carry on the services of the State. We had three years with a Government that dare not increase the taxation. That Government knew that taxation was necessary but they had pledged themselves to certain interests, if elected, to reduce the taxation that had been imposed under the Supplementary Budget in the autumn of 1947. Nothing has ever done greater damage to democratic government here. I hope the Opposition now have seen the error of their ways and that they will support the Government and give the Minister all the help they can to enable him to find these moneys to finance the services that are so urgently required.
Deputy Allen sounded no less than three warnings, and he coupled those warnings with charges that he subsequently failed to substantiate when challenged to do so. He said that there is some kind of underground organisation working in the country against this Budget and that that underground movement has been organised by the Opposition. He was called upon to name the underground organisation and bring it out into the open. I challenge him to do so now, as Deputy Morrissey challenged him earlier this evening.
If Deputy Allen thinks he will intimidate me or any other member of the Opposition and keep me from blistering Fianna Fáil at every chapel gate and from every public platform, he has another guess coming to him. It is a pity he has left the House. He shed a lot of crocodile tears to-night. Does he still stand by the famous 17 points published by Fianna Fáil last June? Number 15 is to the effect that Fianna Fáil, if elected, will maintain subsidies, control the price of essential foodstuffs and the operation of an efficient system of price regulation for all necessary and scarce commodities. That is only one of the 17 points dangled like a carrot before a certain section in order to gain its support.
I will not weary the House by reading out all the 17 points, but I can tell the House that practically every one of them has been thrown overboard and repudiated by those who drafted them. It is no mystery that people sometimes wonder what kind of people there are in Leinster House when a Government which was 16 years in office, three and a half years out of office, and again back in office last June, can a few days before its election issue a programme containing 17 points telling the people that they will implement these points if elected. Incidentally, that programme was the programme of the inter-Party Government, and all Fianna Fáil could say was that they would do still better. Certain sections of the people took them at their word and decided to give them a trial. Once we were voted into Opposition, we told them to go ahead; we told them to take our programme, and if they could make as good a job of it as we made of it, we would give them all the help we could. That was the attitude of every Deputy on these benches. Every single point has gone by the board.
As regards Deputy Allen, I must say that I have a certain amount of sympathy for him. He came in to debate a most important issue. This debate has produced a very remarkable effect on that side of the House — that at no time could I count more than seven Fianna Fáil Deputies behind the Minister for Finance. I seldom see the Minister in his seat, which is clear proof that the majority of Fianna Fáil Deputies are beginning to feel the blast down the country. They would not get up at a chapel gate at the present time, not if you gave them £20,000. As a matter of fact, a colleague of mine in County Mayo told me — it is common property — that a number of them were caught going out on their hands and knees in the dark so as to avoid meeting a crowd of their own supporters. I do not know if Deputy Killilea would find patches on his knees, showing that he had been making good his escape on his hands and knees.
The Deputy need not worry about Deputy Killilea.
The fact that a Budget such as this is being inflicted on the country by the Minister for Finance and the Government clearly shows that they have lost all touch with the people. Deputy Allen tried to give us a few mouldy out-of-date bits of propaganda as reasons why this Budget is necessary. His reasons were very mouldy indeed, and very few people, except perhaps the die-hards, believe them. The truth of the matter, as is well known to everybody who has passed the sixth standard in the national school, is that a sum of approximately £9,000,000 is being squeezed out of the people this year in order to dry up their purchasing power or, to use the more popular phrase, to empty their pockets. I do not pretend to have any great knowledge of high finance, but anybody who takes out a pencil and paper and makes a few calculations can see that there is not even provision being made to spend all that extra £9,000,000 that is going to be squeezed out of the people's pockets this year.
The Ministers themselves, I must admit, have not levelled the charge against us that we left a load of debt behind us. They were too careful to get caught in a trap of that kind. But the Fianna Fáil T.D.s and their supporters are going around whispering that the inter-Party Government left behind it a load of debt. The Minister for Finance is not present. There is a question, however, which I would ask the Parliamentary Secretary to convey to him because I am anxious to get an answer to it. We are not now speaking behind closed doors down the country or at the chapel gate where there are no Press representatives present. Taking the Book of Estimates, as published by the Minister for Finance, I want him to point out to me one single debt that we left after us.
What about the shortage in the Budget last year?
I am sorry I do not know the Deputy's name. Apparently he is a new Deputy and a newcomer.
There is more than that that you do not know.
I am afraid I cannot accept the Deputy as an authority on finance. I want to ask the Parliamentary Secretary or any Fianna Fáil Deputy where is this load of debt that we in the inter-Party Government are supposed to have left after us. Will the Minister, when replying, give us the history of the award made to the Civil Service? It was brought before us after the Budget; and will he tell us what provision was made to meet it? Will he deny that there was a sum of £2,000,000 left by his predecessor in the "kitty" to meet most of that award? Now these are hard, unpalatable facts against the very lame propaganda that has been used up and down the country. This is a place where we ought at least to have the truth. It ought not to be a place for proclaiming a policy for the people and inside ten months going back and eating every bit of it.
Some Deputies have asked the leader of the Opposition and ex-Ministers on this side what is their policy with regard to food subsidies. The best answer they can get to that question is not from this side of the Dáil but from the people of the country. We know exactly what we did during our three years in office. Now, after ten months of a Fianna Fáil Government, I want to tell them that the best answer they can get to that question will come from the people of the country. Let us assume, for the sake of argument, that the inter-Party Government did leave a crushing debt after them. I think some of the Deputies opposite described it as a terrifying load of debt. I would be prepared to give Fianna Fáil the benefit of the doubt when they were drawing up their 17-point programme under which they were to make this country an El Dorado, a heaven on earth for the Irish people. After the election they came in and elected the Taoiseach, the Ministers and the Parliamentary Secretaries. If it were the case that they then found this load of debt, and that such a serious decision had to be taken as the production of this Budget, then I say that the Fianna Fáil Government had neither authority nor a mandate from the Irish people to impose a Budget such as this on them without first consulting them.
If the Government and the Ministers on that side of the House found conditions as they say they found them, then it was their duty last summer, last autumn or last winter to dissolve the Dáil, go to the country, tell the people what they had found and let the people judge as between the inter-Party Government and the present Coalition. That, as I say, was their plain duty. I say that it is a most high-handed and insolent thing for a Government which never sought and never got a mandate from the people on its 17-point programme or policy, to turn tail and inflict such a blistering Budget as this on the Irish people without consulting them.
Some of the people supporting the Government — the Fianna Fáil propagandist machine — have been churning out the story that we had left a load of debt after us. Assuming that there was that horrible mess behind the scenes, then I say to the Government that they had no right to keep that secret from the people up to the 2nd April last when the Budget was introduced. When they did not do that what were they afraid of and why did they not do it? First, because they knew that there was not a tittle of truth in most of the statements made outside this House; and secondly, because they had calmly accepted what the former Minister for Finance has described as a theory. I, too, say that it is a theory. He has said that he has not the slightest shadow of doubt that this £9,000,000 in taxes could be remitted. I agree with him on that, although I have not the same wide knowledge of finance that he has. I do know this, that ten months ago, when we left office, we handed over to you a country that was literally swimming in money and with a new look. We had put everything into shipshape, and everything was going like a house on fire.
House on fire is right.
As I say, that such a terrific change has now been brought about in that time is nothing short of scandalous. One phrase can only describe it and that is incompetence on the part of the Government.
They will be told that at the next election.
Most Deputies were here the day the Budget was read, and the few that were absent were absent through sickness. When over the radio that night at 10.10 p.m. came the news of one smashing blow after another from the Minister for Finance the supporters of the Parties who formed the inter-Party Government were not much surprised. They knew in their hearts that the moment Fianna Fáil got back, the Taoiseach, Mr. de Valera, who imposed the tax on tobacco and drink in 1947, when he had no inter-Party Government on whom to leave the blame, would reimpose that tax if it was nothing only to satisfy his own pique.
Let us take a look at some of the things that have been done. Bread and flour form one of the principal foods, particularly in the country districts. Bread, butter and tea, as has been said here to-night, constitute the principal meal in most houses even yet. These three things have been hit the hardest. While there is great dissatisfaction at the tax on tobacco, drink and on tea and sugar, what has hit the people hardest is the particularly steep increase on butter and bread. There is no gainsaying that. The tax on butter in particular has come as a severe blow to those rearing families. During the time the inter-Party Government was in office strides greater than ever before were made to improve the health of the people of this country. New sanatoria were planned and in some cases built and completed.
I do not think there is any need for me to tell the Minister or the Parliamentary Secretary, who is deputising at the moment for him, that butter is one of the principal mainstays against tuberculosis. The subsidy was £3,500,000 when we left office. Perhaps it was; but if the children up and down the country, particularly the children of the poor, have to do now without butter and fall back on dripping and fats and on what the medical profession describe as "spread", then we are on the high road back again to reestablishing the high tuberculosis rate and instead of building three or four regional sanatoria I think we will have to build five or six more in addition.
Growing children, above all, require butter to nourish them and give them the necessary resistance to fight tuberculosis. One does not need to be a doctor to know that. During the last three or four years such terrific strides were made that tuberculosis was banished almost completely out of the country.
One thing that struck me — it was an absolutely disgusting performance from the Government side of the House— was that every single speech, with the exception of Deputy Allen's, and I must give him credit for it, dealt with what was happening in England, Norway, Spain and other countries. The Minister for Posts and Telegraphs took us right round the world. First, he took us to the Scandinavian countries, then down to the Baltic and before I knew where I was he was right under our feet in New Zealand. He knew what they were having for their breakfast there. He spoke of Denmark until I was sick. I felt I knew even the people from the way he spoke.
England has been quoted as a country we should watch very closely. What are the facts in regard to this country and England? Conditions here, even our climate, are absolutely diametrically opposed to those of England. England is highly developed industrially and otherwise. We are only trying to get on our feet. We are far from being developed. England is overpopulated. We are hopelessly underpopulated. England is a country that finds itself in debt. We are a creditor nation despite the gloomy prophecies of the Tánaiste and the Minister for Finance and all the other people. We are a creditor nation and we are proud of it. None of us wants this country to become a debtor nation.
Fianna Fáil say there are similarities between conditions here and in England. Is not one of the greatest evils that of emigration, the constant flow from our land? The biggest difference between the two countries is that we are exporting, and must export, our boys and girls, and England is able to absorb them. Yet we had the Taoiseach telling us about two people standing under the same bush, a thing which I considered to be absolute nonsense, as there is no similarity between the two countries. England is already fully developed. It has vast mineral resources and has made great inroads into these resources. We have not.
We can give employment to our young people. We have land that should be reclaimed and drained. This year we find that the outlay under the Local Authorities (Works) Act has been reduced from £1,220,000, which the horrible inter-Party Government estimated last year, to £650,000.
Then there is afforestation. I am sorry Deputy Cogan is not in the House. He represents a county which has the highest acreage of State forestry in the Twenty-Six Counties. This forest is doing very well. The sum for afforestation has been cut down very much. Deputy Cogan contradicted some Deputy speaking on this side of the House one day last week. He said that the acreage next year would be increased and that more men would be employed on it.
If Deputy Cogan would look at paragraph 2, sub-head C of the current Estimates he will see that the labour estimate is reduced by £40,000 and materials by £195,000. At paragraph 3 of the same sub-head he will see that the cost of labour is reduced to £25,000. Will anyone deny that we are cheese-paring on the very things that the country is most in need of? Will anyone deny that drainage is a most important work?
Why should we pay over £8,000,000 for timber which we could grow at home? The only argument that could be used against timber growing is that it is what is called a long-term investment, but that is no answer to the question of afforestation. We should carry out afforestation on the waste lands which are producing nothing. It is from areas such as these that the flight from the land is the greatest. We have a moral duty to keep our young people at home.
It occurs to me, in passing, that Deputy Allen made some remarks which were completely false about Deputy Dillon when he was Minister for Agriculture in regard to wheat growing.
Deputy Allen took care not to mention the fact that during the period of office of the Fianna Fáil Government the controlled price of wheat was 55/- per barrel. He did mention that the inter-Party Government increased it to 62/6. Of course he would not have touched the question at all but for the blunder made by Deputy Smith when Minister for Agriculture which helped to contribute to the defeat of the Fianna Fáil Government when he stated that he would put inspectors and tractors into every farmer's land if necessary. The farmers were not taking that kind of bullying from him. Fianna Fáil tried to compel the farmers to grow wheat at lower than an economic price. Deputy Dillon got better results. He got a higher yield by leaving the farmers free to grow wheat on the land which could produce it best. The farmers knew that and Deputy Dillon got the tonnage and the acreage of wheat grown. He certainly would not have made the laughing stock of himself which the present Minister for Agriculture made of himself on the 22nd April when he calmly told us that he had high hopes that a big acreage of wheat was yet to be sown. Deputy Dillon may have had his faults as Minister, but when I heard the present Minister for Agriculture saying that, I said it would not be hard for anybody to get a name for him; they could call him the Minister for straw. You will not get grain out of wheat sown after the 22nd April last.
That does not arise on the Budget.
Deputy Allen discussed wheat ad nauseam. The present Budget can be summed up as a warning by the Government to the Irish people that they must not do a whole lot of things. The first thing they should not do is to eat. They should not by any means drink. They should not buy butter, bread, clothes or fuel. They should not keep a motor car. Apparently, they should sell everything they have and emigrate and, above all things, not come back. Some Deputies may laugh at that, but the Parliamentary Secretary to the Minister for Agriculture, Deputy Bartley, comes from a constituency which is similar, in many ways to mine. The people in these constituencies are very much alike. Deputy Bartley knows well that what I have said is the view that most people, particularly the small farmers under £10 valuation, will take of this Budget.
Deputy Dr. Browne and a number of other Deputies and Senators have made the charge that the farmers are not pulling their weight. Those who make these statements never stood in a field of tillage or even in a field of grass. Certainly they were not reared on an £8 or £10 valuation holding. I should like to see the living they would make out of such a holding. Is it suggested that these small farmers, many of whom are flying from the land because they cannot live on what they have got, should be further taxed in addition to the impositions which this Budget puts upon them? Talk like that is silly and daft. These are the very people who are flying from the land because they have not enough land on which to live.
A great deal has been said about increased production. How are the Government setting about increasing production? Have the Government made sure that those who can produce more and work the hardest on the land, namely, the young people, will be encouraged? Fertilisers have gone up by £5 per ton at least. Drainage has been discouraged and, in most cases, has been stopped. Land reclamation has been slowed down. These are the encouragements which are given to greater production. What is the use then of talking about increased production and asking the farmers to work harder? What greater proof can we have that the present conditions on the land are not remunerative than the fact that the people are leaving the land every day? The inter-Party Government had almost arrested the flight from the land, almost brought it to a full stop. Emigration increased by 80 per cent. during the months of January and February this year. The number of unemployed has gone up by 12,000 at a time when labour is always scarce. That is the effort the Government are making towards greater production.
Speaking on the Supplies and Services Bill on the 23rd November last, I issued this warning to the Minister for Industry and Commerce when concluding my speech:—
"Let me utter this final warning: if there is any attempt made to increase exports by cutting down on the standard of living of the people, I want to say that I will object strongly. The people are using more butter, beef, bacon and eggs to-day than ever before. I want to draw the attention of the Labour Deputies in particular to this point, because some of them are under a misapprehension; agricultural production has not dropped but increased. It has not increased in value but in volume. The volume has increased very substantially. Owing to the prosperity which the people enjoyed under the inter-Party Government they are consuming more of the agricultural production, the result being that the exportable surplus has remained very static. If we are going to increase exports by cutting down the standard of living of our people here in Dublin and down the country I, for one, will be for condemning that policy."
I foresaw as far back as that the policy which is now taking shape and which will come into action under this Budget. We are to increase the exportable surplus by denying our own people the means of buying food. In other words, we must send the best of our food out of the country. We are taking good care to collect at least £9,000,000 in extra taxation from the people in the coming year so that they may not be able to buy food. They are not to purchase it so that we can export it. Then the Minister for Industry and Commerce and the Minister for Finance can say next year: "What great boys we are. We have increased the exports of agricultural produce from so much to so much." I hope that will not happen and that a general election will come in the meantime. If that increase in the export of agricultural produce takes place, it will be because the Irish people are not allowed to buy their own food which is the best in the world.
The tax which the Minister has imposed on beer would lead one to think that he has suddenly turned into an apostle of temperance until one finds that, apart from increasing the tax on the pint by 3d., he proposes to give the small breweries an allowance which is equivalent to taking £40,000 out of the Exchequer. Brewers were entitled to a rebate of 10/- per barrel on a certain number of barrels brewed each year. That rebate has been increased to 30/- on the first 5,000 barrels brewed. The Minister for Finance must not be aware that a large number of the smaller public houses in the country will be virtually closed as a result of this tax. Even during the short time the tax has been in operation it has hit them extremely hard. I am not making a case for drink such as was made by Deputy Briscoe and others who tried to draw a red herring across the track. They said that, according to Deputy Flanagan, there was nothing in this Budget but the increase of 3d. in the pint of beer. The tax on tobacco and drink is bad enough, but the removal of the subsidies on bread and butter will hit the country hardest.
Might I refer to the statement that the Minister for Finance made in Rathmines when he said that some bad-minded people were circulating rumours to the effect that if Fianna Fáil were returned to power the penal taxes on drink and tobacco would be reimposed. The Minister said that there was no truth in such a rumour. That is a sale of the Irish people. Sale is the only word for it.
It is puzzling many people to know why the £140,000 which was collectible from the tax on dances has been dropped by the present Government. Deputy Davern, and Deputy Maguire from Monaghan gave us the explanation that the dance halls were relieved of tax so that political Parties could hold dances to swell their funds. Is that the line the Government is taking on this matter? Shortly before the Fianna Fáil Government went out of office — in October and November, 1947 —some other Deputies and myself had a motion tabled asking for an increase in the old age pensions. We asked the Minister at that time for £250,000 for that purpose, and he said we could not have it. He asked us quite indignantly did we mean to bankrupt the country. Now, according to the Minister for Posts and Telegraphs, to the Minister for Finance and to the Minister for Lands, £140,000 does not seem to matter. Give it to the brewers, while those living up and down the country, who are trying to make a living, have to put up their shutters.
The most disturbing feature of the whole Budget is the facility with which the Government can afford to swing around from the promises they made during the general election campaign last summer, and turn tail without any attempt at consulting the people. We on this side of the House have requested them, not in any bantering or venemous way, to dissolve the House and to make an appeal to the people before they finally impose this Budget, but they have not the slightest intention of doing so. High-handedness and insolence seem to be the forces behind the imposition of this Budget. I have not the slightest doubt, and the people up and down the country have not the slightest doubt that well over £9,000,000 of the money proposed to be squeezed out of the people's pockets is not necessary. We believe that it is nothing more than the stockpiling of money on the one hand and a means of denying the people the right to purchase essential goods on the other hand. I find it difficult to believe that this Budget could come from the Fianna Fáil Minister for Finance. What I imagine happened is that the Minister has been advised by somebody, I have not the slightest idea who he is, to follow this particular line, and that he has calmly followed it. Apparently it is "to hell with the consequences".
I want to conclude on this note, that is, to repeat what I said a few moments ago. The propaganda which has been circulating that the inter-Party Government left a load of debt behind them has been exploded. The Ministers themselves, as I said, have been too careful to make the assertion but for the sake of argument let me say this. Assuming that the inter-Party Government had left a load of debt and that they had left this horrible mess which Deputy Allen, Deputy Dr. Maguire and the Minister for Posts and Telegraphs have described as a fearful mess, if they found that such was the case, why did they remain silent about it between polling day and the day the Dáil sat in October? Why did they save us? We did not need saving. They should not have saved us. It is not the line that is taken in politics or public life to have saved us, to have thrown the sheltering cloak over our mistakes. Why did the Fianna Fáil Government not take steps in October, November, December, January or even in February last when it must have become apparent to them, according to their way of thinking, that this Budget was necessary and would have to be imposed on the people? Why did they not come before the people then and explain what we had done or what they say we had done, and say to the people: "What are we going to do in order to clear up this mess? We will have to impose this tax, this tax and this tax. What are you going to do? Are you going to send back the inter-Party group or Fianna Fáil?"
Even now, before the Finance Bill, which will come before the House next week, is finally passed, I would say it is their duty seeing that they have not got a mandate from the people, to dissolve the Dáil and not allow this shocking Budget to pass into law.
All along for the last eight or nine months we had a similar type of speech from the leaders of the Opposition Parties and by others on the Opposition Benches as that to which we have been treated for the last week on the Budget debate. The sum total of all those contributions was that everything in the garden was rosy, spending could go on ad lib and the more that the Government spent on the different services the better for the country. The question arose as to where the money was to come from but the question of repayment evidently was not considered by those speakers. Before the Budget was introduced one of the Opposition speakers, Deputy Corish, I think, stated that, notwithstanding all the gloomy speeches of the Fianna Fáil Party and their description of what they thought was the position in regard to industry, finance, and so on, the Budget which would be introduced would not be a severe Budget.