Committee on Finance. - Resolution No. 13—General (Resumed).

Debate resumed on the following motion:
That it is expedient to amend the law relating to customs and inland revenue (including excise) and to make further provision in connection with finance.
—(Minister for Finance.)

Having heard Deputy Dillon referring to the cameraman in the hall, I am not surprised having read and heard the many comments over the weekend that this was an election Budget brought in by Fianna Fáil because of a general election.

It should be remembered, as the Taoiseach said last Saturday night, that in 1965, immediately after the general election of that year, Fianna Fáil, in their Budget, increased old age pensions by 10s a week. It is nothing new for Fianna Fáil to look after the poorer sections of the community. Compare this with 10 years of Cumann na nGaedheal or Fine Gael Government from 1922 to 1932 and six years of Coalition Government made up of Labour and Fine Gael. In those 16 years the total increase was approximately five shillings and I do not think I am making allowance for deductions. Divide that up and it would take the Coalition Parties approximately 32 years to give the same benefits that Fianna Fáil have given in this Budget. Much reference has been made to the fact that, this being an election year and Fianna Fáil wanting to get back to power—which they must; there is not anybody else to take over from them —there will be a mini- or a maxiBudget again.

We had two mini-Budgets or maxi-Budgets—whichever you like to call them: the proper word, of course, is "autumn" Budget—in the past four years. There were good reasons why we had those autumn Budgets. One was that in 1965 there was a demand from the creamery milk suppliers for an increase in the price of milk. At that time the Minister put 2d on cigarettes to give 2d a gallon on milk. We had an autumn Budget last year due to the big round of salary and wage increases which had been agreed to and which had to be paid to those in the public service.

If some people say there will be an autumn Budget this year, they must say why. In this Budget the money to provide the services and to provide the increases in social welfare and health is marked in black and white in the Budget Statement and the records of the House and, therefore, I want the people who say there will be an autumn Budget to say why. For what purpose? Is it to give an increase in the price of milk? Is it to increase social welfare benefits further? If they say that, we may believe there is something in what they are talking about. Unless they are able to tell us why we need an autumn Budget, there can be no autumn Budget.

Last Thursday I referred to the beef and cattle incentive bonus scheme. This was one of the best incentive schemes ever introduced to keep people away from milk. In my own constituency— and particularly in the Carlow end of it where there is mixed farming: some of them are in milk, some of them are in beef, and some of them are in tillage to a great extent as compared with other counties—there was a very strong trend for people to go out of sheep and go into milk because it was plainly said that this was the profitable end of farming. This beef and cattle incentive scheme put a halt to that.

There is one little snag which I should like the Minister to mention to his colleagues. It has been traditional for the woman down the road to go to the farmer for three or four pints of milk a day and, under the conditions laid down in this incentive scheme, if this person goes to the farm and buys four pints of milk a day, the farmer cannot qualify for the £12 grant. I can see that you could call this being in commercial milk. I agree that no man who ties a trailer to his car and goes down the road selling milk from house to house should qualify. He is selling commercially. He might as well be selling to the creamery. I would ask that the regulation would be waived slightly to allow the farmer who traditionally supplied milk to the woman down the road to continue to do that. I cannot see that there would be a big problem to be got over. As I say, I would not include people who are selling milk here and there. My reason for saying this is that in some areas, even in my own county which is not very remote, there are small crossroad shops where bottled milk is not available, and where it might be a hardship if people had to go two miles to the nearest village to collect bottled milk. I would ask the Minister to see his colleague, the Minister for Agriculture and Fisheries, in that connection.

We all know that many increases and many incentive schemes for farmers have been introduced from time to time, but there is one section of the farming community which is now suffering a little, if not much, that is, the small farmers who have got additions to their holdings from the Land Commission. The rent per acre in certain cases where the price of land has rocketed is now approximately £12, Take the man who has 21 acres and gets an additional 20 acres from the Land Commission. He has to pay £10 per acre for it and that is £200. That is a far greater hardship than the rates. I sincerely hope we will soon revert to the practice whereby the annuity will be halved in these cases.

Perhaps, one of the reasons why we do not hear too much about this is that we have not got sufficient numbers to join in normal protests. This is an era of protests, be they by the young, the old, farmers, businessmen or trade unions. There are not sufficient of those small farmers who are paying £200 per annum for 20 acres of land, apart from their rates or anything else. This should be considered by the Department of Lands. I do not think the amount of money involved would be great. Judging by some of the questions asked in the Dáil at various times. the amount of money would not be great, but it would relieve those farmers who are hit hard by this penal taxation.

We all know that the small farmer who had 21 acres and got an additional 20 acres, is trying to build up capital and stock to make his farm economic, and it is very rough on him to have to look forward, for the rest of his life, to paying this £200 per year.

I referred generally to social welfare last Thursday. Deputy Tully was on television with Senator Garret Fitz-Gerald and the Minister for Education last Friday night. He said that the contribution from the worker and the employer will be increased next January and that there was nothing about this in the Budget Statement. The very fact that it is a contributory scheme means that people who will benefit will contribute something towards it, whether it is 1s or 1s 2d. A worker said to me last Sunday after Mass: "I am prepared to pay 2s to get benefit for myself and my wife if I become ill, or am injured at work, or when I am getting the old age pension."

By contributing this 1s per week a worker will get for himself and his wife—we will assume there is no family —£1 per week in additional benefit. Surely that is a good refund for a contribution of 1s per week. It is not commonly known—actually I heard a parliamentarian saying it at one time— that the contribution from the worker and the employer pays the total cost of the contributory fund. From the statistics which the Minister for Social Welfare has given us, we know that one-third of the contributory pension is paid by the State, one-third by the employer and approximately one-third by the employee. In the case of the non-contributory pension 100 per cent is borne by the State.

As the Minister for Social Welfare is in the House, I should like to mention something to him in connection with the free television and free electricity scheme. I am referring to a case where the old age pensioner is 73 and his wife is 68. They are living alone. He has got free electricity and a free television licence. He dies and, on his death, his wife must again pay for electricity. I know it can be said: "Where is it to end? The wife could be 40 years of age and she could remarry and where would it end?" In the case where the widow is over 60 and her husband had been getting free electricity and a free television licence, she should continue to get them, provided she is living alone and complies with the regulations as laid down at present. I would ask the Minister to consider cases of that kind.

The cost of administration was referred to in general by the Minister in his Budget Statement. Indeed, the increase in the cost of the administration of the various schemes must worry any parliamentarian and anyone who is associated with public life. Last year in his Budget Statement the Minister said he was considering the introduction of a means test for children's allowances. I would say that if you introduced a means test for children's allowances, by the time a social welfare officer would go down the country and count the chickens, the cattle and the cows, find out how many children were in the house, allow for, say, five children and then allow for only four when one reaches 16 and so on, what the Minister would save by way of a means test would be lost in administration. The income tax provision in respect of children's allowances will save about £400,000 in one year. This is a very well devised scheme which does credit to the Minister and his advisers.

Another provision in the social welfare code which was mentioned in the Budget and which did not get a great deal of publicity was the legislation the Minister for Social Welfare introduced some time ago in respect of a scheme of retirement pensions for insured workers at 65 and a pension for the worker who has an illness of long duration. This is a desirable feature in the social welfare code and we welcome it.

Tourism will, we hope, pass the £100 million mark this year. Over the weekend tourism got a great boost with the arrival in Ireland of General de Gaulle, that great French soldier and statesman. We must compliment the press and the public who have honoured his wish for a quiet and peaceful holiday. I wonder would you, a Cheann Comhairle, when he returns to France, send him a good wish on behalf of the Oireachtas.

You do not know where the Taoiseach's mantle is going to fall next.

I said "on behalf of the Oireachtas". The Minister announced an income tax allowance of £15 for a single person and £30 for a married man, and this has been referred to as a small allowance. At the same time, it will cost £3.5 million, which gives an indication of the amount of money it would cost to give a big relief in income tax. Had the Minister not given those allowances of £15 and £30, he need not have put 2d on cigarettes and 3d on petrol. As I say, the cost of the income tax allowance is £3.5 million, while the tax on cigarettes brings in £1.5 million and on petrol, £2 million; they are exactly balanced. I shall not refer at length to the other items referred to in the Budget speech, but when the first mother qualifies for the £100 for the triplets perhaps the Minister for Social Welfare, who is in the House, would send her a telegram of good wishes.

Deputy Nolan hopes there will be a telegram in the event of triplets. What does he suggest in the event of quadruplets?

Another telegram.

Provision is made in this Budget for quadruplets. There is no use disguising that we are all in favour, as far as our resources allow, of the increases in social welfare benefits. We like to see the old age pensioners and the sick having more liberal provision made for them. There is very little difference in the House about the desirability of doing so.

I want to speak to the House now about certain more fundamental aspects of this Budget. Amongst the documentation preparatory to this Budget the House is presented with Current Budget Tables, and on page 5 of this publication, in Table II, Deputies will be well advised to read the Estimate of Current Government Expenditure as a percentage of Gross National Product. In 1963 it was 22.3 per cent; in 1964 it was 23.5 per cent; in 1965 it was 24.5 per cent; in 1966 it was 25.5 per cent; in 1967 it was 26.9 per cent; in 1968 it was 28.1 per cent; and though no estimate is provided for 1969, I do not think my estimate of 30 per cent will be far wrong. Deputies should take a very careful note of that trend because it will bring problems which are extremely difficult of solution for whatever Government takes over after the general election.

It might also be well if Deputies would take notice of the fact that while capital expenditure annually is a very agreeable exercise it has inevitable consequences. The service of the national debt in the coming year now closely approximates to the total cost of running the country in 1954 and exceeds the total cost in 1948. These are figures of which responsible Deputies in this House should be aware and should try to understand.

We have the two documents, one to which I have already referred. Now I refer the House to the other document, the Estimates for Receipts and Expenditure for the year ended 31st March, 1970, and Part I of that paper deals with the Estimates of Receipts: tax revenue, £315 million; motor vehicle duties £13,100,000.

I should like the House to pause there. The case is being made by Fianna Fáil that there is no raid being made on the Road Fund. But the fact is that from motor vehicle duties, it is estimated that in this year the Exchequer will receive £13,100,000 and in the estimate of expenditure paid into the Road Fund the figure is set at £11,500,000, which means that in this year the general revenue is being supplemented to the tune of £1,600,000 at the expense of the Road Fund. I have heard the Fianna Fáil Party scream in indignation at a Minister for Finance who took £250,000 from the Road Fund to meet a situation of exceptional emergency. I warned the House, when this new departure was introduced of increasing taxes on road vehicles without transferring the proceeds at once to the Road Fund in one particular year, that this would become a permanent feature of Fianna Fáil practice. And it has. These taxes, which normally were used for the purpose of the Road Fund, have now become a permanent source of revenue upon which the Exchequer depends and, this year, we are raiding the Road Fund to the tune of £1,600,000 and, in so far as we are, we are increasing the burdens which will fall upon the backs of the already overtaxed ratepayers.

Going down through these figures we come to the next figure of non-tax revenue of £58,902,000; the repayment of capital and other issues, £1,581,000; capital raised under the Telephone Capital Act, £17½ million; capital raised under the Bretton Woods Agreement Act, 1957, £190,000; additional amount to be found by borrowing or otherwise, £91,035,000. Now it is not altogether easy to reconcile those figures with the figure provided in the Capital Budget, 1969, where at Table III on page 8 public capital expenditure, estimated resources and requirements are dealt with; the requirements are set out there as being £186.7 million and it is estimated that the resources of local authorities and State bodies, other than the Exchequer, will provide £66 million: from the Exchequer Loan Repayment £7.3 million; investment resources on departmental funds £25.6 million; small savings and prize bonds £6 million; miscellaneous £2.8 million. The balance is to be found by a national loan of £26 million and, note this, banks and other borrowing £53 million. Total to be raised by the Exchequer £120.7 million.

Now I want to ask the Minister for Finance a perfectly simple question: why did he not mention the date on which the national loan referred to in that document is to be floated? Is it true that at this moment the Government of Ireland owes the Joint Stock Banks of this country over £50 million on short-term Exchequer Bills that the Government is unable to redeem and that the Central Bank refuses to discount? Is it true—I think I have a right to a categorical answer—that in order to solve the economic dilemma in which they find themselves at this time all the requisite documents were prepared for issue to raise an Electricity Supply Board loan with an interest rate in excess of 8 per cent, at a discount, and that the financial advisers of the Electricity Supply Board told them not to issue the loan, that it would not be taken up? And is it true that the purpose of that loan was to get money for the Electricity Supply Board which the board were to lend to the Government in order to help them out of the present acute economic crisis in which they find themselves? I believe these facts to be as stated. I believe them to be facts full of menace for this country. I believe they are facts that ought to be made known to our people by the Minister for Finance.

Now, amongst the literature furnished to us by the Minister for Finance and his Department preparatory to the Budget, there is theReview of 1968 and Outlook for 1969. This document contains a good deal of material which, I fear, the vast majority of Deputies have not looked at at all. They ought to, because they will see that on page 19, on the authority of the Department of Finance, in paragraph 44, speaking of 1968, this document says:

The capital budget envisaged that, after taking account of normal Exchequer resources (such as capital repayments, small savings and investment resources of Departmental funds), the resources available to State bodies... residual borrowing would be of the order of £33 million. Small savings and public subscriptions to the National Loan, at £30½ million, were in line with the budget estimate of £31½ million. The residual borrowing requirements, at £52 million, exceeded the budget estimate of £33 million mainly because of the deficit on current account, a shortfall in the investment resources of Departmental funds and disinvestment by the public in Exchequer Bills.

There will not be much disinvestment by the public in Exchequer Bills this year because there is nobody to do the disinvesting for them: the Government cannot redeem them and the Central Bank will not discount them.

Paragraph 47 of theReview of 1968 and Outlook for 1969 says:

Bank credit (as defined in the Central Bank's advice) increased by £70 million (almost 15 per cent) between end-March, 1968, and end-December, 1968. The corresponding increase in the same period of 1967 was £36 million (almost 9 per cent). In the calendar year 1968 credit increased by £103 million (23¼ per cent) compared with an increase of £32½ million (8 per cent) in 1967. The increase in the total of current and deposit accounts within the State (adjusted for cheques in course of collection) in 1968 was £93 million (16 per cent) compared with an increase of £61 million (11½ per cent) in 1967.

Now these figures have little meaning for many Deputies in this House, but they really lie at the root of the gargantuan problem that will face the next Government of this country. They lie at the root of the inflation which is raging in our community at the present time, the steady increase in the money supply, for which the Government is primarily responsible as a result of its own activities and its own stratagems.

Sir, these references I have made to the review of 1968, while very significant to those who understand them, are not nearly as important as the part of this report which refers to 1969—Review of 1968 and Outlook for 1969 as presented to Dáil Éireann by the Department of Finance. Paragraph 57, page 23, says:

The likely trend of consumer spending in 1969 is not easy to predict since it will depend largely on the trend of money incomes. On the basis of the expansionary effects of the Eleventh Round increases and assuming no general extension of the increases granted in the maintenance craftsmen's settlement, consumer spending is likely to rise at a faster rate than in 1968. The volume increase may exceed the anticipated rise in the volume of total national production of goods and services for the year.

Paragraph 61 goes on to say:

The interaction of the various trends outlined in the preceding paragraphs, together with a further rise in net invisible receipts mainly from tourism, is likely to result in a balance of payments deficit of the order of £55 million as compared with an estimated deficit of £20 million in 1968. Excluding purchases of aircraft which will have no immediate impact on the external reserves, the deficit in the balance of payments will be of the order of £40 to £45 million. If the net voluntary capital inflow continues to be of the order of £25 million, as in recent years, this would mean a balance of £15 to £20 million to be found from external borrowing or from external reserves.

These prognostications are extremely grave. The best complexion that can be put upon it is that we are going to have a trade deficit in our balance of payments of £50 million to £55 million in the coming year and that is going, the Minister for Finance hopes, to be mitigated as to the extent of £25 million, by selling a further chunk of this country to foreigners who are prepared to introduce capital in order to buy it.

Hear, hear.

We have already sold a large part of the country. How far are we going to be pushed along that road of continuing deficits in our balance of payments, how much more are we going to sell? There is a remarkable parallel between our position and the position of Canada. Canada has been selling large parts of her economy to the United States of America by the importation of American capital. I think the operation of economic laws on that continent will result in the disappearance of Canadian independence. Canada is going to be merged in the United States—and that may be, for her, an honourable course to pursue— several Provinces of Canada electing to become additional States of the United States of North America.

Is it the intention of the representatives of the people of Ireland to ignore the lessons of the conquest of this country which was initiated by violence seven centuries ago and which was undone by seven centuries of sacrifice of varying degrees in every generation? Countless forgotten men and women died that this country should be free. Do we intend to sell for money what they purchased with blood? That is what we are doing, and we ought to think. I want to tell this to the House. You are falling into an appalling illusion if you make the attempt because, though this generation is corrupt enough to sell for gold what was bought with blood, in generation after generation efforts will be made to undo that bargain. I think the British know that. I think you will find that, having successfully extricated themselves from the Irish dilemma, the British will be desperately anxious to avoid getting involved in it again.

I do not care whether the independence of this country is sold to Great Britain or to Germany or to anybody else: it is a bargain that will not stick. Those who are participating in it are selling their souls for an illusory advantage. You cannot sell this country for it will not stay sold.

I now allege that it is the studied policy of the new generation of the Fianna Fáil Party to sell this country for gold—oblivious of the fact that its sovereignty was purchased with blood. It looks to me at the present time—I am happy to think I shall not live to see it—that, in one generation, a cheque book would have achieved what seven centuries of bloodshed, fire and rapine failed to achieve.

Hear, hear.

It is an egregious reflection on the whole outlook of the leadership of the Fianna Fáil Party and, in so far as our people approve it, it would be a tragedy for the nation as a whole.

Paragraph 66 of this report reads:

The prospective outturn in the balance of payments of a deficit of £55 million in 1969, including purchases of aircraft, is based, as already indicated, on certain assumptions regarding the trend of incomes. If incomes were to rise much faster than assumed in paragraph 57 the consequences for the economy would be extremely serious. The additional pressure of internal demand would drive up domestic prices, make exports less competitive and at the same time increase the import bill. This would inevitably lead to so large a deficit on external account as to require drastic corrective measures which would have serious adverse repercussions on growth, employment and living standards.

That is couched in the jingle of the Department of Finance and it is largely incomprehensible to the bulk of our people. What the advisers of the Minister for Finance are saying there is that if the situation is allowed to continue which creates a deficit of £55 million in our balance of payments this year, the consequences will be that the cost of living will go up and, as the cost of living goes up, wages will go up because the trade unions representing working people will demand that their wages at least keep abreast of the cost of living, and as the cost of production rises and tariffs fall in pursuance of the Anglo-Irish Free Trade Agreement and the general reduction of tariffs throughout the world, the output of Irish industry will become progressively more difficult to sell in world markets, and that will mean unemployment, and that will mean emigration, and that will mean a running down of this nation.

I think the Department of Finance were perfectly right when they gave that warning. The fascinating thing is that, in the whole course of the Minister's speech when bringing in the Budget, I do not think he made a single reference to thatReview for 1968 and Outlook for 1969. I wish to emphasise now that a deficit in the balance of payments, when it reaches the level of £55 million, has in it a far greater danger to the fundamental economic position of the country than many people understand. It is estimated that our total external reserves are between £250 million and £300 million. A deficit of £55 million represents, approximately a balance of payments deficit that we could afford for a period of six years if we were prepared to exhaust our entire external reserves.

But do you imagine that the gentlemen who are exporting capital to this country at this time will sit silently by while we proceed to run down our external reserves during a period of six years? Do you imagine that they will not smell the rat four or five years before that operation is consumated? You know what rats do when they sense that a ship is sinking. They jump off. These boys will collect as much as they can and jump off and you will suddenly discover that your prudently regulated annual deficit in the balance of payments has become £70 million, £80 million, £90 million. The fascinating thing to me is that we have seen it happen within the last 12 months.

The President of the French Republic was standing like a rock in the middle of the world and saying: "There is one person in the world against whom the forces of speculation cannot operate. I have thousands of millions of dollars in reserve in the form of gold bars." Come the four corners of the earth against him, the Bank of France would stand. Suddenly, in a week, nearly half his total gold reserves disappeared and he was obliged to put on the most stringent currency restrictions and controls, but in spite of them the outflux still continued until eventually France, who regarded herself as the unconquerable rock, is floundering around looking for credits wherever she can get them, because the rats jumped from the sinking ship and they are all jumping now on to the Deutschemark. Why are they jumping on to the Deutschemark?

The Germans did not make a practice of collecting huge reserves. They did not want them. During the past 12 months, they have been trying to keep them out. If you want to store reserves in a Swiss bank today, instead of them paying interest on your money, you have to pay the bank a rent for keeping your money. What is the fundamental difference between Germany and Switzerland on one hand and France and Britain on the other? The fundamental difference is that Switzerland and Germany are spending less than they are earning and have been doing so for several years. But France and Great Britain traditionally have been spending substantially more than they were earning. This is less true of France than of Great Britain, but nemesis has come on the countries that habitually have spent more than they earned, and stability, even beyond their own desires, has come to Germany and Switzerland who avoided the very temptation in which I suggest to the House we are at present luxuriating.

We spend more than we earn every year. We are trying to pretend that we do not. I was amused one day to hear the present Minister for Finance say, when somebody asked him about the proportion of the national debt and the annual cost of service: "Do not be talking like that. Look at the roads we have, look at the hotels we have, look at the office blocks we have."

When I heard that I remembered the poor, petty landlord near Ballaghadereen, Captain Costello. Captain Costello had a small estate with a modest income, as his forebears had before him, and he was not a very bad landlord. Captain Costello was the last of his line and he took it into his head to get married in middle age. This so intoxicated him that he determined he must have a suitable house in which to receive his bride. Plans were laid and his friends came to have a look and when they saw the foundations dug they said: "In the name of God, how will you pay for it?" Captain Costello said to them: "Do not worry. Look at the size of that drawingroom, it will be lovely; and look at the dining room, it will seat 40 people." However, the walls went up and the friends came back. They said: "What do you want spires on it for? You have three floors and now you want spires on it." Captain Costello told them: "Do not worry. There will be spires on all four corners of it."

The end of it was that the creditors moved in and Captain Costello never reached the stage of putting a roof on the house because the creditors sold his estate, they sold his possessions and put him on the roads long before the house was finished. It was finished subsequently, without the tower, without the spires, but with a good deal too much acreage within its four walls.

When I was listening to Deputy Haughey, I thought of Captain Costello. He used to say: "Look at the house, is it not lovely, is it not becoming more beautiful every day", but the end was that Captain Costello was a tramp on the roads of Ireland and the person who bought his house converted it to another purpose. I wonder, when we have finished building the office blocks and left the people who have not got houses to live in to reside in tents and caravans, when we build the hotels and multiply their numbers so that we can entertain tourists in greater luxury than heretofore, shall we find the day dawning when we will be faced with the dilemma of Captain Costello?

Remember the consequences are somewhat different. Captain Costello had the bankruptcy court to have recourse to, where he could compose his debts and go, but we have not. That is not our option. If we fail to meet our liabilities it is not our financial affairs that will be thrown into confusion, it is the very fundamental institutions of the State which will be shaken. When problems become insoluble for constitutional Government you will hear the weaklings in every community beginning to say: "This is all the fault of Parliament. What we want is someone who will take control, a strong man who will grasp this nettle and resolve this problem", and you will have meetings of Taca in the Intercontinental Hotel exhorting Deputy Haughey, the Minister for Finance, to be the strong man and you will have assemblies of gentlemen with whiskers and dirty shirts and queer pants on them and they will be exhorting Deputy O'Leary to be the strong man and to grow a beard like Cuba's Castro and that we all rally around him. I do not give a damn whether it is Deputy O'Leary representing himself as an Irish Castro or Deputy Haughey representing himself as an Irish Hitler who starts running the country because so far as I am concerned both are equally unwelcome and I would regard our people as being morally justified in resisting their attempt to overthrow the constitutional institutions by whatever means were requisite to do so. Mark you, that situation is the kind of situation that can arise. Bill Norton smiles at me.

The name is Pat. I was thinking of the Blue Shirts.

I was thinking of your father. He understood. I wonder what Deputy Norton will do when the cry comes for a strong man to resolve the situation.

I will resist any Fascist movement that might arise in Ireland.

You know what St. James said—"He that contemneth small things falls little by little." I have seen too many people fall on to those Benches and end up falling little by little. Deputy Norton, they hate you. I know that and they will destroy you and it grieves me to see them succeed in that dirty work, as your father's son——

Deputies

Hear, hear.

However, I did not come here to animadvert to what Deputy Norton did, I am sure with a clear conscience, believing himself to be right.

Do not forget that originally you helped Mr. de Valera.

Yes, I voted for him once—the just man falls seven times a day—the difference being that I only fell once in 32 years. Every dog is entitled to one bite. I had mine and the taste of it finished me forever. I did not go permanently into the dog kennel and with God's help I never will. Some people, Sir, may imagine that I am so obsessed with the inevitable consequences of Fianna Fáil's economic folly that I am content to wander in a whole maze of economic theory which can mean little to the average Deputy, but I want to tell you what is going to happen. In the autumn of this year the Government will have to borrow money. They will not be able to float a national loan because the insurance companies will not subscribe to it. Over and above that, in order to offer it the Government would have to fix a rate of interest for a public loan which would wreck the gilt edge market as it exists at present. The Government will then go to the joint stock banks and they will tell them that they require them to discount Exchequer Bills and to do what they made the joint stock banks do before, to liquidate the Exchequer Bills they had in their hands by accepting a long term Government loan and to take the stock of that Government loan as liquidation of the Exchequer Bills they then had and deposit that loan with the Central Bank as part of the statutory deposit they were required to make and then issue new Exchequer Bills to bridge the Government's economic necessity.

Now, this is no theory. The joint stock banks have now been reduced substantially to two: I do not include the Westminster Bank which masquerades as the Ulster Bank, or the Midlands Bank which masquerades as the Northern Bank. These are two English banks. Not only will the joint stock banks take counsel together but they will say: "They will nationalise us if we do not toe the line. How are we going to toe the line?" They will come back to the Minister for Finance and he will tell them: "There is a very simple way of toeing the line. Get the money from your depositors." Now, that sounds very happy—get it from your depositors—but you know what it really means. It means "call in every businessman who is vulnerable and who has an overdraft and if he owes you £100 tell him to bring it down to £90, and if he owes you £1,000 tell him within one month he must bring it down to £900, and if he owes £10,000 tell him he must bring it down to £9,000 and if that exercise does not produce the necessary resources to meet the Government's requirements call them back again and tell them to repeat the exercise. If there are those amongst them who have to close their doors and wind up their businesses because they cannot meet your demand let them close their doors, there is no alternative to it."

Now, I am thinking of those individuals. I know some of them already who are liquidating their stocks under the warning of their bank manager that their overdraft must come down or he will put in a receiver. I should like the House to reflect for a moment on what a credit squeeze means. There are lots of proud, decent, independent men who are still earning their living and rearing their families and do you know I am slowly coming to the conclusion that any man who earns his own living and is not on the salary list of the Government is coming to be regarded as a public enemy. If he is not getting a dole or a subsidy or a salary from the Government but wants nothing but to earn his own living, rear his own family and pay his own way he is becoming the object of general suspicion.

Why is he able to stay independent of everyone? Why can he kick the bank door or why can he say to the Revenue Commissioners to go and take a running jump at themselves, that he owes them nothing? It has almost become an impertinence in this country to be the provider for your own family any more, but there are such people and many of them conduct their business with their own capital supplemented by the credit that they were entitled to expect from the banker they have been dealing with for four or five generations. There are many among them who, as a result of the credit squeeze that Fianna Fáil are going to bring on this country next autumn, are going to get the loathsome intimation that the bank is putting in a receiver on Tuesday. That means that on Tuesday morning a fellow comes in and says: "I represent the mortgagee. I have been this day appointed receiver for this business." Turning his back on the proprietor of the business he says to the employees: "I warn you that as from now you must carry out my orders and disregard any directions you may get from the proprietor of the premises who has been your employer up to this moment. You will proceed in the knowledge that everything on this premises not only the stocks but everything, his furniture and the food in his larder and the clothes he wears belong to me as receiver for the mortgagee."

Dáil Éireann is pretty far away from that. That can happen in Kilkenny, Tralee, Ballybay, or Raphoe and we may hear little of it but it means the ruin of a family. It means that a father who has always rested on the confidence of his wife and the respect of his children is suddenly charged with the obligation of telling them that he can no longer maintain them. That is the practical consequence of the line of country we are following and it is terribly difficult to make people see that in time to prevent it happening.

I spoke in the Budget debate on April 25th, 1968, and I direct the attention of the house to the warnings I then gave as reported in volume 234, column 446 of the Official Report. I warned the House and the Minister for Finance that I smelled 1929 in the air. There was an acute economic crisis rapidly developing not only in Britain but in the United States of America and I went on to say:

People may ask: "What has this got to do with us?" We are caught between two great powers like a nut between a nutcracker. If devaluation has become the current feature of the two reserve currencies in the world, the dollar and sterling, there will develop a trade recession in the world such as the majority of you have never seen in your lives. If such a trade recession were to transpire, this country has never been in a more vulnerable position than it is at this particular moment.

I want to recall to Deputies the fact that in 1929, 1930, 1931 and 1932 the world was smitten with a great trade recession and one of the miracles of modern economic history was that as that tornado swept across the world when it came to Ireland the winds were duly parted and passed us by and devastated the United States.

While that devastation was proceeding in the United States of America itself in 1931 and 1932, when men in thousands were in the streets of all the great cities of America shaking tincans and asking: "Brother, can you spare a dime?" we actually had the means to start an economic war with our own best customer and out of the accumulated reserves that we had gathered in the previous decade to initiate a vast building campaign which largely absorbed the displaced labour from the small farms of Ireland and diverted the utter collapse of the country which would have taken place if those reserves had not been available to us.

That was the position in which we were. I want to warn you today: you have no reserves of credit. You could not borrow sixpence except by compulsion and that compulsion can only work itself through to the surviving individuals who are earning their own living as I have described. I do not want to overpaint the picture. I am conscious of the fact, quite deliberately and with some relief, that this is the last Budget I shall ever discuss in this House or any other. I am very conscious of the difficulty of the task of any Deputy who takes on the assignment which I have set myself. The root problem of our perplexity is the fact that we have refused to recognise that inflation is the curse of the modern world.

Inflation was presented to the world under a cloak of respectability by the late Lord Keynes and was eagerly grasped by every democratic politician in the world, this lovely concept of controlled inflation. There is no such thing. Unless we can restore to the minds of men belief in the stability of money it is not the collapse of our economic institutions that will matter; it is the disappearance of freedom from the world. Remember that so soon as the people at large become convinced that their money is steadily deteriorating in value they will not rest until they pass it on in exchange for tangible assets that they can store.

As that situation develops ordered government in any community will break down. We are living in a world where the science of anarchy has become a carefully organised thing. We have an example before us of what it can bring about. Let us not forget that it was the collapse of the value of money that started Germany on the road that led to Hitler, that led to Belsen, that led to all the horrors of Nazi control of one of the most highly civilised peoples in the world. It was the appalling belief that the Weimar Republic could not prevent a recrudescence of what happened after the First World War.

It is perfectly true that we have at our disposal today a whole armamentarium of devices and machinery which would prevent the crude development in the economic sphere of the post-World War One period but we have deployed them all in the world in the course of the last few years. We have met in Basle, in Zurich, in Bonn, in London, in Washington. In fact, we have reached the stage now when the aeroplanes are passing one another in the air, the Governor of the Bank of England travelling in one direction the Chancellor of the Exchequer travelling in the opposite direction, and we postpone one catastrophe after another. We vow that a currency will never be devalued and devalue it the following morning. We swear by all the traditions of the German nation that we will never revalue the Deutschemark and as sure as there is an eye in a goat the Deutschemark is going up, whether it is by five, seven or ten per cent, does not matter. The rats are on the road. Whether they are French rats or British rats or American rats or Irish rats, they are all boring away in their subterranean tunnels, all of which are illegal, but does that trouble the rats? —Not a bit of it. The currency rats will find a road around any law. The only people who obey the law are the poor simple residue of citizens going about their lawful occasion earning their living and they will never get their pictures on television. But, in the case of the rats who will grow rich from their currency speculation, the newspapers and the television will grow weary of recording for us, the humble poor, their scintillating extravagances financed by the proceeds of their illegal activities.

People can ask today if money is pouring into the German Reich or into Switzerland, why cannot they channel it out again? There would not be any difficulty if the Government of Germany or the Government of Switzerland did not themselves fear the dollar would be devalued or the £ would be devalued again. We could correct the activities of the international speculators if, but only if, we could banish from the minds of men the belief that the dollar and sterling were not themselves in danger of devaluation.

So far as this country is concerned, inflation means for us the danger of the loss of an independence. It may be the loss of independence to a domestic tyrant or to some external power that intervenes to rescue us from the consequences of economic chaos. I do not care whence that intervention comes, I do not want it. But, the consequence of inflation to the world is far graver and we may perish in the wreck. As I said before—and let this be my valedictory message on this subject in this Parliament—it would not be the first time we showed the world a good example. We could do it now by demonstrating that we were determined that so far as our currency was concerned we would repay what we borrowed and we would not borrow more than we were fit to pay. That is the lesson and it is the only lesson the world really needs to learn. I admit that we cannot control the ebb and flow of inflation in the world at large but if we have got to sink in an international catastrophe, at least let us sink with our flags flying and as we look on them sink with others, let us glory in the fact that ours are clean.

I genuinely regret that we have heard the valedictory speech on a Budget of Deputy Dillon. In saying that I am expressing the opinion of every other Member of the House, on both sides. Deputy Dillon's speech on the Budget, like all his other speeches, was not devoid of histrionics, was eloquent. When I came into this House some 18 years ago, Deputy Dillon's speeches were most impressive and they still are. For that reason, nobody will like to think that Deputy Dillon will not be with us for future Budgets. Of course, none of us has any guarantee that he will be here, unless Providence ordains.

Without meaning to be uncomplimentary, I cannot help thinking of the years when I listened to and was impressed and intrigued by Deputy Dillon's many speeches on Budgets and enjoyed them. It would make a very interesting collection if the speeches Deputy Dillon has made here were compiled in a special volume of Dáil Debates. One thing for which they would be most notable would be their predictions and prophecies. Indeed, in that regard they could compete in rank with Moore's Almanack. Perhaps some of the predictions were true but mostly they were not and very often they were contradictory. If we were in office there were predictions of gloom, despair and disaster and if he were in the Government the speeches held out the brightest hope for the greatest future for this country. However, his speeches were important, interesting and very colourful. His valedictory speech—if it is his valedictory speech I regret that that is so—was no less colourful in its predictions of gloom and disaster, not merely for Ireland but for the world as a whole, because of the tendency of inflation to dispose of and to create dictatorships of one kind or another.

Those of us in public life who are charged with certain responsibility have to do something more than indulge in pipe-dreaming and daydreaming. We must get down to realities at times and face the situation as we find it and carry out to the best of our ability a job of work calculated to improve the lot of society generally. Foreign investment may have, and I am sure has, some influence on inflationary tendencies but it is fairly orthodox economics to accept that the greatest inflationary factor is the rising of income of more and more people as an economy develops. Indeed, in an expanding economy, in a developing country, it is inevitable that certain problems have to be faced. It is problems of a type such as I and my Department have to cope with that are most pronounced and magnified in an expanding economy. It is easy to criticise and say that this Budget is one to rob Peter to pay Paul, or Polly as the case may be, but when Peter gets too far ahead of Paul he must give him some assistance on the way. That is simply what this Budget is seeking to do and nothing more.

Taking all these factors into consideration I am reasonably happy with the provisions of this Budget. I know that one does not expect the Opposition to laud it and say that it was motivated by the highest motives of altruism. We naturally expect them to find the weaker points and, if I am to make an assessment of the Opposition's attacks to date, the only attack that they have made on what I consider to be a reasonably good Budget is to say that it is an election Budget. In other words, they are saying that we were motivated by political reasons alone.

I will seek, in the few minutes for which I speak here, to try to counter that argument and to defend what I consider to be an honest and honourable attempt to close the gap between the more affluent section of our society and the more unfortunate sections. This gap has been brought about as the result of an expanding growth rate. This Budget has been designed to help the less fortunate, who are unable to take part in the race for better living standards. It is not very difficult for one to see that what we have set out to do in this Budget is in conformity with what has always been Fianna Fáil policy since they first introduced the great social revolutionary programme of 1932.

If anybody looks back on the history of this Party they will not have any difficulty in appreciating that the present Budget is in keeping with the policy we have always pursued with progressive improvement down through the years. This will become even more pronounced because the affluent society produced by the expanding economy has aroused in the public conscience a greater awareness of the requirements of the weaker sections of our society.

While Deputy Dillon was speaking I was scribbling down some of the milestones along the road of progress since Fianna Fáil first became a Government in this country, and I shall enumerate but a few in chronological order. First, we had unemployment assistance in 1932, giving, for the first time, a means by which the downtrodden could find some sustenance. Then in 1934, there was national health insurance, which replaced the various agencies which up to then had operated some semblance of national health insurance. Then, in 1936, there was the widows' and orphans' pensions scheme; in 1942, wet time insurance, better known as the intermittent unemployment scheme, was introduced. Children's allowances came in 1944. In 1947, we had the establishment of the Department of Social Welfare and the integration of all the various schemes and offices in operation at that time. In 1961, the contributory old age pension scheme was introduced. Then we had the Occupational Injuries Act of 1967 and the free electricity and television schemes of 1967-68. The widows' and orphans' pension scheme of 1936 incorporated, I think, both contributory and non-contributory. These are some of the milestones in our advancement down through the years. These are only some of the events which mark economic expansion in the country.

I am protesting quietly against the Minister's claim that Fianna Fáil introduced Lloyd George's national health insurance scheme——

I am not doing any such thing. I claim the integration of it.

——and the old age pension scheme of 1910.

I am not claiming any such thing. I am enumerating some of the milestones in the history of this Party with regard to social welfare services. I will go further and ask any interested person to consider not only Fianna Fáil policy down through the years but to consider theThird Programme for Economic and Social Development. What we have done in this Budget is merely in complete accord with what is laid down in that programme.

Taking all these things into consideration, I do not think that anybody could accuse the Government of acting only politically in introducing this Budget. The fact that the last speaker dismissed the provisions of the Budget and talked instead about world inflationary tendencies and so on is in itself a demonstration that the provisions of the Budget are acceptable and, I regret to say, perhaps uncomfortably acceptable to some people. Not alone is this not a social welfare Budget for election purposes but it takes a further definite step forward in accordance with past performances, bringing us nearer the goals yet to be attained in the field of social welfare.

I have had the pleasure recently of examining, in some order of priority, the requirements in the field of future social welfare expansion. What remains to be done would be sufficient for several "election Budgets". We have many projects on hand for the removal of anomalies in the social welfare code. Only last autumn the Government authorised me to examine these matters and deal with them in order of priority. I am confident that, as time goes on and as the rate of economic growth justifies it, we will have many more Budgets of this type until we reach that stage where nobody for ulterior or other purposes in the Opposition will be using our social services on a comparative basis to denigrate the efforts of this Governmentvis-à-vis any other State or Government in Europe or in the world.

We have very many obvious improvements. Recently I have got the approval of the Government for the preparation of a scheme of pay-related benefits. Like all other schemes enumerated in that list it will not be comprehensive at the start but it will cover most of the essentials and is capable of immediate expansion. Take any other of the schemes which I have just read out and you will note that they started on a rather limited basis. The tendency was to expand and extend both in scope and in rate down through the years. I have in course of preparation for circulation a Bill which will take the first step towards pensions at 65. It has already been introduced and will shortly be available for circulation. There, again, it is only a limited scheme but will admit and no doubt will create a demand for improvements in that direction. It will also provide for invalid pensions in respect of those who are chronic invalids and will make provision for death grants in respect of insured persons at the time of death.

Those are some of the matters in the immediate future and they are only some of many things which I hope our continued economic expansion will justify as we seek year by year to distribute the fruits of economic expansion to the less fortunate sections of our community as is pointed out in the Third Programme for Economic Expansion. I do not regard this as an election Budget. I regard it as being a definite step forward in accordance with Fianna Fáil policy and in accordance with our past performance in the field of social welfare and as an assurance of our continued progress in that respect in the years to come given the factors available to us today, namely, a consistently expanding economy of at least four per cent per year as we have had in the past and the retention in office of stable Government by Fianna Fáil.

I consider these are essential factors to assure progress in this direction. It is popular nowadays to capitalise politically on the weaker sections of our people. I suppose this is made more obvious and more pronounced by the fact that all those who are unable to take part in the business and commercial life of this country are today succeeding tremendously. I suppose it is also due for the same reason to the public's conscience being awakened and aroused with regard to a responsibility towards the aged, the retired, the sick, the infirm, the widows and those people who are unable to assist themselves for the time being. Instead of indulging in talk for pure propaganda purposes at least we on this side of the House, those in Government, have got to do something concrete, to do something definite and be prepared to accept our responsibility in respect of those people. I think we are doing nothing more than that.

It has been said we have provided nothing for important sections of the community. There will be those who feel other people have been neglected, irrespective of whether they come within the scope of the welfare code or not. While much provision is made for some sections of those people, I should like to point out that practically everything one looks at in the Book of Estimates, every increase certainly, is for the other sections who may feel they are not mentioned in the benefits provided in the Budget. We provide millions for those engaged in industry, in agriculture, in sheltered employment, in the public service and in various other sections of the community right down through the year. If some of those sections are not specifically mentioned in Budget proposals the very fertile field in which they are successfully developing their business or commerce today is in no small measure due to the action taken by the Government at various times, particularly in the provision of moneys in the capital Budget to ensure the economy is progressing and that they are assisted in whatever manner they are involved in productive development.

The emphasis in our whole capital expenditure is on assistance for those taking part in industry, in commercial life and, indeed, in the distributive services which are allied to our commercial life generally and productive development in particular. Very generous provisions are made for those people right down the line and if at some stage they are asked to make a little contribution towards those whose standard of living is not keeping pace with theirs, then I am sure they will very readily, and without any complaint whatever, subscribe to that same purpose.

Indeed, if you were in an hotel lounge and somebody came in collecting for an unfortunate neighbour pointing out that so-and-so had fallen on hard times, as used to be done so frequently in the past when there were no social services, on such a rare occasion nowadays one readily parts with a very generous subscription. This Budget is doing nothing more than asking those people to pay at certain times a few pennies which is purely voluntary towards improving the lot of not merely one individual but of some thousands and when that is brought home to them I am sure they will gladly subscribe.

The children's allowance scheme was mentioned in last year's Budget when the Minister pointed out he was having the question examined as to what selectivity might be introduced in improving those payments. This naturally has been examined in some depth since then. While the present substantial increases will extend the cost from some £10½ million to £15¾ million they are partially on a selective basis, I would be happier to see it on a still more selective basis. The amount paid in children's allowances is not so excessive as to demand a very strict selective basis in its payment. An effort has been made to ensure that some of it is recovered in income tax and that nobody suffers as a result. It is a very laudable step and we are glad that the position will improve considerably. There is plenty of scope for the introduction of more selectivity in the future in so far as further development of the scheme is concerned.

In recent years there have been improvements in the social welfare code. Many new schemes have been introduced. These schemes are a very definite step in the right direction. I refer particularly to the free electricity scheme for old age pensioners who live alone, or for those who are invalids requiring some member of the family to look after them. I refer also to the free travel concessions and to the free radio and television licences for these people. These schemes have been extended to British pensioners who, in most cases, are our own people who have returned home having qualified for retirement pensions abroad. This movement towards assistance in kind is one which I can state is being carefully charted for future consideration. Much can be done in this field. The "meals on wheels" and various other schemes which are genuinely—and I say "genuinely" with deliberation— organised to assist certain sections who are already receiving assistance from the Department of Social Welfare are excellent ones. The voluntary organisations are doing a tremendous job for no motive other than to help the aged. I would hope they would continue their good work and that we would be able to give them some direct assistance in the future.

I would also hope that any assistance which may be given by the Government to the less fortunate sections of our people, and particularly to the aged, would never supplant or in any way supersede the responsibility which relatives should have for their people. There is a growing tendency for some families to regard their aged parents as the total responsibility of the State. I should not like to see that attitude growing to the point at which people would feel that they could place all responsibility for their aged parents on the State. Parents who have been responsible for rearing a family should not be regarded as the total responsibility of the State. Their immediate families, and even their nephews and nieces, should have a sense of responsibility towards them. I would hope that anything we do, no matter how generous, would not sever the link of affection between relatives and their aged dependants. Relatives should continue to look after the aged with care and affection. They should accept full responsibility for them while they are alive.

Voluntary organisations can often render certain services to the aged. They can do things for them which no Department of State can really do. Such organisations have intimate contact with the aged and can help them greatly.

We are frequently accused of not employing sociologists and persons who are suitably qualified to work in this field of expanding care for the aged and infirm. Voluntary organisations have contact with aged people and sometimes with their relatives. The immediate needs of the aged are not always evident. It can be foreseen that either my Department or the Department of Health must employ a number of these sociologists to supervise the various schemes necessary for the welfare of such people. I hope that these schemes will be pursued with greater interest by my Department in the time to come.

I am naturally concerned with the approval of the welfare benefits set out in the Budget. Nobody can establish that it is an election Budget or that we have been motivated by political reasons alone. Our record in the field of social welfare in the past is excellent. There have been progressive improvements year by year. Our policy as laid down in the Third Programme for Economic Expansion shows our concern for those in receipt of social welfare benefits. It shows our hopes of expansion in the social welfare field in the years immediately ahead. While I have not the Fine Gael social welfare programme in front of me now, I have looked through it carefully.

It would be safe to say that last week we spent almost as much on social services as was projected in that policy for their five-year programme. I am glad the Leader of the Fine Gael Party is in the House because he will be confronted immediately with the task of formulating a new policy. Every time the Labour Party or the Fine Gael Party promulgate a new policy the action of the Fianna Fáil Party in that field of endeavour immediately improved on that policy and the Fine Gael and Labour Parties had to prepare another policy in order to keep in step with the performance of Fianna Fáil. I am afraid they will have to submit themselves again to this very interesting exercise and produce still another policy. Good luck to them.

I am reasonably happy with the Budget. I have a reservoir of projections in the social welfare field from which I could supply several election Budgets for many years to come but I feel our rate of progress is very well in keeping with the best expectations of the most sanguine prophets in the matter of social welfare. For that reason one must be reasonably satisfied with the progress made. I am certain that nobody will begrudge the few pennies they will have to pay here and there which will amount to millions in the aggregate to give succour to thousands of people who very much deserve it.

Mr. Dowling rose.

Progress reported: Committee to sit again.