I have no objection to that and I do not think anybody on this side would have any objection to it. It is only fair and, if there are some millions available, undoubtedly the old age pensioners had a good claim on them. We are not finding fault with that.
With regard to the question of the reduction of the subsidy on flour by not giving the subsidy to those engaged in the confectionery business, we have had some difficulty in understanding how it is going to be carried out. I hope that we are not to go back to the system of regulations which we had during the war. We were very glad to free enterprise from regulations of that sort and I hope this can be done without having to resort to measures of that kind, but frankly those of us who know most about administrative measures are rather sceptical as to the ability to administer it properly, in the way which obviously was intended.
With regard to the Budget, as a Budget, we have not got very much to say to it. What we have to say is that it is a Budget very different from the Budget the people were led to expect. Let it be remembered that a favourite way of dealing with Budgets, when those who are now on the opposite benches were over here, was to suggest that you could do marvels with a Budget, that you could change the whole economic condition of the country by a Budget. I was twitted with having been obsessed—I think that was the word used—with some allegiance to formal consistency in the Budget and that, when we were balancing a Budget, we were only accountants, keeping accounts, and that a Budget in the hands of people who know how to use it could be a great instrument for changing the economic and social conditions of the country. You have had your chance. What is in this Budget to do it, except what was in our Budget?
If the country is in a sound condition to-day, it is because we faced the unpopular task of balancing expenditure by revenue. The former Coalition Government ran away from that task. What they would have done had they been returned to power, I do not know, but they ran away from that task and they attacked us because we faced it. It is because we faced it and put the finances of the country on a sound foundation that you are able to have the satisfactory Budget you have to-day from the country's point of view. It is from the country's point of view satisfactory in that you have been brought down to earth. If you keep to this line, you are on a solid foundation, a foundation which we had to relay after it had been destroyed by the former Coalition Government.
I hope, when Fianna Fáil will resume office, that it will not again have to do the things it had to do previously to clear up the mess that was left by the Coalition Government. If you keep on present lines you will probably be all right. But it is very different from the prating—I do not know any better word—that we heard from the people who were talking on the other side of the House.
We had not merely to settle the position with regard to the Budget deficit in the ordinary State housekeeping accounts but we had also to remedy the position as far as our external accounts were concerned. We had the balance of payments deficit which reached a record figure of £61.6 million, almost £62,000,000, at a time when the estimated net national reserve in the way of external reserves was only about twice that figure. Two such years with two such deficits and our national reserves would have been exhausted. Of course, for the gentlemen who talked about the repatriation of assets, that was a desirable thing. It was desirable that our foreign assets, as they call them, which were being used to help John Bull to have a better standard of living and to subdue other peoples, should be over here.
There are obvious ways in which you can usefully employ our national reserves. You can bring them here, but you can bring them only by goods. Some foolish people think that all you have got to do is to change your account in a bank, and transfer your external reserves to this country. Anybody who has given any thought to the matter knows that you can do nothing of the kind. Some people think that any such transfers in the main have only to be transferred from, say, one bank account to another. This, of course, is not so. For example, if the Central Bank seeks to pass money, its assets, to commercial banks, or a private individual to the commercial banks, all you do is to change ownership within the nation, and you do not change the total amount of the national external reserves by any such process. You can only do it by bringing in goods or services.
If the deficit is due to the introduction of goods to that extent you are reducing your external reserves and then the point is how are these goods or services to be used and for what purpose? Are they to be used for consumption, to be finished with, or are they going to be used for productive purposes? If they are to be used for productive purposes then they serve at home as well and perhaps better, according to the yield from them. But they also serve the national purposes as long as they are outside the country. You get considerable interest which means you can bring in goods to that amount. You have to be careful that you do not reduce your reserves too much, even by bringing in goods for productive purposes, because your external assets are valuable at particular times to enable you to get goods which you want.
We know, for instance, that we wanted to get goods in the dollar area. With the currency that we had, we would not have been able to get them, and we were very glad to get dollar credits for them. You can have a situation like that. External reserves have to be carefully conserved and watched so they are not brought below a reasonable figure. The question arises, what is a reasonable figure? I think you would have to examine the amount you have to call on. For instance, if they were below £62,000,000 in 1951 we would have become a debtor nation. The extra goods we got over and above what we could pay for would have to be got by way of loans or some such way, or else we would have to tighten our belts and do without them. The goods we import enable us to have a higher standard of living than we would otherwise have.
I think about £600,000,000 was the total deficit in the period since 1947 in our visible trade or merchandise accounts. We got goods during that period to the extent of £600,000,000 worth. We were able to stand certain deficits in the balance of payments and had a considerable invisible export. We would not have got them if we did not have these.
That brings me to tourism. We are gradually converting the present Government. It may be a good Govern ment before we have finished with it At the end of the war, there was an exceptional situation. We saw that we had a very exceptional position and that the time could be used for the development of the tourist industry. We had advantages over other countries; we had good food, a lot of it was not rationed, and we had it to spare. We were able, therefore, to cater for the immediate needs of lots of people who had not tasted good food for years. We were anxious to bring them in in order to give them a taste of the food which could be got here, and also a taste of Irish conditions. What do you think we got from the present Government who were then on the Opposition Benches? They behaved most unpatriotically— altogether against the national interests—as they have behaved unpatriotically in a good deal of the campaign they have carried on over the past two or three years. They did not work for the national interests as a whole; they were working definitely for Party and not for national interests. I know enough not to expect perfection. Human nature being what it is it has never been perfect in any country.
Considering the things that have been sacrificed in order to get our freedom, we ought to have a higher standard here in political activity and political methods than most other countries have. But perhaps one would be expecting a higher standard of character, and so on, than people have in general, and that is not easy to find anywhere. At any rate the present Government in opposition behaved most unpatriotically in trying to prevent us from developing that industry. When the change of Government took place they realised very quickly how important that industry was in the whole national interest. When they saw it meant something at the time of about £30,000,000 income to enable us to increase our claims abroad, and which would increase the amount we could get by way of excess of imports over exports, they played quite a different tune. They were in office then, and could tell the truth. They did not think it worth their while examining it and telling the truth when they were in opposition.
In order to keep up our standard of living we want to develop our exports. The Minister for Finance in his talk suggested that Fianna Fáil did not want imports. We want imports of the things we cannot produce ourselves —imports of things that are necessary to keep up our standard of living. We heard some talk about tea recently. We want, as long as the people desire tea as a beverage, to import it. We want to import raw materials for our factories. We want to import capital machinery for our factories. We want to import these things which make for a higher standard of living, but if we want to import them we have got to pay for them, and we must, in order to pay for them, try to increase our visible exports whether from agriculture or from industry. We want, in addition, to increase our invisible exports. We want to increase our tourist industry, for instance.
As regards our external reserves, we naturally want to see that they are managed well so as to yield the highest income possible. That is a commonsense approach. We want it and I am sure that every reasonable person on the opposite benches will want the same. That is why we want imports. We know we have to pay for them by exports, and if there is any difficulty in paying for them by exports we will naturally try to have the substitutes at home which will not need exports to pay for them.
We want to produce the wheat at home. We want to produce the food of our people here at home. With regard to the land of this country, its first charge should be to produce the essential food of our people. We want, therefore, to have produced in this country the amount of wheat which is the optimum amount—the figure of 300,000 tons of dried wheat was the estimate. We wanted to see that that was done and in order to do it we had to give attractive prices.
That brings me to another one of the promises of the Coalition Parties. In advertisements and so on they said that the policy of growing wheat here was agreed upon by them. Not only that, but they were going to go one better than we had gone and would give a five years' guarantee. They did not say they proposed with that guarantee to reduce the price of wheat. The whole implication of the statement at that time and the manner in which it was made was that there would be a guaranteed price at the existing rate. Everybody knows that that is true. When they got into office, they reduced the rate in order to have less subsidy to pay. I am not saying that the idea of trying to have your subsidies as small as you reasonably can is not a good policy. A considerable subsidy for flour is being paid already.
The subsidy, when we were in office, was about £8,000,000 for bread. Our view was that any moneys made available for subsidy would best be made available for flour and bread. That was why we spent nearly £1,000,000 in increasing the subsidy in order to reduce the price of the loaf. Of course, £1,000,000 does not go very far in the case of a reduction in regard to bread. The total subsidy in our time was, as I have said, about £8,000,000.
The question arises as to whether it is better to continue the subsidy on bread or divide the money you have to give by way of subsidy between bread and butter. We felt that bread was more universally used. Whether you subsidise only on bread or partly on bread and partly on butter is a matter on which there can be a difference of opinion.
To reduce the amount made available for subsidies the price of wheat was reduced. It was suggested that that would not lower the amount of wheat which would be grown beyond the limit that would be regarded as the optimum limit. The figures that have been given seem to suggest that this year you may, with reasonable yields, reach the optimum figure but the cultivation in wheat this year is not to be taken as the standard. This year the farmers had to do something before putting the tillage land back into grass. They had to have a nursed crop. Consequently, as they already had produced wheat they continue to produce it this year. That does not mean that you will have that next year. What we are afraid of is that the policy that will be pursued now is the policy pursued during the period of the last Coalition when you had tillage cut down by 500,000 acres.
If we want to increase production— we are told by the Government that that is their aim; it should be; it was our aim—the most immediate and best yields can be got by increased production in agriculture. You cannot increase production in agriculture unless you treat the soil properly and unless you have a reasonable amount of tillage. Anybody who has given attention to this matter knows that you cannot treat the soil properly and get the best from it unless you have a considerable amount of tillage. The amount of tillage that most people would consider fair for the whole Twenty-Six Counties would be from 3,000,000 to 3,500,000 acres. We are very far away from that point and even at the peak period during the war we were very far away from that amount of tillage.
If this Budget is to be the flexible instrument of policy it is claimed to be—what a wonderful array of words they applied to it!—there is a way in which it could be made such an instrument. You could bring about an increase in the total national production undoubtedly by encouraging the farmers to till. You could bring about an increase in production from the land and you could produce the things here to the full extent that is reasonable and save us from the necessity of having to produce a surplus in other things in order to pay for them. We are certain of our market at home in these things. If there is a guaranteed price the farmers can know beforehand what they will get. We could pursue the national policy of increasing production by treating the soil properly, by seeing it is limed properly. I can say for myself that I was never satisfied with the rate at which we proceeded in the liming of the land.
That is true. We did our best. We could have, if we wanted to, set up a State company which would probably have accelerated matters. We could have set up a State company and have a great number of extra State officials. Was that a better policy than to try to induce our people to take advantage themselves of the opportunities that were there; to get people to go out in private enterprise to provide the lime and to get the farmers to interest themselves in obtaining it for their own welfare? We could have set up a State company which would accelerate matters, but we did not choose to do that because we knew in general it was not a good national policy, it would not be the right trend.
Undoubtedly, everything that a Government can do to stimulate agriculture, by urging the farmers to put more lime on the land and more fertilisers into it so that the soil will produce its maximum, should be done. That is the direction in which we believe this Budget should have been framed. The amount that has been provided in the Estimates for that purpose does not show any indication whatsoever of a desire on the part of the Government to implement policy in that direction. In the amount that is provided the Government is simply substituting for the money which came from the Exchequer in previous years moneys from the Grant Counterpart Fund. To that extent they are, of course, saving revenue and leaving it available for other purposes.
If it is the intention of the Government to use the Budget as an instrument of national policy, surely that was the direction in which they should have gone and the direction in which they should have provided more money. I admit that if the money could not be spent there would be no use in providing it; but, if that is the answer, then all one can do is one's utmost to try to ensure that the demand is there. The Government will certainly meet with no opposition from this side of the House if Supplementary Estimates are introduced for the purpose to which I have referred.
There is no indication in the Estimates or in the Budget of a proper appreciation of the importance of doing that. So far as the policy in relation to wheat is concerned, that policy is not being implemented in the direction in which we would like it to go but, rather, in the reverse direction. We hope that the Government as a whole—there may be people in it with different views—will see to it that the productivity of our land is increased.
That brings me now to the really fundamental question with which every Government has found itself faced over the last 30 years. I refer to the problem of emigration. When we were in office it was customary for the people occupying these benches to shout both here in the House and all over the country that emigration was proceeding at a faster rate than at any time since the Famine. It was their practice to suggest that our Government was responsible for that situation. Of course that statement can always be made just as it can always be said by certain people that we have the lowest standard of living in Europe, or in the world. Where is the evidence of that? When that statement is queried no evidence can be adduced in proof of it. When one points to statistics showing the consumption of food by our people the reply is: "Oh, it was said by so-and-so." In the same way in the North recently those who are anxious that our country should remain divided have tried to pretend that conditions in this part of Ireland are deplorable. Of course these particular people want to decry conditions here. But the fact is quite the opposite.
It was said by members of the present Government when in opposition that we were responsible for emigration. There is, of course, no truth in that. We pursued the only possible policy we could pursue in an effort to stop or to limit emigration; that was the policy of providing work for those who needed work. We set out to do that by developing our manufacturing industries and our natural resources. The result of that development was that twice as many were employed in industry when we were leaving office as were employed in industry when we first took office in 1932. All these were given employment at home. If these industries had not been developed these people would never have had employment at home and would have been compelled to seek it abroad.
It has been pointed out, and with truth, that, whilst development was taking place in the case of the manufacturing industries, there was at the same time what is commonly called a flight from the land. The numbers living in the rural areas were diminishing, rapidly diminishing. At one time when we were in Government I tried to get comparisons between the rural populations in other countries, particularly in Europe. At that time our rural population was proportionately higher as a whole than in most other European countries. There has been a gradual movement from the country to the towns. That is a movement which is taking place in most countries.
The problem then was to frame and implement a policy which would have the opposite effect or at least stop that particular trend. As far as we could see the people would either emigrate or go into the town and the only thing we could do was to try to build up industries which would absorb these people in our own towns and cities so that they would not be compelled to seek employment in foreign towns or cities.
We are told that there is standstill in the number employed on the land at the present time. I know it can be argued that if production is increased on the land the land will support a greater number of people. That is true. Some doubt arises as to whether the introduction of machinery into agricultural operations will in the long run mean increased employment. It will undoubtedly mean increased productivity per person and greater productivity generally in the agricultural industry. I am not quite so sure that it will lead to increased employment on the land.
In order to alleviate the position to some extent we tried to implement a policy through the medium of which the provincial towns and cities would be developed. Dublin was developing more rapidly than anybody who had the good of the country as a whole at heart would wish. Possibly some would not agree with that, but, as far as the majority in Fianna Fáil are concerned, we were anxious that that trend towards a rapid expansion of Dublin should be replaced by a trend towards making cities such as Cork, Limerick, Galway, Kilkenny, Wexford, Sligo and so forth a little bigger. That is a problem which faces this Government now.
What are they doing about it? They will, of course, shout that emigration has stopped. They shouted that in 1948. They were shouting when we were in office that emigration was going on at an ever-increasing rate. When the census figures were published, what did they show? When we were in office in 1946 it was about 3,000; in 1947 it was 10,000. Then it went up to 24,000 and 34,000 and it was up to 40,000 before the Coalition left office on the last occasion. These are the facts. These are figures over which the Office of Central Statistics can stand. They were not able to stand over any figures in recent years, though, indeed, I pressed them as hard as possible to do something to give us a picture of that situation because it is a factor in our economy which needs to be carefully watched and carefully observed in an effort to discover if a solution can be found for it. Our opponents set up a commission to examine into emigration. The report of that commission has been published. What is the attitude of the present Government towards that report? What do they propose to do? Do they accept some of the findings? Do they accept some of the minority reports? Have they any policy?
This is the time at which the national policy of the country as a whole should be considered. It is a pity that in present circumstances so much of our time here is occupied with other matters, even though these matters are fundamental to the political life of the country. This is the one opportunity we have in the year of looking at the social and economic situation as a whole, of trying to plan for it as a whole so as to improve the standard as a whole and conditions as a whole.
I do not think there is any definite policy that this Government has for dealing with the problem of emigration though it was the one subject of all others upon which they attacked our Government from one end of the country to the other as if they had a solution. We would all be very happy if the Government could find a solution to this problem. The only solution we were able to find was to try to provide extra jobs for the 15,000 to 20,000—it is variously estimated—that are seeking new jobs every year.
There are some members of the Government who do not regard emigration as an evil at all. I am sure that is not the view of the Government as a whole —certainly it is not our view here, nor is it the view of the people of the country as a whole. For generations it has been an outstanding evil. If we could stop that flow of emigration we could have here an expanding economy; if it goes on we shall not have that. I do not see in the Budget —this wonderfully flexible instrument according to members of the Government themselves—a remedy for that economic evil. Now, that is an outstanding economic evil—has the Government any policy in regard to it? The only policy we could find is the one I have mentioned—have they any better? What is being done in this Budget to further any such policy?
I have kept the House a fair length of time but I have only, I suppose, spoken of one-tenth of the matters that occupy my mind from time to time when I come into this House and listen to some of the debates here, things that would occupy the mind of anybody interested in the development of our country. I have only dealt with a fraction of them but there is one other matter which I have been reminded I had intended to deal with—I was about to omit it—this question of capital development. When we were in office we were accused of starving huge projects by our devotion to sterling, the "sacred cow of sterling", was invoked. Formerly it would have been the "golden calf" I suppose, but it was expressed as the "sacred cow of sterling". Yet they were not able to point to a single enterprise that we were starving through want of capital. They had been boasting—the Tánaiste and the Minister for Industry and Commerce in particular—of the number of productive enterprises being examined by his Department. I think there were some 200 of them brought to completion in our time—200 such enterprises. When we left office a further 100 or so were being examined.
Not merely do Governments sometimes try to pretend that they have control over things on which they have no influence such as the general level of prices, but they pretend also to be able to do quite a number of other things as well. Talking of the level of prices of course—I was talking about the Tánaiste—brings me immediately to that question he raised about the increase in cost of living or the consumer price index that occurred during our period in office. That word "deliberate" which the Taoiseach is so fond of using with its suggestion of not merely deliberate, but purposefully deliberate, with a certain designed purpose: the suggestion was that we in 1952 of designed purpose wanted to decrease the standard of living and that that was our aim.
We are told by the Tánaiste that by designed purpose we increased the consumer prices and consequently the price index. I pointed out that was one of these trends, that the prices had begun to rise in the November before the Coalition left office, that it continued to rise so rapidly that by May it had gone up nine points. It had gone up six points in about three months, from three to nine points. When we came in there was an increase of seven points. The Tánaiste wanted then to make out that it was 15 points, but it was seven. The remaining eight were produced by circumstances as much outside our control as the nine were outside the control of the present Government. Prices can only be controlled to a very limited extent by Governments. They can if they wish subsidise them and control them in that way but if they do they will have to get the revenue by taxation from the people.
We set out in 1947 to reduce prices in that particular period because there was a dangerous trend. We thought it would not be of long duration and we brought down prices far more substantially than they were reduced by the Coalition at any time. We brought down these prices, but, if we did, we had to look for the money to pay for them from the people in the way of taxation. It did happen that, on account of the yield, due to the purchasing value of the unit of money decreasing, there was increased revenue at that time and perhaps some of the extra taxation would not have been necessary if everybody had been able to see in advance to the end of the year. Perhaps it would not have been necessary to put on these at that particular period but generally if you subsidise you have to provide for the subsidies by taxation.
All I want to say is that of the 24 points it had increased up to our time, nine of these occurred during the time of the Coalition. They were not able to control prices either. Eight of these we could not control and the seven were due to the fact that we had to balance a Budget that was unbalanced to the extent of £15,000,000. There was no desire on our part to do anything of the kind suggested by the Tánaiste: it followed because we had to do the thing we had designed to do and that was to see that expenditure was balanced by revenue. To do that with a £15,000,000 gap there was no course open to us unless we were to impose staggering taxation which would probably have the effect that the Taoiseach pretended followed from the whiskey tax of reducing the revenue and so on.
I want again to repeat that only seven of these 24 points were attributable to our period in office. The cost-of-living index had, in fact, become stable for about two years and was actually dropping when we left office. It has increased a couple of points since. If the Ministers on the opposite side of the House had the magic powers they pretend to have they should bring down that cost of living. They promised it to the people. One of the charges against us was that we had starved productive enterprise, which would have given employment, which would have limited emigration, which would have given better conditions generally to our people, by failing to provide the capital.
Now, accounts published in the White Paper circulated recently show that that is completely without foundation. The average for the last few years of the former Coalition régime for the State capital expenditure was about £24,000,000. In our time, it actually went somewhere in the region of an average of £33,000,000. There is no indication of any starving of State enterprise in that.
The Government have tried to suggest that they have some wonderful schemes. I wish they would give us particulars of these schemes. I was also twitted with having said that we might have to meet this high rate of capital expenditure by having annual loans. If you need £20,000,000 for two years you can have two single issues of £10,000,000 each year or you can wait and have the whole lot in two years. Sometimes it is a question of anticipating what you need. You watch the state of the market and conditions generally to see when you can best float your loan.
In his statement the Minister did not suggest how he will raise the money required. I hope that when he is replying he will give some indication of where the money required for capital expenditure will be got. Is he going to get a forced loan from the banks or is he going to give the banks the opportunity of earning considerable interest by getting a loan from them at the normal rates, which is a fact, because, when the banks are given the opportunity of underwriting, it may appear that they are doing a service to the State in guaranteeing that the money that will be required will be secured but they are doing pretty well themselves because they are getting a good rate of interest on a safe investment.
We should like to know how the Minister for Finance proposes to meet these capital commitments which are there above the line and below the line. Does he propose to have a loan on public issue or does he propose to get it by way of the banks? Does he propose to use departmental funds for that purpose?
On this question of departmental funds, foreign assets and so forth, we notice that the total amount of liabilities that the Minister has to face in respect of the Post Office Savings Banks and Savings Certificates is about the £100,000,000 figure and that he has only £27,000,000 to meet his obligations. I am not saying that that position is unsound, but the diminution of these departmental funds to any further extent will diminish his powers to make effective bargains with the banks, and so forth. I think that in the national interest we have to be very watchful so far as any further diminution of these departmental funds is concerned: I am talking now of the Post Office. Perhaps the Minister, when he is replying, would tell us what funds, besides Post Office Savings Funds and so forth, he has at hand? He has committed to his charge a number of other funds such as National Health Insurance Funds, the teachers' pensions fund, etc.
I was going to ask the Minister the total amount of these funds at his disposal so that we might get a clear picture of the financial situation as a whole. I know that if we were in office the question we should be asked would be: "Why not use these funds for national purposes?" We know that responsible people will be very cautious of the way in which these funds are further depleted. They are a very useful instrument in the hands of the Minister for Finance and, so long as he has some of these funds available to him, he can hold back and wait for better conditions if he wants to issue a public loan.
We should like to know what the Minister for Finance proposes to do in the matter of providing the capital funds necessary to finance capital expenditure both above and below the line. Recently I read the report of an address by a professor of economics whose subject was Budget deficits over a number of years. He uses the word "deficit" in the same sense, apparently, as the Central Bank used the word "deficit"—that it is not a deficit such as the £1.631 million shown in the balance sheet of this year but deficits including the whole of the voted capital expenditure. I asked myself more than once why the Central Bank should regard all that as a deficit. It is obvious that they regard voted capital expenditure as a different type of capital expenditure to expenditure below the line. Expenditure below the line has been voted in the House and proper provision has been made in all cases, I think, for repayment through sinking fund and the payment of the prescribed rate of interest. In the case of the voted capital, there has, as Deputies know, been some dispute. I have never been able to take a definite side as between those who support the view that all the items are legitimate as capital expenditure and those who hold that they are not. It is quite obvious that if you have recurrent expenditure it ought not be regarded as capital. With recurrent expenditure, if you try to fund it then you find yourself in rather an interesting situation after a few years.
The other suggestion in regard to the voted capital below the line is that the items are at the discretion from year to year of the Minister for Finance or the Government as a whole. They can alter it as they please. It is suggested that it is, therefore, in quite a different category and that it ought to be regarded in strict accounting as a Budget deficit. Apparently it was regarded in that light by this professor of economics.
I think the Minister for Finance, when he is replying, might also tell us something about our total State indebtedness: the gross national debt is now about £300,000,000. The service of the debt—the yearly sum that must be provided to meet the charges, no matter what happens—has gone up to close on £15,000,000 a year. Of course, the £300,000,000 is a gross figure. There are certain items in that figure for which provision is made so that they yield a financial return. If I understood this professor of economics correctly in the address to which I have referred, he estimates that for nearly half of the whole no provision has been made for any repayments: in other words, this must be regarded as more or less a dead weight debt.
It is difficult to get any detailed calculations such as they had at the time of the Banking Commission. It is difficult to get exactly at this figure of what is the true dead weight debt at the present time. This much is obvious, however. Our capital liabilities are mounting very rapidly indeed. The annual sum that has to be provided has grown very substantially in recent years and it is now on the £15,000,000 mark. It will absorb important items of revenue. We must very carefully distinguish in future between investments or capital expenditure which are of a productive character and yield definite financial returns to the State or to the community as a whole and those which do not.
One of the big problems we have in that regard is that of trying to assign to its proper place and proportion the amount of the available State capital that should be assigned to non-productive purposes—the improvements of various amenities and in turn the improvement of the wellbeing of the community as a whole. In other words, it is a question of how much good we can do there. It is obvious that we should go to the limit, but there is a limit. If we could afford it there would not be a limit but unfortunately there is that limit. The big problem is, as I say, how much of the State capital available should go to productive enterprise or, on the other side, how much of it should be used for nonproductive enterprises.
Productive enterprises would justify themselves, or rather they would justify the raising of capital, but there is the question of the extent to which the State, by its capital investment, might unduly deplete our resources and starve private enterprise. Our resources in the long run are the current and the accumulated savings of the past, and if the State takes too large a share of these savings there will be less available for private enterprise. It is on these lines that you get your indications of Government policy. I do not think that anything, except vague indications that some advisory board is to be set up, has been told to us about these things.
The fundamentals are known to practically anybody who pays any attention whatever to the situation. No member of the Government need be any more than a few days in office to get the information that would enable him to make decisions as if he were a member of a commission. The Department of Finance has been concerned with these matters for many years and every Minister for Finance is advised on these matters when he contemplates anything new and it is on the basis of the aim to be reached and the consequences to be feared that a decision is taken.
I think that the Minister for Finance should enlighten us and the country as a whole, first of all as to how he is to raise the necessary capital, and secondly, what proportion of the estimated savings he proposes to utilise. It is very difficult to estimate savings for a year ahead but we do know what savings have been accumulated over past years. We found ourselves in the position, in 1951, that there were no savings or that savings were zero. We were in office during half of that year and we found that the savings of the community were practically nil. The Minister talked about the importance of savings and I think everybody knows it is of fundamental importance because it is from these savings that we must build up our productive capital resources. It is from these that we have, to a large extent, to provide the amenities necessary to improve the conditions of our people.
I sounded a note of warning at the Fianna Fáil Ard-Fheis that we had reached a stage at which we must move with caution. I should like to repeat that warning here to-day. If we are able to get expansion in productive enterprise we shall be able to afford a higher standard of living and our community will thereby benefit. If not, we shall go from bad to worse— we shall reach a stage where our resources will have become exhausted and where we will be a debtor instead of a creditor nation, going with hat in hand to foreigners to get the things we require. Our external reserves are not being built up. There is a very heavy deficit in our visible external trade at present as there has been for years. Our external resources are matters about which a lot of foolish things have been said. It has been said that they are built up by the transfer of accounts. I have already dealt with that. They have been built up as a result of two world wars during which we were able to export goods in a period when we were denied the opportunity of spending them in the purchase of imports. Let us not waste these; let us see they are carefully conserved and that when there is a question of using them they will be used to the national advantage.
I do not think that there is anything else that occurs to me. As far as the Budget is concerned as a Budget I would point out it might be a Budget which we, if we found ourselves on the opposite side of the House, would produce, but it is not the Budget that people were led to expect. In it we find no lowering of the cost of living. We have all the evidence that some prices are going up and everybody knows why: import prices figure in it as do agricultural prices, labour and so on. I am talking about labour costs. All these figure in the level of the cost of living and as long as these figures increase no Government, whether Coalition or even what is called a national Government—I deplore the idea of a national Government because if such a Government existed there would be no effective criticism—can change that level. The only way that level can be changed is by subsidies, and if you have subsidies you have got to get money to pay for them.
That means an increase in taxation. The only other way in which the cost of living might be reduced is, as has been suggested, by increasing incomes. We cannot, of course, talk of the cost of living as being something in the air by itself—an absolute. Actually it is the price the consumer has to pay in relation to his income. It is a relation between outgoings and income. Perhaps you can increase incomes but, mind you, increasing incomes will increase prices which include labour costs and you will then have a further chase between one and the other. That might not have the same effect on every section of the community; certain sectional interests may find it to their advantage to get increased incomes even though it increases prices generally and will feel justified in extra demands on that basis, but this would be reflected in increasing prices and in an increased cost of living generally.
You cannot have these things both ways and it is only political mountebanks and political charlatans who pretend that you can. I do not like using these harsh terms but under the circumstances I think they are justified. They are political charlatans, political mountebanks, who pretend to simple people that you can have these things both ways. You cannot. The Government will be excusing itself during the period that it may be in office for the various things it cannot do; it will be excusing itself with the arguments which I have used here. When people are demanding that the Government bring down the price of this or that you will find coming, as they have already come from the Government Benches, the answers that we would have given and that we gave when we were on those benches.
I was tempted the other day to put down myself or to get one of my colleagues to put down a number of the questions that were asked from this side of the House, the Opposition side, when we were in office, and to see the answers that would be given to these same questions by the present Government. I believe that substantially the same answers would be given to these things, about foreign assets and the rest of it, that we gave when we were in office, because these answers represented the truth, and when a Government has to defend itself in these matters it would have to tell the truth. It was quite a different thing when you could applaud here, on the Opposition Benches, ridiculous pretences. These were applauded here on this side of the House from people who were quite irresponsible and pretended to be economists and who either had not examined or did not want to examine or, if they had examined, were not able to understand. When some of the people who are sitting on the opposite benches were on these benches they applauded tendentious questions that came from this side. I do not think they would applaud now. As a Government they would give the self-same answers as we gave in regard to these matters, that is, unless they were completely to ignore the national interest.
There are probably other things that, if I waited to think of them, would occur to me as proper to be spoken of on an occasion like this. But perhaps I think I have said enough for the present.
