BACK PAGES:Within months of the end of the costly Civil War in the summer of 1923 the Free State government found itself trying to balance its budget. The new minister for finance, Ernest Blythe, proposed cutting the old-age pension by a shilling (6c) and teachers' pay by 10 per cent: he defended his plan in this speech to the Dáil, writes JOE JOYCE
THE MINISTER for Finance said that it was not necessary to assure the House that the Government did not intend to act in a manner that would be detrimental to education, or would inflict suffering on the aged poor. They simply had to face the fact of the situation they were up against. The country had been thrown under a great burden of debt during the last year. Money had to be borrowed to meet the liabilities of the country, and they had to borrow it on the best terms, because between good and bad borrowing there was all the difference between safety and ruination. If they could not establish the credit of the country nothing could go ahead in it. They could not think of undertaking work of reconstruction without establishing their credit, and if they borrowed at an extravagant or ruinous rate of interest they could not carry on. The operation of the Land Act would necessitate improvements and it would be crushing on the occupiers if money could not be borrowed at a reasonable rate of interest. The country would have no credit if the Government did not make the best attempt they could to balance their budget, and show that from year to year they could pay their way.
To his mind there was no way of thinking of higher taxation, and he thought that increased taxation must be ruled out. The Government might be compelled by circumstances to decrease taxation, and make cuts that they did not anticipate at the moment, for he believed that if the British government lowered their income tax another sixpence, the Free State Government could not possibly allow their income tax to remain at its present rate. If they reduced taxation it would be one of the best possible ways of facilitating industrial development . . .
A great deal of the talk they had heard about education and the old age pension was unreal talk, and he knew that a great many people who asked why these departments had been singled out, did not believe they were singled out. These were the two services where they could make a straight cut, as it were, and he defended these two cuts on their merits. Other cuts would be made very, very soon. He had already made up his mind, subject to further consultation with the departments concerned, as to other very substantial cuts, and he had put forward suggestions as to other very substantial cuts already.
Dealing with the salaries of teachers, he said he thought that no reasonable person would believe that there was any injustice in this 10 per cent cut. They should really have regard to the value of the money paid, and not to the number of notes. He did not take the outcry against it too seriously. It was only natural, and he did not expect teachers to refuse to do their duty on account of this cut...
On the question of economies in the headquarters of the Government, they would have to see that they would not neutralise them by swelling the pension list. They had also to have regard to the fact that very substantial cuts had come off the civil servants during the past 18 months. A man who in March, 1921, had an inclusive salary of £200 now had a salary of £140. The man with £300 had now £214. The man with £400 had £294, and the man with £500 had now £374.
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