Dáil Éireann debate -
Friday, 25 Apr 1924

Vol. 7 No. 1

COMMITTEE ON FINANCE. FINANCIAL RESOLUTIONS. - RESOLUTION NO. 2. (CUSTOMS).

Mr. BLYTHE

I beg to move Resolution No. 2:—

(1) That the additional duties on dried fruits which were first imposed by Section 8 of the Finance (No. 2) Act, 1915, and were continued up to the 1st day of August, 1924, by the Finance Act, 1923 (No. 21 of 1923), shall continue to be charged, levied, and paid on and from the said 1st day of August, 1924, up to the 1st day of August, 1925.

(2) That the new import duties which were first imposed by Section 12 of the Finance (No. 2) Act, 1915, and were continued up to the 1st day of May, 1924, by the Finance Act, 1923 (No. 21 of 1923), shall continue to be charged, levied, and paid on and from the said 1st day of May, 1924, up to the 1st day of May, 1925.

(3) That the provisions of Section 8 of the Finance Act, 1919, shall apply to the duties mentioned in this. Resolution with the substitution of the expression "Saorstát Eireann" for the expression "Great Britain and Ireland."

(4) It is hereby 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.

These are merely renewals.

Professor THRIFT

Does that mean, for example, in the case of ordinary motor-cars that the tax is being continued as at present.

Mr. BLYTHE

Yes.

Mr. GOREY

This resolution deals with dried fruits.

Major COOPER

Is it in accordance with precedent that we could smuggle through motor-cars disguised as raisins.

Professor THRIFT

There is more than that in it.

Major COOPER

Should there not be a separate resolution?

Captain REDMOND

I would ask the Minister to explain the meaning of paragraph 2, namely, the new import duties imposed by Section 12 of the Finance Act. What are these duties?

Mr. BLYTHE

The new import duties are on cinematograph films, clocks, watches, motor-cars, motor-cycles and musical instruments.

Major COOPER

I shall oppose this Resolution, partly on the grounds that this is camouflage, as anybody in reading the Resolution would consider that it was only concerned with dried fruits, which nobody takes much objection to, and partly on the grounds that there were certain recommendations made by the Fiscal Committee with regard to parts of motor cars. These recommendations have, apparently, been ignored by the Minister. It was suggested that it was desirable to allow the import of parts of motor cars in order that an assembling trade might be created here in the Saorstát. We know that in Cork such an assembling trade in the case of Ford motor cars has been created, and that it has succeeded in building up a very considerable industry and is giving a large amount of employment in Cork. I think that that might be carried further. There is a car in England, a popular car called the Morris-Oxford. That car is not made in Oxford, it is only assembled there. The engines are made in Coventry and the body in Birmingham. The parts are put together in Oxford, and it is called a Morris-Oxford car. I should like to see a Morris-Dublin or a Morris-Kilkenny car. A continuance of these duties on parts of motor cars rather checks anything like that. Again, the Fiscal Committee made certain recommendations in regard to the parts of musical instruments, parts for the repairs of musical instruments, gramophones and things of that kind. All these things are hampered and checked, and will be more hampered and checked by the imposition of this tax, which amounts to a half-a-crown on every dutiable article coming in. They entail great hardship on the average man, the man who takes his pleasure in the evening with a gramophone or things of that kind. A duty on gramophone records is an unreasonable duty. If music is of advantage to the State, and if it is an essential part of culture, as I believe it to be, we should encourage the popularising of music and the cheapening of music, and therefore the continuance of these duties, in opposition to the reports of the Government's own Committee, and without apparently any justification, or any argument on behalf of the Minister that they should be continued, should not be assented to by the Dáil. He never referred to them in his Budget speech, but he has formally proposed this Resolution. Speaking for myself, if I find there is any support of my action in the Dáil on this, I shall go to a division against this Resolution.

Professor THRIFT

I would like to support what Deputy Cooper said and to add this to it. There has been a great deal of argument as to the incidence of the motor tax. I think representations were made to the Minister which, I regret, have not apparently met with his approval. I was hoping that the question of this motor tax generally would be gone into and that the Minister would have been able to put before us a satisfactory scheme by which the incidence of the tax might fall much more fairly according to the way in which the car is used. Instead of a general tax on a car there is a great deal to be said for levying the tax in proportion to the use that is made of the car by means of petrol, for example. Though there may be certain administrative difficulties in the collection of such a tax, I think the gain to the community from such a mode of taxation would be of quite sufficient magnitude to outweigh that difficulty. I had hoped that the Minister would have referred to that point and had strong hopes that he would have been able to bring in a scheme to that effect before us. Perhaps he will be able to tell us his reasons for not being able to accede to the representations which were made to him.

Mr. JOHNSON

Perhaps the Minister would help the Committee in coming to a judgment on this point by telling us what is the amount of the revenue derived from these duties, particularly on motor car parts and on musical instrument parts.

Mr. BLYTHE

The duty derivable from the new taxes is £324,000. Most of it, £256,000, comes from motor cars and motor car parts, but I could not give any figures for the parts alone. It seems to us that this is, in the main, something in the nature of a luxury tax. It is certainly not a tax that bears very hardly on the poorest. The greater number of cars that come in are used in part, at least, for pleasure, and are something in the nature, even if they are a utility and a convenience, of a semi-luxury utility in the great majority of cases.

It is, as I say, a good type of tax since we must have a tax. I think it is much better we should take duty off some articles of common use rather than off such an article as this. If I felt we could afford to make sacrifice of revenue of anything like this amount, I would far rather consider such a thing as abolishing the tea duty altogether, or seeing whether we could not give some sort of reduction in respect of sugar. I am not very much impressed with the case made for the reduction or modification of the tax in this particular regard. The question of motor parts is one about which a good deal might be said. The industry in Cork is not an assembling industry. It is really a manufacturing industry. The parts are manufactured there, and I do not think there is anything to be said in that regard for taking the duty off parts. I think, in fact, the opposite would apply. We would probably, by taking the duty off parts, sacrifice a great deal of revenue, and give very little employment, because it would be possible to take out certain valuable parts, which might be fitted, without a great deal of trouble, into cars, and import them separately. In that way we would lose revenue and do very little in the way of promoting industry here. As a matter of fact, there seems to be not very much to be said at the particular moment in favour of trying to encourage that industry. You could encourage others with less disturbing effects from the revenue point of view, and with a great deal less difficulty from the point of view of administration. You would have cars coming in with certain parts taken out, and the question of valuation would be very difficult in those particular circumstances, if you were to have regard, not to the value of the individual parts that would compose the bulk of the car, but to the value of the car as it stood. The same thing applies to musical instruments. A great proportion of the musical instruments are certainly not articles of absolute necessity, and any relief that would be given in that matter would prevent us giving a proportionate amount of relief to other articles to which it would be more desirable to give it. We really felt, when considering this matter, that articles like tea and sugar ought to be the articles to which relief would be given, and not those of the other type.

Professor THRIFT

The Minister did not answer my point at all. I was not suggesting in any way a remission of taxation on motor-cars. I accept the point of view that they are luxuries and liable to taxation. I was not suggesting at all that the total amount of duty received by the State from motor-cars should be diminished. The course I recommended would possibly have effected an increase in revenue from motor-cars. The present incidence of taxation is such that the man who wishes to use his car for half an hour—

AN CEANN COMHAIRLE

This resolution deals with the Customs duties on motor-cars.

Mr. BLYTHE

It has nothing to do with the Road Tax.

Professor THRIFT

I quite understand that, but what I have to say applies to this as well as to the other tax. A man who wishes to buy a car for a comparatively small amount of use pays the same amount of tax as a man who buys a car to use it all the time. I think the argument is applicable to one case as well as to the other.

Mr. BLYTHE

I suggest that it would be hardly possible to arrange that Deputy Thrift, who pursues a peaceful and learned occupation, should pay a lesser tax on his tea than I pay on mine. The same thing seems to be urged, in respect of motor-cars, that one man should pay less duty on his car than another. The man who got in his motor free of Customs duty would be able to sell out and make a little on it. I do not think you could possibly distinguish between individuals and classes in dealing with this matter.

AN CEANN COMHAIRLE

I must say that I do not see the relevancy of this debate to Customs duty.

Major COOPER

I want to get back to Customs duty, and to the statement made by the Minister for Finance that he did not think a strong case had been put up in connection with the motor tax. I agree with him that as strong a case has not been made as might have been made, if this very important section had not been put in the second place in the Resolution. We have dried fruits first, so that a casual observer would think the Resolution dealt only with dried fruits, and not with this taxation on imported motor-cars and musical instruments. That is the reason we have not been able to make a strong case. After all, we only got these Resolutions an hour and a half ago, and we had very little opportunity to frame a case in that time. I was fully prepared to hear the Minister say that these things were luxuries. I have been trying for a long time to find a true definition of "luxury," and I have come to the conclusion that a luxury is whatever the Minister for Finance wants to tax. No doubt we shall hear later that soap is a luxury. In talking about motor cars, it should be remembered that quite a large number of men possess motor cars at present, and we may come to the condition of affairs which obtains in the United States, where the average workman has a little motor car in which he goes to work and which he parks outside the factory. Even outside a motor car, musical instruments and the gramophone are signs of saving. They indicate an attempt to make the home a little better, a little more cultured, and a little more artistic, and they are signs of a desire of parents to see that their children will have accomplishments that they themselves did not possess. I cannot help thinking that these duties are a backward step and are mistaken, particularly in so far as the small musical instruments and things like gramophone records are concerned.

Mr. JOHNSON

And mouth organs?

Major COOPER

I thank Deputy Johnson. He has been attending a congress of his colleagues across the water, and he probably heard mouth organs.

Mr. JOHNSON

Tin whistles.

Major COOPER

If these are luxuries, they are not luxuries to any great extent. I would not oppose the Minister if he put on a sliding scale, and if he taxed a £60 or £80 piano more highly than he taxed the small things. But these are not only not taxes on luxuries but they are taxes which are troublesome to collect, because such things as gramophone records, which practically have to be up-to-date—dance music and so on—come in in very small quantities. All these things involve an enormous amount of trouble and expense in tax collecting. I honestly think they are not worth all the time and trouble and expense involved in collection.

Professor THRIFT

I think what I have to say is relevant. I submit it to you in this way. The outcome of my remarks would not lead to the difficulty which the Minister for Finance foresees, but it would lead to an abolition of the Customs duty altogether, and, therefore, I think it is relevant to this Resolution. My suggestion is that the revenue rate for motor cars should not be raised by a Customs duty, but should be derived from the use of motor cars, and he should make that revenue equal at least to the amount which is at present derived from the Customs duty. I think it would be far fairer, and would not cost the State anything, and would be much more just and equitable.

Mr. BLYTHE

That, I think, is another matter. We have some of these difficulties in connection with the Road Tax, and I think that that is a tax really made for the use of cars. I am happy to be able to inform Deputy Cooper that mouth organs are free. The reason why these duties were brought in in one Resolution is that when they were first imposed they were brought in in one Resolution. They were lumped together, but there is no reason why they should be lumped together in the future. It was not done in that way for any deliberate purpose.

Major COOPER

Will the Minister undertake next year, if he is in office, to separate them so that we shall not have grand pianos mixed up with sultanas and bananas?

Mr. WILSON

The Minister has not replied to Deputy Cooper in connection with the reason why he turned down the report of the five professors who were so very much in prominence some months ago in connection with fiscal policy. They have amongst other things recommended that these motor-car parts should be brought in free in order to revive this industry in Ireland. They also recommended the same in connection with musical instrument parts. The Minister has not yet given the reason of his refusal to accept his own Commission's report.

Mr. BLYTHE

The reason I tried to give was that it would lose us considerable revenue and would lead to a considerable difficulty in administration, and would probably do that especially in cases where we would have several parts imported separately.

Mr. GOOD

Would the Minister inform us whether the Resolution now before us includes motor-car bodies to which he referred specially? It seems to embrace so many items I am at a loss to know what is excluded.

Mr. BLYTHE

It does not include vehicles designed for the transit of goods, that is, commercial cars, either bodies or chassis.

Mr. GOOD

Are not bodies included in this Resolution, or would they have to be put in a further resolution?

Mr. BLYTHE

A further resolution.

AN CEANN COMHAIRLE

Resolution 11, I think.

Capt. REDMOND

May I ask the Minister whether the half-crown which he proposes to put on dutiable articles imported separately into this country is to be in addition to the duties charged on those articles?

Mr. BLYTHE

It is not to be in addition; it simply means that no less sum will be charged under the duty than a half-crown. There is a minimum.

Capt. REDMOND

The sixpence will be charged?

Mr. BLYTHE

If it is a separate consignment. In motor-cars you might have an enormous consignment of them.

Capt. REDMOND

And you might have a very small one?

Mr. BLYTHE

Yes.

Resolution put and agreed to.