Central Fund Bill, 1959—Second Stage.

Question proposed: "That the Bill be now read a Second Time."

The Central Fund Bill is part of the annual financial programme. Its main function is to give legislative effect to the Vote on Account for 1959-60 which has already been passed by the Dáil. Section 2 of the Bill fulfils that purpose in authorising the issue of £38,000,000 from the Central Fund. Section 1 authorises the issue of £3,688,982 from the Central Fund for the year 1958-59. This sum is the total of the Supplementary and Additional Estimates which were passed during the current financial year. Section 3 provides for the borrowing by the Minister for Finance of the total of these two amounts, namely, £41,688,982.

The total estimated expenditure for the year 1959-60 is £115,547,070 which is an increase of £5.55 millions over the original Estimates for 1958-59. When account is taken of the Supplementary Estimates passed during the current financial year, the comparison shows an increase of £1.86 million— Capital Services being up by £2.11 million and non-capital services down by £0.25 million.

I should like, as is customary, to indicate to Senators the more important changes in the Estimates for 1959-60 as compared with the current year. I shall take first the non-capital items, which, as I have said, show a decrease of £0.25 million on the total provision for this year.

There are two substantial decreases in the Estimate for Agriculture. Provision has been made this year to meet most of the loss on the disposal of the 1958 wheat crop as well as the balance of the loss on the disposal of the 1957 crop. This reduces the amount required in 1959-60 by £1,490,000. A fall in butter production during the late autumn and winter months is expected to reduce exports. This coupled with the expectation that a better price will obtain on the export market next year is estimated to afford a saving of £1,025,000 on butter subsidy.

A considerable decrease in the provision for C.I.E. is accounted for by the fact that voted moneys are no longer required to bear capital expenditure or interest payments on Transport Stock. The effect on the non-capital provision is a reduction of £963,300.

Reductions in the Estimate for Supplementary Agricultural Grants and in the Grant-in-Aid of An Bord Gaeltarra Éireann of £100,000 and £110,000, respectively, have been made in the light of experience in the current year which showed that the provisions for these services could stand these reductions.

The Estimate for Social Assistance shows a decrease of £80,000 mainly on widows' and orphans' non-contributory pensions, offset by an increase in children's allowances.

Most of the savings on the services I have just mentioned will be used to provide assistance over a fairly wide field.

The Estimates for Primary and Secondary Education and Technical Instruction are increased by a total of £723,750. Higher pay for teachers accounts for most of the increase. But provision is also made for the growing number of pupils and the consequent increase in the number of teachers in secondary schools; for the expansion of technical education; for the restoration of the 10 per cent. cut in capitation grants to secondary schools and for increased grants towards the cost of heating, etcetera, of national schools. Added to these increases there is the additional provision in the Estimate for Public Works and Buildings for the expanded national schools building programme. As well as that there is a total increase of £260,430 in the Estimate for Universities and Colleges mainly to provide for increased grants to University Colleges, Dublin, Galway and Cork and to Trinity College. Of that sum, £55,000 has been treated as voted capital as representing a grant towards the cost of additional permanent accommodation at University Colleges, Cork and Galway, and Trinity College, Dublin. In all, the provision for education and research in 1959-60 has been increased by some £1.3 million.

Railway closings in the north-west and the development of industries will mean that some roads will be required to carry heavier traffic. Provision for a grant of £200,000 to the Road Fund to meet part of the cost of improvements to those roads has been included in the Estimate for Local Government. I might mention that an advance of £200,000 from the Central Fund will also be made for this purpose. An extra £140,000 for contributions to loan charges of housing authorities is also provided in this Estimate.

The Estimate for Posts and Telegraphs is up by £476,740. This is due mainly to the provision of equipment for Civil Aviation and Meteorological Wireless Services, engineering materials and Telephone Capital repayments.

In the Estimate for Defence, the increase arises mainly from increases in pay and the increased cost of clothing, equipment and provisions as well as from the necessity to expand civil defence. Provision is also made for an increase in the strength of the Permanent Defence Force.

The Estimate for Garda Síochána also shows an increase which is almost entirely due to increased provisions for pensions, gratuities, etc.

Provision has to be made for the repayment to the Central Fund of amounts outstanding in respect of four companies whose borrowing was guaranteed and who defaulted in repayment. The Estimate for Repayment of Trade Loans Advances shows the increased amount necessary for this purpose.

Turning to the capital side, there is an increase of £2.11 million on the total provision for this year. The "Programme for Economic Expansion" published last November contained an outline of the policy of the Government with regard to the development of our capital resources and I should like to mention the provisions in the 1959-60 Estimates which relate to that programme.

In the Estimate for Agriculture, there are two major items. £1,750,000 is being provided for subsidy on phosphatic fertilisers in addition to £500,000 which was included in a Supplementary Estimate for that Vote this year. An additional gross provision of £1,680,000 is being made for the Bovine T.B. Eradication Scheme. Receipts from the sale of cattle slaughtered under the scheme will help to reduce this increase leaving a net additional provision of £936,000. It is hardly necessary for me to repeat what I said in the Dáil that it is a matter of urgent necessity to bring this campaign to a successful and speedy conclusion.

Also in the Estimate for Agriculture, the provision for the Farm Buildings Scheme is higher in 1959-60 even when account is taken of the supplementary provision made for that scheme in the current year.

Additional assistance is being given to tourism by way of grants to Bord Fáilte Éireann—£100,000 for the improvement of major tourist resorts and £50,000 to encourage the provision of additional bedroom accommodation at tourist resorts.

In the Estimate for Fisheries, various provisions are made for projects arising out of the White Paper Programme. In the White Paper £100,000 is allocated for grants for additional boats. Of that total, £70,000 is provided for in the repayable advances from the Central Fund to An Bord Iascaigh Mhara and the balance of £30,000 is included in the Grant-in-Aid of the board. As distinct from these grants for additional boats a provision of £34,000 is included in the Grant-in-Aid for grants of 15 per cent. of the cost, which the fishermen formerly had to borrow in full. In addition, this Grant-in-Aid contains a total of £37,800 in respect of grants for plant and premises. The provision of an exploratory fishing vessel accounts for £45,000 in 1959-60. On the inland fisheries side a scheme of grants for pond fish culture has been announced and a provision of £4,000 has been made for this purpose. £4,000 of the provision for Contributions to the Salmon Conservancy Fund is for the improvement of Salmon Fisheries.

The increase of £532,870 in the Estimate for Public Works and Buildings is due in the main to expanded programmes of arterial drainage and national school building.

Constructional works at Shannon and Cork Airports account for the greater part of the increase in the Estimate for Aviation and Meteorological Services.

In the Estimate for Local Government, the provision for housing grants has been increased by £400,000 to provide for increased grants and to meet the extension of their scope under the 1958 Housing Act. Grants for repairs and improvements are now available on a more generous scale.

The provisions with which I have just dealt cover, of course, only one part of the financial picture. At the moment the House has not before it that portion of State expenditure which arises on the Central Fund Services and on direct issues from the Exchequer for capital purposes. Within a month I will, I hope, have presented my Budget. It is only then that the full picture will be apparent on both current and capital account. On that occasion, I shall, as usual, be giving a full assessment of the position as I see it, not only from the financial but also the economic point of view. Senators will scarcely expect me to anticipate the general assessment of economic prospects appropriate to that occasion.

I might, however, remark at this stage that while the past year has been an unfortunate one on the agricultural front there is every indication that the ground lost will be more than regained in the coming year. In the case of industry, both output and employment continue to rise. We have good reason to think, therefore, that so far as the coming year is concerned, we shall be able to accomplish what we set out to do in the White Paper "Programme for Economic Expansion".

I gave in the Dáil a brief survey of how progress is being made generally in implementing the proposals in that programme and it is hardly necessary for me to go over the ground again. I should, however, like to stress one point. It is that if the broad aim of that programme is to be achieved, it will require the convinced co-operation of all responsible interests in our economic life. Unless the active cooperation and initiative of organisations representative of agriculture, industry and commerce, both on the side of the employer and the employed, and of organisations representative of investment and finance is forthcoming, Government measures alone cannot be fully effective.

I do not think it would be proper for me on this occasion to omit a word of appreciation of the activities of the Minister for Finance, the Minister for Education and, I take it, the Taoiseach in relation to the extra money provided for education. I think that this is certainly the first occasion for many years that adequate finances have been made available for carrying on the work in the institution with which I am connected, University College, Dublin. While the Minister might have, perhaps, in a more Utopian state made up for some of the backlog in relation to that institution, at least we ought to be grateful to him for a fair and reasonable division of the moneys available on this occasion.

Having said that, I might point out that it is not the business of a speaker in opposition in a Parliament to cast too many pearls before the people in office. Therefore, I propose to make some critical remarks about his proposals in other directions. I should also like to say at this stage that I agree with the Minister's allocation of the rather large amount of moneys in connection with bovine T.B. as being proper to be met by borrowing, that is, putting them into the capital part of the Budget. That is a fair and reasonable thing to do, because, once the job is completed, it will be, I take it, a mere job of staffing and working with a very small number of cattle as they come along. Expenditure will be comparatively small as regards compensating the farmers for the cattle which have to be slaughtered or otherwise disposed of.

I must admit that I feel, when I come up against a set of figures such as the Minister read out to us to-day, in recent years particularly, they always have a very decided atmosphere of unreality about them. If I might try to indicate how that feeling arises, I think it arises from the fact that the Government Party seems to have an astounding capacity for consumption— I mean an astounding capacity for consuming all kinds of fortuitous and other savings that come their way. On this occasion, just as they did from 1951 to 1954, they are busily consuming the advantage which has come through the decided fall in import prices. In addition to that, they have, of course, already consumed the savings that accrued from the abolition of the food subsidies—indeed, more than consumed them—as the Minister's predecessor did, to an even greater extent than he is doing, on a former occasion.

Last year, I think I said that the Minister's Budget was not as bad as the 1952 Budget. The Minister said that if he got as good results as he then got, he did not think he would be doing too badly. In retrospect, I think I was correct. The Minister's Budget was not as bad and did not have as many ill-effects as Deputy MacEntee's Budget in 1952, but, as I said at the time, the Minister had not as much slack in the rope.

The expenditure on the Supply Services—which is really what is before us—when Deputy MacEntee came into office was £75,000,000 in 1950-51 and that included the remarkable figure of about £15,000,000 for food subsidies. When Deputy MacEntee left office the expenditure, in his last year in office, 1953-54, was £105,000,000, plus about £9,000,000 that he had used up, that he had taken away from the people in the form of food subsidies. He had, therefore, increased the expenditure of the State, other than on food subsidies, by a sum of £40,000,000 in three years. It is little wonder that the economy of this country has been staggering under the impact of those events ever since.

When the inter-Party Government left office, the expenditure was £109,000,000, but they did put back £2,000,000 of the food subsidies, so that, in a period of two years, the increase in expenditure was £2,000,000 and then, when Fianna Fáil came back into office again, we had the same old story. In 1957-58, the expenditure was £111,000,000 plus, if we take the gross figure, £9,000,000, of food subsidies. The Minister could say, of course, "You should take £2,000,000 off that for the export subsidy on butter and £2,000,000 for extra social benefits." That is not my point at the moment. My point is: if you take the expenditure, plus the savings you took away from the community as a whole—and it certainly has an impact on the accounts of individuals households—the expenditure, in fact, increased from £109,000,000 in 1956-57 to £120,000,000 in 1957-58 and, again, in 1958-59 to, as far as I can see, £123,000,000. This occurred despite a fall in import prices of 6 per cent., whereas the comparatively negligible increase in expenditure in the period the inter-Party Government were in office occurred despite an increase of 12 per cent. in import prices from 1954 to 1957, a very substantial figure, indeed, when you think that imports account for four-ninths of our national income, one way and another.

Now, the provision is up again, being £115,500,000 for the coming year, so that if we take this picture, what we see is that there has been an increase on the Supply Services alone of £50,000,000 compared with 1950-51, that is, an increase of 66? per cent. I would suggest that is a major cause of the stagnation in the economy of our country. It has astounded me that, despite this huge increase in expenditure, the Minister for Finance is apparently unable— judging by his pronouncements—to find even 2/6 a week for the old age pensioners. A half-crown a week would cost about £1,000,000 a year, and that extra half-crown would be required to bring the ordinary purchasing power of the old age pension into line with what it was in 1938.

For example, we hear that the real income of this country has gone up by some percentage compared with 1938. Sometimes we hear a figure of 20 per cent. and sometimes a figure of 15 per cent. At any rate, it was a substantial percentage, probably something between those two figures. I think it is very bad, indeed, that we cannot give the old age pensioners and the widows and orphans even the amount in real terms that we gave them in 1938. It is a very poor show. The fact of the matter is that if they were to get corresponding purchasing power, and their corresponding part of the increase in the real income of the community—and mind you, that increase in real income in relation to certain parts of the community is quite plain to be seen as one moves around the country— the old age pensions would need to be somewhere between 30/- and 32/6 a week, depending on what figure you add. If you took the figure of a 15 per cent. increase in national income, they would need to be 30/- a week and if you took the 20 per cent. figure, they would need to be 32/6 a week. If the Minister is in difficulties about the matter, I think he should, at least, pay some attention to old age pensioners who are living alone. At least that particular group of people ought to get something from the Minister.

I notice that one of the large increases in this Bill is in relation to agriculture, and I think I know one of the reasons why there is such emphasis in the Supply Services on increases for agriculture. However, apart from that, one of the items which the Minister mentioned is a major increase in the amount for the subsidy on fertilisers. I believe that the bulk of this money will go to large farmers who are already reasonably prosperous. It is not good enough for the speakers on behalf of the Government Party to say, as they said in the Dáil, that the smaller farmers will get a proportionate amount, according to their acreages. That just does not happen. The point I want to make is that borrowing for this fertiliser subsidy is not justified.

I am not an expert on this matter. Probably I am less an expert on it than the Minister, but I do not think even the Minister, defending himself, would suggest that the effect of fertilisers on the land lasts very long. I asked a few people a question about it and they told me it depended on the fertiliser, but, generally speaking, they said with some of them the bulk of the benefit would be gone in two years and they did not suggest that the benefit from any of them would last longer than five years. Therefore, if we take that range, it is obvious if this system is to continue—and I rather gather from the programme of economic expansion, it is to continue while the Government are in office—I do not think it is a proper subject for borrowing. Perhaps I know one reason why it is being pushed into the borrowing category—there is room for it there. The older capital programme is petering out and therefore it is comparatively easy for the Minister to shift something on to borrowing.

I propose to direct the remainder of my remarks to the White Paper, the programme for expansion. Perhaps I might make one general remark about it. When I had read through it, I said to myself: That looks fine. There is a great deal of emphasis on agriculture and natural products. If one looks at the total number of pages, we find that two-thirds of that total is devoted to agriculture and primary products, but there is, of course, a snag in this. The Minister for Industry and Commerce will not alone spend all the money allocated to him but additional money, whereas I would be prepared to bet that the moneys allocated for agriculture will not be spent in this programme for expansion.

That is the subject I propose to speak about. If you take last year's exports, three-fifths of them consisted of live animals and foodstuffs of animal origin and therefore the emphasis which is laid in this White Paper on the improvement of grasslands, beef and mutton production, dairying and so on is justified. They get pride of place. I might make a political point and say that it took the Fianna Fáil Party a long time to learn that simple lesson. If we could get an increase in production of primary foodstuffs, that increase would make available a good deal of raw materials for industries in the form of factories for producing packed goods, tinned goods and processed foods generally. If I were asked my candid opinion about the matter, I would say: that is about the only territory in which I can see expansion taking place in this community at present and I mean, by expansion, something worthwhile.

To come back to the existing capital programme for a moment, like all programmes, I often wonder how countries that go in for five or ten year plans assess them exactly because this capital programme here is a ten year plan—it does not matter that we did not call it such—and the pattern of it took very definite shape about halfway through the period. I often wonder how these things are assessed because there is no such thing as a finite end to a programme such as this. Taking it all in all, I suppose that when it was a fair way towards getting into full operation, after being there three or four years, about 1954 or 1955, it looked as if it would cost about £400,000,000 and of that over 80 per cent. has now been spent. Taking the White Paper, I notice it now seems as if it will cost £500,000,000, if you take Appendix 2 into account, that is to say, by pushing out certain parts of it a bit further.

If I were asked to make a criticism of the original capital programme, my criticism would not be that which we have heard so much about, that too much was spent on housing, too much on this or that item that did not make for income. My criticism would be that not enough income has been generated by the parts of the programme which were supposed to be strictly economic. They have been very faulty indeed in the generation of income, as distinct from the social part of the programme such as the housing and rural electrification parts which could not be expected, of their very nature, to pay for themselves. The parts of the programme that I think have been the most serious disappointment are the parts which should have paid for themselves and should have generated income, for example, the power stations and the tremendous investment made in them.

Coming back to the new capital programme, it involves a sum of about £50,000,000 of which £20,000,000 relate to agriculture. Of that £20,000,000, £6,500,000 is the fertiliser subsidy and £7,000,000 is the provision for the nitrogenous fertiliser plant. The remaining £7,500,000 relates to expansion of credit for agriculture and of the total prospective expenditure of £50,000,000, about half is for the expansion of credit. Of that half, £7,500,000 is for the expansion of credit in agriculture through the Agricultural Credit Corporation. The other £17,500,000 is for industry and expansion of credit through the Industrial Credit Company.

The first thing that occurs to one, in relation to my earlier remark that the Minister for Industry and Commerce will spend all the money he is given and that the Minister for Agriculture will probably not spend even the small sum he is given, is that in this first year of this programme only £500,000 or one-fifteenth of the total is provided for credit in agriculture, whereas in the case of industrial expansion of credit the sum provided is £3,000,000 out of £17½ million or three-seventeenths. As a proportion of the total, it is nearly three times as great.

The Minister did remark at column 1072 of the Dáil Debates that factories needed to be brought up to date. I do not visit a big number of factories, but I think it is "all my eye and Betty Martin" to talk in that way. I think our light industries are in as good condition as the light industries in any other country. I say that as a result of personal observation and if other people have made different observations, I should like to hear from them. If they disagree, they might give some examples.

The Minister also remarked that the Industrial Credit Company has applications for £7,000,000. I should be much more interested to know from the Minister what applications the Agricultural Credit Corporation has. I notice in his introductory statement in the Dáil on March 4th he refers to this matter as follows:—

"Consultations with agricultural ... organisations are an essential preliminary to action in the case of such proposals..."

—he goes into the other proposals, financial, industrial and so on, but I am just taking this one for the moment—

"...as the improvement of agricultural credit facilities.... These consultations are proceeding."

Last year, on the appointment of the new chairman of the Agricultural Credit Corporation—I think I should remind the Minister—I made a forecast that if he did a good job, I should be the first to congratulate him. It appears I cannot congratulate him yet. It is quite obvious I cannot congratulate him at all so far.

Similarly, the White Paper, at page 25, referred to the same matter in a very succinct sentence:—

"The various credit schemes operated by the Agricultural Credit Corporation will be simplified and unified, and security conditions capable of being satisfied by the great majority of the farming community will be introduced."

There is nobody in this country who would see with greater pleasure that succinct and direct sentence being implemented.

I want to compare that with one other item. The proposal for the fertiliser plant has not been received with unanimous approval. I have no firm opinion about it, except that I know we have a surplus of power in this country and I think we have other raw materials which could be used for it. I certainly think it should be investigated in detail. I would wish very strongly that the money being allocated by legislation to Irish Shipping could be transferred to it right away. Perhaps the inclusion of it in the White Paper was premature, judging by certain remarks made since by members of the Government. The job of investigation had not been completed when it was included, and the proposal had not reached the stage where it should have been included.

I should like to refer to further proof of my major thesis that the Minister for Industry and Commerce is going ahead like a house on fire. We had the £10,000,000 for ships and we have £5,000,000 for jet planes. As far as I can see, both of these are additional to the industrial proposals in this White Paper. They certainly are not in Appendix 1.

That is better again.

£10,000,000 for ships to be built at Newcastle-on-Tyne, perhaps, or on the Clyde; and £5,000,000 for jet planes to be built by the Boeing Aircraft Company in California. When this money is spent, it will give negligible employment inside our community. I disagree absolutely with the remarks of Mr. John Leydon, chairman of Air Linte, that these planes will pay for themselves or provide the money to enable them to be replaced when they are finished with.

Another proposal, with which I do not disagree quite so strongly, is that for the shipbuilding yard in Cork, but I noted at the time with some amusement the remarks of the gentleman from Holland when he arrived here that he was a religious man, that he did not want to make money and that he had been badgered to come by the Minister for Industry and Commerce and the Irish Ambassador at the Hague. I thought: this chap is certainly placing his cards on the table face upwards. He could not be accused, as in the piece of doggerel: "In matters of commerce the fault of the Dutch is giving too little and asking too much."

What many people felt was a major omission in this capital programme was that no additional capital expenditure is contemplated in connection with education, except the continuation of the building of national schools. I take it that, in spite of the suggestions we hear that our national schools will never be replaced, by the time this capital programme is completed, there will be very few bad, insanitary schools in this country, but it is a little astonishing, having regard to our lack of natural resources, that we are not contemplating spending more money on capital for education.

Perhaps I might try to make a few constructive suggestions. It is not so easy sometimes in this unreal territory, but if we could think very strongly of generating within our own community income rather than employment, it might help the economy. If we could succeed in generating income within the community, relative prosperity would come to the community and that would bring employment with it. The Government ought to know by this time that people will not stay in a depressed community. A good deal of the unemployment here, and some of the emigration, has been caused by what I regard as the undue jerking around of the economy by the financial people since about 1950.

I understand there are at present in the City of Dublin about 7,000 youths who have left school and who are completely ignored and neglected. I understand they are largely unemployed. I would suggest that these are part of the real capital of this country. I might go back to my phrase from John Ruskin—I suppose the Leader of the Opposition will accuse me of giving it first place over the Maginot Line—"There is no wealth but life." Certainly, there is a great deal of truth in it, even if Ruskin was not an economist. Some provision should be made by the State—I do not know through whom; probably through the vocational education authorities or possibly through the Army—to deal with this problem of these young people in the City of Dublin.

We hear a great deal about emigration having gone down. We will see when the five year period comes to an end. Certainly, I think if one wanted to reflect politically on the Fianna Fáil Party, the greatest reflection ever made on them was the manner in which their coming back into office was welcomed by large numbers of young people in this country. They just fled the country, their attitude being, apparently: "Look, whatever chance we had with the last crowd, we have none at all with the new crowd." We had the biggest number of emigrants during the past century in 1957.

That is not true.

It is true.

Figures for 1956 were higher.

I will bet the Minister a £10 note on that.

Perhaps the Senator will make his bet through the Chair.

Yes, Sir. In fact, I never make bets, but I would not mind chancing a little money on that proposition. The greatest emigration that ever took place from this country during the century took place then. Now, I dealt with this matter the year before last and I shall just make two remarks on it now. The population, of course, went up from 1946 to 1951, the only time in this present century that it did. It went down in 1956 by 60,000, but there was emigration between 1951 and 1956 of 200,000. As I said, when the figure was announced, the Tánaiste said in the Dáil: "You can laugh if you like, boys, but we are all in the same boat." That was the gist of what he said. "You can make whatever political capital you like out of it." That massive emigration which took place in 1957 is an indication of what some of the young people thought when they saw Fianna Fáil getting back into office.

Finally, I want to come back now to the White Paper. In Part VI, paragraph 137, there are set out certain considerations about external assets. There are four of them. One of them is quite innocuous:—

"Ireland now has the right of recourse to the International Monetary Fund for temporary borrowings, within certain limits, to meet balance of payments difficulties."

I have no view at all about that, except that I think it is innocuous. I disagree absolutely with the other three propositions in this White Paper, and I want to ensure that there will be no doubt about that. The first is:—

"The primary purpose of these reserves is to underpin the exchange value of the currency, and economic development will be retarded rather than assisted by any action which jeopardises that value;"

It is not the primary purpose of the external reserves to underpin the exchange value of the currency and that is not the case in any other country in the world. The British have not got their external assets— which they had in vast quantities all over the world at one time, in South America, India, China and every country in the world—to underpin their currency. Those of them which are of the most value to this country at present, the investments of private people in industrial shares in Britain and the United States, are not available at all to underpin the exchange value of the currency, unless we take the same action as the British took in time of war.

The second proposition is:—

"Our economy is subject to acute fluctuations in external trade, the impact of which falls primarily on the liquid external reserves of the commercial banks, affecting their ability to extend domestic credit;"

If you set up a certain system, the result of which is inevitably to impact on something, and you then say it is important to watch how it impacts, all I can say is the obvious thing is to change the system that bit. I must take this paragraph item by item. "Our economy is subject to acute fluctuations in external trade." That is not true. I understand acute fluctuations to mean the kind of thing that happens to Australia in relation to wool. These acute fluctuations were experienced over the past decade, if anybody follows their external assets in relation to the price of wool.

"...the impact of which falls primarily on the liquid external reserves of the commercial banks." Why? Because it is not allowed to fall on the liquid external reserves of the Central Bank, where it should fall, and as it does in every other country, and not on the commercial banks. Finally, you have the absurd proposition—"affecting their ability to extend domestic credit." I would say that if any first year student in economics put that down on a first-year paper to-day, he would get a big "duck". Straight away, he would be ruled out as not understanding what he was talking about.

The third paragraph reads:—

"The external reserves of the commercial banks have been greatly reduced since the war and now afford little margin over minimum liquidity requirements;"

This is too big a topic for me to dilate on now, in the course of my speech on this Bill. First of all, they have not been greatly reduced, and in so far as they have, it has been a transfer over to the Central Bank. I think I produced figures here last year to show that our external reserves and fixed liquid reserves, held by the commercial banks and the Central Bank, had increased over the past six or seven years. Whether they had increased in real value is another matter. "Liquidity requirements". There is no difficulty in getting liquidity ratios in Britain where the commercial banks have 5,000,000,000 Treasury bills in their portfolios. That is an easy way of getting liquidity in a country. So far as the commercial banks are concerned, I am not to be taken as advocating it in this country.

I think I have said enough to show that whatever parts of this White Paper I may, or may not agree with, I certainly disagree most heartily with the material on currency theory, if I might call it that, which has been taken over from the reports of the Central Bank and the quarterly bulletin of the Central Bank, the summation of the currency theory that has been put forward and which is now being put forward by the bulletin issued by the commercial banks themselves. There is no doubt that these proposals would not be accepted in any country in the world to-day, and if any Senator would like to test that out, I suggest that he sends them to any country, whether it is big or small.

I suppose the most shocking thing of all is the suggestion that the external assets of the commercial banks affect their ability to extend domestic credit. Of course, that was one of the proposals which I think created grave difficulties in 1956, when the commercial banks, because external assets had reached a level below which they thought they should not go, were not prepared to give loans even to companies in the export business. That caused grave difficulty in the economy —the acceptance of this piece of absurd nonsense. I could not call it currency theory; it is just a piece of doggerel or financial journalism of some sort.

My final remark is in regard to what the Minister for Finance said about the food subsidies in winding up the debate on the Vote on Account. This has been a favourite subject of mine, but I notice the Minister trying to put forward a certain proposition which hinged on this sentence: "The Book of Estimates was with the printers when I took over the office of Minister for Finance." That statement is entirely false because the Minister for Finance came into office on 20th March, 1957, and on 21st March this book was issued to the newspapers with the following note on it:—

"The Minister for Finance has not had time for detailed examination of the Volume of Estimates for Supply Services for 1957-58 which were printed and ready for circulation when the Government assumed office and accordingly he cannot accept responsibility for them as regards either form or amount. They are at present being examined in the various Departments concerned."

The Minister can have it either way, but he cannot base his proposition on that. The Estimates volume was printed when he came into office and the provisions for the food subsidies were in it. The book was printed a fortnight before the Minister came into office. If I had had anything to do with it, or if my opinion had been taken on it, it certainly would not have been printed. The Minister could have done a little more than adding that slip, but he will not be allowed to make this vast concoction about the £94,000,000, and so on, on that false statement, and that is what it is based on.


The Minister hung it around that.

No, that is rubbish.

There is one aspect of Senator O'Donovan's speech to which I should like to address myself, concerning the problem of emigration. There is no point in running away from that problem or in making political capital out of it. It is a problem which is being tackled realistically by the Government. It cannot be solved overnight or in a month or two. It depends on a resolute Government embarking on a long-term planning operation with its objectives set and with capital devoted as much as possible to items of productive investment, either private or public.

As Senator O'Donovan rightly stated, emigration reached its peak in the census results of 1956, showing that 200,000 people had emigrated in the five years prior to that year. There are no figures available on which we can base a sound estimate as to what way the figures are now but indications are that the upward trend has been reversed in the past 12 months and we have rounded the corner in regard to tackling that problem and reducing the numbers of our people who go abroad. We shall not have any sound figures until 1961 or any estimates on which a figure can be given, but I have no doubt that the trend has been reversed.

If anything accelerated the emigration rate during that period, it was the policy of the coalition Government that seemed doomed to keep the working people of this country in a permanent state of high unemployment. I refer to the monthly unemployment figures when the last coalition Government was going into its death throes and I would direct the attention of Labour representatives to the Statistical Abstract of 1958 and to the disastrous figures of unemployment on the live register for the first three months of the year 1957. In January, 1957, the figure stood at 194,648. In February, 1957, it was 92,565 and in March, 1957, the month in which the new Government came in, it was 84,752.

As an example of the real progress that has been made by the Government in tackling this problem, let me quote the figure—the only figure we have so far—for March this year. I do not intend to take my stand in defence of the numbers who are still unemployed. The problem needs further attention, but it is the trend to which I should like to draw attention. In comparison with the March, 1957, figure of 84,752, the figure for March this year for the number of unemployed on the live register is 76,923. In two years, there has been a reduction of 8,000 in the number of people on the unemployed register, which is a practical achievement. It can be bettered, but the trend is obviously in the right direction.

Are they employed in Birmingham?

I am quoting the comparative figures for the same month in those two years. If that trend continues, you will see a decreasing graph in our unemployment figures. The Government White Paper and this practical attempt in the Central Fund Bill to implement some of its provisions are an indication of how we can progress towards further reducing those figures. The idea behind the White Paper and the Central Fund Bill, as regards practical devotion to the task of raising the volume in our productive investment, can best be seen by a comparison of the totals devoted to the capital services and non-capital services this year and last year. In 1958-59, including the supplementaries brought in in the past year, there was a figure of £12.31 million invested in capital services. This year, under this Central Fund Bill, which is the first stage in implementing such expenditure, the figure for capital services stands at £14.42 million, and if there are any capital schemes that require attention during the year, additional supplementaries will be brought in to cover them, as a Supplementary Estimate was brought in to cover the £500,000 which has been spent since last September on the phosphatic fertiliser scheme. Therefore, there is an increase of £2.11 million in the estimated State expenditure for the coming year on capital services.

In contrast with that, we have the determined effort which has been made to reduce expenditure on the non-capital services. In 1958-59, including the original Estimate and the supplementaries brought in during the year, the total Government expenditure was £101.38 million on non-capital services. The Estimate for the coming year is £101.13 million. In other words, there is a decrease of £.25 million in the amount estimated for expenditure on non-capital services in the coming year. The contrast between these two figures more than anything else, gives an indication of the trend which Government policy has taken in regard to investment and public finance—an estimated increase of £2.11 million on capital services and an estimated decrease of £.25 million on non-capital services.

Although it may not be apparent, that is the sort of policy which will gradually lead to a further reduction, which everybody desires, in the unemployment figures, and to higher employment, and the higher investment which is so required in this country, and it is in that direction it can be done, by a switch-over of public investment and public finance from non-capital to capital services. If, side by side with that Government policy, you have a Government policy towards private enterprise, tax incentives and encouragements of that nature towards investment, it is in that direction we can progress. Since coming into office, the Government have consistently pursued that policy of tax incentives towards industry, and towards investment in industries which are geared for the export market, and it is in that tax framework, of encouraging private enterprise and increasing State investment on the capital side, that the progress we all desire can be secured.

One of the best things that emerged from the Government White Paper, and which has been vigorously pursued by the Government, is the emphasis on agriculture and agricultural development. In particular, this new expenditure on the subsidisation of the price of phosphates is very welcome. I should like to cross swords with Senator O'Donovan on this matter. He made the point that this fertiliser subsidy would benefit the big farmer and not the small farmer. I come from an area of small farms and, in my view, the people who will make particular use of a subsidy of that nature are the small farmers. The bigger farmer has the acreage; he has sufficient grasslands not to need to place the same emphasis on fertilisers as the small farmer must by reason of the smallness of his farm. It is the small farmer living on a low-valuation farm who will be most anxious to extract the maximum from his farm because, as it is, he has his back to the wall to eke out an existence. This Government subsidy which has materially reduced the price of phosphates to the small farmer means an awful lot to him.

I have no doubt the rate of investment by the small farmer on phosphates or other fertilisers per acre is much higher than it is in the case of the bigger farmers, because the incentive is there for him to do so. He has to do it, while the bigger farmers has not the same incentive by reason of the largeness of his farm and the fact that he has not got his back to the wall. For that reason, this proposed expenditure of £1.75 million which it is proposed to continue for the next five years on fertiliser subsidies is a very desirable one.

Senator O'Donovan seemed to imply that that was not a fit subject for investment, or that it was not a fit subject for the Government to encourage in the sense that he seemed to imply that it was not productive and money should not be borrowed for it. In my opinion, if anything is a fit subject for Government borrowing, it is an investment of that nature which will permanentaly raise the productivity of the land. I gathered from Senator O'Donovan that he felt it was wrong that that money should be borrowed, as it is proposed to borrow it, and he seemed to imply that he felt it should be got by way of revenue. He said he thought it bad public finance for the Government to borrow money in order to subsidise phosphatic fertilisers. I can think of nothing that would be a more appropriate subject for Government borrowing than that item.

It is quite evident from paragraph 24 of the White Paper that this subsidy, which is initially to go towards phosphates, is part of a general policy in relation to agriculture which will, in time, if the phosphatic investment in the land is to be at the required height, involve further subsidies towards other manures in order to increase the application of the other manures.

I quote now from paragraph 24, page 14, of the White Paper:—

"While phosphorus deficiency is the outstanding grassland problem, soil tests indicate that there is also a shortage of potassium in many soils. A great increase in output could be obtained from grasslands by the use of phosphatic and potassic fertilisers and a further substantial increase by the judicious use of nitrogenous fertilisers, in conjunction with phosphates and potash, for hay and silage and for extending the grazing season. Farmers will be encouraged to adopt a balanced and co-ordinated fertiliser programme. Government assistance towards this end will, in the first instance, be directed towards encouraging the greater application of phosphorus which, as the key nutrient, is essential to the improvement of grasslands; when a satisfactory increase in the use of phosphates has been attained, it will be Government policy to apply State aid towards securing increased application of potash and nitrogen fertilisers."

In other words, this is not just a shot in the dark. It is part of a general Government scheme whereby increased finance will be made available for the subsidisation of fertilisers over the whole field. The liming programme for the past few years has almost brought the lime strength of our lands up to the required level. There is a deficiency in phosphates and there is a subsidy now being granted in that regard. When the required point has been reached at which we have enough phosphatic investment, according to the statement here, the Government propose to transfer assistance to potash and nitrogen fertilisers in order to secure an increased application of those fertilisers.

That is a practical example of the general principle which has been the declared policy of the Government in recent years, to channel investment into production. I can think of nothing better than that fertiliser subsidy, as a step towards furthering that end. Eighty-five per cent. of the agricultural land of this country is under grass. Due to increased efficiency, due to tion and increased efficiency, due to the application of fertilisers, it is unlikely that there will be a great increase in the acreage under tillage. Due to the factors I have just mentioned, the 15 per cent. under tillage, certainly in the case of wheat and barley, has enabled us to meet practically all—or, in fact, more than—our home requirements. Therefore, having reached that stage in regard to the tillage section of our agricultural economy, emphasis should now be put on the raising of the productivity of the remaining 85 per cent., which is the major share of our arable agricultural land.

As regards the other aspects of agricultural, the statement in the White Paper, page 25, paragraph 55, mentioning the proposals which were under discussion with the Agricultural Credit Corporation to ensure that credit would be available on reasonable terms, and the statements made since the publication of the White Paper by the Minister for Finance in that connection, should be ample evidence that the Government are ensuring that practical application is being made in regard to this question of agricultural credit. It is set out in Appendix I of the White Paper that it is intended that a total of £7.5 millions is to be spent over the next five years by the Agricultural Credit Corporation in devoting funds to desirable agricultural projects.

Senator O'Donovan made a point that that compared ill, in his opinion, with the figure in the same appendix which is proposed to be spent by the Industrial Credit Company over the next five years. I do not think his argument is quite valid, when you consider the enormous interest which is being taken by the commercial banks in recent months in this question of investment in agriculture. When one considers that, it is obvious that his argument is specious, in that this £7.5 millions which it is proposed to invest through the Agricultural Credit Corporation is over and above what the commercial banks will undoubtedly give by way of loan under the cattle credit scheme which they announced some months ago. That scheme of providing credit for the purchase by farmers of heifers for replacement is an admirable one, one which has been worked out between the National Farmers Association and the commercial banks. It indicates a very welcome new trend in the attitude of the commercial banks towards farming. There is no doubt that it is the commercial banks which can play an even larger part than the Agricultural Credit Corporation in furthering the credit needs of agriculture. The commercial banks have their branches in every town in the country. They are available to the farmers in their own community and the farmer can meet his needs there quite easily and with greater facility than through State organisations such as the Agricultural Credit Corporation.

We can go ahead on both fronts. That is why it is a very welcome sign that these proposals in regard to the Agricultural Credit Corporation are being actively considered. I am sure that within the next four to six months, we will see the practical working out of proposals which are being considered and which are being forecast by the Minister for Finance.

I cannot emphasise enough the fact that the commercial banks have begun to play their part, as, apart from this heifer credit scheme which was specifically announced, they have shown a welcome relaxation in other spheres of credit, towards the farming community. I think, in all modesty, it might be no harm to claim some credit for the Government in regard to all that, in that they have provided the framework, in this community of ours, over the past two years, which has induced responsible institutions like the commercial banks to have confidence in the country, to have a feeling that they can relax credit and that they can safely invest in productive enterprises. The feeling which undoubtedly is abroad amongst the commercial banks is due in no small measure to the confidence they have in the future of the country; and that confidence has resulted largely from the fact that there is a continous and effective Government in our Parliament, which is supported by the majority of the people in that Parliament and which has a guaranteed support for its full period in office.

Any one of us who will be honest enough to admit it cannot but acknowledge that there is a vast difference between the attitude of the banks at the moment towards the agricultural community and their attitude two or three years ago towards the same community, on credit matters. In fact, there is a vast change in the attitude of the banking system generally towards the community in general, apart from agriculture, as compared with the situation which obtained two or three years ago. It is obvious, of course, that discussions have taken place at Government level, between the Government and the commercial banks, and that the commercial banks are now taking a realistic view of the needs of the Irish community; but they would never take that realistic view unless there were the sine qua non in this country of a strong, stable, effective Government. It is that more than anything else which is conductive towards this welcome development, whereby the commercial banks are devoting more attention to agricultural matters.

As regards the industrial sector, the Industrial Credit Company has been expanded, its activities have been extended and it has now ample funds at its disposal. The main need on the industrial front can be boiled down to a simple one of getting projects. It is a question of canvassing and devoting all activities towards getting specific projects. In that connection I think the Industrial Development Authority could play an even greater part than at present. An example of what I mean is the undoubted activity and interest which was shown-and the quickness off the mark, if you like—by the Minister for Industry and Commerce in capturing the Dutch project for Cork. No part of the country is at present benefiting as much as Cork from this increased tempo of Government activity in the economic sphere. As well as the Cork Dockyard development, there is the oil refinery development and the proposed airport at Cork City. These are very welcome. The main emphasis in the future should be in securing projects of that nature for other parts of the country. We have, in the Industrial Credit Company, a finance lending institution which, linked with the commercial banks, can provide all the credit needs of industry, be it the home industrialist or the outside industrialist who wishes to start a project here.

The framework is there for expansion through the Industrial Credit Company and the new attitude of the commercial banks. There are also the tax incentives, though there I believe we could make a further improvement. The Corporation Profits Tax could very easily go, but that is a matter outside the scope of this Bill. It is a matter now, within this framework which we have, of getting projects which will be of benefit and which will use the credit and tax remission facilities which are available.

Linked with those two factors, we have the grants which are available for the undeveloped areas. More could be done by the Industrial Development Authority in getting those projects. It is a question of canvassing the world and advertising. It is largely promotive. The Minister for Industry and Commerce, in going to Italy in a few weeks' time, is taking a practical step in that direction. It is the individual approach, going straight to the source and seeing the individual, that can do most in getting the projects so necessary. Now that we have effective Government, now that we have this framework of credit and tax remission, the question is to secure the projects which can best take advantage of that framework.

All in all, the new development in Irish economy can best be summed up in a quotation from page 11 of the Irish Review and Annual published by the Irish Times. The article is headed “A Year of Promise for Irish Economy” and summing up the economic situation for 1958 they say:—

"A bewildering succession of new developments marked the year 1958 in the Irish economy. New events and new ideas crowded the scene, and a new spirit, very different from the dejection of 1956 and most of 1957, motivated activities. No sector of the economy was left untouched by these developments. Agriculture, industry, external trade, finance and the Government sector were all affected in varying degrees by the quickening tempo of economic activity and the recovery of confidence in future prospects."

That amply sums up the progress that has been made. There is no doubt that more progress can be made. There is no doubt there is considerable scope for more progress, and that is the challenge the Government are meeting in providing the framework for more productive investment, in reducing the unemployment and in introducing the proposals adumbrated in the White Paper. The challenge now is to implement these proposals effectively so that progress will, in fact, be made. I have no doubt the Government are facing up to that challenge. They are determined to raise this country from the status of being underdeveloped. Underdevelopment is the principal weakness in our economy, and, in order to raise the country from the status of being underdeveloped, one must channel investment both in the private and the public sector of our economy into productive projects. Once that is done, the unemployment figures will come down and the problem of emigration will solve itself.

The Government have rightly set themselves resolutely against cheap-jack proposals for the purpose of temporarily relieving unemployment. They have resolutely set themselves against mad schemes, the only purpose of which is to win votes, while temporarily relieving unemployment. The Government have set themselves against embarking on unproductive public works schemes. They are getting down to the ground work, organising on the productive level and channelling investment, both public and private, into productive enterprises within a framework in which both private and public investment can best be increased. It is only on that sound foundation that the problems of unemployment and emigration can be tackled. There is no point in wild talk and vague generalisations; one must get down to the roots of the problem. In that regard, the Government have done good work so far and are to be congratulated.

In debating this measure, the Seanad is not allowed to discuss taxation. It is not allowed to discuss expenditure on particular Estimates. I propose to observe those limitations and to discuss this Central Fund Bill, which embodies the Vote on Account, by taking what I shall describe as a macroscopic view of our economic position, discussing public expenditure against the background of the general position of the country, without referring to individual items and without referring, except in a most general way, to taxation.

Any honest person who makes an objective and impartial review of the situation cannot fail to reach rather disquieting conclusions. One of the major advances we have made here in the last couple of years has been the publication of the certain documents which have had the result of educating a number of people—and will, I hope, educate more—regarding the very serious problems the country has to face in both the near and distant future.

The Supply Services amount to £115.5 million, which is £5.5 million more than last year's Estimates and £1.8 million more than last year's actual expenditure. The increase is mainly in capital expenditure, a sum of £2.11 million, accompanied by a decrease in current expenditure of £250,000. The decrease in current expenditure is, of course, a matter for congratulation. The Minister must be congratulated on having resisted the very strong pressures which have been in operation all the time to spend more money on current services.

At the same time, a further examination of these decreases shows that most of the items are what I shall describe as accidental, or adventitious, and are certainly non-recurrent. They are once and for all reductions and cannot be expected to be repeated next year or the year after. For example, the saving on wheat subsidy, the saving on the butter subsidy, are savings which, while we are glad to have them, cannot be expected to recur.

The big reduction of £1,000,000 in the Estimate for C.I.E. seems to be rather a matter of accounting and not a real economy. I may be wrong in that. My feeling is that these reductions are somewhat like the reductions in the food subsidies in 1957. They are once and for all reliefs to the Budget. By this time next year, they will have been worn out of the system. I am not saying they are not welcome, but they are non-recurrent, adventitious, almost accidental.

Looking at the other side of the account—the increases which compensate for those decreases—the increases outweigh the decreases, and these are trends which cannot be reversed. They are largely due to increases in the cost of Government services, which may be expected to continue with rising costs elsewhere, rising wages and rising prices. Furthermore, Supplementary Estimates are quite inevitable in the coming year. I do not think, therefore, it is unfair criticism to say that the end picture presented by the Estimates is not quite so satisfactory as the first sight would suggest. In saying that, I want to make it quite clear that I am not criticising any particular Vote or any particular expenditure. As I said, I am trying to take a macroscopic view of the Irish economy. I am not dealing with particular services or with a particular Vote.

Many of the increases in the Supply Services are wholly admirable. The additional expenditure on education will be welcomed by everybody. As a university representative, I should like, on behalf of my own university, to state how much we appreciate the additional funds provided for university education. Every individual increase could probably be justified, taken individually. Regarded as a whole, regarded macroscopically, taking the picture as a whole, it is very hard to resist the conclusion that the upward trend of expenditure is still continuing, that the upward trend will still continue, and that, unless the Government are to have Budget deficits, the upward trend of taxation will also continue.

The revenue figures for recent years very clearly show that upward trend. The figures I am giving is the total revenue which contains a certain amount of non-tax revenue. Here are the figures:—







(Budget estimate)



(possible outturn)

We shall not know the estimate for the coming year until the Minister introduces the Budget. The trend of these figures clearly shows that both expenditure and taxation have been rising at a steady rate.

To pass from the non-capital to the capital items in the Supply Services, each individual object of expenditure is excellent and justified. I do not criticise any single object of expenditure. I think every one is completely justified in itself. They are based on the White Paper on Economic Expansion which has figured in this debate and which, in its turn, is very largely based on a remarkable document to which I hope to refer later. These capital items in the Supply Services are all part of the Government's perfectly proper production programme. They refer to agricultural production, to industrial production, to production in fisheries and forests and to the expansions of the tourist industry. There is not one of these objects of expenditure which, individually, cannot be applauded. The fertiliser subsidy, the eradication of bovine T.B., the additional expenditure on farm buildings and on arterial drainage are all productive capital objects with which everybody must agree.

Again, taking the picture as a whole, regarding the capital programme as a whole, macroscopically, not merely by individual items, the question we have to answer is: Will the increase in production brought about by this capital programme give us in any reasonable period a sufficient increase in national income and production to bear the additional taxation which quite obviously is inevitable from the rising trend in public expenditure? That, I think, is the question to which every student of Irish public affairs should address himself today—how far this programme of capital investment, every item of which is individually justifiable, can, regarded as a whole, contribute sufficiently to the expansion of output to bear the additional taxation burdens with which the country is quite inevitably faced? The answer to that question, I think, cannot intelligently be found without referring to the remarkable document which I have already mentioned, namely, the grey book entitled Economic Development.

I suppose it is against the rules of the House to mention the name of an individual civil servant who is present. Therefore, I shall not refer any further to it beyond calling it the grey book entitled Economic Development. I cannot sufficiently praise this document. It is a comprehensive survey of the whole Irish economic system. It is based on exact statistics. It contains a great deal of wise comment, sagacious counsel and courageous criticism. The preparation of this document was a service of the highest value, obviously imbued by patriotic motives. This document is quite essential to every student of public affairs in Ireland. Every member of the Dáil and Seanad, every person who writes for the Press, every person who talks publicly or privately about Irish economic conditions, must study this indispensable document which is a combination of a national stocktaking and an examination of conscience, both of which were badly overdue.

Unfortunately, having studied this document very carefully, with great attention and growing admiration, the effect it makes on my mind is one slightly depressing for the financial position of the country. On page 2 of this document, the author states:—

"It is apparent that we have come to a critical and decisive point in our economic affairs. The policies hitherto followed, though given a fair trial, have not resulted in a viable economy. We have power, transport facilities, public services, houses, hospitals and a general ‘infrastructure' on a scale which is reasonable by western European standards, yet large-scale emigration and unemployment still persist. The population is falling, the national income rising more slowly than in the rest of Europe. A great and sustained effort to increase production, employment and living standard is necessary to avert economic decadence."

That is a very strong passage. There is one word in that passage with which, with respect to the author, I disagree—the word "viable". I think every economic system in which people are not actually faced with starvation, death from lack of food, is viable. The question is: At what level is it viable? A county may have to reduce its standard of living in the same way as a family may have to do so. If a family has to move from a big house to a smaller house, it is still viable. It has a lower standard of living but it is not daying of starvation.

This country, on the eve of the Famine, was not perhaps viable to the extent it is to-day. I take it that what the author meant as not "viable" is that it is not as progressive as some European countries. I should prefer the word "progressive". However, that may merely be a matter of definition.

This document is relevant to this debate, I suggest, because the whole Budget discussion, of which this debate is really the beginning, will largely reflect the White Paper and the White Paper obviously reflects this document. The whole corpus of financial literature must be taken together. This document aims at a certain programme. The programme aimed at in this document—page 225—is, by means of a certain amount of investment, to double the rate and so increase the national income. The relevant passage reads:—

"However, making all allowances for the indeterminacy of the available information, there is good reason to believe that, if the proposals were adopted, the rate of increase in the volume of gross national product could, in time, be doubled, which would double real national income in 35 years."

That may sound very encouraging —100 per cent. increase in the rate of progress or, in other words, a doubling. In dealing with these percentage figures, one must always try to relate them to absolute levels. The rate of progress in this country in recent years has been only 1 per cent. per annum. Therefore, to double that rate would raise it to only 2 per cent. which, as I will show later, is very low by European standards. The attainment of the whole of the programme outlined in this document on which the Government's White Paper is based would, I suggest, if successful, reach only a very modest target which would not in any way solve our long-period problems.

The assumptions underlining this programme, the conditions of its success, are that a large amount of capital must be available. There are three assumptions with regard to the availability of capital. The first is— page 37—that the existing rate of savings may be expected to increase, that there will be a progressive rise over the next five years. We are told, on page 37:—

"This would mean a progressive rise over the next five years in monetary savings from £45,000,000 per annum to £55,000,000 per annum, giving an average annual rate of £50,000,000."

The second assumption is that future issues of legal tender notes need not be fully covered by external assets and that the assets thereby released would be available for the capital programme. This is stated on pages 29 and 45. This assumption is based on the expectation that the Legal Tender Note Fund will continue to increase at a substantial rate. The Legal Tender Note Fund circulation has actually contracted in the last year and I do not believe there is any foundation for the assumption that it will increase at the rate mentioned in this document. Therefore, that second source of capital is rather questionable.

The third assumption is that abundant supplies of foreign capital will be available. On that, I wish to repeat what I have said in the Seanad many times and which I feel very strongly, that foreign capital can be of two kinds —it can either can be borrowed by Governments or private people from outside sources with contractual liabilities to repay with interest, or it can be the savings of outside people who are prepared to make risk investments in Ireland. I feel very strongly that borrowing abroad which involves contractual obligations either by public authorities or private individuals in this country should be avoided at all costs. It involves the country in future balance of payments difficulties. The experience of the Marshall Aid has not been very encouraging. I expressed that opinion many times in the Seanad and I repeat it.

I do not think that the Irish Government should, even if they could, borrow abroad from the various international lending organisations, all of which charge high rates of interest and all of which are rather selective regarding the people to whom they lead. Even assuming that the Irish Government could borrow abroad, I do not think they should borrow abroad. I feel that very strongly. There is no necessity to do it. We have abundant supplies of capital at home. Therefore, to borrow abroad with fixed interest obligations in order to attract foreign capital in that way would, in my opinion, be subjecting the balance of payments to a quite unnecessary strain.

The other method of attracting foreign capital is one, of course, of which we all approve, that is, to attract outside investors to invest their own savings in production in Ireland. Here again, I have to draw a distinction between the individual schemes and the macroscopic picture. Everybody gives full credit to the Minister for Industry and Commerce for travelling abroad, to the Industrial Development Authority for investigating possible businesses that might come in here, to the individual businessmen who have opened in Ireland—one gives full credit to all these people. But regarding it macroscopically, asking the question how much foreign capital as a whole, as a total, is likely to be invested in this country, I think the answer is, not nearly enough to meet the programme outlined in this document to which I am referring. The same distinction must be drawn that I draw with regard to capital and non-capital expenditure, that each individual item is good in itself, but one must ask what is the possibility of the total amounting to a significant figure. I hope I am wrong when I say that I do not see any sign of a volume of foreign investment adequate at all to the increase in production which is hoped for in the Government's White Paper which, as I said, is based on the document to which I am referring.

Assuming that all these assumptions are realised, that voluntary savings expand, that the Legal Note Tender Fund can be utilised and that foreign capital is available, the target to be achieved is an increase in the national income of 2 per cent. per annum. At page 11 of this document, it is stated that, between 1949 and 1956, the volume of gross national product in Ireland increased by 8 per cent. as compared with 21 per cent. for Britain and 42 per cent. for O.E.E.C. countries generally; in other words, the rate of expansion in Ireland has been very much less than that in Western European countries generally, and even if it were doubled, it still would be very much less. Even if all these assumptions were realised and if this programme all came true, Ireland would still be the least progressive Western European country and, measured by the standards of some of the non-European countries, our rate of progress would be comparatively even less.

Furthermore, as Senator Lenihan said—I agree with him—one thing about this document that we must all applaud and must all understand is that it is a production programme, not an employment programme, that this document and the White Paper based on it aim at increasing production, hoping thereby, indirectly, to increase employment. If, however, production is increased by 2 per cent. per annum and if efficiency is increased by at least 2 per cent. per annum, which is quite normal in a modern economy, the amount of employment afforded, instead of increasing, will tend to decrease. Therefore, this policy does not really hold out any hope, in the short run, at any rate, of materially increasing employment. That is made perfectly clear on page 206:—

"Throughout this study, while there have been some general references to employment, attention has been directed primarily towards productive development. This has been deliberate and has not been due to any lack of concern about unemployment. It is from productive development that the employment worth having from a national viewpoint, i.e., lasting employment, will arise, and the study advocates the maximum productive development which our financial and material resources will allow. It is possible that even this maximum development may not provide a permanent job at the wages he is prepared to accept for everyone wanting to stay in Ireland.”

That seems to me to be essential to the argument. As I said, I believe the approach is correct. I believe that to invest simply in order to make employment is doing something foolish; it is simply redistributing the national dividend in a possibly undesirable way. Therefore, I am perfectly satisfied that the aims in this document are the correct aims of economic policy.

But, what hope does this programme hold out of a reduction in taxation and expenditure? At page 21 of the document, the author states that a reduction in public expenditure is a condition of progress:—

"High taxation is one of the greatest impediments to economic progress because of its adverse effects on saving and on enterprise."

He suggests that mere specific reliefs and incentives are not enough, that there must be a general reduction in taxation. The same sentiment is repeated at page 208:—

"Fiscal policy must be in harmony with the objective of stimulating productive investment, which in our circumstances means that it should favour saving, encourage enterprise and discourage excessive consumption. High and inequitable taxation is one of the greatest impediments to economic progress... The positive objective of fiscal policy should be to arrive quickly at the point at which it will be possible to give the economy the tonic of a significant reduction in taxation, particularly in direct taxation on incomes, profits and savings."

That is, no doubt, perfectly true, but the picture presented by the Vote on Account and the Estimates this year is one of taxation rising at the rate of at least 2 per cent. per annum and therefore of the rate of taxation rising as rapidly as the maximum of production hoped for in the programme. Furthermore, if population should continue to decrease, owing to increases in the efficiency of production, it seems inevitable that the taxation per head of the population will increase and, therefore, that the aim laid down in this document as the indispensable condition to progress will hardly be realised.

The problem presented by this document and by the White Paper which is based on it is one with which every Irish Government will be faced. It will not be changed merely by a change of Government. It will not be changed merely by a change in the method of election of Governments or the Dáil. There is no use in Party recriminations. Every Party has done its best, according to its lights, to improve the condition of the country. Yet the trends exhibited in this document have continued year after year. The population trends and the other trends have continued sometimes faster than others because the condition of the country has been sensitive to outside world conditions. Wars and rumours of wars, the Korean war, the Suez crisis, have had an impact on our affairs. The terms of trade, the different price trends of imports and exports, prosperity and recession in the United Kingdom and the United States, the waxing and waning of the Free Trade Area—these are all matters which have had an effect on Irish economic conditions, but the long period trends have remained the same throughout the changes of Governments for many years.

I think that the great value of the White Paper and the document upon which it is based is that they emphasise and draw attention to the necessity for a resolute facing up to these difficulties in the country. Everybody will agree, of course, that continuity and stability of Government are essential. The Taoiseach, replying to what I said in a debate here recently, said that one reason for the proposed change in the electoral system is that it will give more stability of Government and that stability of Government is necessary for economic progress. I completely agree with that, but I should like to know what Government could be more stable than the present Government have been since 1957. Every time the Minister for Finance, has been in the Seanad since 1957, I have addressed the same appeal to him. I have asked him to make use of the stability of his Government, the remoteness of an election and the strength of his majority to produce a constructive economic policy without regard merely to votes or popularity. I said that two years ago. The election is nearer; the majority is practically the same; but the stability is, perhaps, not as great as it was when the election was two years further away.

I cannot imagine any system of election giving the Government more stability than the present Government had in 1957. Without criticising any particular measure, which I am avoiding, I do say that on the economic side, they have really only scratched the surface of the problem. No real progress has been made. Perhaps the most valuable service in the economic field that the Government have performed is the publication of these documents, because they have at least helped to educate the public regarding the state of our national concern. If I were a shareholder in a company and this document was the annual report of the company, I should not be very pleased when I read it. I should not feel that it was a particularly progressive concern. Therefore, I think that if the Government are to be congratulated on nothing else, they are to be congratulated upon having the courage to publish a document which reveals the strength of their own difficulties and the difficulties of any other Government that may succeed them in the future.

I cannot help ending on a personal or, perhaps I should say professional, note and that is that these documents have, I think, vindicated the opinions of Irish economists for the past 35 years. Many commissions since the Treaty have discussed Irish affairs. Many of these commissions contained Irish economists and foreign economists. All those commissions emphasised the difficulty of the Irish economic position. It was not the economists who held out false promises to the people. It was the politicians. The economists always directed attention to the great difficulties of the Irish economic position.

Those difficulties have now been admitted in the White Paper and in the document on which the White Paper has been based. I think that the Government, by publishing this White Paper, have committed themselves to accepting some of the slightly unpopular views which the economists in Ireland have been expressing for the past 35 years. I think it is important that the public should know that the difficult problems we have to face cannot be conjured away by wishful thinking. They cannot be solved by ill-considered experiments, by trial and error, which we cannot afford. I do not wish to cross swords with an earlier speaker, a colleague of mine, but I believe that they cannot be solved by mere experimentation in the monetary and financial field which, in my opinion—I may be wrong—is of, perhaps, secondary importance. They cannot be solved by importing batches of foreign experts from all over the world to advise us on our affairs.

I should like to end on a medical analogy because the economist is frequently likened to the doctor who attends a patient. I admit he may be a very bad doctor, but the analogy is equally valid, whether he is good or bad. Ireland might be likened to a patient with a rather weak constitution exhibiting at he moment some of the symptoms of a wasting disease. The patient will not be cured or strengthened by being told a lot of reassuring lies. He requires long-sighted, thoughtful advice based on expert knowledge of the people who know his circumstances.

This I repeat—I mentioned it also last year—I am equally sceptical of foreign capital and of foreign experts. I believe we have the capital in Ireland and I believe we have quite as good advisers in Ireland as we can get from abroad. In the case of the medical practitioner, I believe that the family doctor is usually better than the strange consultant. The family doctor knows his patient; he knows his habits, his background and his weaknesses. Therefore, I do not think that the importation of foreign advisers, who perhaps are going to secure some foreign capital and technique, will really help us very much.

We can solve our problems with our own resources, our own capital and our own experts. I think the economists in this country have done their share in educating the public and the politicians. The duty now devolves on the politicians to carry out sound policies, without regard to popularity or to the losing of elections.

The Minister very rightly said that we were looking at only half the picture, and that we would have to await the introduction of the Budget before we saw the whole picture. I quite agree that is correct, but I think it would be both topical and fair to try to foresee what the situation will be. I think there is a fair indication that the Minister will be comfortably placed this year when preparing his Budget. There is every indication that the revenue for the year just ending will be up to expectations. During that year, there have been increased profits and those profits will, in turn, make available increased revenue. With the revenue buoyant, the position may be that when he comes to prepare his Budget, he will find he has some few millions of pounds to spare and, in those circumstances, I believe it is very desirable that we should mention what we think should be done with that spare money.

I admit that the Minister is not quite a free agent because his Budget will be introduced a week after the British Budget. During an election year in Britain, there is very likely to be a reduction in the rate of income-tax and, in such circumstances, the Minister will probably be under very strong pressure similarly to reduce the rate of income-tax here, as otherwise the same tax level would apply. I should prefer, if the Minister proposes to do anything with regard to income-tax, that he would increase the allowances rather than decrease the rate of tax. I say that because it is probable that the Minister, following upon the recommendations of the Income Tax Commission, will introduce the P.A.Y.E. system.

There will certainly be a great administrative saving if a large body of workers who, at present, pay comparatively small income-tax, are released altogether. I represent workers who pay some small income-tax, but, in conscience, I would say before anything were done in that respect, the Minister should do something in regard to the more ill-used section of the community, the old age pensioners, the widows and orphans, and those who are unemployed.

An Leas-Chathaoirleach

The Senator is aware we are not on taxation. We are on the Central Fund Bill.

I was attempting to suggest, if the Minister is in a favourable frame of mind, and if he has money to spare, how it could be devoted. There has been much mention of old age pensioners by other speakers and that subject was used in the Dáil as a stick with which to beat the Government, but I only want to remind the Minister and the House that when old age pensions were introduced originaly by the British Chancellor of the Exchequer, in, I think, 1909, they were at the rate of 5/- a week. Five shillings in 1909 represents a purchasing power at the moment of 24/6 a week, and the maximum rate of old age pension at present is 25/- a week. It is deplorable that whilst every section of the community have improved their standards during the past 50 years, the old and the destitute should be still on the same standard of living as they were on 50 years ago.

I feel that the Government—and, indeed, Senator Lenihan underlined this point—are getting very complacent with regard to unemployment. We will accept it as true, right away, that the figures in regard to unemployment are better than they were during the exceptionally bad years 1957 and 1958, but I question whether the capital programme envisaged in the White Paper will be adequate to deal with the problem of unemployment. Senator O'Brien has driven that point home much more foricbly than I could hope to do, but it is my belief that the Government's approach to the problem of unemployment is that expansion in the private sector of industry can be expected to take care of it.

I doubt if there will be sufficient expansion in the private sector of the economy to take care of the problem of unemployment which will occur in the building industry. Indeed, expansion in the private sector will never take care of the expanding labour force. Every year that passes more people come on the labour market and apparently there is no prospect of the Government being able adequately to tackle that problem. I admit it is a gigantic problem. There are plenty of would-be workers, and their number tends to increase as year follows year.

There is an indication that there seems to be plenty of money available. Indeed, I remember that the Minister for Industry and Commerce assured us that no worthwhile project would be held up for lack of money. Last year, the Government were calling upon the community to save in order to make money available for productive investment, but now they seem to have reached a situation in which they are depending on private enterprise to provide the ideas to put the men and the money to work. I am not against private enterprise. I agree with all the steps that have been taken to encourage private enterprise to provide employment and to make use of our resources, but I cannot accept that the Government, having said we have these men and this money available and that it is for private enterprise to provide the ideas, can sit back and leave it at that. I cannot accept, with private enterprise not availing of the money and the men available at the moment, that the Government should not themselves take more positive action.

I do not know if the Government have projects ready which will absorb the labour and the capital available, but, if they have not those projects, they should be indicted for lack of planning. Thousands of people are unemployed and the Government and their supporters are complacent about the problem. To my mind, it is beside the point whether the number who have emigrated is greater than it was last year. The facts of the position are that there are some 76,000 people unemployed at the present time and, though there seems to be money available for investment, that investment has not been made. Those resources are lying idle, money, on the one hand, and men, on the other, and, if private enterprise cannot provide the ideas, cannot put those two together, then it is up to the Government to do so.

On this Central Fund Bill, we can all air our own little ideas on matters of finance. I would not presume to follow Senator O'Brien or Senator O'Donovan into the realms of external assets, liquid or otherwise, but there are a few points that strike me and most people like me. I agree with both speakers who said that if the Minister found himself in good humour with money to spend, he might think of increasing the allowances to the old age pensioners. That is an idea I agree with 100 per cent. Old people need more attention and more money for their wants and food; and as they get older, they seem to get less attention, both from their own people and the State. I would most heartily commend to the Minister, if there is anything to spare, that he consider favourably our old people. Senator O'Donovan mentioned that if it could not be done for everyone, perhaps it could be done for the single old people living by themselves. I can see great difficulty about that. I would go further and ask the Minister to consider all old age pensioners generally.

The airport project for Cork is now definitely under way, even though some people have doubts about it. I understand the contracts will be advertised in the immediate future. Is it too much to hope for or is it great presumption on our part that this might be a free airport like Shannon or that we could have further developments of that kind? In the matter of education and increased grants, there is one part of education in which I am particularly interested, that is, vocational education. With these new industrial projects in Cork, we have great need for technicians. We hope that the increased allowances will permit us to carry out all the projects and assist in the development.

Under this heading of education, I would also ask for consideration for the Cork Museum, which is something we are very proud of, but for which we have not sufficient money to run it in the way it should be run. Granted we have a very fine National Museum in Dublin, but the museum in Cork is something we created ourselves. It is very worthy, but it needs a little more money to make it better still. I imagine it could be considered under some heading in education and it is something well worth consideration.

Senator O'Donovan made reference to the new development at Cork Dockyard. That is something we are very happy about and very proud of in Cork. I must disagree with him in his description of what Mr. Verolme said when he came to us. I do not think it is a matter for amusement for somebody to claim he is a religious man. That is something we might not have the courage to say about ourselves if it were true, but I do not think Senator O'Donovan can say that Mr. Verolme said he was badgered into coming to this country. I should like to see the reference. I was fortunate enough to be at most of the meetings, social and public, at which Mr. Verolme spoke and I have a very good idea of the kind of words he used. I should be grateful if the Senator produced the reference where Mr. Verolme said he was badgered into coming.

Whether he was badgered or not, I am very glad he is coming. I hope this project will be a great success and that we will all benefit from it.

I do not think Senator O'Brien's analogy about the economist and the family doctor is a good one in our case, because while it is claimed by several speakers that we have the money and the workers, it is also claimed that we lack expert technique. If these foreigners, with their techniques, money and goodwill come, I do not think it can be anything but a good idea. Senator O'Brien's family doctor economist does not seem to supply what we need at present. We need help from outside, and I hope we shall continue to get it.

May I also refer to what I consider the great improvements evident already in C.I.E.? Perhaps it is only a feminine approach, but I admire the new clean-up process going on. I feel it is an indication of great energy, thought and imagination. I hope the effort behind all this will bring good business and make C.I.E. into something of which we can all be very proud. That, in turn, will improve its financial position and it will cease to be a body always looking for money.

This is the time and place for stocktaking. If I cannot share the optimism about the prospects emanating from the other benches, I shall not talk Party politics. I shall try to look at the whole picture. I do not think there is one of us who can do so without some tremor of uneasiness about the road we have travelled in 37 years, the things we have done and the results we have achieved. Dr. Lucey, the Bishop of Cork, has been very severe in his criticism, but no matter how that kind of comment seems to be unfair to those who have directed national affairs, that criticism must be accepted. There has been promise and that promise has failed. The results are not there; indeed, the figures are gloomy.

This enormous bill we are now considering is dreadful. If you add to that the burden on the ratepayers, it has become wellnigh insupportable. There is the other side of the picture. I understand there are fewer employed at the moment and I want the Minister to deal with that. I understand that the figure of those in actual employment is lower than it was two years ago. We know that the emigrant ship is busier than ever. I wonder if even the most sanguine estimate of the results of this investment programme could envisage the absorption of the natural increase in our population, if conditions outside limited our present flow of emigration at any time? That would be a testing time for us. We have been four decades running this country and are any of us satisfied with the future of the nation? We all have responsibility, on the opposite benches as well as the benches here.

When we began, opportunity seemed to be at hand. We had 3,000,000 people and 12,000,000 acres of the best land in Europe. The possibilities seemed to be enormous. The promised land had come—the day we had all been waiting for. Will any of us deny that we must admit we have failed in regard to that promise? Is there any indication that the downhill trend will end soon? The people have lost confidence—there is not doubt about that—and I do not think that barren platitudes from elderly politicians will restore that confidence. My solution would be that the older political figures should now retire from the active direction of affairs.

That is very hard on us.

I am talking about those who direct affairs. We must do a whole lot of things, if we want to be honest with ourselves. We have to re-examine the burden of the Health Act. It is an excessive burden on central and local funds, and that without adequate benefits to those we sought to benefit. It is the kind of things that can be carried out in a vibrant economy, but we have not got a vibrant economy here. We must re-examine the artificiality of a large section of our industry; we must re-examine our expenditure on defence, roads, air services, building and even the building of houses. If the diagnosis the national doctor has given us for the past three years is to be accepted, then we must look at all these weights on the constitution we call our national health. In Cork City, the rate to provide the subsidy for housing alone is 8/- in the £, and every house we build increases that subsidy. The capital debt charges are alarming, and I think we will have to examine even that structure and decide whether we might not have to go outside it, if we want to continue to house the people.

One of our troubles is that every political group in or about to take over government is at the moment watching the way the political cat will jump. For several decades now, we have been bribing the elector out of his own pocket. It is a great many years since the first Prime Minister of this country since the Treaty, Mr. W.T. Cosgrave, said to me: "The bidding is getting too high." He was a man of very great courage and propriety. His conscience would not allow him to compete in that bidding. That was over 20 years ago, but the old men are still there.

How many young men are coming on the scene except those of a distinctly political lineage? The young people are not alive, and it is a bad augury for the future. Those of the young men who are here are asked to spend three and a half months out of this session's political activity discussing the system by which the Dáil will be elected. As I said this evening in an earlier speech, that is very like fiddling while Rome burns. If we do not stop it soon, it is not the economist doctor we will want, but the undertaker.

There is, of course, one obvious hope, one trump card left for us to play, that is, the land. If we spend everything we have and everything we can borrow on the land and on those who work it, we may pull out—but it is only "may". So far, we have spent on the land too little too late. I would scrap every other project and develop our natural heritage. That is the only hope of meeting the bill presented by the Minister to-night and preventing our people from scattering to the ends of the earth.

This Central Fund Bill is probably the best opportunity we have to review Government policy in all its aspects. We had an interesting discourse this evening, particularly from this side of the House. In large measure, it has centered around the papers which have emanated from Government sources during the past 12 months. We all wish to congratulate the Government and the country on having a Civil Service capable of producing such fine documents. Our public servants are among the best and most disinterested in the world. They have given us the material to study and I hope, as Senator O'Brien has said, that the politicians have read these documents.

If I were asked to state simply what I believed was wrong with our economy, I should say the greatest difficulty we have is that we are living near a rich neighbour. We also have rich cousins who speak the same language and who are not too far away. I am referring to our neighbours in Britain and our cousins in America. For every 12/- we have to spend, the Britons have about 20/- to spend; and our cousins in America have about three pounds to spend. That is the kernel of all our difficulties.

Any matter of economics may be fixed at either a high or low level, provided you do not go down to a point where the people will starve. Senator O'Brien went back as far as the Famine years in 1846 and 1847 and said the country may have been in a position where it was not possible to reduce the economy lower than it was at that time, but at present we have a higher general standard of living here than almost any country in the world, with the exception of the English speaking countries and possibly one or two others. It behoves us, as Mr. Micawber said, to spend under the £ we have rather than over the £ we have.

Reading these papers—the plan for economic development, the plan for economic expansion and such documents—we are hoping, like Mr. Micawber, that "Something may turn up", but what I am afraid of is that something bad will turn up. If difficulties arise in England, a war or some such economic difficulties—and they have a habit of happening, unfortunately—we may have tens of thousands of people coming back here and our economy at the moment, which has been extended and taxed to its absolute capacity, will not have any reserves to enable it to take on additional burdens. One of the things which is wrong to-day is that we have tried to pay for everything at a level that we cannot afford.

Several years ago, a man said to me that if we looked at our major item of export, cattle, and if we got £60 for a bullock, if there were a good purchasing power in money and if everybody were paid even less than they are paid at present, provided the money was kept at home, we would all be better off. I am afraid that what is happening is that each year taxation and expenditure of every sort are going up and we are never able to balance our books. We are working on a deficit from year to year. I do not know whether that is a matter for which one Government alone are responsible.

We made a very vigorous effort when we first got into power to see if, by the spending of a great deal of our external assets, we could increase our economy sufficiently to bring the national income per head more in line with the British national income. We had a fair measure of success, but undoubtedly the spending of a good deal of that money had another counterbalancing factor in that much of it was spent on the purchase of goods which were not produced here. The terms of trade ran so much against us during our last few years in government that they forced difficulties on us and we were compelled to introduce levies on the purchase of goods in order to keep our economy right. The present Government has stronger support than any Government ever had and the terms of trade are very much more favourable than since the war.

It might not be any harm to mention the pretty substantial increase which took place in our export trade and the improvement and the revitalising to some extent of our economic affairs, consequent on the change of Government in 1948. In 1947, exports from this country were still under £40,000,000. By 1950, the figure had increased to £72,000,000 and in the last year the inter-Party Government held office, it had increased to £130,000,000. That was achieved by a policy of production and I want to say that much that appears in the "Policy of Economic Development" and "Economic Expansion" was foreshadowed and pioneered in a policy of production that was produced by the inter-Party Government in October, 1946. Much of it outlined policy which had been operating and which it was proposed to expand—the selling of fertilisers at the world price, although they had previously been taxed; the development of the lime scheme to increase the natural fertility of the soil as a pre-requisite of plant growth. All these things, including the eradication of bovine T.B., were either being done or it was proposed to do them at that time. That also included the oil refinery at Whitegate.

In passing, I want to mention that I believe money for the subsidisation of fertilisers should not be borrowed; it should be secured from revenue. Even if the Minister had difficulty in dealing with this matter, and dealing with it adequately, in the first year, certainly he should not allow it to be a feature of our Irish agricultural life. The Minister for Finance is too near the land not to know that the introduction of cheaper phosphates, and later, nitrogenous manures, will not give a permanent fertility to the soil.

In Holland, the greatest user of fertilisers in the world, it has to be an entirely continuing process. In the growing of the grain crop, the present system of fertilising is to put down the granulated compound mixture with the seed, in the same machine, and there is no use saying to the people: "In doing that, you are doing it for the future; you are doing it for the crop." You may get two or three years' benefit from the use of an adequate amount of fertiliser and we all say we are putting whatever crop we decide on into land that has been well cared for, but it is not comparable with, say, the drainage of land or something of that nature. As a long term policy, the Minister for Finance must not allow this fertiliser scheme to be treated as a capital item because it is not truly such.

Many interesting questions were asked in the other House on Tuesday, 3rd March, in Volume 173, No. 3, of the Official Debates. This was the volume from which I quoted when giving some of the figures relating to the increase in our exports which started with the first inter-Party Government. One of the advantages of the inter-Party Government is that it has made Fianna Fáil aware of things like economics. The clash of our views has stimulated them——

The hard way.

——to do these things. That may be considered as a joke——

That is what it is.

You can joke about it, if you like.

It is very serious.

It is a very sound statement to make. If one Government come in and if they shake the whole economy of the country—I can give the figures again if the Minister for Finance wishes to have them—that is a challenge to the people in opposition. Fianna Fáil to-day are talking about the aims and ideas and objects which we had as an inter-Party Government. During their years of office, was there ever the emphasis on agriculture and agricultural production that we hear them speak about now? That is quite true and if we have converted them to these things, we have done a good day's work for them. They have the responsibility of government to-day and if they can do some of the things now even in the year 1959, better than we did them in 1948, we have done so much good for the country. That is our duty as politicians.

The essential difference between a Government having a Fine Gael viewpoint and a Government having a Fianna Fáil viewpoint—and I think this is an important thing that people should consider—is that a Fine Gael Government will say that the economy will be put right by the development of agriculture and the development of the land and everything appertaining to the land. The first claim in the Cabinet and the first claim on the Minister for Finance will be in respect of matters appertaining to our agricultural economy, which is our major industry. The first claim and the big claim under a Fianna Fáil Government will always be in respect of industry and commerce, and to-night Senator O'Donovan gave the figures from the two abstracts which appear in "Economic Expansion." However, he said that since then, the Minister for Industry and Commerce said it is proposed to spend £10,000,000 extra on Irish Shipping which will probably be spent in Britain.

It might be in Cobh.

I should love to see it spent in Cobh and when I was speaking on the Bill last week, I suggested to the Minister for Industry and Commerce that he should encourage small ships like those they have in the Netherlands, and his reply to me was that we were giving the same assistance from the taxation point of view to that type of small ship as they were giving in Britain. But the development of that type of small ship is not coming in Britain, but principally in the Low Countries. Western Germany, France and other places are developing that type of ship we see in all our major and other ports. The Minister should consider what sort of assistance he could give to encourage that type of development, which is a more natural development. Our growing industries in Ireland would be much more inclined to use a ship that could carry 500 or 1,000 tons of raw material and to get a backload on that size trading from our country than to use a 10,000 or 12,000 ton ship engaged in international trade like those of Irish Shipping.

Take an industry that was started in Waterford in recent years, the Waterford Board and Paper Mills. They charter ships of 600, 700 or 800 tons and they bring in coal from Wales and trade with South Wales in the return of board and paper. Is that not the ideal sort of trading? That mill is situated some miles up river to which the ship is able to travel, but it is generally a Dutch ship that is chartered for that work. Such ships could be repaired and maintained in any of our ports and they would also help in decentralising our industry, and the fact that they would be able to trade in our smaller ports would be an advantage. If industries were started in places like Youghal, Kinsale, and other places, these ships would be able to supply these industries with the raw materials.

In regard to the spending of £5,000,000 on jet planes, that money and a great deal of the revenue which will have to be spent each year in maintenance, this trade will go to the United States and will to no extent benefit our economy in relation to the supplying of parts and keeping these fine planes in the air.

What about the tourist traffic?

The tourist traffic will be advantageous, but that traffic can never be as important to this country as a farming, an industrial and a trading people who are prepared to do their job properly. If you bring very rich people into this country, they are inclined to make the rest of us who are working in the country think it would be better to go to America for a job than to be living here. That was the point on which I commenced to-night, that the major difficulty was that our cousins in America are four or five times better off than we are and that our next door neighbours in Britain are better off in the ratio of 12/- to 20/-. Therefore, we should always consider the tourist traffic as something extra rather than something basic.

What we must have in our country is an agricultural economy that is as independently operated as the agricultural economy is in Denmark and in Holland and to some extent as it is in Britain. However, it is more important to us than it is to Britain because Britain is able to inject new money and new life into her economy by the extraordinary buoyancy of her industry. She can tax herself each year, which is the widow's mite, and inject that into the agricultural economy, and they are better paid than they are in any other agricultural economy in the world. They have made great strides, but it is an unnatural development. It is not the same sort of development and the same realistic, down to earth development as has taken place in either Denmark or Holland.

In both of those countries—I have noticed it particularly in Holland— there is complete co-operation ideologically, politically and otherwise in getting on with the job. When I heard people speaking here this evening, saying it was necessary to have direction in order to get things done, I recalled being at a meeting in Holland some time last year. The president of the association whose meeting I attended came from the northern part of Holland, and he was a Calvinist. When we were ready to have our meal, he rose in his place and said: "Gentlemen, let us say Grace." We all said our own Grace. I found out that in Holland they have three farmers' unions. One is a Catholic farmers' union, another a Protestant farmers' union, and they had a common union which had State sponsorship, something like a State board. These people, with their diversity of opinion, are running probably the most buoyant agricultural economy in the whole world. We are always talking about competition from Dutch cheese, Dutch tomatoes, and every other item you can find in the great international food market of the world, London, but they can do that not by direction from the top but by co-operation with the Government.

Debate adjourned.
The Seanad adjourned at 10 p.m. until 10.30 a.m. on Thursday, 19th March, 1959.