Finance Bill, 1935—Second Stage (Resumed).

Question again proposed: "That the Bill be now read a Second Time."

Mr. McGilligan

Last night I was alluding to the general comment one hears with regard to the financial difficulties in which the Fianna Fáil Government finds itself at the moment. One hears comments, generally of this type: In fact, although the Budget seems to lead to a different conclusion, there is greater prosperity in this country than ever before. There is prosperity in agriculture; there is development in agriculture. There is more wealth being produced in agriculture than heretofore and there is a grand revival of industry. If more workers have been employed then, obviously, more wealth is being produced. Other people, however, are not completely satisfied, because the words ring with a hollow sort of sound, even in the mouths of Fianna Fáil enthusiasts at the moment.

There is the second argument which was used last night, that in order to get out of the mess in which we have now been landed, we have only one resort—we must get back again and become part of the British customs area. Of course with that is joined the completely fallacious but clever argument, that to enter into any agreement with Great Britain about this period, would mean the destruction of any new industry which under better conditions of trading might have a chance of growing in the country. Both these things are, of course, entirely wrong. There were trade agreements with Britain before, trade agreements of a much more suitable type than have been got since. There were agreements—somebody referred last night to the necessity of being able to compete on an equal footing with the British in their own market—which not only put us on equal terms with any Dominion but gave us a definite preference for agricultural goods, and not merely for agricultural goods but for a number of industrial products also. There is no apprehension at all felt by anybody who knows what trade agreements with the British are, that any agreement regarding agricultural produce going into Britain must be countered by a British demand that all our tariff barriers or the most of them must be lowered. At the time when we were getting valuable concessions, the tariff barriers were mounting on whatever articles we chose to put them. After eight or nine years' experience dealing with these matters, I can recall no occasion upon which any comment of an adverse type was made verbally or by letter or in any way in relation to these tariff barriers. There is no dilemma. There is no question of the necessity of sacrificing any industrial activity that may be fostered here by means of tariffs in order to get back, even relatively near where we were, in regard to agricultural produce and the sale of agricultural goods in England.

The other point is, however, the important point. The thesis that Fianna Fáil orators have got to substantiate at the moment is that there is great wealth being produced in this country, more than ever before, that the country has never had such a chance of development, that the ordinary Fianna Fáil plans which were mooted have been helped to a considerable degree by the difficulties with the British, and that in fact they are going to attain their goal more speedily than they would have in the ordinary course of development. The question that the people who even say that, whether they believe it or not, have got to answer is this: There is a recognition, I think it is apparent to everybody, that the Ministry are in extremis. They have been driven to go around to scrape the butter off the people's bread. They have to go around with the crumb tray to whisk the crumbs off the people's tables. They have been driven more or less to dip into the tea caddy. They are taxing sugar, they are taxing tobacco, they are doing what Deputy Corry said, they are taxing the things that the people have got to live on, unless they do what the Minister for Industry and Commerce suggested, gaining no credit for himself—avoid taxation by refusing to partake of the commodities that are being taxed—tea, sugar, bread and butter, not to speak of tobacco, pictures and bacon. If they are not in the class of absolute necessities they are in the class of the simplest possible luxuries. These have got to be taxed.

The Parliamentary Secretary to the Minister for Finance who used to be so keen on wiping out income tax has told us here that his policy is that the working class should be taxed. He tried, of course, to put a gloss over that by saying that three-fourths of the people of this country are of the working class. He was discussing the problem in relation to the taxation produced from the necessities of which I have spoken, tea, sugar, bread and butter. He knows the reason that these taxes are spoken of in that way, that the greater portion of a poor person's income goes on these necessities, and that it has been always regarded as unsound to tax things which are necessary to maintain the people's lives and that it is only a Government in extremis would be driven to shift the burden of taxation from luxuries on to the necessities of the people. Let us get the contrast in a country in which Fianna Fáil would have us believe that wealth is being produced in a greater scale than before, that there is more money being made in agriculture and greater development in it, that there is more money being made in industry and that there is greater development in it. Why must the Government tax these necessities of the people if more wealth is being produced in the country? Why did they suddenly shift these taxes from the people who are making money on to the people who are earning wages, the greater proportion of whose means goes in expenditure on tea, sugar, bread and butter? There is, I think, something to be explained there. Of course, the answer which is not acceptable to Fianna Fáil is that there is less wealth being produced in the country, that the sources of wealth are declining, that the things that used to bring in the big sums of money in the country are going steadily. That answer cannot be accepted or confessed because it is a confession of failure.

The original Fianna Fáil plan was cleverly enough drawn even though it was merely a tissue of falsehoods from beginning to end in which nobody could have believed. It was cleverly enough drawn because it had to meet a variety of conflicting points of view. It had to say that there would be more social services, and when people's minds took the natural jump, and said that more social services would cost more money, then there came the other side of the picture and we had to say that two millions would be saved in taxation and that we would have an additional five millions by withholding the land annuities from the British. We had to say that taxation would be reduced at the same time that we had to say that the social services would be increased. We had to say that the money that would be withheld from the British would be used for the purposes of derating, and so forth, at the same time that we had to say that we would get a bigger and better market for agricultural produce, even in England. These were all promised. We could not have more social services without increased taxation unless we were going to say that we would save at least two millions on the existing services. We were going to have five millions as a result of withholding the annuities from the British, which were going to be used to derate agricultural land, and, in addition, we had the statement that we were going to get greater markets both in England and elsewhere.

The Ministry is back on the rocks. They know that social services cannot be provided except at the cost of the taxpayer. There never was anything in "the plan" such as the apologists of Fianna Fáil are driven to at the moment—the statement that, of course, you cannot have social services unless the people pay, or the statement that the people are getting more in the way of social services than what we are taking from them to pay for these social services. These statements, of course, would not have been good draws from the electioneering point of view. It would not have been good tactics to say that we were going to take more money from the people to provide these social services. The answer is provided in the Fianna Fáil Budget. As far as these food taxes are concerned, the answer is a very simple one. The land annuities were promised to the people of this country. They were to fructify and irrigate industry and agriculture. After that they were going to be used in the most helpful ways. After derating, there was going to be a reduction of a million in taxation. In addition, we were told Fianna Fáil were scrutinising the estimates and they assured us they would be able to achieve economies to the amount of two million extra.

Now, if these moneys were there, there should be available the sum of £3,000,000. Supposing the economies had not been made, or supposing that we had the economies made but that the money was not given in a reduction of taxation: that taxation was kept at the old level, we have £3,000,000, and that is the computation made of the main food items taxed in this Budget. The taxes on bread, butter, sugar and tea amount to about £3,133,000, so that if the Fianna Fáil promises could be carried out, or anything like them, we would have that money in hands and would not have to tax the simple necessities of the poor. Of course, we would not have to tax these things either if there was the production that we have been told of.

Again, I put the question that I have put frequently. There are three standards to be applied in any argument that we have as to increased productivity in the country. Let us take the industrial side. If there are more factories being opened in this country, more industries being promoted, that ought to show in three separate ways, and it ought to show in all of the three separate ways. First, there ought to be more workers employed in industry and not in some ephemeral passing business; secondly, there ought to be a greater yield from the taxation imposed on the country, on the people who have incomes, and this ought to show if there is an increase in the incomes of those who are deriving their money from industry; and, thirdly, there ought to be a bigger production of goods. If there is a bigger production of goods in this country than ever before, why is it that at this time, when we can only get £18,000,000 from foreign purchasers for the goods that we send out, that we have still to send out £38,000,000 in order to buy in the stuffs that, apparently, are not being produced at home?

I remember that when what is called the adverse trade balance rose, on the visible side, by about £1,750,000, the reason given for it was that there was an increase on the importing side. It is a strange thing that when we have a huge adverse trade balance we should add to it to the extent of almost £2,000,000. If we have more factories in the country producing more goods, goods that we used to buy from outside countries, there is that fact that someone has got to face and answer: that last year, when the increase in prosperity had reached a point that made Ministers gleeful about what had been achieved, not about promises but about what had been achieved, we find that we are sending out of this country £38,000,000, and the most that we can get in is £18,000,000. When people have an adverse trade balance they generally try to limit their imports. Sometimes they try to do both: to increase exports and to decrease imports, but it is easier, although it may cause a little bit more hardship, to stop goods coming in than to insist on your goods being bought outside. So far from doing that, we are increasing our imports by nearly £2,000,000. That has got to be related to the statement that in this country there is a bigger production of goods than ever before, and that, apparently, there is side by side with this industrial development —according to Deputies like Deputy Corry who have been fooled into the belief that that is so—more wealth being produced even in agriculture.

That is one side of the story. Co-incident with that, and desperately ominous from the angle of the future of the country, is this other surprising fact: that the money that we had invested abroad is being eaten in on. It might be a good thing, if it could be done, to have the money of a country invested abroad brought home if it is going to be invested profitably at home. Anyone who pretends that there is a growing prosperity in the country, and that this growing prosperity has brought home money that formerly was invested abroad, must surely answer the question: in what is that money invested, and where are the returns from it? Is it shown in a bigger production of goods, or of wealth indicated by the tax on incomes, or by a greater number of people being put into employment in the country? If you have co-incident these two matters: that the moneys from which you used to draw dividends in order to bridge the gap between the visible item that indicated whether your trade was adverse or favourable, and if you have to draw on those moneys that you have brought home, you are simply depriving yourself of those dividends as part of what used to bridge the gap. Therefore, if you are not getting increased production at home, you are suffering in two ways. These facts show, despite all the talk to the contrary, that the country is suffering in both ways: that the money is being brought home and has not fructified at home, and that it is not being invested. At any rate, if it is invested, it is not showing any yield. The income tax yield is down. It is far less than ever before. The number of people employed bears no resemblance whatever to the amount of money that is being brought home, and there is no greater production of goods here. If more goods are being produced at home, if the adverse balance on a visible item is high and if the dividends that used to bridge the gap there are being diminished, why did we send out of the country last year £38,000,000 and could only get in £18,000,000?

The income tax is the second test. No matter what may have been said by people like the Parliamentary Secretary to the Minister for Finance before, income tax is the fairest and the most equitable tax that the human community has been able to devise. It falls upon people who make money. There are certain exemption limits which enable people to live, there is a certain sustentation point below which the tax does not operate, but it sweeps away a certain amount of what is above that. In the year 1928-29, we raked off every pound that was made above that particular level the sum of £3,700,000. In our time, 6d. in the £ brought in £500,000, so that if the tax had been 3/6 in our time, instead of 3/-, we would have got in £4,200,000. Last year, an income tax rate of 4/9 in the £ was effectively operated, and yet all that the Government could rake in was an amount equal to what we got on the 3/- rate. Where is the answer to that? You have certain people making incomes. You take off, above a certain limit, a certain amount in the £. If we take our 3/- rate, and add to it the notional 6d. in the £ that used to bring in £500,000, you get on every pound charged in that particular way the sum which the Government should have got last year from the 4/9. Why has not the extra ? brought in the extra amount? I am leaving new factories and new production out of the question altogether. Supposing that there was only the old level of income —let us take it that no new factory had been opened and, consequently, no occasion for a big dinner at which some Minister could display himself and talk about the development of the country —why should not that 4/9 rate bring in £1,250,000 extra? That is the sum that it would have brought in in our time. Add to that the fact, that we have apologists at the other side of the House telling us that there is greater productivity than ever before and that there is more wealth being produced.

Mr. Moore

Is the Deputy taking net figures in both cases?

Mr. McGilligan

Certainly.

Mr. Moore

And leaving out arrears?

Mr. McGilligan

Certainly. The arrears fund that was going to be gathered in was £350,000 but the Minister promised in a particular year that he was going to make a bigger grab. The big drawing from the pool of arrears had been arrested and the Minister in 1932 put on extra taxation. I am making my case on the basis that everything was the same as before. The Deputy should not have asked me to go into the Minister's statement because he does not like that.

Mr. MacEntee

I should like the Deputy to continue on the lines on which he was going.

Mr. McGilligan

I hope the liking will last. Let us see how the Minister registers pleasure.

Mr. Moore

I should point out that I have not been reproved.

Mr. McGilligan

There is a nice way of doing everything.

Mr. O'Neill

You were only reprimanded.

Mr. McGilligan

I was dealing with the matter on the basis that there was only the same old wealth as ever and only the same taxation. We would naturally look for the same yield. In 1932, the Minister made certain changes in income tax, and here is how he introduced them:

"It is good to think that, even for a Minister for Finance, virtue may bring something more than its reward, because, as a result of this entirely beneficial rearrangement of the income tax reliefs and allowances, I hope to bring into the Exchequer an additional £35,000 this year and about £56,000 in a full year."

That was extra. It was not very much. The Minister went on:—

"By the other major change in the income tax law to which I have referred, it is proposed to make assessments under Schedule D on the recipient of a rent from business premises, where such rent exceeds the amount assessed under Schedule A on the basis of the valuation."

Listen to this, which represents the golden-ounce age of Fianna Fáil oratory, instead of the Golden Age:

"Owing to various circumstances, this change will only produce about £13,000 in the current year. We are planning for the future."

Get ready for the burst!

"It is a change, however, which, it is hoped, like the grain of mustard seed, will grow into a mighty tree, beneath whose foliage luckier Ministers for Finance than I will sit at ease to catch the glittering prizes as they fall."

Those were the changes made by the Minister in 1932. One of them did not amount to very much, but there was a glittering prize ahead for somebody. Apparently, the Minister is sitting at ease under the boughs waiting for the wealth that ought to be produced and which has not yet come. These changes do not make much difference except to show that any changes there were were towards getting in more money from income.

Let us get back to the basis of this calculation. When there were no more factories and no greater production of wealth, how does it come that a 3/6 tax used to bring in £4,200,000 and that a 4/9 tax now only brings in the same amount. Let us move forward a step. There is no doubt that part of the tax on incomes that comes into the revenue of this country is obtained from incomes derived from investments in Britain. The return from these investments has gone up. It has gone up to the point that, in England, the Chancellor of the Exchequer this year stated that he was able to get more, with a reduction of 6d. in the income tax, than he got from a tax of 5/- the year before. An increase of British prosperity is indicated by that. We are affected by that in so far as a great many of our people have money in English investments which are now yielding more. That is, again, because Fianna Fáil could not interfere with them. There is a class of the community with fixed salaries—civil servants and others—who pay their income tax with compulsory regularity.

It is extracted from them willy nilly —unless we are to assume that these people have had their wages or salaries lowered. I hope that nobody, in an era of prosperity, will think that that is a likely thing. These people are paying the same amount. The third class of people who pay income tax are the folk who derive their earnings from industrial development—from the wealth in the country. We are told that that is going up. The figures of 4/9 and 3/6 are two figures which should be kept in mind. A rate of 4/9 in the £ ought to yield more than a rate of 3/6 in the £. It ought to yield far more if there are more £s being earned. It would not be surprising to me, if there were the great industrial activity we have heard of, if it were found that a 3/6 income tax rate would bring in the amount that a 4/9 income tax rate did when there was not the same amount of industry. But, here, we have the peculiar dilemma that the position is reversed. The President said to me, as if it explained everything, that these factories took time to develop and that there may be no dividends being paid by them. Suppose there are not. If there is no destruction of wealth or lessening of wealth-making in the country, then a rate of 4/9 in the £ ought to bring in more than used to be brought in by a rate of 3/6.

What Fianna Fáil must nail themselves to is that there is more production and more wealth. Our balances abroad are being reduced. The money is being brought home. Where is it going? Is it going into industry? Are the people putting it into industry here and getting no dividends? If that is so, the gap that used to be bridged by these dividends from abroad is now failing to be bridged, to some extent, and that gap has got to be dealt with. There are two tests on which people can ponder and which they can argue about in this House. The adverse trade balance is up by the huge amount I stated and it is increasing. In our desperate plight, we still think it the proper thing—I think it is necessary—to send out of this country £38,000,000 at a time when we are only getting in £18,000,000. That £20,000,000 that used, in part, to be bridged by dividends from foreign investments, is not now being bridged, to some extent, because these investments are changing. The bank returns show that. In addition, we have the comment made by three banks around Christmas of last year—a fact which everybody knows—that the tendency observed in the countryside from May, 1934 for people to encroach on their small savings in order to maintain their lives was increasing. People do not draw out £1 or 25/- a week from deposits of about £100 or £150 for the purpose of investment. They invest that money only in clothes and food. We are putting a tax this year on the clothes and food that that money is being drawn out to buy. We are doing that, in the midst, as Fianna Fáil will tell us, of a glow of prosperity never experienced before in this country. If we simplify these questions of income tax and the adverse trade balance and get them thought over, they do form a useful corrective to any sort of lightheadedness that may grow up amongst the people when they think of Fianna Fáil promises and when they think further of what they are boasting of having done.

The third point is, of course, much more important. As far as the point about a greater production of goods goes, it may be, as has been said by way of excuse, that the factories are full of learners, that these learners are destroying but not producing goods, or else that goods are being made but put into stock because there is no one to purchase them, which is not an argument in favour of prosperity. But if money is being brought home here to invest in industry, and if there is consequently more industrial activity, there should, at least, be more people employed in making these goods. On that there is one sure test. The Minister for Industry and Commerce gave it as his test, and I agree with him thoroughly, that there is no better test of employment in industry than the rise or fall in the income of the Unemployment Insurance Fund. I have argued this several times. It is complicated by a series of figures which can, however, be made simple.

Let me start at the beginning. Employment which is classed as insurable occupation in this country includes everything except agriculture and domestic service. Every other type of occupation is an insurable occupation, and for every week that a person finds employment in an insurable occupation, a stamp has to be put on a card for that person. The money paid for these stamps goes into the Unemployment Insurance Fund. If a worker gets employment for 52 weeks in the year these stamps are value for £4 2s. 4d. For everyone who works in an insurable occupation during a year the Unemployment Insurance Fund swells by about £4. Let us reverse that. Every £4 in the Unemployment Insurance Fund represents one person at work in some insurable occupation for 52 weeks. Remember, no one can be in insurable occupation without these stamps being put on these cards, and the accumulated money flowing into the Fund. The moneys that go into the Fund are therefore a sure test. You can get different bases for comparison, if you take half-time or full-time employment, but it is easier to take the full time.

The Unemployment Insurance Fund is, therefore, a complete test as to how employment in insurable occupations has increased or decreased. On analysing the amount of that Fund there is, again, a slight anticipation, as in my time the contributions levied from employers and employees were lowered. They had to be raised again by Fianna Fáil. By so lowering them, I gave a present to industry in this country of a quarter of a million a year; I was able to do this because the moneys that were coming in in my time were so far in excess of anything that went out, that it became clear that the debt of that Fund, accumulated in the British time, would be wiped out in three years. I decided to fund that debt and to pay it off in ten years instead. Fianna Fáil had to go back to the old rates because of their impoverishment of industry.

The adjustment between the rates is easy and has been officially made. On 6th December, 1934, the Minister for Industry and Commerce gave figures in answer to a question put to him. Take the figures and remember that the last calendar year in which I had charge of the Fund was 1931. That year showed an increase over the preceding year of £45,000. Taking that on the basis of full-time employment, it means that in that year there were 11,000 more workers in industrial occupations than in the preceding year. There was a steady growth of employment during all the years of Cosgrave rule, but in that last year it rose to 11,000. Remember in that connection that the Minister for Industry and Commerce has stated that all the duties put on in our time were only revenue duties, that they were not intended to and did not protect. I do not accept that as accurate, but it improved the argument. With duties that were not protected, not intended to put people to work and intended only for gathering revenue, in the last year in which we were so operating we happened to get 11,000 more people into insurable occupations than the year before. Again, I stress this, that was only the last of a series of years in which the tot was rising year by year. Take now their activities. From 1931 to the end of 1934 the Fund grew by the difference between £744,396 and £819,797, that is, by £75,000. Divide by four and the result is less than £19,000. In three years, therefore, with tariffs, quotas, subsidies and Government credits, and everything calculated to bring about prosperity, the improvement has been at the rate of 6,000 workers a year, while by contrast in my time, when, according to the Minister for Industry and Commerce, there were no protective duties and no attempt to get people to work, there were 11,000 people put to work in one year.

Move on one step further. Building is an insurable occupation. Every person who works at house construction requires to have a card stamped. In October last the Minister for Industry and Commerce became somewhat frightened by increasing public comment on and anxiety about the ever growing numbers of the unemployed. He issued a statement to the Press in which he begged them to turn their attention from unemployment to the employed. There was this peculiar feature of that statement considering that it was the production of a Minister for Industry and Commerce keen on industrial development and proud of his achievements, that he referred only in a passing and incidental way to real industry and to tariffs, but concentrated—on what? The two things he held out for public notice were house construction and relief schemes. Everyone knows that there is at present a rather feverish burst of activity in house construction and further that we have not begun to pay for it yet. House construction is, in the main, a matter of borrowed money. It is further known that there is an attempt to tide over the impoverishment brought about by the Fianna Fáil policy by spending vast sums on relief work.

The Minister for Industry and Commerce does not appeal to the people to remember the industrial development that he has achieved, but he directed attention to relief works and to house construction, which is not an industry in the proper sense of the word. It gives occupation, but is not an industry in the proper sense. The Minister's comment on house construction was summed up in this phrase, that "in May, 1934, the estimated direct employment on house construction was 21,500." For every one of these 21,500 persons in such occupation for 52 weeks £4 went to the Unemployment Insurance Fund. If there were 21,000 people in such occupation, their contributions put £84,000 into the Fund.

To get this item properly related to my argument two other things had to be considered. First, was house building a seasonal occupation? I thought it was, and that there was much more work done in summer than in winter. Second, how many of the 21,000 were, in the Cosgrave period, engaged in house construction? I put a series of questions to the Minister for Industry and Commerce who was so generous and liberal in his estimates to the Press. He denied that he had the required information and referred me to the Minister for Local Government. From him I learned that the best that could be shown for employment on house construction in our time was 6,000, so that the 21,000 really represents an addition of 15,500 workers. I asked if it was a seasonal occupation. Obviously, the only answer I could get related to subsidised housing. For such houses I got the quarterly returns for last year, and one quarter of this year, and the surprising result emerges that there is little difference between the peak part of the year and the lowest. Roughly, it may be taken that house construction is not a seasonal occupation. There is always a lag, but as some houses will be nearer completion than others, those engaged can, in wet weather, be turned on to other inside work, so that you get relatively, a steady type of occupation all through the year.

At any rate, since it is steady, and when the Minister's figures show that there are 15,500 people engaged on house construction, this means that an addition of about £60,000 has gone into the fund on behalf of new workers, and represents people engaged in house building. The Minister's full tot is only a difference between £744,000 and £819,000—£75,000—and of that difference £60,000 represents house construction. For relief schemes the Minister stated that "in 1931-32 the amount expended was £182,000 while the Fund had risen to £400,000, and that direct employment had gone up by 4,400."

Another calculation has got to be made there. It is well known that the whole amount of money spent in relief schemes does not go in insurable occupations. I asked the Parliamentary Secretary on one occasion if he could tell me that even 50 per cent. of that money went in insurable occupations, and his answer was, "Undoubtedly"—that a minimum of 50 per cent. went in that way. He said that it was more than 50 per cent., but let us take it at 50 per cent. We have 2,000 extra people employed on relief schemes and 15,500 extra people employed on house construction, and the two added together give us what appears to represent this extra amount of money brought into that fund.

I am not saying that there is no development in industry. I know that there is development in industry. I know that certain people have been got into certain types of industrial activity at vast expense to the community, but that fund wipes out all difference between the one kind of employment and the other and it is clear that if there is an increase in industrial activity in certain types of industry, there is a corresponding decrease in some other types of occupation of an insurable kind that used to bring money to people and give them occupation. The net result of all this, after three years, is that the increased amount that the Minister's efforts have brought in to the Unemployment Insurance Fund is represented, in the main, by relief schemes or house-building activities. It will be admitted that relief schemes are, in the main, uneconomic. There is no real lasting benefit resulting from the majority of relief schemes. In normal times, people's attention, time and money would not be turned to relief schemes to anything like the extent in which such schemes are being carried out at the present time. With regard to house construction, it can be said that it is a desirable form of work, but it is not being paid for by the normal methods. The vast majority of the money being used in house construction is borrowed money; and the worst of that is that, naturally, the rents have not yet been struck for these houses. Whatever may be the result when they are struck, we know, at any rate that for a much cheaper type of house, such as labourers' cottages, there is a huge accumulation of arrears on even a payment of 1/- a week rent. If there is a huge accumulation of arrears at even 1/- a week, what likelihood is there of collecting rents that, on the moneys borrowed now, are certainly likely to be not less than five times that amount? We know that if five times that amount of rent were charged at the moment, it would not be paid, and, if it is not paid, that means that later on there is going to be a further addition to the rates paid by those who do pay rates, and we know also that in this year, apart from these houses, one-third of the rates was in arrears. Accordingly, we are getting the benefit in this Unemployment Insurance Fund just of the moneys brought in through the stamps put on by the workers engaged in house building, and we are not meeting the cost of it.

At the end of all this talk about industrial activity, we get back to these three points that I have already mentioned — firstly, there is no evidence in the Unemployment Insurance Fund moneys of any increase in industrial occupations of the sort promised; secondly, the income tax is now only yielding at 4/9 in the £ what 3/6 in the £ used to yield; and, thirdly, if there are goods being produced in this country, there is one obvious sign wanting, and that is that while we could only get £18,000,000 for the goods we sent out of the country we paid out for the goods we bought £38,000,000. That is happening at a time when, as I say, the other jaw of the pincers is meeting us also, in the fact that the dividends that used to come from investments abroad are no longer coming in to the extent in which they used to come, because the moneys formerly invested in that way are now being used, not for investment, but for the present use of the people to enable them to live. At a time when people are drawing on their bank balances to sustain life, we decide that we will tax the very things the people eat in order to sustain life, such as bread, butter, sugar and tea.

Mr. Moore

If the Deputy is right, the bulk of the people who would be drawing money from the banks would be food producers.

Mr. McGilligan

Food producers? Does the Deputy mean farmers? At any rate, it is useful to have the admission.

Mr. Moore

I said "If the Deputy is right."

Mr. McGilligan

I am only saying what the bankers themselves have said and what Deputy Moore can learn from any bank manager he cares to go to. Surely the food producers of the country are an element in the wealth production of the country, and, surely, the food producers of the country eat some of the food and drink some of the drinks we are taxing, and the majority of them do not produce either the tea or sugar themselves. However, we are putting people in that condition that they have got to draw upon what they saved in what they called the lean times, and now, in times of prosperity, as we are told, we have the funny position that they have to draw on these savings in order to sustain life, and still there is no sign of the industrial activity we have been promised. If there were any sign of that industrial activity, would it not show in some of the three ways I have indicated? I think it would show in all of the three ways, but surely it would show itself in some of the three ways? There would be more people engaged in productive industry and more money made in the country and, therefore, the yield would be expected to be greater from 4/9 in the pound than it was from 3/6 in the pound. Surely, also, if more goods were being produced in the country than ever before, there would be less necessity to buy goods from abroad? Yet, we have the adverse balance of £24,000,000 increased in 1934 by about £2,000,000 over that of the year before. Why is that happening? No sane people, faced with a deficit like that, would embark lightly on the purchasing of more goods from abroad. Yet, when the adverse balance was as high as it was in 1933 we decided to spend £1,750,000 more on imports. I think it will be admitted that it is the common practice of depressed communities to attack imports first in order to try to restore the balance. All sane countries follow out that practice. The first attack is always the closing down on imports. We have done the reverse. Why have we done so?

There are certain other figures which are of importance in this matter of the production in the country. Last night, we discussed some of the industries, and we will discuss these again on foot of certain statistical returns produced by the Government themselves. A return has been made of about 27 industries which are mainly protected—which are all protected by some degree of tariff, subsidy, quota, prohibition, or something of that sort. We have full returns for 21 of these industries. Let us leave the numbers of people employed out of the question for the moment and let us take only the wages paid. Let us take the wages so as to ascertain how far the purchasing power of the community has been increased by these industries. As between 1931 and 1933, we find that in a certain group of these industries there was an increase in the wages paid, and that in certain other groups there was a decrease. We find that, over all these 21 protected groups of industries, including grain milling, malting, sugar confectionery, tobacco, linen, woollen clothing, boots, hosiery, and so on, the net result, after two years, is that there is an increase of £25,000 in the wages for them. That is the best that even those returns can show and that is on a total annual wages of £4,000,000. The tot has gone up, after all these tariffs and protection and everything else, by £25,000. That is one side of it. What is the cost? It is one of the arguments of the Fianna Fáil apologists that these taxes on bread and everything else are necessary at the moment because the productivity of industry has enlarged to such a point that the taxation which used to be gathered from goods coming in from abroad has gone down and that, therefore, we have to meet the deficit in some other way. I said last night, when Deputy Corry was using that argument, that if he looked through these Estimates of Receipts and Expenditure, each of which gives the actual receipts of a particular year, he will find that the yield from customs since 1923-24, when it was £8,220,000, never went above the £8,000,000 figure until we got to the year 1931-32. Then it rose to about the same point, £8,257,000, but in all the between years—and our greatest activities with regard to putting on tariffs, or, as the Minister calls it, putting on revenue taxes, were round about the years 1925-26—it went as low as the £6,000,000 mark. It was round about £7,000,000, but it went to the £6,000,000 figure in some of those years.

In 1931-32, it rose to £8,000,000; in 1932-33, it rose to £9,331,000; in 1933-34, it was £9,689,000; and it is estimated for the coming year at £8,900,000, nearly £9,000,000 again, so that in our time, with taxes put on, not to protect, we are told, but only to gather in revenue, we kept it below the £8,000,000 mark. Since Fianna Fáil came in, it rose to £9,600,000 and is estimated next year to be only £44,000 short of £9,000,000. Yet we are told that it is because customs are declining that taxes have to be put on sugar, tea, bread and butter. Let us look at that customs item, part of which represents taxes on the consumers of manufactured goods in this country. Is there any relation at all between the £25,000 wages fund increase over two years and the £9,000,000 which we have to pay in customs duties, a great proportion of which is on protected articles? Would anybody say that the community is getting a fair return if they are paying their whack of what is represented by that £9,000,000 on the items of protective duties and in return the community is only getting the advantage of a wages fund increased by £25,000 in two years in respect of 21 out of 27 industries?

The building figures are left out and I am very anxious to see the return in respect of that because I want to interlock it with the argument I have been using that building is really the sole activity that shows any improvement and for that we are not paying. At any rate, there is a particular fact that people can bite in on, that so far as the community cost is concerned, the community benefit is shown by the scattering of £25,000 in wages and salaries, which is not reflected in income tax or in any other way, and, at the same time, there is an impost, which is characterised as a frightful one because it is a revenue producing one, which used to be £8,000,000 and which has been raised to £9,000,000 and at the worst is going to be cut down to £44,000 short of the £9,000,000 mark. Is there any relationship between the benefit to the community and the cost to the community of these goods? Industry can be developed by interfering with prices and by failing to control prices. There is no way of controlling prices, because these artificial methods of prices commissions have proved, in every country in which they were tried, to have been futile, and they have been proved more spectacularly futile here than anywhere else. You have only to let your mind run on the reports produced by the Prices Commission to see—and it is no blame to them—that they are struggling against difficulties which no body like that is able to get over except under stress of war when things can be done ruthlessly. We had a series of returns from the Department, in regard, for instance, to the development of fertilisers, referred to yesterday. We found that the use of fertilising stuffs in this country had gone down in two years by nearly £60,000—not surely a sign of productivity—and the number of workers was supposed to have increased by 150, but the wages they are getting had gone down on an average by £26 per annum. We have the same in the matter of clothing. The clothing industry wages have been reduced to a point at which—if this return is correct and I do not believe it is correct on this matter—the workers in that industry are getting less than 25/- a week. We were told yesterday by the Minister that the explanation —and it is partly an explanation— is that this includes workers, learners and apprentices, and also includes piece workers. But take this particular point of the 8,191 people supposed to be engaged in this industry. If you say that 4,000 are getting nothing as learners, there is not a wage of £2 15s. 0d. a week for the rest on this return. I think that return is fallacious and I explained why yesterday, but it is going to be used for one purpose. We are going to get somebody adding up all these folk who are supposed to be employed, when the wages side is forgotten and told that there is that employment. If you add in every person, you can get a big tot of people employed, but when you come to the purchasing power created by these people's work, you get the real test. In two years, we have £25,000 and the cost to the community is represented by that huge customs bill, which is, incidentally, the only thing that does not show any decline, and the fact that it shows no decline is an argument against those people who say that there is productivity in this country. If, despite all that, we have still got to buy those goods from abroad—surely the tariffs are high enough to overcome prejudice—there cannot be anything but sheer necessity that still drives people to them.

There is the other side of these figures, worked out in so many figures by Deputy Mulcahy in so many days' arguments that, in fact, if you take the old importation and the old home production in a variety of these things and add them together and the imports at present and the present home production and add them together, there is, in a big number of these, a definite lessening. Apparel is down by as much as £820,000. Ministers are fond of pointing to the decreased imports as a sign of greater productivity at home. It may mean that, but I suggest there is another answer to it. It may mean a lack of purchasing power at home, an inability to buy. When you find that, adding imports to home production and comparing, say, 1930 and 1931 with 1933, such a thing as apparel is down £820,000, it must be taken that it is due to lack of purchasing power. The same applies to fertilisers. In both imports and home production there is a decline. Taking it in quantity, there are nearly 60,000 tons less being used in the country than was used in 1931, and yet we are told that there is increased productivity in agriculture. There is not a sign that can be looked to as indicating increased prosperity. All the signs I have spoken of are to the contrary, and they all relate to matters which should be answered here.

In addition to this matter of not even succeeding in getting industry going, we have got into the position which a lot of other countries have got into through their attempt to interfere with the ordinary economic laws. We have industry now in such a position that nobody knows who is controlling it. Nobody knows when he is going to get his goods in; nobody knows when raw material is suddenly going to be taxed, or a licence given to some competitor to go in ahead of him. It is an amazing thing in this country, even with all the harum-scarum promises and fantastic economies put up in the Fianna Fáil plan, that we have beaten ourselves back in the end, as far as an attempt to increase productivity is concerned, to the one thing which is regarded in every country as the halfway house between private enterprise on the one hand and socialism on the other—that is, this matter of house construction; that and road making. Road making was always regarded as a matter for relief schemes. The only thing which the last 25 years have done for countries in distress is that they have turned rapidly and enthusiastically to this idea, that it would be a good thing to join together the confessed deficiency in houses, and the recognised unemployment amongst those who operate in that line of work. In nearly every country house building is becoming almost a State concern. Of course it had to become a State concern, because during the war private enterprise was crushed out of house building owing to the operation of Rent Acts in every country, and the fact that people were offered more lucrative ways of investing their money—in munition factories and other things of that sort. With people being turned from their natural activity in the building of houses, there was a big gap in the yearly production of houses, and the existing ones were falling into dilapidation and disrepair.

Then the State stepped in. There is something to be said for the State stepping in, in an open and clear-cut way. Take sugar beet, for example. We had an announcement made in the Dáil recently that certain civil servants are getting very big additions to the salaries which that Government used to condemn as too much, because they are put in control of commercial enterprise. We have a gentleman brought from abroad at a salary of somewhere in the neighbourhood of £3,000, and that by a Government which used to say that no man was worth more than £1,000 in this country. If you take the additions and concessions that are given to that man, he has got about £3,800, and it is not too much. Certain other civil servants, who have been put into that same business, are getting big salaries, and they are not too much. At least we know what they are getting, and in this House we can complain of it or applaud it, but what one must object to in industry at this moment is, that through all this system of licensing and giving concessions, there is nothing as clear as that statement which was made about the sugar beet business. Nobody knows who is getting the money. Nobody knows who is let in for a good thing. The Government has taken over—and even gone back on its old ideas with regard to what they did take over—the making of appointments to local posts by boards selected in an independent way. That was done because it was alleged that there was corruption, or that at any rate there was an attempt made to use influence in local appointments. Now, why hand over the making of small appointments at a salary of £150 or £300 to a selection board, and keep the governing of industry in the hands of the Ministry? If matters like reserve commodities are going to be tackled, why should not the State take them over? If they are not taking them over, why should there not be publication in this House of the people selected to run those reserve commodity industries?

Mr. MacEntee

That relates to the Department of Industry and Commerce.

That is obviously a matter of administration for the Minister for Industry and Commerce.

Mr. McGilligan

Let me conclude the sentence. He said: "When there are vast masses of capital employed in an industry, I will not destroy that capital." Will the Deputy tell me of any place where prices have been controlled except in war-time? Will he tell me of anybody who can say outside of war-time experiences, that it is possible to check prices? Is there any case where prices have been controlled except under the impulse of the ruthlessness of war? We are going along in this haphazard way. Wages are definitely going down. The number of people getting into industry does not show any great increase. The people are being taxed by the prices fixed on the goods they utilise through customs manipulation. In addition, the Government are now determined to tax the people's food. Surely, we must come back to that question which always requires an answer in the Budget—why, if there is prosperity, and if there are incomes to tax, must we resort to tea, sugar, bread and butter? Everybody who parades himself as having any democratic sentiment endeavours to keep away from the taxation of these things.

On another occasion I described the Budget presented by the Minister for Finance as a needy Budget, a seedy Budget and a greedy Budget. The three adjectives apply. It is indeed a needy Budget, because the Government are in sore need. They are in the seediest possible state. They started off gallantly with a grand flaunting of promises. Their election plans were full of them. They were greedy for office. Now, the needy side is uppermost. The need for money never more pressing. The Minister for Finance and the Minister for Industry and Commerce said about the coal tax that if they had not the £600,000 got from coal, they would have to get it from something else. That is what we have been driven to. No community has ever to resort to these expedients except they are in extremis, at the end of their tether, down to their uppers, riding on the rims. These are the matters that mainly fall for consideration here.

Production seems to be the aim in most countries except in this country. The Minister for Industry and Commerce and the Minister for Finance went so far as to tell us that very soon we will have no surplus cattle. I would like to ask them what do they mean by saying that we will have no surplus cattle. Does it mean, as it should mean, no surplus other than what we need to eat at home, or than what we need for breeding purposes for the production of further foodstuffs for home consumption, or does it mean just the surplus that will be required to pay the British the money the Government said they would take from them, or does it mean the surplus necessary to pay the British the extra £500,000 over and above what we gave them in the Coal-Cattle Pact? Why should it be a matter for boasting that we have reduced our cattle population to the position that soon we will have no surplus? Most countries want to be in the position of having an exportable surplus, but, apparently, we do not. We are told that we will soon have reached the position in regard to cattle when there will be no surplus. We are told that on account of the money spent on the slaughter of calves, we will soon have no surplus cattle. Is that anything to boast about? At one time we used to sell abroad a considerable amount of high-class quality tweeds. Would it be regarded as a desirable thing that we should reduce the manufacture of tweeds to the point when we will have no surplus to export?

We send abroad a certain amount of butter. We are paying at home almost double the price that that butter fetches in the city of London, and we are doing that in order to permit the Londoner to pay half the price that we have to pay here. Why is it not desirable to reduce that surplus in butter? If it is desirable in the Coal-Cattle Pact, why not in the case of butter, poultry, eggs and everything else? Are we to get to this position of self-sufficiency? Is that what we are aiming at? There is a comment made by a naturalist that if you happen to be in a boat far out from the shore, you find bees humming, flying and running all around you; distracted, but with an unfathomable purpose. That is how the Minister is acting—distracted, but with an unfathomable purpose. You have one Minister, like the Minister for Lands, running around talking about destroying the cattle trade, and you have someone else, like the Minister for Agriculture, saying that the man who wants to destroy the live-stock business is either a knave or a fool. They are all going round distracted and unfathomable, with eyes shut and battering into each other. If there was even an economic philosophy where you would have a clear aim; even if the economic philosophy were wrong, you would have progress. It may be downward, but, even so, the sooner you get to the bottom the better in some things.

Mr. Moore

Where is the good in having a surplus if you have no one to take it from you?

Mr. McGilligan

But there is. That is our point, there is some one to take our surplus. Deputy Moore is using Deputy Corry's argument of last evening—that the only way in which we can get into the British market is to become part of the English Customs Union. If you take meat stuffs and butter, you will find that about three years ago a sum of £330,000,000 worth of these things were consumed by the people of Great Britain. What proportion of that amount did we supply? It was less than £30,000,000. The British themselves produced less than £140,000,000. Their own production added to ours was about half of the total £330,000,000. Now that gap had to be filled up by imports. Even if that gap had been narrowed, there is still a big gap into which we can fit our foodstuffs. Deputy Moore does not believe that the consumption has gone down from £330,000,000 and that the home production has progressed from £140,000,000 to the point at which we could not yet fit in the £30,000,000 worth that we used to export to them. Suppose we can get back to the point of fitting in the £30,000,000 worth of our meatstuffs and butter? That is the only part we have to fill in. We do fill in a certain part. We may say that the cattle quota as a result of New Zealand having won a victory at Ottawa, has been reduced. That victory was won at Ottawa while our Ministers sat around and did nothing. New Zealand got the Ottawa quota and in the following year they increased that as they did in the year after. The amount by which they increased their quota represents what we are debarred from sending into Britain by the Quota Orders.

If New Zealand had not got away with the Ottawa spoils we would still be able to send our old quota to England. Can we do that? We can, without going into any customs union. I read yesterday an article from the Times on the Coal-Cattle Pact, where they said this: that if that Pact had not been made our cattle production would have contracted to a point which in the long run would not be good for either country. The British know what they want. They know the value of this country to them. They know the mutual value we are to each other. They buy our goods and we buy their goods. We can get on to a good footing there, and it is only nonsense to interject, as Deputy Moore has done, that we cannot get any market for our surplus. That market is there and we have a better right to it than any other country that is sending goods into England. We have a right even on the grounds only of what we buy from England and what we have to sell to her.

Remember that all this mess we are in was brought about because we started out to withhold from Great Britain a certain amount of money. This is the money that the President here a fortnight ago confessed that the English are extracting from us with more dislocation and with greater hurt than if paid freely. We have the orators of the Fianna Fáil Party going down the country and talking about the moneys we have kept from England. When they talk of these moneys let them be honest about it. We do hold back that money with one hand but we give it away with the other hand, and we are doing that with more dislocation and greater hurt than if it were paid freely. Remember at the end of that the President's despairing cry was: "As to this dispute with Britain I see no way out." The President sees no way out. Though your agricultural industry declines and your people are befogged because there is no place to which to send your surplus goods, the President sees no way out. With your decline in agriculture and in the country population, you have a corresponding decline in the towns population and in the wealth of the towns, because most of the population of this country are farmers, and if the farmers are dispirited and depressed you cannot get your goods made in the towns purchased. You have, therefore, a decline in the towns as well as in the country.

Remember this is not the worst Budget that Fianna Fáil may have to bring in. This is the top of the slope down. When we are half-way down in another 12 months it will not be merely taking what we have taken this year off the old age pensions and the unemployment benefits and the taxes we are imposing on butter and bread but there will be other duties. The warning has been given this year that the social services cannot go on. There is no sign whereby we can see an increase in productivity or an increase in wealth. So long as that is the situation we will be driven to tax the necessaries of the people. It is by taxing those that you must get the money to run the country and to provide social services. This money must come from a tax on the necessaries of the people. That is the position to which we have been brought. Then we have the slogan of the Parliamentary Secretary to the Minister for Finance that the working classes have to pay and that they will have to face up to that reality. That is the theory now which the Parliamentary Secretary puts before the House. The broad backs and the big backs of the wealth producers are to be bowed down beneath that burden. The wealth producer is to bow down beneath the weight that we are putting on him until he can stand it no longer.

Mr. Anthony

After the very exhaustive examination of the Finance Bill and the clear and convincing speech which Deputy McGilligan has delivered on that Bill there remains very little for members on these benches, whether their affiliations be to Fine Gael, Independent Labour or Independents. There is very little indeed to add to the very careful analysis of the whole Budget position that has been put before the House by Deputy McGilligan. However, speaking as an Independent Labour representative, I want to say that in my view, and in the view of the majority of my constituents, the Fianna Fáil Budget this year which will be operated, I take it, with the help of the official Labour Party, is one which is imposing on the poorer classes of the community a burden which they will find it almost impossible to bear. In saying that I am not alone expressing my own individual opinion, but in that opinion I am supported by no less a person than the leader of the Labour Party, Deputy Norton, and also by one of the lesser lights of the official Labour Party in the person of Deputy Corish.

I have said that this Budget inflicts a serious hardship on the people less able to bear those hardships, namely— the unemployed persons in the country, the under-employed and even those persons in continuous employment who are in receipt of a relatively low wage and who have to support their wives and families in a state of ordinary frugal comfort. All of these people are being hit by the provisions of this Finance Bill.

Deputy Flinn gave us a dissertation the other evening in his usual fashion and told us in effect that it was time this bogey of the unemployed, the poor, and the underpaid people was got rid of; that they should bear their share of any taxation imposed. Everybody knows that the poor man who pays 4d. or 8d. for tobacco is as much a taxpayer as the man paying supertax, though not to the same extent of course. We do not want a school-master's lecture from Deputy Flinn to tell us that.

I suggest that, in my attitude in relation to this Budget, the leaders of the Labour Party, consciously, subconsciously, or perhaps unconsciously, are at one with me. I have here a speech of Deputy Corish delivered in Waterford on May 31st, as reported in the Weekly Star. He announced, of course, that he was a good patriot, though I have never seen him on active service. It is very useful at public meetings now to declare that you stand by the national position. Before we used to hear a lot about the slave mind and about being anti-Irish and pro-British. Now we have a new phrase, “the national position,” adherence to which means that you are a full-blooded, green patriot. Deputy Corish went on to say:—

"The Labour Party was an absolutely independent Party, and if the Government passed any measure which was detrimental to the working classes, they would not hesitate to put them out of office if they could."

The leader of the Labour Party, Deputy Norton, also spoke at the same meeting. The newspaper comment is that his address was chiefly directed to criticism of the Budget. In the course of his speech criticising the Budget, Deputy Norton said:—

"It was a very bad Budget from the standpoint of the taxes which it imposed on the poor."

If there is any logic amongst the members of the Labour Party I should like to know how they can equate these two declarations—the declaration of Deputy Corish, which stated that if there was anything done in the Budget or otherwise that was detrimental to the working classes they would put the Government out of office if they could, and the declaration of Deputy Norton, that it was a very bad Budget from the standpoint of the taxes which it imposed upon the poor. Deputy Norton on that occasion went on to say:—

"In this respect the Government were apparently following in the same path as their predecessors. They now appear to be full of solicitude for the income-tax payers and were making the poor to bear burdens which should rightly be imposed upon the wealthy."

The Labour Party had, by way of camouflage, voted against certain items in the Budget, but they had as a body voted for the enabling resolution which empowered the Government to impose all the taxation embodied in the Finance Bill. They have the audacity to say to the people: "We condemn this Budget as a bad Budget," and, "We did not vote for putting taxes on the food of the poor." Yet they go into the division lobby here to support the Government which they had condemned at the church doors and the street corners. Deputy Norton, in his speech at Waterford, went on to say:—

"In a desperate effort to justify the imposition of taxes on foodstuffs Mr. Lemass stated that the cost of living was continuing to decline. No child who had come to the use of reason would believe that statement. In any case, the cost-of-living index figures issued by Mr. Lemass's own Department showed that the cost-of-living index figure for the last quarter was two points higher than the cost-of-living index figure for the same quarter in 1933, and the new increase in prices, as a result of the Budget, was sufficient to cause that figure to increase still higher."

He also quoted President de Valera as having stated that the heaviest burden should be put on the backs able to bear them. There is some conflict between the statement made in this House by the Parliamentary Secretary to the Minister for Finance the other evening and the statement attributed to President de Valera, because the President here clearly indicates that there is a class in the country upon whom the burden of extra taxation would fall heavier than on other classes.

There was a good deal in this speech which I should like to quote, but I do not want to weary the House with long quotations. There is just one remark which I should like to pass in that connection and it is this: This Budget, through the taxes imposed, has undoubtedly inflicted a burden on the poor which, admittedly, and according to the members of the Labour Party speaking in the House and in the country, the poor are unable to bear. The Labour Party have stated that if and when this Government or any other Government inflicted such taxes on the poor they would put them out of office if they could. They have their opportunity now, but they will not do it.

Mr. Everett

You prevented it yesterday on the coal-cattle pact.

Mr. Anthony

In that connection, I think Deputy Morrissey pointed out in this House last week that, on the matter of the land annuities which was then under discussion, when a vote was taken in the Labour Party a majority voted against the retention of the land annuities, and that majority included Deputy Everett who afterwards went into the lobby against it.

Mr. McGovern

This is an extraordinary Budget. The Minister for Finance has gone, in the matter of taxation, to the fullest limit that he could go. I do not know any sources of taxation that he has not explored. If the Minister fails this year to obtain the taxation aimed at I think it would be very difficult for him to secure new sources next year. I doubt very much if he will secure the money he has budgeted for this year because of the growing impoverishment of the people generally, and because of the condition to which the principal industry in the State has been brought. Notwithstanding all that has been said about the prosperity of the country the condition of the agricultural community is simply appalling. The seizures and sales throughout the country, and all the confusion created are not due, as the Government tried to convince the people, to any desire on the part of the people to evade their responsibilities and not to pay their debts, but are due to the inability of the farmers to meet their liabilities.

In the circumstances now existing, the Budget must be adopted, but it is in the power of the Government to change these circumstances. I know the Minister has no alternative to introducing a Budget of this nature in face of these circumstances. It is all due to a miscalculation of the effects of their policy on the country. They started out by giving certain promises to the electorate. These promises were based on a miscalculation. Now that the effects of this policy have been brought home to them, the result is very far from what they anticipated. The Minister for Finance is making an honest effort to balance the Budget as far as he can. It is a difficult task in the circumstances, and these difficulties will be increasing and multiplying from year to year. There is no question of that fact. The policy of destroying the sources of national income is making it necessary to tax the people in order to pay bounties on certain products. We are paying £113,000 odd for bounties, due to the destruction of the sources of wealth and income in this country. The Minister is imposing taxes upon such necessaries of life as tea, sugar, bread, tobacco and building materials. We find in the first schedule of the Budget that taxes are imposed even on such articles as cotton bandages, bandages which are necessary in hospitals and in first-aid remedies for people who meet with accidents. Taxes are also imposed on satchels for schoolchildren.

When we come to building materials, we find that on such necessaries as felt, cement and other articles as are not being manufactured here, a revenue tax is imposed—not, of course, to check building. The Government policy is to encourage building. They give a grant of £40, and, in some cases, more to encourage people to construct houses. They are giving this money with one hand and taking it away with the other. There is a good deal lost in the transition between the giving and the taking. There is so much waste because of administrative expenses. It would be much better if some of these commodities were not taxed, even if the amount of the grant had to be reduced. It would mean a saving to the people who want to build, and a saving to the taxpayers as a whole. It is all camouflage to give a grant and then to impose a tax upon every article used in the building of houses. There are many articles used in the erection of houses which are not being manufactured in this country or are not likely to be manufactured for a long time to come, and yet these are being taxed. Prayer books are also being taxed. I think a Commission sat here a couple of years ago, and it was proven before that Commission that manufacturers of prayer books in this country could never hope to compete with the manufacturers in Belgium. I believe that these taxes are not protective but that they are for revenue purposes entirely.

Then we have necessaries of life such as sugar and molasses taxed. There is a tax of 4/8 per cwt. even on sugar manufactured from home-grown beet. I think it will be readily admitted that the price of sugar produced in this country is much higher than that at which sugar was sold formerly in this country, even without the imposition of any tax over and above that price. In the time of the late Government, the Minister was very eloquent in his condemnation of a sugar tax although sugar was much cheaper then than it is now. He went to great pains and elaborated the subject in great detail in explaining what sugar cost an average family of five and what it cost the community as a whole. He explained how it bore much more heavily on the poorer classes because their consumption of sugar, as he argued and rightly argued, was so much higher in proportion to their income than would be the consumption of other people because, as he said, the principal meal with them was often substituted by a meal in which tea was used. We have in this Budget the price of sugar raised to a point, because of taxation, never reached before in this country. It has been pointed out in this House that there is a difference of 11/- per cwt. between the price of sugar here and in Northern Ireland or Great Britain. I think that this tax of 4/8 should never have been imposed on sugar. People who have been consuming sugar have been making a very big sacrifice in the assistance they have given to the beet industry in bounties and other ways, and in paying the extra price entailed by the home production of sugar. I think they have already made a very big sacrifice without being called upon to meet this imposition of 4/8 extra.

There are many parts of the country in which no sugar beet is grown and in which no factories have been established for the manufacture of sugar. These people are supposed to be deriving a great benefit from the home production of sugar but the benefit that they derive is that they have to pay 11/- per cwt. extra for their sugar. The same remarks apply to districts which do not grow wheat. That is all the benefit they derive from the Government policy of encouraging these home industries. They are prepared to make a certain amount of sacrifice to help home production but this imposition of 4/8 per cwt. as a revenue duty on home-produced sugar, is something that nobody can understand. The policy that has made that necessary is one from which the Government should turn. They should try to mend their hand. Sooner or later, they must turn back from the course that they are pursuing because the country will be unable to stand the strain. Raw fruit is another article that is taxed. I think that the health of the people would be improved by the consumption of more fruit. As some Deputy pointed out, the tax on fruit, taken in conjunction with the tax on sugar, must affect the consumption of jam, and the poorer people will be unable to pay the higher prices for these commodities.

I do not propose to go into the details of the Budget because I will have an opportunity later of doing that. The one thing that I want to stress is that the circumstances that make such a Budget necessary should be dealt with. The Fianna Fáil policy has destroyed the principal industry in this State and our principal source of income. It is that policy that has made all those duties necessary. Therefore, we should try to get back to the position when this country will be able to secure its national income as heretofore. Three years ago our adverse balance had decreased to something like £13,000,000. It was decreasing year by year. Now, it has increased to over £20,600,000. Deputy Corry told us yesterday that, having destroyed the principal source of our income, the Government are unable to use this £20,000,000 as a bargaining asset to make trade agreements. Deputy Corry taunted Deputy MacDermot because the latter said that this country had a bargaining asset with which it could make trade agreements that would be advantageous to this country. It is certainly a reflection on the ability of Fianna Fáil that, with this bargaining asset of over £20,000,000, they are not able to make advantageous trade agreements with other countries. It would be a strange thing indeed if other countries were to follow the example of our Government. Great Britain, for instance, depends on her foreign trade. Her population could not be maintained if she were to depart from the system that has been in operation there for more than 100 years. She has built up industries that make it necessary for her to export her manufactured goods to every country in the world. Suppose, for instance, some new political Party were to come into power in Great Britain and were to suggest that they should destroy their factories, destroy her trade in the export of manufactured goods and get down to what is known as a policy of self-sufficiency, what would be said about that Party or what would the people of Great Britain think about it? I think that such a policy would be regarded by the people of that country as one of madness, and I do not know what sort of institution would have to be devised in which to confine the people who preached it. I do not believe there is any Government in the world that would set out on such a wild and reckless policy as the one that we now have in operation here, the policy of destroying the market which took all our surplus agricultural products. Our calves have been destroyed as part of that policy, and we are denied the opportunity of disposing of our surplus agricultural products in a country that is disposed to deal with us to our advantage as well as to its own. And that is all because we want to carry on this fight, this so-called economic war.

I hope that the Minister for Finance will use his influence with the Executive Council and try to bring about a change in the conditions that make a Budget like this necessary. After all, there is no use in blaming the Minister because, in the circumstances that exist, he has done the proper thing in trying to balance his Budget. He has had to impose extra taxation despite the fact that it will bear very heavily on the people, but he has had to do that in order to keep the financial credit of the State right. The imposition of heavy taxes will not keep the State right unless the State is guaranteed its income, and, unless by trade agreements, means are found to retrieve the State from the position in which she now finds herself. At the present time, our national income has been cut down by almost £20,000,000 a year. But our adverse trade balance gives us a great bargaining asset, one which, if other countries had it, they would make great use of. Think of what Germany would be able to do with a bargaining asset such as we have. As it is, she has been able to make a bargain with the Free State in the proportion of 14 to 1. She is able to get £14 worth of her goods sold here for the one that she takes from us. The same is true of the United States and of some European countries. Great Britain, which is so often referred to in this House as the hereditary enemy of this country, is the one that comes nearest to us in the matter of parity so far as trade between countries is concerned. I think that steps should be taken to secure further trade agreements with that country and to re-establish the old trade relations. The British people are only too anxious to have trade relations with the Free State, because these would be to their advantage as well as to ours. It is more important to us than it is to Great Britain that the old trade relations should be re-established.

The Minister himself realises that, and, on occasion, has made some very fine speeches dealing with that question. Not long ago he drifted into the realms of prophecy. He predicted that we would soon have conditions existing between this country and Great Britain the outcome of which would be that our farmers would be quite prosperous. I do not know if he had the coal-cattle pact in mind at the time that he made that statement. I propose to give some quotations from a speech that the Minister made in Bailieboro' in August last.

I believe he must have had the coal-cattle pact in view at the time, and I am sorry it did not turn out as well as the Minister expected. The Minister first advised the farmers of Co. Cavan, who are practically all small farmers, to go in for breeding prize-winning racehorses. He did not seem to be taking well with his audience, and then he advised them to change their agriculture and get out of cattle. As he wanted a clap towards the finish, he tried to put the farmers in good humour by saying:—

No struggle was ever endured to victory without some sacrifice and some suffering. He believed that the end of the year would see the end of their suffering. Things were going in such a way in Great Britain that another year would see the end of the quota restrictions, and their cattle would be allowed into the English market at such a price and in such numbers as would establish the Irish agriculturist on his feet.

Apart from the actual Budget the cost of living has gone up owing to the fiscal policy of the Government. We were told last night that the taxation on wheat is to be used for paying pensions to widows and orphans. Widows' and orphans' pensions are to be the great excuse for the extra taxation imposed in this Budget. That total extra taxation will amount to £1,183,000. I understand, however, that during the first few years widows' and orphans' pensions will not amount to a quarter of that sum. Why are the widows and orphans being used as an excuse for finding this large sum of money? The same cry was used with regard to the old age pensions. What is to happen now? Are the pockets of the old age pensioners not being ransacked for money for this Budget? If the cost of old age pensions is to be reduced by £100,000 there is no guarantee that the deductions from the old age pensioners will not be further reduced. When the squeeze comes will the saving stop at that figure? Then we come to the tobacco tax. The Minister should be careful about interfering with tobacco, having regard to what he knows happened to beer and spirits. In his Budget statement he stated that beer and spirits were staggering along under a load of taxation. He pointed out that in five years the revenue from these articles had gone down by £1,126,000. That is an enormous amount of money, and the Minister should be aware that the tax on tobacco has reached saturation point, and that perhaps in future the revenue from it would be less.

All this points to the fact that we are coming back to some sort of sanity. While we cannot congratulate the Minister on his Budget, perhaps it is as well to be thankful that, at least, there is some attempt at last on the part of the Government to face facts. There is going to be borrowing for larger expenditure, and the Minister told us of the assets he was going to borrow on. One of the securities on which he was going to borrow, and of which he boasts a good deal, is the Land Annuities. Everyone knows the sort of asset these are, seeing that there is a controversy raging about the annuities, which has made the position very insecure for an asset on which money is to be raised. In his Budget speech the Minister said:

"This advance must be regarded as a first charge upon the unremitted balance of land annuity arrears which accrued prior to the May-June gale of 1932, which in turn are fully secured upon the lands in respect of which they are charged. That they should ever become uncollectable is not to be thought of, for if they did, all security of tenure and of private right and title in land would vanish in this country and we should have a position in regard to it comparable only with what exists in Communist Russia. I do not think that those who have been responsible for withholding those annuity payments in respect of which the guarantee fund has had to borrow, wish to bring matters to that pass, but in any event the Government is determined, for the sake of the general credit of the State, to enforce payment of "these moneys."

That threat is the security on which we are going to borrow money at a time when we have flying squads in County Cork.

Mr. MacEntee

We have seen less of the Deputy at sales in Marsh's yard.

Mr. O'Neill

You were told to keep quiet and to keep order. I conduct myself. It is nearly time you learned a little common decency.

Mr. MacEntee

Common honesty is what the Deputy wants.

Mr. O'Neill

I avoid personalities. I will make it painful for you if you do not conduct yourself, either inside or outside the House. I have shown from the figures I quoted that everyone must realise the very serious position we are heading for. The cost of living has gone up enormously, and it is increased by the taxation in this Budget. The cost of living represents a terrible tax on the poor people. I referred to the boasted opening of mills and to the extra flour from Irish wheat that will be brought to them in a few months' time. I calculate that the cost of bread here will be increased by 10/- a sack above the world price. In other words, the people will have to pay 1½d. more for the 4-lb. loaf, representing an increase in the cost of bread of £1,300,000. The Minister was very annoyed when I contrasted what he said when he first became Minister for Finance, "that there was money, and more money, flowing in," and his present views asking us to halt.

He asks in his Budget speech this year: "Shall we, too, join in the mad race and spend and spend and spend?" Of course he was referring to the European situation, but it is just as applicable nearer home. He is beginning to realise that the capacity of the country to bear taxation is becoming less as the people become poorer. I only hope that we have come to an end of the present policy, because we are all anxious to see a balanced Budget and to see the country paying its way. We should get away from talk about empty ideals and about Republican policies and forms of Government, because that will not keep this country going. A country, like an army, depends on its stomach, and the money to carry on. No matter what the Party outlook of a Government may be, a Minister should realise that money talks. It is money that makes it possible to attain prosperity when money is properly utilised. The Minister stated: "This nation has been given into our hands after centuries of sorrow." I think no period of its history will be so black and so miserable to look back upon as the years of the régime of the Fianna Fáil Government.

Mr. Coburn

This Bill and the Budget are really the one instrument by which the people can judge the policy of the Government. This Bill reflects the policy of the Government that introduced it. Speaking, not as a politician, but from the point of view of the country my chief criticism of this Bill is that it displays a great tendency on the part of the Government to enter into the every-day life of citizens. If one examines the Bill in conjunction with the speeches made by the Minister, and by members of his Party, one can come to no other conclusion but that this country is on the high road towards a 100 per cent. socialistic state. I am not saying that that would be a bad position. Possibly it might be good. My objection is that the Government denies that such a construction can be put upon their policy. Yet, any one who has given a little consideration to it realises that we are progressing that way for the past one and a half years, and judging by the Budget will continue to progress that way in future. The Government's policy is, at least, 80 per cent. socialistic. I am not going to argue about the advantages or disadvantages of socialism. That can be debated in another place. Experience should teach the Minister, the Government and the people that it is not the best policy. We had an example of it in much richer countries than this, and we know that the experiment turned out to be an absolute failure.

I think I pointed out here before that, when the Labour Government was in power in England, after two or three years the members of that Government were glad to get out. We have the same policy pursued to a much greater extent in that mighty Empire, the United States of America. I ventured the opinion, when President Roosevelt set out in his mad policy, as I considered it to be, of settling the unemployment question in America, that instead of decreasing unemployment the measures he was about to take would increase unemployment, and I think that there are signs lately that all is not well with the question of unemployment in that country. We, in this small country, are under the impression that, by the raising of large sums of money by means of taxation, we are going to solve this great question. In pursuance of that policy, the Government are going to raise this year £30,000,000 in this Finance Bill. Of course, that is not the whole thing, because, in my opinion, we have at least three or four Budgets in the various quotas and duties that are put on certain articles that are imported into this country and which do not appear in the Finance Bill at all. But they are going to raise £30,000,000 from a population of a little over 3,000,000 people. I want to put a query to the Minister for Finance and to the members of the Fianna Fáil Party and the Labour Party— in fact, to the people of this State— are we in a position to raise this huge sum of £30,000,000 from industry in this country and expect, at the same time, that the people engaged in industry can carry on those industries and give the same amount of employment as they gave heretofore? There, again, I think that anybody who has given any little study to the question at all must come to the conclusion that that is an economic impossibility.

The Government, in pursuance of their policy, as they say, of looking after the interests of the poor—and that word "poor" covers a multitude; it enables people to do things they could not do in other circumstances— say that a great part of this money is going to go back into the pockets of the poor. It has been stated also that the method of high taxation does not involve any great hardship on the people who subscribed it so long as those who spend the money ensure that a big proportion of that money goes back again to the pockets of the people from whom it was taken. Let us take the poor, for example. In my opinion, the Government give with one hand and take away with the other, and I suppose, when they refer to the poor, they mean that section of our people who are in receipt of assistance under the Unemployment Assistance Act. I presume that the arguments that will be used and that are being used by the members of the Government, when speaking to these people, are: "Why object to ¼d. increase per lb. in sugar when we are giving you 9/- a week under the Unemployment Assistance Act; why object to 4d. per lb. on tea when we are giving you 9/- a week under the Unemployment Assistance Act; why object to ½d. an ounce on tobacco and 6d. per cwt. on wheat? We are the people who are giving you that 9/- a week and are thus enabling you to pay these increases which we have found it necessary to put into this year's Budget if we are to get the money that will give you this assistance under this Act." I would like to remind the Minister and the members of the Fianna Fáil Party and, in particular, the members of the Labour Party, that there is a type of people in this country who may be poor but who are working at very low rates of pay and who are not in receipt of anything from the Unemployment Assistance Act. They are decent, manly people who want to live their lives in their own way, in a way typical of the way in which the Irish people always carried on their lives with dignity and self-respect. I put it to the Minister; the members of the Fianna Fáil Party and the Labour Party have they not made it much more difficult by means of the increases they have imposed on these commodities, for the fathers and mothers of such families to give their families what is their due? Is it not only right and proper to argue that by the imposition of these taxes the earnings of those people—respectable and decent people, people who do not want doles, have been considerably reduced in purchasing power? When I speak of ¼d. per lb. of an increase on sugar, I want the House to remember this fact: that in Northern Ireland sugar can be purchased at 2d. per lb. whereas the cost here in the Free State is 3½d. per lb. Therefore, the difference between the price ruling here and the price ruling in Northern Ireland is 1½d. per lb., and one can easily see the great difference in purchasing power that that one item alone makes as between Northern Ireland and the Free State. In the same way I can go down along the whole category so far as these increases in the cost of living are concerned.

Again, this high taxation must come from somewhere. Where is that somewhere? Is it to come from industry? Does any man of common-sense think that in the present position here in this country we can afford to subscribe £30,000,000 per annum, not taking into account the other large sums raised by the other means I have already indicated? Take the position of agriculture, which is recognised as being the chief industry in this country. There was a time in this country when the prices prevailing for agricultural produce were greater than the prices prevailing to-day by at least from 300 to 400 per cent. There was a time when barley was from 38/- to 40/- per barrel, when wheat was the same, when oats were from 25/- to 30/-, and when potatoes were from £8 to £12 per ton, and so on. There was a time when every other part of the agricultural economy realised prices in proportion to the prices existing for the commodities I have mentioned at that particular time. Compare the prices prevailing then and the prices prevailing to-day for agricultural produce and, taking into consideration the cost of living in this country to-day, one can see at a glance that the position is impossible.

It is the same with every other industry. I know perfectly well that it is a good policy to balance the Budget, and I know perfectly well that the Minister can say that when you ask for increased expenditure, you must have increased taxation, but on this question of increased taxation and increased expenditure, I want to ask the Minister a straight question: Who is responsible for this increased expenditure? Who held out the promises at the last general election and the previous general election? I can safely say here that I am not responsible for it, because, on every platform, I deliberately went out of my way to say what I believed to be the most unpopular thing any man seeking the votes of the people could say—that it is not the duty of a Government to solve the unemployment question. But you went out at the last election and told the people that if returned, you would get work and good wages for every idle man. The Minister for Defence even said that they would grow so fat as a result of the good wages that the doors would have to be widened to let the people in. Therefore, the Minister must accept responsibility for the increased expenditure. They told little farmers—men with self-respect and with the dignity characteristic of the Irish people—that if they voted for you, they would get a few shillings in unemployment assistance.

Thousands of men who never knew in their lives what a labour exchange was, as a result of the utterances of irresponsible members of the Government Party in order to get votes—and I speak now as an Irishman—have been encouraged to go to the nearest labour exchange and register in order to get a few paltry shillings. What an inglorious end and what an ignominious end to all the beautiful promises and high-sounding phrases we heard so much about a few years ago—Ireland a nation, great and grand, and the preservation of the dignity and the culture of the people of Ireland. That is the answer I give to Deputy Flinn when he flings across the taunt that those who object to increased taxation must also object to increased expenditure. I, at least, have not been responsible for that increased expenditure.

Again, we have been told over and over again by members of the Government, including the Parliamentary Secretary to the Minister for Finance, that if you want to reduce taxation you must also be prepared to effect economies in proportion to the amount by which you want taxation reduced. The Parliamentary Secretary should be the last man in this House to issue such a challenge, because, if my memory serves me right, he made the statement, when in Opposition here, that if he got a short three months to go through the various Departments of the Civil Service, he would effect economies amounting to £500,000. The Minister for Finance himself and President de Valera said, in my hearing, on many occasions here, that they would save anything from £500,000 to £725,000 on the Army and the Gárda Síochána. When those statements were made, neither the Army nor the Gárda Síochána was as popular as they seem to be to-day with the President and the Minister and members of the Fianna Fáil Party. Yet they said they could effect these economies. If those statements were correct on the day they were made, they are as correct to-day when the Government is in sore need of money and when economies would be very welcome.

It has been stated over and over again by the Government that the reason for imposing taxes on tea, sugar, wheat, coal, tobacco and all the other things that have been taxed, too numerous to mention, is because of the measures taken by the Minister for Industry and Commerce in regard to the starting of industries here and, thereby, to reduce the amount which the Minister formerly received from articles manufactured outside this State and imported here. That is one of the main reasons why it is necessary to impose these increases. I think the Parliamentary Secretary the other night made use of that statement and, of course, I would welcome that if that were really the position. It would be a good thing if that were so, but is that the case? If the figures are correct, as given even in this year's Budget, as to the amount the Minister hopes to gain from customs duties imposed on articles imported here the statement of the Parliamentary Secretary is not very convincing. There must be something wrong. Can it be that, notwithstanding the great activity shown by the Minister for Industry and Commerce during the last two years, the Minister still hopes to realise from £6,000,000 to £8,000,000 this year by way of Customs duties? What is the explanation? Can it be that after the last two or three years, notwithstanding the fact that there has been a wave of national principles and national ideals all over the country, there is a very large percentage of our people who, while shouting "Up the Republic" and wrapping the green flag around them still prefer to import foreign articles even at an increased price? That is the only possible explanation that I see. The very small minority in this country at present cannot very well be blamed because their numbers are so few that, even if they purchased all their goods from the far side, they could not possibly be responsible for a thousandth part of that huge sum. What is wrong? Is it that the Government on the plea that they are protecting home industries are actually imposing taxes on articles which are not manufactured here, and which will not be manufactured here for the next two or three years, even under the most favourable circumstances?

The Parliamentary Secretary, when twitted on this aspect of the Government's policy, stated the other night that they imposed those duties in order to prevent dumping, and one of the things referred to was cement. The Parliamentary Secretary made a very grievous mistake when he referred to cement as an article that could be dumped, because anybody who knows anything about cement knows perfectly well that you cannot dump any considerable quantities of cement here, to be kept over for any length of time, because it is an article that will not keep; the very air itself sets cement. Yet the Parliamentary Secretary said that he wanted to prevent supplies being dumped here that would cover two or three years, and thereby prevent progress in any industry which might be set up in this country to manufacture such commodity. Of course, any excuse is good enough. It is the same way with many of the other taxes that are imposed. The lives of the business people of this country are not their own. They are one continual hardship, between taxes and quotas, and not knowing when they will be able to get delivery of their stuff. The Government seems to be oblivious of where their policy is going to lead them. As far as I personally am concerned, I would not go out of my way to unduly hamper the Government, or prevent them from doing anything which, in my opinion, would be for the benefit of this country, but I do honestly say that a Government which sets out on a policy of endeavouring to do a thing which is impossible, and which has been proved to be impossible not alone in this but in every other country—that is that they can solve unemployment; that they can hope to interfere, as they are interfering, with private enterprise in this country, and continue to do that while at the same time expecting people who are engaged in industry to be able to carry on—is, in my opinion, pursuing a policy that cannot and will not succeed.

The sooner the Government recognises that fact the better. The sooner the Government, from the President down, get a little of that thing called moral courage into them, and tell the people the truth—that owing to the peculiar geographical position of this country, owing to the fact that our population consists of 3,000,000, and the further fact that our chief industry is agriculture, what is being asked of them cannot be given, and that the people must be prepared to make certain sacrifices—the better it will be for all concerned. To think that they can carry on as they are doing and give employment to everybody would be farcical if it were not so tragic. Time will prove the truth of what I have said. I stated three or four years ago, and I state it here again, that the Government which is foolish enough to mould its policy with a view to giving employment to everybody can only produce one result, and that is to increase rather than decrease unemployment.

There is one other aspect of this Budget with which I should like to deal, as it is one in which I am particularly interested, and that is the effect that this Bill, and, in fact, the whole policy of the Government, have upon a very important industry in this country—the building industry. The Parliamentary Secretary the other night made a passing reference, and an uncomplimentary one at that. When he was trying, I suppose, to explain his 22/- per week for the labourers, he thought fit to make little of one of the skilled trades of this country, namely, brick-laying. It was only a matter of a few weeks to learn that trade, according to the Parliamentary Secretary. If it only takes four weeks to make a bricklayer, then in my opinion it would only take as many seconds to make a Parliamentary Secretary to the Minister for Finance. To come back to the effects which this Bill has on building, it shows the short-sightedness of the policy of the Government that, whilst they are out to build as many houses as possible for the people, the measures they are taking are increasing the cost of those houses. There is a 5/- tax on cement—a commodity which is not manufactured in this country, and is not likely to be manufactured here for the next couple of years. Until it is, in my opinion this 5/- per ton should not be imposed. This tax means that when a builder tenders for a contract, if he calculates that he will use a thousand tons of cement he will have to put an extra £250 on his estimate. The same applies to all the other articles that are used in the building of houses.

I think it is a very short-sighted policy on the part of the Minister and his Government to put on any tax that would increase the cost of building because, remember that most of the cost of the building which is now being carried out by the Government has got to be paid back, and the Government has to realise the fact that the rents charged depend to a large extent on the cost of the houses, so that every additional pound that is being added to the cost means an increase in the rent Everybody knows that at the present time rents are abnormally high. While I do not want to be too optimistic, I agree with much of what Deputy McGilligan has said in connection with this matter, that as regards housing and the capital invested in the building of houses, repayment of which probably extends over 40 or 50 years, a serious position may arise owing to the fact that there is a great difference in the rents that will necessarily have to be paid for the new houses, as compared with the rents for the old ones. That particularly refers to labourers' cottages in the country. I hope it will not happen, but I can visualise a situation arising where people who are at present paying 2/- or 2/6 a week will not, when the pinch comes, continue for very long paying 2/6, while their next door neighbour or the person on the far side of the road pays only 1/-. That is one of the things which have to be reckoned with in Bills of this nature, where taxes are imposed on the materials used in the erection of such houses.

So much has been said on this Bill that I do not intend to delay the House much longer. In conclusion, I would advise the members of the Government to forget about their past and think of the present; think of the position existing at the moment in the country and endeavour in the near future to bring this country back to the position it once enjoyed. Above all, refrain from making rash promises such as you made on the occasion of the last election and in the previous general election. The fulfilment of such promises is reflected in this Budget—or at least their partial fulfilment. As I have stated already, were it not for those promises, much of the taxation imposed on the people would be unnecessary. Remember also that a great proportion of the relief given is only of a very temporary nature, that you will have to continue it every year, and that in the long run, if you pursue the policy that at the moment you are pursuing, you will find as the years go on that it will be necessary not alone to raise £30,000,000, but that it will be necessary next year to raise £35,000,000 and that it will go on increasing until you will be driven to the conclusion that the game is up. You will then, perforce, have to tell the people the very thing you should tell them to-day, and that you should have told them last year or the year before, and that that you must cut your coat according to your cloth. It is the only way out. Economic pressure is one of the things that cannot be fought with words, or even with the aid of a machine-gun. It is relentless. It haunts us day and night. Economic pressure is fast on our heels at the present time, and the only way to deal with that is to meet it boldly, not to run away from it. That is what is wrong with the present Government, they will not face it. They know the position of affairs in this country as well as I or any other member of the Opposition. For the sake of the country they should face up to that position. They ought to recognise the fact that you will never be able to restore the prosperity that existed in this country some few years ago until you restore the only market that this or any other country has for the moment, but this country in particular—the only market that will give a fair return for the surplus agricultural produce which our farmers find it necessary to export.

Mr. MacEntee

May I intervene for a moment?

Mr. J.M. Burke

There are three more Deputies who wish to speak.

An Ceann Comhairle

I am discussing the industrial position to-day in reference to taxable capacity, Deputy McGilligan quite rightly used some concrete cases to illustrate his arguments. At the end of one instance, of the nature of which the Chair had no previous knowledge, Deputy McGilligan referred to the Leas-Chathaoirleach of the Seanad, and to three Deputies of this House whom he did not name, as being concerned in a certain concession. That transaction, as put, might seem to reflect upon the honour of persons concerned, and I am allowing the Minister for Finance to explain the facts of the transaction briefly now.

Mr. MacEntee

I am not going to go on that line. It is not the reflection on the Leas-Chathaoirleach's honour with which I am now concerned. He is perfectly well able to defend himself. It is the reflection on me and the untrue statement made by Deputy McGilligan that I am concerned about. If I have to speak, it will be to point out that the Deputy made a statement which to his knowledge, was untrue, in saying I had primary responsibility under the Mines and Minerals Act. I do not intend to deal with only one case. I intend to deal with all the cases in which anything relating to the question of the leasing of State lands granted, proposed to be granted or requested to be granted to Deputies or Senators was brought to my notice. It will take me more than five minutes to do so. I will hold the House for three-quarters of an hour or more, because I intend to put all the documents on record now.

An Ceann Comhairle

The Minister for Finance states he has no responsibility in that connection. Having said that, he may reserve his other remarks.

Mr. Wall

I notice that the Minister said he proposed to increase by 25 per cent. the present poor law valuation on houses, and the reason he gave for imposing the extra 25 per cent. is that the valuations are out of date and that they do not represent the true values. I suppose, generally speaking, that is so, but in that connection I would like to direct the Minister's attention to the position of the county borough of Waterford. I think it was in the year 1925, at the request of the Corporation, a general revaluation of the county borough was carried out. Valuations were then increased by 15 per cent. I think that would possibly be more than the most recent revaluations carried out in the country. I think a valuation carried out in 1925 cannot be regarded as being out of date. If the Minister is not prepared to make an exemption in the case of Waterford County Borough—and I understand representations have been made to him in that respect—if he is not prepared to make the exemptions sought by the local Chamber of Commerce, he will be inflicting a very severe hardship on the citizens of Waterford. I would like to make a special appeal to him in that connection. I think it is a very special case. I trust he will give sympathetic consideration to the representations that have been made to him. If the Minister imposes a further 25 per cent. on the people of Waterford after their own recent revaluation he will be penalising them very harshly.

Mr. J.M. Burke

In view of the size, the population and the taxable capacity of this country, the financial proposals now being discussed will place on the people an appalling burden. It seems to me that the policy of the present Government may be summed up in the words of a very old song—

"We'll tax them up,

We'll tax them down,

We'll tax the country

And we'll tax the town."

There are so many different phases and aspects of the Finance Bill to be discussed and considered that it is almost impossible to pick out any of them for particular discussion.

Debate adjourned.

The Dáil adjourned at 2 p.m. until 3 p.m. on Tuesday, 18th June.

Dáil Éireann debate - Friday, 14 Jun 1935

Finance Bill, 1935—Second Stage (Resumed).

Dáil Éireann debate -
Friday, 14 Jun 1935