Bille é seo chun éifeacht do thabhairt, in aghaidh na bliana airgeadais ar fad, do na Rúin lenar ghlac an Dáil tar éis na Cainfhaisnéise, mar ní bhíonn éifeacht reachtúil ach ar feadh tréimhse teoranta ag na Rúin sin. Toisc nár gearradh aon chánacha nua leis an gCáinfhaisnéis i mbliana, ní dhéanann an Bille ach na cánacha atá ann cheana do bhuanú arís. Maolaíonn sé ualach cánach áirithe i slite fé leith, ámh agus bhéarfaidh mé tuairisc orthu san ar ball.
Ghlac an Dáil leis an mBille seachtain ó shoin agus molaim é anois don tSeanad. Bille gearr é agus níl foráil ar bith ann nach bhfuil a brí ar eolas ag Seanadóirí cheana trí léamh na horáide Cáinfhaisnéise ar a bhfuil sé bunaithe. Dá bhrí sin níl an oiread chéanna cúise conspóide ann, tá súil agam, agus a bhíodh tamall de blianta ó shoin.
The main purpose of this Bill is to give continuing effect to the Financial Resolutions passed by Dáil Eireann following the Budget as these Resolutions have statutory effect for a limited period only under the Provisional Collection of Taxes Act, 1927. In conformity with the Budget the Bill, which has been passed by the Dáil, contains no new taxes but provides for certain reliefs and exemptions which I shall explain in the course of its passage through the House.
When addressing the Seanad on the Second Stage of the Finance Bill, 1944, I remarked that we regarded our revenue estimates for 1944-45 as somewhat optimistic, and emphasised that they were framed in anticipation of the economic fabric of the country remaining undisturbed. I am glad to be able to report that our anticipation was realised and that economic activity in 1944-45 continued to be fairly satisfactory. Revenue continues to expand and again last year exceeded our expectations.
The yield of tax and non-tax revenue at £46,175,000 was £395,000 in excess of the Budget estimate, and £2,395,000 in excess of the previous year. A few words may be said as to the yield of the various duties. Leading the field, property and income-tax, including surtax, at £12,517,000 increased by well over £1,000,000. Corporation profits tax yielded £4,042,000 as against £3,781,000 in the previous year, an increase of £261,000. As regards customs and excise, tobacco continues to dominate—yielding almost £9,500,000. The excise duty on beer advanced by £230,000 and on spirits by £199,000, whilst betting and entertainments yielded £100,000 more than estimated. Not all movements were favourable, however, for instance, there has been a virtual cessation of imports of beer since June, 1944, while clearances of imported spirits and sugar fell considerably. As total revenue exceeded expectations and expenditure, though high, was less than anticipated, the deficit for 1944-45 was approximately one-half of the anticipated figure.
Our estimate of tax revenue for 1945-46 on the basis of pre-Budget taxation is £41,295,000, an increase of £1,880,000 over the actual receipts for 1944-45. Customs revenue at £11,750,000 is expected to show an expansion of £457,000, excise revenue at £9,515,000, an expansion of £631,000, and inland revenue at £19,380,000—of that £12,240,000 being from income-tax—an improvement of £763,000 on the preceding year. As non-tax revenue is put at £6,700,000— a decrease of £60,000—the estimated receipts of tax and non-tax revenue total £47,995,000.
This assumption of a net increase of £1,820,000 over the yield of what was a good year may seem optimistic. I realise that the continuance of the war in the Far East will prevent anything like a complete change-over of industry in the belligerent countries to a peace footing and that the demands of the civil population will for some further time have to take a back seat. On the other hand, helped by the cessation of hostilities in Europe, the forces of recovery should assert themselves in many directions beneficial to the Exchequer and the general wellbeing before the end of this financial year.
On the expenditure side, Central Fund and Supply Services are estimated to cost £52,367,000, of which the latter account for the record figure of £47,166,000. As compared with the original net provision for Supply Services in 1944-45, the provision for the coming year is up by almost £2,250,000, due mainly to provision for further subsidies on food and fuel, provision for children's allowances for the first time for a whole year, and increased bonus to civil servants, Gárdaí and teachers. Included in the Supply Services figure are amounts of £4,503,000 for food and fuel subsidies, and £4,571,000 for the provision of employment. The aggregate of the special provisions included to offset the impact of increased living costs on the poorer sections of the community is no less than £8,000,000.
As in the past, certain capital and abnormal items amounting to £718,000 have been earmarked to be defrayed from borrowing, leaving a sum of £51,649,000 to be met from revenue. From the total estimated revenue figure of £47,995,000, to which I have already referred, must be deducted an amount of £53,000—the estimated cost in the current year of the reduction in the duty on matches provided for in Section 4 of the Bill now under consideration. This reduces our anticipated income to £47,942,000, leaving us with a deficit of £3,707,000 which as Senators are already aware, I am sure, I propose to meet by borrowing.
It will be realised that the amount of our estimated expenditure, which is unprecedented, provides for many services which we would not have to finance in normal times. I had hoped to be relieved of the need to provide again for defence expenditure on the large scale of the past five years, but the Estimate for the Army this year again exceeds the substantial figure of £8,000,000. The release of Army personnel which will be put in hand at an early date will, of course, result in savings under many heads of the Army Vote, but these will be more than offset by issues in respect of demobilisation gratuities, deferred pay, and provision for the unemployment insurance of demobilised personnel. Indeed, as I announced in the Dáil, it is likely that such issues will involve my having to find a substantial additional sum of money for the Army in the course of the year.
Our plans for the post-war period must involve the Exchequer in further increased expenditure. Plans for housing, afforestation, arterial drainage, tourist development, rural electrification, turf development, construction of airports, etc., have already been framed or are under consideration. I would like to emphasise that execution of such an extensive programme of post-war development can, of course, become a reality only if the cost of the Supply Services is greatly reduced and emergency services, such as food and fuel subsidies, disappear. As I pointed out here last year, the double burden of emergency services and post-war development could not be carried. The annual service of our existing debt now absorbs almost £4,000,000. Further additions to borrowing can only mean further additions to taxation, and unless our burdens are eased in other directions our post-war programme of development will be hampered.
Apropos of our tax burdens, different bodies of industrialists and individual trading concerns have represented to me that alterations should be made in income-tax law, so as to afford special reliefs to industry for the post-war years. In this connection I would remind Senators that there has not been in this country a 100 per cent. tax on excess profits. The standards provided have been generous. Excess profits made before the 1st January, 1941, have not been subjected to the excess tax. I mention these matters because reliefs have been asked for on the lines of those included in the Income Tax Bill introduced this year in the United Kingdom where a 100 per cent. charge on excess profits exists and where the standard rate of income-tax has been 10/- in the £. It should also be borne in mind that our industries have not had to suffer, for example, the dislocation entailed by switching over to war production, not to mention the process of changing back. I may add that I have withstood in the past four years considerable pressure to increase the levy on excess profits to 100 per cent. One of my reasons for not increasing it was my desire that provision should be made for the position of industry in the years immediately following the war. As a result, industrialists have been able to accumulate reserves against post-war dangers the total of which should by now be not inappreciable.
In the monetary sphere, with wartime conditions still prevailing the tendency towards inflation continues to be a major cause of anxiety. The past year has again witnessed a considerable increase in the volume of money of all kinds unattended by any increase in the volume of goods available for consumption. We have endeavoured to check inflation by high taxation, rationing, control of prices, dividends, wages and other remuneration, and the absorption of savings, but we have not been entirely successful. Without such measures, however, the situation would have got completely out of control with dire consequences for all, but particularly for wage-earners and the lower income groups. It is possible to get some limited satisfaction from the fact that the cost-of-living index has remained stable for the past 18 months, but on the other hand, this stability at more than 70 per cent. above pre-war is at an unduly high level for a country which is essentially a food producer.
In the interest of maintaining the internal and external purchasing power of our currency it is very desirable that an appreciable downward movement of this index be secured. The large advances in prices of all kinds leave us less free to travel further along the path of liberal expenditure than if the existing price increases had been more moderate. High budgetary expenditure and deficit financing are the most potent of all inflationary forces, and their effect is most harmful where, through heavy rates of taxation, enterprise is deterred from an extension of productivity.
As regards our external position, it is too soon as yet to say whether the proposals of the Bretton Woods Conference will come into operation and, in the meantime, their possible bearing on this country must remain indeterminate. No exaggerated hopes should, however, be entertained that the Bretton Woods scheme will provide us with any simple or magical solution of the grave difficulties to be anticipated in the financing of our future external trade; especially outside the sterling area. Indeed, it is clear, and has been emphatically stressed by many exponents of the scheme, that it does not and cannot do anything to relieve any member of the fundamental obligations to keep his own house in financial order and to procure imports by the maintenance of a sufficient volume of exports on an efficient and competitive basis.
A few words, perhaps, about the sections of the Bill may be of value. Section 1 of the Bill corresponds to Financial Resolution No. 1, which was passed on Budget Day and is the customary charging section for income-tax and surtax. Section 2, broadly speaking, is by way of amendment of the law. It provides that where there has been a loss on a transaction where if a profit had been made, it would have been assessable under case VI of Schedule D of the Income Tax Act, 1918, relief may be given for tax purposes.
Section 3 was foreshadowed in the Budget speech. It secures exemption from income-tax and surtax in respect of deferred pay and gratuities for members of the Defence Forces. Section 4 reduces the rates of excise duties on matches. This was explained at some length in the Budget speech. It is estimated that it would cost £53,000 this year, and in a full year £58,000. Section 5 provides for the exemption from estate duty and legacy duty of certain payments for service with the Defence Forces.
Section 6 of the Bill secures that a public utility company which carries on a tramway undertaking shall not be deprived of the exemption in corporation profits tax afforded to other public utility companies. The effect of the section will be that the new transport company, Córas Iompair Eireann, will be exempted from corporation profits tax in respect of the whole of its profits for two years. Section 7 is the customary care and management section, and Section 8 is the usual section relating to the short title, construction and commencement.