In Committee on Finance. - Finance Bill, 1934—Committee.

(1) Income tax shall be charged for the year beginning on the 6th day of April. 1934, at the rate of four shillings and six pence in the pound.

I move amendment No. 1 standing in the name of Deputy McGilligan.

In sub-section (1) to delete the words "and six pence" in lines 17 and 18.

The effect of the amendment will be to reduce the income tax to be charged in the current year from 4/6 in the £ to 4/-. The Minister since he has taken charge of the Finance Department has very substantially raised the rate of income tax and he has seen in the income tax returns the result of putting such an excessive burden on the income tax payer. He has had already pointed out to him on many occasions the effect of this on different industries and on the commercial community. He has seen that the effect of the present rate is that he gets £800,000 a year less in respect of income tax than he would get if income tax produced at the same rate as it did before he increased it by 1/6 in the £, all pointing to the fact that the income tax is assisting in the way in which other policies are assisting to crush down the earning capacity of the people.

I have nothing to say in regard to this amendment.

Surely the Minister admits that the rate of income tax at present is such as to bring about the disastrous effect in his general income that I mentioned?

There is a point in connection with this and some other amendments on the Order Paper which was borne out to some extent by the Minister for Finance in introducing the Budget. In connection with last year's Budget the Minister stated that he had a surplus of £1,141,000, allowing for the absorption into the Exchequer of the Suspense Account moneys. For the year ending 31st March last there was a surplus of approximately one and a half millions. In the two years there was a sum of £550,000 in the Local Loans Estimate which he took credit for in his compilation of the figures showing the assets and liabilities of the State. Altogether these sums amount to about £3,500,000. That money has been collected from the taxpayers and it was not required. It is money which was not needed to provide any services, all services having been accounted for under various heads. In introducing last year's Budget the Minister said that he intended to use the £1,141,000 to which I have referred and in addition he proposed to borrow half the cost of the bounties and subsidies. It was not necessary to borrow money for the bounties and subsidies as the revenue was able to meet them. It was not necessary to use that £1,141,000 and so on. There is in the amendments tabled no difficulty presented to the Minister in balancing his Budget if we are to believe the figures he gave us, and, therefore, a case does exist for reducing taxation.

In the first year the new taxes amounted to an extra imposition of about £4,000,000. Last year there was scarcely any reduction from that figure. There was an addition of £140,000 in Customs duties and, if we eliminate the £350,000 arrears of income tax, the burden was less by about £200,000. This year we have the same scale of taxation which has shown a surplus for two years of over £1,000,000 each year. There is, therefore, a case for a reduction in the imposition so that it would be possible to meet practically every amendment on the Order Paper without making the position an unsound one from the point of view of budgetary balance.

Question put: "That the words proposed to be deleted stand."
The Committee divided: Tá, 37; Níl, 15.

  • Aiken, Frank.
  • Bartley, Gerald.
  • Beegan, Patrick.
  • Boland, Gerald.
  • Bourke, Daniel.
  • Breathnach, Cormac.
  • Briscoe, Robert.
  • Concannon, Helena.
  • Cooney, Eamonn.
  • Derrig, Thomas.
  • De Valera, Eamon.
  • Doherty, Hugh.
  • Donnelly, Eamon.
  • Flynn, Stephen.
  • Fogarty, Andrew.
  • Goulding, John.
  • Harris, Thomas.
  • Hayes, Seán.
  • Jordan, Stephen.
  • Keely, Séamus P.
  • Kelly, James Patrick.
  • Kennedy, Michael Joseph.
  • Kilroy, Michael.
  • Lemass, Seán F.
  • Little, Patrick John.
  • MacEntee, Seán.
  • O'Briain, Donnchadh.
  • O'Grady, Seán.
  • O'Ceallaigh, Seán T.
  • O'Reilly, Matthew.
  • Pearse, Margaret Mary.
  • Ruttledge, Patrick Joseph.
  • Ryan, James.
  • Ryan, Martin.
  • Ryan, Robert.
  • Smith, Patrick.
  • Traynor, Oscar.

Níl

  • Alton, Ernest Henry.
  • Bennett, George Cecil.
  • Burke, James Michael.
  • Byrne, Alfred.
  • Cosgrave, William T.
  • Dillon, James M.
  • Dockrell, Henry Morgan.
  • Doyle, Peadar S.
  • Fitzgerald, Desmond.
  • Fitzgerald-Kenney, James.
  • Morrisroe, James.
  • Morrissey, Daniel.
  • Mulcahy, Richard.
  • Rice, Vincent.
  • Thrift, William Edward.
Tellers:—Tá: Deputies Little and Traynor; Níl: Deputies Doyle and Bennett.
Question declared carried.

I move amendment No. 2, standing in the name of Deputy McGilligan:—

Before sub-section (2) to insert a new sub-section as follows:—

"Sub-section (4) of Section 3 of the Finance Act, 1932, is hereby repealed and in lieu thereof the following provision shall be substituted for Section 23 of the Finance Act, 1920, that is to say:—

‘An individual who makes in the manner prescribed by the Income Tax Act a claim in that behalf and makes a return in the prescribed form of his total income shall be entitled to be charged at half the standard rate of tax on the first £225 of his taxable income.'

All references in the Finance Act, 1920 or any subsequent Act to the said Section 23 or any sum mentioned in that section shall be construed and have effect subject, and with due regard to the substitution effected by this sub-section."

I am not accepting this amendment.

We waited to hear the Minister's justification of this preposterous Departmental proposal.

Would the Deputy let us know what proposal he is thinking about?

The proposal contained in sub-section (2). I presume the Minister has read it.

The proposal in the amendment is to increase the amount of income a person is entitled to get, free of income tax, in order to relieve some of the smaller paid workers of the income tax they are paying at a time when everything they purchase has become dearer and dearer. The clothes on their backs and the food they eat are getting dearer day by day. The Minister for Agriculture tells us, through his newspaper, that his operations regarding bacon are not increasing the cost of bacon, but we already see that the prices of bacon and sausages are up.

There is no income tax on sausages or bacon.

Unfortunately, the people who would like to eat bacon and sausages if these commodities were not so dear, are paying income tax, and they are not only paying additional for certain food articles, but as the Minister is aware, over and above what he dare tell the House he was taking out of their pockets last year he got £1,500,000 in customs duties. It is while these impositions are pressing on the lower-paid workers throughout the country that the Minister for Finance is asking to lower the amount a person is entitled to have as income free of income tax. If the Minister were not simply trying to hide the other side of the picture of the additional burdens falling on these classes through extra taxation he would not be so silent as he now is with regard to this proposal in the Finance Bill.

The speech just listened to is an example of the mental senility which characterises the Opposition in regard to these matters. They are always harping back to the good old days, and though he did not say it in so many words, I gather what he had in mind is that we ought to get back to the halcyon days of 1931-32. The amendment is ostensibly proposed in favour of the class whom the Deputy refers to as the lower-paid sections of the community, the people who would like to eat bacon and sausages, as the Deputy said, if they were not so dear and if the income tax were not so high. What was the position in 1931-32 as compared with to-day? At the present moment, the standard rate of income tax in the Free State is 4/6 in the £. At the close of the financial year, 1931-32, the standard rate was 3/6 in the £. The standard rate in Britain at the moment is 4/6 in the £. Do not let any person assume that, because the standard rates here and in Great Britain are 4/6 in the £, the effective rate of tax in both cases is the same. Let us take what is the most typical case, a married couple with three children. These are the people for whom the Deputy should be most concerned, these are the people who would like to eat bacon and sausages, as the Deputy said, if they were not so dear and if the amount of income which was left to them after tax had been levied upon it, would permit them to make the purchase.

In Great Britain, a married couple with three children, enjoying an earned income of £400 per annum, have only £395 10s. to buy sausages and bacon with after income tax has been deducted. Here, with the same income that man would have the whole £400 with which to buy sausages and bacon. because in this country a married couple with three children and an income of £400, if it is all earned, do not pay any income tax at all. They belong to the class of smaller paid workers. If the same conditions prevailed here in the present year as in 1931-32, when the Deputy was a member of the Executive Council and responsible for taxing the smaller-paid workers, a married couple with three children and an earned income of £400 would have to contribute £3 18s 9d. in income tax. In the same way, if the income had been £450 and the standard rate of income tax was 3/6, as it was under the Deputy's administration, they would have to pay £7 17s. 6d. In Great Britain, at the present moment, a couple fulfilling the same conditions and with an income of £450 would pay £9 tax. Here, they do not pay anything at all. With an income of £500 in the year 1931-32, the happy year to which the Deputy is always harking back, they would have had to pay £11 16s. 3d. In Great Britain, at the present time, if the same couple had £500 of an income they would contribute £13 10s. Here, they would pay only £5 1s. 3d. If the income here were £550 in 1931-32 they would have been paying the then Saorstát Government £15 15s. In Great Britain they now pay £18 on that income and in this country £10 2s. 6d. If the income were £600 in 1931-32, when the standard rate of income tax was 3/6, they would pay £19 13s. 9d. In Great Britain, on that income, they are now paying £25 6s. 3d. and here they are paying £19 2s. 6d., and so on down practically the whole of the gamut.

Up the whole of the gamut the Minister has been going. Has he not considered anything below £400? The Minister has been going up the gamut. Perhaps he will speak of £400 and under. What percentage of the employees in the Civil Service have £400?

By far the greater proportion, and if they are married and have children, they are getting off scot-free in the matter of income tax at £400. When the Deputy was in office and when he was parading up and down the country telling us that the income tax was 3/6 in the £— and he probably compares that with our 4/6 to-day—they had to pay £3 18s. 9d. The smaller paid workers, the people with the lower incomes, are paying less income tax now under this Government than they did under the Cosgrave Administration.

The Minister says that by far the greater proportion of the workers in the Civil Service have £400 and upwards.

I asked the Minister could he say what percentage of the civil servants have salaries of the type he is speaking about, and I asked him to refer that to general commercial employment. The Minister has taken, so to speak, the gold line of £400 a year and addressed himself entirely to that. The Minister has been asked to address himself to the case of people under £400.

They do not come into it at all. If the Deputy is so blind that he cannot see that, I cannot give him comprehension.

I wonder is the Minister still labouring under the delusion that he has reduced the taxation of this country by £2,000,000 a year?

That question does not arise on this amendment.

It does, obviously. The Minister has been lecturing us for the last ten minutes on how he reduced the burden of taxation on the most deserving class of the population since he came into office.

I confined myself strictly to income tax.

Exactly. The Minister confined himself strictly to income tax. The Minister merely showed that in confining himself strictly to income tax he has not given the amendment any consideration at all. I know the extent to which the Minister gets his thinking done for him. He ought to satisfy himself that the thinking is adequately done. If he would reflect for a moment he would have realised there was some good reason for suggesting that the burden of taxation on the people referred to in this amendment should be lightened, and the reason why it is necessary that that burden should be lightened in respect of income-tax is that under a variety of other heads the Minister has piled up the burden as it was never piled up in this country before. I remember, 18 months ago, in a whirl of patriotic patriotism, the Minister begged this House to place in the hands of the President the Emergency (Imposition of Duties) Order in order to facilitate him in the pious and patriotic practice of twisting John Bull's lion's tail.

What on earth has this to do with the amendment? Is it not merely wasting valuable time?

I was waiting to hear the Deputy develop his argument. The Deputy must confine himself to the question of income tax.

The Deputy might, at least, wait until I would have an opportunity of completing the argument that I propose to put to the House. The Emergency (Imposition of Duties) Order was used by the Minister during the last 12 months to place upon the backs of the people referred to in this amendment a burden of £1,500,000 in excess of what the Budget proposed in 1933.

The Deputy should realise that that line of argument would be appropriate on the Second Stage of the Bill, but not on this amendment.

We want to reduce the burden of income tax on the shoulders of these particular people, because the Minister has increased the burden of customs tax enormously on them. It is the man with the modest income and with a comparatively large family who has to buy ready-made clothes. It is such a man who has to buy boots for his children. It is such a man who has to purchase almost every one of the items which appear in the tariff schedule of this Bill. Most of the tariffs in the Bill were imposed under the Emergency (Imposition of Duties) Order, imposed by an authority that the Minister never got in spirit, though he may have got it in the letter.

This is not the time to question the Minister's authority.

Only in so far as to prove to this House, that, far from reducing the aggregate burdens of taxation on the shoulders of the people the Minister has vastly increased them. He may, and in fact he has, so manipulated the income tax code that the burden of taxation upon the people in the lower scale of salaries and incomes with families, has been reduced. That is admitted; but through the instrumentality of indirect taxation, and the imposition of tariffs, he has immeasurably increased that burden. We find ourselves confronted with an absolutely resolute refusal to consider the reduction of any tariff on account of the burden imposed upon the consumer; and so we say if you do not reduce that part of the burden, we ask you to reduce the other part, namely, direct taxation in income tax. It is perfectly clear to the House that the Minister has never dwelt on that side of the situation at all. The Minister has proved himself to be the greatest taxing machine that the country has ever experienced. I venture to say that the Minister put on that burden of £1,500,000 without knowing it. When he consented to the imposition of that tariff he admitted that he never dreamt it would produce the revenue that it had done. Where did that revenue come from? Out of the pockets of the people that we have in view. Out of what other pockets could it come? I do not expect Deputy Little to understand the everyday patent facts of the effect of taxation on our people. He is too busy with high politics to understand these things.

What has that got to do with the subject matter before the House?

When the Deputy opposite interrupts me and says that my observations are irrelevant I am surely entitled to point out that it is the Deputy's mind that is devious, and not my observation. Let me further point out that while indirect taxation, imposed upon those people by tariffs, is represented by something like £1,500,000 over and above what the Minister foresaw in 1933, in addition to that these people have to bear the burden of the increased prices which are charged by a considerable number of merchants who have started their business within these tariff walls. It would be extremely difficult to estimate accurately the full measure of that burden.

We had recently, from the Prices Commission, a statement that they found it almost impossible to estimate the burden that Government activities had placed upon the shoulders of the consumers of the country. I submit, with respect, I am entitled to examine any burden that the Minister has placed upon the shoulders of the taxpayers and to advance that burden as a justification for our proposals to increase the sum that should be exempted.

The Chair differs radically with the Deputy because such contention, if accepted, would enable the Deputy to go through the whole financial and economic position, and to reopen the Budget debate. He cannot do so at this stage.

I shall say no more than this: that the burden imposed by the policy of the Budget has been brought to bear with crushing weight upon that section of the people referred to in this amendment. We have had the testimony of the Prices Commission, we have the testimony of the Drapers' Association, and of everybody who is concerned with the proper distribution of merchandise, that the prices are far higher to-day than those that ruled before the Fianna Fáil Party came into office. It is true and, admittedly true, that the Government have manipulated the income tax in order to get over that section of the community that have comparatively small incomes. But it is equally true that the Government have placed upon the shoulders of those people a burden far greater than they are capable of bearing. They have placed upon them a burden that they will eventually refuse to pay. I charge the Minister for Finance with having imposed at least £1,500,000 of that burden upon their shoulders without even knowing what he was doing. In support of that I point to his Budget speech in which he expressed amazement at the enormous yield of customs duties.

Is not the Deputy renewing the discussion on the Second Stage of the Finance Bill?

No, I shall leave it to the Minister to fill in the gaps. He can contemplate what I have just said. I imagine it might be thought that our proposals would exempt a considerable section of the farming community from the operation of the income tax. Much might be said upon that score. I will not elaborate it here and now and for this reason: that that part of the Minister's policy, which it would appear to be out of order to refer to now, has reduced the majority of the farmers of the country to a condition where they will pay no income tax, so that the operation of the income tax code in their connection has only a theoretical side. But I would, without hesitation, press this amendment from the point of view of the farmers who feel these deplorable effects. I suggest he should cogitate that too. He might make inquiries from his genial colleague, the Minister for Agriculture, as to whether my contention in regard to the farmers is true or not. In conclusion, I ask him to think, so far as this section is concerned, on the basis of the incomes, of 1931 and 1932. Now, he is going to have the rather ghostly experience of collecting income tax on the basis of the incomes of 1932-33, and the ghost before him of collecting income tax on the basis of the income of 1934. May I make a prophecy? The Minister has shown himself recently to be a courageous man, with a courage, and lack of discretion that has sometimes to be restrained. I imagine when the time comes for contemplating the ghost that awaits him, in the yield of the income tax of 1934, that like the Boogum he will softly and silently fade away, and this country will have achieved something worth achieving when they see the last of him.

That is a good election speech.

Amendment put.
The Committee divided: Tá, 20; Níl, 39.

  • Alton, Ernest Henry.
  • Bennett, George Cecil.
  • Burke, James Michael.
  • Byrne, Alfred.
  • Cosgrave, William T.
  • Curran, Richard.
  • Dillon, James M.
  • Dockrell, Henry Morgan.
  • Doyle, Feadar S.
  • Fitzgerald, Desmond.
  • Fitzgerald-Kenney, James.
  • Lynch, Finian.
  • MacDermot, Frank.
  • McGovern, Patrick.
  • Morrisroe, James.
  • Morrissey, Daniel.
  • Mulcahy, Richard.
  • Rice, Vincent.
  • Rowlette, Robert James.
  • Thrift, William Edward.

Níl

  • Aiken, Frank.
  • Bartley, Gerald.
  • Beegan, Patrick.
  • Boland, Gerald.
  • Bourke, Daniel.
  • Breathnach, Cormac.
  • Briscoe, Robert.
  • Concannon, Helena.
  • Cooney, Eamonn.
  • Davin, William.
  • Derrig, Thomas.
  • De Valera, Eamon.
  • Doherty, Hugh.
  • Donnelly, Eamon.
  • Flynn, Stephen.
  • Fogarty, Andrew.
  • Goulding, John.
  • Harris, Thomas.
  • Hayes, Seán.
  • Jordan, Stephen.
  • Keely, Séamus P.
  • Kelly, James Patrick.
  • Kennedy, Michael Joseph.
  • Kilroy, Michael.
  • Lemass, Seán F.
  • Little, Patrick John.
  • MacEntee, Seán.
  • Maguire, Ben.
  • O'Briain, Donnchadh.
  • O'Dowd, Patrick.
  • O'Grady, Seán.
  • O'Ceallaigh, Seán T.
  • O'Reilly, Matthew.
  • Pearse, Margaret Mary.
  • Ruttledge, Patrick Joseph.
  • Ryan, James.
  • Ryan, Robert.
  • Smith, Patrick.
  • Traynor, Oscar.
Tellers:—Tá: Deputies Doyle and Bennett; Níl: Deputies Little and Traynor.
Question declared lost.
Question—"That Section 1 stand part of the Bill"—put and agreed to.
SECTION 2.

I move amendment No. 3:—

At the end of the section to add the words:—

"The following rule shall be added to the said Rules, that is to say:—

A.—(1) If the owner of any land or building shows that the annual value is greater than the rent, according to the average of the preceding five years, he shall be entitled on making a claim for the purpose, to repayment of the amount of tax on the excess.

(2) Rent for the purpose of this rule shall be taken to be the full amount payable by the occupier, and in arriving at the amount chargeable under this rule a deduction shall be made for any portion of such rent wholly and irrecoverably lost, for any portion of such rent voluntarily foregone by agreement with the occupier, and for any sums which the person receiving or entitled to the rent is obliged, by agreement with the occupier, to pay or satisfy out of the rent in respect of any rates or assessments which by law are charged upon the occupier, and for the cost of maintenance, repairs, insurance, and management, ultimately paid or borne by the person receiving or entitled to such rent.

(3) for the purposes of this rule numbers (2), (4), (5) and (6) of Rule 8 shall apply."

This section of the Bill proposes to remove Rules 7 and 8 of No. V. of Schedule A of the Finance Act. These Rules gave two reliefs to the owner of property in regard to income tax. The first we have had already something to say about, namely, the permission to deduct one-sixth for repairs from the valuation. The amendment I have down does not deal with that particular relief. Although I adhere to my disagreement with the Minister on the point I am not pressing it in this amendment. I am, however, pressing very strongly the relief which is given under Rule 8, Part V., of the Schedule. That Rule 8 gave the option to the owner of property either to pay income tax on the valuation of his property or on his actual net profits from the property as submitted and approved by the Revenue Commissioners. That is, it allowed the owner of property to tabulate his actual rents received and to deduct from these rents the average, taken over a period of five years, of his actual outlay on the property. If that were the course chosen and adopted by him and approved by the Revenue Commissioners he would actually pay income tax on his actual profits on the property. That seems to be eminently reasonable and just.

Income tax, after all, is a tax on income, not on something else of an imaginary kind. There are many cases where the valuation of property gives no indication at all of what income that property is going to provide for its owner, even when in making the valuation an allowance has been made for the ordinary course of repairs in connection with the property. There are very many cases where special expenditure becomes necessary, though not from any neglect of the premises, by the owner at any rate.

Take a particular case. A lease may expire, and the owner of the property may have to expend large sums to restore the property to its former value, although he may not have been responsible for allowing the property to fall into a state of disrepair. Frequently special cases arise, which could not be taken account of in fixing the valuation, in which the expenditure of considerable sums of money is necessitated in order to preserve the property in a proper state—not to improve its value but to maintain it. I could give the Minister many cases where taken over a period of five years the actual profits derived from the property are far less than its valuation figure. There are numbers of cases where, taken over a period of five years, the expenses of maintenance have been so high that the property proved an actual loss to its owner for that period, and where there was no profit at all. I shall simply content myself with mentioning one case.

I have here the figures for a number of cottages the total valuation of which amounted to £216. I leave out the odd shillings. The total rents amounted to £341. The repairs for five years amounted to £474. The only repairs that were allowed for when the valuation was being considered amounted to between £12 and £13 a year. If that were to be taken as the proper criterion, the expenses for that period would have been only £65 instead of £474. If the rule, as now to be laid down by the Minister, were to apply, income tax would be charged on the valuation, and the only concession that would be allowed would be an allowance of £124. In fact, even after deducting from the cost of repairs the allowance that has been taken account of, the sum for repairs exceeded the total amount received by £120 altogether. The claim was investigated by the Revenue Commissioners, and was found to be accurate and substantial, and accordingly the claim for income tax was entirely discharged. No income tax was due in equity because no income whatever had been received from the property during that period. As I have said, surely it is only fair and reasonable that we should try to get at what value the property actually is to its owner. There is nothing unreasonable—it is eminently reasonable—that the owner should only be expected to pay income tax on the income he gets. It is no answer at all to say that repairs have been taken account of in making the valuation, because such exceptional expenditure on repairs as I am talking about could not be taken account of in making the valuation.

Furthermore, property often consists of a collection of various kinds of houses, some old, some new, but all in one estate and under one management. Under the equitable system that has been in vogue, the good property acts as a kind of set-off against the bad property. The whole is taken as one estate, and the total cost of repairs for the whole estate is allowed for. I hope the Minister will see his way to accept the principle of this amendment. I can see only one reason which could be put forward against it, one reason which would at all hold water. That is, that it is very much easier to administer a simple scale by charging on the valuation. But, after all, justice is something, and we should not sacrifice justice to simplicity, particularly in matters of this kind. It would be very simple to make a standard rule that every man must pay income tax up to a certain figure, for example, but it would not be just, and, after all, it is income tax we are considering here. I hope the Minister will consider this amendment favourably, and see his way to accept it in principle.

I should like to urge the Minister to accept this amendment. I am looking at it from a slightly different angle to that of Deputy Thrift. Deputy Thrift has stated that when a property or premises is valued an allowance is made for repairs. That is quite true, but the repairs are allowed for on the basis that the building is in a good state of repair, and will last for a number of years. I should like to suggest to the Minister that there are many classes of property in connection with which his proposal would not be just or equitable. These are cases where the property is old. A very considerable amount has to be expended on repairs each year. The building may be of an unsubstantial type, and a considerable amount of money has to be expended in keeping it in repair.

There are two things that will probably arise if the Minister does not accept this amendment. First of all, I suggest to him that it is to everybody's interest—the country's interest, the landlord's interest, and the occupier's interest—that property should be maintained in the very best state of repair. It will last the longer, and the people who are living in it will be all the healthier, not to mention the amount of employment which repairs will give. There is, however, another aspect that I would like to urge on the Minister. Has he considered that, if he does not accept this amendment, a number of properties will be worked at a loss, at any rate over a period of years? If the owners of those properties appealed against the valuation, I have no doubt that the court would take the facts into account and, probably, the valuation would be reduced. At the same time, it would lead to a most unsatisfactory state of affairs in which people would be constantly appealing against the existing valuation. I would like to suggest that the Minister should accept this amendment.

I should like, first of all, to point out that, in general, this amendment introduces a new principle here, in so far as it is limited to the case of property let. The people who would be principally affected by Section 2 of the Bill are the occupiers of properties which they own. The case is being made that certain hardships may arise, but they can only arise in very special cases. They may arise in the case of the owner of cottage property who is letting it at an uneconomic rent. In connection with special cases of that sort, I may be able to bring in an amendment on the Report Stage which would meet the special conditions which there obtain. With regard to the generality of cases, however, I think that Deputy Dockrell, in the closing sentence of his speech, killed the case for the amendment, because he said that there is no doubt that if owners appealed against the valuation on the grounds that their account for their expenditure on repairs was excessive and that consequently the valuation of the premises was too high, they would secure a commensurate reduction. I think that is our case in a nutshell. If any man feels that he is aggrieved by the fact that at the present moment he is assessed at a valuation which does not make due allowance for repairs, taking one year with another, his remedy is to go to the Commissioner of Valuation and ask him to revalue the premises, and put before him such proofs as will satisfy him that the valuation of the premises should be reduced because the tax payable on that property will be reduced also.

There is another case to which, I think, Deputy Thrift referred. That was the case of the ground landlord in cases in which properties held under lease fell in to him.

I had house property in mind.

House property? Yes. Well, in the great majority of cases those leases contain repairing clauses, and it is the duty of the ground landlord to insist that these repairing clauses shall be carried out from time to time. If the ground landlord fails to look after his own interests in that regard, I do not think he can expect the State to come along and indemnify him afterwards for his neglect of his own interests. I could not accept the amendment in its present form, but, as I say, I may be able to do something on the Report Stage to meet the case of the owner of cottage property which is let at an obviously uneconomic rent.

I should like to know is the Minister serious in saying that an aggrieved person can go to the court and have a revaluation made? What is the court to consider? Is the court to consider the case in which the person has spent money on the improvement of the property and is the court then to be asked to reduce the valuation? It is preposterous on the face of it. The court or the Valuation Office are not invited to consider property as an investment. They are entitled to consider it from the point of view of what is its lettable value.

They are not there to judge as between the Income Tax Revenue Commissioners and the taxpayer. They must, however, take into account any and every penny spent on the property with a view to its improvement. If the property itself is sufficient evidence of the fact that money has been spent on it, surely that is a reason for continuing the valuation rather than increasing it. I should say that this amendment would go farther than the owners of property. Surely any owner is entitled to cite cases on which he has spent money in the improvement of the property. A person may be assessed in respect of income which does not show the value on which he is taxed. If a person occupies a house the valuation of which is only £20 a year, and if he spends £10 on repairs in that year, it is obviously unjust to tax him on the full £20 when the annual valuation is put down by the Valuation Office as £20.

This change, which is expected to bring in £24,000 a year, to my mind, is rather a change for administrative convenience. It saves time and trouble in the office of the income tax people in going through their accounts and seeing whether or not the money has been spent, and they come to the conclusion that it is not worth it. From their angle they are entitled to put forward that contention. Where they have a series of figures and returns showing the expenditure of money and so on, and then make up what the amount involved is, they can very well say: "Surely it is not worth our while to be going along with this," and they take a rough and ready method. But a rough and ready method is unjust if it so happens that a person in possession of property, whether he owns it or it is let, spends an amount of money annually on the property, which reduces the value of it to him, and I suggest that he ought not to be taxed in any one year on a sum over and above what is the annual value of the property to him. That is the sum and substance of the case. If the Minister cannot establish a better case against this amendment, and he has had only two cases so far—£24,000 to the revenue, and the excuse that he has kept back, that it is administrative convenience—those cases are not sufficient justification for the injustice on the ordinary person. It is not a normal case or a case which would have the same colour or appearance at all if it had not been for the war. House property has increased in price since that time both as regards repairs and acquisition. A man in receipt of £3 or £4 a week is put to twice the expense that he was put to in pre-war days to get housing accommodation, and the only consideration there is for him on the part of the Ministry in this is that he is going to be taxed on an annual value in excess of what he is in receipt of.

I suggest to the Minister that surely it is a case of "passing the buck" by taking the liability of property for income tax from the Commissioners of Income Tax to the Commissioner of Valuation. It is the Revenue Commissioners' job to consider that matter from the point of view of income tax. It is not the job of the Commissioner of Valuation. The remedy that the Minister proposes for any one who finds himself suffering under an injustice, under Section 2 of the Finance Bill of 1934, is to go to the Commissioner of Valuation.

As Deputy Cosgrave very accurately points out, the compelling case that the victim of injustice would have to make to the Commissioner of Valuation would be: "I have just spent £400 on improving my premises and I think it is high time you reduced the valuation."

I hope that the Deputy understands the amendment more clearly than that remark would indicate. I should not advise him to follow Deputy Cosgrave's bad example.

The Minister made certain proposals. One of these proposals was "If you spend money on repairs——

"Repairs." The Deputy previously used the word "improvements."

"If you spend money on repairs and you find that you cannot recoup it under my new Finance Bill, I shall tell you another way to do the same thing—go to the Commissioner of Valuation and get your valuation reduced." The first question the Commissioner of Valuation would put is: "What brought you here? What put the idea into your head that your valuation should be reduced?" The answer would be: "Because the rapacity of the Revenue Commissioners has made the valuation unbearable.""Dear, oh, dear," the Commissioner would reply, and out would come the information that the man had spent this very considerable sum on whatever the Minister would like to describe it as, but what the Commissioner would hold to be repairs amounting to improvements. He would say: "Whatever I may do about increasing your valuation, one thing is perfectly certain —I shall not reduce it." He is not going to look at the matter from the income tax point of view. I suggest that the result of this will be that the landlord will not repair.

He will not own.

That will be the further stage. Who will suffer if the landlord does not repair? Will it not be the tenant? True, the tenant has his remedy. He can leave. But in these times, it is not always easy to change one's place of residence, and it is less easy for the poorer tenants than for the others. I think that the Minister will admit that the first effect of this section will be to reduce the expenditure on repairs. The Minister should inquire from his colleague, the Minister for Local Government and Public Health, what he finds to be one of his most formidable problems, and he will tell him that it is the problem of insanitary dwellings. He will tell him that one of his greatest difficulties is to get people out of insanitary dwellings when there is nowhere else to put them. The operation of this section will create a vastly increased number of insanitary dwellings, because the landlords will not expend the money they ought to expend, and the money which they ought to be encouraged to expend, on necessary maintenance repairs. I suggest that the theory upon which this system of abatement for repairs was first founded was that the Revenue Commissioners took the view that property of this character was constructively income and that, therefore, they were entitled to assess and tax it, making due allowance for the expense in which the property involved the owner. So we have a situation in which the Revenue Commissioners maintain that property of this class is constructively income. That is all right until you can come forward and demonstrate——

To clear up an ambiguity, perhaps the Deputy would explain what property he means when he refers to "property of this class?"

The property affected by Rules 7 and 8, Section 2 of this Bill, and the amendment which has been proposed.

There are several classes of property involved, but we are dealing with the amendment.

Buildings and land other than agricultural land.

But we are dealing with the amendment.

I shall quote the amendment.

Amendment quoted.

The Deputy having read the amendment, I should like if he would explain, so that I may understand the point he is making, what he means when he says that the Revenue Commissioners regard property of this class as "constructively income."

There were two methods of procedure under the income tax code heretofore—one under rule 7 and the other under rule 8. Under rule 7, you could claim for the purpose of income tax a rebate in respect of one-sixth of the valuation of your property. Under rule 8, provided that there was not a difference between the rent received and the valuation of the property greater than 16½ per cent., you were entitled to claim an abatement in respect of moneys paid out for repairs when you came to be assessed on the rents received from the property in respect of which the repairs were carried out. It is extremely silly for the Minister for Finance to try to trip me up in one of the most complicated corners of revenue procedure. If the Minister for Finance wants to know, I went this morning and found out all about it.

I merely thought that the Deputy was addressing himself to the section and not to the amendment.

What the Minister wanted to do was to trip me up in a very complex piece of revenue procedure. Unfortunately for the Minister, he did not succeed.

That never entered my head.

The funny feature of the matter is that while I came to understand it this morning, the Minister came to understand it the day before yesterday. If he had been cross-examined about it before then, he would have known no more about it than Adam. It is manifest to anybody that this section was drafted by the Revenue Commissioners, who placed it before the Minister and said: "It is high time this was done. We were trying to get Blythe to do it for ten years and we could not make the least impression on him." The Minister said: "I am very glad to oblige you. You have gone to a lot of trouble, and if this will help you, I shall do it." The brief was prepared and is now lying before the Minister, who has the greatest possible difficulty in following it.

The Minister is responsible to this House and nobody else.

When the Minister tries to make me read my brief here, I draw the attention of the House to the Minister's brief, which is lying before him.

The Deputy has been addressing himself since he started to the section, and not to the amendment.

There is some force in the Minister's contention, but I assume that, since the Deputy discussed the section along with the amendment, there would be no discussion on the section proper.

I am quite willing to proceed on that basis.

I could not agree to that.

I decline to give any undertaking in that respect. If I have departed from the rules of order, I shall submit to your ruling, a Chinn Comhairle, without hesitation.

I respectfully submit that I have not departed by a hair's breadth from matters that are strictly relevant to the amendment, and if you, Sir, rule that I have, I shall depart from any particular line of ratiocination that you shall indicate.

I shall hear the Deputy on the amendment.

Why should the Commissioners take the view that certain forms of house property are constructive and, therefore, liable to taxation when one is in a position to come forward and demonstrate that this particular form of property is no longer constructive but in fact, has become a liability. It is manifestly unjust to provide that that constructive view is to prevail when such a view is demonstrably false. You create a situation in which a person, having shown clearly to the Revenue Commissioners that during the past 12 months he has made a loss, taking the five-year average of his expenditure on repairs, the Revenue Commissioners will still be entitled to say, notwithstanding all that Section 2 of the Finance Act of 1934 provides, that you must pay income tax on this assessment and pay it you shall. I trust that the brief discourse the Minister for Finance and I have had on our respective knowledge of the income tax code will not serve to prejudice his judgment against this most excellent amendment. I submit that a section which provides that a person who can demonstrate that he is really experiencing a loss and is still liable to pay income tax in respect of that particular year, is manifestly wrong.

I submit to the Minister that the Revenue Commissioners have demonstrated again and again that they are more than competent to surmount any routine difficulty that is presented to them. It is only modesty on their part that would suggest the danger of complications arising out of Rules 7 and 8 of the income tax code. They have very onerous duties to deal with. No revenue commissioners in Europe are more competent to elucidate difficulties and to disentangle any knots that may present themselves. I suggest to the Minister that it would be a graceful thing on his part to make this gesture of confidence in the personnel of his own Department, to strike out this section and to accept Deputy Thrift's amendment. Let him tell his colleagues and his Department that Fianna Fáil expects that every man will do his duty, and I have not the slightest doubt that there will be quite a generous response to the Minister's encouragement.

The Minister has promised an amendment of, I think, a rather restrictive kind. I hope that when he comes to consider it he will see his way to enlarge the scope of it very considerably. Why should he or any of us want to pass legislation which will definitely cause hardships? Take, for instance, house property. There is little enough thought of it at present as an investment. What will be thought of it as an investment if this becomes law? Many cases arise where house property, over a period, ceases to produce any income. Dry rot sets in and the floors get damaged. All that results in very considerable expenditure. When the repairs are done the house is no better than it was before these accidents appeared. It is only restored to its original state. But the outlay that has been required in order to produce that prevents the house from becoming a source of profit to its owner for a considerable time. Yet the Minister, if he sticks to this section, proposes to make the owner pay income tax on that property although he is not making anything out of it. Could anything be more unjust? The Minister has promised an amendment. I am prepared to wait until we see that amendment, but I strongly urge on the Minister, in the interests of fair play and so far as income tax is concerned, to enlarge its scope and make it exclude as many cases of hardship as he possibly can. The Minister will be bringing in a most dangerous new principle if he refuses to accept the principle in the amendment I have moved. He will be making a man liable to income tax on what ceases to be a source of income to him. It is not a fair principle in taxation. It is a most unjust principle, and it is bound to produce permanent damage so far as that kind of property is concerned.

Is the Deputy withdrawing the amendment?

For the present.

Amendment No. 3, by leave, withdrawn.

I move amendment No. 4:—

To add at the end of the section the words:—

"or houses subject to the provisions of the Increase of Rent and Mortgage Interest (Restrictions) Acts."

There is a certain class of property held under rent. The owners of it, over a long number of years have been restricted in the increasing of the rents. That property comes under the Rent (Restrictions) Act. In the case of Dublin, the Act applies to house property, the rateable valuation of which is £25 and under, and outside the City of Dublin to house property the rateable valuation of which is £20 and under. Legislation of this kind was considered very necessary at one particular time, but the incidence of it at present is regarded as a very serious matter for the people who own this particular class of property. As late as 1927 this rent restriction applied in the case of Dublin to house property the valuation of which was £40 and under and, outside of Dublin, to house property with a valuation of £30 and under. These figures, as I have already mentioned, have now been brought down to £25 and £20 respectively. The persons who own that class of property have been restricted in the matter of raising rents from about 1914 or 1915. They are allowed to increase their rents to some extent in the case of improvements and of rates and, by an Act passed, I think in 1924, by an additional 10 per cent. Under this Bill we find a further addition in respect of which there is no consideration at all given under the Rent (Restrictions) Act being put on this class of property owner. Here is property where this restriction has been recognised as being burdensome, where it has been released gradually off property until it now stands at a particular point so that only the less well-off people are protected by it. I submit that the owners of it who would get a certain amount of relief, if this amendment were accepted, are suffering in a personal way, whether they be rich or poor, in order to provide housing at reasonable rents for the less well-off classes of the population. That is a matter that should be taken into consideration by the Minister. The change that he is proposing in the Bill should be waived in respect of the owners of that particular class of property.

I am not accepting this amendment. I think it has no merit at all. If any person feels aggrieved in a case like that he can go to the Commissioner of Valuation and ask for a revaluation of the property. In making the revaluation the Commissioner will, naturally, have to have regard to the letting value of the house and to the provisions of the Rent and Mortgage Interest (Restrictions) Act. He is the person to take those matters into consideration, and I have no doubt will because he is bound to make a revaluation, having regard to the rent at which the property can be let. Accordingly, I do not think there is any case at all for the proposal.

Surely the Minister does not seriously recommend, as an administrative arrangement, that because a certain class of property owners are restricted in the amount of rent they may charge for their present property, and because he wishes to abstract additional income tax from them, they should go to the Commissioner of Valuation, apart altogether from the conditions that attach to their property, and say: "I am being stuck for more income tax under the Finance Act this year, and I want you to reduce my valuation? Surely the Minister knows that the connection between valuation and rent is very thin and slender at the present time, and surely he will agree that it would be a most absurd thing that a certain group of property owners, simply because they are affected for the moment by the Restriction of Rent Act, should go to the Commissioner of Valuation and say: "I want you to change this valuation"? Surely the Minister will admit that the valuation as it now stands is only in the most limited way referable to rent?

Once again the Opposition are defeating their own case. Deputy Mulcahy has made my case that valuations are only in the most remote way referable to rents.

The fact of the matter is that the great majority of the owners of property which is subject to the Rent and Mortgage Interest (Restrictions) Act do not get any allowance at the moment because they are letting those properties at rents very much in excess of five-sixths of the valuation.

The Minister says that I exploded my own argument by saying that there is no connection between valuation and rent. I submit that that argument explodes what he says when he suggests that they go to the Commissioner of Valuation and say: "Because I cannot charge a bigger rent than I am charging, I want you to reduce my valuation." The Minister wants to bring back in a most absurd way some kind of a connection between valuation and rent. The position with regard to this particular class at present is that whereas the scale of valuation of houses that were caught by the Rent Restriction Act was gradually reduced, the latest reductions taking place in 1928-1929, he is now to turn round in a most arbitrary way and say: "I am going to take additional income tax from property." This particular class are caught by the Rent Restriction Act. There were certain provisions made under the Rent (Restrictions) Act by which certain increases of rent could be charged. I submit to the Minister that if the position which he proposes to bring about now had obtained at the time when these things were being taken into consideration, as to the amount of increased rent that could be charged, that, too, would be taken into consideration, but the particular class that is appealed for under this amendment is a class that is suffering something, and suffering it for the purpose of providing houses for the less well-off classes of the population.

They have their remedy.

One cannot call the remedy which the Minister proposes anything but a cock-eyed remedy—to go to the Commissioner of Valuation and say: "Change my valuation because I am caught by the Restriction of Rent Act"—a temporary measure that may disappear any day and which has been disappearing gradually over a certain number of years. The Minister, I suggest, is asking the Commissioner of Valuation to take into consideration a matter which is entirely outside his scope. He is in an absolutely careless and unthinking kind of way penalising a section of the population, who are being penalised already, and to a very considerable extent in the interests of a deserving class.

I do not know whether it is necessary for me to try to answer the Deputy again. The position is this: A man owns house property which is subject to this Rent and Mortgage Restriction Act; he gets a certain income from it, and either that income is referable to valuation or, as the Deputy admitted, it is not so referable. In general it is very much in excess of the valuation, and our duty is to tax the man on the income which he is deriving from that property, or, at least, to tax him on the income derived from that property, subject to the limitation imposed by the valuation. That is all we are seeking to do, and that is all the existing law does. The new section which we have introduced does not apply to the generality of cases of houses subject to the Rent and Mortgage Interest (Restrictions) Act. In general, those houses are let for a rent. Let the person who owns those houses pay upon his fair income, if he wants to do that. He can do it by going to the Commissioner of Valuation and asking him to revalue the property. If he feels he is aggrieved by the course we are taking; if he feels that in effect his real income is very much less than the valuation of the property, I have no doubt whatever that, to save himself, he will go to the Commissioner of Valuation. If, on the other hand, he feels that he is doing very well under his existing valuation, he will not go, and if he does not go, I do not think he is deserving of the consideration of this House.

There is another matter which the Minister has excluded from his observations. Perhaps the best testimony that could be given as to the cost of repairs of house property is to be found in the final report, issued by the State itself, of the Commission of Inquiry into the Sale of Cottages and Plots. The rent is ½ per week, and repairs amount to 5½d. per week, which is more than one-third.

In those special cases.

In which special cases?

In the case of cottages owned by local authorities.

That is not the question I am dealing with. I am not now dealing with the question of ownership; I am dealing with the question of the cost of maintenance of a premises in a habitable state of repair.

Those are not typical cases.

As a matter of fact, we cannot have any more typical case, because the number of cottages is about 40,000, and this figure I refer to is not for an individual typical case but the average cost of repairs in respect of all the cottages.

A property in a public ownership.

Property in a public ownership or in a well-regulated State or belonging to an individual costs money to keep in a habitable state of repair, and in this case one can readily understand, having regard to the charge there is on a local authority, a charge equivalent to the amount of rent collected, that the local authority would exercise some discretion in expenditure on the property. In the first place, these houses very in life from 20 to 30 years. Very few of them are 30 years old, and they lend themselves readily to being kept in good order, as they are mainly one-storey buildings, although some of them are two-storey buildings. The cost of repairs in this case represents one-third of the rent. The Minister's case is that he is abolishing the one-sixth provision because it is unnecessary, and, further because he says "If you have a complaint, go to the Commissioner of Valuation." The complaint here is in respect of practically all householders. The Commissioner of Valuation has to bear in mind, not the profit, but the sum in respect to which, compared with the total valuation of the city, the town or the country, as the case may be, a person is liable for rates. The income tax charge is much lower than the rates in any case. Obviously if he went before the Commissioner of Valuation and told him that he had spent £50 on a house, the first thing the Commissioner would say is: "Very good; you have enhanced its value. It is fifty pounds a better house now than it was this time twelvemonths. If it were not in sufficiently good order to be let twelve months ago it is now. If that sum of money is spent over five years it amounts to £250. The owner, if he be the occupier, has not been in possession of a taxable income during that period. He has an income, perhaps, after the end of the five years which is more likely to be included in the incidence of taxation than in the previous five years. The case that is made here is to exclude those houses which Parliament in its wisdom excluded from any increase of rent during that period. The Parliament has taken that action with regard to the individual owner—the landlord—and it comes forward itself and says: "While we will not allow the owner to get anything out of it, we are going to make sure that we will get something more out of it in the future than we have got in the past." That is the whole sum and substance of the Minister's case.

Amendment No. 4 declared negatived.

I move amendment No. 5:—

To add at the end of the Section the words:—

"or premises which have been acquired by the occupier at any time since the 25th May, 1914."

This amendment is intended to take into consideration a certain number of things; first, the people who are in the position of having to bear the results of the high post-war costs of building, and, as part of that class, the persons who have bought houses on the hire-purchase system from various parties in the country, including the Corporation. The people who either had built houses or purchased houses post-war are in the position that they bear considerably higher costs in respect of house ownership than the people who owned their property before the war. That applies particularly in the case of newly-built houses. The position with regard to building costs was disclosed in the discussion on the Housing Bill which took place in this House on the 18th February, 1931, Col. 1655. There it was disclosed that building costs, particularly in the years 1922, 1924, and 1925, were very high; that they gradually reduced, and that as between 1922 and, say, 1930, the fall in building costs is reflected in these figures, which are figures for houses built by local authorities throughout the country. The cost per square foot for houses built by those authorities in 1922 was as high as 14s. or 15s. When we come to 1924 and 1925, the average cost had fallen to about 12s. 6d. per square foot, and when we come to 1930 the average cost had fallen to 9s. 4d., so that, taking the information provided by the operations of local authorities as between 1922 and 1930, building costs had fallen by 33 per cent. As between the years 1924-25 and 1930, as a result of the same experience, we find that building costs had fallen by approximately 25 per cent., so that the people who are bearing the burden of house-building costs post-war are in, say, a very different position from the people who are occupying houses that were built previous to the war.

The question arose, particularly in dealing with the Financial Resolutions, of the position of persons who had bought their houses, say, under the Dublin Corporation. The Minister for Finance tried to minimise the additional taxation that was falling on those people, but the Minister must be aware that, as a result of the high rents charged, particularly in respect of houses built in Dublin in the earlier years of the establishment of the Free State when building costs were high, as I have indicated, a very heavy burden is falling on those people. There is a considerable amount of agitation by those tenants, which is being looked at with a certain degree of fear by the Dublin Corporation, in respect of the burdens that are falling on them. To add to the burdens of those people at the present time is, I think, a most undesirable thing. Naturally, with the high costs of building, and with the undesirability of placing too much of that burden on the rates, the rents which are being charged to those people are as high as could reasonably be paid. There may, perhaps, be reductions in some of them. At any rate, it is an entirely wrong position that, where an attempt was made to encourage people to own their own homes and enter into that responsibility at a time when building costs were high, they should now quite unexpectedly find themselves liable for additional income tax. Accordingly, I beg to move the amendment.

I do not exactly understand why the Deputy selected the 25th day of May, 1914, for the purpose of granting the very special privileges which his amendment would propose to grant. I am rather at a loss in that respect, in view of the fact that the Deputy did not state the reasons which actuated him in selecting that particular date. Once again, this goes back to the whole basic principle— whether people are going to get an allowance on the double——

Surely, that has been exploded long ago.

——which the Government, of which the Deputy was a member, thought should be removed over ten years ago, and which, but for an unfortunate incident here in the Dáil, would have been removed.

I think the Minister's recollection is at fault.

I forgot that the Deputy was not a member of the Government in 1924. At any rate some of his colleagues were, and I am not aware that the Deputy in 1924 opposed the then Government in trying to remove the anomaly——

If the Minister will look at the reports he will find that Deputy Mulcahy did.

I see-he was in opposition.

Not in opposition; he is consistent.

That is more than Deputy Cosgrave is, because Deputy Cosgrave was responsible for putting before the House a section more or less in the terms of Section 2 of the Finance Bill.

I again have to correct the Minister on that point.

The Minister has not really gone into this question.

Possibly not as fully as Deputy Mulcahy did, but at any rate I went into it sufficiently deeply not to talk about rents, and the burden upon the people who are paying rents, when this section has nothing whatever to do with people who are paying rents.

I think the Minister's recollection is again at fault. I talked of housing costs.

The Deputy referred to the high rents charged for houses, particularly in Dublin. He said that the burden of those rents was falling heavily upon the people, and that there was agitation, which was greatly disturbing the Dublin authorities, because of those high rents. The Deputy went on to say that the section would add to the burden of those people who are paying these high rents. As I have indicated, this amendment has nothing to do with the people who pay high rents.

If the Minister likes I shall call them annuities. But the people who bought their houses from local authorities, like the Dublin Corporation—the Minister may not want to call them rents for some particular purpose—are paying annual sums extending over a very long period in the hire purchase of their houses and, therefore, are the owners of their houses and the Minister is going to charge them additional income tax.

The Deputy may have his own peculiar methods of conducting a debate in this House, but surely he is not entitled to assume that the Minister is a thought reader and that he should know the Deputy really means people who bought their houses under the annuity system when he talks of them as people who pay rent. However, as I said the position is that these people are occupying houses as owners. If they were occupying them as tenants they would not get the benefit of the existing law which we propose to change. They would have to pay their income tax irrespective of the rent or the valuation, whichever the case might be. They would not get the additional allowance of one-sixth for repairs which they do at present when they occupy houses which they themselves own. We say in that connection that a man is not entitled to get the allowance on the double in that way.

I might point out in connection with this particular amendment that, in the form in which it has been put down here, it would benefit only the man who purchased the house in which he happened to be living as a tenant prior to the purchase. The man who, for one reason or another, would be unable to purchase the house which he had previously rented, but would have to purchase another one instead, would be excluded from the benefit of the amendment. The whole case of Deputy Mulcahy for this amendment has been anad misericordiam one. He has referred to the fact that houses, because of the high cost of building in Dublin in the earlier years, are now either being let to people at a high rent, or sold to people, so that a person who was living in a house for which he was paying a high rent and bought another would not get the benefit which Deputy Mulcahy would propose to confer upon the person who was so happily circumstanced that he could buy the house in which he was living. This amendment goes to create a further anomaly in connection with the whole position which exists in regard to the repairs allowance.

Will the Minister tell me do the local authorities owning house property pay income tax?

Certainly.

So the local authorities will pay income tax on the labourers' cottages.

Certainly.

The weekly rent of a labourer's cottage is ½, and the repairs of a labourer's cottage 5½d.

They have their remedy.

What is the remedy?

To go to the Commissioner of Valuation.

Let us consider that situation.

It does not arise here.

We are at amendment No. 5. I wonder whether labourers' cottages are premises which have been acquired by the occupier since 25th May, 1914.

Would not premises which have been built come under the heading of acquisition?

That was intended.

Presumably the land on which they were built would have been acquired since 1914 and the buildings constructed thereon would have been acquired since 1914.

I was wondering whether a labourer's cottage would come under that definition, "premises which have been acquired by the occupier at any time since the 25th May, 1914."

The Minister says it would.

I was present when some of them were being built after that date.

And acquired by the occupier?

They were not acquired by the occupier.

I think it is relevant. I submit that the Minister's proposal that local authorities should go to the Commissioner of Valuation is surely a boomerang. He thought he had discovered a boomerang in the conclusion of Deputy Dockrell's initial speech. Surely now he has discovered that, instead of being a boomerang in the hands of Deputy Dockrell, it is a boomerang in his own hand. It is areductio ad absurdum to say that, in the case of a labourer's cottage where the rent is ½ and the repairs 5½d., or 33? per cent., the only remedy left to the local authority is to go to the Commissioner of Valuation and to reduce the yield of rates.

That is a matter for themselves.

So the proposal is that the local authority should thrust their hand into this pocket and draw out a sufficient sum to replenish that pocket and, having replenished that pocket, to thrust their hand into that pocket and draw out a sufficient sum to replenish this. When they have worn holes in their pockets the Minister may bring in a section in 1935 that local authorities who have worn out their pockets transferring money from one pocket to another may apply to the Revenue Commissioners for a rebate under the special heading of repairs.

All I am concerned with is that they do not put their hands in our pocket.

There is sufficient matter in this Bill for this year without bringing in 1935.

The Minister is so fertile in suggesting remedies that he ought to foresee the consequences of the remedies which he suggests. I have suggested that the Minister did not foresee the result of some of his proposals. It is significant that these proposals were introduced on the 1st April. I am not suggesting to him that on the 1st April, 1935, he should recollect and honour the day, but I am prognosticating, from the experience I have had so far, that the Minister, true to form, will honour the day and introduce a section to revive thereductio ad absurdum I have outlined. Surely the time has come for the Minister to advance a little. This is a technical question. The revenue involved is infinitesimal—very small indeed, a bare contribution to the £2,000,000. I suggest to him that he should make a start now and give us an instalment of the £2,000,000 in reduction of taxation. The only instalment I ask is to forbear to impose an additional £24,000. That is not asking much. I think it would be a handsome gesture and, what is better, it would redeem his reputation for sanity and clear-thinking.

Amendment put.
The Committee divided: Tá, 18; Níl, 41.

  • Alton, Ernest Henry.
  • Bennett, George Cecil.
  • Burke, James Michael.
  • Cosgrave, William T.
  • Costello, John Aloysius.
  • Curran, Richard.
  • Dillon, James M.
  • Dockrell, Henry Morgan.
  • Doyle, Peadar S.
  • Fitzgerald, Desmond.
  • Fitzgerald-Kenney, James.
  • Lynch, Finian.
  • MacDermot, Frank.
  • Morrisroe, James.
  • Morrissey, Daniel.
  • Mulcahy, Richard.
  • Rice, Vincent.
  • Rowlette, Robert James.

Níl

  • Bartley, Gerald.
  • Beegan, Patrick.
  • Boland, Gerald.
  • Bourke, Daniel.
  • Brady, Seán.
  • Breathnach, Cormac.
  • Briscoe, Robert.
  • Concannon, Helena.
  • Cooney, Eamonn.
  • Davin, William.
  • De Valera, Eamon.
  • Doherty, Hugh.
  • Donnelly, Eamon.
  • Little, Patrick John.
  • MacEntee, Seán.
  • Maguire, Ben.
  • Moore, Séamus.
  • O'Briain, Donnchadh.
  • O'Dowd, Patrick.
  • O'Grady, Seán.
  • O'Ceallaigh, Seán T.
  • Flynn, Stephen.
  • Fogarty, Andrew.
  • Goulding, John.
  • Harris, Thomas.
  • Hayes, Seán.
  • Hogan, Patrick (Clare).
  • Jordan, Stephen.
  • Keely, Séamus P.
  • Kelly, James Patrick.
  • Kennedy, Michael Joseph.
  • Killilea, Mark.
  • Kilroy, Michael.
  • Lemass, Seán F.
  • O'Reilly, Matthew.
  • Pearse, Margaret Mary.
  • Ruttledge, Patrick Joseph.
  • Ryan, James.
  • Ryan, Robert.
  • Smith, Patrick.
  • Traynor, Oscar.
Tellers:—Tá: Deputies Doyle and Bennett; Níl: Deputies Little and Traynor.
Amendment declared lost.
Question proposed: "That Section 2 stand part of the Bill."

I would not like to let this section pass without making a protest against the withdrawal of the privilege, if it is a privilege, that the owner-occupier at present enjoys in being able to deduct one-sixth of the rateable valuation of his house for the purpose of income tax valuation. I know that the protest I am making is a hopeless one; that the Minister will turn it aside with contempt. He has got his answer ready; it is supplied to him from his Department. The regular cliche for this is, "You cannot have it both ways." I will just go into that. Apparently it is iniquitous, it is immoral, for the man who pays income tax to think that he should get a deduction of this sort. This proposal to withdraw the deduction of one-sixth is a very old one. I think it was Senator Blythe, then Minister for Finance, who first brought it into the Dáil and the present Minister for Finance is now nursing it tenderly. But it is a very poor foundling and I advise him to drop it. He may think me senile. I think I heard him reproach someone to-day with suffering from senility because he talked of the past. I cannot help thinking of the present Minister for Finance, when he was a Deputy, some years ago. He was then the spear-point in the attack on the iniquities of income tax. Of course, he is now Minister for Finance and he has undergone a tremendous transformation. The great and burning eloquence that stirred me, old as I was then, has been replaced by formal replies and the stereotyped refusals of his Department. We are told "You cannot have it both ways; it is immoral for the income tax payer to expect this deduction."

My personal regard for the Minister for Finance prevents me denouncing that reply as impudent, but impudent it is. If there is any immorality in this transaction, the guilty party is the Finance Department. Money is disbursed in rates, and the money that a citizen pays in rates should not be subject to income tax at all. The moneys paid in the form of rates are really taxes and when you tax a man on the sums he pays in rates, you are taxing him on taxes. Surely that is not equity in the true sense, and if there is any party having it both ways it is the Commissioners of Revenue or of Income Tax. I have made my protest. I have tried to make it vehemently. I only wish I had the eloquence which Deputy MacEntee of 1928 had and, perhaps, then I could have made my case all the stronger. I merely ask the Government to grant us this slight concession. It is obvious, however, that they want to get money and they do not care how they get it.

As we come to consider this section and decide finally whether it is to be incorporated in the Bill, I think it is right that two points should be made. One is that the inevitable consequence of the acceptance of this section is that individuals will be called upon to pay income tax on actual losses. That can happen under this section. I submit that the moment that is proved to the satisfaction of the House, the section stands self-condemned. The Minister has been forced to admit, not only that such cases are possible, but that such cases actually exist and have been brought under his notice. Nevertheless, he proposes to enact this section and give some kind of vague promise that he will introduce legislation at a later date to provide for exceptional cases, if that should be necessary. When the time comes, let me prophesy that the Minister will wave his hand and say, "No one can legislate for the exceptional case. No matter what precautions I take, some odd case will turn up and the hallmark of bad legislation is to try to legislate for the exception."

I have already pointed out that the Revenue Commissioners in this country are as competent or more competent than any body of Revenue Commissioners to deal with such administrative difficulties as may arise. They have very successfully dealt with them in the past, and they can deal with them in the future. From the revenue point of view, the accession to the revenue is trivial. The loss to the individual concerned may be very substantial indeed. On that case alone, I think this section is deserving of rejection. If we do reject it, it is going to create no difficulty; it is going to involve neither the Government nor the Civil Service in any dilemma. It is simply going to restore the law to what it was before.

There is a second convincing argument against this section. I will take the case of the labourer's cottage, which is the property of the local authority. We find that the average rent is ½, and we find that the repairs are 5½d. Heretofore the local authority would be entitled to claim a rebate of income tax on those houses in respect of the money expended on repairs. Now the Minister's remedy is, if a local authority is embarrassed by that situation, to go to the Valuation Commissioners and get the valuation of the property reduced.

If they feel that they are paying tax wrongly.

If they feel they are paying excessive income tax as a result of not getting an allowance for repairs. The Minister apparently forgot that the tenant pays the rates. The board of health, which is a subsidiary body to the county council, would come to the Commissioner of Valuation and say: "As a result of the Fianna Fáil Finance Bill of 1934, we find ourselves mulcted in income tax, and, therefore, we appeal to you to reduce our valuation." The Commissioner of Valuation might reduce it, whereupon, to the horror and dismay of the county council, they would discover that inasmuch as the board of health had benefited in the way of valuation, they lost by the shrinkage of rates. The only person who is going to come out of that transaction triumphantly is the Minister for Finance, loudly protesting that he does not want the money, that he has too much money, and that the Executive is overflowing with money. I am prepared to admit that I believe—nay, that I am satisfied— that a great deal of that surplus money the Minister has is of a ghostly variety; it exists in the Berkeleian sense, or in the Minister's own mind. Nevertheless, taking the Minister's statements on their face value, he has no argument to put forward for these proposals. His only proposal, to redress the injustice that will be done by his act, is to go to the Commissioner of Valuation. I pointed out that in one case, at least, that will not, in any sense, procure any redress for the victim, and I pointed to the embarrassment that will result to the Exchequer. I pointed out that from every part of the House remonstrances and representations were made that an amount of injustice would be done, and, in these circumstances, I submit the Minister is bound to withdraw the section and to abandon the proposal as having no merit good, bad, or indifferent.

Deputy Dillon did not make quite clear what exactly was the interest for which he spoke.

The public interest.

He talked about the cottages owned by the local authorities. He was making a case for the owners of property, that is, in this instance, the local authorities. He said it would be unfair to ask the local authorities to go to the Commissioner of Valuation, because, in that event, if the local authorities showed that the amount allowed for repair of these cottages was not sufficient—and that is the assumption, of course, that in striking the valuation the Commissioner has not made due allowance for repairs—and asked for an allowance and reduction of the valuation the local authorities themselves would be at a loss through the rates. But what about the poor unfortunate tenant, the lowly paid worker about whom Deputy Mulcahy was waxing eloquent? According to Deputy Dillon's argument, he is paying the rates on a high valuation. He said the occupier was responsible for the rates. Accordingly, if the houses are at present over-valued, without taking into account the amount spent upon them in repair, if the value is reduced, the local authorities might be at a loss, but the lowly paid occupier would get the advantage in a reduction of the rates and the valuation. As the rates in general are higher than any other charge, the tenants of the cottages would secure the benefit of a reduction. Therefore, when Deputies opposite make a plea about the alleged hardships that the new section may impose upon the owners of property, there is all the more reason why we should tell them to go to the Commissioner of Valuation.

Deputy Alton's prognostications—a word which Deputy Dillon is very fond of—were in this instance correct. I have, as Deputy Alton said, my answer ready, and as that answer is, in the words of my predecessor, Senator Blythe, who was then Minister for Finance, I propose to read them. They will be found in the pages of the Official Reports dated 13th June, 1924, col. 2341. Mr. Blythe said.

"The object of this proposal"—our proposal is substantially the same—"is to remove an anomaly which exists in this country in regard to income tax on houses. It does not exist in England, because there is a different system of valuation there, but the effect of the law as it stands in this country is that where, say, a man in Dublin is a tenant of a house at £120 per annum, the schedule assessment is £45, if the poor law valuation is £45, and the income tax is 5/- in the £, the amount is £11 5s. If, however, the same individual purchased the house and remained in occupation as owner an allowance is given of one-sixth which is supposed to be for repairs, although there is, of course, an allowance for repairs in the poor law valuation on which the assessment is based. The result is that the tax in Schedule A is £37 10s. instead of £45, and the amount payable, instead of £11 5s., is £9 7s. 6d. That means that on the same house which is exactly of the same value there is this year a tax of £11 5s., but next year, because the house passes into the hands of a different owner, there will be only payable £9 7s. 6d. The thing is anomalous. There is absolutely no reason for it. It is unjust that on two houses exactly identical in every particular, two different amounts of income tax should be paid. The matter is of some importance financially as well as from the point of view of equity in view of the way in which houses which formerly were let to tenants are now being purchased and occupied by the owners, owing to the housing shortage. Every day we find that allowances have to be made which were not previously made, and the amount of the tax is reduced. The matter arises out of the conditions in Great Britain, where the poor law valuation is not the basis of income tax, where there is a special valuation for income tax purposes and where the valuation is the full rental value of the house. As a matter of fact, in the sort of instance which I have indicated, in Great Britain the income tax would not be paid on the £45 which is the poor law valuation but on the £120 less an allowance of one-sixth for repairs. This particular allowance affects only residences and shops. It affects urban houses only."

Mr. Blythe then went on to say, in reply to a statement made by Deputy Good:

"When a house is valued here there is a gross value assessed, and then a reduction made for the estimated cost of repair. The net result is a poor law valuation which is considerably lower than the actual value of the house. The real point is that if you take a house which has a certain value there is no reason why its value should be estimated at less next year because it has passed into the ownership of another person. It is inequitable that on two houses standing side by side in the same street, exactly the same, more income tax should be charged on one house than on the other simply owing to the chance working out of a law made to meet other conditions. As a matter of fact, from the point of view of income tax, there is already an encouragement for any person who has money to invest it in houses. Assume that a man has a thousand pounds in some investment, and that he gets fifty pounds a year out of it, he will be charged income tax on the fifty pounds, but if he invested his thousand pounds in a house—for himself—and he will get a fairly good house at a poor law valuation of, say, £25 or £30, he will only have to pay income tax on the valuation, whether it be £25 or £30. In such a case as that, the person making the investment escapes the payment of the income tax on something like half the money he has put into the house by actually investing his money in the house."

What did Deputy MacEntee say on that occasion?

Deputy MacEntee was not here then. I am perfectly certain if he was he would have had due regard to the equities of the situation, and would have supported the then Minister for Finance.

May I remind the Minister that these arguments were put up to the Minister of the day, now Senator Blythe, and as he utterly failed to convince the House, the Government was defeated on the proposal?

On the contrary. I think the Deputy's memory misleads him. On the occasion on which Deputy Blythe put this amendment before the House, and was here to defend it in person, it was accepted by the Dáil. Deputy McGilligan, who was then Minister for Industry and Commerce, was in charge of the Bill in the Seanad, and though he put the case very cogently there, the Seanad turned it down. It came back here, and the then President of the Executive Council, Deputy Cosgrave, owing to the fact that the then Minister for Finance was absent, took charge of the Bill, and, I think, made a mistake in putting the case to the House. He fell into the trap laid for him either by Deputy Thrift or by Deputy Alton, and, as a consequence, the Dáil thought that the proposed alteration in the law had no substance, and, on a free vote, rejected it. The main point is that Senator Blythe, who was familiar with the circumstances, was in charge of the Bill when the Dáil accepted the proposed amendment.

I accept the Minister's correction. My recollection is that Deputy Cosgrave was in charge when the House decided against it. As the matter was rushed the House never questioned it. It was only when it was given time to think deliberately that the House rejected it. The Minister is very dexterous. He smiles and makes me very benevolent towards him. The point is that it is indecent to try to charge income tax in two ways. The people who are having it both ways are the Revenue Commissioners. It is time that the Minister for Finance should take some notice of these taxes, both of which are largely directed towards the same aim and taxpayers are mulcted by either one or the other. I hold that it is perfectly iniquitous—perhaps that is too strong a word to use—inequitable that taxpayers have to pay income tax on moneys they disburse as rates. The Minister has not met that point.

Will the Minister deal with the case where there was a loss?

I do not like to occupy the time of the House. The Deputy has made the assumption that a number of people have been taxed on a loss.

Deputy Thrift outlined a case.

The circumstances were peculiar in that case. It referred to tenement property which was let on lease in the City of Dublin.

Not tenements. They were cottages.

No. I do not think Deputy Dillon was in the House when I dealt with that particular case, where cottage property was concerned and stated that I was prepared to bring in the amendment on the Fourth Stage. I presume the case the Deputy has in mind is where slum property was let at a loss. The lease contained a repairing covenant, but the landlord, during its currency, did not enforce that covenant. He had power to do so, but allowed the leaseholder to get the benefit of the allowance for repairs without compelling him to expend a corresponding amount on repairs to the property. Consequently, when the property reverted to the ground landlord, he had to spend a considerable amount of money in putting it into repair. The fact that he had to incur that expenditure was due to his own negligence, and we say the State should not indemnify any property owner against the consequences of his own neglect.

The amendment proposed by Deputy Thrift did not propose to standardise procedure whereby a leaseholder might allow a tenant to take the benefit of Rule 6 without carrying out repairs, and then claim under Rule 8. The proposal of Deputy Thrift was to let the benefit of Rule 7 go by the board and to rehabilitate Rule 8, wherein the occupier or owner would be required to show the Commissioners five years' actual expenditure.

If tax is to be assessed on valuation, then the person to whom the taxpayer should go for relief is the person who strikes the valuation. Accordingly, if there is any person aggrieved by the fact that he considers the valuation too high, he has it in his own hands to go to the Valuation authorities and ask them to have the property valued, having regard to the rent and the amount which must be spent on repairs to the property from one year to another.

I wonder if we, on this side of the House, were to make the full and frank admission that all the logic in connection with this argument is on the side of the Minister and the Revenue Commissioners, and if we were to appeal, not to the better nature of the Revenue Commissioners—which I do not think exists—but to the better nature of the Minister for Finance, to consider the ground and the effect of agreeing to the proposal in the amendment, what would be the result? The Minister read, with great gusto, the reply given by Senator Blythe, when he was Minister for Finance, and just adopts that as his views. Of course, both views are really the views of the Revenue Commissioners. I have forgotten the Scriptural text in which Esau figures, but anyone who remembers it can apply the quotation to the present context. The proposal of the Minister, as I understand it, is that we are to rely upon the good graces of the Commissioner of Valuation to reduce the valuation if a case can be made.

The present Commissioner of Valuation was a former Inspector of Taxes, and I do not know whether there would be much of an opportunity for any unfortunate taxpayer appealing from the Revenue Commissioners to the Commissioner of Valuation. However, he may forget the days when he was an inspector and may reduce the valuation on the grounds mentioned in the present proposal.

The basis on which we put down the amendment is not on the basis of logic, but on the basis of fair play. The Minister should remember that this particular method of assessing income tax in respect of property occupied by the owner has been in existence for a considerable number of years, and that when a person is buying a house one of the elements taken into consideration in fixing the purchase price is the valuation and the amount of taxes and rates upon it. Up to this a person buying a house for the purpose of living in it takes into consideration the fact that he would get this allowance for repairs. A considerable volume of vested interests has been created owing to the existence of this method of assessment for owner-occupiers for a number of years, and the fact that the proposal, which is now sponsored by the present Minister for Finance, was defeated by the Oireachtas, on the proposition of a previous Minister for Finance, rather strengthens the belief that this method of assessment should not be interfered with.

A number of people must have purchased their houses and based their purchase price on this factor, that the amount of income tax they would have to pay for the future would be based on the poor law valuation. I think that is an aspect of the case which the Minister ought to take into consideration, not on the logic of the case but on the equities. I make a present of the logic of this case to the Minister. I base my case on the equities and on the fact that this arrangement has operated for a considerable number of years, and that people have spent their money and made their plans on this assumption. Undoubtedly a certain hardship, not perhaps of a very considerable nature or to a very considerable extent, but some hardship will accrue to people who have bought their houses on the faith of this particular method of assessment.

The Deputy has made a very eloquent and a very moving speech, but I think his speech is most unfair to his own colleagues, and most of all to Mr. Blythe, because none of these proposals, even though it originates in one of the various Departments of the Government, does come before the House unless the Minister responsible for the particular Department concerned and the Executive Council as a whole are satisfied that the proposal is fair and equitable. It is all very well to describe this as a proposal of the Revenue Commissioners, and thereby rather discount the real merits of the proposal, but it is neither fair to the Minister nor is it fair to the Revenue Commissioners, nor is it even fair to my predecessor, as I have said. The Revenue Commissioners discharge very important functions here. They have to safeguard the revenue of the State, and so far as possible to see that fair play is done as between taxpayer and tax payer. I am responsible, on the other hand, for putting before this House only those proposals which I am convinced are sound, reasonable and just. The same position obtained in the case of Mr. Blythe. It was the same, I hope, also in the case of the former Executive Council. In fact, in this particular case the House has reason to believe that our predecessors in 1924 were all personally concerned to see that the proposal which was then put forward was one which in the interests of the community should be accepted by the Oireachtas. Deputy Cosgrave, in the course of a statement on the original financial resolution which was introduced preparatory to incorporating this particular section in the Finance Bill, indicated that he alone of all his colleagues had any doubt about this proposal. I have said that it was rather unfortunate that Deputy Cosgrave had charge of this matter when the Bill came back to the Oireachtas, because it was due to a misunderstanding which a statement of his had created that the proposal was ultimately rejected by the House. The statement was made in reply to either Deputy Thrift or Deputy Alton, who were sitting beside each other. Either of these Deputies asked Deputy Cosgrave: "If the proposal which you are introducing is accepted by the Oireachtas does it mean that if a man rents a house the landlord will still get the allowance of one-sixth?" I think the statement was made by Deputy Cosgrave, then President of the Executive Council, that such would be the case, that the landlord or the income tax payer would get this additional allowance of one-sixth. Either Deputy Thrift or Deputy Alton then said: "Very well, we can quite easily evade it then. All I have got to do is to let the house in which I am living to my colleague, and he will let his house to me. He will be my landlord and I shall be his, and in that way we can get the allowance of one-sixth." It was on that statement the Oireachtas rejected this proposal and not on the equities of the matter.

I do not think that any great hardship is going to be occasioned by this proposal. It may be quite true that people have taken the present method of assessment into consideration in purchasing their houses but if people are willing to gamble on the likelihood that an anomaly will be permitted to exist, that is their lookout. Surely none of us is going to argue that because people take a chance of that sort the hands of the Legislature should be tied for all time. Mr. Blythe in 1924 referred to a house in which the schedule assessment would be £45 and the poor law valuation £45. In that particular case, with the income tax at 4/6, the owner-occupier, on the present method of assessment, would be called upon to pay something like £8 10s. This would be a house which would rent at, say, £120 a year. In the first case, he might pay £8 10s. but in the second case, if the house were let, he would pay £10 2s. 6d. The extra charge upon him would be something like £1 13s. There is no reason in the world in equity why a person who occupies his own house should not pay income tax at the same rate as a person who owns a house that he does not occupy and who rents it to another person.

I should like to ask the Minister a question. The Minister gave us an estimate of the number of people who would be affected by this change and also the amount which the revenue expected to get as the result of it. I think he estimated that £24,000 would accrue to the revenue and that 6,000 persons would be affected. When the Minister says that the change is going to bring in £24,000 to the revenue and that 6,000 persons will be affected, does he include local authorities amongst these persons?

All sorts. I think that 6,000 persons was an underestimate.

I just wanted to know whether the Minister could stand over that. The Minister frequently complains that the Opposition is exaggerating, but I suggest that he is certainly not giving us an exact picture when he says that 6,000 persons are involved, and that the total amount of money which the revenue expects is £24,000. I suggest that he is doing something other than exaggerating when he is giving us these figures.

Question put.
The Committee divided: Tá, 40; Níl, 23.

  • Bartley, Gerald.
  • Beegan, Patrick.
  • Boland, Gerald.
  • Bourke, Daniel.
  • Brady, Seán.
  • Breathnach, Cormac.
  • Briscoe, Robert.
  • Concannon, Helena.
  • Cooney, Eamonn.
  • De Valera, Eamon.
  • Doherty, Hugh.
  • Donnelly, Eamon.
  • Flynn, Stephen.
  • Fogarty, Andrew.
  • Geoghegan, James.
  • Goulding, John.
  • Hayes, Seán.
  • Jordan, Stephen.
  • Keely, Séamus P.
  • Kelly, James Patrick.
  • Killilea, Mark.
  • Kilroy, Michael.
  • Kissane, Eamonn.
  • Lemass, Seán F.
  • Little, Patrick John.
  • McEllistrim, Thomas.
  • MacEntee, Seán.
  • Maguire, Ben.
  • Moore, Séamus.
  • O'Briain, Donnchadh.
  • O'Ceallaigh, Seán T.
  • O'Dowd, Patrick.
  • O'Grady, Seán.
  • O'Reilly, Matthew.
  • Pearse, Margaret Mary.
  • Ruttledge, Patrick Joseph.
  • Ryan, James.
  • Ryan, Robert.
  • Smith, Patrick.
  • Traynor, Oscar.

Níl

  • Alton, Ernest Henry.
  • Bennett, George Cecil.
  • Cosgrave, William T.
  • Costello, John Aloysius.
  • Curran, Richard.
  • Dillon, James M.
  • Dockrell, Henry Morgan.
  • Doyle, Peadar S.
  • Esmonde, Osmond Grattan.
  • Fitzgerald, Desmond.
  • Fitzgerald-Kenney, James.
  • Lynch, Finian.
  • MacDermot, Frank.
  • McGovern, Patrick.
  • McMenamin, Daniel.
  • Morrisroe, James.
  • Morrissey, Daniel.
  • Mulcahy, Richard.
  • O'Sullivan, Gearóid.
  • Rice, Vincent.
  • Rowlette, Robert James.
  • Thrift, William Edward.
  • Wall, Nicholas.
Tellers:—Tá: Deputies Little and Traynor; Níl: Deputies Doyle and Bennett.
Question declared carried.
SECTION 3.

Amendment No. 6, to Section 3, standing in Deputy Davin's name, is not in order.

Question—"That Section 3 stand part of the Bill"—put and agreed to.
SECTION 4.
Where the Revenue Commissioners are satisfied that the application of the provisions of Part II of the First Schedule to the Finance Act, 1929 (No. 32 of 1929), would give rise to hardship in the case of income derived from an employment exercised wholly outside Saorstát Eireann, they may grant such relief as in their opinion is just.

I move amendment No. 7:—

Before Section 4 to insert a new section as follows:—

The word "rents" wherever it occurs in the Income Tax Acts as part of the expression "stocks, shares, and rents" in relation to income arising outside Saorstát Eireann, shall include and be deemed always to have included any payment in the nature of a royalty and any annual or periodical payment in the nature of a rent derived from any lands, tenements, hereditaments, or heritages, including lands, tenements, hereditaments, or heritages to which the Rules of No. III of Schedule A of the Income Tax Act, 1918, or of Part I of the First Schedule to the Finance Act, 1929 (No. 32 of 1929), would apply or have applied if such lands, tenements, hereditaments, or heritages were situate in Saorstát Eireann.

I think I explained the purpose of this amendment fully when the requisite Financial Resolution was before the House. It deals with income from mining royalties and other income from similar sources arising outside Saorstát Eireann, and is necessary for purely precautionary purposes.

Does it interfere with the double income tax arrangement?

Amendment agreed to.
Section 4, as amended, agreed to.
Sections 5 and 6 agreed to.
SECTION 7.

I move amendment No. 8:

Befort Section 7 but in Part I of the Bill to insert a new section as follows:—

In order to remove doubts it is hereby declared and enacted that income derived from fees charged for the service of stallions kept at a farm for stud purposes shall be treated as income coming within the terms of Schedule B and not of any other Schedule of the Income Tax Act, 1918.

There have been occasional cases before the courts in connection with the liability of owners of stallions who have lands as well in respect of the fees chargeable in connection with the services of these animals. There was a case in Ireland in connection with a celebrated stud in Limerick owned by Mrs. Bailie. Recently, there was a case in England in which a well-known racehorse owner succeeded in establishing that the liability in respect of this part of his income merged in the liability in respect of the larger item arising out of his general agricultural activities. So far as individuals are concerned, I am not interested in them as such. None of them has approached me with regard to this amendment. The amendment is put down with a view to helping, if it is possible to help, in present circumstances, the horse-breeding industry. During the last couple of years, the tariffs have brought within their scope horses, and it has been found by several stock-breeders that the operation of these tariffs prevented mares being sent over from England and, consequently, reduced their income from thoroughbred horses. A half-dozen of these horses have already left the country. That is not to be taken as the maximum loss we have sustained. During the course of the last couple of decades this industry has spread more, perhaps, than any other, and for a very good reason. The soil and climate of the country are particularly suitable for horse-breeding, from the thoroughbred down to what is called the Irish draught horse. He is a much more suitable animal than those of other countries, not alone for draught purposes but for practically any purpose. Those who take an interest in the development of the industry of agriculture must be satisfied that this particular extension is of very great importance. There is no need to tell the House of the great success which has attended Irish-bred horses, particularly during the last few years. The year 1929 was probably the peak year. The success of Irish-bred horses is not confined to Great Britain. Success has been achieved in distant parts of the world. In Canada, the success of the jumping team is largely due to the fact that they bought quite a number of jumpers which made their mark at the Dublin Show. The success of France in the jumping competitions here is largely attributable to the fact that, in their wisdom or unwisdom, those engaged in the production of horses here 25 or 30 years ago allowed two of the best sires of the year, at any rate, to leave this country.

It may be asked what this particular concession, if it be regarded as a concession, has got to do with the horse-breeding industry. Six horses, as I have said, have already left the country. It may be that others will go. Nobody wants them to go. Least of all do the owners want them to go. On another occasion here, mention was made of a celebrated horse bought by an Irish owner at a comparatively small price and sold by him a few years later at approximately five times that price. He had the maximum of success in this country, but when he left it he had the minimum of success—if it could be described success at all. It may so happen that the animals who leave here may not be as successful as they were when here. If that were to occur, it would be a very great interruption in the success of Irish horse-breeding. One of the horses with which I am dealing is a most remarkable animal. He has sired three Derby winners in the last five years and it is a great pity and a great loss that he has had to leave the country. From my own knowledge of the owner, he was not happy when taking him away. He had at home 16 nominations for the horse. Of the 16, six had been withdrawn. Of the ten which were left, he did not expect to get more than six. Six times £400 is £2,400. He brought the horse away and he has filled up the nominations— 40 mares at 400 guineas. The owner of even a very successful sire like that can ill afford to be at a loss of £12,000 or £14,000 a year. Worse than that, fashionable bloodstock are sent to other sires. A fashionable sire here gets a limited number of nominations. There are, consequently, a limited number of competitions in which he can show his form. If he be engaged for only six mares, as against his competitors with 30 or 40, it is quite obvious that they are operating at a six to one advantage over him. I do not use that phrase in the bookmaker's sense but in the numerical sense. It is obvious that the Irish horse is at a disadvantage if the progeny of 40 mares are competing against the progeny of six mares covered by him.

Although I know only one of the owners concerned, I do not believe that a single owner was happy in sending his horse out of this country. In my view, it would pay the Government to undertake the whole of the burden of the tariffs. I am not so sure that that would solve the problem but it would pay to do it. The alternative contribution we might make would be to adopt this or a similar amendment which would induce owners of horses still here to keep them here. It may be that they will have to go because, obviously, if a horse's nominations do not fill he must go where the demand is. That is a serious question for this country, for more reasons than one. We have top place at the moment and, if we lose it, it may be years, for the reason which I have stated, before we get it back. If you have two horses of the same calibre, one having served only six mares and the other 40, obviously the sire whose progeny shows the greater amount in stakes to credit at the end of the year will be the more fashionable sire.

The best contribution which we could make would be to lessen the losses of those engaged in that particular industry. The industry is, to some extent, speculative: speculative in the sense that an owner may spend anything from £300—to give the correct comparison anything from £100 to £40,000—in making a purchase. The purchase that he makes for £100 may turn out to be more valuable than one for £40,000. Cases of the kind have occurred. One celebrated sire, Tredennis, cost £100. Another most remarkable sire—Gallinule—cost £1,000, while others costing tens of thousands of pounds, perhaps, have not been as successful as either of these two. If those who have studs in this country find that there is not a sale for their stock either as yearlings or as two-year-olds, or that the nomination lists of famous sires that they own are not filling, then, obviously, they have to consider whether they will sell out or move a valuable animal. In one case, I believe, an owner has actually bought a farm in England. It may happen in that case as it happened in the previous case that I referred to: that the sire may not prove to be as successful in England as he was when in this country. Although there have been cases in which men were fortunate in purchasing animals at a very small price, this particular industry requires the expenditure of very considerable sums of money. Not only that, but it is necessary to employ a very considerable amount of capital in carrying it on. There are many people engaged in it who have done that—not so much in this country as in Great Britain, and yet the results to them have not been at all commensurate with the large sums of money that they have put into the industry.

I think it would be an attraction to those engaged in the industry if this particular concession—in effect it may not be a concession at all, because it may be the law that they are entitled to it, not perhaps all, but certainly some of them—were granted. I do know of one case where, I think, it would be possible to put forward the contention that if the position in England is governed by the decision in the English courts he would probably get the same decision in the courts here. As a rule this class of person does not like going to the courts. It remains for us in the special circumstances of the case, having regard to the hardships that have been endured, the losses sustained and the damage that may possibly be done to a very important branch of industry in this country, that we, at any rate, should make the maximum contribution towards easing the burden on these people. I accordingly move the amendment.

I desire to support the amendment moved by Deputy Cosgrave. The industry of breeding thoroughbred horses is one of the most important that we have. It is also one of our growing industries. In late years the fame of the Irish thoroughbred has spread practically all over the world. English owners were attracted by the success of Irish horses here, in England, the colonies and in foreign countries to investigate the reason why Irish bred horses could be so successful. It has always been held by Irish breeders that the soil of Ireland is particularly suitable for the breeding of thoroughbred stock of any kind. It appears, too, that the climate has something to do with it. Everyone knows that a number of wealthy English breeders were anxious and, in fact, did take farms here for the purpose of setting up studs. A number of very valuable stallions were imported into the country. Racing, as everyone knows, provides the greatest advertisement that the thoroughbred horse can get. The success of the Irish bred horse on Irish and English race courses during the last 20 or 30 years in particular greatly benefited Irish breeders generally.

I think it was the late Mr. John Gubbins who first made the name of the Irish thoroughbred famous in this country, when he produced, out of his comparatively small stud, such famous Derby winners as Galteemore and Ardpatrick. His success was followed some years later by that of the late Mr. Boss Croker, who bred Orby in this country, trained him here, and won the Derby with him. The Derby has been won by many Irish bred horses. Then there is that famous sire Blandford. Anybody who knows anything about thoroughbred stock must be familiar with the career of Blandford. Practically every important race in England has been won this year by Irish bred horses. They are all designated in the newspapers as Irish bred. That famous sire to which I referred a moment ago, Blandford, stood in the County Dublin for many years, but he has now been removed to England, partly, I suppose, on account of the tariffs or, perhaps, for other reasons, such as that it was difficult to fill his list. No more severe blow could have been struck at the thoroughbred industry in this country than the loss of Blandford. A number of other valuable stallions, not, perhaps, so valuable as Blandford, have also been removed from the country in comparatively recent times. The position at present is that comparatively few high-class sires are now left in the country. Luckily there are a few left, but their lists are practically less than half filled, and in some cases only quarter filled. In view of that it seems doubtful if the owners of these horses will continue to keep them here. If such a situation should come about, then a very severe blow will have been struck at one of our most important industries—the breeding of thoroughbred stock—a blow from which it will not recover for very many years, because not only will the sires disappear, but the owners of high-class Irish mares, where they can afford it, will be compelled, even if they have to breed at a loss, to send their mares out of this country. In future, therefore, the position, it is to be feared, will be that Irish bred horses winning important races in England will be designated as Irish bred: that in two or three years' time, when one takes up a newspaper and reads the results of important races in England, India, France or in any other part of the world, one will find it stated that the winner was bred in England. We shall not have the name of a single winner being designated as Irish bred. Therefore, a blow will have been struck at the Irish bloodstock industry that it will not have recovered from, possibly, in the lifetime of present breeders.

I do not know whether the concession that is being sought under this amendment is a very valuable one or not. At all events, it is something. If there is any concession or inducement that we can give to Irish breeders in this direction we ought to give it to them. In fact, I should like to see this House more generous in this respect. I think that we might, as Deputy Cosgrave pointed out, with great profit to this country, try to devise some scheme, even if it costs money, that would help to keep these valuable sires in this country; not only to keep them here, but to open the way for more to come into the country. We should do everything possible to attract English breeders of wealth and eminence to bring their valuable mares into the country, to keep them here and to have the foals born here. The bloodstock breeding industry in the country would, naturally, benefit greatly by such an advertisement. As I said, this may not be a very valuable concession, but it will be looked upon as a concession in spirit, anyhow, and the least we ought to do is to make some advance on these lines. I hope it may be possible, later, to go even beyond this, but I would ask the House and the Minister to accept this amendment.

I think the attitude of the Government might be summed up in the words which Deputy Bennett used when he said that he did not know whether this would be a very valuable concession or not—I presume he meant whether it would be an effective concession. We are not anxious that the bloodstock industry in this country should suffer, if it can be avoided, as a result of the condition of affairs that now exists, but I am not satisfied that the proposal contained in the amendment before the House would do very much to remedy the position. We are merely administering the law as it has always been administered here and as it has already been interpreted by the Irish courts. I do not think Deputy Cosgrave, in putting forward his amendment, challenged that. He based his whole case upon the ground that it was expedient that something should be done to help the bloodstock owners out. I am not prepared to controvert that, but I do say that the way in which it is proposed to do it in this amendment is not the right way. After all, the law is as it is and it would be quite inconceivable that, say, in a case that may have existed here a couple of years ago, a person who drew an income from a stallion which was measured and assessed for tax purposes at five figures —something like £15,000—should, if this amendment went through, be assessed in respect of something under £1,000.

I do not see how any party standing for the interests of the taxpayers as a whole could justify an amendment of the law that would put the man who is actually in receipt of an income running well into five figures in the position of being assessed for income tax purposes as if he enjoyed an income of something less than £1,000. That would be the effect of this proposal. We should lose considerably but I am not certain that the amount which would accrue to that particular individual would be such that would induce him to continue to keep his horses here if he thought that the existing circumstances were such that it would be to his advantage to bring them to Great Britain and an examination of the figures will show that. Deputy Cosgrave talked about a horse which had a list of, I think, something like 40 mares. I do not know what the service fee was for the stallion, but it must have been of the order of a couple of hundred guineas. Forty mares at a couple of hundred guineas each would be £8,000 and income tax on that, on a rough calculation, could not be more, and, in fact, would be a good deal less, than £1,800, but the import duty into Great Britain would be considerably more than £1,800. We would only be in the position that we would be making this general concession and not having the assurance, at the end of it all, that the condition of affairs which Deputy Cosgrave, the members of the Government and everybody are concerned to prevent would not come about after all and that there would not be this tendency to transfer stallions to Great Britain where nominations can be easily filled.

I am not at all certain, in the case of the stallion to which Deputy Cosgrave referred, that whether or not there had been any dispute between us and Great Britain, that horse, because of fashionable considerations and the ease with which the nomination list could be filled, would not be transferred to Great Britain in any event. Therefore, I say that so far as this particular amendment is concerned we are not in a position to accept it because I do not see that it would be equitable to change the existing law. If the existing law were changed, I do not know whether the concession would be, as Deputy Bennett said, of much value or not, that is to say whether the concession would be effective or not. If the interest which approached Deputy Cosgrave and asked him to put down this amendment—he indicated that some people had asked him to put it down—were to approach the Minister for Agriculture, possibly some other way out might be found.

I do not know that I said that anybody did approach me. As a matter of fact, nobody approached me to put down this amendment.

Then I must have misunderstood the Deputy.

I had a certain representation, from a quarter which, I believe, is disinterested, some months ago when the case was decided in the British House of Lords—the Lord Glanely case—as to whether it would not be possible to put the law here as it had been found by the House of Lords. That was the only representation I had. The Minister says if the law is what it is, then let it be decided. In other words, people are invited to go to the courts. May I advise the Minister solemnly not to go into a matter about which he knows nothing whatever. Anybody who knows anything about horse-racing or horse-breeding, and even those who know nothing about it, would laugh his suggestion to scorn that the owner of Blandford would in any case have shifted it out of the country. Just think of the ludicrous suggestion for a moment! Here is a horse than which there was no more successful sire in this or in any other country for the last six years, and we are invited by the Minister to consider the suggestion that he might go in any case. I will leave it at that.

There are people who indulge in horse-breeding, not with a view to making money, strangely enough. There always have been such people. The National Stud in Kildare is perhaps the outstanding example in this country of the generosity of a man of that type. Colonel Hall-Walker, subsequently Lord Wavertree, is keenly interested in the breeding of horses. It was there that Blandford was bred, and if anybody likes to go down, I am sure the manager of the stud will take him around and show him what success has attended the breeding there. The Minister takes the narrow point of view that here is a man with a five-figure income who is going to be allowed off. I do not suppose that in the whole country there are four persons who would go into the five-figure sphere in respect of stallion fees, and those persons may have had to expend very considerable sums of money in order to get to that point. In other words, they have put in money and they give employment. One stud which was almost closed down since these tariffs were imposed had, when I visited it, something like 20 employees, all well paid, and nothing but fashionable sires were responsible for the progeny that was there. Over a certain number of years, I expect that scarcely a single animal was sold out of that place under £2,000. I would hesitate to say that, even with that, there was a profit made. The principal person engaged in horse-breeding in this country has a very big establishment. He would be assessed on much more than £1,000; it would probably go into three or four times that figure. He has something like 300 employees. He not alone breeds horses, he not alone keeps sires and takes in mares, but is responsible for having increased the price of another class of stock in this country—steeple-chasers. He is very largely responsible for that, and it has spread money out in all directions.

This has nothing to do with the matter under discussion.

Oh, yes; it has. That is the unfortunate thing about it; I am dealing with a Minister who knows nothing about this particular case. Has the Minister ever heard of the Lord Glanely case before the House of Lords?

Has the Deputy?

Yes; I have read the decision. Not alone have I read the decision, but also the citation of Mrs. Bailie's case and the man who owns the Clydesdale sire over in Yorkshire. In Lord Glanely's case all his activities in connection with the horse-breeding industry—his entrance fees for races, and other expenses such as that—were taken into account. A man may get £16,000 income out of a fashionable sire for one year, but it does not follow that he will put that £16,000 into his pocket—not by any means. If the Minister thinks he is going to be assessed on £16,000 he is making a big mistake. The animal has to be insured. There are various expenses of one kind or another. He cannot keep a horse without having mares himself—without being engaged in racing. Racing people are not commercial pirates such as the Minister has in mind. The people who are engaged in racing and engaged in the horse-breeding industry do not go into it as a commercial transaction. Some of them are prepared to pay a very large sum in connection with it. One of the most remarkable of the owners we had here spent about £15,000 on his stud. He got very good results. He bred the best mare ever bred either here or in England.

So far as a concession is concerned, this is, if anything, a very faint variation of the decision of the House of Lords. It is a case in which I do not believe any of those stock owners or stock breeders in this country would take the action. It is to relieve them of the necessity of doing that, and to show them that this House has some interest in the industry, that I put down this motion. Those who are engaged in this industry give employment to a large number of people. Not alone that, but they stimulate other people to invest money in horse-breeding. It is not the man who owns a sire is the mainstay of the thing. There was a discussion some time ago about the question of the economic advantage to farmers, and a suggestion that people should not be allowed to keep a single mare. Everybody who was of that opinion got a shock when they saw by the Royal Dublin Society's sales that the man who got the highest price was a man who had a single mare. You cannot lay down any mathematical rules with regard to this business. This is nature. Those men are engaged in getting the best out of nature for this country, for its products, and for the name that it has. It is with the desire to preserve that name under specially difficult circumstances that this motion is put down. It is put down with the intention of providing some attraction, some little inducement, or some hope for them, and certainly with the intention of putting a further obstacle in the way of the export of some of those animals, which would be equivalent to exporting industries out of this country, and no small industries either.

I should just like to put a point before the Minister, which I think has been forgotten, so to speak. I understand that the fees earned by stallions are assessed at their full value. It was mentioned by Deputy Cosgrave, and, I think, by the Minister, that if a stallion earned, say, £1,000 or £1,600 or £2,000, as the case may be, the owner was assessed to income tax on that amount. Of course, in the case of Lord Glanely, that was disallowed. I want to put this point to the Minister: supposing a man had two or three, as the case may be, and the others were a failure, what would the position be then? The amendment, as I understand it, is to bring about a state of affairs in this country which would take into consideration the whole activities of any particular man engaged in horse-breeding. I understand that has not been the case here in this country before. In view of all the circumstances of the case, in view of the fact that this country is so specially adapted to horse-breeding and the rearing of bloodstock, and also in view of the fact that this country has achieved so much in that direction, I think the Minister and the Government should do whatever they can to preserve that branch of our industry here. It is one which gives a lot of employment. In the past it has been responsible for bringing an amount of money into this country, and for making the horse breeding industry in this country a very famous one. We do not want too much in this matter, but I think due consideration should be given to the facts of the case. I cannot see any equity in taking a particular asset in a particular man's case, whether he be a millionaire or a pauper, and singling it out for special assessment on the part of the income tax authorities in this country. I understand that that is the position here. If it is—and I believe it is—it is very unjust. The whole circumstances should be taken into consideration. The least the Minister and the Government can do is to act reasonably in connection with the whole horse-breeding industry here.

There seem to be two very good reasons why this amendment should be accepted. One is that it is always sound to define the law. This House should never take up the attitude of saying to the citizen: "Go to the courts and find out what the law is."

There is no doubt about what the law is.

If there is any doubt about the law, it is through the medium of the Finance Act——

But there is no doubt, except in the minds of the inferior Deputies opposite.

——that the doubt ought to be cleared up. A very similar case has been presented to the House of Lords, and a verdict secured. The very fact that such a case went to the House of Lords implies that there was a doubt, and a very substantial doubt. The fact that it required a House of Lords decision to settle the matter——

There is an Irish decision which governs us.

We are now dealing with two similar Finance Acts. In fact the Finance Act under which the Lord Glanely case arose was the Finance Act of 1918, which was common to both countries. We had a decision running one way from the House of Lords. What way does the Irish decision run, would the Minister say?

In favour of the law as it stands.

Does the Irish decision override the English decision?

It runs against the taxpayer in this case.

That illustrates the case exactly. We have two of the foremost judiciaries in the world administering this law and taking opposite views.

But we have nothing to do with what happens across the water.

The Minister loves to dabble in matters which he does not understand. If he will go down to the Four Courts any day he will hear his Attorney-General quoting English cases day after day. Admittedly they are not coercive, but they are persuasive. The Attorney-General quotes them continually. Frequently when prosecuting Blueshirts for crimes they never committed he will quote eloquently from the cases prosecuted by British Attorney-Generals in British courts of law. He is constantly digging up British precedents to justify him in jailing General O'Duffy, jailing this one or closing up that man's house or raiding another man's house. Of course, the Attorney-General, being a trained lawyer, knows that it is perfectly legitimate to quote a British decision. So that you have a House of Lords decision going one way and you have an Irish decision going another way. You have here a High Court case going one way and the House of Lords going the other way in Great Britain. So that anybody might quite legitimately proceed here in the Supreme Court in order to override the existing Irish case which governs this particular dilemma. I submit, therefore, that it is highly desirable, now that the point has been raised, that it should be settled by this House and that we should proceed to settle it.

I want to make this submission to the Minister—that in revenue legislation the most essential element to preserve is absolute impartiality towards all citizens, so that the revenue law will apply to every citizen equally and without distinction of person. Take two farmers side by side, each of them with 100 acres of land, one running a market garden and the other running a stud. The market gardener, being in a very advantageous position with relation to the city which he supplies, having very little competition in the particular product in which he specialises, makes £2,000 a year out of his land. The stud farmer next door has a peculiarly suitable sire and makes £2,000 a year. The market gardener can stipulate that he will pay income tax under Schedule B.; but the stud owner can be compelled to pay income tax under Schedule D. The Revenue Commissioners have no power to compel the market gardener to pay income tax under Schedule D.; it is for the market gardener to elect. The result of it is that you may have a man on one side of the fence paying on his valuation and, possibly, contributing very little to the common weal in the way of reproductive trade; and a man on the other side of the fence being compelled to pay, under Schedule D, a very much larger sum, who is giving employment, who is building up a great industry which yields a very large profit to the general trade of the country. Surely, there you have the possibility of a most undesirable situation arising.

Over and above these considerations, the case has been made by Deputy Cosgrave, and made, I think, with unanswerable force, that in these trying times, when one branch of agriculture after another has proved to be uneconomic, when it has been demonstrated to the Minister for Agriculture that there is virtually no branch of the agricultural industry which can be carried on at a profit, is it not eminently desirable that this one branch, which may survive the storm of the economic war, which the Minister for Finance hopes to see pass at a very early date, should get some encouragement to hold out, to live horse and it will get grass? Bear in mind in that connection that Senator Connolly, President de Valera, and the Minister for Defence are ramping around the country thanking God at all the cross-roads that the British market is gone, blessing Providence for having destroyed it, while the Minister for Finance is protesting that he is going to borrow three-quarters of the bounties, because he does not believe that this horrible economic war is going to go on much longer and does not believe that the bounties will be necessary very much longer. I put it to him that here is one branch of the agricultural industry which is managing to struggle along, one horse out of the whole collection which shows some promise of living until grass is provided. We invite him to give it a mouthful of grass here, to give it a helping hand; to stay the process of its emaciation; to check the fury of Senator Connolly, President de Valera and the Minister for Defence as they assail it, as they salute the dawn of the day when it will perish out of the land. That is all we ask, and it is not very much.

The Minister admits that from a revenue point of view it is negligible. What is there to be said against the proposal? We are only asking for equal treatment for everyone engaged in agriculture. We are asking for a clarification of the law, and to establish definitely that such a view of the revenue code will prevail. We are asking, under the exceptional circumstances that exist, that the Irish decision, which was adverse to the taxpayer, will be reversed by the Oireachtas, which has every right and authority to reverse it, and to have it established, in these difficult times, that the horse-breeders of the country will be given this slight concession, which, by the merest chance, the courts withheld from them, in order that the Minister may afterwards be able to say, "When such a horse was staggering under the blows of my colleagues I provided the grass so that it has lived until the dawn of a new day."

I do not know whether it is really worth while taking Deputy Dillon seriously. He started off by saying that every taxpayer should be treated impartially. Exactly. The man who keeps stallions for stud purposes and earns good substantial profits does an ordinary business, and is in a position to present proper accounts and pay upon the net income, the profits, which he derives from keeping stallions. Deputy Curran was under a misapprehension. A person is not charged income tax on the gross fees he receives, but upon the profits. If he has one, two, or three animals, he is charged on the aggregate profit derived from keeping these animals. He is not charged on the gross fees and, therefore, since he is charged on the profits, he is in a no less unfavourable position than the taxpayer who runs any other business.

Is the Minister quite sure of that?

Quite certain.

Will he say whether there is any allowance for depreciation and whether the price of the animal is allowed for in the first instance?

I am perfectly certain that every due allowance is given.

Will the Minister make inquiries?

I am perfectly certain. What are we asked to do? We are asked to put this man, who is running a highly organised establishment from which he derives a substantial income, on the same plane as the man who runs a composite farm, and to take a rough and ready estimate of his income under Schedule B. What is the position? Can anybody say it would be equitable that the person who is capable of making £10,000 a year out of his stallions should be assessed for income tax purposes as if that income of his were only £700 a year? Put two men side by side—a market gardener occupying a farm of the same valuation as the gentleman who keeps stallions and who is getting £10,000 a year out of the fees for the stallions, and the market gardener who will not get anything like £700 out of his market garden.

Suppose both of them make £2,000?

The point is that the person who keeps a stallion can make many times more than the person who is a market gardener. There is no mathematical relation between the income which the holding will make for the owner of the stallion and the valuation of the holding. The real point at issue, however, was put very clearly by the Lord President of the Court of Session in Scotland in 1917 and his decision was subsequently upheld by the House of Lords in 1919. In the course of that decision, the President of the Court said: "Has this keeping of a stallion to serve mares for the public at fees any relation to the occupation of the farm? I think not..." and if it has not any relation, then he is not entitled to this deduction.

Is that theTimes stated case?

I have given it to you as a case that has been decided. It is the case of Malcolm v. Lockhart. It makes no difference what the name of the case is. The principles are the same. Now, this decision was upheld by the House of Lords. Here it is:—

"Has then the keeping of a stallion to serve mares for the public at fees any relation to the occupation of the farm? I think not. It is not the occupation or any part of the occupation of the lands. A stallion kept for this purpose has no necessary relation to a farm or to the adventure of a farmer. Such an animal may be kept in a separate stable, and may be kept by a person who is not a farmer. The obvious advantages of keeping him at a farm are indirect considerations. He may be kept at a farm, and yet not be the property of the farmer or bring the farmer any profits or gains other than those derived from his keep, which as it involves the consumption of the farm produce, is only one way of marketing or realising the fruits of the occupation of the farm."

Would you keep the stallion in a hotel?

Well, the Deputy might, because the Deputy has said some things in the course of his speeches here that rather indicate to me that that is the normal level of the Deputy's intelligence.

Does the Minister know that it would not be possible to keep a thoroughbred stallion without making provision for the occupation for a number of men on the farm?

I am not giving way. I am merely stating what the law at present is, as laid down in the decision of the Court of Session; and it is quite clear a stallion may be kept on a farm and may not be the property of the farmer at all. He may belong to some other person. Whom are we going to assess in respect of that stallion? Are we to let the income go scot free because it does not belong to the man who occupies the farm? Or, are we going to assess the owner of that stallion with the income tax which should properly be paid under Schedule B by the man who occupies the farm? What are we going to do? What we are doing at present, what the law says we are entitled to do, and what was the clear intention of the legislature when the law was first brought in is to assess the person who keeps the stallion in the same way as any other person who runs a business, to assess him upon the profits of that business, the business of a person who keeps a stallion. A person may run a farm and the owner of the stallion may pay the farmer a certain amount for keeping it there. The more we examine this position the clearer it is that this is the only equitable way of doing it—to assess him upon the profits of that occupation and not to let him ride off and give him the benefit that was originally designed for the agriculturist and not for such an individual. That is the position as it stands here. As to the other point, the point as to whether this conclusion would be a sufficient inducement to overcome the disadvantages which already exist—whether it would be a sufficient inducement to persuade any stallion owner to keep his animals at stud here in view of the circumstances which exist, I say in my opinion that it is doubtful whethere it would or not. But, in any event, the way to approach the matter is not through the medium of this amendment. There is a more direct way and a better way. If those who are interested in the industry approach the Minister for Agriculture, I am perfectly certain he would be willing to give them a sympathetic hearing. The one thing to do is not to load the dice in favour of one particular person as against the generality of the income tax payers.

There is one particular item in connection with this assessment. We had mentioned here the export of the most fashionable sire that has left the country. The Minister might speculate upon horses being sent out of the country. In the case mentioned the owner of that horse bought another sire at a considerably higher figure but that is very much by the way. Let us take the Scottish case which the Minister read out. If I am not mistaken this is a case in which a man kept a Clydesdale sire upon his farm and he sent that sire around the country for a period of the year performing his functions as a sire and not staying on the farm at all during portion of the time. That is not at all a comparable case to the other. In that case the man kept a Clydesdale sire and if he had a fairly big stock of mares himself and if the judge did not take account of that, he was not doing his duty. If this man had 20 mares, which is very unlikely, then you had a different case. The Minister says if a man is making £10,000 a year from the sire he should pay income tax on it. With the general premises everybody would be in agreement. Let us suppose a case in which a man kept two or three sires and was making £20,000 a year out of them until this thing started, and now that has gone down to £6,000 or £7,000 a year. Alternately, if in order to get some value out of them he has to buy bloodstock himself and run a farm like that what is the possibility? Remember the damage that has been suffered and the loss incurred in this business. There is one person in this country who could put up a clear case if he went before the court. There is a big element of speculation in this but that is a thing of which the Minister takes no notice.

The main thing that we have in view here is preserving the cream of thoroughbred stock for the world, if you like, but in particular for this country. The fact that half a dozen sires have gone is bad enough, and we had very good ones, remarkably good ones, including such sires as Blandford, Mr. Jinks and several others. This proposal is with a view of hindering their export. Mind you, if they are going to go it is because of necessity. There is no wish or desire on the part of any single person that they should go. If there should be a case in which a person gets out of a large assessment in these circumstances there can only be one and in that case the amount of employment that is given, and the fact that the farm is being run in the fashion in which it is being run, would bring him to out-Glanely the Glanely case. The Minister says there is a way of settling it. Now, goodness knows, it is the job of the Ministry to settle it if they are concerned about it at all. The very fact that five or six good-class stallions were sent out of the country ought to be enough to put the Minister on to his job at once in connection with this business. It ought not to be necessary to bring it up here. There is no more unsatisfactory method than to draw attention to such things in this House, particularly since the bench opposite came to be occupied by politicians, men who see in everything, in every suggestion nothing but politics.

This is not a political question and should not be treated as such. The persons involved in this are not concerned with politics. Their whole concern is the production of high-class bloodstock. One of the best breeders in this country has not a single stallion at the moment. The man who has, I suppose, most money invested in bloodstock in this country has not a stallion. At one time he had, perhaps, two or three, but now he has none. He pays very high fees, and the economic war has cost him a good deal of money. In one instance last year he paid £2,500 tariff duty. That sort of person ought to be the concern of the Minister, because there is a limit even to such a man's purse. If he reaches that limit greater damage may be done to breeding than to the individual. There is no sound reason for objecting to this, having regard to what Deputy Dillon said. It ought to be for us to make the law clear. The Clydesdale case cited by the Minister has nothing whatever to do with this case. The Bailie case was not on all fours with this case and was ignored by the House of Lords when they were considering the Glanely case. I am not sure that everyone in England who has a farm and a stallion on it will escape under the law as it is now. I was asked a very trite question by one of those persons. He was not a person engaged in horse breeding at all; he was a man engaged in general taxation. He said: "Will the Revenue Commissioners take note of the Glanely decision?" I said: "I think not.""Why?" said he. "Because," I said, "I think they will get an Irish decision." He asked: "Would they take note of an English decision if it was to their benefit?" I said: "Yes, certainly. From what I know of them I think they would."

I would like to put the point, why should the breeder of horses be placed in a more invidious position than the breeders of other animals? Of course, in some cases the amount of money concerned would be so small as to be insignificant. The Minister's line of argument could apply equally to fees got from a boar, a turkey cock, a jackass, or any other male animal on a farm. One could keep a turkey cock in a box, or a male pig in an enclosure and let them have nothing to do with the farm and the Minister might proceed to assess the farmer on some other schedule besides Schedule B. I think the Minister ought to lose sight of the Scotch case when he is considering this amendment. As Deputy Cosgrave has said, it has nothing to do with it.

The Minister charges me with advocating, by inversion, discrimination as between taxpayers. He has frequently advanced the case himself very convincingly that you cannot legislate for the exceptional case. I quite agree. Now, in the revenue code it is laid down that a person engaged in agriculture can elect as between Schedules B and D. Admittedly, certain members of the community, by careful scrutiny of that option, will derive benefit that may not be available to their neighbours. You can remedy it by passing general legislation withdrawing that option from every citizen. But it is not just and it is not good legislation to put it in the power of the Revenue Commissioners to withdraw it from A but not from B. The Minister does not seek to establish that a person legitimately engaged in the horse-breeding trade is not an agriculturist within the meaning of the Finance Act for the purpose of Schedule B. He admits he is an agriculturist, but he says "He is a particular type of agriculturist that I am going to go after because he is making too much out of agriculture." Withdraw the right to opt from every agriculturist or leave the right to opt to every agriculturist and then you have a perfectly fair case.

I quoted the House of Lords decision and the Minister tossed his head, his eyes flashed with patriotic fervour and he said "We have got Irish decisions." Three minutes later he read to us a Scotch decision. When I quote a House of Lords case, by implication, it is West-British, treachery in the face of the enemy. When the Minister wants to collect a couple of thousand pounds off a horse breeder in the South of Ireland it is the acme of patriotism to quote a Scotch case. That is not common sense. As Deputy Cosgrave said, really this is not a question into which politics need enter. I am quite prepared to say, in fact I have already said, that, unlike his colleagues, the Minister for Finance professes himself openly to be genuinely solicitous for agriculture. He looks towards the day when export bounties will no longer be necessary and he hopes to see agriculture thrive and prosper in the future as in the past. So do we. We are on the one ground there and it is only a question of how best to achieve that end. We have made our submissions. I stand for equal treatment for all the taxpayers. Let every agriculturist have the right to opt as between Schedule B or Schedule D or let none of them have it, but do not discriminate. That is what the Minister is doing by rejecting this amendment and by declaring his intention of adhering to the Irish decision in preference to the other decision to which I have referred.

The speech which Deputy Dillon has just made indicates clearly the confusion that exists in the minds of Deputies in the opposite benches in regard to this amendment. The Deputy said that every agriculturist should be taxed under Schedule B, or have the option of being taxed under Schedule D. But there is a clear distinction between a man who is an agriculturist carrying on the horse-breeding industry, using his own stallions and his own mares, and a man engaged in stallion keeping for other mares. We say that this second man is not an agriculturist, properly speaking, at all. His business is that he owns a stallion which serves other mares, not his own mares. He is charged upon the profits on that stallion, or such other stallions as he may keep for the same purpose. He is not an agriculturist, and, therefore, should not get the benefit.

There is competition between Irish breeders and British breeders. The British breeders now get a concession that we do not. The British breeders now are not subject to this tax, whereas our breeders are.

Deputy Cosgrave was approached by certain interests some time ago. Why did he not approach the matter in another way instead of putting down an amendment? Why did he not see, or write a line to the Minister for Agriculture, because he could not hope to get an amendment into the finance code that would put a certain section of the people in a privileged position,vis-a-vis, with other taxpayers?

Question put.
The Committee divided: Tá, 22; Níl, 40.

  • Alton, Ernest Henry.
  • Bennett, George Cecil.
  • Cosgrave, William T.
  • Curran, Richard.
  • Dillon, James M.
  • Dockrell, Henry Morgan.
  • Doyle, Peadar S.
  • Esmonde, Osmond Grattan.
  • Fitzgerald, Desmond.
  • Fitzgerald-Kenney, James.
  • Lynch, Finian.
  • MacDermot, Frank.
  • McGovern, Patrick.
  • McMenamin, Daniel.
  • Morrisroe, James.
  • Morrissey, Daniel.
  • Mulcahy, Richard.
  • O'Sullivan, Gearóid.
  • O'Sullivan, John Marcus.
  • Rice, Vincent.
  • Thrift, William Edward.
  • Wall, Nicholas.

Níl

  • Bartley, Gerald.
  • Beegan, Patrick.
  • Boland, Gerald.
  • Bourke, Daniel.
  • Brady, Seán.
  • Breathnach, Cormac.
  • Briscoe, Robert.
  • Concannon, Helena.
  • Cooney, Eamonn.
  • Davin, William.
  • De Valera, Eamon.
  • Doherty, Hugh.
  • Donnelly, Eamon.
  • Flynn, Stephen.
  • Fogarty, Andrew.
  • Geoghegan, James.
  • Goulding, John.
  • Hayes, Seán.
  • Jordan, Stephen.
  • Keely, Séamus P.
  • Kelly, James Patrick.
  • Killilea, Mark.
  • Kilroy, Michael.
  • Kissane, Eamonn.
  • Lemass, Seán F.
  • Little, Patrick John.
  • McEllistrim, Thomas.
  • MacEntee, Seán.
  • Maguire, Ben.
  • Maguire, Conor Alexander.
  • Moore, Séamus.
  • O'Briain, Donnchadh.
  • O'Grady, Seán.
  • O Ceallaigh, Seán T.
  • O'Reilly, Matthew.
  • Pearse, Margaret Mary.
  • Ruttledge, Patrick Joseph.
  • Ryan, James.
  • Smith, Patrick.
  • Traynor, Oscar.
Tellers:— Tá: Deputies Doyle and Bennett; Níl: Deputies Little and Traynor.
Amendment declared lost.

On the section, I understand the Minister has something to say on this, as it introduces quite a revolutionary change into the tariff code.

I do not understand what the Deputy means.

I will explain. Apparently Section 7 is the codifying section for the whole of the existing tariff system. There are new tariffs, and old tariffs re-enacted or altered. Some of the obligations imposed by the Minister under the Emergency Imposition of Duties Act, in order to enact tariffs imposed thereunder, are fulfilled by this Schedule. I am asking the Minister to give us an outline of what tariffs are being imposedde novo, what tariffs are alterations of existing tariffs, what tariffs are Confirming Orders under the Emergency Imposition of Duties Act, and whether this represents a fairly complete schedule of the tariffs which it is the present intention of the Government to impose. On this section a matter of general interest arises, and that is the burden that these tariffs are placing upon taxpayers. A great deal of noise was made by the Minister for Finance to-day about how he had juggled the income tax code with a view to lightening the burden of taxation on the shoulders of those who have modest incomes, and considerable family responsibilities.

Is it in order to have a general discussion of tariffs on this section?

A general discussion of tariffs is not in order on the Committee Stage of the Finance Bill. It would be on the Second Stage.

I shall listen with attention, Sir, and when you rule me out I shall promptly desist. When waxing eloquent to-day the Minister conveniently overlooked Section 7. The Minister for Industry and Commerce thinks there should not be a general discussion now. I was trying to save time. Since the Minister does not want a general discussion, I will read through the Schedule word for word, and that will take about three-quarters of an hour.

I should like to have a direction from the Chair. Is it proposed to discuss the Schedule at this stage or at a later stage?

The Schedule may be discussed as each section is taken.

Surely if we are to discuss Section 7 we are entitled to refer to the Schedule?

The articles mentioned in the First Schedule.

I am desirous of saving the Minister's time and the time of the House. I can set out each tariff individually and say that this or that imposes a burden on taxpayers. As a matter of fact the First Schedule practically comprises the Minister's whole tariff policy. It comprises so wide a selection of goods that it covers every branch. All I want to draw the attention of the House to is this, that in the holy name of industrial development, what is being put upon the backs of one section of the community is a terrific burden of taxation. Members of the Fianna Fáil Party do not seem to realise that what is actually happening is, that the burden of taxation is being lifted off the backs of the comparatively prosperous and put on the backs of the poor. There was 6d. taken off income tax this year, and according to the Minister for Finance that reduction was made out of excess receipts from Customs duty. Who is paying the Customs duties on children's cotton socks? Who is paying Customs duties on handkerchiefs? Who is paying Customs duties on second-hand clothing? Who is paying Customs duties on almost every item in the Schedule? The poor of Dublin and the poor of the country. There is not a single country in the world to-day in which there is a strong Tory reactionary Government, that has not gone whole hog for protection. Why? Because in every one of these countries the supporters of the Tory Party have come to realise that if you can get up tariff walls you collect a very large tariff revenue, and with that you can reduce direct taxation, or relieve the wealthy section of the community of the burden that they would otherwise have to bear. The average poor person cannot be expected to—and in fact does not—realise that he is being taxed through the imposition of duties. If you want to shift the burden of taxation from the shoulders of the comparatively rich on to the shoulders of the poor, the safe way to do it is through the medium of indiscriminate tariffs.

Surely this is not in order.

If the Minister wishes I will go down each tariff and criticise it. That will take me some hours, but I will do it if I must. One by one I will take each individual item and attack it. I wanted to save the time of the House. I see that the Minister for Industry and Commerce does not like that.

Seeing that I would not be in order in replying——

The Minister can reply if he wishes. He need not for one second imagine that the old gag of starting a jest or a joke is going to deflect me by a hair's breath. The Minister may make up his mind that he is going to hear——

The Chair may have something to say to that.

If I was out of order——

The Deputy is proceeding to discuss tariffs in general. That matter was discussed on the Second Reading, and the Finance Bill was agreed to by the House. If the Deputy desired to move for any alteration he should have done so on the Committee Stage when the details were discussed.

I am making the case that Section 7 of the Bill should not be accepted by this House. That section deals with the case for imposing a certain Schedule of tariffs. I am dealing with that Schedule of tariffsen bloc. I submit, with respect, that in the case of one article, cotton socks, I am entitled to make the case that it is imposing a burden of taxation on the poor and lifts it off the back of the well-to-do. We have tariffs en bloc. Here is a case where the burden of these tariffs is being imposed on the poor. A tariff of 6d. is imposed on cotton socks, but the retailer has to charge 10d., let us say, for convenience. It will be found, sooner or later, that every manufacturer in this country will bring up the price of his product to as near to 10d. as will leave him a free agent in a protected market.

Take the case of flour. We put a duty of 5/- on flour, and immediately the price of flour went up 5/- above the Liverpool price and, for a time, 6/- above the Liverpool price. The poor innocent Minister for Industry and Commerce said "That is impossible. If it has gone 6/- over the Liverpool price anyone could import it and sell it here at a profit." But the poor Minister did not know B from a bull's foot. He did not realise that you must not only bring over six or seven bags from Liverpool, you must bring over a cargo, and anybody who imported flour 1/- less than the price prevailing here, or 5/- more than the Liverpool price, would find that the millers here would quickly drop their prices to a point, when, say, it would be 3/- above the Liverpool price, until such time as the poor importer here was burst. They would not allow him to import flour, and when he got tired trying to do so——

On a point of order. Is there anything about flour in this Schedule?

This is simply wasting time.

I submit the Deputy is out of order in referring to flour. It is not in the Schedule.

I do not think so. The Ceann Comhairle is not conversant with every article in the Schedule.

Has the camarilla died down?

I submit that the Deputy is discussing this question on grounds of general principle, and is not dealing with the details as they should be dealt with at this stage in committee on amendments.

The Deputy was taking certain examples to show the effect of the list of tariffs. I am prepared to hear the Deputy.

As I pointed out, the result of that course of action would be that that man who had imported flour, with a view to competing against the merchants here, without taking into account the conditions, would find himself held up, because they would drop their prices below the price at which he could import, until they would break him. The next man who would think of following his example would think twice over it. So not only have the poor to pay the tariff on commodities of that kind, but they also have got to pay the price that home industrialists raise against them behind that tariff protection. To meet all that, the Minister says: "Do not be in the least uneasy. There will not be an unduly high price charged for galvanised iron goods, cordage, tools, or the other things contained in this Schedule. The Prices Commission will see to it."

What has happened? They went to the Prices Commission and the Prices Commission sat for months. Eventually they came out and said "The thing cannot be done. It is impossible." We had some kind of an interim report from the Prices Commission on the question of the price of flour in which they said it was virtually impossible to get the information that was necessary to form a reliable judgment and that they had now prescribed a new form of accounting for the millers in order that they could arrive at a definite conclusion. In fact what has happened is exactly what we warned the Minister would happen. The prices control machinery broke down and will break down so long as you have industrialists determined to break it down because they are all experts in their particular branch of trade. The members of the Prices Commission cannot be expected to understand every branch of trade. To get that thorough knowledge, on which they could form a judgment on prices, they would have to spend 12 or 15 years in particular branches of trade. Here you have a situation in which the burden of taxation is being lifted from the backs of the well-to-do on to the backs of the poor. You have got poor people paying these taxes without their being able to defend themselves because they do not know that they are paying these taxes. You have Deputy Davin and the Labour Party sitting by, watching that thing going on and knowing perfectly well that it is going on, knowing that the burden of taxation is being steadily heaped up on the backs of the poor and that they will not get up and fight it.

A second matter with which I wish to deal in connection with this Schedule, is to appeal to the Minister to make a note of the conditions which exist in respect to tariffs at the present time. There has been a very large number of tariffs imposed under a variety of instruments—by Financial Resolution, by statute and under the Emergency Imposition of Duties Order. Some tariffs have been done away with, others have been put in their place, further tariffs have been imposed and some tariffs remain at their original figure. I would ask the Minister to publish without delay a schedule of the tariffs as settled, say, by this Finance Bill. Where changes are so rapid, I know it is difficult to keep a list of that kind up to date. Perhaps the Minister will be able to state in the course of his reply whether he foresees that the tariff schedule will be more or less stabilised in future and more easy to publish in this official form. He will remember that the Department of Industry and Commerce did publish some time ago a schedule of tariffs which really proved more of a pitfall than a source of information; before the ink was dry on it most of the tariffs had been altered. In that way very considerable confusion exists at the present time.

A further extremely important matter arises under this Schedule. The Schedule indicates that whenever the Minister for Finance, after consultation with the Minister for Industry and Commerce so thinks proper, he may issue a licence to import certain commodities free of duty. As the Minister will have noticed, amendment No. 9, which will fall for discussion very shortly, has reference to that matter, and there are certain aspects of the question to which I do not propose to refer on this section but which I shall reserve for that amendment. There is, however, one aspect of the general licensing principle which I wish to submit to the Minister. The Minister will agree with me that the public life of this country so far has definitely been free from the grosser forms of corruption that manifest themselves in some other countries which we know. When I refer to the grosser forms of corruption, I mean the knowledge that is common to all of us, that there are very few men, if there are any, in this country who would accept a monetary consideration in order to secure a favour for a particular citizen. Nevertheless, such a condition of affairs is purchased only by eternal vigilance, and where licensing provisions of this kind can be a source of profit to individual citizens, it is very desirable that every precaution should be taken right from the very beginning, that no trading in licences of that kind can ever be possible under any condition that might obtain in this country. I submit to the Minister that there is one very ample safeguard, which I think would operate as a safeguard for all time. It is, that when the Revenue Commissioners decide to issue a licence in respect of any article in this Schedule, the licence should (1) be for a finite period, and (2) that a provision should be made that if such a licence is issued to any person or trader for a finite period, any other person engaged in a similar trade should be entitled, as of right, to get a similar licence during the finite term of the original licence. The effect of that would be that if a person with a corrupt intention in his mind sought a licence, he would know that the moment the licence was issued to him he would give access to that particular commodity to every competitor of his in a similar trade, and so it would become not worth the while of any man to seek a corrupt advantage over his competitors.

I am well aware that the Revenue Commissioners are eminently reasonable, and I have no doubt that if a trader goes and makes a case the Revenue Commissioners will listen to it and consider it very favourably. I have no doubt that the Minister would consider it favourably. However, I want something more than that. I want the issuing of a licence to one citizen, for a finite period for a certain commodity, to operate so as to give a legal right to any other person to get a similar licence. I issue a solemn warning to the Minister that unless precautions of that character are taken, sooner or later the practice of issuing licences will give rise to corruption in this country. It will do so inevitably. We all have had cases brought under our notice where a persistent and vigorous candidate for a licence, by haunting the Revenue Commissioners and by haunting T.D.s in the House and making all sorts of representations to the Minister, had succeeded in getting a licence. Some other fellow comes along and wants a licence for a similar purpose, but because he goes the wrong way about it, because he does not state his case clearly and cogently, since he has not the ability of the other fellow, you have a situation arising in which one man, who can state his case succinctly and clearly, and who has the energy to persecute everybody, gets the licence, while an equally deserving citizen, who has not the same persistence or tenacity, goes without his licence and struggles along as best he can.

That is a highly undesirable situation to have obtaining. Later on, it will develop inevitably that a corruptionist will buy a licence one way or another, and the man who would not stoop to corruption will go without it. I have said already that it is something that this country can boast of that such activities have never disfigured its public life so far. I want to make provision so that that condition of affairs will continue to prevail, and I submit that my proposal is the only absolute safeguard against such a state of affairs arising in the country. Certain other matters will arise, Sir, on amendment No. 9 in connection with licences, which can be discussed in their appropriate place.

I thought that the Minister might have had something to reply to Deputy Dillon, but there is another matter in connection with the section that I would like to raise. On the First Schedule there is an amendment, No. 20, in my name, which deals with one particular end of the shirt industry: that is, the finer class of shirt-making with which the County Donegal is more concerned than, say, the City of Dublin. Since putting down that amendment, I find that there are other aspects of the matter very closely affecting the City of Dublin and, no doubt, other places. Under item 22 of the First Schedule, it is proposed to put a tariff of 33? per cent. on cotton piece goods of four and a half ounces to the square yard. A very regrettable state of affairs exists in the shirt-making industry in Dublin as a result of the action of the Minister in clapping on this particular tariff in the way he has clapped it on. I am told, indirectly, of at least two shirt-making industries in the City of Dublin where there is a considerable amount of unemployment as a result of the fact that the factories are unable to get material coming to them and unable to get from the manufacturers of that material in the country the amount of the material they want. I know, directly, of one shirt industry in the city where, at the present moment, 60 girls are standing idle since Thursday last, because stuff which is waiting at the port, and in respect of which representations had been made to the Minister on Friday, on Saturday, on Monday, and on Tuesday last, is not yet delivered. They are waiting for that stuff to be delivered under the licence that the Minister has power to grant.

I know, directly, of one other shirt-making firm in the city where, they tell me, that in another day or two, with the present stock of materials that they have on hand, it will mean that a further number of their employees will be idle. The difficulty arises from the fact that certain materials, that are known in the trade as Oxfords, Harvards, and drills, cannot be obtained here either in quantities or qualities that they are required at the present moment, and the Minister's action in clapping on this tariff, in the particular way he has clapped it on, means that these firms cannot get this stuff in the quantities in which they require it at the moment. As far as these particular classes of materials are concerned, there is no chance of getting them made in the country for six months and the firm that, as I say, has 60 girls idle since Thursday last, has a big order for tennis shirts. The material is at the port, and they cannot get from the Minister the licence that he has power to give. Not only is unemployment being caused at the moment, but the manufacture of these shirts at the present time is a matter of urgency. It is a seasonal trade, and the shirts are required for delivery urgently. The passage of two or three weeks may mean that the factory is going to lose a very considerable amount of any possible profit that might be made on the transaction.

Generally, the position is that while these cloths are known in one case by the name of Oxfords and in another by the name of Harvards, they represent cloths that are used for the making of strong shirts worn by workmen. I am told that, as far as Oxfords are concerned, there is not any firm in the Free State making that type of cloth at all. In the case of Harvards, there is one quality, I am told, of that particular type of cloth made here. I am informed that, whereas the cloth of that particular type is available from abroad at prices of from 4½d. a yard upwards, the price of the one quality available here is about seven seven-eighths of a penny. As far as drills are concerned, I am told that only one quality is made here, and that it can be imported at from 4½d. to 5d. a yard, whereas the one quality obtainable here is 10d. a yard. That, as I say, affects the City of Dublin. Both Oxfords and Harvards as well as blue drills—the first two are striped and the other plain—are used in the manufacture of the stronger type of shirt which is particularly made here in the City of Dublin. That is the position.

I submit to the Minister that it is utterly absurd to have a tariff policy operated in the way in which he is operating it. He wants to tell someone that he is going to tariff a particular type of article, and the way he does it is to slap on a particular tariff and wait to see what kind of development there is going to be in the production of that article.

Which may be never.

It may be six months or 12 months before the article can be manufactured here. He takes in the fourth column power to grant licences. These licences operate in a way that causes the greatest possible confusion and inconvenience to people who are struggling to keep industry going. I raise the matter on the section because it is not a matter that could be raised on the amendment which deals with another section of the trade. I submit to the Minister that it discloses a state of affairs which ought not to be allowed to exist. It would be preferable to have these cloths completely struck out of the Schedule until such time as the Minister has entered into an understanding with the people engaged in the industry that these materials will be available here. If the Minister is stubborn about taking that line of action, there is only one other course open in the interests of the workers and of the capital invested in shirt-making—to give a general, widespread licence, amounting to an instruction to the revenue authorities, for the admission of these materials. One of the firms in the city has a certain amount of material on order for the making of sheets. That material can be easily damaged by being knocked about either on board ship or in the warehouse. This firm has had to have the order held up on the British side until such time as they can arrange for the issue of a licence by the Minister. In the meantime, girls are idle and more girls are promised idleness in the next few days.

The position in respect of sheeting is very different from the position in respect of shirting. It would be with very considerable reluctance a licence for the importation of sheeting would be issued. It would be only issued after very careful consideration of the relevant facts, because the supply from the Saorstát mills is probably adequate in quantity to meet the requirements of the country, or will be very shortly.

In sheeting?

Twill sheeting?

All classes of sheeting.

Go fish!

I hope you, a Chinn Comhairle, will be able to keep the Deputy in order until I am finished speaking. The position in regard to cotton woven cloths, generally, is that we are anxious to get that industry developed in the Saorstát. It is established to some extent but very large development will be necessary before the requirements of the country will be met. To that end, we had some months ago, and extending over a period, discussion with firms engaged in the production of cotton goods here. We had also certain discussions with firms outside this country who were interested in the production of cotton cloths here. It was obvious, however, that at an early stage information that these discussions were taking place had reached the ears of importers of these cloths. If the Deputy will refer to the trade and shipping returns, he will notice that a considerable increase in the importation of these cloths took place in the first quarter of this year. It was, therefore, decided, on the introduction of the Financial Resolutions on the occasion of the Budget, to impose a duty on cotton cloths of certain classes, although we had regard to the fact that, at that time, the existing mills would not be capable of supplying all the requirements of the country and that, for a period, it would be necessary to license the import of certain classes of these cloths. Developments are taking place at the moment. The installation of additional equipment and so forth is either being planned or taking place and the position will become less acute as time goes on. In the meantime, importations are taking place under licence.

I have had representations from the shirt manufacturers but in no case did these representations arise out of delay in the issue of licences where licences might ordinarily be issued. The representations received from the shirt manufacturers were all directed towards delays occurring at the port. I want to explain to the Deputy that the class of cloth used most extensively in shirts—printed cotton cloth for the production of tunic shirts—is not dutiable at all. The cloths to which he refers—the Oxfords and Harvards which are liable to duty—are of a woven pattern. In respect of these classes of cloths, licences are at present being issued. The delays which have occurred and of which the shirt manufacturers complained have been at the port and have had to do with the delivery of the cloths by the transport agencies or their clearance through the Customs. I have had inquiries made concerning these complaints and certain representations made to those interested in the management of the shipping companies concerned. From the information I received, following these inquiries, it is quite clear that, in the vast majority of cases, the delays that have taken place have been entirely due to the failure of the importers to produce the relevant documents and, particularly, the invoices of the exporters. That is not an unexpected development having regard to the fact that the persons engaged in the importation of this cloth were not familiar with the procedure heretofore. They are now learning in the best possible school and in a short time they will be able to secure expeditious clearance of goods, as other importers are doing. The particular cases in which representations were made and investigated by me were in that category. In each case, with one exception, the delay was due to the fact that the importers failed to furnish the necessary documents to enable the goods to be cleared. The delays which occurred in connection with non-dutiable goods were, perhaps, inevitable under the circumstances. It was necessary to get the officers concerned familiar with the classes of cloth that were free and the classes of cloth that were dutiable. These delays are not occurring now, although it may be that the arrangements for dispatch of the cloth by the transport agencies could be improved upon. I have in no case as yet received any representation from shirt manufacturers concerning delay in issue of licences. If Deputy Mulcahy has received such complaints from shirt manufacturers, I suggest that he advise these manufacturers to establish contact with my Department and produce evidence in support of their complaints. They have certainly failed to make complaints to me and one would assume that, if there were any foundation for such complaints, they would have been made to the Department concerned. The complaints made were all of the character I have described and arose out of causes which could be easily remedied by the importers concerned. I understand that they are now taking steps to ensure that these delays will not occur in future.

I find the Minister very unconvincing on the question of licences. I have here a long communication from a Donegal firm in which they say that they applied for a licence on the 4th June for five pieces of webbing for the making of collars. They enclosed patterns of the material but, at the time of writing —12 days afterwards—they had not got an acknowledgment of their application. There is also the case of a telephone conversation with the manager of a shirt-making firm this morning. These people were with the Minister on Friday, Saturday, Monday and Tuesday and they have been asked to call back to-morrow. What they want is a licence to get some stuff at the port for the making of tennis shirts.

The result is that there are a large number of girls idle. I find it difficult to be persuaded that the situation, as regards licences, is as the Minister says. The Minister leaves the other part of the question entirely unanswered: that is in respect of a type of shirt which, I take it, is very much used. Strong woven cloth is used for workmen's shirts and clothing. I understand that is, to a very large extent, the basis of the Dublin shirt-making business. In respect of three of the principal classes, two of them are striped and one is plain. One of the striped classes is not made here at all and the other is made only in one quality at a price very much in excess of what the stuff could be imported for. It is in a case like that that an absolute tariff is slapped down all around. As far as the manufacture of particular shirts is concerned and following conversations with a number of representatives of the different firms that might make this material, they are quite satisfied that they are not likely to get anything like an adequate supply or anything like an adequate number of different qualities inside six months. At this particular time of the year they are thrown into this confusion—that they have to hunt around looking for licences. The Minister says that there is room to learn in the hard school of experience. A number of Dublin workers are learning in the hard school of experience due to the fact that they have been thrown out of employment for some weeks, while a number of people struggling to get ahead with the shirt-making industry in the City of Dublin are running the risk of losing a certain amount of their capital simply because the Minister will insist on doing things in a way that has no administrative excuse for it.

It should be quite possible, when imposing this particular duty on a particular date, to give a general licence. It should be possible now to issue a general licence even if it were only for a month or two because such hoarding of stuff as may go on in the meantime is a very small matter. I think that if the Minister is definitely setting about the establishment here of this industry there should be some gesture from him of his intention to meet the shirt manufacturers in a more reasonable way. To ease their administrative difficulties and to relieve their minds of the chance of possible loss in their trade at the present moment is a matter of urgency. I think the Minister should approach that in a very definite and sympathetic way. Again, on the question of licences the information that I have is such that the Minister, when speaking on it, was very unconvincing to me.

In regard to licences I have had some considerable experience of them. I think that the question is largely a matter of staff. Certainly, my experience has been that where there has been delay, if you go to the Revenue Commissioners and direct their attention to a particular licence and they pick it out, it is disposed of with all the dispatch that any reasonable man could want. But I do think that there is a lack of staff to deal with the enormous mass of applications coming in for licences. I think the occasions for applying for licences are being multiplied much more rapidly than the staff which is designed to deal with these applications. Inevitably, in the case of legislation of this kind the staff is going to growad infinitum. Unless the trade of the country is to be held up adequate staff will have to be provided, but there is not adequate staff at present. I think it would be worth the Minister's while to inquire into that aspect of the situation. The Minister is now breaking out into a line of industry that he himself understands. He knows just as well as I know that the manufacture of Oxfords, Harvards and Clithero grandrilles will never be carried on in this country with any degree of satisfaction. There are many trades into which he has taken a gallop recently, of which he knew nothing, but he does know this trade. He knows perfectly that substitutes can be produced in this country and that by reducing the quality and raising the prices something that will do can be produced, but nothing will be made available to consumers in this country within 3d. per yard of what you could get Oxfords and Harvards for. These cloths will never be produced in this country, and nobody knows that better than the Minister for Industry and Commerce because he had a long experience in handling that type of goods just as I have.

The Minister is now embarking on this line of business of issuing licences —a branch of the Minister's trade that he may not be very familiar with. I believe that in the particular area where the Minister was engaged in trade himself before he came into public life, there was a certain contact with the rural population, and he may, therefore, have experience of the kind of trade to which I refer. In rural Ireland a very large part of the shirts which are used are made up by the woman of the house. We are now going to create a situation here in which the woman of the house will have to pay a tariff on the cloth, whereas the Dublin manufacturers will get the cloth free. Or, is it the intention of the Minister to issue licences to retail traders to import these materials— Oxfords, Harvards and Clithero grandrilles—until such time as the substitute is available from Irish factories? The Minister ought to bear in mind that every country house, certainly in the west of Ireland, is a miniature factory for shirts, and that he will be doing a real disservice to the countryside if he makes it more difficult to manufacture shirts at home and throws the whole trade into the hands of the shirt manufacturers. But I suppose that once he has imposed this duty he will go on with it. How he can ever do it, I do not know because, as I say, he knows perfectly well it is a complete farce. There is not a factory in this country, nor will there be a factory in this country which can provide an alternative source of supply for these three particular types of cloth.

The Deputy is very foolish to wander into the realms of prophecy.

No, I am not, and I know perfectly well that the Minister entirely agrees with me in what I am saying, though he does not choose to say it. I have more respect for his business ability than to imagine that he could have built up the business that he did build up and at the same time believe in the tomfoolery that he dishes out to this House. The Minister in business is no fool. He knows perfectly well that these three types of cloth are not capable of production in this country at a price anywhere approximating to the price in England, and, as regards quality, anywhere approximating to the quality that is available in Great Britain. I do urge the Minister to give his attention to the question of the personnel in his Department that deals with licences. I have told him that my experience has been that they are doing their best to deal with the cases that arise, but the position is that there are not enough men to deal with the masses of applications that are pouring in.

I am satisfied that there is no delay in dealing with licences where applications made give all the relevant information in relation to an article in respect of which a decision has been given. Deputies will get complaints from persons who are refused licences either because they fail to give the necessary information or because licences are not ordinarily being issued for the classes of goods concerned, or for some other reason. Because of that people will complain about delays and refusals, but in the majority of cases Deputies will find, if they examine the matter, that there has been good cause for any delay or any refusal. Very frequently persons may make a sort of general application for a licence. It is necessary, of course, that they should specify the quantities, the port of entry and other relevant facts. Failure on their part to supply that information at the first stage leads, of course, to correspondence and, consequently, delay. It is from circumstances like those that most of the complaints which I have heard have arisen. I merely refer to this question of delay in relation to the complaints voiced by Deputy Mulcahy, as having been made by shirt manufacturers. I have received representations and complaints from shirt manufacturers but they did not relate to the delay in the issue of licences on the part of the Department of Industry and Commerce. They related to certain delays which they said were taking place at the ports, and these delays, on investigation, were found, in the vast majority of cases, to be due to the failure of the importers to supply the transport companies with the documents required. There was only one case in which delay might have been attributed to any other cause and it was due to a certain mistake on the part of the transport company. That, however, is a position which can be only temporary and has, I think, been rectified already, because I am aware that the principal transport company concerned has sent a memorandum to the association which has been acting for the manufacturers, explaining carefully the procedure that must be followed.

Would the Minister say if he intends to issue licences to retailers in respect of these cloths?

At the present time licences are being issued in respect of classes of cloth in limited quantities. In respect of some classes of cloth, there will be little or no restriction on importation for some time to come. In respect of other classes, there may be restrictions gradually becoming greater as home production increases, so that I should not like to make any general statement on that matter as yet.

I take it that we shall have an opportunity of going through the Schedule in detail when the Schedule falls for consideration?

Section 7 agreed to.

On behalf of Deputy McGilligan I move amendment No. 9:—

Before Section 8 to insert a new section as follows:—

All licences issued by the Revenue Commissioners in respect of the free importation of goods under any statutory authority shall contain the following particulars, that is to say:—

(a) the number and date of the granting of the licence;

(b) the name of the firm or person to whom the licence is issued;

(c) the quantity and class of goods to be imported free of duty;

(d) the duty from which exemption is granted;

(e) the duration of the licence;

(f) the statutory authority under which the licence is issued showing the relevant provision in the section or schedule of the Act;

(g) any other conditions governing the issue of the licence.

This amendment deals with the question of licences and makes statutory provision that licences issued in future, under the powers conferred on the Minister by the various Finance Acts, shall contain certain data. The House will remember that at a very early stage in these licence enactments I drew the attention of the House to a gentleman in Donegal who, I alleged, made representations to the Minister for Industry and Commerce that he desired to import a given quantity of flour for the purpose of keeping his bakehouse open. I preserved this gentleman's anonymity until the Minister for Industry and Commerce saw fit to publish his name, but in any case, this gentleman made representations to the Minister that he wanted the flour for the purpose of keeping his bakehouse open.

I think it would be impossible for me to deal with any specific complaint unless the name of the person is given.

The Minister, strange as it may seem, found it possible to deal with it because he knew that the scandal was just as great as I knew it was and he knew perfectly well the name of the man who was guilty of the conduct I described.

The Deputy is referring to the same case to which he referred before?

The case of the society known as the Templecrone Co-operative Society?

In that case, the Deputy should refer to the society and not to an individual.

I am referring to an individual, but not by name; I am referring to the individual who approached the Minister for Industry and Commerce, I believe, through a member of the Fianna Fáil Party. To make a long story short, he got his licence.

He did not.

He did not what?

He got no licence.

The Minister has said, on the records of the House, that he did.

I said that the Templecrone Co-operative Society got a licence.

Oh! He got a licence to import the flour——

——and he sallied off and imported a quantity of shop flour and, being an impetuous gentleman, he sailed around to all his competitors and said that he was going to civilise them with his flour and he proceeded to sell it at 2/- or 3/- a sack below the price of his competitors. To the horror and dismay of Fianna Fáil, the cat came out of the bag and the case was raised here in the House, vigorously denied for a while, eventually admitted and then explained and finally the Minister said that in fact there was no impropriety at all. He never had any power to impose conditions and all he issued was a licence to import flour; even if he had wanted to impose a condition as to the quality of flour to be produced he had not statutory power to do so. Here is the power. We propose to provide the Minister with the necessary power in future. The number and date of the granting of the licence is manifestly necessary and the name of the firm, or person, to whom the licence is issued, in this particular case to which we refer, is very necessary. We have a situation developing in which we do not quite know whether it is an individual in the employment of a firm or the firm which employs him who is, in fact, the importer. It is very necessary that that should be shown clearly on the face of the permit and that the permit should be available to nobody else and, above all, that the licence should not be transferable for a consideration or for nothing.

The third head (c) refers to the quantity and class of goods to be imported. It seems from the Minister's unfortunate experience in the case to which I refer, to be very necessary to make that quite clear on the face of the document, or he may get his leg pulled again. The fact that the Minister's leg was pulled does not make very much difference, but when the pulling of the Minister's leg costs respectable merchants down the country very large sums of money, by reason of the person who pulls the Minister's leg beginning to cut prices, having got himself into an advantageous position through the Minister issuing him a licence, it is a serious matter. We want to provide that when the Minister issues a licence, it will be a licence for one particular thing and not for a whole series of alternatives, and we want to provide that when the Minister issues a licence, he will know what he is doing. Further (d) provides that the licence will show clearly the particular duty from which exemption is granted. That is very necessary, too. It is very desirable that it should be shown on the face of the licence and should become there a matter of record.

Next (e) provides that the duration of the licence shall be shown. The Minister himself has dwelt, at some length, on the desirability of limiting the operation of such instruments as these when he was introducing the Bill under which he has power to fix quotas, and it is unnecessary for me to take the Minister over the ground which he himself covered. Under the sixth head, the Minister must show the statutory authority under which he proposes to act. That is largely a matter of reference and largely designed to ensure that adequate precautions will be taken to see that the Minister does not take to himself powers which he has not got and that he shows on the face of every instrument he issues the statutory authority on which he proceeds.

The last heading deals with any other conditions governing the issue of the licence. It is very necessary and essential that this House should be in a position to ascertain at any time, in respect of any particular licence, what conditions the Minister attached to its issue, and that he will not be able to raise, in defence of his Department, that he attached this provision or that provision to the licence, unless he is in a position to show that those conditions were shown on the face of the instrument. This whole system of licences is rotten. It is extremely dangerous. The best we can hope to do is to hedge it round with as many protections as we can devise. I am not so sure that the public resentment at the way in which licences were being granted earlier is as intense now as it was in the past. I am not sure that I have not succeeded in shaming the Minister into a certain amount of vigilance in respect of this business, but there was a time when havoc broke out in Donegal. There were men getting coal in without licences who never handled a ton of coal in their lives, while men who had been all their lives in the coal industry would not be allowed to get in a ton. There were men in Carndonagh who were notorious allies of the Minister and his colleagues getting licences to import coal, while their rivals in the same town were being denied them.

I think the Deputy had better get away from generalities and mention some specific case.

I will give the Minister any particulars he may require.

I am asking them now.

Does the Minister want to know them?

I want to know them.

I will furnish them in private.

Then I suggest to the Deputy that he should refrain from making general charges.

It is a well-established rule in this House that the name of any individual should not be publicly mentioned unless the individual is here to defend himself. The Minister wants a specific case. I will send him several. Is that fair? If I do not send them he can get up here on the next stage of the Bill and say that I made general charges and was not able to substantiate them. His colleague on one occasion said that, and the Minister had to intervene and say, "He has sent me cases; I admit it." Does the Minister remember that? Now, I will send him a few more. I shall be glad to. I think the Minister will agree with me that the merchant of Carndonagh was quite justified when eventually, in exasperation, he put up a placard which said, "Come and deal with me. I have carried on business for the last 50 years without help from Church or State." I must say that I do not blame him. The Minister perhaps knows the case to which I refer?

I do not.

Oh, no! I will give him full particulars, and he can examine them at length. I think, when he has examined them, his sympathy will be with the gentleman who put up the poster. Now there is this case at Innishowen, of which particulars will be furnished to the Minister. There is the famous and notorious case from the Lower Rosses, to which I have referred on more than one occasion in this House. Other Deputies will be able to report on the conditions obtaining in their own particular areas. There was a case in reference to timber, to which I think I referred in this House before. I will try and get the details of that, and I do not allege any case at the moment——

Why not give details without the names? The Deputy is taking shelter behind the rule of the House that the names of individuals must not be mentioned, but at least the place and other details can be given.

Let me be perfectly clear as to what I have undertaken to do. I am telling the Minister that if he will go up to Carndonagh, in the Peninsula of Innishowen, or if he will ask Deputy Joseph Doherty to tell him about it, Deputy Joseph Doherty will tell him an earfull—all he wants to know. I have promised to give particulars of the case to the Minister for Industry and Commerce, in so far as I have got them. If the particulars do not reveal to the Minister for Industry and Commerce aprima facie case for the statements I have here made, then the Minister for Industry and Commerce on the Fifth Stage of the Bill can read out what I am saying now, and state, “He undertook to furnish me with particulars, but no particulars came to hand.” Can I do more than that?

You could have investigated the cases here and have given specific instances in this debate.

I do not think that is the correct procedure. I prefer to adopt the procedure which I intend to adopt.

Of course the Ministers are such good hands at giving information that they like other people to follow their example!

We do not make charges until we have the evidence.

Deputies

Oh!

That is the best yet.

And to say that from the first seat too!

I will undertake this: no man will go to jail on the uncorroborated evidence of a convicted perjurer in any case as a result of the charges I make. When the Minister is able to say as much he can criticise me. I suggest to the Minister that he can have no objection to accepting this amendment. It places upon him no obligation which he will not vigorously protest he is already discharging. I invite him, in the cause of democratic government, to place upon himself a statutory obligation to do all those things which he will protest he is bound to do in the proper and adequate discharge of his duties as Minister for Industry and Commerce.

Deputy Dillon on this question of licences, with particular reference to the famous flour licence to which he referred, reminds me of Christopher Columbus who set out to discover he did not know what, who, when he got there, did not know where he was, and when he came back did not know what he had discovered. We have had this flour licence debated on a number of occasions, and Deputy Dillon has persistently got the facts wrong. The Templecrone Co-operative Society got a licence to import flour. The mere fact that this organisation, the members of which appear to be supporters of the Government, should get a licence to import flour is the cause of all Deputy Dillon's indignation, because his information comes from an individual in Carndonagh who considered at that time that he was the only person in Donegal who had a right to get a licence to import flour.

That is not true.

I know the individual in question. He is a well-known supporter of Deputy Dillon. In fact, I think he is the only supporter Deputy Dillon has in that part of the country.

Oh, I have a few more than that. On a point of order——

This is not a point of order surely. It is a point of disorder.

That is for the Chair to decide. The Minister has attributed to me a statement which I did not make. Am I free to correct him? The Minister said that my information came from an individual in Innishowen—my information with regard to a licence to import flour by Mr. Gallagher of Templecrone. My information did not come from Innishowen. It came from men living in the Rosses who were in competition with Mr. Gallagher.

I have identified the information. It is hallmarked. All Deputy Dillon's information relating to coal, timber and flour is hallmarked. I know the source of it all. The individual in question is, I know, a supporter of Deputy Dillon. As I said, he is in fact the only supporter Deputy Dillon has in that particular part of County Donegal. I agree that he makes up for the deficiency in the numbers of Deputy Dillon's supporters by the loudness with which he cackles. He cackles very loudly. He had an idea at that particular period that nobody in County Donegal should get a licence to import flour except himself. There are letters in the Department in which he put forward that point of view with considerable vigour. We did not agree with him. We gave him and others a licence to import flour. The Templecrone Co-operative Society, which run a store and a bakery and a number of other activities in that part of Donegal, were entitled to get a licence to import flour. They were just as much entitled as anyone else to get that licence to import flour.

And that he refused to other merchants in the area.

I want the names of the other merchants who are flour importers and who were refused licences produced here. There are none such.

Go and look up your own files.

There are none such. What was the position at the time? We were licensing the importation of all the flour required in the country to supplement the production of the native mills. All was being licensed. Deputy Dillon talked about people having to pay import duty. These were people trying to get in more flour than was required. All that was required in the country, plus 10 per cent., was being licensed free of duty, and the licences were being given to every person——

Not for shop flour.

——to every person for shop flour——

That is not true.

——who was engaged in the business of importing flour. There was, in fact, no distinction as to the type of flour brought in. We worked on quantities. We reckoned on a certain total quantity being required over a certain period. We deducted from that quantity the amount going to be produced from local mills and we allowed all the rest, plus 10 per cent., to come in. There is still flour coming in. The Templecrone Co-operative Society has had a number of licences to import flour since. So has the gentleman from Carndonagh. Until the local mills are capable of supplying all the requirements of the country, flour will come in under licence, and those who will get the licences are those who, according to the procedure laid down, are entitled to them. The licences will permit them to import the quantity to which they are entitled under the departmental scheme which was discussed with the flour importers. For the benefit of County Donegal, we had a special meeting with the flour importers of Donegal, indicated the proposals to them, and got their approval of these proposals, and the gentleman from Carndonagh was at the meeting.

On this amendment, I have only to say that it is not necessary. Deputy Dillon, I am sure, and certain other Opposition Deputies who are familiar with the licence form at present in use, will have noted that it provides for most of the things set out here. The number and the date of the licence are given. The name of the firm to which the licence is issued is given. In respect to the quantity and class of goods, that may be either specific or general. It may be stated in respect of the quantity or in respect of the total value. That varies according to the class of goods, the time of the year, and the circumstances of importation. In other words, a certain amount of elasticity must be permitted. The duty from which exemption is granted is stated and the statutory authority under which the licence is issued is stated. On occasions the duration of the licence is stated, but not always. There is no necessity for this statutory provision at all. The only effect of making it would be to cause still further delay of the kind which Deputies have been recently complaining of in the issue of licences; because, once the statutory authority is there, the licence would have to be in precisely the form laid down by the statute, and that would mean checks and counter-checks, which would be the occasion of further unnecessary delay.

It would mean the printing of a form.

Deputy Dillon in his earlier speech was good enough to say that corruption had not appeared in this country as yet.

Gross corruption.

I know that he was sorry for having said that after he had said it. He realised that he was talking heterodoxy as far as Fine Gael was concerned. According to their official organ, this Government is a sink of corruption. He tried to qualify his certificate before the debate had gone on very long. He talked about licences in Donegal, flour licences in particular and other licences in general, and threw out wild charges which he would not be able to substantiate. The most extraordinary thing about the whole licensing system is that the only person who has complained about them is Deputy Dillon. We knew he would complain. If we had failed to get a complaint from Deputy Dillon we would have regarded it as being as unusual as snow on a straw hat. It was bound to come. We did not take it altogether seriously. Deputy Dillon may occasionally fall upon something of value. He may, now and again, get cause for complaint that deserves investigation. But he is bound to complain in any case, whether he has cause or not. The most remarkable thing about this is that nobody else has complained. In fact, there has been from many independent authorities a number of testimonies to the remarkable efficiency and impartiality with which the licensing system has been operated, and we prefer to take those certificates rather than Deputy Dillon's.

I want to make one thing clear. The Minister dwelt on my reference to corruption. I deliberately chose the form of words that I employed. I do not believe, and I do not think anyone on these benches believes, that the Minister could be bought with £5; but I believe that he could be very materially influenced with five votes. That is the difference. I do believe that our public life is quite free from the gross corruption that disfigures public life in other countries, but we know perfectly well that a man who supports Fianna Fáil, who wraps the green flag round him, who whistles an appropriate air, and shouts "Up Dev." loud enough will get a licence.

The man in Carndonagh did not do that.

Indeed he did not.

If a Deputy charges the Government with corruption, either for votes or money, he should produce some proof and ask for an inquiry.

Charge you with political corruption! I have spent the last half hour charging you with political corruption. You are rotten with it.

If the man in Carndonagh thought he could get anything by supporting the Government we would have him as president of a Fianna Fáil Club long ago.

Amendment put.
The Committee divided: Tá, 22; Níl, 41.

  • Broderick, William Joseph.
  • Burke, James Michael.
  • Cosgrave, William T.
  • Curran, Richard.
  • Dillon, James M.
  • Dockrell, Henry Morgan.
  • Doyle, Peadar S.
  • Esmonde, Osmond Grattan.
  • Fitzgerald, Desmond.
  • Fitzgerald-Kenney, James.
  • Lynch, Finian.
  • MacDermot, Frank.
  • McGovern, Patrick.
  • McMenamin, Daniel.
  • Morrisroe, James.
  • Morrissey, Daniel.
  • Mulcahy, Richard.
  • O'Sullivan, Gearóid.
  • O'Sullivan, John Marcus.
  • Rice, Vincent.
  • Thrift, William Edward.
  • Wall, Nicholas.

Níl

  • Bartley, Gerald.
  • Beegan, Patrick.
  • Boland, Gerald.
  • Boland, Patrick.
  • Bourke, Daniel.
  • Brady, Seán.
  • Breathnach, Cormac.
  • Briscoe, Robert.
  • Concannon, Helena.
  • Cooney, Eamonn.
  • Crowley, Timothy.
  • Davin, William.
  • De Valera, Eamon.
  • Little, Patrick John.
  • McEllistrim, Thomas.
  • MacEntee, Seán.
  • Maguire, Ben.
  • Maguire, Conor Alexander.
  • Moore, Séamus.
  • O'Briain, Donnchadh.
  • O'Grady, Seán.
  • Doherty, Hugh.
  • Donnelly, Eamon.
  • Flynn, Stephen.
  • Fogarty, Andrew.
  • Geoghegan, James.
  • Goulding, John.
  • Harris, Thomas.
  • Keely, Séamus P.
  • Kelly, James Patrick.
  • Killilea, Mark.
  • Kilroy, Michael.
  • Kissane, Eamonn.
  • Lemass, Seán F.
  • O Ceallaigh, Seán T.
  • O'Reilly, Matthew.
  • Pearse, Margaret Mary.
  • Ruttledge, Patrick Joseph.
  • Ryan, James.
  • Smith, Patrick.
  • Traynor, Oscar.
Tellers:—Tá: Deputies Doyle and G. O'Sullivan; Níl: Deputies Little and Traynor.
Amendment declared lost.
Sections 8 and 9 agreed to.
SECTION 10.

I move amendment No. 10:—

Before Section 10, to insert a new section as follows:—

(1) There shall be allowed in respect of beer brewed in Saorstát Eireann on or after the 6th day of August, 1934, the following rebate from the excise duty now payable in respect thereof, that it to say:—

In the case of beer brewed by a brewer for sale for every 32 gallons of beer of whatever original gravity charged with duty and delivered from the brewery, a rebate of one pound, or where the duty now payable in respect of 32 gallons of any beer so charged and delivered is less than two pounds four shillings, a rebate equal to the amount by which that duty exceeds the sum of one pound four shillings; and so in proportion for any less quantity.

(2) The excise drawback now payable on the exportation of any beer or on the deposit thereof in a warehouse for exportation from Saorstát Eireann as merchandise or for ships' stores shall unless it is shown to the satisfaction of the Revenue Commissioners that no rebate has been allowed in respect of that beer under this section be reduced by an amount equal to the amount of the rebate allowable under this section in respect thereof.

(3) This section shall be deemed to have had effect as from the 6th day of August, 1934.

(4) The Revenue Commissioners may make such regulations as they consider necessary for the purpose of carrying this section into effect, and in particular for the purpose of facilitating and controlling the calculation of the amount of the rebate to be allowed under this section and with respect to the method of computing the quantity of the beer in respect of which rebate is to be allowed.

This amendment is in similar terms to the amendment which I moved to the Finance Bill last year. Whilst the same considerations apply as applied then, there are new considerations that should be taken into account this year and to these I propose to advert later on. Before coming to those I would like to say a few words on the principle of my amendment. I would like to refer, first of all, to the extraordinary increase in these duties on beer and spirits which have taken place in comparatively recent times. Before the war period the duty per barrel on stout and beer—on everything under the generic name of beer —was 7/9 per barrel. That duty went up by successive rapid increases until it reached the sum of £5 per barrel.

As this is a matter in which we are dealing with Excise duty it is relevant to consider the revenue received. It will be relevant on this amendment to deal with the duty on spirits though it will be more appropriate to the following amendment. I will, however, deal with that matter on a subsequent amendment. The increase of duty on beer in this country rose from 7/9 in 1914 to a sum of £5 per barrel, at which it now stands. The amount of the increase was extraordinary, being 13 times the original duty. When these increases were put on it was also explained by the Ministers of the day that they were temporary, purely war measures. In relation to the increases in the duty on spirits, those increases rose from the original figure, the pre-war figure of 14/9 per gallon, to £3 12s. 6d.; in other words, an increase of five times the amount of the original duty.

Last year I put forward the considerations that I believe now apply and that should be taken into account in determining the question as to whether the reductions now sought for should be given. I think the main argument is this, that stout or porter, or to use its generic name, beer, is the drink of the working man. It is an extraordinary thing, even for revenue purposes, to keep on this enormous increase from 7/9 to 13 times that amount. It is the custom in every country, I think, to encourage the consumption of local drink as compared with foreign drinks. It is done in France and Italy and other foreign countries. This is, I think, the only country in the world in which there is such an extraordinary tax on a local product which is consumed, mainly, by the working people. The main consumers of porter or stout in this country are the working people— farmers, agricultural labourers and town workers. No doubt temperance advocates will say that it would be a retrograde step to reduce these duties, but I do not think that is an argument that can hold water for a moment, because long before these duties went on the consumption of all kinds of drink in this country was rapidly decreasing.

In a debate a number of years ago in this House on a kindred subject figures were quoted showing the decrease in arrests for drunkenness in this country from the year 1900 to 1919. In 1900 the number of people arrested for drunkenness came to 92,927, and that number had fallen to 15,339 in 1919. No doubt, in the years before 1919 the main part of those heavier increases of duty had been imposed. I do not know that figures are available for the decrease in arrests for dunkenness in the period from 1900 to 1914, but it is a matter of common knowledge that there was an extraordinary change in those years in the direction of decreased drinking. A change took place in the habits of the people apart from any question of cost and, in fact, during the period when these heavy duties were imposed in the war years and in the years immediately following, when the price of drink was a matter of small concern because there was so much money in circulation, the statistics still showed a continuing decrease in the consumption of liquor and a decrease in drunkenness.

On the question of the value of these drinks from the point of view of the working people, I do not like repeating what I said 12 months ago, but I did mention this, that a very eminent authority brought here in 1925 to give evidence before the Intoxicating Liquor Commission, Doctor Shadwell, who had control of the drink trade for the whole of Great Britain during the war years, a man who had written books on temperance and was a temperance reformer himself, said that as regards stout and beer they had a very high value from the point of view of food and they were of great value to working people such as the working people of Dublin, agricultural labourers and others in carrying out their work. He said that they contained a food element of considerable and very high value.

On the question of revenue, I should like to refer to figures showing the revenue derived from beer and spirits at three different periods of time. In 1924 the revenue from beer amounted to £5,640,415. I am omitting the odd figures indicating shillings and pence. In 1932 that amount had fallen to £2,548,050 and in 1933 there was a very slight increase on that figure. As regards spirits, in 1924 the amount was £3,184,000; in 1932 the figure was £2,061,000 and in 1933 it was £1,936,000, so there is a very steady and considerable decrease over that period of years in the revenue derived from spirits. Last year, on this subject, the Minister said he considered it a sufficient reply to the proposal in the amendment to say that there would be a loss of £500,000 on the year. I think later on he amended his figure and said £423,000. I should like to point out that these duties are at a pitch when they are becoming from year to year, particularly with the increasing financial pressure, unprofitable from a revenue point of view and, therefore, the argument that there would be a loss incurred is hardly a sound one. That was well illustrated by what happened in Great Britain in recent years. Their tax was never quite as high as ours, but they increased it two years ago in their Budget. The result was a definite loss of revenue and the increase then put on has since been removed.

I said that there are new considerations that apply to this question this year, considerations that were not available last year. The argument always put forward by the Finance Minister against a reduction of this kind is that it might be necessary, in order to grant such a remission, to impose new taxation. Last year there was a balance—I am taking the Budget figures—on the 31st March, for the year 1932-33, of income over expenditure for the year of £1,140,000. That was raised by taxation, and it was estimated by the Minister to be the sum required in order to balance the Budget for 1933-34, but, in fact it was not used.

In 1933-34 we had a balance of income over expenditure for the year, not including this £1,141,000, of £1,354,884. There is a third element that should be taken into account in this connection, namely, the Local Loans Fund. There is added to the Local Loans Fund, and set out as an asset of that fund, £550,000 for each year for loans to local authorities amounting to £1,130,000. The total sum collected from the taxpayers, and not required for any purpose, and not required to provide any service chargeable to expenditure at the present, was £3,595,884. That is a sum, accordingly, by which the public have been overtaxed in two years. It was money raised by taxation and not used for any purpose. No wonder we have speakers going around the country, in the last few days, putting forward the views and the policy of the Government, stating there is plenty of money for all purposes. I am glad to see that the solitary Deputy sitting behind the Minister approves of that.

Well, we are not bankrupt yet.

Mr. Rice

I am glad the solitary Deputy opposite emphasises the word "yet." It is, therefore, no longer an argument to say that in order to give this remission asked for, it would be necessary to raise money by taxation. The money is there. I do not think there would be any loss to the revenue if this remission were given. No doubt the argument jumps to the mind of the Minister that that would mean increased consumption. After all, that is not an argument that would intimidate anybody, because the consumption of porter and stout in this country, having regard to the population and the enormous percentage of people who use it, would not mean any social evil of any description. The workman in particular will take more porter or stout at present and not run the slightest danger of damaging either his health or his character. I did hope, and I pointed it out when I raised this question before, that some remission would be given before now. Unquestionably the Minister for Finance, when he took office, did hold out, to a deputation of the licensed trade that interviewed him, the hope that some relief would be given. I quote from a letter in which the licensed trade expressed their appreciation of the way he received them. He said he was impressed by the justice and strength of the case they had made, and the licensed trade added that they hoped as a consequence for some remission.

Who said all this?

Mr. Rice

I am referring to a letter that the Minister received following his interview with the deputation of the licensed trade.

That is a letter written by some person to me.

Mr. Rice

Yes. The letter says:—

"We were pleased with your reception of us, and we felt we had come to a Minister who was impressed by the justice and strength of our case, and we had hoped for some remission of the duty."

Perhaps they got an entirely wrong impression from the Minister. I am aware that was before the general election, and perhaps they were given a wrong impression.

Has the Deputy the date of that letter?

Mr. Rice

No, but they certainly came away with the impression that they were going to get some remission of the duty. I can give the approximate date, because I find that I mentioned it last year, and referred to it as a letter addressed to the Minister for Finance in the previous April.

The Deputy knows whether it was before or after the general election?

Mr. Rice

It was after one general election, but in anticipation of the general election which was to come on soon. I do not think I need take up the time of the House any further in advancing arguments in favour of this amendment. It is really an amendment the benefits of which would go to the workman, or, as members of the Government love to call them; "the plain, common people." It would not do to call them the common people unless you call them the plain people as well. That is the true democratic distinction. Well, this is an amendment in favour of the plain people. It is an amendment to give a reduction of a penny a pint on stout, which would be appreciated by the plain common people. The financial argument that was used formerly for keeping on the high duties is no longer available having regard to the fact that there is in the Exchequer over £3,500,000 available for any proper national purpose such as I suggest this amendment would serve.

I support this amendment of Deputy Rice. Deputy Rice spoke about some argument that would not hold water. Evidently the liquor is holding some water anyway. There is no equity behind the maintenance of this tax at its present figure. There is no justice behind it. The tax on spirits and beer at the present figure was for war purposes. It was imposed by Great Britain. It was fashionable in this country to sweep away everything with the British flavour about it. One would think when the knife was used to that extent it would be used to the same extent in this matter.

Now take the economic side. Is it the intention to kill this trade and industry entirely. That is the only plea that can be put up in support of the present duty. Is this tax an indirect form of prohibition? To me it looks like it. Is it proposed by that means to kill the distillery industry in this country? Is an indirect means being taken to do that? It is all right for half-a-dozen men in a total abstainers' society to gather in some room once a year and to send out a snowball resolution. What right have they to dominate this country as against the rest of the community? I am just as much entitled to go into some room and to have a snowball resolution passed. I take it that I am as much in favour of sobriety as they are. While I take it that I am as great a teetotaller as they are, I feel that it would be immoral on my part to adopt such tactics. If I were a temperance fanatic and if I wanted to impose my will on the general public I might adopt such tactics. I am a teetotaller. If I took intoxicating drink very likely I would insist on taking it just as I insist now on being a total abstainer. But that is not the position here at all. There is no reason why a small band of men should intimidate the Government to do an injustice to a particular trade or industry. There are two sides involved here, an industry and a trade. There is the industry of distilling in various forms and then a trade.

The Deputy is talking to the wrong amendment. The amendment before the House has nothing to do with distilling.

The two amendments can be taken together.

Are we discussing them together?

Is the sum involved such a large one, if you take into account the rural population, who are now unable to buy anything but stout? The consumption of spirits has disappeared. It is but mere justice to take off a larger sum and for that reason I wish to support the amendment.

This amendment would cost half a million of money and we are not accepting it.

Mr. Rice

That is precisely the same speech as the Minister made this time last year.

There is some vision about that.

It is very much to the point.

Question put.
The Committee divided: Tá, 18; Níl, 39.

  • Broderick, William Joseph.
  • Cosgrave, William T.
  • Curran, Richard.
  • Dockrell, Henry Morgan.
  • Doyle, Peadar S.
  • Esmonde, Osmond Grattan.
  • Fitzgerald, Desmond.
  • Fitzgerald-Kenney, James.
  • Lynch, Finian.
  • McGovern, Patrick.
  • McMenamin, Daniel.
  • Morrisroe, James.
  • Morrissey, Daniel.
  • Mulcahy, Richard.
  • O'Sullivan, Gearóid.
  • O'Sullivan, John Marcus.
  • Rice, Vincent.
  • Wall, Nicholas.

Níl

  • Bartley, Gerald.
  • Beegan, Patrick.
  • Boland, Gerald.
  • Boland, Patrick.
  • Brady, Seán.
  • Breathnach, Cormac.
  • Briscoe, Robert.
  • Concannon, Helena.
  • Cooney, Eamonn.
  • Davin, William.
  • De Valera, Eamon.
  • Doherty, Hugh.
  • Donnelly, Eamon.
  • Flynn, Stephen.
  • Fogarty, Andrew.
  • Geoghegan, James.
  • Goulding, John.
  • Harris, Thomas.
  • Jordan, Stephen.
  • Keely, Séamus P.
  • Kelly, James Patrick.
  • Killilea, Mark.
  • Kilroy, Michael.
  • Kissane, Eamonn.
  • Lemass, Seán F.
  • Little, Patrick John.
  • McEllistrim, Thomas.
  • MacEntee, Seán.
  • Maguire, Ben.
  • Maguire, Conor Alexander.
  • O Briain, Donnchadh.
  • O'Grady, Seán.
  • O Ceallaigh, Seán T.
  • O'Reilly, Matthew.
  • Pearse, Margaret Mary.
  • Ruttledge, Patrick Joseph.
  • Ryan, James.
  • Smith, Patrick.
  • Traynor, Oscar.
Tellers:— Tá: Deputies Doyle and G. O'Sullivan; Níl: Deputies Little and Traynor.
Amendment declared lost.
The following amendment appeared in the name of Deputy V. Rice:—
11. Before Section 10 to insert a new section as follows:—
(1) There shall be allowed on and after the 6th day of August, 1934, in respect of spirits imported into Saorstát Eireann a rebate of one pound two shillings and six pence for every gallon computed at proof.
(2) In lieu of the Excise duty payable on spirits distilled in Saorstát Eireann there shall, on and after the 6th day of August, 1934, be charged, levied and paid for every gallon computed at proof of spirits distilled or manufactured by any other process whatsoever in Saorstát Eireann an Excise Duty of two pounds ten shillings in respect of spirits warehoused for five years and upwards; and an Excise Duty of three pounds in respect of spirits not warehoused or warehoused for less than five years.

Mr. Rice

The same arguments in the main would apply in favour of No. 11 as in the case of No. 10, and no doubt we shall have the same lucid speech from the Minister in objection to this amendment.

Is the Deputy withdrawing the amendment?

Mr. Rice

Yes.

Amendment, by leave, withdrawn.
Section 10, 11 and 12 ordered to stand part of the Bill.
SECTION 13.

I move amendment No. 12:—

To add at the end of the section a new sub-section as follows:—

(3) Whenever a person shows to the satisfaction of the Revenue Commissioners that he has in his ownership or possession in Saorstát Eireann on the 1st day of July, 1934, more than one thousand pounds of tea on which either the duty imposed by Section 14 of the Finance Act, 1932 (No. 20 of 1932), or the duty imposed by Section 15 of that Act was paid and of which no portion was received by him after the 16th day of June, 1934, or received back by him after delivery on sale from his stock, such person shall be entitled to receive a refund at the rate of two pence on every pound of such tea after the first five hundred pounds thereof.

This amendment provides for a refund of duty at the rate of 2d. per lb. on stocks of tea in excess of 1,000 lbs. held on 1st July. The refund of duty will be calculated on the total stock less 500 lbs. in each case. The rate of refund will be at half the rate of the decrease in duty, but in that connection we have to bear in mind that a period of seven weeks has already been allowed for the disposal of stocks. The stock for which a refund is claimed must not have been received after 16th June last, or must not include tea returned after delivery on sale. The first provision is necessary in order to prevent people from taking advantage of the terms of the amendment, after they are made known, to bring their stocks within the 1,000 lbs. limit, if their stocks are close on 1,000 lbs., simply for the purpose of claiming a refund. The second condition is intended to counter the objectionable practice in the trade which is that when rumours of an impending increase in duty arise, some merchants lay in large stocks. These merchants demand, if there is a decrease in duty instead of the anticipated increase, that any abnormal stocks should be taken back by the wholesaler. Tea sold in this way will be excluded from the stock for a refund.

I regard all this system of retrospective legislation or retrospective taxation as fundamentally bad. It was introduced by the British, and their loyal imitator, Deputy MacEntee, Minister for Finance of Saorstát Eireann, has copied it. When the Minister imposed a duty of 4d. per lb. on tea he made it retrospective in respect of all stocks of tea then in the hands of tea merchants. For the moment I forget, but I do not think he made any allowance in respect of stocks that were held.

He did. The Excise duty was charged on stocks of tea in excess of 1,000 lbs., but only the first 500 lbs. were free of duty.

When the tax on tea was imposed one was entitled to have 500 lbs. stock, but over and above that one had to pay duty?

Yes, on the second 500 lbs.

Or so much more tea as you might have had.

Precisely.

Now the proposal is to remit the duty on all of the tea in stock or on 1,000 lbs. of tea less 500 lbs. Let us take a concrete case. Suppose a merchant has in stock 2,500 lbs. of tea. He is entitled to a refund of duty in respect of 2,000 lbs. of tea?

It is admitted that he paid duty on all the tea. If the Minister accepts the principle that he should remit the duty on tea in stock, why cannot he go the whole way and remit it on the entire stock at the relevant date instead of compelling him to suffer a loss of 4d. per lb. on 500 lbs. of his stock? What defence is there for remitting the tax on part of the stock and not on it all? It simply means that he has got to lose 4d. per lb. on so much of his tea, because the Minister for Finance decides to take the duty off. If the principle of retrospective taxation had never been introduced, I do not think the tea merchants could fairly ask to have any remission at all, but when they paid the duty retrospectively in the past, apparently they got this advantage in respect of the first 500 lbs. of tea, and the reason they got it was that the retrospective principle was a new one. The object was to spare their paying duty on the normal stock of tea.

I am afraid the Deputy is making assumptions that are not warranted by the facts.

That was the purpose of the imposition in the original instance, when the Minister put on 4d. per lb. Now the Minister provides that we are to get a refund in respect of any tea in stock exceeding 500 lbs. At first glance that looks as though it were consistent, but, if you examine the principle closely, you will find that there is no good reason whatever for not granting the remission in respect of the additional 500 lbs. of tea. I submit that when the Minister is going to make the remission at all he might as well go the whole hog and spare individual merchants the loss of a £10 note, because that is what it amounts to. The loss of a £10 note will mean a good deal to a country shopkeeper, whereas it will mean very little to the Revenue Commissioners. I suggest that the simpler and fairer procedure would be to remit the 4d. tax paid— or the 6d., in the case of extra-Commonwealth teas—on all the tea that was in stock on the 16th June, 1934.

This amendment provides for a refund of 2d. per lb. on some tea for which a duty of 6d. was paid, and on other tea in respect of which a duty of 4d. was paid. If a person has in stock 1,000 lbs. of tea, which is approximately ten chests, on the 1st July, he will get allowed somewhere about £5, if he satisfies the Revenue Commissioners that he did not receive any of it since the 16th June. If there be any purpose at all in putting down this amendment, it is that the duty on tea would not be chargeable to a consumer after the 1st July. A rather unusual procedure was adopted when this tax was imposed originally. Formerly, when taking tea out of bond, one paid the duty. The Minister, in that year, went a step farther and assessed the value of tea in stock. Now, these business commodities are not easily adaptable to what you might call Finance or Revenue Commissioners' regulations. Tea is an item of which traders have got to keep considerable stocks. It is not so easy to reduce the entire stock on the 1st July, 1934. It may be that one could run down to a very low amount, but it may so happen that, while a person may have had a very small stock when this duty was imposed originally, and may now be in possession of not quite 1,000 lbs. of tea, still he would be liable to either 4d. or 6d. a lb. on tea. That he is allowed a rebate of 2d. on 4d. or 6d. paid is difficult to understand, but some regard ought to be had to traders and their difficulties in the remission of duties.

If traders are in the habit of blending—I do not know whether or not they do so nowadays—it may be that it would be a very great inconvenience to them to let the stocks run out, and then they are taxed on an article for which they can get no return, because, obviously, people will expect that tea will go down by 4d. or 6d. a lb., or perhaps 8d. a lb., on the 1st July. There are traders who deal exclusively in tea and sugar and it is inconceivable that they would allow their stocks to run down to a very low ebb. The advantage they will derive will be offset by the disadvantage which is accruing to them now. It is quite conceivable that the Revenue Commissioners will have some difficulty in being satisfied on the 1st July in every case. It may take a week to satisfy themselves with regard to this. If a date had been put on from, say, 24th June to the 10th July, and some allowance made for a normal output with regard to tea, it might have been better. In the first place, however, it was an unusual thing to tax stocks which were in hand, and, in the second place, we are only relieving them to a limited extent in respect of whatever stocks of tea are on hand now.

Last year the Minister told us that he got £413,000 from the tea duty. This year he said he got £467,000, which he said was £77,000 more than his Estimate and £126,000 more than the previous year. In the returns for the previous year it is to be noticed that Customs is returned at £341,000, and £77,000 is down for Excise. Are we to assume that the £77,000 was in respect of duty on stocks in the hands of merchants, which, by reason of the alteration in the incidence of the tax, was responsible for bringing in £77,000? If that be the case—that they were taxed in respect of that £77,000—now they will get back somewhere between one-half and one-third of that. In a case of this sort, there is no just reason for refusing to allow what they paid, whether it was the 4d. or the 6d.

Has the Minister nothing to say on the points raised by Deputy Cosgrave as to why the rebate given on the tea in stock is at the rate of 2d. and why it is not at 4d., when, under the tax on tea that was imposed under the 1932 Act, traders who had tea in stock were asked to pay 4d. on the stocks of tea they had above 500 lbs. in stock? Now the Minister is taking off the 4d. tax and is allowing a rebate of 2d. Surely, if the Minister, as I take it he does, intends to relate what he is doing now in respect of stocks of tea in hand to what he did in respect of stocks in hand when the 1932 Act came into operation, some explanation is warranted as to why the tax of 4d. was imposed on such stocks in 1932 and a rebate is being allowed on stocks now only at the rate of 2d.

I expected that we would hear some answer from the Minister to the cases made by Deputies Dillon and Cosgrave. The Minister has not given any indication or any figures to the House as to the quantity of tea on which duty was paid, or how much duty at the rate of 6d. was paid for non-Empire tea in stock last year, and how much at the rate of 4d. The Minister, I think, ought to be aware that people in the tea trade last year were put to considerable trouble as a result of being taxed on the quantity of tea which they had in stock. Some of them paid very heavy sums. We do not know whether a person paid 6d. on two-thirds of the tea in stock, and 4d. on the other one-third or whether all the stock was paid for at 4d. or all at 6d. The man who paid 6d. gets only 2d., the same as the man who paid 4d. Another matter has to be remembered. The Minister may say that it does not affect this question but to my mind it has a very distinct bearing upon it. That is, that the price of the cheap teas has increased considerably during the last 12 months. The cheaper teas have increased in price, retail, by 60 per cent. or 70 per cent. in the last 12 months. When the Minister brings a proposal like this before the House, he ought to be able to give us some figures as to the amount of Empire tea which had to pay 4d. per lb. and the amount of non-Empire tea which had to pay 6d. per lb.

I do not know exactly whether or not Deputy Dillon intended to oppose this proposal. I do not know what he meant by saying that he regarded retrospective taxation as fundamentally bad. That is not retrospective taxation. This is a concession. I shrewdly suspect that when Deputy Dillon got up to lead for the Opposition he had not read the amendment.

Deputy Dillon was speaking of the imposition of the original tax.

He was not; he was speaking on this amendment and he said that he regarded retrospective taxation as fundamentally bad. This is not retrospective taxation. It is a concession to the tea trade to help them out of their present difficulties. These difficulties are not of our creation. They themselves are largely responsible for them. To liquidate these difficulties, they are being given a period of seven weeks. As I am on the point, I may refer to Deputy Mulcahy's question as to why we are giving the members of the tea trade a relief of only 50 per cent. Having met the representatives of the tea trade, examined the whole position with them and put all the facts, as I knew them, before them, they agreed that a concession of this sort would be a very valuable one to them.

Whom did the Minister meet?

People who are in a better position to speak for the tea trade than is Deputy Morrissey.

That is no answer. I am entitled to speak as a member of the House, and I am entitled to ask for this information.

The Deputy ought to have put the question when he was on his feet. I am not giving way to him now.

I shall have plenty of time afterwards. The Minister did not like the point.

I met the people most representative of the tea trade.

In Dublin?

No—in all Ireland. I met people from Cork, Limerick, Dublin and other places.

What about Belfast?

I met the members of the Irish Wholesale Tea Traders' Association, and, in addition, persons representing important concerns not affiliated to that Association. I am satisfied that they spoke for the tea trade as a whole. Having considered the whole position with them, I gathered that if we went as far as this proposal goes, we should be meeting them reasonably. I may say that if it had not been shown conclusively to me that there had not been any general forestalling by members of that association, they would have received no concession whatsoever. The concession has been given largely because the wholesale tea trade has been greatly hampered by the reduction in duty and because, pending the clearance of existing stocks, it is to be presumed that tea merchants and tea-blenders in this country would be at a disadvantage as compared with outside importers if we did not meet them in this way. One of the reasons why people who have less than 1,000 lbs. of tea in stock will not be eligible for the concession is that, when we were imposing the Excise duty originally, people who had less than 1,000 lbs. in stock were not charged with the Excise duty, and the first 500 lbs. were not chargeable with the duty even in the case of those who had over 1,000 lbs. in stock. Deputy Morrissey was very eloquent about the 6d. and 4d. rates of Excise duty. If the Deputy had made up his case before he came to the House he would find that, when the Excise duty was imposed, it was at a flat rate of fourpence.

The amendment was the Minister's. If the Minister had explained his amendment we would have known all about it.

Deputy Cosgrave asked whether we were in the habit of blending our own teas. One of the reasons we are making this concession is that since the passing of the Finance Act of 1932, which gave a special concession to revive in this country the tea-blending trade, quite a considerable tea-blending trade has sprung up here. It is largely because of that that the stocks of tea in this country are at the present time greatly in excess of what they were during the ten years that Deputy Cosgrave was in office.

The gist of the whole case is that the Minister is giving 50 per cent. of what he imposed last year. That is the Minister's whole case. The Minister talks about consulting the tea trade. There are more persons concerned in the tea trade than wholesalers. Many ordinary shopkeepers and tea merchants in the country towns are as much concerned as, and perhaps more concerned than, the wholesalers. The Minister ought to know that. The fact remains, notwithstanding what the Minister has said, that he is giving back 50 per cent. of what he imposed last year.

The Minister's reluctance to rise is explained by what I should call the disgraceful attitude he takes up to those engaged in the tea trade. I do not know what the Minister means when he says that there was a flat tariff of 4d. under the 1932 Act. Was it not a 6d. rate, with a preferential rate of 2d?

Does the Deputy not know the difference between an excise duty and a customs duty? The excise rate was 4d.

The Minister put a tax of 4d. on every lb. of tea traders liable to the duty had in stock over 500 lbs. When he did that, he was establishing a principle which ought to be applied now when he is reducing the tax on tea. But apparently what is enshrined in this, if it is a concession on the one hand, is really a kind of penal differentiation against the tea trade. The Minister seems to have it in his mind that, because the people in the tea trade may have thought of forestalling and getting in a certain supply of tea due to the fact that an increased tax on tea may have been expected, he is not going to let them have it.

That is the rub.

That is the rub which the Minister denies is so.

No. I will deal with that point in a moment if the Deputy makes it in relation to the retailers.

I make it in relation to people who have stocks of tea, the people who, when the Minister started his tea policy, were made pay a tax of 4d. per lb. He is now giving them a rebate of only 2d. on their stocks, and this is simply a kick at the people in the tea trade because some of them may have thought that it would be worth while forestalling imports of tea.

That is what they were led to believe.

Whatever they were led to believe, what is happening now is that the Minister is having a kick at them.

Because they were foolish enough to follow the advice that the Deputy's Party gave them.

The principle of forestalling comes from the Minister in this case. What he is doing is that he is forestalling to the extent of 500 lbs. of tea. I suppose that the Ministry and the members of the Party expect that the tea duty is to come down on 1st July. The Minister should remember that 900 lbs. of tea represent a very considerable stock. It means about nine chests of tea. Is the trader to be at the loss of that, and is the Minister going to forestall the duty on that? Is it to be charged to the people? According to the returns to which I have already referred, the Minister got £77,000 in excise duty on the last occasion from this. That was obtained from the stocks then held. Assuming that we are in the same position now, he is going to hand back £38,000, and he is going to forestall £38,000. The allegations that have been made against traders come, I suggest, very badly from the people who are at the same game themselves. Is it an honest thing to expect a trader to pay duty on an article when he cannot recover from his customer? Did the Minister inquire from the trade if seven weeks' notice was enough. He might have given them notice, even before he introduced his Budget, that he was proposing to charge a duty on tea after a certain date. That would have been a great convenience to traders, and would not have resulted in any just loss to the revenue. All this means a great disturbance of business: this thing of having certain stocks paraded here as forestalling, and the fact that charges are made on traders which they cannot recover from their customers. All that is bad. The imposition of taxation should be level and fair to everybody. This is not. In this case a person with 900 lbs. of tea gets no concession. A person with 900 lbs. of tea on the last occasion was not liable for tax. It is all nonsense to say that you play off one against another, but a trader may be caught both ways. Then we had the Minister talking about blending. He said that it only started in the last two years. I would advise the Minister to tell that to the horse marines. The ordinary retailers in the country have been blending tea during the last 40 years.

And they are doing so at present.

Then the wholesalers came along and got into the business in a big way. They had better facilities and carried out the blending on a large scale. It is all nonsense to say that the blending of tea was not carried out during the last ten years.

Deputy Cosgrave's speech, to which we have just listened, is characteristic of him. It is full of misrepresentation. When he speaks at all he tries to give the impression that he is speakingex cathedra: as if the spirit of infallibility had descended upon him. His speech was not unlike some of the speeches he makes from public platforms to his constituents when he puts the debit side where the credit side should be, and then claims whatever credit he can for that.

I have refrained from making after dinner speeches, which has been a feature with the Minister for some time past.

The Deputy may have thought that he was refraining from making an after dinner speech this evening, but certainly some of his speeches are informed by the prandial spirit. We have to consider separately the position of wholesalers and retailers in connection with this matter. We were satisfied, before the reduction in the tea duty was decided upon, that normally a retail trader did not carry more than a seven weeks' stock: that it had been a continuous practice with him. The tea traveller called on him at intervals of six, seven or eight weeks. The retailer bought what stock he thought he would require from journey to journey. In the case of the wholesalers, that assumption has been found to be unwarranted by reason of one special consideration: that is, that the prices for certain qualities of tea have been rising continuously, and blenders have naturally been buying against a rising market. Consequently, a wholesaler's stock, which formerly would have been equivalent to nine or ten weeks' trade, now represents about 13 weeks' supply. There is no doubt whatever that a great many retailers did stock large supplies in anticipation of the Budget. We cannot say that there has been any forestalling on the part of wholesalers. In fact, the figures in relation to clearances from bond do not substantiate that. They rather indicate that, so far as the wholesalers are concerned, the clearances over this period have been normal, but there is reason to believe that on the part of some retailers, at any rate, there was an attempt to forestall the Budget, and that there was a very heavy stocking up.

The position that we are in is this: we are giving the retailer the seven weeks' normal period that he would require to clear his stocks. Any retailer who fails to secure the concession at the full rate and who has to pay duty on any tea which he may have in stock on 1st July will normally only have to pay duty on stock which he got in in anticipation of the Budget, because if a traveller went around to him after the Budget concession was announced, and he had to buy, he naturally only bought what would carry him through to the end of the period at which the tea fell free of duty. If he had been buying before the Budget, then he bought more than a seven weeks' supply and he must have been, as I have said, stocking up in anticipation of an increase in the duty on tea. In fact, he took the tip from the wrong paper, and, like every man who acts on the advice of a bad tipster, he has to pay if the gamble goes against him.

The wholesale tea people, on the other hand, are not in the position the retailers are in. Their trade is not quite at a standstill, and they naturally will have disposed of some of their stocks, but there will not be the same continuous liquidation of stocks the retailers had the advantage of during the seven weeks which have elapsed since the concession was first announced. Accordingly, we feel that while something must be done to meet the wholesaler and while possibly some concession might be given to the retailer, we are satisfied that the concession we are now making is the one that is just to everybody in all the circumstances.

The Minister said there had been forestalling by the retailers. I wonder does the Minister know what takes place in this matter? If there has been forestalling by the retail trade, by the buying of extra tea, in 95 cases out of 100 it has been done on the advice of the wholesalers, because the shopkeeper in the country does not know anything about official or unofficial secrets and he has to take his advice from the travellers who come from the cities. Everybody connected with the trade, or everybody who knows anything about it, knows that any buying that takes place before the Budget is done on the advice of the wholesale traveller and the wholesale house. Now, apparently, the wholesalers are protecting themselves and leaving the retailers with the baby.

The retailers are getting the same concession as the wholesalers.

They are getting 2d. after buying a commodity upon which there was 4d. tax.

They have had seven weeks to clear their stock.

What is the use of talking childishly like that? If the wholesale traveller advised the retail merchant in the country to get in a lot of tea because there was going to be an additional tax on it, how is he going to dispose of his stock?

That is his job.

It is very easy to talk in that fashion here, but the retailer has a fixed number of customers. He cannot increase them; he cannot make them.

I am sure he did a little persuasion himself.

It is not fair to that man. The sum involved here is not very considerable, and the matter should be put right. It is a very small sum of money, and if there are concessions being given to the wholesale trade, why not give them to the small retailer, because a strong firm of tea merchants can stand the blow better than the small retail merchants? They are getting quite enough, and too much, to do.

The Minister has skirted around the meeting he had with the deputation from the tea trade, but is it the Minister's contention that this is the result of an agreed settlement with the deputation, or is it the result of the Minister saying: "I will give you so much—take or leave it"? I think the House is entitled to know that. The Minister says that they had seven weeks to get rid of their stocks, but surely everybody knows that in this respect, there is a falling market. I cannot imagine what persuasion a retailer of tea could use with the general public to get them to stock up with tea because he knew it would be cheaper next week. The position is that if they have the tea in stock, they are surely entitled to a refund on it. I should like the Minister to tell us, as I said, whether this proposal is an agreed settlement, or otherwise.

This is not a case of a settlement. It is a case of concession.

A part concession.

And the only thing is that we have reason to believe that it will be satisfactory to the tea trade.

The Minister talks of this as a concession. When the Minister put this tax on tea, as Deputy Dillon has pointed out, he dealt with the matter retrospectively. He put a tax of 4d. on every lb. of tea over 500 lbs. that every person in the country had in stock. Now he takes off his tea tax and he talks of it as being a concession. Surely, if there was any case at all to be made for the Minister's doing what he did in 1932—and I think a case can be made out for what he did then quite as reasonably as it can be made against it—there is no ground at all upon which he can avoid giving the full equivalent concession to the people who have tea stocks in hands at present. Anything less than a 4d. remission could not be called a concession. If he gave a rebate of 4d. per lb. in respect of every lb. over 500 lbs., it could not be called a concession. It would simply be the equivalent of what was done originally, and, if, for any particular reason, the Minister thinks that the rebate should only be to the extent of 2d. per lb., I should like to hear him argue again that the 2d. should not also apply to the first 500 lbs. as well as to any amount over that.

Amendment put and declared carried.
Section 13, as amended, agreed to.

With reference to amendment No. 13, Section 14 proposes to exempt from Customs duties antiques, that is, articles manufactured or produced 100 years before the date of importation. The amendment proposes to fix the date of production or manufacture as the year 1800. In other words, it would now add 34 years to the age of such articles and such increase of age would be progressive. The amendment, therefore, would worsen the position of certain sections of the people and would put an added burden on them and is, therefore, out of order.

Might I put the case that Section 14, as it stands, implies that there is a burden of taxation on the people at the present time which the section itself would lighten? The amendment would only mitigate or reduce in the same way the amount of taxation that is involved here.

Would only lessen the decrease!

So that the effect of the amendment would be to reduce the amount of taxation there is at the present moment.

The Deputy's argument is rather ingenious, but there is no question that the amendment would worsen the present position of certain classes in the community and is, therefore, out of order.

Question proposed: "That Section 14 stand part of the Bill."

I move to report progress.

Progress reported; the Committee to sit again to-morrow.
The Dáil adjourned at 10.30 p.m. until 3 p.m. on Wednesday, 20th June, 1934.