Frank Aiken by Bryce Evans

Author:Bryce Evans [Evans, Bryce]
Language: eng
Format: epub
Tags: Nonfiction, History, Ireland, Modern, 20th Century, British
ISBN: 9780716532569
Publisher: Irish Academic Press
Published: 2014-04-14T04:00:00+00:00

Budgetary Policy

Aiken’s first budget as Minister for Finance in early May 1946 was generally considered to be a ‘good news’ budget. Press reaction was almost universally positive. The Irish Times praised the reduction in income tax to six shillings six pence in the pound, together with the reduction in duties on goods such as sugar, petrol and turf, and the abolition of the excess corporation tax.43 The paper, having praised Aiken for his ‘excellent budget’, wrote further: ‘Mr Aiken has distributed his favours with a discriminating hand, giving something to everybody’.44 Local press reaction was also favourable, with the Dundalk Examiner welcoming the budget for bringing a measure of relief to taxpayers.45 The Dundalk Democrat, typically supportive of the Fine Gael party, also welcomed the budget for its progressive character.46 The Dublin Evening Mail struck a different note, however, arguing that it was the worst budget in history for savers as the 2.5 per cent rate on bank deposits had been cut to 2 per cent for the first £300 and 1.5 per cent thereafter. This was a break in a tradition dating back to 1888. The paper claimed that Aiken had granted relief to industrialists and big business while hitting savers.47 Partially overshadowing the budget was concern about the fate of the republican hunger striker Seán McCaughey in Portlaoise Prison, which was also discussed in the Dáil.48

Army expenditure, which was the single biggest outlay in the previous four to five years, had been practically halved due to army demobilisation, at a saving of over £4m.49 The budget allowed for capital expenditure, together with tax reductions. The excess corporation profits tax and the excess surtax were both abolished.50 There was also a reduction in the price of turf and oils. Duties on wines and spirits were increased, by way of contrast, and the reduction in the interest rate on deposits provoked some disquiet, but can be seen as trying to encourage money to be spent in the local economy.51 The resumption in shipping trade with Lisbon, again a benefit of the end of hostilities, had benefited customs duties.52 With knowledge of Aiken’s views on natural resources, it is not surprising that there were concessions to encourage the extension of mining activity throughout the state, and the budget made provision for borrowing for capital projects at Bord na Móna (£400,000), rural electrification (£1m), tourism (£350,000) and for activities at Aer Lingus (£1.4m).53

Arguably the most innovative aspect of the budget was the proposal to set up a Transition Development Fund for the next two years, from which contributions would go to extra capital expenses of state organisations and local authorities, attributable to post-war transitional difficulties such as the shortage of equipment and the high price of material. The plan proposed to borrow £5m in 1946 for the fund, which would operate for two years. Priority projects would be in the Gaeltacht and large urban areas where desirable schemes might be postponed otherwise. It would be legalised in the Finance Bill, and could also be used for farm improvements and housing, increased productivity and better health services.

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