Finance Bill, 1937—Committee (Resumed.)

Debate resumed on the following amendment:—
Before Section 5, and in Part I, to insert a new section as follows:—
"Section 3 of the Finance Act, 1935 (No. 28 of 1935) shall be and is hereby annulled."

Is the Deputy pressing the amendment?

Oh, yes. The Minister has not replied to it yet as far as I know. Is the Minister going to make any reply to the arguments advanced?

It is very hard to deal with the Opposition——

This may be very interesting but we cannot hear a word the Minister says.

——when they put down vexatious amendments in this House and then, when the amendments are being discussed, walk out of the House. Deputy Costello was not here when I replied last night. I replied after Deputy Mulcahy had spoken.

I was not here and did not know that.

I had intended to say something on this amendment with reference to a statement which was made last night by Deputy Dillon, to which I think it is essential I should take the earliest opportunity of calling the attention of the Dáil. In the course of my reply to a speech which was made by Deputy Costello and Deputy Mulcahy on this amendment last night I said:

"I said then"

—that was with reference to an amendment which Deputy Costello had down last year—

"and I say now, that I know of no case of hardship occasioned by Section 3 of the Finance Act of 1935 and I challenge any Deputy opposite, if he does not want to give me the name of an individual here, to give it to me in confidence and I shall ask the Revenue Commissioners to investigate the case."

I think it is necessary to direct your attention to the fact that I only undertook that, if a case of alleged hardship were submitted to me, I should ask the Revenue Commissioners to investigate it. When Deputy Dillon rose after I sat down he said:

"The Minister in the course of his observations has said that if he was given a case of a named person in confidence he would refer it to the Revenue Commissioners for investigation and report."

The Deputy then went on to say:

"To me that raises a very interesting question. Are the Revenue Commissioners free to report to the Minister personally on private income affairs which they learn in confidence."

I drew the attention of the Deputy— I do not propose to repeat what I said—to the fact that he was grossly misrepresenting me and Deputy Dillon went on to say this:

"There is a statutory obligation on the Revenue Commissioners to preserve the confidences they receive in the case of individual citizen's income returns. There is no such statutory obligation on me and I think it would be a very unfortunate thing if even on the obiter dictum of so irresponsible a man as the Minister for Finance, any doubt were cast upon the integrity of the Revenue Commissioners.”

I think Deputy Dillon's observations last night were scandalous in the extreme and were in the extreme unfair. First of all, he attributes to me a statement which I did not make and then on foot of that statement— which I repeat I did not make—he charges me with having made an irresponsible statement which, in fact, would cast a doubt upon the integrity of the Revenue Commissioners. If Deputy Dillon were in his place I should expect him to have the grace to withdraw the allegation which he made last night. I said then, and I say again, that if a case of alleged hardship were submitted to me, I should ask the Revenue Commissioners to investigate it. I would not ask that they should make any report to me as to the particular circumstances of any individual.

But the whole case for this amendment has been based on one thing, and one thing only—that cases of alleged hardship have been brought to the notice of Deputy Costello. I said to Deputy Costello here last night and I say to him here to-day that if there is any case of alleged hardship brought to my notice, I shall have it investigated. It is not the purpose of this section to cause hardship. The purpose of this section is to deal fairly with all taxpayers.

I see Deputy Dillon in the House now and I would draw his attention to the typescript of the report of my speech last night. I tell the Deputy that he grossly misrepresented what I said last night. When I ask the Revenue Commissioners to investigate for me, I do not, no matter how irresponsible he considers me, undertake that I shall put any strain on the integrity of the Revenue Commissioners. I have been very careful always in regard to that matter. I never once approached them to report to me on any individual case unless I had the permission of the income-tax payer who alleged that he had a grievance. In such a case I would ask the Revenue Commissioners to examine the case and, if necessary, to make a report as to the circumstances. I, however, am the person who is responsible to this House for the fairness and the equity of the revenue laws and accordingly, because I take the responsibility seriously, I am prepared to refer a case of alleged hardship, if it is submitted to me, to the Revenue Commissioners and ask them to investigate it. I am not going to ask them to report as to the particular circumstances unless I have the permission of the individual concerned. I am not going to ask them to violate the confidence which should naturally enshroud the private affairs of an individual when he is dealing with such an important body as the Revenue Commissioners.

I again say that I did not say last night, and I have never said, anything in this House which would justify the accusation which Deputy Dillon levelled against me. I do not think that is going to worry Deputy Dillon. We have heard him here time after time in this Dáil make statements as wild and as unfounded as the allegation which he levelled against me last night. He has charged Ministers with corruption. He has charged private individuals with corruption. On Friday last, as I say, he alleged an attempt had been made to blackmail and coerce him into taking certain action in regard to a board established under one of the statutes of this House. The public who read the report of what I said last night and of what Deputy Dillon said, will now have a touchstone by which to gauge the trustworthiness of any statements that may emanate from Deputy Dillon in future.

Listening to the Minister's arguments it seems to me that he is answering a case that was never made.

A not infrequent occurrence.

Last night he said that Deputy Dillon was out to produce a privileged class of the community. The Minister has also offered that if any case of hardship is brought to the notice of the Revenue Commissioners it will be investigated and presumably remedied. I am not in Deputy Costello's confidence, but I should be greatly surprised if he could point out anybody who, having received a demand for the five-fourths Schedule A, income-tax, is now in receipt of home assistance. I think it is most unlikely that any such case as that has been brought forward. That is not the case which was made from this side of the House. What we said was that after people had been induced to invest their money in a class of property from which they were led to believe, by making certain calculations, that they would receive a certain return, the dice was then loaded against them by Government action. That is the charge we are making, and the Minister has carefully refrained from answering it. Perhaps it has not been put with sufficient force from this side of the House, and lest the Minister has not fully understood the case we are making I should like again to urge upon him that that is our complaint.

What would be thought of a commercial concern which had put out a prospectus for a certain return on an investment if it were subsequently found that it had altered the terms of the yield for the investor? I suppose it would be said that they were obtaining money under false pretences. I do not suggest that the Government are exactly obtaining money under false pretences, but people were induced to invest money in buying their own houses, and remember that the Government ought to be anxious for as many of the community as possible to own their own houses and feel a sense of responsibility. Are the Government and the municipalities to be the only landlords in this State? Considerations of thrift and everything else enter into it. To sum up the charge which has been made from this side, it is that the conditions on which the investor was induced to purchase his house have been altered, by Government action, to his detriment. The investors who purchased their own houses would not have made that investment if they had known what was coming in the legislation. That is the charge we are making on this side. I listened very carefully to the Minister, but to my mind he made no reply to that case.

The Minister has referred to the amendment down in my name and the name of Deputy General Mulcahy as a vexatious amendment. His constituents will be interested to hear that. He also went on to say that I left this House before he replied. I left this House, and I am back in this House, but he has not yet replied to the arguments that were put up. He did not reply last night. He spoke, but he did not reply to the arguments put forward in support of the amendment, as Deputy Dockrell has pointed out.

Deputy Costello does not know whether I did or not.

I was in the House.

I will deal with Deputy Dockrell in due course——

The Minister can deal with me afterwards, when I sit down.

——but I am dealing now with the assertion, made by a gentleman who was not present, that I did not reply.

Again I repeat that, whether I was present or whether I was not present, the Minister did not reply to the case made for this amendment here in this House last night. The fact that the Minister, for want of an argument, is reduced to the position where he can say nothing else than that the amendment is a vexatious amendment, is a condemnation of the Minister's attitude in reference to this matter, and a complete justification of our attitude in putting down this amendment. I am speaking from actual cases. The Minister says grandiloquently that he will ask the Revenue Commissioners to investigate and report on any case of alleged hardship. I am not interested in whether or not any aspersions have been cast on the tender feelings of the Revenue Commissioners. The Revenue Commissioners' feelings are extraordinarily tender. We have the tenderness of their feelings demonstrated in practically every Act we pass. I am not interested in their feelings. I am interested in the taxpayer, for whose very tender feelings the Revenue Commissioners have no feelings whatever, whether he is suffering any hardship or not.

I should like if the Minister would think it worth while to answer this point: What authority have the Revenue Commissioners to investigate any case of alleged hardship? The Revenue Commissioners are a body whose duty it is to administer the law, not to say whether the application of the law or the administration of the law causes any hardships. That is not their function as I understand it, and I should certainly be interested if the Minister would give me any reference to show where the Revenue Commissioners are authorised by law to investigate hardships caused by the existing statutory law which they are bound by law to administer and carry out. I want to know, if I furnish the Minister with information in cases of hardship, whether the Revenue Commissioners are to be the judges as to whether or not hardship has been caused in the administration of an Act? Where is the statutory authority for that? The Revenue Commissioners' duty is to assess in accordance with the law as laid down in this section which we desire to amend. Their duty is to collect the 25 per cent. additional, and not to consider what consequences flow from the imposition of that additional tax.

I want the Minister to say if he can give any justification whatever for this additional 25 per cent. tax. I stated last night that this was a tax on a limited class. Taxation on a limited class is quite unjustifiable. As Deputy Dockrell pointed out last night, when introduced there was an endeavour to justify it on the grounds that there was going to be a revaluation of property. Even on that ground it could not be justified. Taking it even on that ground of valuation, this is a flat rate of 25 per cent. Revaluation can only be justified on the basis that existing valuations are not in accordance with proper principles—that some houses are valued too high and that some are valued too low. Whether some houses are valued too high and some houses are valued too low, this tax has been imposed on everybody, irrespective of whether the poor law valuation of their premises has been assessed on a proper basis or not. The case I made was on behalf of small property owners and people who purchased their own houses on the assumption that the poor law valuation was a certain thing. Anybody who has any experience of the purchase and sale of houses knows that one of the matters which are considered in connection with the purchase price of a house is the poor law valuation. Money passed, houses were bought and sold, on the assumption that the poor law valuation was not going to be disturbed except in accordance with law, and that income-tax was going to be assessed only in the ordinary way in which it has been assessed, levied and collected for years past.

Suddenly the Minister comes along —having, as I said last night, taken away the one-sixth allowance for repairs which was allowed for years until the Minister took charge of the Department of Finance—and imposes this entirely artificial burden. I ask the Minister for Finance is he prepared to give complete relief in respect of this to those people of small valuations who have purchased their own holdings— small property owners who are living out of the income that they derive from letting those houses which are subject to the restrictions imposed by the Rent Restrictions Act. Those owners of property cannot, under the Rent Restrictions Act, increase the rent charged to their tenants, but the Minister comes in to increase the burdens which they have to bear and the outgoings which they have to pay. They have no method of recouping themselves for that. There is no method that I know of by which that hardship can be got over.

It is no use for the Minister to come here with these grandiloquent phrases. We have got enough of these in other directions. There is no use in saying that the Revenue Commissioners will investigate alleged cases of hardship. That is not their function or duty, nor have they any right to investigate alleged cases of hardship. I do not intend to let the Minister get away with that. Is the Minister prepared to give relief in the three cases I mentioned—cases of low valuation, cases where persons have purchased their own houses with the intention of living in them before this tax was imposed and the case of people who have purchased property on the strength of the existing valuation, with no idea that the valuation of the premises would be artificially increased for one purpose and one purpose only, the imposition of a special tax on a limited class of people? Can the Minister advance any argument for his action other than the use of this grandiloquent phrase that the Revenue Commissioners will investigate cases of alleged hardship? It is no answer to my case to say that this is a vexatious amendment or that it has been put down for property owners. It is put down for property owners and it is no justification for injustice or hardship for the Minister to sneer at property owners. Can he make any case for the continued imposition of this tax other than the mere collection of taxation by artificial means from a limited class?

Deputy Costello is evidently a believer in the confusing effect of loud noise. We have heard a speech from him full of sound and fury, signifying nothing. The reason Deputy Costello delivered that speech was in order to evade the obligation which rests upon him of submitting to me for investigation instances of alleged hardship upon which, in his speech last night as in his speech a year ago, he rested the case for this amendment. Twelve months ago, the Deputy ran away from that challenge.

Then it was a challenge?

To-day, he has continued his strategic retreat. I say that, according to the Revenue Commissioners, this section of the 1935 Act has wrought no hardship and has not worked inequitably. Deputy Dockrell took it upon himself to deliver a homily to the Minister because he had not answered his case and he said that he stayed in the House as I was speaking on the matter. I have here the Official Report of what I said:

"We have been told in this debate that Deputy Costello——"

On a point of order, is the Official Report of last night's proceedings yet available? If it is, I have not received a copy.

The Deputy can get a typescript copy.

The Official Report is not yet available and the typescript is not, of course, conclusive evidence.

I am quite certain that any Deputy sufficiently interested would be able to get a typed copy.

I understand that it is a rule of order that a typescript, secured by courtesy of the reporting staff, may not be used in the House for the purpose of quotation. It may be used as a note to help a Deputy to frame his observations, but not for quotation. If the typescript of the Report is to be used in this way, it is going to give rise to very serious difficulty.

I shall use this typescript to refresh my memory. I am not submitting it as the Official Report, but I do not suppose that any fair-minded Deputy will allege that my memory, as refreshed by this note, is not reliable. This is what I said:

"That was the purport of Deputy Mulcahy's speech. That was the end to which Deputy Costello's effort was directed. We have been told in this debate that Deputy Costello was moved to put down this amendment because of the hardships which Section 3 of the Finance Act, 1935, had inflicted upon certain individuals. Now, the Revenue Commissioners deal with all classes of income-tax payers. The case of every income-tax payer comes under the notice of the Revenue Commissioners' staff and of their inspectors, and the Revenue Commissioners tell me that not a single case has come under their notice in which the section has worked inequitably—that is to say, not one case in which the actual net income taking one year with another, derived from house property, or which, if the property were let, would be derived, fell short of the Schedule A assessment, calculated in the manner required by Section 3 of the Finance Act of 1935, the section which it is proposed to repeal."

To the best of my recollection, as refreshed by this note, that is the statement I made last night. Yet, Deputy Dockrell has charged me to-day with misrepresenting the reply I made last night. Deputy Costello says I did not reply at all. Deputy Dillon went further and, as I have already told the House, put words in my mouth which I did not use at all. Is there any sense of fairness or fair play in the Opposition? Have they any regard for the virtue of truth since they are reduced to resorting to the tactics which I have detailed to the House? How can we be expected to deal seriously with them? I shall try to deal with some of the arguments used by Deputy Dockrell and I shall try to show him where they lead.

The Deputy's case for this amendment, and against the section, is based on this ground: that when people bought certain property, they expected the charges upon that property would be a certain amount and assumed, in their wisdom, that they would never be more. Then, he went on to ask what would be thought of a company which issued a prospectus and subsequently departed from the terms of that prospectus. Surely, the Deputy, as an intelligent business man, must realise that there is no true analogy between the two cases. What position would the Government, or even the Corporation of Dublin be placed in, if they were to accept Deputy Dockrell's principle? We could not revalue these houses because, if they were revalued, it is quite likely there would be an increase in the tax charges upon them. If we are to assume, according to Deputy Dockrell's argument, that the charges borne by property at the date of purchase should remain fixed for all time, we could not come in and increase the rate of income-tax. The Corporation of Dublin could not vary its rates one year with another. Is not that the case Deputy Dockrell has made for this amendment?

Is not the whole case he has made that, when certain property was purchased, it had to bear a certain amount in respect of income-tax and that, when that amount was increased, the Government was breaking a bargain with the purchaser of the property. The Deputy knows that there is no such thing as a contract between the Government and the purchaser or vendor of property. Does not that show the shallow basis on which this amendment is put forward?

What is the basic principle underlying the income-tax code? It is that a person will be taxed according to his true income, whether he derives that income out of the profits of a business, the practice of a profession or as remuneration for services rendered as an employee. Deputy Costello has tried to becloud the whole issue by dragging in a lot of extraneous factors, but there is one thing clear, and there is one thing generally admitted, and that is that of all tax systems, provided that due allowance is made for the circumstances of the individual taxpayer, and the tax code is so designed as to give a fair grading —the income-tax is possibly the fairest and most equitable because people are taxed upon their true incomes, upon their real capacity to pay.

But not upon the five-fourths of their true income.

That just betrays the lack of knowledge and the absence of logic which is characteristic of the whole attitude of the Opposition. May I take the Deputy over the ground again? The basic principle of the income-tax code is that the tax will be levied on the true income of the person. I have cited cases time after time in this House to show that, in fact, the true income derived from and enjoyed by the owner of house property, in the generality of cases and, I would say, universally, so far as our country is concerned, exceeds the valuation which, for poor law purposes, was placed upon the property. Now, the question at issue here is whether you will tax a person upon the real and true income he derives from the property, or whether you will tax him upon a much lesser amount, upon the notional value placed on the property many years ago, or upon the bulk of property many years ago, to which the valuations made upon new properties to-day are related? If you are going to be consistent and to give effect to what is the true principle of the income-tax code, that is, that the taxpayer should be taxed according to his real income, you have no justification whatever for taxing him according to the notional income which is represented by the poor law valuation of the property. In the case of the notional income, based on the poor law valuation, the amount of tax he will pay will be too low and if one taxpayer pays less than he would be called upon to pay if he were taxed upon his true income, then you are giving that taxpayer a privilege and a concession at the expense of the general body of taxpayers and you are treating the general body of taxpayers unfairly as compared with him. You are treating him inequitably. You are letting him off with a much lighter burden of tax that he ought to pay.

The whole plea that has been made in favour of this amendment from the opposite benches is that, just as in the case of the stallion owners, we ought to make them a privileged class in the community, so, too, in the case of the property owners, we ought to constitute them a privileged class. We can only do that, and I make this statement with special reference to the speech of Deputy Mulcahy last night, at the expense, not merely of the remainder of the body of direct taxpayers who are not fortunate enough to own property, but also at the expense of the general body of indirect taxpayers, of the poor man about whom Deputy Mulcahy talks so glibly here, and who, according to him, has to pay a tax on his table, on his boots, on his clothes, on his sugar and on his tea.

And his windows, and his wallpaper, and his oilcloth.

Deputy Mulcahy's purpose in this amendment is to increase the tax upon that poor man in order to relieve that small section of the taxpayers who are fortunate enough to own property and to derive an income from it.

I wonder that the Minister for Industry and Commerce did not spring from his slumbers when he heard the Minister for Finance describe his protective tariffs as taxes. This debate has dragged out a great deal of useful information. I welcome the earnest disclaimer by the Minister for Finance of any desire to pry into confidential matters——

That statement is characteristic of Deputy Dillon. First, he concocts a lie——

The Minister has not allowed me to proceed.

——and then he gives currency to it.

Is it in order for the Minister to say that the Deputy concocted a lie?

We will not quarrel about it.

The records of the House would convict the Deputy.

I rejoice to hear that the Minister and I are in entire agreement as to what are the obligations devolving on the Revenue Commissioners in regard to secrecy and confidence, and I rejoice that the Minister has given to his colleague, the Minister for Industry and Commerce, the well-deserved rebuke of pointing out to him that many of the sky-high tariffs he has imposed operate as a cruel tax burden upon the people. The Minister for Finance feels that he must put 25 per cent. extra on the property owner, lest the savage rapacity of his colleague, the Minister for Industry and Commerce would be further inflamed to scourge the backs of the very poor to a greater extent than he already has.

The Minister first says that to ask exemption from this 25 per cent. impost is to ask for the creation of a privileged class. Far from it. It is a request that there should not be a victimised class in the community. Would the Minister think it a justinable application of the income-tax code to provide to-morrow that income derived from preference shares or fixed interest bearing securities would be deemed to be five-fourths of their true value for the purpose of income-tax, while income derived from ordinary shares or equities would be taxed on their actual value, because surely that is the position?

If the Deputy thinks that is the position, there is no use arguing with him.

There are certain classes of people in this country, and in every other country, who prefer a small yield for perfect security. They measure what they expect their expenses to be in their later years, and they invest their savings in debentures, in preference stocks and in house property. They measure very carefully to get the last penny they can out of whatever slender assets they have. Is it right that you should go to those people and say, "Despite your careful reckoning in respect of these fixed interest securities which yield you a certain income, we are going to upset the reckoning. Although we know that you could have got a bigger income by putting your money into ordinary securities, which are subject to wide fluctuations, and that you deliberately sacrificed that greater income for the security to be derived from preference shares and house property, we propose to take that security from you by introducing a new peril into investment, that is, the particular whim of an individual Minister for Finance who will not hesitate to segregate one restricted class in the community and tax them on a fictitious valuation of their incomes." The Minister says this is not a fictitious valuation of income; on the contrary, the valuation is itself a fictitious representation of income, and the five-fourths valuation much more closely approximates to the true income than does the valuation itself. The Minister, however, has forgotten that most house property of the kind affected by this legislation changes hands, particularly amongst people who hold houses and desire to derive an income from the rents. The person who invested his money, say, four years ago, was told by the house agent, "This is a house with a valuation of £15, but the rent is £25." Of course, if the rent were only £15, the house for your purpose would be worth very much less than it is.

Here is a house, the rent of which is substantially in excess of the valuation, and it is, therefore, worth more money. The investor who had a couple of thousand pounds to put into house property turned that proposition over in his mind, and, estimating the valuation and the rent that should be derived from the property, paid an extra sum four years ago for that house, because, as the Minister has very properly said, the fundamental rule of the income-tax code is that it should be applied to all equally, in accordance with their real incomes. That person's real income from that house was £25 a year, and the rule of the income-tax law had been, and presumably was going to go on being, based on the valuation; whereupon the purchaser paid more for the house than he otherwise would. Now, he is quite calmly told that his valuation for the purpose of income-tax is going to be increased in the Minister's mind—I emphasise these words, in the Minister's mind. He then goes to his tenant and says, "I want you either to accept this burden or at least to share it with me." He is informed by the statute law of this country that he cannot ask the tenant to do that. If he induces the tenant voluntarily to do it, at the end of ten, 15 or 20 years the tenant, by a process under the Rent Restrictions Act, can recover every penny of his contribution to that new burden. What equity is there in that?

The Minister's argument up to this has been an argument for revaluation. There may be an argument for revaluation. There may be an argument that the Commissioner of Valuation ought to be given a general warrant to revise valuations all over the country, or at least the valuation of house property. If such a revaluation did take place no reasonable tenant could object. It is right that houses should be correctly valued, because if they are not, from the point of view of municipal taxes, national taxes, and every other kind of levy based on valuation, one person is paying more than he ought to pay, and another person less than he ought to pay. But, to put 25 per cent. on house property necessarily means that you must do injustice, because we cannot accept the proposition that there is not a single house in the Free State which has been properly valued. If there is a single house which has been properly valued, must not this tax be inequitable?

I challenge the Deputy to produce that case.

The Minister admits that if there is a single house correctly valued, injustice accrues in that case. I take him on that. If there is one house which is correctly valued the Minister admits there is injustice here.

What does the Deputy mean by correctly valued?

What did the Minister desire to do when he evolved this method of arriving at a true valuation of properties which are taxed under Schedule A?

What does the Deputy mean when he says, "if there was one house correctly valued?" What is the standard?

We must help the Minister, because he stands in need of help. I can understand that under the leash of the Revenue Commissioners he is inclined to wince and, naturally, he will take the easiest way. Without intimidating or frightening him, we must encourage him to walk straight. What had the Minister in mind when he devised this plan of the five-fourths valuation? His plan was to bring the valuation of a house into line with some preconceived standard of valuation which, in his mind, and in the mind of the commissioner, was an equitable standard. The proper way to go about that was not to put on a flat increase, but to ask the Commissioner of Valuation to revalue the property. When this change in the revenue law was made doubtless houses in this country fell into three classes—those which were too highly valued, those which were correctly valued, and those which were valued too low. The Minister says his object was to get at the houses that were valued too low. What he did was to get at all three classes. If the three classes are equal, he has done two injustices for every justice. If the vast majority of houses were undervalued, he has done as much injustice as he has done justice. But, whatever way you approach his plan, unless you approach it on the assumption that every house in incorrectly valued, substantial injustice has been done.

It must be borne in mind that a great many houses were valued comparatively recently. This House has no reason to imagine that the Commissioners of Valuation fell down on their job. Obviously the method employed by the Minister was an easy method, an expeditious method, but it is not a just method. On the Minister's admission, if one single house was correctly valued before this provision was brought in then injustice exists. The Minister has indicated that if he is satisfied that injustices have arisen out of the operation of this provision he will consider a proposal to revise it. On his own argument, must there not be cases of injustice? If that is so, is he prepared to accept the amendment standing in the name of Deputy Costello.

There are two points to which I wish to direct attention, not that I wish to waste either my time or Deputies' time in replying to alleged arguments of the Minister, because they are not worth replying to. He, presumably, thought it would hurt my feelings if he would not answer my arguments, but I have a very strong hide, and I am capable of putting up with much more hard insults than the Minister, even with his vituperative tongue, can produce. But I wish to put on record two points in reply to the statements made by the Minister in answer to Deputy Dockrell. The Minister said that the Revenue Commissioners had not heard of any single case of hardship. I would be amazed to think that the Revenue Commissioners had heard of any case of hardship arising out of this, because it is not their business. They would be wasting their time for which they are paid if they were looking after cases of hardship. It is no argument to say that Revenue Commissioners have heard of no case of hardship. I will go to this extent and say, that in every single instance where a taxpayer had to pay this additional unjustifiable burden there is hardship—Revenue Commissioners or no Revenue Commissioners. Except the Revenue Commissioners were wasting their time, for which they are paid, doing that, instead of collecting the taxes which it is their duty to collect, they could not investigate this matter. Suppose the taxpayer whose letter I have here wrote to the Revenue Commissioners and said: "There is a hardship caused to me in this case," the Revenue Commissioners would be bound to file it away and say, "That is not our business. We are here to carry out the law; the law is such; and until it is changed we have nothing to do with hardships—pay up."

I want to put this specific case of a man who has a house from which he received an income which is within the limits laid down by the Rent Restrictions Acts and who is dependent upon that income for his livelihood, partly or wholly. This additional tax is put on an artificial increase of the valuation of the property, thereby increasing, in fact, his outgoings, and thereby reducing his income. I want to ask the Minister (1) does he consider that a hardship; and (2)—to come to the second alleged point—does he consider that that man has been charged income-tax on his true rate of income? Does he believe in his own argument, that the income-tax code is based on taxing a person on his true income? Because, if he does, he must take this tax off. The true income of the man whose case I have put here is what he gets from the tenant. Under the Rent Restrictions Acts he is only allowed a certain income from that property. He is allowed to vary that with the increase in rates, if they go up; but he is not allowed to increase it by the amount of the increased artificial income-tax put on by this provision. Where is the principle of taxation on true income? He is taxed an additional 25 per cent. artificially on the same income that he is getting out of the property. Where is the principle of true income? If you test the argument of the Minister on the great principle upon which he says he is acting, that income-tax is a tax on true income, the argument falls to the ground and shows to what straits the Minister is reduced to answer any argument in this matter.

The Minister spoke about valuation in answer to Deputy Dockrell. Is the Oireachtas to be prevented from ever having a revaluation, or is the local authority ever to be prevented from getting rates? Certainly not. The Minister knows perfectly well that that is not at all analogous to the present case. What happened in this case is that the income is supposed to be taxed, whether it is the true income or otherwise. When the Minister first brought in this section in the Act of 1935, the income-tax on house property was based on the valuation. That was the rule of thumb method, but at all events it was the statutory method by which the income was measured. How was the valuation of premises supposed to be arrived at? By the letting value, the sum at which houses will let from year to year, taking one year with another. That is roughly the principle of the Valuation Acts. The valuation is on the income which is supposed to be got from the property. That is the principle upon which houses, whether new houses or old houses, were supposed to be valued. That was the principle upon which income-tax was extracted from property owners. The true income was represented by the valuation, and then an addition of 25 per cent. was artificially imposed and the Minister justifies that by saying, "We are only taxing the man's true income." That is demonstratively false. Then he tells us that we are making a case for the rich man. In 1935 his own Parliamentary Secretary asked: "Why should not the poor man be taxed?" He was taxed in 1935 before this five-fourths section was added, and he was taxed additionally by this new section in the Act of 1935.

I want to take up from the debris that has fallen down on him in this debate, the head of the family who is living in the home that he bought to shelter his family. At the time when this income-tax——

What was his income?

——on his home should be taken entirely off him— when we consider the great increase in the income-tax rate and the increase in other taxes that have fallen down on that unfortunate man —at the time when he should be relieved entirely of tax on his home, he finds the income-tax on his home increased artificially in this particular way. We heard a great lot of talk in this debate about the property owner, the property owner with a capital "P" and a capital "O." And this is the time when we are supposed to be discussing the family preservation, the family exaltation and the family as a unit of our social organisation and the special attention that should be given to it. We have been hearing about property rents. Now if there is any property which ought to be safeguarded from indiscriminate attacks it is the home, the house in which the man is rearing his family, the man of humble circumstances.

The man of humble circumstances?

The working class or middle class man who has bought his own home and who has been caught under the increased tax the Minister has imposed through the increased cost of living, finds himself now with his income-tax on his home increased by 25 per cent. The Minister has attempted in the course of his contribution to this debate to label the man who owns his home as "a property owner."

Will the Deputy tell me what he is?

I have told the Minister what he is. The Minister has complained of misrepresentation by Deputy Dillon and Deputy Costello. I want to be in on that misrepresentation too. I want to underline the fact that in speaking of a home owner like that, the Minister has intervened to obscure his case by labelling him as a property owner. That shows how much credit we can attach to the protestations of the Minister about his regard for the family and their property rights.

I am afraid I must again charge the Minister with having failed to answer the case that was made. I also think he was a little bit inconsistent because he reproached Deputy Costello with leaving the House and at the same time reproached me for remaining in the House. That is what I get for listening carefully to the Minister.

The Deputy did not listen carefully to me.

The Minister refreshed his memory with some notes of last night's debates on the particular point on which I wished rather to refresh my memory. Fortunately, the Minister repeated what he said last night. He mentioned last night that it was Deputy Dillon who wished to create a privileged class. The Minister mentioned stallion owners and that we were out to create a privileged class amongst property owners. I want again to repeat that that quotation shows that the Minister has not yet grasped that we are making a case for property owners who have been deprived of something. The Minister makes a great case that these people are property owners and are very wealthy people. I suppose they range from people who are bordering on the wealthy down to the very humble people who have in a number of cases borrowed money from the bank or money from a building society or from some other source and invested that money in the purchase of the house in which they are living.

In my opinion the Minister has loaded the dice against these people. I instanced the case of an investor who invested money in a commercial concern, and then found that there had been some alterations in the conditions. The Minister made great play with that. He said: "What about income-tax rates, are we never to alter them?" He asked: "What about the local rates?" I would like to say that I never suggested that the terms upon which a person purchased a house meant that they did not have to take a risk of the rise or fall of certain of those items which went to make the whole cost of the house. The local rates may go up. As a matter of fact they have gone up. The Government may alter the income-tax but, as Deputy McGuire interjected, what the Minister had not a right to do was to make the fraction five-fourths and charge the man income-tax on that.

The case that was made for this class being attacked when the Minister altered the conditions in 1935 was that a revaluation was imminent. Now, apparently, the Minister has forgotten that and he says he has a perfect right to alter the fraction to five-fourths. Is there any reason why he should not alter it to six-fourths or seven-fourths or eight-fourths? That is a point that the Minister has not replied to. I would like to suggest to the Minister that he is altering the terms on which people invested in house property. If investors thought that this five-fourths was going to be followed by six-fourths and further increases, there would be a landslide in house property. At the present time, with houses so scarce, the Minister surely is most anxious that all the investors who can be brought in, small or large, to carry the burden of building houses and owning them, ought to be encouraged. That is the reason for the proposal in this amendment.

The Minister's main case for this imposition is that the house property in this country is undervalued. Now, in the case of the City of Dublin a general revaluation took place some 20 years ago and the increase in the valuation amounted to somewhere about 10 or 12 per cent. Examining what the Minister has done with regard to income-tax on house property, we find that he removed the one-sixth which was a concession the people had until he commenced to interfere with it. With the one-sixth the house valued for £12 was assessed at £10. By reason of the five-fourths the house formerly assessed for £10 on a valuation of £12 is being assessed for income-tax at £15, so that the Minister has put up the income-tax assessment by 50 per cent. Let me repeat that in the case of the revaluation of Dublin, to which I have referred, the actual increase all over was somewhere between 10 and 12 per cent.

It might be well, not alone for Deputies here, but for people outside to watch with very great care the possibility of a revaluation of property. The whole idea is to get as much income-tax as possible out of the property of this country. Within the last 15 or 20 years very large rebuilding took place in the two principal cities in this country, Cork and Dublin. In the case of Cork the valuations were increased enormously. Houses that were formerly valued at £80, say, were increased to £200, £300 or £400. Is there a hardship in those cases? In this particular clause which it is now proposed to repeal, exception was made in the case of one borough, the Borough of Waterford. The extra valuation of the property which was destroyed in Dublin or Cork would probably have exceeded the whole value of the City of Waterford.

The question really at issue is whether or not it is fair in all the circumstances to assess certain people at 6/9 in the £ instead of the 4/6 that other people are being charged. That is the essence of this particular imposition. If there are small property owners, who, by reason of this tax which was imposed in 1935, are paying 6/9, I think the Minister ought in justice to them make some case as to why he is charging them 6/9 in the £ while other people, who are either earning £1,000 a year or drawing incomes at £1,490 a year, are charged only 4/6 in the £. There was at one time—I do not know whether it prevails now or not—a general view that if the rent of a house exceeded the valuation by 50 per cent., it was supposed to be a rack-rent. I presume it is on some such lines that the Minister is justifying this particular imposition.

A man is assessed in the normal course upon his income and one takes some time to appraise the value of the Minister's statement that the income-tax code is on a fair basis. Where did he get it? This income-tax code came from Great Britain. They left it here. The Minister is not one of those who would charge the British with either justice, mercy or consideration for the people of this country, or fair dealing. But that is what they left. They left an income-tax code that allowed one-sixth off. In fact, so far as they are concerned, comparing them with the Minister, the Minister is charging on house property 50 per cent. more than they did. They had a basis upon which they based their whole income-tax code.

It was held apparently with such conviction by those people whom we used to charge with injustice, and whom the Minister delights in referring to as unjust administrators—they were so convinced with the difference in conditions as between this country and Great Britain that they allowed this particular exemption. That is what the Minister inherited, but he has changed it, and his only case for changing it is that this is a privileged class. It is no such thing. A house may be assessed at the present moment for £12, let us say. The Minister will collect that tax in the year in which the house falls. A normal income-tax payer only pays upon the income he receives, but the Minister will charge it in that particular case. I must say I never heard such an explanation as that the Revenue Commissioners or the Minister will consider cases of hardship. The Minister does not hear them and it is not the business of the Revenue Commissioners.

I am a better judge of what the Revenue Commissioners' business is than the Deputy.

I have had a longer experience of that than the Minister, and the Minister will scarcely have as long an experience as I have had.

The Deputy, when he had the opportunity of gaining experience, did not take his duties very seriously.

That is a matter of opinion, and it is one in which I would weigh the Minister's opinion very lightly.

It is a matter of more than opinion with some people.

This is a proposal that came up before in a previous Parliament. I was the single member of the Executive Council who was opposed to it. I was left in the extraordinary position of having to defend it here when the Seanad refused to accept it. There was a Parliament here at that time which supported me with a very considerable majority.

Will the Deputy say which particular proposal he is referring to?

The proposal to take off the one-sixth.

The Deputy is talking upon another motion.

I am not going to let the Minister away with the two loads. This refers to the five-fourths. The Minister previously took off the one-sixth. The Parliament here then was not a tied Parliament. The people in it were not afraid to express their opinions, and even though there was a Party vote that day Parliament rejected the proposal.

We are not discussing that proposal now.

That was in the year 1924. This is the year 1937. The reason for this particular imposition, pure and simple, is this: that the Minister was short £60,000 to balance his Budget He asked the Revenue Commissioners what is the easiest method of getting it, and they told him. This is his proposal, and that is the whole justice of it from beginning to end.

I am sorry to have to rise again, but I must after the speech to which we have just listened. We were supposed to be discussing an amendment to annul Section 3 of the Finance Act of 1935. That is an amendment which provides that Schedule A assessment on house property will be based on five-fourths of the valuation. Deputy Cosgrave has devoted most of his speech to quite a different aspect of the income-tax code governing Schedule A assessments. However, it is not my business to do more than draw the attention of the House to that fact. I would, however, like again to draw attention to the tactics which have been pursued by the Opposition in the course of this debate. At the beginning of the proceedings to-day I had occasion to put on record the fact that last night Deputy Dillon deliberately invented and put into my mouth words which I did not use in order that he might be able, by misrepresenting me, to bolster up a bad case. I had occasion also last night to call attention to the fact that the Opposition was seriously divided in the views which it expressed as to what was in order and also in relation to matters of greater public concern than that.

Deputy Dillon, who preceded Deputy Cosgrave, when speaking to the amendment, urged that the right way to deal with this anomaly was by having a revaluation of house property. Deputy Dillon, I think, is the deputy Leader of the Opposition. The titular Leader of the Opposition comes in now and warns the public to watch the idea of a revaluation of property. Deputy Dillon wants a revaluation of property. Deputy Cosgrave, apparently, is opposed to a revaluation of property. Not for the first time has the Opposition been divided against itself, but there is one thing upon which the Opposition is agreed, and that is, when they are short of facts to substantiate a case "then let us invent them to suit our case."

I said, in the course of my reply to Deputy Dockrell, that income-tax was a fair and equitable tax provided it were levied on the true income of the taxpayer. Deputy Cosgrave gets up and alleges that I said that the income-tax code was a fair one. There is a world of difference between the two statements. One of the reasons why we deprived the property owner of the allowance which he was getting twice over when he was getting that additional allowance of one-sixth for repairs, is that we were trying to make the property owner pay upon a basis of assessment which will be more nearly approximate to the true income which he derives from his property, and to make the income-tax code which we have inherited from the British a fairer code in this country. Now, income-tax is a fair tax, but if the code, to the extent to which it governs the assessment and collection of the tax is anomalous and inequitable as between individual taxpayers, to that extent the tax tends to become an unfair one. We are trying to remove the inequities and to make the income-tax code in this country a fairer one than that which we inherited from the British.

I do not know whether I should deal first with Deputy Dillon or with Deputy Mulcahy, but as Deputy Dillon is absent from the House possibly I may deal with Deputy Mulcahy first. Deputy Mulcahy got up here and said that he wanted to speak for this forgotten man: for this lowly individual hidden under the debris which had accumulated in this debate—I presume that when he referred to the debris he meant to refer to the broken arguments of the Opposition. He said that he was going to speak for the man in the humble circumstances. I asked him would he be good enough to particularise the circumstances which, in his view, might be truly described as humble. Just as Deputy Costello refused to cite one instance of the alleged hardships which had been brought under his notice, Deputy Mulcahy ran away from the obligation of defining what in his view were humble circumstances.

But, let us take the case of a man who might be described as being in humble circumstances, and consider how he is, in fact, affected by this Section 3 of the Finance Act of 1935 I notice that Deputy Mulcahy is not worried about, and does not want to listen to, this example, because if Deputy Mulcahy were to have a specific case put before him it might embarrass him, but I do not think it would prevent him from getting up here and treating the House to the same sort of hypocritical misrepresentation of the true position as we had to listen to from him last night and to-day. However, whether he listens or not——

I am listening.

We shall take the case of a married man with a salary of £360 per annum. He is a father with two children. I do not know whether that person would be described as being in humble circumstances or not by Deputy Mulcahy.

He would have his difficulties, I can tell the Minister.

I am sure he would if Deputy Mulcahy was sitting here on these benches and I was sitting as I used to over there.

The Minister will be over here soon enough.

Of course, I anticipate that one day I shall be over there, but I hope that when I am in Opposition I shall have learnt more than the present Opposition appear to have learned when they were in office, and I shall, when we come to discuss these matters, discuss them with some modicum of knowledge to back my arguments. I was dealing with the case of a married man, with two children, in receipt of a salary of £360 per annum. He owns a house, and since he is in humble circumstances, I suppose that even Deputy Mulcahy would admit the house could not possibly be a very large one. But, at any rate, it is a house with a poor law valuation of £20. It is not too uncomfortable a habitation for a man in humble circumstances. Under the existing income-tax code, after applying this fraction of five-fourths, the total income of that man would be £360, plus £20, the poor law valuation of his house, and plus £5 the additional one-fourth added for income-tax purposes under Section 3 of the Finance Act of 1935. Therefore, his total income would be £385. Now, against that total income in the year 1937-38—the present year—there would be earned income relief, marriage allowance, and children's allowances, totalling £405.

The Revenue Commissioners send him £20 to make it right.

It is quite possible that Deputy Cosgrave may have that notion in his head, because, judging by some of the statements he has made here, I would not put it beyond the bounds of possibility that he should know so little about the income-tax code as to believe that, in that event, the Revenue Commissioners would hand this gentleman out an additional £20. In any event, however, the position is that his total income, for income-tax purposes, amounts to £385, and the amount of allowances to which he is entitled under the income-tax code, as amended since 1932, comes to £405. Therefore, in the year 1937-38, that man, in humble circumstances, that poor, honest John Citizen, would pay nothing. He would pay no income-tax.

Would the Minister allow me to ask him a question?

If the Deputy is going to ask me what that man would have paid in 1931-32, I am quite willing to tell him. I am quite willing to tell the Deputy that the man who owns a house with a poor law valuation of £20, who has an income of £360, and who is a married man with two children, would have paid, under Deputy Cosgrave's administration, £4 18s. 0d. in 1931-32, whereas now he would pay nothing. Deputy Mulcahy is full of concern to-day for the man in humble circumstances—the man from whom the then Minister for Finance, in the Cabinet of which Deputy Mulcahy was a member, extracted £4 18s. 0d. However, Sir, supposing we consider the case of another man—let us say the case of a married man with three children——

Why not discuss Donal Buckley's pension?

——or Deputy Mulcahy, if we are talking about pensions.

Discuss Mr. Donal Buckley's case.

Other pensions could be discussed also.

It might be desirable to discuss some of them.

The point is that none of them is in order at present.

As I was saying, Sir, let us take the case of a married man with three children, who has an income of £420, and who, again, owns a house of a poor law valuation of £20. His circumstances are not so humble as those of the previous case I mentioned, if we are to appraise them by the income he earns. Under the existing income-tax code, his assessable income would be £445, but against that, again on account of the increases that we have granted in respect of the earned income relief and children's allowances, he would be entitled to allowances amounting to £475, and he will pay no income-tax in 1937-38; but in 1931-32, this man, in circumstances not so humble as the other man, would have paid £7 5s. 3d. to Deputy Cosgrave's administration. Now, I think I have disposed adequately of all this cant that the Opposition are putting forward to the effect that, in this amendment, they are fighting the battle of the man in humble circumstances. The fact of the matter is that they are fighting the battle of the big property owner, and they know it. They are fighting to confer upon the big property owners an exemption from income-tax at the expense of the general body of the ratepayers.

Let me pursue this matter a little further. It is extraordinary how much of the Opposition case is based, even in the case of Deputy Costello, upon ignorance of the income-tax code. Deputy Dillon made the point that, if one house were valued correctly, then the tax was unjust. Again, in trying to get the Opposition to talk in precise terms and to put in clear language what they are trying to say, I asked Deputy Dillon to tell me when he would regard a house as being correctly valued. The Deputy dodged around that point and did not give me a straight answer. Of course, the house might be assumed to be correctly valued when the valuation placed upon it was equal to what the house was worth to be let from year to year, and if the valuation of the house is equal to the nett rent at which it was worth to be let from year to year, then the tax is a fair one. If the fraction of five-fourths represents that, then the tax is a fair one. In so far as the valuation, plus the additional 25 per cent., would fall short of what the house is worth to be let from year to year, then the tax is unfair, but not unfair to the taxpayer—unfair to the Revenue. On the other hand, it might be said that, if the valuation, plus the additional 25 per cent., were in excess of the nett rent derived from the property from year to year, it might be unfair to the taxpayer; and it would be unfair if the income-tax code did not make provision to relieve the income-tax payer in such circumstances.

That brings me to the statement which I made a few minutes ago, that a great part of the case which is being made against the section by the Opposition is founded upon an ignorance of the income-tax code, because, Sir, that position—the position in which a taxpayer might be called upon to pay an amount based upon a notional income, due to the application of the five-fourths fraction, greater than that which he actually derives from the property—is covered by sub-section (4) of Section 187 of the Income Tax Act of 1918—the Consolidated Act. What do we find there, and it is well-known to taxpayers who derive their incomes from property? We find there that:

"If it is proved to the satisfaction of the special commissioners by whom the appeal is heard, or the Recorder or County Court judge by whom the appeal is reheard, as the case may be, that the annual value on which the assessment is based exceeds the annual rent at which the property in respect of which the assessment is made is worth to be let from year to year, relief shall be given by reducing the assessment and charging the tax on the amount on which it would have been charged if that rent had been adopted as the basis of the assessment instead of such annual value."

Accordingly, what is the position under the law? The position is that if, in fact, an income-tax payer is assessed for tax on a greater income than he actually derives from his property, he has his remedy by going before the special commissioners. In fact in most cases, it is not necessary to go before the special commissioners. The matter may be settled by the inspector, but, at all events, by going before the special commissioners he can have the tax levied on his true income. Therefore, there is no case made for the amendment. That is the reason that I have so often and so emphatically challenged the Opposition to cite one single case in which an income-tax payer has been charged on a greater sum than he would be charged on the income which, in fact, he would derive from the property if he let it. I have not been able to get as much as a single example of that occurrence.

Deputy Cosgrave and Deputy Costello had occasion in this House to tell me what the duties of the Revenue Commissioners were. They said it was not their duty and it was not their function to investigate complaints of hardship if hardships occur. I, Sir, am the Minister responsible to this House for the Revenue Commissioners and I say the Revenue Commissioners, who are my advisers in regard to these taxes, to whose representations as to the effect of taxes I am bound to listen if I want to fulfil my responsibility in the matter to the full, the people who administer these laws,— they and I both agree, notwithstanding what Deputy Cosgrave and Deputy Costello have said, that it is clearly the duty of the Revenue Commissioners to inform the Minister, if a section is working hardship in cases which the Minister brings to their notice. I take my responsibility very seriously and so do the Revenue Commissioners. They are not there as mere machines, to steamroll taxpayers. They are not there as ruthless tax gatherers. They are there to gather taxes, it is true, but also to advise me as to any anomalies, hardships or inequities which their experience brings to their notice during the course of the year. Therefore, they would be bound if real hardship occurred in any case to draw my attention to it. If there was a case in which this particular tax operated inequitably, that is to say if there was a case in which it was levied, by reason of some phraseology in the statute, upon persons in such a way that they would be taxed upon a greater income than they in fact enjoy, it would be the duty of the Revenue Commissioners, and I regard it as their duty notwithstanding what Deputy Cosgrave and Deputy Costello have said, to call my attention to that fact, whatever may have been the position before 1932. If the instructions of the former Minister for Finance and the then Administration to the Revenue Commissioners were to be ruthless in dealing with the taxpayer, that is not the position now. The Revenue Commissioners are, as I have said, my principal advisers in these matters and they, as well as I, regard it as their duty to bring to my notice any cases of hardship that may arise in the administration of the income-tax code or any other code of taxes.

The Minister for Finance has thought fit to refer to me as a pensioner.

No, but the Deputy said——

I should like to remind the Minister that I spent 13 years in the Civil Service of this country, apart from any military service which I rendered entitling me to a pension. I do hope that I am rendering services to the country here that are altogether out of proportion to the amount of money which I get as a military service pension and I want to say that I could not render these services if I had not that pension.

Are we going to discuss this?

I am prepared to discuss it. The Minister introduced it.

No, the Deputy introduced it.

The Minister introduced it.

The matter was introduced by an irrelevant interruption.

From the Minister.

Not from the Minister, but from the Opposition Benches.

I am replying to the Minister and I am entitled to do so.

The interruption was an interruption made by Deputy Mulcahy in relation to a Bill before the House the other day.

If the interruption was made by me, at any rate I am not conscious of it but I shall reply to the Minister's interruption. I just want now to deal with the matter under discussion. The Minister's attitude simply amounts to this. There is a figure staring in the face the heads of families in every part of the country. That is not the official cost-of-living figure. It is a very much bigger and darker figure which arises from every aspect of the cost of keeping up a home. That figure has to be supported and put in proper perspective. The Minister is simply in this matter erecting a pedestal sufficiently large to ensure that the cost of the maintenance and upkeep of that home will not look out of proportion. That is the explanation for the Minister's sticking so fast to this particular proposal. He wants to make the cost of the home sufficiently large so that the cost of maintenance of that home will not look too much out of perspective.

Before the debate proceeds, Sir, when I was speaking I heard an interruption which, I understood, came from Deputy Mulcahy.

The interruption was not made by Deputy Mulcahy. It came from the Opposition Benches.

I wish to apologise to Deputy Mulcahy for the remarks I used and which I made under the misapprehension that the interruption came from Deputy Mulcahy.

If it was not in the Minister's mind it would not come out.

It is in the Deputy too.

It was I made the interruption.

Deputy McGuire should keep out of these matters.

The Minister I am afraid did not reply, and I suppose is not going to reply, to the arguments that were raised. He has given another set of figures which require some contradiction from this side. He has taken the case of a married man with two children, who had, I think he said, £400 a year.

In 1932 he paid £8.

£4 18s. 0d.

I make the Minister a present of that statement. I am sure it is perfectly correct but one story is very good until you hear another. If the head of a household does not pay income-tax it will not loom very much in his calculations, but he would be entitled to assume that he had to face an all-in cost-of-living figure. If you compare the all-in cost-of-living figures at the present day with those of 1932, 5 per cent. would be a moderate increase.

It would apply equally well. There is a rise on 1931 of at least 5 per cent.

The Deputy is not correct.

We will just take what the figures are.

Over the whole year?

Take May, 1931, and November, 1936. It is 11 points up.

But they are not comparable figures. Take May, 1931, and May of this year.

There are points higher. The Minister has taken two favourable dates, and we hear from time to time from the Labour Benches about the cost-of-living figures not really representing the increase. However, I will make the Minister a present of that. The saving which he has made in the income-tax is more than swallowed up if you take the percentage increase in the cost-of-living figures.

The matter before us is the question of income-tax, and the cost-of-living figures in comparison with those of 1931 do not arise.

Well, a Chinn Comhairle, I accept your ruling, and having allowed me to make the point I will hand it to the Minister.

No case whatever for the retention of this section of the 1935 Act has been made by the Minister. I have often heard the Minister speak in this House, but seldom have I heard him let off such an amount of hot air as he has let off here during the last hour or so since I came into the House. The points made by Deputy Dillon — I think he spoke twice on this amendment — do not seem to have been grasped by the Minister. He made the point — quite clearly I thought, although the Minister does not seem to have grasped it — that, if there is even one case of hardship created by this section, that is something which should receive the consideration of the Minister, and the Minister in argument should try to reply on that particular point. We have heard a great deal from the Minister about consultations which took place between him and the Revenue Commissioners, but all that seems to me to be beside the point. What can the revenue collectors tell the Minister except that they failed to collect or that they have collected. I take it that, in the vast majority of cases, their story to the Minister in connection with this five-fourths valuation is that they have successfully collected. The Minister assumes from that statement that this particular tax is working no hardship. That is exactly the point which the Minister made. If some other communication was made to him or to his officials I should like to hear what the nature of it was, but I take it that the sort of communication which did come was that this tax is not working any hardships or inequalities for the simple reason that it is collected.

That is not so. I did not say that. I repeated twice in the House what I did say in that regard.

Will the Minister tell the House how he could know whether a particular taxpayer has or has not experienced the necessity of going to a moneylender for the purpose of getting money to pay this tax?

That is a different matter. He might have to go to a moneylender because he squanders his income in other ways.

Would not the tax be working a hardship if the taxpayer had to go to a moneylender?

Not at all.

How could such a case come to the Minister's notice? This tax should be taken on its own merits. The suggestion by the Minister is that instead of taking the valuation figure another quarter should be added on — that he should take five-fourths instead of four-fourths. I should like to know from the Minister why he takes that particular figure of five-fourths? Why should it not be three-fourths? Could not just as much be said for the figure of three-fourths as for the figure of five-fourths? Has there been a report on the valuations throughout the country? Had the Minister anything to go on except informal conversations between himself and the other members of the Executive Council? Was there anything except, as Deputy Cosgrave said, a request from the Minister to his revenue officials: "What is the easiest way to get £60,000?" The Minister, as we all know, was looking for this £60,000. He asked his officials: "What is the easiest way to get this £60,000," and they said: "Put another quarter on to the valuations, and you will get it very quickly." That is the sum total of it. The Minister comes in here now and raises a lot of hares which he expects the Deputies in this House to follow — the Deputies on this side of the House, because the attendance on his side when this rather important matter is being discussed is conspicuous by its absence, except for three Deputies, one of whom is fast asleep.

Which one?

I thought Deputy Tom Kelly was asleep. I hope he is following the debate well, and will be able to answer the questions which he will be asked around the South City in a few weeks in regard to this particular tax. I should like to hear from the Minister why he chooses this five-fourths figure? What particular attraction has it got for him?

It is a nice fraction.

I think that if a debate were started in this House, on a private motion or otherwise, as to what is the proper basis of valuation in this country at the moment, the result of a fair-minded discussion — if no whips were put on — would be just as likely to be a decision on the figure of three-fourths as on the figure of five-fourths, which has been arrived at in some obscure way about which we have not yet heard.

I should like to say a word on this subject, about which I have spoken frequently before. I regard this tax as unworthy of the Minister — unworthy of that Minister for Finance who smiles on us, but still exacts his farthing. I regard this tax as a dishonest one. There is no personal implication in that. It did not take into account the fact that when a person purchased his house — as many of my friends have done, investing a certain sum of money which was hardly earned in many cases; it was got by careful saving and not by squandering — he expected a certain return for the money which he invested. The Minister, by this tax, has made what amounted to a capital levy on the assets of the tenant occupier. He destroyed their capital value by a certain sum. I do not know what the particular fraction is — I am not a mathematician — but it is a very considerable one. He reduced the value of their investments very considerably. It was somewhat like the procedure adopted when they cut down the debentures of the Great Southern Railways. That was also, in my opinion, a nonmoral transaction, inequitable, and unjustifiable on any grounds except those of dire emergency.

I do regard this tax as particularly aggravating. To some of us it is more than that. It is a hardship, and it is a tax hard to be met, because in every direction all the concessions that were given to the payers of income-tax have been cut down and whittled away. The general attitude of the Revenue Commissioners to the unfortunate income-tax payer, who does carry a fair share of the country on his back, is that he is something between a footpad and a sneak thief; that he has got an income which his neighbour ought to have. It is rather rough on people who have earned their income, and earned it hard, and who have been provident enough to invest their money in house property — their own house particularly. I do regard this tax as an encroachment on the capital of the unfortunate investor. It is on those grounds that I should like the Minister to consider it, shall I say, in a less financial mood; let him look at it fairly. I think he is doing considerable harm to the ordinary citizen, who ought to be encouraged to save his money and buy his own house. It is very desirable that a citizen should own his own house. Such citizens do not go in for revolutions or for blowing up things. I was aware that attempts were made to bring in this tax long before I ever heard of the Minister. Finally, those people who are organising it in the background succeeded. I do not think they did a good turn for the thrift of the country.

Amendment put.
The Committee divided: Tá, 29; Níl, 45.

  • Alton, Ernest Henry.
  • Beckett, James Walter.
  • Bennett, George Cecil.
  • Bourke, Séamus.
  • Brennan, Michael.
  • Brodrick, Seán.
  • Corish, Richard.
  • Cosgrave, William T.
  • Costello, John Aloysius.
  • Dockrell, Henry Morgan.
  • Dolan, James Nicholas.
  • Doyle, Peadar S.
  • Finlay, John.
  • Fitzgerald, Desmond.
  • Good, John.
  • Keating, John.
  • McFadden, Michael Og.
  • McGuire, James Ivan.
  • McMenamin, Daniel.
  • Minch, Sydney B.
  • Morrissey, Daniel.
  • Mulcahy, Richard.
  • Murphy, James Edward.
  • O'Higgins, Thomas Francis.
  • O'Leary, Daniel.
  • O'Neill, Eamonn.
  • O'Sullivan, John Marcus.
  • Redmond, Bridget Mary.
  • Reidy, James.

Níl

  • Bartley, Gerald.
  • Beegan, Patrick.
  • Boland, Gerald.
  • Boland, Patrick.
  • Brady, Brian.
  • Brady, Seán.
  • Briscoe, Robert.
  • Browne, William Frazer.
  • Concannon, Helena.
  • Cooney, Eamonn.
  • Corbett, Edmond.
  • Corkery, Daniel.
  • Crowley, Timothy.
  • Derrig, Thomas.
  • de Valera, Eamon.
  • Flynn, Stephen.
  • Gibbons, Seán.
  • Goulding, John.
  • Harris, Thomas.
  • Hayes, Seán.
  • Keely, Séamus P.
  • Kehoe, Patrick.
  • Kelly, Thomas.
  • Kennedy, Michael Joseph.
  • Killilea, Mark.
  • Kissane, Eamonn.
  • Lemass, Seán F.
  • Little, Patrick John.
  • MacEntee, Seán.
  • Maguire, Ben.
  • Moylan, Seán.
  • Neilan, Martin.
  • O'Briain, Donnchadh.
  • O Ceallaigh, Seán T.
  • O'Grady, Seán.
  • O'Reilly, Matthew.
  • Pearse, Margaret Mary.
  • Ruttledge, Patrick Joseph.
  • Ryan, James.
  • Sheridan, Michael.
  • Smith, Patrick.
  • Traynor, Oscar.
  • Victory, James.
  • Walsh, Richard.
  • Ward, Francis C.
Tellers:— Tá: Deputies Doyle and Bennett; Níl: Deputies Little and Smith.
Amendment declared lost.
SECTION 5.
Question proposed: "That Section 5 stand part of the Bill."

This section appears to enlarge the duty on a large number of articles. Something may have to be said on the Schedule in regard to these articles but we should like to have some explanation from the Minister as to what the policy at the back of this section is.

I do not know whether there is any special point the Deputy wants to raise, but I am prepared to deal with any point he may raise, either now or on the Schedule.

I think I have an amendment down to the Schedule, but here you have duties of 40 per cent. on shirts, 40 per cent. on collars, 60 per cent. on handkerchiefs and 40 per cent. on umbrellas. You have quite a series of 60 per cent. taxes, together with minimum charges of 3/- on a pullover, 1/3 on a shirt, 8d. on a glove, 15/- on a coat, suit or dress, 7/6 on a skirt and 10/- on an overcoat. I submit that on the section which proposes to treat with that Schedule, the Minister has a suitable opportunity for giving an explanation of policy behind all these rather exorbitant minimum tariffs.

The policy behind the tariffs is to secure the development of the production and manufacture of these articles here. I think that in respect of every article mentioned by the Deputy, there is a sufficient number of firms in this country equipped to supply all the requirements of our people in them. Their importation is no longer necessary, and these duties are imposed to restrict and to prevent the importation of these goods, in order to ensure that the products of Irish factories will be employed, and Irish people engaged in their manufacture. I doubt if it is possible to give a more detailed explanation of the policy than that. Of course, so far as the majority of the duties upon wearing apparel, to which the Deputy has referred, are concerned, they are not new duties. As I explained earlier, the duties upon wearing apparel have been simplified. Formerly, there was a very large number of separate items in the duty Schedule. These have been substantially reduced in number for the purpose of facilitating the administration of the duties, and, also, those who are engaged in the importation of those goods. The small number of separate duties and the wider definitions used will, I think, be found a convenience by everybody concerned, both the customs officers, on the one hand, and the importers on the other. In fact, the request that these duties upon wearing apparel should be simplified in that manner is one of long standing. It was not possible to meet it until now because of the detailed work involved, and the very close examination of the position with regard to a large number of articles which was necessary; but now that the request has been met, I think most people are glad of the change.

I take it the Minister is not making a detailed statement which, I suppose, he is reserving for the First Schedule. I take it that there are no revenue producing duties in the First Schedule. They are all protective?

They are all protective duties.

The Minister has made a few general remarks with which we might all agree, but let us take this:

"Rates of minimum duty on suits, coats and dresses which, in the opinion of the Revenue Commissioners, are made wholly or partly of woven tissue and are either suitable for wear by women or suitable for wear by girls, 15/- per suit, coat or dress, as the case may be."

Will the Minister give the House some explanation as to how that 15/- tax is arrived at? Is the position with regard to the production of women's clothing in the country that it requires a tax of 15/- an article to protect Irish manufacturers here?

It would require more than that, in my opinion, and in the opinion of anybody who knows anything about it.

It requires more than that?

Because they are made so cheaply abroad.

In Belgium, for instance.

That is the rate which is considered will be effective.

Does the Minister seriously say that the women and the girls of this country would clothe themselves adequately, and to their own tastes, at a cost of 15/- per coat, 15/- per dress, and 15/- per suit, if there was not a 15/- tariff on here to make them use native manufacture?

No. The Deputy, of course, has been misled by Fine Gael propaganda. The fact that that duty is considered necessary for the purpose of protecting our own industries does not mean that the prices here are that much higher than they would be if imported goods were on sale. Particularly with regard to ladies' wear, there is necessity for having an effective rate of duty, because considerations of fashion and design enter so largely into the question of what makes an attractive article. I think most people will agree that design and fashion, much more than value, determine the price at which articles of ladies' apparel are sold. Furthermore, persons engaged in the sale of these goods have for many years established trade connections with foreign firms supplying them. For various reasons, they are not always willing to break these trade connections and to establish new connections with home suppliers, and, in relation to this class of goods in particular, it was found difficult to secure that the bulk of the orders for these goods would go to the home factories, although the home factories were quite capable of filling these orders. Hence a minimum rate of duty is necessary.

The Deputy also should be aware that most countries in the world export goods for sale abroad at a much lower price than similar goods are sold in the country of production. Export trade is always carried on upon that basis. A factory engaged in the manufacture of goods for sale at home and abroad endeavours to secure that all its overhead charges will be met by the profit upon home sales, so that the exported goods can be sold at the lowest possible price. Consequently, goods of many classes can be imported here, apart from the protective duties in operation, cheaper than they can be purchased by the persons who actually make them in their own countries. The effective standard by which to judge prices prevailing here is not, therefore, the price at which goods can be imported from some other country, but the price at which similar goods can be purchased in other countries; and by that standard the prices prevailing here are, on the whole, very reasonable.

If we are to base our criticism of Irish industries upon a price consideration alone, and to regard their effectiveness and their efficiency solely by the prices they charge, I suggest it is utterly unfair to compare their prices with the lowest price at which similar goods can be purchased in other countries. That is the attitude that Deputy Mulcahy has consistently taken. I assume that anybody importing goods into this country will import them from England, or Japan, or China, or America, or wherever he can get them cheapest, irrespective of the conditions of labour or the export bounties paid, or the system of government in operation, or any factor which may operate to make these goods cheap. He will import the cheapest goods. It is against the price of these goods, the cheapest that can be imported from anywhere, that Deputy Mulcahy wants to put the price of Saorstát goods in comparison. I submit that that is not a fair standard by which to judge Irish industries. It is a fair standard to judge the prices prevailing here by the prices at which similar goods can be purchased in Great Britain or other countries where the general standard of living is not dissimilar to our own, and where the various factors which operate to increase or lower the cost of an article operate as they operate here. On that basis, the prices of our products are reasonable.

But, in framing protective duties, we have to have regard, not to the prices prevailing in Great Britain, not to the prices at which goods can be imported from these countries where the standard of living is similar to our own, but the prices at which goods can be purchased from any country, no matter what standards prevail. It is because goods can come in at an extraordinarily low price from certain countries that minimum rates of duties are necessary, because we can only compete with these prices on the basis of having a standard of living and rates of wages and conditions of employment and industry here similar to those in these particular countries. Nobody here would tolerate that for one moment. We have established a particular standard of living here which we are anxious to maintain, or rather to improve upon.

The Deputy's mentality is one which could be argued as being in favour of sweated wages and the very appalling conditions of employment which exist in certain countries which are developing an export trade of considerable dimensions at the present time upon the basis of the cheapness of their products. It is not in competition with these goods, exported from these countries, in the matter of price that we want to put the industries of this country. We want to assure that these industries will supply the requirements of our people at a reasonable cost, having regard to the cost of other commodities, and, at the same time, ensure reasonable wages and conditions of employment to their workers and, except on that basis, industries in this country are not worth having.

Are they subject to quota as well?

Some of them.

Section put and agreed to.
Sections 6 to 14, inclusive, put and agreed to.
SECTION 15.

I move:—

Before Section 15, and in Part III, to insert a new section as follows:—

The Cement Act, 1933 (No. 17 of 1933) is hereby amended by the deletion of Section 36 and Section 37.

The effect of the amendment would be to delete that part of the Cement Act which enables the Minister for Finance to collect 5/- tax on every ton of cement imported into this country. When we take into consideration the amount by which the price of cement has increased recently and the increase in the cost of timber and every other article that goes into the building of a house, I think the time has come to stop the imposition of this tax on one of the most important of building materials. A lot of noise has been made about the amount of building that is going on in the country, but not so much noise is being made about the amount of debt that is being piled up on this State in respect of the houses that are being built. In respect of houses built by local authorities, for the loan charges on these houses I suppose about £3,500,000 or over has already been added to the State debt.

The Deputy can get it all in my Budget speech.

We can get it in a more satisfactory and clear way from the figures that are extracted from time to time from the Minister for Local Government and Public Health. At any rate the Minister for Finance will not question that in respect of the houses built up to the end of December last the amount of State debt due — moneys that have to be paid off from revenue in the coming years — was about £3,500,000. The Minister is giving grants, but he is to-day by this tax piling on more debt for housing. He is putting a tax of 5/- a ton on the cement used in the houses. That increase has to be raised by borrowed money, and I am given to understand that in the case of the ordinary house built by the local authority the increased cost, due to the rise in the price of cement alone, is something like £2 10s. to £3. That increased price of cement has come about chiefly in the last few months. In addition to that, the cost of timber has also risen, and so has the cost of every other article going into the houses. It is time that the cost of building houses should be relieved at all events of this particular tax. We had to-day a discussion in reference to one aspect of income-tax that causes a rise in the cost of homes. This tax of 5/- a ton on cement is another of the things that rise the cost of homes. With the other increases at the present time in the cost of building the Minister certainly should take off this cement tax and give relief at least by that amount to the building of homes for the people.

Mr. Brodrick

The Minister at the time this duty was put on cement claimed that the price of cement was so low that it could well bear the duty. That is what the Minister is now going on. Instead of, as Deputy Mulcahy said, the increased price of cement causing a difference of £2 10s. Od. or £3 in the building of a house, I am aware that the cost is more like £10 or £12 a house as compared with what it was, say in March, 1935. At that time, I know that in the western counties, cement was being sold at £2 2s. a ton. The duty brought it up to 47/- a ton. Some time afterwards there was a sharp rise to 52/- a ton, and to-day the price of cement delivered at the ports in the western countries is £3 a ton. That represents, roughly an increased price in the building of a labourer's cottage of from £10 to £12 per cottage. With the cost of building going up so much it is only fair that this duty should be taken off. The amount of cement imported in 1935 was 335,000 tons, and the tax on that was £83,750. The amount imported in 1936 was 336,687 tons, and the tax was £91,671. The Minister may say that is a small amount, but I am satisfied that it certainly is going to check or hold up building. At all events it will affect building, seeing that in every other respect there is an increase in cost in the last two years. In the last 12 months, leaving out entirely the increased costs caused by the Conditions of Employment Act, there has been an increase in building costs of 33? per cent. In February, 1935, lead was £20 a ton, and that has now gone up to £42. Steel and iron are up by 40 per cent.; ordinary concrete roof tiles are up by 10/- per 1,000. What will be the position in the case of houses to be erected in the coming year and afterwards? We find to-day in the West of Ireland that the tenants of the labourers' houses built at 33? per cent. less than they could be built to-day, plus 7 per cent. or 8 per cent. that might be added under the Conditions of Employment Act, say in all, 40 per cent., are complaining that they are unable to pay. The tenants are not able to pay those rents that are 40 per cent. less than future tenants will have to pay. What will be the position when the houses will have to be built at an increased cost of 40 per cent.? How will those tenants be able to pay the rents? I know that for houses that were built before there was a rise in the price of building material, and before this 5/-a ton tax on cement was put on, the tenants in rural towns in the West of Ireland are unable to pay something like 9/- a week. There is little employment in these towns. I know one town in which another scheme is being started. Already in that town houses are let at 9/-, but under the increase in cost the new houses will have to be let at least at 13/- a week. That is a matter I would ask the Minister to consider seriously. I know very well that the Government are not responsible for the increase in the price of materials, but they could at all events relieve people of building costs by removing this 5/- a ton tax. I am aware that at the time the duty was put on, the price of cement was low and it could bear that tax. Cement at that time was being sold at £2 a ton. Now it is being sold at £3. The Minister could give some relief to the building industry and relief to the poor man who wants a house by removing that tax. I understand that the revenue for one year, 1935-36, from this tax was £83,000, and the revenue for the following year was £91,000. The removal of that impost would, at all events, give some relief to the building trade and to the people who want houses.

I am supporting this amendment. I can very well remember the remarks made by the Minister for Industry and Commerce when introducing this tax. At that time he said it was undoubtedly correct to say that cement was being sold, or dumped as he described it, in our markets below world prices. That was true. Now, there is an international cartel at work and I do not know whether everybody pays the same price. But certainly this market has got to stand a very substantial increase in the cost of cement. At the time it was stated that this tax on cement would be negligible. Possibly, that might have been thought then, but when you tot up all these negligible items they mount up to something and hence you have an increase all round. I understand that the amount collected by this 5/- per ton tax or the ad valorem tax came to £218,000. I suppose you could build close on 600 houses for that sum. If somebody suggested that this country was going to be made a present of 600 houses it would be considered a very substantial matter. Other Deputies have spoken about this tax and I wish merely to draw the Minister's attention to the fact that when it was first put on, it was represented that cement was really too cheap in our market and that it could very well stand an addition. I do not think anybody will deny that it has got to a very high price and it ought not to be asked to stand a revenue-producing tax, because I do not suppose the Minister is going to contend that the cement factory is going to put out any cement for a year, at any rate.

Having regard to the ad valorem tax which produces a revenue of £49,000, I would like to ask the Minister to do away with that. He will remember perfectly well that it was put on as a 10 per cent. emergency duty by way of reprisal when the English put a tax on the cattle. That was reduced under the Coal-Cattle Pact to 5 per cent., and it is an extraordinary anomaly that we are supposed to have got what we wanted under the Coal-Cattle Pact and yet we are holding on to the 5 per cent. on cement. I would like to suggest that it is not getting us anywhere in the annuities question. Either we are satisfied with the Coal-Cattle Pact or we are not. I think the tax could be taken off altogether and the cement should be left to find its own level. There is a flat rate of 5/- per ton on all cement coming into the country and I will ask, as I have previously asked, for the removal of that tax.

This ad valorem tax of 10 per cent., reduced to 5 per cent., is extraordinary and it works in a very peculiar fashion, because some people find that they have to get their supplies from England while others find that it does not suit them at all and, in that way, I think it is most unjust to discriminate against one article which was supposed to have formed the basis for a settlement with the cattle. I suggest to the Minister that he should take the duty off the cement and ask the English for a corresponding quid pro quo. Other speakers have suggested that the increase, due to world conditions, has raised the cost of building. Nobody could look upon a cost to building of £218,000 as a trifle, and I suggest it is a serious condemnation in view of the shortage there is of houses and the way we are practically borrowing money to build most of the houses. I would like to support this amendment.

Deputy Dockrell rightly described the origin of this licence fee. At the time the Cement Act was passed and power was taken to charge this fee on the issue of a licence to import cement, this was practically the only free market for cement in Europe. For some reason the international cartel had made no arrangement concerning this market, with the result that the surplus production of all cement-producing countries came in here at extraordinarily low prices, prices in some cases so low that they hardly seemed to repay the cost of transporting the cement here. We had determined to engage in the manufacture of cement ourselves. We foresaw the end of this arrangement which was temporarily advantageous to us and the consequent increase in cement prices when this market was brought within the ambit of the cartel's arrangements. This licence fee device was decided upon for the purpose of stepping up the price of cement to an economic level until such time as Saorstát-made cement would be available. In the meantime, however, the cartel came to an agreement concerning this market and the price of cement went up very considerably. In the circumstances now existing, the amount of this fee is obviously open for reconsideration at any time. But that is not what Deputy Mulcahy is proposing. He is not proposing that we should reconsider the amount of the fee; he is proposing that we should abolish the power to charge a fee at all, and that is something we could not agree to.

Will the Minister make provision for limiting the size of the fee? It is absurd to be charging 5/-.

The economic price of cement is the price at which we can manufacture it here with up-to-date equipment. The aim is to ensure that cement will be got at the price at which it will be available from these plants when they are in operation here. If there is any benefit to be secured for the Exchequer, well and good. The Exchequer is open to receive any contribution of that kind. With the rise in the price of cement, the amount of the fee is open for reconsideration at any time. Whether circumstances justify its reconsideration now, I am not in a position to express an opinion.

Ought not the Minister to be in that position?

I think we could not abolish the power to charge a fee because the two cement factories which are being constructed will be capable between them of producing 250,000 tons of cement per year. At the time we decided upon the construction of these factories, that appeared to be about the amount of cement required annually in this country; but, as Deputies have remarked, the consumption of cement here has increased considerably and, in fact, on the basis of last year's figures and the figures of the year before, there is now room for a third factory of an economic size. Until that third factory is constructed there will be a period during which a proportion of cur requirements of cement will be supplied from the factories at Drogheda and Limerick and the remainder will be imported. This fee arrangement is designed to ensure that the price of the home-produced cement and the imported cement will be uniform and that no one part of the country will have a special advantage, or disadvantage, as against another. I think the power to charge this fee should be retained, although the fee itself may vary from time to time. In fact, the Act gives power to vary the fee not merely from time to time but in relation to various ports of importation and it is desirable to keep that power, particularly now when we are coming to the point at which home-produced cement will be available to meet some part of the requirements of the country, but not all. I cannot say now that this fee is going to be changed, but I can assure the House that the position in respect of cement prices is under examination and that the power to vary the fee will be exercised when the circumstances appear to justify it.

The Minister has given us a sample of the kind of two-headed monster that is attacking our people. I could understand the Minister for Finance claiming that he wanted money and that if necessary he was going to get it off the importation of building material. But I cannot understand the Minister for Industry and Commerce, with the prices of building materials what they are at the present time, saying that the Minister for Finance was entitled to any money that he was able to get. The only suggestion that can be gleaned from the statement of the Minister for Industry and Commerce is that either he has been shutting his eyes completely to the cost of building materials or that he is prepared to allow a revenue tax to go on building materials coming into the country. It shows the danger of giving the Minister for Industry and Commerce power to operate a sliding scale of taxation like this. No discrimination is made in the amount of the licence fee that has to be paid in respect of different ports in the country. The 5/- per ton is charged on all cement coming in.

At present.

In spite of the repeated rise in cost, the Minister has not shown any indication of sliding down the charge of 5/-at any particular port. The 5/- is simply left on and is being taken in as revenue.

When speaking I had intended making some reference to the remarks of Deputy Brodrick and others concerning the price of building materials. The price of all building materials has gone up quite considerably during the course of the past year, due to causes, operating in all countries, which are, in the main, outside of our control altogether. We are not in a position to control the price of timber, of steel or of lead or of quite a number of other materials used in the construction of a house. That increase in the cost of materials has its reaction upon the cost of the completed dwelling-house or other building. In so far as a large part of the cost of building represents the wages paid to labour, the increase in cost is less obvious than a mere comparison of the present prices with the prices prevailing 12 months ago would suggest. Because there has been this increase in the cost of building materials, and because buildings of the kind that it is desired to provide for members of the working classes in cities and for agricultural labourers in the country, if constructed and let at a minimum rent, would be altogether too dear for the members of these classes to occupy, the State provides a subsidy.

The only way you can off-set the high cost of building and at the same time ensure that houses will be available to those for whom they are intended at rents they can afford is by giving a subsidy: by providing from the Exchequer in one form or another a direct contribution towards the cost, although from Deputy Mulcahy's remarks it appears that he objects to that. All this talk we have had about the debt on local authorities and the contribution which the State is paying towards the fulfilment of the Government's housing problem are at least an indication that they object to the subsidy available. But there is no alternative to it. The subsidy may be varied as costs rise or fall, but apart from that subsidy arrangement there is no other way of ensuring that houses can be constructed and let at rents which the members of the working classes and agricultural classes can pay.

The Government are giving with one hand and taking away with the other.

Nonsense!

Mr. Brodrick

It is rather strange that while we have the admission from the Minister that he has the power under the Act to revise the duty on cement, and that there has been an increase in the cost of building, yet he will not exercise his power to reduce the duty. He says that the Government are subsidising the cost of building. Will the Minister deny, in connection with development schemes down through the country and the building of labourers' cottages, that unless the local authority keeps within a certain figure the Government will refuse to pay the subsidy? A case came under my notice where plans and specifications were prepared for development work in connection with a particular scheme of cottages. The estimate exceeded the figure approved by the Government, and, accordingly, the Government refused to sanction the scheme. They refused to pay the subsidy unless the estimate for building was brought down to a certain figure.

Will the Minister not again consider the increase in the cost of housing? I do not blame the Government for the increase in the price of timber, steel and lead. Where the Minister has the opportunity of reducing the cost of houses for the poor people of the country, I think he should do it. In the two years since the duty was put on, the Government have taken in a sum of £171,000. Why not utilise some of that to bring down the cost of houses for the poor people of the country? Labourers' cottages, which could be erected for £250 in March, 1936, are at present prices going to cost £320. In view of that, I think the Minister should make a proportionate increase in the amount of the subsidy. It should be increased to meet the difference in cost as between the prices in March of last year and present-day prices. If the Minister did that, houses could be built and let at an economic rent. If he refuses, houses cannot be let at an economic rent. I am familiar with schemes where, making allowance for all charges, the rents of the houses are 9/- per week. With building costs as they are to-day, houses of the same type cannot be let in future at less than 13/- or 14/- per week if the Minister does not do something in the way of meeting the increased cost of building by increasing the subsidy.

The Minister stated that this amendment was designed to take away the power to levy the 5/- tax. I think the House would be prepared to concede to the Minister that when the time arrived to give protection to the cement factory here it would be ready to confer on him the power to levy a duty on cement coming in. Apparently the Minister is sympathetic. He thinks the time has arrived when there ought to be some reduction in this 5/- duty on cement. It seemed to me that he destroyed his own case when he admitted that the duty of 5/- was put on at a time when cement was 30/-, and that it is being continued now when cement is 50/-. At what point does the Minister consider that this duty ought to be reduced? Surely the Minister must have some idea as to what price the new factories here are going to charge for cement. I imagine the Minister has an approximate figure in his mind as to what their price will be. I think that at the time this cement duty, or licence fee, was introduced Deputy Good suggested that, probably, the cement manufactured in this country would cost £1 a ton more. I think that the Minister expressed horror at that idea at the time, but it looks as if it has now become part of the settled idea that the price of cement is not going to be reduced by the home production when it does arrive. However, I should certainly like the Minister to give us some indication as to at what point he considers that some relief ought to be given to the cost of cement by a reduction in this 5/- tax.

The Minister has been absolutely silent about the other question that I asked, namely, about the ad valorem duty on the price of English cement. I suggested to the Minister that he might consider the abolition of that altogether and put all cement importers into this country on the one footing. Perhaps the Minister could see his way to give us some enlightenment on that point.

As regards the point at which a variation in the licence fee would be considered justified, I can say no more than that the matter is under careful consideration. I can hold out no immediate prospect, however, of the 5 per cent. emergency duty being removed.

I must say that the Minister has been very unconvincing in this matter, and it does not appear that he has given any thought to it. However, I do not want to take the power from the Minister that is in the Act, but I do think that that power ought to be taken if the cost is going to be left at the present price owing to the 5/- tax, but I have no desire to press the removal of this now if the Minister says that the matter is really under consideration.

It is definitely under consideration, but I cannot commit myself as to what is going to be the outcome of it.

Is the amendment withdrawn?

No, Sir. I do not think the answer is satisfactory.

Amendment put and negatived.

Sections 15 to 22, inclusive, agreed to.
FIRST SCHEDULE.

I move amendment No. 3:—

In page 13, reference No. 13, to insert in column 2, outside and after the brackets in sub-section (a), the words "excluding cotton quilts and cotton blankets."

The object of this is to prevent the possibility of cotton quilts and cotton blankets coming under a duty of 40 per cent. Cotton blankets are things that nobody in this country wants to manufacture. I understand that they are made from very rough cotton waste, that they principally came from the Continent, and that they come in at such a price that Lancashire itself could not make them. The price of a pair of cotton blankets at the present time — say 50 inches by 70 inches — is 2/11 retail. If you get a mixture of wool and cotton, then you go into the realm of 13/11 per pair, and for all wool 15/11. What is proposed under reference No. 13 is that, as well as putting 40 per cent. on certain other articles, a 40 per cent. duty is going to be put on cotton blankets, a type of blanket mainly used in poor families. It is not every year that the ordinary working-class household is able to pay 13/11 or 15/11 for a pair of these articles, and the Minister is imposing a tariff of 40 per cent. on an article which no one proposes to manufacture here and which is used only in the houses of the poor classes, the working classes.

Then there is the case of cotton quilts. Nobody at all proposes to manufacture them here. The cotton quilt is the honeycombed article that you see in nearly every rural bedroom or in the bedrooms of working-class homes. The Minister may say that bed-spreads may be made here or that they are going to be made here, but there is no comparison between the articles used in certain homes and in working-class homes. Here you have a tariff being imposed, under reference No. 13, on two articles that are not going to be made here and that are used only in the houses of workers.

So far as cotton blankets are concerned, the duty is being imposed upon these for the first time by this Resolution. I understand that there are at least two firms about to engage in the manufacture of cotton blankets from imported material.

I cannot say where at the moment, but somewhere in the Saorstát.

Well, it is very late to be telling us that now.

Our industrial programme also includes the manufacture of the material at a later stage; but I intend that, in the interval, cotton blankets will be imported, free of duty, under licence, to a reasonable extent.

By whom — wholesalers or retailers?

By persons previously engaged in the business of importing cotton blankets. However, I want the Deputy to mark the words I used. I think it would not be in the national interests to allow free import, unrestricted as to quantity, particularly now that it is known that these blankets are about to be manufactured here.

Everything is known except where they are going to be manufactured.

I can get the information for the Deputy if he will put down a Parliamentary question. I cannot tell him from memory at the moment. That is the only difficulty I have in that regard. However, a reasonable quantity will come in under licence for a certain time. There will be no difficulty in having the full amount manufactured here. The process of manufacturing these articles from imported materials offers no very great difficulties. At a later stage, however, I hope we shall be manufacturing the material as well, but that is something for the future. The same applies in regard to cotton quilts. I am aware of at least one firm that proposes to engage in the manufacture of these cotton quilts from imported material, and at a later stage we hope to be able to manufacture the material. In the meantime, reasonable quantities will be imported, free of duty, under the licence provision.

The Minister certainly gets the biscuit for his contribution to this debate.

The biscuit?

Yes, the biscuit. He proposes to put a tariff of 40 per cent. on the manufacture of cotton quilts and cotton blankets, and he says that both of these articles are going to be manufactured in this country, when persons who are closely in touch with that line of business express themselves as being of opinion that it is impossible to get these articles manufactured here, that there is no likelihood of their being manufactured, and that, at the prices at which they are available from the Continent, they could not be manufactured even in Lancashire. An important industrial development of that kind, which the Minister said is going to surprise so many people in this country, is going to take place, and he does not know where it will take place.

In Dublin. I have since found out.

The Minister has just found out that it is going to take place in Dublin. Well, the Minister ought to know somewhat more about it and he ought to have his information a little bit more digested in his mind than merely, say, after a scratch of the head and a casual inquiry, that it is going to be made in Dublin. All the preparations for putting this tariff on these articles were made some months ago, and the Minister never went to the trouble before to find out that it was in Dublin this factory was going to be established. The Minister is only humbugging the House. The Minister proposes to put on a tariff that is going to squeeze revenue out of the unfortunate people who have to rear families in this country. Again we are dealing with a tax that is going to raise the cost of living for every family in the country.

It is impossible for me to stock my mind with all the information which Deputy Mulcahy might possibly require on a schedule of this kind. I think nobody could attempt to do that. So far as I am aware, there is no difficulty in the manufacture of these goods here. One of the firms that are about to engage in their production can be described as one of the largest hosiery manufacturers in the country. They are confident of their ability to produce these goods here. In any event, I would advise Deputy Mulcahy not to commit himself again to the statement, in relation to any article, that it cannot be manufactured here. He said that about so many articles that are now being successfully produced in this country that his stock as a prophet is at a considerable discount. These articles will be manufactured here. I agree that, in relation to these and other articles, there may be some countries which would be able to export them at a price with which we could not compete, but there is no reason why the prices of these articles should be any higher here than they are in other countries where similar wages are paid and similar machinery used.

If I felt that any good could be done by dealing with a larger number of articles than I am dealing with at the present moment, I assure the House I would deal with them. The Minister has been aware for nearly a fortnight — for ten days at any rate — that he would be asked to deal, in response to an amendment put down by me, with five articles. Cement was one. Cotton quilts and cotton blankets were the next. He had ten days' notice that he was going to be asked to agree to the removal of these articles from the Schedule and yet, he found it impossible to prepare an answer to all the questions that he might be asked. Again the Minister is simply trifling with the House.

Amendment put.
The Committee divided: Tá, 32; Níl, 48.

  • Alton, Ernest Henry.
  • Beckett, James Walter.
  • Bennett, George Cecil.
  • Bourke, Séamus.
  • Brennan, Michael.
  • Broderick, William Joseph.
  • Brodrick, Seán.
  • Corish, Richard.
  • Cosgrave, William T.
  • Costello, John Alovsius.
  • Dockrell, Henry Morgan.
  • Doyle, Peadar S.
  • Fagan, Charles.
  • Finlay, John.
  • Fitzgerald, Desmond.
  • Good, John.
  • Keating, John.
  • MacEoin, Seán.
  • McFadden, Michael Og.
  • McGilligan, Patrick.
  • Minch, Sydney B.
  • Morrissey, Daniel.
  • Mulcahy, Richard.
  • Murphy, James Edward.
  • O'Higgins, Thomas Francis
  • O'Leary, Daniel.
  • O'Neill, Eamonn.
  • O'Sullivan, John Marcus.
  • Pattison, James P.
  • Redmond, Bridget Mary.
  • Reidv, James.
  • Rowlette, Robert James.

Níl

  • Allen, Denis.
  • Bartley, Gerald.
  • Beegan, Patrick.
  • Boland, Gerald.
  • Boland, Patrick.
  • Brady, Brian.
  • Brady, Seán.
  • Briscoe, Robert.
  • Browne, William Frazer.
  • Concannon, Helena.
  • Cooney, Eamonn.
  • Corbett, Edmond.
  • Corkery, Daniel.
  • Crowley, Timothy.
  • Derrig, Thomas.
  • De Valera, Eamon.
  • Flynn, Stephen.
  • Gibbons, Seán.
  • Goulding, John.
  • O'Reilly, Matthew.
  • Pearse, Margaret Mary.
  • Ruttledge, Patrick Joseph.
  • Ryan, James.
  • Sheridan, Michael.
  • Harris, Thomas.
  • Hayes, Seán.
  • Houlihan, Patrick.
  • Keely, Séamus P.
  • Kehoe, Patrick.
  • Kelly, Thomas.
  • Kennedy, Michael Joseph.
  • Killilea, Mark.
  • Kilroy, Michael.
  • Kissane, Eamonn.
  • Lemass, Seán F.
  • Little, Patrick John.
  • MacEntee, Seán.
  • Maguire, Ben.
  • Moylan, Seán.
  • Neilan, Martin.
  • O Briain, Donnchadh.
  • O Ceallaigh, Seán T.
  • O'Grady, Seán.
  • Smith, Patrick.
  • Traynor, Oscar.
  • Victory, James.
  • Walsh, Richard.
  • Ward, Francis C.
Tellers:— Tá: Deputies Doyle and Bennett; Níl: Deputies Little and Smith.
Amendment declared lost.
Question put —"That the First Schedule be the First Schedule of the Bill."

I want to make a few remarks on Nos. 6 and 28. In regard to the duty which it is proposed to impose under No. 6, I am afraid the wording does not make clear what it is intended to catch. Veneer, I suppose, is usually understood to be a hard wood and very thin, but where a veneer stops and a plywood begins I should like the Minister to make clear. I take it he is not going to put a duty on plywood. The next thing which seems, to my mind, a little bit obscure is this phrase: "Wood which is imported in the piece." Is that intended only to catch raw wood on which a veneer has been put? That would be perfectly plain and everybody would understand it. But is it intended to go further? Is it intended, say, to catch the case of a piano, or something like that, which has veen veneered? I have referred to the question of plywood. I do not know if the Minister can put in the hard woods which he intended to catch as veneers. Plywood may be, say, birch or elderwood, which are really laminations, if you like to put it that way, but at the moment it seems to me that plywood is really veneer-wood. I do not think the Minister intends to catch that at all, and I suppose there would be some latitude under the licensing provision. At the same time it would be desirable if the position could be still further clarified as between wood in the piece — whether that is intended to catch articles which are partly or wholly manufactured and which are veneered — and plywood. I will not say anything about No. 28, on which I was going to make a few remarks, until the Minister tells us what the position is in regard to No. 6.

It is not intended that plywood should be subject to this duty. The definition has been framed with some care in order that the duty will apply only to veneer and not to plywood. I think the Deputy need have no fears on that score. It will be possible to administer the duty so as to catch only the class of goods to which it is intended that it should apply — that is, veneer-wood as distinct from plywood. Similarly, the duty will apply only to veneer-wood imported in the piece. A manufactured article composed of veneer-wood, such as a piano case, to use the Deputy's illustration, will not be subject to this duty. It will apply only to veneer-wood imported in the piece.

Could the Minister say anything with reference to No. 5, elastic stockings, socks and bands? I think a question in regard to it was asked at an earlier stage, but the Deputy who asked it is not here. That is a matter of general interest, because it affects the sick.

These articles are being manufactured here. In fact, there is little difficulty in manufacturing them. I expect that practically every hosiery firm in the country will, in due course, instal a machine for the manufacture of these goods. But they are being manufactured now. If there is any immediate difficulty in getting supplies, following the imposition of the duty, the licensing provision will be operated. In a short time, however, there should be no reason to import these articles. There is no difficulty about their production, apart from getting the necessary machinery, and the machinery which is being installed is sufficient to supply all the requirements of the country.

The Minister does not anticipate an increase in price?

No. It is anticipated that there will be no increase in price.

Is the Minister satisfied about that?

There may be a reduction.

I put the question because I am one of the unfortunate users.

With regard to reference No. 13, I do not know whether any comment has been made on the general nature of that provision. It refers to "articles ... which are made wholly or mainly of woven material and are, in the opinion of the Revenue Commissioners, suitable for personal, domestic or household use." Some articles come under that reference, which, I think, it was not contemplated by the person who drafted the provision would come under it. I take it that the Minister will agree that it is an extraordinarily general provision. One article I have in mind — it is only one of a large number — is what is called a fabric handbag. Undoubtedly, there are handbags produced here at the moment, but they are mainly of leather. Handbags of the fabric type are largely purchased by women in the early and late summer. If they cannot get that particular type of handbag they will not buy any. I understand that no such article is produced in this country. I wonder if I am correct in that. The Minister may have information at his disposal to show whether I am or not. I understood from what he said when I was here about half an hour ago that these tariffs are intended to be protective of industries which he has established or is establishing. These types of fabric handbag are not made in the country, and, if imported, they could not possibly be sold with that tariff of 40 per cent. added to the cost.

Handbags made of woven material are subject to this duty. These handbags are being made, or are about to be made, here. Leather handbags and handbags of other materials are being manufactured here at present and that production is being extended to cover these handbags of woven material. They will be subject to this duty and will be manufactured here.

Shops do a fairly good trade in this type of fabric handbag and it would be a great loss to them if they were not able to do that business during the present summer. If they cannot get these handbags at home, they will not be able to sell the imported handbags if a 40 per cent. tariff is imposed. The people will not pay that price.

These articles are about to be made here, but that should cause no difficulty this summer, because the licensing provision will be used to ensure that supplies will be available until the home production shall have sufficiently grown to meet requirements.

Reference No. 28 refers to adhesive pastes and powders for the preparation of adhesive pastes. I do not know what the deciding factor is to be as to an adhesive paste or a powder for the preparation of an adhesive paste. Will wheaten flour or maize flour be dutiable as a preparation for pastes? Pastes could, undoubtedly, be made out of these flours. I should like the Minister to give us some idea as to what will be caught by this section.

The powders described in the reference are powders prepared for, and sold as, adhesive paste when water is added. Certain firms engage in the production of these goods. Instead of selling paste in a jar, they sell powder which becomes paste when water is poured on it. It is intended to catch these adhesive pastes for office use.

Stuff in bulk which would be the raw material for these pastes would not be caught?

Only powders for the preparation of adhesive pastes — not powders for the preparation of powders for the preparation of adhesive pastes.

The Minister is aware that a tariff was put on starch and that it still remains on corn-flour, as a result.

Is the Minister inclined to be generous in operating the licensing provision dealing with Linguaphone and linguistic records generally as affected by reference No. 21?

I assured the Deputy on a previous occasion that if there is any difficulty in procuring records giving lessons in a particular language, the licensing provision will be operated to allow them in. It is the intention of the company manufacturing these records to produce here any of them for which there is a demand. For some of them, there may not be sufficient demand to justify production here, in which case the licensing provision will be used.

I should like to mention that, in connection with the duty on wrapping paper, I propose on the next stage to move an amendment to remove from the scope of that duty paper which is called cloth-faced paper and cloth-centred paper. These classes of paper will not be manufactured here, and it is not intended that the duty should apply to them. If I did not give notice of that amendment now, I understand that it would not be permissible to move it.

Schedule put and declared carried.
Second Schedule agreed to.
THIRD SCHEDULE.

I move amendment No. 4:—

In page 22, Part I, to delete reference No. 14 and all references thereto in columns 2 and 3.

Reference No. 14 imposes a duty of 60 per cent. on "articles of personal clothing or wearing apparel not chargable under any other reference number in this part of this Schedule." This is a blind swipe — and a heavy one — at every other type of article imported for wear. I suggest that it is a duty which will impose a great hardship on those who have to clothe children. It is going to hit a variety of articles used in small numbers and not manufactured here. These articles are not manufacturable here because the market is not big enough. This tax is going to hit particularly people who have to clothe young families.

All the articles which are made subject to this duty under this reference were dutiable previously, although not all at the 60 per cent. rate. A large number of them and, in fact, from the point of view of value of sales, probably the bulk of them, were chargeable at the 60 per cent. rate and there has been no change in relation to them. It is true that in relation to boys' clothing the rate has been raised. The primary consideration in effecting this change is to simplify the duty, to get all the articles of similar description into one category and to make them subject to one duty, so as to facilitate administration and also the business of importation, to whatever extent importation must take place. So far as boys' clothing is concerned, the home firms are quite capable of supplying all the articles of that kind required. So far as girls' clothing is concerned, I will admit that the task of getting home firms to the point of supplying the entire market here has been somewhat more difficult, and an increase in the duty there is necessitated. But again, these firms are quite capable of producing much larger quantities of these goods than they have been selling heretofore, and under the stimulus of an increased duty there is no reason why any garments of these descriptions should be imported.

In relation to the bulk of the garments covered by this duty, there is quite considerable competition between the home firms, which, between them, are capable of producing much more than the market can absorb, and that competition has, I think, operated to effect considerable keenness in the fixing of prices. I feel that in relation to these classes of goods, there is no reason why we should have any imports at all. These are goods which require no very heavy capital equipment and no very high degree of technical skill to manufacture. Our people are familar with all the processes of manufacture, and, if organised properly, can produce these goods as well as they can be produced anywhere, and I think that duty at the rate suggested is desirable in order to stop imports, because we can do all this work for ourselves.

The Minister declares that it required no technical skill——

No exceptional technical skill.

——to prepare the large range of various classes of clothing that are required for infants, for children, say, up to the age of four years. The Minister emphasises the position we are in with regard to boys' clothing. We would be alright in that respect if we could get decent thread for the manufacturers to make the clothing with, but we cannot. That is another matter, however, but the fact is that, in spite of the Minister's pious explanations, this putting of a round 60 per cent. duty, a duty at the highest rate in Part I of the Schedule, on all other articles of clothing not caught by that Schedule is going to put a serious tax on people who have to clothe families, and young families particularly.

There are a very large number of factories engaged in the production of these goods.

In my view, it is impossible for the Minister to make such a sweeping statement as is made in this reference. It refers to "Articles of personal clothing and wearing apparel not chargeable under any other reference number in this Part of this Schedule." I submit that it would be difficult for the Minister, on the spur of the moment, to satisfy himself as to what would be included in a sweeping statement of that character, or for his officials even after considerable thought, because when you make a general statement of this type, it is impossible, even after days or weeks of consideration, to be sure that you have contemplated everything that possibly can be brought under it. Relate that to the Minister's statement that he wishes to put a tariff only on things which he regards this country as being capable of producing, and it seems to me that the bona fides of that statement are slightly staggered. In my view, the common-sense way of going about tariffing goods which we are capable of producing here would be to get reports from people who contemplate producing these things, get accurate details of what they intend to produce and then tariff those particular goods seriatim. Here we have put in a general statement of this kind covering perhaps 20 per cent. of the things generally used in this community in that particular line, covering merely what is produced or is capable of production in this country, and then covering the other 80 per cent. of the same line which cannot be produced here and which must be bought by the purchasing public. There is that danger. I do not say that it exists here. There may be only a 5 per cent. margin of error here, but I think that, when introducing duties of this type, my method of approach is far preferable to that used by the Minister, and he shows that he uses that method by employing a general statement of this type.

I should say that this Schedule is really the result of ten years' experience. I think it is ten years, or more than ten years, since the first duty was imposed upon wearing apparel of all descriptions. It is quite true that the original duty was collected upon all sorts of extraordinary things, such as divers' suits, cricket bats, wigs, paper carnival hats, and a number of other things of that sort, but throughout the whole of that period, benefiting by experience, changes have been made. These articles are being brought into other categories and the flat rate duty upon all wearing apparel which originally existed has been broken up into a number of separate rates. The rates have been raised in a number of cases, it is true, but we reached the point last year at which we felt we could take the whole of the Schedule of duties upon wearing apparel of all descriptions, which, as I mentioned here, ran to well over 200 items, and simplify it. There were frequent consultations between the officers of the different Departments concerned, who had ten years' experience of the administration of these duties, and there were consultations with traders and other people likely to be able to give advice on the matter. As a result, this Schedule was produced. It effects changes in duty only incidentally, as it were, in order to achieve the simplification at which we were aiming. We have got that simplification and we are satisfied that this duty in its present form will be much more workable than the long scale of duties which was in existence heretofore.

All the other articles which might at one stage have been deemed to have been caught in a general definition of this kind are now being taken out of it and put into other categories, so that they will not be subject to this duty at all. I may say that it has been my experience that a general duty of this kind is always somewhat doubtful. It is much better to specify exactly the articles you intend to catch rather than have a general description of this kind, but in relation to these duties, after the ten years' experience of their operation, it is possible to have this definition without any apprehension that we are, in fact, catching more than we intend to catch.

I am still somewhat in agreement with Deputy McGuire as to this section. It seems to be, as Deputy McGuire puts it, an attempt to make it impossible for any article of any kind of clothing to evade duty. It seems to be a case, putting it in betting parlance, of so much against the field. The Minister is putting a 60 per cent. tariff against the field, and the field includes everything. I notice that Deputy Allen smiles. I do not know whether he understands the term, but perhaps the Minister knows that, in racing terms, the field includes everything, even a non-runner. Under this section, we have caught anything in the line of clothing that may have evaded the ingenuity of the Revenue Commissioners for ten years. Having assessed all the items of clothing for men, women and children that could be thought of, we are now putting a duty on any article not chargeable under any other reference number. There ought to be no necessity for that. If there was a 60 to one or a 40 to one chance of the taxpayer escaping the Revenue Commissioners and the various manufacturers he should get it.

Amendment put and negatived.

I move amendment No. 5:—

In Part I, to delete reference No. 15 and all references thereto in columns 2 and 3.

The amendment is to delete the words —

"Articles which are, in the opinion of the Revenue Commissioners, accessories of personal clothing or wearing apparel."

It is bad enough to come up against a 60 per cent. duty on every article of clothing that the Minister and his officials could not think of, but when we come up against a 60 per cent. duty on anything that could be an accessory to an article of clothing, it is hard to dissociate the proposals in these Schedules from taxes that affect the home we have been discussing; and it is very hard to credit what the Minister says—that the proposals made in these Schedules are to safeguard and round-off the position in this country so as to stabilise and completely develop the clothing industry here. It seems to be, to a large extent, an imposition of taxation for revenue purposes. The Minister is aware that a very considerable amount of clothing of types not made in this country is going to come into the country and the Minister for Finance is going to get his taxation on that. Here we are putting a 60 per cent. duty on anything that is an accessory, and I should like to ask what is going to come under this heading?

Braces, belts, sock suspenders, garters and all that class of goods, as well as trimmings and other decorations.

Studs and cufflinks.

These are dutiable under other Schedules. All these accessories have been dutiable heretofore, but not at this rate. They are being kept dutiable, and I think we could not contemplate removing the duty on these goods, all of which are made here. If wearing apparel can be made here, these accessories of wearing apparel can be made here also.

Would this apply to such things as hooks-and-eyes?

No. They are non-textile.

Or buttons. They must be textile?

The definition is very indefinite.

It is in the section.

It is left to the opinion of the Revenue Commissioners.

One article occurs to my mind which I have heard discussed. It is what is called a cravat and is part of women's wear. I do not know whether the Minister knows about it, but I believe it is made in 100 or 200 different varieties and is not produced in the Free State.

She has 40 per cent. on her collar and 60 per cent. on her cravat.

I do not know whether that would come under the definition of an accessory. I think it would be part of the wearing apparel.

If I understand the Deputy, it would be dutiable under this reference.

That is something which is not produced here at all. This will be a pure revenue tax, because I believe there is no one producing these cravats here. A cravat is not an ancient sort of article. If Deputy Mrs. Concannon and Deputy Miss Pearse were here, they would be very worried to imagine that a tax was being put on this type of article, because there is nothing very ancient about it. It is something which is sought after every day of the week by women shoppers. Am I accurate in saying that this article is not being produced in this country or that it is not contemplated producing it here?

I could not answer straight away. I should imagine they are being manufactured here by the firms engaged in the production of clothing apparel.

I suppose a flea would escape this reference as being difficult to catch?

It is not a textile material.

Amendment put and negatived.

I move amendment No. 6:—

In Part III, reference No. 28, in column 2, after the word "gauntlets" to insert the words "other than gloves and gauntlets suitable for wear by children."

Reference No. 28 proposes to put a duty of 8d. per article on "Gloves and gauntlets made wholly or mainly of leather or of skin or of leather and skin and not backed with fur, and also component parts (made of leather or skin or of leather and skin) of any such gloves." That means a tax of 1/4 on a pair of gloves. Again, this is a tax that will hit persons with young families particularly. Gloves are not made in this country in the various sizes and descriptions suitable for children, and the greater part of the gloves of that particular kind used by children here will have to be imported. The Minister must be aware of that. It is an absurd tax to put on children's gloves. That is why I ask to have this amendment inserted.

I am prepared to bring in an amendment on the next stage to exclude children's gloves from the scope of this duty, if the Deputy will let the matter stand over until then

Amendment, by leave, withdrawn.

As to reference No. 30, one is tempted to say that, while under our draft Constitution we are anxious to see that the skirt is kept on women, we seem, on the other hand, to have the opposite desire so far as this reference is concerned, in which it is proposed that "skirts which do not form part of a suit or costume at importation and are, in the opinion of the Revenue Commissioners, made wholly or partly of woven tissue" are to have a duty imposed on them of 7/6 per article. The Minister is probably aware that this particular duty will affect the very poorest type of purchaser of this particular type of article, because so far as they are produced in this country at present, they are not of anything like the quality of those which have been imported up to this.

There are shops all over the City of Dublin, in Grafton Street and Henry Street, and they have been able to buy their skirts in England at a price which enables them to sell them at something like 3/11. I do not know what the actual cost would be. It will now be impossible to get in any article of this sort at a price like that. An article bought in England at 3/11 would be sold somewhere in the region of 5/11. That is a modest estimate as to what the retail trade would expect on an article of that kind. I suggest that the Minister's Department should, before imposing a duty of 7/6 on an article of that kind which is of universal use amongst women, be satisfied that the local manufacturer would be able to produce an article which would ensure that no hardship would be inflicted on the people who require these goods. I am sure the Minister would agree that this is the sort of article that women cannot get on without.

Mr. Lynch

Or get off without.

I do not like to introduce any humorous element on this tariff. The matter works out in this way — that the more prosperous buyer of this class of goods is not going to be affected at all. The imposition of this 7/6 tariff will bring the selling price of a 3/11 article up to 13/-, and possibly the retail price will be considerably over that figure. That price would not affect the richer customers. They can buy no matter what the tariff is. The type of person I have in mind are the poor, who will not be able to get the article at all.

The tax is a prohibitive one and that, taken in conjunction with the other point, which is equally important, that no similarly cheap article is being produced here at all, will work out as a hardship on the very poor. It amounts to this: I understand that 4/11 is the basic price of skirts in this country. The selling price would be about 5/11. That would compare very unfavourably with the present price. I am sure the Minister would be able to correlate my remarks on this particular schedule with the general remarks made in the House already to-day about the rise in the cost of living. These things do not come into the calculation of the cost-of-living index figure at all but they are things that a Minister should take into account.

The particular duty mentioned here can be regarded as prohibitive. These goods can be made here and we believe that the firms engaged in the manufacture of them will be able to cut down their costs and compete in price with the imported goods when they get down to business. These firms are in a position to supply all the articles required and will do so.

I can understand from the Minister that this is a prohibitive tariff. That is evident on the face of it. But this tariff would possibly have another effect on the cost of living in this country. This tariff under reference No. 30 would mean a 200 per cent. protection. That is to say, that gives protection to the people engaged in this business in this country up to a margin of 200 per cent. That will make the cost of articles used here very high. I know the Minister is interested in protecting industry. At the same time he must be interested in protecting the consumers, and a 200 per cent. tariff is certainly going to hit the consumers of these articles.

In most classes of readymade clothing, indeed I might say in all classes, the competition between the existing firms here is quite keen. That will check any tendency to put up prices.

Is the Minister satisfied that there is sufficient competition amongst them?

I am quite satisfied.

I just want to refer to Part II. of this Schedule to which no reference has been made. That is reference No. 16 dealing with second-hand garments brought in for resale. Some persons might consider that the tariff of 25 per cent there was not high enough.

That was my opinion, too, but the Dáil thought otherwise.

That is what I remember. If the Minister is satisfied there is sufficient competition amongst the producers of cheap clothing, this tariff is high enough. I know the idea originally was to protect the home market and to keep out these second-hand goods of which much were imported but what I want to refer to just now is that a great deal of these second-hand goods are brought in by charitable societies and people like that.

That is already covered.

The charitable societies are allowed to import free of duty?

There is a special provision.

Are they imported free of duty?

The position has not been changed by this Bill. In the earlier years second-hand clothing came in and the Revenue Commissioners had discretion. I do not want to be taken as speaking authoritatively now, but my recollection is that the discretion worked all right.

Are they allowed in free? The Minister should allow them in free of duty, because they are of great advantage to the poor. The distribution of these goods coming into the country has been a great boon to poor people.

There is no change made under this Bill.

Third Schedule put and agreed to.

FOURTH SCHEDULE.

I oppose this Fourth Schedule. In reference No. 1 you have a tariff on wireless cabinets which is increased from the present 25 per cent. to 50 per cent. You have in reference No. 7 an increase in unglazed clay manufactures from 50 to 75 per cent. or on the preferential side from 33? per cent. to 50 per cent. The duty on dry batteries is increased from 33? to 50 per cent., and parcel tape and holders are increased from 50 per cent. to 100 per cent. One of the features of the information that was given in the preface to the trade returns in 1935 was the substantial rise in the cost of boots and shoes from 1932 to 1935. The rise in the cost of boots and shoes was accompanied by complaints on the part of the general public as to the quality of the boots and shoes.

In reference No. 16 there is a change in the rate of duty on certain component parts of boots and shoes. Component parts of boots and shoes, after bearing a tariff of 30 per cent., are now increased to 60 per cent., and another section of these is increased from 20 per cent. to 40 per cent. These are only a few samples out of Schedule IV, showing how the tariff wall grows, and with it the cost of living of the people is going up.

Fourth Schedule put and agreed to.

Fifth Schedule and Title put and agreed to.

Bill reported without amendment.
Report Stage fixed for Tuesday, 25th May.