I presume, as customarily, that the Financial Resolutions will be formally adopted and that then there will be a general discussion.
Financial Resolution No. 1.—Income Tax and Surtax.
I desire to speak on the first Resolution.
The usual procedure is that a general debate takes place on the last Resolution which deals with the amendment of the law. In addition there are usually a few short speeches. Deputies, being at a disadvantage at not having seen the proposals until the Minister has concluded his Budget statement, do not as a rule speak at length, but on the first Resolution Deputies intervene.
I move Financial Resolution No. 1 which fixes the rates of income tax and surtax for the year and provides for the continuance of existing enactments.
(1) That income tax shall be charged for the year beginning on the 6th day of April, 1935, at the rate of 4/6 in the £.
(2) That surtax for the year beginning on the 6th day of April, 1935, shall be charged in respect of the income of any individual the total of which from all sources exceeds one thousand five hundred pounds and shall be so charged at the same rates as those at which it was charged for the year beginning on the 6th day of April, 1934.
(3) That the several statutory and other provisions which were in force during the year beginning on the 6th day of April, 1934, in relation to income tax and surtax shall have effect in relation to the income tax and surtax to be charged as aforesaid for the year beginning on the 6th day of April, 1935.
(4) It is hereby declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1927 (No. 7 of 1927).
On the first Resolution my desire, in accordance with the usual custom, is to make a few preliminary remarks on the general discussion, but I will speak in more detail on the last Resolution. I think it is desirable, before we dodge in amongst the trees for the usual skirmishing, that there should be some prospect of being able to see the wood for the trees. Forbidding and dark as it is at the moment, I make this one comment on the speech to which we have listened: that it is a good thing that the curtain was separated by a considerable amount of his speech from that part of his speech about the effervescent products of the grape. Otherwise people may form a wrong conclusion as to where the emotions came from. There has now come as a clear fact, what might have been determined by reflection. The Minister puts in the forefront of his speech this sentence—did his Budget last year balance? And I notice that he evaded that question by talking of the standards of those who would seek to judge and give a decision on that question. If it did balance, how is the balance achieved? One has often seen those who disport themselves upon a tight-rope. Nobody would consider that a man had sustained his balance if he had been, three or four times, spreadeagled over the rope and had been shoved back into position by external aid. And that is what has happened last year's Budget. Ordinarily, if revenue was found to be failing, the Minister came before the House and got new Resolutions passed.
By his activities, Deputy Norton and the Deputies who surround him aided the Minister in imposing taxes. The Minister was able to get £300,000 by the Excise charge on bacon. Even then the Minister had not felt himself free from collapse. That was clear from the failure in revenue. The Minister hold over a measure which he told us this time twelve-months had been fully worked out in all its details, that was the Widows' and Orphans' Pensions Bill. In that way the Minister saved himself from having to introduce a fresh tax to meet the expenditure for this Bill, for which he had fortified himself by a tax last year. In addition to that operation and the operation of other facts, he proposes again to borrow for bounties. Borrowings for bounties are becoming the ordinary feature of the year's financial proposals and there is no apparent end in sight. The Minister proposes to borrow for these things that are becoming normal and regular, and that on the strength of a fund which is supposed to produce an amount calculated at no less than £716,000. If he can get that collected! It is not balancing a Budget to hand over the deficit to the local authorities.
The worst feature of this Budget is not the estimate of the questions which might be dealt with were last year's Budget balanced; but this year's Budget or any year's Budget, under the circumstances which the Government have now brought about, can never be balanced. I do not mean that this country is not equal to bearing the strain. I do not mean that if this country were taken in hand immediately it could not be brought around. Deputy Cosgrave mentioned here recently how much quicker is the process of decay than progress and building up. Decay has started and is running its length and the process of getting back is, year by year, becoming more difficult. The resources of this country which might recover now may eventually be strained in such a way that it will not be possible to bring the country back to the point at which it was some years ago.
Let us consider the situation in the country generally. Need I do more than refer to the promise of the reduction of the £2,000,000, merely for the sake of pointing the contrast with what has happened? Deputy Norton helped the present Government and presumably will help them again this year to pass taxes which will enable him to say to his supporters that their sugar and their tea will be taxed and that there will be taxes on their bread. Already they have taxes upon their butter. He will be able to say that he is helping the Government to put on those taxes and that he will continue to help them to put charges on their coal, in a word, he is helping to tax their bread, their butter, their tea, their sugar and their coal. Meat and bacon are taxed as well. These extra taxes have been imposed and the Government has continued to increase them.
The Minister may remember that he promised a reduction of two million pounds. But beyond the point at which he found the taxation the Minister has gone. He is going far beyond that point. By inflicting these charges upon necessities such as sugar, tea, bread, butter, coal, bacon and meat the Minister is taxing the necessities of the people. He has accompanied that this year with the statement that though all these things weigh heavily upon them the administration of the Old Age Pensions is to be tightened up, its administrative strings are to be tightened and what is being paid in old age pensions is to be reduced by £100,000. He is to reduce the money for the relief of unemployment assistance. The butter tax this year according to the last statement we have from the Minister for Agriculture is likely to cost the people a sum of one million extra. A sum of £300,000 will be required for the Wheat Subsidy. That is going to be found in a charge upon the people's bread. Those who are already in employment have had to suffer an increase in the moneys they have to pay into the unemployment fund. They have to pay into an unemployment fund in order to support those who cannot get work. And that is to cost £250,000 extra this year.
One section of the community has been bled more than others. That is the farming community. A saying was quoted here before with regard to a certain type of mosquito. It is said of them that they bite not to hurt but to live. What they want is not the people's pain but their blood. Deputy Norton may go before his constituents and say when bleeding these people that the blood is being taken from them for the necessities of their leaders. The Ministry are not anxious to hurt them, but merely because the Ministry must live and continue in office they are bleeding them. There is increased taxation which I stress following upon these items but there are other and much more alarming features. I have already spoken of the deficit of £716,000 in the annuities. The Minister knows that the local authorities with the arrears of rates outstanding amounting to over one-third of the total warrant, cannot shoulder this burden. The Minister believes that from the people who are crushed and broken down and who cannot pay half of their annuities, he can extract £716,000 and that in addition to that they can still provide the increased cost of government. He still hopes to get successful results. From time to time and for a little time revenue can be increased by extortion until in the end it begins to diminish from despair. How can any country stand what we have seen revealed here from those people who are in arrear with both annuities and rates? The Minister must confess his whole Budget speech is, in the main, a confession that Excise is still falling. But he walked very carefully around and away from any question of income tax receipts.
People who appear in this House, when outside the House are fond of telling their supporters that the country with which we are having our economic war is suffering also from this struggle of ours and that she is failing. Let us take one test. Last year the income tax in Great Britain was reduced by 6d. and it was also reduced here by 6d. This year the Chancellor of the Exchequer in Great Britain was able to say that on the 4/6 income tax he got more money than he previously got on the 5/- rate. In other words, there were signs of prosperity, of trade revival, and everything, enabling incomes to yield more on the 4/6 rate than they did previously on the 5/- rate. We reduced our income tax to 4/6 and what is the result? We are told we got in £4,206,000. In 1927-28, when income tax here was 3/- in the £, it produced £3,600,000 and the calculation on which we worked, and which was always borne out by facts, was that an extra 6d. brought in an extra £500,000. Suppose we had a 3/6 income tax in these years, we would have got at that rate, £4,120,000; but here, with an income tax which last year effectively was 4/9, because the lag of the 6d. remains out for the financial year, the Government got in £4,216,000. On the 4/9 income tax last year the Minister was able to achieve £100,000 more than the Cosgrave administration could have got from a 3/6 rate and the British, whom we are defeating, on a 4/6 rate can get in more money than in the previous year on a 5/- rate. That is significant.
We are told we have prosperity in this country; we are having a great change over in our economic fabric; industrial activity is becoming pronounced; agriculture is being helped out of its difficulties. Where is the sign of all that in the income tax? Where is the sign of it in the wages paid to agricultural employees? Where is the sign in the wages paid to industrial employees in the new or even in the old industries? Apart from the moneys paid to these people, can any one in the Ministry say that, owing to the increased cost of living in this country, even the wages these people are getting have anything like the purchasing power they had three or four years ago?
There is one other item which certainly should impose itself on the mind of any Finance Minister and should have drawn comments from him here to-day. In the last trading year there was an adverse balance of £20,000,000. It was an adverse trade balance of £20,000,000 on a total trade of £57,000,000. At the same time that the trade balance is showing an increase adverse to this country, this country is drawing home its investments from abroad. The bank returns show that. It would be a good thing for investments to be repatriated, if they showed signs of being used productively and remuneratively at home; but there is no such sign. The two jaws of that pincers are snapping on us—our adverse trade balance, as far as the visible items are concerned, is going up steadily year by year. Our total trade is falling; and the investments, from the dividends of which we used to bridge the gap, are being called in.
Apart from that, the banks reported this year that the tendency observable throughout the country last year for people to draw on their small savings in order to live upon them is becoming more pronounced. There used to be a complaint in this country about the cost of government. I remember when a serious attempt to discuss national finance was made by a man who, in the eyes of the Government of the day, was regarded as a great financier; he complained that in those days it took nine months of our total export trade to pay for the cost of government. What have we now? An export trade of £18,500,000 and the total cost of government, as shown by this white paper, is £36,000,000. Nine months of our export trade is no longer sufficient to pay for the cost of government. It takes two years of it to pay for the cost of a single year or less. Reduced to the irreducible minimum of £29,000,000, to which the Minister brought it down in his statement, if every penny gathered in from our export trade was put to defray the cost of government, it would fail by £11,000,000 to meet the requirements of the Minister in this year.
Has the Minister made any attempt to discover what is the national income at present? Again I refer to a comparison made. Figures derived from the census of production showed that in 1925-26 the wealth of the agricultural industry in this country amounted to £88,000,000 and in those days the cost of government, central and local, was £27,500,000. There was dismay, natural dismay, that the cost of government formed such a tremendous proportion of the entire national wealth or productivity of the country. That left out the investments from abroad. What is the national income at present? I have seen a calculation worked out in detail which brings down the cash value of the productivity of the farmer from £45,000,000 in 1929-30 to £26,000,000 in 1933. How much further decline has there been in the cash value of what the farmers produce? What is the value of what is produced in industry in this country, and what is the fraction now of the total that we are paying for government in this country?
Surely a Minister for Finance who is looking, not to whether his last Budget balanced, but whether future Budgets can balance, would have considered and told us why income tax has fallen and why excise has fallen. What are the incoming items that will tend to minimise this adverse balance of over £20,000,000? What is the decline in the balancing power of these invisible items if our investments abroad are being called home? Where is the sign of productivity either in agriculture or industry here? How does it come about, if we have a vast increase in industrial activity, that the Minister for Industry and Commerce must fall back upon the building trade to give him any figures over which he can stand for employment in the country? Has the Minister considered the serious encroachment there is upon the people's capacity to live by the increased costs that he has put upon them in a variety of ways—taxes, tariffs and everything else?
The Minister spoke towards the end of his speech of social services. Social services are ordinarily the winning card always playable. But the Minister knows, and the people are beginning to discover also, that if standards of living are beaten down, as they must be beaten down in the process of financing the huge cost of Government activity, it will not be long until the social services must follow the same downward trend now shown in the standard of living.
The Minister for Posts and Telegraphs, who controls the largest number of civil servants in the payment of the State, boasted the other day that, although certain civil servants could not be attacked on account of their contractual position with the State, he was aiming at getting a Civil Service with lower rates of pay. Is that only to apply to the Post Office, or is the Minister for Posts and Telegraphs, speaking in that fashion, speaking the mind of the Government? Whether the Government like that or not, have they come to realise that, carrying on as they are at the moment, salaries must be cut, social services eventually will go down and the burden of all this, now concentrated in the main upon the farmers, will have to be spread over everybody? The signs are on it; we have started this year with tightening the strings of the purse on the old age pensioners and cutting down unemployment assistance in respect of deeming certain people to be employed and putting them off the receipt of certain benefits. They are all significant, and if they marked clearly that the Government had at any rate learned that this rake's progress cannot be continued and that its necessary reaction is a lowering in the standards of the people, accompanied by a lowering of social services, it would be good, because, then, a halt might be called before we had gone too far.
It is almost cruel at this point to refer to old boasts, but still some mementoes must be given to the Minister. "When the British Government," as the Minister put it, contradicting his leader, "inaugurated the economic war upon us," the Minister on 14th July said:—
"He must stress the fact that, whatever the temporary inconvenience caused to Irish producers, this tariff on our agricultural goods, whether it be 20 per cent., 40 per cent., or 100 per cent., will be paid inevitably by the British farmers and the consumers."
Does he believe it? He went on to say, contradicting himself in the next sentence:—
"The trade relations between this country and Great Britain are such that for every penny piece she robs us of by tariffs, we can recoup ourselves by a tariff on her manufactures."
Have we done it? Deputy Norton, the aid of the Government in these emergencies, was called to London about that time and in an interview which he gave to the correspondent of the Sunday Independent, reported on 4th July, he said:
"If Britain adopts a policy of tariff reprisals, the Free State will not suffer alone. The people of Britain will also suffer."
Then, there was this grand pointed example:
"Take one instance—the British import of live cattle. The Irish Free State has practically a monopoly of that trade and that was the strength of our position."
I wonder will the Deputy lean upon that for strength at the moment? Apparently not, for, on 6th July, he advanced further to tell those who came to interview him that the British had recognised that reprisals were a bad policy, and then, he said—and one hates to mention it:
"I have a plan myself but I do not propose to disclose it for the moment."
That was in 1932. Surely Deputy Norton ought now to relieve the anxieties of people who built upon that plan, even though plans are ill-omened phrases in this House.
The Minister to-day finds himself caught for money. Does he remember the time we were promised more and more and more and more money, and why should it ever stop if you vote Fianna Fáil? I say that it is cruel almost to speak of these things, but that is what was said, and then precise statements were made in respect of one item of taxation alone. Let me refer to it just here and now. The President announced that the Free State Army was costing £1,500,000.
"Why? It was being kept solely for the purpose of keeping down the people, who, being denied representation in the national assembly, were thrown back on force."
It is now more than £1,500,000. Do the same conditions hold? Further, he said "the Gárda Síochána were costing £1,500,000 for the purpose of political propaganda." The present Minister for Finance, speaking at Killeshandra, announced that Fianna Fáil were going to save £9,000,000 by a repudiation of the Ultimate Financial Settlement and the abolition of the Army. The President was only going to cut it down but the Minister for Finance was going to save the whole of it.
That was only a statement.
These were fantastic sayings. Deputy Dowdall says they were only statements and not promises. He will probably dilate for us upon the difference between the two after a while. Those are the conditions we are in at the moment. We have our trouble. We were told it could never come. The present Minister for Industry and Commerce said that, of course, no such thing will happen, and all three now sitting there promised us alternative markets. We need only just pause silently and think about the alternative markets. We are still waiting for Deputy Norton's plan and while all this is going on, the Minister finds himself forced to come in here to-day with proposals for cutting in on the unemployed and on the old age pensions—and it may be necessary—for putting taxes upon wheat and tea and sugar, raiding the Road Fund and the housing grants. And he is going to tax tobacco.
He said in the end that possibly this country would be regarded as the only peaceful haven in a war-scarred world. I waited for that phrase or something like it. The Minister has always told us about prosperity waiting around the corner.
What about turning the corner?
It is a bad reputation that womenfolk have for being late. Prosperity must be feminine and as the Minister waits for her, it seems to me that this year he will wear a greater air of disgust, as if he knew by instinct that she was, as usual, going to be late for her appointment.
The Deputy talks from experience.
Not of the Miss Prosperity. The Minister told us finally in this, which should have been a serious debate, in which he might have attended to national income, decaying taxable capacity, the weight of taxation and the lower standard of living which he is imposing on the people, that you may read Culbertson but you will not get anything to affect these facts. You will. I suppose that present day Ministers could not think of holding kings or queens in their hands and I suppose that even aces would be dreaded as something of the Hitler or Mussolini semblance but the Minister might learn from Culbertson, at any rate, that you cannot go a grand slam on a handful of knaves and if that sounds awkwardly put, let me say that you cannot go the same grand slam on all the low cards in the pack— and I mean low, from the point of view of scoring value.
Intelligence, in the absence of experience, should have shown the Ministry that if you are going to try to keep up the same population in this country and have either only the same productivity or less, this standard of living has to be cut down. We are now definitely clear on that because the signs are there. The standards are down and they are going to be still further depressed by the impact of this Budget. The Minister might also have realised that when your adverse balance rises and when you are raiding your investments at the same time, it is an unhealthy sign, and the Minister might have still further realised that when your cost of government has gone to the point at which it is more than double your export trade, there is a danger mark flashing in front of you. Notwithstanding that, he introduced this Budget here to-day in a most casual way, with laboured jokes and with poor finance, and with no appreciation of the fact that it is not this year or even next year that we will have to pay for all this, because, when the process of demoralisation starts, it goes on quickly and the cure is very slow.
The Minister has asked us to co-operate with him in having a conversion loan. He will get our co-operation in anything sound in the matter of finance, but the Minister must know that people outside can read the signs of the times as well as the people in here can speak them, and if it is clear to those outside that this country is not operating in a sound way, and that this country has no capacity to pay in order to balance the enormous budgets which are being presented, he will not go before the people in anything except the rôle of a very necessitous type of beggar. You do not get good conversion loans in favour of people who present themselves as mendicants, needy, seedy and greedy, as the present Government are.
In many respects this Budget will be an unpopular one with the people of this country. There are many disappointing features in it. The most glaring point about it is the absence of adequate provision for the relief of the serious unemployment problem with which the country is confronted. In the course of his speech the Minister told us that £350,000 had been made available under Vote 69. He told us that we would find an additional £150,000 in the White Paper which was circulated last evening, but in the aggregate the sum made available for the relief of unemployment is not more than £500,000. The Minister indicated, of course, that additional sums were being made available in respect of housing and in respect of land improvements, but in any case, even when those figures are added to the sum of £500,000 which is being made available for the provision of special relief, I think the Minister will be compelled to admit that the gross provision is utterly inadequate for the special unemployment problem which we have to meet here. According to the latest figures published by the Department of Industry and Commerce, the Unemployment Assistance Act is now costing about £1,750,000 at the rate of expenditure which was in operation recently. Even if we were to absorb these able-bodied unemployed persons into employment, and pay only the low rates provided under the Unemployment Assistance Act, it will be seen that the provision made in this Budget for the relief of unemployment falls very much below what the real needs of the country are in respect of making provision for that unemployment problem.
Disappointing as was the provision for the relief of unemployment, the report of the Minister on the working of the Inter-Departmental Committee dealing with the problem of large-scale schemes of public works was more dismal still. The Minister indicated that it had been found that large-scale schemes would not meet the problem of absorbing the unemployed, and, passing from that, expressed the view that he thought a solution would be more likely to be found in the provision of moderate-sized schemes. But we were told nothing in the course of his speech as to what the moderate sized schemes were to cost, and I am still in doubt as to whether the £500,000 provided in the Budget is to represent the amount which the State is prepared to spend on the schemes of public works referred to in the Minister's statement. If it is, then I think that the provision for the relief of unemployment and the provision for public works on a large scale will be regarded as extremely disappointing; as not making any impression on the serious problem of unemployment; as barely touching the fringe of the problem and leaving not merely the hard core but a very substantial proportion of the problem undealt with, except in so far as the provisions of the Unemployment Assistance Act go any distance towards dealing with the problem.
There are other features of the Budget which do not make very heartening reading. We were told that, as a result of the issue of two unemployment period orders under the Unemployment Assistance Act, it is anticipated that a sum of approximately £300,000 will be saved to the Unemployment Assistance Fund. From that, apparently, we may deduce that it is anticipated that those who are put off the unemployment assistance rolls this year as a result of the issue of the unemployment period orders are going to yield up to the State this year, in the form of financial sacrifice, a sum of £300,000. The Minister, in the course of his speech, did not tell us that those unemployment period orders were justified. The last information which we had on that subject from the Minister for Industry and Commerce about a fortnight ago is that no special investigation was made to ascertain whether it was possible for the persons who were the subject of the unemployment period orders to obtain outside employment. The Minister for Industry and Commerce told us he just issued the orders; it was assumed there would be work available, but no special investigation was made to ascertain whether in fact the work was available. Apparently there was to be no provision in the order and no provision in this Budget for dealing with the cases of persons who are unable to get unemployment assistance benefit as a result of the issue of those orders, and who are unable to get the employment which the Minister for Industry and Commerce thinks is available but admits that he made no investigation to ascertain whether or not it is available. I think that asking the unemployed to yield up £300,000 in the form of denying themselves unemployment assistance benefit is an unjustifiable sacrifice to ask the unemployed people to make, and I think this Budget, if it were otherwise good, has certainly a very heavy black stain on it in respect of that particular provision.
We are told, too, that there is to be more rigid administration of the Old Age Pensions Act, so as to prevent persons not entitled to old age pensions from getting such pensions. If there is any case of maladministration in respect of old age pensions, or if there is any flaw in the Act by which persons are unfairly taking advantage of the conditions of that Act, we could understand the problem being dealt with, but if this £100,000 is going to be saved, not after a specific investigation of maladministration or as a result of the discontinuance of bogus claims made under the Act, but merely to balance the Budget, then I am rather afraid that the test of saving that £100,000 will be the needs of the Budget rather than the extent of the abuse that is disclosed in the administration of the Act, or in respect of bogus claims for pensions under the Act. In any case we have it that the unemployed are going to yield up £300,000 in respect of unemployment assistance benefit; the old age pensioners are to yield up £100,000, and in addition, on the same class of the community, there is to be imposed a tax on tea at the rate of 4d. per lb. and an additional tax on sugar. It seems to me that in looking around for new sources of taxation, the Minister did not pay due attention to the burden-bearing powers of the poor and needy section of the community, because we have in tea and sugar taxes which have always been admitted to be taxes which press most heavily on the needy sections of the community. In the special contribution which unemployed persons are expected to make, we have evidence that the making of that contribution by that section will impose a heavy and unwarranted burden upon them. In respect to old age pensions one cannot be sure that the provision is to cure cases of abuse. My great fear, from the way in which it was proposed in the Minister's speech to-day, is that it was done not so much to cure abuse as to raid that social reform for a contribution to the problem which faced the Minister in compiling his Budget.
These features of the Budget are a serious blot on it. They will impose a serious burden on the plain people of the country. They will impose a particularly heavy burden on the poor and needy people and to that extent I think the Minister might have scratched the surface much deeper before resorting to impositions of the kind I have outlined, or requiring contributions to be made by the sections of the community to whom I have referred.
The Minister told us that it is necessary this year to make provision for a widows' and orphans' pensions scheme. We were told last year that £250,000 had been made available in the Budget for the provision of widows' and orphans' pensions and the delay which has taken place in the introduction of legislation has never been explained satisfactorily. It seems to me, and this Budget confirms it, that the delay in introducing the Widows' and Orphans' Bill had more a financial explanation than it had an administrative explanation. But even the Widows' and Orphans' Pensions Bill, particularly in respect of pre-Act widows, will not make as serious a contribution to the relief of destitution as the Minister thinks. In any case, I do not think it is a justification to parade a Widows' and Orphans' Pensions Bill in a Budget in which old age pensioners will be required to contribute £100,000, the unemployed sections of the community £300,000 and in which all sections of the community, but particularly the poor and needy, will be required to accept imposts on tea and sugar which are the staple articles of diet of those people. As a matter of fact, if provision has to be made by the State to the extent of £250,000 to finance the Widows' and Orphans' Pensions Bill, then it seems to me that it is not the State that is providing that necessary financial support, but that the unemployed community, who will be sacrificed to the extent of £300,000, will in fact bear the State contribution for the Bill and give the Minister £50,000 over.
I think this Budget will make dismal reading among the poor people. There are other classes to whom this Budget will be satisfactory. It represents a raid on social services, a raid on unemployment assistance benefit, a raid on old age pensions, imposts on needy people by taxation on tea and sugar and possibly by taxation on flour, when we observe the Government dropping its subsidy for millable wheat and imposing a tariff on imported wheat. There are other sections of the community to which the Minister might have looked in order to help him to balance his Budget. The Minister might well have looked to other sections much more endowed with wealth than the unemployed and the old age pensioners. This Government at all events can claim that it has been very generous with the industrialists of the country. They scarcely ever meet without expressing their appreciation and admiration of the Government. Yet in this Budget, apparently a difficult Budget so far as the Minister is concerned, no special contribution has to be made by that section of the community. Instead, the unemployed, the old age pensioners and the consumers of tea and sugar are to make their contribution.
On top of it all the provision made for the relief of unemployment in the Budget is particularly disappointing and will be regarded as most disappointing by those who had expected the Government would have done something to produce a large scale scheme of public works. I do not mean by that a scheme of public works on a grandiose scale, but I do mean schemes of a widespread and of a socially valuable character. There is no evidence in this Budget that we are going to have large scale schemes of public works, because the money made available for the relief of unemployment, if that is intended to finance such schemes, would be only adequate to touch the bare fringe of the unemployment problem. I hope in the course of the discussion on the Financial Resolutions that the Minister will reconsider this Budget statement, that the poor and needy will not be asked to make the contribution which they are asked to make in this Budget. I think the Minister might well have looked elsewhere to find sources of taxation rather than resort to the raiding of the unemployed, asking old age pensioners to make a contribution and imposing taxation on the section of the community least capable of bearing that additional taxation.
I would like to say a few words before the discussion closes. What are the outstanding features of this Budget? It provides two new boons, £250,000 for widows' and orphans' pensions and a concession as regards the duty on pig carcases, amounting to £240,000. The two together amount to £490,000. As against that there is a reduction in unemployment assistance of £300,000 and there is also a tightening-up in the administration of old age pensions which is to provide another £100,000. It will thus be seen that the cutting down in old age pensions and unemployment assistance goes most of the way to pay for the new boons that the Minister for Finance is providing. What difference remains would be more than covered by, say, the new arrangements with regard to income tax, Schedule A., and the tax on cinemas. These two would be more than enough to take care of the difference between what the Minister for Finance is giving to the poor and what he is taking away from them.
A few weeks ago the Minister was telling us that he anticipated a comfortable surplus. What did he mean by that? Have we got a different terminology in this country from what other countries have with regard to surpluses and deficits? If you are told that a Chancellor of the Exchequer in England is going to have a surplus, you understand by that not that there is a small realised surplus on the year that is gone by, a surplus which is applied automatically to the reduction of the public debt, but that for the year which is to come the Chancellor of the Exchequer is going to have money in hand wherewith to make concessions and that he is not to be faced with a deficit which he has to make good by fresh taxation. What is the situation in which we find ourselves? I have explained how the new boons which the Minister for Finance is by way of providing are balanced by what he is taking away, with the addition of one or two of the smaller new taxes, and, on top of that, he is going to make dearer for the people of the country tea, sugar, tobacco, and bread. That is a very odd way for the Minister for Finance to behave if he has got a comfortable surplus, but that is what has happened.
Deputy Norton has well said that this Budget will not be popular. I am bound to say that I consider, to the Minister for Finance personally, that is rather a compliment than otherwise, because he, as distinguished from his colleagues, is not to blame any more than they for the general course of policy which has brought about the financial circumstances which result in this Budget. It is just as well that the Budget should be of a kind that would make the country face the facts.
Deputy Norton has complained that the Minister has not done more to extract the money which he requires from the wealthier classes. I have no doubt that the Minister has done everything which he could do in that particular, but he is in the uncomfortable situation that income tax has reached saturation point and that he knows if he increased it, the likelihood is that its yield would diminish instead of the contrary. In the circumstances in which he has found himself, I do not believe he had any choice except to impose taxes which will spread their burden all through the community. It is just as well that the community as a whole should begin to realise where we are drifting to, and it is just as well that the Labour Party should begin to realise where we are drifting to. This Budget fills them with horror. This Budget is their work perhaps more than the work of any other Party in this House because they had less excuse than any other Party for creating the state of things which made this Budget inevitable.
I am not so optimistic as to suppose that the expenditure forecast by the Minister for Finance in his estimates will be the only expenditure that takes place during the year that is to come. I have no doubt there will be Supplementary Estimates, that there will be more and more money needed for meeting the necessities that arise for healing the war wounds that are resulting from the economic conflict into which we so unnecessarily precipitated ourselves. The time has come when the followers of the Party opposite are themselves beginning to cry out that the burden of that conflict should be more equitably distributed and the Minister for Finance is making his contribution towards distributing that burden, because he finds himself in such a situation that he really cannot do anything else.
The Minister made a very long speech and a very ponderous speech, with a great deal of rather shoddy humour through it. I think it is a pity that he could not find time to present his Financial Statement a great deal more lucidly than he did and that he did not find time even to tell the House whether in the ordinary sense of the word he had a surplus or a deficit. Of course we have the use of our reason and it is perfectly easy for us to infer from all the new taxes that he had in fact a deficit. But as he was devoting so much time to the subject of the Budget he might have paid us the compliment of admitting that instead of leaving us to discover it for ourselves.
The Minister endeavoured to gild the pill which he is making us swallow by a great deal of rhetoric on the subject of world conditions and armaments, and we were invited to clap ourselves on the back and thank God we were not as other men because we were not participators in the mad race for creating instruments of blood and destruction. After all it might be worth while to ask why it is we are not participators in that race, why it is we feel safe. I think a little reflection will show us that the reason we feel safe from invasion is largely, at any rate, because we rely upon the protection of the British Navy, uncongenial as that thought may be to Deputies opposite.
I do not know any excuse we could possibly have for indulging in expenditure on armaments unless, indeed, we were to take literally the metaphors so popular with Deputies opposite in regard to the alleged fight we are making for the liberty of this country. If these expressions were to be taken literally, no doubt we should stop at once wasting our money on bounties to get our goods into the British market, and doing many other things that are not at all consistent with the relations that would exist if there really was a fight. We would not be having large sums of State money invested in British securities, and we would be spending money in building up armaments and preparing for the day when we would advance on the Six Counties and wrest them away by force from the British Commonwealth. But, of course, these metaphors are nonsense, and they are not to be taken literally, and if we are not spending money on armaments it is not because of any special virtue with which we are endowed, but because there is obviously no object that we have to gain by spending money on armaments. In point of fact, as Deputy McGilligan mentioned a few minutes ago, we are spending a great deal more money on armaments than the President and the Minister for Finance thought proper when they were in opposition.
We are in no position to sneer at the world in general because of the madness that infects them. We have had less excuse here for being led away by erroneous political and economic conceptions than other nations. The madness with which the world has been infected, as the Minister for Finance himself indicated in his oration, includes an absurd degree of economic nationalism. There was no excuse for that in our case. We were not, like other nations, threatened with the loss of our markets. Our export trade was more secure than the export trade of any other country in the entire world. We are rapidly destroying that export trade by our own folly. We see not merely a diminution in the total volume of that trade, but a constantly increasing adverse balance, an adverse balance increasing by terrifying leaps and bounds, and the general picture that surrounds this Budget is a picture of a nation forced by its necessities to spend more and more, with no prospect ahead but that of an increased expenditure and, on the other hand, a rapid diminution of the means wherewith to meet that expenditure.
The Minister for Finance has appealed to us to co-operate with him in maintaining and improving the financial credit of this country. Nobody is more anxious to see the financial credit of this country on a high footing than the members of the Opposition are. The last Government when they were in power worked to the very best of their ability to exalt that credit and I do not think that the record of the present Government when they were in Opposition was such as entitled them to give any lectures to us on the attitude that we should now adopt in regard to maintaining as high as it ought to be the credit of this country. We shall always co-operate and those for whom we stand will always co-operate to secure that the public finances are in the best state in which they can be. But it would be a false idea of patriotism and a very false policy in the long run for the credit of this State and the prosperity of this country to disguise from ourselves and from our people that the present economic basis of the Government's policy is unsound and must lead in the end to destruction.
It struck me in the Minister's speech that he now feels that he is up against realities. These were inevitable and while I have great sympathy with his concluding remarks yet I am surprised that the Minister and his Government did not give more service to the ends he wants to accomplish as disclosed in his concluding remarks. Briefly surveying the speech I notice he proposes to tighten up the old age pensions. I wonder is that a suggestion that he is going to reduce old age pensions, or does it mean that the administration of them has been lax; in other words, that he has known apparently that some people who are not entitled to them are getting old age pensions, or that some people are getting more per week than what they are entitled to? He must either mean that or he must mean that he must tighten up old age pensions generally. It seems strange to me that there is going to be a further tax on tea and that there are to be Excise duties on sugar. I think, when the Sugar Bill was before the House, I pointed out to the Minister himself, and to the Minister for Industry and Commerce, that the figures on which they were working were not sound. The bases on which they were working were not sound. It has now come to their knowledge that those figures were unsound and the Minister admitted it here to-day. I am sure the Minister is aware of the difficulty in which that Act has placed the country. However, it is part of the Government's policy. Without looking carefully into the future the Government rushed the production of all our requirements in sugar. I am sure Ministers have read the recent findings of the British Sugar Inquiry in which it is set forth that the British Government is paying the entire cost of the production of beet. That is what their bounties amount to.
The Minister finds himself now saddled with the entire machinery of producing all our sugar requirements. He expects to get revenue out of that commodity. That article is a necessary one for every human being in this country. It is a necessary article in various manufacturing industries. He proposes to tax it and counts on a certain revenue out of that necessary article of food produced at home, protected by tariffs and with home-produced raw materials for the industry. I think the Minister will have to get away from the idea of getting any revenue from sugar. Not only will he have to get away from the idea of getting any revenue from sugar but he will have to acquire the idea of subsidising sugar production so that the people of this country will get sugar at a reasonable price. The price of 3d. or 3½d. per lb. wholesale for sugar is too high and nobody was more eloquent than the Minister for Finance and the President in enunciating that view to the House and to the country a few years ago. There is in this Budget a big item of perhaps £100,000. That would be about the figure, I think, of the expenditure on that item last year, but it will not be an item of expenditure this year. I refer to the bounty on wheat. In future, I understand, it is the intention of the Government to have legislation that will provide for a percentage mixture of Irish wheat in the flour. The producers of home wheat will compete for that percentage and in that way they will fix their own price. Flour will not be allowed to be milled without having that percentage of Irish wheat in the grist. In that way the people will have to pay what corresponded to what heretofore was a bounty provided and collected by the Exchequer in taxation. The public will now have to pay that bounty indirectly in an increased price for their loaf and for their half-stone or stone or cwt. or sack of flour.
Are you sure?
Certainly. There is nowhere else from which it can come. If a percentage of Irish wheat is to be milled into flour there is no need for a bounty. Then a certain price must be paid for the milled flour. When that wheat is bought it is mixed with foreign wheat and the mixture is milled into flour. The consumer then pays in the buying of his loaf. He pays for the cost of milling plus the profit. He there pays directly what heretofore was paid by a bounty or its equivalent. I am only dealing with the principles of how prices will work out in future in an economic way. Personally, I have no fault to find with that. I believe it is the better way of doing it.
I must say that I had sympathy with the concluding remarks of the Minister. Events have happened in Europe in the last couple of months which have changed my outlook on the question of sugar production and wheat growing. I always believed in producing our own sugar and wheat, but I did not think it was sound economics to accelerate the production at a time when the wholesale price of sugar and wheat was so low. The best wheat is about 12/- or 12/6 per barrel at present, and we have a guaranteed price of 26/-. Normally, and in the conditions that obtained last year, I considered, and would consider now if those conditions still obtained, that it was very bad economics to rush the production of wheat for our own requirements, because we could not produce it at anything like what we could buy it at, and could use the land that we were producing wheat from to a much better advantage by producing other crops. But a new element has come into it. The Minister touched upon that in his concluding remarks and with the views expressed by him I am in 100 per cent. agreement. What I have in mind is that Germany is now armed and is producing aeroplanes and submarines, and I would not like to see this country in the event of another European war, which seems inevitable, not free to make its own decision whether it should enter that war with Great Britain or stay neutral. I hope Deputies who think otherwise will visualise the position in which we would find ourselves in the event of a European War, if we were only producing enough wheat to give us bread for a fortnight or a month or two months, or three months. What position would we be in?
How much would it cost to produce all the wheat we require?
I do not care what it would cost. I would pay the price to be in the position that nobody can catch me by the back of the neck and shove me into a foreign army that I do not want to go into. Let us consider the position in 1918 when the question of conscription became acute. The Deputy's family contributed honourably to the fight against conscription. Conscription of that kind cannot come again; but supposing we are an independent nation, Great Britain will not have the same responsibility to provide us with flour in the event of a future war as she was during the Great War. We were then part of the United Kingdom; now we are on our own; and we should show foresight in managing our own affairs and our own defence; because I look upon the producing of sufficient wheat as part of the national defence, rather than a part of the national agriculture. Supposing we found ourselves confronted with the position that we want wheat here to produce flour and we have not got it. Great Britain could say to us: "We will protect the trade routes; we will guarantee you Canadian or Argentine wheat, provided you put 500,000 men at our disposal." If we were confronted with that position, which seems to me most natural and inevitable, what would be our answer?
Deputy Belton is putting his finger on the spot. We are depending in this country on a European war to make a comparative success of the Fianna Fáil agricultural policy.
No, but we must provide for our defence.
What will you do if there is no war? You will be ruined.
I daresay the Deputy, who is a large business man, is not so foolish as not to have his business premises in Ballaghadereen insured. What is he paying insurance for if he will not have a fire?
That just describes your state of mind. I hope your insurance company reads that observation. You will find it difficult to renew your policy.
I hope they do. I do business with half a dozen companies.
You are well insured.
I am well insured. I must say that my standing with these companies is as high as the standing of any Deputy in this House.
It will not be after that declaration.
It will. We are insured, not with the hope or expectation of having a fire, but as a measure of precaution in case we have a fire so that we will not lose all. That is the position. If Deputies ponder over that well, they will not laugh so much. Some months ago I read on a Sunday morning that Germany was arming— not but she has a perfect right to arm—and that she was going to have submarines. The rest of them would like to stop her, but nobody is going to stop her. She is going to have submarines whether they like it or not. If it comes to a European war Germany will not look to see whether the tricolour is floating from the boat bringing us wheat; she is going to sink it at sight. We do not want to be short of three square meals a day. We do not want to have the black loaves we had before. We are not sure of having sufficient flour unless we grow wheat ourselves. Because of that, I say that not only is this policy sound from the point of view of national defence, but this policy should be accelerated at all possible speed. It is a cheap national insurance. I will be delighted to see Deputies who take an opposite view to that in the course of this debate putting their cards on the table.
The Deputy said it would be a cheap national insurance. Does he know how much it will cost per annum to grow what wheat we require in this country? If he does not, how can he say whether it is cheap or dear?
I think I have dirtied the pages of the daily Press on that subject as much as any man and I have not been contradicted once by any correspondent. I do not claim to be an authority, but I claim to know a little. I do not claim to be a master, but a student of national economics.
What is the figure?
It would take about 700,000 or 800,000 acres to produce sufficient wheat for our requirements. I should like to see us, as a precaution, in the region of 400,000 or 500,000 acres so that we would have six or seven months' provision made in case the worst happened. By a supreme effort then, we could in one year provide all our requirements. We cannot do it at the present time having so much leeway to make up.
What bounty would you give? £3 an acre?
No bounty; none whatever. I never believed in bounties. I would take a census of the crop that was down. I would calculate the percentage which that would be of our entire requirements and I would reserve that percentage, in the grist that would be milled, for home producers.
Then you would never know the cost.
Let the public bear the cost and the public will bear it. Why should they not bear it? Take the case of parents during the conscription years——
The Deputy does not intend to go into all the details of wheat growing, surely?
No, but I have been asked for costs, and I want to get away from it without refusing an answer. Not that I am afraid of it, but I was afraid of taxing the patience of the Ceann Comhairle too much—and apparently, I am at the breaking point. I am not afraid of giving an answer. If it is relevant—I do not think it is— to elaborate that point, I am quite ready to go on with it.
It is not relevant.
It is sufficient to say that I agree with that portion of it. I agree with the discontinuance of bounties and the substitution of a percentage reserve for Irish growers. That percentage should be such as would be measured by the area under cultivation and the reports on the crops coming up to harvest time. It can be easily mapped out, but I would remind the Minister that there is a hidden saving there to the Exchequer. There has been no relief in taxation, and I take it that if this legislation which I have heard of comes—I forget whether the Minister referred to it in his speech—it will be the fixed policy of the Government and the Minister is going to save the amount which last year he paid in bounties. There is, however, no corresponding relief in taxation. I should like the Minister to tell us, when replying, why there is not that saving in expenditure.
The Minister referred in his statement to some hydrocarbon oils. I have a shrewd suspicion that these are some kind of oils in common use in this country, but they are certainly not known by the name the Minister gives them. Would I be far wrong in suggesting that some of these oils are paraffin oils?
If they are used for driving motor cars, yes; if they are used for illumination purposes, no.
I remember often lighting a simply constructed lamp and going out to see if a cow had calved——
If they are used in lamps they are not being taxed; if they are used for driving motor cars, they are.
If they are used for tractors or for power purposes?
I do not know whether they come within the definition of motor vehicles.
Anyhow, may I take it that ordinary paraffin oil used for lighting purposes will not be taxed?
Yes, and in the case of tractors used for agricultural purposes, it will not be taxed either.
I presume they will be tractors started on petrol and driven on paraffin?
If they are used for agricultural purposes, the paraffin oil will not be taxed.
I wonder has the Minister convinced himself that sugar and tea are able to bear taxation. I think the wholesale price of sugar before this was 3d. per lb. That is too much. I quite agree that the cost of production of beet sugar does not warrant selling it at a price lower than that, but I think it is too much to put the tax on that. It is not good economics to impose a tax on a native product and a product which enters so largely into the food of the people and also enters so largely into industry as a raw material. I suppose the Minister is committed to it now, but if there is any chance of his retracing his steps, he should consider it very closely. We will have to pay more for our smokes, but I will leave that there.
I will not take the Minister into the sobering effect of taxes on spirits and so on, but he is going to borrow for bounties. We have been told several times that the farmer is getting back the double payment of the land annuities—and the double payment is not denied—in bounties. Now, if the farmer is to be told: "You will get bounties but you will have to pay your annuities two or three times and we will borrow on your credit; you will have to pay your share in the future; we are going to float a loan and we will pay you bounties out of that." the farmer will begin to wonder how many more times he will have to pay his annuities. Surely if equity enters into this at all, the farmer should get in bounties the equivalent of the British special duties.
I do not like to interrupt the Deputy but I should like to make this representation to him, that, on the General Resolution, there will be an opportunity of going into these matters. It is not customary on this day to make a long Budget speech.
I will not develop that point beyond saying that it strikes me as peculiar that when certain moneys are falling into the Exchequer, which, generally speaking, could be used to provide bounties, the Minister finds it necessary to borrow to provide those bounties. I do not want to develop that any further, as I appreciate, as the Minister has said, that further opportunities will be afforded for going more deeply into it and I suppose we will get ample opportunity, in the various subsidiary debates to this, to say all we have to say.
I just want to make one or two remarks, and will reserve any analysis of the various parts of the Budget for a future occasion. I must say that I welcome the changed attitude of the Minister for Finance, and his conversion to the principle that, as in Great Britain, we should vie with each other in inculcating confidence in the public finance. That, in my view, is one of the most heartening things in the Budget. There are other matters in the Budget statement about which the same cannot be said. I wish to enter my protest against the imposition of a tax on tea and sugar, and the continuation of the tax on coal. Those are commodities which enter very largely into the home economics of the working class people of this country. As the Government pretends to have so much sympathy and solicitude for the working people of the country, I was rather disappointed that the Minister could not see his way not to interfere in any way with the present position with regard to tea, and to refrain from taxing it to the extent of 4d. to 6d. per lb. The Minister in the first portion of his Budget speech appeared to me to be making quite an apology for past misdeeds. He spoke about our credit being as high as any in Europe. I agree with him that it should be, and were it not for the activities of the Minister and some of his colleagues when they were in opposition the credit of this country would stand still higher. It was frequently pointed out to the Minister himself when he was in opposition that he was crying down the credit of this country on every available opportunity which presented itself from time to time in this House. I do not want to repeat ad nauseam the proclamation of the Minister that he was going to reduce the taxation of this country by £2,000,000 per annum. We all know that that promise has never been fulfilled.
There is one matter to which, notwithstanding the jokes of the Minister about mixing his tea with whiskey—I do not think he takes whiskey, by the way—I should like to refer. The liquor taxes produced £108,000 less than they did in the previous year. It appears to me that this industry will one of these days go out of existence altogether if it decreases at the progressive rate shown by the lesser tax being produced from it. A number of people were expecting—possibly they might be considered optimists—some reduction in the liquor duty this year. However, in the present state of the finances of the country, and the large cost of public and social services, I suppose I am not exaggerating when I say they were optimists. Again, the fact that the Minister finds it necessary to tax tobacco to the extent of 8d. per lb. is another very unwelcome feature of the Budget. In conclusion, I want to say in regard to the peroration of the Minister when he referred to armaments, etc.—he spoke about the speeding of the plough and made certain references to other countries arming themselves to the teeth—surely the Minister must not have looked over his own shoulder. In this little country we had one small army, but we were not satisfied until we got another army. I wonder does the Minister contemplate now taking a lesson from Deputy Belton's speech about what is going to happen to us in the next war, and his rather intriguing statement about insurance and not having a fire. Is he contemplating building any boats to supplement the "Muirchu," or building any airships? I admit, of course, that an intensive wheat cultivation is a very useful thing and is a kind of national insurance, but there are other kinds of national insurance which we enjoyed for a considerable time, and I am wondering, in the event of this terrible and disastrous war which Deputy Belton spoke about a moment ago, whether, even with our two armies and the Navy, consisting of the "Muirchu," we would have any protection against invasion by any of those various powers with all their wonderful armaments. I must confess my disappointment at the continuation of the tax on coal and the other articles which I have mentioned. I do seriously hope that this will be the last Budget in which we will see those commodities taxed to the present extent.
I hope the Minister is now going to tell us all about the surplus.
Not at this stage. I suggest that we pass those Resolutions, and when proposing the final Resolution I will take the opportunity to reply to any points raised in the debate, and leave the Opposition speakers to open to-morrow.
Are we going to get anything to-day?
Resolution put and agreed to.