Finance Bill, 1935—Committee.

SECTION 1.

Mr. Keyes

I move amendment 1A:—

To add a new sub-section as follows:—

(4) Sub-section (1) of Section 21 of the Finance Act, 1920, as amended by subsequent legislation shall be construed and have effect as if the words "or serving a term of apprenticeship under indenture" were inserted therein after the word "establishment" where it now occurs in that sub-section.

At the present time parents who are in the fortunate position of being able to send their children to the university are granted exemptions. The object of this amendment is to secure that the same privilege should be extended to parents who are not so fortunately circumstanced and who have their children apprenticed in a profession of one kind or another. High fees have to be paid in respect of those children, and in many instances technical equipment for them is very expensive. The cost of their maintenance, during their apprenticeship period, falls as heavily on their parents as the cost of maintenance on parents who are able to send their children to the university. It is only fair, I think, that when an exemption is given in one case it should be given in the other. It is particularly desirable that the exemption that I am seeking should be conceded in view of the fact that our hope is to equip our young people to take up technical positions in many of the new industries recently established. A number of the positions in those new industries are at present filled by foreigners. Our hope ought to be to have them filled by our own people. I urge that as a strong reason on the Minister for Finance why he should grant the exemption that I am seeking for the parents of children serving a term of apprenticeship under indenture.

Minister for Finance (Mr. MacEntee)

I regret that at such short notice for which the Deputy, possibly, is not responsible, I am unable to give any hope that the amendment can be accepted. The matter is not quite so simple as it would appear. If we were to accept the principle involved then, no doubt, we would be driven to give further concessions. The amount that the Exchequer might lose in respect of this particular amendment might not be very large but, nevertheless, the repercussions of it might be extensive and might involve us in considerable loss. In any event, it seems to me that the position is this: that either those people who do send their children to be apprenticed to one occupation or another are in a position to pay income tax and are, therefore, assessed for income tax, or else they are not assessable for it. I do not know that, from the point of view of the wage-earning classes generally, the exemption would be very effective, because there are comparatively few of them who, I think, would come within the limits of income tax assessment. The main objection to the proposal at this stage is that we have not had time to consider it and, therefore, I could not undertake to do anything in regard to it in this year's Finance Bill. I will, however, have the matter looked into to see what exactly it would involve, and come to a decision when I have ascertained what the facts are.

Professor Alton

I hope that the Minister, when considering the principle involved in the amendment, will take a wide view of it, and see if he can extend it so as to cover all parents who have taken on themselves the burden of spending large sums of money in educating their children for the professions. They are a most deserving class of citizen. They spend large sums of money in educating their children for professions—doctors, engineers and even lawyers. They do that at great cost to themselves. In most cases they get no help, direct or indirect, from the State.

Professor O'Sullivan

Perhaps the Minister would give some indication of what his fears are if he accepts the amendment. If he were to grant the exemption, would he not be in quite as strong a position as he is at present? I do not think there is much point in what he says, that if he were to grant this concession he might then be asked to grant further concessions. I think the Minister will admit that he was extremely vague in what he said. He did not tell the House what other classes he had in mind which, he feared, might seek concessions if he were to grant this particular one.

Mr. MacEntee

I think Deputy Alton's speech is a pointer as to what my fears are: that the granting of an exemption of this kind would not be confined to the wage-earning classes who apprentice their children in some particular occupation, and that an attempt would be made to extend the principle to those whose children are preparing for the learned professions. It might be urged then that the exemption now proposed was not based on the inability of the parent to earn such a sufficient income as would allow him to pay income tax during the period he was maintaining his children but on the hypothesis that during the period of apprenticeship they were being educated. As I have said, I am not able to do anything about it this year. I will have the matter looked into to see what are the possible extensions of this concession, and what the probable cost to the Exchequer would be.

Amendment, by leave, withdrawn.

Sections 1 and 2 agreed to.

SECTION 3.

Amendment No. 1 (Deputy Mrs. Redmond and Deputy Wall) not moved.

Professor O'Sullivan

This amendment will be put down for Report Stage.

Amendment No. 2 not moved—to be taken on Report Stage.

Amendment No. 3 not moved.

Mr. Fagan

I move amendment No. 4:—

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

For the purposes of the foregoing sub-section and of sub-section (1) of Section 2 of the Finance Act, 1934, any house or buildings used or occupied by a person for the purpose of farming or working lands shall be deemed to be a farm house or a farm building.

A direction which is unnecessary. It is a sound principle in drafting not to err on the side of tautology.

General Mulcahy

What strikes me about the Minister's refusal to accept this amendment is that this increased taxation is going to fall on people who are actually engaged in farming—the people who, under another Act of this year, are being deprived of £100,000, given last year in relief of rates on agricultural land. I suggested to the Minister, when this fact disclosed itself, that the reduction of this £100,000 would bring to the farming population the particular kind of tax that has been brought to townspeople. There was a suggestion that the farmers were going to escape this particular type of increased taxation, but I urged that they were not, as the agricultural grant was being reduced. The Minister indicates by his refusal to accept a definition along the lines of Deputy Fagan's amendment that there are farms on which this particular taxation is likely to fall in its total weight.

Mr. MacEntee

Not on people who make their living by farming.

I will do that.

Amendment, by leave, withdrawn.

Mr. MacEntee

I move amendment No. 5:—

Before sub-section (5), page 4, to insert a new sub-section as follows:—

Where an inspector of taxes or such other officer as the Revenue Commissioners may appoint in that behalf is of opinion that the annual value with reference to which an assessment of tax is made on any tenement or rateable heriditament in pursuance of sub-section (1) of this section exceeds the annual rent at which such tenement or rateable heriditament is worth to be let from year to year, he may, notwithstanding that there has been no appeal under Section 5 of the Finance Act, 1929 (No. 32 of 1929), against such assessment and notwithstanding anything contained in sub-section (6) of the said Section 5, at any time before the end of the year of assessment grant relief by reducing such assessment and charging the tax on the amount on which it would in his opinion, have been charged if it had been assessed with reference to the said annual rent instead of the said annual value, and the said assessment as so reduced shall be final and conclusive for all purposes.

The purpose of the amendment is to enable inspectors of taxes to give relief, where the increased assessment exceeds the annual rent at which the property is let from year to year. Hitherto that relief could only be given if it was proved to the satisfaction of the Special Commissioners or the Circuit Judge on appeal. The purpose of the amendment is to ensure that taxpayers can secure relief.

Professor Thrift

What does the Minister mean by the term "annual rent"? Is it the rent the tenant would pay?

Mr. MacEntee

The rent which the tenant would pay if he were paying the rates and repairs.

Question put and agreed to.

Question proposed: "That the Section, as amended, stand part of the Bill."

Mr. Dockrell

I should like to call the Minister's attention to the increase in the valuation to five-fourths. That is a most undesirable form of tax. Even if it stands this way for this year it will probably lead local authorities to make representations that the balance between the Central Government and themselves has been upset. There is another aspect of that to which the Minister did not give sufficient attention. If there is one problem that requires attention it is housing. Housing for the working classes is proceeding as fast as the resources at the command of the country permit. That class of investors who purchase their own houses, and who are hit under this section, are the very class that the Government should be most anxious to encourage.

A return was issued a few days ago giving the housing work in each of the counties in the Free State, and in a table issued by the Department of Local Government and Public Health there is given the number of houses constructed by persons under the Housing (Financial and Miscellaneous) Provisions Act, 1932-34. Under the heading, "New Houses Completed," 12,000 is the figure given, and for houses erected by private persons and public utility services, the figure given is 9,000. That shows the enormous proportion of houses that are being built for the small class of persons who are especially hardly hit under this section. I suggest to the Minister that on every house put up for the working classes there is a loss which has to be paid off in one form or another. Now, where a house is put up for a private individual, no such loss is entailed. Even here in the City of Dublin, where there is a Corporation Small Dwellings Acquisition Act, there are really only financial provisions to assist those persons to own their own houses. If those houses were not put up, a great many more houses would be required to be put up by the local authorities, and I suggest that it is penalising the small and thrifty class of investor whom the Government should be most anxious to encourage.

I think that it was last year that the allowance of one-sixth towards repairs was done away with, and now you have the Schedule A raised to five-fourths. This is a most undesirable form of discrimination against an investor who has come to the assistance of the State in order to help them to solve the housing problem. I should like to suggest to the Minister that this form of special legislation against the owners of their own houses is most undesirable and that it will lead, probably, to a certain amount of curtailment of this class of purchasing power by private individuals in the future. I believe that, in the long run, it will defeat the object which the Government had in view, namely, the encouragement of the building of as many houses as possible. I ask the Minister to reconsider this tax which it is proposed to put on under this section.

Mr. Dillon

On this section, Sir, an amendment, standing in my name, was withdrawn for redrafting because, I understand, permission was given to reintroduce it on Report Stage. The object of my amendment was to avoid a flat increase of the valuation by 20 per cent. because of the obvious absence of equity in such a proposal. If it is fair to increase the valuation of a house, which was valued 30 years ago, before the war, by 20 per cent., it is obviously unfair to increase in the same way the value of a house that was valued 12 months ago. My suggestion to the Minister is that he ought to try to arrive at some scheme which would be analogous to the proposals contained in the Rent Restrictions Act, where it was laid down that the rent payable in respect of any tenement or heriditament on a certain day should not be increased except by a statutory percentage. The critical date was a date prior to the beginning of the great war. I think it was the 4th August, 1914, but I am not certain as to the date and, for that reason, I should prefer to leave it over till the Report Stage in order to establish an exact analogy between my proposal and the rent restrictions legislation. Some workable case may be made for the increase of valuations which have become out-of-date, but, in my submission, no case can be made for the equity of increasing the valuation of all houses by the same percentage without any regard to the time when the valuation was made. I suggest that the Minister ought to withdraw this or, at least, that he should indicate his intention of accepting the principle contained in that amendment and introducing an amendment of his own on those lines on the Report Stage.

Professor Thrift

I agree with the Deputies who have spoken. I think that this proposal is most unfair to those who happen to own property. In my opinion, it is most undesirable and it is very short-sighted on the part of the Government. This is a proposal which, not alone proposes to tax the income of a property owner, but strikes a direct blow at the capital of the house owner. Everyone who has bought a house up to the present has paid a certain sum for it, estimated upon what the cost of the house is going to be to him in upkeep and in the payment of rates and taxes; and, to give an example, for every house on which you put, by this means, an extra £5 a year, it will mean that that house will become to its owner worth the capitalised value of that £5 a year less when he comes to sell the house, because the new purchaser will only be prepared to give such a price as he thinks value under the new conditions. I think it is inequitable to follow such a course and to impose this additional cost on the property owner at present.

I think that the proposal of the Government is based, as the Minister himself said, on a fear that property requires a fresh valuation, and the only reason that can be put forward for that is that property, on the whole, is unequally valued: that some houses are valued at an unduly low figure as compared with others. If that is the case: if that is the foundation of the Government's proposal, I think it is manifestly only making things worse to propose putting a proportionate increase in the tax to which each property owner is liable. As Deputy Dockrell has pointed out, the ideas of the Government ought to be based on entirely different lines of thought. They ought to be trying to secure that the individual will become the owner of his house; but every move of this kind that they make, tending to make the burden of being a house owner greater, will tend to act against the wish of a person to become the owner of his own house. Furthermore, those people in this country who happen to have money to invest are in a difficulty owing to such investments not being safe or suitable up to the present, or not being what we might call trustee securities sufficient in magnitude to take the money which is in the country ready for investment. Therefore, those who, as trustees, are looking for proper investments, are very largely obliged in the nature of things to go outside the country for that purpose, and that class includes many private owners of funds. The Government, in my opinion, ought to adapt their policy so as to make it more desirable for such people to keep their money in the country, rather than to invest it outside. Every action of this kind which is a direct blow at the owner of property or land in the country tends exactly in the opposite direction. Therefore, I agree very strongly with Deputy Dockrell in saying that this proposal is an undesirable one. I think, as Deputy Dillon said, it is a manifestly unfair one, and in view of the Government's professed intention of bringing in at a later date some revaluation scheme, I think it is one that certainly ought to be postponed until they have had time to carry through that revaluation in a proper way.

Professor O'Sullivan

It is obvious, Sir, that the Government was in a hurry; it could not wait; and, therefore, it determined to take a step that must undoubtedly work out unsatisfactorily in a number of cases. We gathered from the Minister, and from pronouncements of various others on behalf of the Government, that there is going to be a revaluation of the property in the Irish Free State. That might have two grounds; first, that the property is too lowly valued at present; secondly, that it is unequally valued. Supposing it is merely too lowly valued, what is the inconvenience? That could be got over by increasing the rates or the taxes. The mere lowness of the valuation does not justify the expense of a revaluation. We must assume that if the Government is going to undertake such a serious and costly operation as the revaluation of property in this country it has reasonable grounds for doing so.

I think such conduct on the part of the Government can be fully justified only by the second reason, namely that, owing to the length of time which has elapsed since there has been any systematic and complete valuation of the country, all sorts of anomalies and inequalities have crept in. It seems to me that that is the only real justification if the Government is determined to press forward this scheme of revaluation. The idea of inequality or inequity in the present values attributed to property is the real basis of a revaluation. It may be —and it probably is—that there are all sorts of inequalities. It may be that, owing to the fact that the valuation of property has extended over a number of years, even though an attempt is made to keep the basis or the standards the same, it cannot be done, with the result that you may have two properties, both of equal value in the ordinary sense of the term, but one rated much more highly than the other. If there are in existence many abuses of that kind which have grown up in the course of years, that may be a good reason for the idea of revaluation.

What are you doing under this particular section? As Professor Thrift rightly pointed out, you are increasing the injustices as between man and man. In the case of two people whose property is of the same value, but one being rated more highly than the other, what you propose in this particular instance is to increase the injustice by making the difference all the greater. If I did not feel, as I do, that the real ground for revaluation is the existence of those anomalies, there might be some case to be made for this idea of revaluation before there is any valuation, because that is what it comes to; we are told that there is to be a revaluation of the country, but the Minister cannot wait for that. The Government is too hard up for money and it is determined to increase the injustices that already exist. That is what it is going to do. If there are grounds for complaint at present owing to the unfair way in which different properties are valued, those grounds for complaint are going to be increased. The injustices, instead of being diminished, will be increased. Again we have much the same example of the method of looking at things which was displayed when we were discussing Deputy Fagan's amendment—leaving the idea of equal handed justice between man and man out of account. That seems to me one of the principal arguments which can be brought against this section. Another has been mentioned during the Budget debate, on previous stages of this Bill, and by Deputy Dockrell and Professor Thrift to-day. Again, it is only an example of what the Government is continually doing. One Minister is marching one way while another is marching the other way. The Minister for Local Government is strongly advocating a policy of housing, but the Minister for Finance and the Minister for Industry and Commerce come down to this House and try to throw every possible obstacle, by means of taxation of various kinds, in the path of the Minister for Local Government in regard to his housing policy. There is no doubt that the tendency of a section of this kind would be to discourage housing. Whether a person has money to buy a house or whether he has to pay somebody else for it, it is the person living in the house who must ultimately pay. Therefore, it will hit everybody, and is bound to influence people in precisely the opposite direction in that to which the Government professes to be so eager to travel, namely in the direction of housing.

We have these two reasons then. The fact is that it increases the existing injustice whereas the aim or the idea of revaluation should be to do away with injustice. The Minister, in his Finance Bill and, more or less in his Budget speech, indicated that he could not wait until that was done. But he should have waited. If he had any purpose in mind other than the raising of money and the raising of money independent of any consideration of the justice of the method by which it was raised, he should have waited. It is not forestalling, as the Minister, if my memory serves me correctly, tried to imply. The scheme of revaluation does make the present conditions worse. Any decent scheme of revaluation should be a remedy, but in this connection this is not so. It is the very opposite. It increases the abuse.

As I am on my feet I think I am right in suggesting, in this particular direction, that the Minister estimated at £60,000 the amount that he was going to get out of this revaluation. Perhaps he would tell us the basis on which he arrived at that estimate. It is a matter, as properties now stand, that ought to be susceptible of being estimated. It ought to be susceptible of fairly exact computation. Possibly the Minister would be good enough to put the grounds on which the estimate was arrived at before the House. It is mainly because of the two reasons I have given that I am opposed to the section as it stands.

Mr. Cosgrave

The Minister is one of those who, along with a number of his supporters, occasionally referred to the former over-taxation of this country. I wonder if he is aware of the fact that the income tax and the excise duty on whiskey were the two principal items in that connection. The position the Minister has taken up now has justified that over-taxation. Because he is increasing the income tax on the basis of the assessment in operation during the British period. It is said that one of the causes for this new imposition this year—which really means to increase the charge which was in operation two years ago by 50 per cent.—is that it is so long since a revaluation took place in this country that most of the property in the State is undervalued. The old City of Dublin was revalued in 1914, only 20 years ago. Even the British Government did not then charge the income tax on the new valuation at once—if my recollection is correct. I venture to say that the old City of Dublin, as it then was, comprised possibly a quarter of the entire country as far as house property was concerned. The city was revalued in 1914, and any new buildings added since have been valued up to date. I do not know that the Minister is aware that in those revaluations there is practically no comparison between the new valuation and the old. I can give at least one particular case in which a house having been rebuilt somewhere early in the century was revalued about 1903 or 1904. The old valuation was put at £50 and on appeal it was reduced to £40. Subsequently, when the revaluation took place it was again put up to £50. That £50 under the one-sixth arrangement would have been liable for income tax at a shade under £42. Under the Minister's present proposal it will be taxed up to £62 10s. because there is added a fourth on to the valuation. So that in that particular instance, at any rate, the idea of revaluation does not hold. The house was valued at £40 in 1903. Under the revaluation of the City of Dublin it was increased to £50. That £50 was its full value. If revaluation took place to-morrow there would not be any increase in its valuation. On the basis of the Minister's equity plea the income tax charge in respect of that house is £62 10s. now.

From the point of view of equity we have to examine this measure in the light of circumstances. The Minister wanted £60,000 and he taxes tea, sugar, tobacco, everything that was available. On the last official Estimate of the Revenue Commissioners he said: "How can you give me £60,000 more?" The answer was "You took off that one-sixth some time ago; if you increase that by one-fourth it will give you the exact sum you require." I want to say that if that system of legislation is going to be pursued you are going to stop any enterprise in this country. There has been scarcely any more useful citizen in this State for a long period of years than the person who built houses. It is quite true that on many occasions he has been held up to public odium. House building was up to the time of the war a profitable and safe investment. There were companies which were interested in it. Since then, they have practically ceased operations and the result is that the bulk of the cost and the bulk of the need for providing the money has fallen upon the State and upon the local authorities. There are limitations to the borrowing of either the State or the local authorities. It was certainly satisfactory to know that those persons who put their money into house property continued in their operations and that it was regarded as a safe investment and so on. Directly this Bill passes it will become clear to those people that they will not know from day to day in what respect the taxation Acts are going to fall upon them. Then that source for the provision of houses is going to dry up.

Apart from that, there is the thrifty class who will be mulcted in connection with this particular tax. These are people who had balanced their accounts very carefully before they purchased a house. They are now faced with this extra imposition. With no other plea than that revaluation of the property of the State must take place within the next couple of years, they are being faced with this. Is it the Minister's intention that he is still responsible, after the valuation has taken place for reducing these charges or alternately, is he aware that the revaluation of the City of Dublin amounted to very little more than an addition of £200,000, if so much, on a valuation of £1,000,000? That is one-sixth. The Minister has taken away one-sixth from the allowances and added a quarter. The Minister has been estimating during the last couple of years that house property was not sufficiently assessed for income tax and that he ought to add on 50 per cent. to it.

Then there is the other anomaly and that is that you have old houses. A great extension of building has taken place within the last 12 years; that extension has been accompanied by an increased valuation on the houses. I know it myself. I was a member of the Dublin Corporation. Up to 1914, the Corporation had scarcely a single house constructed with a valuation of over £8. The houses that were constructed in 1918, 1919 and 1920 had a valuation of £11 10s. put upon them. That was not because of the increased accommodation but because of the increased cost of building. All these new houses had their valuations increased. The Minister will tell us that he has got to get this £60,000 and that if he is not to get it from house property he must get it somewhere else. In considering how taxation should be imposed and upon whom it should fall, particular advertence ought plainly to be made to the dangers that will arise from the new impositions.

I would say that the principal danger in this connection is that people will no longer have an interest in house property. Alternatively if they do, it is a new class of house-property owner that one will get—one that will pay for the property that is going to be acquired a lower sum than they would pay if it were not for this particular imposition. It falls unevenly and unfairly. It is practically a headline to other people in the country that they are going to be saddled according as the Minister requires money.

No social services would be hurt if this tax were not put on. If the Minister wants to know where to save money, he has two services in the State on which it is proposed to spend this year as compared with the estimates prepared for 1932, £500,000 extra, and these are the Army and the Guards. No interruption whatever of any social service will be necessary in order to do this. It may be—I hope it will not—that this particular imposition will cost the State far more than what is going to be levied upon the people in question.

Professor Alton

I wish a miracle could occur but I do not think it will. I wish the Minister would see the light as he did in 1929 when he expressed sympathy for the ordinary citizen and for the struggling taxpayer. I am afraid he is in the clutch of circumstance, or rather his Department is. For a long time I have known that a tax of this kind was one of the dearest ideas they had—one of the contributions that they would like to make to the happiness of the ordinary citizen. It came up before several times. Of course the tax this year is only a sequel to what occurred last year. Last year the small concession of one-sixth which was made to the owner-occupier was withdrawn. Reasons were given. It contributed very much to facilitate administration. It was very hard to make this little subtraction. That was one of the reasons given to us. This year the account is going to be very difficult. It will be very hard to add this one-fourth, but they are not afraid of that. They are simply going to cut a little nearer the bone in shearing the unfortunate tax sheep. I know it is useless to protest.

The social and legal undesirability of imposing a tax of this sort has been pointed out clearly and eloquently by previous speakers. If there is one idea which we should encourage in this country, it is that every man should own his house. Thrift ought to be encouraged in every way. But this is a penalty on thrift. Indirectly, I can see many undesirable and serious consequences arising from this particular tax. The Department of Finance is taking upon itself another function— the function of a valuation officer—and is proceeding to put on a valuation which, as has been pointed out, is obviously unjust—a valuation on a flat-rate upon houses which have been valued at different times and from different standpoints. One of the consequences that arose from the action of the Minister last year is going to appear in an aggravated form this year. The ordinary humble occupier-owner has still to think of keeping his house in some kind of repair. He will find it very difficult to do that. This increase, which I am sure the Minister will point out is a trifling increase, will certainly interfere with the question of repairs and upkeep and directly lead to unemployment. I know of two instances in which the action of the Minister last year in withdrawing the one-sixth allowance made occupier-owners postpone their repairs. Repairs should be carried out every three years or every five years, if it is possible to carry them out. I ask the Minister to look at that aspect of that matter.

There is one reason why the allowance of one-sixth, so far from being withdrawn, ought to have been increased—the cost of repairs and upkeep under modern conditions has materially increased. I do not think the Minister has considered that, but it is a point that should be considered. However, I think it is useless to speak on this matter. The Minister, who saw the light in 1929, has lost it. I am afraid he is proceeding to salt the seeming rich in this country—the unfortunate man who happens to have saved enough money to own his own house or who, perhaps, in many cases, has not paid for it.

Mr. McGilligan

The Minister was always something of a house-wrecker. In his first Budget, I remember, he started with an attack upon house property. I do not know if the House remembers the picturesque phrase he used. The first little attempt upon the Schedule with regard to house property was going to bring in a very small amount of money but, like the mustard seed, it was going to grow into a great tree, until some other Minister, more fortunate than he, could catch the glittering prizes as they fall. We do not know what that little seed grew to. We do know that there has been a fair amount of digging at the roots since, a fair amount to prune and transplant from it. Last year we got a further addition to what the Minister did the first year. Now we have the third step.

The Minister cannot get away from the calculation made, mathematically accurate, that as a result of his operations, the amount that a person will pay in respect of house property in the coming year will represent an increase of 50 per cent. on what he was paying two years ago. That is done against house property. The phrase was used about soaking the rich who have come across from other countries. We have been given to understand that this is a Christian community which was going to be better christianised under Fianna Fáil auspices by the better distribution of property, and, particularly, that the settling of people into the possession of their own houses was a laudable object. And the way these people are being rewarded for getting their stake in that way in the country and for getting possession of a house, is that they will have to pay on a valuation which has been increased by what, in fact, amounts to 50 per cent. Further, the point is to be noticed which has been made previously, but which I want to stress, namely, that this, although introduced in context in regard to anomalies in valuation, really does nothing except to magnify the anomalies. There are anomalies in regard to valuation of property, and different types of houses, in any one of the towns in the country. The houses that will be hit the hardest are those recently built and subject to modern ideas of valuation, charged in a better way from the angle of the Finance Department, and for these we are to have this added percentage figure.

The whole Budget shows that the Ministry are definitely upon their uppers, as far as money is concerned. They are taxing every kind of article relating to the necessaries of life, and this matter of house property is being taxed in that category. Housing has been segregated from every other matter, mostly since the war, in two ways. Firstly, it is a particular type of work from which, in the main, or certainly more than any other matter, private enterprise has been ousted. That occurred because of the fact that during the war period people were taken away from building houses and put to other things more urgent and necessary at the time; and, by reason of that, there had to be legislation for the restriction of rents and again, by reason of that, private enterprise was given its marching orders. The State stepped in and in most countries since that period has been engaged in building houses. Now that this taxing process is going on it will bring an increase in house building to an end. This particular stoppage will hit the working classes in this country, because the figures show that the only real increase in employment has been in house building. We had a statement that 21,000 persons were put in permanent employment in 1934, and the figures show that only 2,000 of these were put into industrial employment since 1931.

Mr. MacEntee

Are we entitled to discuss this matter on the Finance Bill?

Mr. McGilligan

It is not very pleasant to the Minister, but it is incidental to this whole matter of taxation. This tax is going to shut down the only real avenue open to other employment in the country for the last three years. The figures submitted as to the increase in employment show that only about 2,000 could be accounted for in industrial occupations. Despite the fact that the only real increase has occurred in the building industry, the Minister has now decided to tax a particular type of construction which is giving most employment. The Minister will wind up by telling us he must get money. But the Minister will remember that the Fianna Fáil Party before they came into power, in their famous plan, promised £2,000,000 economies which they declared to be easily available after an examination of the Estimates, and that only in regard to a particular number of items; and these economies were to be effected with a promise that no hardship was to be caused to any person. Supposing we were given these £2,000,000 in economies which we were assured would be given, it would far more than pay for those taxes on house property, in addition to the other taxes that have been put on food-stuffs. I gather that the actual amount to be got from this tax is only £60,000. Five good mineral concessions, properly worked, would bring the Minister in all he wants.

Tá

Aiken, Frank.
Bartley, Gerald.
Beegan, Patrick.
Boland, Gerald.
Bourke, Daniel.
Brady, Brian.
Breen, Daniel.
Briscoe, Robert.
Cleary, Mícheál.
Concannon, Helena.
Cooney, Eamonn.
Corbett, Edmond.
Corry, Martin John.
Crowley, Timothy.
Daly, Denis.
Derrig, Thomas.
Dowdall, Thomas P.
Flinn, Hugo V.
Flynn, Stephen.
Gibbons, Seán.
Goulding, John.
Hayes, Seán.
Keely, Séamus P.
Kehoe, Patrick.
Kelly, James Patrick.
Kelly, Thomas.
Killilea, Mark.
Kissane, Eamonn.
Lemass, Seán F.
Little, Patrick John.
Lynch, James B.
McEllistrim, Thomas.
MacEntee, Seán.
Maguire, Conor Alexander.
Moane, Edward.
Moore, Séamus.
Moylan, Seán.
Murphy, Patrick Stephen.
O'Dowd, Patrick.
O'Grady, Seán.
O'Reilly, Matthew.
Pearse, Margaret Mary.
Rice, Edward.
Ruttledge, Patrick Joseph.
Ryan, James.
Ryan, Martin.
Ryan, Robert.
Sheridan, Michael.
Smith, Patrick.
Victory, James.

Níl

Alton, Ernest Henry.
Bennett, George Cecil.
Broderick, William Joseph.
Burke, James Michael.
Davin, William.
Desmond, William.
Dockrell, Henry Morgan.
Doyle, Peadar S.
Esmonde, Osmond Grattan.
Fagan, Charles.
Fitzgerald, Desmond.
Fitzgerald-Kenney, James.
Hogan, Patrick (Clare).
Keating, John.
Keyes, Michael.
Lavery, Cecil.
MacDermot, Frank.
McGilligan, Patrick.
Coburn, James.
Corish, Richard.
Cosgrave, William T.
Costello, John Aloysius.
Morrisroe, James.
Morrissey, Daniel.
Mulcahy, Richard.
Murphy, James Edward.
Nally, Martin.
Norton, William.
O'Donovan, Timothy Joseph.
O'Leary, Daniel.
O'Mahony, The.
O'Sullivan, Gearóid.
O'Sullivan, John Marcus.
Rowlette, Robert James.
Thrift, William Edward.
Wall, Nicholas.

Tellers:—Tá: Deputies Little and Smith; Níl: Deputies Doyle and Bennett.

Question declared carried.

Sections 4 to 9 inclusive ordered to stand part of the Bill.

Question proposed: "That Section 10 stand part of the Bill."

General Mulcahy

I presume that we shall discuss the schedules when we come to them?

An Ceann Comhairle

Yes.

Question put and agreed to.

Section 11 ordered to stand part of the Bill.

SECTION 12.

(2) In lieu of the present excise duties, drawbacks, and allowance in respect of sugar, molasses, glucose, and saccharin, there shall, as on and from the 16th day of May, 1935, be charged, levied, and paid in respect of all sugar, molasses, glucose, and saccharin made in Saorstát Eireann the excise duties specified in the third and fourth columns of Part I of the Third Schedule to this Act and be allowed and paid in respect of all sugar, molasses, glucose, and saccharin so made the drawbacks and allowance set out in Part II of the said Schedule.

Mr. Norton

I move amendment No. 6:

To delete sub-section 2.

The object of the amendment is to provide that taxation will not be imposed upon sugar under the provisions of this Bill. I think it is hardly necessary to state at length the case which can be made against the imposition of taxation upon sugar. The matter has already been exhaustively discussed on the Financial Resolutions and on the Second Reading of this Bill. I think I could crystallise the case by saying that the object of the amendment is to ensure that the community generally, and particularly the poorer sections of it, will not be muleted by the taxation which is imposed under this section of the Bill. A tax upon food-stuffs has always been regarded as an objectionable form of taxation because it is a form of taxation calculated to press most heavily on the poorer sections of the community. It has rightly been the object of democratic Governments in all countries to exempt the people's food-stuffs from the burden of taxation imposed for the purpose of balancing State Budgets. I think the Minister for Finance, in other days and at other times, appreciated that the imposition of a tax upon food-stuffs was objectionable. I think that he will be found on record as one who, at one time at all events, expressed the same view that I am expressing on this amendment. Last year we had the Minister recognising the undesirability of taxing food-stuffs by abolishing the tax upon tea. But this year we find him in this Finance Bill going back not merely to tax tea, but to tax sugar as well. I say to the Minister that the imposition of this tax will press heaviest on the poorest section of the community. Per head of the population, they use sugar to a greater extent than the wealthier classes. The tax on sugar will also have the effect of making still dearer the price of jam and other forms of sweet confectionery which are sometimes the occasionally procured luxuries of poor people. The amount which will be raised by the Minister under this form of taxation will not be very considerable in the Budget of the State, but it will represent a considerable exaction from the poor. In existing circumstances, with so much unemployment and with wage standards in many cases being reduced, particularly in the agricultural industry, I think this is a most unfavourable time to contemplate the imposition of taxes on the foodstuffs of the poor.

I do not think that the effect of the amendment is clearly appreciated. As Deputy Mulcahy seemed to grasp in the concluding portion of his remarks, it would have the effect of relieving Irish manufactured sugar of Excise duty, but I do not think it would have the effect—which is probably what Deputy Norton is seeking—of reducing the price of sugar to the consumer. If what the Opposition tell us be true, that would probably be determined by the price at which imported sugar was being sold. This amendment would not have the effect of increasing the amount the beet grower would get for his product, or in redistributing the increased profits amongst those immediately concerned in the industry—the growers and the factory operatives. The effect would be to increase the possible profits of the Beet Sugar Company and, in that way, allow the Minister for Finance to get indirectly a greatly increased dividend from his shares in the company. From the point of view of reducing the price of sugar, the amendment would not be desirable. We have it on record that the Opposition, through Deputy Mulcahy, are prepared to support this proposition. We, on the contrary, are not accepting it.

Question put: "That the sub-section proposed to be deleted stand."

The Committee divided: Tá, 54; Níl, 31.

Tá

Aiken, Frank.
Bartley, Gerald.
Beegan, Patrick.
Boland, Gerald.
Bourke, Daniel.
Brady, Brian.
Breathnach, Cormac.
Breen, Daniel.
Briscoe, Robert.
Cleary, Mícheál.
Concannon, Helena.
Cooney, Eamonn.
Corbett, Edmond.
Corry, Martin John.
Crowley, Timothy.
Daly, Denis.
Derrig, Thomas.
De Valera, Eamon.
Doherty, Hugh.
Dowdall, Thomas P.
Flinn, Hugo V.
Flynn, Stephen.
Gibbons, Seán.
Goulding, John.
Hayes, Seán.
Keely, Séamus P.
Kehoe, Patrick.
Kelly, James Patrick.
Kelly, Thomas.
Killilea, Mark.
Kissane, Eamonn.
Lemass, Seán F.
Little, Patrick John.
Lynch, James B.
McEllistrim, Thomas.
MacEntee, Seán.
Maguire, Conor Alexander.
Moane, Edward.
Moore, Séamus.
Moylan, Seán.
Murphy, Patrick Stephen.
O'Briain, Donnchadh.
O'Dowd, Patrick.
O'Grady, Seán.
O'Reilly, Matthew.
Pearse, Margaret Mary.
Rice, Edward.
Ruttledge, Patrick Joseph.
Ryan, James.
Ryan, Martin.
Ryan, Robert.
Sheridan, Michael.
Smith, Patrick.
Victory, James.

Níl

Bennett, George Cecil.
Broderick, William Joseph.
Burke, James Michael.
Coburn, James.
Corish, Richard.
Costello, John Aloysius.
Davin, William.
Desmond, William.
Dockrell, Henry Morgan.
Doyle, Peadar S.
Fagan, Charles.
Fitzgerald, Desmond.
Fitzgerald-Kenney, James.
Hogan, Patrick (Clare).
Keating, John.
Keyes, Michael.
Lavery, Cecil.
MacDermot, Frank.
McFadden, Michael Og.
McGilligan, Patrick.
Morrisroe, James.
Morrissey, Daniel.
Mulcahy, Richard.
Murphy, James Edward.
Nally, Martin.
Norton, William.
O'Donovan, Timothy Joseph.
O'Leary, Daniel.
O'Mahony, The.
O'Sullivan, John Marcus.
Wall, Nicholas.

Tellers:—Tá: Deputies Little and Smith; Níl: Deputies Davin and Keyes

Question declared carried.

Question proposed: "That Section 12 stand part of the Bill."

Professor O'Sullivan

The remarks made by the mover of the amendment have application really to the section. We are supporting the amendment because we believe if it was carried it would be impossible to stand by the section as a whole. We strongly object to a section of the Finance Bill that proposes to increase the tax on sugar. Deputy Norton's real purpose in moving his amendment was to defeat the section. He professed to find some back-sliding on the part of the Minister and the President. Although not within the last couple of years, I am afraid, there were profuse professions when the President and the Minister first came into office. But their professions soon went by the board. If we are still to believe the things that were said at that time, Deputy Norton must realise that within the past couple of years they have completely abandoned most of these professions. There was a time—I am not referring to pre-Ministerial days—when the present Minister for Finance looked upon this particular tax on sugar as being particularly harsh. It was, I believe, a "hard" tax and, at the time the softhearted Minister—I am now referring to the heart of the Minister for Finance —could not impose this hard tax on the people. Since then he has developed. Within the last couple of years we have seen not one but a couple of increases in the tax, with corresponding increases in the price of sugar. Unlike Deputy Norton I did not look upon that as something not completely in keeping with the whole development of Government policy, or with the carrying out of their professions, but the actual way in which they have developed their policy.

No; merely to prevent the Deputy from showing how foolish he is.

General Mulcahy

I understood that the Minister's point was that this is a purely taxation matter, and that he wanted to stop me merely because I raised, as briefly as I could, the position with regard to employment arising out of the beet industry. My point in referring to that is that the case that the Government and their followers throughout the country make, in order to induce the people to accept this terrible burden of taxation, is that it is all providing employment, and that such taxation would not be necessary but for the tremendous employment that is being provided by the policy that the Government is pursuing. They apply that argument particularly to the position in regard to sugar, and say that the necessity for imposing the Customs duty on sugar is to protect the greatly increased employment that is being given throughout the country, particularly in the agricultural districts, where the sugar beet industry is being developed. I simply point out that in Leinster, where more than 50 per cent. of the total increase in beet between 1931 and 1934 has taken place, that is an increase to the extent of 28,813 acres where only 4,606 were grown in 1931— and in provinces in which 50 per cent. of the subsidised wheat is also grown— there has been a fall in the province of Leinster in the total number of agricultural labourers under 18 years of age permanently employed.

Mr. MacEntee

That has been discussed on the Second Stage of the Bill.

Mr. Morrissey

There is an aspect of this section to which I should like to draw the Minister's attention. I had a letter last week from a constituent of mine, asking me to put a question to the Minister as to where she was to get the requisite number of farthings to meet this increase of ¼d. per lb. on sugar. The Minister is looking at the Ceann Comhairle as if that should be out of order also. I want the Minister to consider that as a result of the increase imposed under this section, leaving out the other increases which have been imposed on sugar, the price per lb. charged in many towns—as far as I know in most towns and villages throughout the country—is now 4d. per lb.

Mr. MacEntee

Would the Deputy send us some examples of that?

Mr. Morrissey

I will undertake to get them. A number of people have written to me to that effect, and I understand that that is so. I should like if the Minister would give some declaration on that matter which would safeguard the consumers, because it is sufficient that they should be compelled to pay an increased price without having to pay over and above that increased price. There is another aspect of the matter to which I want to draw the attention of the House. This increase, like the increase on tea, leans particularly heavily upon those who are compelled to buy in very small quantities. It is all right for the person who can buy a half stone or a stone at the one time; it perhaps does not lean so heavily upon them, but people are being made to pay over and above the additional tax which the Minister is imposing this year. I do not know whether the Minister is aware of it, but there are thousands of people in this country who are compelled to buy in such small quantities that this additional tax is far greater on them than what is set out in the Bill. It seems to me that the Minister has a duty to see that the price of sugar—a commodity which, on the Minister's own admission, is a necessary—is not made prohibitive. The Minister seems to be getting terribly uneasy. Is there anything which the Minister would consider we are at liberty to discuss on this particular section? In my opinion, the people are being charged over and above the imposition, and that is a point on which I should like the Minister to say something for the protection of the public. Secondly, would the Minister tell us whether the necessary farthings are available.

Mr. Coburn

I thought I made it clear that I did not intend to attack an Irish industry, but the facts are there.

Mr. Corry

Who is the merchant?

Mr. Coburn

A merchant who pays 20/- in the £.

General Mulcahy

The Minister talked of the taxation on sugar and said that this was not the first time that a tax was put on sugar. It is the first time that there was ever anything like £980,000 additional taxation put on sugar in the space of about 12 months. The only thing that could be compared with the change in taxation was the change that was brought about in the year ended March, 1926, when the taxation on sugar was reduced by the then Government from £1,881,000 to £849,000. The taxation on sugar was then reduced by, approximately, £1,040,000. That was a shift down in the amount of money that the people had to pay for sugar. What we are dealing with here is the fact of a shift up of something almost the same because the taxation on sugar was reduced from a figure of £1,800,000 odd to an average of £893,000 for the five or six years before the present Government came into office. I suggest to the Minister that it was not £1,465,000 in the year 1931-32, but it was £1,371,000 between Excise and Customs. The Minister should be a little more accurate. The additional taxation was then put on in order to give special assistance to the farmers during that last year and to meet a definite budgetary situation. Nevertheless, the taxation on sugar was more than £500,000 lower than the Government had been raising in, say, the year ended March, 1924, or the year ended March, 1925. They had been able to reduce the taxation by that amount.

Mr. MacEntee

Why not go back prewar?

General Mulcahy

An Ceann Comhairle

The Chair differs with the Deputy's view.

Mr. Coburn

An Ceann Comhairle

The Deputy now proceeds to maintain that it was in order.

Mr. McGilligan

Mr. Corry

I can produce letters to show that it is not untrue. I can prove it.

Mr. O'Leary

What are they getting now?

Mr. Corry

Does the Deputy deny that E.J. Cussen made a public statement on it and that supporters of his Party hired motor cars to follow me around my constituency when I was arranging about the contracts?

Mr. MacEntee

They were only breeding greyhounds.

Mr. Corry

We have to listen to a lot of balderdash from Deputies opposite. It is like the £2 apiece they were paying for the cows.

There are 450,000 farmers in this country, and £1,000,000 is going to be distributed amongst those with the 40,000 acreage. All the others have to contribute towards that expenditure. That is what I am always protesting against. I protest against unfortunate small farmers having to pay the bounty, and having to maintain people like Deputy Corry and others who have good land up and down the country.

Question put.

The Committee divided: Tá, 54; Níl, 39.

Tá

Aiken, Frank.
Bartley, Gerald.
Beegan, Patrick.
Boland, Gerald.
Boland, Patrick.
Bourke, Daniel.
Brady, Brian.
Breathnach, Cormac.
Breen, Daniel.
Briscoe, Robert.
Cleary, Mícheál.
Concannon, Helena.
Cooney, Eamonn.
Corbett, Edmond.
Corry, Martin John.
Crowley, Timothy.
Daly, Denis.
Derrig, Thomas.
De Valera, Eamon.
Doherty, Hugh.
Dowdall, Thomas P.
Flynn, John.
Flynn, Stephen.
Geoghegan, James.
Gibbons, Seán.
Goulding, John.
Hayes, Seán.
Keely, Séamus P.
Kehoe, Patrick.
Kelly, James Patrick.
Kelly, Thomas.
Killilea, Mark.
Kissane, Eamonn.
Lemass, Seán F.
Little, Patrick John.
McEllistrim, Thomas.
MacEntee, Seán.
Maguire, Ben.
Maguire, Conor Alexander.
Moane, Edward.
Moore, Séamus.
Murphy, Patrick Stephen.
O'Briain, Donnchadh.
O'Grady, Seán.
O'Reilly, Matthew.
Pearse, Margaret Mary.
Rice, Edward.
Ruttledge, Patrick Joseph.
Ryan, James.
Ryan, Martin.
Ryan, Robert.
Sheridan, Michael.
Smith, Patrick.
Victory, James.

Níl

Belton, Patrick.
Bennett, George Cecil.
Broderick, William Joseph.
Burke, James Michael.
Burke, Patrick.
Byrne, Alfred.
Coburn, James.
Corish, Richard.
Cosgrave, William T.
Costello, John Aloysius.
Lavery, Cecil.
McFadden, Michael Og.
McGilligan, Patrick.
McMenamin, Daniel.
Morrisroe, James.
Morrissey, Daniel.
Mulcahy, Richard.
Murphy, James Edward.
Murphy, Timothy Joseph.
Nally, Martin.
Davin, William.
Desmond, William.
Dockrell, Henry Morgan.
Doyle, Peadar S.
Esmonde, Osmond Grattan.
Fagan, Charles.
Fitzgerald, Desmond.
Fitzgerald-Kenney, James.
Keating, John.
Keyes, Michael.
Norton, William.
O'Donovan, Timothy Joseph.
O'Leary, Daniel.
O'Mahony, The.
O'Sullivan, Gearóid.
O'Sullivan, John Marcus.
Reidy, James.
Rice, Vincent.
Wall, Nicholas.

Tellers:—Tá: Deputies Little and Smith; Níl: Deputies Doyle and Bennett.

Section 13 put and agreed to.

Question declared carried; the section ordered to stand part of the Bill.

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

General Mulcahy

On the section, Sir, I take it that the result of this section will be to increase the price of all fruit consumed by the people, so that those who use apples, plums, pears, cherries, strawberries, raspberries, currants or gooseberries, will pay more?

Question—"That Section 14 stand part of the Bill"—put and agreed to.

Section 15 put and agreed to.

SECTION 16.

(2) The duty imposed by the next preceding sub-section of this section shall be charged, levied, and paid at whichever of the following rates produces, in each particular case, the greater amount of duty, that is to say, at the rate of an amount equal to 75 per cent. of the value of the article or the rate of six pence on each article.

General Mulcahy

On the section, Sir, I think it would be well if the Minister would tell the House, in the first place, what the effect of the section is and, in the second place, what is the intention. Sub-section (2) says that duty shall be imposed at the rate of any amount equal to 75 per cent. of the value of the article, but subsequent information, vouchsafed in some schedules circulated to the House, indicated that the duty, instead of being 75 per cent., is going to be 100 per cent. Now, a tax of 100 per cent. —or with some kind of preference thrown, a preferential tax of 75 per cent.—is being put on all cutlery that is being brought into the country. Would the Minister tell us clearly what exactly is the amount of the tariff that is being put on this cutlery, why it could not have been put plainly into this section, and what he has in mind when he proposes that a tariff of that particular size should be put on cutlery?

An Leas-Cheann Comhairle

Is the Deputy moving amendment No. 7?

General Mulcahy

I am sorry, Sir. I was talking on Section 16, but with these remarks I should like to move amendment No. 7. I now move amendment No. 7:

In sub-section (2), line 44, to delete the word "seventy-five" and substitute therefor the word "twenty"; and in lines 44 and 45, to delete the words "or the rate of six pence on each article."

Minister for Industry and Commerce (Mr. Lemass)

There was a duty of 15 per cent. imposed in 1932 as a revenue duty. When the project of having a cutlery factory established in this country was first mooted, then, in order to discourage any tendency to undue importations that revenue duty was increased to 25 per cent. and cutlery was imported into the country subject to 25 per cent. duty which was paid. When the flotation of the company took place and the construction of the factory was begun, it was obvious that there was some danger of large quantities of cutlery being brought into the country in anticipation of an increase in the duty or of the making of a quota order under the Control of Imports Acts, and, in order to prevent that, this duty of 75 per cent., with a 50 per cent. preferential rate, is being imposed. However, the duty of 25 per cent. imposed under the Emergency (Imposition of Duties) Act has not been repealed and at the present time cutlery is being imported under licences which remit the duty imposed by the Finance Act; that is, the 75 per cent. with the 50 per cent. preferential rate, but the 25 per cent. imposed under the Emergency Act is still being collected. That emergency duty will disappear when the factory at Droichead Nua comes into production, and the permanent duty will be 75 per cent. with the 50 per cent. preferential rate.

The reason why the duty is being imposed at that height is because there is reason to anticipate that certain forms of cutlery could be imported at very low prices. In fact, it is known that Germany and other continental countries are subsidising the export of cutlery at the present time, and it was felt that a smaller rate of duty might prove ineffective and that dumping tactics might be resorted to in order to get cutlery products into this market. It must be remembered by Deputies that cutlery products are not perishable and that they could be brought in and stored here in any quantity. The industry is being established at Droichead Nua by a company which has been recently formed, and it is anticipated that there will be no difficulty experienced in producing cutlery there at practically the same prices as in Sheffield. No increase in prices is anticipated, but we could not take the risk of having a lower rate of duty which would interfere with the development of the industry even though the duty is not required because of any higher costs of production anticipated here. The industry is an important one and it is expected to give employment to about 200 persons in the town, of which the greater proportion will be men, but with some proportion of women. The market available is valued at about £60,000 per annum.

No. The 25 per cent. was in operation from last year. The problem we were faced with at that time was that either we were to increase the 25 per cent. to 75 per cent. and then say to the importers: "You will pay 75 per cent.," or "we will give you a licence to import free of that duty." The first alternative would have been unfair to the importers. They would have to pay 75 per cent. for articles which were not available in this country. The second alternative would have meant that cutlery would come in for those three or four months cheaper than it had come in for the past year; in other words, the 25 per cent. would also have to be remitted as well as the increase in the duty. In order to avoid that situation arising, and maintain the 25 per cent. throughout the whole of the period until the factory would come into production, the emergency duty was left in operation, and this duty was imposed to discourage people from importing abnormal quantities. This duty is not now being paid by anybody, because any importer can get a licence to import free of that duty for the time being. That is, as the Deputy has properly described it, a quota arrangement. It is only a temporary arrangement, which will finish at the end of August, when this duty becomes effective and will be the only duty in operation. There will be no restriction on people importing except the duty.

It is considered preferable to have that arrangement in force rather than a quota and restriction in respect of quantity. There would be certain difficulties in operating a quota order in relation to cutlery. Up to the present, quota orders have restricted imports by quantities. A quota order permitted the importation of a certain quantity of goods, so many yards of cloth, so many tyres, or so many motor vehicles. It would be difficult to operate such a system in relation to cutlery. You might possibly have a quota in respect of the value. We have not done that, because there are difficulties in the way of doing it. We prefer to have protection of this industry, not by a quota order, but by the imposition of a Customs duty, which will still permit people desiring to import certain types of cutlery, perhaps cutlery which may have a sentimental value for them, subject to the payment of the duty.

Mr. Norton

This amendment has been moved by Deputy Mulcahy. I would like to point out to him the wide door which he is opening if he persists with his amendment. The Deputy seeks to delete the protection of 75 per cent., which is afforded in the section to cutlery produced here, and he desires to substitute for the 75 per cent., protection to the extent of 20 per cent. He wants to delete completely the provision which establishes a minimum rate of 6d. on each article. It has been decided to establish a cutlery factory here. It will be located at Droichead Nua. At present premises are being adapted for use as a factory and the adaptation will be completed about the end of this month. The factory is likely to be in production about the end of August. While efforts were being made to establish a factory here, it was found there was a large number of English and Continental travellers endeavouring to book orders in this country in advance of the establishment of the factory.

If that position had been allowed to develop without restrictions being imposed by the Government, obviously it would be a long time before the Newbridge factory would be required to produce cutlery for the Irish market. It was therefore not only necessary to impose a duty of this kind, to forestal dumping from the British and Continental markets, but it was particularly necessary to do so in respect of the imports from non-European sources. A kind of cutlery has been dumped here from Japan and sold at a price that it is not possible for any Irish producer to compete against. Some of the articles of cutlery imported from Japan could not be made and sold here, even if the workers here were to work for nothing. It is obviously desirable that we should have some adequate protection against imports from Japan of a cheap type of cutlery made under diabolical labour conditions. I think Deputy Mulcahy will hardly object if we protect Irish made cutlery against importations of that description.

Mr. Morrissey

Will 75 per cent. be sufficient to stop that?

Mr. Norton

Mr. Lemass

And at that stage prices are going down.

Question put—"That the words proposed to be deleted stands."

The Committee divided: Tá, 59; Níl, 35.

Tá

Aiken, Frank.
Bartley, Gerald.
Beegan, Patrick.
Boland, Gerald.
Boland, Patrick.
Bourke, Daniel.
Brady, Brian.
Breathnach, Cormac.
Breen, Daniel.
Briscoe, Robert.
Cleary, Mícheál.
Concannon, Helena.
Cooney, Eamonn.
Corbett, Edmond.
Corish, Richard.
Corkery, Daniel.
Corry, Martin John.
Crowley, Timothy.
Lemass, Seán F.
Little, Patrick John.
McEllistrim, Thomas.
MacEntee, Seán.
Maguire, Ben.
Maguire, Conor Alexander.
Moane, Edward.
Moore, Séamus.
Murphy, Patrick Stephen.
Murphy, Timothy Joseph.
Norton, William.
O Briain, Donnchadh.
Daly, Denis.
Derrig, Thomas.
De Valera, Eamon.
Doherty, Hugh.
Dowdall, Thomas P.
Flynn, John.
Flynn, Stephen.
Geoghegan, James.
Gibbons, Seán.
Goulding, John.
Hayes, Seán.
Keely, Séamus P.
Kehoe, Patrick.
Kelly, James Patrick.
Kelly, Thomas.
Keyes, Michael.
Killilea, Mark.
Kissane, Eamonn.
O'Grady, Seán.
O'Reilly, Matthew.
Pearse, Margaret Mary.
Rice, Edward.
Ruttledge, Patrick Joseph.
Ryan, James.
Ryan, Martin.
Ryan, Robert.
Sheridan, Michael.
Smith, Patrick.
Victory, James.

Níl

Alton, Ernest Henry.
Anthony, Richard.
Bennett, George Cecil.
Bourke, Séamus.
Broderick, William Joseph.
Burke, James Michael.
Burke, Patrick.
Coburn, James.
Cosgrave, William T.
Costello, John Aloysius.
Desmond, William.
Dockrell, Henry Morgan.
Doyle, Peadar S.
Fagan, Charles.
Fitzgerald, Desmond.
Fitzgerald-Kenney, James.
Keating, John.
Lavery, Cecil.
McFadden, Michael Og.
McGilligan, Patrick.
McMenamin, Daniel.
Morrisroe, James.
Morrissey, Daniel.
Mulcahy, Richard.
Murphy, James Edward.
Nally, Martin.
O'Donovan, Timothy Joseph.
O'Leary, Daniel.
O'Mahony, The.
O'Sullivan, Gearóid.
O'Sullivan, John Marcus.
Reidy, James.
Rice, Vincent.
Rowlette, Robert James.
Wall, Nicholas.

Tellers—Tá: Deputies Little and Smith; Níl: Deputies Doyle and Benett.

SECTION 17.

(1) There shall be charged, levied, and paid on every of the following articles imported into Saorstát Eireann on or after the 16th day of May, 1935, a duty of customs at the rate hereinafter mentioned in respect of such article, that is to say:—

(a) clocks or clock movements which, in the opinion of the Revenue Commissioners, are completely or substantially assembled— whichever of the following rates produces in each particular case the greater amount of duty, that is to say a sum equal to seventy-five per cent. of the value of the article or two shillings on each article;

(b) articles which, in the opinion of the Revenue Commissioners, are assemblies of parts of clocks (excluding articles mentioned in the next preceding paragraph of this sub-section, and also excluding parts assembled by pressing and clock-cases and parts thereof)—a sum equal to seventy-five per cent. of the value of the article.

(c) clock-cases made wholly or mainly of wood—whichever of the following rates of duty produces in each particular case the greater amount of duty, that is to say, a sum equal to seventy-five per cent. of the value of the article or five shillings on each clock-case;

Get them at 75 per cent. more than the import price.

Question put: "That the words proposed to be deleted stand."

The Committee divided: Tá, 59; Níl, 34.

Tá

Aiken, Frank.
Bartley, Gerald.
Beegan, Patrick.
Boland, Gerald.
Boland, Patrick.
Bourke, Daniel.
Brady, Brian.
Breathnach, Cormac.
Breen, Daniel.
Briscoe, Robert.
Cleary, Mícheál.
Concannon, Helena.
Cooney, Eamonn.
Corbett, Edmond.
Corish, Richard.
Corkery, Daniel.
Corry, Martin John.
Crowley, Timothy.
Daly, Denis.
Derrig, Thomas.
De Valera, Eamon.
Doherty, Hugh.
Dowdall, Thomas P.
Flynn, John.
Flynn, Stephen.
Geoghegan, James.
Gibbons, Seán.
Goulding, John.
Hayes, Seán.
Keely, Seámus P.
Kehoe, Patrick.
Kelly, James Patrick.
Kelly, Thomas.
Keyes, Michael.
Killilea, Mark.
Kissane, Eamonn.
Lemass, Seán F.
Little, Patrick John.
McEllistrim, Thomas.
MacEntee, Seán.
Maguire, Ben.
Maguire, Conor Alexander.
Moane, Edward.
Moore, Séamus.
Murphy, Patrick Stephen.
Murphy, Timothy Joseph.
Norton, William.
O'Briain, Donnchadh.
O'Grady, Seán.
O'Reilly, Matthew.
Pearse, Margaret Mary.
Rice, Edward.
Ruttledge, Patrick Joseph.
Ryan, James.
Ryan, Martin.
Ryan, Robert.
Sheridan, Michael.
Smith, Patrick.
Victory, James.

Níl

Alton, Ernest Henry.
Anthony, Richard.
Bennett, George Cecil.
Bourke, Séamus.
Broderick, William Joseph.
Burke, James Michael.
Burke, Patrick.
Coburn, James.
Cosgrave, William T.
Costello, John Aloysius.
Desmond, William.
Dockrell, Henry Morgan.
Doyle, Peadar S.
Fagan, Charles.
Fitzgerald, Desmond.
Fitzgerald-Kenney, James.
Keating, John.
Lavery, Cecil.
McFadden, Michael Og.
McGilligan, Patrick.
McMenamin, Daniel.
Morrisroe, James.
Morrissey, Daniel.
Mulcahy, Richard.
Murphy, James Edward.
Nally, Martin.
O'Donovan, Timothy Joseph.
O'Mahony, The.
O'Sullivan, Gearóid.
O'Sullivan, John Marcus.
Reidy, James.
Rice, Vincent.
Rowlette, Robert James.
Wall, Nicholas.

Tellers:—Tá: Deputies Little and Smith; Níl: Deputies Doyle and Bennett.

Section 17 ordered to stand part of the Bill.

SECTION 18 (1).

In lieu of the duty of customs imposed by Section 14 of the Finance Act, 1934 (No. 31 of 1934), there shall be charged, levied, and paid on all tea imported into Saorstát Eireann on or after the 16th day of May, 1935, a duty of customs at the rate of sixpence the pound.

The following amendment appeared in the name of Deputy Dillon:—

The intention of the amendment was to confine the duty to the lower priced teas, but I shall not go into that now. This is the section which imposes a duty of 4d. per lb. on tea. Members of the Party opposite seem to be somewhat confused about this whole question of the tea duty, even some of the Ministers. Recently we had the Minister for Local Government and Public Health announcing that when the Fianna Fáil Party assumed office they found a duty on tea. Notwithstanding the fact that that was denied at the time the Minister for Local Government and Public Health made that speech, we had it repeated afterwards by another member of the Party. The fact, of course, is that there was no duty on tea when the present Government assumed office. The Minister himself, on one occasion, described tea as a luxury. I do not know whether he still holds that view, or whether he is going to give that reason this year for imposing this duty. Of course, it is known to most people in this country, probably to everyone except the Minister himself, that tea is not a luxury and that as far as poor people are concerned it is an absolute necessity. Unfortunately, it forms part of nearly every meal which is partaken of by the poor people. For that reason it hits them in an exceptionally hard way.

There is another aspect of the matter to which I would draw the attention of the House. Up to about two years ago if a duty of 4d. or 6d. per lb. were imposed on tea, the very poor people, those on the point of destitution, could, in a way, get over that by purchasing cheaper tea. About two years ago, however, the tea planters came to an agreement restricting the output of the cheaper teas by about 25 per cent. Prior to their reaching that agreement it was possible for retailers to purchase tea at prices as low as 10d. or 1/- per lb. That tea was retailed at 1/2 or 1/4 Therefore, if a person had been buying tea at 1/6 per lb., and if a duty of 4d. were imposed on that, he could adjust his expenditure by falling back on the cheaper quality of tea. That is not the position to-day.

I do not know what the wholesale prices are at the moment, but up to quite recently I think that the wholesale price of the cheapest tea on the market was about 1/4 per lb. In other words, it is about 6d. per lb. dearer than it had been. It will, therefore, be seen that, so far as those who are compelled to purchase the very low quality of teas are concerned, they will have to meet the full burden of this 4d. per lb. A person, however, who was able to pay 3/- per lb. for tea can meet the situation by buying tea at 2/8, or a person who was in the habit of buying tea at 2/8 can now buy tea sold at 2/4, but the poor people who are compelled by circumstances to purchase only the poorest quality of tea will have to bear the full duty of 4d. per lb. That is a heavy imposition. In the case of these very poor people to whom I am referring, it will mean much more than 4d. per lb. because, unfortunately very many of these people have to buy tea in very small quantities. It is not uncommon for poor people living in slums and tenements to buy tea in such small quantities as a couple of ounces at a time. Because of that they pay proportionately more for tea than people who are able to buy a pound or a half-pound at a time. Taken by itself, this tax on tea is a very serious imposition, but when taken in conjunction with all the other increases in the necessaries of life imposed by this Finance Bill then, as I said on a former occasion, it amounts to a substantial reduction in the wages of workers.

We had Deputy Hugo Flinn, the Parliamentary Secretary to the Minister for Finance, telling us on an earlier stage of the Bill that everyone in this country drank tea: that the drinking of tea was not confined to the poor. The Parliamentary Secretary overlooked the fact that persons in receipt of fairly decent wages or salary are able to enjoy a greater variety of food than the very poor. They do not use as much tea as the poor. It is because people are poor that they are compelled, so to speak, to drink so much tea. It is silly to suggest that an extra charge of 4d. in the lb. on tea will mean as much to a person in the position of the Parliamentary Secretary as it will to the unfortunate poor person trying to exist on home assistance or on unemployment assistance. Those who are in touch with poor people know that if they are able to have three meals a day, their principal diet at each consists of tea and bread. As people say in the country, the tea-pot is never off the hob. Therefore, they consume a great deal more tea than people more fortunately circumstanced, and this tax for that reason is going to press more heavily on them.

I hope Deputies in all parts of the House will make it clear to the Minister that they are opposed to this tax on tea. The country is opposed to it. It is an unpopular tax, and if the Minister does not already know that, he ought to know it. As I cannot move the amendment on this stage, I propose doing so on Report.

Mr. Fitzgerald-Kenney

We all know that the Minister for Finance has a very strong objection to tea drinking. He informed us in one of his Budget speeches that a tax on tea did not matter: that tea was not a necessity at all, and that it was a thing that people could do without. Tea, he said, was simply a beverage. The Minister endeavoured in that somewhat heavy jocose style of his to brush aside the whole question of the heavy impost which a tax on tea means to the poorest members of the community. Those of us who live in the country and know the habits of life of the people are well aware that a great number of people rely on tea as a great stimulant to keep them going. We all know that ordinary working girls, especially in the cities, take tea a great number of times each day. Tea and bread are really the main sources from which they derive support for their bodies, and the cost of tea and bread is being increased. The Minister is quite regardless of all that. He seems to think that a tax on tea, combined with the other taxes in the Budget all of which must of necessity hit the very poorest classes in the community, is one that can be lightly imposed. That is the attitude he seems to take up in respect of all these food taxes. Anyone who knows the conditions in rural Ireland, especially of the small farmers of the West—the conditions to which they have been reduced by the economic policy which the Government have put in force—is well aware of the privations they are suffering at the moment, and must be satisfied that these taxes on the necessaries of life are a cruel and an unjust imposition. After all, what is a just tax and what is an unjust tax? A just tax is a tax which places a burden upon backs that are able to bear it, as far as that object can possibly be achieved. An unjust tax is a tax which places a burden upon backs which are too weak to bear that burden. The Minister and his colleagues, by these food taxes, are placing a terrible burden on backs already weakened by the policy which the Government have adopted. The Government have taken away their means of livelihood, their sole source of income, from a very large number of persons in this country—from the small farmers and agricultural labourers and from the working class people in the towns. The case for the latter has already been put forward in the House. My object is to stress the burden which these food taxes will place on people whose condition I am familiar with, people living in my own constituency. A great number of them are finding it impossible to make ends meet at the present time.

Mr. MacEntee

They are paying their rates and their annuities.

Mr. Fitzgerald-Kenney

They are, with money which comes to them from England. Here is an argument which I hope the Minister will take to heart because I submit it is a direct answer to his interjection. It is this: that the people who are paying their rates and their annuities, who are stinting themselves in order that they may do so, are the people upon whom the Minister's taxes are going to press with extra weight. People who could afford to pay their rates and their annuities, and who are not doing so, can laugh at the Minister's taxes. They have got the money in their pockets and can afford to pay the extra taxes imposed by the Minister upon the necessaries of life, but the people who stint themselves in order that they may be able to pay their rates and their annuities, are the people upon whom the Minister's extra imposts press with a double weight. The Minister should recognise that fact. He should consider the position of the people who have lost their sole means of getting ready money for what they have to sell, whose market for the sale of their livestock has been taken away, and whose market for eggs has been reduced to such an extent that it is now of very little value to them. They have been compelled to reduce the number of hens which they usually kept, a very important thing for the small holders in my constituency. I move to report progress.

Progress reported; the Committee to sit again to-morrow.

Dáil Éireann debate - Tuesday, 2 Jul 1935

Finance Bill, 1935—Committee.

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Níl

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Níl

Dáil Éireann debate -
Tuesday, 2 Jul 1935