I move:—
That the Bill be received for final consideration.
National Development Fund Bill, 1953 —Final Stages.
Question put and agreed to.
Question proposed: "That the Bill do now pass."
One of the principles behind this Bill will certainly be accepted by the Fine Gael Party. As I understand the principle behind the provisions of the Bill, it is to spend considerable sums of money on works of national development. It has been a cardinal point of our policy to accept that principle. The budgetary methods adopted by Deputy McGilligan when he was Minister for Finance, including the capital Budget which he introduced here shortly after he became Minister, were designed to ensure that the country would know exactly the amount of capital development each year being undertaken by the State. Those methods were also designed to ensure that the maximum amount of capital development would be undertaken by the State. I am in complete agreement with any legislative proposals which are designed towards increasing domestic capital investment, and investment where necessary on the part of the State.
I think there is no doubt, in view of the turn of affairs in the last two and a half years, that it is of great necessity and urgency that works of national development be undertaken by the State. It is being pressed time and time again by speakers from these benches that the State should undertake works of a capital nature in order to prime the pump, in order to ensure that the resources of the State are developed to the maximum. When private enterprise cannot undertake these works—or will not do so, in many instances—it is the duty of the State to undertake them. For the last two and a half years we on these benches have been pressing this principle. When the Party of which I am a member was part of a Government, between 1948 and 1951, it carried out that policy by means of the capital investment programme which it expanded so greatly.
I cannot help feeling that the effects of the last two and a half years demonstrate the inability of the present Government either to accept fully that policy or to carry it out. I have not the figures—I do not know whether they are available—for domestic capital investment last year; but there is no doubt that in 1952 there was a sharp decline in domestic capital investment in this country. There is also no doubt that the decline in employment was directly attributable to the decline in domestic capital investment. That is a set of circumstances which we deplore. Where that type of conditions exists, it is the duty of the State to step in and, if the private sector of the economy is unable to provide the maximum amount of capital development, the State itself should undertake it. Our objection to the Government's financial policy over the last two and a half years is that by means of its budgetary policy it has cut down, through excessive taxation, on the initiative and the ability of the private sector of the economy to invest in works of a capital nature. It has dampened down on demand, it has sucked up purchasing power and that has resulted in a slowing down in the whole development of our economy. We, on the other hand, always held the policy that part of the budgetary policy of the Minister for Finance should be to ensure that the private sector of the economy has got initiative and is given the ability to invest as much capital as possible in this country.
Hand in hand with that policy has been the realisation that no matter what initiative is undertaken by the private sector of the economy there is still not enough capital development undertaken to ensure full employment and maintain the maximum production from our land and our resources. For that reason, it has been necessary greatly to expand the works of a capital nature undertaken by the central authority.
It is interesting to compare the tremendous expansion of the State capital programme with, say, 1938-39. In that year a sum of a little over £1,500,000 was expended on works of a capital nature. Between 1948 and 1951 the capital development programme of the State was expanded three or four fold and the results were there for everyone to see—the expansion of the economy, the reduction of unemployment, the increase everywhere in purchasing power, which led to more production and a rise in the standard of living. The trouble in the last two and a half years was the reversal of that programme, the cutting down of the purchasing power and the restriction of spending, which was the result of the two Fianna Fáil Budgets.
This Bill which is now before the House is an endeavour to remedy the condition which has been brought about by the budgetary policy of the last two and a half years. For that reason it is to be welcomed. As I say, we are in complete agreement with the principle of expanding as much as possible the State side of the capital formation in the country, as long as it does not interfere with the private sector of the economy. I do not think that for many years to come that set of circumstances will come about. At the present time the State capital investment is complementary to and not contradictory of the capital investment undertaken in the private sector. Therefore, our opposition to this Bill is not based on the principle of State capital development but is based rather on the manner in which it is proposed to undertake that development under the terms of the Bill.
I regard this Bill as introducing a fundamentally bad principle into our national finances. It must be clearly understood what we are doing by the Bill—we are giving the Minister for Finance £20,000,000 to do what he likes with. It is true that we are giving him directions as to how he is to spend the £20,000,000, but in fact, he is going to be empowered to choose at his own discretion what are projects of development of a public character, and what are in the national interest.
Now, I think the principle in this Bill is cutting across all the principles of State finance as we have known it up to the present time, and I do not think that the circumstances at the present time justify such a departure from principle. At the present time, the Dáil and the country know the general heads of expenditure undertaken by the central authority. They know the particular items on which there is to be expenditure under the heading of supply services. They know what particular works of a capital nature are to be undertaken under the provisions of the various Acts which have been passed from time to time in this House. We are now departing from that principle, and we are now giving the Minister for Finance very wide and farreaching powers to spend money, as he thinks fit, without any control and without any previous directive from the Dáil as to how the money should be spent.
As I say, the exigencies of the present time do not warrant such a grave departure from financial rectitude. I could see no objection at all to amending some of the existing legislation for increasing the demands of the capital Budget, if necessary, so that the money payable under the existing capital investment programme undertaken by the Government should be increased and should be speeded up. Any such proposals to speed up works of national development in order to relieve the unemployment situation at the present time would be welcomed by this side of the House. The Minister has done no such thing. Instead, he is asking the Dáil to pass an Act to set up a pool in which it is proposed to put £5,000,000 per annum, and he is asking for authority to spend that money as he thinks fit in the national interest and for works of a public character.
I can see nothing wrong with the present method by which the finances of our State are directed into the various channels of public development and various works of a national character. When the Budget comes before the Dáil every year we have a statement of the manner in which the Government propose to spend the sums voted by the Dáil and to spend the sums raised by borrowing. We are now departing from that principle and we are in fact allowing the Minister to spend £5,000,000 per annum, or £20,000,000 in all, as he thinks fit. An extension of this principle is merely to vote £30,000,000 or £40,000,000 per annum to the Government each year to spend on works of a public character in the national interest. Once we have accepted the principle that we just vote money en bloc to the Minister and give him blanket authority to spend it as he likes, there is no reason why the Minister should not come in next year and ask for £10,000,000 or the year after and ask for £30,000,000. As I say, once having accepted that principle, it will be a simple thing to amend the Bill each year.
I do not think that the existing method of the payment of money on works of a capital nature should be departed from. I do accept the necessity of increasing the capital development undertaken by the State. I do think, however, that the Minister should have come in with amending legislation to the existing Acts under which money is paid on works of a capital nature if such amendments were necessary.
I thoroughly agree with the necessity of getting over procedural difficulties and with the necessity of spending large sums of money in a hurry when, perhaps, an unexpected pool of unemployment in one particular area comes to the knowledge of the Government; but I do strongly object to passing an Act of this sort which could give rise to a very wrong type of expenditure of public money, which could give rise to political pressure being put on the Minister, and which could give rise to all sorts of malpractices in the administration of a very large sum of money. No such considerations should be allowed in the expenditure of the capital resources of this country, and the manner in which that has been avoided in the past has been by having machinery by which the Dáil knew beforehand the manner in which the money was to be expended.
I am not going to suggest that the Government is going to put this £4,000,000 or £5,000,000 into a county in which a by-election is going to be held, but I am suggesting that the public are aware that such a thing could be done, and that such a practice could conceivably arise. I think it is very wrong to introduce a procedure which could be abused in such a fashion. I, therefore, suggest that the existing legislation, if it requires amendment, should be amended.
I want to return very briefly to what I said at the commencement, and that that I am a firm believer in the necessity of expanding the capital investment undertaken by the State. I believe it is the means by which we can help to get rid of the very grave unemployment problem that we have at the present time. I believe that the unemployment problem which we have at the present time is of a magnitude which has been caused by the budgetary methods undertaken by the Government in its last two Budgets, and if this is a Bill to endeavour to rectify the results of the Government's last two Budgets, I welcome it. I do think, however, that we are introducing a bad principle into our public finances, and I do not think that the Bill should go through in the manner now proposed.
I am in agreement with my colleague, Deputy D. Costello, that this is a bad precedent. I think that the origin of this Bill is due to the fact that the Government found themselves in such an awkward position with regard to unemployment in the country. They found it necessary to procure money, there and then, to deal with that situation which they themselves had brought about by the policy they had carried out over the last three years. We on this side have always advocated the expenditure of money on schemes that are of benefit to the nation as a whole, and, in the few years during which the previous Government were in office, they established a state of affairs which it was possible for this Government to have continued. They could have from year to year budgeted for these capital schemes and the country would have been in a position, as per the Estimates produced annually, to know what these schemes were, and it would have been up to each Department to come into the House with whatever capital schemes they might have and put them before us for debate.
The position is that we are asked to vote £20,000,000 over a period of four years for the Minister to expend on what he considers necessary in the national interest. It may be sound economics to spend that money, and, as I say, we are in full agreement with the spending of it, provided it is spent on what we consider to be reasonably constructive schemes, but it seems to me that we are asked to give to one man the power of deciding where the money is to be spent. I do not think we have got, on the various stages of the Bill so far, any real clarification of what the money is to be spent on. I have a very strong suspicion that it is going to be spent on Dublin Castle, on the Bray Road, and possibly on the Naas Road as well. As a country Deputy, I do not feel satisfied that we have had sufficient indication from the acting-Minister as to where and how this money is to be spent.
In practically every part of rural Ireland, extensions of our water schemes are required and there are very few villages in the main which have an up-to-date water supply. These are schemes that will have to be put into effect, and I should like an assurance from the Minister that that is one of the projects he has in mind. I should like to feel also that some of this money will be spent on dealing with a problem which is becoming a source of serious consideration in my constituency, in Wicklow, and, in fact, in all parts of the country—erosion of our coast.
The other day, another Deputy and I put down a question asking whether it was proposed to spend money on this problem. We did not get any definite information from the Minister, and it is fair for me to say that what we did get was the idea that there is a good deal of muddled thinking about this national development fund. The Minister more or less indicated that it was a matter that was under consideration, but he did not know if the money was going to be spent or not and did not know who would spend it, but I knew that the local authority in my consituency had already made representations, not to his Department but to another, for the expenditure of money in that direction. I should like to suggest now that it would be money well spent.
Erosion is an insidious thing which has done irreparable damage in a great many cases before people appreciate that the damage is being done. The situation has been recognised in other countries as constituting a serious menace, which causes destruction of valuable tracts of land and of valuable property, and I suggest that when the Minister has these funds at his disposal, one of the purposes to which he could put some of the money would be the securing of expert advice which is procurable from America where they have founded a national erosion board on the subject of what could be done to minimise this menace. If there is a sum of the size of £5,000,000 available, it surely would be worth spending a small amount on saving the land which we are losing every day.
I should like the Minister also to indicate—the Bill has been in his Department for a considerable time— what actual schemes are in course of preparation or establishment. The Minister said the other day that approximately £2,000,000 was to be spent before the end of the financial year. It should surely be possible for him to indicate how that sum is to be spent, because, as Deputy Costello has so rightly said, we are establishing a precedent here. The Government are turning away from the ordinary financial arrangements which obtain in most Parliaments and arrogating to themselves the right to spend a large sum of money, and, for their protection, the ratepayers and taxpayers and those who invest their money in this country generally are entitled to have the fullest statement from the Minister as to what he proposes to do. That is the least he can do for us.
As I have said, we are in full agreement with the expenditure of money for the development of the country, which is grossly underdeveloped. It was only during the period of the previous Government that any attempt was made at any solid national development. The amount expended by the Fianna Fáil Government on capital development each year was less than £500,000, and is it any wonder that we should be rather sceptical about the handing over to a Government formed of members of the Fianna Fáil Party a sum of this size to do more or less as they please with it? The least we are entitled to is a full and comprehensive statement from the Minister as to the schemes he intends to put into effect.
I wish to say a few words mainly to reply to Deputy Esmonde's remarks. Deputy Esmonde has demanded a full and complete statement of how this money is to be expended. As I see it the main purpose of the National Development Bill is to give the Government a little more latitude in regard to expenditure than they have under the ordinary voted moneys for the different Departments. I think that freedom of action is desirable, and that, just as it is necessary for a local authority to have a sort of contingency fund, it is equally desirable that a small portion of the moneys allocated to the Government for general expenditure should be voted in such a way that they could be applied to any particular national purpose for which they might be required, subject, of course, to certain limitations. I think it is rather foolish for the spokesmen of the Opposition to be quarrelling with this expenditure. Is it not desirable that work of national development should be carried out? Is it not desirable that every effort should be made to improve the condition of our country and provide additional employment? That is what this Bill seeks to do, to carry through work of national development which will make this nation more fruitful and more productive in every possible way, and for that reason I think that the Opposition are unduly critical.
They were particularly critical on the Second Reading of this Bill when it was described as a "slush fund" and ridiculed by the leaders of the Fine Gael Party, and it was only the common sense and prudence of the spokesmen of the Labour Party that brought the Fine Gael Party more or less to heel and made them see that there was a practical need for a measure of this kind and that it ought to be a permanent feature of our administration.
As we all know, needs arise in one particular area or another at different times. Extra unemployment arises in areas, unexpectedly, perhaps, at times, because in the main our chief economic activities are of a seasonal nature. Agriculture is a seasonal industry, turfproduction is seasonal, beet growing and sugar manufacture are seasonal industries, and thus in areas where there is a very high rate of employment at one time of the year you may have considerable unemployment for short periods, and it is necessary that the Government should have a flexible system of dealing with that problem. That is the way I look at the matter; and I think it is ordinary common sense to give the Government the powers which they seek in this Bill to develop the resources of our country to the fullest extent and to utilise to the fullest extent the labour force available within the nation.
I have just a few points to make in connection with this. I think that in allocating moneys to the county councils under this Bill there should be a strong recommendation to the local authority to devote the money mainly to the county roads. Those of us who travel to rural Ireland recognise that there is still a very large mileage of county roads which has not been given a modern tar-bound surface, and with present-day traffic any other surface is completely out of date. Every effort should be made when there is money available such as this to bring the local county roads up to date. I feel also that an effort should be made to promote such beneficial bodies as Muintir na Tíre and parish councils by making allocations to them under this Bill to do work of development in the local rural areas where it is only those closely in touch with the area who will be able to ascertain what is the most beneficial work.
I think it would not be any harm to give to a properly constituted parish council a certain allocation of money to expend in the relief of unemployment, subject, of course, to certain conditions —possibly the provision of a local contribution, or certainly the proviso that men on the register of unemployed in the area should be given employment as far as the funds are available. In the same way, I think that any publicspirited local development body which is anxious to improve the particular area should be helped by those funds out of this Bill, subject, of course, always to provisions to safeguard against inefficiency or waste.
I do not accept at all the view expressed by Deputy Esmonde that the only years in which there was national development work carried out were the three years in which the Coalition Government were in power. That is an absurd suggestion when we think of the thousands of acres of land that have been planted, the estates that have been divided and improved, the roads and houses provided for our people, the thousands of acres of turf bogs which have been drained, developed, and put into production, and the amount of work that has been done in regard to hydro-electrical development during the years of the Fianna Fáil Government's period of office. In all fairness, the Opposition Parties ought to recognise that a tremendous amount of national development work has been done over the past 20 years, and I think that the Fianna Fáil Party would be prepared to give credit to the Opposition Parties for anything that they did during their period. But it is just an absurdity to suggest that the present Government have not at all times been keen on carrying through works of national development. As a matter of fact, one of the criticisms that have been particularly directed against the present Government has been that they have incurred too much expenditure in works of that kind. We hear strong criticisms of the present Government for spending as they are spending now approximately £40,000,000 in the current year on work of national development.
I think we can deal with this Bill and consider it in a fair and impartial way without trying to make Party capital as Deputy Esmonde tried to make. I think this Bill is a measure that will be renewed when its term of operation has expired and that it ought to be a permanent feature of our administration here in this country. No matter how prosperous this nation may be there will always be a certain number of people unemployed and a certain amount of very useful work of national development to be done which can only be done by the State or by local bodies financed from the Central Fund. Therefore, I think this Bill should be given a little bit more generous approval by the spokesmen of the Opposition.
Deputy Declan Costello should, I think, have cleared his speech with the other members of the Fine Gael Party before he came in. He denounced this Bill as introducing a thoroughly bad principle, and he is opposed to its going through in the manner in which it is proposed. On three different occasions we have had a discussion on this measure; we have had the Second Reading, the Money Resolution and the detailed discussion on the Committee Stage. On all these stages the measure received the unanimous approval of the Dáil, including the unanimous approval of those members of the Fine Gael Party who were here.
The principle upon which this Bill is based is not a new principle. Immediately after the war I, as Minister for Finance at the time, brought in the Transition Development Fund Bill for a sum of £5,000,000. Under that Bill the same rights were given to the Minister for Finance to spend or not to spend. That Transition Development Fund Bill when it became law did excellent work in getting housing and development generally under way; it encouraged organisations like the E.S.B. to go ahead with rural electrification. The E.S.B. was promised that if rural electrification was proceeded with and there was a deficit over and above what they estimated the work would cost, that deficit would be met out of the Transition Development Fund. Local authorities were not able to estimate firmly what any housing scheme would cost. They did not know how long they would have to wait for lead piping or substitute aluminium piping; indeed, they had many difficulties in estimating the time a scheme would take and the total cost of that scheme and the result was that local authorities tended to postpone housing schemes. The Transition Development Fund enabled the Minister for Finance, through the Minister for Local Government, to promise them that, if they went ahead, the Transition Development Fund would meet any costs over and above what they estimated.
I do not know if I would go as far as Deputy Cogan went when he said this should be a permanent feature of our financial policy and procedure. In these days when changes occur very rapidly and there are few who can foresee what the economic situation is likely to be for more than a few months ahead, I think it is essential that the Government should have this little bit of control over expenditure without having to come to the Dáil for approval of every item on which it is proposed to spend money. It is not after all a very big sum in relation to total State expenditure. We are now spending on current and capital account something in the region of £140,000,000 per annum; £5,000,000 is only a very little over 3 per cent. of that amount. What we are asking the Dáil to do is to give the Minister for Finance in the circumstances in which we find ourselves—circumstances in which we are afraid this country will find itself for the next four years—the liberty to spend something in the neighbourhood of 3 per cent. of the total State expenditure without having to get prior approval for every item in that 3 per cent.
Very few people can estimate their own expenditure over a year to within 3 per cent. The man with £500 a year cannot tell to the last £15 exactly how he will spend that £500. It is pretty good work on the part of the various State Departments that they can estimate as closely as they do expenditure over the following 12 months. In normal circumstances it might be a satisfactory system to estimate in detail ahead of time and to receive Dáil sanction for every item of Government expenditure but, in our present circumstances, we think the Government should have the right to spend about 3 per cent. of total State expenditure without having to get detailed Dáil sanction ahead of time for every item. That is not to say that the Government must not get Dáil sanction. Accounts must be published and the Dáil must be told whether or not the Government has spent this £5,000,000 in the year and the purposes on which it was expended.
On the Financial Resolution in relation to this measure, I detailed the sums which the Minister for Finance and the Government have approved for expenditure out of this fund to date. Deputy Esmonde was very insistent on getting them to-day and I would refer him to columns 71 and 72, Vol. 144 (1) of the Official Reports dealing with the debate on Wednesday, 10th February. Not a week ago I gave full details of the amounts that were approved for expenditure out of this fund. I do not propose to go over them again to-day. Anybody who is interested in them can find them by looking up these two columns.
Deputy Costello is a young man and he seems to believe a lot of the Fine Gael propaganda, as he repeats it so often. He believes it and can recite it in the Dáil with all the appearance of conviction as to its truth. I do not know where he got the notion that Fine Gael was the father and mother of capital development. One of the things of which Fianna Fáil are proud is that we actually converted the Fine Gael people——
Jocose.
——to spend money on capital development. I remember when the present Leader of Fine Gael was Minister for Local Government and we asked him to engage on a big programme for the provision of houses. That was in 1931 and he said that the Government could not embark on any great housing programme until wages and the cost of materials fell to such a point that houses could be built to let at an economic rent. If we had waited for these two things to happen we would have been waiting ever since. Deputy Cogan pointed out that, although we had not put an overload of debt upon the country, great capital development had taken place. Where did the 140,000 houses come out of that were built between 1932 and the time that Fianna Fáil left office in 1948? Was not that capital development? There has not been anything like the same number of houses built in the intervening period. The most the Coalition Government could do was to provide about 13,000 houses a year and, at that, they were adding fistfuls of national debt on to the backs of the taxpayers.
We tried to pay our way as we went along. We tried to get the people to make savings and to give us the taxes out of which we could make grants and loans of various kinds to encourage people to go ahead and develop their resources. It is no virtue that capital development should be associated with a very big increase in the national debt. It may be necessary, but it may be wrong. An increase in the national debt is an increase in the volume of money circulating within the country, and it may be wrong that there should be an increase in the volume of money if already there is in existence a surplus of money, and an increase in the capital development of the country might very well take place with a decrease in the national debt by paying for the increased capital development out of current savings and out of a Budget surplus.
No one denies that an increase in the volume of money, whether by an increase in the national debt or otherwise, is sometimes a reasonable policy, sometimes a sound procedure. It is a sound procedure when there is a shortage of money circulating within the country, but it is a poisonous procedure if there is a surplus. Our criticism of Fine Gael policy is that there they were increasing the national debt, increasing the volume of money, when already there was a surplus of money, which had the effect of inducing a very heavy adverse balance in our international payments.
I have dealt with the many points which I think should be replied to. I recommend the Dáil to give the Government the powers asked for in this Bill. I feel that it is necessary for any Government to have them during the sort of times we are living in and the sort of times that are likely to exist for the next few years. We hope that having this contingency fund, if you like to call it that, to call upon we will be able to meet acute unemployment if it shows its head in any particular district or be able to add to the opportunities for employment generally throughout the country if the necessity for that arises. Notwithstanding the fact that the expenditure on capital development on Government account has doubled in the last couple of years, it was essential that this last year the Government should have a fund of that kind in order to deal with the acute unemployment that occurred in certain areas.
I should like to remind Deputy Costello that in the last year in which the Coalition was in power a sum of £24,000,000 was spent on capital development on State account.
You attacked us for it.
The Deputy was talking about the period of the Coalition as the only period in which there was capital development. I pointed out what happened before the war, when 140,000 houses were built. The Coalition Government spent, in the last year of office, a sum of £24,000,000 on State capital account. In the following year, the first year of office of the Fianna Fáil Government, a sum of about £32,000,000 was spent. At the time of the introduction of the Budget last year the Minister for Finance estimated that there would be something like £39,000,000 spent on capital development by the State and subsidiary bodies. That £39,000,000, even though it was double what was spent in 1950, was not sufficient to absorb all the people who were available for work and we had to call upon further sums of money which will be paid out of this National Development Fund.
I do not agree with Deputy Declan Costello when he says that the State will have to go on increasing capital expenditure. I would much prefer to see the energies of our people being absorbed to the full by private capital development. There are great opportunities for it if our people, as private individuals, would spend their savings in improving their own businesses, whether in town or country. I hope that in the coming year there will be more private capital development and less necessity for State development works to absorb the energies of our unemployed. From every point of view it is preferable that such money should be spent by private individuals, but if it is not spent by private individuals, if private individuals do not display the necessary initiative to spend their own money or such money as they can borrow in increasing the capital wealth of the country and in absorbing the unemployed, then the duty devolves on the State to undertake the expenditure, but that is the most expensive way in which the community as a whole can do it.
I hope that private individuals who have capital will regard this National Development Fund, not as a cure-all for the ills from which we suffer in common with a great number of other countries, but that they will regard it as an assurance from the Government that it will do its utmost to keep production high and to keep the rate of employment as high as is possible in the circumstances of the present time. With that assurance, I hope that private individuals will spend more of their own money in their own private businesses or co-operate with others in putting sums of money together to start some new productive enterprises for their own immediate profit and for the ultimate benefit of the country as a whole.
Question put, and agreed to.
This Bill is certified as a Money Bill in accordance with Article 22 of the Constitution.