When the debate was adjourned at 6 o'clock I was asking whether the Opposition really apprehended the nature of this tax and the purpose for which it was used. It seemed to me, judging by the speeches which we listened to from the Opposition, that there was a great deal of mental confusion among them: that they really thought we were discussing this as a mere academic issue without any relation whatsoever to the conditions which prevail outside this House. We had Deputy Blythe stating that we were taking away the purchasing power from the individual. We had Deputy McGilligan saying that we were limiting what a man is spending on himself in the useful way he is spending it on himself, and then he adverted quite casually to the fact that among the three million people in this little State of ours there are the extremes of great wealth and abject poverty. He thought, judging by his speech, that that was merely an irrelevant consideration, that we should pass away from it. The whole purpose of the Budget is to ensure that those who are living in abject poverty, who are a liability on this State and community as a whole, who because they are living in abject poverty and below the subsistence level and because they are unemployed are fast approaching a condition of chronic unemployability that we have made up our minds to do two things: first of all, to relieve them in their misery, to revive in them the habits of industry which are going to be wealth-producing, and, secondly, to ensure that they will not be driven to that state of desperation in which the extremes of wealth—not merely the extremes of wealth in this country but all opportunity for producing wealth in this country—might well be destroyed.
We had Deputy O'Sullivan saying that income tax is calculated to cause unemployment. I should like to consider that a little further. As a matter of fact, when I was interrupted I was dealing with that particular point, and I did ask the Opposition to consider this: that if we had not increased income tax but instead had reduced the old age pensions by four shillings per week, what would be the reactions of that particular policy upon the state of employment in this country? If we reduced old age pensions by four shillings per week we would, first of all, be imposing a very much greater hardship upon a considerable section of the community. We would be imposing upon those whose total income is £26 per annum if they are enjoying pensions at the full rate, an income tax equal to almost 50 per cent. of their income, and we should be reducing their purchasing power by a very much greater proportion than any imposed upon the income tax paying class which any Government could conceivably impose. We should be going further, because we should be reducing the purchasing power of a section of the community which spends whatever income it may have mainly upon articles which are made or grown in this country. The old age pensioners' 10/- per week is spent mainly, as I have said, upon the elemental necessaries of life: upon vegetables, milk and the simple things of life, the things which I repeat and emphasise again, are made or grown in this country. If we limited or curtailed in any way the purchasing power of that section of the community unemployment would be created in a much greater measure than could possibly be done by any increase of income tax which we imposed.
Even if we did grant the contention of the Opposition that this does mean a curtailment in purchasing power of the very rich, in what way after all is a large part of that purchasing power utilised? It is used to buy motor cars and to import silks and furs. It is spent on the sumptuous livery of the well-to-do, most of which is not manufactured in this country, and in so far as the incidence of this tax upon the very wealthy classes in this country could create unemployment at all, it would create that unemployment not here in the Saorstát, but elsewhere where these things are made and in the countries from which we import them. There is, therefore, in short so far as income tax is concerned no destruction of purchasing power inside this community. There may be a transfer of purchasing power but it is, I repeat again, a transfer within the community and a transfer which will ensure that a much larger proportion of that purchasing power is utilised in the creation of employment within the Saorstát.
