A figure appears on the cover of the Supply Service Estimates which is supposed to represent the anticipated expenditure on the Supply Services during the coming financial year. Deputies on the far side of the House will remember that they came in here pledged to reduce taxation by £2,000,000 per annum. At first glance, it would appear that they had not increased it by more than £9,000,000 but when it is remembered that the Supply Service Estimates to-day appear in an amended form, as compared with those published in 1931-2, Deputies may begin to realise that the increase is far greater than they know and that the burden is proportionately heavier. If we take the Supply Services Estimate for 1931-32 on the same basis as the one published for 1939-40, we find that the Supply Services have been increased from £19,389,000 to £30,618,000 over that period. They are now £11,300,000 per annum greater than they were when Fianna Fáil came into office. If we add the Central Fund Services to ascertain the total anticipated expenditure in the two financial years, that of 1931-32 was £24,213,000 and that for this year is £35,716,000, an increase of £11,500,000 in expenditure, to be financed either out of revenue or borrowing.
But this is not all, because the Banking Commission directed the attention of this House to a fact which is too frequently forgotten, and that is that the Supply Services Estimates, as published in the White Book, bear little relation to the expenditure actually undertaken in any financial year. The Banking Commission pointed out that in 1931-32 we had 25 Supplementary Estimates; in the following year, 31; in the year after, 37; in the year after, 35; in 1935-36, 20, and in 1936-37, 30. In the year 1932-33 and in 1933-34 the Supplementary Estimates represented additional expenditure of over £5,000,000. In the year 1936-37 the Supplementary Estimates represented an additional net expenditure of £2,235,765. I do not think there can be any doubt, from the tone adopted by the Minister for Finance when he introduced his Budget yesterday, that it is his intention, before this financial year closes, to introduce Supplementary Estimates similar to those which he has introduced and carried through this House in the previous six years of his administration. So that, though the burdens outlined in his speech yesterday may shock the public of this country, they should realise now that the tale is only half told, and that before the end of this financial year further burdens will probably be forthcoming which the public will have to meet.
Nor should we let this occasion pass without paying our annual tribute to the mathematical distinction of the Taoiseach. It was ever his practice to assist us, when discussing financial business here, by a short display of his well-known flair for mathematics. He told us that after years of research, historical and mathematical, he had come to the conclusion that the taxable capacity of this country compared with that of Great Britain was as 1 to 66. He has made impassioned speeches on that subject, even to shaking down his lock of hair to evoke the plaudits of his supporters when that conclusion was made. It will be a salutary thing to invoke his aid for the purpose of comparing the burden that this Government propose to lay on our people now with that which the British Government propose to lay upon their people. Let us apply the formula of 66 to 1 to our circumstances. It was high treason four years ago to challenge it. It was sabotage and playing England's game to question that figure four or five years ago. Applying it now, we discover that the Minister for Finance's modest proposal is that our people should pay £2,357,256,000 to meet the Supply Estimates of this year, as compared with the modest £900,000,000 which the British Chancellor of the Exchequer asks from his people.
It is well to consider, while the Minister for Finance raises the income-tax to 5/6 in this country and is saluted by Deputy Corish for having spared the poor man, first, whether there is any justification for that and, secondly, its probable repercussions on the poor man. In Great Britain, where the income-tax rate has been raised to 5/6 in the £ they are spending at the rate of £2,000,000 sterling per day, over and above their normal services, on defence preparations. In that situation, spending, as she is, close on £700,000,000 sterling over and above the expenditure on her normal services, she thinks it is defensible to put on an income-tax of 5/6. The greater part of the surplus expenditure in Great Britain at the present time is calculated to stimulate her foundation industries—steel, iron, coal, textiles and machinery. All these are working at high pressure as a result of the expenditure which has called for the imposition of this exceptional tax.
In our country, where the income-tax has been raised to this figure, it is notorious that the agricultural industry is semi-bankrupt, and it is also notorious that a number of the industrial concerns which this Government has been responsible for establishing, are on the verge of economic collapse. It is common knowledge that the additional burden represented by this imposition on the income-tax is calculated to drive many of them over the precipice into bankruptcy. Now, it is great fun for Deputies, who imagine that you can achieve anything by passing an Act of Parliament, to pass an Act of Parliament which compels your neighbour to pay out another 1/- on his income-tax. There are very few of us who will be greatly bothered by the increase in the income-tax or the increase in the super-tax, either of the first or second degree; but unfortunately, the fact is that you cannot alter economic laws by passing Acts of Parliament. It is an illusion that every democracy in the world has allowed itself to be deceived by, that you can halt the logical sequence of economic laws by passing high-falutin' Acts of Parliament. You cannot, and if you think you can save the workingman, the wage-earner, from the repercussions of a rise in the income-tax from 4/6 to 5/6 under existing circumstances, you never made a greater mistake in your life.
I ask Deputies to consider for a moment what it means. There are very few mighty financial corporations in this country. The bulk of the employment in this country is provided by people in a moderate way of business. The man who employs 20 or 30 people is the average, decent employer. Take the distributive trade, for instance. Deputies must have recently read the accounts published of the big establishments in the City of Dublin. They are all hard pressed. They are all trading on a wholly uneconomic margin of profit. I ask Deputies to consider what will happen when their profits are required to yield a further 1/- in the income-tax? What would Deputies themselves do in such circumstances? Suppose you come to the point when you cast up your accounts at the end of the year and you find that instead of having a surplus to distribute you have a deficit and that you must take from your reserves? What can you do? You cannot go out into the public street and drive people into your shops and make them buy. If the people do not want to buy you cannot make them buy. Then, on the other side, you cannot raise the price to the point that would yield you a profit, because if you do, the people will not deal with you at all. What can you do? There comes a Saturday night when you want to pay the men who work for you and you are driven to this conclusion—you have only a certain sum for wages—that you must reduce the men's wages or else you must let one or two of your men go. I agree, at once, that before a person who has any margin of profit to be passed on, should dream of reducing the wages or dismissing a man, he ought to cut himself down to the level at which is own men are working, so that all together they could survive the period of distress. But suppose the imposition of these taxes results in the employer being cut down not alone below his employees but to a point where he is actually involved in a loss? What is such a man going to do? One cannot ask men to work for nothing. The net result is that somebody is going to lose his job. Now, that, to most men who have been habitually working with old friends, is a very distressing experience. All of us know some man or other who has not been too scrupulous to run his establishment on the strictest principles of economic administration. He could, if his whole establishment were keyed up to the maximum efficiency, discharge a man who could, conceivably, be done without. Is not the effect of this new imposition upon the head of such an establishment, imposing an obligation upon that man to protect himself and the other men who are working in the establishment, to key up his whole business to a maximum efficiency, and to let the man that he can do without go? The head of an establishment has failed in his duty not only to himself, but to the men working with him if, by laches, he allows the whole enterprise to become involved because he has failed to make it as efficient as the events require. He is faced with that duty so as to save his own livelihood and the livelihood of other men who work for him from being destroyed. It is his duty to preserve the livelihood of the majority of the people who work in the establishment. It is his duty to do everything possible so that he might make ends meet at the end of every year. Now, this additional burden imposes on that man an obligation which must react on those least able to afford it. From that point of view, in my judgment, the imposition of 1/- additional in the income-tax is a reckless procedure.
Look at the picture presented by England at the present moment. You have there clearly a precedent for the scaling of taxes. You have there increased employment in the steel industry which is working at its maximum capacity. You have increased employment in the coal industry which is working at its maximum capacity, and even in some cases working at such pressure that it is unable to catch up on its orders. You have the machinery and the electrical equipment firms working three shifts a day. That being the position there, it would be no harm to glance for a moment at our condition. The income from our agricultural industry has gone down in the most extraordinary degree in the last seven years. I have the figures here. The net income of our agricultural industry, as published in the Banking Commission Report and brought up to date in the Irish Trade Journal, reveals these figures:—In 1931 the net income of our agricultural industry was £47.7 millions; in 1932 it was £38.8 millions; in 1933 it was £33.3 millions; 1934, £30.3 millions; in 1935, £34.3 millions; in 1936 it was £39.3 millions. The figure for 1937 is not yet available. These are the figures as revised in the current issue of the Irish Trade Journal.
We have passed through a period which has been described in the course of the agricultural debate as one in which the resources of our principal industry have been shattered. The earning capacity of the large part of our people living on the land has been virtually destroyed. Our national income is fast disappearing. The value of our agricultural industry may have recovered somewhat since the negotiation of the Agreement with Great Britain. But with all this loss in our agricultural industry we are asked to meet the same kind of burden as Great Britain is meeting at the present time. I agree that in certain conditions the Government may ask the people for short periods, very exceptional periods, to radically amend their way of living in order to meet an emergency. I agree that the Government may, for legitimate reasons, ask the people to do that. But it must be for a sufficient purpose and in a situation where the Government has reason to believe that the resources are there for production if the people try to get them.
I submit to this House that we are confronted with the position to-day, as has been abundantly emphasised by the Banking Commission Report, of the birds, after the last six years, coming home to roost. We find ourselves drifting into a period of peculiar distress, after six years of frantic extravagance. The money is not there. If you start now by simply putting on the screws, what is going to happen is that you are further going to wreck the machine which produced the national income, and this would go on until we reach the point where there would not be a national income in this country to meet the normal current requirements without a material reduction in the standard of living of all of us.
I agree that the fly-by-nights and the profiteers and the exploiters of the consumer in this country are getting—and will do so so long as they are permitted to get it—a very satisfactory income. I am thinking of the mass of the people. I wonder am I right when I say that, when the Minister was drafting this Budget, fortified by the Banking Commission report he tried to make a stand for some kind of moderation, and was advised by his colleagues of the Cabinet that it was politically impossible. I suspect that that is true. I assume that the majority of the Fianna Fáil Party did not read and will not read the Banking Commission report, and I am pretty sure that if they did they would not understand much of it, but I suspect that the Minister did peruse that report, and does know what is in it. I presume that it was his perusal of that report which induced him to produce the record with which he presented us yesterday of the dead-weight debt, and the other appallingly alarming symptoms which he thought it best to publish in his own speech rather than to have noted in the speeches of the Opposition. The per capita dead-weight public debt of this country has gone up from £10 6s. to £17 3s. That is the existing debt, and to that must be added—if a proper estimate of our economic position is to be got—our growing liability in respect of pensions, not the pensions that we are paying now, but the pensions which are accumulating in the service of public servants, and which will fall to be paid when those public servants retire in due time; the steadily increasing liability that we have under the Land Act, which requires the State to shoulder the burden of 50 per cent. of every land annuity fixed under the 1933 Land Act, and the substantial liability that lies ahead of us if we are to make any real impression on the housing problem in the City of Dublin and the City of Cork.
The Minister yesterday, when dwelling on those staggering burdens, said he anticipated criticism, but he wondered if his critics would bear those facts in mind when they themselves were advocating additional taxation. That is where the Minister never understands. The difference between the Minister and us is this, that we have foreseen the probable trend and have been appalled by its possibilities. We are going to find ourselves requiring essential services, and we will not have the money to pay for them. I remember saying in this House year after year that, if the course of public expenditure continued on the lines on which it has been going, we would find ourselves at some time unable to maintain the social services that we consider necessary because we would not have the money. If the Minister can say to-day that certain social services may not be discussed because there is no money to finance them, whose responsibility is that? What has become of the difference between the Supply Services Estimates of 1931 and the Supply Services Estimates of 1938? The Minister says that £5,500,000, I think, has been expended on social services. Suppose that is admitted, though it is not true, what has become of the other £6,000,000? Where has that gone? Where is it going? Apart from the other £6,000,000 of direct taxation that is visible, what about the £2,000,000 on wheat, what about the £1,000,000 on sugar, what about the industrial alcohol, what about the millions that have been spent on other "cod" schemes, and which our people have had to pay and are paying? When the Minister rebukes the Opposition for contemplating social services, the desirability of which I do not think he will deny, will he tell us what has become of the £6,000,000 over and above the £5,000,000 which he claims for social services, and how can he justify the expenditure of £3,500,000 on schemes which nobody wants, and which do no substantial good to any considerable section of the community, when there are really necessary and desirable schemes which would benefit everybody and buttress the institutions of the State but which cannot be undertaken through want of money?
Deputy Corish is greatly gratified that there is no tax on sugar. He does not know the Minister as well as we do. He does not realise that for every bag of sugar that is cut down on the output of Tuam the Minister collects the full tax. Last year he collected, I think, £270,000 in tax on sugar. This year he confidently expects £500,000, but it is no longer fashionable to put your taxes in the Budget statement. You pass an Act of Parliament in 1933, trusting to God that the more innocent will forget about it, and you proceed to collect your tax in 1939, and the innocent, like Deputy Corish, have forgotten all about it. The Minister hopes to get £500,000 from sugar this year, and he will, because, as the output of beet sugar declines, imports of foreign sugar will become necessary, and the customs duty on that will be payable and will be passed on to the consumers of this country. But the Minister is no such fool as to proclaim his intention to collect a sugar tax. It can be done administratively without anyone being a bit the wiser, except the person who has to pay for the sugar.
I am thinking largely of the effect that this Budget is going to have on the average fellow who has a job down the country. That, in my opinion, is one of the most vital aspects from which we must look at it. When I speak of the person who has got a job I am thinking not only of the fellow who is earning a week's wages. I am thinking of that much neglected individual in Ireland who has the temerity to earn his own living, that despised creature who does not want a dole, who does not want a subsidy, who does not want any assistance at all except just the right to carry on—the small shopkeeper, the small farmer and the small tradesmen scattered up and down this country. Take the small shopkeeper in the rural towns of Ireland. The Conditions of Employment Act has entailed increased expenditure for him, and the burden on him in many cases has been substantial. If he gets a travelling lorry or a travelling van he will have to pay an additional 2d. on his gallon of petrol, which is going to represent approximately 10/- per week to him. He has to pay a tariff on all of the things in which he deals, because many people forget that articles produced behind a tariff wall are just as expensive in most cases as the articles which come in across that tariff wall. Not only have the goods in which he deals increased in price but all the equipment which he uses in the carrying on of his business has increased in price. All the overhead charges he has to meet have increased. In addition, he has to pay, over and above the taxes outlined in this Budget, his proportion of the taxes on sugar, taxes on bread, taxes on flour and taxes on almost everything he buys.
Now, it is very hard for those in high places, those who sit in Government offices all day, particularly those who draw Government salaries of from £80 down to £40 a month, as we do, to put themselves in the place of a man who depends for a livelihood on the balance of profit that he extracts from his business at the end of the week and to contemplate the condition of a man who finds himself week after week, coming to the end of the week without any profit at all, who finds that all his expenses have absorbed all his gross profit and that there is nothing left. I think that it is almost impossible to bring that individual's state of mind before this House at all. I believe there is little or no sympathy with him but yet it is upon people who are in that condition that this State depends. I apprehend that the result of this Budget will be to drive a great many of them just beyond the point where they could have carried on. If Deputy Corish imagines that that will not have repercussions on men who work for small wages in the small towns of this country he is mad. It must mean, and it will mean, that when their employers are broken their jobs will be broken, too.
