As Deputies are aware, there was a deficit on current account last year of £5.88 million. Table I of the Tables in connection with the Financial Statement compares the outturn with the budget estimates. On the revenue side the estimation was close, but expenditure far outran the budget figure. The Central Fund Services required an additional £610,000, mainly because of higher interest charges on the public debt, but most of the excess expenditure was incurred on the non-capital Supply Services and agricultural subsidies were mainly responsible.
But for the need to provide for exceptionally heavy losses on the disposal of butter, bacon and wheat, the sum of £950,000 which I set aside last year for unforeseen Supplementary Estimates would nearly have been enough. The Estimates for 1958-59 should cover the commitments arising in respect of agricultural price supports—the provision is almost £3 million—and we may reasonably hope to avoid a repetition of last year's experience in regard to Supplementaries.
The total amount of savings, specific and general, for which credit was taken at budget time last year was £10.6 million, including £7.1 million on food subsidies. The savings actually realised came to £9.45 million a sum which, though short of the Estimate by £1.15 million, was in itself substantial. The shortfall arose on the allowance of £3 million for general overestimation. Taken as a whole, the specific savings—on Food Subsidies, the Civil Service, Land Commission, Health Services and Defence—were realised but this, of course, had the incidental effect of narrowing the field from which general savings could be drawn.
II. CAPITAL ACCOUNT, 1957-58.
The outturn on capital account last year is shown in Table II. It will be seen that the capital requirements of the State and other public authorities came to £36.33 million as compared with the Budget Estimate of £40.99 million. Housing, sanitary services, hospitals, schools and other building accounted for £15.6 million.
To the borrowing which the Exchequer had to incur on capital account must be added the deficit which arose on the current budget and a small amount to make good the revenue deficiency involved in accepting National Loan stock in settlement of death duties. The total amount borrowed was £30.98 million, as against the original Estimate of £31.38 million.
The sources of this borrowing are set out in Table III. A sum of £1½ million was obtained from the commercial banks whose deposits increased considerably during the financial year. The remainder was obtained direct from the public in various ways—by the State through small savings, Exchequer Bills, Prize Bonds, the sale of existing Irish Government securities and the issue of a new National Loan, and by the Electricity Supply Board through a public issue of stock. The financing of public capital needs was made less difficult last year by the gratifying increase in total savings.
Prize Bonds continue to be popular. Total net receipts in the year, allowing for encashments, were £6.79 million. The support given to the bonds was not without effect on small savings in the form of Savings Bank deposits and Savings Certificates, the receipt from which was a net £640,000. There is no way of telling how much went into the bonds which would otherwise have gone into small savings. It is known, however, that a sum of over £1/2 million already invested in small savings was withdrawn for reinvestment in the bonds.
The traditional forms of small saving suffered also from transfers into the National Loan last November and into the recent public issue by the Electricity Supply Board. Reinvestment in these issues and withdrawals to purchase Prize Bonds account for the small savings total being so low last year. Nevertheless, Prize Bonds, Savings Certificates and the Savings Banks between them brought in £7.4 million of new savings.
An innovation since the last Budget was the issue of Exchequer Bills to the public. The support received in June, 1957, encouraged us to raise the amount of the quarterly issue from the original £2 million to £3 million and we are still experiencing oversubscription. A noteworthy feature of these issues is the close correspondence between the average discount rate and that of British Treasury Bills. For instance, the average rate for the last issue was £5 11s. 10½d. per cent. as compared with the contemporary Treasury Bill rate of £5 10s. 5½d. per cent. Apart from the consideration of borrowing successfully at competitive rates for Exchequer purposes, the position is satisfactory also in providing evidence of widespread confidence in the soundness of our financial structure.
Exchequer Bills, of course, are not a substitute for long-term borrowing. Their main purpose is to tide the Exchequer over seasonal fluctuations in revenue intake. Their temporary help in financing public investment may be welcomed but, in principle, capital development should be financed on a more long-term basis, principally by way of National Loans and other stock issues.
III. ECONOMIC BACKGROUND.
Before turning to 1958-59 I should say a few words about the economic background to this year's Budget.
While the economy is still faced with serious problems, it is stronger now than it was a year ago. Production is higher both in agriculture and in industry. The national income has gone up in real as well as in money terms. In the calendar year 1957 a surplus was achieved in the balance of external payments for the first time since 1946. This was the result of a substantial expansion in exports which reached a record total of £131 million. The principal increases compared with 1956 were in live cattle, meat and other foodstuffs and in manufactured goods, mainly textiles, clothing and vehicles. Imports declined in volume but were slightly greater in value because of higher prices.
The substantial increase in agricultural exports and the larger acreage under crops point to a significant rise in agricultural output. Preliminary estimates show an increase of about 10 per cent. in the value and of 3 to 4 per cent. in the volume of gross output. There were marked increases in the output of livestock and livestock products, wheat, barley and beet.
In the third quarter of 1957 industrial activity began to revive and there was a notable recovery in the closing months of the year. In manufacturing industries the volume of output in the December quarter was almost 9 per cent. greater than in the corresponding quarter of 1956. The recovery was most marked in the motor assembly, electrical equipment, fertiliser, footwear and furniture industries. Production was stimulated both by increased export demand and by higher internal demand resulting from increased incomes, particularly among the farming community. Industrial employment also recovered somewhat but it is clear that the pace of industrial expansion will need to be quickened considerably. The unemployment figure is still too high although it is several thousands less than a year ago.
The improvement in the country's external balance has done much to restore confidence and it provides the firm basis necessary for expansion. Looking to the future, one must recognise, first that the upward trend in exports, which was responsible for last year's favourable outturn, halted towards the end of the year. The exceptionally heavy sales of cattle last year have made an inroad on saleable stocks. In the first three months of 1958 cattle exports were over £3 million less than in the corresponding period of 1957. It must also be noted that imports were restrained for the greater part of 1957 by the restrictive measures introduced in 1956 and by the slackness of business activity generally. They increased, however, towards the end of the year—following the relaxation of the special import levies and the recovery of industrial production —and in the six months ended March, 1958, they were over £6 million higher than in the corresponding period a year earlier. The further increase in industrial activity, for which we hope, will lead to a further rise in imports of raw materials.
We must be very careful to avoid a return to the conditions of 1955 and 1956 when difficulties in external payments necessitated a series of corrective measures which, though successful in restoring an external balance, reacted unfavourably on employment and production. Every effort must, therefore, be made to keep all three moving forward together—production and employment increasing and the balance of payments rising to a higher equilibrium level. This cannot be achieved unless there is restraint in relation to claims for increased money incomes. Real incomes can rise only as fast as our national output rises. Fortunately it has been rising well in recent months and this is tending to make good in real terms the increases which have taken place in money incomes.
An unwelcome factor, however, was the worsening of the terms of trade in 1957. Import prices increased by 5½ per cent. a against an increase in export prices of less than 2 per cent. This means that we have to work harder, or more efficiently, even to maintain our standard of living and that the increase in productivity required to improve that standard is all the greater. A reduction in costs arising from an increase in productive efficiency would improve our competitive power in world markets and enable higher expenditure on imports to be sustained. We should not deny ourselves this solid advantage by being too quick to press for higher money incomes. Increased wage and salary costs may result in less employment unless they are offset by greater and more efficient production.
The primary aim of policy in the present conditions of this country must be to secure as much productive employment as possible while at the same time restraining inflationary forces so as to avoid balance of payments difficulties. Various factors are likely to impose a strain on the balance of payments in the coming year and it is appropriate that financial policy should tend to relieve that strain. The tax incentives and other aids available for increased production for export, both in industry and in agriculture, will help in that direction; so also will a net reduction in public borrowing.
There are many grounds for uncertainty about the course of economic affairs over the next year or so. Not all of these are internal or within our control. Indeed, one of the major uncertainties is whether the American recession will become any wider or deeper. It is our earnest hope that it will not. It will, however, be necessary to watch the balance of payments trend very carefully as the year progresses so that measures may be taken in time to correct any tendency towards an unduly large deficit. When corrective measures are applied in time they need not be so harsh or cause so much upset to industrial output, trade and employment as when action is delayed until the situation has become critical.
On the whole, however, there is reason to hope that we may get through 1958-59 without the upturn in production and employment being checked and without any serious setback in external payments.
IV. CURRENT ACCOUNT, 1958-59.
EXPENDITURE.
Exchequer issues last year for the non-capital Supply Services amounted to £101.26 million. The Estimates as published for this year total £98.26 million. Having regard to the limits imposed by statutory and other commitments, the reduction of £3 million indicates some success in curtailing current expenditure. It was never contemplated that the Exchequer would gain, in full, the cost of the food subsidies because, from the outset, compensatory increases in social assistance were conceded. At the maximum the net saving by comparison with 1956-57 expenditure would have been £6.5 million. That it is, in fact, less is due to increased requirements for other services. Support for agricultural prices alone is estimated this year to cost £2.5 million more than in 1956-57. Córas Iompair Éireann, contributions to loan charges and grants to health authorities are amongst the other heads of increase. The nature of these items illustrates the difficulty in the way of reducing expenditure.
In relation to Central Fund Services there is not even the limited scope for reducing expenditure that exists in the case of the Supply Services. This year the Central Fund Services are estimated to cost £21.1 million, or £1.7 million more than last year. Over 90 per cent. of the expenditure is required to service the public debt and the recent downturn in interest rates has been allowed for in framing the estimate. But even if interest rates generally should fall further, there is no early prospect of avoiding an upward trend in the Exchequer charge for the service of debt. Borrowing for public capital purposes cannot be stopped without also arresting national development. We can, however, do more than in the past to offset the inevitable increase in interest charges by securing a higher revenue from State assets. This in turn depends on arranging that a higher proportion of public capital outlay will be of a directly productive character.
REVENUE.
The figure of £95.78 million which appears in the White Paper as the expected revenue from taxes (other than road tax and special import levy) shows an increase of £1.3 million over the actual revenue in 1957-58. In comparing the figures it should be borne in mind that the estimate for 1958-59 includes £600,000 from the customs duties which have recently been substituted for special import levies. As against this, however, I have had to forego revenue of the order of £600,000 because of the reliefs announced in last year's Budget. I have also allowed for revenue balances being reduced to the standard level of £2 million.
The revenue from road tax is estimated at £5.4 million—only a little less than the quite exceptional intake of 1957-58, a financial year which benefited from the aftermath of the Suez incident. The uncertainty about petrol supplies in early 1957 caused many individuals and firms to tax their vehicles only for a quarter, rather than for the usual twelve months. This left the revenue of the financial year 1956-57 rather light but, when the uncertainty lifted, the receipts of 1957-58 were correspondingly swollen by the taxing of these vehicles for the remaining nine months of the calendar year. In the current financial year we can expect only a normal intake but it reflects the renewed upward trend in motor vehicle registrations.
Non-tax revenue admits of close estimation, as the outturn for 1957-58 shows. The estimate for the current year at £21.825 million is £1½ million more than the actual yield in 1957-58 mainly because increased receipts are expected from State assets, from the Post Office and from the Central Bank.
OPENING GAP.
We have, therefore, an opening position on current account as follows: tax and non-tax revenue is expected to amount to £123.005 million, whereas estimated current expenditure totals £124.758 million. The budgetary gap with which I am faced at the outset is, therefore, £1.753 million.
REMUNERATION.
I have also to take account of the recent decision regarding pay increases for civil servants and others whose remuneration is borne on public funds. It is not difficult to imagine the problem which faces the Government when it comes to deciding whether a general wage increase in outside occupations should be applied to public employees. Cognisance must be taken of a number of important points. On the one hand, it cannot be ignored that the cost of administration is one of the factors tending to raise the level of taxation. On the other hand, the Government has to ensure that the relationship between the remuneration of persons in State and in outside employment does not get completely out of line—particularly as the conditions of public employees may be adversely affected by higher costs due to wage increases granted to outside workers.
When claims for increased pay were presented last autumn it was already clear that the financial position precluded any consideration being given to them in the year 1957-58. The claims were such as would entail extra taxation on a scale which, if feasible at all, would be gravely harmful to the economy. In these circumstances the associations representing the Civil Service and the teachers were told that if the claims were pressed to arbitration it would be necessary to move for the rejection by the Dáil of any arbitration award.
When the budget for this year came to be framed the pattern of increases in outside occupations had become so widely established that I felt bound in equity to see how far, without damage to the economy, I could go to meet the claims of those paid from the Exchequer. Having carefully studied the financial and economic position, I felt I should, in effect, agree to extend the National Wages Agreement to the arbitrable groups in the civil service and also to teachers, the Garda Síochána and the Army. The civil service groups concerned have accepted a settlement on this basis, which is being extended to the Garda Síochána and the Army. I am including the relevant provision for teachers in the budget. The total required is £1,450,000, including roughly £640,000 for the civil service, £350,000 for the three categories of teachers, £165,000 for the Garda Síochána and £190,000 for the Army. The remainder will be available to the Minister for Health to recoup health authorities half the amount of any increased remuneration they may concede.
ADMINISTRATIVE ECONOMY.
This is the appropriate point at which to mention what has been happening in regard to structural reorganisation and the reduction of posts in the civil service. I referred last year in my budget statement to an examination which I proposed to have made of the possibility of simplifying the rather elaborate system of civil service grades. Heads of Departments have before them proposals for a radical alteration in the present structure. Once their views have been received and considered I intend to have the proposed changes discussed under the conciliation machinery for the civil service. It is, of course, necessary to afford the staff an opportunity of expressing their views on a major change of this kind. I am confident that substantial progress will be made in this matter during the present financial year.
With the co-operation of Departments, recruitment has been reduced so that the preliminary figures for serving staff at 1 January, 1958, show a reduction of 400 compared with the previous January. The filling of vacancies occurring as a result of retirements and deaths is rigorously scrutinised in every instance and no opportunity of suppressing posts is omitted.
I would like here to express my appreciation of the active co-operation of all grades of the civil service in the pursuit of administrative economy.
The provision for increased pay adds £1.45 million to my opening deficit, making it £3.203 million. Faced with this substantial deficit I was compelled to explore the possibility of finding more revenue or reducing expenditure or perhaps of taking a contribution from both. It will be appreciated that the Estimates were all most carefully examined and in many cases rigorously pruned before they were released for publication. On re-examination I could find no single item or group of items on which a saving of the required magnitude could be made without undue hardship and serious loss of services. Neither could I satisfy myself that it would be wise or consistent with our economic objectives to attempt to close the gap by imposing increased taxation. A net allowance could properly be made for general savings and overestimation—I will return to this later—but a large gap would still remain.
SPECIAL IMPORT LEVIES.
In the circumstances it was necessary to consider the position with regard to the revenue from the special import levies. It is clear that the levies still play an important part in keeping our external payments in order. They have a deterrent effect on imports and are conducive to saving. No less important is their psychological effect. Their removal would have an influence out of proportion to the direct effect on the particular imports concerned. The recent review, therefore, is as far as we can safely go for the present in the direction of relaxation. The assistance which the levies afford in financing the capital programme has already been greatly reduced; the changes made since March of last year have taken away roughly two-thirds of the income of the Capital Fund. The need to apply the proceeds of the levies to capital purposes is still diminishing. Current savings have been increasing, while public borrowing is being kept in check. I am satisfied, therefore, that no harm will be done by applying the remaining revenue from the levies to current purposes. The Finance Bill will contain a clause removing the statutory requirement that the proceeds of the levies be paid into the Capital Fund. This will increase the current income of the Exchequer by £1.778 million this year, reducing the gap on current account to £1.425 million.
NET ALLOWANCE FOR OVER-ESTIMATION.
For a number of years it has been the practice at budget time to make some provision for unforeseen expenditure but, on the other hand, to take credit for general over-estimation. The credit taken for savings has usually exceeded the allowance made for additional expenditure, with the result that the net deduction from the expenditure side has been as follows in recent budgets:—
|
Last year |
£2.05 million |
|
1956-57 |
£2.25 million |
|
1955-56 |
£2.25 million |
|
1954-55 |
£3.25 million |
The tendency has been to reduce the credit taken for general over-estimation and to increase the provision for unforeseen expenditure. Experience underlines the need for a further step in this direction and I do not feel I would be justified this year in making a net deduction of more than £1½ million.
This leaves a small balance of £75,000. Every year about this time the Minister for Finance is faced with the rather distressing duty of having to listen to the many groups and organisations who feel that they have a good case for some form of relief under the budget. Many of them have impressed me with their arguments, supported by figures. The amount I have to distribute, however, is small, so small that those whose need is substantial in amount have to be passed over—irrespective of their merits. Of the many remaining deserving cases I have selected two where, I think, the greatest benefit can be expected from a small amount of relief.
CINEMAS AND PATENT THEATRES.
First, I feel obliged to do something to help to preserve both the revenue from cinemas and theatres and the employment which they afford. As in other countries, the cinemas have been suffering from the competition of other ways of enjoying leisure, with the result that attendances have fallen and receipts from entertainments duty are contracting. Last year's revenue from cinemas was 7½ per cent less than the year before. The time has come to lighten the tax burden on cinema entertainments but with the limited amount of money available to me this year I can go no further than removing the customs duty on films. I propose also to give some relief from 1 August next to cine-variety in patent theatres by increasing the entertainments duty rebate from 30 per cent to 50 per cent. These minor concessions will cost a net £50,000 this year.
EXPORT PROMOTION (WHISKEY).
The sum of £25,000 which remains ought, I feel, to be applied to increasing the grant-in-aid to Córas Tráchtála Teoranta for the promotion of exports. The provision for the grant-in-aid to this body has already been increased from £125,000 for 1957-58 to £135,000 for the current year. The additional amount of £25,000 will enable Córas Tráchtála to expand its activities further and, in particular, to give greater support to the campaign for promoting sales of Irish whiskey abroad. The distilling industry is an old-established one based almost entirely on native raw materials, and it has a large unrealised export potential. I hope that the increased provision will prove a good investment, encouraging increased effort on the part of all concerned and leading to a sustained expansion in exports.
That disposes of the financial aspects of the Current Budget. It would, of course, have been open to me to propose some increase in indirect taxation in order to give certain reliefs in direct taxation—particularly in relation to income tax, sur-tax and death duties— which are all, for different reasons, desirable. I decided against this course. For two years in succession increased taxes have been put on tobacco and petrol. The tax on beer was raised only last year. The prices of tobacco and beer were increased recently without any benefit to public revenue. Whiskey will bear no more at present. Indeed, all the principal players on the customs and excise side need a rest if they are to recover their old vigour and resilience. After the big changes made in recent years, it is well that increased taxation, for any purpose, should be avoided this year.
I shall now mention briefly some proposals which do not affect the balance of this year's budget but which will be included in the Finance Bill.
NEW OR INCREASED EXPORTS— EXTENSION OF TAX EXEMPTION.
To give an added impetus to the expansion of exports and a further encouragement to both home and foreign industrialists to build, extend and equip factories within the next few years to manufacture for export, I propose to lengthen from five to ten years the maximum period of the 100 per cent. tax exemption granted for new or increased exports. This relief will not, however, be afforded in any case for a year subsequent to 1969-70.
TAX RELIEF FOR ANNUITY CONTRIBUTIONS BY SELF-EMPLOYED.
I shall also introduce provisions enabling a self-employed person or a non-pensionable employee to obtain a measure of relief from tax on payments made to secure a life annuity for himself in his old age or to secure, after his death, an annuity to his widow or dependant. An adjustment of the law as to the assessment of assurance companies will be involved.
OTHER TAX CHANGES.
The Finance Bill will contain a series of sections concerning the treatment, for tax purposes, of husband and wife. To a large extent these will simply codify the law, but there will be new provisions to authorise collection from a wife of tax on her income which was assessed on her husband.
Tax may be avoided by means of superannuation schemes, the benefits under which are either excessive by generally accepted standards or are given in non-taxable form. The remedy I propose is that, where a scheme does not satisfy certain conditions, the cost to the employer of providing the benefits will for tax purposes be treated as income of the director or employee.
Where benefits in kind are given by employers to directors or other employees, tax cannot as a rule be charged upon the recipients, although the employers would normally get relief for the expenditure. Similarly, where the benefit consists of an excessive expense allowance, it may not be possible to tax the element of disguised remuneration. I propose to bring in legislation to put these matters right.
I propose to secure that duty payable in a foreign country on a death, in respect of property situate there, shall not, if double taxation relief arrangements subsist between Ireland and that foreign country, be deductible from the value of the property for purposes of estate duty assessment.
I propose to abolish as from 1 July next the additional duty chargeable on tobacco dealers' licences under Section 26 of the Finance Act, 1932. The yield from this duty does not justify the cost of collecting it.
The six last-mentioned proposals require Financial Resolutions, which I shall move to-day with the resolution regarding the duty on films and the usual income tax and general resolutions.
When a comprehensive arrangement is entered into with a foreign country for relief of double tax, the only available method of giving it the force of law has been to schedule both it and the requisite technical rules to the next Finance Bill after the conclusion of the arrangement. I am proposing that the Government should be enabled, subject to the prior approval of Dáil Éireann, to give effect to such arrangements by Order as is done with conventions in relation to profits from the business of sea or air transport.
Among the other matters to be included in the Finance Bill are provisions to facilitate the collection of tax.
QUESTION OF SINGLE RETURN FOR INCOME TAX AND SUR-TAX.
The suggestion has been revived in recent years that the same form of return of income should suffice for sur-tax as well as for income tax. This has been investigated departmentally and I am satisfied that it is feasible only if sur-tax is decentralised—a matter which is now being considered.
P.A.Y.E.
I have also had representations for the introduction here of the Pay As You Earn system in relation to income tax. This is an important matter of considerable administrative complexity on which I await the views and advice of the Income Taxation Commission. I would prefer not to come to a decision on it at this stage.
I should like to take this opportunity to thank the members of the Commission, who have undertaken a comprehensive examination of our system of income taxation, a far-reaching task which has not been attempted before and one which must make heavy inroads upon their time.
SHANNON AIRPORT.
While it will be a matter for a special Bill, I should add that, with a view to encouraging the use of Shannon Airport as an international distributing centre, the Government are considering the complete exemption from taxation for a twenty-five year period of profits derived from new bona fide export businesses using air freight and established within the confines of the Free Airport area.
V. CAPITAL ACCOUNT, 1958-59.
The particulars of the Capital Budget for 1958-59 in Table IV take into account the decision to apply the special import levies to current purposes. The capital requirements of the State and various public bodies are estimated at £36¼ million which is the same as was actually required last year. A substantial part of the capital provided in 1957-58 was earmarked to discharge outstanding bank or other indebtedness, much more than is the case this year. A total of approximately £3 million was needed last year for this purpose by the Electricity Supply Board, Córas Iompair Éireann and local authorities. The comparable figure this year will not be much more than the £1.4 million which the Industrial Credit Company will use to repay existing overdraft accommodation. This means that the public capital programme should afford at least the same volume of employment as last year.
The 1957-58 provision of £14.88 million for local authorities included, moreover, £900,000 for an advance to the Road Fund. This advance was made to ensure that the maintenance of a satisfactory volume of road works and employment would not be jeopardised by the arrears of payments due to local authorities in respect of previous years. Because of the upward trend in Road Fund income from motor taxation, it has been possible to make the same grant allocations this year as were made last year without supplementing the resources of the Fund.
Apart from the Road Fund advance, £13.98 million was provided for local authorities in last year's budget. This was later increased to allow greater access to finance for housing and schools. In the event, local authorities found that they did not need to borrow more than £12.85 million and out of this they discharged abnormal bank and other indebtedness of about £1 million. It will be seen, therefore, that the estimate of £11.49 million for the current year provides for a continuation of local building and kindred activities at roughly last year's level.
There will, of course, from now on be a tendency for social investment to fall, not because of any curtailment of capital but because the arrears of housing and other social needs are being overtaken. The housing problem which once appeared almost insoluble is now well on the way to solution. Sanitary services have been greatly improved. General hospitals are almost adequate to requirements. Numerous schools have been built or reconditioned—although admittedly there is much leeway still to be made up. In addition, there are now ample power resources, the supply of domestic fuel is large and growing, and transport in all forms has been modernised.
The activity under all these heads in the past has, one might say, laid the basis for positive economic expansion. Some reduction in the scale of investment under many of the heads I have mentioned is inevitable and may be welcomed because of the opportunity it will afford to apply more of our development resources and energies to immediately productive purposes.
As I said last year, the remedy for the related problems of emigration and unemployment is through the provision of productive occupations. The approaching satisfaction of social development needs means that more of the nation's savings can be applied to productive development, private and public.
In this budget I have held the line against increased taxation. I have not, in general, been able to afford reliefs beyond those which came into effect this month as a result of last year's Finance Act. I have made provision for increased State aid for industrial development so as to facilitate the expansion which the recent taxation reliefs are intended to stimulate. My intention is that no industrial project with worthwhile prospects, particularly export prospects, should be frustrated by lack of capital. The substantial provision made for agriculture and for tourist development is apparent from the Estimates Volume.
I spoke last year of the need to apply our capital resources along lines to be settled after considering the best objective advice available, both from home and extern sources. Since then, legislative authority to join the International Monetary Fund and the World Bank has been obtained. We are now members of these bodies. An International Monetary Fund mission has already visited this country and has been briefed with up-to-date information about our economy. This information will be available to the World Bank and we have in mind that the Bank, with its expert knowledge and world-wide experience, will give us advice and assistance towards increasing the proportion of directly productive capital expenditure by the State and other public authorities and generally ensuring that our economic development programme is on sound lines.
The second report of the Capital Investment Advisory Committee, which deals with housing, will shortly be published and I understand that the Committee is now at work on a general report dealing with the principles on which future development should be based. Apart from this, my Department, with the cooperation of other Government Departments and State bodies, is engaged in a study of how best our economic deficiencies might be remedied and our development opportunities realised. This study, together with the general report expected from the Capital Investment Advisory Committee, will form the basis of discussions with representatives of the World Bank which will begin in June.
I think it important that the public should be aware that much constructive thought is being given to ensuring that our plans for national development are realistic and progressive. I do not wish to be understood as suggesting that a spectacular improvement in our position can be achieved overnight. This is clearly impossible. At the same time, there is no need for despondency. Our economy is sound and will be developed to yield a steady improvement in national production and employment.
