asked the Minister for Finance if he will state (a) the basis and reasons for the statement in his Budget speech of the 2nd April, 1952, that the estimated deficit on the balance of payments for the year 1952 would be £50,000,000, and (b) whether his attention has been drawn to the statements of the Minister for Industry and Commerce (i) made on the 16th July, as reported in Dáil Debates, Volume 133, No. 8, column 1027, that there was a fair prospect that there would be no deficit in the balance of payments this year; (ii) at Ennis, as reported in the daily Press on the 16th September, 1952, that on a conservative estimate the deficit on the balance of payments this year would be £25,000,000; and (iii) as reported in the daily Press on 6th October, that in the light of late statistics the deficit for the year 1952 in the balance of payments would be between £10,000,000 and £12,000,000; and, if so, whether his Department arrived at estimates which agree with those figures and, further, whether these varying estimates of our external payments position have in any way affected Government policy.
Ceisteanna—Questions. Oral Answers. - Budget Deficit.
The Deputy at (a) of his question appears to misinterpret the passage in my Budget speech quoted in column 1124, Volume 130 of the Dáil Debates of 2nd April, 1952. If the Deputy reads this passage he will find that I made no prediction that the deficit in the balance of payments for the year 1952 would be £50,000,000. What I did say was that the balance of payments deficit which we faced at the beginning of 1952, that is to say three months earlier, was about £50,000,000. I used the past tense deliberately, as this figure was a reflection of trends carried over from 1951 which I hoped would be radically corrected during the remainder of 1952. The general scheme of the Budget was, indeed, intended to reinforce other measures which had already been taken to achieve this objective. I went on to say that the way to secure a reduction in the deficit was for the Government to bring its receipts and expenditure into closer accord and for the community to save more and to spend less.
The Government took steps to achieve a better balance between receipts and outgoings and the public, for their part, responded by saving more and, in particular, by spending less on imports of consumer goods. Moreover, the volume of exports has risen considerably. The result has been a great improvement in our balance of payments. If this improvement is maintained for the remainder of the year the overall deficit for 1952 will be reduced to manageable dimensions.
In association with the improvement in our overall balance of payments there has also been a substantial reduction in our deficits with the dollar area and the rest of the non-sterling world. In my Budget speech I set limits of $16,000,000 to our deficit with the dollar area and of £9,000,000 to our deficit with the rest of the non-sterling world for the second half of 1952. It seems likely that we shall come close to these objectives.
The improvement which has taken place in the balance of payments is consonant with Government policy and is to a degree a direct consequence of Government measures aimed at improving the internal financial position and reducing the deficit in external trade and payments. The situation, however, still calls for attention and restraint and it will continue to be Government policy to protect the economy, as far as possible, against a recurrence of the serious developments of 1951.
I decline, however, to make any precise forecast of the future position. The Deputy should by now be aware that external trade, visible and invisible, is subject to major fluctuations not always predictable. Prophetic insight in these matters is denied even to politicians.
The Minister has not answered portion of my question. I asked him if his estimates agreed with the various and different estimates given by the Minister for Industry and Commerce during the year; and, secondly, if these various and different estimates had any effect on Government policy.
I am perfectly certain that the Minister for Industry and Commerce is quite fit to reply for himself.
I asked the Minister if the Minister's figures agreed with the estimates given by the Minister for Industry and Commerce and then I asked the Minister if those various and different figures had any effect on Government policy.
The Deputy began with a major blunder. He misrepresented what I said in my Budget speech in 1952. I think he ought to study the reply which I have given to him and then, if he wishes, put down another question.
Might I ask the Minister if in the consequences of his fiscal policy to which he attributes the encouraging balance of trade, he includes the export of building timber by builders' suppliers from this city on the ground that the housing programme has so far diminished that there is no prospect of using it here?
That is an entirely separate question—and a nonsensical one.
A Deputy
And it is true.
With a view to avoiding further misrepresentation, would the Minister be somewhat more explicit as to what he means by improvement in the internal financial position?
That is quite clear. You fellows could not raise £20,000,000.
We did not give away the people's money as you did.
Does the Minister, therefore, suggest that the present financial position of this country is better than it was this time last year?
Undoubtedly.
The extravagant house-building has stopped.
The pensioned teachers will get their gratuities now.