One approaches a Bill of this nature and importance with mixed feelings. The Minister appears to have taken the reverse order of certain advice which I was bold enough to offer him in this House on this occasion last year, or perhaps the year before. I think the suggestion I then made was that, in a time of necessary transition to a new economy imposed on us by the circumstances of the emergency, the State should borrow the amount necessary to balance the Budget during the period of transition, but that having successfully effected the transition, it should then resort to adequate taxation. The Minister appears to have steepened up the rate of taxation very heavily in the first two years of the process, when such action probably impeded us in the process of making that necessary transition and now, having effected that transition, probably less happily and less successfully than we would have done if the other method had been chosen, we find ourselves faced with a situation where the Minister borrows in order to close the gap in the Budget. I still think that he would have done better if he had done his borrowing in the first year or two of the transition and had increased the rate of taxation at the present stage of the process. But perhaps the fact that I recommended the other procedure was an adequate reason in his mind why he should proceed by the reverse method, because I notice, as a rule when I recommend a thing in all good faith, some other method is adopted that is extremely likely to lead to the opposite result being accomplished. If I had only applied that principle in this case I would have recommended the opposite to what I did recommend in the hope that the right solution would automatically have been accomplished. However, that is perhaps a debating point.
I accept the Minister's view that, in the circumstances in which we find ourselves, and which are apparently imposed upon us, it is better that we should close the gap of some £4,000,000 or £5,000,000 by a process of borrowing than by attempting to increase the yield of taxation. I would even not be unduly alarmed if the Minister decides to do that borrowing in the first instance from the banking system and is in no great hurry to fund these short-term loans in the form of a new long-term loan. I think in present circumstances it should be possible to get £4,000,000 or £5,000,000 from the banking system at a rate of interest which will not be unduly high and which will impose no serious additional burden on the taxpayers of the immediate future. We, then, bridge the gap in our expenditure by borrowing a sum of £4,000,000 or £5,000,000 in the current financial year. Our neighbours are spending money at the rate of £100,000,000 a week and are getting perhaps half of that total amount in the year from taxation and the greater part of the rest of it by borrowings from savings in various forms. But even then, according to my most recent information, they have been faced with the necessity of increasing the floating debt and borrowing from the banking system to the order of some £400,000,000 a year. That, although a huge sum from our point of view is, perhaps, not excessive from theirs. They have a much more buoyant economy, precisely because of the terrific war expenditure which they are incurring, and the yield of taxes over there shows a tendency to increase much more rapidly than anything of the kind that could happen over here.
There is and must be, however, some relation between the amount of money taken by way of taxation for public purposes and the amount of the national income or the aggregate of personal incomes which are liable for public taxation. That relationship favours a high yield of taxation in the British case but in our case, owing to reasons for which we may be thankful, there is not the same cause for rapid increase in the national income and, consequently, not the same tendency to a buoyant yield of public taxation. At the same time it is necessary that we should have some appreciation of this relationship between public taxation and the total national income in whatever way that national income may be defined. I am not aware that any recent authoritative estimate has been made of our present national income. I think it would be desirable that there should be before this House and before the other House on occasions like this, some authoritative estimate of the current national income so that we might have it in our minds when we are considering the total of contemplated taxation.
Doubtless, when the central bank has been created, and is functioning, one of its chief duties will be to maintain a research department which will, from time to time, furnish the public and the Oireachtas with this authoritative information about changes in the amount of the national income. I do think that the national income is probably not any less than it was two or three years ago, but I doubt whether it is much more than it was two or three years ago. I think the last authoritative estimate of it put the figure at about £160,000,000. But, be it more or less than £160,000,000, I am quite certain that the national income of our people in money—I am thinking of their money income in this connection, not their real income—is certainly less than it otherwise would be because of the fact that our export trade is not as flourishing as it should be, and in particular because of the fact that our export trade in fat cattle is paid for at a price which is decidedly less than the price paid for cattle of a corresponding quality raised and finished in Northern Ireland.
In fact, I would go so far as to suggest that the difference in the money income of our people arising from the fact of that differential price affecting our fat cattle exports must be at least as much as £2,000,000 a year, and, if we follow it in all its ramifications through the rest of our agricultural and national economy, we would probably find that that blight on our fat cattle trade which has been going on for years—the fat cattle trade being so fundamental a part of our national economy—has probably diminished our national income by anything up to about £10,000,000 a year.
I do not want to go into the matter in detail now, but I should like to say that in my considered opinion the unfavourable price which has been paid for our fat cattle during the last ten years in the British market has been a force tending to disorganise our whole agricultural economy, to diminish our capacity for producing wealth, either for home consumption or for export, and that in fact it represents one of the principal grievances we now have in relation to our neighbours. I might put it this way, that the economic war officially was settled in 1938, but this particular aspect of the economic war has been going on ever since 1934 and is still continuing. I think there should be some kind of concerted national effort made to persuade our British neighbours that it is quite time they stopped this economic war against our cattle exports, and that it is just as much in their long-term interest, and in fact in their short-term interest, that they should pay us a fair price for our fat cattle as it is in ours. I know that the Minister and his colleagues have been doing their utmost to secure a favourable adjustment of this price for our fat cattle exports, and I know that their lack of success is not due to any lack of effort on their part, but I think that perhaps it is worth while going on trying. It is worth while putting the argument to them from the British point of view, and it is worth while that we should realise that this business of their paying a differentially higher price for their own home-reared and finished fat cattle is part of a British racket which began in the interests of the British fat cattle producers some ten years ago and was continued during all those recent years in a way which was unfair not only to us but to certain British interests, because, associated with that policy was a policy of restricting imports of Argentine beef, and consequently making the poorer classes in particular in the country pay more than they should have for the foreign beef which they consume, in order that the State might have the funds with which to subsidise the production of British beef, which is mostly consumed by the wealthier classes in England.
Even from their point of view, therefore, the policy involved in their differentially higher price for fat cattle is lacking in social justification, and, if we could convince them that the effect of it on our mutual relations must be to diminish the amount of fat cattle that we can produce and go on producing for them during the period of the war emergency and afterwards, we might in the end get them to see the thing from a British, if not from an Irish point of view, and thus bring about a change which would undoubtedly tend to the increase of our national income. We might point out to them, for example, that their long-continued war on our fat cattle has made stall-feeding an unprofitable proposition for years in this country, with the result that animal manure has been scarce, and as a consequence the fertility of our land has diminished. In order then to produce for ourselves the wheat that we must have for our own consumption, we now must extend cultivation to first-class pasture fields, which, from their point of view, would be better employed in producing beef for them. Their policy has compelled us to extend tillage to areas which in the ordinary way would be better employed in producing fat cattle for them, whereas if they had pursued a different policy and we had been able to have the animal manure that would have resulted from stall-feeding over the last decade we would have got all the cereal crops we needed from our old fields without having to extend cultivation to those first-class pasture lands which are ideally suited to the fattening of cattle.
I am trying all the time now to put the argument from the British point of view. They are lessening their source of supply of beef by the long continued effect of this unfair price policy with regard to our fat cattle. We might also point out to them that, although they have a monopoly of our export surplus during the war, after the war— which they must win or perish and we along with them—they will have to compete with other countries for our agricultural surpluses, if any, and it will be injurious for them as well as for us if they continue to pursue a price policy which makes it unlikely that we will have any considerable agricultural surplus for a great many years after the war is over. They will probably need us as a source of supply in any conceivable future time, and we will certainly need them as an export market and a source of supply for industrial raw materials in any future which we can contemplate or conceive. They have, of course, a monopoly grip on all our export surpluses now, and in a sense they can pay us as little or as much as they like. According to a statement made by the Minister for Agriculture in a recent debate, the Minister of Food, in some negotiations with the Department of Agriculture, said:
"Why should we not buy in the cheapest market?"
But I suggest that talk about buying in the cheapest market on the part of the British Ministry of Food is, in present circumstances and from their own point of view, short-sighted nonsense.
They have a monopoly grip on our market at the moment, but, from their point of view as monopolists and also taking into account their own national interest, the consideration that matters most is what price is necessary to induce us to maintain and increase supplies for their market. They are certainly not paying that price now with reference to pigs or with reference to cattle. In their own interests, they should pay a price which would encourage us to maintain and increase supplies for them as well as for ourselves. The Minister may, or may not, have used all these arguments already in his negotiations with our British neighbours but I should like to impress upon him that the matter is of vital national importance to us as well as to Britain, so that he should make repeated efforts to get the British to see sense from that point of view. I should like to assure him that, in any policy of that kind, he will have the united support of every section of the community, including the section of the nation for which I might claim especially to speak. We had some unsatisfactory debate on this matter in which the Minister for Agriculture failed to convey the impression to me that he was anxious for any co-operation on the part of people like me. His answer took the form, for the most part, of cheap debating points and cheaper sneers. I consider the matter is so important that one should not approach it in that way and I hope the Minister and the Government will give most serious consideration to it in the course of any negotiations they may have in the immediate future.
There is one other matter to which I should like to refer—family allowances. The Minister rightly said that Senators and Deputies are more skilled in recommending objects of public expenditure than they are in suggesting ways and means of raising the finance necessary to meet these objects. Some time ago, we had a debate in this House in which we unanimously recommended the principle of family allowances, with special reference to the circumstances of agricultural labourers. In the course of my remarks on that occasion, I advocated family allowances in respect of the whole population under 16 years of age. I mentioned that I understood that the financial cost of paying 5/- a week in respect of each child under 16 years of age would be in the region of £8,000,000 a year. That is a lot of money for us, but I also stated that I considered that certain adjustments in public taxation which were possible, and even desirable under present circumstances, could be used to give us, at all events, during the present emergency, the money necessary to meet the cost of family allowances for agricultural labourers. I suggested that the general nature of these adjustments of taxation should be directed to whitening the black market. I do not know whether or not there is a black market in tobacco, but there is, certainly, an under-the-counter market. Everybody is familiar with the phenomenon when he goes into a tobacconist's shop and asks: "Can you change a 10/- note and I do not particularly mind in what form you give me the change?" That is one particular approach that works satisfactorily on occasion. There is a certain lack of adjustment between the available supply of tobacco and the demand for tobacco, and circumstances exist which would tend to bring about a black market in tobacco, though whether or not they have actually brought that about, I do not know. That being so, there is room for additional taxation of tobacco.
Tobacco is a very agreeable gift of Providence but it is not a down-right necessity of life. It is, more or less, a luxury, especially in war time, and, consequently, is a suitable object for increased taxation, if increased revenue must be got. I estimated, rightly or wrongly, that if the Minister had the nerve to add 8/- per lb. to the tax on tobacco, he would get, in that way, £4,000,000 in revenue, on the assumption that there was no substantial reduction in the total consumption of tobacco, following so steep an increase in the price. Perhaps that assumption is not justified. Even if that would be going too far, I think that there could be some slight addition to the tax on tobacco which would bring in a substantial amount of revenue which could be used either to help to bridge the gap in the Budget or to provide the additional cost of family allowances, if family allowances are adopted.
I made another suggestion which does not seem to have received serious consideration. We are familiar with the fact that the women of Donegal, when they cross the Border, do not wear ordinary clothes but wear sackcloth clothes which are capable of becoming flour sacks on the return journey. The flour which they buy at about 3/- per stone in Derry becomes worth about a guinea a stone in Donegal. People are prepared to pay as much as a guinea a stone for white flour. If people are so foolish as to be prepared to pay a guinea a stone for white flour, why not let them freely buy a certain limited percentage of white flour, milled under Government supervision and under the strictest control, at a guinea a stone? In other words, arrange for the milling of 10 per cent. of your available wheat into 70 per cent. extraction white flour and put an excise duty of £100 a ton on that white flour. Let the people then pay £160 a ton, or £1 a stone, for that flour.