In the very lengthy statement made by the Minister for Finance on Wednesday last in connection with the Budget, there was one notable omission. He did not disclose to the House whether there was an increase or a reduction in taxation. It might be inferred from quite a number of newspaper articles, at least in the case of two daily newspapers in Dublin, that there had been a reduction in taxation. In February last, through the Emergency Imposition of Duties Act, or some other Act of that kind, there was an imposition of 4/8 a cwt. on sugar. That imposition remains in this year's Budget; it was not in last year's Budget. Speaking on the com parison of the sugar tax and the tea tax two years ago, the Minister indicated the difference in amount between the two was estimated by him at £18,000. He calculated that the income in respect of the ½d. on sugar would amount to £400,000. Added to that, there is £24,000 in respect of income tax this year—the removal of one-sixth which up to this has been allowed on the valuation of houses estimated under, I think, Schedule A. Under tobacco this year there is an impost of £35,000 remaining on the 3½d. allowed to Irish manufacturers. The Minister anticipates an increased yield of £150,000 from the alteration of the customs duties, making in all a sum of £609,000. The remission of outdoor sports tax, the reduction in the cost of tea, and the reduction of 6d. in the £ on income tax lead to a total reduction of £560,000, leaving a net imposition in this year's Budget of 49,000 as compared with last year's. Making allowances for receipts in respect of the period from February to the 31st March the actual increase since this time last year amounts to £100,000.
There are other figures of some importance which the Minister mentioned in the course of his speech. The figure for overestimation amounts to almost £1,200,000. It is a very large figure when we take into account the Minister's own statement. In the course of his speech he said that something like £600,000 had not been expended. What he said was:—
"Revenue has surpassed indeed even the most optimistic expectations ... while supply expenditure, carefully scrutinised and controlled, has been less than the Estimate by over £600,000."
Let us take a liberal amount and make provision for double that sum in finding what amount of money is required to meet the expenditure for the current year. The Minister said that would be 4 per cent. of the supply services but I find that included in that sum of 4 per cent. there are very considerable items. The Minister took the sum, if I mistake not, of £28,000,000. The total estimated expenditure this year is £31,119,107 on which he made a deduction of £75,000 saving on unemployment estimates, and windows' and orphans' pensions. Now deducting local loans amounting to £4,200,000, property losses, £110,750, industrial alcohol, £102,000, advances to Guarantee Fund, £300,000 and £470,000, which I presume is to be expended in relief of rates, and the two-thirds of the provision for export bounties and subsidies, £1,500,000, supplementary agricultural grants, £900,989, we get a total of £7,583,739. We are left with a sum which the Minister might speculate on as £22,460,368. And on that sum you would require over 5 per cent., possibly 5.7, to get the reduction necessary. The second figure—the allowance of £1,500,000 to be borrowed against the expenditure of £2,250,000 on bounties and subsidies, is apparently a figure which has been treated as an asset. But it is borrowed in respect of a sum of money which is in dispute. So far we have not had any benefite statement from the Ministry that these land annuities, and other sums, are not in dispute. We have always heard that they are subject to a settlement still, or yet to be made. We have heard no departure from the statement that the Government were prepared to accept an outside arbitrator; and so far as the sum is concerned, it is one in regard to which there is no doubt at all about it there is a dispute. Have they entered into possession of these sums? Are they satisfied that there never will be any settlement of the dispute, and, therefore, that these sums are under their control? And the next question which arises—and it is rather important having regard to the seizures and arrests through the entire country—is: is this really an asset and can it be counted upon as what one might call a good debt, and have we not to take into account the fact that some thousands of sheriff's orders are circulating in regard to this sum throughout the country at the present moment?
Having regard to the fact that there have been cattle seizures and baton charges this year in connection with this matter one is inclined to doubt whether it is of such a character as that which the Minister put forward. These are the two items—£1,500,000 and £300,000 in connection with the Guarantee Fund and these are also to be borrowed. So we have this position that the debt which the Minister calculated in respect of the unpaid instalments does not exceed £500,000, and the Estimate—I think it is a large Estimate— that the whole of the May and June land annuity instalments of last year were not paid, and we have a debt which has been funded of approximately £2,500,000 against which we are going to borrow £1,800,000 this year. That does not appear in the first place to justify the circumstances of the case, and in the second place it is open to doubt whether if circumstances and conditions should remain as they are the Minister or the Land Commission will be able to collect each year the instalments and interest in respect of the funded annuities in the case.
We come now to what the Minister calls the difference between the public debt as it was two years ago and as it is to-day. He calculates that in respect of that we are better off to the extent of £5,460,000. The first item that attracts one's attention is the item of £1,511,000 for which the Road Fund is responsible and respect to which the Minister takes credit. Two years ago we were informed that the Minister proposed to borrow £1,000,000 on the security of the Road Fund in order to give more employment. That money has been advanced out of that fund and either to the fund or to the State in respect of it he is responsible for a sum approximafely of £900,000.
The Minister takes this line in respect of it: we have borrowed that, we have spent that, but we do not owe it; the Road Fund owes it. Whatever satisfaction the Minister may be able to take to his conscience in respect to that, unless he is in a position to prove that that sum of money was required to put the roads into order if they were not in order to the extent of the sum subscribed to the Road Fund, and that in consequence the Road Fund could be saddled with a liability in respect of that sum, its inclusion does not appear to me to be justified as an asset. One could just as easily borrow on the customs or the excise duties of the future as upon the Road Fund. In any case it is owed. The Minister may say that the Road Fund owes it, but somebody has responsibility for the Road Fund and this does not appear to me to be a justifiable item for inclusion amongst a number of assets.
Assuming for the moment that we take that out—that we leave that £4,500,000—the Minister took into Revenue two years ago a sum which he informed the Dáil amounted to £4,677,000. Later in his speech on the same occasion he stated that he did not get the whole of that; that not much more than half of the land annuities, which were slightly under £3,000,000, had been paid, and that in consequence he required to deduct from this £4,677,000 approximately £1,500,000. That sum at any rate has to be added to the £900,000, so that you get a total of about £4,000,000. Last year, if we are to accept his figures as correct, he had a balance of income over expenditure of £1,300,000. The sum total of these three items very closely approximates to £5,460,000. But, going back to his earlier statement in connection with what is called the public debt— what he has this year made to be a sort of comparison between what he received and the debt that he had to shoulder—and the position as it is now, it will be within the recollection of the Dáil that at that time he stated that we had a liability in respect of £92,000,000 to Great Britain which had been practically placed upon the State by the preceding Government. But in the following year he took credit for wiping out that debt, and this year it was scarcely mentioned at all. Let us see exactly how the matter stands. If the Minister, or the Government, has escaped liability in respect of that sum of £92,000,000—a capital liability—it is beyond question that somebody, or some collection of individuals in this country, has had collected from them, from their produce or their goods, an average of £4,000,000 a year over the last 21 months. The published returns of our customers beyond the sea show that they have received £7,000,000 in 21 months. That is the sum that has been levied on goods that went into that country from this country.
Now let us examine what the price of money is to-day. The Minister borrowed a loan a short time ago. It was offered at 98 at 3½ per cent. In order to get the value of the £4,000,000 you require to multiply it by 28. Formerly we had a 5 per cent. loan. Twenty times the annual sum would practically give you the value of that loan. In this case, owing to the fact that money is cheaper now, you have got to multiply the £4,000,000 a year by 28, so we find that while the Minister and the Government have escaped liability in respect of the £92,000,000 our agricultural industry and the goods that we export which are subject to tariffs on the other side are being saddled with the sum of £112,000,000. That does not appear on the face of it to be good business, but it is a fact. When we talk about a conflict, about the economic war, the struggle for our national independence, and the struggle for self-sufficiency or something of that sort, let us remember that we are starting off with a present-day value of a debt amounting to £112,000,000. So far as the other items are concerned, when one considers the figure at which that particular debt stands to-day as compared with two years ago one can make the Minister a present of the £5,000,000 even if the other figures to which I have referred have any weakness in them, a thing which I do not admit at all.
I do not propose to make any further observations on that particular matter. The Minister, in the course of his statement, referred to the publication of some observations during the course of the collection of his National Loan last year: that somebody in the Opposition whom he did not mention made a statement to the effect that this £6,000,000 was going to be used for the purpose of buying an election result for the Party opposite or, to use, I think, his own term, for Mr. de Valera. I have looked up the newspapers of that particular period, and I find that the most remarkable incident that occurred at that time was a letter that was sent from the President of the Executive Council to the British Government. In one newspaper we find this in leaded type:
"Britain and the issue of a Republic."
In another newspaper we find this:
"Great Britain and the Free State; Mr. de Valera's question on secession: Dominions Secretary's reply: no statement of attitude to a Republic."
and so on. Was it good business to raise such a highly controversial—to say the least of it—political question at that particular moment: at a time when the Minister was issuing a prospectus for the borrowing of £6,000,000? These statements were being published in the Press day after day, and I ask the House to take note of the date. I find that the letter was addressed from
"Department of External Affairs, Irish Free State, 29th November, 1933. Despatch No. 142,"
and that it winds up:
"I have the honour to be, sir, your most obedient servant, Eamon de Valera, Minister for External Affairs."
It was addressed to
"The Right Honourable the Secretary of State for Dominion Affairs. Dowing Street, London, S.W.1."
That is the sort of letter that would injure any National Loan. Whether the Minister likes it or not, I want to say that that is the sort of statement which would have a much worse effect upon the minds of citizens and on the prospects of the National Loan than any statement that might be made by a member of the Opposition, supposing that such a statement were made. I do not remember any such statement being made: that the money was going to be used for political purposes. I find that the Minister addressed the Chamber of Commerce at that time. The Irish Independent in a leading article on the day afterwards, the 5th December, stated:—
"Concluding his address the Minister said it was the earnest desire of the Government that the relations between the peoples of this country and Great Britain should be amicable and cordial, and he believed that it was not beyond the capacity of the two peoples to arrive at an understanding which would be honourable and lasting."
These were the Minister's pious beliefs, but I would remind him of the old saying that "Faith without good works is dead."
So much for the National Loan. Let us examine now some figures which were given by the Minister in the course of those compilations of his in connection with the situation in 1932 and two years afterwards. We find, on column 1490 of the Official Debates, 11th May, 1932, that, in assessing the assets of the State at that time, the Minister puts down the Local Loans Fund at a value of £2,536,237, and on pages 21 and 22 of his statement, in speaking of the Local Loans Fund, he said:
"That Fund, having been virtually dormant for a number of years, began to function again in 1926. When we came into office six years later it amounted to £2,834,134."
The Minister, probably, will be able to correct the difference between those two figures—somewhere in the neighbourhood of between £200,000 and £300,000. We observed also that the Minister, in assessing the capital liabilities, brought down the Telegraph Acts, Public Offices Site Act and the Railway Act and Marine Works Act— a total of something between £100,000 and £200,000. There were other items also but I do not see these other items. Perhaps they, too, have been won in this economic war.
In the course of the Minister's statement in respect of the great increase in revenue this year, he starts, very inauspiciously, with one item—death duties. Apparently, to oblige him, more people died, and possibly wealthier people died, or perhaps it was a little of both; but in any case we managed to get £17,000 better than the Estimate. This time last year, property, generally speaking, was not as valuable as it is this year. There has been an improvement in value of most shares in the intervening period. Perhaps the Minister's advisers did not anticipate that. However, it is a small item.
The next item is stamp duties— £65,000. Now, as property and shares generally have increased in value, one might expect a corresponding expansion here, which, I suppose, the pessimistic minds of the Minister or his advisers did not expect last year. Income tax and surtax is up £12,000 on last year. Taking into account the full effect of the 1/6 it might be expected that it would amount to £300,000 or £400,000 in the revenue, but only £140,000 was estimated for and the Minister has beaten that by £12,000. Corporation profits tax at £11,000 has much the same character as most of the other items. It is an estimate, and it will be found as a rule that those who advise the Minister always advise on the safe side.
The next item is Excess Profits Tax at £93,000. That sum has no reference to any expansion in business that has occurred during the last year. It has reference to money that was carned during the last 20 years. Customs brought in almost £1,500,000 and while, last year, the Minister was in a position to attribute most of the advantages of the tariffs to his colleague, the Minister for Industry and Commerce, this year he has the lion's share of whatever advantage was in it. It may be that the people, when the tariffs were put on first and Customs increased, held off purchasing and that purchasing last year was almost a necessity. Let us hope that there has been at least as big an improvement in the industrial activities of the State as there has been in the Customs, but that steep rise in Customs receipts—that lean Estimate of the Minister, on the one hand, and the big sum that has come in—larger, I think, by about £2,000,000 than four years ago—does not indicate the industrial activity to which the Minister referred last year.
The last item is Excise. Last year the Minister congratulated himself upon some items of increase under that heading. This year he goes a step further, but the fact is that the receipts from Excise this year are lower than they have been in this State—£5,443,000 as against £5,450,000 or £7,460,000, I think, last year. I warned the Minister last year that that particular item of receipt had shown, and was continuing to show, a marked contraction and that it was a question for consideration whether some reconsideration of the impositions of duties upon those items, which were responsible for that enormous reduction, should not be made. Now, in that question of Excise, there is another feature. One firm is responsible, I should say, for the larger proportion of that particular receipt, and as their trade, which is, I think, two-thirds export, expands outside, they require a larger stock upon which duty is paid. As the duty on beer has been reduced in England for some time and as the exports of that particular firm have increased something over 5 per cent.— occasionally going up to 10 per cent., but on the level, I should say, about 5 or 6 per cent.—their stocks must increase and a larger sum must come in in respect of duty. The Minister cannot point to any great expansion of business in connection with those items. The Minister went on to say that, in connection with the tea duty, he had received £467,000—£77,000, he said, in excess of the Estimate and £126,000 more than last year. I had the curiosity to look up last year's receipts in respect of the tea duty, and I find they amount to £413,000 odd. The Minister had expected, I think, to get £413,000 and I think he must have displaced the figures slightly and have read his £413,000 for £341,000 if he meant to make a difference between the figures of this year and last year of £126,000.
That the figures generally are satisfactory in respect of receipts I am prepared to admit very freely indeed. If the Estimates of receipts and expenditure this year will stand close examination, I find no excuse for locking up a surplus of £1,300,000—a surplus of receipts over expenditure of last year. Not since the State was established has there been such heavy taxation as there has been during those last two years. The receipts are colossal, the scale of taxation is high, and the impositions are heavy. Why should there be kept in the Exchequer £1,300,000 collected last year and admitted by the Minister to be surplus revenue and from which there is no remission of taxation and no advantage given for this year? In normal countries such a tying up of capital would be serious. Here, I am glad to say that from the top to the bottom of the Ministry some appreciation of the sound financial condition of this country has come to them during the past two years. It is a welcome sign. During the general election of 1932 people were warned of the danger of our impending bankruptcy, but the Ministers are now satisfied, having increased taxation during two years, that the country is sound, but there can be little excuse, from the point of view of strict or sound finance, for taxing people beyond the requirements of the State.
If, as I have said, we are to take the Minister's figures in respect of last year's receipts and expenditure and his estimated receipts and expenditure this year as being true figures, according to his own account there does not appear to be a justification for withholding from the people of the State the sum of £1,300,000. There is all the more reason for reconsideration in connection with that matter when we remember that no Minister has denied that the agricultural population and the agricultural industry in this country are in a bad way; that prices are bad, that profits are low, and that it is inconceivable that, politically or otherwise, an agitation could be started or a conspiracy engendered throughout the country against the payment of rates or annuities, unless people found themselves in a difficult position and had to draw on reserves or, perhaps, had not got them at all.
The situation becomes almost tragic. I have a letter here from a solicitor in Mayo to the effect that two people have been served with notices by the sheriff or by the registrar, or whoever he is, for two sums of £1 6s. 8d. and £1 10s. 3d., with 3/6 costs in both cases. Those are very small farmers, and it is one Mayo case. How many other cases are there that never come to light? Unquestionably, if agricultural produce is subject to such tariffs as it is now bearing, it is inevitable that you will have cases of privation, cases of difficulty and cases of financial stress throughout the country and if that be-the case with regard to agriculture, let us then look at the industrial side, the business section in the towns and cities. The policy of the Ministry, if we are to accept their own statements, is to help industrial projects, to expand industry, to give people hope in the present and in the future. Can they have hope in the present and in the future when they find the scale of taxation at its peak point in this year? Is it any inducement to industrialists or to manufacturers when every country in the world is endeavouring to limit its expenditure, to decrease its taxation, to give an opportunity to bona fide industry to get upon its feet? Is that the time when taxation should be at its peak point and not alone that, but, having been at its peak point, that there should be something kept in reserve in respect of the short period of two years?
Those are considerations which the Minister would be well advised to ponder and to see whether the best interests of this country would not be better served by reducing the burden of taxation, by giving hope to the people so that they can do their work, and by getting down to that statement, made by the Minister for Finance, that it was the wish of his Ministry that there should be amicable and cordial relations as between themselves and the British Government. Let us remember that if we have escaped a debt of £92,000,000, we have handed over to the shoulders of people unequal to it a liability for £112,000,000. In my opinion, and in the opinion of any man who has any knowledge of business or finance, it is not good business.