Central Fund Bill, 1963 (Certified Money Bill) — Second Stage.

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

The main purpose of the Central Fund Bill, 1963, is to give statutory force to the Vote on Account for 1963/64, which was recently passed by Dáil Éireann. The amount of the Vote on Account is £55.37 million and Section 2 of the Bill provides for the issue of that amount from the Central Fund. The Bill also provides authority in Section 1 for the issue of approximately £9 million out of the Fund in respect of additional and supplementary estimates voted in 1962/63 which were not covered by the Appropriation Act, 1962.

Section 3 empowers me to borrow up to about £64.4 million, which is the total of the Vote on Account and the Additional and Supplementary Estimates which I have mentioned.

At £167.04 million, estimated expenditure on the Supply Services for 1963/64 is £18.67 million higher than the total provided for in the Estimates Volume for the current year. £140.57 million relates to current services, this being £16.87 million higher than the original provision for 1962/63; £26.46 million refers to capital services, an increase of £1.80 million on the corresponding figure in the Estimates Volume. Bearing in mind, however, that Supplementary Estimates totalling over £13 million were provided this year, the increase in the 1963/64 estimates adjusted to take account of this fact is reduced from £18.7 million to £5½ million. That is to say, the bulk of the increase in next year's Estimates has already taken place in 1962/63.

Senators have already received a summary of the principal changes in the Book of Estimates for 1963/64 compared with the current year's provision. I need hardly, therefore, go into these changes in detail and I propose in the circumstances to devote the remainder of my address to the principal causes of the increase of £18.7 million as compared with the original Estimates for 1962/63.

Almost half of this increase relates to State-aid to agriculture. The total provision in the Volume under this heading is £36.6 million—this being £8.1 million higher than the original provision for 1962/63. The increase is equivalent to the total additional amount provided for agriculture by way of supplementary estimates in the current year. Among the main items for which provision was made in these supplementaries were the bacon and dairy produce subsidies and wheat losses. Expenditure on bacon and butter subsidies is expected to remain at a high level in 1963/64 due to the continued difficult marketing conditions for these products. The expenditure on disposal of unmillable wheat arises as a result of the decision by the Government last autumn to help farmers to cover the losses incurred as a result of the bad wheat harvest last year. Most of the payments are appropriate to 1962/63 but about £½ million will have to be paid in 1963/ 64.

State-aid to agriculture is designed to increase efficiency, reduce costs and sustain production and exports, the object being to help in achieving a better balance between the incomes of farmers and other producers. In addition to the subsidies which I have mentioned, there have been increases in State aid in the form of rates relief, fertiliser subsidies, grants towards farm buildings, arterial drainage and improvement schemes. This list accounts for more than £3½ million of the increase on the original provision for the current year, £2½ million of it being attributable to the increase in the Agricultural Grant in last year's Budget.

Of the £36.6 million to be spent next year on agriculture about £12½ million relates to capital investment, £5½ million of the latter figure being the net expenditure on the Bovine TB Eradication Scheme. This scheme has been almost completed in 20 counties and only five counties in Munster and one in Leinster remain to be dealt with. I should, however, mention that these counties contain about 40 per cent, of the total cattle population of the country. With the introduction of compulsory measures in these counties, the Government expect that the Bovine TB Eradication scheme will be completed in the next few years.

Expenditure on the social services is expected to rise by over £3¼ million to £40 million. This amount includes the full year cost of the increases announced in last year's Budget.

Education is expected to cost the State over £1½ million more next year. £½ million of this refers to increases in teachers' salaries while the improvements in grants to vocational education committees is partly responsible for the increase. A further £½ million of the rise relates to the cost of the new UCD science block at Belfield. This is of course a capital item.

The Book of Estimates contains provision for over £4½ million which will be devoted to promotion of industry, in 1963/64, representing an increase of £1.3 million on the original provision for the current year. Senators will no doubt be aware that most of the expenditure which might be classified as aids to industry, namely, that part of it which is provided by way of advances from the Central Fund, falls outside the scope of the Supply Services Estimates. Of the increase in the provision for industry in these services for next year, almost £1 million relates to industrial grants which are, of course, capital payments. Noteworthy among these grants is the £¼ million being provided for reequipment grants as a result of a recommendation by the Committee on Industrial Organisation. Most of the increases in non-capital expenditure on promotion of industry relate to expenses in connection with the proposed Irish participation in the New York World's Fair, 1964/65.

A further contributory factor in the increase in the Estimates total for next year is the rise of £900,000 in the provision for public service pensioners. This latter is partly due to the increases announced in the 1962 Budget, together with the normal growth in pension costs.

A number of smaller items account for most of the balance of the increase. The most notable of these is a rise of £700,000 in expenditure on defence of which £¼ million is for clothing and equipment and slightly more than that figure for the purchase of helicopters. About £400,000 more will be spent next year on tourism, about a half of which will be capital expenditure on the development of resorts and of holiday accommodation.

Debt service chargeable against the Supply Services will probably show a rise of £400,000, due mainly to telephone capital repayments. The soundness of this investment can, however, be seen in the growth in the revenue from the telephone service.

Total State expenditure in the Book of Estimates for the remuneration of State and local authority employees in 1963/64 is expected to be £53½ million, an increase of £2 million on expenditure in the present year. Something less than half of this increase refers to the Civil Service, including industrial staffs and is nearly all attributable to various eighth round pay increases and to additional numbers employed. Approximately £½ million relates to the secondary teachers' pay award.

If I might recapitulate briefly, the following are the principal increases I have mentioned:—Agriculture, £8.1 million; Social Services (including Health), £3.3 million; Education, £1.6 million; Promotion of Industry, £1.3 million; Public Service Pensions, £0.9 million; Defence, £0.7 million; Tourism, £0.4 million; Service of Debt, £0.4 million.

The bill to be met on the Supply Services next year is undoubtedly a heavy one but I can assure Senators that the total has been arrived at only after a rigorous examination by the Government of the Estimates as submitted by the various Departments. The pruning of these Estimates has involved curtailment of many worthwhile public services. A fundamental problem with which the Government have to contend is that of striking a balance between the growth of State expenditure directed towards raising national productive capacity and, on the other hand, increasing taxation in order to finance such expenditure. We have always to be on the watch to ensure that the beneficial effects of public outlay of a productive kind are not offset by the inhibiting influence of rising tax rates.

I ask the Seanad to approve the Bill.

The Book of Estimates on which this Central Fund Bill is based contains the first indication of the Government's financial policy for the coming year. The coming year is a particularly important one because it will be the last year of the five yearProgramme for Economic Expansion and so, in looking at the Book of Estimates and discussing this Central Fund Bill, it is necessary for us to look at it in that particular context. The amount that is voted is important, but still more important is whether the money will be well spent and most important of all, whether it is spent in such a way that vigorous economic growth can be promoted.

Now, it is difficult for anybody not in full possession of the facts to discuss these matters thoroughly and, of course, actually only the Government are in full possession of the facts. So it is impossible for those of us who have to speak on this Bill to discuss the general facts of this Book of Estimates, to produce our alternative version of the Book of Estimates, to say that we might have done this differently or that differently, voting a little more here or a little more there. Nevertheless, it is possible to make some general comments and in particular, some general comments on the indications from the carrying out of the Government's financial and economic programme during the first four years of their five-year plan, to say whether money in those years has been well spent and whether in probability the money will be well spent during the coming year. These comments can be made and should be made.

Now, the Government's policy on financial and economic matters can be found in the Book of Estimates we have before us, summarised in the Minister's speech introducing the Bill. It can be found in the generalProgramme for Economic Expansion and the results to date of that programme. It can be found in the recent White Paper on Incomes and Output. It can be found, too, in Ministers' speeches on financial and economic matters from time to time.

If we look at theProgramme for Economic Expansion of which the Minister's financial proposals today are a part, the first thing we should be quite clear on is that the overall principle of that five-year programme is a matter for agreement. There might be disagreement on points of detail but in general there is agreement with the overall principles of the five-year Programme for Economic Expansion.

Why should there not be? If we take the programme published by the Government, look at it and read it, we will find in the table of contents under the general heading "agriculture" a series of subheadings. The first subheading is: "improvement of grass lands"; the second: "beef and mutton" and the third: "dairying." I think, taking this White Paper published by the Fianna Fáil Government, that critics of Fianna Fáil policy down through the years have no reason to take exception to these as primary headings in economic policy for agriculture. Look under "industry" and examine the headings. The first one is "foreign participation" and the last one is "reappraisal of policy". Here too there is general agreement and there is no need for any further discussion on this particular point.

When we come to the question of fundamental principles laid down in that five-year programme we find once again that we are substantially in agreement. I would quote paragraph 8 of the White Paper. We can all agree when I quote:

As capital is scarce, it is desirable both to conserve existing capital assets and to obtain the utmost value for new outlay.

There is no disagreement whatsoever. I quote from Paragraph 9:

Our problems will not be solved merely by additional productive outlay, whether public or private. While capital is a condition precedent to, it is not a condition sufficient for economic progress. More is required—the adoption of improved methods and techniques, the loosening of restrictive practices, the raising of the general level of technical education, the stimulation of new ideas, etc.

On these points again there will be substantial agreement. What is open to discussion is not whether these are good principles of policy but whether in fact the Government responsible for producing this five-year programme has itself lived up to the principles in the programme as I have quoted them here.

If we look at the results of the five-year programme in its first four years what do we find? The best indicator, I think, that can be used is to take the increase in gross national product at constant prices. I take the national product instead of the national income because allowances are made for changes in stocks. Also, if we want to deal with real economic progress we must take it at constant prices.

Taking these figures what do we find? We find that in 1959 the increase in real national product was just under 4.7 per cent.; in 1960 it was just under 4.8 per cent.; in 1961 it was about half-way between 4.6 and 4.7 per cent. These are figures that can be found from theEconomic Statistics introduced in connection with the 1962 Budget. What of 1962? Until the Minister produces his statistics for the 1963 Budget we will have no official estimate, but the quarterly bulletin of the Central Bank published in January has made an estimate of the national product which, I think, we can take as giving a reasonable indication of what the figure for national product is likely to be. What do we find in this estimate of the Central Bank? We find that in contrast to the rates for the first three years of between 4½ and 5 per cent. the rise in the national product at constant prices for 1962 was less than 3½ per cent.

Here, I think, we have the essential picture of how the economic programme has gone. In the first three years growth was at a rate in excess of 4½ per cent. which was indeed much higher than was anticipated when the programme was drawn up—the figure 2 per cent. was mentioned in the programme. In the fourth year, 1962, we have a falling off to 3½ per cent. Let us look then at both of these phenomena.

Firstly, regarding the fact that the rate of growth was better in the first three years of the programme than was anticipated, what were the factors which produced this? Can we get some idea of the factors that gave us this growth in real national product which was higher than anticipated? There were factors indeed which were part of the plan but which had an effect greater than was thought when the plan was drawn up. First of these factors of course were the benefits of planning itself, even planning of a most tentative kind. Secondly, there was the effect of the tax relief on exports decided upon by the previous Government before the plan and before studies which were the basis of the five-year plan. Another factor was the acceptance in the five-year plan of the recommendations of the Capital Advisory Committee. The fourth factor was the removal of some of the distortions in the economic structure of this country which had been inhibiting our growth and notable among these was the amendment of the Control of Manufactures Act.

What of the tapering off in the rate of growth which is something to which we must look, something we must think about? Of course it is far too early for anybody even to guess at the causes for this particular tapering off. There do not appear to have been any external factors to which it could be directly attributed. We find ourselves in the position apparently that we have this slacking off. It is hopeful that the tentative estimates which have been made so far do seem to indicate that the falling off was not so serious during the fourth quarter. When the final figures for the fourth quarter are analysed the position may not be so bad since there appear to be signs of recovery in the fourth quarter.

We find ourselves in this position and as always when faced with a position like this we should not panic but neither should we be complacent. We should not panic because if we do we may take measures either wrong in themselves or which may be unnecessary, which may not be called for due to the fact that what is occurring is a transient and temporary phenomenon. On the other hand we should not be complacent. Above all we should not be complacent and say that we started to plan for a two per cent growth rate and are now beating this. The fact that we have got to three and a half per cent is after all still beating our initial target of two per cent. However, something very important happened since then. When the five-year plan was drawn up a growth rate of two per cent was anticipated and hoped for, but since then this country and every country in OECD has pledged itself to increase real national product by 1970 to 50 per cent above what it was in 1960. To do this requires a steady rate of growth of something just above four per cent. In other words this country has pledged to its fellow members of OECD to have achieved by 1970 a state which corresponds to a growth rate of four per cent.

There is something else, however, that this tapering off in the fourth year means. It was stated in theProgramme for Economic Expansion and in the study of economic development on which it was based that an aim of the programme was the release of a dynamic in the Irish economy. Indeed Paragraph 139 of the programme states:

The programme outlined in this White Paper is calculated to release a dynamic of progress in the Irish economy.

This is the whole purpose of our economic planning and this dynamic, this state of accelerated change, is something which has not appeared and is not apparent from our viewpoint at the moment. From this point of view we might have been better to have started at a two per cent. rise and then came on to three per cent and four per cent rather than to have started in excess of four per cent and then to fall from that initial effort. What happened in these years might be due to the initial impetus which may now die away.

This fall off may not persist, it may be transient, but on the other hand, we must realise that no dynamic, no self-feeding mechanism, no accelerating growth factors have been released. Therefore, we find that the present time is time for thought. It is time for some action but not necessarily for the action proposed by the Government. It is time, indeed, for clear thinking and a time during which slogans should be left aside. During the year 1962 there appeared to be some slackening in our growth. We should learn from what has happened in this country in the past and from what happened in Britain, our close neighbour, in the recent past. In this connection I think it well that we should recall what Deputy J.A. Costello said in Dáil Éireann in recent weeks. He said he believed that in 1956 the measures taken went too far, too fast. It would be a pity, if at the first sign of a slackening of growth at the moment, the Fianna Fáil Government today would go too far and would go too fast in applying deflationary measures to the economy.

We can learn, too, from what happened in Britain in 1961. During the first half of that year, there was a slackening in the British economy; in July, 1961, there was introduced the British pay pause and other restrictions; and in the second half, from July to december, the national income actually fell. It can be argued that the national income would have fallen still further if these restrictions and this pay pause had not occurred, but it is equally arguable that the way in which this pay pause was introduced in the British economy in 1961 tended to accelerate still further those factors which were tending to slow down the growth of the economy. We can learn not only from what happened here and in Britain but from the Continental countries who have always placed their main emphasis on growth and have managed to avoid the difficulties in which we found ourselves in 1956 and the difficulties in which Britain found herself in 1961.

In facing the situation as it is at the moment it is important for us to distinguish between objectives and policies. There are objectives, there are outlines of policy and there are detailed policies. Again, there is no dispute between the Parties in this State about the general objectives. If you ask members of any Party to list the general objectives of that Party the same list will turn up—full and stable employment, fair distribution of income, steady economic growth, control of the balance of payments, control of prices, maintenance of the value of money, the reduction of emigration and so on. We all have the same list and economists can advise us on the questions that are involved in all these single problems. What the economists cannot do is to analyse the full, total, complex and complete situation of the Irish economy in its European context today. Because they cannot analyse it in full they cannot predict all of the inter-actions which would be involved. Hence it is necessary for any person who has to make a decision about the policy to recognise that there are areas of uncertainty and that in time either of crisis or uncertainty a priority of objectives must be determined.

It is here that differences will arise. This determination of priorities is a question not of economic expertise but a question of a value judgement which confronts those responsible for key policy decisions. The economists can tell us that inflation at any time in this country is equivalent to a deterioration of our balance of payments position; they can tell us also that deflationary measures can check growth and can inhibit its recovery for an unknown period. But the position is how do we choose between these two in any given situation? What faces us today is the choice as to whether we repeat what in my opinion were mistakes of over-action in this country in 1956, and in Britain in 1961, in order to keep our balance of payments tidy and neat in every single year at the cost of losing our growth momentum, of whether we are prepared to accept a temporary out of balance situation in order to concentrate on growth.

This is a choice that lies before us and I would submit that in our present situation, both from the point of view of the development of the economy and from the point of view that our word is pledged to growth— that we have pledged ourselves in the OECD to look to a policy of growth— growth should be the first priority in the policy of any Irish Government at present. If we fail on the 1970 target we will have let down our partners of free Europe and North America and even more we will have let down our own people and we will have demonstated to Europe quite definitely that we are unfit both economically and temperamentally for entry into EEC.

We do face a dilemma at present but I submit that we should not have to face this dilemma and that we should not have to make this critical and ominous choice between concentration on growth or concentration on the balance of payments position and that there should have been no setback such as appears to exist at the moment. There need not have been a set-back if the Government had followed out and converted into a detailed policy the principles of the programme which they published for economic expansion. In particular, I think we have not had from the Government an effective investment policy, that we have not had an effective productivity policy and that we have not had any income policy at all that is worthy of the name. I feel that on those three counts the Government are open to criticism.

If we go back to theProgramme for Economic Expansion we find in paragraph 8—which I already quoted:

As capital is scarce, it is desirable both to conserve existing capital assets and to obtain the utmost value for new outlay.

I submit that if we look at what has been happening in recent years in this country, we must come to the conclusion that public investment, and public support of private investment, have not been adequately examined from the point of view of economic and technical efficiency. If we look through the Book of Estimates we find that on the staffs of the Department of Finance and the Department of Industry and Commerce, only one professional economist is employed, as such. I am not denying that there are people with economic qualifications in those Departments apart from that, and neither do I want to take away in any way from the merit of the step of appointing a professional economist, as such, but I think that is a tendency, a direction, and a move, which should have gone much further, and which should have been started much earlier.

We have to face the situation that in this country we can only afford to invest in the best and most suitable plant. When we are investing, for example, in plant in our manufacturing industries, if we merely import plant, know-how and processes directly from other countries, we are, in effect, putting ourselves in a permanently disadvantageous position in regard to competition. Unless all our new processes and plant are the best available and are suitably adapted to our conditions, or where possible are actual innovations, we shall not be able to get ourselves into a really competitive position. Above all, we shall never be able to get into a position in which our capital investment will be as good for our conditions, as capital investment is in other countries for their conditions.

We must do far more than we have been doing, not only in investment itself, but in the actual creation of investment opportunities, that is, in research and development. It is not a sufficient answer to say that the money to be expended on the Bureau of Industrial Research and Standards is being increased. The fact that we are now spending £137,000 for industrial research and standards, in this Book of Estimates, is better than if we were spending a lesser amount, but it is far short of what we still have to do to get anywhere near the competitive conditions of other countries. That fact has been presented to the Government again and again. Indeed, I was a member of a committee of the Engineers' Association which presented a report to the Government in February, 1959, on many matters including, in particular, some views and figures in regard to the question of the research and development effort which was needed in order to make the Irish manufacturing industry competitive.

Professor Leahy, Professor of Mechanical Engineering in University College, Dublin, later in that year made a detailed estimate of the money which would be required to make Irish industry competitive allowing for the present structure of the Irish manufacturing industry. He estimated that £1 million would require to be spent on research and development. At the moment something less than one-quarter of that amount is being spent. We will never get real value for capital, and we will never get real value for investment, unless those conditions are changed.

Let us look at the overall position of investment in research not only in industry, but in agriculture. In the Book of Estimates presented to us the total expenditure from Government sources on research is something between £1,000,000 and £1,200,000, and the word "research" covers such activities as seed-testing in the Department of Agriculture which is carried out by technicians and which cannot properly be described as research at all. That sum of £1,000,000 or so is our total investment in research. The amount is in sharp contrast with the figure given by Professor Carter in a Finlay lecture in University College, Dublin, last year. Professor Carter was an advisor to the Irish Government as a member of the Capital Advisory Committee, and to the British Government on various aspects of economic and scientific policy. His estimate of the requirement of Government expenditure on research in this country is at least £5 million, and that to be comparable with the civilian research expenditure in Britain the amount spent should be of the order of £10,000,000.

I think that we are far from having worked out in detail an investment policy which will ensure that we will get value for money invested in accordance with the principles laid down in theProgramme for Economic Expansion. It is not enough to invest capital unless we get real value for the capital invested. Labelling it as productive capital is not enough. We have to ensure that not only is it really productive, but that it is productive at as high a level as it can possibly be.

If we leave the question of capital and go to the question of productivity policy, here again I think too little has been done during the first four years of theProgramme for Economic Expansion. The first comment I want to make is that I think the word “productivity” which is bandied about so much nowadays is a highly misleading term. The term “labour productivity”, which is used to indicate the ratio of output to labour input, is highly misleading since it carries with it the innuendo that it is something which depends on the effort of the worker whereas, in fact, this so-called “labour productivity” is something which is the responsibility of the manager, and indeed “management efficiency” would be a far better term to describe it.

For that high productivity as it is called—and I suppose one must follow the fashion and use the word—what is involved is the wise purchase of plant and equipment, proper organisation and control of operation, and a personnel policy. Here I think we see the weakness of productivity policies as they have been carried out in this country. Too many of our productivity policies have concentrated on plant and equipment, organisation and control, without bothering about a proper personnel policy which should be the start of any effort in productivity. Productivity is not only the responsibility of management; it is also the responsibility of the Government, because one of the greatest factors in productivity—and what is a necessary part of any productivity policy—is the education and training of certain people who cannot properly be trained within the firm: top management, scientists, engineers and technicians. The improvement in the existing practice will give limited returns, but it is not sufficient. Unless our manufacturing industries are receptive of new ideas, and continue to be receptive of new ideas, we will never have anything in the nature of a real productivity policy.

The position is that here again is something in respect of which I think the Government have failed to translate a principle into a detailed policy for action. Again, this is a point which was contained in the report presented to the Government in February, 1959, by Cumann na nInnealtóirí, the Engineers' Association. In this connection, Cumann na nInnealtóirí, pointed out that in the countries of Europe, with which we hope one day to be competitive, there were at least 15 technologists per 1,000 workers. What was the condition in this country? The Report states:

The group of Cumann na nInnealtóirí responsible for this present report has estimated the number of technologists per 1,000 workers in the transportable goods industry in this country to be about 2.5. Even in large well-established industries, ranked as moderately efficient by Irish standards, this number is as low as 3.0 to 3.5. It is, however, most significant that when a number of industries were examined which are known to be producing at competitive world prices, the number of technologists per 1,000 workers was between ten and 20.

The point is that Irish industry will have to make itself receptive in this way. Of course Irish industry has got to be told this, and I think the Government again bear a responsibility in this regard. Senators will remember that when this House was dealing with the setting up of a highly complex industry, when it was dealing with the nitrogenous fertiliser factory at Arklow, the Minister for Industry and Commerce did not feel that there was any necessity for a technically qualified person to be on the board of that company. In investigations made in Britain, published by Professors Carter and Williams in their book,Industry and Technical Progress, they have shown a high linkage between the number of scientists and technologists on boards and the progressiveness of industry. I hasten to add that Professor Carter and Williams are not technologists but are both economists. They examined 110 case studies in detail and found that in 70 of 110 cases there was a positive connection between progressiveness of the firm and the presence of scientists on the board. In 19 cases, the effect was negative and in 21 cases, it was doubtful. This is the position in British industry, the position that was found as a result of a special survey. The question is: is it fair to blame Irish industry for not following suit when in the case of a highly complex industry, the Minister for Industry and Commerce himself does not seem to be convinced on this point and does not seem to be aware of the conditions in these industries in other countries?

Above all there is the problem of technicians. For years past, engineers in this country have been urging the Government that the greatest lack in this country and the greatest hampering of productive efficiency in this country is the complete lack of technicians. Again there has been no real move towards a policy on this point. The point is that something can be done now. Something could have been done four years ago on this point, and something can be done long before we receive the result of two years' survey under the auspices of the OECD. We require a policy on technicians, a policy on technical training, an educational policy on the use by management of technicians and a proper recognition of the status of technicians in our industrial world.

It is easy to say that we have a National Productivity Committee and that we have been doing a great deal for productivity. I agree a great deal has been talked about productivity in this country, but I do not think half as much has been done, and I think we have had far too much talk and far too little action on the subject of productivity in the real sense of the word. The word is being used as a sort of magic ju-ju—that in some mysterious way we will, by continually chanting the word, reach higher production in our manufacturing industries. Again the Government hold the responsibility for this.

In that connection, I should like to quote from the Minister for Transport and Power, speaking on the Vote on Account—Volume 200, No. 6, column 844, of the Dáil Reports:

Obviously there has been an immense growth of activity in increasing productivity. There are seminars dealing with productivity of every kind. For the first time we have real action by the National Productivity Committees. We have speeches by trade union leaders on these committees. We have a growth in the country of associations of every kind interested in the improvement of rural life.

This is not what West Germany means by productivity, not what France means by productivity and not what Italy means by productivity. I think the sooner we overhaul this productivity drive the better.

Let me quote from the Minister for Transport and Power in column 845 of the same debate:

I think it is true to say that in no other country in Europe has there been a more consistent campaign for the growth of productivity and the stimulation of exports than there has been in this country.

The person who believes that is true knows nothing whatsoever about what is happening in regard to productivity in Holland, in France, in Germany, in Italy and in Ireland. It is simply not true that we are leading Europe in a productivity campaign. We are not even playing the game well. We have not even started and the sooner we get down to it, the better. The more we do so we will find our productivity will rise, and the sooner we will avoid need for White Papers lamenting that productivity has dropped down and we must start getting terribly worried about incomes and about wages. If we had a proper investment policy and a proper productivity policy, there would have been no falling off in 1962. There would have been no gap between productivity and wages and there would be no dilemma facing the Government today.

I agree that we need a wages policy and an income policy in this country. I agree there must be some relation between income and overall resources. What we want is a wages policy that will not interfere with economic growth. A wages policy that will not interfere with economic growth is not easy to devise and is something that must be planned with care. It may be that our present dilemma has been highlighted by wages outstripping productivity, but it must not be forgotten that during the past few years, we have been having CIO reports which have been showing an inflation of another kind which faces us, beyond yea or nay a cost inflation, in the Irish economy due to relative inefficiency in Irish industries. If we had had a proper investment policy and a proper productivity policy, many of these inflations which were revealed by the CIO reports would be well on the way to elimination. There is no reason why we should have a wages policy under which the worker should be asked to pay for the incompetence either of the Government or of management.

Even if we do have a wages and income policy of the type the Government consider it should be, what is going to happen? The one thing about wage restraints is that they do not work.

I wish to quote from an article in theIrish Banking Review of March, 1962,—“Wages and Economic Planning” by Richard Bailey, Director of Political and Economic Planning. That organisation is an independent research organisation in Britain and in case anyone thinks it has dangerous left-wing tendencies I might mention that one founder member was Harold Macmillan M.P. Here is what is said:

Although different attempts at keeping incomes and production in balance have been made, the experience has always been that either incomes have risen faster than production so pushing up prices, or restrictions have been imposed on incomes that, while checking rising prices, have at the same time caused a setback in employment and production alike. This has happened in cases where attempts have been made to adjust pay by voluntary agreement, and where compulsory arbitration has been tried.

The position is that where these restraints have been tried they simply have not worked and where there has been a failure to keep wages in restraint it has not necessarily been an economic disaster. If we look at the General Bank Report for 1962 we can find there on Page 42 tables of output per man and earnings per hour for several European countries. What do we find here in reference to Western Germany and France? If we take output per man and earnings per hour in Western Germany in 1950 as 100 in each case what do we find in 1961? Output has gone up to 167 and earnings have gone up to 229. Earnings have outstripped productivity in Western Germany. But Western Germany did not close her gap and has not reached economic disaster. While it might be said that Western Germany has a condition of a considerable surplus on external balance yet it can also be said that we have a sufficient surplus on external balance to enable us to ride a temporary imbalance of payments for a short period.

The question is that there may be no necessity for correction. There is no certainty of economic disaster. There has not been economic disaster in the European countries where we have had the conditions which were outlined in the Government's White Paper. We have at the present day in countries such as Germany and USA examples of the classic economy of high wages which is in itself the most effective challenge possible to management. When labour costs are high labour must be used efficiently and it is this efficient use of labour that makes the German economy successful. It is the inefficient use of labour that makes our economy a relatively stagnant one. We often hear of the principle of equal pay for equal work. I think a great deal could be said for equal pay for equal capacity. I think we have in much of our manufacturing industry people employed but not used to their proper capacity. This is the fault of management and if we had some plan such as equal pay for equal capacity management would pay for its own inefficiency and pay for its unused capacity.

We must realise that we are not isolated in this matter. The problem which we face at the present moment and which seems to have put the Government into a deflationary state of mind, or at least put their thoughts running in that direction, is something which is happening in other countries. Let us look at the position in other countries and ask what is its significance. I would like again to quote from an independent economist on this source. I would like to quote from a publicationWages in Ireland 1946 to 1962 by Edward Nevin, a British economist, and published by the Economic Research Institute in February 1963. What does he say of the increase of wages in Ireland from 1946 to 1962. He says:

To lament this inflation of the money-wage in Ireland without reference to similar developments elsewhere, however, would clearly be absurd. To maintain a low level of wages in a world of rising prices would merely involve gratuitous gifts to other countries in the form of (to them) improved terms of trade which would be advantageous from Ireland's point of view only if increased exports (assuming a positive real elasticity of demand for them) were regarded as an unmitigated good; alternatively, it would involve a redistribution of income in the form of rising profit margins. Looked at in the European context, it would be difficult to argue that the Irish wage level has risen dangerously rapidly in absolute terms. Irish wages are still distinctly low by European standards; by British standards they were even lower in 1961 than in 1953, despite a roughly equal rise inper capita product in the two countries during recent years.

The question is, I submit, that we should not treat increased exports as an unmitigated good. It is a good certainly but it is not an unmitigated good. Concentrating on our export policy is not going to be worth while if it destroys the overall growth— overall growth that we may not recover for several years. The Minister will probably tell us before this debate is over that this country is in a good condition in relation to emigration because emigration was lower last year than it ever was before. I want to say this to the Minister. Last year was a year of pay pause in Britain and it was a year in which wages were rising here. If there was not a slackening of emigration under those conditions of stagnant wages in Britain and rising wages in Ireland then we would never get it. But if, at a time when Britain is moving towards getting her economy going again and abandoning her policy of restraint, we take steps to restrain wages, we could becomes stagnant here and emigration would rise. Emigration would certainly be on the way up again.

As I said before, we should have an income policy and I think it is something which we should have if we are to plan our growth. In this connection I think it is only fair that I should say what I think should be the conditions of such an income policy. Perhaps before saying what an income policy is we might just say what it is not. I want to quote again from the article in theIrish Banking Review, March, 1962, by Richard Bailey, “Wages and Economic Planning.” Here is what he said:

The following expedients and devices are not regarded as constituting a wages policy:—

1. Exhortations to labour to exercise restraint.

2. Informal arrangements with labour to hold off all wage demands for a given period.

3. The use of arbitration machinery where those concerned are not made aware of the possible "average wage increase" before starting negotiations.

4. Intervention by the Government in a labour dispute to secure a compromise.

5. Centralised national wage bargaining without reference to "guiding light" signals from the Government.

These are given as things which do not constitute a wage policy and I think if we take the word of an independent economist in this case that these are not wage policies in the real sense of the word, then we can say quite clearly the Irish Government have no wage policy in the real sense of the word. If there is to be a real wage policy then there must be a parallel policy in regard to prices, profits, and management efficiency. Unless there are parallel policies here—and I do not mean by policies mere statements of sentiment around which the Government hopes are centred; I mean detailed policies which have been worked out—unless we have these we are not going to have a wage policy in any real sense of the word.

In this connection it is interesting to look at the views of two leading members of the Liberal Party in Britain, the Party who believe in a planned economy, the Party who do not believe either in the tinkering of the Conservative Party or in the nationalisation and socialisation planning of the Labour Party, a Party who believe in free enterprise under planning. What do they say? They say:

The first essential of any national incomes policy is that it must be by consent.

Secondly, they say:

Co-operation must be obtained from unions and boards of directors as organised sectors of the community.

Then they go on to say:

In particular, union co-operation would have to be sought as part of a package deal including for instance, the taxation of capital gains, worker-participation in coownership schemes, revision of company law to increase industrial democracy and a decent redundancy policy.

Set out these things in detail and you are nearer to having an income policy worthy of the name. I submit that this Government by their failure to work out in detail an investment policy that would be an effective policy, a productivity policy that would be an effective policy, have produced a dilemma and now they have fumblingly sought a wages policy. They have given an indication of their lines in thinking in this and having created a dilemma, have done, I think, absolutely nothing to remedy it. What is the White Paper on Incomes and Output? It is not a real wages policy and it was not intended to be so. Nevertheless it reveals a danger, I submit, of moving towards deflationary expedients.

What will be its effect? Of course we must look at certain possibilities. First there is the possibility that the White Paper would be acted upon by employers in all sectors and if this happens I submit what is most likely to occur is a slowing down of growth still further and a real danger of slipping towards the mistakes of 1956 in Ireland and towards the mistakes of 1961 in Britain. What happens if it is not acted upon at all in any sector? What then will happen? I submit that even if this happens the publication of this White Paper has already done damage. It has shaken the confidence of workers and union leaders and by its very publication it may result in the generation of resistance to worthwhile productivity proposals which workers quite understandably might look upon as merely an alternative way of imposing wages restraint. Of course their attitude in this is much reinforced by all the talk that has gone on about the imposition of some form of purchase tax characterised by the Commission which discussed it as a "wages cut in disguise".

What happens if it is acted upon only in relation to public servants? If this happens it will undoubtedly affect the morale of public servants. It will lead to the loss of well trained staff from these jobs and will affect recruitment of first-class people to the Civil Service. I believe that the Civil Service is in difficulty in these respects already. I do not expect the Minister to agree with me but I do believe that it is in difficulty in these respects already and what the Government have done in publishing this White Paper will tend to aggravate it. Over all the White Paper has done and will do harm and probably without real economic benefit.

Before I conclude I should like to ask the Minister some specific questions regarding his intentions and the intentions of the Government on income policy. In particular I should like to ask him the meaning of the last sentence of paragraph 21 of the White Paper on incomes and output:

It is not envisaged that conciliation and arbitration procedures should be put in suspense but rather that the findings should be considered in relation to their possible reaction in other sectors and, if necessary, not applied until this can be done without damage to the national economic interest.

What I should like to ask the Minister here is whether it is the intention that conciliation and arbitration should proceed as if the White Paper never existed and that only when the results of conciliation and arbitration come to the Ministers concerned the intentions of the White Paper will be carried out. This means in effect asking the Minister does he intend to instruct the official side in conciliation to ignore the White Paper and ask the arbitrators to do likewise because it is clear from reading this paragraph and from what was said in the Dáil by Ministers that the findings are to be in abeyance but that conciliation and arbitration are not to be in abeyance, and I should like to ask the Minister to clarify this particular point. In other words, is there going to be suspension only of the findings and are we going to ask the official side and the arbitrators to wipe from their minds every Ministerial speech and statement? That is what the Government say they can do—a greater task, I think, than to produce a four per cent. Or six per cent. growth rate in our economy. They say in effect that that is what it is intended to do and I would ask the Minister to clarify it. Is it his intention to do this and the intention of appropriate Ministers to do the same thing for statutory bodies?

If this is not done there will be a double effect, an effect on the minds of the official side and of arbitrators and then when the findings come forward those findings are going to be in abeyance. When things improve, are public servants to be given only this deflated increase? If things are to be done in this way the Government are imposing not one restraint but a double restraint on all arbitration and conciliation.

At the end of the Central Fund Bill debate last year I asked the Minister about certain parts of the Civil Service which had not received an eighth round increase. The position was, he assured me at that time, that these were going to arbitration and that the question of an award and the date of an award was a matter for arbitration. Since then we know that the group with which I was concerned, the clerk typists, got as far only as the High Court. I would ask the Minister specifically when this case eventually goes to arbitration will he ask the arbitrator to turn back his thinking 12 months and ignore everything that has happened in 12 months or are special arrangements to be made in this regard? We need much more clarity on this point.

With regard to local authorities one case which I know only too well is that of local authority engineers. Their case has been dragging on since 1960. A claim was made in April, 1960, and in October, 1961, an adjustment was made. At that time it was indicated that the adjustment which had been made was not an answer to their claim of 1960 but merely an adjustment to balance up differentials due to increases in other grades. Now we find the position in November, 1962, that these people were told that their claim of April, 1960, is no longer worthy of attention; that they have in fact received a complete eighth round. Here, again, I would point out to the Minister that this case is one which we hope will go to arbitration at some stage. In this case also what are to be the instructions? What will be the Minister's advice to the Minister for Local Government when he is asked to sanction these particular increases?

In speaking about the present economic position and the present economic and financial policy of the Government I speak, as it were, in three capacities. I speak first, as a technologist. As a technologist, I have a knowledge of the part played by technology in the economic growth of other countries. As such, I cannot but grieve at the extent to which we have fallen behind. I speak also as one who returned to this country from abroad and as one who returned because he believed there was a future in the country. From this point of view, if we are to have a future, to have any future in Europe, I believe that it can only be achieved by keeping our eyes fixed firmly on the idea of economic growth. I speak in the Seanad as a representative of salaried workers who have been particularly threatened by the Government's clumsy reaction to a situation which was largely brought about by their own failure to think out principles of policy into detailed policy and action. By re-thinking their policy the Government could avoid further damage to our growth; they could prevent further harm to individuals and they could enable us to keep our word to the other OECD countries by remembering that we were pledged to growth and that this should be the principal objective of our economic policy.

Two weeks ago, when introducing his motion on the use of the Seanad, Senator Hayes stated that the atmosphere here is different from the atmosphere in the Dáil. He said that the members of this House brought a different consideration to a Bill than that brought to it in the Dáil. I must say that my recollections of debates on the Central Fund Bill and the Finance Bill in recent years, unfortunately, do not bear out the Senator's statement. My recollection is that year after year we have had a replica of the Dáil debates on these Bills——

We have not had it today so far, have we?

We heard a good Fine Gael speech anyway.

The tone was set by the Taoiseach here——

——with some Fine Gael speakers playing the same record and using the same old catch-cries as have done duty for them at crossroads and church gates for the past 35 years.

(Interruptions.)

Retaliation, naturally, comes from this side of the House and debates in my recollection developed into a welter of charges and counter-charges which had very little relation to the business before the House. Senator Dooge's speech today was a refreshing change and will, I hope, give the lead to certain other members of his Party who may speak in the debate.

If they speak they will make their own speeches.

In due course I shall endeavour to show Senator Dooge how the Government have lived up to theProgramme for Economic Expansion to which he devoted a considerable amount of time and which I am glad to know is now wholeheartedly approved of by the Fine Gael Party. An appreciation of any situation must be based on facts. Let me give a few facts for the information of the House and because of the statements which I anticipate may be made by certain Senators on the other side of the House. No Government anywhere deliberately or maliciously inflates its annual bill of costs. No Government anywhere does it with the satanic intention of punishing the people they represent just for the pure amusement of doing so. However, as Senators know, life does not stand still; the world does not stand still. The world goes on and the 20th century State must provide 20th century services and the demands for 20th century services in Ireland today are unceasing.

I doubt whether there is any Government in the world at present whose estimates of expenditure for the coming year do not show an increase. Even the two Governments, of all the talents, which we had from 1948 to 1951 and from 1954 to 1957, were obliged to expend more money each succeeding year they were in office. The figures are illuminating and I should like to mention them. In the first year the first Coalition spent on all services £25,691,000 more; in the second year they spent £3,854,000 more and in the next year £6,156,000. That was a total of £35,701,000. The second Coalition Government, in their first year of office, spent £2,317,000 more; in their second year they spent £12,344,000 more and in their third year £19,954,000 more, a total in three years of £34,615,000 more. To put it more succinctly, it cost £73,490,000 to run all the services of the country when the first Coalition took office and £109,199,000 when they left. It cost £178,176,000 to run the country when the second Coalition came into office and it cost £212,791,000 when they went out.

Who wrote it out for the Senator? It reads nicely.

Just to complete the picture I may add, for the information of Senators who will speak and who I anticipate will not follow the intelligent line put forward by Senator Dooge, that the facts of life under both Coalition Governments included a hefty adverse trade balance, a balance of payments problem, an increase in the national debt, in the cost of living, in unemployment, emigration and in taxation.

But not record ones.

I would remind Senators that these things are not new and they are not peculiar to the Fianna Fáil Government and if Fine Gael speakers approach this debate in the light of these facts we shall have a useful and intelligent examination of the Bill. Such an examination was attempted by Senator Dooge and I hope that the tone which he set will be followed by the other speakers from his Party who may take part in this debate. In this connection, I recommend them to read the constructive speech made in the Dáil on the Vote on Account by the Leader of the Labour Party, Deputy Corish, speaking on the 6th March. He said that before criticising the Vote unduly for its size the Deputies should ask themselves whether the moneys are applied in the right direction, are they being spent properly, and in relation to Government policy, have we got good results. In my opinion, this is an excellent yardstick by which to judge the position. My answer to these questions is "Yes" and I submit if the——

Is the Senator quoting Deputy Corish?

Oh, it is Senator Ó Maoláin who answers "Yes".

The Senator does not give Deputy Corish's answers to the questions.

If the Senator reads the Deputy's speech he can find the answer and in his vote on the Vote on Account he will find evidence of what he thought.

On a point of order, when members of the other House are quoted they should be quoted fairly. I have some doubt whether they should be quoted at all, except Ministers, but certainly Deputies should not be quoted in such a way as to convey that they asked questions and gave answers, when in fact, they are the answers of Senator Ó Maoláin and not the answers of the Dáil Deputy. That is very important.

I have quoted Deputy Corish—not directly——

The Senator is right—not directly.

The Chair has frequently asked Senators to avoid quoting or criticising members of the other House.

Misrepresenting is worse.

The Chair is not ruling, but advising Senators against such a course so far as possible. Senator Ó Maoláin has given a quotation, and perhaps Senators thought he was continuing the quotation. I think that is the trouble.

When I finished giving Deputy Corish's views in the Dáil, I said that it was an excellent yardstick, in my opinion. If Senator Hayes had been listening he would have noticed that I used the words "in my opinion". I say again that it is an excellent yardstick by which to judge and I hope that when Fine Gael speakers are making their case, if they find their answers to Deputy Corish's questions are "no", they will give their reasons and say what are the exact services which they would cut, and the exact amounts by which they would reduce the bill. If they advocate that not enough money is being spent on certain services, I hope they will give an indication of how they propose to raise it.

Continue quoting Deputy Corish's speech on what he said about the cost of living.

I think the Chair should restrain Senator L'Estrange from these interruptions. He is leaving the way open for his removal from the House. I think this is ridiculous. The interruptions started the moment someone on this side of the House started to speak. There were no interruptions during the previous speech.

The Senator started by making an indirect attack on me.

In the Good Book there is excellent advice and the advice is: "Contend not with a fool or his folly lest thou become like him." I propose to adopt that advice and ignore the Senator.

Which member of his Party does the Senator think qualifies as a fool?

When I was interrupted by people who cannot stand these facts being shown to the House, I was asking did anyone question the justice of the increase of £2 million in the amount for the salaries and wages of civil servants, teachers, Garda, the Army and the health authority staffs. I do not think so. Every country in the world is spending more money on education at present. In every country the demand is for more and extended facilities for education. Does anyone here propose to say that in stepping up the amount allocated this year by £1,600,000 the Government have done something which they should not? What about the less well off section of the community for which the Government are providing £3,750,000 more in social welfare and health services? Does anyone say that increase cannot be justified?

With regard to agriculture, which is our basic industry, which employs 38 per cent of the population, and is responsible for the greatest percentage of our exports, the Taoiseach rightly said on one occasion "Prosperity, no matter what we may do in other sections, depends on our ability to make agriculture prosperous." It is proposed to spend in the coming year £36,600,000 on agriculture, that is, an increase of £8,100,000. In view of its importance will any Senator say that is an extravagance? As large as the amount is I have no doubt that there will be people who will say it is not enough.

Keeping workers in their jobs, and providing jobs for workers who are at present unemployed, is one of the basic aims of Fianna Fáil policy, and one of the fundamental aims of Government policy also.

We heard that before.

As well as keeping existing industries going and keeping them in production, we must get new industries started. Hence it is that increased amounts are being allocated to Córas Tráchtála and Foras Tionscal; re-equipment grants for technical assistance to industry. Will anyone say that expenditure is unnecessary, or that we should sit back and let the situation drift until we reach the point of no return? I do not think any member of the Fine Gael Party will quarrel with that.

Irish participation in the World Fair in New York was referred to by the Minister. That will cost us £210,000. That is a modest sum in view of what other nations are spending, and it will have good results. I do not think any Senator will quarrel with the expenditure of that money either.

We quarrel with the fact that we did not take part in the Trade Fairs in London for years.

We have often heard criticisms of our failure to provide helicopters for rescue operations. We have heard sneers and jeers about the poor quality of the uniforms of our soldiers. We have heard those complaints on practically every Bill relating to Defence that has come to us. We are now buying helicopters, and we are improving the uniforms of our soldiers. Those two items are responsible for an increase of over £500,000 in the amount allocated for Defence. Are we to scrap the helicopters, and do Senators suggest that we should allow our soldiers make do with the cloth which is used at present? I do not hear any Senator saying "yes" to that.

Incidentally, the week-end tragedy in the Wicklow mountains shocked us all, and our sympathy goes out to the bereaved parents of the victims. The rescue operations once again showed the useful part a helicopter can play in cases like this, and the sooner we get one the better. Our thanks are due also to the authorities in Belfast for their prompt response to the call for a helicopter to carry out this mercy mission.

Other notable increases in the amounts required this year come under the headings of arterial drainage, housing, sanitary service works, water supplies, sewerage facilities, forestry, tourism, airports, rural electrification, post and telephone services, and Army pensions. These are all necessary and desirable services, and they have to be paid for, naturally. They will cost more money this year, but is there anyone who will say we should not have them? I hold that these services are good, that they are necessary, and that the increases allocated are justified and will give good results. I am not alone in that belief as evidenced by editorial comment in the three national newspapers of 1st March.

TheIrish Times said:

The increases which Dr. Ryan seeks are not to be devoted to frivolous ends. The large sums to be spent on the marketing of agricultural produce will not benefit the farmer immediately; but they will help to create new markets and expand old ones to his ultimate advantage. Nor can one quarrel with higher wages or pensions for the Civic Guard, or with increased expenditure on social services, housing, public works, and education.

TheIrish Press said:

Much of the increased cost is going into services designed to stimulate higher production. This is particularly true of the agricultural services.

TheIrish Independent said:

A glance at the sectors where the major increases in estimated expenditure occur shows that they are being largely spent in inherently desirable schemes of agriculture, industry and commerce, transport and power. Much of the total increase has also been occasioned by the extra cost of higher wages and salaries to those employed by the State. The Government, like any other spender, cannot, unfortunately, isolate itself from the continued upward swing in the cost of its normal outgoings.

For the further information of Senators I quote from the February issue ofDevelopment, the journal of Ireland's economic progress:

The expectation of better times ahead must be demonstrated at every possible level. An excellent example of this is to be seen in the Government's estimates of expenditure in the coming year. Very definitely these reflect the confident expectation of an expanding economy. In every sector increases and improvements in the country's economic constitution are forecast. This forward planning is based on cold calculation from known facts. It is very far indeed from being inflated conjecture. But it is—and should be used as—a morale booster.

Fine Gael, of course, will say that they are "all out of step but my Johnny". Nevertheless, these comments reveal a remarkable degree of agreement amongst responsible organs of public and industrial opinion, and, as such, they are entitled to get at least as much consideration as the views of any member of this or the other House. Senator Dooge dealt at some length with theProgramme for Economic Expansion. That programme which came into operation in 1959 provided for an annual increase in the public capital programme and the White Paper estimated the programme in 1962-63 at £44,000,000. Progress made has been so rapid, however, that the current year's expenditure on capital investment was £67,000,000 or 50 per cent more than the original estimate. The main increases were in agriculture, housing, hospitals, schools, industrial development, fuel and power. Senator Dooge spoke of dynamism but this increase reflected the dynamism throughout the country and the sound financial basis which was laid in the past few years as a result of which the Government was able to set aside such large sums for economic development. Lest I should be charged with exaggeration let me call an independent witness whose testimony will not, I am sure, be said to be inspired by Fianna Fáil propaganda.

Here are some extracts from theIrish Independent of December 18, 1962:

The forward surge in the Irish economy in the past few years is borne out by the detailed national income figures which have just been published by the Central Statistics Office. In the three years, up to and including 1961, the value of total national production—after allowing for differences due only to price changes—increased by 15 per cent.

This is a satisfactory performance, far in advance of the cautious assessment of the 1958 Expansion Programme, and in marked contrast to the decline of the previous three-year period.

The vital question for the future is whether the average annual 5 per cent increase of the past three years heralds a real breakthrough to a situation where steady growth becomes the normal condition. There are solid grounds for rejecting the idea that recent expansion has been no more than a "flash in the pan".

There is much evidence that a real revitalisation has occurred in the economy, particularly in the industrial sector.

The economic correspondent of theIrish Times did not disagree. Writing on January 2nd he said that our economy remained basically healthy, in spite of a world-wide slackening of economic growth:

We can look back with some satisfaction on the achievements of the past four years—a rise of almost one-fifth in national output, of one-sixth in living standards, and of almost two-fifths in fixed investment, accompanied by an increase of almost one-fifth in the value of our liquid external assets.

He concluded:

Four years ago, no one in Ireland would have dared to forecast such progress; so, perhaps, our cautious hopes for the next few years may in turn be surpassed by the reality.

Only last Sunday theObserver, which, I am sure, most Senators read, and which is one of the most responsible English newspapers, had this to say of our progress:

Ireland is making the difficult transition from a peasant economy to one that combines industry and agriculture. Partly because of the Government's enlightened economic policy exporting manufactured goods and raw materials have more than trebled in the past ten years, and in the last couple of years Ireland has achieved the 4½ per cent rate of growth that is still a dream in this country.

Obviously, they cannot all be wrong.

Did the Senator get the English edition of that particular day, and see what it said?

It said the same thing. In addition, last year, 1962, there were more people at work and the number of unemployed was at the lowest point ever reached. Our population showed an increase.

Mr. John Conroy, General President of the Irish Transport and General Workers' Union, in a New Year's interview with theIrish Press asserted that 1962 showed an increase in real wages and higher living standards for all trade unionists. He visualised a further forward movement in living standards during 1963 and added:

It is heartening, too, to record that there was a substantial reduction in 1962 in the number of emigrants as compared with previous years.

Between June, 1959, and June, 1962, average industrial earnings rose by 24 per cent, and the cost-of-living by less than 8 per cent, so that the purchasing power of industrial earnings rose by 15 per cent within the three-year period. At the same time, the average working week was cut from 45.3 to 43.9 hours.

This is a substantial measure of social progress in a short period and it is worthy of note that in Britain the purchasing power of wages rose only fractionally in the same period. Senator Dooge will I hope take note of that.

While the value of our exports fell by 3.6 per cent last year they were up by some £20,500,000 compared with 1960. The slight fall was due in the main to the running down of stock due to the very high exports of cattle in 1961. It should not recur this year. In this connection, it is useful to recall the statement of the President of the Federation of Irish Industries at their annual conference in Dublin on February 14. Mr. McCourt declared that no country in North West Europe or in North America had achieved as rapid an increase in industrial output as Ireland, which during the past five years had a rise of no less than 41 per cent.

It is not quite as gloomy as Senator Dooge indicated. To prove that the cattle traders are not downhearted we have the words of Mr. J.L. Ward, Chairman of the Irish Cattle Traders' and Stockowners' Association at their annual meeting in Dublin on February 13:

It must not be forgotten, he said, that the year 1961 was a record year, or very nearly so, and the subsidy paid by the Department gave the trade a wonderful fillip, so we should not be too despondent about 1962.

Imports showed an increase in value of £4.7 million. While materials for industry and agriculture accounted for 62 per cent, capital equipment requirement for new production for 13 per cent, consumer goods represented some 20 per cent. On this point there are some things to be said. There was a marked increase in the imports of food, clothing, footwear, drinks, textiles and cutlery, to a great extent unnecessary imports in view of the fact that they are all produced here as good as, if not better than in other countries. This is a matter on which the Government can do very little but the people can do quite a lot. A substantial drop in our adverse trade balance would follow a determination by our people to buy Irish goods. A proof of the quality and value of Irish goods and food is that they are finding steadily increasing markets abroad.

I am afraid we still suffer here from an inferiority complex and every organised section of our community should take steps to eradicate it. I am thinking here particularly of the trade union movement which represents half a million organised workers, thousands of whom depend for their livelihood on the factories producing those goods, and yet, sad to say, goods go into Irish workers' homes which are in competition with the goods we produce here, goods which are in no way superior in quality or lower in price than the goods which come from the Irish workers in Irish factories. The trade unions could be a powerful force in remedying the position by a sustained publicity campaign amongst their own members.

Why do the Government not do it? Are they shy of it?

There is need for an educational drive on the value and quality of Irish goods throughout the country at the moment. Those who work in the shops in many cases show foreign made produce to the potential customer while the economically good, or better produced, goods made in Ireland remain on the shelves and the foreign products are bought. I doubt if there are many Senators who have not had the experience of going into stores and asking for certain goods and finding that the shop assistant produces goods which come from abroad. Until you ask for the Irish goods they do not worry about showing you whether they have them or not. Employers' federations have an equally important part to play in this. They can ensure that Irish goods are not alone stocked but are properly displayed in the shops and that instructions are given to their staff that it is the manufacturers of Ireland who pay their wages and that they should do their best to promote the sale of Irish goods which, as I say, are equal, if not better in quality and as low in price as many of the foreign articles which are available in our shops. A substantial contribution towards remedying our adverse trade balance would result if a campaign of that nature were conducted by the interests to which I have referred.

There is another appalling factor which I found looking at the trade returns. Those who consume alcoholic drinks, and non-alcoholic drinks can help in this connection. We produce in my opinion the finest drinks in the world and yet the consumption of Scotch whisky in the Republic of Ireland is breaking all records. For every bottle of Irish whiskey sold today a bottle of Scotch whisky is sold as well.

Some of us have no sin on our souls for that.

The sale of imported beer—80 per cent of it Continental lager—has more than trebled in the past ten years while the sale of Irish beer has not kept pace. There is no excuse in the world why the people who wish to take a drink should drink Continental lager when we are producing at the moment some of the finest lager in the world. There is no reason why Irish people should go on buying Continental lager which unfortunately for some reason I cannot understand is sold at the same price as the home made brew.

Another example that occurs to me is why is it that a number of our hotels and firms boycott Irish cheese? There seems also to be a general boycott of Irish cutlery and delph when hotel proprietors are replacing their cutlery at the end of the year. Many of them make a point of buying English made cutlery. There is no excuse whatever for that either. The federation which deals with those particular people should make it their business to advise them to buy Irish goods not merely for the sake of buying Irish goods but because they are as good in quality and as reasonable in price as any foreign article and that, above all, they give employment at home to our own people.

The bill for consumer goods which was 20 per cent of our total imports last year could be very heavily cut if our people would buy the products of our farms and factories. Under the system of election which we have here, a candidate to stay in the race must get a certain reasonable proportion of first preference votes. In my opinion, Irish manufacturers in order to stay in the race must get a reasonable slice of the home market. They cannot depend completely on building up an export trade to keep the machines going. Irish workers, who are the direct beneficiaries of home production, should be the first to appreciate that if the home market is not in a state of response to Irish goods then it is likely that the economic repercussions will be first felt by the workers concerned. I have no doubt it is lack of thought—it is lack of thought on many of our parts occasionally—which an educational policy of publicity would undoubtedly help to cure.

Senator Dooge made, as I say, a very refreshing type of speech but it seemed to me that he struck an air of gloom and adopted an attitude which was not in consonance with the successes we have achieved under the economic programme for the past four years. I do not see any grounds for gloom. The country is making good progress and this year should be a fruitful one in all sectors of the economy. The increased amount of money called for will be spent to the best advantage and in the best interests of the country to create progress, provide work and build up a prosperous economy.

This is a difficult Bill to speak on every year. It is particularly difficult this year because most of the remarks I would like to make have been made very much better I believe by Senator Dooge. This Bill is really the beginning of the financial business of the year. It is followed by the Finance Bill which comes after the Budget in the Dáil. Finally, we have the Appropriation Bill after all the Estimates have been fully debated. The field of discussion on this Bill is rather narrow. We are confined entirely to the Supply Services. We are not entitled to discuss the Central Fund Services although it it is called the Central Fund Bill. We are not allowed to discuss expenditure below the line. These are very closely related to the matters which have been covered in the debate up to now. Furthermore, we are not allowed to discuss taxation nor are we allowed to discuss particular Estimates, apart from the Estimates as a whole. Therefore, the field of discussion in this debate is rather narrow.

I notice, in reading the debates in the Dáil, that considerable latitude was allowed by the Chairman and matters were discussed there in regard to taxation, capital expenditure, which I would like to discuss, but I personally feel it would not be allowed by the more rigorous rulings of the Cathaoirleach. However, general economic policy may be discussed, and has been discussed already. Obviously, it must be discussed in relation to the Supply Services because the Supply Services which deal with Government expenditure in the first place reflect economic policy. They reflect the course of economic policy because when the national income is growing naturally the amount of Government expenditure tends to grow as well. Therefore, an increase in Government expenditure and in the Supply Services is not in itself an unhealthy sign. It may represent a growth of the economy as a whole. Secondly, the Supply Services can cause changes in the rate of economic growth because they can affect both the volume and the direction of production. Therefore, the general economic position of the country is relevant to this debate but, as I have said, it has already been very ably covered by Senator Dooge. Therefore, some of the things which I proposed to say in my remarks I am not going to say now.

In recent years the national output of this country has expanded and also costs of production have risen. This rise in costs of production is a worldwide phenomenon. We are living in an inflationary era in the world. If there were any difference of opinion between Senator Dooge and myself I would say it is that his fear seems to be primarily directed to the danger of deflation whereas my fear—it is, I suppose, because I am an economist rather than an engineer—is primarily directed in the direction of inflation.

The remarks I am going to make on the Supply Services are directed to the possible inflationary dangers shown by increased public expenditure. Increased public expenditure in a period of growth is only to be expected. It is a healthy sign very often in itself. The question is not only how much money is being spent by the Government but how it is being spent. The direction, as well as the volume of the growth of public expenditure, is, of course, relevant.

I need not repeat facts. They were given by the Minister in his introductory observations. When Supplementary Estimates for the year which is just finishing now are taken into account, the real growth in Supply Services between the actual expenditure in the year ending and in the coming year is reduced to about £5½ million but, of course, there are bound to be similar Supplementary Estimates in the coming year. Therefore, I have no doubt at all that actual expenditure in the coming financial year will show an increase over that which is coming to an end by a substantially larger amount than the £5½ million mentioned in the Minister's speech.

The principal point made by Senator Dooge is one, I think, which is unquestionable. There has been a growth in national output in recent years, especially since 1958, but the rate of growth tended to diminish last year. There seems to be a certain slowing down in the rate of growth of our economy. As Senator Dooge stated, the objective of the present Government's economy is growth and although we are not supposed to quote members of the Dáil I think I am entitled to quote a Minister when making a statement on official policy. I should like to quote from the Dáil Debates of 12th March, column 1025, where the Minister for Justice stated:

This Vote on Account must be considered in the context of the Government's general economic policy. This is an expansionist Government. Progress and expansion have always been basic Fianna Fáil objectives. Our aim is to keep the economy moving forward and expanding and that underlying objective runs right through this Book of Estimates. The Vote on Account should be examined against the background of that policy.

I could quote a great deal more to the same effect but that is enough to show that the basis of the Government's policy is expansionist and that the Supply Services are framed with a view to helping that growth.

Therefore, the question we really have to ask ourselves is whether the additional expenditure which undoubtedly has appeared in this year's Supply Services is calculated to serve that objective. We are accepting that the objective of the Government is growth. Have the Supply Services increased more rapidly per cent than growth in income last year? The question is whether this increase in public expenditure is calculated to help the growth in the economy which we all in this House, whatever Party we belong to or whether we are Independent, accept as a desirable objective of enconomic policy.

Without going into detail—because as I said we are not supposed to discuss particular Estimates on this Vote on Account—we may say that a great deal of extra expenditure can be justified. Take agricultural policy. I would quote the Minister for Industry and Commerce when introducing the Vote on Account in the Dáil. He said on March 6th, column 693:

About £12½ million, or one-third of the total provision for agriculture next year, relates to capital investment.

That we can accept without going into details. Furthermore, expenditure on social services of all kinds, using the term in its widest meaning to include such things as health and education, can be regarded as productive in the long run. No more useful investment can be made in any country than in the health, strength, ability and acquired efficiency of the population. Therefore, I think the increases in expenditure in this Budget on health and education can be regarded as productive in the long run while they may produce, of course, a temporary burden which has to be borne.

There are several other increases in the Supply Services which, I think, are inevitable though I do not think they are as desirable as those I have mentioned, capital expenditure on agriculture and social services, but they are inevitable in view of the movement of the times. Increases in salaries reflect the eighth round of wage increases and it is impossible for the Government to avoid being caught up in this rise in salaries and wages. I take it that it is largely in order to put a brake on this movement that the White Paper about which Senator Dooge spoke so wisely and so well was issued when it was issued. One might, however, criticise the Supply Services for the increase in the numbers employed. While one may accept an increase in salaries for existing employees as inevitable, there is not so obvious a necessity for an increase in the numbers of civil servants employed and one cannot help wondering whether the Government have really approached this matter in the same way as a progressive business would, by the employment of industrial consultants or the replacement of staff by computers. One cannot help feeling that the actual number of people in Government service could possibly be kept lower than it is without causing acute unemployment. A slowing down in the rate of recruitment is called for rather than anything in the nature of a reduction in the numbers already employed. I would ask the Minister to consider whether the administrative machine in this country is becoming top heavy.

There is no question at all about the reality of the growth in the Supply Services in the Estimates. The question we have to ask ourselves is: is the national income of the country growing equally fast? I think, without actually going into figures, a number of which have been quoted by Senator Dooge, it must be agreed on the statistical information at our disposal that expenditure is growing more rapidly than the national income. The percentage of increase in Government expenditure is becoming larger than the increase in national income itself. That does not necessarily condemn it. The question we have to ask ourselves is: will these increases in Government expenditure help to increase the national income in the future by production, by building up the productive resources of the country? Therefore, the mere fact that the Supply Services increase more rapidly than the national income in any particular year is not in itself, I think, anything which should be condemned. Here again, as the last quotation I am going to make from the Dáil, I should like to quote a Minister's speech directly on the subject we are discussing. It is a statement of Government policy and I ask the Leas-Chathaoirleach to allow me to quote it. The Minister for Justice, speaking on 12th March at column 1029 of the Official Report, said:

It is no use bemoaning in a general sort of way the overall size of the national expenditure. We believe that money must be made available for economic development or we will not survive as a nation.

The only type of question which is valid in this connection is: is the expenditure advantageous; will it pay off in terms of jobs, terms of production and in terms of efficiency?

That is a very fair question, that expenditure as a whole, or increases in expenditure, must be judged by those criteria. Speaking as an independent member of the Seanad, without any political ties, and speaking as a man in the street, I think I may say that the onus lies on the Government to show that the answer to these questions is in the affirmative. If the Government ask the people to contribute to more Government expenditure the onus is on the Government to show that it will lead to more efficiency and more production in the nation as a whole. It is very easy for the Government to criticise individual members of the Dáil or Seanad for not advocating reductions in this or that Estimate. Each individual item of expenditure usually can be justified by itself and I do not think, especially in this debate where we are not allowed to discuss particular items, that it is for us to suggest where economies should take place in these Estimates.

I have no doubt at all that the Estimates have been framed with the utmost regard to possible economies. I have no doubt that the Government have had to refuse many requests, have had to resist many pressure groups, and that many things that would have been desirable if more resources had been available have had to be rejected this year. I am sure that takes place every year. Having said that, I think it is the duty of the Government when they come into this House, to justify increases in the Estimates on the grounds either that they are unavoidable, such as increases of salaries, as I have mentioned, or if not unavoidable that at least they are desirable in the sense that they are going, in the long run if not immediately, to increase the output to the community. This is particularly true at a time when, as I say, the share of the national income which is being taken by the Government is increasing. There is no question at all that this increase in the Estimates for the Supply Services this year will lead either to more taxation or more borrowing.

There is no reason to believe that the buoyancy of the existing revenue will be sufficient to cover the additional sums now proposed to be spent. Therefore, we have to face the fact that the country will have to face either more taxation or more Government borrowing if this programme is to be carried out. We have to discuss in a general way this matter which has largely been covered by Senator Dooge, of whether the country is in a position to stand up to this additional taxation or additional debt. I suppose that here, again, I am coming to something where there may be a slight difference of emphasis between Senator Dooge and myself.

The first thing we must look to is the balance of payments. When the economic doctor comes to the patient with a stethoscope the first thing that he will examine is the balance of payments. Looking at the mere balance of trade, the balance of imports and exports, it is extremely unfavourable. The visible balance is extremely unfavourable and the country has a deficit of nearly £100 million. I admit that a great deal of that is for raw materials for future production and of capital goods that will add to the national income in the course of time, but a great deal also is for consumer goods, as Senator Ó Maoláin has stated. A great deal of these imports could be substituted but the fact is that they have taken place and that in regard to the balance of payments we have to accept them as a fact. The invisible items in this country's accounts are so favourable to us, our remittances, our revenue from abroad, that the ordinary gap of £100 million is reduced to something like £12 million. Therefore, if I am correct in my figures, the deficit in the balance of payments is something in the nature of about £12 million.

There has been a certain amount of confusion, not in this House but in the Dáil, and I hope I will be forgiven for saying one word on this matter. There has been an inward flow of funds and our external reserves have increased and not decreased. There has been a certain confusion in some of the speeches. The invisible exports, the remittances, the tourist income, and things like that, which tend to bring down the current deficit, have been confused with the inflow of funds. The fact of the matter is, if we take the current account, visible and invisible, all the tourist receipts, emigrants' remittances, investments abroad, we have a current deficit of about £12 million. That has been more than covered actually by the inflow of funds. In the ordinary way in a country with a deficit to the extent of £12 million the external reserves would go down by that amount. The curious thing is that last year, as far as we have figures, the external reserves in the country actually increased and increased substantially. This, of course, gives us a breathing space and gives us an opportunity of postponing the necessary deflationary action which Senator Dooge fears so much. I am not, for a moment, advocating deflation.

I think the present position of our external reserves is such that we can afford to live beyond our income in the balance of payments for a short period, but at the same time it is well to realise and to have our eyes and minds wide open to the fact that if it were not for this inflow of funds from abroad, this capital inflow, drastic action might have to be taken which would be extremely uncomfortable for everyone in the country, like the corresponding measures taken some years ago, and which would certainly put the brake on growth in no mistakable manner.

It is relevant just for a moment to try to clear our minds as to what these external reserves are and what they consist of. The curious thing is that in spite of the excellent statistics which we have in this country, there seems to be a certain doubt about the composition of these external reserves. They almost seem to come into the national accounts as a balancing item. People do not seem to be able to put an exact amount on them.

Of course, we know the external deposits in the commercial banks, the Central Bank and the departmental funds. We know those figures, but the amount of external reserves of the country is greatly in excess of the figures shown. They may to a small extent reflect purchases of land in Ireland by foreigners, and no doubt they reflect certain purchases of Irish securities on the Stock Exchange. They reflect a certain amount of investment by foreigners in Irish industry, but they also include certain liquid balances probably of outsiders who buy Irish Exchequer bills and things of that kind which are very easily withdrawn. In other words, they include what is known in present economic jargon as a certain amount of "hot" money which is regarded as something which is so easily removed from the country that it is not considered safe to rely on its retention.

Looking at these external reserves, which have undoubtedly increased in the course of the past year, I think there are two things to be said about them in order to discourage any undue complacency to which they may give rise. The first is that, in so far as they represent foreign investment in Irish industry, when that industry begins to earn a profit the remittance abroad of those profits constitutes a burden on the balance of payments in the other direction.

The second thing to be said is that, to the extent that they can be rapidly liquidated, they constitute "hot" money and, therefore, can easily be removed thus reducing the monetary ease which the country unquestionably enjoys at the moment. It is the existence of those reserves which enables us to postpone the steps, which Senator Dooge rightly dreads so much, of deflationary action which would undoubtedly reduce employment, reduce growth, put on a brake, and be in conflict with general Government policy as enunciated by the Minister I quoted from the Dáil debates.

There are certain other aspects. I now come to the part of my remarks where I disagree with Senator Dooge. I think this influx of foreign capital may produce undersirable inflationary effects. It puts at the disposal of the people living in the country incomes and purchasing power without a corresponding output of goods and to the extent that the money is spent it means that incomes are expanding more than production. That, in itself, on the face of it, is inflation. It also has the other inflationary effect to which I have already referred: it delays the correction of a deficit in the balance of payments. Therefore, it allows us to go on consuming foreign goods and buying foreign goods longer than we otherwise could. In that way it is inflationary.

It can produce two inflationary results. The first is the actual purchasing power it puts in the possession of the people in the country, and, secondly, the capacity to delay the correction of an adverse balance of payments. It seems to me that as between Senator Dooge and myself in this debate we really do not disagree about the facts of the situation, but it seems to me that he fears deflation whereas I fear inflation. It may be that economists are always taught to regard inflation as the worst and the most dangerous disease in the system, and one from which we have all suffered in our lifetime and which is endemic in the world today.

As we are talking about inflation, I think I am entitled to say that, on top of the possible inflation caused by this influx of external reserves, the additional Government expenditure provided for in the Book of Estimates can also be inflationary. It can be inflationary in the sense that it creates what is known as demand inflation. The Government will be spending on objects which are undoubtedly highly desirable but that expenditure tends to put more money into circulation, to increase the national expenditure and, therefore, it creates what is known as demand inflation.

I think there has been too much emphasis during the discussion on this Bill and generally in this House this evening on cost inflation, inflation caused by rising wages. The White Paper was referred to at some length by Senator Dooge and I agree with most of what he said. The White Paper quite definitely deals with the danger of cost inflation. Inflation may be caused by an expansion of incomes and an expansion of demand without any actual rise in costs. The only way in which this expenditure can be prevented from having inflationary effects is that it could be met by current taxation and not by borrowing. If it is met by taxation of course the inflationary danger disappears, because the money is not available for the public to spend, and the plus of Government demand is matched by the minus of private demand. Therefore, there has not been any addition to the purchasing power and inflation does not take place.

I am perfectly well aware that we are not allowed to refer to taxation in this debate and that we can deal with it when we come to the Finance Bill, but I think that, while I am on the question of inflation and additional expenditure, I am entitled, subject to the ruling of the Chair, to make one short remark about taxation. If what I am saying about additional Government expenditure is correct, the Government are faced with the dilemma of inflation or additional taxation, one or the other. We all read the newspapers and however closely we try to stick to the rules of the House we cannot escape having read that something in the nature of a sales tax or a purchase tax is in the air. I think I am entitled to say that such rumours might lead to inflation. If people believe there is to be a purchase tax or a sales tax in the near future they may expedite their purchases. People are already buying things to have them before the Budget. That may be inflationary. Furthermore, if a tax of that kind is imposed it has the effect of cutting down real wages which is completely contrary to the policy laid down in the White Paper.

I entirely agree with Senator Dooge who said that income policy is a necessary part of public policy today. I also agree with him that the White Paper in dealing with income policy tends to deal with it too narrowly and does not cover the whole ground. It does accept the fact that an income policy is important today, generally accepted today: that an income policy is as important in a community as the fiscal policy of the Government or the monetary policy of the Central Bank. From the point of view of the survey, planning the system, avoiding either deflation or inflation, some sort of income policy is a necessary part of public policy today. That has been accepted all over the world. In Great Britain there is the National Incomes Committee. There is the NEDC, or Neddy as it called, all applying their minds to incomes policy.

If one reads international economic publications, one is impressed by the fact that every country in the world to-day is concerned with incomes policies. We have had our own beginning of an income policy in Ireland—discussions between the Government, trade unions, employers, and so on. So, therefore, everybody is agreed that an incomes policy is desirable in the interests mainly of preventing cost inflation. If there is no incomes policy, cost inflation is liable to occur. The whole trend of wages and salaries is upwards in every country in the world, and, therefore, there must be an incomes policy. I quite agree with Professor Dooge that it must be wider than a mere restriction on increased wage and is not to be confused with pay pauses or anything of that kind. It is something much wider. At the same time incomes policy is a necessary part of the policy of a country which tries to avoid cost inflation.

We must not become bemused by the fear of cost inflation. Cost inflation may be checked but the maintenance of a deficit in the balance of payments, or in the public finances may cause inflation. In this war against inflation not only will we have to have an incomes policy but also a fiscal policy and a foreign trade policy. Every single section of economic life can lead to inflationary dangers, and, therefore, the incomes policy is only part of general policy in this respect. This increased expenditure which we have to accept must be met either by taxation or borrowing. If it is not met by taxation it is inflationary.

Assuming for a moment that for some reason or other the Government do not wish to impose additional taxes; assuming they wish to run a deficit, assuming they share Senator Dooge's views that growth is worth paying a price for, in that case the Government will have to borrow.

That brings me to the last matter with which I want to deal and that is the growth of public borrowing in the country. The amount of public borrowing in the country is rising steadily year by year and the figures in the quarterly bulletin of the Central Bank show that the percentage of Bank advances to Government and to public authorities has been steadily increasing for many years. I am not suggesting that any individual borrowing is unjustified. I am not suggesting that any of this State capital expenditure has not produced good results, but I do suggest that if the Government make too many claims on the capital market there is a danger of shortage of private capital. Private industrialists may find themselves not able to borrow as much as they wish.

I strongly agree with Senator Dooge that at the present time progress and growth depend very largely on investment. They depend on investment of large amounts of capital. Whether the capital is domestic capital or foreign capital, we must have the capital if we want the growth. The CIO reports have emphasised the need for readaptation by Irish industry in the light of the Common Market. Whether this country ever enters the Common Market or not, the readaptation is necessary. We are living in a period of reduction of tariffs. We are reducing our tariffs and we have to become more competitive, more efficient and, therefore, it is most important in this country that industries should have access to abundant supplies of capital and the Government must not make too much of a claim on the capital market. The supply of savings in the country is limited. It is not sufficient to meet all the needs of public and private borrowers and, therefore, we may have to borrow abroad.

It is quite possible that too great a demand for capital by the Government and by private borrowers combined might even raise the price of capital, or put up the rate of interest. That, again, would be cost inflation. When people talk of cost inflation they seem to think of nothing but wages. But Senator Dooge has already covered this very well and I agree with him that wages are only one end of cost and the cost of capital is another.

This word "productivity", which one is almost afraid to use nowadays because one gets misunderstood, is a result of many factors other than the cost of labour. It may be the result of under-capitalisation. It may be the result of unused capacity in industry, of inefficient management, of lack of technical advances, of lack of adaptability. I have nothing to add to what Senator Dooge said on this matter. He, as an engineer, probably knows more about it than I do. I agree with him that productivity today depends on a great many things besides wages, the cost of labour, and practically all those things require capital. Therefore, it is very important in this country to conserve our supplies of capital for essential productive purposes.

I wish to summarise what I have been saying before concluding. I have endeavoured, I hope successfully, to keep inside the bounds allowed on the Vote on Account. I have not discussed expenditure below the line, or capital expenditure or individual Estimates. Therefore, so far, I think I have succeeded in not breaking the rules. The keynote of the present situation seems to me to be that Government expenditure is increasing more rapidly than national output at the moment. We have on the authority of the Minister in the Dáil that the Government policy is an expansionist policy and output is expanding, but Government expenditure is expanding even faster. This Government expenditure may be inflationary. It may add to the other inflationary factors of the situation.

Inflation is the great evil in the world today. It is the upsetting factor in all calculations regarding cost and Government programmes all over the world and every country is suffering from rising costs, rising wages, inefficiency, lack of capital, lack of savings, and in our country, and in many other countries, adverse balance of payments, all of which are inflationary. In this country the inflationary effects of the adverse balance of payments are to a very large extent plastered over by the incoming flow of capital, part of which is "hot" money which might disappear. To some extent a country which is maintaining a deficit on balance of payments plastered over by movements of capital of that kind is living in a fool's paradise. It may wake up some morning to find itself not as well off as it looks. It may find that the need for correction has come suddenly and, as Senator Dooge pointed out, correctives of that kind—deflationary correctives of that kind—can be very painful and very fatal to growth.

Deflation is almost always the result of previous inflation. Inflation is a disease and deflation is a cure and the best way for a country to avoid the painful remedy of the deflation is to avoid the predisposing disease of inflation. Therefore, I do suggest to the Minister that his fiscal policy must always be directed towards, first of all, the prevention of inflation and secondly, its correction when it begins to appear. The fiscal policy of the Government is quite as relevant to inflation as the cost of wages, the cost of capital or industrial inefficiency. It can cause inflation also for which the Government must take the blame if it is allowed to develop.

The last thing I want to say is that I have not criticised the growth in the Estimates for Supply Services with the possible exception of the numbers employed in administration. I consider many of them are inevitable owing to rising costs and rising wages. Many of them are productive in the long run in the sense that, directly or indirectly, they stimulate growth either by way of agricultural grants or money spent on technical education, health services and so on. However productive they may be in the long run, in the short run they should be covered by taxation. They may produce a crop many years hence. Education particularly is a slow crop. The cost of educational efforts should be met by taxation in the short run. The reason I say that is because it takes away one of the causes of inflation and also reduces the need for Government borrowing at a time when, as Senator Dooge very ably put it, there is a great need for more capital in private enterprise.

Therefore, I suggest to the Minister that these additions to Government expenditure should be met in the short run in the hard way and not in the easy way. I also suggest that the onus is on the Minister coming into the Seanad to convince us that these increases in Government expenditure are either inevitable, the result of rising costs, or desirable because in the long run they will be productive.

Listening to Senator Ó Maoláin earlier on I was reminded of the Minister for Transport and Power. I felt that never before had so few given so much advice to so many. He gave us advice about the buying of Irish goods and I rather resent his reference to the trade union movement in this connection. Quite frankly, I think the trade union movement is doing more here than the Government have been doing lately. Hardly a Congress passes without some resolution or some publicity in regard to the desirability of buying Irish goods being discussed by the delegates. I have time and again read public utterances by the leaders of the unions organising shop workers as to the desirability of pushing the sale of Irish goods. However, the employees in the shops do not decide what is bought by the owner of the undertaking. All the workers can do is to follow the instructions of the boss. However, I can assure Senator Ó Maoláin that I, like most trade unionists, buy Irish socks, Irish shoes, Irish shirts and an Irish suit when I can afford it. I will not go any deeper into it than that but if the Senator cares to invite me to have lager with him I will drink an Irish one with him. However, I am not going into criticism.

Before I pass from the question of buying Irish, I think I should have said there has been a notable absence of Government sponsored campaigns in regard to buying Irish in recent years. I seem to have missed it. I think previously the Department of Industry and Commerce every year sponsored or engaged in some publicity about the desirability of buying Irish goods. Whether that is unfashionable because of our anxiety to enter EEC I do not know. I may be wrong in this and I very much hope I am. I hope the Minister in his reply can assure me that I am wrong and that it is still Government policy and the appropriate Department do still engage in a campaign of pushing the purchase of Irish goods.

But to come to the issue in the debate, I shall not engage in any criticism of the amount involved in the Book of Estimates even though it is £19,000,000 more than we saw in the Book of Estimates last year because, quite frankly, I do not think that taxation is a particularly heavy burden in the economy of this country in spite of what Fianna Fáil say when they are in Opposition. Then, of course, it is a crying shame; it is breaking everybody's back; once they get back into power they will reduce taxation drastically. I think we heard the Minister himself promising some years ago drastically to reduce the number of civil servants employed. I forget now whether he mentioned the percentage which he aimed at but I do know that there are now more civil servants employed than previously. I am not necessarily criticising that. I am just making a comparison of the type of attitude adopted by Fianna Fáil when they are in Opposition and when they hold the reins of power. However, before we go from the Civil Service may I revert to something I mentioned in the same debate last year, the desirability of taking some look at productivity in the Civil Service the same as Ministers, particularly the Minister for Transport and Power, advocates for industrialists and trade unionists in the economy outside?

I do not for a moment suppose that Civil Servants are underemployed. I never noticed any such thing. I am referring to the methods of working, the organisation of the work and I would remind the House of what the Taoiseach said about 12 months ago about the prime responsibility in regard to productivity lying with the employer. It is he must take the initiative; it is he must make the decisions, whilst the co-operation of the workers and the trade unions is necessary that prime responsibility in regard to increasing productivity lies with the employer. The Minister here before us this afternoon is the employer of the civil servants—civil servants whose number he promised to reduce drasticallv and now we find there are more employed than ever. Let me come back to the question of the tax burden which, even though I am in Opposition and will be, I suppose, in Opposition for some years, I do not say is a particularly heavy burden and I quite agree with what the Taoiseach said in the debate in the Dáil.

He did make the very relevant point that total taxation, including, I think, rates and the cost of insurance contributions, as a proportion of gross national produce, was fairly consistent over the years. Over the past ten years it varied between 22 and 23 per cent of the gross national product. That may seem high until you compare it with the figures in other Western European countries. Then you find that in recent years it has been 26 per cent in Great Britain, 29 per cent in Italy, 29 per cent in the Netherlands, 34 per cent in France and 34 per cent in West Germany. Senators no doubt have seen those figures which were given by the Taoiseach in the debate in Dáil Éireann.

I thought the Taoiseach might have gone a little further. He might have made the point regarding the break-up of taxation because we usually find that apart from Fianna Fáil, when they are in Opposition, the people who complain most vehemently about the burden of taxation are the people who are paying direct taxation by way of company profits tax, income tax and so on, not forgetting the potential payers of death duties who are very loud in their objection to that punishment. The fact of the matter is that when we look at the break-up of taxation in this country——

An Leas-Chathaoirleach

I must ask Senator Murphy to take to heart several self-admonitions administered by Senator O'Brien when he was speaking. Taxation is not in order in this debate.

I was speaking of the break-up of the burden of taxation involved in the £167 million in this Book of Estimates and comparisons have been made between that burden here and in other countries. I suggest that it is quite relevant to look at the burden of taxation. I am not proceeding to discuss the actual rate of taxation, the rate of income tax, how it is imposed or anything like that nor am I going in any depth into the sales tax which was previously mentioned but I was making a general point that the people who complain about the burden of taxation are the people who pay direct taxation.

Over two-thirds of the money involved in this Book of Estimates, over two-thirds of £167 million, will be collected by way of indirect taxation and about a third from direct taxation. In those same Western European countries with which comparison was made by the Taoiseach in the Dáil their general average—I shall not go into details as they would be more appropriate to the Finance Bill—is that indirect taxation is only one-third or half of the burden of taxation. Here it is over two-thirds. This is all in the context of a Government announcement that they were contemplating the introduction of a sales tax. No doubt we will have a further opportunity of discussing this but I would just make a general point. Again, they propose to increase the weight of taxation not according to ability to pay but simply on the people generally including the ordinary wage and salary earner. They are doing this at a time when they have issued a White Paper imposing a wage pause on the people they can control and by that encouraging a wage pause in other employments.

I think the Government are unrealistic in all this. I am afraid they are rapidly losing their sense of direction and going in different directions. The economy may be entering a difficult period. It may be quite relevant to appeal to the good sense of trade unionists but in my opinion the Government are not going the right way about it. They started off ham-handedly by the issue of a White Paper without any prior consultation with the trade union movement. It is all very well for the Taoiseach to say with his hand on his heart: "I cannot hand over direction of the Government to any outside body". The Irish Congress of Trade Unions were not criticising the Government for making a decision. What they were saying was that this was a decision vitally affectting the congress and the members represented by it and it would have been in line with the general Government declaration of policy that there should have been a prior exchange of views, prior consultation, with the congress on a matter like this. Following that stage let the Government make up their mind and stand by their own decision. What the Government did was to indulge in this White Paper and launch out on it without any prior consultation. Immediately and inevitably they came up against the opposition of the organised trade union movement here.

Then very quickly after that they came up with the announcement of the possibility of a sales tax which will not be related to the ability of the taxpayer to pay but will simply be taken from him whether he can afford it or not. It is a burden on the ordinary wage and salary earner at a time, mind you, when the Government have been following a policy of easing the supposed burden on the people who pay direct taxation. The Minister in reply to the debate in Dáil Éireann made the point that by reason of their policy of easing the burden of direct taxation he had saved the income tax payers and the companies who pay profits tax I think £6.3 million. The point he made was that if 1956 tax rates were still in operation direct taxation collected by the central Government would have been increased by £6.3 million while indirect taxation would have been £4.8 million lower.

The Government have announced this policy. They have been quite open about it. They have boasted about it. They have shifted the burden of taxation over the years from the people who pay direct taxation to the people who pay indirectly. They use as excuse for this the fact that purchase tax, sales tax and this sort of indirect taxation is general in Western European countries. If the Minister was coming along saying: "We have kept the level of direct taxation. We have not reduced it but we do not think we can increase it further and we want to do more things for the community. We want to provide free education up to university level or something like that which will cost an awful lot of money and to get that money we need to impose a purchase or sales tax" then I should imagine the attitude of the trade union movement would be completely different. But remember one particular argument is what I said a moment ago. The Minister is proposing this in the context of developments over the years to ease the burden of taxation on those best able to pay by taxation.

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

Senator Ó Maoláin in the course of his speech asserted that there was a greater number in employment last year than ever before. The Senator was probably referring to the number employed in industry only but that is probably too narrow an approach to the question of employment. Might I advert to what I said frequently in the past and what the Taoiseach, heading this Government, has always asserted, that the Government must be judged on its ability and success in providing employment for the citizens here in Ireland? I reassert what I suggested previously and that is that on that assessment this Government have failed.

We find that the peak of employment in its economy was back in 1955. At that time there were 1,181,000 in employment. By 1960 that had gone down to 1,112,000, a decrease of 69,000. Last year, speaking on this debate, I welcomed the fact that the estimate for 1961 appeared to indicate that there had been a slight improvement in the overall employment position, and the estimate, which subsequently turned out to be correct, was that in 1961 there were 1,119,000 in employment, an improvement of 7,000 over the previous year. I suggested that at that rate of progress it would take us about nine years to get back to the peak of 1955, to recover the situation of total employment in the State reached in 1955.

Unfortunately, the indications are that instead of making further progress in 1962 the opposite has been the case. In answer to a Parliamentary question recently it was disclosed that there were 390,000 employed in agriculture in 1962, which was a phenomenal drop of 19,000 since the previous year. We have not yet got the figure for people in non-agricultural employment but assuming that it increased at the same rate which has been the tempo of the increase in recent years, namely about 10,000, we would have the position that in 1962 there were probably 720,000 in employment, which gives us the grand total of 1,110,000 in employment, a drop of 9,000 from 1961. There were 9,000 fewer in employment in 1962 and 71,000 fewer in employment than there were in 1955. I suggest that that is a rather alarming situation, and I suggest that the Government must accept responsibility for that development. If those figures are correct they have failed in their own judgment, and on their own assessment, namely, that the mark of good Government is the provision of employment for Irishmen in their own country.

Furthermore, we have the latest figures for unemployment. The latest figures which were furnished to all Senators and Deputies show that the total on the live register on 16th March was practically 60,000, compared with 54,500 for the same week last year and nearly 55,000 for the corresponding week in 1961. There were more unemployed and, so far as we can estimate, there were fewer in gainful employment in 1962 than in 1961 and far fewer than in 1955. Where are we going in all this? We have had theProgramme for Economic Development. I am—and I suppose all the people in the Labour Party and the trade union movement are—concerned with the people involved and not with the figures or the percentage increases in productivity. Those are all very fine, but how do they affect the people?

If my figures are correct, in 1962 we fell back again and there were fewer in employment than there were in 1961. As I said on another point earlier on, I hope I am wrong. I hope the Minister can say that my figures are incorrect. For the Minister's benefit let me repeat the figures I am taking. I hope I am interpreting them correctly. In 1962, there were 390,000 in agricultural employment, and I am assuming there was the same rate of increase in non-agricultural employment as there was in previous years, which would bring in up to about 720,000 making a grand total of 1,110,000. On that basis, and on the Government's own assessment of good Government, this Government have failed.

We had another shock recently. This week we were told that the population on 9th April, 1961, was 2,818,341, a decrease of 5.6 per cent since 1956. In the same report we were shown that for the five years 1956 to 1961 emigration was approximately 212,000 compared with 196,000 odd, or nearly 197,000, for the previous five years. It may be that the rate of emigration in 1962 has declined. I hope so. I hope that is correct, but the five years measurement is probably the better way to look at it, and it shows that for the most recent five years for which we have figures the rate of emigration has increased. I believe this Government could do better than that. I believe there are more progressive minds, and that there could be a more progressive policy, in a Fianna Fáil Government.

It would be a very useful exercise for all of us no matter to which Party we owe our allegiance to look occasionally at the document down in the hallway, the Proclamation of the Republic of 1916, and refresh our memories and spirits. I suppose it is impertinent of me, a comparative youngster, to remind the older people here of 1916. That document makes various references which are still relevant in 1963 and will still be relevant to any Irish Government in 1973, 1983, or what have you. It refers, amongst other things, to the provision of equal rights and opportunities to all its citizens, to all the citizens of the Republic. To what extent have we succeeded in that?

Relate that to education. I will not go into details. Another thing referred to in the Proclamation is the duty of the Government, the Republic, to pursue the happiness and prosperity of the whole nation and all its parts. I include amongst these parts the workers of this country. Relate that to the taxation policy for development by this Government. Another item in that Proclamation refers to cherishing all the children of the nation equally. I suppose if I stood up and expressed those sentiments without reminding you that they were in the 1916 Proclamation you would say—a damn socialist, preaching this sort of thing here. But it is in the Proclamation of 1916.

Those are, I hope, still the aims of this Government. They have not up to the present been very successful in achieving them.

Is mó Bille a cuirtear ós ár gcómhair ó am go ham agus más Billí iad lena loirgítear breiseanna airgid, nó breis cabhrach in aon tslí d'aicmí áirithe dár muintir, cuirtear fáilte Uí Cheallaigh rompa mar Bhillí. Ach nuair a thagann lá an chúntais, lá an bhille d'íoc, ní fáilte a cuirtear roimh an mBille sin ach a mhalairt. Sé an doicheall agus an dubh-chroí a bhíonn roimis. Is mar a chéile, dar ndó, cúntas an Stáit agus cúntas an ghnáth-dhuine. Is breágh leis an ngnáth-dhuine a bheith fial, flaithiúil dó féin ag éileamh na rudaí a bhíonn uaidh, nó a cheapann sé a bhíonn uaidh, ach nuair a thagann lá an bhille d'íoc tagann grabhas agus gruaim air.

Is fada mé ag éisteacht le cainteoirí idir an Dáil agus an Seanad agus ní dóigh liom gur cuimhin liom riamh aon chainteoir acu ag cur fáilte roimh an mBille Príomh-Chiste fiú na daoine sin a bhí ag lorg so agus súd d'aicmí fé leith dár muintir ar feadh na mbliana roimis sin. Ní taise don Bhille Príomh-Chiste atá ós ár gcomhair inniu. Tá forálacha ann le h-aghaidh breiseanna, breis do thalamhaíocht, breis do sheirbhísigh an Stáit, breis i gcóir leasa sóisialaigh agus sláinte agus breis i gcóir oideachais. Siad san na breiseanna is mó le rádh atá breacaithe síos i Leabhar na Meastachán agus má tá seanadóirí anso inniu, fé mar a bhí Teachtaí sa Dáil, cáinteach agus doícheallach i dtaobh méid an bhille, tá dualgas dearfach ar na daoine sin a insint dúinn ar dhein an tAire Airgeadais dea-rud nuair a thoilig sé leis na breiseanna sin. Ní h-eol dom gur dhein éinne sa Dáil é sin, dá mhéid cáineadh a dhein cuid de na Teachtaí ar an Rialtas i dtaobh méid an bhille agus sé mo thuairim ná déanfaidh aon tSeanadóir é ach oiread.

Fé mar a thuigimse an scéal, ceapann daoine áirithe, go mór-mhór na daoine atá in aghaidh an Rialtais i gcúrsaí politíochta, go bhfuil sé de cheart agus de phribhléid acu gach rud is mian leo d'éileamh ar an Rialtas ar son pé dream daoine is maith leo, ach go bhfuil sé de cheart acu leis an t-asachán a chaitheamh leis an Rialtas nuair a loirgíonn siad an díolaíocht le h-aghaidh an éilimh sin. Dar ndóigh, ní féidir sa saol atá ann leanúint de chuspóir an Gobán Saoir. Ní féidir linn an croiceann agus a luach a bheith againn san am gcéanna.

So much has been said on the Central Fund Bill by other speakers who have come before me that I do not propose to speak for any great length. Reference was made to many things; the last speaker—Senator Murphy— referred to the question of employment. He gave us to understand that the Government must be judged on the number of people they put into gainful employment in this country. While I agree that that is a very important consideration, it is not the only consideration. There are many other facets of administration on which the Government will have to be judged.

But coming back to this question of employment, I do not know exactly where Senator Murphy got his figures, or his data. One thing I do know is that the situation as regards employment today compares favourably with that which existed in 1956. As far as I can remember in 1956 there was a marked decline in the number of employed in this country. I think the figure was 20,000. I have not the figure before me now; I am only relying on my memory. Perhaps, the Minister will have the information about that when he comes to reply to the debate.

Regarding the question of employment generally, it must be always the concern of a Government here to provide employment for the people but, while it is their concern, the most they can do is to create the conditions in which this employment will be made available. I submit it is the policy of the Government to have an advanced industrial policy. It is their policy to have as many industries established in this country as possible. Anybody who has been following the trend of events in recent times must conceive that that policy is succeeding fairly well but it takes time to put a policy into full effect. I am sure that as time goes on it will be seen that a big impact will be made on the unemployment situation in this country.

I was surprised to hear Senator Murphy referring to the number of unemployed in this country today. Of course, we have that problem to solve but it cannot be solved overnight. One would be inclined to infer from the remarks of the Senator that the record of his own people when they had charge of the affairs of this country was a good one as regards this question of unemployment and solving the unemployment problem. What was the position in March, 1956, when we had no fewer than 95,000 unemployed in this country?

We had 107,000 unemployed under Fianna Fáil.

There were 95,000 unemployed towards the end of the Coalition period. Senators opposite would be well advised at the present time to let this unemployment question alone because if there is to be a comparison the comparison will be entirely against themselves. The same thing——

There is no Korean war now.

There is less emigration that in the Coalition period and I will refer Senator Murphy to the speech of Senator Dooge who led for the Opposition in this debate. He admitted in the course of his speech that we have less emigration from this country today than formerly.

They are not there. They have grown up we hope.

There is always some excuse like that. I am just pointing out what the position is. Then we had the Proclamation of 1916 pointed out to us. If any Party have upheld the principles of that Proclamation it is the Party on this side of the House. Furthermore, together with realising our duty to provide employment for the people, we also realised our duty to those who could not get employment in this country. We have improved the social services beyond the expectations of the most optimistic amongst us here today. If you look at the Book of Estimates you will see that the figure for social services is no less than £40,000,000.

Including health.

Including health; in other words almost 25 per cent of the total bill. So, let nobody come along and tell us that we are not mindful of the position of the weaker sections of the community. We have always realised our duty to them and this Government have done much better than any other Government that ruled this country before them. Senator Dooge, when he led off for the Opposition, made a very well constructed speech. He was complimented by my colleague, Senator Ó Maoláin, on the non-political tone of his speech and his enlightened approach——

(Interruptions).

I would not entirely be at one on that question because I regard the speech that I heard from Senator Dooge as being highly political and couched in very nice language. I notice that he devoted very little of his time to the question of the White Paper. Other politicians recently have been referring to the White Paper and we also heard the remarks of Senator Murphy to-day in regard to it. The people opposite think that they have in this White Paper a medium with which to attack the Government. There is no doubt about that and they are trying to create the impression that this White Paper has enshrined in it a policy of wage restraint, a pay pause as some people would call it. It has no such thing. I read the contents of that White Paper as well as anybody else and I am bound to say that I could not get that meaning from the contents of the White Paper.

I hope the Minister agrees with you.

We will have to get——

Should Senator L'Estrange be allowed to continue this barrage?

I hope the Senator will restrain himself.

Senator Murphy gave as his opinion that they would have been wise if they had consulted the trade unions before they made any decision in that connection with the White Paper. I am not aware there was any decision contained in the White Paper. All the White Paper contained is what I would describe as a homily by the head of the Government, the Taoiseach, to the people of the country to the effect that the national output had slackened this past year in comparison with the preceding years. I can see nothing wrong with that. I think it is the duty of the Government, the duty of the head of the Government, to take the people of the country into their confidence and point out to them the changes which are taking place in the economic life of the country. It is a good thing to keep the people enlightened on what the economic trend is. I would like, therefore, to point out to Senator Murphy and other Senators that no decision whatever, no proposal, was contained in that White Paper to formulate a policy of wage restraint or wage restriction.

Senator Dooge devoted a lot of his speech to theProgramme for Economic Expansion and he waxed very eloquent on what he described as the downward trend in the economic expansion of the country. According to his figures, the downward trend from 1961 to 1962 was infinitesimal, from 4.65 per cent to 3.5 per cent. As has been pointed out, the Government expressed the hope, when the Programme for Economic Expansion was published, that national production would increase by two per cent but in the year 1959, as Senator Dooge himself pointed out, it increased by 4.7; in 1960, by 4.8; in 1961, by 4.65 and in 1962, by 3.2. If you add up all these, they give you 17.6 per cent over a four-year period and I submit that that is not a bad achievement. It is a good achievement.

The White Paper published in 1958 in connection with thisProgramme for Economic Expansion referred to the period from then up to 1970 and it was regarded as a good target for economic expansion if the increase in national output should reach 50 per cent by the year 1970. According to the rate at which the economy has expanded over the past four years, between 1959 and 1962, there is every likelihood that that target of 50 per cent will be reached by 1970, if we continue along the road we are traversing at the present time. The period from 1958 to 1970 is a 12 year period, three times four, and three times 17 is 51. That is exactly it. In other words, the full Programme for Economic Expansion is being fulfilled and if it happens to go down a bit in one year compared with what it was in the previous year, I do not see what difference that makes so long as it is still above, and substantially above, what it was at the commencement of the period.

I have mentioned the percentages but there is also the compound percentage which must be added to form the total of the four years growth. Some of the speakers on the opposite side, I am glad to say, laid more emphasis on the use to which the bill we have before us is to be put than on the size of the bill itself. I mentioned that here, I think, last year in the debate in the Central Fund Bill. I gave it as my opinion at that time that, while it was important to have regard to the amount of expenditure envisaged in the Book of Estimates, it was equally important, if not more so, that the money should be spent in the right direction and judging from the figures I have given you, judging by the results of the past four years and the fulfilment for the time being of theProgramme for Economic Expansion, this money is being put to the proper use. The expenditure is resulting in the proper development of the economy and that is a step in the right direction. This Government are moving in the right direction.

Of course, there are increases this year. There will be increases this year in State expenditure, in the expenditure envisaged in the Book of Estimates, but I take it that there is no great difference of opinion between us as to that. I am not going to labour the point because it has been mentioned already, but nobody said here that we should not spend more on agriculture, social services, education, the promotion of industry, public service pensions, defence, tourism, the service of debt and, of course, also on the salaries of public servants. All these things account for the increase we find in the Book of Estimates and I am glad to see that nobody has objected to these increases. All these increases amount, according to my calculation, to £18.7 million. If you compare figures this year and last year you will see that this £18.7 million more than makes up for the difference between the bill presented last year and the bill presented here today.

There was reference also to the balance of payments. This balance of payments, of course, appears to be a recurring problem. But in the circumstances in which we find ourselves today I do not think it is a serious problem by any means. As a matter of fact I would say that it is an inevitable problem that we have this imbalance because, as I said, it is the Government's policy to industrialise this country as much as possible and to encourage the people to support that policy. If that policy is succeeding, and I say it is, it involves the importation of materials, machinery and equipment for these industries. Unfortunately, these commodities have to be purchased in foreign markets and are very expensive at present.

As Senator Dooge said, we have to choose between the risk of having an adverse balance of payments and pursuing the development of our economy, continuing the growth both of our agricultural economy and of our industrial economy. As between the two I would pursue the development of our resources and the industrialisation of the country as quickly as possible. It is no surprise then to find ourselves on the wrong side as regards the balance of payments, provided, of course, that that does not continue too long. It is not the first time that we have had an adverse balance of payments but I venture to suggest that circumstances today are different and that if there is an adverse balance of payments we have something to show for it.

Senator Murphy mentioned taxation, although I thought we were debarred from making any reference to taxation. He expressed the opinion that those who complained about the heavy incidence of direct taxation were those who had to bear the burden but he did not tell us that these very people have also to bear the burden of indirect taxation. I am afraid we will always have to have taxation with us to get the wherewithal to finance the activities of the Government to develop the country. I do not know what changes the Minister has in mind for his forthcoming Budget. It is just as well not to attempt to anticipate those changes. We will have a more appropriate time for discussing that subject.

There is another matter in which Senator Murphy and all of us are interested. The subject was also mentioned by Senator Ó Maoláin and that is the question of supporting Irish manufactures. As he and other people pointed out, if we supported Irish manufactures it would make a big impression on the adverse balance of payments. I think it was pointed out that either 63 per cent or 65 per cent of the imbalance could be attributed to the importation of machinery and equipment for our industries so that for the remainder, if we adopted a policy of supporting our own manufactures, there would not be very much left to grapple with. Senator Murphy, of course, put the onus on the Government to indulge in a campaign for the support of Irish industry. I do not know whether that would be appropriate for the Government but he tried to create the impression that the Government had no interest in the promotion of Irish industry. That is far from being the case. As you all know, a Minister identified himself with the Saint Patrick's Day Parade of Irish industry.

That was a big contribution.

It is a contribution in its own way. As I said, I do not think it would be appropriate for the Government to embark upon such a campaign because there are many people who do the very opposite to what the Government advise. It would be far better if some independent body undertook that campaign. I remember in the early days of the Gaelic League spokesmen for the promotion of the Irish language went around the country advocating support for the language and also support for Irish manufactures and if there is to be a campaign again for the support of Irish manufactures the appropriate body would be the Gaelic League or Comhdháil Náisiúnta na Gaeilge. All of us, of course, can give a hand in the promotion of that campaign.

I take it that we are debarred from discussing an individual Estimate but, perhaps, it would be no harm to mention one or two points in passing. I should like to refer to this new institution called Telefís Éireann as I am on this question of our language and culture. In my opinion a lot more could be done by Telefís Éireann to promote our language and our culture. I do not want to be extreme, narrow-minded or impossible on this point.

Perhaps further comment could be deferred to another occasion.

I shall finish by saying that I saw in tonight's evening paper that the time of Telefís Éireann is to be curtailed by three hours a week, and that some of the "Wild West" programmes are to be cut out. I am glad that none of our Irish programmes is to be cut out. I hope they will continue in their good work, and I hope that we shall see more of our Irish talent on Telefís Éireann, of which we have an abundance.

In discussing the ramifications of Government policy, arising as it does on Bills such as this, it is extremely difficult in view of the specious and calmly-delivered speech of Senator Ó Ciosáin to be objective. It would appear that when a Government he supports are in office certain aspects of our economic life, however bad, are justifiable, but when they are not in office they are not justifiable. In my respectful view, such an approach in discussing the Central Fund Bill, and Government policy, is far from objective.

Government policy is a very queer thing in operation. A good, or even a middling policy, can achieve excellent results if there are no intervening factors such as a world crisis which affects our trade or, for example, if the terms of trade go against us and we have to pay more for what we buy, and get less for what we have to sell. Taking those factors away everything can go reasonably smoothly. The test of Government policy involving expenditure of the order which we are now considering, is its reaction on our people in their various ways of life. If the policy were good, and if it were having the desired effect, then I would expect—and I think it is reasonable that one should expect—that there would be a very high degree of contentment in the various sectors of the community.

Examining Government expenditure not only this year but reviewing it for last year, which followed the same trend more or less, one would expect, after repeated assurances of prosperity, to see contentment that would be indicative of that prosperity. For instance, one would expect to hear from the dairy farmers in the south and east resolutions of congratulation to the Government that had planned so well and had achieved such wonderful results from that planning. We hear no such resolutions from the dairy farmers from the south and east. Instead there is general discontent.

One would expect that in the west, south-west, north-west and even portions of the north itself—including the counties of Cavan and Monaghan in the underdeveloped areas—that the people would stay at home which would be indicative of the successful working of a policy which was designed to make their lot a better one. So far as I can gather from my travels, and from what I hear, the situation in those areas is following the same pattern that has set in during the past five or six years. People are leaving their smallholdings and going away, for the time being at any rate, to try to bridge the gap between what is demanded of them, and what they are able to earn from their holdings.

There are, of course, certain considerations that are not attributable to this or any Government. There may be a calamity arising from a series of deaths or losses of animals or crops— bad luck, as it were—or any other consideration which would tend to make the position on a small holding untenable. Those are matters for which no Government can be blamed. I hold that in relation to those areas whatever planning was done by the Government — and no doubt the effusion of White Papers has been considerable—where the real damage has been done—and this is something that has gone on for a considerable period and I do not know that we are all blameless—is that our people have been led to expect too much as a result of lavish promises, gilded speeches and oratorical expressions designed to excite emotion and generally play down what is bad in the outlook for the future, and by the painting of rosy conditions which could not reasonably be expected to mature.

From that kind of policy I have seen from day to day, from week to week, from year to year, a growing cynicism among our people, and particularly the people in the areas I mentioned where our best endeavours should always have been directed towards their sustained betterment down the years. It is because of that cynicism that our younger people have uprooted themselves and gone away. It was not all economic. It cannot have been, and no politician, however brazen, from the Government or Opposition benches, can assert that it was all economic. The greater percentage of it—and I would be afraid to think how great—came from the cynicism that developed as a result of the broken promises which deluded the people. That type of specious argument has continued even up to tonight.

After the original uproar which followed the issue of the White Paper calledClosing the Gap (Incomes and Output), I experienced some surprise when the Taoiseach back-pedalled somewhat and said that it was not as serious as it might be. In other words, I am sure he recognised the danger attendant on such a pronouncement as is contained in paragraphs 20 and 21 of this Paper to his own political and his Party's cause.

When I heard Senator Ó Ciosáin just now say that there is no suggestion of a pay pause in this—that it is merely a homily—I reached to my colleague Senator L'Estrange for a copy of this White Paper, and I have to crave the indulgence of the House in order to read paragraphs 20 and 21.

As a more immediate matter, the Government are convinced that it is necessary to avoid the damage to the national economy which would occur if further wage and salary or other income increases, whether in the public or private sector, took place before national production had risen sufficiently. General restraint is essential and may reasonably be expected. Employee incomes in general, as well as profits and other non-agricultural incomes, have risen significantly over the last few years. Farmers have done less well, though in their case, too, an improvement has been achieved through increased production and State aid; it is important that the cost of what they buy should not be further raised by wages, salaries and other incomes increasing out of line with national production.

I agree with Senator Ó Ciosáin that if the thing remains at that it is nothing more, or can be construed as nothing more, than a homily. But, of course to the wage-earners it contains a certain inherent threat; but, even at that, I do not think that any reasonable wage-earner could be unduly disturbed by it if it remains as I have just read it in paragraph 20.

Let us move on to paragraph 21:

In the light of the considerations set out in this White Paper, the Government deem it necessary that Departments and State-sponsored organisations should not accede for the present to any claims for increases in wages and salaries, or for changes in conditions of work having the same effect, which would arouse expectations of similar increases in other employments.

I think now that the homily is over and there is a pay pause.

There is no decision in that.

There is a pay pause. When a Government deem it necessary that Departments and State-sponsored organisations should not accede for the present to any claims for increases in wages or salaries, what else is it except a pay pause in that region of employment over which the Government have direct or indirect control, which, in my view, is not quite in keeping with social justice all round? Why, for instance, keep those in direct or indirect Government employment down and prevent any increases in salaries or wages if the private sector cannot be similarly controlled. I think it is turning on one's own household in rather irrational domestic rage. Be that as it may, I think the White Paper speaks for itself in that particular matter, and I will be interested to hear the Minister, when replying, giving an explanation of paragraphs 20 and 21 of this White Paper in the same light as that given by Senator Ó Ciosáin. I will be surprised if he is able to do it, and even if he attempts to do it I will be disappointed in the light of what I have said about such pronouncements making for cynicism among the people of our country.

The acid test of Government, the acid test of good Government, is the question of employment and emigration. These are not my own words; I am taking them in paraphrase from a speech made by the Taoiseach some few years ago. I agree with him that that is the position. Whether the unemployment figures are high or low, they are not, I think, real because there are an awful lot of people on the unemployed register who are not really fully unemployed—smallholders at certain times of the year and some of them all the year round. There are others who are not employable. With emigration, it is, of course, difficult to say that an unemployment figure at a certain level is real, or, if the people came back who had emigrated, what the total would be. Whether emigration has slackened, whether it has increased somewhat or whether it has remained static, it is still a very serious problem for this country. It is one to which, I think, we will have to stop paying what amounts in the long run to lip service. It is with us, I think, practically since this State was founded, and we may search for political, psychological or other reasons to account for it. They are not all economic. It is an extremely serious problem requiring a combined national effort to eradicate. It is not a subject with which one Party should taunt another. It is not a subject out of which either one Party or another should seek to make political capital, provided that each Party or that all Parties approach the subject objectively and acknowledge the real reasons for it as each year passes. I do not think that is unfair. I do not think there is anything political in that. When I talk about emigration, and there are many in this House who know the kind of areas with which I am familiar, I do not regard emigration or anything associated with it as a political asset on platforms or otherwise. It is far too sad a subject and it is far too serious a matter in the economic life of this country to be bandied about between one Party and another. Having said that, I shall leave the subject of emigration and hope that the future of our country will be such under any Government that gradually we will have a trickle back, an improvement in our population figures and a situation where our communities, particularly on the smallholdings of Ireland, will again be secure and where they can bring up their families in the knowledge that no Irish Government will impose taxation upon them that will bring about the immediate exit either of all of them or so many of them as would make the family no longer a viable unit in that small-holding.

It is true that there are increases in expenditure this year in the Central Fund Bill. Again, I am wondering how real they are. How much of the increase is attributable to rising costs? Is it a question of finding where there is an increase for education, in relation to increased costs of building schools —we have many schools being built all over the country—but it is due to the fact that the cost of equipment has increased? How much of that increase is a real one that makes for an amelioration of the standard as it was last year? That is what I would like to know and I would be quite happy if there was any appreciable percentage of it attributable to a real increase, one that would amend the situation rather than keep pace with rising costs. Where we are all deluding ourselves is thinking that things are being done better and better as every year passes while our requirements are bigger and bigger. Are we just moving along in the spiral or are we making a real contribution? That is the test and I would like to see that test applied to the figures. I have not got them before me. I do not think anybody has got the machinery here with which to examine them but the Minister and his advisers have. It would be interesting in regard to any particular aspects of some Department to have them examined in detail, and broken down to see if we are keeping pace or making real improvements.

On this question of expenditure generally administrative costs are too high. I do not think there is any business concern in the country which has much greater losses than we have. I do not think they would tolerate such administrative costs but the administrative costs of our Departments and the total amount expended are too high. I saw somewhere recently where it was alleged that in the Land Commission it took £1,000,000 to spend £2,000,000. I looked at the figures, and, mind you, they were not far out. That is outrageous particularly with the clamour for land, land improvement generally and land settlement.

There are too many commissions in this country. Government Departments themselves should by now be fully aware of the problems and the remedies necessary to relieve those problems without setting up commissions to inquire into them.

When a commission is set up for this or that new Board or something of that nature we have to wait for months and months before somebody reports. Then the report has to be examined and it can only be implemented in part and the whole show goes on year in and year out. But, if the policy is good the result should be good and the people should be content. I do not think they are. One can never make a final or conclusive assessment of the situation. The farming community are not satisfied and the wage earners do not appear to be satisfied. Small holders are rejected. You see them going to the Labour Court seeking an increase in their wages because of the rise in the cost of living. I do not think that means the policies are good. I think the result should be an atmosphere of content if the plan is sufficiently good to bring that situation about. The result today shows a national debt of £500,000,000. That is not good. There is £100,000,000 of an adverse balance and Senator Ó Ciosáin says it is not serious. Mind you he makes a very plausible argument to tell us why. I do not know how much of this £100,000,000 he attributes to the cost of machinery brought in for industrialisation. I should like to see the Minister break down that figure in the adverse trade balance and give us in pounds, shillings and pence the amount of the adverse balance attributable to the purchase of machinery for the development of our industries. I should like to see that figure given and the reason for it.

It is true that there are increases in defence. When I think of the perennial exhortations about the provision of helicopters and the perennial rejections of those exhortations, the House will agree that one would be justified in challenging some of the accounts. This afternoon the Leader of the House, Senator Ó Maoláin, painted what I might call an autumn lily.

A spring lily.

He is good at the colouring.

There has been a Buy Irish Campaign. We agree with the sentiments expressed that it is in the interests of those who work in Ireland that they themselves should buy Irish goods as much as possible. In fact, we all buy Irish commodities if they meet one's requirements. Senator Ó Maoláin mentioned cutlery in hotels and Irish cheese. I agree with him fully.

And whiskey.

I shall come to the drink later. We will have to have our cheese first. I agree fully on this question of Irish cheese. I think it is largely a matter of taste as well as being a certain kind of inverted snobbery or pride. There are people who love to be able to talk about the French names of things, Dutch names and various things like that instead of talking of our own particular brands. A lot of this can be attributed to taste and I think in that particular field the Irish producers of cheese are making great strides indeed. I think it may not be any length of time before they are able to keep pace with, if not outpace, the foreign produced article. That is a matter for themselves, but as I was saying at the very beginning, even if you have this cry "buy Irish" here and "buy Irish" there it is necessary to examine why there is necessity to keep clamouring and urging our people to do so.

Is it possible that something is wrong in design, something wrong in quality, something wrong in the durability of the articles produced? I have heard complaints about certain kinds of articles, not many, but it is possible that manufacturers might well take stock of themselves if they are having any difficulty because there are two sides to every story, even allowing for snob value which is a small percentage in favour of the imported article.

I do not know anything about cutlery replacements. I do not know what the complaint is but I suppose if people do not get the cutlery here they themselves know what suits them best or what suits their pocket best. I do not know, but it is something which might bear examination possibly.

The high incidence of Scotch whisky drinking here is a very serious matter for Irish distillers but modern travel, I think, has a great bearing on it. Emigration and migration certainly have an awful lot to do with it in Counties Donegal, Mayo, Galway and down the coast. People get accustomed, in Scotland particularly, to Scotch whisky. They like the flavour and bring it back. In those parts a considerable amount of Scotch whisky is taken as well as Scotch beer and lager, much more so than the Continental stuff. Every effort should be made but what can you expect? The most wonderful concern this country has ever seen is Arthur Guinness's and I might also say that theirs is the most wonderful product.

What about milk?

It is all very well to talk about "buy Irish," but when you find rooms laid apart in hotels in this city where if you ask for a bottle of stout, a pint of draught Guinness or a glass of draught Guinness you are looked at as if you are a leper, told to get out with the plebeians in some other place and leave the gin and tonic-ers, the lager people and the Scotch whisky people by themselves. I am often amazed that the people who do that type of thing are not rapped on the knuckles by the suppliers.

Coming nearer home about the "buy Irish" business, there is a firm in Cork called Ford's who have been making for very many years an excellent car but I think that only one Minister of State uses a Ford car and the good reason for it is that he is a Cork Deputy. The remainder of them have Rovers and all the rest and there you are—buy Irish how are you.

There is one aspect of Government policy on which I want to conclude. That is education, particularly university education and more particularly still University College, Galway. University College, Galway, is a college apart. It is one of the constituent colleges, of course, of the National University but it caters in a very special way for those people in those parts of the country to which we always look for inspiration, about which we always boast as possessing the largest quota of our culture and as being our language reservoir. I find in the papers over the past few weeks calm mild-mannered men such as the President of University College, Galway, and some of his professors making public announcements about the inadequacy of the amount of money allowed and the consequent inadequacy of equipment.

There is something wrong with Government policy which allows that to happen in that part of the country to which we look as being the embodiment of everything that is Irish spiritually, culturally or any other way one cares to view it. I should like to make this appeal to the Minister for Finance. Whatever sums he has already done regarding expenditure and Estimates he should not alone come to the assistance of the Minister for Education but he should offer the Minister for Education this aid at the expense of something else, something that can wait. A university of the standing of University College, Galway, cannot wait and I would exhort him to aid it.

It is true that the grants which have been given down the years, as I see in an answer to a Parliamentary question, have been increasing, but how are we to regard this increase? Is it to meet living costs, increased staff, increased salaries, increased costs of administration, while nothing is happening to provide the extra room or extra equipment necessary for the proper education of the student so as to make him fully competitive in a very competitive world?

I am very happy to be able to make this plea on behalf of University College, Galway. I have no close interest in it save the fact that I graduated from it and I think there are a few here who have done so as well as I have. I look back on it with great affection and no less esteem. It is a college which has given distinguished men to all fields all over the world. On the institution of the Shannon scheme the professor of engineering there, Professor Rishworth, was the man chosen to supervise and govern the whole scheme to its completion. He was, of course, consultant to both the British and the Egyptian Governments. University College, Galway, excels in the field of classics, romance languages, mathematics and medicine. The Galway doctor at the present time is revered in all the most important clinics of America and even in some in Europe.

Make it possible, I urge the Minister through you, Sir, for that state of affairs to continue not alone as it was but even better and brighter for those students from that part of the country which had a long wait for opportunity. Opportunity came to them first of all from the British Government through the institution of a college in Galway. It was continued by the Irish Government by the provision of extra staff, duplicate staff, to provide lectures in Irish. Let not an Irish Government then be niggardly in their approach or retain money from an institution so worthy of help and support, an institution to which the country owes a great deal and to which it will continue to owe a great deal in the future. If as a result of this appeal the Minister can see his way to come to the aid of Galway College I will regard my intervention in this debate as worthwhile. I think incidentally in passing there should be in Government policy a sort of list of priorities rather than having a sort of patchwork every year and in every Department. Surely there is a Department which every two or three years can wait for things? It is like arterial drainage. The whole country clamours for arterial drainage but they must wait their turn. There must be Departments which have priority calls and others which can wait. We have only a limited amount of money and it must be spent as well as possible. Instead of having a whole series of half-bandaged sore thumbs, have a couple of thumbs without bandages and with sores but have others properly bandaged and on the way to a cure.

One satisfactory feature of this debate, compared with similar debates in previous years, is that there appears to be a more honest approach to the whole problem which we are discussing in this Bill than there was heretofore. I have listened more carefully to this debate than to any other since I became a member of this House. Generally speaking, those who have spoken did so in an honest and outright fashion. It is accepted that the increase in the Book of Estimates this year, which is very substantial, was inevitable. We have the Minister's assurance that the most careful consideration was exercised by the Government in the initial consideration of the Estimates. He went further —which I do not think he did in previous years—and said that all the Estimates were pruned and that he has now come before us with a demand for the minimum amount necessary to run the various services under this Bill. I did not hear any speaker say that the Minister had included any single item, large or small, which was unnecessary. As a matter of fact, if the debate could be widened I am sure most people on this side and on the other side, would suggest there were many other worthwhile projects which the Minister should have taken care of. In fact, a couple of speakers managed to get in particular points in that connection.

It is obvious to everybody, members of this House and people outside it, that the Minister has to find money to administer the services that are specified in the Book of Estimates and it is natural that there should be a wide difference of opinion as to how he should find that money. The general trend of the debate is more or less one of approval in regard to the steps which the Minister proposes to take to find the money. We would be doing a very good service not alone to the House but to the country if we passed over the general details and dealt with the general picture of our national economy. The contribution made by Senator Lindsay appealed to me more than any speech I have heard in this House for the past one and a half years. The question of emigration has been discussed in the Dáil and Seanad far too often. The Government in power are always charged with responsibility for the deplorable position that exists in that connection. When Governments go out of power and become the Opposition it has happened in the past that they have taken up the same line of action.

Senator Lindsay hit the nail on the head when he said this was a national problem and all any Government could be expected to do was to provide good Government to the best of their ability and provide ways and means for the people to pursue gainful employment with a view to keeping our people at home. Beyond that, in my opinion, no Government can go. The present Government have made very worth-while contributions over the past few years on all fronts, not alone in the industrial sphere but also in the agricultural sphere, in this connection. The figures given to us this evening are not considered to be correct. I do not propose to go into the background of this problem of emigration but I do suggest that it is time for some sort of political truce about it. There have been precedents on one or two occasions already in regard to the course I suggest.

During the Emergency, between 1939 and 1945, the defence of the country was seriously at stake and we had the Defence Council composed of representatives of the Government and of the main Opposition Parties. We still had Party Government and we had the Opposition functioning in the same manner as at present. The national problem was then so grave that it was accepted there should be a united front in the matter of Defence. As I understand it, the Defence Council then set up was charged in certain respects with carrying that policy through. All that emergency has happily passed over but I feel it is about time that a some what similar approach should be made to the question of emigration. There is too much moaning and groaning and harping on the matter from political platforms and in the Houses of the Oireachtas and we get nowhere. I feel that our people have a tendency to emigrate, that it is a tradition which it is going to be difficult to break down.

I always held the view that practical patriotism should be taught to our children in the schools on more direct lines than it has been. In 1963 a greater emphasis should be placed on the obligations our children will have when they become citizens and the schools, national, secondary and vocational, could do a tremendous job in that connection if they were geared for it. Our children should be educated to the viewpoint that this country offers opportunities, which it does, comparable with those in other countries and we should be able to encourage and stimulate the various qualities that are necessary in the minds of our children, so that when they grow into early manhood they will be equipped with the self-confidence that is necessary to exploit all the potentialities of the country which are not now exploited. Any worthwhile progress that has been made here within the past five or six years in industrial expansion has been contributed to by foreign-sponsored firms. For some reason, which I find it very difficult to understand, our people here, even those who have a technique in a particular direction, do not seem to have the necessary confidence, drive or initiative which you find in so many foreigners, and even in foreigners with less ability, less intelligence and perhaps even less money.

The system of Government here, as led by the different Parties, is, in my opinion, very good. It has always been honest and free from corruption, which cannot be said for all other countries. I have the word of foreigners that our Civil Service machine is reputed to be most efficient and hard working, even though it is often difficult to get people to believe that the Civil Service does work hard. It has that reputation against the Civil Service machines of the most progressive countries in the world.

In the matter of emigration, it might be too much to expect the national approach which Senator Lindsay recommended, and which I wholeheartedly endorse. I should like to avail of my contribution to the debate this evening, to make an appeal to the community development associations, and particularly to the voluntary associations, to get something done. Nowadays Government is a difficult business. While I am sure that the Government would be anxious to help in any worthwhile scheme that is presented to them with a view to easing this problem of emigration, I think that the initiative and drive must come from the people themselves, through their local community organisations.

We have a multiplicity of organisations in the country. We have heard a lot of talk about community development. It has been going on for years and, in my opinion, it has led to nothing. Sooner or later the whole question of emigration will have to be tackled at that level. I have some experience of this problem and I know that people in good employment, with good prospects, are rather restless and cannot be got to remain here. That is a very serious situation.

We heard complaints this evening about the very serious and marked falling off in employment during the past year, as compared with previous years. I think that if it were examined and analysed it would be found that the greater part of that falling off in employment is in the agricultural sphere. People who operate the agricultural industry tell me it is almost impossible to get workers. Evidently the introduction, generally speaking, of the five day week in industry has made it more and more difficult for farmers, whether dairy or tillage farmers, but more particularly dairy farmers, to get paid help. At the moment in the dairy industry a substantial part of the work is done by family labour. The number of paid hands who can be found to take employment in the dairy industry is diminishing every year. I do not know what any Government could do about that. They may have to take special measures eventually by introducing some form of incentive or gratuity after a farm hand has worked for a certain number of years, but the position is getting worse every year and is now very serious.

I think Senator Lindsay's approach to the question of emigration is very practical and I hope the Minister will find it possible to examine it in that light and perhaps a lead could be given at Government level. One thing we should try to discourage is the unfounded propaganda—and I use the expression deliberately—that has been prevailing in the country. I think that is the most damaging aspect of the whole matter. I am of opinion that there is far less unemployment than is recorded in the official statistics. I think it was Senator Lindsay who dealt with that aspect of the matter and said if the register were broken down it would be found that quite a number of people on it were small holders and not fully unemployed, and that there were people on it who were not employable and should more correctly be on some sort of disablement register. Anyway, the pattern of assessing the unemployment position has not changed for the past 30 years, so we have to examine in that light.

One speaker made an appeal this evening to the Government to sponsor a Buy-Irish campaign. Other speakers said that perhaps a lot of people would go the opposite way if a Government appeal were made. I do not think that at all. I think that the people would expect far too much from the Government, or from an organ of the Government, if such an appeal were made. We take justifiable pride in the spirit of patriotism that exists in the country today. Apart from the impact that a Buy-Irish campaign would have on creating an imbalance of payments, to buy Irish is a patriotic obligation.

With the improved position of our economy and with the increased purchasing power of our people, we must agree that our standard of living has improved by leaps and bounds over the past 15 or 20 years. Some people take the view that our standard of living has risen more than is good for the country. I do not subscribe to that theory. I think it is good that our standard of living has risen even if some of that improvement can be attributed to a more liberal form of credit. I refer to the purchase of domestic appliances, motor cars and other such things.

America sets a very high standard of living, and there are very few countries which can match it. We know that the general pattern of purchasing there is based on a hire purchase system. The people of this country are more conservative in that direction, and I hope they remain so. By and large, any improvement in the standard of living will come about as a result of an improvement in national productivity, and for no other reason.

The other point I want to raise this evening is the substantial increase that has taken place in the number of schemes financed to help agriculture. We are very glad that the Minister has been able to yield to the representations that were made in that direction. We have got to live with the times, and in the matter of education and industry and agriculture, the Minister has seen fit to expand the economy in these particular activities. I suppose it would be too much to expect any Minister to provide sufficient funds under all headings in the various Departments to meet the requirements of everybody. Reference was made here in the debate this afternoon to the general discontent of people in certain branches of agriculture. It was indicated that one particular section had shown marked restlessness and disappointment because the Book of Estimates did not contain better provision for them, and they were the dairy farmers down the country.

I know the debate is limited to the extent that I cannot make a case and I do not propose to do it now. I would, however, make a suggestion to the Minister, as the previous speaker did, in regard to University College, Galway. I could make a better case than that speaker made for a university for the dairy farmers' case. I shall not try to outdo him. I know the Book of Estimates is settled and that the expenditure is settled. I feel, however, that the Minister, who is a man of progressive ideas, may find it possible to re-cast some of the expenditure under agriculture headings, where he may work in something—perhaps in kind if he cannot do it in cash to help farmers in the price of milk.

The general problem facing us, the general shock we have received, has been in the magnitude of the sum that we are asked to face in the Book of Estimates. In this debate we seek to examine some of the principal sectors of the nation and to see why there is not somewhat more response from some of them, and to try to discover the reasons for this.

Before getting down to some of the individual policies, I should like to comment on the very direful speech we heard from the Leas-Chathaoirleach on the vicissitudes of his native University College in Galway. That is a picture that can, of course, be painted for practically all the educational institutions in this country today, certainly those of higher education. But I would differ somewhat from the Leas-Chathaoirleach and I would take a more optimistic view. I would neither regard the provisions made in the Book of Estimates as an indication that the Government are about to face up to their responsibilities in the domain of higher education. I find in the increases for the current year that University College, Galway, got 14 per cent; UCC 12 per cent as an increase in the yearly budget. That is a very welcome increase and, though a few per cent will be taken up by increased costs—increased costs of materials and wage increases, probably 2 or 3 per cent—still there remains a real increase of about 10 per cent. Provided the Government maintain this rate of increase, or I hope step it up in the years ahead, it may give an indication that they are planning a 10-year programme that will in ten years narrow the gap between the state of the universities here — their financial and general staffing position — and that which prevails in universities elsewhere. One needs only look across the Border to feel rather envious of the developments in Queen's University, and the very liberal endowments they receive. We do hope that we can interpret the present increase as a positive move in the right direction.

While we can say quite legitimately that our universities have scarcely one-half the staff or the equipment that is regarded as being essential in a modern university, still we cannot provide this overnight. It is not a question of doubling grants in the next year since if that were done the universities could not cope with the resulting expansion. What is really required is a definite policy to narrow the gap. In this we are encouraged by the approach of the Government to the university building problem. We see the strides that have been made in the Belfield project, and now we in University College, Cork, have at last got approval in principle for our much needed science building, for which a token sum is included in the present Estimates. We expect that by next year our building project will be well under way.

I interpret the small Galway estimate for buildings as an indication that UCG is slightly less advanced in its planning than we are in UCC, and there is not any reluctance on the part of the Government to give Galway the buildings that are its due. Thus we have some reason for feeling happier than we did twelve months ago about the university position.

If we look at the world situation in university education we find that our problem is not an isolated one. All countries are feeling the current demand for higher education and for greater facilities for research. In every country there is an effort to expand university facilities. Only yesterday I read in the newspaper an account of the debate last week in the Norwegian Parliament. They are planning by 1970 to double the number of students in their universities at a cost of £28,000,000. The population of Norway is about the same as our own. Yet they are prepared to spend £28,000,000 in the next eight or ten years and we should take courage from this. Likewise we can look at England and see their expansion plans in university accommodation. We should ponder on the great pressure to get into universities in England and in America. Perhaps right here is an industry—I use the word "industry" deliberately—into which the Government may very well get in the future. There is a world need for expansion in university facilities, and if we had surplus university capacity here — even double or treble our present capacity —we could easily fill the vacant places by the sons and daughters of our kith and kin in England and America. Seeing that we are finding it so difficult to find really big and worthwhile enterprises with which to expand our economy I suggest that the provision of university education for foreign students may be very well worth considering.

I know that Trinity College has been doing this for quite a few years and have a large foreign population among their students. We should regard each foreign student as bringing some £300-£400 into the community, or creating that amount of wealth in the economy. Accordingly a foreign student generates as much wealth, and is as valuable to the national economy as a worker in a new industry. Looked at in this way the costs of university extension are by no means out of line. It is a very modest industry that can be established today for £3,000 per worker. If we consider a 500 student addition to one of our existing colleges, be it Galway or anywhere else, at the figure of £3,000 per student, we obtain £1,500,000. I believe from experience over the past years in planning university buildings that this sum would be more than adequate for a 500 student expansion. I think then that the Government might well look at university expansion for foreign students from the point of view of whether such an industry would help both ourselves and our kith and kin abroad. Make no mistake about it, our kith and kin abroad are finding it quite difficult to get places in universities. I am not saying there is any prejudice against them but their difficulty is part of the general pressure on university facilities in the community in which they live today.

In passing from this I would like to raise something that I have raised here on every possible occasion in the past three or four years, that is the absolutely disgraceful treatment that is meted out by the Government to one of our finest university institutions—Maynooth College. In the Book of Estimates they are given the paltry sum of £20,000. That sum has not been changed for the past seven years. It is no excuse for the Minister in his reply to say: "Have they asked for it? The bishops can look after their own." I submit that such an approach is not a proper approach for an Irish Government to an Irish institution. They should get what is fair, and they should get it on the samepro rata basis as is given to the other colleges whether asked for or not. Whether the grant to universities is based on the number of graduates turned out every year or on any other basis, I submit there is no manifest basis whatsoever for the £20,000 for Maynooth College in the Book of Estimates. I do not want the Minister to disgrace the Book of Estimates next year by including such an unfair and discriminatory figure. He should at least add another nought to that. In no other section of our economy would he get better value for increased expenditure than from Maynooth. It is amazing to observe the amount of first class work that is coming from Maynooth, including books and papers of international standing. Yet, the people who achieve all this work in many cases have not got even the assistance of a typist to help to lighten their burden much less an assistant. They simply have to do it like the monks of old, almost by the quill pen.

I should also like to raise the question of our poor relation, the College of Surgeons with its £4,500. I just put two or three big question marks after that. I think the figures speak for themselves far more eloquently than anything I say about them. Again, I think that the College of Surgeons are making a contribution to the economy in a very marked way, so I hope that those anomalies will be put right in future Estimates. I am glad that the Government are adopting a positive approach to the question of agricultural research. The high hopes which we entertained here less than three years ago when the Agricultural Institute Bill was being debated are being realised with even greater speed than we had dared to hope at that time. The Government are matching this achievement, I am glad to say, by giving an increase this year of 30 per cent. I congratulate the Government on this and I hope they will be as generous next year.

It is in the domain of agricultural research our main hope lies of boosting our agricultural production, and thereby breaking a stalemate that has prevailed almost for 100 years. We became acutely conscious of the central position of agricultural economy in the past year and a half when we were planning for entry into the European Common Market. It was then realised everywhere that agriculture was again to be the national beast of burden; the beast which would carry the burden of the shocks that the Common Market would undoubtably have given to our industrial arm. I suggest that this realisation of the central position of agriculture, even though it has come very late, should permeate our future planning. Our major national problem is the expansion of our agriculture and you do not have to be an economist to realise the strong competitive position of our agriculture, seeing that its costs of production and the prices received at the farm gate are considerably below the corresponding prices in Europe. Consequently, if expansion in the domain of agriculture has not a future, where are the rest of our industries going?

I am saddened by the Book of Estimates on agricultural education because I find that the injustice that was perpetrated last year on our private agricultural schools still continues. Last year I drew the attention of the Minister to the fact that our private agricultural schools received but 2½ per cent. for the eighth round. Schools directly run by the State, like Clonakilty and Athenry, received an average increase last year of 15 or 16 per cent. I am not saying that was too much. It was just their due share of the eighth round and they deserved it. But, if they deserved it, and if they are giving a good return to the nation for this increase, I can assure the Minister and the Government that he would get a far greater return by giving justice to the agricultural schools. In fact, it costs the State as much to train one pupil in a State school as to train ten in one of the private agricultural schools like Warrenstown, Pallaskenry or Gurteen. There is a bargain surely if ever there was a bargain to be got in our economy, and yet advantage is being taken of it, to starve these schools. This year there is not an iota of an increase in the Book of Estimates to make up for the fact that the private agricultural schools have not got any eighth-round increase, unlike their more favoured State counterparts in Clonakilty and Athenry.

If you look back over the past eight or ten years you find that at no stage did their increase keep pace with the increases given to the State schools. So what price private enterprise? That is a most shortsighted policy because all realise that our future lies in training the young men, who are going to be the future captains of the farms, every bit as carefully as those destined to be the future captains of industry. It is from the agricultural schools that the leadership, the new ideas, and the well-trained young farmers must come and I appeal to the Minister to please right this situation. It is a national injustice, and I do not think any Minister of any Government in any country in any age could stand over it.

Government policy illustrates the marked contrast between industry and agriculture in Government planning: agriculture is the beast of burden and industry is the child who must be babied along. I am not objecting to what has been done for industry because desperate diseases need desperate remedies. Even if we have tremendous losses like the recent debacle in Avoca or have to take tremendous gambles as in shipbuilding, I feel that in our position beggers cannot be choosers. We have to try anything that offers even modest prospects of success.

Undoubtedly, we want efficient industry and efficiently trained managers in industry. The Government are doing everything possible to encourage the training of such managers and then proceed to set them up with proper equipment in proper factories to exploit their skill to the fullest in the national interest. As a result of recent Bills it is now possible to provide a manager, or his group, with grants or loans to float an enterprise if they can put up a quarter of the cost of an enterprise. Contrast this with the position of a well-trained young countryman who has spent eight or ten years equipping himself to be a farmer. At the end of his period of training do we say to him: "You have splendid prospects of making a successful career on the land and, as an excellently trained young man, you should be in charge of a 60 or 80 acre farm costing £12,000 and provided you can put up £3,000 the State will provide the rest." No such thing. As coming from the beast of burden side of our economy he is told: "If you are one of the lucky farm apprentices, the Government will give you one of their 30 scholarships—they are not called grants—valued at £500 to help you to get launched on your career."

I do not know what part of the farm £500 is expected to buy but certainly it does not make any real contribution to providing a young man with ability, without accumulated fortune, with a farm, to be in a position to get from the land of Ireland the wealth it possesses. We have waited long enough for this. When the Government took office this was one of the things they promised most. We have had many fine statements from the Minister for Transport and Power. Many of us applauded his enthusiasm for the farm-apprenticeship project, but we are still awaiting effective Government action.

We are suffering from the stagnation in our main industry. An increase of two per cent per annum over ten years cannot be called a worth-while increase, when we are told by eminent international authorities that a six, seven or eight per cent increase is possible. If we could get an increase of that order it would solve many of our problems, even though it might cause marketing difficulties. Surely such difficulties, in the case of products which are admitted to be the most cheaply produced in Europe today, cannot be insurmountable. Indeed with the initiative and skill An Bord Bainne have shown, I think we need not have too many fears with regard to marketing. But what do we find?

We find from statistics that while Government policy in industry is paying rich dividends to those engaged in industry, agriculture is going down. We find from the Survey of Agriculture of September 1962 that the percentage of the national income generated in agriculture decreased from 28 per cent in 1955 to 24 per cent in 1961. That is a lovely term—the percentage of income generated in agriculture. If agriculture had been given its fair share of the wage increases that took place in the above period then those increases would have been reflected in the national income generated in agriculture and consequently the above drop is purely a measure of the injustice done to the farming community. Parallel with those figures in the same survey we find that distribution and transport have continued to generate exactly the same percentage of national income in 1955 as in 1961. What does that mean? Simply that distribution and transport are served by efficient trade unions and that those trade unions at every stage of the recent wage rounds got justice for their members.

The position then as shown in agriculture is critical and I can well understand the unrest of the farming community, coming as I do from the heart of the region where unrest is highest, County Limerick. These people cannot understand why every other section can get an increase but not they. It is very hard really to understand and it is very hard for a farmer to see why a civil servant can get an additional 16 per cent increase in the eighth round, but no increase for the farmer. Is there any measure of productivity that says output from the civil servant had gone up by 16 per cent in that period? The output of the Civil Service cannot be measured. You cannot produce figures to show whether it has increased or decreased —unless the size of the Book of Estimates is a measure of the increase. We all know in this country that the farmer's output has increased because the numbers on the land are going down steadily by two per cent per annum yet they are managing to achieve a four per cent increase in production, a figure comparable to that achieved in much more highly mechanised agricultural countries.

Consequently we should tackle this problem in a much more realistic way than we have attempted in the past. We should not simply reach for the Book of Estimates and say that total expenditure is £30 million. What does that mean? Very little in effect because if we look at England we see the truth. It is that if the consumer does not give the farming community the proper price for their products, a price that increases regularly to reflect the decrease in the purchasing power of money, if the nation adopt a cheap food policy, as in England, then the fasmers have to be compensated by subsidies. The consumer is paying for his goods in two instalments, one to the farmer, and the other to the tax-collector, who then hands portion back to the farmer. In England under that system subsidies to agriculture are over £300 millions a year. Judged by those standards the Government's claim of giving £30 millions in subsidies to agriculture is far from impressive, and should not be made the basis for trying to prove that justice had been done to the farming community.

I speak on this subject not alone for the good of the farming community, which I regard as but one other section of our national community, but rather to point to the grave national loss that the nation suffers in failing to get from agriculture its possible contribution to the national welfare. As long as that lasts we cannot have a stable national expansion or stable national development. To come now to the question which seems to underlie all our difficulties, the question of how to get initiative, creative ideas, new thinking, and, above all, how to get action at national level. Many know what should be done, and quite a few can plan how to do it, but the real bottleneck is in getting quick action. That is largely due to the fact that the State has such control and influence over every walk of life, or to put it another way that the Civil Service has so much power and influence in the country. I am not for one moment criticising the Civil Service or saying anything derogatory about it. I pay the highest tribute to the Civil Service but it is one of the salient features of our national life that too much rests both with the Civil Service and with the Government. We ask the Government to do this, and the Civil Service to do that. Besides the greatest concentration of our talent is in the Civil Service and in other forms of public employment. Our main task is then to get initiative within such a framework, because by and large the Civil Service framework does not lend itself to initiative or quick action. Civil servants have to be exceedingly careful as there is too much of a penalty attached to making a mistake, and if you are not free to make mistakes you cannot take quick action. I can give an illustration from my own university to illustrate the point, not of quick action but of slow action.

When we were planning the Agricultural Institute some years ago it was obvious that agricultural research required to get a tremendous boost. It was obvious that dairy science had to be boosted. We had already dairy science in our Faculty but it had to be boosted. The Government were quite willing to provide the necessary finance, and the planning began over three years ago. Then committees had to be set up, which, of course, are the curse of most inaction. The committee had to try to reconcile the views of the members of the Faculty, who wanted certain things, and the Department of Agriculture which often wanted something quite different. The planning took a long time and was drawn out. When things were finally agreed, Town Planning entered the picture and refused to allow the building on the site on which it was planned to put it. There now is the long tedious procedure of contesting this decision and trying to get an order repealed. In short, three years after the need was recognised for this expansion we are still without it. My point is that we need some mechanism to cut through much of the red tape, and short-circuit a great deal of these committees and give us some solution. It might not be the best solution but at least it would be a solution. Can we give power somewhere to somebody to make a mistake and not have him forfeit his life if, having made an honest effort, it turns out he has only got what was in effect the second worst solution.

We can be of some assistance here because it really amuses me in one sense to hear how much is expected from a new Government by the mere process of changing Ministers, while the fundamental apparatus of planning and running the country, the Civil Service, remains as it was before. I am not saying that it should be otherwise but we must credit all Ministers with goodwill and with endeavouring to do the best for the country. The real advantage of a change of Ministers is in the bringing of a different point of view to bear on our permanent planning departments. A real contribution could be made to this problem by setting up committees of the Dáil and Seanad, where certainly there would not be any lack of initiative or originality in the views put forward, and where we would meet the senior members of the various Departments and be able to exchange ideas across the table in the secrecy of a committee, and not have to give those criticisms here across the floor of the House. One has only to look at Belgium or the Netherlands to see the tremendous success which they have achieved by such committees. The committee has been the means of introducing change and initiative into the permanent State organisation. I submit we need that badly here though I am not, for one moment, to be taken as saying anything disparaging about the devoted service of, and long hours spent by our civil servants, especially our senior civil servants. They carry a burden which is heavier than the burden carried by senior civil servants in most other countries.

I would appeal to the Minister to try to do something to lighten the burden on his senior civil servants, to try to give them time to think and reflect, and to encourage the granting of periods of leave of absence for a minimum of six months to enable them to go to other countries to study. I think such breaks from home routine, the getting into a different atmosphere, and being free from office cares would work wonders in introducing incentive and new ideas into our Civil Service.

It was suggested that we should take the White Paper as a little homily by the Taoiseach to the nation, a type of lenten pastoral, as it were. No doubt it should be considered in that light because "you cannot have your cake and eat it." In other words, we cannot look for more until we have produced more. Those are self-evident economic truths, but the difficulty lies in the fact that proper provision was not made for those who had not already shared in the recent increases.

If the Government had said: "It is not in the national interest that there should be any further wage increases until production shows a significant increase", I think any fair-minded citizen would agree with that, but there are many groups who have not got the eighth round increase or perhaps the seventh or sixth round, and they have a justified sense of grievance. They feel that, as happened so often in the past unfortunately, they will be caught in the wage pause and their legitimate claim will not be dealt with fairly and justly. I think that to set their minds at rest the Government should have set up a special tribunal to deal with such cases as a matter of urgency, and to short-circuit the tortuous procedures which are very often involved in the present machinery of conciliation and arbitration.

The engineering profession have a very real sense of grievance in this matter, because whatever way you look at it the increase they got, it was scarcely more than four or five per cent, and then it was only a rectification of a previous injustice. They have a justifiable sense of grievance when they see that the body with which they are obliged to negotiate has participated in the increase. How can any Government justify one group in the service of the local authorities, the managers, getting the regular increase which was given to everyone else, and another group in the same service, the engineers, getting only a fraction of this increase. Besides, over the past 10 or 15 years the engineers are falling further and further behind the managers.

I want to warn the Government that in this matter they are dealing with dynamite. Not dynamite that may create a revolution for them, but dynamite in the sense that even though the Government do not seem to appreciate the value of engineers other countries most certainly will. There is not an engineer working for a local authority in this country today who could not go to England, America, Africa or elsewhere and get a considerable increase both in salary and prospects.

If the Government continue to deny justice to the engineering profession they will find that what has already been happening will deteriorate rapidly. The younger members of the profession will leave the country in increasing numbers and only those who are tied by family commitments will remain. I ask the Government not to press the engineers too far, or we will be left in a position in which we will not have sufficient engineers to man our essential services and spearhead the development of the economy. After decades of downgrading and bad treatment of the young house surgeons in many of our hospitals, we now find that they are at a premium, and many hospitals are without their full complement.

If the Minister and the Government wish to have the White Paper taken as a realistic statement, they should take immediate steps to set up this arbitration council as a matter of urgency. In that way only, can we have confidence in the national wage policy, as the foundation of a national wage policy must be the feeling that every group within the community has equal rights and will get its share of whatever increase is going, whether or not it has a powerful union to fight for it.

It seems to me from the Book of Estimates presented to us that costs have been allowed to rise much too speedily. The country is not in a position to face the burden of carrying the total in the Book of Estimates. I think that by and large a business approach should be adopted to the needs of all Departments. They should be given a certain amount of money and told: "That is for your spending; go short or long with it." Indeed, the Estimates for the various Departments, with a few exceptions, could have been frozen at what they were given last year, and it could have been left to the internal arrangements within the Department to see to the spending of the money.

We would benefit considerably from a great deal more autonomy between the various Civil Service Departments. It has often intrigued me to think of how many man-hours of Civil Service time in the various Departments are spent in fighting with the Department of Finance. The only way to keep expenditure within bounds is simply to hand out a certain sum to the Department of Agriculture, the Department of Education or any Department and say: "Go long or short with it."

If the Minister is really looking for large sums of money he should take another look at the bovine TB scheme. He might put a question mark over whether the policy of ridding the six Munster counties of bovine TB within the next two years is realistic or whether it would not be far better to taper it off over six or eight years. We have satisfied the basic requirement, and we have a large part of the country attested, so that stores are available for shipment to the British market. The policy of striving to rid the dairying areas of TB is not realistic and its contribution to the improvement of animal health is infinitesimal.

Debate adjourned.
The Seanad adjourned at 10 p.m. until 3 p.m. on Thursday, 28th March, 1963.