They go on to say in the next paragraph—perhaps Deputy MacEoin and his colleagues will chew over this paragraph:—
"An important consideration in creating a climate favourable to capital investment is the status of the Government financial position. Ireland's Budget has been out of balance for some time in its overall accounts, and lately on current accounts as well. The direct remedies lie in a policy of curtailing non-productive expenditures and stepping up taxation in a pattern that does not undermine incentives. It would appear that there is room for increasing the tax payments on the agricultural side of the economy. Government capital expenditures should be directed towards self-liquidating projects, with a curtailment of ‘make-work' expenditures as well as social welfare measures. Controls should be exercised to discourage consumption imports in favour of capital goods imports of a type that cannot be produced competitively in Ireland."
The House knows that millions of dollars' worth of food and feeding stuffs are imported from the United States of America. The Government have got very little assistance from the Opposition in their endeavours to remedy that position and to try to make ourselves as self-sufficient as possible in this fertile agricultural country so far as feeding stuffs for man and beast are concerned. The Opposition are more concerned with trying to ride away on the misrepresentation that the Government have compulsory tillage or something of that kind in mind rather than asking the farmersof this country to face up to their responsibilities and produce from their own soil, what God has enabled them to do, sufficient for our requirements without being dependent upon the foreigner, who will certainly fix the highest price that he thinks he can extract from us.
According to our agricultural experts, we can produce sufficient cereals and root crops to make the country self-sufficient or nearly so, not alone for human, but animal consumption. If we were to increase our barley production on a substantial scale it would undoubtedly mean increased productivity in the pig industry and greatly increased production so far as poultry are concerned. If we were to increase our cereals and root crops substantially, as can be done, it would mean that we could provide better winter feeding for our dairying cattle, and that would mean increased milk supplies, rendering it unnecessary to have recourse to increasing the prices of butter and milk, as has been done.
In that connection, the Government are aware and have been deeply affected by the fact that butter output has declined substantially in this country, but consumption on the other hand has increased. As I pointed out recently, except for New Zealand, we have the highest average consumption of butter per head in the world. Milk, of course, is being diverted to industrial uses, but it certainly gives room for fruitful thought as to whether we are proceeding on the right lines or whether, in fact, there is sufficient advertence to modern dairy practice, the dairying practice that in other countries has given such great results, that we can actually import from New Zealand to this country butter at a lower price than it can be produced at home, when, I am informed, that, in New Zealand, not alone are higher wages paid for work on the land, but there are higher yields all round from the cow population and higher butter fat content also.
The £200,000 that is coming into the Exchequer from the increase in the price of butter, for the present month, I think it is, will go into theDairy Price Stabilisation Fund, and will help to meet the very heavy cost of cold storage of butter. We are really only getting butter during the summer months from our own producers and during the winter period we have had to depend to a greater extent on imports. As the Tánaiste pointed out, there is no profit to the Exchequer whatever from the increased price of butter. Any national profit will help to set off the cost of charges in respect of storage.
When you look at the headlines in some of the newspapers—"Consumer Prices Increased by Cabinet Action and Policy", "Pre-War £ Now Worth Less Than 9/-"—it would seem to the uninitiated that some sin which the Minister for Finance had been guilty of was responsible for reducing the value of the £ to 9/-. What has reduced the value of the £ to 9/-? The policies which have been followed in the neighbouring countries for years past, the state of inflation that has been allowed to continue when prices and wages have driven one another into an inflationary spiral situation. Now there is a painful process of adjustment going on in all these countries and it is pretended that in this country we can remain completely aloof, that we are in an ivory tower, and that what happens our neighbours or on the Continent or in America will not affect it.
We know that the price of wheat, the price of maize and the price of fertilisers on the foreign market will affect us. We know similarly that the price at which the Danes, the New Zealanders, the Australians, the Canadians, the Dutch and whoever else may be competing with us in the foreign market are able to sell their produce will determine the price we will get. If we do not consider that price good enough we are reduced to the position that we will be unable to export because we cannot sell in the foreign market unless our price is related to the price that obtains there, namely the international price obtaining at the time. Therefore, we will have to give up exporting altogether and depend on the home market. Have those who criticise the Government no conception of the fact that WesternEurope has been in this inflationary situation since the war period, that nearly every European Government has had to take steps to deal with it and put its finances in order by cutting down unnecessary consumption, cutting down unnecessary imports and taking the most stringent measures to increase home production and exports?
The Manchester Guardian,which represents the British industrial interests to a very great extent, particularly the textile industry and the great industrial area of Lancashire, had a leading article on the 3rd March last from which I propose to quote:—
"Competition: This year the stamina of British industry will be tested for the first time since the war. The textile slump, from which we have recently recovered, was part of a world-wide trend. This country was not hit more heavily than others. The struggle that is now beginning, not only in the consumer goods trades but in the whole field of engineering, is of a different kind. The pressure of post-war demand for goods of almost any type has slackened. Much of the reconstruction work is done and the inflation of credit has been greatly reduced. Almost everywhere production has caught up with the level of effective demand; that is, what the people and the country can afford to pay. This new balance of demand and supply has created a new situation. Competition has appeared again. After years of virtually guaranteed sales for anything that could be produced, British manufacturers and merchants are beginning to find that they must compete both with other firms and with other countries if they want to keep the factories going and the men at work."
In spite of the fact that Great Britain is devoting a large proportion of her industrial resources and capacity to rearmament projects, the position, according to the Manchester Guardian,is that they are faced there with a very grim situation this year because for the first time competition in the international market has appeared since the war. That is the opinion of an organwhich is in close touch with the English industrial worker.
England is an industrial nation with a long tradition, with great skills and with great resources. There they are viewing the present year with the greatest anxiety, because they see coming into the field countries like Japan and Germany, the elimination of which during the war had given them a comparatively free field for their exports for years past. They see now that that situation is changing and that the only way to deal with it is to become more efficient, to reduce their costs and to get away from the idea that, by arbitrarily increasing wages or other costs, they are doing other than what the Trade Union Council said—"Cutting themselves out of the world market."
I have quoted already a document in the hope that our friends in the Irish Labour Party might be tempted to read the remarks of their English colleagues, the T.U.C., in the statement issued by them in August, 1952, to the effect that:—
"In the absence of a rise in productivity, which cannot be expected to come quickly, substantial wage increases are bound to raise costs and rises in the cost of exports could in themselves press Britain out of world markets, and such an increase, therefore, might have the most serious consequences for our standard of living."
The statement goes on to say:—
"Costs are largely within our own control and to some extent within the control of the trade union movement."
As the Tánaiste pointed out recently, the increases in wages here compare very favourably with the increases in Britain. The cost of living here has not increased to the same extent as in Great Britain during the past year or so, while the increases in wages have outrun those in Great Britain. If one is to judge them from the point of view of the number of hours spent or the output given, seeing that our productivity is not the same as the British by any means and that ournational income is only half what the British national income is, it stands to reason that increases in wages not related to output, not aiming at higher productivity or not resulting from higher productivity must, therefore, have a very clogging effect upon our economic progress.
Purely political suggestions have been made that housing has been slowed up. That statement has already been contradicted here. There are precisely the same facilities. Indeed, there are greater facilities. I wonder if the subsidy per house being built at present in the City of Dublin has been reduced? I incline to the view that if the figures were procured we would probably find that the subsidy has increased. In any case building has been going on with steadily increasing momentum since 1946 and a considerable amount has been achieved in both the rural and urban areas and the greater part of the work has been done in providing homes for the working classes. In the City of Dublin a great deal still remains to be done but something approaching two-thirds, or 60 per cent. of the estimated arrears in 1947 has been achieved. Even in Dublin, therefore, despite the huge increase in population and the increasing demand for housing the situation has been kept well in hand.
House building at a comparatively high rate cannot continue indefinitely. There must be fluctuations. It is well known that the housing programme for which this Government is responsible represents only about one half of the total amount of employment and constructional work given generally. What we are doing is only equivalent to what private enterprise is doing in its own sphere.
I do not know how the Opposition has the audacity to refer to emigration remembering that it was their Government that set up a commission to inquire into emigration years ago, and that was their only solution. We have not yet received the report of that commission. The migratory labour with which the rural areas in the West of Ireland have been acquainted for generations has continued. Unfortunately inrecent years, as well as the large number of young men emigrating, we have had a very large number of young women, a very serious matter for the country. It is not easy to provide employment for these young women in their own areas and even when the employment is provided they may sometimes go. They have actually left employment provided for them by the Government, and for which good wages are paid, to go across to England. They first come to Dublin and that is merely a half-way house to get out of the country. I do not know that they are any better off.
I refuse to believe it is an economic question. I have never believed it, but if you want to stop emigration you have to provide the amenities for young people, to try to vitalise rural life, build up a community life that will enable young people to have the kind of social life and the amenities they would like to have and that they feel they can have when they come into the large cities.
It is a difficult problem but the Government cannot be accused of not doing everything possible to provide amenities. I should say the criticism might be that we are providing too much, that we are being too generous. Let us consider rural electrification, one item for which we are providing £904,810 in subsidy this year. Last year we provided £504,000, an increase of just under £400,000 in one year in order to provide this amenity in rural areas. The Government has made special grants for the improvement of tourist roads in these areas and it is perhaps no wonder people like Deputy Blowick would gibe at us and tell us we are doing it for political reasons. Those are the people who, on the one hand, have the audacity to get up here and talk about emigration, in spite of their Emigration Commission, and abuse the Government because presumably, it is not doing anything to stop emigration. I should like to know what more could be done by the Government than has been done in the tremendous development that has gone on under Bord na Móna in the setting up of both large and small power stations in the West of Ireland which, in due course, we hope, whether we see it or not, willlead to industrial development in those areas and provide that community life of which I have spoken.
I challenge Deputy Norton and anybody else who attempts to suggest that there has been any cutting down on capital expenditure or on capital schemes to have the honesty and decency to admit that there have been increases under almost every heading. Deputy Cosgrave goes through the Estimates to try to dig up some reductions here and there. Is it not the duty of the Minister and his Department to effect reductions in co-operation with all the other Departments, wherever it is possible, so long as those reductions will not adversely affect employment, production or the real welfare of the people?
Expenditure on hospital construction increased by nearly 20 per cent. in 1952 as compared with 1951. This year £4,500,000 is being provided. Deputy Dillon and others, in their post-1952 Budget speeches, delivered in March, 1953, in Dáil Éireann, have again harked back to this £10,000,000 surplus which never existed except as a figment of their imagination. I hope the anticipation of the Minister that he will close the year with a deficit will not be proved correct. He will be very lucky if he has a surplus, but to talk of a surplus of millions is simply eyewash.
Perhaps Deputy Cosgrave takes comfort in the hope that if the Taoiseach has arrived with a lifebelt, this extraordinary division in the Fianna Fáil Government may become serious. I am afraid it is not likely to become as serious as the cleavage in the last Government. I cannot see any contradiction in the statement of the Minister for Finance that inflation should be curbed. As he also says, the only way to reduce taxation is to reduce expenditure. We must reduce expenditure by giving up services that we expected to have, not demanding that they should be brought into operation, or by cutting down on the existing services. In the same way, if we cannot do anything better with regard to inflation, we can at least prevent it getting worse than it is.
Nobody ventured to envisage what the position might have been in regard to inflation and our general economic position if the Government, through the Minister for Finance, had not taken the steps he found it necessary to take in last year's Budget. From his point of view, the Tánaiste is quite right in saying—and the history of the period since the first world war shows —that a sudden fall in prices can have catastrophic effects and bring about a depression, perhaps a world depression. I do not know if there is much likelihood of that at present with the American Government maintaining firmly the ceilings of primary products which are the basis of the international structure of prices.
There is nothing inconsistent in making the statement, on the one hand, that inflation must be curbed and, on the other hand, that stability must be maintained as far as possible even with a degree of inflation, if the alternative is to create serious unemployment and a serious crisis or depression. My personal view is that with the extraordinary productive capacity of the world, with the way that mechanisation has gone on, the amazing improvement in methods and in reseach, our knowledge of soil science, of plant diseases, and so on, undoubtedly there would be a reduction in prices of foodstuffs if the population of the world remained normal. However, we are told it has increased by 50 per cent. since the year 1900 and that all those people are securing year by year a higher standard of living, consuming more and encroaching more on the world's food resources. As I stated in the beginning, food prices are going up in the world market and there is no evidence that they are going to come down.
I think that what the agriculturist, or the businessman for that matter but perhaps to a lesser extent, is really interested in, is to secure stable prices over a period and in my opinion the Tánaiste has done a good service to the country in calling attention to the necessity for stabilising prices at the existing level. If they go down somewhat lower, well and good; probably the housewife will benefit but if they were to go down catastrophically itwould mean of course a reduction in employment. It might mean a serious reduction in employment and have very adverse results for our Irish industry.
There has been a great deal of repetition of the expression "better off". Whether the people of the country are better off under one Administration as compared with another, may be due in some measure to the efforts of that Administration, but one Administration cannot suddenly depart drastically from, or reverse, the decisions and policy of its predecessor. It has to carry on the position as it finds it and make whatever adjustments it thinks right and necessary, if that is possible. It is not always possible to achieve that. But to say that we are living in a world where everybody could be better off, because of speeches made in Dáil Éireann about capital investments or about the methods of bookkeeping in national affairs or that because this Party or that Party has published a particular policy in its programme in regard to capital investment or capital expenditure, would seem to indicate that those who make these statements do not believe that our people are alive to the realities of the situation or are as capable of intelligently considering our problems as I believe every one of them to be. The people know that services have to be paid for if they are provided. They know that you have to pay your way and that, if you escape payment now, you will have to pay either in the near or the distant future and the longer it goes the more expensive it is likely to be. They know that services have to be paid for, and paid for out of taxation.
One of the disadvantages from which this country has been suffering is the nonsensical talk that has been going on that by some manipulation of credit or currency a situation can be brought about in which you need not work, you need not produce and you need not give value to the community for what you are getting, that you could live in comfort if the Government would only find the wherewithal. That is nonsense. Services can only be maintained out ofthe production of the people. As I said when I last spoke in this House, we have ended the epoch of free giving. We have now to face the situation that what we give has to be paid for. We have to face the problem of how these services are to be provided, how the production and the wealth-giving capacity of our soil and our industries will be geared up so that we shall be able to maintain the services and to give those who are employed in industry and agriculture better wages and better remuneration.
There has been an assumption with regard to Civil Service arbitration, apparently, that when the award was made, it should be automatically put into operation. Of course it is not automatic. If it were automatic in the sense that the Minister for Finance could get £1,000,000 or £2,000,000 or whatever sum is involved from some reserve at his disposal, and if he had not to come to this House to ask that taxation be levied to raise the amount, there might be something in that argument, but it is not automatic and never was intended to be automatic. The Government under pressure accepted the principle of arbitration. We put into operation last year an award, for which, as I stated in the beginning of my remarks, our predecessors had not made provision. We put that into operation; we felt that we should keep faith with the Civil Service and keep arbitration in being. We appointed a chairman; we sent our representatives there, they sent their representatives and the case was argued. It has been made quite clear at all times that as well as the alternatives of accepting in full the award of the tribunal or rejecting its findings, there was a third course open, which is the course the Government has taken. In the present year, as we announced, since the award would have been retrospective, we are not in a position owing to the budgetary situation to implement it as it would involve the imposition of additional taxation, by way of a Supplementary Budget presumably, to raise the money. We are not doing that. As regards the coming financial year, the whole matter will be carefully consideredwhen the budgetary situation is being examined by the Government. Seeing the attitude of the different Parties in opposition, if I were in the position of the Minister for Finance, I would have the most serious reluctance to come to this House to suggest that extra taxation should be imposed in order to provide for the award of the Civil Service Arbitration Board.
I am not opposed to the award in saying that and I am not prejudging the issue. Like every other Minister, I hope that when we come to consider this matter collectively, we shall consider it fairly and justly with due regard to fair play for all concerned, but I want to say that the attitude of the Opposition, who, for the past two days—for the past year, for that matter—have been grousing because the Minister for Finance and the Government had to introduce additional taxation to provide for the commitments that they left over, is certainly a very poor tribute to the intelligence of the Civil Service. I hope civil servants will not be deceived by these walrus tears from the other side of the House behind which there is very little sincerity. The Government is fully cognisant of the position of the lower-paid workers, but it is extremely difficult for the Minister and the Government to provide for all the charges, all the demands and all the services. Unless the House can make up its mind when we have these speeches, unless the people who want—presumably—the Civil Service arbitration award implemented are prepared to go a step forward and say that they are prepared to support the necessary taxation measures to carry that or any scheme in which they are interested into operation, we can only characterise their contribution to the debate as mere hypocrisy.
Deputy Costello referred to some schemes in regard to bog production. Of course, they are only infinitesimal in comparison with the huge schemes for electrification that have been planned. Due to the dry summer, there have been large accumulations of turf, and it has not been possible to dispose of them. We can onlyappeal to local authorities and to the citizens generally to buy turf and thereby help to keep employment going in those areas. There is this large surplus of turf which it has not been possible to dispose of. The most effective way in which that situation can be remedied and in which future employment can be assured to those who have been getting it in the past is to try to get greater turf consumption—to urge the public collectively, wherever there are authorities or institutions concerned, and individually as businessmen and as farmers, to lay in a stock of turf. They will get much better value than by buying the foreign fuel, they will be putting money into circulation in their own areas and they will be helping to give much needed employment.
