FROM THE ARCHIVES - March 29th, 1952:Early April was traditionally the start of the tax year and, therefore, the usual time of year for the annual budget.
Still feeling the effects of the second World War with rationing in force, Fianna Fáil’s finance minister in 1952, Seán Mac Entee, was promising a tough budget with cuts in food subsidies and, in the way of the time, efforts to reduce consumption in the belief that that would encourage savings and productive investment, as the Politicial Correspondent of The Irish Times reported in this preview. – JOE JOYCE
WITH A knife in his left hand and a scoop in the right – Mr Mac Entee is a right-handed man – and a manual on plain living between his teeth, the Minister for Finance is putting the finishing touches to his anniversary budget this week-end.
It is 20 years since Mr Mac Entee first put his hand to the framing of a budget – this will be his ninth – and, if his own statements and those of his leader and colleagues in the Cabinet are fully acceptable as those of responsible public men, his speech next Wednesday will take the form of a sermon on “how to live within your means”, with a number of suitable penitential exercisers thrown in.
In few years during the history of the State have budget prospects been so confused by external influences and political considerations so darkened by advance warnings of belt-tightening . . .
Pressure of circumstances on the outside compels Mr Mac Entee to use the knife in the national interest, and his first stroke will cut imports from hard-currency countries by nearly a quarter. How this will affect the level of over-spending, which reached £65,000,000 in the last 12 months, will depend largely on the character of the goods to be eliminated.
He is committed, in an overall way not only to reduce purchases in hard currency, but also to develop production and increase exports, and, by limiting consumption, produce savings to meet the capital demands of expanding industry.
Inevitably, the knife must slide through a thick slice of maize and wheat imports, not to speak of tobacco and oils . . .
Here, the dual-price system for rationed foodstuffs has foundered hopelessly on the rock of falling production. The butter situation has acquired something of a tragic nature with millions of pounds being paid for foreign supplies, while Irish farmers, who formerly produced it themselves, are being paid, in effect, to eat creamery butter.
Sooner or later, butter must go up to its economic price of 4s.
At that rate it will be a cheaper commodity in this country than in most other places. If there is to be a knife cut at this, it will reach the bone. The total cost of this subsidy in the next year would be £3,558,000.
Of the other foods supported out of the subsidy pool, which works out at about 2d a head for every person in the country, bread is in the next most unreal position. At 6½d per lb, it is cheaper than feeding stuffs, and, with the ration at 6 lb, the amount of waste has been considerable.
It costs about £9,000,000 a year to cover the margin between the subsidised and the economic price, and, if Mr Mac Entee decides to make a dent in this, it may run to between £2,000,000 and £3,000,000, and put up the price of the loaf by 2d.
To keep the price of tea at 2s 8d per lb for the 2 oz ration costs more than £2,000,000 a year . . .
The bottle of stout is cheaper at present than it was in 1920, and its 7½d carries only 1¾d in duty, compared with 1/7¼ in the 3/- for a glass of whiskey.
At 1s 9d the packet of 20 cigarettes carries 1s 1d duty, and where £3,000,000 or £4,000,000 is needed to get a balance, the Finance Minister will not hesitate to plant another 3d. on it.
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