Financial Statement.

The financial year which closed on March 31st was, unfortunately, marked by a continuance of the calamitous conflict which has brought death and destruction in wholesale measure to many peoples. It is also memorable for the spread of the horrors of this bloody conflict to nations previously outside the war zones. Short as is the period elapsed since March 31st, even in that short time we have witnessed a still further widening of the area of hostilities and the spread of the horrible sufferings and sacrifices inflicted on ancient cities and towns. We have become so accustomed to it that now we can read without a shudder the daily accounts of the deaths of thousands of unoffending men, women and children in the countries of the war area, massacred through the ruthless military actions of this awful struggle.

While our hearts are wrung with sorrow for the afflicted peoples and our sympathies go out to them in fullest measure, the woes which have been the lot of the smaller nations since this war began must cause us to ponder long and seriously on our own position. These are times of the gravest peril and anxiety for all, but, particularly, for the smaller nations. When we read our daily newspapers or listen to the war news on the radio, our attention is forcibly called to the fact that small nations with histories as old as, and no less honourable than, our own have suffered grievous wrongs since this war began. Nations whose historic past and whose great achievements have been known to us from childhood through song and story, whose peoples up to a year ago, or even less, were living their lives in peace and comfort, pursuing in freedom their ordinary avocations, not thinking of encroaching on their neighbours and with no intention of interfering with the rights of other peoples, to-day mourn the loss of many thousands of their citizens, have had their cities and towns blown to atoms and their peoples who survive them left homeless and hungry. In some cases, these sufferings and sacrifices have not sufficed. Practically, these nations no longer exist as free national entities.

Though Ireland has not entirely escaped the savageries practised in modern warfare, the part of our national territory now under the jurisdiction of the Oireachtas has for 20 months succeeded in avoiding the major misfortune of being involved in war. It is earnestly to be hoped that this good fortune may be prolonged until peace has been restored. We unite with all our people in earnest prayer that this may be so. We trust that our neutrality may continue to be respected. It is our misfortune, however, that we, like other small nations to whose sad fate I have referred, have not the means to guarantee peace to our people. Our duty is, therefore, so far as our strength and circumstances permit, to be prepared for the worst and for the rest to put our trust in God.

It is in these unhappy circumstances and with the disturbing and anxious thoughts which such appalling conditions arouse in us that we must face the problem of budgeting for the financial year to end on the 31st March next.

Though we have avoided, so far, the grave misfortune of being involved in war, we could not and did not succeed in avoiding the manifold repercussions of the war situation. The effects of these repercussions on our economy are too painfully familiar to Deputies and, indeed, to all sections of the community to need detailed recital here. It is, probably, with regard to our imported supplies that these repercussions have been most keenly felt. Stocks of various classes of commodities with which the country entered the war have been steadily drawn upon, in some cases to the point of exhaustion, without hope of replenishment. Increasing shortage of shipping, due to war casualties, reduced imported supplies. Shortage of petrol and of certain foodstuffs became noticeably acute. The farmers were hampered by lack of fertilisers and feeding stuffs, and their difficulties were intensified by what can be described only as a national calamity. The outbreak of foot-and-mouth disease, which has taken such tragic toll of some of our best herds, has also played havoc with our exports and affected the flow of business and the circulation of money, particularly in the rural areas. Fortunately this dreadful scourge seems now to be getting under control, but its evil effects will persist for a long time. It has caused me, as Minister for Finance, more concern than the many homilies, learned and otherwise, that have appeared on the state of the national finances, currency, credit and banking. Without a sound agricultural economy, no amount of juggling with financial machinery or bits of paper will avail, no national well-being can be assured, and all progress must be arrested. This is not to say that I am unconcerned about the condition of our public finances. They cause me no little worry, but worry does not solve a tangle of problems which nothing short of prophetic vision can, to my mind, completely resolve.

As Deputies will see from the tables circulated in connection with the Budget, the financial year closed with a deficit of £1,755,000 instead of a surplus of £4,000 anticipated in May last. This deficit occurred despite the fact that the tax revenue, including motor vehicle duties, at £28,824,000, exceeded our anticipation by £931,000, though non-tax revenue at £5,814,000 showed a slight fall of £62,000. The improved yield of taxes is ascribable in the main to customs which exceeded the Estimates by £662,000, excise by £10,000, and income and surtax by £333,000. Motor vehicle duties at £915,000 disappointed to the extent of £85,000, a minor fall in the circumstances.

It may well be asked how, with this good showing made by the revenue, the results of the fiscal year proved so disappointing. The answer is that a spate of Supplementary Estimates not only swept away all the anticipated savings of £600,000 on Supply Services, but involved much greater outlay than we expected. These supplementaries totalled in all £4,114,000 and were mainly for defence. The growth in recent years of this system of Supplementary Estimates is one which must cause anxiety to any Minister for Finance. It may be unavoidable in times like these, but even in peace time the practice tended to be carried to an unreasonable extent. The taxpayers, that is all citizens—for no one escapes the net—are entitled to know their bill for the year at the time of the Budget, and the Minister for Finance should stand between them and further demands, unless some critical need arises. A need of this kind can, I think, be pleaded in defence of our military expenditure, and it was indeed accepted on all sides of the House. The two Supplementary Estimates for defensive purposes made up £3,553,000, out of a total for Supplementary Estimates of £4,114,000. Outgoings from the Army Vote for the year came to £6,682,000, as compared with £2,973,000 in 1939-40, while Army pensions totalled £496,000.

The deficit of £1,755,000 last year is thus attributable to our exceptional outlay on defence, and it has already been met at the expense of the large Exchequer balance with which we entered the year, viz., £3,623,000, which, of itself, represented part of the proceeds of the £7,000,000 loan floated in December, 1939. By financing the deficit and other outgoings, this balance was reduced to £728,000 on 31st March last. The latter figure would have been further reduced had not additional borrowings taken place during the year— £500,000 on Ways and Means Advances and £592,000 on Savings Certificates, the latter more than offset by repayments of £658,000.

In view of the interest taken in questions of supplies, Deputies may like to know how the main heads of the customs revenue turned out as compared with anticipations. The most prolific by far of all customs duties is tobacco, which produced no less than £6,590,000 in the year. We had, of course, the benefit for the full 12 months of the additional rate of duty of 2/8 per lb. imposed in the Supplementary Budget of November, 1939. Even so, the increased yield of duty was £1,285,000 above that of 1939-40. Sugar also suffered an increase in November, 1939, of 7/- per cwt., and this was responsible for raising the yield from £596,000 in 1939-40 to £1,400,000 in 1940-41. Practically all other heads of customs revenue showed declines. Tobacco, indeed, saved the situation. It represented 55 per cent. of the total customs collected during the year, while customs duties themselves represented 40.54 per cent. of the total tax revenue, including motor vehicle duties, a proportion reduced to 31.75 per cent. for the current year, as Deputies will see by referring to the Estimates given in the White Paper, which are, of course, based on existing rates of taxation.

On the excise side the principal contributor again was beer—with £3,214,000, an increase of £73,000 on the previous year's figure, but still £23,000 below what we had hoped to get. It will be remembered that the beer duty was raised in November, 1939, by 12/- per standard barrel of 36 gallons, bringing the excise duty to £5 12s. Despite dismal prophecies at that time about killing the goose, etc., the consumption of home-made beer appears to have been maintained. Reduced to terms of barrels of a specific gravity of 1055º, it amounted to 616,800 barrels in the year to 31st March, 1940, as compared with 617,900 in the previous year and 573,000 in 1938. To some extent, this is due to a contraction in imports which amounted in recent years to around 42,000 barrels retained for home consumption.

The excise duty on spirits netted £1,816,000, an increase of £82,000 on the preceding year. Here again, the rate had been raised in November, 1939, by 10/-, to £4 2s. 6d. per proof gallon. A decline in receipts under this head had been budgeted for but, despite this heavy duty, the movement was the other way. The consumption of both home-made and imported spirits has in recent years shown a slight upward tendency, but it is impossible to draw final conclusions as to the trend of consumption owing to forestalling. There is, everywhere— amongst wholesalers, retailers and the consuming public—a tendency to lay in abnormal stocks of dutiable commodities, owing to fears of short supply, rising prices and increased taxation. These movements tend to inflate the figures of revenue, just as the increased value per unit of imports tends to inflate the yield ofad valorem duties. All these make the forecasting of revenue under particular heads a matter of extreme difficulty.

It is interesting to note that beer and spirits between them provided in 1940-41 £5,030,000, or 76 per cent. of the total revenue from excise. Adding in tobacco, the total yield from these three commodities came to £11,620,000, or 41 per cent. of the total tax revenue, excluding motor vehicle duties. Advocates of increased Government expenditure would do well to ponder these figures, which illustrate in such a striking manner the extent to which taxation has gone on these commodities.

One of the tables circulated to Deputies gives particulars of the gross capital liabilities of the State which, on 31st March last, amounted to £72,931,000. Adding a sum of £9,250,000, estimated capital value of State contributions under the Housing Acts, we get a total of £82,181,000. This represents an increase during the year of £1,085,000 on the liabilities side, with which has to be coupled a decline of £2,192,000 in capital assets, making a total addition during the 12 months of £3,277,000 to the capital burden. The decline in the assets was mainly occasioned, as stated above, by financing the deficit and other expenditures, which reduced our cash resources from £3,623,000 to £728,000. These movements, though regrettable, are, I suppose, part of the financial history of all nations at present.

Before I leave this topic of debt, I must say a word about the position of local authorities. The latest figures available relate to 31st March, 1940, on which date the gross indebtedness of local authorities amounted to £33,879,000. After making the necessary adjustment for State contribution towards housing and for certain electricity and technical instruction loans, the net debt outstanding was £21,200,000, as compared with £20,001,000 on 31st March, 1939, an increase of £1,199,000. Capitalising, as an asset, that portion of the loan charges paid by tenants, at 4 per cent. for 35 years, we get a figure of £7,600,000, which leaves a total deadweight debt of £13,600,000, as against £13,201,000 on the previous 31st March.

The total gross liability of the State and local authorities combined amounted to £100,207,000 on 31st March, 1940, after deducting £6,264,000 in respect of advances from the Local Loans Fund since 31st March, 1935. Allowing for an increase in the case of local authorities of about £1,000,000 during the year, the corresponding figure at the end of March, 1941, was no less than £101,546,000. These huge figures show that we have not been niggardly in sponsoring and financing development schemes of all kinds, local and national, for the benefit of the country, and they furnish a complete answer to critics who speak as if we had shirked our duty in this respect.

The purse strings have never been held too tightly here. A liberal and even generous policy has been pursued by me as it was indeed, by my predecessor. As I explained in my Budget speech 12 months ago, I am not wedded to orthodoxy, but a Minister for Finance must necessarily be discriminatory. No Minister in my position, no matter how heterodox his financial opinions, could finance every one of the projects that will come his way, and if he disappoints any section of its cherished scheme, his whole policy will be suspect and denounced accordingly. To those who look at the situation in broad, general perspective, we can, I think, submit our financial record with confidence.

The task of a Finance Minister in a neutral country, right in the zone of hostilities, grows progressively more difficult as the war advances. His embarrassments are twofold—a decline in revenue and a rise in expenditure. Moreover, any Estimates that he may frame under either head may be completely falsified by an unexpected turn of events. He must, however, make some assumptions before he can proceed to construct a Budget, and the assumptions on which I have gone are that, with the help of God, our country will not be involved in the conflict that is raging round us, that some supplies at any rate will continue to reach our shores, and that, with the co-operation of home producers of food and materials, no major economic catastrophe will overtake us. These assumptions may or may not be well-founded, and accordingly a big element of conjecture attaches to all our figures. It is in the light of this knowledge that I would ask Deputies to study the White Paper of Estimates of Receipts and Expenditure for the year ending 31st March, 1942, which has been circulated.

It will be seen that, on the basis of existing taxation, our estimates of tax revenue for 1941-42 are £26,045,000, as compared with actual receipts of £28,824,000 in 1940-41, a decline of £2,779,000. Customs revenue alone is down from £11,688,000 to £8,270,000, a gap of no less than £3,418,000. A variety of adverse movements has contributed to this. Imports of all kinds from the Continent practically ceased with the collapse of France in June, 1940. New sources of supply were, generally speaking, not available, and, where they were, the longer haul and greater element of risk attaching to it tended to reduce quantities. Moreover, the intensification of the war effort in the United Kingdom has led to a gradual contraction in output for civilian requirements which, in turn, will affect what we can draw from this source. The greatest loss that we will face occurs in the mineral hydrocarbon group, from which we received in customs revenue £1,343,000 in 1940-41 and can expect only £700,000 for 1941-42. Tanker tonnage has been depleted owing to war casualties, the demand for war purposes has been intensified and we have sustained a considerable cut in our imports which, I hope, may not be so serious for the remainder of the financial year.

The sugar group is another instance of reduced import and corresponding loss to the revenue. It yielded us £1,400,000 in 1940-41, but we can put it no higher than £505,000 in the current year, a drop of roughly £900,000.

Tobacco, that saviour of the Exchequer, to which I referred already, shows an estimated decline from £6,590,000 last year to £4,785,000 in the current year, a descent that in no way impairs its position of leadership on the customs side. Even at that reduced figure, it will produce 57 per cent. of the total customs revenue as compared with 55 per cent. in the year just closed.

Tobacco has been the subject of repeated and unwelcome attentions on the part of Finance Ministers here and elsewhere, but our consuming public seem to stand up in a wonderful way to each successive impost on the weed. The thrifty pipe has been superseded by the unthrifty cigarette, and the fair sex contributes materially to this smoke screen that is so valuable to the Exchequer. There were abnormally heavy clearances of leaf in 1940-41, so much so that, in order to preserve our limited stocks, I was forced to make an order restricting, as from the end of February last, the weekly clearances from bond of unmanufactured tobacco. These cannot now exceed 1/65th of the clearances in the year ended 31st March, 1940. Clearances in the current year will, therefore, be reduced to about 80 per cent. of those of the standard year and, in consequence, a decline of more than one-quarter on the abnormal revenue receipts of last year must be anticipated.

The raw material position in this industry, which is so valuable from the employment as well as from the revenue standpoint, is one of increasing difficulty and fills me with anxiety. It is dependent mainly, as Deputies are aware, on imported leaf, which comes chiefly from the United States of America. If relief does not come before the end of the present financial year, the 1942-43 revenue will be still more seriously affected.

Wine is another good revenue producer for which the import prospects are not bright. Shipments from the chief source of supply—the Continent —have practically ceased, with the exception of the wines of Spain and Portugal. Stocks are declining and cannot be replenished, but are sufficient to give us a yield in the current year only slightly below last year's. In the spirits group, brandy, rum, geneva and other sorts, the stock position is even more precarious, and substantial declines in yield have to be expected in the current year. The revenue from piece goods of all kinds, cotton, linen and wool, as well as from clothing and apparel, is affected by the restrictions on civilian output in factories in Great Britain and Northern Ireland, while the duty on motor car parts and accessories will, for obvious reasons, suffer serious decline.

This catalogue of deficiencies may seem unnecessarily long, but they are a reminder to those who would continue to pile liabilities on the Exchequer that our resources are not only limited but contracting. Nobody has any thought of tempering the wind to the shorn lamb. Almost every Deputy, almost every organ of public opinion clamours for more and more expenditure. Our newspapers, it is true, praise economy in the abstract, and so do many of the Deputies, but when it comes to applying it in practice, their spirits falter, and the Minister for Finance is left alone—a voice crying in the wilderness. I have no doubt that, in the coming year as in the past, I will be the recipient of many lectures on the need for less expenditure and less taxation, but if a demand is put forward from any class of public servant for improvement in conditions, from any outside service for new or additional subventions or assistance in some form or other from the Exchequer, our leader writers, who, the day before, castigated the Government for its lack of thrift, will join in a chorus of commendation, and will be shocked if reproved for inconsistency. In virtually the same breath they speak of more expenditure and less taxation. Lack of realism or of business instinct is, I suppose, responsible, but it is regrettable that the community, or sections of it, are led to believe that they can get what they want from the public purse without the painful necessity of having to pay for it.

If I have so far dealt almost exclusively on the revenue side with customs duties, it is not to underrate the importance of the Inland Revenue. Fortunately, the latter is not subject to such violent fluctuations and here, of course, the income-tax and surtax stand out as our primary benefactors. It will be remembered that for the year 1939-40 the standard rate of income-tax was raised by 1/- to 5/6 and that, in November, 1939, I announced a further increase to 6/6 in the £ for the 12 months beginning on 6th April, 1940. Exchequer receipts from income-tax and surtax in the year just closed were £7,305,000, and on the basis of existing taxation are estimated at £7,939,000 for 1941-42. The receipts from both heads in the past year were substantially in excess of Estimates. Trade conditions, though difficult, have been relatively better than expected, but this buoyancy is not reflected in other directions, e.g., stamp duties, where the sweepstakes have proved disappointing and are expected to yield even less in the current year. Our other main heads of Inland Revenue, Estate Duties and Corporation Profits Tax, made a satisfactory showing and are expected to maintain their position.

I now turn to our main task, the Budget for the coming year. On the expenditure side, the chief item is the provision for Supply Services which, as Deputies will have observed from the Volume of Estimates circulated early in March, comes to £35,323,000. To this we have to add two sums of £102,000 for the provision of shipping, and £7,000 for the relief of distressed Irish nationals abroad, for which Estimates have already been submitted to the Dáil. A further bill is promised from the Department of Agriculture in connection with foot-and-mouth disease. The size of it is uncertain, but it will probably be not less than £350,000. These various additions bring the provision for Supply Services to £35,782,000. Adding the figure given in the White Paper for Central Fund Services, £4,844,000, we get a total of £40,626,000—a burden with which the country has never before been faced and with which no former Minister for Finance has had to deal.

We must first proceed to make dedutions for capital or abnormal expenditure. These relate mainly to the defence provision for mechanical transport, general stores, guns, ammunition, armoured cars, anti-gas equipment and our modest Naval establishment. Further, there is provision in the Public Works and Buildings Vote for barracks, magazines, etc. I feel justified in charging to revenue only one-quarter of this expenditure and defraying the remainder, £682,000, from borrowing.

Expenditure on airports and meteorological equipment in the coming year is expected to be £220,000 and, as in the past, deducting the annuity required to meet the total estimated expenditure, calculated on a 15-year basis at 3½ per cent. interest, we get a figure of £84,000 to be borrowed. For afforestation, I propose to charge to capital £60,000—part of the cost of acquiring land and of cultural operations. For employment schemes, I am borrowing, as in the previous year, one-quarter of the total provision of £1,000,000; and as regards shares in Irish Shipping Limited, I feel justified in treating the whole amount, viz., £102,000, as a non-revenue charge.

These various capital items together total £1,178,000, and subtracting this from the gross figure of expenditure mentioned above we get £39,448,000.

We must, I am afraid, assume this to be our net bill as no relief can be expected this year from savings. In 1940, I assumed a figure of £600,000 under this head in relation to Supply Services, but the large volume of Supplementary Estimates undid the reckoning, an under-estimate of £2,028,000 occurring instead.

From the White Paper, Deputies will see that the yield of tax revenue on the existing basis is £26,045,000, and of non-tax revenue £5,638,000, making a total of £31,683,000. The gap between revenue and expenditure is, therefore, £7,765,000.

This is a figure of alarming proportions and I must frankly say at the outset that I see no way of bridging it by normal means, that is, by economy or by taxation. The Budget cannot, therefore, be strictly balanced, and we must succumb to the general epidemic of Budgetary malaise that has been sweeping the world, and particularly European countries, in recent years. Of course, we have had before now Budgets that did not precisely balance according to the strict canons. Our equilibrium has, however, been more than usually upset this year, but I think Deputies will agree with me that the circumstances are entirely exceptional and abnormal. My first drive, when confronted with the situation, was naturally to secure a curtailment of expenditure, and here the Army seemed to offer the most promising field with its Vote of £8,313,000 and Allied Services of £1,048,000. If their defences in the field are as strong as their defender in the Council Chamber, our soldiers need fear no foe. All my attacks were repulsed. I suppose I am revealing no secrets when I say that not even was succour forthcoming on my side from the Council of Defence. All efforts to force economies on other Departments were equally unsuccessful.

Faced with this dilemma, there seems to be no alternative but the imposition of heavy taxation. This I am reluctant to do because of its unfavourable reactions on industry and commerce generally, and particularly on employment. On the other hand, we must make income more in harmony with outgoings. We must not allow our national finances to become waterlogged, and in this attitude I am sure I can count on the support of all Parties in the House.

As a first step towards meeting the deficit, I propose to increase the standard rate of income-tax from 6/6 to 7/6 in the £.

The question of imposing an excess profits tax has again been explored. When this question was examined prior to the preparation of last year's Budget, that is to say about February and March of 1940, very few trading concerns whose accounting periods ended on dates some time later than the outbreak of war had completed the making up of their accounts, and still fewer of these accounts had reached the officers of the Revenue Commissioners. In accordance with the usual procedure prior to the introduction of the Budget, trading concerns of importance which habitually made up accounts to dates such as the end of December or the end of March were requested to furnish in advance approximate estimates of what their profits for the year to December, 1939, or March, 1940, were likely to be. The estimates received did not in general indicate any very appreciable increase in profits and I, therefore, decided not to impose an excess profits tax last year. Since then, audited accounts of business concerns have been coming in, and an examination of these goes to show that the advance estimates furnished by traders early in 1940 were for the most part unduly conservative. This does not mean that the estimates were deliberately misleading. There are very many concerns in which the trader cannot determine even approximately the amount of his profit for a particular year until his stock has been taken and valued and his books have been balanced and audited.

The accounts now available indicate that a considerable number of business concerns have been making substantially increased profits since the outbreak of the war and that these concerns are mainly in the hands of limited companies. I, therefore, propose to make certain changes in the Corporation Profits Tax and these changes include a modification designed to give the Exchequer a very substantial proportion of the increased profits which have accrued as a result of the war. Before explaining these changes I should like to point out that it would be quite wrong to assume that a trader has been profiteering merely because he makes increased profits as a result of a situation like the present one. The war has inevitably resulted in an increase in world prices and, therefore, in the cost to the trader of the goods which he purchases and sells. If a trader is paying substantially increased prices for the goods he buys, charges on those prices merely his ordinary rate of profit and maintains the volume of his sales, his profit will automatically be increased.

Corporation Profits Tax at present is not charged on the first £5,000 of profit. I propose to reduce this exemption limit to £1,000. The rate charged now on profit in excess of the exemption limit is 7½ per cent. in the case of companies incorporated in this State and on other companies trading here which keep here a register of their Irish shareholders. The rate for companies trading here but not incorporated here and which do not keep in this country a register of their Irish shareholders is 10 per cent. I propose to increase these rates to 10 per cent. and 12½ per cent., respectively. These changes will operate as from the 1st September, 1939, the profits of accounting periods beginning before and ending after that date being apportioned on a time basis. In addition to these changes in the existing structure of the tax I propose to impose a charge of 50 per cent. on profits made as from 1st September, 1939, in excess of a standard computed in normal cases by reference to the profits for earlier years. In the ordinary case the standard will be the two best of the three yearly accounting periods ending on the 31st December, 1938, or the last prior date to which the accounts of the concern have usually been made up. The Finance Bill will contain provisions for alternative standards to meet exceptional types of case, and there will be a provision dealing with certain cases in which the trading during the standard years has on balance resulted in a loss.

The effect of all the changes in the normal case will be that taking into account the 10 per cent. ordinary Corporation Profits Tax charge on the excess profit, the excess Corporation Profits Tax charge of 50 per cent. and the income-tax of 7/6 in the £ which will be charged on the balance of the excess after deducting the Corporation Profits Tax charge, a company which is liable to be assessed to excess Corporation Profits Tax will pay altogether 75 per cent. of the excess in taxation.

Deputies will not expect me to detail in my Budget speech all the provisions relating to the changes in the Corporation Profits Tax which will appear in the Finance Bill. There is, however, one further matter to which I should perhaps refer. It concerns a very small number of companies, but to these companies it is of some importance. Where the capital of a company includes an issue of preference shares and there has also been an issue of debentures, the burden of Corporation Profits Tax falls wholly on the balance of profit available for payment of dividend to the holder of ordinary shares and the existing law contains a provision to the effect that Corporation Profits Tax shall not be collected in excess of a sum equal to 10 per cent. on the balance of profit available after payment of interest and dividends at a fixed rate. I propose to provide that for the purpose of this provision the limit should be 15 per cent. instead of 10 per cent. This limitation will not operate in respect of the charge of 50 per cent. on excess profits.

I estimate that the effect of the changes in the Corporation Profits Tax will give me an increase in the current year of £1,400,000. As I have already indicated, a company liable to Corporation Profits Tax is entitled to deduct the tax paid in computing its profits for income-tax purposes. Since income-tax payable by companies is payable in one instalment on the 1st January, whereas income-tax payable by individuals is payable in two instalments on the 1st January and the 1st July, the collection of income-tax from January to March, 1942, will be materially affected by the changes in the Corporation Profits Tax, and I cannot, therefore, count on receiving more than £300,000 in the current year from the increase of 1/- in the income-tax rate. I estimate accordingly that the net result of the increases in both taxes will be to give me an increased yield of £1,700,000 in the current year.

Before leaving the subject of the Corporation Profits Tax I might mention that I am proposing to legislate to continue the existing provision which exempts from that tax concerns such as the railway companies, building societies, and the Agricultural Credit Corporation.

As I have already stated, my information goes to show that the businesses which have been making substantial excess profits are mainly in the hands of limited companies. It is obvious, however, that where an individual trading alone or in partnership is in possession of a substantial income and that income includes substantial profits from a trade or business carried on by him, any excess profits made in the business should be brought into charge on lines analogous to those applying to a company. I propose, accordingly, to introduce into the provisions relating to surtax a modification designed to bring about this result. The effect of the new provisions will be that where the income of an individual in the surtax range has increased and such increase is due partly or wholly to an increase in the profits of a business carried on by him which has a standard of at least £1,000, either the increase in the total income or the increase in the business income (whichever is the lower) will be liable to an excess surtax of from 2/6 to 7/6 in the £. The rate charged will depend on the rate already payable on the highest portion of the taxpayer's income, but again the effect will be that in the normal case the chargeable excess will, as between income-tax, ordinary surtax and excess surtax, bear tax amounting in the aggregate to 15/- in the £, thus aligning the case of the individual with that of the company. In the cases to which the new provisions apply the additional charge to surtax will operate to increase the surtax payable on the 1st January, 1942, in respect of the total income of the year 1940-41. In the normal case the excess total income will be ascertained by comparing the total income as computed for surtax purposes for 1940-41 with the average total income of the best two of the three preceding years as so computed, and the excess business profit will be ascertained by comparing the amount of the profit included in the total income for 1940-41 with the average of the best two of the three years ending on the 5th April, 1939 (or the last prior date to which the accounts have been customarily made up). Some special provisions will be necessary with regard to exceptional cases to ensure comparison of like with like and in relation to cases in which there have been business losses. It is very difficult to estimate what the provisions for excess surtax will yield in the current year since forms for the making of returns of total income for surtax purposes for 1940-41 have only just been issued to taxpayers. As already stated, I am informed that the great majority of the concerns which have been making substantial excess profits are in the hands of limited companies and I do not propose, accordingly, to count on a yield of more than £20,000 from excess surtax in the current year.

The only remaining change of importance which I propose to make in direct taxation is to increase the rates of estate duty applicable to estates of which the net capital value exceeds £10,000. The change will operate in the case of persons dying after this date, and I estimate that it will yield £60,000 in the current year and £80,000 in a full year. The effect is to increase by a further 10 per cent. the pre-war rates of estate duty applicable to the estates concerned, over and above the increases already effected by the Finance (No. 2) Act, 1939. The new rates are set out in the Schedule to the Resolution.

These changes on the Inland Revenue side will, I expect, bring in £1,780,000 in the current year, which still leaves us with an uncovered balance of £5,985,000.

On surveying the field of customs and excise duties, I came to the conclusion that the mineral hydrocarbon oil group, of which the chief member is petrol, could carry some more taxation. The customs duty at present is 10d. per gallon, which succeeded a figure of 8d. imposed in 1931. I propose to make an addition of 5d. per gallon, bringing it to 1/3. This duty will apply to both light and heavy oils, on the same lines as at present, and is estimated to bring in an additional £374,000 in the current year. At the same time, I propose to raise the excise duty by a similar amount from 8d. to 1/1 per gallon, but as home-refined oil is not at present being produced, no revenue will result.

In regard to petrol, I am making two assumptions. First, that substantial imports will take place during the year, and second, that all such imports will be consumed.

In view of the extensive raids carried out in the past on tobacco interests, I had hoped not to despoil them further, but my needs are so pressing that a substantial increase in duty is inevitable. The basic addition to customs duty which I am proposing is 5/6 per lb. on unmanufactured tobacco of a certain moisture content, raising it from 13/4 to 18/10 per lb., with consequential increases for the different descriptions of imported manufactured tobacco. On excise, the basic increase will be 5/3 per lb. or 3d. less than in the case of customs. The concession of 1/4 per lb. on hard-pressed tobacco, principally plug and roll, which I granted last year will be continued.

I cannot say precisely what effect these changes will have on the consuming public, but, in the light of past experience, the retail price of cigarettes may go up by as much as 2d. for ten and 4d. for 20, while tobacco, now selling at 10½d. and upwards per ounce will be advanced by 4d. per ounce. The benefits accruing to the revenue from these changes are expected to be considerable, amounting to no less than £1,870,000 in the current year.

When one is looking for light in the midst of Budgetary darkness, what is more natural than to think of matches. On matches we collected in excise duty £144,000 in 1939-40 and £152,000 in 1940-41. The receipts of the latter were unexpectedly high owing to widespread purchases through fear of scarcity and of possible additional taxation. The speculators will, for once, not be disappointed, as I propose to double the excise duty, thus raising the main rate from 3/8 to 7/4 per gross, and benefiting the Exchequer to the extent of £85,000 in the present year. Were it not for restricted deliveries of tobacco and less consumption due to the higher price, we might expect to get even more from matches, but the aggregate receipt in the current year should not be less than £200,000.

Another customs change which I am suggesting is an increase of the existing duty of ?d. per copy to 1d. per copy on imported daily newspapers. Under the Finance Act, 1933, by which this duty was imposed, exemption was allowed in the case of newspapers with an average daily circulation in this country of 1,000 copies or less. It is now proposed to remove the exemption. This increase of ?d. is also being made effective in the case of periodicals, and certain classes hitherto exempt are being brought within the scope of the duty. The various changes are estimated to bring in £8,000 in the current financial year.

Complementary to this duty, I am also submitting a Resolution imposing an excise duty of ?d. per copy on every newspaper which is published within the State at weekly or lesser intervals. This duty will not become operative until the 26th May and the interval will afford an opportunity to the people concerned to make any necessary adjustments. Certain exemptions are set out in the Resolution for religious, scientific, trade, educational and other publications. Refunds of duty are provided for in certain cases. I anticipate a yield of £135,000 in the current year from this new tax and £160,000 in a full year.

Another excise change which I have in mind relates to the betting duty. An exemption was accorded by the Finance Act, 1931, to bets made on the course by bookmakers at horse races and greyhound coursing and racing tracks and to bets with the totalisator. This exemption will cease as from 1st July next and a duty at the rate of 2½ per cent. on the amount of such bets will be imposed, giving us a return of, I hope, £33,000 for the remainder of the financial year.

I have made a careful survey of the existing duties on beer and spirits, as a result of which I am satisfied that neither industry is in a position to bear further impositions. We did increase the duties, after considerable hesitation, in November, 1939, and from the figures which I have quoted earlier in my statement, I do not think we lost on balance by the change, but over a long period, the revenue has suffered a grievous setback in regard to both beer and spirits, with consequent hardships on members of the licensed trade. Heavy taxation is not altogether responsible for the decline as there has been a change in social habits and people have taken to other forms of amusement besides the consumption of intoxicating liquor. There is one beverage, however, which, I think, can bear a little more duty, cider. In 1940, it was made subject to 1/- per gallon and I propose to raise this to 2/-. Cider contains a higher percentage of proof spirit—about 8 per cent. —than porter or light beer, and even at 2/- per gallon, the rate of duty will still be much less than the average rate of duty on beer, which works out at approximately 2/9 per gallon. The production of cider has risen substantially in recent years, and as it will still enjoy a considerable preference, its position should not be materially impaired, Coincident with this change, I am raising the customs duty on imported cider from 5/- to 6/- per gallon. The revenue is expected to benefit altogether to the extent of £7,000.

These various changes and additions to customs and excise duties will bring in altogether, it is estimated, £2,512,000 in the year to 31st March next.

I propose to make certain alterations in postal rates and telephone charges. The inland letter rate will be raised from 2d. to 2½d. and the postcard rate from 1d. to 1½d., while various changes will be made in regard to printed papers and parcels, reducing the weight which can be carried for a given payment. I am also proposing a 5 per cent. addition to telephone accounts due on and from the 1st October next. Under the arrangement I have made with the Minister for Posts and Telegraphs, all the other changes will operate as from 1st June, and the additional revenue accruing from them, including telephones, is expected to be £190,000 in the current year.

In view of its diminished income, I propose to take this year from the Road Fund only £100,000 as compared with £150,000 in 1940. The necessary clause for this purpose will appear in due course in the Finance Bill.

Deputies will remember that the difference between revenue, on the basis of existing taxation, and expenditure that we arrived at earlier in my statement was £7,765,000. The additional revenue which I hope to raise under the various proposals mentioned amounts to £1,780,000 in the case of Inland Revenue duties, £2,512,000 in the case of Customs and Excise duties, £190,000 from the Post Office, and £100,000 from the Road Fund, making in all £4,582,000, from which a minor loss of £1,000, due to a concession in regard to imported agricultural tractors, has to be deducted, leaving a net amount of £4,581,000. The amount of expenditure still remaining uncovered is, therefore, £3,184,000, a figure which we are justified in treating as expenditure arising wholly out of emergency conditions and, accordingly, as appropriate to be defrayed from borrowing.

In my proposals in regard to corporation profits I have been careful to interfere no more than is necessary with the possibility of companies accumulating resources in order to meet the inevitable shocks of post-war adjustment. While others may differ with my view, I feel that the 25 per cent. margin which we have allowed to remain with them will be adequate for this purpose. Even so, I expect to hear a chorus of complaint, but it may be well to state here and now that the Government is most anxious that there should be equality of sacrifice all round and that no section of the community could claim to have accumulated excess profits at the expense of other sections during this grave period of crisis. In pursuance of this end, we are to-day promulgating two orders of first-class importance which are, to some extent, complementary to the proposals in regard to income-tax and corporation profits tax with which I have been dealing. These orders place restrictions on increase of rates of remuneration of practically all classes of workers and employees in the service of public utility and statutory undertakings in certain essential industries and sheltered or protected industries and, at the same time, limit the amount that can be paid by companies either by way of dividends or remuneration of directors. Where companies have paid no dividend they will be allowed, under the order, to distribute up to 6 per cent. per annum on all their paid-up ordinary share capital.

The employments to which these orders relate are set out in a long Schedule which I will not attempt to summarise here, save to say that it covers practically all who are employed in sheltered occupations and in essential or protected undertakings, whether in office or factory. In these pursuits any increase in costs, whether arising under wages, salaries or other heads, is reflected in increased cost to the public and therefore in an increase in the general cost of living. Agriculture is not included in the scope of the orders.

I did refer last year to the results which follow from conceding cost-of-living bonuses to offset increased prices during war time, and I pointed out that such bonuses aggravate the problem instead of solving it. As misunderstanding still exists regarding this very important matter and as increases have since been granted to a number of categories with the idea of offsetting increased prices, I propose to speak about the matter again.

When wages are raised in any particular occupation the normal practice is for the employer to recoup the additional outlay involved by increasing the cost of the service performed or the goods produced. The increase is simply passed on to the consumer. When the consumer is an employee, he in turn seeks to offset the increased price which he has to pay for those goods or services by demanding, if he is in a sufficiently strong position to demand, an increase in his own wages—which, if granted, pushes up in turn the cost of the services or goods which he performs or produces. And so the mad race goes on; higher wages followed by higher costs, higher prices and again higher wages—all in rapid movement; and the dangerous sequence is unaffected by a statement of the order of events beginning, as labour unions prefer to put it, with higher prices and cost of living, then higher wages, and so on.

These consecutive increases occur more rapidly and with more certainty in war time when the supply of available commodities is strictly limited and when the bigger volume of purchasing power made available by wage increases operates on the steadily diminishing volume of commodities available for purchase.

Those persons sufficiently strongly placed to enforce their demands for increased profits or wages are in a fortunate and privileged position. But what of those not so favourably situated and not in "sheltered" occupations? Where they are employers they may be forced to reduce the number of their employees and those so disemployed will then have to try to carry on with only a fraction of their former income to pay for dearer foodstuffs and commodities. Similarly, the real value of the income of those in unsheltered occupations and of persons drawing old age or widows' and orphans' pensions, unemployment insurance and unemployment assistance, etc., is diminished. The conditions of those at or near the poverty line are worsened and their standards of living still further depressed. The largest body of consumers in the country are our agriculturists and agricultural workers. If they were in a position to meet the increased cost of living by receiving correspondingly increased prices for exports of agricultural produce, the general position might be comparatively safe, but the fact is that while the prices received for our agricultural exports have increased they have not moved in step with the increased prices which have to be paid for our imports. Taking the export price index number in June, 1939, as 100, the figure for June, 1940, rose to 129.8, and for February, 1941, to 155.0. Similarly, taking the import price index number of June, 1939, as 100, we find that it rose to 156.0 in June, 1940, and to 166.9 in February, 1941. The rise in the import price index number between June, 1939, and February, 1941, was 66.9 per cent. as compared with a rise of only 55.0 per cent. in the export price index number over the same period.

If we allow to proceed unchecked the inflationary movement which inevitably follows from granting wage increases in such circumstances as exist at present, we are faced with a situation fraught with ever-increasing hardships and injustices for many. We must expect that everyone shall be prepared to make some sacrifice in his standard of living and not hope to continue his old standard at the expense of the less fortunately placed members of the community.

The first step taken in giving effect to this policy was to stabilise the cost-of-living bonus of civil servants. The same principle was applied to officials of local authorities who are in receipt of a cost-of-living bonus. As employers and employees generally have not seen fit to follow the definite lead thus given, the Government is now constrained to take the measures mentioned in order to check the tendency to grant wage increases in one trade and industry after another.

There are some additional items of expenditure also arising out of the emergency, to which I must now refer. They will, perhaps, be welcome after the long and bleak catalogue of impositions which I have recited.

The Government, realising that the poorer sections of the community who are dependent upon assistance from various public sources are more seriously affected by the increased cost of food and other commodities than those engaged in occupations, have decided to the extreme extent that financial conditions permit to make provision for easing their burden. I propose, accordingly, to make certain additional allowances available for recipients of unemployment assistance, and for old age pensioners and blind pensioners, and pensioners under the Widows' and Orphans' Pensions Acts. The intention is that these allowances will be issued in kind by way of vouchers for specified rations of milk, butter and bread. These commodities have been selected as being amongst the most important in the dietary of the poor, and persons offering them for sale will be under a statutory obligation to supply the commodities in exchange for the vouchers issued, payment being made subsequently by the Exchequer. The allowances will be granted only to beneficiaries under the social services mentioned who live in urban areas and townships, and so far as recipients of unemployment assistance are concerned will be issued only in respect of dependents. Financial considerations exclude any possibility of extension of the allowances to rural or non-urbanised areas, where it may, I think, be taken that the food problem of the necessitous classes is in general somewhat less difficult, even in present circumstances, than it is in the larger centres of population. The decision to issue the allowances in kind rather than in the form of increased cash payments has been based in some measure on the fact that it is desirable, in the case of milk and butter, to encourage an increase of home consumption and, in particular, to provide the poor with a wholesome substitute for tea. It is an additional consideration that the arrangement will ensure that the real benefit of the allowances will be independent of price fluctuations.

The entire cost of these allowances, which I estimate at £524,000 in a full year, will be borne by the Exchequer.

I propose also, with the concurrence of the Minister for Industry and Commerce, that the rates of benefit payable under the Unemployment Insurance Acts, 1920-40, shall be increased by 2/6 a week for adult dependents, and by 1/6 a week for dependent children. These increases will involve an estimated additional annual charge of £92,000 upon the Unemployment Fund.

The Government would like to feel that the local authorities charged with the provision and administration of home help would consider that they too should afford additional allowances of bread, milk and butter to those who are obliged to apply to them for assistance. To encourage the local authorities to undertake this extra liability during these difficult times, I propose to provide a sum not exceeding £200,000 towards meeting the cost of the additional food which the boards of assistance may grant to such of the necessitous poor as are approved by them. In allocating this subsidy regard will be had to the extent to which additional allowances for food are granted by the boards of health and public assistance over and above the amount normally granted as relief in recent years to individual applicants by the local authorities concerned.

Apart from this additional provision, the estimates of expenditure with which I have been dealing contain considerable sums of benefit to the classes now suffering hardship—in the sense that they directly or indirectly afford or stimulate employment. The Employment Schemes Vote of £1,000,000, supplemented by £250,000 from local authorities, and £775,000 in the Public Works and Buildings Vote for new constructional works of various kinds falls under this head. Expenditure on land improvements, forestry, turf development, Gaeltacht industries, sea fisheries, etc., and grants for housing, drainage, etc., all help to provide work. The items of this character in the Supply Services Estimates total £3,587,000. There is, further, the provision for capital issues set out in the White Paper, totalling £1,514,000. In addition to the £100,000 shown therein for advances to the Local Loans Fund, arrangements are being made for advances to that fund from other sources of £1,200,000. Adding these figures, we get a grand total of £6,301,000, which represents no small effort to cope with our unemployment problem.

In addition to all this financial provision I have, as Minister for Finance, given considerable assistance to the Minister for Supplies in his efforts to provide us with additional shipping, flying the Irish flag. I have arranged to take up capital in a newly-formed shipping company up to a figure of £102,000, or 51 per cent. of the total nominal capital of £200,000. This company will have borrowing powers up to £2,000,000, all of which I have power to guarantee. Borrowing up to £1,000,000 has, in fact, already been guaranteed by me.

The measures taken by the Government to stimulate food and turf production by individuals and local authorities have helped and will help further to find employment for many now dependent to a greater or lesser extent on public relief.

I have set out for you in detail the financial situation as I find it. I have outlined the expenditure for the current year—the expenditure for normal services and for the abnormal services arising chiefly out of the war situation, through which our ordinary life is greatly upset. The picture I have drawn for you is not a pleasant one. Less pleasing is the heavy additional taxation I have found it necessary to impose. We here are victims of circumstances which we are powerless to control or alter. Situated as Ireland is, an island outpost of the Atlantic Ocean, within a few minutes flight from a neighbour engaged in a life or death struggle, it would be miraculous if we were not seriously affected economically and otherwise by our proximity to the war zone.

Though we are neutral, I think I may claim that, to some extent, this Budget is a war Budget. It is a war Budget certainly in so far as a considerable proportion of the additional expenditure I have had to make provision for arises directly out of the war. Of course, it is true that if we had the grave misfortune to be involved in hostilities this Budget would have had to be of a very different and perhaps a very oppressive kind. Though so far we have managed to escape being involved, our neutrality as well as our proximity to the greatest theatre of war imposes certain obligations upon us.

Neutrality may not be an heroic rôle —especially for Ireland—but, nevertheless, it is an expensive rôle. To secure due respect for our neutrality our defence force has had to be increased. This year it costs four times as much as before the war. The rise in the cost of living, even though the cost-of-living bonus has been stabilised, has added considerably to our expenses. The emergency services too, though largely administered by staff borrowed from other Departments, have caused additions to the number in the Civil Service. The cost to the Exchequer of the various social services is considerable. The schemes we have had to subsidise or finance in order to procure substitutes for essential supplies from overseas, now unobtainable, add heavily to our liabilities. These charges with many other smaller items, which added together make a respectable figure, can, I suggest, be classed as charges forced upon us by the emergency or war situation. If I did not have to provide for them the expenditure side of my Budget could be lighter by several millions.

I would have been happy, and I know the members of the Dáil would have been happy too, if instead of spending on what I may call war services, we could have spent even a moiety of this large sum on services which would stimulate production and help our people generally.

The determination of peace or war unfortunately is not ours to make. Our power to influence those who can decide for peace or war is slight. Small as our influence may be, however, we will, as a Government, do all that lies in our power to influence the restoration of peace among the warring nations. A just peace may it be this time and, God willing, a lasting peace.

With the restoration of peace, which happy day we hope may not be too long delayed, the heavy additional load of taxation imposed by this Budget will be reconsidered. Oppressive taxation discourages industry and increases unemployment. In our present circumstances, the additional imposts, though they do not even meet fully the increased expenditure are, I realise, a very heavy burden. I like to look towards the day when it can be lightened with advantage to the permanent well-being of the nation.

Our people in the past, remote and recent, have made sacrifices not surpassed by those of any other people for the nation's right to determine freely how it should live and be governed. Money was not counted in the days of those protracted struggles. Our neutrality to-day is an expression of the same people's desire to live its own life free from external control or interference. You men and women of the generation which succeeded in winning the independence we here now enjoy will not be found wanting if further sacrifices have to be called for to maintain the rights and liberties won at such cost. In the past our people gave their lives generously, aye, lavishly, for the cause of freedom in all corners of the world. Though the love of freedom is not less dear to us to-day nor perhaps the will to fight for it, all we ask of other nations now is—and it is the most earnest request of our people—to be let live in peace.

The tables referred to in the Financial Statement are as follows:—





Original Estimates

Actual Payments

Original Estimates

Actual Issues











2. NON-TAX REVENUE (including £150,000 from Road Fund)









3. Deduct for Capital, etc., expenditure to be defrayed from borrowing:—

Original Estimates




(a) Defence Expenditure on Votes 10 and 63



(b) Airports



(c) Afforestation



(d) Employment Schemes



















No. of Vote




Increase over 1939/40

Principal Causes of Major Variations





President’s Establishment





Office of the Minister for Finance





Office of the Revenue Commissioners.




Extra Establishment charges, salary increments and bonus.


Old Age Pensions




More pensioners and a higher average rate.


Compensation Bounties




Increased exports of manufactured goods containing sugar made from Irish beet.


Office of Public Works




Salary increments, additional bonus and extra Architectural and Engineering staff.


State Laboratory





Superannuation and Retired Allowances.




Increased number of pensioners and additional bonus.


Rates on Government Property




New Property and increases in rates.


Secret Service





Expenses under the Electoral Act and the Juries Act.





Miscellaneous Expenses





Valuation and Boundary Survey





Ordnance Survey





Supplementary Agricultural Grants.




Law Charges




Unexpected savings occurred in 1939/40.


Universities and Colleges





Widows’ and Orphans’ Pensions




Management of Government Stocks.









Expenses in connection with Foot and Mouth Disease, Farm Improvements Scheme and increased cost of Lime Subsidy.


Office of the Minister for Justice





Gárda Síochána




Taca Síochána and Local Security Force expenses; increased rent allowances.







Supreme Court and High Court of Justice.





Charitable Donations and Bequests





General Register Office





Dundrum Asylum





Office of the Minister for Education





Reformatory and Industrial Schools




Increase in numbers eligible for Capitation Grants.


Transport and Meteorological Services.




Meteorological Service expansion.


Railway Tribunal





Marine Service




Protection of ships against magnetic mines; compensation for war losses.


Posts and Telegraphs




Salary increments and bonus. Increased costs and purchase of reserves.


Wireless Broadcasting




Large surrender from 1938/39 resulted in reduced issues for 1939/40.






All round expansion, additional charges for pay, transport, stores, etc.


Employment Schemes




Casual variation.


Office of the Minister for Supplies





Irish Tourist Board





Dublin Institute for Advanced Studies.



New Service.


Repayments to Contingency Fund





Emergency Scientific Research Bureau.








No. of Vote




Decrease from 1939/40

Principal Causes of Major Variations.





Houses of the Oireachtas





Department of the Taoiseach





Comptroller and Auditor-General





Public Works and Buildings




Reduction in purchase of sites, etc.


Haulbowline Dockyard





Civil Service Commission





Property Losses Compensation




Commissions and Special Inquiries





Stationery and Printing





Quit Rent Office









Transfer of patrol boats to Department of Defence. Special non-recurring item of £25,000 in 1939/40.


District Court





Land Registry and Registry of Deeds.





Circuit Court




Reduced staff charges. Increased Appropriations-in-Aid.


Public Record Office





Local Government and Public Health.





National Health Insurance





Primary Education




Casual variation.


Secondary Education





Technical Instruction




Reduced number of scholarships. Ending of training courses. Transfer of certain grants to Vote 26.


Science and Art




Effect of economy measures on Museum, Library and Publications.


National Gallery









Reduced scope of operations Vacancies on establishment.






Curtailed activities due to shortage of materials.


Gaeltacht Services




Increased receipts from Appropriations-in-Aid.


Industry and Commerce




New York Fair and Glasgow Exhibition expenditure included in 1939/40 and not in 1940/41. Reduced expenditure on Minerals Exploration.


Unemployment Insurance and Unemployment Assistance.




Extension of Employment Period Orders.


Industrial and Commercial Property Registration Office.





Army Pensions




Reduced volume of arrears.


External Affairs




Non-recurring expenditure in 1939/40 on official visit to U.S.A. and contribution to Committee on Non-intervention in Spain.


League of Nations





Export Subsidies




Improved prices for butter entailed reduced subsidy payments. No egg subsidy required in 1940/41.





Net Increase





Total Issues on all Votes











On 31st March, 1940

On 31st March, 1941


On 31st March, 1940

On 31st March, 1941







Funded and Unfunded Debt:—

Exchequer Balance at Bank



5% Second National Loan, 1950/60



National Loans Sinking Fund unapplied



4½% Third National Loan, 1950/70



3½% Compensation Stock Sinking Fund unapplied



3½% Fourth National Loan, 1950/70



Saving Certificates (Interest Charge Equalisation) Fund



4% Conversion Loan, 1950/70



Exchequer Advances Repayable:

3½% Financial Agreement Loan, 1953/58



Shannon Power FundElectricity Supply Board

6,011,130 6,887,465

6,013,930 7,225,095

4% Exchequer Bonds, 1950/60



Road Fund



3½% Compensation Stock



Local Loans Fund (see note

Savings Certificates (Principal




and Interest)



Advances to Guarantee Fund

Ways and Means Advances


—Capital outstanding



Other Capital Liabilities:—

Land Commission: Improvement of Estates, etc.—Estimated capital value of Excess Annuities outstanding



Under Telephone Capital Acts, 1924/38



Under Land Acts, 1923/39:

Advances for Costs Fund and State Contribution to Price (including 50-55% of tenant purchasers’ liability for Land Bond Advances charged on Public Funds under Land Act, 1933)



Purchase of Creameries



Advances under Trade Loans (Guarantee) Act, 1939



Advances to Agricultural Credit Societies



Shares of—

Compensation Annuity under Damage to Property (Compensation) (Amendment) Act, 1926



Agricultural Credit Corporation



Industrial Credit Company



Comhlucht Siuicre Eireann, Teo.



Aer Rianta, Teo.



Monarchana Alcóil na h-Eireann, Teo.









Estimated Capital Value of State Liability under the Housing (Financial and Miscellaneous Provisions) Acts (a) on 31st March, 1940, and (b) on 31st March, 1941