When discussing this section of the Finance Bill, I think the public should be made aware that the only reason that these taxes are necessary is simply because the public have been conditioned by the Coalition Government to the belief that the amount of external investments available was almost limitless. It is just as well to consider, as I have said, these levies and the effect they will have on employment, the effect they will have on the requirements of the people, in that light. We have now the fantastic situation that, at the end of some nine years after the war, we have spent the whole of our foreign savings, that 350,000 people have emigrated from this country, that agricultural production is only about 10 per cent. higher than it was in 1926 or 1911 and that the total number of people employed here, taking agriculture and industry together, is the same as in 1926. It is a pretty grim picture. It means we have wasted the whole of our period. It means that while progress has been made in practically every other North European country, whether that country was neutral during the war or devastated, the same progress has not been reflected here. It means that we failed to use the advantages of our neutrality during the war, and that we failed to take advantage of the tide of savings that came into the country during the same period.
The Minister now chooses to impose these emergency levies in order to try to stop the flow of savings that is gradually ebbing from the people of this country because they have been conditioned by the Coalition Government to believe that everything could be pleasant for them, that no effort was required, that external assets were indefinite in quantity, that they could be utilised for any purpose. There has been no proper plan to improve production on a fundamental basis and, as a result, we are now in this position.
We have no great volume of easily found reserve savings for capital investment. We are now trying to find the capital money for this year's capital services. The Minister for Finance has informed the people that, over and above this emergency levy, unless the people are prepared to save twice what they saved last year, he will be unable to keep the State capital programme in the way he would desire. He has not told the House what he would do if these savings failed to be accumulated in the manner in which he wishes them.
These emergency levies were imposed as a result of utterly foolish thinking on the part of the Coalition since the war on the whole subject of our savings and our external assets. There have been periods since the war when the Coalition Government were almost giving medals to those who were prepared to sell their assets. They almost had a roll of medals to dole out to those who were prepared to sell their assets, suggesting that the sale of these assets was doing something good for the country. We have begun to learn the bitter truth of that nonsensical talk, which began in 1949 when the Taoiseach told the Bankers' Institute about the desirability of repatriating external assets. Without speaking of the necessity for the provision of a sufficient margin so that we could increase our production by capital schemes, the Coalition Government simply gave the people the idea that there was an easy method of progress, that everything would come right in the long run.
I suppose it is absolutely true to say that the Minister for Finance has not yet told the truth to the people about our present position, that when the Government spends money they encourage imports, that when a large amount of capital expenditure is engaged in, the inevitable result is the import of more goods, that if men are paid extra wages, they spend 10/- in every £ of those wages on imported goods, that unless either a rise in cattle prices continues or there is a genuine increase in total production in the State, the day will come when the whole economy of the country will be distorted to the point that far too many people are engaged in importing goods in one form or another, either in producing goods largely of imported materials or of causing goods to be imported in one form or another.
Now we have reached that position and the Minister for Finance is introducing these levies, and he and his colleagues do not even agree about the general economic climate of the country at the present time. We have Labour Ministers going around telling trade unions that the increases in wages are an effective fulfilment of their promise to reduce the cost of living. We have the Trade Union Congress's official journal denying that it is necessary to restrict consumption in any way and implying that, so far as any action taken by the Government along those lines is concerned, it is wrong. We have Ministers going around during the course of the by-election using the expression: "To hell with the balance of payments". We have the Taoiseach on 26th January, 1956, in his address to the Cork Chamber of Commerce, explaining the reason why this levy is necessary, and these are his own words:—
"...if we recognise the futility of seeking to offset rising prices by a rise in money wages unaccompanied by a rise in output... We are faced in 1956 with the prospects of experiencing the effects of a full year's wage and salary increases which cannot fall short of £15,000,000... it would not be surprising if more than one half of the increase in money incomes were spent on imported goods or home produced goods with a large import content."
Therefore, the Minister and his colleagues encourage increases in wages and salaries. The Minister increases the salaries of the Civil Service and then proceeds to put emergency levies on goods in order to stop people spending. It is a lunatic form of economy, a lunatic method of expanding production in this country. Whatever its temporary necessity may be, it is just as well that the people realise the position with which they are faced. These levies are necessary simply because Ministers of the ilk of the Minister for Defence have been roaring around this country for ten years, telling people that we have £500,000,000 invested in Britain and that the sooner we bring it all back the better, and that if anybody even quietly warned people that there were liabilities against this £500,000,000, that the liabilities had come so close to the assets that a dangerous position was reached, he was a Britisher; he was encouraging this country to lend money to the British to suppress the Mau Mau.
The Coalition deliberately gave the idea to the people over the last ten years that any single person who gave any warning in regard to the repatriation of assets had something anti-Irish about him, that he was trying to stop employment, was trying to encourage emigration. In this way, those people who had the time or the energy to study economics, if they should listen to any one of my colleagues or myself, would get this little worm into their brain: "That fellow is trying to encourage emigration. That fellow is anti-Irish. That fellow is really pro-British."
That is the atmosphere in which we have been living in the past nine years. All we in Fianna Fáil wanted to do was to ensure that our external assets would be devoted largely and mainly either to reducing our imports, with greater production in that direction, or to increasing our exports. The position is, as I have already said, that the economy of the country has now got out of hand and it will be extraordinarily difficult for the Minister for Finance to bring it back into a form in which we can continue to make progress.
Even during the past few months, I do not consider that the present Government have made the position sufficiently clear. I remember the Minister for Finance telling the country in 1951 that he was going to spend lavishly and still more lavishly. I remember the Tánaiste saying in 1951 that it was ridiculous for the people to deprive themselves of all the pleasures of life and that the more external assets that were spent the better. No one of the Coalition Government ever seemed to realise that one day agricultural prices would cease rising, that one day they would be faced with some crisis which would make it necessary to have an extra reserve of net, immediately usable external asests with which to deal with the difficult trading position. They did not seem to realise that, in addition to requiring a volume of savings enabling a complete and revolutionary change to be made in our agricultural production, in order that we could expand our industrial exports, over and above that, we needed millions upon millions of pounds with which we could assist in cushioning the result of a trade depression, equally of an inflation, or of any other circumstances where it became difficult for us to import the normal amount of goods required for our people.
There is nothing over-conservative in that statement I have made. We have not at this moment got that cushion of savings enabling us to get over difficulties which we all have to admit are partly due to world conditions and partly due to the conduct of the Coalition Government and of the Ministers in the way they have spoken about this matter ever since the war. Now that we have to impose levies, it is as well the country should know the reason for them.
How many times in the past nine years has any Coalition Minister, when speaking on the question of our foreign assets, ever referred to our foreign liabilities? I have read the newspapers week after week and month after month and on every single occasion these speakers merely wave before the people this huge sum of £400,000,000 or £500,000,000 of foreign assets, some of which are private and cannot be touched by the Government, save by some special socialist measures, and some of which may be seen and can be controlled to a certain extent. How often have Ministers in the course of the past nine years adverted to the fact that our foreign liabilities were growing steadily every single year and that we have now reached the point where, according to the statement made by Deputy de Valera, which nobody has contradicted, the net balance between assets and liabilities is approximately £100,000,000? That includes both private assets and those which are visible and which we can control.
I have heard the Minister say—and this, of course, has given people the idea that they can go on indefinitely exhausting these external assets—that wage and salary increases can be given without any increase in output; and people have the idea that, so long as the money is spent on giving employment, the import content resulting from the employment does not matter and that, somehow or other, the money will be found to pay for the imports that come in as a result of the spending of that money. We have the Taoiseach's admission that the last round of salary and wage increases will, in his view, cause a huge increase in imports this year; and he says that these increases took place without any increase in output.
The Coalition Government have, by their own policy, caused a complete distortion of the employment-giving capacities of this State since the war, until now the expenditure of money has driven up imports while not sufficiently expanding exports or reducing imports but causing rather the import of more and more goods. The task of reorganising our economy now and of getting a voluntary decision by the people for a tremendous expansion in production, will unfortunately be more difficult. The Minister now wants the people to save more money and we have, at the same time, the extraordinary position that he has not yet secured the leadership of the workers in that regard.
We have the statements made by trade union leaders over the radio encouraging the people to save one day and the next day making statements, through their official organ, that it is not necessary to reduce consumer spending. The Minister for Finance had better be very frank with the people and tell them that, if they are going to save, they must reduce consumer spending; and, if they save enough to provide him with the capital he will require over the next three years, that may have some effect on employment in the State.
Does the Minister really imagine that these emergency levies will be sufficient to deal with this problem? If he asks the people to save money, they will only refrain from spending money purely on imported goods. He has not made the position sufficiently clear. When we discuss these import levies, we may as well, as I have said, discuss them in an atmosphere of realism, an atmosphere in which the country will know where it stands and in which we have now to build up patiently a sufficient volume of savings and increase our production in every form, our production for export and any other production we have which will have a measurable effect in reducing imports.
But the reason for these levies in the main lies in the foolish and idiotic speech made by the Taoiseach at the Bankers' Institute in 1949, which was misunderstood in many ways and misapplied in others ever since that time. All I can say is that, although we did make some effort when we were in office to bring the position back to normal—to a reasonable extent, we did manage to bring the balance of payments position back to normal—we did not complete the job. I admit that. We were not able to complete the job and do all that was required in order to reverse the adverse trend. We were not long enough in office to do that, but we did at least make an effort. The Government now will find it extraordinarily difficult to reverse the state of affairs which they themselves have inaugurated.
