Wednesday, 25 March 1953
Seanad Éireann Debate
Minister for Finance (Mr. MacEntee): This Bill is in usual form. Sections 1 and 2 authorise the issue of money from the Central Fund to cover, first of all, the total amount of the Supplementary and Additional Estimates for the current financial year which were not already covered by the Appropriation Act, 1952, and, secondly, the amount of the Vote on Account, 1953-54. Section 3 provides for borrowing by the Minister for Finance in respect of these two items and the issue by him against such borrowing of such securities as he sees fit.
Dáil Éireann has granted a Vote on Account, amounting to £34,185,410, to enable Supplies and Services to be carried out until the individual Estimates have been passed and the Appropriation Act for the year has become law. The White Paper which has been circulated to members of the Oireachtas will have enabled Senators to ascertain for themselves how this sum has been made up. The Supply Services, according to the Estimates for 1953-54 which have been presented by the Government to Dáil Éireann, total £100,548,106, which is an increase of £5,676,483 on the figure published in the Volume of Estimates for 1952-53. In making comparison, however, it is necessary to have regard to the alterations in the 1952-53 figure which were made in the Budget for the current year. This Budget, it will be recalled, provided for, firstly, heavy extra expenditure on social welfare services which was offset mainly by savings on food subsidies. Allowing for these charges, but ignoring the sum of £1,000,000 which was also included to cover unspecified Supplementary Estimates, the net figure for the Supply Services in 1952-53 was £93,954,000, so that the increased sum required to pay for these services in 1953-54 is £6,594,000.
The largest increases over the original Estimates for 1952-53 arise in  respect of the following services: Social Welfare Services, £6,463,132; Health, £5,308,600; Defence, £1,381,350; Primary Education, £344,440; Forestry, £295,100; Army Pensions, £291,520; Wireless Broadcasting, £280,740.
I have already referred to the extra provision which was made in the Budget of 1952-53 for the social welfare services. In fact, the Supplementary Estimate taken for these services amounted to £4,754,810, but even if this sum is taken into account, provision for the coming year, that is, 1953-54, will still show an increase of £1,708,322 over the current year. The balance of the supplementary provision for 1952-53 is £4,526,925 and includes £580,010 for Health, £715,000 for Defence, and £167,300 for Primary Education.
The Health Estimate increase is mainly occasioned by the new item, Grant-in-Aid of the Hospitals' Trust Fund, which, it is proposed, will be £4,500,000. The capital of this fund is exhausted and it is necessary, therefore, for the Exchequer to come to its aid if the hospital building programme is not to be brought to a standstill. Decreases of any significance are to be found only, I regret to say, in a few Estimates, notably the Estimate for Industry and Commerce, Agriculture, Posts and Telegraphs and the Garda Síochána.
I should emphasise, I think, that a net decrease, or even a comparatively small increase, shown in any particular Estimate may tend to conceal substantial individual items of increase in the Estimate. A good illustration of this is to be found in the Estimate for the Department of Local Government which, although it shows a net increase of only £141,740 which would appear perhaps to be merely of casual significance having regard to the size of the Estimate itself, contains an increase of £300,000 in the amount to be provided for the purchase, erection and reconstruction of dwelling-houses by private individuals and public utility societies and, in addition, makes provision for a further sum of £400,000 for a new item to wit, grants to local authorities for the improvement of roads conducive to development of the tourist  industry in the Gaeltacht and in the congested areas.
Again, the Estimate for the Department of Agriculture although showing a net decrease, provides £179,304 more for the land reclamation scheme, or the land rehabilitation project as it still continues to be described, than was originally provided in 1952-53 and it doubles the original provision in 1952-53 of £300,000 for ground limestone subsidy. Again, in the case of the Department of Industry and Commerce while we have a net decrease on the Vote as a whole, nevertheless there is included in the total £400,000 more than in 1952-53 for the repayment of advances for rural electrification and, as against a token provision of £5 made in 1952-53 for fuel subsidy, we have a provision of £240,000. This is the amount required to cover losses connected with the stocks of coal accumulated by Fuel Importers Limited against the contingency of an outbreak of war, and, I may say, the possibility of a reduction in or cessation of supplies from Great Britain.
The total of £100,000,000 for the Supply Services does not, of course, take into account the additions during the year for new services. I think the Seanad will agree with me in my view that it would be carrying optimism to the extreme to expect that the coming year will not produce its quota of Supplementary Estimates. Even making allowance for such additions, it must in any event be remembered that the provision for the Supply Services constitutes only part, though of course a very large part, of the total State outlay. The problem of keeping such outlay within the limits imposed by the capacity of taxpayers to meet it and not only the capacity of the taxpayers to meet it, but their willingness to meet it, is becoming very great indeed, especially as demands for increased public services continue to be made. However what these difficulties are will be fully revealed in the Financial Statement for the year which, as the Tánaiste has informed Dáil Éireann to-day, will be made to that House on the 6th May and which no doubt as is customary will be the subject of prolonged and acute debate.
These are the main provisions of the  Central Fund Bill and in mentioning them I have drawn the attention of the Seanad to those more noteworthy changes in the Estimates for the coming financial year as compared with those, which have already been debated by Dáil Éireann, for the current year.
Professor Hayes: The Minister has told us that this Bill comes in the usual form and in presenting it the Minister has run true to his usual form. That is to say that he is increasing expenditure and this year he is presenting us with the biggest bill ever. It should be noted in the beginning that that is not because of any special circumstances of the moment. It is in accordance with the settled policy of the Minister to increase expenditure and further to increase taxation and costs generally. The Minister and his colleagues have always made pronouncements of economy but they have never carried them out.
The reason for that was that they never regarded economic and financial problems as a whole but they always regarded everything from the point of view of politics. They made all sorts of wild statements inside and outside the Dáil and criticised expenditure of every kind. They were against the higher civil servants, the E.S.B., and indeed on occasion the Dáil itself. When the Minister introduced his first Budget in 1932 of which he was very proud, he increased taxation and expenditure enormously.
Perhaps it should be said that the policy of the Government—it has been always a consistent policy, lasting until the present moment and very strongly evident even in the last financial year —is to combine low agricultural production with a very rash and very imprudent form of industrial development. It was not always rash and it was not always imprudent, but very often it was rash and imprudent and very expensive. It has had a certain effect in putting people into employment but, looking at the picture as a whole, one sees that as many people have gone out of agriculture as have come into employment in industry and,  in spite of all that, nearly 90,000 people are now unemployed. However, adverting again to the Minister's politicial Party point of view, no doubt the industrial revolution did help to bring money into the funds of the Party and enabled them to fight elections, even if not always successfully.
One reason why this bill is higher, and has indeed steadily become higher ever since the Government went into office, is that they have an immense faith in Government and parliamentary action. They are never done thinking up schemes and bringing in schemes, with resultant increase in the cost of government. In 1953 we have higher direct and higher indirect taxation, higher costs in agriculture and in industry and a higher cost of living, both from the point of view of taxation and also from the point of view of tariffs. The impact of these tariffs on the cost of living is never quite ascertainable, but the process by which the Government have proceeded without using any discreation in the matter has certainly added to our costs. All that has added up to the highest bill with which the Oireachtas has ever been confronted. Yet, with all that, there has been a complete failure to develop overall agricultural production. We have failed, although Northern Ireland and England have succeeded in increasing theirs.
The Minister and his colleagues display a curious lack of restraint. We have had from them political polemics about high finance, economic affairs, the balance of payments and what taxes would produce. The Minister has told us that the position now is not so bad as he had thought it was.
Professor Hayes: I am sorry to vex anybody but the Minister last year described the situation in the most lurid terms and was wrong in every single prophecy he made about our trade, our balance of payments position and even about the returns from taxes  which he himself imposed. It would be impossible to concede that the improvement in the balance of trade is something due to the Minister's policy. I think that is a claim which is arrogant and completely unfounded. The more favourable position of our balance of trade, which, it now turns out, instead of having an enormous deficiency, may very well be balanced—taking into consideration invisible exports—may very well be due to the Minister's predecessor.
Our general figures in respect of the balance of trade have undoubtedly improved. However, you have little evidence for the ordinary citizen or the 90,000 unemployed that there is any improvement at all. Whether you are a shopkeeper, artisan, builder or labourer, whatever your tastes run to in food or in drink, it is very difficult to believe that the position is good. Trade is bad and employment is bad and difficult to get. You have two things together here which the Minister has brought about and which are quite rare: high prices and high unemployment. They do not usually go together.
Similarly we have the policy of dear money of which the Minister is proud. We have paid 5 per cent. for money and we have to pay interest and sinking fund of course out of our annual income. But the Northern Ireland Electricity Board issued a loan of £2,000,000 at what works out at about 4½ per cent. of guaranteed stock redeemable in 1968-71 at 99. They got £26,000,000. Their loan was over-subscribed 13 times although their income-tax is 9/6 and ours is only 7/6. Yet our Government here is proud to have obtained a loan at 5 per cent. at par. The comparable rate here, taking the tax into consideration, is 4 per cent. Considering our trade resources and external assets it is difficult to see how our credit, which once stood so high, has fallen. It is difficult to see why the Northern Ireland Electricity Board should be able to get money at almost 1 per cent. less than we can get it.
I noticed yesterday or the day before that the North of Scotland Hydro-Electrical Board is looking for £20,000,000 at 4 per cent., redeemable  1973-78 at 96. The gross yield is 4¼ per cent. and the net yield, after tax of 9/6, would be about £2 6s. The net yield on our loan is £3 2s. 6d. That is something the Minister has accomlished and for which he has been patted on the back, but it is something we have to pay for and it was caused by the wild and irresponsible statements which the Minister made in the course of his political polemics about finance—because he spares nothing and nobody when he is on that kind of line. It is an extraordinary thing that the Northern Ireland Electricity Board can get money at a much cheaper rate than we can and that Britain, after two crippling wars, can borrow at 1 per cent. less for comparable loans than we can. I think at the time of the last Government—if I may be allowed to mention the last Government—our terms were slightly better than the British. Our credit has been brought down by the political campaign of the Minister and his colleagues, by their false prophecies and irresponsible statements and by the Minister's own recklessness for the purpose of internal political Party gain.
We are going to spend a great deal of money on a number of other things and I think their roots are also to be found in politics. The Government looked around after the last election and we have several fruits of the results of that election: an Undeveloped Areas Bill, and a proposal to build turf-fired stations in four different places in the West of Ireland. I suggest that they are not power stations but polling stations, that their aim is rather electoral than electrical and that the results may very well be to reduce the E.S.B., which is a sound concern, a large business institution in this country which gives good service to the people, to the position that it may have to be like C.I.E. looking for subsidies from the State. All that, I think, is the result of politics. In fact, the Minister himself I noticed in the other House, or his deputy—I forget which—said with some pride: “The inter-Party Government squandered money”, and next moment said: “Look at us, we are spending twice as much as they spent on capital  development.” It is very difficult to have it both ways.
Professor Hayes: I did not get that. Perhaps it is just as well. But I thought I knew the Dublin accent well. The Government has been in control with the exception of a little over three years of this country's resources and of the Civil Service and legislation of this State for nearly 20 years, all told. One would like to know what the policy has been and what the result of that policy has been over all those years. The result of it is to be found now in a Bill, which is the biggest Bill ever presented to us, in a swollen expenditure and in quarrels with almost every class in the State. The civil servants have a very substantial grievance and are agitating at the moment. The Government now in office created the situation some years ago against which the national teachers went on strike very unwillingly. Now we have a situation in which doctors find themselves thwarted, a situation in which civil servants of a very high grade find themselves in the position of walking the streets by way of protest.
Now, it is the present Government which has been in charge of the civil servants for the last 20 years. They have taken over the Service. At one time they were sworn enemies of heads of the Civil Service, said they were Freemasons, Free Staters and Heaven knows what else. They did their very best at one time to suborn the civil servants, to induce civil servants to serve the Party, to be Fianna Fáil henchmen and against the Government of the day. They have promoted some of them for political reasons. They staffed the temporary grades and some other grades with political hangers-on.
One of the good things in the legislation of the present Government was the Labour Court. The Labour Court is based upon the notion that the case of any set of employees should be heard by intelligent, impartial, independent people, that the two sides of the case should be presented and a decision  should be made. We know that the employer need not agree. Neither need the employees but, in nearly every case, the employers have agreed. Surely the Government should not give a bad example in this case by adopting a completely non possumus attitude towards the Civil Service. It should be said that the Civil Service, the great bulk of it, is not highly paid.
A great many people enter the Civil Service, foolishly, I think, and live for the remainder of their lives in a frustrated condition. The Government seems to have a policy which hits the unorganised white-collar class. That class is now facing rising costs and rising prices and the falling value of money. The Government should adopt the policy of ordinary citizens and should not employ people whom they have not the money to pay. It might be better if one could hold an investigation and see how many civil servants we do really want. Nothing could be more frustrating than the present situation. Many of these people are in a state of frustration and discontent, and these are people of increasing importance in ruling the affairs of the country.
The Civil Service attracts excellent people to its ranks, and they are very often, in the course of their service, reduced both in initiative and in competency. The Civil Service maintains grades of people who are much above their work. Entrance into the clerical officer grade, for example, is based upon the intermediate certificate, but it is absolutely impossible to get a place as a clerical officer unless you have a very, very good leaving certificate standard. The result is to get people into the Civil Service of a very high grade who are better than their work. This leads to grave discontent, and psychological disturbance for the remainder of their lives. Perhaps, indeed, the Civil Service is swollen beyond reason, not necessarily in the higher grades, and that is a situation which has never been properly looked into. I am quite sure that there is no real control of it. Has the Department of Finance, for example, which works very hard and which includes  a great many competent officials, any real control over the numbers?
Take, for example, the Department of Defence. In 1938-39 Estimates, the number of civil servants in the Minister's office was 292. The number in the present Book of Estimates is 553. One could understand that there was a big increase during the war when the Army stood at over 50,000 men but, apparently, compared with pre-war, the number is doubled. One could perhaps take some steps about the Civil Service which would lead to greater production and reduce the costs for the taxpayer. The cause of the present position is, to a considerable extent, that we have carried over parliamentary procedure from the British which was created for a situation wholly different from the situation in which we now exist. The Civil Service machinery here and in Britain is not fashioned for the job it has to do now. It includes parliamentary questions, debates, public accounts committees, and so on. We could possibly be able to improve on them if it were looked into in an intelligent way, and were not a matter of Party politics.
Professor Hayes: It is amazing how people who do not curb their own tongues in any way, who let themselves go about their opponents cannot bear criticism. At one time they took the line that anybody who was not on their side had no right to address the Irish people at all.
Professor Hayes: That really is a fundamental point about them—that Fianna Fáil politics are not politics at all, but that everything else is politics. If you agree with Fianna Fáil, you are a faithful servant of Cathleen Ní Houlihan wrapped around in a green mantle and everything is all right; but if you say they are wrong, you are a low politician and none of them wants to let you speak. They once tried to prevent their opponents from being heard but they were a complete failure on that—I can remember it well—and they will be a complete failure on this, too.
Let me resume what I was trying to say, and the first point is illustrated by these interruptions. The Government Party still clings obstinately to the single Party, right all the time— right in every detail, right from the bottom up, accepting advice from nobody and trying to dragoon everybody. The Minister and the Minister's friends—perhaps you will not believe me, Sir, but I have this note written down, and it illustrates exactly what I want to say, as it has been illustrated by what has happened here—are still engaged in a bad-tempered effort to justify their own stupidity and criminality in the past. They are still incurably political in their outlook and never view our problems objectively. They never seek solutions in an economic or financial way, but always seek a solution which they think will pay a political dividend.
Surely this Central Fund Bill is a confession that they have been a complete failure. Look at our position: rural depopulation and emigration;  the City of Dublin increasing every day—we had a Bill last week and we have another to-day dealing with the immense increase of Dublin, whereas one of the main features of their policy used to be decentralisation, which they certainly have not accomplished—rising taxes, rising prices, and falling production. I would suggest also that our national spirit is not rising either, because people are getting cynical about public affairs.
One of the roads towards economy— I have suggested it often before—is that there should be less power given to the State and more power left to the ordinary citizen; that there should be a truce on legislation, except legislation like this Bill and the Finance Bill which are necessary for the running of the State; that people should be left alone; and that Bills should not be constantly brought in which create more and more civil servants, give more and more power to the State and add more and more to the costs of the State.
Instead of the eternal political Party approach to our problems, we should consider them as problems which have to be solved by some kind of co-operation and goodwill, and not on the basis that everybody is an enemy unless he is prepared to subscribe to every single thing the all-powerful single Party wants. The Party now in office should give up the notion that they must use the resources of the State to preserve and improve the position of the all-powerful Party. If they did that, the country's problems might be on some way to solution, and, instead of an increasing bill, we might possibly be on the road towards decreasing expenditure.
Mr. Hawkins: Senator Hayes took us back over 30 years and referred to certain actions taken by the Republican Party to ensure as far as possible that the promises made to the then Dáil Éireann by the then President that the Republican institutions would be maintained should and would be implemented. It is because those who accepted the promises then made took the line of action they took that we have had in recent years a reconversion to these policies and an acceptance of  all for which that particular episode was gone through.
He also suggested that the economic war was a Party war, that it was begun by Fianna Fáil and engaged in for some political purpose. The issues at that time were put to the people, and the people by a majority vote elected here an Irish Government and gave them a mandate to put into effect the policies which the people had accepted. I have said in this House before and on various platforms throughout the country that it is regrettable to look back even now over that period and to think that there were then persons who claimed to be representatives of the Irish people, who, when the Irish people had decided on a particular line of action, did not side with the Irish people.
Senator Hayes suggests that, in every crisis, whether national or international, the Party opposite gave its support to the Government. Had the Party in opposition at the beginning of the economic war done as any national Party would have done, no matter what their views on the matter may have been—the decision had been made: the people had made a decision and the Government, in the name of the people, took steps to implement it—they would have sided with the people. In place of that, however, we had a campaign, as we had for many years afterwards, both openly and by suggestion, that all that was necessary was to win the people from their allegiance to and support of the then Government, and all would be well.
There is, however, something which the Fine Gael Party and the Leaders of the Opposition do not seem to be able to grasp or understand, something which is deep down in the hearts of the people, particularly the small farmer and the worker, a national sentiment, and when that national sentiment is appealed to, as it was during those years, it was that sentiment and that steadfast devotion of theirs which won the economic war, in spite of the opposition of the Parties opposite and the various types, classes and colours of the shirts then worn.
Senator Hayes suggested that an organised attempt was made to deprive  the Opposition Parties of freedom of speech. There was no such thing. The excuse given at the time by the organisers of the Blueshirt movement was that it was an organisation which was going to insist that their speakers would be given a hearing throughout the country, but there was another ulterior motive in it to which expression was given by Deputy Costello, when he said that the Blackshirts had won in Rome, the Brownshirts in Germany and that the Blueshirts or blouses would win here.
Senator Hayes has travelled over all that ground and I had the feeling while he was speaking that it was a very well thought out campaign of his. He was anxious to criticise the Bill before the House but he was at pains to see how he could do it without suggesting an alternative. If the demand that the Minister is making on the people is too high and if, in the opinion of any member of the House it is one that should not be approved of, then I think the particular Senator should state the provisions in the Bill of which he does not approve. Senator Hayes thought it wiser, however, to talk about the history of political events over the past 30 years.
I also resent very strongly the suggestion that the industrial revival brought about under Fianna Fáil administration for over a period of 30 years had the sinister motive of trying to induce the people engaged in industrial development to subscribe to Party funds. I think it is an insult to the people engaged in these industries to suggest that because the Government or a Party advocate what they think is the best policy for the country, a policy from which those engaged in industry might benefit to some extent, they should be expected to subscribe to a political Party. It is only from the leaders of the Opposition Parties that such a suggestion would come. Having covered a period of 30 years, the Senator made some passing reference to the results of the recent elections.
Mr. Hawkins: I would like to remind the Senator that the election was held because of certain events that were about to take place in the Dáil and because the then Government thought it was better to dissolve rather than face defeat in the Dáil so that they might be able to come back again, make some more bargains and, by some method or other, secure a further term of office. Senator Hayes, of course, is a much wiser politician than the other speakers in his Party who, referring to the same period, stated that the present Government had no mandate from the people to continue in office.
I would remind Senator Hayes and those people that if the results were properly examined it would be found that the very members of the Dáil who were responsible for the decision to go to the country because of their withdrawal of support from the Government were re-elected. That in itself proved that the persons who supported them originally in 1948, and who afterwards found that certain bargains and agreements had been entered into and a particular form of Government brought about, approved of the actions they took in forcing the Government to go to the country and ensuring that once more a Government, in whom the people of this country would have confidence, would be returned.
I grant this to Senator Hayes and the members of the Opposition Party for what it is worth. From what I know of the more ardent supporters of the Fine Gael Party, and those who supported the Party right through the years, they were the people whom I found most pleased, because there was a change of Government. At least they felt that they knew where the Fianna Fáil Government was. They knew what their policy was and they knew where they were going, but they never knew from day to day what the others' policy was or where the members of the inter-Party Government were going. They did not know what direction, north, south, east or west, the various Parties composing that Government would drive it.
 In his opening remarks, the Senator stated that the Minister was in his usual form for increasing taxation. If Senator Hayes examines the Estimates over a number of years, and goes back to the last Book of Estimates prepared by the Fianna Fáil Government in 1947, before the change of Government, he will find that there was a demand for £58,000,000. In the Estimates introduced by the inter-Party Government in 1951 the demand was for no less than £90,000,000. That is to say, within the short period of three years there was an increased demand of £31,000,000 by the Senator's own Party, or at least the major Party in the then inter-Party Government. Together with that increase of £31,000,000 during that period no less than £39,000,000 was raised by way of internal loans together with over £40,000,000 expenditure under Marshall Aid.
The loudest boast of Senator Hayes and the members of his Party was that we were spending more money now than ever and that the spending must go on but, as I pointed out already, taxation during the three years of the inter-Party Government increased by £31,000,000. Money borrowed from the people of this country amounted to £39,000,000. Worse still, money was borrowed from the United States of America which must be paid back in dollars, not in sterling. This country must earn dollars in order to pay that back.
What has been the result of the expenditure of this money? Where has it gone to? Where is the machinery? Where is the capital development we heard so much talk about during the three years? Senator Hayes referred to the question of unemployment. He asked why we had the number of persons unemployed we had to-day. During the three years to which I refer, we had the various Ministers congratulating themselves on the housing drive. At that time we, on the Opposition side of the House, pointed out that if we were going to continue at that particular rate of building we would have to make plans for the future. Plans would have to be prepared and drainage and all the other works would have to be undertaken to ensure the continuation of work in the building  trades. But in order to show some spectacular results, all these details were forgotten. The result now is that in many instances the building is not as brisk as it would have been had the Government of that time given thought to the importance of planning in advance the works to be undertaken.
We had, with all the surrounding pomp and ceremony, the laying of hospitals and sanatoria foundations and we had vast sums of money being spent. These plans, however, were prepared during Fianna Fáil period of office, prior to 1948, and under the Fianna Fáil Administration would have been given effect to in a more rational and planned manner than they were actually given effect to under the inter-Party Government. These works which have been begun have to be completed and the Oireachtas and the people must find these moneys by taxation.
I do not wish to go back over that full period of three years beyond to say that Senator Hayes referred to the national loan. We have heard much criticism against the Minister for Finance because he did not seek the loan earlier. Members of the Opposition and former inter-Party Government seem to have some particular fad about loans: if it is not a fad for raising loans, it is a fad for some change of monetary reform; if that cannot be done, they say, then we must change the banks. Between transferring direction from one of these fads to another, we will always avoid getting down to making concrete suggestions and putting the facts before the people that there is only one way in which commitments which have to be met can be met, that is by work and production and finding the money ourselves.
Senator Hayes put before us the example of how moneys were raised in Northern Ireland, Scotland and England, and asked why it was not possible for our Minister for Finance to secure his loan at a lower rate of interest. He did not tell us, however, that in the three times Mr. McGilligan, as Minister for Finance, attempted to raise far smaller sums of money he had failed and the loans were not fully subscribed and had to be taken  up by the banks. He did not tell us that in the intervening period the manner in which they had raised £39,000,000 or £40,000,000 became known to the people of the country and, particularly, those persons who would be likely to invest in any loan. These people realised that some serious steps must be taken to rectify the financial position if we were to make any serious contribution to providing for repayments and for utilising these moneys in the best possible manner.
Senator Hayes suggested also that this Party could not see any good in any suggestion or in any person in the Opposition, but he is the one person who suggests that there is something evil in every suggestion put forward by the Fianna Fáil Party and Government. I think it is not right for a member of this House to suggest that, because the Government takes very serious steps to do something for the Gaeltacht and congested areas in order to give these places some of the facilities given to other parts of the country—good housing and good hospitals—and to see that the natural resources there are developed and employment given to the people, there is something sinister behind it and something is being done for a motive, not a national motive or a motive to cater for the good of the people, and that the sole thought behind it is whether it is going to react well on the Party. Senator Hayes can rest quite assured from the record of his Party so far as the West of Ireland was concerned that, if the West is the only ray of hope for getting a governmental majority for his Party, he will have quite a peaceful time, because that day will never come.
The Bill before the House involves a large amount but, large as it is, when one examines the Book of Estimates, one is more inclined to quarrel with the provisions in so far as they may or may not prove ample under particular headings. There is no one in the House who is prepared to get up here or in the country and say that we want to curtail or reduce our social welfare services. Every time there is a suggestion made regarding the extension or increasing of such services  we all maintain that the provision is not ample and should be more generous, no matter what service is concerned, old age pensions, widows and orphans.
I would like to remind the House that the major increases occurring in the Book of Estimates are under the following headings. We have increases for widows' and orphans' allowances, unemployment assistance, old age pensions, public health, and there is provision made to have new dispensaries built, with encouragement and assistance given to county councils and public health authorities to provide better and more up-to-date dispensaries. We often deplore the fact that many of our national schools are not being replaced by more up-to-date buildings and suggest that the replacement is not taking place quickly enough. That may be, but the money has to be found and the day will come on May 6th when a decision will have to be made as to how that money is going to be secured.
Much criticism has been levelled against the steps taken by the Minister for Finance last year to rectify the position then. I would like to say now that I think I was the first person in this or the other House to advocate during the term of the inter-Party Government the curtailment or total abolition of food subsidies. That would open a very wide field of discussion undoubtedly, almost as wide as Senator Hayes opened here this evening, and I think it would be better that we should avoid that. I think the time has come when the leaders of every political Party should be honest with the people and put the issues clearly before them. If there are services required—and we would all like to see many of the present services improved and extended—we must also be prepared to support measures necessary to find the money to do so. If we are not prepared to do that, then we should not be associated with groups who will advocate the extension of the many services that are demanded.
Professor O'Brien: The Central Fund Bill is one of the few occasions  in the year in which the Seanad has an opportunity of reviewing the state of the national finances. I do not think I need apologise on this occasion for making a review of that kind, as shortly as I can. In making that review I intend to be objective and detached. I hope to survey the good and bad financial aspects as they appear to me, and to emphasise—it cannot be over-emphasised—that the national finances cannot be studied in isolation but must be related to underlying conditions, such as production, trade and above all the balance of payments.
In saying what I am going to say, I shall repeat what I have said on many previous occasions. I make no apology for this. I think that the elementary principles of financial prudence are universally valid. I do not think one need apologise for repeating them, and they cannot be repeated too often. Although they are universally valid, I think that they should be proclaimed with particular emphasis on certain occasions. I think that the present debate is one of these occasions on which it is necessary to emphasise certain elementary financial principles which can only be ignored to the danger of the country.
Looking at the state of our affairs to-day, it seems to me there are two good features which must be considered. I am not going to enter into the question whether the Budget will be exactly balanced or not in the present year; there is a good deal of difference of opinion about that. Usually a Government attempts to show that the Budget is overbalanced, and that their revenue is buoyant, while the Party in opposition tries to show that the state of the country is such that the Government had not achieved a balanced Budget. In the debates in the Dáil on this Bill and on the Vote on Account, it was the Opposition who were claiming that there was going to be a surplus in this year's Budget, and the Government were proclaiming quite definitely that there was going to be a deficit. Taking the middle line, I think we can agree that the Budget this year is just going to be about balanced.
The second good feature in the  situation is that equilibrium has been restored in the overall balance of payments. This is partly the result of the last Budget, which was of a deflationary kind, but it is the result also of certain happenings in the outside world, such as a dropping-off in prices of some imports and the disappearance of the necessity for stockpiling. Therefore, partly as a result of Government policy and partly as a result of certain developments in the outside world, the balance of payments is coming more or less into equilibrium in the present time.
As against these two favourable items, there are certain unfavourable matters such as unemployment and high emigration which is consequent on unemployment. There is a good deal of discontent existing amongst certain sections of the population. The Civil Service is protesting against the failure of the Government to implement the arbitration award. That is a serious embarrassment, I am sure, to the Government and to the heads of the Civil Service. As we have seen in the Book of Estimates, the expenditure of the State is growing. Taxation appears to have reached the point of diminishing returns. Finally, and most menacing of all, our agricultural production, as far as we know, continues to remain obstinately stagnant.
There is no great increase of output taking place. I think it is not unfair to say that the financial superstructure in the country tends to grow at a greater rate than the productive basis of our economy. If that tendency continues long enough, the superstructure may become too heavy for the base. That is, I am afraid, beginning to occur. It may be no harm to repeat that equilibrium in the Budget and in the balance of payments, however desirable that may be, are desirable as means and not as ends in themselves. The ends of economic policy are the solvency, progress and prosperity of the nation as a whole. One must always have regard to the level at which these two balances take place. Perhaps it is not incorrect to say that we should aim at attaining the balance of payments on the highest possible level and the balance of the Budget on  the lowest possible level. I do not say that that is universally true, but I do say that the tendency in this country is rather tending in the opposite direction. The equilibrium in the balance of payments has been obtained by a downward pressure and the equilibrium in the Budget is being obtained by an upward pressure. That shows that the financial superstructure is too heavy for the national productive base. Efforts should be made either to lighten the superstructure or to strengthen the base.
As regards the superstructure, everybody must agree that the Government is faced with very grave difficulties. When asked to curtail expenditure, the pressure of vested interests is so great that it requires supercourage on the part of politicians to curtail existing services very much. I suggest that, on the grounds of justice, one type of economy that should not be effected, if at all possible, is economy which causes discontent in the public services and raises complaints that promises have been broken and legitimate expectations have not been rewarded. Having said that, I would say that no new commitments should be undertaken. Commitments, the full effects of which will not be seen until further Budgets, should be avoided rigorously. The time has definitely come, in the circumstances of this country, when further public expenditure cannot be embarked upon until the productive foundations of the country have been considerably strengthened.
I have to accept, looking at the Book of Estimates, that certain increases in expenditure are unavoidable or at least have become unavoidable. The question arises how far this additional expenditure can be met with the least injury to the welfare and the credit of the country. Most of the indirect taxes have reached the point of diminishing return and further imposition of taxation will not produce any additional yield. As regards direct taxation, I think that there might also be very wide agreement that anything in the nature of an increase in the standard rate of income-tax would have a very depressing effect on saving, on investment,  on enterprise and on the country generally. Any further taxation of business profits should, in particular, be avoided.
“The business tax structure has probably been too high for Ireland's state of industrial development. The ostensible weight of this tax burden has been increased by what appears to be an inadequate allowance for depreciation and depletion, when consideration is given to the great need for strong incentives to encourage plant and equipment modernisation.”
I think that the point of diminishing returns has been reached both in indirect and direct taxation. Possibly, to come back to a matter that was fully debated in this House before Christmas, the burden of direct taxation might be more equitably spread, but anything in the nature of an increase in the standard rate would have an adverse effect on incentive and should be avoided. It, therefore, seems to me—and I think it is a general opinion—that the lightening of the superstructure must take place by a reduction in expenditure rather than by an increase in taxation. Public opinion must be educated up to realise that Budget deficits for current expenditure are fundamentally unsound— financially, politically, economically and socially. This is particularly true at a time like the present when interest rates are high. Deficits that necessitate borrowing at the present time involve the payment of high rates of interest.
Everything I have said regarding the lightening of the superstructure is, of course, always conditioned by the strengthening of the base. Taking the longer view of matters which should be debated in this House in the course of this debate on the Bill, the strengthening of the foundations in this country is a matter which ought to engage the attention of every member of both Houses. One of the reasons why I  regret the abolition of the capital Budget is that in that Budget the distinction between current expenditure and investment expenditure was at least clearly brought out and put in the forefront of the national accounts in a way that could not fail to impress even the most casual reader of the Book of Estimates.
The strengthening of the foundations in this country involves a considerable amount of capital investment. This is a word which has been abused and bandied about and used in quite a wrong sense in many discussions in recent years. Investment does not, in my opinion, include expenditure on durable consumer goods, however desirable from the social point of view those consumer goods might be. It does not include the construction of mere amenities, of what appear to be capital constructions ancillary to the provision of social services. Above all, it does not include expenditure of public money for the sake of giving employment, of making work. None of those three things is, in my opinion, correctly described as investment.
Investment, in the present context, and in the discussion of the national finances which should be carried out during this debate, must be narrowly defined. It must be defined as the production of truly productive capital goods, whether fixed capital or working capital or stocks of raw materials, which in the near or even in the distant future will add something to the size of the national income. And in the peculiar circumstances of this country I would go further and say that investment ought to produce the type of goods which will help the balance of payments, either by producing substitutes for imports or potential exports in the future.
Everybody must agree that investment of this kind is desirable from the national point of view. Everybody may not agree with my opinion that investment by private investors is preferable to investment by Government or by public authorities. I have three reasons to support that view. The first is the general political reason that individualism is, I think, to be preferred to socialism. I prefer to see enterprise  undertaken by private people than by public authorities. The second reason is that private investment takes place under the stimulus of the profit motive and people working under the profit motive must be efficient at their peril. The third reason is that investment undertaken by private people leaves no legacy of debt behind, if it proves unsuccessful. It leaves no hangover in the form of vast fixed-income-bearing securities which have to be borne by the taxpayer in the future.
I have no doubt that in this country everything should be done to encourage private investment. Whether investment takes place by private investors or by public authorities it must be preceded by savings. That brings me to the central point—I am repeating what I have said before but I make no apology for that, for the matter is even more urgent now than on previous occasions—that we must investigate the sources of savings in this country and try to utilise whatever are available in the best possible way.
There are three sources of savings and three only. The first is new savings out of current expenditure by private individuals or by companies. The second is the obtaining of foreign savings by encouraging foreign investors to invest in the country. The third is to use up old savings by the repatriation of external investments. Savings may be obtained in all these three ways and I propose to say just a little about each of them in so far as they bear on problems which are relevant to this Bill.
As regards new domestic savings, I do not propose to quote any figures in what I say, but every statistician, every foreign observer and every businessman agree that current savings in this country have not been at a sufficiently high level in recent years. That is unquestionable. At this point, I just want to quote one sentence out of deference to people in the House and in the country who do not consider that any statement on public finances is adequate or up to date unless reference is made to the late Lord Keynes. I am going to drop my piece of incense on that altar at this stage and beyond that I will not drop any more. If  there is sufficient investment, that new investment itself will create a source of new savings and therefore this process of investment which I am advocating may be a cumulative one in the sense that, if the investment is successful, further savings at a later date may become easier than they are to-day.
We fully discussed domestic savings in our debate on income-tax. All I will say is this. The Government can encourage domestic savings by differential taxation on that part of personal and company incomes which is saved. The allowances for life insurance can be modified in this direction. The depreciation allowance for companies, the taxation of undistributed profits— these are all matters which I will just mention as possible for encouraging the flow of savings. Savings of the less well-off members of the community should be encouraged, and can be encouraged by suitable terms for savings certificates, post office savings bank deposits, and in other ways. I am glad to note in the newspapers in the last couple of days that the Government is about to institute a savings drive.
There is one way in which savings can be obtained, but which, in our country, I think, should not be resorted to, and that is by Budget surplus. I think that savings obtained by means of a Budget surplus do not provide risk capital for the private investor and may even have the effect of reducing the incomes out of which risk capital might otherwise come. Therefore, I consider a Budget surplus in this country as a means of inducing savings something to be avoided or, if resorted to, only to be resorted to as a last resource.
The second source of savings is foreign savings. Here again I feel very strongly that, if foreign savings come into this country, they should come in the form of equities, risk-bearing capital, not loans from foreign Governments or foreign lenders. Such loans leave a legacy of debt behind of a kind that involves pressure on the balance of payments. In this matter, I think the country should learn a lesson from the experience of Marshall  Aid. We know that we will be faced for a number of years ahead with an obligation to repay large sums in dollars out of loans which were advanced in recent years. I do not wish to enter into this particular controversy, but I think I can safely say that these loans were not all spent in such a way as to provide the means of their own repayment. But, although I object to the borrowing abroad of fixed interest securities, sometimes this may be absolutely necessary. I think that if money can be obtained in that way abroad more cheaply than at home it should not be despised.
The experience to which Senator Hayes referred, of the Northern Ireland Electricity Board, is relevant in this respect. The only thing I think that might be said about that is that, although we might be willing to borrow in that way, foreign Governments might not be willing to allow such borrowings. In the last couple of weeks, the Treasury refused to allow a public authority in New Zealand to borrow in the London market for the construction of a bridge. A similar veto might easily be imposed on borrowings which we propose in this country which were not directly related to improving the balance of payments of the sterling area, which is the test that I understand was applied on that occasion.
I think that the possibility of attracting private capital from abroad has not been sufficiently explored. Numbers of people in other countries would like to get access to the Irish market, comparatively small though it may be. Others would like to use Ireland as a base from which to reach markets inside the sterling area. Others would like to diversify the risks of their investments in a period of international uncertainty. Therefore, I think the Government should consider ways in which foreign investors could be encouraged to invest in production in Ireland. The making of double taxation agreements with other countries is one way in which this could be done. The amendment of the Control of Manufactures Act, which was advocated 15 years ago by the Banking Commission, should again be  considered. The possibility of Irish companies being quoted in the London Stock Exchange lists should also be investigated. These are ways in which I think foreign capital could be induced or encouraged to come into this country.
The final method of obtaining capital, the repatriation of external assets, is one which has been discussed in this House many times; but it is so current, so relevant, so topical and so misunderstood that I would like to say a few words about it once more. I do not think it is sufficiently appreciated that the process of repatriation consists in inducing the owners of those assets to shift them into private domestic investment.
The best way to induce people to shift their assets is by having low costs of production in Ireland, low taxation and a feeling of confidence in the future credit of the Irish nation and the Irish Government. To the extent to which private investors fail to avail themselves of and respond to inducements of this kind, the Government and the public authorities should try and encourage people to shift their foreign investments into Irish loans. One way of inducing them to do that is by offering high rates of interest—and when I say “high” I do not mean exorbitant rates. But I think that if a slight increase in the rate of interest has the effect of attracting a considerable amount of Irish capital home, then that is a justification for it which ought not to be overlooked.
Of course, as has been said over and over again, and as every member in this House will agree in principle, repatriation of that kind can only be justified when home investment is of a truly capital productive nature of the type which I tried to define. When we come to judge the priorities of such investment, certain problems have to be faced which I think have not been fully dealt with in Ireland up to the present. As regards private investment, the banks should be asked to exercise certain orders of priorities. The English banks, everybody knows, take their orders in this respect from the Central Bank. There is one small amendment of Irish banking which I  should like to see, that is, a classification of bank advances on the same lines as the English bank advances are classified. We could then see whether private credit was being directed towards productive purposes and above all towards export productive purposes.
When it comes to the allocation of priorities in regard to public investment, I refer again to the Banking Commission of 1938 which recommended the establishment of a national investment board. One of the curious things about that Banking Commission Report was the selective manner in which its recommendations were adopted by the Government. The recommendation for setting up the Central Bank was adopted, but there were other recommendations which were ignored. The amendment of the Control of Manufactures Act, the cessation of the compulsory powers of land purchase and the establishment of an investment board—all these matters were recommended by the commission but were not adopted by the Government of the day, or by any Government since.
I cannot sufficiently emphasise that the repatriation of external assets is never justified to maintain current consumption and is never justified to create employment simply for making work for work's sake. Even for productive purposes, in the narrow and most correct definition, it is a process that must be undertaken with great caution and prudence. The amount of our external investments tends to be exaggerated and they are usually stated gross and not net. Their value has gone down, through no fault of our own, but owing to the rise in the sterling price level. To the extent to which they are dissipated, they never can be replaced. They are a sort of iron ration, an essential reserve to be kept for a contingency. The income that is derived from investments abroad is bridging a smaller and smaller proportion of the adverse balance on visible account. For all these reasons, the process of repatriation should be undertaken with great caution.
The final matter I wish to refer to  shortly is one which I have not dealt with before in the Seanad, but I think it is important and a matter which should be ventilated. Whether our investment is based on new domestic savings, on foreign capital or on the repatriation of external investments, it all could be lubricated and facilitated if the Irish capital market could be improved. The question of the Dublin capital market was investigated by the Banking Commission in 1938, but, in the past 15 years, many changes have taken place and I suggest to the Minister that the question might be reinvestigated to-day. There are certain matters which could be investigated. One is a reform of the company laws. That, I understand, is already taking place. Others are a reform in the requirements regarding information in published balance sheets and changes in the Trustee Acts.
A more important suggestion is the foundation of some corporate institution which might act as a collector of small savings. Saving in modern times, with high direct taxation, will have to take place more by the less rich than in the past, and it becomes a matter of importance, which is being discussed in other countries, to direct all these small rivulets into one stream. I suggest that in this country there might be room for something in the nature of an investment corporation, the capital of which could be found by the banks, the insurance companies, the building societies and other authorities handling large liquid funds. A corporation of that kind could quite possibly be used as a source of loans for agriculture. It could also act as a support for prices in the Dublin market. Some very well informed foreign investors have complained that the comparative illiquidity of the Dublin market makes them disinclined to deal there, because, in a falling market, there is no support. A body of that kind might perform certain jobbing functions which might have the effect of supporting the market. To that extent the liquidity of the Dublin market would be increased and it would become more attractive for savers at home and abroad.
Finally—a more controversial and  difficult technical question—a body of that kind might deal perhaps in short obligations of Governments, public authorities and private firms. Something in the nature of a domestic money market could at least be investigated. An investigation of that kind might lead to positive practical results. But, even if it did not do so, it at least would answer a great deal of uninformed criticism of the Irish banking system, that it does not lend sufficiently at home, that it lends short money at low rates in London and that the Irish Government and Irish borrowers are not accommodated at the lowest possible rates in the Dublin market.
Any inquiry of that kind, I suggest, however, should be made with the co-operation and goodwill of the existing financial institutions. It would be better still if it could be made by the financial institutions themselves, of their own initiative; but if the Government decides that a public inquiry of that kind should be made, it is most important that it should be made with the co-operation and goodwill of the existing financial institutions. The most important thing at the moment is to create a feeling of confidence regarding the future solvency and credit of the country, and any serious difference of opinion, or of outlook, between the Government and the banking system would not be conducive to that result.
This confidence will not be engendered by mere financial gadgets. It must rest on a sound financial policy. This brings me back to the point at which I began what I am afraid was a rather long speech, namely, that the public finances of this country have now reached a stage where they require the most thorough investigation. The financial superstructure has become too heavy for the productive base. Public expenditure should, if possible, be pruned, with due regard for existing commitments and legitimate expectations. New public expenditure should be avoided at all costs.
If these observations sound pessimistic and alarming, I do not make any apology on that account. I have said  nothing that was not said 15 years ago in the Report of the Banking Commission. That report was criticised very adversely in many quarters and yet I think many people will agree to-day that some of its warnings have proved to be only too true. Its insistence for financial prudence was derided as the utterance of timid, old-fashioned, foolish pessimists. But even the utterances of quite foolish people sometimes have good results. It must not be forgotten that the Roman Capitol was saved by the cackling of that most foolish of all birds—the goose.
Mr. Summerfield: I think that one of the most extraordinary features of modern life is the complacency with which the citizen takes these annual demands for money. I am going to suggest that the Minister, in coming here to-day and presenting a bill, which, on the face of it, is for a staggering sum, is merely in the position of a shopkeeper from whom we have all ordered goods, and now we have to face up to the unpleasant task of paying for them. Is it not an amazing thing that, even now, faced with a bill of the size shown in this Central Fund demand, we are envisaging new legislation which is going to add still further to those demands? I think that, over a period of years, we could be accused of having a gradual weakening of our moral fibres. We ought to be ashamed to look to the State to do things that years ago we were proud to do ourselves and at less cost. What is the use in accusing the Government or anyone of the size of the bill when it is made up of the accumulated results of the demands made over a period of years?
We ought to face up to the matter as realists and ask ourselves whether we should not, as a matter of extreme urgency, make a scientific investigation of the entire cost, not merely of the Civil Service, but of all Departments in which public moneys are spent. We heard, in the course of the past few days, reasons for the indignation of the Civil Service whose request for additional salaries has not yet been acceded to. I am in full sympathy with the civil servants, as I am with any  other persons operating in the State, requesting a fair return for their services, but I am going to make what might be considered a rather sensational request. It is that we should put all Government servants, whether civil servants or people employed in any Department, on working conditions comparable with those that characterise industry. If the civil servants had a longer working week than they have, if they had fewer holidays, the State could save, and we could then pay to the essential civil servants a salary more commensurate with their cost of living.
Senator O'Brien, as we have come to expect of him, gave us a very careful commentary on our general economic position. He joined with others in urging that there should be a halt called at least to incurring fresh expenditure. To-day, industry is in the doldrums, and I wonder why. The figures of our trading indicate that our exports are at a height seldom, if ever, reached before. That means money is coming into the country, but what is happening to it? It certainly is not in circulation to the degree it should be, in proportion to its volume. For some reason or another much money in this country is immobilised and is doing nobody any good. Money to-day in many cases is not even put on deposit where the banks could use it in some way or another for the common good. I know, and I have heard of many cases where money is put in the banks in sealed envelopes. That does nobody any good. That may be the 20th century version of the old stocking, but the effect is the same.
The national economy is weakened by every £ or stiver that is put in an envelope and put out of circulation. Mention, among other things, was made by Senator O'Brien of the necessity for the amendment of the Control of Manufactures Act. I have to regard that with somewhat cynical amusement. The Control of Manufactures Act has been blown sky-high over a period of time in the light of experience by our legal friends in this State who know all the loopholes through which anyone seriously wishing to come into this State to create an  industry can get in. The Control of Manufactures Act is no deterrent to the man or firm genuinely anxious to come into the State and bring his industry with him. There are deterrents not merely to the people outside but to those inside and the biggest deterrent is, of course, that we have got to pay 6 per cent. for the use of money. Within the past weeks we have seen the accounts of companies operating on very heavy capital and after a year of trading all the board of directors could do was to ensure to the shareholders a return of 6 per cent. in respect of the industry, 6 per cent. return on a speculative industry at a time when that same industry has to pay the bank 6 per cent. for the use of money. That does not offer any great inducement to speculate in the country.
We are to-day confronted with a bill —in this connection I will use another phrase and chance the consequences— the size of which is largely due, amongst other things, to our own stupidity because if we put somebody else out to do a job which is within our own competence, we shall have to pay for the services of that person. In this case, that person is the State. Every new thing we demand from the State means a new State Department with all its attendant personnel. We have got so many of these activities in our economic life that the deadweight cost of maintaining them is something we want to get rid of. I want to see a halt called to the creation of new Departments. We can at least do that. As I said before, there should be an overhaul of the whole system of State expenditure, no matter how it is done, to ensure that those engaged as servants should be adequately paid but if they are, they should at least work reasonable hours and with reasonable holidays and on conditions comparable with those obtaining in industry to which the State has to look for so much of its revenue. I commiserate with the Minister in having to come before us to seek approval for this Central Fund Bill, the staggering demands of which could have been lessened had we the sense to shoulder our own obligations.
Professor Fearon: I feel that the level of taxation has reached such an  intensity now that apart from being what it was at one time, an incident in our life, it has become a determining and controlling factor. From the moment we wake up, we are continually being reminded that we are faced with an economic upheaval which is getting steeper and steeper as we proceed to climb. For that reason I should like to develop two of the points made by previous speakers.
The position would not be so bad if we could feel that instead of being in a pit we were in a tunnel and that we were going to see some light when we emerged at the other end. If we had any form of assurance from the economists that the hardship is not entirely unavailing, it would enable us to endure it, not with any pleasure perhaps, but with composure. For we are a country with a great tradition of suffering and endurance and we can endure, if we feel that either we, or those who come after us, are coming to a better time.
With regard to the position of the capital account, I feel, in the absence of the Budget, that it is easy to get an air of unreality about the debate, since it is a question of expenditure without the equivalent taxation. One or two things, however, might possibly be developed by the Minister in his reply. Could we have a slightly clearer approximation of the difference between capital and current expenditure? In general, the trend of current expenditure is that it is partly of a non-reversible type. When speaking some time ago in connection with social services, I said that the trouble is that it is a one-way street, that when something of that nature is done, it cannot be undone and must be permanently maintained and preserved.
The second and even more serious consequence very often is that it inevitably begets increasing subsequent maintenance expenditure. I feel it is a terrible thing that our Hospitals' Trust Fund is exhausted three weeks or a month after each Sweep and that that very powerful and effective enterprise requires State support for the  reason that the hospital scheme has overreached itself in its building programme.
The fact that we are letting ourselves in for increased current expenditure and not just capital output is particularly alarming. I think propaganda is the best medicine—it is at any rate the best preventative—and an immense amount of good work could be done in that way. However, that will be discussed later during the debate on another Bill.
Regarding the question of civil servants, I wonder if it could not be better adjusted in some way, because it has been my experience that the staffs of some Departments, with which I and other Senators have had some dealings, are very much overworked and obviously do their best with considerable difficulties. Yet other Departments seem to have quite an easy time and they are obviously not worked so hard. Could there possibly be a more uniform intensity of work?
What is our proper ration of civil servants? We know our size as a Republic and we should be able to determine how many are required per hundred of the citizens. We know that one doctor is needed for 800 people. What is the proportion for civil servants? Is there a ceiling to the size of the service or will we all end up as civil servants in a paternal State?
Many years ago I urged the initiation of a savings campaign and after a suitable interim of delay, a half-hearted campaign was instituted. It approached it in a wrong spirit, however, and treated it rather as a joke. Jokes and comic cartoons are not likely to encourage savings any more than ringing up your bank manager in a cinema or club is likely to get you a loan. Indeed, savings have become something simply for the old folk to talk about. It is a lamentable fact that many of our younger friends and acquaintances seem to regard savings as something grotesque. If you ask them about it, they will reply: “I never save, I even have to borrow to live up to my income”. That is the type of retort you are likely to get.
Another question is that even if I am  willing to save how am I going to go about it? If I am in business, the only time I can get out is in the luncheon interval and if I go around at that time I will probably find it shut. The only way to increase savings is by something much more than the present drive and by ceasing to treat it as a half-hearted joke. Until we get back to some satisfactory method of savings —not just by the wealthy person but by the humble or by those who, like Mr. Micawber, will at least be sixpence right at the end of the year—we shall not be encouraging thrift which is a plant that does not grow freely on our own soil.
Those are the two points I particularly wanted to make. Can we emphasise more strongly the difference between capital expenditure and current expenditure and realise that we are committing ourselves to a certain course of action which will have to be recognised by successive Governments? The second point is Government expenditure and organisation and the third is the question of a proper drive for thrift and savings.
Mr. McGee: I listened with very great interest to most of the speakers this afternoon and I do not propose to enter into something that, perhaps, I am not conversant with in everyday life. Recently, public bodies in the country have found the same difficulty of increased expenditure on their institutions and particularly on their roads. We have, I think, a duty to register a complaint that while there is a very great rural prosperity apparent everywhere, the expenses each year seem to be overtaking the people's savings.
It is a magnificent sight to see the number of motor-cars around the churches throughout the country, and I think it means a possibility of a very happy future for rural residents. I would venture to suggest to the Minister, however, to try and balance the Road Fund so that it may serve the most distant parts of the rural community. Just now, in the three or four counties through which I pass regularly, one must be struck with the very great improvements, all stressing  the desire for greater speed. Outside Dundalk, which the Minister knows so well, a very narrow part of the road has been widened at a cost of hundreds of thousands of pounds. In the locality of Drogheda—which I think did not call for so much—the same thing has happened: thousands of pounds have been spent. Similar work is going on around Balbriggan, and this morning I saw 40 men at work between Navan and Swords. Everywhere they are widening the roads and making them faster.
That is an excellent thing to do, but I beseech the Minister not to forget that there are road taxes being paid by people to whom a steam-roller never went nearer than four or five miles. Those are the people who are sticking to the remote homes and who are contributing much to stop the flight from the land.
I am sure all of us notice at times, when we pass along the main roads, and come to a crossroads and look up, the dozens of potholes which are on these minor roads. There is a great necessity for motor cars in these areas far more than in cities and in towns, but none of the people living in the remote rural areas can afford motor cars. I think a great deal of this neglect of the minor roads is due to the fact that county managers and county engineers require to have such excellent training that they come into the cities to the universities and they are inclined to take back to the rural areas that university outlook and a desire to get as close as possible to the biggest towns in the rural parts. If you ask the engineer or the county manager why so much was being spent on the main roads and so little on the other roads, they will tell you quite rightly that most of the tax comes from the motorists in the towns. That is quite true because there is so much poverty that all the citizens in the rural community cannot afford the luxury of motor cars. It would be very desirable if some system could be devised that would reduce taxation in this Department of State or if it could be arranged that a great percentage of the Road Taxation Fund could find its  way back into the purely rural roads.
I listened with interest to Senator Professor O'Brien telling us that the State and banking institutions should pull together for the credit of the country. The greatest asset the country has is its land and that asset is not receiving and has never received from the Irish Government the consideration that it should obviously have received. To begin with, the possession of land is an old institution and it had its basis in the British days here. Of course, the State does protect as far as it can the owner of the land. The Land Act of 1903 provided that if land was acquired the owner should be able to get the same income from the compensation paid to him as he would if he had retained ownership of the land.
I see no reason why any landholder should object if his holding, whether it be 500 acres or ten acres, is acquired by the State so long as he gets the same income out of the moneys given to him as he would have got had he been left in ownership of the land. We have, however, legislation passed over the last 20 or 30 years providing that the land shall make what it is worth. In other words, the price to be given for land acquired compulsorily or by negotiation, was at the rate of what it is worth in the future.
I hold that the State should be satisfied with the provisions under the Act of 1903 where a fair price should be paid to the owner of the land so that he should be able to get the same income from it as if he had been working it and had not been prevented through illness or otherwise from doing so. If you want to make the most of the land, you will regard its credit as No. 1. Money invested in Irish land by Irish citizens should be regarded in a higher light than money deposited and left lying in the banks. You would not require to have grazing schemes and other land schemes operated by the State if sufficient credit were placed in the hands of the owners of the land. It is lack of that credit which is preventing them from developing and making the most of their lands.
In this House in the last 20 years,  Senator Counihan introduced an Act to provide that the market value should be paid by the Land Commission for any land which they acquired. We find that the market value is not being paid to-day. When you go to Merrion Street as I have often to do, you find it is a very poor show. It is certainly not very encouraging to go there and it is very poor as compared to the proper development which should be found in any other business. There are a lot of delays of one type or another and there seems to be quite a stopper on all branches of the work. There is no reason for that stopper in land development if sufficient guarantee is given by the State as to the credit of the land.
The tribunal in fixing the value of lands does not seem to have any regard whatever for the value of the land bonds which are there as being equivalent in value. Certainly that is most unfair to the owner. Even when the bonds are allocated they extend in value when passed through stockbrokers and others. These lettings are continued for a number of years but the lettings are held by the Land Commission and they never find their way back, as they ought to, immediately to the owner of the land.
This practice is contrary to the spirit and letter of the Land Acts and very often the tenants having such lettings are small farmers and landless men who believe that by taking the land they stand in a favourable position for future allocation. That promotes a certain unhappiness and puts people like myself in a very awkward position. I know of a holding in Joristown which the owner purchased in a public auction for £14,000 in 1949. This was acquired by the Land Commission in 1952 and the price given by the Land Court here, despite all protests, was £14,000 in bonds three years afterwards, although the value of land had gone up in the three intervening years, and the value of land bonds had gone down. The result was that a holding which had cost £14,000 in 1949 yielded to the owner something like £10,000 or £10,250.
The financing of land is an important subject which the Department of  Finance ought to consider as a basic problem in the State. It helps everybody and while private ownership will always exist here it may well be that State ownership may find a certain amount of sympathy from those of us who at times think that it is necessary. Perhaps neglect of this problem is due to the fact that there are no efficient farmers' organisations or perhaps nobody gives a thought to those people whose holdings are down and out, but good use could be made of these holdings and greater encouragement would be given to the ideas of progressive farmers, if the matter is held on an even keel.
Mr. S.T. Ruane: I propose to confine my remarks to a subject raised by Senator McGee in the opening part of his speech on this Bill. There is no use stressing the question of over-taxation in this country: the Taoiseach has himself stated that the country is staggering from taxation. I would like to say, as many members of this House know, that the ratepayers in the several counties of this State are staggering and tottering under the burden of local rates and that is mainly due to certain innovations in local administration introduced over a period of years. First of all, you have the extension of the local government vote to non-ratepayers where those people—and they are in the majority here—who are never worried about the payment of rates have just as much power in the selection of local bodies as the people who have to foot the bill. Subsequently, you had the abolition of what is known as the district charge and the introduction of the managerial system.
All these innovations were designed, we were told, for the purpose of bringing about higher efficiency and greater economy. The efficiency, I hold, is being maintained but it is in no way higher than when the administration of the different bodies was under the direct control of the councillors elected. As far as the economy is concerned, it is a word which has now no meaning as far as local administration is concerned.
Senator McGee referred in the opening part of his remarks to the question  of road administration, and while I may not approach that matter from the same viewpoint as the Senator, I am very interested in trying to impress on the Department of Local Government the necessity for a change which, if brought about, would contribute greatly towards the reduction of the demands made on local bodies periodically. Every year towards the close of the financial year substantial grants in aid of road making are indicated for the different counties of the State. We are all glad to see these grants given to the respective counties, but there are strings attached and the extra work which these are intended to bring in making, tarring and spraying the roads, constitutes a charge on the local rates, which are subsequently levied for maintenance. This year in County Mayo the extra charge for main road and county road maintenance was almost £60,000.
I hold in common with several local representatives that as these grants are paid out of the fund built up by motor taxation and as the work carried out as a result of these grants is mainly in the interests of motorists, the maintenance costs should be continued year after year out of the same road fund. I contend that any people who happen to travel through the country from time to time and who see the difficulties that the farming community undergo in trying to bring their horses and produce over steam-rolled roads, have no reason to be enthusiastic about the grants made each year for road improvement.
There is another matter connected with local administration, namely the abolition of the district charge. The entire county in every case has now to accept responsibility for any sanitary improvements, improved water works, and sewerage carried on in different parts of the county. There is competition in several counties in these matters and the result is that you have schemes, as Senator Hayes pointed out, on another occasion, as streamlined schemes put forward by architects which are no doubt splendidly drafted but are too expensive for the people who have to pay for them. Very recently, in one village with 170 inhabitants, an architect put up a scheme for waterworks which, if carried out,  would cost over £10,000,000 and in that scheme he had a written provision for 34 fire hydrants.
Now, I have no objection in the world and no member of a public body would have an objection to different districts getting the benefits of these schemes, if they could afford them. We see no reason to object to their making applications to be considered the same as other areas because we are all contributing towards it. The time has come when a halt must be called and when something should be done to bring expenditure in these matters within the means of the people who have to pay for them.
Architects are paid on the basis of the estimated cost of the scheme and there is the temptation to have expensive schemes formulated as a result. People will answer that we do not pay directly for these, that we work on loans, but the loans must be met, and commitments for loans to repay interest and sinking fund in the different counties at the present time are very big. The tendency is for them to increase further.
There is another matter in so far as local administration is concerned, in which the Local Government Department could introduce changes that would help to bring down the costs that ratepayers have to meet every year and that certainly would mark a turning-point in the increasing rates that have gone on for a very considerable time. If a local body at the present time feels the necessity for extending the accommodation in an institution, the Government always provides a grant, but the provision of that grant is contingent on the matter being submitted to an architect.
Some time ago in County Mayo we found it necessary to ask for a grant to provide accommodation for 34 nurses who had to sleep in outside apartments. We were told a scheme would have to be submitted, with plan and specification by a competent architect, and that only when that was done could a grant be indicated. The services of an architect not resident in the county were requisitioned, and his scheme contained an estimate for the  building or the extension of the building that was designed to provide sleeping accommodation for 34 nurses which would cost £34,000. Needless to say, that improvement has not been gone on with.
I hold that in every county you have an engineering staff who are quite competent to carry on work of that particular kind. Why are they not competent to come to the assistance of the body that employs them for consultation when they think that an extension or improvement is necessary? They are capable of designing water and sewerage schemes that come within the means of the people who must pay for them. By having to go outside and accepting the rule that the local engineering staff have not the technical qualifications to look after such schemes, the costs of them on the rates in every county have soared and will go on soaring until the system is changed.
In so far as the employment of architects and consultants is concerned, we have some rather unpleasant experiences in many counties. An institution was built some years ago—a hospital —and I am informed that the architect's fees for the institution totalled over £4,000; and when everything was ready to have it formally opened it was found out that there were no bells in the different wards, not withstanding the periodical supervision of the architect and the employment of a clerk of works responsible to him. Also within a period of half a dozen years the entire hospital had to be rewired because the original wiring was laid too near the central heating system. Now these are matters that should be attended to and unless the Local Government Department comes to the assistance of the local authorities in giving effect to these necessary changes I see no possibility of rates being reduced.
This year, in County Mayo, the members of the council had to meet on three occasions, and from the amount of correspondence covering the estimates put before them from the manager and the county survey staff the council members would need the training of an accountant to get down  to all those statements and to discuss them sensibly. Something must be done in the matter of local administration to bring about the change in the supervision that can be brought about without in any way interfering with the efficiency of the service, and until that is done, as I stated earlier, I see no possibility of a change coming in the rates. There is every possibility of the rates reaching a point where the people will not be able to pay them.
There is one other matter I would like to refer to before I sit down. It has to do with a reply given earlier in the debate by Senator Hawkins to remarks made by Senator Hayes. Senator Hawkins referred to the fact that those Independents who were responsible for bringing about the downfall of the inter-Party Government were re-elected. That is quite so. They were re-elected at the subsequent general election; but I believe that the subsequent support they gave to the Government was directly influenced as a result of the publication of 17 points by the Fianna Fáil Party as to what their programme would be if returned as a Government. Among those points were the maintenance of the food subsidies and a promise that the penal taxes would not be reimposed on liquor and tobacco. We all know, of course, that those promises were not implemented. I hold that if that assurance was not given those Independents certainly would not have supported the change. That is all I have to say on the matter.
Professor Stanford: I should like to comment, first, on the Estimates for Science and Art on page 218. They are Estimates under the Office of the Minister for Education. First I have a general criticism to make. It is about the condition of our National Museum. It is a grave criticism. It has been phrased to me by a person well able to judge in the following terms—that of all our national institutions, the one, and perhaps the only one, which shows definite deterioration since the Treaty is our National Museum.
With the exception of the section devoted to Irish archaeology, which has been developed very efficiently in  the last 20 years or so, the other sections have deteriorated deplorably, especially those dedicated to general art and to the sciences. This seems to me particularly regrettable because a small country like ours can excel in its museums. There are other forms of national development which we simply cannot afford. But a country even as small as Denmark can produce superb museums. I would like to emphasise this deterioration. I have the assurance of my own eyes when I go to visit the natural history section of the museum in Merrion Square, and I have consulted various experts. The fact is that in Merrion Square, in the natural history section of the museum, there is a most valuable and interesting collection of mammals, birds, fishes, insects and so on from Ireland and abroad.
That collection should serve two main purposes. First, it should interest and instruct school children and the general public. Here the most important matters are the condition of the specimens and the method of display. Both of these are deplorably bad, judged by modern standards. The condition of the specimens is going from bad to worse, and the display is antiquated and generally unsatisfactory. The second function it should serve is this: it should be an invaluable source of help to research students. I am assured on the highest authority that this function is steadily deteriorating, too, and that research students in natural science are not getting the help they need from that department.
Good museums, as I have said, are within the scope of small and not very wealthy countries. Why is ours not a good museum, judged by the standards of Denmark, Holland or other countries of that size? It is not simply a matter of education, though, needless to say, I value that highly; it is a matter of national prestige. One of the first places visitors to this country go to is the museum. They judge the scientific and artistic merit of the country by what they see in the museums. Inferior museums are thoroughly bad for the country's good name abroad and, to revert to what I said before, inferior museums are bad for the education and  for the good taste of our own citizens.
Who is to blame for this? I do not believe that any competent judge can challenge the facts as I present them. First, I notice that the office of administrator is vacant. If one turns to page 220 of the Book of Estimates, one finds that there is no administrator there. Again, if one compares the staff of the museums with the staff of the National Library, one finds that they have just half, 21 in the museums and 40 in the National Library. I should like to say, incidentally, that the National Library, in contrast, is an example of a magnificently run national institution. It is imaginative, up-to-date, progressive and efficient, and in fact is an excellent example of what we could do if the museums were properly run.
What is the cause of the museum's deterioration in standards? First, I suggest the absence of an administrator and secondly, the numerical inadequacy of the staff. I cannot see why 21 people should be expected to run the two big buildings devoted to the museum while 40 people are provided to run the National Library. I fear, too, that the museum has been neglected by the Department to a certain extent. I have been told that the visitors recently threatened to resign en bloc and were only prevented from doing so by the suggestion that the Arts Council would do something for the museums. So far as I know, the Arts Council has not yet done anything for the museum. I hope they will, but I chiefly hope that the Minister for Education will consider setting this matter right in our country, because I think it is doing harm both to our prestige and to our education.
I turn now to the Arts Council which I have just mentioned. I find that they have not yet issued a report. They probably have not had time. They have justified themselves to a certain degree by the exhibition of contemporary Irish paintings in the United States recently. I should like to make a suggestion here. Many of us will have seen in the English newspapers, reports of the magnificent Mexican art exhibition in London recently. This exhibition has done an enormous  amount to bring the culture and art of Mexico home to the minds of the ordinary man in the street in London and England. I think our Arts Council should organise a similar exhibition on the same scale—not simply an exhibition of contemporary art, but an exhibition of art going back to the earliest times, a genuinely representative exhibition. It would do a great deal for the country's good name. We could bring some of our treasures out of the cupboards of the National Museum and display them, not merely to London but to the capital cities of Europe.
This Mexican art exhibition has, I understand, been a tremendous success, financially as well as culturally, and I hope that our Arts Council will be able to venture on something similar. We have superb national treasures of art and we have not displayed them. Most people know something of the Book of Kells, the Ardagh Chalice and the Tara Brooch but, beyond these, what do they know? Very little, I think. It should be the first duty of the Arts Council to organise something approaching that Mexican art exhibition.
There is one specific point in connection with the organisation of the National Museum and with the development of art in general in Ireland which I should now like to mention. We saw in the papers yesterday that the Pieta statue was being moved from the museum in Kildare Street to a new site in Marlborough Street. Professor Bodkin in his report on the arts in Ireland dated 30th September, 1949, commented on the siting of that statue in the National Museum in the following terms:—
It is now being moved to Marlborough Street and I have been told—I have formed no personal judgement in the matter—that it also is an extremely inappropriate site. I will leave it for others to judge whether that is a justifiable criticism or not, but it certainly is a questionable site. I mention that simply as a proof of the lack of firm direction in the museum. First, that  statue is put in a bad site there, and now it is being moved to another site which is certainly open to question.
I turn now to a completely different matter, the Irish News Agency, for which the Estimate is on page 351. I should like to say that the Irish News Agency, in my opinion, has been doing excellent work. Its news-sheet is admirably written and most elegantly illustrated. As a professor, I would give it full marks as a news-sheet, but —and here is what I do not like— when the previous Minister for External Affairs, Deputy MacBride, presented the Irish News Agency Bill to the Seanad on 30th November, 1949, as reported in the Official Debates, column 182, he said:—
That was very clear. Some of us in the Seanad were still perturbed and pressed the Minister on the point and he gave us a satisfactory description of the kind of news he meant—largely cultural, scientific and so on, but definitely not hot news. It was on that understanding that I personally supported the Bill. But now we find that the news agency definitely is handling hot news and sometimes red-hot news, as, for example, the picture of the Derry celebrations on St. Patrick's Day of last year—so hot that, frankly, I think they might have let it drop altogether. I do not think it redounded to the credit of the country, North or South, in the end that one section of our people should circulate such a picture of another section of our people. In my opinion, it did not redound to the good name of the country, but that is by the way. The point is, it was hot news.
“The allegation has been repeated that the supplying by the agency to its clients of a full and competitive news service constitutes a breach of  faith by the board with the Dáil. This is not the appropriate place for a full discussion on these charges...”
I think it is a legitimate charge. I think it is a true charge. I think it is a breach of faith with what the Minister said. I think it is unjust to other working journalists in Dublin that they should have to compete with State supported journalists.
I notice from the Estimates, page 351, that a policy of retrenchment is intended here. It has had the result, as we see from the newspapers, that some of the members of the staff have resigned. I would like that retrenchment to include an implementation of the previous Minister's pledge that the agency should not handle hot news.
I spoke to a member of the staff of the agency about this. He argued with me that to speak of a news agency which did not handle fresh news was more or less a contradiction in terms. I can see that point of view. It is almost an irresistible temptation. But the fact remains that the Minister gave a pledge in this House, and some of us voted on that pledge, that they would not handle hot news, but they have done so. I hope something will be done about that.
There is one other point to which I want to refer. I rejoice to see an increase in the Estimates in respect of the Department of External Affairs, in connection with the embassies abroad. In the last couple of years I have had the privilege of meeting some members of the diplomatic corps abroad and some of the headquarters staff at home. I can only say that I was immensely impressed. They seem to me to have all the necessary diplomatic qualities, ranging from sheer patience to outstanding intellectual and social talents. That is rather remarkable, I think, because an External Affairs Ministry is probably the hardest to build up in a recently independent State and 30 years is not a great deal of time to do it in. I would like to record my own impression that we have a magnificent diplomatic service and that it deserves generous spending. I am astonished to find that we can run an embassy in Madrid for £6,000. I would urge  the Minister that on this Department a policy of generous spending would be justifiable and would bring good report to our country.
Mr. McHugh: In the only speech which we heard from the Government Front Bench, Senator Hawkins, in his usual inimitable way, gave us a long rambling account of the many disasters which happened to this country prior and up to the re-election of the Fianna Fáil Government some two years ago. He rambled from the civil war to the economic war. From that he went on to the attempt of his own Party to deny the right of free speech to the Fine Gael Party. He then proceeded to deal with perhaps the greatest disaster of all—the arrival of the five Independents on the political scene. I do not intend to go over all that. If that is the only justification for the Minister's and the Government's policy it is, perhaps, just as well that the Fianna Fáil Party are significantly silent this afternoon.
Mr. McHugh: Since the advent of this Government it is common knowledge that every section of the community suffered increased hardships. They can only look forward to further increased hardships, in view of the Minister's coming Budget. These hardships are largely unnecessary and are entirely the result of Fianna Fáil policy. There has been an increase in unemployment, a rise in emigration, a rise in the cost of living and an increased rate of interest charges. All this has been the result of Government policy. Some of these, such as the increase in interest charges, were, indeed, deliberate acts of the Government.
The Government's aim appears to have been to decrease consumption by raising taxation and increasing prices.  They have succeeded completely in this aim but, in succeeding, they have caused a recession in trade, an increase in unemployment and an alarming increase in the numbers emigrating. During a debate in one of the Houses of the Oireachtas the figures in regard to emigration were questioned. I do not intend to produce any proofs here of it beyond a quotation from the Clare Champion, dated 6th September, 1952. A delegate at the Fianna Fáil convention in Ennis stated that people were emigrating by boatloads because they could not find employment at home. I am sure that this delegate, like all Fianna Fáil delegates, was a well-informed individual.
This week a savings campaign was initiated by the Government. I doubt very much—anybody who attempts to understand Government policy must also doubt—whether this campaign will succeed, since the Government's policy seems to be designed specifically to prevent people saving at all costs. Since Fianna Fáil's advent to power they have succeeded in reducing the people's income by increasing taxation, thereby decreasing their spending power. If the people's spending power is decreased it must stand to reason that the earnings of workers which depend on the amount of money spent by the general population will be reduced. If the earnings of the average worker are reduced I certainly fail to see how he can save. If high taxation, which bears on shopkeepers, workers, producers, farmers and all sections of the community, is any help to increase savings, it seems to me to be a completely new theory.
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