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Dáil Éireann díospóireacht -
Tuesday, 29 Jun 1965

Vol. 217 No. 1

Ceisteanna—Questions. Oral Answers. - Imbalance in External Payments.

13.

asked the Minister for Finance if, having regard to the position disclosed by the recent trade returns, he will indicate what steps the Government propose to take to deal with the imbalance in external payments; and if he will make a statement on the matter.

The position disclosed by the recent trade returns is that for the first five months of this year, as compared with the same period of last year, imports are up £16 million and exports are down almost £10 million. The trade deficit has, therefore, increased by £26 million and may increase further before the export expansion is resumed and the import rise slows down.

As was explained at Budget time, and in replies to questions and debates since, the position is one which is of concern to the Government, whose policy aim in the present difficult circumstances is to promote, as quickly as possible, an improvement in the trade balance and to ease the pressures on resources, while at the same time ensuring continuance of the highest practicable level of productive domestic activity.

Some of the adverse factors are external, including the levy on exports of manufactures to Britain and the international shortage of capital. As far as internal factors are concerned, much of the recent decline in exports is due to a purely temporary shortfall in the availability of mature cattle for export. Cattle stocks are, however, increasing and exports are expected to rise to a much higher level before the end of the year. The various internal pressures on resources have tended to become, in the aggregate, excessive; the levels of public expenditure and of personal incomes have been rising steeply and borrowing and consumption appear recently to be increasing somewhat faster than saving and production. In the field of credit, the Government have supported the advice given by the Central Bank, which is directed towards moderating the rate of expansion of credit and reserving priority for credit facilities to productive purposes. I have already stated in the House that it is in the national interest that applications for credit for less essential purposes receive a lower priority so that more essential needs can be met from the resources available.

A continuing and careful analysis is being made for trends and developments so that steps may continue to be taken, even during the recess, to safeguard the long-term interests of the economy and sustain production and employment.

Does it appear from the Minister's reply that it is not proposed to take any steps before the recess, or does he contemplate——

That is neither meant nor implied.

I thought there was a suggestion that they might be necessary during the recess.

I said that the Government are keeping the matter under review and will take appropriate steps even during the recess. The Government have in contemplation at the moment certain steps which they regard as appropriate and remedial in the circumstances.

May we take it they will be applied before the recess?

May we assume that they will not be announced at a wool combers' dinner or a cider brewery's fiesta, and that the Taoiseach or the Minister will consider it appropriate to address some preliminary notice to the Legislature which, after all, is elected by the people of Ireland and not by the wool combers or shareholders of the cider breweries?

It is not inappropriate to make comments of the nature the Taoiseach made yesterday at functions. Any positive action that will be required or taken will be announced to the Dáil, and where Dáil approval is required, it will be requested.

You will not get Dáil approval at brewery meetings.

If the need arises during the recess, has the Minister any plans in mind?

Some of the provivisions we propose to apply can be applied during the recess, if necessary, and if it becomes urgent, it is possible to have the Dáil recalled for any necessary action.

Tá focal nua againn anois agus tig linn é a chur isteach sa bhfoclóir atá againn i nDáil Éireann —brú-cháirde.

Can the Minister say if there have been any recent contacts or discussions with the British Government with regard to the ten per cent surcharge?

There are continuous contacts in that respect. As the Deputy is aware there are trade negotiations——

Agus brú-cháirde.

Perhaps Mr. Dillon will allow me. He is becoming rather tempestuous since he left the Opposition Front Bench. During the course of the current trade negotiations, advantage is taken of all appropriate occasions to bring home to the British Government the difficulties the ten per cent creates for us.

Have the Government any indication as to what may happen in the future?

No, except that it appears from the British position now that is is likely to last a considerable time.

Can the Minister say to what degree has the surcharge contributed to our balance of payments problem?

I think it has contributed significantly in that, as I think I said during my reply on the Second Reading of the Finance Bill, by reason of this ten per cent, and by reason of higher costs of production, profit margins are getting thinner, and in many cases——

If the Minister will excuse me, I want to pin it to what the actual effect of the surcharge has been.

It is a contributory factor. The Government have given the export promotion grants of 40 per cent of the amount of the surcharge. That leaves a margin of 60 per cent in some cases for the exporters to catch up with but as I said, the costs of production and other things have made it more difficult for them to export goods profitably.

Question No. 14. This could go on all evening.

Surely in view of the 40 per cent the Minister should know the exact figures in reply to Deputy Corish's supplementary question?

No. That would be impossible.

Either it is having an effect and the Minister knows what it is or——

How do you count what did not happen?

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