I was referring before Question Time to the volume of expenditure as disclosed in the Book of Estimates and to the fact that expenditure which arises consequent on Government policy is not confined to the figure shown on the face of the Book. We must also remember that the Government decided—we think it was one of the greatest errors ever committed by any Government since the State was founded—to withdraw food subsidies and the people are now being called upon every day of the week to pay sums which were formerly borne by the State. We must also recall that local expenditure has rocketed in consequence, on two counts; first the transference of charges formerly borne by the State to the local authority; and, secondly, the increased cost of running all public institutions as a result of wage increases consequent on the withdrawal of food subsidies. Another consequence was the increase in wages and salaries of all local government staffs which was absolutely necessary, in view of the reduced value of the £, to which Deputy Loughman referred.
We on this side of the House contend that it was extremely foolish on the part of the Government to have sparked off those successive rounds of wage increases by the complete withdrawal of food subsidies. We express that opinion, secure in the knowledge that we had given fair warning to the Government of the exact consequences that have flowed from their action. Not alone had the Government the advantage of opinion expressed inside the House or outside the House but they also had the sad experience of the partial withdrawal of subsidies in the Budget of 1952. The reasons advanced for the partial withdrawal could not be adduced for the Government's action on this occasion.
It will be recalled that the first time the Government interfered with the food subsidies, it cost the State infinitely more to compensate the organised classes in the community for the consequent increase in the cost of living. The Government had the sad experience of the increased cost to the State and of the resultant increased cost of production in industry and agriculture, to which the Taoiseach referred to-day as being such vital factors in our economy. The impact on the community is unassessable in view of the fact that these increases in production costs were responsible, as the Taoiseach admitted this morning, for pricing us out of world markets. Consequently, when considering the amount they expected to save in the partial reduction of food subsidies and the actual results, the Government must have learned a lesson that should have lasted for many years.
I shall not refer in any way to the political implications, to the fact that promises were made by the Government before they assumed office, that they included in the programme they presented to the electorate a promise that the subsidies would be left untouched. I am leaving all that aside and I am examining the withdrawal of the subsidies and the consequence of that action, apart from the political implications of assurances given to the electorate that strong control would be kept over the cost of living, that prices would be diligently guarded against further increases. We shall discard all that and apply ourselves to the economic consequences.
When the inter-party Government were in office, they applied themselves constantly during that period of almost three years to keeping down the cost of living. We felt that it was vital that the value of money should not drop further than it had already dropped. The investment of the £9,000,000 which it cost perhaps could not be defended in normal circumstances but it was one which we felt was desirable because the difficulty could not be overcome in any other way.
The Party which is now in Government went before the people three years ago, and presented a certain programme. They made a contract with the electorate and it was represented to very many people, not in the labour areas or in the urban areas but in the rural parts that, if they supported the return of the Fianna Fáil Party to office, a new strong Fianna Fáil Government—and the emphasis was on the strength of that Government—could and would cut from the amount of State expenditure the amount of money that had been spent in the subsidisation of food. On that basis they won a lot of conservative support at the last general election in particular parts of the country.
When the former Taoiseach took himself to the West his declarations there were entirely different. It was an assurance that there would be a diligent watch kept over bread prices and that they would be prevented from rising further. However, those people who thought there would be some gain from the reduction of State expenditure by the cutting away of food subsidies have been faced over the months and the years that have ensued with round after round of wage increases. The State were compelled to give their own personal increases because it would not be fair to leave them out after the private sector had been looked after. Consequently, we can claim that the first people to realise the impact on the ordinary man of the commitments he had to face because of the prices he had to pay for the necessities of life were the private employers, and that rounds of wage increases were given in the first instance by the private sector of our people.
We know in many small concerns what that meant. It meant that those who were continued in employment and got an increase in wages were no better off because purchasing power had been so much reduced, and that quite often they did not enjoy that constancy of employment which they had before. In the last resort, many employers, where it was possible for them to do so, passed on the increases to the community by way of increased prices for the goods they were retailing or manufacturing. That was the easiest way to recoup themselves for their increased expenditure but those who could not do that had to resort to the more undesirable method of reducing the number employed or curtailing the number of days of employment of those still on their payroll.
Following the increases given by the private sector, State personnel were given increases. The Taoiseach, when speaking today, was inclined to defend the action of the Government as if they would be assailed from this side for having given increases to State personnel. There is no danger of that occurring because nobody on this side of the House ever thought of a Wages Standstill Order. It was the people on this side of the House, including those in the Labour benches, who when they were in Government provided the machinery for arbitration for so many of our State personnel. Consequently, there was no need to defend that section of our community from an attack which was not going to come.
We can truthfully say, however, that those increases have lost their value because of the increase in the cost of living which would not have occurred if this Government had not been elected. Now a shrinking number in the community will have to face increased taxation for State expenditure of £20,000,000 in excess of what it was when this Government assumed office. There is not much use in going back over the years but one recalls that when this State was being run for a figure of £22,000,000 the assurance was given at that time by the incoming Government that they could run the country at £2,000,000 less than that figure. Now we see the figure rocketing to that on the face of the Book of Estimates, showing that the Government have no consideration for the people as regards the amount they must pay because of the increased cost of food as a result of the abolition of the food subsidies, the increased cost in the other necessities of life, the increased cost in the operations of local authorities resulting in increased rates, and so on. It is a vicious circle.
Some Deputies in the Government benches had my sympathy because in speaking they got no lead from the Minister for Finance in his statement. He made no reference to what the general policy of the Government was. In his usual manner he read a bald statement containing a lot of figures. There was no lead given to Deputies until the Taoiseach spoke today. Those Deputies who spoke before the Taoiseach must feel very sorry for themselves this afternoon, because they found the claims they were making were not supported by the Taoiseach. Their claims were completely discounted by his obvious pessimism this morning. There is no man living who can put a better face on any situation than the Taoiseach. It is no wonder the House was stunned by what he said and the way in which he said it, and it is some credit to the loyalty of his Party that he got the little applause he did get when he sat down. His speech today was in direct contrast to his usual bounce, the optimism and self-confidence he displayed, when proclaiming to the country at large that he would "get cracking," that with a strong Fianna Fáil Government elected all these difficulties would be resolved overnight. We have a new approach now in which he is apologetic. Five times in the course of a short speech he used the sentence "Nothing can be done about it." He was referring to the difficulty of the times: "Nothing can be done about it."
Where now are the confident proclamations that the Government would "get cracking" and would secure all these benefits for so many sections of our people? There is very poor evidence of their achievement in the Book of Estimates or in any forecast by the Taoiseach in his speech today. He said the Government were most grievously concerned by the recent rounds of wage increases and implied that any time now a wage increase was expected it would be transferred in toto to the taxpayers so that the public would be energised to act against these demands for wage increases. There is no reference at all to what sparked them off, to the fact that it was Government policy, that it was a breach of the contract made with the electorate.
The Taoiseach claimed that the whole benefit has been secured by the wages and salaried classes. I wonder is that true? We know that those in a position to demand their right to increases got them. However, there are many disorganised sections in the country today who have got no increase or perhaps the increase they got was not commensurate with the increase in the cost of living. The Taoiseach stated that agricultural incomes were declining. It is a great pity that Deputy O'Malley was not present to hear that. He went on to say that costs on the agricultural community were increasing since the beginning of 1958. Who caused them to increase? Was there sympathy or understanding in the levying of £100,000 on the small farmers, particularly the small dairy farmers, in the last month or two? What evidence is there of that? Was it the reduction in the subsidy on ground limestone or the levy of 1/- per gallon on milk supplied to the creameries?
