Léim ar aghaidh chuig an bpríomhábhar

Seanad Éireann díospóireacht -
Wednesday, 23 Mar 1960

Vol. 52 No. 8

Central Fund Bill, 1960—Second Stage.

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

The main purpose of the Central Fund Bill is to give legislative effect to the Vote on Account of £40,988,440 which was passed last week by Dáil Éireann. Section 2 of the Bill authorises the issue of that sum from the Central Fund. The issue of £4,179,560 which Section 1 authorises from the Central Fund is in respect of those Supplementary and Additional Estimates for the current year which were not covered by the Appropriation Act of 1959. Section 3 authorises borrowing by the Minister for Finance up to the total of these two amounts namely, £45,168,000.

The Estimates for the year 1960/61 total £123,460,060 or £7.91 million more than the original Estimates for 1959/60. Of the total, £105.88 million relates to non-capital services. The corresponding non-capital figure in the 1959/60 Book of Estimates was £101.13 million, the increase for 1960/61 being, therefore, £4.75 million. When Supplementary Estimates are allowed for, the increase is reduced to £3.93 million. Most of the rise in current expenditure is due to three items— pay, pensions and social assistance. There is an increased provision of something over £2 million for pay— including £1,074,000 for the Civil Service, £415,000 for National Teachers and £262,000 for the Defence Forces. More retirements at higher rates have raised the cost of public services pensions by £462,000.

For Social Assistance, notwithstanding a reduced provision under Unemployment Assistance, an additional £873,000 has to be provided, mainly under the headings of Old Age Pensions and Widows' and Orphans' noncontributory Pensions, consequent on the augmented payments authorised by the Social Welfare Act, 1959. The total increase under these three headings is nearly £3½ million, representing, as I have said, the bulk of the increase in current expenditure.

There are, of course, variations in other provisions as well. In the Estimate for Agriculture the provision for An Foras Talúntais is up by £350,000 due to the extended range of activity of this body. There are, however, reductions in the provisions for those projects formerly the responsibility of the Department of Agriculture and now taken over by An Foras Talúntais, for example, the Peatland Experimental Station at Glenamoy, Johnstown Castle and Grange Farm.

The stronger emphasis on research in agriculture is reinforced by improved educational facilities in the same field, as evidenced by the increased grants for the General Agriculture and Dairy Science Faculties of University College, Dublin, and University College, Cork, and also by the new grants to the Faculty of Veterinary Medicine of University College, Dublin, and the School of Veterinary Medicine, Trinity College, Dublin. These last-mentioned grants arise out of the transfer to the Universities of the non-administrative functions of the Veterinary College.

Another major increase under the heading of Agriculture is that of £170,000 for the subsidy to manufacturers of home-produced super-phosphate, although there is an offsetting decrease of £105,000 in the amount required to meet the delivery cost of lime. £100,000 less is needed for grants to creameries towards the purchase of plant for pasteurisation of separated milk because this scheme is nearly completed. Only a token provision of £5 is required for losses on the 1958 wheat crop, for which £470,000 was included for 1959/60. Subsidies for dairy produce are provided for to the extent of only £250,000, as against £1,000,000 for the current year. As I indicated in the Dáil, however, this estimate may require revision at Budget time.

By comparison with the original provision for the current year, an extra £268,000 is being provided for Supplementary Agricultural Grants because of the rise in local authority rates. An additional £100,000 is required for the intensified activities of the Land Commission, this amount being spread between purchase of new interests and improvement of estates already acquired. Non-capital Forestry services, that is, those relating to forest management and timber disposal, require an additional £213,500. The only increases of consequence under the heading of Industry and Commerce are an extra £86,500 for technical assistance and an additional £41,000 for the export promotion activities of Coras Tráchtála.

The new Estimate for Transport and Power embodies, in the main, the provisions formerly comprised in the Votes for Transport and Marine Services and Aviation and Meteorological Services. The only major increase of a non-capital nature is the £143,900 provided for repayment to the Central Fund under an Act of 1958 of advances made to the Electricity Supply Board for rural electrification. The provision for fuel losses, for which £200,000 was made available in 1959/60, is no longer necessary. Receipts in respect of landing fees, catering and sales services at Shannon Airport are expected to be down £200,000.

Other miscellaneous variations worth mentioning are: the increase in the Defence Estimate, because of greater provision for pay and allowances, general stores and defensive equipment; increases totalling £256,000 in the contributions towards loan charges of local authorities in respect of housing and sanitary services works; the additional £280,000 for grants to health authorities, required mainly for hospital services; the extra £137,900 for secondary education, due to increased numbers of pupils and teachers and the further £110,400 for technical instruction, arising from the expansion of the vocational education system; the higher provision for staff for the Office of the Revenue Commissioners necessitated by the extra personnel required for the P.A.Y.E. scheme; the large increase in the Estimate for the Central Statistics Office, due to inclusion of provision for the 1961 Census of Population and for a 100 per cent. Census of Agriculture and the addition, under the heading of Telephone Capital Repayments, arising from the expanding telephone programme.

The only remaining major decreases are in the provision for equipment for the civil aviation and meteorological wireless services and the Estimate for Wireless Broadcasting. In the latter case, however, it must be pointed out that, as the note to the Estimate indicates, the provision is sufficient for four months only and will be superseded by a new Estimate when the Broadcasting Authority Bill, already passed by the Seanad and now before the Dáil, has finally been enacted.

On the capital side, the total of £17.58 million for 1960/61 represents an increase of £3.16 million over the corresponding 1959/60 figure.

I do not propose to go into detail regarding the Programme for Economic Expansion as a progress report on it will be circulated soon. I shall merely mention briefly those items in the Book of Estimates which relate to the Programme. The bulk of the increase on the capital side springs from the greatly increased provision for the bovine tuberculosis eradication scheme. The net provision of £3,454,000 shows an increase of £1,634,000 over the original provision for 1959/60. It should be mentioned that a Supplementary Estimate was passed by Dáil Éireann this month for a net amount of £3,154,000 and the possibility that a Supplementary Estimate will be needed next year also should not be ruled out. These amounts may appear large but, viewed against the background of the absolute necessity of eliminating bovine tuberculosis within the shortest possible time, I think we all agree that this expenditure is justified.

There is no material change in the provisions for subsidy on phosphatic fertilisers, for the Farm Buildings Scheme and the Land Project, but a new item of £50,000 for grants for works of modernisation in layout and plant at bacon factories gives effect to an assurance in this regard in the White Paper. Another major increase is that of £291,000 for capital forestry services, that is, those relating to State forest nurseries, establishment of plantations, new roads and buildings and the acquisition of mechanical equipment. A sum of £39,100 is being made available for the development of sea fisheries, while the inland fisheries items are continued. Increased provisions are included for the schemes for the development of major tourist resorts and the provision of additional accommodation for tourists.

The provision of £975,000 for grants for the establishment of industries is the same as that made by way of original and Supplementary Estimate for 1959/60. Related to these grants is the grant of £132,000 towards expenditure on the promotion of commercial, industrial and trading enterprises at Shannon Airport which now appears for the first time in the summary of Capital Services. Other major increases under the heading of Transport and Power relate to constructional works at Dublin and Cork Airports.

The increased demand for housing grants, arising from the improved grant facilities made available by the 1958 Housing Act and the 1959 Gaeltacht Housing Act, necessitates increased provisions under the relevant subheads of the Estimates for Local Government and Roinn na Gaeltachta. The increase in the provision for capital services under the Estimate for Public Works and Buildings springs mainly from the expanded arterial drainage programme and work on fisheries harbours.

I think that these are the main variations in the Estimates and I commend the Bill to Senators.

It is just as well that we do not listen too carefully to the Minister. I have never heard so many figures jumbled together in disorder in my life. If one puts up the cost of central Government by £8,000,000 in the Estimates volume alone in a single year, it is necessary to talk backwards and forwards with small figures of various sorts. One of the Minister's statements which I did pick up was that, when the Supplementary Estimates are allowed for, the increase is £3.93 million. I wonder why the Minister bothered to make that statement? Will he have no Supplementary Estimates this coming year? Will he emulate one of his Party predecessors in office who said he would have no Supplementary Estimates, though it turned out that he had a number, despite the fact that he set his face against them?

I do not see any point in that at all, particularly for the current year, in relation to the provision of £1,000,000, or whatever the sum will be, for the new Broadcasting Authority, if the Bill passes in the ordinary way in the next week or two. Apart from that, various other matters loom up. I do not see any point in comparing the eventual figures in the year 1959-60 with the prospective figures for 1960-61. The total on the face of the Estimates volume is £123.5 millions. If one wants to compare the attitude in this matter of the previous Government and the present Government, one can look at the 1955-56 Estimates volume for £105½ millions. That was the year the Government brought disaster on the economy! They had an Estimates volume of £105.5 million.

Are we to understand that if the Government who prepared the Book of Estimates for 1955-56 had at that time an Estimates volume of £125 million, we would not have heard all the talk about the balance of payments difficulty and all the talk about crises? In his reply in the Dáil, the Minister made great play with this matter. He said the food subsidies were not £9,000,000 but £7,000,000 or something else. Reading through the debate in the Dáil—the Vote on Account—as far as I could see, everybody who spoke allowed for the increase in the social services. However, comparing the two volumes, and allowing for the increase in social services, without being too precise about it there is an increase from £100,000,000 to £125,000,000, in round figures. It is as accurate a comparison as any of the figures we hear from the Minister from time to time.

In five years, there has been an increase in the Estimates volume of 25 per cent.—from 1955-56 to 1960-61. The Minister for Finance has a long way to go before he will equal Deputy MacEntee's record in that regard when he was Minister for Finance and when he put up the Estimates volume from £75,000,000, at which figure it stood in the year before he came back into office, to £115,000,000, when allowance is made for the food subsidies. In other words, he put it up by £40,000,000 in three years. The Minister still has a bit to go before he equals that feat, but he is not doing badly! He is doing better in the matter of equalling Deputy MacEntee than I thought he would at one stage. He is doing very nicely indeed. There are other people in the community who are not doing so well.

The Minister said he would not speak about the Programme for Economic Expansion,—economic development, in other words—because there is a report to be made shortly. With the best will in the world, if the report is not better than the last one, it would be just as well if the people concerned did not bother writing it. The last one was of little or no value. I say that in all sincerity. I was very careful a year and a half ago, when the Government White Paper and the Grey Book, as it was called, were produced, not to make any particular remarks about it. I had my own personal reasons for that.

I think the time has come to point out that in so far as there was a central core in that Programme for Economic Expansion, it related to the livestock industry. What has been the experience in the past here in relation to the livestock industry? First of all, the Programme for Economic Expansion set out the hope that the number of cows in the country would increase from 1,250,000 to 1,500,000, which was, as far as I could see, the central and most serious point in the Grey Book.

I thought at the time really that it took the form of baying at the moon because at the time when an attempt was being made to eliminate bovine tuberculosis, the chance of increasing by one-fifth the number of milch cows in the country—a number which had been roughly constant for a whole century—in a period of four or five years was negligible. It did not matter what money you put into it; you could not do it because you had the physical job of replacing the cows that were going out of the herds.

Let me be honest about it. It is not a question of wishing its failure. The Republic of Ireland will be extremely lucky if at the end of the five year period of the Programme for Economic Expansion, that is to say, in the year 1964, there will be as many milch cows in the country as there were in 1959. I am very doubtful about it. That central core of the Programme for Economic Expansion is just wishy-washy wishful thinking. That is all it amounted to.

The Minister, as, indeed, did the Taoiseach, also spoke about the real income of the community going up, that it had begun to increase. The Taoiseach at column 326 of the Dáil Debates of 10th March said:

I have said that the national income is going up and the indications are ... that the two per cent. increase in national income which we hoped to bring about last year was, in fact, achieved, if not something more than that, but that is not the only thing going up.

I think he was wise to put in that latter clause in the sentence so as not to put too much emphasis on what he said. The facts we know up to the present are that following that awful year, 1956—if we are to believe members of the present Government, it was the worst year this country ever had —the real income of this country went up by three per cent. in 1957 and went down two per cent. in 1958.

Despite these prognostications—I have no figure except ordinary powers of observation—I am quite certain that the real income of this country did not go up by two per cent. in 1959. There are obvious serious reasons for believing that. One of them is the fall in the incomes of the milk producers. The other is the fall in the income of the cattle and sheep raisers—a substantial fall in their income. There was an increase undoubtedly in industrial production, though whether that is an increase in real income is a matter upon which one might dilate at some length as to whether, for example, the purchase of an additional 20,000 motor cars by people in 12 months is real income is a very neat point in economic analysis. If the economy here was in any way buoyant last year, I did not notice it.

I notice again that the Minister spoke of what a dreadful year was the year 1958. It was the worst year he remembered since he was born! At least that was the inference. He never remembered a worse year since his boyhood in county Wexford. I could remember one or two worse years climatically, as a matter of fact, if I were asked, and that not so very long ago. The year 1959 was an outstanding year climatically. I would say it was one of the best years we had in my lifetime. We are up against a situation where there will be a negligible increase—an increase not worth speaking about—in the real income of this community in that remarkable year.

I can see why the Government should avoid this topic. I take it we are sliding out of that topic now. I take it that we are pulling out of this economic expansion programme idea— the Programme for Economic Expansion. I take it that the word “development” will be heard less often in the next 12 months than it has been for the past couple of years.

We have this reality here—a sum of £123,500,000 on the face of the Estimates volume. That is for many people indeed a dire reality in a situation like the present. The Government have met this situation in a specific way. They have decided to go in for an internal inflation. I am not to be taken as condemning that altogether, but it is quite obvious from reading the Taoiseach's speech that is what he has decided to do. I am not to be taken as condemning that if it has the same kind of result as it had in certain other countries, but to get these favourable results, that internal inflation has to impact on the economy in certain directions.

Let us look at the expenditure in this volume. Let us take, for example, the £500,000 increase in the provision for forestry. I have many times spoken in favour of forestry. I think it is regrettable that it was not developed earlier. The fact is that you cannot do a genuine job with an extra £500,000 in the current year. Anybody who has looked at the facts and figures published in the reports of the Forestry Division of the Department of Lands will know that it cannot be done with the available quantities of land on hands. The area is going down. The people there are experts in the matter. They say you require certain quantities on hands and in course of preparation before you can plant an area in a single year—three times the area.

It is just a form of social expenditure. That is all it is. Quite frankly, I am not to be regarded, personally at any rate, as being in favour of a social forestry programme. I think it has no merits worth speaking about. All over the country, you see an area where work had been done but there are no trees growing on it. The land shows that it has been prepared and planted but the trees have failed. That would usually be regarded as part of the social forestry programme.

I should imagine that the forestry programme already was expanded to about the limit to which it could be. This new approach is a change of direction by the Fianna Fáil Party, because the Minister for Lands in the Fianna Fáil Government between 1951 and 1954 reduced the acreage of land being planted each year. Now we are to go in the other direction. One asks oneself why. Obviously, it is because it is necessary to give a few more shots in the arm to the economy. This is one of them. There are others in this volume of Estimates such as the increased provision for drainage and so on. Implicit in it is the philosophy that the Government can spend better than the ordinary citizen can.

Twelve months ago, I had a dispute with the Minister as to whether the cost of living had gone up one or two points or not, when the Minister at that stage replied to the debate on the Vote on Account in Dáil Éireann. This year, we need not delay too long on that subject because the cost of living is going up anything from six to ten per cent., say, about eight per cent. in the next nine months.

I should like to make some remarks about the speech of the Taoiseach which, in general, conveyed to the people who listened to it, I understand, the idea of complete defeatism. The Taoiseach could see no way out of our present difficulties. Those difficulties are obviously not accounting difficulties, the kind of unreal difficulties with which so much play was made by certain people in 1956/57. The difficulties facing us to-day are in a quite different category, and the reason is that the economy of the country, having been badly shaken twice in a short period of years on the basis of those accounting difficulties, and deliberately so shaken by people with what I regard as right wing Tory financial views, has not recovered, and will not recover unless there is a complete change of heart in relation to these matters.

The Taoiseach referred, for example, in the course of his speech, to the increase which is to be given to the civil servants, and on that I estimate that roughly there is a sum of about £3½ million of extra remuneration in the Estimates volume. The Taoiseach linked it to some glib phrases about what the Fine Gael Party had done prior to the 1954 election. He said at Column 319 of Volume 180: "The Fine Gael Party at that time may have been thinking merely in terms of a useful election gimmick...."

Would it occur to the Taoiseach at all that the Fine Gael Party were thinking in terms of ordinary equity, that the arbitration award to which the Government were committed should have been implemented? That was my understanding of it. I can say for myself that I never spoke about it during the election of 1954, and that was commented on, but it was spoken about by Deputy McGilligan, who, with the authority of the Party, committed the Party to honouring the award. The Taoiseach said that one of the first acts of the Coalition Government when it came into office was to repay the award retrospectively. With all respect to the Taoiseach's recollecion, it was not one of their first acts. They were in office seven or eight months before they did it. That is the kind of glib phrasing in relation to this matter that I do not particularly like.

He went on to show a complete change of heart on the part of the Fianna Fáil Party. They are now giving to the civil servants a rise in remuneration which the Taoiseach says is not required in order to offset rises in the cost of living such as justified previous increases in their remuneration. He said:

We did it because we recognised that wage rises were being generally secured in private employment and we considered that it would be unfair that public servants should not participate in that movement. We recognise that in all the circumstances which I have mentioned, we have to defend our decision to increase the remuneration of public servants not under the compulsion of an arbitration award but at conciliation level and, to that extent, by our own decision.

That is very poor stuff from the point of view of real economics, though it may be a good election gimmick, and it may be that the Taoiseach had an election in mind. The correct procedure was adopted up to the present except when it was killed by the Fianna Fáil Party during the war years in the most serious circumstances, when the cost of living was skyrocketing and many of their servants were in rags or the equivalent of rags. In general, except for that brief period of the standstill Order on wages and salaries, it has been agreed and on the whole implemented on one or two occasions with a fair degree of liberality, particularly by Deputy McGilligan, that civil servants' salaries should be linked to the cost of living.

In these circumstances, what economic justification is there for an increase of £3½ million in the Estimates volume for people who we are told have suffered no increases in their living costs? Let us compare it with the farmer's position, and particularly with what happened to the dairy farmers last year. I am not to be taken as having any undue sensitivity to the Creamery Milk Suppliers' Association, that particular group of Fianna Fáil henchmen. The dairy farmers suffered a reduction of one penny a gallon in 1959 in the price of milk, although the cost of living had gone up by 15 per cent. since the price of milk was previously fixed, I think, in 1951, when Fianna Fáil returned to office and had made certain promises that they would do certain things. Now we hear again that engines are to be reversed in that territory and the dairy farmers are to get about threepence a gallon extra.

That would not surprise me, because the Fianna Fáil Party delayed a rise in the price of creamery milk at the end of the war until a situation was reached where, in the bad year of 1947, the price had to be increased at one go from 10½d. to 1/2d., an increase of 33? per cent. If you wanted a similar increase to-day, you would want to give them an extra 6d. a gallon. I do not think the Fianna Fáil Government will be as generous this year as in 1947 in spite of that bad year of 1958 that the Minister for Finance has said was followed by an equally bad year from the creamery point of view—a year which I thought was very good, though I admit that the grass did not grow as well during the summer as during the rain of the previous year.

We have a situation in which there are quite obviously real serious problems before the economy of the country and the Minister to-day just gives us a jumble of figures—.5 here and .4 there. There was, however, one important point in the Taoiseach's speech. That was his statement, whoever supplied it to him, on the question of bilateral trade agreements. He said at Column 329:

"We must not think of the European trade situation as being similar now to what it was immediately after the war, when our trade with every country was regulated by a horse trading type of bilateral agreement. That situation has long since passed. There is no country in Europe with which we have any substantial trade which is now operating on that basis."

I have condemned unreservedly the system of negotiating these bilateral trade agreements. As I have said on many occasions, and I notice that more and more people seem to be saying it now, we should certainly take the sternest action in relation to countries which treat us shabbily about these agreements. Let me say that in their worst day the figures were far better than the figures recently published in the Dáil, in reply to a question, in relation to 1959. The best of these western European countries in 1959 were on a three to one basis, that is, selling us three times what they were buying from us, and it went up as high as six to one in the case of Holland and something of that order in the case of Sweden.

I know, of course, that the people negotiating on behalf of these countries, for example, the Germans, have said: "Oh, you have nothing to supply us with." First of all, I do not think that is true. For example, at the time that the particular remark was made by one trade delegation from Germany, butter was 6/6 per lb. in Germany and it was 3/6 per lb. here and the Germans took only a negligible quantity of butter from us. There is only one solution, to my mind, for that kind of thing, that is, to cease trading with such people.

I am, however, concerned by the oblique attempt made by the Taoiseach to show that the system had changed. His next sentence was:

The whole trend is towards a trade liberalisation and the multilateral application of any alteration of changes in import arrangements.

A few years ago, we were doing fairly well with France and Spain. In fairness to the French people at the time, although there was a good deal of odious criticism about one transaction, I think they were in balance of payments difficulties. Even Spain, for all I know, may be in balance of payments difficulties too. There is not one country in western Europe to-day which buys as much from us as it sells to us except the despised market across the Irish sea and the Six Counties. In other words, we are using our entire income from other sources all over the world to buy goods from western European countries who will buy nothing from us. I might also say that I think the negotiators we have had on these bilateral agreements were ill-equipped for their work, or else they were not given adequate authority. I do know that it was said in Germany that they were unsuitable people, that they were not tough enough. That was said to a friend of mine, who goes frequently to Germany.

There is no use in the Taoiseach trying to get out of that serious position by suggesting obliquely that we can now blame it on the Inner Six or the Outer Seven, or something of that sort. There is certainly no progress to be made on that line, and I do not think this country is nearly so ill-equipped with machinery of all sorts that it could not have a show-down with some of these other countries.

There is one other subject to which I want to refer and to which I referred briefly last year, that is the fact that the commercial banks were making no advances and lending nobody any money in the second half of the year 1956 when more than adequate measures had been taken, in my opinion, to put the economy right. As was shown by subsequent events, these more than adequate steps were partly due to inaccurate information given to the Government by various agencies. The commercial banks would give no money and we subsequently had Senator Lenihan dilating here about the position.

These same commercial banks lent large sums of money in the autumn of 1958 when cattle and sheep prices were sky-high. They lent large sums to people who could only sell the same cattle and sheep, at the end of 1959, without making any income whatever out of it. They were lucky if they could pay the interest on the money they had borrowed. The reason was obvious. The price of cattle had risen by 40 per cent. between the second half of 1956 and the second half of 1958. But the banks would not lend one shilling in 1956. The banks which would not lend anything to anybody the second half of 1956 just poured out money at the end of the year 1958.

I notice that the learned journals which write apologies for these establishments do not see anything wrong with that. I notice one of them speaking about the reduction in the monetary circulation putting the banks in a more liquid position—a piece of argumentation which I must say I could not follow. How a monetary reduction could put the banks in a more liquid position, I do not know, considering that the monetary circulation is about the most liquid thing that we could have in a bank.

There is one thing about it, that is, that it is all taking place in rural Ireland. It did not occur in the city of Dublin. Of course, the city of Dublin had been dealt with in 1957 when the building industry was finally killed. Certainly there was no reduction in the second part of last year in Dublin. On the contrary, there was something of an increase with the various wage increases and the obvious overflow of prosperity, Dublin being the nearest point to the British economy, and in the second half of last year, it obviously got a greater benefit than any other part of the country.

Again, we have the Government showing evidence of retracing their steps on their attitude towards food subsidies. At column 194, Vol. 49, of 26th March, two years ago, talking about the butter subsidy, I said:

With the subsequent fall in the value of money... you will find the production of our butter subsidised again.

The Minister went to town on the way Deputy Costello would wig me when he got me outside this room for saying that. It is a strange thing, but my nose tells me that something like that is coming up again; something closely approximating to it, in spite of the wigging I was to get such a short while ago. I have said in this House, and elsewhere, that I am in favour of subsidies. I believe on that basis you keep down costs. If you abolish them, you do not keep down costs, and you get expansion of wages to meet those costs. If you subsequently reinstate them, you get the worse of both worlds; economically, you pay both ways.

One other thing I have noticed, is evidence of a really frightening tendency in our public services with regard to duplication of services. That game, of course, was started in the Department of Industry and Commerce. There is the new Industries Section in that Department and there are the Industrial Development Authority and the Industrial Credit Company. These are all duplications of one function, but they are all writing to one another explaining their various points of view on different matters. They provide a lot of so-called occupation for people which, of course, again is of no real significance to the economy, except as a cost.

I have noticed a similar development in relation to the Department of Agriculture. Other people may have different views on this matter and I know it is not popular in either House to say that something with some good purpose is too expensive. Let us take, for example, An Foras Talúntais. The provision last year for An Foras Talúntais was £50,000. This year, it is £400,000. I know there have been transfers. I know that Johnstown Castle is now included, but I say from my own observation, An Foras Talúntais, the Agricultural Institute, is essentially a research institute. If any one thinks an organisation of that sort can be built up with suitable staff in 12 months, from a figure of £50,000 to £400,000, and that that can be done efficiently, he had better start thinking again. You get only the men who are on offer at the particular time and they will often be second-class men. There is no use in pretending you can build up an organisation like that within a period of 12 months. I do not know whether or not it has been done with the approval of the Department of Agriculture. There is duplication in relation to An Foras Talúntais. Similar work will be done in the Department of Agriculture, in the Central Statistics Office, in the Faculty of Agriculture, in University College, in Trinity College and An Foras Talúntais. Again, the people concerned will spend a lot of time writing to one another.

I want to mention one other subject and I hope the representatives of Dublin University will not mind my mentioning it. I refer to the duplication of the faculties connected with the Veterinary College which was mentioned by the Minister in his opening remarks. That kind of duplication is completely uneconomic.

There is one other aspect of the economy as a whole. We should never forget that nowadays, without being too precise about it, the Government, the local authorities, and State enterprises are responsible for almost 50 per cent of the economic activity of this community. About half of the national income is made in that way, or spent in that way. When we look at these bodies, what do we find? We all know what happened in relation to the Electricity Supply Board. They ended up with about £10 million worth of surplus plant, that plant having been built on the absurd and ridiculous assumption—the kind of assumption someone who has no training in social economics at all would make—of providing for a doubling of the demand for electricity every six years and then every five years. Some more enthusiastic person said every five years, basing that assumption on what happened in western Europe in countries like France with the Marshal Aid allowance coming in the form of electrical equipment for hydroelectric stations.

The financial position of the E.S.B. has deteriorated very much down the years on that account. Quite apart from anything else, they have £10 million worth of plant which could be done without. The day will come, of course, when we shall catch up on that, but in the meantime, we have to pay for the costs of servicing it. I notice the Minister for Transport and Power said publicly recently that he was dealing now with power projects for the year 1964/65. Of necessity, he has to deal with power projects for that year because what is required up to 1964 has already been done.

I am not to be taken as decrying effort or decrying people trying to do good, but let us take the figures for C.I.E. for the past year. We all remember the suggestions in the 1958 Act—indeed we all supported that Act. There were two provisions in the Transport Act, 1958: one was that C.I.E. were to cease being common carriers—that burden was to be taken from them—and secondly, that, when making agreements with people, they would do so on the same basis as any other commercial undertaking on any basis they liked instead of being bound by the fixed railway tariff system.

I did not pay any attention to the matter until recently when I looked at the monthly statistics report and saw that last year when the 1958 Transport Act was implemented, say, from March 1959 to October or November, the receipts of the railway end of C.I.E. were down by £25,000 a week, which is a rate of £1¼ million a year. That was when the obligation of common carrier was gone, and when their obligation to stick to certain rates was gone, and when this great idea of the "Package Deal" had been fully implemented. Of course, if that type of thing continues, some day the Minister will have to produce a vast Supplementary Estimate for C.I.E.

An aspect of the semi-State organisations that is apparent today is the many proposals to build headquarters in the city of Dublin. There is one for tourism in Baggot Street. Another factor which I think is of great seriousness is the inaccuracies in the basic information on tourism. There is a long explanation in the Trade Journal about the way in which the Central Statistical Office collects technical information on tourism. Of course, these bodies, when they refer to “tourism” forget two groups:—first of all, ordinary businessmen visiting this country and, secondly, the returning emigrants who come here for their annual holidays. Time and again, one has heard criticism of this ludicrous figure of £36 million. That figure was badly shaken some years ago and was never to be produced again, but the Tourist Board doubtless kept hammering at the doors of the Central Statistics Office in the Lower Castle Yard and eventually got that office to produce it again.

It all depends on how you define "tourism." If you take every penny spent by every traveller who comes into this country, then the figures of the Central Statistics Office are right. The fact is that the bulk of the money spent in this country to-day by people coming here is spent by people coming over on holidays from Britain. I invite anybody who has any doubts about it to go down to Dún Laoire the week after Christmas or the week before Christmas. A most interesting social phenomenon indeed is to be seen there. The ordinary workers can be seen going back to their ordinary jobs, which they keep on, the day after Christmas and then, as the week extends, you get the more dignified people until eventually you get professional people, and so on, after a week or 10 days. If anybody wants to study social conditions, he could not go to a better place. He will see the ordinary people of Dublin who have had to emigrate go back a day or two after Christmas and the better-off people going back after a longer holiday.

The Irish Sugar Company will erect a large building in Leeson Street. In this territory I notice that the Minister and myself have done our best, though we have each been equally unsuccessful. I know no reason why the headquarters of the Irish Sugar Company should be in Dublin. I notice the Minister made an effort to transfer the Department of Social Welfare to Galway on one occasion. I am sorry he did not succeed. At least he put a decision on the Government records which remained on them for some years that the Department of Social Welfare was to be transferred to Galway.

Another large factor in this Estimates volume is the expenditure on the airports in relation to air companies. It is not all there. There is the provision for 'planes, and so on, outside the Estimates volume. When one thinks of the continuous expenditure on the airports one is reminded of the very noticeable decline in the past twelve months in the income at Shannon. It was a sizable income up to last year but recent figures show it was practically halved in the past 12 months. One must ask oneself at a certain stage what return is forthcoming and in what form does it come from this kind of expenditure.

The same applies to Irish Shipping. I suppose the Verolme Dockyard at Cork is an effort to change that a little. Will the position be that the people of the Republic pay the expense of that Dockyard at Cork and, if anything is made out of it—except the payment for ships which would be a saving to the extent that the work would be done inside the economy—that the profit will go to these kindly people, the Dutch, who are so generous to us when it comes to trading arrangements?

I think I am justified in speaking at such length about this matter. When this volume for 1955/56 was put together at a total of £105½ million it was got down to that figure only by very hard work at night for 2 to 3 months. In that connection, I made a suggestion to the Minister last year and he promised he would consider it but nothing has been done about it. It is a suggestion which would result in an economy of £100,000 a year. It is quite feasible to operate, without any trouble whatsoever. It was that the Soldiers' Pay Section and the Pensions Accounts Section in the Department of Defence should be worked by the Army. It would give these young officers serious work to do and it would save £100,000 a year. I do not see any objection to it.

To small boys, Army work may look like marching around the barrack square, and so on, but the bulk of Army work to-day is in a different category altogether. It is desk work, the same as any other job of administration.

That would be more a matter of administration.

Very good. I have just finished.

I think the public generally are rather disappointed at the Estimates this year, £123 million as against £115 million for last year's Estimates and against £120 million for the actual expenditure in the financial year now drawing to an end. If we allow that there will be Supplementary Estimates in the coming year of roughly the same order of magnitude as those in the year now coming to an end, the actual expenditure for the coming year will be about 7 per cent. over that of the present financial year.

The Government's defence of this is very ingenuous and rather difficult, really, for people to answer in the Dáil and Seanad. As was explained in the debate in the Dáil, a great deal of the increased expenditure is automatic and inevitable. It is the result of pay increases arising out of contracts which cannot be disowned. The only comment I can make is that the time to avoid that situation is before the commitments are made.

I quite agree that, when commitments are made that there will be future pay increases as a result of arbitration, the increases become inevitable in the course of time. Therefore, I suggest it is too late at this stage to do anything about a very large part of the Estimates but that, at least in future, it is possible to reduce the amount of commitments on that account.

Another ingenuous defence by the Minister which he used against me in this House last year and which I notice he used in the Dáil—I am quoting from column 546 of the Dáil Debates of Tuesday, 15th March, 1960—is that of taking each item in turn and asking Deputies and Senators would they like that particular item reduced; would they like less spent on education; would they like less spent on the Office of Public Works; would they like less spent on unemployment relief?

That is a very good form of making debating points but it is an attempt to place on the members of the Dáil and Seanad the responsibility for certain unpopular decisions which the Minister himself should shoulder. It is not for us to suggest economies after the Estimates have been published.

Again, commitments have been made when the Estimates are published, from which there is no escape. The time to avoid these increases in expenditure is when the Estimates are being drawn up. I do not want to raise a major Constitutional issue at this stage but I want to say that there is a great deal of discussion at present in the House of Commons regarding Parliamentary control of public expenditure. One of the suggestions that is very much debated is that there should be a greater control of expenditure at an earlier stage—that, once the Estimates have been presented, the House of Commons is powerless to do very much. Our position is the same. Once the Book of Estimates has been presented to us, it is not for us to suggest economies in particular departments. We cannot do that. It is an attempt to shift the onus from the Government where it lies to their critics where it does not lie. We are entitled to criticise the total Estimates without suggesting economies in any particular Department. That is particularly true of the Seanad which has not the opportunity to debate the Estimates individually as they come up. Therefore, I will confine my remarks to a criticism of the total Estimates.

I suggest that the total amount of the increase, 7 per cent., is disquieting against what we know will be the maximum increase in the national income in the coming year. It would be too much to hope that the national income will increase by more than three per cent. at the very most. If the country is faced with an increasing national income at the rate of three per cent. at the most, and an increase in public expenditure at the rate of seven per cent., it is perfectly obvious that the burden, both of taxation and debt, is increasing on the community. Of course, in the peculiar circumstances of our community, where our population is falling, the increase in the burden of taxation and debt per head of the population is increasing to an even greater degree.

This debate in the Seanad is the only occasion upon which the Seanad has an opportunity of discussing general economic policy and I propose to take advantage of this opportunity to follow up some of the observations made by the Taoiseach in his very welcome speech. One of the encouraging features of the past two or three years, I think, has been an increased awareness of the difficulty of our economic problems. The Taoiseach was criticised on the grounds of being pessimistic or defeatist. I should be more inclined to describe his speech as realistic and as indicating that he is facing realities which have been there for a long time. I want to say that the problems facing the Irish economic system are not new. They go back quite a long time. They are deep-seated and long-dated. What is new is the appreciation of their difficulty by the politicians and also, to some extent, by the general public.

The economic difficulties in this country date back to the Treaty. The peculiar difficulties under which we labour have been pointed out in the reports of many commissions and committees of which I was a member. I shall refer to two by name—the Fiscal Inquiry Committee of 1923 and the Banking Commission of 1938. Those are two of the many commissions which attempted an analysis of the underlying economic structure of this country, but their Reports were met in some cases with derision and certainly they were not listened to very much at the time, I think. Many of the observations of the Commissions were regarded as being theoretical and unrealistic but the fact is that many of the forecasts of those Commissions have now come true. The situation, as I see it now, is that the bills are beginning to come in and the politicians are beginning to wake up.

I do not think it is any good discussing this matter in terms of pre-1957 and post-1957. I do not think there is any use discussing it in terms even of pre-1932 and post-1932. The essence of the Irish economic problem has been very much the same for the past 40 years. Every Government, since the Treaty, had to deal with these problems and every Government dealt with them in accordance with their own lights, although, perhaps, in some cases the light might burn brighter, while, in other instances, the light might burn rather dimly. Future Governments will have to face those problems in a period of increased competition abroad and increased difficulty in the export market. I do not think that the solution of these problems will be helped by Party recrimination, by pious hopes, by election programmes or by glittering promises.

I think the essence of our economic difficulty here is a certain lack of coincidence between the economic and political frontiers of this country. The United Kingdom and Ireland are a single market for labour and capital. Owing to the great mobility of labour and capital between the two areas, the wage rates and the interest rates tend to approximate in the two countries. This state of affairs actually solves many of our difficulties. It means that many Irish people are able to benefit themselves by going into a rising labour market. It means that a good deal of our unemployment is exported and it does not have to be solved at home.

The fact of the matter is that there are many countries in Europe that would very much like to change places with us. Let me just quote one example. Sicily suffers from great poverty. If the Sicilian population had the same access to a rising labour market as our population has, many of their problems would be solved and public opinion there would welcome the change. It is not an entirely bad state of affairs and one must face the fact that it exists but it does have this inconvenient consequence in the Irish economy, that wage rates tend to be very much the same in the United Kingdom and in Ireland. Owing to the great mobility of labour inside a single labour market, it is inconceivable that there should be wide divergences in wages in different parts of the market.

That would not cause any difficulty if the productive advantages of the two countries were the same, but the fact is that, although wages are the same in the two countries, the United Kingdom enjoys many productive advantages over this country. It has a much more developed industrial environment. It enjoys what the economists call in their jargon the external economies of production. It has a much larger home market to support its export industries. The result is that, if there are two areas with similar wage rates and one has a great many productive advantages over the other, the poorer area, the less developed area, actually suffers from higher labour costs.

The money wages tend to be the same but the labour costs in Ireland per unit of output tend to be higher than in England. That can be to some extent overcome by means of protection in a protected market. Now that everybody admits that we have to try to export and cannot shelter behind protection any more, that problem has become very acute. That is really the centre of our exporting difficulties. We are in the same labour market as an extremely developed industrial country and the same money wages mean for the Irish employer higher costs of production.

Markets are widening and the whole tendency in Europe today is towards wider markets. Those wider markets are creating problems for the smaller countries in Europe, even for those countries which are low labour cost countries. Some of the countries in the original discussion for the Free Trade Area, such as Portugal and Turkey, claimed exceptional treatment. Those are countries whose labour costs are very much lower than ours. If countries of that nature have difficulty in holding their own in these growing markets, we shall find very much greater difficulty because I do not think there is any disputing the fact that our labour costs are, in fact, high.

I want to make a passing reference to suggestions that have been made arising out of the realisation of this labour situation. As I say, there has been a growing awareness of difficulties in our situation and it has been suggested in quite responsible quarters that Irish people should be asked, as an exercise in patriotism, voluntarily to endure lower wages and a lower standard of living than they could attain by emigrating to other countries or by insisting on a higher wage level in this country. That may or may not be an attractive proposition but it is unrealistic.

The Minister for Transport and Power said in the Dáil on 10th March:

Sixty per cent. of the Estimates increases relate to remuneration and are part of the relentless pressure exercised here to achieve living standards as near as possible to those of our neighbour across the water.

I think that phrase of the Minister was correct, and that it is unrealistic to ask people to make voluntary sacrifices of this kind; at any rate, they are not going to make them in a wide way, and therefore we have to take it for granted that wages in this country will continue to approximate to United Kingdom standards and, as the Minister said, the relentless pressure will continue.

Therefore, as I said earlier, in view of the difficult industrial environment, labour costs in this country will continue to be higher, except in one or two cases. First, there are certain old and very well-established industries which survived in the past and will continue to survive, and secondly, there are some industries for which this country enjoys peculiar natural advantages. But these are the exceptions, and for industry as a whole, we may take it that labour costs will continue to be higher than in the United Kingdom. Because of the realisation of that fact, Irish economists and students of political problems are rather disturbed by rises in wages, unless they are accompanied quite definitely by equivalent rises in productivity.

I want to clear away a certain amount of misunderstanding on this subject. The attitude of people who are afraid of the effect of rises in wages is not caused by any lack of sympathy with trade unionists or the working classes, and certainly does not in any sense imply any accusation of idleness, laziness or slackness. It is not suggested that productivity can be raised simply by people working harder. The fact of the matter is that the people who work hardest in the world are the coolies in the plantations in West Africa, who produce very little, and the people who produce the most are people who work not particularly hard, with short working hours and a short working week.

They are for example people in the United States, and the reason that they are able to produce so much is the assistance they get from capital equipment. It is not anything the individual worker does in the United States that makes him so much richer than the coolie in Africa, but the fact that the worker in the United States is helped by a large amount of capital equipment, which enables both the capitalist who has invested in the equipment and the labourer to share a higher income. The productivity is the result of the investment, and the way in which that increase of income is shared between the investor and the labourer is the result of the bargaining power of the two parties in trade unions and associations of that kind.

The fact is that the increased income which results from higher productivity, makes it possible for both investor and wage earner to have increased incomes without the price of the product being raised. Efficient production enables the product to be sold at the same price, and therefore, in industries where these conditions prevail, it is possible to have increases in wages without increases in prices and without any difficulties in the export trade.

In every country, the number of industries where these conditions prevail is rather limited, and as long as the idea prevails, as it does in this country and in Great Britain, that a rise in wages in one industry sets the pattern for a rise in wages all round then, if wages rise where increased productivity is possible, claims arise in other industries where it is not possible. If these claims are met, those industries have to increase wages without increased productivity, which means increased prices of the product they sell. That gives rise to an increase in the cost of living, which in turn gives rise to increased wage claims all round, and the country is then suffering from the vicious circle of rising wages and prices which is the essence of cost inflation, and the only result in the long run is redundancy, unemployment, difficulties in the export markets, and in this country, increased emigration.

This is not a peculiarly Irish problem. It is a problem which was discussed at length by the Cohen Committee which emphasised that uniform increases in wages are inflationary, that there are a number of industries that can pay increases in wages without putting up prices of the products, but that, if that increase is shared by industries such as railways and mines and several other industries that cannot increase productivity at the same rate, the only effect is to put up prices and to involve the country in difficulties in the export market. That was why the Cohen Committee Report was very badly received by the trade unions, and I have no doubt at all that what I am saying now will be badly received by the trade unions also, but I cannot help that because it happens to be true, even if people do not like it.

As I said, increases in productivity are always the result of increases in investment. It is the fact that the worker has the co-operation of a large amount of capital that enables high wages to be paid. That brings me to the point we dealt with in a similar debate last year, the great difficulty of finding enough new well-paid employment in this country without a very vast investment of capital. In modern times, high wages can be paid only in industries where there is a large amount of capital per unit of labour employed. Therefore we have this dilemma that if we want to give high wages in new Irish industries, we have to attract investment, either by Irish citizens or by foreigners, and we have to attract a considerable amount of investment to give anything like a substantial amount of employment. If, on the other hand, we attempt to give employment without all that capital investment, the employment we give is necessarily badly paid, and people in this country will not take it as long as they can emigrate and get better paid employment in the rising labour market in England.

That seems to me to be the essence of the Irish economic problem—that the amount of investment necessary to give a substantial amount of well-paid labour sufficient to absorb the people who are being displaced in agriculture is very much higher than most people think. That brings me to the remark of the Taoiseach in the Dáil on 10th March at Column 320, when he said:

We were, and are, particularly concerned by three aspects of this increase in wages and salaries. The first of these is the effect on the cost of living; secondly, the effect of a higher general wage level for workers and those employed in industrial and urban occupations, at a time when agricultural income is declining; and thirdly, the possible effect upon the country's export trade.

That is the first time I have mentioned agriculture. As the Taoiseach said, agricultural income is declining. Whatever may be happening to the industrial leg of this country, the other leg certainly is weakening. It is not very strong. Incomes cannot be guaranteed. Farmers have no trade union and no body that they can exact money payments from. Therefore employment is falling in agriculture; output is stagnant; prices are falling; and market difficulties are very great. It was stated in fact in the Dáil last week by many speakers that country towns are experiencing stringency in regard to credit, collection of debts, and allround depression. Now the Government are trying to meet that situation—quite rightly; I am not criticising them—by something in the nature of subsidies to farmers.

It is a very reasonable and proper thing to do if one section of the population falls behind that they, the weaker section, should as far as possible be lifted up. But the point which we cannot get away from is that these subsidies have to be paid for by somebody in this country. There were some proposals recently that Ireland and the United Kingdom should devise some sort of reintegration in the agricultural field. That would have been very attractive if it had taken place. Irish farmers would have received subsidies paid, not by anybody in this country, but either by British consumers or British taxpayers. But as far as I know, speaking merely as a newspaper reader, that prospect has faded. It is not going to be realised. In the absence of integration of that kind, any subsidies that Irish farmers receive will have to be paid for either by the Irish taxpayer or the Irish consumer. In other words, this programme, this very proper programme, which I am not criticising, of building up some additional earnings for the farmers really amounts to a redistribution of a national income which we have already said is practically static. It does not involve the creation of anything new. It is really a case of robbing Peter to pay Paul or, perhaps, it would be better to say of taxing Peter to pay Paul.

This brings me back to the Estimates from which I may have appeared to have strayed. I am quite prepared to admit, as I said at the beginning, that much of the increased expenditure is automatic, unavoidable, that every individual item in itself is desirable and that a great deal of it can be justified on the ground of being productive in the long run. But that does not get away from the fact that the total is going up by seven per cent. as against an increase in the national income of two per cent. That is the disquieting aspect of the Minister's proposals before the House today.

I think that the public finances constitute the Achilles heel of the Irish economic situation. It is in the public financial sphere that one senses danger most. We have not really got an unemployment problem because we are able to export our unemployed. That does not solve it but at least it shelves it. When we come to the balance of payments, about which I do not want to say much, it can be kept one year with another in something like equilibrium, and even if, during a period, we suffered from recurrent deficits I do not think it would be entirely imprudent that a small amount of the national external assets might be used to bridge the gap, within limits. We must remember that the value of the external assets held in this country must have increased considerably in the past few years, that many holders in this country of British equities must have shared in the boom and also that the invisible exports arising from dividends coming into this country will undoubtedly increase in the next two or three years as a result of the industrial boom in Great Britain.

Therefore, I do not think that the balance of payments really gives the same acute ground for anxiety as it does in countries less financially sound. But, even assuming that we do keep equilibrium in the balance of payments, we are keeping it at a low level. We are not spending substantially beyond our means but at the same time our equilibrium is at a low level. We are like the poor man living within his income, not the rich man. Even the poorest man will keep an equilibrium in his balance of payments, but he may not be living very well. That is really the most we are aiming at at the moment. We are aiming at equilibrium at a low level without any great signs of progress.

That, of course, brings one to mention the great problem in the world of economics today in every country: Is stability consistent with progress? Is it possible to maintain stability in the balance of payments and in the budget and at the same time to progress? Or does a progressive economy necessarily run into some inflation? These are the great problems which are being discussed by economists and central banks and Ministers for Finance all over the world today. They do not really arise here because we have not got the progress; therefore, if there is any inflation in the Irish economy, it is not as a result of full employment. It is as a result of other actions outside that field. The fact is that our economy is a stable economy. We are maintaining equilibrium at a low level. The balance of payments is in near-equilibrium. At any rate, the national income is stable; our population is almost stable—slowly decreasing—but the point I want to make and the one I have been coming to all the time, is that an economy of that kind cannot stand increases in expenditure, in national debt. Those increases in expenditure, in national debt, must sooner or later result in increased taxation.

Now I do not want to anticipate the Budget this year. It is irrelevant in this debate, I am prepared to admit, that revenue buoyancy may tide the Minister over another year without increases in taxation rates. At the same time, it is interesting to observe that the Taoiseach, on 10th March last at column 320, does refer to this possibility when he said that the Minister for Finance may find it necessary at the end of next month to come here with proposals for tax increases, and he goes on to say:

It may not be a bad thing in the long run to have it demonstrated once again that pay increases must be paid by someone, either by the taxpayer in the case of public servants or by the consumers in the case of other employees.

Therefore, I am prepared to admit, for the purpose of argument, that the buoyancy of the revenue, of which there are signs, will enable the Minister to present a Budget without increases in taxation rates. But that is not enough. Taxation is too high already and what we should aim at in this country is a reduction in the taxation rates. I have no doubt at all that the present rates of direct taxation income tax, surtax and death duties, are operating to paralyse both the power and the will to save; that the disincentive effect of the tax system in a country with a low level of national income is devastating to investment and therefore to progress.

Therefore, if the Minister succeeds in not raising the rates of taxation in the Budget, it will be a relief, but at the same time he will not avoid criticism, certainly from one quarter, because I suggest that Irish taxes are too high and should be reduced. There is no hope or sign of that in the Estimates as we find them today. Of course it is always possible to pay one's way by borrowing, always possible by borrowing to put off the evil day by increasing public debt.

Now a great deal of the borrowing that has taken place in recent years can be justified as being productive. I fully agree with that. It will lead, in the long run to increased agricultural output, and perhaps increased industrial output, but in the short run, it does involve dead-weight. It is not self-liquidating. The real distinction is, I think, laid down in our Banking Commission and it has always struck me that the real distinction in debt charges is not between productive and nonproductive but between dead-weight and self-liquidating debt. Whatever the productive justification may be for a great deal of the expenditure in these Estimates, and I am quite prepared to admit that a great deal is productive, if you increase taxation that is strangling the country. Any increase in debt is an increase in dead-weight debt, and that involves more debt charges in the future, rising expendidure in the Central Fund and, of course, in the long run, higher taxation.

There is one point I want to put to the Minister. This is not the time to borrow if he can possibly avoid it. The world is coming into a period of very high interest rates. That is the general view of the best authorities all over the world. There is a world capital shortage. The undeveloped areas are crying out for enormous sums of capital. The industrial countries, themselves, require a great deal of investment. Modern machinery and modern inventions, far from being capital-saving, are very capital-consuming. The general atmosphere of inflation makes lenders rather hesitant to lend at long term fixed interest. They require something in the nature of a little insurance, a little hedge against inflation.

Another thing is that, certainly in these countries, the ordinary people are waking up to the fact that the rates of direct taxation are so high that the net return on Government securities, when tax is paid, is much less than the gross. The gross rate they receive on 1st January is £x from the Bank of Ireland on their interest from Government Stocks, and on the same day they receive a request from the Revenue Commissioners for a substantial portion of the sum. The people are beginning to think—they may be quite wrong in doing so, but at the same time they are beginning to think—in terms of net yields.

Finally, equities are coming into fashion by institutional investors. The whole trend of markets is in favour of equities and against gilt-edged. This will increase the price at which Governments can borrow. Therefore, Governments, even of the highest credit standing, will have to pay very high rates of interest for loans. I feel pretty safe in prophesying that the normal rate of interest in the Sixties will be 6 per cent. That ought to make the Minister think, not only twice but several times, before he adds to the public debt. He will be adding to it at a time of very dear money.

I have attempted to follow in the footsteps of the Taoiseach in painting a realistic picture, and a good painter in painting a portrait paints the warts. I have tried to deal with the problems which we have in this country which are long-standing and deep-seated. This is not the occasion to discuss industrial or agricultural policy. I shall just say that I welcome the new approach that is being made and the new research that is being made into our problems I welcome the setting up of the Economic Branch in the Department of Finance. The Agricultural Institute and the Irish Management Institute are doing good work of the right kind.

I have no doubt progress will be made but, until it is made, further public expenditure and further debt will do more harm than good. Whatever the correct cure for Irish economic stagnation is, it is not the pouring out of a lot of public money. We must agree about that. Therefore, until the shoulders of the people, so to speak, have grown strong enough to bear it, the load should not be increased.

I appeal very strongly to the Minister —nothing can be done about it this year—in the future to resist all pressures and temptations to add to expenditure, however desirable, until there is an increase in production, a real concrete increase in production and by that. I mean an increase in production. I do not mean promises or programmes or policies or prophecies.

Is féidir mórán a rá ar an mBille thar an gceist seo maidir le cúrsaí na tíre—an cuspóir sóisialach, an cuspóir géileagrach, an cuspóir oideachais agus gach gné de shaol na ndaoine agus an tionchar atá ag obair an Rialtas ar an saol san. Ach nílim chun chur síos a dhéanamh ar na nithe sin go léir. Thógfadh sé tamall ró-fhada.

Maidir le stáid na tíre go hiomlán agus an tslí ina bhfuil an Rialtas ag cur díobh, táimse sásta go bhfuiltear ag dul sa treo ceart agus go bhfuil feabhas ag teacht ar an saol eacnamaíochta agus bheadh an scéal níos fearr muna mbeadh an saol míshuaimhneasach atá ann fé láthair agus muna mbeadh an mhícothramacht atá sa trácht idir an tír seo agus tíortha lasmuigh. Ach rudaí iad san nach bhfuil aon neart ag an Rialtas orthu, rudaí iad ná beadh aon leigheas ag aon Rialtas anseo orthu.

Maidir le cursaí náisiúnta, táimse sásta go bhfuil cuspóir maith oiriúnach ag an Rialtas agus má tá breis chaiteachas le bheith againn sa bhliain airgeadais atá rómhainn, is chaiteachas torthúil é, caiteachas a rachaidh chun tairbhe na tíre sa deireadh thiar thall. Ina theannta san, ní mór don Rialtas seasamh leis na breiseanna tuarastail a tugadh as na seirbhísí Stáit le déanaí agus ní mór dóibh leis cabhair airgid a chur ar fáil do talmhaíocht, do thionscail, do na seirbhísí sóisialacha agus mar sin de.

I have listened with a great deal of interest to the speeches delivered by members, on the opposite side of the House who have spoken so far, and I must say one thing emerges from their speeches, that is, they seem to be inclined to convince us and to convince the people that the economic position of the country is not good. I do not know the reason for those pessimistic speeches which we hear nowadays from spokesmen of the Opposition, but they must be rather bewildering to the ordinary man in the street. Anybody who has experience of political manoeuvring and political propaganda can understand very easily what the reason is.

You understand it fully, so.

The reason is to try to convince the people that the policies being pursued by the Government——

Lack of policy.

I must say, a Leas-Chathaoirligh, that while the members opposite were speaking, there was no interruption from this side of the House. I think we on this side are entitled to the same privilege, that is, if it can be called a privilege.

An Leas-Chathaoirleach

The Senator is entitled to be heard without interruption.

He is inviting it.

We know very well what is behind these gloomy speeches. The object is to try to convince the people that since the Government took office, the state of the country has been worsening. That is not the case. Anybody who is not blind or prejudiced by political bias must admit that the economy of the country is on an even keel at present and that we are moving in the right direction.

The people are moving towards England.

Very little reference indeed has been made to the cost of living to-day, for the simple reason that the cost of living has been static over the past few years. There has been little or no increase in the cost of living over the past three years and that in itself is an achievement.

In former years here, in a debate on the Central Fund Bill, a lot of time was devoted to a discussion on the cost of living. We are happy to say that the cost of living has been kept down very well since the Government took office three years ago. That shows that we are moving in the right direction.

Another problem about which there were many complaints was that of employment. We are very happy to note that unemployment has substantially decreased over the past three years. The satisfactory feature is that the decrease is progressive from year to year. There appears to be no justification for the gloomy and pessimistic speeches from the opposite side of the House.

Senator O'Brien dealt with many matters. I was rather amazed at his suggestion that the onus should not be put on members of the Opposition to show where any economies could be effected in the Estimates. That appears to be an orientation of policy. Is it to be the position that anybody can stand up here and condemn a Minister for Finance or a Government for certain expenditure and at the same time, have no corresponding obligation to show where economies could be effected? Very often, in the past, we have invited members of the Opposition to do just that when they complained about the size of the bill being presented to the Houses of the Oireachtas. It has been a common thing for people on the Government side, who must have a responsibility, to call upon these people who find fault with the size of the bill to show where economies could be effected. There is nothing wrong with that. It is right and proper that when people make statements of that sort, they should be expected to show where the expenditure could be curtailed.

I have gone over the Estimates for the coming financial year. I could not see where any worthwhile economies could be effected. For instance, take the 6-figure items. For arterial drainage and construction works, there is to be an increase of £115,000. Will anybody here suggest that we should cut down on that? If so, he would be entirely wrong. Over the years, many of us have advocated an acceleration in the policy on arterial drainage and works of national importance all over the country—works for the improvement and development of the land, and so on.

Then, as the Minister pointed out, we have a special figure for the eradication of bovine tuberculosis. This is a task the Government and the people have to face. This is a national task that cannot be accomplished without the expenditure of a lot of money. Where is the money to be got?

Then we have items such as forest development and management, for which there is an increase of £504,550. This also is a field of national activity that is well worth the money that is to be spent on it. Over the years, many of us have been advocating an acceleration in our afforestation policy. We have been complaining that enough trees are not being planted. Now that it is proposed to devote additional money for that purpose, fault is being found with it, it appears. Nobody, seemingly is prepared to say that we should not go ahead with afforestation, although I thought I understood Senator O'Donovan to say that spending money on projects such as afforestation was likely to bring about inflation in this country. That is a very strange suggestion.

The Senator has complained that no suggestion was made by speakers from this side. That is a suggestion.

It is. I should like to know how many would follow it up. If Senator O'Donovan is to be taken as the mouthpiece of the Fine Gael people in the Seanad and of the Fine Gael people in the Dáil, we know where we stand, that the policy of afforestation is to be slowed down. We cannot have it both ways.

The way you slowed down on house building.

There is an increase of £350,000 in respect of capital forestry services. These are items of national development. I, for one, hold that money spent on items of national development is money well spent. We hear from time to time complaints about the size of the bill being presented by the Minister for Finance. I said before here in this House that the size of the bill is not so important at all as the way in which the money is to be spent.

That is correct.

It would be quite possible for a Minister for Finance to come in here with a bill for £10 million or £20 million less, but there would not be national activity. National activity would be at a standstill.

Senator O'Donovan also drew a comparison between the Estimates for this year and the Estimates for 1955-1956. He pointed out the discrepancy between the two. Of course, there could be a discrepancy because we remember that in that year work of national importance was held up. There was nothing doing in that year. Even housing was held up in that year for want of finance. Everybody knows that. People have not such a short memory as not to remember the position that obtained in the country at that time, especially in the last year.

That is lying propaganda and the Senator knows it. The figures prove differently.

An Leas-Chathaoirleach

Order! The Senator will be afforded an opportunity to make his own speech.

Projects of national importance were held up. Farmers could not get any credit from the commercial banks and so on. That was the position. We do not want a repetition of that. I should prefer to see a bigger bill presented than to have to revert to a position of that kind.

Senator O'Brien mentioned the question of subsidies. He seems to think that there is no justification for subsidies for farmers. I do not agree with him. I think it is necessary to subsidise the agricultural industry because that is being done in other countries. Even across the water, the British Government are subsidising the agricultural industry. If we did not face up to that responsibility, if we did not adopt a similar policy, what would the position be? The farmers here would have to sell their produce at a disadvantage vis-a-vis the farmers across the way. There is no doubt about that.

You did it for a long time.

Subsidies in aid of agricultural production are an entirely different proposition from subsidies, say, to keep down, the cost of living. Subsidies in aid of agriculture will, in the end, pay for themselves or, perhaps, pay dividends, whereas subsidies to keep down the cost of living are non-productive. It is just a case of robbing Peter to pay Paul or taking money out of one pocket and putting it in another. That is the situation so far as subsidies to keep down the cost of living are concerned.

It is an entirely different matter when we deal with subsidies designed to aid agricultural production. It is a right and proper policy for the Government to give whatever financial incentives necessary to the agricultural industry here so as to increase production. Everybody wants increased production. We all want it. The people opposite say they want it. If we are to have it, we have to make the financial aids available to the farmers engaged in that work.

You took a penny off milk last year and 5/- off Grade A bacon.

We shall take that statement in the same context as that mentioned here by Senator O'Donovan when he called the Irish Creamery Milk Suppliers' Association Fianna Fáil henchmen. That can be likened to a similar statement made by the Coalition Minister for Agriculture when a certain deputation of farmers came up here to seek an interview with him. He told them to go away, that they were Fianna Fáil racketeers.

Members opposite would be very well advised to give up that line of approach and deal with these things on their merits. The dairying industry is a very important one and is, indeed, one of the main branches of agriculture. It is a subject that should not be fuddled by statements of the kind made here. The dairy farmers are entitled to whatever incentives they can get from the Government. At the present time, it must be admitted that they are going through a difficult time, due to the fact that the price of cattle has fallen in the British market and in the markets of the world.

These are circumstances over which the Government have no control; they are circumstances over which no Government here could have control; and so I say we must not deal with the dairy farmers of this country lightly. We have to pay them the respect to which they are entitled.

There is an election coming.

I have already said that it is much more important to consider how the Estimates we have before us are to be spent than the overall size of the bill. It would be better to have £123 million, as we have, spent constructively from the national point of view than to have £100 million spent unconstructively. For the benefit of those people who find fault with the Estimates, it is as well to recall that a good deal of the increase is due to measures that were brought into the Dáil and Seanad to effect certain salary increases to which the people opposite gave their support.

They supported these measures to increase salaries for civil servants and other State servants and so on and when it comes to paying the piper, they must not find fault with it. It is foolish and futile to stand up and try to find fault with the Minister because he has the responsibility to provide the wherewithal to meet these increases. We cannot have it both ways in matters of this sort.

Senator O'Brien also gave it as his view that there should be no more borrowing by the Government for capital purposes. I do not subscribe to that. It will always be necessary to borrow here for capital development. If the reverse were the case, if the Government did make a decision not to borrow for capital development, there would be many people who would find fault with it. There would be no way of further reducing the number of the unemployed. The only way to reduce the number of unemployed is to provide work of national importance, and constructive schemes of national importance cannot be carried on without capital, so I am not in agreement with the Senator when he says that there should be no more borrowing for the present. I believe there should be, within reasonable limits.

As I have said, the economy of this country is quite sound. We are moving in the right direction and there is no justification, therefore, for the gloomy speeches we have heard from the Opposition. The sooner members on the opposite side and in the Dáil also take a different attitude, look to the future with greater hope and see the silver lining to whatever clouds may be passing for the time being, the better it will be for themselves and for the country.

Senator Ó Ciosáin is wondering why the speeches from this side of the house are so gloomy, and has made a very good effort to dispel the gloom which has settled not alone upon this side of the House but upon the country generally. The reason people have become extremely gloomy about the economic condition of this country is to be found in the speech made by the Taoiseach in the debate within the past fortnight on the Vote on Account. Reading the Taoiseach's speech, I cannot but recall the cant of the Fianna Fáil Party when they got into office in 1957. At that stage, the drill was that confidence in the country had gone, and wherever you listened to Fianna Fáil speakers, you heard that confidence had gone and the country was in a very bad way indeed.

Then there was the fine victory of the Fianna Fáil Party at the polls in 1957 and in the full flush of that great victory, the cant was that confidence was returning, and for quite a long time, we had this phrase being used by Fianna Fáil speakers. Then, when they were some further months in office, a new variation on the theme was taken up—confidence was back. We heard that for quite a while and the people were looking forward with keen anticipation to the progress that was to be made by the Government. Then we had the White Paper and the Grey Book on economic development, and a great deal of legislation was introduced last year to implement many of the recommendations in the White Paper. Then the new line was that these were all steps in the right direction. I am afraid we have reached the stage now where the galloping progress of the economic policy which the Government were to introduce has been grinding slowly to a standstill.

In thus realising that the economy has not been making the progress that was necessary, the Taoiseach intervened in the debate on the Vote on Account in the Dáil, and he assigned three reasons for the failure of the Government—for that is what it amounts to—to make good their election promises. The Taoiseach mentioned as the first reason why the Book of Estimates contained such a large sum that it was necessary to give increases to public servants; and to show how effective that propaganda has been, we have even Senator O'Brien here this evening believing that that has had a big effect upon the increase in the Estimates.

The total amount, according to the Taioseach, that has resulted from the increases given to public servants, including the Civil Service, the teachers, the Guards and the army, who must amount to perhaps 80,000 people, is £2,000,000, which is next to nothing in a sum of £123,000,000. The Taoiseach, however, used that for the purpose of persuading the country that the cause of the failure of the Government's economic policy was the wage increases, and that these wage increases have been brought about (a) in circumstances which did not really warrant increases and (b) by something over which the Government had no control and was due not to any action on the part of the Government but to a scheme of conciliation and arbitration for the public servants which was introduced by the inter-Party Government in 1950.

The Taoiseach seeks to evade all responsibility for these increases by reference to a scheme which was introduced and which, having operated in a particular way, he now says has deprived the Government of all effective control over wage increases, as far as public servants are concerned. That, of course, will convince nobody. The truth of the matter is that the increases granted to public servants involving £2,000,000 were due to increases in the cost of living between 1955—the occasion of the last increase—and 1959, when they got the recent increase.

The Taoiseach said at column 320 of Volume 180 of the Dáil Debates:

Everybody recognises that this latest round of wage and salary increases is the first since the end of the war which was not occasioned by an increase in the cost of living.

Senator Ó Ciosáin has been talking about there being no increase in the cost of living since the Government came into office, and has stated that there has been stability in prices for the past two years. The relevant figures for the cost of living increase are contained in the consumer price index, which was, in February, 1957, 135 and in February, 1960, 144. That is an increase of 9 points or nearly 7 per cent. That, first, disposes of the contention of the Senator that there has been no increase in the cost of living.

I want to get back to the statement of the Taoiseach that the recent increases were not brought about by increases in the cost of living, as far as public servants were concerned. The Taoiseach ought to know very well that the last major salary increase given to public servants was in 1955. In September, 1957, after the Fianna Fáil Government had come into office, as a result of the intervention by the Taoiseach, or rather, as a result of an invitation extended by him to the Trade Union Congresses, the trade unions at that time decided to reduce their claim for wage increases in the national interest and they agreed to what is known as the 10/- formula. The Taoiseach knows very well, and nobody is in a better position to know than he, that the recent round of wage increases was due to the fact that in the wage increases in the latter part of 1957, and the earlier part of 1958, the workers in the trade unions did not get the increase that the cost of living would have entitled them to, and that the recent increase was designed to make up for what they voluntarily surrendered for the time being under that agreement, which was brought about on the initiative of the Taoiseach.

I cannot call that reference to the salary increase honest. I do not want to call it dishonest but when the Taoiseach is referring to a matter of this kind, he ought not plead that the Government are now placed in a position where they have to give wage increases to public servants and have no control over these increases because of the decisions of conciliation and arbitration machinery. The Taoiseach used this argument about the wage increases which had been given to public servants, first of all, to justify the large increase in the Estimates and secondly, to mollify the anger of the farming population who have suffered a substantial reduction in income under the Fianna Fáil Government.

At Column 323 of the same volume, he says:

It was, however, the effect upon agriculture of this recent increase in wages, and the implied threat of a general increase in the prices of commodities used in agriculture, which gave the Government the most concern. The fact that farmers were facing the prospect of higher costs from higher industrial wages, and were facing the obligation to pay higher wages to their own workers at a time when farm prices generally are tending downwards, could have a most discouraging effect.

The Taoiseach, in this statement, is trying to suggest that the lower standard of living enjoyed by the farming population is due to a £2,000,000 increase in wages given to public servants. One would imagine from what the Taoiseach said that the 500,000 farmers were all employing agricultural workers and therefore going to be affected by the higher wages they would have to give to their agricultural workers.

The Taoiseach is obviously perturbed by the failure of the Government's policy as far as agriculture is concerned and merely trying to pave the way for the introduction of subsidies of another kind, subsidies to farmers, having abolished the food subsidies and increased the cost of living to the farmers as well as to every section of the community. I think when we are considering the Government's policy, it is highly relevant to recall that we have a large number of people who are engaged upon relatively small farms and who have no income except what they derive from these farms and from remittances from their relatives who are working in England.

We have, as far as I can see from the best figures available to me, about 92,000 farms under 50 acres and of that number 51,000 are under 30 acres. That represents 75 per cent. of all the agricultural holdings in the country. Now, we have a great deal of money being devoted by the Government to what they call their economic plan. As far as I understand the position of the £220,000,000 provided for in the Programme for Economic Expansion, only £48.6 million of that sum, at the outside, and that includes £11,000,000 for advances by the Agricultural Credit Corporation, are provided for agriculture.

We are spending a great deal of time trying to bring people with technique, with know-how, to establish industries here. I regard every one of the 92,000 farms which has a dwelling on it, which has out-offices and which is fenced and which has running water on the land, as a going concern. There are 92,000 going concerns which are not producing at maximum capacity and which are not being enabled to produce as much as they might by Government policy. It would be far better for the Government if the major portion of the £220,000,000 which is to be devoted to economic expansion were siphoned off to give to these going concerns and that we started with the basic elements in our economy.

I turn now to the Grey Book, "Economic Development” at page 208, and find under the heading “Importance of Agriculture” as one of the conclusions, this statement:

The immediate potentialities of increased agricultural production are very great. The realisation of these potentialities in any large degree would, by increasing the purchasing power of the farming community, raise generally the demand for goods and services, leading to an expansion of industry and additional employment.

That obviously contemplated that you should begin at the beginning and begin to build a house from the foundations and not from half way up. It continues:

The provision of lasting employment turns on the concurrent development of manufacturing industry (mainly for export) and of tertiary industries, particularly tourism. All this can be set in motion by improvements in agriculture.

As I said, we have these going concerns. We have people in them who know how to farm, who know how to look after cattle, sheep, pigs and poultry, and so on. But if one goes through the country at the present time one finds what Senator Mrs. Connolly O'Brien once described as the depressing prospect of farmhouses with padlocks on the doors outside, no curtains on the windows, outhouses falling into a state of disrepair, and fields, which were at one time green, full of nettles, returning to rushes and with buachallans growing there during the summer months. The lands are not even taken up for conacre by other farmers in the district. That is the depressing prospect that I see as I go through the country.

I do not know what policy the Government have to remedy that situation. In my estimation, they have only the policy of a pinch of fertiliser and a shake of lime to offer to these small farmers. That is no substitute, in my view, for a policy for the under-50-acre farmer. I believe that if the Government were seriously interested in agriculture—as they ought to be— and if they really examined the situation, they would find that it was possible to make a dramatic improvement in the lot of the people on these small farms.

Some people are inclined to think that rural depopulation is due to the introduction of machinery. I find very little evidence of machinery on the farms of 30 acres which carry such a large proportion of the rural population. There is no room on small 30-acre farms for machinery and they are not affected, as the Taoiseach pretends to suggest in his statement, by the higher wages given to public servants. Their low standard of living today is not in any way attributable to the £2,000,000 increase given to public servants. But that sounds well. It sounds well to say that the farmers are badly off because the public servants have got increased wages in recent times.

I grew up in County Mayo where I do not suppose there are 40 farms of over 100 acres and very few over 50 acres. I know conditions in places like County Mayo and guaranteed prices for wheat, guaranted prices for cattle, have nothing whatever to do with the farmers there. A small farmer in Mayo may sell two bullocks, if he is lucky, in a year. Whether the price of bullocks goes up £2 or £3 makes no appreciable difference to his standard of living or his income over the year. They keep two or three pigs and it is a mystery to me how they manage to survive on the obviously small amount of produce they have to sell. The reason, of course, that they do manage to survive is that they have such things as milk, potatoes and some vegetables and probably kill a pig—to a lesser extent nowadays than formerly—and have their basic requirements. But the income on the small farms is negligible and the Government have no plan whatever to enable these people to have an income of even £5 or £6 a week guaranteed to them.

I make this suggestion to the Minister and the Government, and I do not hesitate to make it on the basis of my own experience: If the small farmer in Mayo keeps two pigs at the present time and turns them out every four months, I see no reason why he should not be given, not a subsidy, but a grant to enable him to stock 20 pigs and turn them out every four months. He would have an immediate increase in income and if he were able to turn out ten times as many pigs as he is at the present time, he would be able to sell them at a much lower rate while still having a bigger income. If he could sell them at a lower rate than at the present time, I do not think we would have any difficulty in talking trade terms to the British or in beating the Danes out of the British market on the basis of competition in prices and quality. I do not, however, see anything like that envisaged in the current Estimates.

We had Scéim na Muc but I do not know what became of it. We have not heard anything recently from the Minister for the Gaeltacht. It was for the Gaeltacht areas and I do not know to what extent it has even provided experience for the Department of Agriculture as to how such a scheme would operate, but I have no doubt that unless we get to specialisation in various lines of production on the small farms and a much bigger turnover—and they are capable of having a much bigger turnover—there is no future whatsoever for the rural population on farms of under 30 acres.

I would seriously suggest that instead of trotting round opening some kind of venture such as that in Waterford on Monday last, attending meetings here, there and everywhere or giving after-dinner speeches to the Blood-stock Association, the Minister for Agriculture should get down to staying at his desk. He should spend more time considering the facts of Irish agriculture as they exist and seeing how the lot of people in rural Ireland can be improved. He would then be doing his duty as Minister in a far better fashion than by making very often belligerent speeches at these functions.

I do not know in what fashion it is proposed to introduce subsidised farm prices, nor do I suppose that it would be relevant to treat of them at length, but I was gratified when Senator O'Brien pointed to the fact that subsidising farm produce would not of itself create an increase in national income. I myself had come to the same conclusion and I am not an economist. Therefore, it seems to me that it should be perfectly clear to the Government who have available the best economic advice the country can get, that this project upon which they are about to embark, the subsidisation of agricultural prices, will not increase production or increase national income.

Government speakers have been preening themselves on the increase in industrial production and in the export of industrial products in the past year. I venture to suggest that if the amount of money poured into industry were devoted to agriculture, then the Government could really begin crowing about an improvement in the economic condition of the country. Frankly, I do not understand why a Government who have a Grey Book stressing so clearly the necessity for increasing agricultural production should devote so little time, money and attention to that sector of the economy.

The gloom which the Taoiseach set off by his speech led us all to ask whether the Government had the imaginative powers to plan what is necessary to improve the economy of the country, or, if they had those powers, whether they had the capacity or energy to put such a plan through. It seems they were able to formulate a plan called a "Programme for Economic Expansion,” but now on the Taoiseach's own confession, a confession which must have caused him considerable pain to make, this plan does not seem to have produced any worthwhile results. Looking around me, it seems to me that this Government, while it may, and undoubtedly does, contain Ministers of first rate ability, contains also a great deal of dead-weight.

We have the spectacle of the Taoiseach writing out to county councils, chambers of commerce and other such bodies asking them to tell him whether they have any kind of an idea for an economic project and if they have, to submit it to the Government for consideration. Certainly, I have indicated that the whole sector of agriculture is one such economic project but apparently is not regarded by the Government as being well worth the expenditure of whatever finances are available for expenditure on these other projects. I have come to the conclusion that the Ministers of the Government are not properly discharging their responsibilities as Ministers of State. The situation has been reached in this country where we read more often of pronouncements made by Ministers at every kind of footling function than of pronouncements made within the precincts of the House. Ministers, to my mind, are in the position that they are vastly overworked doing things they should not be called upon to undertake.

First of all, every Minister is a Deputy and in his capacity as a Deputy, in the ordinary course, he has quite a lot of constituency work to engage in. As Minister, his constituency activities are double, treble or quadruple what they would be if he were merely a private Deputy. In the ordinary course of a political democracy, a Minister has to spend a good deal of time in attending Party meetings, constituency executive meetings, branch meetings and so on. In the ordinary course of events, from day to day and from week to week, a Minister of State has to devote a great deal of time to taking the ordinary routine decisions which he is statutorily obliged to take in this Department.

In addition to that, they have to devote a great deal of time to the business of Parliament. I am wondering whether the fact is all the speeches that are made at luncheons, openings of halls, openings of festivals and so on mean that Ministers of the Government are devoting their time to work they are not really charged by the people to do. Only yesterday I read in the papers of one Minister down in Waterford opening some new mart or something of that kind. Another Minister was digging a sod with a shovel for the new stadium at Santry and a third Minister was down the country opening a festival. That was the Minister for Defence.

Might I ask what useful purpose is served by a Minister digging a sod for the new stadium at Santry? Would the Minister for Justice, the Minister for Defence and the Minister for Agriculture not be doing far more for this country and attending properly to their duties if they spent their time sitting at their desks, first of all, to ascertain what the problems are——

They would go to seed.

They are of better calibre, I trust, than to go to seed sitting at their desks. They should be seeking the solution of their problems and persuading their colleagues in the Cabinet that they had the proper solutions and trying to find the finances and plans to implement those solutions. They cannot possibly do that if they are to go around attending luncheons, dinners and all kinds of festivals day after day. It sometimes is a matter of amazement to me now the digestion of the Minister for Transport and Power can stand up to the number of dinners he has to eat——

An Leas-Chathaoirleach

I think the Senator has made his case now.

He has tried anyway.

He is working up the gastric juices.

In the course of nature, the gastric juices would be worked up at this hour, anyway. So far, I have been dealing with the fact that we have not got the solution or are not nearer the solution of the various problems confronting us in this small country. In the Dáil, the Taoiseach was most pessimistic about emigration. The solution of the problem of emigration lies in providing remunerative employment for the people in rural Ireland to a great extent. Once we increase the income of the people on the farms, we then create a demand for more goods and services in the industrial sphere. To talk about that is like talking about something that is almost trite. It is axiomatic. At the same time, we have no plan, as I have already indicated, to deal with the situation.

Senator Ó Ciosáin obviously spent a great deal of time perusing the Estimates to see in what way he could make suggestions to the Minister for Finance to reduce taxation here and there. I have perused the Estimates with one end in view, to find out what we are doing about one of our great national problems which I think it in order to raise on this Bill. For a long time, we have been wont in this country to listen to the former Taoiseach, President de Valera, saying there were two great national problems confronting the nation: one, the removal of Partition, and the other, the restoration of the Irish language. On these two problems, we were told that his mind changed and that the restoration of the Irish language was more urgent because it was dying out so rapidly under the fine policy which had been pursued by his Government for such a long period.

I have perused the Estimates with a view to seeing what sum of money is being devoted by the Government to deal with the national problem of Partition. I did not find the word "Partition" mentioned anywhere in the Estimates. That leads me therefore to ask what is Government policy in March, 1960, to deal with the problem of Partition?

They are waiting for the next general election for that.

The Estimates are very detailed. You will find detailed in the index such things as "maps, sale of", "medals". Money is voted to medals—simply "medals". We find that money is voted for "pond fish culture" but when we come to the problem of Partition which is one of the things which is keeping back this country, we find not a single ha'penny voted, or proposed to be spent by the Government in relation to the whole question of Partition. I should think that if some activity in this field, some positive steps—if only steps; we cannot hope to make strides in relation to the resolution of the Border problem —some faltering steps were being taken it would be a great contribution to the internal peace and stability of the country. I have said before and I repeat that a great deal of the lawlessness which has arisen here in recent years has been due to the fact that some people, rightly or wrongly, thought that, nobody being interested in Partition, it was up to them to make a move.

Sitting suspended at 6 p.m. and resumed at 7.15 p.m.

I had been commenting upon the absence of any provision in the Estimates for dealing with the problem of Partition. The solution of the Partition problem will not be speedy, or easy. While that is so, it still does not exempt any Government from taking such steps as the circumstances of the times permit to bring about conditions in which the solution of Partition will become a reality.

I have referred to the fact that, even from the point of view of the maintenance of internal peace and stability, some indication of the Government's interest in this problem would be a contribution. I think there is a limited field in which the Government can take steps which would have some effect upon the ultimate solution of Partition.

As far as my understanding of the position goes, the nationalist elements in Northern Ireland do not look with favour upon the manner in which the problem of Partition is being handled or, if you like to put it another way, is being ignored by the Government of this part of the country.

It seems to me there is no liaison whatever between the Government of this country and the favourable elements in the North and that any Government concerned with the solution of Partition should, as one step, establish some kind of a permanent liaison between Nationalist elements in the North and the Government here. I also think that, in a variety of other ways, action can be taken by a Government which will bring about conditions favourable to the resolution of Partition.

There are altogether too many extravagant statements on one side and on the other in connection with this problem. I believe progress would be made if people in this part of the country who have contact through business, through sport, in the cultural and social fields, with people in Northern Ireland had a certain line or a certain understanding of the basis of this problem given to them by the Government they would help to create conditions in which the solution of Partition would become easier, in time. I think It should be out of order if I were to proceed further in elaborating upon this matter on this Bill.

It would seem from what the Senator has said so far that it would be far better if he put down a substantive motion.

That is a matter that has occurred to me. However, what I am saying is that I think it would be out of order if I were to proceed any further and, beyond commenting on the failure of Government policy in this important national problem, I do not propose to say anything further.

The Government, through their chief spokesman, the Taoiseach, have been talking about access to markets for Irish products. In that context, it appears that the Government feel we are limited merely to the old markets where there are already too many competitors for this country. I do not see any reason why the Government, being interested in increasing the volume of our industrial exports and indeed of our agricultural exports, should not undertake a major and sustained drive to capture markets in the states in Asia and Africa which are reaching statehood year by year. In all of these countries, the standard of living of the people generally will improve and that involves imports. There is no reason why this country should not get at least some portion of the export market to those countries.

As far as I can see, a shambling kind of plan is being operated by the Government. The results have convinced even the Taoiseach that the plan is not working successfully. The time has now come when the Government should take thought in this matter. Principally, that involves thought by Ministers at their desks as to what should be done to rectify the position.

I trust that, in what I have said, I have made some contribution in the form of workable suggestions that might be taken seriously by the Government.

It might be no harm, in discussing the Capital Fund Bill, to look at the Estimates presented for the coming year and compare them in regard to certain outstanding items that can be regarded as indicators of economic progress with the Estimates with which the present Government were left to contend early in 1957 in their first year in office, 1957-1958.

Senator O'Donovan deplored the fact that the Estimates before us have increased. That is so. It is very easy to deplore the fact that Estimates seem to keep going up. I would issue a challenge to any honest critic who may deplore any increase in the Estimates to tell the Government plainly in this House or the other House in what way and how certain specific items in those Estimates can be cut out or reduced and, if so, whether those reductions are likely to improve the economy.

If you analyse the Estimates for the coming year and compare them with Estimates left on our hands by the previous Government and analyse the increase in the present Estimates compared with the Estimates for 1957-58, you will find that most of the increases are highly justified increases which contribute in no small way towards the improvement of the economy of this country.

The total increase in these Estimates over the Estimates for 1957-58 comes to about £10.8 million—an increase from £112,570,000 to £123,460,000. Of that increase of £10.8 million the following are certain items in respect of which I challenge anybody in this House to advocate a reduction. Of those £10.8 million, capital accounts for £7 million. Therefore, out of the £10.8 million increase, the increase devoted to capital purposes comes to £7 million. That is a positive increase. Nobody can say that an increase on current account of £3.8 million over three years is exorbitant. It is a perfectly natural and logical increase at the rate of £1 million per year which is more than explained by the salary increases given to civil servants.

The capital increase of £7 million can be broken down into certain categories. There is an increased sum of £.25 million for arterial drainage. There is an increase of £.5 million or £500,000 to forestry. There is an increase of £3.5 million towards the eradication of bovine tuberculosis, a particular endeavour which was neglected by the previous Government which never undertook the job properly.

Do not start that.

There is an increase of £1.3 million in regard to expenditure on the Land Project, plus lime and fertiliser subsidy schemes. We find an increase in regard to agriculture and land of £5.5 million devoted to the development of land and agriculture; in other words, an increase of over £5 million towards land development and agriculture compared with the Estimate left on the Minister's table in 1957. Over half of the total increase of £10.8 million can be related entirely towards the development of land by way of forestry and drainage and the improvement of agriculture by way of the eradication of bovine tuberculosis and by the Land Project and lime and fertiliser schemes.

In addition to that, there is an increase of £1,500,000 in respect of industrial grants, grants to the tourist industry and the provision of better air facilities. Of the £10.8 million increase, the £7 million which I have broken down can be regarded as entirely capital and as devoted to improving the employment position. I challenge anybody on the other side of this House or the other House to tell me that any of these increases should be reduced, that there should be less than £250,000 extra spent on arterial drainage, less than £500,000 extra on forestry, less than £3,500,000 extra on the eradication of bovine tuberculosis and less than £1,500,000 extra spent on the Land Project and the fertiliser scheme.

What about the food subsidies?

I am not concerned with the food subsidies. I am concerned with the positive effort made to improve capital investment and that investment should be tilted towards capital services and endeavours of a productive nature which can improve the economy. If you analyse the figures, it will be seen that practically all of the increases in the Book of Estimates during the past three years, apart from the natural increase in wages, can be related entirely to these matters of land development, essential agricultural work, and an increase in industrial grants and grants for tourism.

There are other indicators which would seem to point towards greater progress in the economy. One item which I would like to take out, and which at first sight may not appear to suit my argument, is the fact that the value of imports in 1959 reached the record level of £212,500,000. There was an increase in the value of imports by £13.6 million or 6.8 per cent. When that figure of an increase in imports is analysed, it can be seen how effective it has been in improving the productive capacity of the country. Of that £13.6 million, £13.4 million were for materials for further production and towards the import of productive capital goods. In other words, practically the whole increase of imports in 1959 compared with 1958 was towards production at home, towards increased imports which were spent entirely on productive raw materials and capital equipment for further production.

These are the sort of imports we want. We do not want imports of a consumer nature. I think that is a single example of how the Government have in a practical way led to a situation where moneys are being tilted towards productive use and where you have that rise in imports that can be related to capital imports designed to give employment at home. I see nothing wrong with imports, particularly imports which are designed towards improving the capital value of the country and our productive capacity. In particular, I see nothing wrong with an increase in imports of that nature when the net result is equilibrium in regard to our balance of payments.

In case anybody might think that that statement had no justification in fact, I should like to quote from the Irish Banking Review of March 1960 which was published only recently.

In this volume is discussed the question of the balance of payments which practically every year causes a disturbance in the Irish economy but which now seems to be rectifying itself. In years past, if there was a condition such as I have mentioned, where imports had increased by 6.8 per cent. over the previous year, one would have immediately a crisis in the economy and all the jeremiads would start up, and there would be a period of recession and restriction but the story has been different this time.

What has happened is that despite the increase in imports there have been no economic crises because the increase has resulted in no excessive consumer expenditure at home. Here we find it stated in this review for March, 1960, that, despite that increase in imports, the only result has been to create a balance of equilibrium at a higher level, the ideal at which we should aim. There is no point in equilibrium at a low level, which means a low rate of employment, and when you have increases in imports and despite that still an equilibrium, that is the ideal situation.

The Irish Banking Review under a heading: “What sort of Budget?” says this, referring to the deficit of £15,000,000 on current account:

This deficit was almost certainly balanced by an inflow on capital account. The net external assets of the Central Bank and the Commercial Banks declined by about £2,000,000, but those of Departmental Funds increased by £6.3 million. There was also a considerable inflow of external capital in connection with the investment in the country by foreigners which continued steadily through the year. The continuous influx of foreign capital, even in comparatively small amounts, is a distinctly healthy sign. It is legitimate to conclude that the total balance of payments, on current and capital accounts, was in equilibrium, and that the external reserves were not depleted.

Therefore we have arrived at a situation where in 1959 on the best banking authority, despite increased imports to the extent of 6.8 per cent. over the previous year, we still have equilibrium in the balance of payments at a higher level of economic activity, which is the ideal towards which many Governments have aimed. This is a most heartening sign of the economy and indicates what progress was made in 1959, when we had this rise in imports which did not bring one of these crises regarding the balance of payments which we have had so often in the past. The Government can justly say that they have contributed in no small way to this state of affairs.

Why is it that this progress has been made? First of all, we have the factor mentioned here in the Irish Banking Review, the considerable influx of external capital. Why has that come in here?

You did not want it at one time—"Burn everything British but their coal."

The fact is that these external investors must have confidence in the form of government here, in the stability of our institutions, in the fact that there is a Government in power who, whether they like it or not, know where they are going and know their mind, a government who if they provide a certain system of taxation or a certain scheme of concessions, will not topple but will stay and that they can rely on the particular system or scheme.

That is the principal basis on which anybody interested in investing in this country will invest. He will not come here if he is confronted by an administration pulled hither and thither by minority groups within it and which may at any moment collapse and disintegrate at the slightest breath of bad luck or anything of that nature.

The Government have positively contributed to that influx of outside capital by the very excellent tax concessions, particularly the remission of tax on profits derived from exports. The policy of industrial grants extended over the whole country has also been a considerable inducement in that respect.

Another factor which has improved the balance of payments position is the very welcome increase in our tourist income. We have no positive figures yet about what our tourist income was last year but there is no doubt that it must be between £35 and £40 million and during the past 6 to 9 months, we have all seen more people coming to spend their holidays here. That increase in tourist income was also a factor which enabled us to have 1959 as a year of equilibrium on our external account.

Probably the most heartening factor of all has been the very welcome increase in industrial exports, which was sneered at by Senator O'Quigley. No increase of that magnitude and rate has ever been experienced in our economy. We had a situation where we were more or less stuck or semistuck, making no leap forward, and suddenly, in 1959, industrial exports jumped from £25 million to £34,600,000—an increase of £10 million or almost 50%. We thus have had a welcome increase both in industrial production at home and in industrial exports.

Tell us about total increases in all exports.

I am coming to that. The welcome feature of that is that it underlines the fact that any increase in industrial production in future must reflect itself in exports. It is a welcome sign that our industrialists have now become aware of the fact that the home market is restricted and any further improvements in production must reflect themselves in exports. It is only in that way that we can progress in that regard, and the progress that has been made in production has been reflected by this increase of £10 million in industrial exports.

More desirable even than these figures is the very welcome improvement in the human factor in all this— the increase in employment in industry. Again, over some years past, the position in regard to employment in industry seemed to be static. That has been broken through and there has been an increase in the past year of 5,000 in the number of people employed in manufacturing industry.

There are 32,000 fewer than three years ago.

The total number employed in manufacturing industry was 156,000 and in the previous year, it was 151,000. There has been a break through there as well and all the indications are—I could quote from the Irish Banking Review or the Central Bank Report or the Statistical Survey—that that trend will continue in regard to increases in exports and employment.

That figure of an increase of 5,000 employed in manufacturing industry is particularly important because too often in recent years, when we alleged that there was, as in fact there had been, a drop in the unemployment figures, it was said by our critics that that drop was no credit to us because it meant more emigration.

There are 12,000 fewer on the land.

There are 5,000 more jobs and more people at work in manufacturing industries than 12 months ago.

And 12,000 fewer on the land.

Senator L'Estrange has not spoken yet. The Chair will give him his opportunity presently. I ask him now to let Senator Lenihan continue his speech without interruption.

The position is that the figures which Senator L'Estrange is so anxious to get in regard to employment on the land are not yet available for the year 1959.

Yes, they are.

I shall quote from the various statistical data available, and the consensus of opinion is that the figure of 5,000 I have mentioned more than absorbed the numbers who left agricultural employment, so that, for the first time in six years, we shall face the welcome position that the number of people employed will show an increase on the number employed in the previous year. The final figures of agricultural employment are not yet available, but when they are available if this trend continues, inevitably, at the end of the year 1960, it will be seen that, for the first time, we are absorbing more people at home in gainful employment, taking the agricultural and industrial spheres together. That is the principal point that emerges in regard to this increase in employment of 5,000.

It might be no harm to remind some Senators of some other very pertinent figures. There has been a drop of 8,000 in the numbers on the unemployed register for this week as compared with the same week last year. Five thousand of those can be related to the fact that we have more people in industry. Compared with the black year of 1956-57, the declining months of 1956 and the early months of 1957, when local authorities were broke, when the Government were broke and unemployment——

On a point of order, is it in order for Senator Lenihan to say that local authorities were broke? They were not broke.


Senator Lenihan is in order.

Compared with that black year, unemployment is down by 20,000.

I wish to inform Senator L'Estrange that unless he conducts himself from now on, I shall ask him to leave the House.

Yes, if we get the facts.

The facts are 20,000 fewer on the unemployed register at the moment than there were this time three years ago. That is a fact. Again the figures are there. Does the Senator challenge me to produce them? The figures are 20,000 fewer unemployed in March, 1960, than in March, 1957. The figures are still lower if compared with previous months. I have chosen the reasonable figures. There were nearly 30,000 more unemployed at some stages.

A similar trend is evident in emigration. We shall not have the final figures available until the bicentennial census is completed in 1961 but the indications seem to be that the trend is downward. Whereas in early 1957, the figure was 50,000, it is now down to 30,000.

Was it not 70,000?

I think it was nearer 70,000 and I have said so already.

I shall not pass any judgment on emigration figures but the indications are that there has been a drop of 20,000, from 50,000 to 30,000, between early 1957 and early 1960. This welcome state of affairs which shows an improving trend and which if that trend continues will be still better, will result in a good level of economic activity in two years' time when this Government face the people again. That welcome trend is all the more merited when you consider the fact that there were certain economic difficulties, not of the Government's making, facing the Government last year.

I think the principal economic difficulty which is being surmounted at the moment arises out of the state of the cattle trade. There is no doubt that that has been entirely caused by the bovine tuberculosis eradication problem. The reduction in the prices for which our live cattle are sold in Britain can be entirely related to the fact that there is a state of disorganisation in the trade at the moment, or a state of upset, due to this vast bovine tuberculosis problem. That was also the view of the compilers of the Central Bank Bulletin. They take the view that this question of a decline in cattle exports can be related entirely to the trouble the cattle trade is meeting with regard to the problem. However, it is a problem which is being met in a vigorous manner by the Government, a problem which was delayed and on which there was procrastination during the closing years of the Coalition Government, at a stage when the problem should have been faced up to and dealt with vigorously. The fact of the matter is that in the last year of the Coalition Government, about £1 million was spent, not from the taxpayers' money but from a free gift which was in the "kitty" from the American Counterpart Fund.

I thought it was all gone.

This was something that was found knocking around the office and they spent £1 million on the bovine tuberculosis eradication scheme. They did not seek to do that by way of raising a loan or by way of extra taxation. They had £1 million kicking around and pushed it in a haphazard way into this national problem. That £1 million was spent in the last year of the Coalition Government on bovine tuberculosis eradication. This Government spent £3½ million on that serious and pressing problem last year and are facing up to it in a still more realistic way in the coming year by spending practically £5½ million, an increase of £2 million. That is the practical way to face up to the problem. There is no doubt in my mind, and there is no doubt in the mind of the compilers of the Central Bank Bulletin that if the problem is tackled in that way, by spending all we can afford, we can look forward to the future of the cattle trade with the utmost confidence.

With regard to the west of Ireland, I was glad when I read an announcement that a new tag scheme was to be introduced for cattle from accredited areas in the west of Ireland so that they can be purchased directly by English buyers, without the necessity of the 14 day test. That shows that the Government are facing up to the problem which has already arisen in regard to areas which are rapidly becoming accredited. I can see the situation arising before the end of the year in which English buyers will be able to go to fairs and marts West of the Shannon and buy their cattle there at good prices from small farmers who have been hit in the past 12 months by the eradication programme. That will arise in the next ten months or one year. They will be able to get good prices for fully accredited cattle.

Is that in the recent trade agreement?

It was announced by the Minister for Agriculture last week that this facility would be made available because the experience of English buyers so far has been that cattle purchased in the west have in few cases failed in the 14 days test and that cattle purchased in the west of Ireland have proved outstanding in that respect. Of course this is not surprising, because the incidence of tuberculosis there has never at any stage been very high and before the end of the year, this practical work should result in very good prices obtaining at western fairs and marts. If that happens and the cattle trade improves in the next 12 months, the country should be well on the way to success in every aspect of our economy. Were it not for the £8.4 million drop in cattle exports we would be now well on the way. However, due to the tremendous efforts of the Government, that drop has been compensated for in industrial exports.

Another matter to which I should like to draw attention as being vital is the £2½ million now being devoted for the lime and fertiliser subsidy. There is a very strong argument in favour of extending that subsidy, in accordance with the Government White Paper, to other fertilisers, particularly potash. It would be in accordance with the scheme laid down in the White Paper to move towards subsidising other fertilisers, when it was felt that the phosphate content of our land had improved to a certain degree. We should welcome further producer subsidies of the kind which this Government brought in in a practical way when they introduced the phosphate subsidy of £1¾ million last year.

Another welcome indicator in recent figures of trade statistics is that, last year, there was an increase of £3,000,000 in exports of fresh, chilled and frozen beef. In other words, you have there, despite a drop of £8.4 million in the live cattle trade, an increase of £3,000,000 in this far more profitable type of trade, a trade which gives more employment here at home, a trade which is more beneficial to the community generally.

I should like to ask if some examination could be made into a major development in that direction regarding the lamb trade. I come from an area where the sheep farmers are fairly badly hit and where there has been a great increase in lamb production. I think it would be very feasible to encourage developments in frozen and chilled lamb which could be marketed, particularly in Britain, where there is an opening for high quality frozen lamb. I do not think we have made any impact in that direction. It is a pity because the sheep and lamb population has increased tremendously in recent years and equally with the increase in exports of frozen beef, I should like to see an increase in exports of frozen and chilled lamb.

I am glad to see that the Irish Sugar Company have engaged in an investigation of the possibilities of exporting vegetables and horticultural products in the frozen food line. That was indicated in the Programme for Economic Development: that there were possibilities in this form of agricultural development. It was mentioned that there was a market in Britain for frozen and pre-packed vegetables and fruit and that we have made no impact whatsoever on that trade. The private enterprise section of our economy has made no impact whatsoever regarding the export of frozen fruit and vegetables. I am glad the Sugar Company have taken the matter in hands in the past few months and are looking into it. The Government should give every encouragement as the future of our economy will largely rest in industries of that nature based on agricultural produce. An example is the frozen and chilled beef trade which has increased by £3,000,000, and if that could be followed by exports of chilled and frozen lamb and of pre-packed frozen horticultural produce and vegetables, we should be moving in the right direction.

There has been very real progress in the past 12 months. There are indicators used by economists which point out this progress. The national income is up by two per cent.; the balance of payments is at equilibrium at a high level; industrial exports are up; and the only thing that is down, that is, the export of live cattle, can be related entirely to a matter outside the Government's control and which the Government are now tackling vigorously, that is, bovine tuberculosis. The only single reduction in exports can be related to a matter which the Government are tackling in an enormous way—they are spending £5,000,000 in the coming year— and which was neglected scandalously by the Coalition Government who should have woken up to the danger long before they did. The Minister is to be congratulated on the Estimates he has presented to us.

I had hoped to make a contribution to the debate without directly attacking statements by Senators opposite, without confuting them and without having to reply to them, but such an antagonistic speech as we have just listened to means that it has to be replied to, that it cannot be allowed to pass. Such irrelevancies, such inaccuracies, I have never heard. Worst of all was the statement constantly repeated that the inter-Party Government neglected bovine tuberculosis. The only evidence produced was that we spent less money than the present Government spent this year and are proposing to spent next year. It is quite obvious, of course, that that is merely a statistic brought in to prove something that is not true. The real reason we spent less is that a scheme of that magnitude cannot be started in a day, in a month or in a year. You might as well try to set up a major industry in this country in a month, six months or 12 months.

I should like to remind Senator Lenihan that the inter-Party Government were the Government who instituted the scheme to eradicate bovine tuberculosis. They pressed forward as well as they could and I want to say that as far as I know, this Government are doing the same thing: they are pressing forward as well as they can. I do not want in any way to cast on them the aspersion that was cast on us. It would do Ireland a very bad service if I did. Senator Lenihan's contribution on bovine tuberculosis has not done Ireland or the cattle trade any good.

I take grave exception, too, to another statement made by Senator Lenihan. I bow to your ruling, a Chathaoirligh, but I was surprised to hear that it was in order. The statement was that in 1956/57 the local authorities were broke. I want to assure Senator Lenihan, you, Sir, and the House that I am a member of two of them. In Louth County Council, we have a credit balance of £80,000, which means that we include in the estimates only a token sum of £50 by way of bank overdraft. In Drogheda Corporation, we have a similar token sum of £50 because our credit balance is such, saved year by year by the officials, that we have amassed a sum which enables us not to avail in the normal way of bank overdraft accommodation.

Senator Lenihan says that these old institutions built up by men who came before us and who did better work perhaps than we can hope to do were broke in 1956/57. That is a statement oft repeated by Deputy Briscoe to the detriment of the workers of the country, many of whom are now living and working in London or elsewhere in Britain, just because that statement was made, undermining the confidence and the belief of the people who put up the money, bankers and financiers, had in this country. I want to assure Senator Lenihan that now, after three years of Fianna Fáil, the local authorities are no better off than they were when we left. They are by no means broke, and I have cited for him two which do not have to avail of bank overdraft accommodation.

It is quite obvious also that Senator Lenihan knows nothing of the cattle trade. He produces figures on exports of chilled beef. The reason for the higher exports of chilled beef is the low prices obtaining for cattle for the past 12 months, because when prices are low, we get down to the prices at which we can sell chilled beef on the British market. Everyone knows that the chilled beef trade in this country is a highly fluctuating trade. Many men lost much money in that trade in which you have these periods when cattle prices are low, and store prices are lower than beef prices. When that happens, of course, we can export. Then, happily for the farmer, we get a premium for our stores, because no other country can put its live stores into Britain. When we are given, this premium, the chilled beef trade drops, and even vanishes at times, and the farmer gets more money for store cattle.

Senator Lenihan also relates directly to the bovine tuberculosis eradication scheme, the fall in the export of cattle. The fall in the export of cattle, in my view, is clearly attributable to the low prices. I would draw the Senator's attention to the fact that there is a small increase in the number of cattle on the land. There is an increase, with which I am not very pleased, of 4.9 per cent. in the number of cattle on the land, and an increase of 5.7 in the number of sheep on the land, and this I attribute directly to a lowering of prices, rather than to the bovine tuberculous eradication trouble to which, of course, it is also attributable.

I feel, however, that Senator Lenihan's contribution was such that interruptions were invited and it was hard to refrain from making interruptions. The measure we are discussing to-night gives us a picture of expenditure at a very high level at a time when, notwithstanding what has been said, the numbers of people in our country have been reduced, and at a time when it is true to say we have had for some years a high level of emigration, proving that since 1922 everything which was done—and plenty was done by all Governments—was not sufficient.

A radical change is needed. I looked this year for a radical change and a radical change I did not see. I saw, for instance, a change in the housing policy of the Government—a change to which I shall refer later and with which I do not agree—and I saw a tougher approach all over the country to the social services—a change with which I do not agree. In general, in broad outline, I do not see any change. I do not think any Government Department, or any section, has been turned inside out. In the situation with which we have been faced for the past three or four years, there must have been many places where such a radical change was necessary.

The first thing we must realise and not pay lipservice to, but really realise it and pay true service to it by doing things for it, is that the whole basis of our economy rests on the land. One of our disabilities is that, if we have 50 or 100 men employed in a factory, that is something which we can see. They can be seen and Senator Lenihan could refer to 5,000 new jobs and boast about them, and tabulate them, but agriculture is entirely different. Agriculture is in this maze, with different facets, and interdependence, and we have this huge industry in which people who are employed are listed in statistics, in the supply services, or listed all over the range of different tabulated lists, which are, in effect, directly attributable to the expansion in agriculture.

In the light of the figures that face us, we have to look for an expansion in agriculture. I do not think we have got that expansion; as a matter of fact, I am quite certain we have not. Senator Lenihan quoted figures. I do not like figures. The Chair will know when I refer to this little saying that I do not not refer to Senator Lenihan personally, nor do I refer personally to anyone in saying: "Lies, damn lies and statistics." A set of figures can be taken out of context to prove that black is white.

There are round figures for a two or three years' period which, I think, prove, notwithstanding all that has been said, that all is not well. When I heard Senator Lenihan speaking of the equilibrium being at a higher level, I suddenly bethought myself of figures which I have. They may be a little out-of-date but they are still quite relevant. They prove that since the change of Government, 10,000 fewer people are unemployed, an improvement of 10,000 souls, but at the same time, a few months ago, there were 40,000 fewer people employed, and the figure given for the normal increase in the number of persons seeking jobs was 30,000. In the three years, 120,000 people went somewhere. We can argue all we like about where they went to, but there is only one place they could have gone to, and that is to the emigrant ship.

I believe then that the equilibrium being at a higher level of activity is a bit of a myth. It is at a lower level of activity, and the only higher level that can really bring a contribution is a higher level of activity in agriculture. If we look for expansion in agriculture, even though I do not want to quote figures, we must look for the evidence. We must seek the evidence in the crops and the livestock increase in 1959. I find that in total corn crops, we have a reduction of 9.1 per cent. In root and grain crops, we have a reduction of 2.8 per cent. and, at the same time, in cattle, we have an increase of only 4.9 per cent., and in sheep, an increase of 5.7 per cent.

I have given the reason for that increase in cattle but the only real measure you can use in looking for expansion in agriculture is more tillage and, at the same time, more milch cattle on the lands. If the farmer with 100 acres has fertilised his lands and increased his capacity for production, he can increase his cattle numbers and at the same time, increase his level of tillage. If we could find that we were getting expansion, we would be getting somewhere but as we are at the moment, we are getting nowhere. When we examine cattle numbers which is the only real expansion we have got, we find that while in three-year olds, two-year olds and one-year olds, we have got very satisfactory increases, the increase in milch cows and heifers-in-calf is not satisfactory.

We all know that in Mr. Whittaker's White Paper on the Government's policy for economic expansion and in all these documents, there is an insistence that we have to get our cow numbers up. We have to get more cows giving more calves, giving more cattle for export. The commercial banks have given heifer loan schemes. They loosened up their purse strings and gave loans to buy T.B.-free cows. That has been going on, and the only increase in milch cows was .9 per cent. That is a disappointing figure and one about which we cannot be proud. The figures for heifers-in-calf are only 5.3 per cent. but we must remember that the number of heifers-in-calf is only 130,200, whereas the number of milch cows is about 1¼ million. The increase as a result of the heifer loan scheme was 6,900.

My view is that so long as we have not got expanding agriculture, we shall not get anywhere, and no matter what figures are quoted, I think we are in a contracting economy, and we must get out of it. How do we get out of it? I do not know, but, first of all, we must examine what we can do about agriculture.

The Leader of my Party has a great saying that if you pay the farmers, they will produce the goods. That is good, solid, common sense. I am sure all the people opposite will agree with it. At the same time, when you examine to-day the opportunities for increasing the prices, you will find they are very few. By and large, the price of wheat was a political issue, say, for the past number of years. At the moment, everybody accepts that there can be no spectacular increase, that if we hold the price at the same level or at a small increase or at a small reduction, it is about the way it will be.

Feeding barley is entirely related to the price of our pigs. There is no opportunity there for a higher price. Perhaps there are a few shillings extra for exporting malting barley but the increase is not spectacular. There is nothing spectacular in the prices.

Yesterday, the Irish Times forecast that the Taoiseach would find £1 million, and increase the price of butter somewhat. As a result, the creamery producer would get 3d. per gallon on his milk and we in the Dublin sales district and those in the Cork sales district would similarly get 3d. extra per gallon for our milk. I hope I am not being conservative when I talk about a 600-gallon cow. I do not think I am. Threepence a gallon on a 600-gallon cow is £7.10.0. Therefore, a man with 10 cows would get £75 more per year if his cows are 600-gallon cows.

I submit that for that sort of man all that increase has been swallowed up in costs over the past 18 months. If you take the carriage costs, feeding-stuffs, imported proteins, and all these other increased costs, with the exception of the reduction in the price of fertilisers, you will see what I mean. In my view, for this man, all that increase has been removed before you even take into consideration the drop in the price of cows, the increase in the price of the T.B.-free cow which he must purchase now and again for breeding. Therefore, I take it there is not much opportunity anywhere for increasing the price of agricultural produce.

I think that if the Taoiseach did give this 3d. it would be princely, if he can get it. However, as far as the 10-cow man is concerned, and he is the backbone of the country, it is not much use. You must give him something further. It would be a help, but it is not much use when you consider the costs. It has a political use, of course.

We may take it that the era of fancy farm prices has gone. Let us face it. Fianna Fáil must face it just as we have to face it. The era has arrived, as I see it, of a lesser percentage profit and a greater turnover. We have arrived at this era without an expanding agricultural economy. I submit that, by some means—I do not know how we are going to do it—we must expand our agricultural economy but so far we have not done it.

The first thing we must do is to make greater efforts for agricultural education. If you go out for a shot on Sundays across the fields, if you go across neighbours' land and get across three or four miles of country, you will find many fields not in full production. They must be got into full production but we cannot do that unless we get its importance across to the owner. We have to go right back, forgetting Party politics, to the Parish Plan. We have to have more agricultural produce. We have to get across to the hardest people I know to get a point across to, the small farmers, that they must do their job in a different way from their present standard of agriculture.

The day of ploughing the field up the hill and killing the horse because "my father did it before me and what he did will do me as long as I am here" has gone. That man will no longer be able to live on a profit and there is nothing else he can live on. When we come back to the Parish Plan, for which the Party to which I belong have wholeheartedly spoken again at the Fine Gael Árd Fheis and have wholeheartedly decided to go forward with, we have then to decide to channel money into agriculture. How are we to do that? That may be our most difficult job and the most difficult part of it may not be the finding of the money but the proper channelling of it into agriculture and into our farms.

We must face the fact that the Irish farm is a small unit. It is very small and in some cases it is either mechanised incorrectly or not mechanised at all. Many farmers, as an evidence that this channelling of money is difficult, have gone too far with mechanisation on the small farms so that now they have not the money for stock. Therefore, as we review the situation in this time of rather low farm prices staring us straight in the face, we have to face the fact that this channelling of money must be done well and that there must be no losses by wasting money. One form of trouble is that there may be failure to make wills, failure to take out administration, difficulties in regard to Title. These difficulties have meant that most bank managers have no interest in lending money to the small farmer.

In my business, I meet a lot of farmers. I have sent men I knew to be fully creditworthy to banks. I have rung up the bank managers and told them all about these men and their stock. They knew all about these men. Later, if I met the bank manager and asked him about the individual whom I sent to him, he might say: "The land was small and there was difficulty in getting title. I sent the man away to have the matter cleared up and if he comes back to me in a year or in six months' time, I shall try to do something for him."

If that man had been a 500-acre man or had a balance sheet showing £500,000 turnover, there would have been no difficulty. The legal trouble would have been set in train when a good firm of solicitors would tell the bank about the position. They would soon get security and the money would be forthcoming. On the other hand, when all the man wanted was £500 or when all he was worth was £2,000, the game was not worth the candle. Furthermore, if there was a charge on the estate, probably in respect of a great-aunt who went to America fifty years before and it was possible that her heirs and successors could come and demand £1 a week for 50 years, the game was not worth the candle.

In October, 1956, the inter-Party Government decided in the Engineers' Hall they would set about freeing small holdings from deeds of charge which had been there for a number of years. That has now been dropped. We did not stay in office long enough to do it. This Government would be well advised to go into that aspect of things to see what they can do to free small farmers from these liabilities and so make it easier for them to get administration. Furthermore, they should ensure that money is channelled in through the commercial banks where it is most needed.

A lot of money lent was wasted. Therefore, I think the commercial banks, in relation to these small farmers, have a very serious responsibility to see that the money they lend is not wasted. Two banks so far have appointed agricultural advisers in an entirely advisory capacity. As I understand it, these men are going around the country giving agricultural lectures. They will advise clients at the banks on their agricultural activities. They do not go to the farmer who is seeking an increase of overdraft, who is seeking a loan to develop his farm for stock or for anything else. They do not examine his farm. They do not examine his stock. They do not take a critical look at his produce and then advise the bank for or against. The banks are behind time there.

The Agricultural Credit Corporation, let it be said, has its inspectors. It sends these inspectors out to the farms to report back on the state of the land, on the state of the buildings, on the numbers of stock, on the health of the stock and on the ability of the farmer and, on that basis, they give a loan. The Agricultural Credit Corporation's repayments are 98 per cent. My guess is that the other two per cent. is good and will be good although it is slow. Therefore, in this channelling, there is a lot of good work to be done, back-breaking toil. The commercial banks must do something for the small farmers of Ireland.

If that means more officials, more agricultural advisers who do more than advise, who inspect the cases of applicants for loans, I think the banks had a good year this year. Let us hope they have a good one next year and that the profits are there. The agricultural marketing reports were excellent documents and the Government must act upon them. So far, the Government have not done so. So far, they have done absolutely nothing on any of these marketing reports. I can say here that the report on the marketing of turkeys was prepared and issued to the Government, at great inconvenience to the members, in time to do something last Christmas. Nothing was done. Happily, the position was not quite as bad as was foreseen. Had the price of turkeys been as bad as they foresaw, it would have been almost a national catastrophe. Since then, nothing has been done.

Again, the Leader of our Party will not defer to anyone in the view that the Department of Agriculture is the best in Europe. I do not disagree with him but where I am inclined to part slightly is in relation to this question of marketing. It is almost a question of finger-tip control, why to sell, how to sell. The business man only knows something about how it is done and what a back-breaking job it is, what contacts have to be made and what effort has to be made at all hours, times and waking moments. It is such that I think a Government Department is not the right place for it.

The marketing reports in general welcomed the operation of a marketing organisation of our own, particularly in Britain. Take, for instance, bacon which we could supply for the 52 weeks of the year. By putting an organisation in a city, it could distribute Irish bacon to every shop in that city at the right price. It could do it for two years and then see what could be done.

Eighteen months ago, when the Minister was here, I asked him what was being done about agricultural marketing. He said that £250,000 had been voted when the Government took office in 1957. That is quite true. All that has been spent so far is the expenses of the marketing committees—the trip of one or two men to Liverpool to talk about eggs and the trip to Denmark to talk about bacon. That is all that has been done. I could give the Minister the names of organisations in this country that spent five or ten times as much. The Government, the Minister and the Minister for Agriculture in this regard are sitting down. If they were ordinary business men, they would have been on their toes and doing their jobs.

It is a question then of whether or not this country can afford to give anybody anything for nothing. I tend in general to the view that we cannot afford to give anybody anything for nothing. It may be almost heresy for me to say—indeed, my Party is the Party that instituted the agricultural grants—that the better thing would be that instead of agricultural grants, there should be interest free loans or loans at low rates of interest. There would then be a recurring fund from which there would be money constantly available for farmers.

I do not think this country is capable of producing a level of taxation to make any impact upon the housing of farm animals upon the farms of Ireland but if a recurring fund were available, the loans being repaid by the farmers after 5 or 10 years, something would happen. I concede that this is particularly a line of thought that would probably be all right in the eastern counties. I concede that in the western counties, where the level of production is so low and where these grants are very welcome, they should be maintained. I think—and this is a personal view and not the view of my Party; I do not know what the view of my Party is at present, although I know the views it held in the past—that in the developed counties at least, it would be a far better thing to devote these funds to interest-free loans which would recur and be available for distribution again.

In the Department of Lands, there was the greatest flurry one ever saw when the present Minister for Transport and Power took over. One would almost have imagined that we would have had pulp mills and forests all over the country inside six months. One would have imagined that we would have had farmers with pools at the back of their houses with fish in them which they could dispose of in the Dublin market almost overnight. Nothing happened; not one solitary thing happened.

I am proud to be a member of a Party who have decided to make it a point of policy to review this whole business of land division. Our view is that it would be a far better thing in relation to these moneys which are wasted to give loans to small farmers for more land and to give loans to farmers—young farmers of ability— to lease farms. We feel that the Department of Lands is the most wasteful Department of State. The tragedy of the whole thing is that events in Kerry have proved what we knew all through the years. When we obtained our freedom, we got some sort of idea that we also obtained freedom to trample upon everyone else's land. We did not obtain freedom to take his business. We did not obtain freedom to do any of those things. We obtained freedom to take possession of a man's land. Even though a Cumanna na nGaedheal Minister instituted this system of land division —he was one of the best Ministers ever in this State—even though he did that, I believe if he were alive today, he would be the first person to abolish it.

You cannot succeed in a poor country in giving anything to anybody for nothing. When you try, what happens? You spend money erecting the fences between the small fields when you give a man 35 statute acres. You have to spend money in building the house. You have to spend money on all the officials who must look after him. You have to spend money on investigating all the applicants for land, and they are legion. When all that is done, you do nothing but put him on 35 statute acres which is now an uneconomic holding and you create feelings of greed and envy in these parishes which did not exist before. I am proud to be a member of a Party who decided to end that.

Does the Seanad realise that only one-third of the amount of money voted to the Department of Lands goes for the purchase of land for re-division—£1 in every £3? Could anything be more wasteful? Should that money not be applied, if we have land-hungry men, in a different and more decent way by way of interest-free loan, by way of facilities for leasing land by farmers with ability and who could lease land for a certain number of years and prove themselves? The land could then be given on a long term purchase of 60 or 100 years?

The trade talks now almost concluding seem to me to be a case of what might have been. When they started, the flavour was that it was a question of whether or not we would offer Britain easier access to our home market for their industrial goods in return for access to the producer subsidies which their farmers enjoy. Lest anybody should think that that was not so, I refer him to an article by the Sunday Press Political Correspondent on February 14th, 1960, and he will see it clearly demonstrated there that that was the situation.

Of course, we started with an almost hopeless case because the Minister for Agriculture and the Government had sat down doing nothing for two years, and during that period, the Danes had come to Britain and secured the removal of a 10 per cent. tariff on their bacon and parity with all other exporters to Britain, and Mr. Menzies had come from New Zealand and got a guarantee that no country would get better terms for its dairy produce than he would.

There we were caught in a cleft stick. Was it deliberate? Did the Government never want to offer easier access for industrial goods here in return for better agricultural prices? I hesitate to charge any Government with that, but I am suspicious and the country is suspicious, and of course the situation is that now nothing can be done. The whole thing is a fait accompli. I quote from the Sunday Press article:

The Anglo-Irish Trade talks in London on Friday have shown one thing—economic integration between Ireland and Britain, as mooted in certain quarters here, is now out of the question. As an independent political and economic unit, this country must work out its economic destiny....

On the other hand it should also be remembered that the trade advantages which Ireland would have to have given to Britain in return for agricultural integration might have threatened Irish industry. The President of the Federation of Irish industries expressed this fear during the week when he said that the reduction of tariffs would have to be extended over a period of twenty years.

Now, of course, we had faced failure and this is the way the Political Correspondent, who no doubt had the closest contact with the Taoiseach on return, put it at the end of the argument:

There are many people in Ireland who welcome the outcome of this week's talks. The industrialist and the farmer will welcome the fact that policy had been defined. Those who feared the ultimate consequences of a policy of integration will no longer be troubled by the fear that economic integration might be the first step to political integration and the loss of our independence.

Wrap the green flag round me, boys! He continued:

The die is cast. Ireland must meet the challenge of the present as an independent community. And, I might add, in his heart every worthwhile Irishman was proud to have it so.

Was proud to have it what way? That our farmers had to export their bacon and eggs at prices lower than the cost of production? When I say that, I mean to prove it by one example, that is eggs. The subsidy on eggs in Britain has two features: one is that it is a producer subsidy and the other that it is a subsidy to reduce the price to the consumer so as to stabilise industrial wages. The position with regard to eggs is that we have to sell at an average price of around 2/3d. a dozen. The British farmers get around 4/- a dozen and I maintain that the price at which the farmer probably may sell would be an average of 3/3d. There we have the subsidy which the British farmer enjoys first to bring his price well above the cost of production so that he will continue to produce large numbers of eggs, and obviate the necessity of imports, and at the same time, a subsidy to bring down the price to the industrial consumer so as to stabilise industrial wages.

The Irish farmer right through this range of agricultural goods must export to Britain, not at the cost of production or a little more, but at the cost which is the cost to the English industrial consumer, which is a subsidised cost below the cost of production, and therefore of course he has not a hope. What could have been offered if we had gone early enough, before Mr. Menzies and the Danes had their run? Might it not have meant an expansion in agricultural production here which would have meant an era of prosperity being continued for 10 years which would have been unprecedented?

The 1948 Trade Agreement—and Senators know whom I am quoting now—doubled the volume and trebled the value of our agricultural exports in eight years. Senators have heard it thousands of times before, and I get annoyed with Deputy Dillon for repeating it so often, but it is true. The agreement was that we got parity for our agricultural products with British farmers.

Industry here must be expanded, but industry has failed to stem emigration. The increase mentioned by Senator Lenihan, if it is correct, is only a fleabite. Five thousand more men in agriculture would not be seen, if we had an expanding agricultural economy. How many farmers have we who have two or three sows, how many farmers have we whose wives have two or three hundred hens? Look across the Border where the prices are right, and every small farmer has four or five or six sows, and five hundred or a thousand hens, because the farmers' wives are being paid to produce them. Because we thought we might injure an industry which is entirely a supply industry and which has failed to stem emigration, and because we thought it would cause a great amount of unemployment, we did not offer what we could have offered to Britain, namely, freer access to our industrial market here.

All our industries were based on supply industries and none of them was geared for export. The perfect example is the boot and shoe industry which has three or four large factories in Louth. All you needed was an empty malt house or grain store or something like that in which to instal machines which you were not allowed to buy. A tariff wall was set up and there you had an industry supplying the home market. After a while when the quality improved, happily they went into the export market in this case, but in most cases these industries are sheltering behind 33?% or 50% protection and are not interested in moving out, as Mr. J.C. Tonge said in the Evening Herald:“When the Little Free Trade Area convention was signed recently, it was agreed that in the case of Portugal tariff reduction would be spread over 20 years, and it was most important that Ireland should not agree to any shorter period.” The Taoiseach has come back from the trade discussions with no period mentioned.

An Leas-Chathaoirleach

Would the Senator give the date of the quotation?

15th February, 1960. There is no number of years mentioned for the reduction of tariffs and in this situation we must have a restricted economy, for liberalisation is the whole scheme of things to-day. This is a small country in a very big world daily growing smaller and it has no choice but to liberalise. Up to the credit squeeze, Deputy Sweetman, then Minister for Finance, instituted very great incentives for export of industrial goods which happily had their effects as indicated by Senator Lenihan to-night.

The Control of Manufactures Act was supposed to be designed to stop foreign industrialists coming in and getting control of Irish industry. That was the most stupid piece of legislation ever perpetrated on the Irish people. We were starving for capital and, at the same time, we had an Act on the Statute Book which precluded men from coming in and investing money to employ people.

Did you ever see a man investing money when he did not hope to get something back? Was the investment not sufficient security that the industry was bona fide? But the credit squeeze completely exploded that myth, because the Control of Manufactures Act was not for that purpose at all. The Control of Manufactures Act was to see to it that there were two or three factories behind the tariff wall which could produce, at whatever price they liked, sufficient goods to supply this country alone. There is evidence of that all over the range of industrial goods. Now that the Act has been amended, the tariff wall is not perhaps such a strong weapon as before because I think, if there were four factories producing an article, it would be hard to refuse permission for the fifth or the sixth factory.

If there were a fifth or sixth, then we would have competition. As long as two or three people were organising the thing and got permission from the Government to set up factories, and as long as nobody else got permission, then the Irish consumer did not know what price he was paying. He could not compare it with outside prices. The position was that the people in our economy who had to export at world prices were paying far more than they should and their net profit therefrom was thereby reduced.

The result is a small number of well-paid people in industry with great power and great influence, and this influence is often used to the detriment of the entire community. After all, when you get a man with 500 employees and he does not get what he wants, he says to his local T.D.: "I am knocking off 200 men next week." Then the Minister hears about it; the Minister listens; and the Minister must do something about it. That is the snag about the position of protected industry. But again there is here the opportunity and if we can liberalise and integrate our economy with that of Britain, without the slightest doubt we can expand, but we must integrate. Our tariff walls are so light and so small and weak that we shall find ourselves engulfed and completely drowned in a flood of economic depression, if we do not see to it that we take our place in the world, which, as I said, is gradually growing smaller.

I do not agree with the Government's policy on transport. I noticed two statements in the Irish Times by Dr. C.A. Andrews, Chairman of C.I.E., who said:

I myself think that if it had a monopoly it could give a much better and cheaper service to the public than at present it can give.

The report continued:

Dr. Andrews said that he greatly doubted if many of the firms which were running fleets of lorries could justify them on economic lines, even against the existing C.I.E. prices. One of his company's problems was to persuade fleet owners that this, in fact, was the case, and to woo them back to using the public transport system.

A little further on he said, according to the report:

The balance, however, of 1250—

He was referring to lorries—

were owned by private firms which could replace them with C.I.E. services. The traffic potential for C.I.E. from this source was, therefore, quite substantial—it was estimated, in fact, to exceed £2,000,000.

From that, reading between the lines, we can take two points, that C.I.E. are so interested in getting private transport moved on to their services that they have actually carried out a very detailed assessment in Dublin city of the number of trucks owned by firms, which they believe should not be there and whose services should be provided for them. Secondly, when I look at the first quotation and see the word "woo", I relate it to Government activity and Government activity has not been in any way the liberalising sort of thing which I advocated to-night. I would draw the attention of the House to two Acts which passed through here this year. The first Act was to see that private hauliers who had to use containers would only be allowed 7½ cwts. in respect of the weight of their container on the licensed weight on their vehicle. That of course, means that licensed hauliers will not be able to use containers because modern containers weigh 25 cwts. and must use sacks for grain and other commodities. That places them at a disadvantage compared with C.I.E. who want to get in on new business. That is not exactly the way to woo the people. That is the big stick that has nothing to do with wooing, which is a gentle art.

Similarly, we had a statement by the Minister for Transport and Power, on that Act when he said he would do nothing which would endanger one iota of business to C.I.E. Therefore, I take it the Government are not in exactly a wooing mood either and the Minister for Local Government, speaking on the Act in which he proposed to raise all motor taxation on commercial road vehicles, was in a similar mood to that of the Government. He was not wooing anybody. He was making it clear that the private user, these 1,250 people in Dublin and around the country, would pay considerably more to put their trucks on the road and well this House knows it. The high road tax on the vehicles of the private firms must be paid for from their income and must be shown in their balance sheet. C.I.E. show it in their balance sheet but when we observe their balance sheet, we find the figures are, shall we say, a little more resilient than those of the Minister for Transport and Power, or those of the Minister for Local Government. They are a little more resilient than the normal balance sheet figures.

I quote now from page 7 of the ninth annual report of C.I.E. under the heading "Financial Results," and from the second sentence, which reads:

The loss of £2,588,074 in the year 1957-58 was reduced to £1,789,917 in the year under review. This loss again includes a sinking fund provision of £105,000 and also depreciation provisions amounting to £1,594,000. No provision has been made for the depreciation of fixed assets of the Great Northern Railway Board acquired at no cost to the Board. Renewals and replacements of £1,290,544 have been charged in the capital account. The Government granted the Board a sum of £701,483 towards meeting this expenditure to the extent that it was not covered by the moneys available from the working account.

The Government paid, in the form of a free grant, the amount (£719,188) required to meet the interest payable during the year on the Transport Stocks.

Does it matter a hoot if the Minister for Local Government comes in here and raises everybody's road tax when you have a situation where you can write off a sum like £1,200,000 and provide at a stroke £700,000 and again £720,000?

The policy of the Government in relation to transport is to break even in 1964. That is an excellent objective but you will break even by making quite sure that private firms are forced off the road or forced to use C.I.E. who have realistic costs while private firms costs are forced up—but that is due to two items of legislation with which the House is familiar. I quote from the Irish Times of February 6th:

Entire C.I.E. System Under Examination.

Will meet 1964 deadline.

Mr. Tim Dennehy, C.I.E. information officer, told members of the Dublin Rotary Club at their luncheon in the Royal Hibernian Hotel yesterday: "We have a deadline, and we must and we will meet it. By March, 1964, C.I.E. must be paying its way."

Unfortunately private hauliers and private owners of firms owning road vehicles are interfered with and, at the same time, you have a situation in which one cannot move with a lorry on the road 15 or 20 miles but a young policeman who has completed a course of lectures in Dublin stops you to find out if there is any contravention of the Road Traffic Act.

An Leas-Chathaoirleach

The last sentence, I think, is not relevant.

And the words "to woo", I take it, are not relevant either. Deputy Sweetman when speaking on the Vote on Account in the Dáil said there was something which he wanted to introduce before leaving, a separate Budget and a separate debate on capital account and on current expenditure. The useful thing about that is that it gets across to the ordinary man in the street where the money is going. We must move up the capital account and move down the current account. Of course with changing factors each year, that may not be evident in actual figures, but we have got to move and that must be our trend. There is a necessity for wise capital expenditure by the Government on the land and the sound industry of Ireland. That is most important.

Senator Lenihan referred to the local authorities being broke. That was, of course, the time when Deputy Briscoe was conducting his housing campaign of 1956 and 1957. In the matter of replacement economy, we were trying to do something but the Government are engaging in many ways in unwise expenditure. We were trying to do something and the figures since have proved that we were building more houses, but this Government have substituted Section 19 of the Act of 1931. Where a local authority may decide that a man is eligible for a house or that a house must be condemned, the Department of Local Government inspector comes along and feels that the house should be reconstructed; he decides on reconstruction, gives a grant and proceeds gaily on his way. On paper, that appears an excellent thing; in practice, it has been a rotten thing.

Inspectors of the Department of Local Government passed for reconstruction houses which were not fit to be reconstructed. They might pass a house which was inaccessible, a house made with mud walls, a house which would in any case be vacated in 15 years. They spent £300, £400 or £600 on those houses instead of spending £1,000 on building a labourers' cottage. That is being penny wise and pound foolish. It means, of course, getting around the Government's difficulty. It stops people from kicking up a row for new houses but it is bad economic practice.

Has the Louth County Council not got a supplementary grants scheme?

Certainly, but that has nothing to do with it. My point is not that there must not be expenditure but that expenditure on a house which will be vacated within 15 years is unwise expenditure.

An Leas-Chathaoirleach

This would be more appropriate to be a discusion on the Appropriation Bill.

The entry of the Irish banks into hire purchase finance is noteworthy. It has been happening in Britian for a number of years. They are being forced into this business because this plum, this high profit business, was passing them by. Somebody came to them seeking a loan and was refused, but then he went to a hire purchase company and got it and the banks had to go into that business themselves. One bank controls a very big hire purchase company. They have a heavy responsibility because they must direct finance in this direction to good effect. The banking system must endeavour to see that there is money for agriculture and industry and that the channelling of this money is well done.

We had a credit squeeze here and during that period it was almost impossible to get bank accommodation. That was unfortunate because it meant restriction, meant that people were left out of employment and meant generally that we had to tighten the belt. At the same time, it did cure our ills, but having cured them, it is wise to look at what is happening in other countries. I would have the temerity to point out what is happening in the United States.

I quote from Fortune of March, 1958: “The Autocrat of 12 Per Cent Money.” The article deals with the finance company of Walter E. Heller which sponsors loans all over the United States. I understand from this article and from others I have read that he provides such a service that people who can go to the bank at six per cent just do not go. He issued a three monthly balance sheet and his impact on industry all over the United States is such that he can advise companies where they are going wrong, find markets for them and set them up so easily that his service is well worth 12 per cent.

Our banks have not got any service like that but that has got to come and I hope the Government will influence it. I have not the slightest doubt that we are in a contracting agricultural economy and if we do not set about changing that state of affairs, the situation that existed in 1956/57 will return. We must do something about it and my view is that there is a lot that can be done and that the Government had better get moving.

I am going to bite on only one cherry in this discussion and I am sure that the House and the Minister will forgive me, if I am less global than previous speakers have been. I want to speak about something that has disquieted me for some time and it refers to the organisation and structure of the two kinds of government we have in this country. There are two arms of government, central government and local government, and their purposes are different, but that difference in recent years has blurred. I think the injustice that blurring indicates is a serious injustice and I want to draw attention to it. I hope that the subject will be shown to be completely nonpolitical and non-controversial and one that concerns every one of us.

My case is that the Central Fund Bill does not reflect the full picture of taxation. I should like the House to address itself to the impact of the activities of the Government on the fabric and the purposes of local government, and particularly its finances, and to focus its attention on the developments which constitute a threat to the continuing organisation of local government in Ireland.

Gradually, and for that reason, not clearly observed, a movement can be noted over the years of taxation from the taxpayer to the ratepayer. The pattern is now becoming clear and the purpose is now obviously deliberate. This movement has not meant any relief for the taxpayer. In fact, it has rather acknowledged that the burden on the taxpayer is almost at maximum, but the burden on the ratepayer is now double what the taxpayer's contribution was in the early years of the State. The actions of this Parliament have brought about that change.

The real functions of local government, the provision and maintenance of local services, have been elbowed aside and the purposes which belong properly to the State are rate financed, to the detriment of expenditure in proper local government spheres. Every local councillor knows that this transfer has been subtle, stealthy, but very effective. The imposition of State functions in the priorities of local expenditure has created chaos and dismay, and threatens the entire edifice of local government in this country. In the domain of health and social services, it is most obvious, and most pronounced, and the consecutive rounds of wage and salary increases made necessary by State action in increasing living costs have been added in, too. The subsidiary bodies which all local bodies control have had to meet similar charges, and these charges come home to roost and they sit on perches outside the local government treasuries. The amounts involved would be staggering if the people could focus them properly.

The city of Cork to which I have the honour to belong, and on whose local council I serve, finds that its expenditure on public health services in the ten years since 1950 has increased by 200 per cent. Expenditure on health services in the city of Cork, a modest-sized city, is now running at £½ million per year. It was £175,000 in 1950. Wage increases which have been made necessary by the action of this Parliament show an upward trend of 55 per cent. in that period and clerical and professional salaries have all followed. The result has been that the proper and appropriate spendings of that local authority have had to be postponed because they were snowed under. The fact is that any councillor who examines his Book of Estimates will see that one-fifth of the expenditure of local government is now properly controllable by the local councillors. The items therein are really being cut too much now and such services are being starved.

There is another side to the picture. The local government auditor who has just completed his audit of the finances of the city of Cork states that the councillors have underestimated in recent years, that they have not struck a high enough rate, and that the solution of their financial difficulties is to estimate more fully. The Cork rate is at an all-time high but the trouble apparently would be solved if we provided more money. What happens in that case is that there are ratepayers' organisations who advertise warning the ratepayers not to be fooled by the auditor's comments. They say that one thing must not happen; the rates must not be increased. Newspapers add to that kind of pressure. Some shrieking headlines and some pretty wicked leaders are published commenting on the activities of local authority members. Some of these leaders are uninformed and thoughtless, but some are written with worse motives. There are always agitators in this country waiting for trouble, and they find it quite easy to inflame the harassed ratepayers. A pretty denouement is coming to hand and the next stage will be worse than the first, if this trend does not cease.

Rates are climbing, and shrieking headlines pillory councillors for their failure to control what is uncontrollable, by reason of what this Parliament has done. Businessmen, farmers and small householders shrink from the rate demands and they cannot be blamed. We are nearing the point of diminishing returns, and the State will be very unwise if it ignores the protests and grievances that are being stirred up by that subtle, stealthy, but undoubtedly progressive development.

There is one other danger to which I should like to direct the attention of the House. Members of the House who are members of local authorities will agree with me that there are good men who take part in the work of local government. They are the most valuable men in any local government body —county council or city council. Those men will be found to be unwilling to endure any longer the criticism levelled at them for their failure to do what it has been made impossible for them to do. They will withdraw from public bodies and the whole fabric of local government may deteriorate as a result.

This sombre picture will be accepted as true by every public representative in Ireland and the State would do well to halt and, if possible, to reverse this trend of transferring obligations which are properly functions of the State machine to the local government machine. I commend examination of this problem to the House and particularly to members of the House who undertake the very thankless task of local government.

I am sure Senators were rather appalled at the dismal forecasts made in the speeches we listened to here this afternoon from Senator O'Brien and Senator O'Donovan. If those speeches could do something to alert the ordinary men and women of Ireland to the necessity and urgency of the situation, they will not have been in vain. Possibly the greatest use that could be made of Parliament in our time would be to speak some home truths to all the people within our economy.

Most of us in public life must by now be almost cynical of anyone who reads or takes heed of the prognostications of all those who were asked to examine our economy. We remember that in 1951, the then Government asked a firm of industrial accountants —before industrial accountants were quite as fashionable as they are at present—to report on the industrial sector of our economy. They made suggestions. I do not think even one of the suggestions or recommendations made by the I.B.E.C. commercial service was put into effect. In fact, it is a document to which we never hear anyone refer now though it might well be read. It is as timely and as modern to-day as it was nine years ago.

When Senator O'Brien was speaking on expenditure without increase of income, I felt like saying that the only thing that that could do for us in the final analysis would be to bring us to bankruptcy. We might as well face these situations. If we increase expenditure by 7 per cent. and production by 2 per cent. we shall eventually reach a situation in which we shall not be able to balance our books.

When I hear Ministers speak in either House, they always give me the impression of waiting for something to turn up. They are hoping somebody will come from America or some other place and start big industries here. They are hoping for a repeal of the Control of Manufactures Act and that we shall immediately, without creating the conditions here, encourage large industrial firms to come in and be Irish-based and manufacture goods for export to the four corners of the world. They are hoping they will pay high wages and big rates and that there will be plenty of opportunities of employment for University graduates and others in these industries. Such fairy tales do not happen here or in any other country.

In most places where it has been a success, industry has been built up, slowly and patiently, step by step. The workers, the management and the people who own the business and invest their money in it all have a background of acceptance of a situation of that nature.

The English business man and the English workman is attuned to that way of life. It is part of his environment. His school and his home are suitable for that type of development.

One thing that worries me considerably about our economy is that we believe we should be able to pay the same rate of remuneration, whether in the case of management or in the case of workers, as is enjoyed in Britain because people can freely leave this country. If we increase the remuneration of one sector of our community —civil servants have had an increase and all our workers are about to get an increase—the other sectors will suffer, unless the national income increases.

If the total increase were no more than two per cent. I suppose it could be met but the increase is considerably more than two per cent. Therefore, the farmers and people in other vocations have to suffer but it is generally the farmers. I was interested in the debate in the other House on 10th March during which the Taoiseach said it would be necessary to allow the price of some agricultural products to increase on the home market and to increase some farm production subsidies in order that the farmer may be compensated. I wonder how far we can get by redistributing the small income we have.

Increasing our taxation and paying subsidies to farmers is only redistributing income. It is bound to cost money to do so. It has often struck me that if we could keep down our costs and get real value for money here in Ireland, it would solve our problems.

It is costing us about £150 million a year to govern 3 million people. The result is that we have a very high-cost economy. We have a taxation level which in relation to our resources is probably almost the highest in the world. Our salaries and wages are high in relation to each unit of production. They may not be high in relation to the very high output in British industry but they are high in relation to each unit of production here.

Another matter to which the Taoiseach referred in the debate on 10th March is the fact that we are not in a position to control the price of our agricultural produce. In my opinion, that is a very basic fact and I propose to deal briefly with it. The principal exports from Ireland are cattle and livestock and livestock products. We are in no way able to influence the price Britain will pay but we should be in a position to influence the value of the money which is received for those exports. By allowing money values to deteriorate in this country, by increasing taxation, increasing salaries and wages and all forms of costs, we become such a high-cost economy that, each year, we are devaluing our exports and making a solution increasingly difficult.

Tourism is one of the industries that could greatly be encouraged by good value. I remember that in the 1920's, everyone wanted to go to France because France was the country where one could live cheaply. I believe everyone in Britain would want to come to Ireland for holidays if the cost of living here were a small bit lower than it is in Britain. I fear we shall shortly arrive at a situation in which our cost of living will be higher than that of Britain.

Another advantage of a low-cost economy is that many people on pension or with a private income would want to come to live here. Industrialists would want to start industries here because they would be in a stronger competitive position than any of the industries on the continent of Europe or in Britain. I know all this sounds very Utopian but what will become of us if we allow the position to drift as it has been drifting since shortly after the establishment of the State?

Senator O'Brien made one observation to-night which must give us food for thought. Speaking about high and low cost economies, he said that in order to pay high wages, we must have a vast pool of money available for investment. This vast pool of money is not available for investment. No one can tell us where or when that vast pool of money will be available.

I am interested in directing two or three industries. The State ought to have the same problem as we have, that is, that we cannot spend more than we have earned or more than our resources, but the State has no interest, as far as I can see, in what are the resources of the country. They say so much money is required to run the essential services and they pile it on the economy, irrespective of whether the economy can carry it or not. That is why we find ourselves in the dilemma we are in now. The sooner the State imposes taxation burdens which are within the capacity of the people of the country to carry, the better and the sooner shall we be able to make any progress in Ireland. These facts are known by everybody.

Senator Barry spoke here briefly to-night on local government. I feel that there will be almost a revolution in many of the country towns if something is not done to curb expenditure. The old Department of Local Government put a restriction on local spending. Local Government to-day directs, stimulates and encourages spending and high rates. The old procedure of any form of control on expenditure has gone.

There is nothing in local government that is analogous to the Department of Finance in State administrations. Every State Department has to justify its expenditure to the Department of Finance. Local Government is encouraged to spend prodigally. Further, the semi-statutory bodies that form part of local government, such as mental hospital committees, vocational education committees and the like, are entitled to demand from the parent body, the county council, the wherewithal to run their affairs and they have no such control as is exercised by the Department of Finance on the expenditure of these bodies.

Apparently the effect of all this is that the rates have got out of hand. It costs more to finance local government in this country to-day than it cost to run the whole country 30 or 40 years ago. Unless some new system is introduced which will control the expenditure of local authorities, I am afraid that the situation to which Senator Barry referred will become manifest in most of our towns and cities.

We saw what happened in the city of Waterford. It was revalued. The rate struck there during the week was something in the neighbourhood of 52/-. There was almost a revolution in the city of Waterford. I think Senator Barry was right to bring this to the notice of the Minister for Finance to-night because if provision is not made to stop this sort of malaise, I am afraid it will have very ill-effects on the morale of the people, the householders and the various businesses in our cities.

I should like to refer again to what Senator O'Brien said in his concluding remarks this afternoon. He said that if we are to have a stable economy, we cannot afford any more increases in expenditure or the national debt. He also said that taxation is a disincentive to investment and progress. When are we going to stop spending money on the various projects that will not bring us any great return?

Tonight I looked down the Vote on Account. I think there is hardly a heading in it that does not show a considerable increase on the Estimate for 1959-60. If we got an opportunity of examining many of these items before they reached the stage at which they are presented to us, they might be reduced. His suggestion that there should be some form of committee to look into the formation of the various subheads before the Minister introduces them in the Vote on Account might be a very helpful way of dealing with this matter.

Many people down the country say to me that considerable savings ought to be made on items such as External Affairs. In regard to the amount of money spent by this country, somewhere in the neighbourhood of £500,000, on the offices of ambassadors in the various legations abroad, what trading advantage accrue to us? Are we maintaining all these trappings that we cannot afford as a measure of prestige? Prestige is all right in its own way but the trading situation with these countries with the imbalance that exists in our trade with most of the nations where we have embassies with the rank of ambassador is of little advantage to this country.

We have not made a great success, and more is the pity, of our trade agreement with Britain. I wonder if we purchased less from the countries which purchase so little from us, might we put ourselves in a very much stronger position in Britain than we are in at the present moment? There is no country on the Continent in regard to which the terms of trade are not in the ratio of about three to one against us. If we look at the German terms of trade, we find that most of our exports to Germany are not true exports at all by reason of the fact that they are exports to United States personnel in Germany.

Finally, I think this debate was very helpful. It was very realistic. Perhaps at this hour it has the effect of making all the sectors in this economy realise that we as a nation must be the same as we are in our private capacity. We must live within our means; otherwise, we cannot be successful. I think that even at this hour it is a lesson to all of us in the art of Government. The Minister for Finance ought to spend the time between now and the introduction of the Budget in finding out how this enormous proposed burden can be reduced.

Undoubtedly this country's agricultural industry and its small industries trying to compete with the larger units in Britain and the Continent will be adversely affected unless a climate of lower taxation and favourable incentives directed towards export can be encouraged. Otherwise, we shall not make the economic progress that will allow us to enjoy the standards we should all like to enjoy and which we see our friends and neighbours in Britain enjoying.

An Leas-Chathaoirleach

Has Senator Ó Ciosáin anything to say about the arrangements for to-morrow?

As far as I know, we meet at 3 o'clock to resume the discussion of this Bill, and then the Health Authorities Bill.

I take it that the intention is to finish this and then take the Second Stage of the Health Authorities Bill?

I should like to concur in much of what was said by Senator Barry. I shall be 35 years in public life if I live until next June, please God, and I have served on practically every board. I think that something will have to be done to curb the rates of local authorities. There will have to be some ceiling. Every year, the rates are going up and authority seems to be slipping from the local bodies. I remember long ago before the County Management Act, when we had the old boards of health, we framed our own estimates and knew exactly every item of expenditure. We were able to compare our estimates for one year with those of the previous year. In the same way, the mental hospital committees framed their own estimates, budgetted accordingly and made their returns to the county council, but any person must be perturbed now by the awful increases in rates.

I am a farmer, earning my living solely from the land, but I should like to refer to people living in towns. I am very familiar with some towns I represent. I know people who have no land at all, with high valuations, and they have to pay the full rate in the £. They get no rebate under the Relief of Agricultural Rates Acts. Our rate last year was 39/9d. in the £. There will probably be a big increase this year. Long ago if local authorities seemed to be spending too freely, the brakes were put on at Local Government or headquarters. Now it seems to be the reverse. I am a very large ratepayer. I think any person must feel perturbed at the way public men are being denounced. As Senator Barry says, we shall reach a point when it will be hard to get men of responsibility prepared to go forward as candidates.

Our estimate in Clare, which is a very small county, was more than £1,250,000 this year and that does not include our indebtedness under various other headings. Any man with a stake in the country or any ratepayer must feel perturbed by the terrible increases in the rates. Where are they to end? Is there to be any ceiling? Does it mean that we must have a rise this year of a 1/- or 1/4d. and we can look forward never to a reduction but always to an increase? Whether the capacity of the people to pay the rates is increasing accordingly is a poser I should like to put.

I have spoken about people in the towns. I deal in various shops, and their owners tell me that they get no remission in rates though they have very high valuations. I know men with small shops with a valuation of £18 or £20 and paying the full £2 rate, which is £40, as well as rent to the landlord. They have not a perch of land and have to buy the grass of a cow if they can get it, or milk for their families if they cannot.

I have intervened in this debate to concur in what Senator Barry has said. Any ordinary man must feel very perturbed by the ever-increasing burden of rates every year. I know quite well that the capacity of the people to pay those rates has not increased. Since I was very young, I have taken a great interest in local administration. I was associated with the creamery movement and with the co-operative movement before that and showing cows at shows and fat cattle at fat stock sales, and trying to do everything I thought any good farmer should do. Long ago if local authorities were regarded as flaithiúlach in giving increases in salaries or such things, the Local Government Department would not sanction them and say that they were not justified, but now one does not see anything like that.

This is our annual opportunity of discussing Government policy, and as such we all welcome it. The debate so far has not highlighted any item but I think I might begin by endorsing very heartily what has been said by Senator Barry and Senator Brady from both sides of the House on the apalling dilemma thrust upon the local authorities in the rates they are forced to strike when less than one-fifth of the rates is within their jurisdiction. It would be the decent thing for the central Government imposing these obligations, the health services and the rest, on the local authorities to face up to what they are imposing, to call it a property tax and at least take that amount of the rates off the backs of the local authorities and let them be responsible only for the rate that is within their jurisdiction. Then we could judge how these people performed their duties and there would be far more appreciation by the citizens of the unselfish service given by many representatives on the local authorities.

To come back to policy, the first thing we must acknowledge at this stage is that big changes have taken place in 12 months. In fact, the leadership has changed in all our main political Parties and while we must pay the highest tribute to the men who have borne the burden for so long, we should one and all welcome the fact that a new generation has come and taken its place in Irish affairs. Let us hope that in our approach we shall endeavour to realise what we have in common, the common task we have to build up this country, and that we shall cease raising minor difficulties and minor differences to the stature of major differences, saying: "You did this and we did that; your Government did this but our Government did that."

There is more than enough for all of us to do to pull our country together and to pull it out of its present continuing economic dilemma because this dilemma is not just due to our mismanagement, to bad Governments or to good Governments. It is due to the unfortunate position in which we find ourselves, economically placed as we are between two mighty economic powers England and America and enjoying as we do free access for our people to both of those markets. We are being pushed ahead much further than we could go by sound economic standards; we are pushed to try to "keep up with the Joneses" in the real sense because we cannot afford to let our level of life sink far below the level of our competitors. If we do, our people will emigrate and if we have lost our people, where are we?

We should recognise that central fact of our struggle. If we could tow the country into Central Africa, we would be the America of the region and our problem would disappear overnight. Our people would work longer and harder and make far less exacting demands on the country, but placed as we are, we can only face the task as best we can.

If we had more general realisation of our task, more general discussion on it, less criticism of those endeavouring to put our economy on a sound basis and a more general realisation of the hard economic facts that make it so difficult to do so, we would be making progress. Of course, we are somewhat alarmed at being confronted with an Estimate for £123 million, compared with £115 million for last year. That is a seven per cent. increase when the national income has gone up by at most three per cent. That is certainly living beyond our means and would be justified only if it were felt that the incentives given by way of salaries or otherwise would produce some striking effects in the future. I have my doubts on many of these and I shall deal with them in detail later in my contribution.

We have been challenged by Senator Lenihan to say where we could effect economies: "Everybody can decry expenditure, but where can you show economies which can be effected?" The kernel of that lies in the committee system. If we in the Seanad were allowed to do our duty, we would have a general finance committee composed of members of the Dáil and Seanad or maybe a separate committee for each. We would put in long hours with experience brought from all walks of life and I am sure that we would succeed in significantly reducing the Book of Estimates without impairing the services to be provided. After all, the maxim applies to that as in all walks of life: two committees are better than one. Paying due tribute to the committee in the Department of Finance, I am sure that another committee looking at the Estimates could also make a contribution.

What is alarming about this, of course, is that all sections of the community by means of close organisation have been able to put pressure on the Government to maintain or increase their standard of living. In fact, the justification for the large increases voted to the civil servants in the present Estimates is that it is a restoration of 1953 or 1954 standards due to inflation in the period 1954 to 1956 or 1957. It is quite correct to say that these should be restored, but what about our largest community, the farming community, that has suffered and has got no increase since 1953? I think that position calls for speedy redress and it is some source of consolation that the Taoiseach has acknowledged it in his speech, although it would be more consolation if in announcing the figures for the Estimates, he could have announced at the same time reliefs to be given to the farming community.

It was suggested in the Irish Times and in other papers that an increase of threepence a gallon for milk would not even restore the position to what it was in 1953 when the last price was fixed and that anything less would be merely trifling with the problem. It would show that the Government are deliberately keeping the farming community a depressed community, chiefly because they are so disorganised that they are not able to apply the pressures other groups can apply. “Anything less than threepence would be trifling with the problem.” If that involves a certain amount of subsidy —and I believe it will have to because you cannot jump the price of butter suddenly from 4/3 to 5/2—it would be one of the best subsidies that could be introduced in our economy and the one likely to pay the highest dividends in the future.

I know that in an economy a subsidy is said to be taking from the pocket of one to put something into the pocket of another, but when this increase is given to all sections, why should the farming community be the one pure-souled company among us who must not partake of this gain? I want to express the greatest anxiety about the present condition of the farming community and the greatest hope that the burden will be passed around, even though I shall have to pay more for dairy produce, as Senators and everyone else will have to pay more; but, in strict justice, it is only fair and right.

The Seanad adjourned at 10 p.m. until 3 p.m. on Thursday, March 24, 1960.