Introducing the first Free State budget

Cosgrave says ‘Irregulars’ campaign against the economy has failed

Dublin, 14 April 1923 - The general state of the country’s finances are such that the Government is considering introducing an internal subscription scheme to help reduce the burden of the new state’s debt. 

Introducing the first budget of the Irish Free State yesterday,  President W.T. Cosgrave ruled out the prospects for any tax cuts and indicated that borrowing would be necessary. However, the President of the Executive Council insisted that the ‘attacks on trade and industry’ by Irregular forces intent on exerting economic pressure on the Free State had failed. ‘We are’  he said, ‘now emerging from a period of trial, and we are entering on more stable conditions, in which it can safely be predicted that there will be no appreciable increase of our existing commitments. ’

During 1922, the Irish Exchequer took in a total revenue of £27,863,000, but in order to maintain basic public services the state’s expenditure amounted to £30,197,000 - the deficit of  £2,334,000 was to be found by borrowing. The total amount borrowed up to the close of business on 31st March last was greater than this figure by £197,112 which is the amount of the Exchequer balance carried forward into the new year. The position, therefore, is that the year 1922-23 ended with a debt of £2,531,000, and with an Exchequer balance of £197,112 in hand.

However, a full picture of the country’s finances is not yet possible owing to adjustments between the British and Free State governments that have still to take place. The worrying news for the Irish government is that a resolution of these issues is likely to leave its finances in an even more difficult position.  Although still subject to investigation, the British claim indicates that a payment of £1,750,000 from the Free State exchequer to that of Great Britain is still outstanding.

Addressing the Dail yesterday, President Cosgrave said that this amount, subject to verification, must be regarded as a liability of the current financial year, and has been so treated in the Estimate of Receipts and Expenditure circulated before the adjournment.’

The revenues brought in by the state fell approximately £2m shy of projections, but President Cosgrave explained that this was largely the result of:

‘computation adopted in the old White Papers of the British Treasury. Improved machinery set up during the last financial year has, during the interval, provided new information and, as matters stand, this information goes to show that the White Paper arrangement tended to overstate the revenue of Saorstát Eireann.’

[Editor's note: This is an article from Century Ireland, a fortnightly online newspaper, written from the perspective of a journalist 100 years ago, based on news reports of the time.]