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Dáil Éireann debate -
Friday, 13 Apr 1923

Vol. 3 No. 2


I beg to move the first resolution, which reads as follows:—
"That (a) income tax shall be charged for the year beginning on the 6th day of April, 1923, at the rate of five shillings in the pound, and the same super-tax shall be charged for that year as was charged for the year beginning on the 6th day of April, 1922, under the law then in force in Saorstát Eireann or in the area now comprised therein; and (b) the several statutory and other provisions which were in force in Saorstát Eireann or in the area now comprised therein during the year beginning on the 6th day of April, 1922, in relation to income tax and super-tax shall, subject to the adaptations and modifications made in such provisions by or under the Adaptation of Enactments Acts, 1922 (No. 2 of 1922), and subject to the provisions of the Double Taxation (Relief) Act, 1923 (No. 8 of 1923), have effect in relation to the income tax and the super-tax to be charged as aforesaid, for the year beginning on the 6th day of April, 1923; and (c) the annual value of any property which has been adopted for the purpose of income tax under Schedules A and B for the year 1922-23, shall be taken as the annual value of that property for the same purpose for the year 1923-24, but subject to the provisions of any Finance Act to be passed by the Oireachtas in the current year.
"And it is declared that it is expedient, in the public interest, that this resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1913."

In regard to the statement that has been made, I wish to ask, merely on a point of order, whether, in view of the fact that the Minister has found it necessary to give the Dáil a great deal of information with regard to the financial year that closed on the 31st March, and, further, in view of the fact that certain detailed information that we have not had until we met here in regard to expenditure estimated for the future, it would be in order, and to the convenience of the Minister and the Dáil, if the adjournment were moved, so that Deputies might have in writing the statement that was so clearly and lucidly put before us. They could then base their comments upon the exact words used by the Minister, rather than rely upon conjecture.

Does the Deputy suggest moving the adjournment of the debate?

Yes, until such time as the Minister would consider it desirable; say Tuesday, at 3 o'clock.

It would be in order to move the adjournment of the debate, or, rather, to report progress, and it can be arranged that the discussion on one of the resolutions, perhaps the last one, which deals with the amendments of law, may range over the field which the Minister for Finance has covered. We shall probably be taking that on Tuesday.

I do not know whether the Minister himself deserves more congratulation for the possession of a temperament which will allow him to bring this kind of a resolution and of a speech forward more or less by accident to-day instead of yesterday, and to do it with a good grace and effectively; or that the Dáil should be, shall I say, commiserated with at having this kind of statement, the most important that could be made in the year, and one which one would imagine would be looked upon with very great anxiety by every person in the country, brought forward in a more or less casual way as contrasted with the serious way in which the same kind of statement is made in England. However, we have had a statement of the Minister's intentions, and I suppose any anxiety or fear that new taxes of an oppressive character should be placed upon the people will be dispelled within a very few minutes. The deficit of £4,000,000 that the Minister has given us information about is a serious one no doubt. It is £4,000,000 of a deficit on the last year's working. I suppose if we were to press the matter, we would find out that in truth the deficit was a great deal more. We have not had any information as to the state of the financial arrangements in regard to the share of the British National debt, which, I suppose, still has to be borne in mind as a possibility if not a certainty. Such as it is, it ought strictly to be brought within our review of the situation if we want to understand our real financial position. Then, I think, there is also another item in the account, which has not been disclosed, and that is the cost of ammunition which ought to have been added to the Army Estimates. When these items are added, I imagine that the deficit will be shown to have been considerably more than £4,000,000. Nevertheless I appreciate the more, the optimistic tone of the closing paragraphs of the President's speech. I believe that the country is quite easily capable of bearing the burden that is at present imposed upon it, and even a considerably greater burden, provided that the productive resources of the country are utilised and not allowed to lie waste and idle. The utilisation of those resources, human and material, is to a very considerable extent the responsibility of the Government of the day. If we realise that responsibility we shall find that the country is quite easily capable of bearing this particular burden, and even a considerably increased one. It might be interesting to draw attention to the comparative figures with regard to the revenue of Ireland 30 or 40 years ago, and to compare the revenue of 1890, which was for the whole of Ireland estimated to be about £11,000,000. That is at a time when prices were at their lowest. I suppose one would not be far wrong in speaking of £7,000,000 of that as being collectable in the 26 Counties comprising the Saorstát. Considering the circumstances of the last year, and considering the circumstances of to-day and the purchasing power of money to-day, an increase from that £7,000,000 even to £25,000,000, while it sounds, or seems to be very great, is not so enormous as to make us afraid.

But the important deduction I want to draw the attention of the Dáil to is that notwithstanding the extraction from the people of 25 millions to-day as compared with 7 millions in 1890 the people are considerably more comfortable, and enjoying a better state of life than they were in those days of low prices and comparatively low taxation. The weight of taxation is not the only consideration, and if we can ensure that the taxes that are paid to the public Exchequer are to be circulated within the country the loss will not be felt by the normal workmen of the town or the normal working farmer of the country. The people who will be hit no doubt will be that considerable section of the community which is living upon unearned incomes for which they give no service, and who desire to see no taxation and low prices because their incomes are fixed and their purchasing power is thereby increased. If we can continue to distribute well the wealth that is created, the country will be able to bear this and even a greater burden of taxation.

One could not fail to remark the sentence in the President's speech when he said that improved machinery that they had been able to put into operation had provided new information, and it shows that the British White Paper arrangement tended to overstate the revenue of Saorstát Eireann. The improved machinery is proving that the revenue which has been assumed to be due to the Saorstát has been overstated. This is an age of disillusionment, and in this realm it appears that we are going to find many of the claims and contentions that have been used for the last 50 years in regard to the character of the country, spiritually, socially and financially, were not entirely well based. But it is well that we should get at the truth about ourselves and about the country, however hard it may be to face it; it is well at this time when we are prepared to face realities that we should get the whole truth and build up from the base. The Minister has moved a resolution in respect to Income Tax. His proposal is that the existing super-tax rates should be continued, and I am not sorry for one that he has not waited until he learned what the proposals of the British Chancellor of the Exchequer might be. But I would like to find out what arrangements have been made as between the Irish Exchequer and the British Exchequer as to the outcome of the Double Taxation Relief Bill which was passed a few days ago. What is to be the position in regard to the Irish Income Taxpayers, supposing the hopes of a large number of people in England bear fruition and that there is a shilling taken off the Income Tax? I expect they will be disappointed. But, supposing that is the case, are we to understand that the Irish citizens who have money invested in England, and which is subject to Income Tax where they may be paying 4s. in the £, will have to pay the other shilling into the Irish Exchequer? If that is the arrangement then I am ready to wager that the Minister is praying nightly that the Chancellor in England will, as a matter of fact, reduce Income Tax, because a very large sum of Irish money which is invested in British investments ought, in my opinion, to give a return to the Irish Exchequer. It is not balanced by a very long way indeed by the investments in Irish securities by residents and citizens in Great Britain. I think the Minister would be well advised if he would satisfy our curiosity in that respect as soon as it is possible. The Minister has told us that he has inaugurated an inquiry through all the spending departments with a view to economy. I am all for economy, but I use the word as meaning wise and beneficent expenditure. I am afraid the Treasury Departments, the guardians of the public purse, always think of it as a reduction of expenditure, and I would like to warn the Minister against taking that view of this word economy. I can imagine he will look down the lists of the items which go to make up the great sums required by the various departments, and he will see wages first—most of them call them salaries, of course—and it will be the lower ranges of salaries that will be looked at, and it will be said by the economists of the Department, no doubt, that salaries can be cut—wages can be cut. The inquiry will not be as to whether the earners of these wages are giving service, but whether the amount that is paid into their pockets can be reduced. Now, I want to urge the Minister that if he is looking for economy it should be rather to put men into places where they can do the best work and pay them well for doing that good work, and that will be the greatest economy that he or any other Minister can secure.

There will, I think, if our hopes in regard to the political and military situation come to early satisfaction, be a still greater need for expenditure which is not provided for, at present, in these Estimates. You will have to make provision for the proper utilisation of these 50,000 men. They cannot be kept as an Army, eating their heads off, and doing nothing. They might be tempted to do things they ought not to do. They cannot be demobilised and thrown on to the labour market with no resources and no chance of employment. And you cannot trust the exigencies of the market in the hope that there will be an immediate revival of industry and commerce. It will be necessary to look ahead and to organise the resources of the nation in such a way that these men, as well as the remainder of those at present unemployed, can be properly utilised for the national wellbeing. That will inevitably call for a considerable addition to the expenditure in the coming year. You will get value for it. You will get material value for it. It will not be like the expenditure of the ten million pounds, which is in truth waste. Except in so far as it is saving the national life, materially and economically, in the narrow sense it is waste, and worse than waste. Put you can utilise the labour of these men and the labour of the men who are at present unemployed in such a manner as will add to the national wealth, and even make it possible for ordinary economic processes in future years to be more productive and beneficial to the individuals who are responsible for the running of the economic machine.

I hope that Ministers will not be afraid to ask for loans in sufficient amounts to cover this particular need and prevent a very much worse calamity falling upon the nation. I was very glad indeed to hear the Minister say that he is going to appeal to the people of this country to provide the money that has to be borrowed. I hope I understood him aright. I hope he is not only going to give them a chance, but I hope he is going to throw upon the people of this country the burden—if it is a burden—of supplying the money that is required. We read of a hundred odd millions of Irish money invested in British Government Stocks. Probably there is anything from fifty to a hundred millions invested in other British Stocks. The banks have large deposits which are not included in these two estimates of British investments. Money can be obtained in this country for all its needs, and I am hopeful that when you have obtained the money within this country you will see to it that it is expended in this country. The estimates that have been placed before us are not satisfactory from one point of view particularly. They do not enable the Dáil or the Committee on Finance, as I suppose we should call it, properly to weigh up the question as to whether they ought to vote this sum of money at least, whether they ought to levy upon the people this income tax of 5/- in the £, or the various other items that are embodied in this paper giving the estimate of Tax Revenue. I realise quite well that there are difficulties in the way of making anything like an accurate estimate of the yield of specific taxes. But the Minister's department has been able, at any rate, to make an estimate and I assume that they have got some figures upon which to base that estimate. They have had one year of experience and I think that we ought to be a placed in a position not only of knowing the figure estimated to be the yield of the property and income tax, but we ought to know what is the estimated yield of the beer tax, the tea tax, the entertainments tax, and the various other taxes which are included in the annual reports. We know that there is to be a sum of about twenty million pounds raised as Revenue, and the Minister asks us to raise that money by specific means—to continue the present taxation. Before we can properly consider and judge the merits of these various taxes we ought to be told what is their estimated yield. We have had no information on that point. We have had simply Customs, seven million, three hundred thousand pounds; and Excise, eight million pounds placed before us.

I would like to know what is the estimated yield of the sugar tax, the tobacco tax, the whiskey and beer tax, the entertainment tax, and the various other taxes that are carried on from last year. A good deal of interest has been aroused, and the question was raised upon the last occasion we were discussing this matter as to the merits of the motor tax and the merits of the film taxes. I am not going to get into any excitement about the film tax, but I would like to know whether in the minds of the advisers of the Ministry it is going to be productive of any revenue at all, when one considers the probable amount of it? and the probable loss arising from entertainments. I feel that the Minister is justified almost wholly in saying that the circumstances are such as to warrant his carrying on the present taxation more or less as it stands, but I do not think that that decision should rule out any adjustments to meet the circumstances of the country. I suppose it is quite an accident that the tobacco tax is going to encourage the making of cigarettes in this country; and just as that is an accident arising from the incidence of taxation, these other taxes will probably be detrimental to the particular industries affected, and I think that the Minister should not be too rigid in his adherence to the present taxes without regard to the effect upon the industrial and commercial life, simply because of loyalty to the holus-bolus carry-over idea.

I would ask when the Finance Bill is brought forward, and when we are discussing these more detailed matters that the Minister should not close his mind to the possibility of altering his plans in such a way as to fit in with the industrial and commercial life of the country where it is not going to mean any considerable loss to the Exchequer. When we have had some information—and I hope the Minister will not delay in presenting it to the Dáil—as to the estimated yield of the various taxes, we shall probably have to suggest some alteration in the incidence of the taxes which hit the poor more hardly, and the variation in some respects of these taxes. We cannot do that unless we have some knowledge of the probable yields, and how they are affecting the country, and how any alteration would affect the Exchequer. Therefore I would press upon the Minister the necessity of providing the Dáil with that information.

I believe the country will receive this Budget with very mixed feelings, as I suppose Budgets are usually received, but there will be disappointment in the minds of those who have been looking for many years to the establishment of an Irish Government with power to control its own fiscal arrangements. The hope of being able to use that fiscal power to encourage the development of home industries is dashed so far as this year is concerned. The Minister says they have not had time to make any inquiry. Presumably they have been living from hand to mouth, and all the discussion and all the columns upon columns, and pages upon pages of arguments that appeared in the Sinn Fein weekly and monthly papers in the past few years, have been passed over as being unreliable, and a new inquiry is to be made the basis upon which exact knowledge is to be got, and until this inquiry is made it is not safe, it is not wise, and it is not statesmanlike, and it would not be good for the revenue probably, and it cannot be good for the industry of the country to embark upon a new fiscal scheme. But I have a hankering suspicion that when this question was being discussed by the Executive Council they began to find lines of cleavage, and that the foundations of new Parties were there shown. On the one side you would find the protectionist and on the other side the free-trader, and some questions were raised as to whether this should be altered or whether that should be imposed, and finally it was decided that we had better go on as we are and leave the burden of making a change to our successors. I rather fancy something like that must have occurred, because unless that had been the case, and unless they feared a split within the camp, we would have at least something done to satisfy the supporters who put them in office and the people that led the agitation upon the economic side for the establishment of an Irish Free State. It must be a great disappointment, and I wonder whether they will ever recover. At any rate the Ministers have told us that they are not going to take that plunge. They are not going to say whether they will advocate a policy of free imports, or whether they will put a tariff upon imports for revenue, or a tariff upon imports for protection—they simply say that for the present we are an extension of the British Government in Ireland so far as revenue is concerned, and we will carry on the good work that the British Government placed in our hands. We will not change the incidence of taxation; we will use the instruments they have fashioned for us, and we will let the country see at last what can be done.

I am sure we are not very far from a very considerable ferment in the country upon this particular question, and I believe the sooner we get into it the better. The sooner we get people thinking about this kind of problem and problems affecting their economic and social life so much the better for the country, and I should wish for that reason only, if for none other, that the Minister had been bold enough to say, "Well, we are going to help agriculture by a tariff on this; we are going to help industry by a tariff on that," and thus bring all the forces of economic discussion into the field and compel the people to think about these questions rather than other questions of less interest though perhaps of more vital importance.

The Minister has made a most interesting statement. He has at least opened up many questions, and I suppose he will have satisfied the curiosity of very many people. I hope though that in future years we shall have educated the country to feel that such a day as Budget day is a day of vital importance to them all, and that they will be looking forward for the arrival of the day and that they will be so much interested in the internal political affairs of the country as to be wondering from day to day what the Dáil was going to do, what the Minister for Finance was going to do, in regard to the question of revenue and expenditure. I am sorry to say that from my observation the country has not realised, but to a very trifling extent indeed, the change that has come over the position and that the Dáil is thought of as an institution which they need not be concerned very much about. The Minister for Finance may have something interesting to say to commercial men and to financiers, but it seems to be of no concern to the average man. I think that is an unfortunate state of things and I hope we shall rapidly grow out of it and that the Dáil will justify the hopes of the more thoughtful and earnest of those who made the Dáil possible and presented it to us, and that we shall be looked to here as the body representing the people, with a Government and an Executive authority responsible to it and to the people. It seems to me that we ought to direct our attention, and Ministers ought to direct their attention, to creating that feeling in regard to the Dáil, and to do so we would require on every occasion such as this, when a Budget statement is made, that we should be prepared for it, and that the speech or statement of the Minister should not be allowed to be sidetracked by a trivial discussion on daylight saving.

I judge it a matter of some importance that on the first Budget statement of our new State we should have an opportunity of coming down to the practical business details of the conduct of this State, and not be compelled, by one circumstance or another, to indulge in what, after all, cannot be regarded as very much other than the generalities of taxation. We have had certain figures put before us, some of which only came into our hands this afternoon. Others have been in our hands for some weeks. The statement made by the Minister for Finance disclosed a revision of certain of them in important details, because of considerations that he placed before us so very clearly. In the circumstances, it seems to me that it would be unwise and unfair to direct any criticism or comment towards figures that are not before us in a final form, but are merely based upon a speech that we have had delivered to us very clearly and very lucidly, but which we have not had before us in writing, and the arguments of which are only recently in our minds. For that reason I will ask the permission of the Dáil to move the adjournment of the debate.

I understand that there are certain resolutions before us that it is of the utmost public importance should be passed without delay. I suggest, if it is agreeable to you, A Chinn Chomhairle, and to the Dáil, that what might be done under the circumstances is that the eight resolutions should be passed, and the general debate on the subject adjourned. If I understand the procedure aright the passing of these resolutions is without any prejudice whatever to such amendments by way of revision—revision being clearly understood to be reductions and not increases—that may be judged advisable, necessary, or wise at a later stage, when these resolutions come before us in a Finance Bill. With your permission, I make bold to suggest here now that we pass the eight resolutions, seeing that they are clearly required at the earliest possible moment in order to give statutory effect to certain actions within the next few days, and that when these resolutions have been passed I would desire, if you would give me permission, to move the adjournment of the debate.

You mean to report progress? We are now in Committee.

Yes, I take it that would carry the necessary adjournment back again into the Dáil.

It would carry us into the Dáil, and you could adjourn then if you so decide.

Having passed the eight resolutions, I will ask for permission to move to Report Progress.

Of course before you can do that it will be necessary to get the agreement of the Dáil. No one could move to pass eight resolutions, seven of which have not been proposed. You will have to get the matter straightened out before you can move your motion. If we get general agreement on the matter, we can pass the motion which has been made, and then go on and pass the seven others as they are proposed by the Minister for Finance. The Minister can then move the ninth resolution about the Amendment of Law. At that stage, if it is moved to Report Progress, we can go out of Committee and adjourn. On the resumption of the debate you could go into Committee on the ninth resolution for the Amendment of Law, continue the general discussion, and then Report to the Dáil. General agreement, of course, would be necessary for that. What is the opinion of the Minister for Finance?

I am perfectly agreeable.

Probably I would not have got up to speak but for an article that I read in yesterday's evening papers, and some remarks I heard here with regard to the revenue expenditure, productive resources and the development of Ireland. I will call attention to other matters later on. My remarks on this occasion will be very brief. It was mentioned by the Labour leader that he would like to see an equal distribution of wealth.

I deny having said that.

I have no recollection of that statement, Deputy O'Donnell.

Well, it was something tending to that; he said he would like to see wealth more widely distributed, or something of that sort. I wonder would he like to see labour more equally distributed, and that the Government should give every man the right to work?

Hear, hear.

Would he like to see an equal chance of work for all? What makes me draw particular attention to this matter is an article that I read in yesterday's Evening Herald. The first ship that ever arrived in the Liffey from Portugal, owing to a sordid dispute on the quays of Dublin, was detained three days at great expense.

I am afraid the Deputy is out of order in discussing a strike on a Budget resolution.

I am speaking in connection with the revenue, development and resources of Ireland. I am referring to statements that have been made on the subject of development, resources and revenue. I will bring up this matter later on. I am now only briefly dealing with it as a protest against this sordid action. I know the same thing occurs at Waterford and at Cork. I would not give a monopoly to any port to hold up the general work of the country. We should try to develop other ports. We have, for instance, ports on the west of Ireland, such as Westport and Sligo. I say those ports are getting very little encouragement from the Government or anybody else. I would like to see that no port would have a monopoly, that the resources of Ireland would be fully developed, and that every workman should get fair play. I am speaking mostly in protest against this action that occurred on the Dublin quays.

On the understanding that the resolution now before the Dáil can have effect for only twenty days, or until the Finance Bill is before us, I desire to propose that the question be now put.

The motion is that the question be now put. I take it that is agreed to.

Has the closure motion been passed?

The motion to put the question has been passed.

Has been passed?

I understood there was general agreement. Was there disagreement? I did not understand that.

The motion is that the question be now put.


Question: "That resolution No. 1 (Income Tax) be adopted," put and agreed to.

The resolutions have not been circulated.

I understood they were.

They are never circulated.

If they are going to be taken now and passed, they will certainly have to be circulated.

I understand they are not usually circulated until they have been moved. I gave instructions that copies were to be ready for circulation as soon as they are moved.

Copies are available and can be circulated.

Before proceeding with the second resolution, I feel that, while the first resolution might well have been passed to allow business to proceed, we ought not to proceed with the remaining resolutions. I do not think the public service requires it until we have had further information on the estimated revenue from the several taxes.

Would the Minister for Finance have any difficulty in next presenting the resolution referred to as the ninth, upon which the general discussion will take place? My object in proposing the closure was to get as soon as possible to that resolution.

I am afraid we are at cross-purposes. We had begun a general financial discussion on the first resolution. I understand the desire was that the general discussion should be postponed until Tuesday next.

If that were done the general discussion could take place on Tuesday next in Committee, assuming that the resolution upon which that general discussion takes place is moved on Tuesday. All these resolutions which it is proposed to pass to-day can be reported on Wednesday, and the Deputies can then move any amendments on the Report Stage; so that the discussion can take place again on each individual resolution in the Dáil.

I submit that we are entitled to see what is before us if we are asked to vote.

That has been decided. The papers are being circulated.

What will the procedure be? If these resolutions are passed merely as a question of public policy, and are only in effect for 20 days, until they are embodied in the Finance Bill, do I take it that then they can be varied if the Dáil felt they so required?

There are two processes. The resolutions if passed in Committee must be reported in ten days and will cease to have statutory effect if within 20 days after they have been agreed to, the Finance Bill has not passed its Second Reading.

I wonder if the Chairman is aware that even now we have only got the Income Tax resolution?

I take it if sufficient patience is shown we will have all these resolutions in time.

While the other resolutions are being distributed, perhaps the President will permit me to draw his attention to the fact that the Income Tax resolution that we have in our hands falls short just at a vital point. It states that Income Tax shall be charged at the rate of blank shillings in the £.

The Deputy may not be aware that in passing that resolution the words "five shillings" were inserted.