I move amendment (a)—In paragraph 1, line 30, immediately after the word "that" to insert the words, "with the exceptions hereinafter mentioned."
FINANCIAL RESOLUTIONS—REPORT. - DAIL IN COMMITTEE.
Amendment put, and agreed to.
I propose to take amendment (c) before amendment (b). I beg to move amendment (c). To insert immediately after paragraph (1) a new paragraph as follows:—
"(2) That on every glass bottle or glass jar imported into Saorstát Eireann on or after the 9th day of May, 1925, and containing at the time of importation any dutiable commodity, there shall be charged, levied, and paid the following Customs duty, that is to say:
(a) if the capacity of the bottle or jar does not exceed five fluid ounces, a duty at the rate of three-pence for every dozen or part of a dozen such bottles or jars,
(b) if the capacity of the bottle or jar exceeds five fluid ounces, a duty at the rate of sixpence for every dozen or part of a dozen such bottles or jars."
I need not say that we are not actuated by the desire to forestall Deputy Cooper or to prevent him making any remarks that might suggest themselves to him on this matter. We have given this a good deal of consideration during the past week or ten days, in view of the various protests and complaints that were aroused. We felt that there was undoubtedly a case for charging a duty on certain bottles imported as containers. For instance, without some such provision you might have lemonade bottles being charged, if they were imported empty, a duty, say, of 1/2d. per bottle. Then you might have similar bottles brought in free, if they contained lemonade. The importer of the full bottles having that advantage, you might have people escaping the duty on empty bottles by actually bringing in full bottles, say, of lemonade, and using the bottles afterwards in the same way as if they were imported here.
We, on the other hand, felt it would be going too far to charge a duty on all bottles whether full or empty, because that would very much widen the area of dutiable commodities, and you would sweep many commodities now non-dutiable into the dutiable net that would have to submit to Customs examination and all the formalities with regard to duty would have to be observed. Generally there is a certain lack of space at our ports, for one thing, and it would mean a great congestion and delay. There is a tendency at the present time if you bring in a great number of commodities to have them piled and put up in transit sheds. Once there is any considerable amount of congestion it is difficult to find goods, and it is more difficult to get them out, and great delays occur. We think it would not be wise bringing into the dutiable list by a charge upon the containers all sorts of things not dutiable at all, and which could be got out rapidly.
On the other hand we feel the case for charging a duty on containers can be fairly met by the charge on different containers of dutiable commodities. Now this extension proposed will bring in bottles containing lemonade because mineral waters are dutiable. Of course bottles containing all classes of wine and whiskey and spirits of all sorts, table water, cider, and so forth, various sauces and condiments which might contain sugar, bottled fruit and jams, jellies, as well as sweets and various toilet preparations, that contain either sugar or spirits, and even certain furniture and boot polish that contain sugar —all these at present have to be examined by the Customs. Probably in most cases samples will have to be taken and an analysis made and there will be no additional delay caused by charging a duty on glass containers. The whole thing of charging the duty will be, as it were, one operation and no fresh or additional congestion or delay will be caused. It is not practicable even if we desired to do so to charge an ad valorem duty on containers.
We are dealing with empty bottles and invoices will come to be checked in various ways to show the value of the imports, but when dealing with containers it would be more difficult to ascertain the value. We are satisfied that containers must be charged specific duty as distinct from ad valorem duty and we propose on all those a specific duty of three pence per dozen where the capacity is not in excess of five fluid ounces.
There are a few very small mineral water bottles that will not contain that, but generally mineral water bottles will be in excess of that and will contain more than five fluid ounces.
I put down an amendment to delete the word "empty," the effects of which would mean that all glass bottles will be subject to this duty. I rather did that with a view to draw from the Minister some views as to the exemptions that would require to be made and I anticipated there would need to be some exemptions. The Minister's proposal meets in a very large degree every case I had in my mind except one. I have not consulted anybody in this matter since last year when the same question arose, when we thought that mineral water bottles would be included in the tariff. When mineral water bottles were excluded then the proposal I had put down a year ago to delete the word "empty" fell. But now that mineral water bottles are included, the question arises as to whether the amount of duty would not make it profitable on the part of bottle exporters to fill these bottles with water not dutiable because the cost of filling and stoppering would be considerably less per bottle than the amount of the duty, and inasmuch as this proposal is only to place a tariff upon dutiable articles which would cover mineral waters, water which was not mineral could be filled. It would cost nothing more in freight. The same space would be occupied because there are no collapsible glass bottles, and therefore I can see a possibility that has not yet been considered and that should be considered, namely, the possibility that it would pay the bottle exporter to export these bottles full of water and empty them when they arrive here.
I put that forward for consideration. I do not know whether it has any solid basis or not. I do not know how the cost would compare with the rate of duty or what the cost of filling and stoppering would mean. Apart from that I think the Minister's proposition meets all the instances I had in my mind. When I desired that the duty should have been put upon glass bottles, I had mainly in my mind whiskey bottles and mineral water bottles.
I welcome the amendment moved by the Minister, and I think it more or less covers the cases that I had put down. There are, however, two, I think, that are not met, and I mention them now because it may have been the Minister's intention to have dealt with these two cases. The first case arises in connection with certain manufacturers who have spoken to me about the needs of their business. In one case certain medicines are manufactured here or preparations that are made into those to be styled as medicines, and another case was that of toilet requisites of various kinds. In one firm 88 different sizes and shapes are used, in another firm over fifty. The argument put forward by these people is that they buy their bottles; they manufacture their commodities here, and they fill these commodities into bottles on this side, and that they are in competition with British firms who sell exactly the same article in Ireland. That argument is this: if they are charged a duty on their bottles, and the British manufacturer of the same article can put it on sale less the duty on the bottle, because his is a filled bottle, that, in effect, will mean that this duty will be a protection, not to the Irish manufacturer of the filling, but to the British manufacturer of the filling. The difference will constitute a very great portion of the profit that is now made which, because of the very keen competition, is a slender sum. That was not the intention of the duty, and I have been puzzled to discover how far, exactly, the amendments moved in the Minister's name will meet the case.
It is perfectly true that in some cases the filling in the container would be dutiable. In that case the amendments would meet all requirements. But it is also true that some of the filling of the containers is not dutiable. One case that was mentioned was that of cod liver oil. A certain manufacturer in Ireland puts up cod liver oil in bottles which, under this proposal, he would have to pay duty on. He has to meet in competition English firms that put cod liver oil into bottles and who can get their bottles, because they are filled, across the border without any duty at all. Obviously the Irish manufacturer—he could hardly be called a manufacturer, because he is little more than a filler—is put at a serious disadvantage against the British competitor. I suggest that in that case—it was one of the two cases I mentioned—care should be taken to see that the British manufacturers are not put in that position of advantage and that Irish manufacturers are not put in that position of disadvantage. That is one case. The other refers to people who have represented their case to the Minister, and the statement has been made that Irish manufacturers will be able to supply all the bottles required, in the case of medicine bottles, for example, in a very short time.
I should be very reluctant, indeed, to say anything that would suggest a question of that statement; but it has been said to me that that promise would be very hard to keep, simply by reason of the financial difficulties of some of the manufacturing firms, because the procuring of the moulds and machinery required for the manufacture of the special types of bottle of the exact size required is not an inexpensive matter. What then happens in the case of the Minister's amendments, which are themselves grounded in the assurances that have been given to manufacturers of bottles in the Saorstát? If those assurances cannot be made good, or made good early enough to be of real use in the present financial year, what happens? I should like the Minister to direct his reply to those two points in order to meet the difficulties that have been raised by those who, having worked the matter out, think they would not only seriously be affected by the duty, but would be affected in the very opposite way to the intentions which inspired the original resolution.
We are at a double disadvantage in dealing with this matter owing to the procedure adopted by the Government. In the first place, the Deputies who have been approached by various firms interested in this matter have had no opportunity of consulting with them since this amendment appeared on the Paper late yesterday afternoon. At least I, personally, have not had. We do not know whether firms have raised objections to the admission of bottles filled in England and we do not know if they would be satisfied with the duty that the Minister proposes. I think the Minister is quite right to propose a flat rate. I think the ad valorem rate is absolutely unworkable. Whether the flat rate is high enough is a doubtful question. Here we are placed at another disadvantage and in another difficulty. Once this resolution is passed—and it must be passed to-night —that is the highest rate that can possibly be imposed. We cannot move, on the Finance Bill, any increase in duty.
We could move to reduce, but this is absolutely the maximum, and if we find firms that feel they will be prejudicially affected by the original duty saying that they may have to go out of business if they are exposed to English competition of the kind Deputy Figgis has described, we have no remedy. If we find this duty is inadequate to help them, we have no possible opportunity of moving for its increase. I think the President will see now that I was not merely acting on punctilio in raising the question on a point of order. We are still very much in the dark. The Minister tells us that mineral waters are taxed. Are all mineral waters taxed, or is it merely sweetened water that is taxed?
All mineral waters.
Including noneffervescent waters?
Yes, all table waters.
That meets one or two points. It does not meet all the points that Deputy Figgis mentioned, and it does not meet the point regarding the manufacture of ink that I have in mind. There is one manufacturer of ink in the Saorstát. That work is not carried on in my constituency, but it is in Deputy Wilson's. They have been unable to obtain in Dublin the bottles they require. They have to import them from Great Britain, and if they have to pay the duty, which is a heavy duty on such imported bottles, they will be paying more than their British competitors, who can send bottles filled with ink in free. The result will be that the Irish manufacturer will be, as Deputy Figgis has said, at a material disadvantage compared with competitors across the water. The ink I have referred to is good ink; I believe you have some of it on your table, A Leas-Chinn Comhairle. I do not think it should be placed at any disadvantage. We ought to promote that industry; we certainly ought not to hamper or harass it.
As I say, I am dealing with this matter under great handicaps. I have not been able to consult the firm; but they expressed a view to me that nothing less than a flat rate of 9d. per dozen, such as was originally suggested, would be of any use. It should not be anything short of that. The Englishman can undersell them if they would be obliged to pay a 33? per. cent duty. That is a very heavy duty, and I do not think it should in this instance be imposed. Perhaps we could extend the protection in paragraph (c) not merely to dutiable goods, but to any other goods that we manufacture in the Saorstát. How we are to do it, working as we are under such limitations of time, I do not know. I can only regret the ill-considered procedure that has been adopted in bringing in a duty on glass bottles without considering how it would affect firms manufacturing articles here. I see no way out. It is admitted the Irish firms do not manufacture all these bottles now, and that machinery cannot be installed for manufacturing them for a month or two. But that period alone might mean that those comparatively small and struggling firms would be beaten out of the market.
The factory I desire to refer to is the ink factory mentioned by Deputy Cooper. The complaint is these bottles are not procurable in the Free State, and therefore we are handicapped to the extent of 33? per cent. as against the English manufacturer. What would be the price of these bottles? The duty on an ink bottle would not, I am sure, be very much.
And ink is not dutiable.
There is some point in it. I was wondering whether the Minister would agree to delete the word "dutiable?" The argument which affects the ink bottle is net met by the Minister's amendments, and I would like to hear him on how the particular manufacturer in question is to meet the competition in which the Englishman has the advantage of 33? per cent. on the price of bottles.
I wish to emphasise the point made by Deputies Cooper, Figgis and Wilson with regard to these bottles. They are used by what we call the manufacturing chemist or the packing chemist in Dublin. A packing chemist, as the term is generally understood, is a man who puts any of the drugs he will have to import —some of the ingredients which he uses are also manufactured in Dublin —into bottles. He will have to import his bottles. The materials bottled mainly consist of brilliantines, hair washes, cod-liver oil, cosmetic drugs and cosmetic preparations. The merchant at the other side of the water who sends these preparations into this country, sends them in bottles which are free of duty. The bottles cannot be found in Ireland, and the manufacturing packing chemist will have to import them from England. The result is that he is under a great handicap. It means that he has to pay a very high percentage, 33? per cent. of the value of the bottle, and the trade cannot afford it.
These bottles are not made in Dublin, and I do not believe, having looked into the matter, that it would be a commercial proposition for any bottle manufacturer in Dublin to manufacture these bottles. They are very varied in size, and not only are they varied in size, but they are also freakish in size. The moulds that would be required would be very expensive to make, and the quantity the Dublin packing chemists require would be too small to make it a paying proposition for any bottle-maker in Dublin to go to the expense of making moulds. Even at present there is no doubt there is no bottle manufacturer who can supply this want, and the result will be that if the Dublin manufacturing or packing chemist has to give up his trade—they say themselves they will have to abandon it until such time as the Dublin bottle-makers can make these bottles—he will lose it and lose it for all time. I think if some provision were made either by exemption or by taxing bottles in such a way that it would put the Dublin chemist on a level with his English competitor, it will be a great advantage to him. Otherwise it will mean that these chemists will have to go out of the trade and that a lot of their employees will lose their jobs.
I wish to deal with Mr. Wilson's ink manufacturing firm first. Ink, as we all know, is generally put in tiny little bottles, that will cost 3d. per dozen when they are bought wholesale. These are the ink bottles that are bought when full at 2d. each. If a duty of 3d. per dozen is to be charged on these bottles, I do not see why this firm is going to be at any disadvantage at all. I say the duties that are to be imposed on glass containers are an absolute necessity. To anybody coming from the part of the country from which I come, it is quite apparent that if this duty were not imposed, every trader from Dundalk to Londonderry who is engaged in any business along the Border, would be very seriously handicapped. That is leaving out the question of what comes in by sea or from England. This is a very fair duty, and I do hope that the Minister will not yield to any inducements that have been held out to him to remove this duty in any way. I can say that the trade of all mineral water manufacturers who are bottlers on this side of the Border would be absolutely ruined if full bottles were allowed to come in across the Border. It would be very easy for any trader to get in full bottles and to make at least 33? per cent. or more, perhaps, on these bottles, and have them for his own use afterwards. I think the duty is a very fair one, and that the Minister should insist on its being enforced.
I would like to make it clear that Deputy Hughes has entirely misunderstood the suggestion I have made, and entirely misinterpreted the suggestion that I understood other Deputies had made. It is not to remove the duty; it is to extend it, which is quite another matter. Again I would suggest to the Minister—I have got it down quite hurriedly, but I think it would meet the case—that after the words in the amendment "at the time of importation any dutiable commodity" the words be inserted "or any commodity which is filled into bottles in the Saorstát." That, I think, would meet the case, or if it would not meet the case, that is the intention, the point being that if a commodity is filled into bottles in Ireland the person who does that packing or filling should not be placed at any disadvantage.
I would like to raise a further point before the Minister replies. The Minister gave us a list—I am sure it could be extended to a very large extent—of small bottles that are brought in containing a small amount of dutiable material which, with this duty, become liable to 3d. per dozen, that is ¼d. per bottle. I do not think that any of us could foresee as the result of that that there would be an increase in the price to the consumer of a farthing per bottle. We know it would be heavier.
If they are chemists' bottles it would be 5/-.
Perhaps so. Take the case of any material made in Great Britain and sold here at a certain price. When sold in bottle there is an increase in that price because of the bottle duty. We all know that there would be an increase in the price to the purchaser because of that increase in the duty. We all know, we expect it certainly, that it would not be a mere farthing but at least ½d. That is to say, that the distributor would make out of this duty the difference between 6d. per dozen and 3d. per dozen, and that the consumer would pay the higher rate rather than the lower rate. I do not see why the revenue should not make that profit instead of the distributor. I do not think there is any advantage to be gained in reducing the duties by a farthing per bottle. It simply means that the duty should not be of a less amount than that which may conveniently be added on to the price and turned on to the consumer.
In regard to the point raised by Deputy Johnson we considered that last year, but when we had reached a certain stage it did not become necessary to consider it further. Therefore, as far as we have gone, we are satisfied that there would be hardly any circumstances in which it would pay to fill bottles with water, cork them, and bring over the extra weight. We were also satisfied that if they contained water and not some commercial commodity, that most probably the Revenue Commissioners would be supported by the courts if they charged a duty in the same way as if they were corked full of air. However, if it is a matter that it is thought we should consider more fully, we can go into it again.
You will not forget how close Derry is to Donegal, and Newry to Dundalk.
That will be looked into by the Revenue Commissioners. In the case of bottles which are brought in in that way to escape the duty, we can remedy it. A great number of medicines and toilet requisites are dutiable, and a great number of these contain either spirits to some extent, or sugar to some extent, and the people who bottle here will be in a very large measure protected by this tax on glass containers. Cod liver oil is not dutiable, and there are a number of other things that are filled here which are not dutiable commodities. The only way that can be met is by arranging that bottle manufacturers here will turn their first attention to producing bottles used in that class of trade. We are satisfied that the glass factories will now be able to do work which they have not been able to do before. The great handicap under which factories laboured in the past has been lack of capital. They have been struggling along on the verge and have not been able to do the best that could be done owing to lack of capital. They will now be able to get capital.
The prospects which this particular tax opens up will enable them to get capital, and they will be able to take on the supply of the types of bottles needed. We can only get them to give their first attention to the sort of bottles required for, say, ink or cod-liver oil, or other preparations. Deputy Dr. Hennessy referred to the need for medicine bottles, and he believes that it will be impossible for them to be supplied in any reasonable time here. As a matter of fact, one firm which has been out of business and which, I think, will re-start, has moulds for 400 different sorts of medicine bottles. As soon as the furnaces can be re-started it will be possible for them to supply a very great range of medicine bottles. It may be that in certain classes of trade the druggists could not bear any tax, even in the meantime, but so far as bottles sold to persons getting prescriptions made up are concerned there is no doubt that the druggist makes a great profit. The ordinary bottles, from two to eight ounces, are bought at prices ranging from 8/- to 14/- a gross, and they are sold at twopence a bottle. They will certainly, so far as the filling of prescriptions is concerned, be able to bear the tax in the meantime, and I think it will be a very short time, indeed, until sufficient bottles can be made here to meet the requirements in that trade and to meet the requirements to which Deputy Figgis referred, and which are really concerned with the same trade.
I did not say that the firms concerned would say that the rates we propose are high enough. I do not think that we could propose rates that they would regard as being high enough. We think that the rates we propose will suffice. We do not want to make them higher than is absolutely necessary. In cases where we are dealing with dearer classes of bottles, such as mineral-water bottles, you have to remember that the home-made bottle used by firms at home will be refilled a number of times. In certain cases bottles belonging to a firm that has its own brand will not be used more than once, because we will not admit bottles of that sort empty free of duty on reimportation. The clauses regarding reimportation will not apply to them. I do not know whether there are any classes of preparations where the effect which Deputy Thrift fears will take place. We know that in all these medicinal preparations the rates of profit charged are very high, and far beyond those charged in any other classes of business. I cannot imagine that threepence a dozen in their case would give any justification for an increase, or would go any way to make it necessary for traders to charge an increase of prices. If any difficulty were found to arise at any time before the Finance Bill enters on its final stages it is possible to introduce a supplementary resolution. Such supplementary resolutions were introduced last year, and if anything appears as a result of experience and practice to make it necessary, supplementary resolutions can and will be brought before the Dáil.
I would like to ask the Minister if he will take into consideration between now and the final Stage the matter of stamp duties on patent medicines. I raised the matter some time ago and the Minister, I think, thought that the revenue derivable would not justify the imposition of a stamp duty, as has been the practice in England for a long time. Now we come to the imposition of a duty on bottles containing dutiable articles, and I think, in view of the immense consumption of patent medicines, the intrinsic value of which is very small and the cost to the consumer very high indeed, there is a source of considerable revenue which will be added to now by a duty on bottles. That might help to meet some of the cases of the drug merchants and fillers of medicine in preparations of their own concoction. It might assist to maintain their business. I think the Minister would find a very considerable revenue would be derivable from a stamp duty on patent medicines and the additional revenue from the duties on bottles in which these medicines are imported.
That matter was examined and it was one upon which we were not able at the time to reach any decision. Perhaps we might hear of it again. It is a tax somewhat difficult to administer. That is the reason that, so far, no proposals have been made in regard to it. Whether proposals will be made, or whether we will have to wait, is a matter which requires on our part some further examination.
Has the Minister any authority for saying that the bottle manufacturers in this country will be able to supply the ink makers? He evidently thinks that he meets the case by stating that the factories will be able to supply, but I would like to know if he has authority for that statement.
They promised to supply them and the matter has been dealt with directly by the Minister for Industry and Commerce. We are satisfied that the firms will be able to fulfil their promise in this matter. I do not say that if they state that they will do certain things in six weeks it might not take seven weeks.
May I mention this point as we are taking all these amendments together? Take one example. As I understand the case put before me, the one firm I mentioned used 88 different sizes of bottles. Some of these are not used in large quantities. Some of these are not even obtainable in England owing to their size and pattern, and they have to be got from Germany and Belgium. Some of them are quite small. The fact is it would not pay Irish manufacturers to make these bottles and to keep the furnaces or moulds going for these particular sizes and patterns.
Surely, in a case of that kind, where the Saorstát manufacturer of bottles would be unable to supply a particular pattern, for it would not pay him to do it, the Irish manufacturer is, by the curious irony to which I have already referred, finding the British manufacturer protected against him, which is the opposite intention of the resolution.
I think you will find that a good number of those bottles are probably scent bottles, or bottles containing commodities that are dutiable.
Would not the Minister consider it a great convenience to have a flat rate of 6d., and whether the introduction of the different sizes is not a complication, bad in itself, because it is a complication, and further, with the objection, lying against it, which I have suggested. He mentioned certain articles such as boot polishes and sauces which are sold at certain prices in retail houses, and which leave a certain margin of profit. I am perfectly certain, and I think the Minister will agree, that the retailer will not be satisfied with one farthing less profit on the bottle than before this duty. What he will do is to raise the price by one halfpenny. I think the revenue might as well have the extra profit.
The Minister called attention to the point that small bottles which are charged at the lower rate are used for certain types of mineral-water. He may have been referring to what is called the Baby Polly. No one imagines that there would be only a charge of a farthing extra. I am certain that the retailer will pass the duty on to the consumer, and will charge a halfpenny. I agree that the revenue ought to get the extra profit, and not the retailer.
It may be that the Baby Polly will be substituted by something else.
Amendment put, and agreed to.
I move amendment (b).
To insert after paragraph (1) a new paragraph as follows:—
"(2) That the duty mentioned in paragraph (1) of this Resolution shall not be charged or levied:
(a) on glass syphons, nor
(b) on glass bottles which the Revenue Commissioners are satisfied are adapted for use solely for feeding infants, nor
(c) subject to compliance with such conditions as the Revenue Commissioners may think fit to impose, on glass bottles or glass jars which the Revenue Commissioners are satisfied are imported for use solely for containing milk for sale."
I would like to congratulate the Government's draughtsman on Sub-head C. I wanted to bring in an amendment on that, but I could not find any form of words. I am very glad the Minister has met that point.
Amendment put and agreed to.