As I understand it, the Budget is the instrument of Government policy through which the Government arranges the national housekeeping to make the best possible use of its funds, to contribute in various ways to the expansion of the economy, to provide opportunities of employment and to ensure that precedence is given to the development of the national resources, which in our case is principally land. There is also the duty to ensure that help is given to those who need it, principally the sick, the aged and the young. There is the further necessiry that, through our various educational institutions, an equal opportunity will be given to all our citizens to expand their knowledge and their natural talents and thereby benefit themselves and their country. In order to do these things, the Government must ensure that the burden of paying these various accounts in distributed equitable among the whole community so that those best able to bear the burden will shoulder the heaviest share of it.
As I mentioned in my contribution to the Budget debate, there is no doubt that, as a nation, we have been living beyond our means for quite a number of years, while, at the same time, certain sections of the community have been living, if not in dire poverty, at least very close to it. I assume that it is the duty of any Government to ensure that it orders the affairs of the nation in such a way that there will be an expansion of the nations's economy, that the standard of living for all the community, not a section of the community, will be improved, and that a rising standard of living will be available to everybody, particularly those in the lower income classes.
This year, the Minister for Finance, like, I think I am correct in saying, most previous Ministers for Finance, was faced with a deficit in the national housekeeping accounts. As Deputy Sweetman said, quite rightly, a short time ago, this country has adopted a policy of deficit financing for quite a number of years past. That is one of the contributing factors to the position in which the country finds itself to-day.
In order to balance the Budget, at least on paper, the Minister decided to take certain steps. He decided to increase taxation on tobacco, beer and petrol and to reduce assistance given by way of subsidies on essential foodstuffs, etc. By those two devices he managed to fill a gap of £9,000,000. I do not object to the increase on what I would regard as near luxuries although I would appreciate that they are necessaries to certain section of the community. I refer to tobacco and beer and, to a lesser extent, to petrol. The increase on petrol was far too high. It would have been far better to devise a scheme whereby those using their cars for pleasure would carry a higher share of the impost which the Minister decided to put on the gallon of petrol.
I do not object to, and i voted in favour of, the increases on tobacco and beer and I would been quite prepared to vote for increased taxation on other luxuries because I believe that the first thing to tax when money must be got, particularly for production purposes, is luxuries or near luxuries. I only regret that the Minister did not find room in his proposals for taxation on other luxuries, the use of which is quite apparent throughout the country.
It is true that we in this country spend an inordinate amount of the national income on amusements and pleasure. With more thorough searching, the Minister could have found some means of raising money from the amusement seekers, from gambling and from entertainment generally.
The abolition of the subsidies, about which most of the debate has ranged in recent weeks, was a very severe blow. There is no question about that. The suggestion has been made by certain Opposition speakers that, if subsidies had to be touched at all, it would have been far better to reduce them by stages and to make compensatory payments, particularly to the lower income groups. I do not think anybody can suggest that you can take a rough average of 1/1 per head of the population and, in return, give 1/- to the social assistance class and say that everybody is fairly compensated. I am sure the Minister for Finance would be the first to agree that such a simplified calculation could hardly be accurate in human terms. Undoubtedly, the lower income groups consume more bread and butter than people in the other groups and their average loss as a result of the abolition of the subsidies must be substantially in excess of 1/1 per head. When the Minister decided to go the whole hog, as he has done in this Budget, he should have been more generous in the compensatory payments which he made to the social assistance classes.
The Minister should have imposed taxation in the upper income groups. This Budget has been criticised throughout the country as being in the nature of class distinction because the main burden of balancing the Budget has fallen on the shoulders less able to bear it. On the face of it, that criticism is justified. I find it difficult to believe that the Minister could not have found some other source, through surtax or otherwise, to compensate for a reduction in the subsidies rather than their complete abolition.
Reference has been made to the question of levies as an alternative to the abolition of subsidies. The levies were imposed by the former Minister for Finance during a period of great difficulty. He was faced with the necessity of making a very rapid decision. The balance of payments position worsened rapidly over a matter of months, largely due to factors such as the drop in the price of cattle. He had to make a quick decision as to what should be done about it. He decided to impose levies. There is no doubt that the levies caused a great deal of upset and quite a considerable amount of unemployment but they did achieve their purpose. As the former Minister for Finance has said, the position in regard to the balance of payments—which I regard as a far more serious problem than the question of an unbalanced Budget—was largely solved when the former Government went out of office, leaving the present Government, in that respect at least, with a clean sheet.
The present Government could argue, and I think with some degree of accuracy, that the removal of the levies contributed to employment. I have no figures at my disposal to show the amount of employment that would be given by reducing the income from those levies from an anticipated amount over £4,500,000 to something less than £2,000,000. If that would make a substantial contribution to increased employment, I would favour the reduction in the levies but if the result is merely to ensure that a very few people get an increase in their incomes, I would prefer to see the levies reimposed and an adjustment made in the food subsidies. It should be remembered, of course, that the levies were originally intended to augment the capital investment sums and that a transfer from capital to current account now might have the effect of reducing the employment potentials.
There is no doubt that the greatest problem to-day is the problem of unemployment, which is followed automatically by the problem of emigration. Given a choice, most people would perfer to pay higher prices, even for essential foodstuffs and to have a decent, regular job than to pay subsidised prices for foodstuffs and to draw either 60/- or 61/- a week unemployment benefit or, worse still, 38/- or 40/- a week unemployment assistance.
The Government's case is that they had to balance the national housekeeping and at the same time make good the promise wich they made to the electorate when they appealed to them to put them back into office, that they would get the people back to work. This Government must stand or fall on its boast that it intends substantially to reduce unemployment and to put the people back to work. Every member of the House would support a Government in its efforts to provide employment. The Government have put themselves on trial in that regard and this House will judge them accordingly.
I should like to make some brief reference to the question of inducements to exporters by way of tax remissions on profits made on manufactured goods exported from the country. As I understand it, it is proposed to give 100 per cent. tax exemption to profits or increased profits made from the export of manufactured goods. Considerable play has been made about that concession. I do not know what the total of manufactured goods exported and covered by this concession is. It may be £15,000,000 or £16,000,000. Assuming that that is increased by 33? per cent., which would be a very substantial increase, the Exchequer does not give away £4,000,000 or £5,000,000; it merely gives away the tax on the profit on that £4,000,000 or £5,000,000, possibly £100,000.
I understand there is a condition that the money gained through that tax exemption must be reinvested in the concerns in question. Perhaps the Minister in his reply would confirm or correct that view. If that is true, I should like to make the point that it would not be an inducement to outside interests to invest in industries here for export. I think, first of all, we must make those tax concessions and, secondly, we must allow these people to take profits out of the country, if we do accept the fact that we want foreign investment in industry here, particularly in industries for export. We do feel now that is highly desirable although, as an Irishman, I would much prefer that we contributed our own finance, saved by our own people, to industries here producing either for home consumption or for export; but in order to solve our problem and solve it quickly, we must look to investment of foreign capital export poterntials, large or complete export potentials, towards ending unemployment here. Very generous concessions will have to be made to foreign capitalists to induce them to establish plants here.
Reference has been made to the question of monopolies in the flour milling and bakery business and it is possible that a wrong impression might have been created by some of the remarks on this subject. I think it is only right to say that where these sales were made and where the smaller or medium-sized bakeries have been taken over by large groups, they have been free sales and the people have not been forced out of business through unfair competition. Smaller bakeries or millers have sold their premises because they got offers they considered worth while.
It seems to be the era of the larger unit. We are living in an era where the tendency is towards larger units, not only here but outside, and it is unfortunately true that the smaller manufacturer and the smaller unit generally is tending to go out of existence and the larger unit is tending to become larger. I think the main reason for that fact is that our tax laws assist the larger man at the expense of the small man. If we want to put into effect what I think most of us subscribe to, the doctrine of diffused ownership, we shall have to do something practical about it by some from of graduated tax to allow the small businessman to accumulate sufficient capital to enable him to expand his own business and to ride out the slumps and set-backs that come to every business at times. That principle, I believe, is accepted in personal taxation, but it is not accepted, or certainly it is not applied, in the case of industrial taxation.
Some Deputies have referred to the fact that speeches have been made particularly in the past 12 months or so which have done serious damage to the country's credit and I should like to add my protest to theirs. There is no doubt that certain prominent politicians here in the past 12 months or so made speeches that do amount to a serious reflection on the credit of the country. Possibly they did it for political purposes, but I can assure them, from my own knowledge of the results of those statements, that they have been seriously deterimental to the country's good and to the good of commerce and business generally.
What this country needs as a prerequisite to any expansion of productivity is a return to self-confidence, self-confidence in the people themselves and in the Government of the day. The Government can best contribute to that by giving the people a lead. There have been suggestions, open and overt, recently that the only hope for the country is to ally itself with some other country such as the United States. I should like to put on record my own personal view: I hope this country will not ally itself with any outside group or country. I hope it will do what the people who sacrificed so much wanted it to do, that is, stand on its own fact and, by a spirit of self-reliance and hard work, bring about a condition of prosperity so that we can give the people a decent standard of living here. Anything the Government can do to provide that situation will, I am sure, get the support of the House.
I think this Budget, or one of its instruments, the Finance Bill, may have inflicted on the country a form of taxation that is certainly not equitable. The Government is asking a section of the community to bear what is more than a fair share of the burden and in doing that, has given the impression that this is a Budget for the middle groups and the better-off at the expense of the poorer sections. That can still be redressed, and I hope will be redressed, when the Minister for Finance has an opportunity to consider his figures at greater leisure.
