Vol. 40 No. 15
I move on behalf of Deputy Cole:—
Before sub-section (4) to insert a new sub-section as follows:—
"Where the Revenue Commis sioners are satisfied that any petrol is being used entirely for agricultural purposes, they shall allow a rebate of fourpence per gallon."
It would not be possible to accept the amendment. When the old petrol duty was in force there were numerous provisions for rebate. It was found practically impossible to work them. The revenue officers had the choice of lax administration, in consequence of which many people got rebates who were not really entitled to them, or such a careful system that under it those who might be practically entitled could not enforce their claim. There is no such rebate as this in Great Britain. They have not the rebate because of the impossibility of working it. If we were to insert such a provision in the Bill, it would involve not merely loss of revenue but probably as much again in the attempt to administer it. When the original petrol duty was imposed, I gave a great deal of consideration to this matter, and I came to the conclusion that it was impracticable. It could not be worked in such a way as to be fair and to give satisfaction. In whatever way it might be worked, the administration cost— the cost of inspection, returns and checks—would be so great that it could not be carried out.
During the war, I understand, a measure of this kind was adopted and adopted successfully.
Petrol was not dutiable during the war.
The principle was adopted then.
No. It was adopted before the war. It was because it really killed the duty that the old duty in force about 1910 was abandoned.
There was a rebate given on a certificate that so much petrol was used for starting oil engines. The oil engine is in general use amongst farmers, and this will be a considerable impost on them. If the Minister could see his way to give the concession in respect of No. 3 petrol, I think it would meet the case. I hope the Farmers' Party will support the amendment.
I would like to support Deputy Cole in this amendment, but I see the difficulty the Minister would have in defining what are "agricultural purposes." It might easily be said that a petrol-driven wagon going to a creamery with milk would come within the ambit of the amendment. It might easily be argued, if the amendment were accepted, that a car conveying a farmer and his family to town was being used for agricultural purposes. I can see the difficulty of administering the Act if this amendment is included, and I am sure Deputy Cole will admit that it would be a very complex question. If the Deputy had clearly defined his amendment, we would know what was meant by agricultural purposes, whether it was cars conveying milk to a creamery, or whether the petrol used in tractors or machines of that character would be included. I am anxious to support the amendment, but the words "agricultural purposes" might be translated in various ways.
I intended that the amendment would cover only agricultural purposes on the land and not for taking milk to a creamery or anything like that. I think it would be quite easy for the farmer to furnish a return showing the amount of petrol he was in the habit of getting. In that way it would be quite easily carried out. It was done before. I furnished the returns myself.
Yes, it was done before, but it was found that it could not be administered. It really killed the tax. The system of exemption killed the tax. It was found impossible to administer it. It was found impossible, for instance, to prevent people applying for petrol which would be free of this duty and supplying it to their neighbours at the top rate. Generally, the system was found, after three or four years' experience, utterly impossible to administer. The revenue authorities had either to allow a supply of petrol to these people without really being satisfied that no abuses were involved or else they had to establish a system of control, or of bonds and storage, which could not be worked out. The system was tried out fully, and was abandoned as impracticable. As regards its use on land, there was a proposal in Great Britain a year or two ago to give exemptions for this purpose, but that was only entertained as long as it was the intention to have the tax also on paraffin. As the tax is not on kerosene, the amount of petrol which it is necessary to use is very small; and if you confine it to that narrow scope — that no farmer could apply for this petrol except a farmer who had actually a tractor working on his land—and eliminate all possible leakages, the cost of administration would be out of all proportion to the advantage conferred. Even in that case, the cost thrown on the Exchequer generally, by trying to administer one of the exemptions, checking it, and preventing farmers increasing the quantities of petrol used, was found to be prohibitive. A man getting petrol duty free might not be above using it for purposes out of which he could make a little profit. All these things are difficult; and although there might be some relief for farmers, I do not think the cost of exemption could be justified.
I understand what the Minister has said about leakages of an undue character, but at the same time the amount which the farmer got could always be checked, and it would not be worth his while to try and make anything out of it. A great many farmers have small engines on their farms which they find more economical to run on petrol than on paraffin. This would be a considerable tax on farmers who are in the habit of using their engines for threshing purposes, or who send their engines round the country to carry out threshing operations. It is a considerable increase in their taxation.
I would like to add a word to the case put forward by Deputy Cole. I am a farmer using a Ford tractor, and from my experience I have found that commercial petrol is the most economical fuel to use. My tractor is never working on the road; it is used entirely on the farm. If the difficulty could be got over of making a distinction between farm engines and those used for transport purposes I think it should be done. It is hardly fair to charge the present rate of tax on petrol for an engine that is never used on the road.
This is not a road tax.
Could not the Minister see his way to apportion a certain amount of petrol to farmers if they were using tractors or machinery for agricultural purposes such as slicing turnips and things of that kind? Quite a number of farmers use these tractors now. I do not see why he could not apportion petrol to these particular farmers, because we should remember that generally when those farmers sell their produce they fall in for this tax again. Lorries and motors are very much used nowadays by farmers in taking their produce to market, and also the buyers who visit the farms in the country will be inclined to pass on any tax they have to pay to the farmers. If the matter is properly examined it will be found that the farmer is unduly punished. I do not see why the Minister could not adopt some method of that description, that where tractors or machinery are being used on farms he should apportion a certain amount of petrol to the farmers. I do not see any difficulty in doing that, and there would not be the slightest danger of leakage.
I do not know whether I would be in order in suggesting to the Minister that there is another section of the community who might be considered—that is, people who drive motor cars and use them solely for hackney purposes. I would suggest to the Minister that the fact that these people are paying a big taxation now——
That does not arise on this amendment.
What the Deputy has just suggested supplies another argument against it. If you start by making exemptions there is no logical limit. If one section can get an exemption another can make quite as good a claim for exemption also. That was found to be the case in Great Britain. I thank Deputy O'Dowd for his suggestion.
Deputy O'Dowd supplied the Minister with a good argument, but the Minister has not replied to what I asked—would it not be possible to apportion a certain amount of petrol to those farmers who use machinery for the purpose either of ploughing, chaffing, slicing turnips, or anything of that kind. I do not see why you could not apportion a certain amount to these farmers. It is easy to discover the amount that would be necessary.
That involves the question of new machinery, new inspections, new official employment, and the reliefs would not correspond in any case to the cost. Then you cannot avoid wastage or abuse. I am not saying that Deputy Haslett would begin to get a good deal of petrol and supply it to his neighbours to run about in their cars, but there are people who would do that. For every case in which you supply a certain amount of commercial petrol, you would have to set up a new system by which in some way you would apportion a certain amount of petrol to a farmer. You would have no means of knowing whether a man who has a tractor and who has a motor car also would not use that petrol for his motor car. His children might be using the car to go to dances and to all sorts of places. Unless you went to impossible lengths in the way of checks in that way there would be no possibility of preventing abuses. This is not a new thing. It was tried out for several years. A system of exemptions was set up, and there was a great deal of experience of them and of the enormous abuses that arose. It was the impossibility of administering this system with exemptions that led to the abandonment of the petrol tax pre-war.
No doubt the Minister is aware that prior to the introduction of the petrol tax in England some years ago, again and again, Minister after Minister was appealed to to put a tax on petrol instead of the ordinary road tax and he said it could not be done. The adminisstrative difficulties, it was said, were overwhelming. They had come to the conclusion after careful examination that it was utterly impossible. Now we have a petrol tax in England. When they wanted money in addition to the road tax, they found it was quite easy to get over the administrative difficulties and that these impossible barriers they saw in front of them really were not impossible at all. They found it an extraordinarily easy tax to administer and I think that one of the great advantages of the tax both here and in England, is that it is easy to collect. Instead of being the terrible bugbear it was a few years ago, it is now one of the most useful things that it is possible to administer.
I agree with the Minister in his present attitude, because practically every farmer who would have a machine for which he would require petrol—a tractor or engine or anything of that kind—would also have one or two motor cars or other vehicles. It would be practically impossible to prevent his making a claim in respect of petrol that would be used for these other vehicles; and unfairness would arise as between one farmer and another. My main criticism of the amendment is that it is like straining at the gnat and swallowing the camel, because every farmer is going to lose a great deal more from the general increase in the tax on petrol and the cost of transport than he is going to lose by the increase in the cost of running his tractor. It is going to amount to a very substantial increase in the case of the farmer who is accustomed to send his cattle and pigs and so on to the market by motor lorry. Why is it that Deputy Cole seems to accept that big increase and at the same time objects to an increase that will be very paltry? There are very few farmers whom he has in mind who would use 50 gallons of petrol in the year in the running of their engines for tractor purposes on the farm.
The amount of petrol that a farmer will use for these purposes is very small, while on the other hand the increased cost of conveying by motor lorry farm products and goods required for consumption on the farm is going to be a daily toll on the farmer. And I may fairly say that there never was a greater instance of inconsistency on the part of the Government than this increase in the petrol tax indicates. They have been claiming all along that their whole desire was to keep down cost to the farmers, and that they have had to look at every proposed measure twenty times, and examine it again and again in order that it may not represent any increase, or too large an increase at all events, in the cost to the farmers. Here is a tax put on apparently without consideration at all, which is going to affect practically every item of the goods that the farmer uses, either in connection with his work, or in connection with his living. I am sure that, as a matter of fact, it is going to press, in present circumstances, so heavily on particular places where train services have declined, and where the farmer is now accustomed to get his goods by motor delivery—I am sure that the tax is going to press so heavily on these places that the Government will be forced in quick time to reconsider it.
Has the Deputy any idea of the amount of petrol that a tractor would use per day?
I will answer that. I have a Ford tractor which on a full working day will use from 8 to 10 gallons of petrol.
Will the Deputy vote against the petrol tax?
I understand there is an amendment.
The real point is: how many tractors are there in the Free State? If they were all taken together, and if the petrol tax which arises in consequence of them, were lumped together, would not the aggregate amount be absolutely insignificant in comparison with the burden that the general tax is going to impose on the agricultural community?
How many days in the year does Deputy Haslett say the average tractor works?
I am giving you the daily consumption and you can multiply that.
How many days in the year would it work?
It would all depend.
The burden of everything that will arise from this increased tax will be passed on to the consumer, and that means somebody in addition to the farmer. The farmer will see that somebody else will pay for the extra price that he will have to pay to the lorry owners.
Did not the Deputy vote for the tax?
Certainly, and I am going to vote for it again. I should prefer to see an increase in the petrol tax rather than an increase on the price of sugar used by the poor in the cities and in the towns. I do not want any more burdens. We certainly have had light thrown on the situation to-day. I know very few farmers who, in addition to possessing a tractor, also possess two motor cars. We hear a lot about the poverty of the farmer. Deputy Moore has quite enlightened us. The Deputy must know farmers who have tractors and two motor cars as well. We are glad to hear a happy note struck here at last. We are glad to hear that the farmer is not so down and out as he is supposed to be. It is a good sign of the times. Assuming that the Minister wants to respond to Deputy Cole's amendment and to put aside twenty thousand or fifty thousand gallons of petrol for division amongst the farmers who are using petrol solely for agricultural purposes, who use petrol for their tractors, how is that petrol to be divided? The Department is right up against that. A great number of people will claim that they would be entitled to petrol for similar reasons, and then you would have quite another problem. Another lot of people would be dissatisfied, and you would have another disgruntled section of the community up against every Party in this State. As far as this amendment is concerned, while I am in sympathy with it, I find that it would be very hard to administer it, and I will vote against it, though I dislike to vote against it. I am in favour of the principle of the amendment, but I find that it would be impracticable. I do not see how the Minister could work it.
Deputy Anthony in the speech that he has just delivered has endeavoured to justify his attitude in voting for this tax on the grounds that he would prefer a tax on petrol to a tax on sugar. But why should there be any tax at all? Is not that the first consideration? And unless the Deputy is convinced that there must be a tax on sugar or a tax on petrol he has no right to vote for either and ought to vote against. But in fact this is not quite such a simple tax in its incidence as Deputy Anthony seems to imagine. As I said on an earlier occasion, the trouble about petrol is that it suffers from its evil associations. Some people can only think of it in one aspect of its use. Some people never think of the workmen in Dublin who are carried in buses to and from their work. They never think of the buses which run down the Coombe bringing the workman to his mid-day meal who, before that service started, was never able to see his home or his family from early morning until late at night. These are the people who are going to be hit principally by this tax, a tax imposed now at the end of the present motoring season when the amount of petrol used for luxury purposes is practically nil. This tax is not a tax on luxury but a tax on transport. It is a tax on production, and in the case of the working man it is a tax on his tools. Yet Deputy Anthony, who would not vote for a tax upon sugar, is prepared to vote for what will tax the tools of the working man. He is prepared to do that without having been able to satisfy himself or anybody else that the tax is unavoidable. We have said that if it were not for the fiscal policy which the Government have pursued it would not be necessary for the Minister to come here and say that he is faced with a deficit at the end of the financial year. Even yet, if we face up to the situation we can still balance our Budget without imposing additional taxation. Those voting for this tax will be supporting the Ministry in their failure to face up to that situation.
That is the issue that is involved in this matter. I have some extraordinary figures which have been supplied to me by people engaged in the transport of workers in the city of Dublin. There is one case of four small 14-seater buses on the road. In the year 1928-29 the tax on these buses amounted to £134 8s.. With the increase in the road tax that burden was increased to £336. That is to say the imposition of the first tax on petrol resulted in an additional charge of £300 upon that particular transport service. With the second increment in the petrol tax a further charge of £300 is going to be imposed on these four buses, so that in something less than two years the total tax burden on the transport of working class people in the city of Dublin, that section of workers who use these buses, has increased from £134 to £936. That additional burden of £802 will inevitably be transferred to the workers in the city.
A similar situation will exist in other towns and cities where buses are used for the transport of people to and from their place of employment. Inside of two years that burden of £802 has been imposed upon this transport industry, and as I have said, it inevitably is going to be transferred to the workers either in the form of increased fares, which will be paid by the passengers, or in the form of decreased wages paid to the employees. That is why we opposed and have opposed all along the imposition of this tax. If we were satisfied that petrol was being used merely for luxury purposes, merely by the motorist out on pleasure trips, we would have no hesitation in imposing the tax because we believe that luxury motoring of that type could be fairly taxed. Here we find that the ramifications of this tax are going to be borne not only by the farmer who has a tractor on his land but by every farmer who produces foodstuffs and sends them to the market as well as by every farmer who is a consumer. In that connection I would remind Deputy Anthony of what he said, that this tax would inevitably be transferred to the consumer.
That is right.
If the farmer has to pay more for the goods which he himself produces; if his costs of production are increased, and he has to transfer that increase to the consumer, where does the Deputy think it is inevitably going to rest? It is going to rest on the workers in the towns, who consume everything that the farmer produces. It is the workers that will have to pay for the increased burden that this tax will impose on the farming industry. By far the greater proportion of this petrol tax will rest there. I am convinced that under any circumstances it would be borne by the workers in the cities, but in present circumstances, and at this period of the year——
That applies to all taxes except income tax.
Fully nine-tenths of the additional burden that we are now going to impose on the community is going to find its ultimate incidence upon the workers in the cities.
As I have already said, that applies to everything except income tax.
In present circumstances, if the workers pay for everything except income tax, why should the Labour Party or any man, even though he be no longer a member of the Labour Party but still stands for Labour principles, vote for any tax until the Minister for Finance shows him by figures that cannot be controverted that the tax is unavoidable and must be imposed?
Where is the Minister to get the £900,000 that he requires?
Deputy MacEntee has referred to the effect this tax will have on the bus services. I would like to say a word on behalf of those who use the smaller motor cars solely for hackney purposes. Within the last twelve months a direct tax of 8d. per gallon has been imposed on petrol. Assuming that a hackney driver will use only three gallons of petrol per day, that means that he will be paying in direct taxation to the State 2s. per day, or £36 10s. per year. I submit that men in a small way of business, such as hackney drivers operating in the country districts, will not be able to stand that strain.
It is no argument to say that petrol is cheaper now than it was some time ago. The fact remains that a man who owns one or two motor cars and makes his living solely out of cars that he has for hire will have to pay in direct taxation from £36 to £40 a year in respect of each car, and, taking these figures, he will not be doing a lot of running. That man will really have to pay more than a man with a pretty large income will have to pay in income tax. In the British time these people used to get a rebate. The tax was then, I think, 3d. a gallon. As to the rebate they used to get, I never heard there was any abuse in connection with it. I suggest to the Minister that the owners of hackney cars throughout the State will not be able to bear the strain imposed on them by this tax and that the question of giving them a rebate should be considered.
Deputy MacEntee let flow a great deal of vapour about the poor working men in Dublin. When a duty of 4d. a lb. on butter was imposed, a duty that meant a very serious imposition for poor working people, Deputy MacEntee did not wail or weep a great deal over it, nor did he weep or wail over the duty that was put on oats. That was not of much advantage to the poor working man or to the small farmer who does not grow oats. The poor working man has had to pay an extra 1/2d. a lb. for sugar in order to provide the money required for a partial de-rating scheme for farmers. I would ask Deputy MacEntee what is being done for the poor working man? No duty is being put on to protect him from hunger, degradation and wretchedness.
With reference to this tax on petrol, the Deputy who has just spoken seems to forget that we do not produce petrol. The duties that were imposed in the case of butter and oats and on other commodities produced in this State are likely to bring a return in increased prices to the farmer. That will enable the farmer to pay better wages to his workers, but I do not see how a tax on petrol is going to have any such results.
Listening to the debate that has taken place on this tax, into which the farmers have been dragged, I wonder if the Deputies on the Labour and Fianna Fáil benches forget what the responsibilities of the farmer are in connection with this. Is there any more equitable manner in which the tax could be imposed than to make those who use the roads pay a reasonable share of the cost of maintenance of them? Who has to shoulder responsibility for the maintenance of the roads which are used by buses, lorries and motor cars? Is it not the farmer? In the great majority of instances, who has to shoulder responsibility but the farmer? He has to shoulder all the responsibility, and what benefit does he derive from it? After all, who should contribute except those who make so much use of the roads? You may have a motor car lying up for a week; it may not be in use for that period although the owner has paid his road tax. He, at all events, has contributed his share, but on the other hand, you have buses and lorries out every day in the week, and they have contributed only the amount of the road tax.
On a point of order, how does any contribution out of this particular tax go towards relief of road maintenance through the road tax?
With all respect to Deputy Good, does he suggest that the owners of motor cars, buses or lorries should not contribute in proportion to the use they make of the roads, and that the farmer should not be relieved to the same extent? I realise that this is not going to the Road Fund.
Where is it going?
I realise it is not going to the Road Fund, but notwithstanding that fact, it goes to relieve the farmer of other responsibilities directly or indirectly.
It adds to his burdens.
I wonder does Deputy Good contend that it is not fair or equitable that individuals using the roads with their buses or motors, should contribute a fair share towards the cost of maintenance?
The money comes from an entirely different source; it comes through the road tax.
What is wrong or unjust in motoring individuals having to contribute a fair and reasonable proportion towards the cost of maintaining the roads?
There are none so blind as those who do not want to see.
Of course Deputy Good says——
Nothing but good.
That is quite right. Anything he does is always good. I have no hesitation in saying that a tax on petrol is the most equitable that could be imposed. It makes every user of a motor vehicle contribute his fair and reasonable share towards road maintenance. We cannot get away from the fact that the farmer is the one man who has to shoulder the main responsibility for road maintenance. Anybody with experience of public boards and who has to deal with the affairs of local authorities in the country districts will realise that the farmer's responsibility is fast exceeding his capacity to live up to that responsibility. I think the Minister for Finance is to be congratulated upon imposing this tax. As far as I am personally concerned, I cannot look at it from any other point of view.
I do not know whether Deputy Davis was quite serious in his speech, because once or twice, in reply to interruptions by Deputy Good, he made it quite clear that he realised that not one penny piece of the odd seven hundred thousand pounds which the Minister expects to collect by way of a petrol tax is going to the Road Fund and not one penny piece of that money will be spent on the roads. It is going to defray the cost of central government and the farmers who have to pay this tax are not going to receive any benefit as far as I can see.
Not directly.
Deputy Davis wants to lay it down as a sound principle of taxation that the harder a man works, the more journeys his lorries make to the market carrying cattle and other livestock, and the more journeys people make from towns distributing goods to farmers, the greater the tax that should be imposed upon them. That is Deputy Davis' argument. His tax policy is going to be based upon the principle that the harder a man works the more you are entitled to tax him; instead of helping and assisting him, you are to pile burden upon burden on that man until he is entirely crushed. If Deputy Davis were quite clear in his own mind as to the purpose of the tax he surely would not have made the statement he did make. His speech was a plea for increasing the burden upon the man who works hardest, upon the farmer who produces most, upon the worker who is in constant employment.
If there is any plea to be made in this House by a Deputy speaking for the agricultural community or for the working classes, instead of endeavouring to increase their burdens an endeavour should be made to decrease them. We should endeavour if we can to secure these moneys out of economies or retrenchments. We have often urged from these benches that the deficit that we are called upon to meet could be met by holding for the benefit of our own people the money that is really ours, the money that we collect through the medium of those taxes and then pay over by way of pensions to ex-R.I.C. men.
Permit me to draw attention to the fact that my Party is represented here one hundred per cent. and, as far as I can see, only six per cent. of Cumann na nGaedheal Deputies and six per cent. of Fianna Fáil Deputies are present to consider this very important measure.
I think it cannot be seriously disputed that a great portion of the use of petrol in the country is at least a semi-luxury use if not entirely a luxury use. All sorts of people are using motor cars, even, as they may say, on business, in a semi-luxury way. You find a business man who formerly came to town on the tram or on the train now driving to the city in a motor car. Probably he saves five or ten minutes and he may lie a few minutes longer in bed in the morning in consequence; but to allege that if he were not able to travel to the city by motor and if he has to come in by tram or train there would be a serious economic loss in his business seems to be absurd. The use of cars in a great many instances is, I will not say a luxury use, but at least it is a semi-luxury use. Take car owners in the City of Dublin, for example. The use of cars in the city is in nearly all instances a semi-luxury use.
A great deal of bus travelling is something of the same nature. There are many bus services, and if they were curtailed it would not be, to any great extent, a loss. There are other bus services that supply an amenity which previously did not exist. In some cases you have people travelling by bus who, with very little inconvenience, could travel by train or tram. Where you have excess facilities, where you have three or four ways of getting to a place that are not really necessary, that is uneconomic, and in such a case the use of the bus is a luxury use. I have not any hesitation in saying that a very great proportion of the use of petrol is either luxury or semi-luxury use, and therefore there is a very substantial proportion of this charge that does not by any process get back to a charge on the poorer members of the community.
Deputy O'Dowd mentioned a certain exemption which existed before, and he said he never heard that it had been abused; never heard there was any abuse in connection with it. The story I heard was that there was never anything but abuse in connection with it.
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Aiken, Frank.Allen, Denis.Boland, Gerald.Boland, Patrick.Bourke, Daniel.Briscoe, Robert.Buckley, Daniel.Carty, Frank.Colbert, James.Cooney, Eamon.Crowley, Tadhg. Kent, William R.Killilea, Mark.Kilroy, Michael.Lemass, Seán F.Little, Patrick John.Maguire, Ben.MacEntee, Seán.Moore, Séamus. |
Derrig, Thomas.De Valera, Eamon.Fahy, Frank.Flinn, Hugo.Fogarty, Andrew.Gorry, Patrick J.Goulding, John.Harris, Thomas.Hayes, Seán.Houlihan, Patrick.Jordan, Stephen. O'Dowd, Patrick Joseph.O'Kelly, Seán T.O'Reilly, Matthew.Sexton, Martin.Sheehy, Timothy (Tipp.).Smith, Patrick.Walsh, Richard.Ward, Francis C. |
