Dáil Éireann debate -
Tuesday, 10 Jun 1941

Vol. 83 No. 13

Committee on Finance. - Finance Bill, 1941—Second Stage.

Minister for Finance (Mr. O Ceallaigh)

I move that the Bill be now read a Second Time. The main purpose of this Bill is to give continuing effect to the taxes and duties embodied in the Financial Resolutions following the Budget. These Resolutions have statutory effect for a limited period under the Provisional Collection of Taxes Act, 1927. They have already been debated at considerable length, and it is, in the circumstances, hardly necessary for me to deal with them now in detail. The Committee Stage of the Bill will, in any case, afford Deputies an opportunity of raising particular matters that appear to require clarification.

The time may, however, be apposite for discussing some of the general principles which had to be considered in dealing with the problem of balancing revenue and expenditure. We were faced with a difference of £7,765,000 between estimated revenue on the pre-Budget basis and estimated net expenditure, after allowing for a deduction of £1,178,000 in respect of certain capital and other expenditure for which, following the precedent of other years, we proposed to borrow. In considering how to narrow this difference, I examined three different methods: first, the planning of economies; second, the imposition of additional taxation; and, third, borrowing.

Apart from old age pensions, widows' and orphans' pensions, other superannuation charges and unemployment assistance, the greater part of expenditure under Supply Services goes directly or indirectly on salaries and wages. Economies in these services may, therefore, involve the disemployment or short employment of those affected. In normal times with alternative openings available in other occupations, the problem for those disemployed or put on short employment would be capable of solution within a comparatively short time without undue hardship. At present, however, with many existing industries threatened with actual or prospective shortages of supplies, employment conditions must be considered rather precarious. That being the case, the Government cannot be too insistent on economies where the latter mean less employment for large numbers. Where economies can be made without serious consequences I have tried to effect them as in the case of the Land Commission provision for improvement of estates. As alternative employment is available in rural areas owing to the increased tillage and turf campaigns, the reduction in that provision will impose no undue hardship.

As an example of economies of another class that are not so apparent on looking at the Supply Service Estimates, I may mention the considerable number of civil servants of various grades who have been transferred on loan from normal service departments to emergency service departments, such as the Department of Supplies, Censorship Office, and the Department of Defence, including A.R.P. The numbers so transferred run into several hundreds, and in most cases their parent Departments, which still bear the cost of their salaries, are carrying on with the vacancies unfilled. The staff reductions thus made in some of the normal Departments inevitably mean some reduction in their activities with a curtailment of normal expenditure.

For the reasons already stated, no substantial economies have been feasible on the Supply Services as a whole. This does not mean that I have abandoned my search for savings. With a Budget of the dimensions we have had to face, and with a national income that is not expanding to meet the increased weight of taxation, it would be idle to deny an element of danger in the public finances. To the many strategic and other surprises that have marked the present war must be added the economic novelty of a relatively stagnant market for our agricultural exports. This surprising feature of the situation is intensified by the difficulties in our domestic position, due to the appalling wave of cattle disease that has swept the country and has not yet ceased to take toll of our choicest herds. In conjunction with the shortage of materials needed not only for agricultural but for industrial production, all these forces operate towards a diminution in the national income which is in strong contrast with the progressive growth of taxation.

Nothing but inexorable necessity could, therefore, justify the additional burdens which I have called upon the citizens to bear, and after hearing and considering carefully the criticism and advice tendered to me from all parts of the House since the Budget was introduced over a month ago, I feel that no course was open to me other than the one I adopted and that any Deputy placed in my position would have been compelled by force of circumstances no matter what his desires, to follow a somewhat similar course.

The increase in the cost of living has indeed made it essential for us to add to the bill for social services by providing for additional allowances for certain recipients of unemployment assistance, for old age pensioners and blind pensioners, as well as pensioners under the Widows' and Orphans' Pensions Acts, the total annual cost of which will run to about £524,000. On top of that we are making a sum of £200,000 available for local authorities charged with the provision and administration of home help to give extra allowances for food to those who receive home assistance.

With economy thus more or less in the discard, I was left with no alternatives but additional taxation or additional borrowing and I struck what I considered a judicious blend. I am reinforced in this view by the contradictory character of the criticisms urged against my proposals from the Opposition benches. Some chided me for borrowing too much, others for borrowing too little; some called me orthodox, others unorthodox. This, I suppose, is admissible as evidence that the Budget as a whole represented a reasonable compromise between conflicting views and theories. I have, however, in response to arguments advanced by Deputies and to facts since brought to my notice, dropped some of my original proposals and modified others. These changes I do not regard as a sign of weakness or lack of foresight. It should surely be a characteristic of any proper system of democracy that members of the Government are open to reason. Our Parliamentary institutions are based on that principle. In framing a Budget strict secrecy has to be observed and it is often not possible to consult in advance the interests most affected by taxation proposals. These interests have at their disposal a vast amount of information regarding their own affairs which I have not, and could not have, before me when considering our financial programme. It is only when my programme is made public that I can get in touch with them and consider more closely Budgetary reactions on their financial position.

It is, I think, indicative of the fact that we are approaching the limit in the matter of taxation, that some of our taxes, if persisted in, would have meant economic dislocation and unemployment in certain quarters. Having received innumerable letters, and given a patient hearing to numerous deputations, and after listening, as I have stated, to pleas for reconsideration of this or that proposal urged from all parts of the House, I did not hesitate to make changes once I was satisfied, and I was not easily satisfied, of their necessity. In the case of matches I found I could get more revenue without adding to the consumers' burden, and I moved accordingly. I decided not to proceed further with my proposals in regard to cider, and to the Customs and Excise duties on newspapers and periodicals. In regard to betting, I have, as already explained, removed from the course to the office the 2½ per cent. on bets, and I am coming to an arrangement with the Totalisator Control Board whereby I get a percentage of the net receipts derived from its operation.

The greatest volume of complaint and criticism reached me in regard to the corporation profits tax, ordinary and excess, and after a painstaking review of the whole position in the light of the fresh evidence available, I propose to make a considerable modification in my original proposals. These changes will come before the House in the form of amendments on the Committee Stage of the Bill, but as they are of considerable importance it would be well to acquaint Deputies at this stage of their general purport.

The Finance Bill as it stands provides that the exempt margin for the purpose of ordinary corporation profits tax should be reduced from £5,000 to £1,000, that companies hitherto liable at a rate of 7½ per cent. should be charged at 10 per cent. and that companies hitherto liable at a rate of 10 per cent. should be charged at 12½ per cent. It provides further that these increases in the charge should operate as from 1st September, 1939. I propose to move Government amendments on the Committee Stage of this Bill, the effect of which will be that the existing, that is, the old exempt margin and the existing rates of charge shall operate up to the 31st December, 1940, that as from the 1st January, 1941, the exempt margin shall be £2,500 instead of £1,000 as provided by the Bill, and that the new rates of 10 per cent. and 12½ per cent. shall also be operative as from 1st January, 1941, only.

With regard to excess corporation profits tax, I propose to move amendments as follows:—

To allow a company to choose as its standard the best single trading year for which accounts have been made up ending during the three years to 31st August, 1939, instead of the average of the two best trading years ending during the three years to 31st December, 1938.

To provide that the minimum standard shall be £2,500 instead of £1,000. To make the charge for excess corporation profits tax operative as from 1st January, 1941, instead of from 1st September, 1939.

As the House is aware corporation profits tax is not payable by individual traders or by firms not registered as limited companies. The proposals in the Bill for an excess surtax are accordingly designed, as I have already explained, to provide for a charge on excess profits made by businesses not registered as limited companies. The postponement of the charge of excess corporation profits tax makes it necessary that the charge to excess surtax should also be postponed. I propose, therefore, that excess surtax be charged in respect of the year 1941-42, payable on the 1st January, 1943, instead of the year 1940-41, payable on 1st January, 1942, and that the minimum standard of profits shall be £2,500 as in the case of excess corporation profits tax.

Mr. Cosgrave

The minimum is £2,500?

Mr. O Ceallaigh

Whilst the changes as regards surtax are of course concessions, I am advised that for technical reasons arising out of the provisions of Standing Orders it will be necessary to move two fresh Resolutions. These will be moved before the Bill goes into Committee.

It is not possible at this moment to state with any degree of confidence what the financial effect will be of the proposed changes in corporation profits tax but it is clear that we cannot this year count on a considerable portion of the revenue of £1,400,000 which we had hoped to get. The yield next year from my new proposals should be substantial. As it is, I will probably have to add something in the neighbourhood of £500,000 to my borrowing figure in the current year. On cider, newspapers and racecourse and totalisator duty, I will lose on the basis of the original Budget Estimates £183,000, against which has to be placed the gain of £24,000 on matches and of £25,000 from the duty on office betting and the arrangement with the totalisator, leaving a net £134,000 to be found by borrowing. There is thus an addition to the borrowing figure of £3,908,000 contained in the Table Explanatory of the Budget, of some £634,000 giving an aggregate of £4,542,000.

I propose now to go into somewhat more detail on various sections of the Bill. In regard to Part I, Income Tax, Section 1 imposes income-tax and surtax for the year 1941-42, and provides for the continuance of previous enactments. I should add that, in consequence of the change to be effected in the excess surtax, it will be necessary to amend the second sub-section so as to fix the surtax rates for this year, and a Supplementary Resolution will be introduced in due course.

Section 2 deals with "double residents", in other words, persons— mostly wealthy persons—who are resident both in this country and in Great Britain or Northern Ireland. It may be recalled that Section 2 of the Finance Act, 1933, enacted that, where certain stated conditions were fulfilled and where the total amount of tax, both British and Irish, payable by a double resident for a given year after deduction of double taxation relief was greater than the amount of British tax which he would have paid if he had not been resident here for the year, the Revenue Commissioners might grant further relief subject to a maximum. In certain cases it has happened that, purely on account of the war, all the conditions laid down in the section have not been complied with, and the purpose of Section 2 of the present Bill is to enable the relief to be granted notwithstanding such non-compliance.

Section 3 is included in the Bill in order to meet, so far as possible, certain representations which have been made to me and to my predecessor from time to time. The provision affords a measure of relief from double income-tax to persons who have spent a considerable number of years abroad, who derive a pension from the foreign country in which they have lived, or, perhaps, have money invested there, and who come to live in this country.

Part II of the Bill comprises eight sections on the new tax to be known as excess surtax. I shall explain the provisions in Part II in the light of the amendments which, as I have said, are to be introduced into the Bill at a later stage. As the Dáil is already aware, this additional duty of surtax called excess surtax is complementary to the excess corporation profits tax, that is to say, it imposes a duty on excess trading profits, so far as these arise to individuals, which is designed to correspond, so far as possible, with the special tax which is to be placed on excess profits of corporations or companies.

Section 4 contains two definitions. The definition of "accounting year," which is adopted as the standard year in relation to trading profits, is self-explanatory. The definition of "total income" ensures a comparison of like with like. If a standard year's "total income" had been diminished by reason of any of the reliefs referred to in the definition, the trader would be at a disadvantage. Conversely, the trader would secure an unfair advantage if the "total income" in the year of charge were so diminished.

Section 5, the charging section, was covered by Financial Resolution No. 2. As I have already indicated, however, there will be a supplementary resolution varying the charge. The section, as it is proposed to amend it, will provide for an additional surtax charge for 1941-42 (rather than for 1940-41, as in the present print), to be described as "excess surtax," at the rate of 7/6 in the £ (abated as provided in Section 9) on the excess trade profits of the individual or on his excess total income, whichever amount is the lesser. It will be borne in mind in this connection that, although trading profits may increase, "total income", which includes these trading profits, may fall, if the fall in investment income, etc., is greater than the trade profits increase.

Section 6 confines the excess surtax charge to trades and businesses within the ordinary meaning of those terms. There is an exclusion in favour of farming. Turning to Section 7, sub-section (1) of the section, as it is proposed to amend it, will enable the trader to select as standard profits either the profits of the best of his three standard years or £2,500, whichever amount is the greater. Sub-section (2) provides the necessary apportionment of standard profits where the trade is carried on for part only of the chargeable year (1941-42).

General Mulcahy

With regard to the £2,500, the Minister is referring to Section 7, as it is proposed to amend it?

Mr. O Ceallaigh

The proposed change of the figure to £2,500 occurs in many sections—sections relating to corporations profits tax and excess surtax. Sub-section (3), paragraph (a) is self-explanatory while paragraph (b) provides that a successor in a business shall be entitled to use the "standard" of his predccessor. Sub-section (4) provides the necessary adjustments where a partner's share of profits has been altered as between his standard year and the year of charge.

Section 8, in its opening sub-section, with the proposed amendment, will enable the taxpayer to select as his standard year of total income the best of three specified years. The £1,500 mentioned in paragraphs (a), (b), (c) and (d) is to be raised to £2,500. Sub-section (2) provides the consequential adjustment in the case of a person dying during the chargeable year 1941-42.

Section 9 secures that, where the taxpayer has paid ordinary surtax on the excess profits, the excess surtax charge shall be abated pro tanto, but subject to a maximum abatement at the rate of 5/- in the £.

Section 10, with the proposed amendment, will provide that, where over the three standard years (out of which the trader selects the best year for the ascertainment of standard profits) there has been a net loss, such loss will be deducted from the profits to be charged with excess surtax.

As regards Section 11, the reasons for this section are the same as those given in connection with the definition of "total income". If the profits either of the standard year or of the chargeable year were diminished on account of depreciation allowance or losses for other years, either the taxpayer or the revenue, as the case might be, would be placed at a disadvantage. It is essential to compare like with like when projecting a standard year's profits against those of the chargeable year.

Part III of the Bill relates to Customs and Excise. I have already told the House of the dropping of the duties on newspapers and periodicals, on totalisator stakes and course betting, and of the imposition of the new duty on office betting, contained in Section 18. The other additions in this Part are Sections 20 to 26.

Section 20 extends to the Foynes-Lisbon Air Service the provision of Section 21 of the Finance Act, 1936, which allows the importation or delivery, without payment of any duty of customs or of excise, of any article required for the establishment or maintenance of a transatlantic air service, and any ancillary radio, etc., services.

Section 21 makes the necessary statutory provision for the refund—already announced—of motor licence duty to motorists who discontinued using their cars and returned their licences owing to the petrol scarcity. Section 22 provides for relief from excise duty for trailers drawn by motor cars or lorries to convey turf. Section 23 proposes to relieve from excise duty a trailer drawn by a motor car or lorry where the trailer is used for conveying a petrol substitute (e.g., gas bag) or apparatus for making a petrol substitute (e.g., producer gas plant).

Representations have been made regarding the hardships caused to garage owners by reason of the fees for kerbside petrol pumps which must be paid to local authorities irrespective of whether such pumps are or are not in use for supplying petrol. Provision is, accordingly, being made in Section 24 for a refund of the fees paid where such pumps have been sealed by the local authority concerned, or taken over by the Minister for Defence under the Emergency. Powers (No. 70) Order, 1941.

Section 25 increases the penalty for failure to pay dog duty, raising it from £1 to £2. The existing penalty for failure to produce a licence on request by a member of the Gárda Síochána is £2, and it is thought that the penalty for the greater offence of failure to license a dog should be at least as high. Formerly the penalty for failure to pay duty was in fact £5.

In view of doubt whether the reference to "prohibited goods" in Sections 172, 182, 202, 204 and 205 of the Customs Consolidation Act, 1876, might not be held to be restricted in its application to goods whose importation is prohibited, I propose to clear up the matter, and Section 26 provides that the term "prohibited goods" includes goods which are subject to export, as well as to import, prohibition.

Part IV of the Bill contains the death duty sections, Nos. 27 to 33, which were, with the exception of Section No. 29, already explained in connection with Financial Resolutions Nos. 17 to 21. Section No. 29 being of a relieving character did not require a Financial Resolution. It is designed to protect purchasers and mortgagees of reversionary interests from increases of estate duty that were not in force at the time of purchase or mortgage. The equitable principle underlying Section No. 29, which protects the taxpayer, has been consistently applied on each of the many occasions in the past on which the rate of estate duty has been increased and it is now framed for permanent application in the future. It will apply to the increase of rates in Section No. 27 of the Bill.

Part V of the Bill contains the sections (Sections 34-46) dealing with corporation profits tax. I propose to explain the effect of the various sections as they will stand if the amendments I have already outlined are adopted. Section 34 is a "definitions" section. References to the "relevant date" will be read with the 12 months ended on the 31st day of August, 1939, substituted for the calendar year 1938. Section 35 as amended will increase the existing rates of charge from 7½ per cent. and 10 per cent. to 10 per cent. and 12½ per cent. respectively, and reduce the exception limit or non-liable margin from £5,000 to £2,500. The section will also extend as regards accounting periods ending on or after the 1st January, 1941, the time limit for making corporation profits tax assessments from three years to six, as in the case of income-tax.

Section 36 by sub-section (1) removes an anomaly whereby branches, trading in this country, of a company incorporated in another country could claim an allowance against the corporation profits tax of excess profits tax payable in the other country. Sub-section (2) will make the necessary special provision for the "split" accounting period beginning before and ending on or after the 1st of January, 1941. It will ensure that profits arising before that date will be charged on the old basis. Sub-section (4) restricts the allowance of deductions in respect of directors' remuneration in the case of a company whose directors have a controlling interest.

Section 37 will impose excess corporation profits tax as an additional corporation profits tax chargeable at the rate of 50 per cent. on profits arising on or after the 1st January, 1941, (instead of the 1st September, 1939, as specified in the present print and in Financial Resolution No. 24) in so far as they are in excess of the defined standard the provisions as to which in Section 38 may be condensed as follows.

Section 38 will provide that the standard profits are to be the profits of the best of the last three years ending on or before the 31st August, 1939 (or £2,500, whichever is the greater). If the standard based on profits is not satisfactory to the company, the standard profits may be taken to be the "substituted standard."

Section 39 defines the substituted standard. As regards domestic companies, it fixes it as an amount sufficient to pay for the chargeable period 6 per cent. on the paid-up ordinary share capital of the company in addition to the fixed rate on the paid-up preference share capital and on debentures issued. As regards foreign companies, the substituted standard is modified in accordance with the proportion which the company's turnover in this country bears to its total turnover.

Section 40 is a provision which, when amended, will have the effect that, in certain cases, where there is on balance a loss over the three standard years such loss shall, to the extent to which it exceeds the profits arising in the period from the end of the last standard year up to the 31st December, 1940, be deducted from profits chargeable to the "excess" tax. Section 41 applies where a company which has not adopted the substituted standard has made a new issue of capital since the end of the last standard year and its profits show an increase. It would not be reasonable to regard as "excess" profits the whole of the increase in the company's profits, since some increase might naturally be expected in consequence of the new issue. Relief is provided accordingly in the section for such a case.

Section 42 enables a newly formed company which in certain circumstances has succeeded to the business of an individual or of a partnership to claim as its standard profits, in preference to the substituted standard, the profits which arose to the individual or to the partnership during the standard period.

Section 43 for purposes of the excess tax, confines, in the ordinary case, the allowance for remuneration of directors in the chargeable year to the amount allowed in the standard year selected. In the case of a company, controlled by its directors, which has not got a standard year the allowance is confined to £1,000 per annum in the case of each director. Such restrictions are not to have effect where the director is engaged on a whole-time or substantially whole-time basis in a managerial or technical capacity, and does not control more than 5 per cent. of the company's ordinary stock or shares.

Section 44 continues the temporary exemption from corporation profits tax hitherto granted to certain public utility companies (for example, railways), to building societies and to The Agricultural Credit Corporation, Limited. Section 45 ensures that, where corporation profits tax has already been assessed on profits, any additional charges to the tax by virtue of what is contained in the Bill may nevertheless be assessed and recovered. Section 46 is a "construction" section.

Part VI of the Bill deals with stamp duties. Section 47 is designed to exempt from stamp duty documents requesting the Currency Commission or certain banks to give new legal tender or bank notes in exchange for mutilated notes and containing an undertaking to make good to the commission or to the bank concerned the amount involved in the event of the mutilated notes being presented and paid. The documents in question are normally liable to the stamp duty of 6d. and the amount of duty involved in the exemption is about £5 per annum. Section 48 was represented by Financial Resolution No. 25 and was explained in connection therewith.

The only sections in Part VII of the Bill that call for comment are Sections 49, 50 and 51. Under the Emergency Powers (No. 81) Order, 1942, dollar balances held by Irish residents must be sold to the Minister for Finance. Section 49 makes the necessary financial provisions governing the source from which the Minister may make payments for such dollar balances acquired, and for the setting up of a foreign exchange account.

Owing to shrinking income the Church Temporalities Fund is at present unable to meet all the statutory charges thereon. One of these is an annual payment of £41,250 to the Land Commission. In order to avoid realisation of capital of the fund, it is proposed to confer on the Minister for Finance power to reduce the annual payment to the Land Commission by such amount as is necessary to bridge the deficiency between the income and outlay of the fund. Section 50 provides accordingly. Section 51 makes the necessary provision for the transfer to the Exchequer from the Road Fund of the sum of £100,000 already taken into account in the Budget statement.

Mr. Cosgrave

Would the Minister tell us if the duty that is fixed in respect of excess profits tax is to date from the 1st January, 1941, and if the date in respect of the changes which are being made in the corporation profits tax is being left unchanged?

Mr. O Ceallaigh

The retrospective collection of the excess surtax and corporation profits tax has been dropped.

Mr. Cosgrave

The changed dates in respect of corporation profits tax are the same as for the excess profits tax?

Mr. O Ceallaigh

The rates have not been changed.

Mr. Cosgrave

No, but the date?

Mr. O Ceallaigh

In both cases it is operative from the 1st January, 1941.

Mr. Cosgrave

I did not follow that when the Minister came to that particular point in his statement. This Finance Bill represents something very different from the budgetary speech which we heard some few weeks ago. Taking it all round, it would appear to be somewhat of an improvement. While there might be cause for criticism about our not getting notice and all the rest, we can very easily overlook these particular courtesies at a time like this. One point that stands out in connection with both the first Budget and this second one is that profiteering as such and the expanding business of whatever character it may be are both placed in practically the same position. No distinction is drawn between the one and the other. If we take the general interpretation that is put upon the profiteer, that he is some person who battens upon the consumer, and who is described usually as a person who gets all he can from the poor, from his use of his goods or money as the case may be, and place him in a category by himself, no one on this side of the House certainly has any objection to the Minister getting all the profits that he has made arising out of the war.

We take the stand that there is no comparison whatever between activities of that sort and an ordinary well-run business in which an effort is made by the person controlling it to increase employment owing to increased business and to take any possible development that could commend itself to the proprietors, in order to improve the employment position or the profits of the company. In the case of a firm which, by reason of war, has had to engage in some business that they had not yet developed or had not taken any part in promoting, and where there is an expansion arising out of an activity of that sort, to put that firm or industry into the same category as a profiteer is, to our mind, unjust and improper. This is a time when, by reason of the shortage of commodities and the difficulties in getting necessary products of one kind or another which are essential to business, every effort should be made to stimulate owners and managers of businesses to expand their businesses so as to continue those who are in employment and, if at all possible, to employ still more people. That situation is not remedied by the amendments we have heard in connection with this measure.

We get some picture of the importance of this question when we hear from the Minister for Industry and Commerce that, instead of the usual increase which has taken place since the State was established, the number of persons registered in insurable occupations has come to a stop this year, and for the first time in our history the register is short 6,000 persons who were registered last year. In the course of one of his speeches on this Budget the Minister paid a compliment to the Minister for Supplies, for his energy and ability, and credited him with responsibility for initiating the industrial drive, as it was called. Whether it was in his former capacity or in his present capacity, it must be a source of great dissatisfaction to him to have noticed that for the first time practically in 20 years the number of persons insured against unemployment has diminished by 6,000. A still more remarkable figure concerns persons registered for national health insurance. From 1926 to 1931, the number of new registrations amounted to 11,400 each year, or 57,000 in five years.

On examining the report for the last nine years we find that only 64,000 have been added notwithstanding the great industrial drive on which the Minister congratulated his friend and colleague, the Minister for Supplies, and of that number 62,000 were persons registered in insurable occupations, so that the whole drive has been towards persons who were registered in insurable occupations and in other occupations the number has gone down by 2,000 in nine years. That is a serious contemplation, particularly when one remembers the very heavy taxes which are imposed in this Budget. It is inevitable that as taxation rises occupations which would fall for normal registration under national health insurance or unemployment insurance would tend to fall. It is obvious from these figures that there has been a considerable drop in the number of persons employed. The registrations for national health insurance are down by 11,000. One has to take into account that before this Government, with its industrial programme, came into office, there was an expanding registration so that the numbers should be at least 22,000, instead of 11,000.

In the course of his speech the Minister said that he had got some recommendations even from the Opposition, where there were divided counsels, some of whom criticised him for borrowing while others suggested that he should borrow. It is to be noted that the Minister does not require much temptation to throw up his hands. In this particular case it is quite possible that some of those who urged the Minister to borrow were under the impression that he had been behaving himself and that his predecessor in office had been doing the same thing. In one of his speeches he referred to this question of not having balanced his Budget, adding that presumably the reference was to housing. According to the Official Debates, volume 83, No. 2, page 516, May 15th, the Minister said:—

"I presume the Deputy was referring to housing. That is the item which might be said by some people to add the greatest amount to what would be described by them as the dead-weight debt of the country. I do not regard it as dead-weight debt. I regard it as a good investment, but I do admit that it was expensive."

The facts are that according to the publications furnished to the Dáil during the last few years with the Budget statements, the dead weight debt, distinct from housing, amounts to £5,677,319 from the year 1937 to 1941, and that the housing liability over that period had increased by £4,450,000. It is clear from these figures if we accept the Minister's publications, that the greater responsibility for housing is not the cause of the increase in the dead-weight debt, but unbalanced Budgets. The Minister may brush aside this question of dead-weight debt, whatever the cause, whether housing or any other desirable or even essential service of the State, but when we examine what the service of the £10,000,000 amounts to, we are presented with an entirely different phase of the situation. Some £10,000,000 have been added to the dead-weight debt in the last four years in respect of unbalanced Budgets and housing, but the larger sum is for unbalanced Budgets. We see from the estimates for the Department of Local Government, according to the Book of Estimates, that the contribution of the State towards loan charges under the Housing (Financial and Miscellaneous Provisions) Act, was £516,000, that is over half a million for housing alone. I calculate that the liability of the State in respect of the £10,000,000 on unbalanced Budgets, but not providing for the services of housing in the estimate amounts to over half a million a year. If we add to the £5,000,000 that the Minister proposes to borrow this year the sum required annually is increased to £750,000 or perhaps £800,000, and in that way we see the seriousness of unbalanced Budgets, if we go on for the next 25, 30, or 40 years. The Minister was, at least, candid in his statement when he said that we are not in possession of an expanding income.

That is one of the worst situations affecting the country at the moment, and this Budget in particular. We are assessing this extra taxation— it is a very big impost—at a time when employment is falling, when costs are rising and when the difficulty of getting commodities is increasing; at a time when there is uncertainty, and when the country is suffering from this foot-and-mouth affliction which is probably the worst that has ever affected it in its entire history. Borrowing, in these circumstances, is reprehensible. We are faced with the question: what is to be done in the circumstances? I do not approve of the suggestions that were made to the Minister by some of my colleagues regarding alternative methods of taxation. It is not a time for them or for extra taxation, but rather a time for the cutting of expenditure. There is no other way of meeting the situation. If we are satisfied that it is not possible to increase the national income, then we have got to cut our cloth according to our measure, or face the problem of being unable, in the future, to meet the cost of those services which we admit now are necessary in the present state of affairs.

The Minister, in the course of the speech which he made when replying on the Budget Resolutions, referred to the criticism that I had offered as regards the cost of the Education Office —I mean now the Education Office as distinct from the education services— and to the increase there had been as between the period 1931-32 and 1941-42. Speaking from memory, I think I said there had been an increase of from £169,000 to £190,000 odd—to almost £191,000. The Minister said:—

"... if Deputy Cosgrave and his Government had remained in office for the last eight or nine years, or if there had not been one added to the staff of the Civil Service, the cost would be increased by 10 per cent or 15 per cent, because when the State was set up the civil servants were mostly young people. Civil servants' salaries are graded, and when they reach a certain maximum, if they are qualified, they can go higher, so that there would have been a considerable increase in every Department if not one person had been added to the Civil Service..."

I have taken the trouble to look up the numbers, as recorded in the Book of Estimates, of civil servants in the Education Office in 1931-32 as compared with 1941-42. In the former period, the number was 407—I am speaking now of the Office of the Minister for Education—while for 1941-42, the number is 491, the difference, therefore, being 84. That represents a very considerable expansion in the service. The staff are not now engaged in dealing with a larger number of national teachers because within that period the number of teachers has fallen. While an effort would appear to be made this year, for the first time, to keep down the numbers, it must be said that the expansion I have referred to is out of all reason. Is it to meet that extravagance that people are to be asked to pay an extra tax on their tobacco this year, and an extra sum by way of income-tax? Is it contended that there was no proper service in the Ministry of Education ten years ago, and that it had to be added to by increasing the number of civil servants in the office of the Minister for Education by 84? I do not believe it. I do not believe that the Minister is even satisfied about it. At any rate, he should give us this satisfaction, that if there is no longer control, on the part of the Ministry of Finance over those expanding bodies, we will at least be saved the cost of maintaining that expensive institution known as the Ministry of Finance.

The Minister was at great pains to criticise some observations of mine on the way the foot-and-mouth outbreak was being dealt with. Speaking at column 534 of the Dáil Debates on the 15th May last, he said:—

"One other remark which I thought unfair of Deputy Cosgrave was his reference to the foot-and-mouth disease and ‘the incapacity and uselessness of the Minister for Agriculture and his Ministry.' He is entitled to say what he likes to the Minister for Agriculture. I am sure he will get a Roland for his Oliver any time he does address polite or other remarks to that Minister, or to others, myself included, but I think he might have left the Ministry out of his reference."

I do not suppose the Minister will expect me to read the whole of the extract which runs to one and a half columns in the Official Report. The Minister, in that space, mentioned the Department of Agriculture six times. I want to refer now to what I said, which was taken as the basis for this condemnation by the Minister. This is what I find attributed to me on page 63 of the Official Debates for the 7th May, 1941:—

"A very similar state of affairs is presented in connection with the terrible affliction of the foot-and-mouth disease. Its spread was really traceable to the inefficiency and incompetence of the Ministry. One single case of infection came in and spread throughout the country almost like wildfire. The cost is enormous but, perhaps, the lowest part of it is that which the Minister for Finance will have to pay. That cost is due entirely to the inefficiency, the incapacity and—one might almost say—the uselessness of the Minister responsible and of the Ministry."

The Minister may put any name he wishes after the word "Ministry" there, but what was meant was the Government, the collection of Ministers —of persons who have collective responsibility in connection with this matter: the persons who, if they knew and appreciated the responsibility that was upon them, as well as their duty to the public, should have been in consultation with the Minister for Agriculture in connection with this terrible affliction that has come upon the country. If the Minister for Finance wants to be informed as to what my view about the Ministry of Agriculture is on this matter. I want to say that I am entirely dissatisfied with it. I am positively certain that there is not an official in the whole Department of Agriculture that must not feel the same way—that he is dissatisfied, too.

This expensive and heavy Budget is falling upon the country at a time when it has been almost impossible to export cattle since the first month of the year. During the second month of the year, our exports were down by practically £1,000,000. Anyone who understands the agricultural situation can tell the Minister, if he is not prepared to take my word for it, that cattle that normally would be sold for £12 are now going for £9, that cows that would normally realise from £30 to £35 on the market can now be bought at from £20 to £25. Is there any appreciation at all of the hardship that this outbreak is causing, apart altogether from the losses the people are sustaining by reason of not being able to take their stock to the markets and so on? It is in that situation that we find taxation is being increased, and the cost of running the State continually rising. It might be taken that, in selecting the Vote for the Ministry of Education, I chose a Vote which would prove my case. Let me take another Vote. Take the Vote for the Civil Service Commission. In 1931-32, the Civil Service Commission had 39 officials on its pay-roll. Last year, according to the Book of Estimates, it had 81 officials and this year it has 71. Is it not clear from these figures that the scale of expenditure was expected to rise? The plans for a rise in cost are there and, if the money is not spent, people will wonder why it has not been spent. The whole scheme is one of bigger expense in the running of the State.

In the course of his observations dealing with the Ministry of Agriculture, the Minister for Finance referred to the giving of "a Roland for his Oliver." That is the mentality behind the Minister's attitude in connection with this matter. Who cares about Rolands for Olivers or Olivers for Rolands? The question is who is going to run the State, run it efficiently, and stamp out this disease? The Minister referred to the medical staff of the Ministry of Agriculture. The Department has a veterinary staff, but I am not aware that it has a medical staff. One of the first things that should have been done when this disease occurred was to appoint a bacteriologist, either as a consultant or in some other capacity. Compare our administration in connection with this matter with the British administration. In Britain, the disease is stamped out in any place in which it occurs within a couple of weeks. Here we have been afflicted with it for five or six months.

The last item that calls for attention is the observation made by the Minister with reference to the Army Estimate. Anything that occured in connection with that Estimate arose from the Minister's own observations. He led me to understand that he had in mind the Defence Conference rather than the Council of Defence, which is a statutory body. I do not know what action the Minister took in connection with this Estimate. It is to be expected that the officials of the Department of Finance examined it, criticised it, and recommended reductions. I am positive that that was done, and it is unusual to tell the House what transpires in the councils of the Cabinet, the Government, the Executive Council, or whatever name one chooses to call it.

There is collective responsibility and there are no two voices. There is no such thing as a Minister saying: "I am not able to carry that." Ministers go in and take decisions and, whether they are for or against the decisions, there is collective responsibility. I was favoured by one of my colleagues with a copy of the Army Estimate. I studied it with great care, committed my criticisms of it to paper and gave a copy of that paper to two of my colleagues, who dealt with it. I understood that this matter was to be regarded as private but the Minister drags it before the public. I am still satisfied that the Army Service could be run for £3,000,000 less than is being charged. I do not know any collection of brass hats, as they are called, or general officers, in any country who do not put up huge estimates. They demand more men, more munitions and more equipment, regardless of the cost. The question of cost is not their business. Their business is to do a certain thing and they put up their demands, irrespective of cost. It is the Minister's job to cut these estimates and if he does not do that, we cannot help him. It is not in connection with discussions of the estimates here that bulk costs are reduced. That is a matter for detailed examination. Assuming that that was the position, would the Minister inquire how the Army Estimate was dealt with? The Agricultural Estimate was under discussion for two days. It was interrupted to allow the Army Estimate to be considered and no notice of that was given to me. I do not complain. I simply state the fact.

These are the main points arising out of the Minister's speech which call for comment. To my mind, the Budget is too expensive. It is scaled to collect more money than the country can afford. It is obvious that even the Government are aware of that, since they propose to borrow so much of the expenditure. But why should they put their borrowings into two compartments? This Budget is unbalanced to the extent of £5,500,000. In a time of emergency, such as the present, it would be reasonable to borrow to some extent to meet exceptional circumstances. But since we borrowed even in normal circumstances the justification for borrowing now falls to the ground. However we may, in a time of emergency, dislike the orthodox canons of finance, whatever abuse we may pour upon economists and bankers, if we go on borrowing to balance our Budgets, the greater insecurity we shall be affording the future in connection with social services. Everybody ought to know that. When one considers the importance of the social services to a country which has not got an expanding income, we realise how serious it would be in a few years' time if it were found that we were unable to meet these social liabilities; people would then wonder how it was that we had not a little more sense, if not a little more honesty, during the years of trial. That is all the more discreditable when we consider that in this House those who took part in the revolution of about 20 years ago are in a preponderating majority. If this is the best we can do, it is no great credit to those of us who took part in that particular phase of national activity. Will the Minister go so far as to say that, though he does borrow this year, he will undertake that in connection with next year's Budget he will cut the cloth of the country according to its measure and that this will be the last year upon which dishonest methods will be brought into play in order to put a sort of face on the public finances for presentation to the public?

These are matters upon which, in my view, there ought not to be differences between politicians. We bring discredit upon the State and we create a certain amount of uneasiness in the public mind when we cannot discover any common line upon which we can get agreement. In my view, this country for years past has been asked to meet growing expenditure beyond its capacity, beyond any possible optimistic anticipation of the country's wealth or prospects. The end of all that—the end of that in every country —has been disaster, desolation, privation for those least able to bear the troubles of this world. I think for people, such as we are, who are so close to the common people, who know their sufferings, realise their deprivations in so far as the goods of this world are concerned, it certainly ought to be our primary duty to ensure that no action we take now would prejudice their future. We should bend all our energies towards lessening public expense, increasing production, stimulating industry, seeing what possibly can be done to eliminate obstacles to agricultural prosperity in this country, doing what we can to get an ever-increasing number of people in gainful occupation in the country.

Professor O'Sullivan

It is not often that we have the benefit of two Budget statements within a month. We listened to the Minister for Finance a few weeks ago giving us, apparently, a résumé of the financial position of the country and of the taxes that he proposed to impose to meet at least some of the increased expenditure. We listened to the same Minister to-day making what was, to a certain extent, a new Budget statement, greatly modifying some of the taxes that, apparently after full and due consideration, he asked the House to impose a few weeks ago. A unique experience. I do not like to put it down to lack of experience by the Minister but it is undoubtedly something that calls for comment. Was much thought really given to the matter originally?

Deputy Cosgrave has dealt with a very serious aspect of this whole business, and I do not propose to repeat the arguments he clearly put before the House. I am beginning to feel that, at last, even the Government is realising the difficulties that it has been and is heaping up for itself for the future—that, at least in words, it gives a certain amount of recognition to the danger of rising State expenditure and diminishing sources of revenue. We have, at least, received a formal acknowledgment from the Minister that such a problem exists, and that it is a grave problem.

I would again stress a somewhat different aspect of that matter, one to which I called attention when the Minister made his initial Budget statement. If the Government review the different Departments for which different Ministers are responsible in this House, are they convinced that they are getting increased value at all in keeping with the increased expenditure that has been heaped upon the people? I happen to have accidentally before me the covers of two Books of Estimates, dated 31st March, 1933, and 31st March, 1942, respectively. The figure £21,000,000 appears in large print on the cover in one case, and the figure £35,000,000 appears in the other. I have no doubt that a number of explanations—some of them quite satisfactory, some of them less satisfactory, and some of them entirely unsatisfactory—can be given for the enormous difference between these two figures, an increase of practically 80 per cent. according to these two covers. I asked the House to consider —and I repeat it in the hope that some people may become alive to the fact—not merely how much we are spending but what value we are getting for it. I would urge the Minister to go through the different Departments, see the vast increase of expenditure that is taking place, and ask himself what increased value the State has received as a result of that increased expenditure.

I do not intend to go through the various Departments, but merely to take one or two. It often drives me to despair when men in the position of the Minister give the House what are palpably wrong and totally inadequate explanations. Take the Minister's own Department. The increase of expenditure is not due by any means to the increased age of the various civil servants. Some of it may be due to that, owing to the fact that a number of young men may have been taken in, but that is a very small contribution to the explanation. It does suggest a lack of seriousness on the part of the people responsible when they trot out explanations of that kind. The Minister's Department, which has increased tremendously in expenditure, has also increased in the number of officials in the Department. I suppose the Minister gets able help from that Department, and if the fact that we have had two Budget statements in a couple of weeks is a proof of increased efficiency, possibly he is satisfied. There is one Department which, I think, has increased in efficiency, judging by the reactions of the public towards its activities, namely, the Department of the Revenue Commissioners. It, possibly, has tightened up and has been able more efficiently to get the last penny out of the taxpayer. I think that will be acknowledged. It has increased tremendously also both in personnel and in cost. The Minister may be satisfied with the excellent return it is giving in the way of squeezing out the last penny. I do not think the same can be said of the various other Departments. Deputy Cosgrave referred to the increase in the Estimate for the Office of the Minister for Education. I ask the Minister to turn his attention, say, to the Vote for Primary Education—I am not discussing the details, of course. He will notice an increase there. The increase may not be great, but I suggest the return, in some respects, is less, because you are teaching fewer pupils and you have less teachers teaching them. Take that particular instance where, as I say, apparently there is no very great increase that might make us uneasy but the return received by the country, so far as one can calculate by the mere numbers taught and the number of teachers teaching, is not what it was in previous years—say, what it was nine years ago.

Take the Gárdaí. Is it the contention of the Minister that, as a result of the increased cost of that force, better service has been given to the State? There are two problems to be faced which I would stress. I shall continue to stress them in the hope that the Minister and his colleagues might wake up to the importance of the question: firstly, whether, in the year 1931, full value was got for the money spent, and secondly, whether extra value has been got in keeping with the extra cost incurred since then. Consider the matter in reference to the increased expenditure on the Gárdaí. Can the Government contend that the work is better carried out now than it was when the Gárdaí cost much less?

I do not wish to discuss the Department of Defence, but even there the Minister for Finance and the members of the Government might ask themselves whether the increased millions that are spent on that particular service have really greatly increased the defensive powers of this country. It is not a question of whether you are spending £2,000,000 or £8,000,000 on the Army. That I am not now discussing; I am asking the Government to ask themselves what value, from the point of view of defence, they are getting for that. I am not going into the question as to whether or not it is in their power to build up a really effective Defence Force in this country. That is a very difficult and different question, but, for the actual money we are spending, does the Minister believe that there has been such a tremendous increase in the actual defensive qualities of this nation to face an attack from outside? The same remarks apply to the various other Departments of Government.

I would seriously ask the Minister to give up this type of back-chat that we get so frequently now, especially from himself and the Minister for Supplies, and try to meet in a reasonable way the criticisms that are put up, with complete absence of personalities, from the Opposition. This is not a time to give these smart or half-smart answers that might appeal to an unthinking audience. The Minister ought to know that the situation is altogether too serious for that. When I say Ministers ought to know, I am afraid they are getting worse in that respect. When serious criticisms of policy are put forward here in this House, no attempt is made to meet these criticisms, to show where they are wrong, or, if possible, even to learn from them. We have simply glib answers that might do all right at the cross-roads to arouse the laughter of an audience for a short time, but they certainly ought to have no place here when we are discussing the finances, and even the fate and the future, of the whole country.

As I say, anybody who has been in this House and who has listened to Ministerial replies, finds that the only thing we get is that type of, I cannot call it wit, but back-chat from Ministers. If they want to be taken seriously, either in this House or in the country, I think they had better mend their hand in that particular respect. But I almost despair that Ministers will settle down to their work seriously. Last evening we had a statement made by the Minister for Supplies to a Fianna Fáil club, which, incidentally, got ten or 12 minutes on the radio. That is one use the radio has. It at least makes people familiar with the Government side of business, if nothing else. The spirit animating that speech was the same spirit that animates many of the statements from Government Benches and from the Minister for Finance himself — one of extraordinary complacency. The Government is doing splendidly; we are assured every problem is being faced and if it is not being faced, it is going to be faced, as if the country had not been facing a crisis, whatever Ministers may have been facing, for well on to two years now. We are told that the Ministry will face these problems, that they will find a solution. If people live long enough, they may find Ministers at least facing something in that particular direction. Nothing wrong with prices we are told; nothing wrong with supplies, so far as the Government are concerned. Everything that mortal man could do to face a difficult situation, Ministers have done. Such is the burden of the speech. Really if that is the mentality of Ministers, what hope is there for the country? If, with that same complacency, which I might say is not shared in the country, even by their own followers, as I presume the Minister knows, they face even the more serious problems that may lie ahead, how can anyone look to the future without the gravest uneasiness? Everything was being done for the benefit of everybody by this collection of intellectual giants.

The standstill order, however much workers may have been misled into thinking the opposite, was really made for their sake and for their sake alone. So the Minister for Supplies states. The Minister would not admit that there was overcharging except in a few negligible instances. He held that nothing more could be done in the way of controlling prices than he and his colleagues were doing. He suggested that one of the reasons—one of the most extraordinary statements that I have heard for some time—for the standstill order was not the usual one we hear, namely, that higher wages mean higher cost of production and therefore higher cost of the commodity. This ingenious Minister for Supplies, occasionally ingenious in argument, if not in the management of his Department, struck out on a new line, namely, that if increased wages were paid to the workers they would be able to buy more and so increase the prices of the limited range of commodities for their fellow-workers. That is a piece of ingenuity and is an amazing argument. Keep down prices by diminishing the purchasing power of the workers! If that is the mentality behind the Government—I assume they are all standing behind this order—what can we expect? If that is their mentality—that it is a source of national danger to put increased money into the hands of the workers, not because it increases costs but because it increases their power to buy——

An Ceann Comhairle

I would remind the Deputy that there is on the Order Paper a motion, which possibly will be reached to-day, dealing with that very matter. Debate on it must not be anticipated.

Professor O'Sullivan

I am not going into the details of the matter at all. I am dealing merely with the extraordinary complacency of a Ministry that is under the impression—I wonder whether they all are?—that they are doing everything possible to face a real crisis. They pay tribute to each other when they come in here. Are they all so blind, not each to his own faults but each to the faults of his colleagues, that they can believe in the tributes they are paying? Here you had for years increased expenditure, put up at a time when we were not facing a crisis, which makes us now less able to face it. Has that increased expenditure solved any of the big problems that the Government set out to solve? Is there a return? Has the unemployment problem been solved, despite all this increased expenditure and the increased taxation which it involves? Does the Government even any longer hope to solve it? It was the Minister for Supplies, then Minister for Industry and Commerce—the Minister to whom the Minister for Finance paid his glowing tribute—who laid down two essential conditions as hall-marks, so to speak, as proofs, as the acid tests of successful government—decreasing unemployment and increasing population. How does the Government's policy stand when judged by the tests put forward by that same Minister?

Taking their policy as a whole, can they find any real justification for the extra expenditure which they have put upon the country? That is a matter which I am anxious that, at some time or another, the Government would face. To repeat what I have said on more than one occasion before—the Minister for Supplies referred to it last night, saying that we must have co-operation from the people—surely in a crisis like this the people are entitled to have some co-operation from the Government, instead of the cheap back-chat which is generally what we get when important problems are raised here.

I cannot see that value is being got for this expenditure, apart altogether from the heavy burden which is placed on the country, although that is an important matter in itself, but one which, as I said in the beginning, I am not going to touch as Deputy Cosgrave has dealt with it. I cannot see that there is any effort on the part of the Government not merely to answer that question but even to put themselves that question: "Are we getting anything like value for the money?" There are times when I have certain hopes that the Minister for Finance realises the situation, but he is in the awkward position that, whatever his own private views may be, he must officially give the opposite view—that everything which the Government does is splendid, and that no body of men facing a crisis like this could do better. Well, I hope that opinion will be at least partially entertained by the country. The Government's prestige is low enough at the moment, and it would be a pity, dangerous even, to damage it more. Unfortunately, I fear that the opinion is growing in the country that a number of the Ministers are not cooperating with the people, and not merely are not doing the best that men can do but are doing practically nothing so far as solving the nation's problems is concerned.

Mr. Cogan

This Budget has been very seriously condemned throughout the Twenty-Six Counties. It has been condemned for two very sound and strong reasons; firstly, that the burden which it imposes is altogether beyond the capacity of the people to bear, and secondly, that the burden is inequitably distributed over the community in general. Deputy Cosgrave has very strongly appealed to the Government for a drastic reduction in public expenditure. I think the time has come when the Government and all Parties in this House should co-operate in giving effect to that appeal. A national conference has been set up to deal with the problem of national defence, and I think it is equally important that an all-Party conference should be set up to tackle this question of economy in public administration.

There is no doubt that this country, in setting up an administration here in 1922, adopted a scale of administration which was altogether too expensive for the needs of a purely agricultural country. The most unfortunate point is that that standard of expenditure in administration inaugurated in 1922 has continued to expand every year since, more particularly in the last couple of years. The expenditure in practically every Department of the State has been increased. It is very hard for the ordinary people of this country to understand what is the need for that extraordinary increase, particularly when people realise how little return the State is giving to the ordinary taxpayer for that huge expenditure.

If the ordinary working man, who is paying an additional 4d. an ounce on his tobacco, were to ask himself: "What is this Government giving to me in return for that additional 4d.?" he would have some difficulty in answering that question. If he is told that the State is protecting him from outside aggression, he immediately finds, on considering it, that he himself is called upon, as a member of the Local Defence Force, to contribute in a very large measure to his own defence, and to contribute without any pay or reward from the State. If he is told that the State is protecting his life and property, here again he finds that he is called upon, through the Local Security Force, to contribute to that protection. If it is suggested that the State is providing him with employment, he finds when he is out of work that the State has nothing to offer. If he is in a rural area, the State has nothing whatever to offer; he is not even entitled to the "dole". If he is in an urban area, he is entitled to an altogether inadequate form of relief. In view of these circumstances, in view of the inadequate return the State is giving to the taxpayer for the enormous burden imposed upon him, I think it is time that the appeal made by Deputy Cosgrave for drastic economy in every branch of our national administration was acted upon at once.

I have already criticised the Budget statement and the proposals in this Finance Bill on the ground that the burden, excessive and crushing as it is, is not distributed equitably over the community. So far as income-tax is concerned, I have nothing to say, but in regard to indirect taxation, I think that a very inadequate attempt has been made to distribute the burden of taxation equitably. One of the worst features of the Budget was the impost on tobacco, and although there have been amendments and alterations of taxes imposed in the Budget, there has been no amendment of this particularly heavy tax. It has been found possible to relieve newspapers of the small amount of taxation levied upon them by the Budget, and, so far as the ordinary observer is concerned, it is very hard to understand how that relief can be justified.

Mr. Everett

Ask the Irish Press.

Mr. Cogan

I do not know what is the financial position of the Irish Press, but I know that some of our Dublin newspapers are in a very strong financial position and making very large profits, and I do not think that their case for relief was in any way comparable with the case for a reduction of the taxation on tobacco. Apart from whatever the newspaper companies are in a position to contribute, it is generally remarked that the consumption, if I might so describe it, of newspapers in this country is altogether excessive and beyond the needs of the community. There is altogether too much money spent on papers by the people and if the result of the impost upon newspapers circulating in this country had been to reduce the circulation of newspapers to a certain extent, I do not think the country would have suffered any grievous injury.

It might be well to ask in this connection what real value has the Press given to this country, either in the present or in the past, and what real value are the people gaining from the enormous expenditure which they incur in connection with this form of reading matter. I believe that 20, 30 or 40 years ago, when the great majority of our people were satisfied with perhaps one paper weekly—and which had perhaps to do three, four or five families—the people were much better informed than the people are to-day who have to purchase at least two or three papers a day. It would be well for the Minister to reconsider whether he has been too generous in his attitude towards the newspapers. He should also consider that the newspapers in general have not been very generous or very fair in their attitude towards the State, the Constitution or the Parliament of this country. If he were to go back only to last week, he would notice that, in the reporting of the proceedings of this House, one small incident, which reflected discredit on the House and upon the particular member involved, which did not add to the dignity of the House, was given very great prominence in all the daily papers, including the Government's own paper, while statements in the same debate by members of the Front Opposition Bench and by some able members of the Minister's Party, including Deputy Childers, received very little prominence. The incident which reflected discredit upon the House was given the greatest possible publicity. Is a Press which adopts such an attitude towards our Parliamentary institutions, towards our Constitution, towards our State and towards democratic government in every form, an asset to the country? If it is not an asset, I do not see why it should not be subjected to taxation. I think the working man who works for ten hours a day and who produces at least one ton of turf, which is a very valuable fuel now, per day, or who follows a pair of horses or drives a tractor in the field, producing the nation's food, is of much more value to the country than our daily or weekly Press and was much more entitled to consideration in respect of his tobacco than the Press in respect of the taxation imposed on them.

I mentioned already that there are very many other luxuries which the Minister has overlooked. I do not agree with Deputy Cosgrave when he condemned the suggestion of alternative taxes, and I believe that, while the burden of taxation is excessive and should be reduced, the Minister has not made any attempt whatever equitably to distribute the burden, and that the fullest pressure should be brought to bear upon the Minister by every Deputy to get that burden more equitably distributed. There are luxuries in common use by a large section of the people which are not taxed to anything like the same degree as the small luxuries of the working man.

Mr. Dockrell

I suppose that in this Assembly we cannot all agree at all times, and, when listening to the last speaker, I was struck by how much apart some of us are. I think he suggested that the extra tax on the tobacco should be done away with, and I am sure we should all like to support him in that suggestion, if we could see where the additional revenue was to be raised. I think he also cast some aspersions on the Government newspaper for reporting fully an incident which happened here last week, but I think it is to their credit in that it showed that they do not shield any member of the Party. The Minister suggested that there were some differences of opinion in this Party as to whether all the revenue ought to be raised by taxation and none by borrowing. Now, quite frankly, I am a financial purist, and I object to borrowing. At the same time, to suggest that the Minister should raise the whole of the deficiency this year without borrowing might possibly result in finding that the cure was worse than the disease, and although, as I said, theoretically I am against borrowing, I am afraid the Minister was rather up against it.

I think the Minister was quite right in abolishing the retrospective portion of the corporation profits tax. A retrospective tax is most unfair, and as the Minister is doing away with it I shall not go any further along the lines which one might have followed in pointing out that a lot of matters flow from the years that have been closed. For instance, dividends were paid, allocations to reserve, and so on, were made, and even the staffs received bonuses on the ascertained profits, etc. If the Minister were going to rip up taxation in the past I am afraid it would lead to a chain of consequential actions on the part of the companies. However, as he has done away with it, no more need be said.

There is one thing about which I am not clear at the present time, and possibly the Minister can enlighten me. We are living in very extraordinary times, and a number of companies find that they simply cannot make the necessary expenditure on certain things, such as repairs to buildings, replacements of machinery, replacements of motor-cars, and so on. I should like to ask the Minister whether, if there was an average standard of expenditure on those items, it ought not to be allowed as an expense in order that these firms, at the end of this period of difficulty through which we are going, may not find that their buildings are falling down, that their motor-cars will not run, and that their machinery cannot carry out the work that is necessary. Apart from the improvements that are going on all the time, firms will find that tremendous expenditure is necessary, and unless they are allowed to accumulate something towards that, when they cannot spend it at the present time, they will find themselves in a very difficult position. I put it to the Minister that he does not want to kill the goose that lays the golden egg.

Another matter which I should like to suggest for the Minister's consideration is in connection with the standard of 6 per cent. for people who have made profits. That is far too low. In my opinion, that should be raised to something more like 10 per cent. or 15 per cent., and people who have a low standard of profits should be allowed to take a percentage on the effective capital employed in the business. If they were allowed to do that, it would do away with a lot of the criticism that has been levelled from quarters in this House about people who are making excess profits already and who have really established a standard for themselves which is, probably, questionable. To allow them an alternative of a fair percentage on the effective capital employed in the business would do away with a lot of the anomalies, and I should like to suggest to the Minister that he should seriously consider putting in a fair allowance, because that percentage on the capital would do away with the grievances of all the people who feel that, through one reason or another, they have been passing through hard times. I have in mind the profits of a local company who are not very long started and who employ a very considerable number of men. Now, what happened with them was that in the earlier part of their trading years they were unable to accumulate or to show any profits. They had a lot of invisible repairs to do, and all sorts of things like that. There were accidents and they had a most disastrous strike—a strike which did away with their profits for one year. If the percentage on capital at a fair standard was substituted in that case, that would do away with a lot of the grievances.

I suppose the Minister will present us with his amendments in good time for the Committee Stage of the Bill, and that will enable us to look more closely into details, but there is another matter which I should like to suggest to the Minister, and that is that nobody takes seriously his statement that he has looked around for economies. I think that everybody must have personal knowledge of economies that could be effected. In the Ministry of Industry and Commerce, or, as it now is, the Ministry of Supplies, a most elaborate machinery was built up for permits, quotas, etc. Possibly, while the local manufacturers had to be protected, and we were living in normal times, some case could be made for the carrying on of that system, but most people engaged in industry are quite aware of letters that have to be written to the Department, replies received, and particulars filled in or given about some commodity regarding which there is absolutely no reason why it should not be imported by the million tons if one could obtain supplies of it. It is not against the interests of any local manufacturer, because he is not engaged in the manufacture of that commodity. In fact, it is really only making work for a circumlocution office. I should like the Minister to look more closely into the question of economies, because the country is not convinced that drastic economies could not be effected in our expenditure.

Mr. McGilligan

I do not suppose I have fully got the effect of the changes the Minister announced to-day but, so far as I understand them, I welcome them and I want to mark my appreciation of the fact that the Minister has seen fit to yield to certain arguments that were put forward from various parts of the House. Judging by the table explanatory of the Budget which the Minister served to us the day he made his Budget statement, he is now remitting £143,000 which it was proposed to get from the newspapers; he is remitting the £7,000 which it was proposed to get from cider, and he is making an exchange between betting on the course and off the course and in the result he is going to lose £8,000. He proposes also to remit the extra taxation that was to be put on industry to the extent of about £500,000.

These changes that are proposed mean that, of the additional taxation originally proposed in the Budget, he is losing £660,000. If one takes the new Budget framework, it will be seen that by adding the extra monies the Minister proposes to spend this year— which incidentally are, with one small exception, all for relief purposes, not for the provision of work, not for extra production, but mainly representing the handing out of money in some form of relief—the Budget will be short by about £9,750,000. The Minister now proposes to borrow £5,750,000 and to impose taxation to the extent of about £4,000,000. We are taking this leap into the dark. The Government find that they have no fields of taxation open to them, and they are driven to borrow something like £5,750,000 and impose taxation to the extent of only £4,000,000. It is not a happy or a pleasant picture, but I suppose we must congratulate ourselves that it is not worse under the type of management we have.

I have not heard the Minister give any explanation of the remissions announced to-day. When we complained, during the Budget debate, about certain items of taxation that were proposed, we spoke about certain taxes, small sums amounting to £30,000, and we were told the Minister wanted the money and had no other way of getting it. Despite that we have here cast aside the tax that was intended to bring £143,000 from newspapers. I think it is quite clear why that tax is not being continued. I do not think the Minister would have been as delicate in his handling of the proposed tax on newspapers were it not for the fact that the Irish Press would have been made bankrupt as a result of the taxation. The tax that would have brought the Irish Press to its knees might have brought another newspaper to its knees. If we were showing how the Minister treats certain people, or the difference in treatment accorded to certain people, we should have prominently displayed in the picture that one item, the £143,000 that has been remitted, and the Minister is doing this because it would mean that organ which supports the Government would go out of print, would go out of circulation, if the tax were to be imposed.

The Minister may parade the people who would lose employment, but that, I fancy, is not the Minister's chief concern; that does not enter into the Minister's calculation. I have no doubt if it was the other paper that was going out of circulation, there would be very few tears shed for these people, who are just as much flesh and blood as the people on the Irish Press. The Minister’s main concern, I suggest, was the Irish Press, which was only able to stagger along for years and which would have been brought definitely to dissolution by this tax. People may like the Irish Press, but they would not pay 2d. a day for it. That was the acid test and the Government do not like to see this organ, which has been giving them so much support over the years, going out.

I should like to find some explanation—again we must have our curiosity satisfied to some extent—why there was this change over in the betting tax. It was proposed to get £33,000 by putting a 2½ per cent. tax on bets on the course. That is now cast aside and the unfortunate people who cannot go to race meetings and who have to get their pleasure by looking into the bookmakers' offices——

Mr. O Ceallaigh

It was Deputy Cosgrave who suggested that change.

Mr. McGilligan

Am I to take it that it was entirely on his representations that the change was made?

Mr. O Ceallaigh

Assisted by a deputation from the betting men.

Mr. McGilligan

It seems to me to be rather peculiar that we are going to tax the people who have to take their amusement by looking into the bookmakers' offices now and again but who may, perhaps, get as much amusement from the sport of racing in that way as those who rub shoulders with people not entirely clad in hair shirts on the course. By adding 2½ per cent. to the off-course betting, we are going to collect, the Minister says, almost the same amount, but I estimate that we will lose £8,000. I await, with some curiosity, information as to the arguments put up by the deputation as to why this change was made. I do not suppose the deputation suggested the tax should be changed.

Mr. O Ceallaigh

They did.

Mr. McGilligan

It will be interesting to see what arguments they used to convince the Minister to make the change and put the tax on the less fortunate fellows who have to deal with the down-town offices. I should like to know their method of persuasion. As regards the cider tax, I think everyone will welcome the fact that it has been cast aside. Half a million is now going to be remitted, and it will be interesting to hear what the Minister will say in that connection. On the last occasion that this tax was discussed, it was represented from this side as a tax on industry. The Minister referred to it as a tax on profiteers. He is now throwing £500,000 to the profiteers.

When he last spoke he said that he was going to get this money from the profiteers. He said that when he got the accounts he realised that there were people who made extortionate profits as a result of the war. He is now yielding, to the extent of £500,000, to the people whom he described as profiteers. His last remarks on this are reported in column 963 of the Parliamentary Debates on 21st May. He said he would like to underline the hypocrisy and humbug of many speeches made over here by Deputies who charged the Government with pampering the profiteers and allowing them to loot the pockets of the poor. He added that now, when the Government were making an attempt to get some of the profits, the ill-gotten gains, there was a howl from this side that it would be hurting industry. We shall be anxious to see what new tune the Minister sings to-day in regard to this matter.

He put the whole of the industrialists —whom he was going to tax through his proposed taxation—into the same category as banks and the bacon curers, and that was a very foul and odious spot to put them. No matter what explanation may be given for those changes, I welcome them. I am particularly glad of the remission of £500,000 on what I describe as industry. There may be an odd profiteer who will get away with a little extra, but this remission will be for the general benefit of industry, and will prevent greater unemployment. This £500,000 remitted, in the sense that it will not be taken from industry, will be a welcome relief to the great majority, and may help to keep a certain number of people employed who, but for the remission, would have to walk the streets. Even so, it will be difficult to keep them from walking the streets sooner or later.

I hope the Minister for Industry and Commerce will keep a new list—a list of those people who should be put down as conscripted, in the sense that they are thrown on the streets through no voluntary demand of their own. They are like a part of the Ministry of Supplies—they could be called the "Minister for Supplies' Volunteers" when they appear in the list of unemployed. On the whole, faced with the present situation, we have, to a certain extent, avoided our responsibility simply because we are not able to shoulder them this year. To that extent we may list them in that way, in this rather foolish type of situation into which we have allowed ourselves to drift.

The whole thing shows a pretty serious lapse of forethought and lack of initiative which has characterised all Government Departments and Ministers since the outbreak of war. One would have thought then—and this may be repeated in the hope that the lesson will be learned while any chance remains—that it was immediately visible to any ordinary mind or far-seeing eye that there was necessity to get in certain supplies while it was yet possible. It was necessary to get supplies for defence materials, if they could have been obtained; it was necessary to get supplies of foodstuffs while the going was good, and the going was good even for a long time in regard to this; it was necessary to get supplies of raw materials for industry, and the going was good there for a still longer time. All that was necessary in the hope of keeping people in employment. Even if it were only for that purpose, it would have been worth while spending a limited amount of money. I do not think it would have needed an expenditure of actual cash if the Minister had been sufficiently alert, had taken time by the forelock and had asked banks to grant credit to certain people in industry. If that had been done, we would not have been in such a completely beleagured position as we are now.

There were promises at the outbreak of war—promises to which the House gave full approval—that there would be a checking of prices and a closing down on profits. By advanced warning given with regard to profits and by advanced notification of increased taxation, we could have avoided injustice and found the real profiteer, without harming anybody except, perhaps, the people employed by such profiteers. We could have reduced the spending power of the richer people and that reduction in purchasing power would not have mattered a whole lot. In addition to that, there was surely a warning from the last war. Even from the preparations already made in 1939 by some of the nations which were facing war then, it could have been realised that every effort should be made to stabilise prices and keep down the cost of living. We found in February, 1941, an index figure of 218; in August, 1939, that was 173. There was an increase of 45 or 25 per cent. on the figure for August, 1939.

We are told in the journal of the Department of Industry and Commerce for March, 1941, that the cost-of-living index number is designed to show the percentage change since July, 1941, in the cost of maintaining unaltered the standard of living of the wage-earning classes as in the month of June, 1922, no allowance being made for any changes in the standard which may have taken place since that date. That means there is no allowance for any change of standard since 1922 nor for the fact that the world has moved on so as to bring people with low rates of wages to some higher degree of comfort, or even something approaching luxury in their lives. It is merely to maintain unaltered the standard of living. The cost of doing so has gone up from 173, as an index figure, to 218. That is for all items. The food item only in February, 1941, stood at 196, compared with a figure of 158 before the war. There is again an increase of over 40 points, or over 25 per cent. on the figure for August, 1939. I have said often that, instead of the Ministry saying they would not allow wages to be raised because wages would start this spiral and we would have wages and prices chasing each other, it would have been far better if the Ministry had said that they would make every effort to stabilise the cost of living, that they would allow increases in the standard of living but would see that the cost of living would be kept the same. That might have meant subsidising to some extent a variety of things, but it would have been a better policy. They allow the cost-of-living figure to swing upwards and say that it is designed to maintain unaltered the standard existing before the war and that now they will not allow any increases in wages to meet that. They hide a particular lack of plan by this vague talk of inflationary spirals. That figure has risen, notwithstanding that more people probably will be thrown out of employment as a result of the particular measure before us and more will be thrown out of employment through the changes which have been announced. It has been foreshadowed that costs will rise still further, but the people will be pegged down to a particular wage level. Whatever may happen them at the lower end, they will not get the chances which those at the upper end will get when extra assistance is being given to meet the extra cost.

With regard to the impact upon industry of the present Budget, I still hold that the taxes proposed in the original Budget statement would have borne very heavily upon industry proper and would not have hit properly and with sufficient severity the person who ought to be hounded out of this country as a profiteer. Warnings were given to Ministers, at the start of the war, that there was one inevitable outcome of the war and Ministers were asked to see that excess profits would not be allowed. The speeches made from every part of the House at that time showed an anticipation—and a condemnation, nevertheless—that people would make profits in this way. We could not have but the worst forebodings of what would happen, when we looked at what had happened in the previous four or five years, when certain people were allowed to make profits at a time when the country was being crushed by the economic war.

I find it hard to understand the Government policy in this matter. The Minister for Supplies told us for months, in the sort of hoarse exultation that he always adopts when these matters are under discussion, that no profits would be made and that he was in control, that there were supplies in plenty and that he was looking after them. He was changed from that particular Ministry and another member of the Government took it over. Quite recently the Minister for Industry and Commerce replacing him was calling together employees and employers and saying that it was a question now of putting all hands to the pumps as the poor industrial ship was very heavily waterlogged and if we wanted to keep going sacrifices must be made by everybody. He did not say that there were supplies in plenty and did not indicate that there was any question of undue hardship upon those firms by checking the rate of profit or prices.

The Minister for Finance came along and in his Budget statement told us that these people were too well off. Previous accounts had not let him into the secrets of the trade but quite recently he did realise that they had made extravagant profits as a result of the war and he wanted the greater part of those profits to accrue to this State. He proposed to take 75 per cent. of those profits, leaving 25 per cent. to meet the bad repercussions of the difficult economic situation and the still worse times which would come. Yesterday the Minister for Supplies went off to a Fianna Fáil club and told there in detail what he cannot be made say here where he is subject to criticism. He has gone back on the crowing note that supplies were good and that everything is happily as good as it could be expected to be. Against all this, the Minister for Finance comes in and tells us that, apparently, now he has discovered that these profits were not so much in excess as he thought previously. He is concerned now, apparently, about the effect on unemployment that the exaction of these taxes involves and proposes to reduce them and to throw away £500,000.

Could we get something in the nature of a policy instead of a welter of inconsistent statements about the four or five things I have described? I believe there is profiteering going on. I believe it could be got after, and I believe that that should be done. I do not believe there will be any peace amongst the lower element of the community who are kept to a particular standard while other people before their eyes are openly profiteering.

I have often spoken of Rank's and of bacon firms. They are no small people in the way of profiteering. They had devices of their own. The Ministry had these devices exposed by two commissions which they set up; having got these reports they sat quiet. These people, whose sins were blazoned before the public, simply went on sinning. We know that the Ranks' situation was dealt with in the report. They came here and spent a certain amount of money acquiring milling interests. They added to these milling interests since the Government came into office and they unloaded on an unsuspecting Irish public shares in "Ranks (Ireland) Ltd." They recouped themselves the greater part of their capital expenditure by what they got from the Irish public, and having pocketed pretty nearly all they expended, they still retain a controlling interest in the company. They were able to put that over on the Irish public either with the connivance of the Ministry or owing to the inability of the Ministry to take any steps to have the situation rectified. They allowed these people to continue with profits of a high standard, though they may seem low when considered in relation to the very high fabric which they erected.

The bacon curers had a different device. They did not get away with so much. They had not so good a period to work in, and had not the same claim on the Government to strengthen them as Ranks Ltd. They were put into a position of trust, and were given control of the industry. They were told that if they came through a particular bad period they should build up a fund so that they could keep people in production by raising prices artificially when prices were going down and taking a little extra when prices were good. They proceeded to build up the fund, and at that point they raided the till, according to the commission's report. What was the measure of the estimate they made? The measure was the amount in the till—every shilling of it. That was exposed in the commission's report, and the Government was asked to take steps to deal with them. They have not dealt with them. The Minister for Supplies told us that these people were not profiteers at all.

I do not think that is the view of the present Minister for Industry and Commerce. The Minister for Supplies said he had a way of getting after them and that he was going to get after them. We have not seen it yet. We have not seen what knife was being sharpened for these people. Until we see it definitely in operation on them and something excised from them, there will be very little in the way of peace or quiet in industry or those employed in industry.

I put these people and certain other people who have abused the tariff policy in a class by themselves, and I segregate them from the ordinary body of Irish industry. Whether there are more in the profiteering class than in the other, I do not know, but the blatant examples of profiteering are certainly no advertisement for the tariff policy, and certainly do not inspire confidence in the people in a Ministry which, when its eyes were opened, did nothing to get rid of the abuses which have crept into a system which they themselves established. I think something should be done even at this late stage about Ranks (Ireland) and the bacon curers. I called attention here recently to the fact that a director of one of these bacon companies, having, I suppose, steadied himself a bit on his business footing on whatever his share of the loot was when they emptied the till or fund which they had been allowed to build together as public trustees, announced that, despite all the hazards of the last year, they made an extra £12,000 profit last year. The Minister was going to take 75 per cent. and leave them 25 per cent. to carry on, and possibly he is now going to take less. Of course, that was a case that called for special inquiry and for some action on foot of the special inquiry. With people like Ranks, the bacon curers and a particular bacon company, possibly we would get in all the money that is being thrown away, or that is not being taken as a result of the remissions announced to-day.

I have never in this House drifted into the mistake of equating Ranks and the bacon curers with those who run Irish industry, and I would dislike to see anything done to Irish industry simply under the cloak of getting in a half-hearted way at people like Ranks or the bacon curers. They should be segregated into a special class, to a special place in whatever industrial hell the Minister is going to have reserved for them. They should have their own special punishment, and, if we can get some benefit, whatever the thumbscrews the Minister uses on them, all the better. I object to people pretending that Ranks and company were not making money. All I say is that it is a pity they were allowed to get away with so much for so long.

Two or three things have emerged from the reconstructed statement of the Minister for Finance. The figures are confusing, but, as they are to a certain extent pointers as to how the State is able to bear the weight of taxation, perhaps the Minister would give us some enlightenment. In his statement explanatory of the Budget, he said he expects additional revenue from income-tax and surtax of £320,000 as a result of an increase of 1/-. The old calculation was that an increase of 6d. brought in £500,000, so that an increase of 1/- should bring in £1,000,000. One must recognise that the greater number of shillings put on, the greater the likelihood of the £500,000 or the £1,000,000 becoming correspondingly less. Nevertheless, it is surprising to see that a rate of 1/- in the £ on income-tax is calculated to bring in only £320,000. I should like to find out how the Minister will balance the figures when making an adjustment between corporation profits and excess profits. Previously, we were told that the corporation profits tax figure was £1,720,000. If we assume that the £500,000 now being set aside comes entirely from this source, it looks as if the Minister will get in £1,220,000.

In the table that was circulated with the estimates of receipts and expenditure for the year ending the 31st March, 1940, these two headings— excess profits tax and corporation profits tax—were estimated to bring in £673,000. These calculations are definitely mixed, and I do not pretend that I have extricated them from their context. But, if the figures are suitable at all for the purpose of making a comparison, one may say that it was estimated that the old rate for excess profits and corporation profits tax would have brought in £673,000 and that now they are expected to bring in about £1,200,000. I do not say that figure is right, but, at any rate, it must be somewhere around £1,000,000 and is, therefore, a heavy tax on industry. The Minister proposes to remit the £500,000 that he had expected to get from those described by him as profiteers. I am anxious to hear what convinced him to adopt that course. Was he swayed by the arguments advanced with regard to retrospective taxation? Was he led to take this step by reason of the fact that business is facing a lean time, and that further heavy demands on business and industry might lead to an increase in unemployment? He proposed to get £673,000 from certain avenues of taxation, but we find now that the figure will be in the region of over £1,000,000.

I come back to the question of borrowing to which many Deputies have referred. The figure under the head of what the Minister calls sound borrowing is £1,178,000. He also proposes to borrow, in a way which he cannot so describe, £4,500,000, so that his entire borrowings will amount to £5,750,000 in a year in which he said he had attempted to make economies in the Book of Estimates. I find that the way that book itself sums up his effort is this, that the net increase over last year is something short of £700,000. As the Army Vote represents £1,400,000, we may take it that if it were not for the increase in that Vote there would be, as between the two years, a decrease of about £700,000. On a further examination we find that £400,000 of that was due to the dropping of certain employment schemes, so that when one looks at the Book of Estimates the so-called economies are found to be a vain sort of thing.

In this year the Minister recognises that he cannot tax the people any further. There is a definite recognition that unemployment is going to increase, and a definite acceptance of the view that the cost of living is on the increase. It is recognised, and cannot be denied, that our people are flying out of the country and are prepared to go to bombed England rather than stay here and wait for the impact of hunger. In that situation, the economies claimed by the Minister in the Book of Estimates are surely fantastic.

The Army, with its allied services, is going to cost £9? millions this year— nearly £750,000 a month. As regards that expenditure, this House does not know what proportion is going to be spent on materials and Army equipment, and what proportion on the people who handle that equipment. The Minister presents the House with an Estimate for £9? millions per annum. That is the sum this definitely poverty-stricken State is expected to bear. We do not know how much of that is going to be useful expenditure from the point of view of defence. We have not been given the proportions as between equipment and man power. The Minister simply tells us that the Army is going to cost £9? millions this year. He does not tell us anything with regard to the proportions I have spoken of. We know, at any rate, that this will be expenditure mainly on another form of occupation, on men who, in the main, have no other occupation.

The Minister's attempted drive towards economy in this particular field of expenditure does not create any great confidence. First of all, as Deputy Cosgrave has said, the Minister misled people by saying that, when he referred this Estimate to a certain body, they agreed that no economies could be made in it. It was, however, discovered later that it was to the Army Council, a statutory body, that the Minister had referred the Estimate.

It would be ludicrous to expect that any body of that type, in view of its associations, would give any sort of ready ear to any suggestion of economy. One realises that it is easy to get money for the Army, particularly in the circumstances in which the Estimate cannot be subjected to a proper analysis. The whole thing has to be done sub rosa. There is also the feeling that if anyone objects to the expenditure of money for the Army he will, immediately, be held up to public scorn as a person who wants to weaken the defence of the country. A further repercussion may be that it may be said that such a person may even be weakening the morale of those people who have been good enough to give their services in the defence of the country. Even good Army men will recognise that there is something to be said for having proper defence equipment and a proper defensive corps. The good Army man would not like to have to face the public afterwards and say that on account of the lack of equipment his efforts could be of very little use in repelling an attack, and at the same time be paraded as the person responsible for all this taxation.

One must realise, however, that a good part of this £9? millions that the House is being asked to vote will be useless expenditure. We are tied by the Minister's statement that this sum is required. The Minister cannot promise the results that will accrue from the expenditure of this money. We know the harm that it is going to do. The Minister has been driven from his attempt to tax industry because of his fears of increased unemployment. The only excuse he can give for all the borrowing that is foreshadowed is that the defence of the country simply demands it. We shall have to wait until later, I suppose, to get an explanation of how much of this expenditure was ever likely to be of any use, and how much of it was simply another way of hiding still further the vast amount of unemployment that the Government have already created by their twin policies of industrial tariffs and excess taxation.

Mr. Hughes

The most alarming aspect of the policy pursued by the Government in recent years is the heavy and varied imposition of taxation, both direct and indirect, due to the cost of administration, resulting in deficiencies and unbalanced Budgets and an ever-growing national debt. To my mind, if borrowing for ordinary expenditure could be justified at any time, it would be during the emergency we are now experiencing. We have, in fact, been borrowing during the last five or six years to meet normal current household expenditure, and we have balanced our Budgets by that method. It is not, therefore, surprising to find that this year the Minister has recourse to that method of balancing his Budget. He proposes to borrow this year about £5,500,000. He told us, in his statement on the Bill this evening, that it was idle to deny that there was an element of danger in our financial position. There were, he said, three courses open to him in raising the additional moneys necessary for the present financial year—to secure the necessary moneys by additional taxation or by economies or by borrowing. The Minister's effort at economies has resulted in a few minor savings. The one outstanding economy effected, as shown in the Book of Estimates, is £400,000 on employment schemes. When one considers the problem which the country has to face, one is amazed to find that the Government turns to that item and reduces it by £400,000 when one would expect it would be increased. A further sum of £250,000, which would be subscribed by the local authorities, is also saved under that head.

What burdens will this Bill, when implemented, impose on our people? The aggregate sum set out in the Book of Estimates for Supply Services is £35,000,000. When the amount required for Central Fund services is added to that, the figure is about £41,000,000. We shall be asked for supplementary amounts during the year, so that the country will have to meet an expenditure during the current year of, at least, £42,000,000. When one compares that with the Estimates for Supply Services some years ago, when the figure was about £24,000,000, and when Central Fund charges represented about £5,000,000, one cannot but feel alarmed, and one cannot fail to see in the present huge sum a real danger to the financial and economic position of this State.

What is the ability of the country to shoulder this very severe imposition? We have not in our period experienced more difficult times. Industry is suffering from lack of raw materials. The sources of supply are definitely drying up. The intensification of the blockade around our coasts is making it impossible for many of our industries to replenish their supplies of raw material. That will, inevitably, result in further unemployment. In that situation, the Minister thinks fit to impose on industry very severe impositions. Our principal industry is in a shocking condition owing to the ravages of the foot-and-mouth epidemic and the failure of the Ministry to deal with that epidemic in a proper manner. That will mean a loss to the country in general and to the farmer in particular, not only of thousands of pounds but, perhaps, of millions. The cost of compensation and of the steps being taken to eradicate the disease must, at the present time, be well over £500,000. It would probably be nearer £750,000. It seemed, up to some months ago, that this would be a very favourable year for the sale of live stock. Deputy Cosgrave mentioned that prices had fallen considerably. I think that they have fallen even more than he suggested. Many farmers, even in the free areas, are unable to dispose of their stock. At the time, we were, unfortunately, carrying stock beyond our capacity, taking into account the amount of additional land which had been put under cultivation. Thousands of cattle which would normally have left the country during the store period are still on hands and, owing to the shortage of grass, are in a very poor condition. Even if we had an outlet for them, they would not be fit for marketing during the next few weeks. That, unfortunately, is the position of the people who have to shoulder these tax impositions. The Minister may say that the imposts proposed in this Bill will not fall upon the agricultural community but, unfortunately, most taxation is passed on in one form or another, and the result of severe taxation is to hit the community as a whole. One cannot but feel seriously alarmed regarding the whole financial situation. It undoubtedly calls for a more determined effort by the Government, and by the Minister in particular, to reduce expenditure and, in consequence, taxation, than has been made so far.

We hear certain fears expressed now and again by the responsible Minister. The Minister made an effort to convey to the House that he was beginning to feel alarmed about the position. It is not now that he should become alarmed; he should have been alarmed in years gone by because good government, to my mind, means that, normally, people should not be taxed up to their full capacity, so that during a period of emergency you will be able to draw on the reserves that have been built up as a result of wise administration. We have been pursuing a policy for the last decade of years of taxing our people up to the hilt all the time, even beyond their capacity. This policy has kept them down and has thrown such burdens on industry and on the principal industry, agriculture, in particular, that there was no possibility of expansion. Some people, even in this House, people who know a little, possibly, about agriculture, are more or less inclined to suggest, by innuendo, that it is the fault of the agricultural community that we have not expanded production. In my opinion, it is anything but that. One of the causes that undoubtedly has contributed to the failure of this country in recent years to expand agricultural production is the heavy taxation and the burdens that are thrown back on agriculture which it is impossible for that industry to bear. We cannot look or hope for expansion while that situation continues and while the present policy is pursued. There is no effort then, on the other hand, to protect that industry from the activities of certain profiteers in this country. We were assured—and the Minister for Supplies, addressing a meeting of his supporters in the city yesterday, assured them—that we had effective control over prices, and that the supply position was as good as could be expected. This year, we were supposed to have an active food campaign being pursued by the Government. In that campaign one would expect that every effort and assistance would be given by the Government to those who were engaged in the production of essential food in the present year. We find that these people are left on their own oars, without protection. People are allowed to charge a profit of £1 and 30/- a barrel on wheat that was bought for 35/- and 37/-. For artificial manures, particularly phosphate manures, we had to pay an ex-factory price here of £8 a ton while the same manure could be sold in England at £5. That is the sort of thing we are up against, and then people all over the country are wondering why we cannot get expansion of agricultural production. If agriculture has to carry those burdens and if agriculture is not protected from the activity of the profiteer, we cannot look or hope for expansion.

I was glad to hear that the Minister listened to the advice that was given from these benches and has made some concessions in the matter of industrial taxation, corporation profits tax, and excess profits tax. While the concessions are small, they are better than nothing. It has been pointed out here before that while we agree that where profits have arisen out of profiteering, we do not object to those profits being taken by the Government and by the State, we certainly think it is unfair and unjust to put the profiteer and the man who makes a normal and just profit out of industry into the same category. Time and again in recent years the Government's attention has been drawn to the fact that we are suffering from the activities of certain profiteers. These profiteers were given a monopoly position by the Government. In fact, some of them were put in the position that they could profiteer by the policy of the Government. Commissions were set up which pointed out that excess profits were being made and nothing was done about it. No action was taken by the Government. Now we find that those profiteers are being put in the same class as the industries that have made normal expanding profits. In fact, they are put in this position that if the excess profits they made during the standard years were as great as the profits they make today—as undoubtedly some of them were, and possibly greater—they will be called upon to pay less excess profits tax than other industries that have made normal expanding profits during that period. Some industries that made less profits during the standard years and were not profiteering during those years, which have expanded in the normal way since that time, will be called upon to pay more taxation now than those industries that were permitted to profiteer all the time. That is one thing that we object to, and the Minister's attention has been called to it on the Budget and on the Financial Resolutions. He has made no effort to adjust the matter. I think it is unfortunate that he has not done something about it, and I suggest it is not yet too late. I think the Minister ought to introduce some amendments to deal with that aspect. Under Section 21 of the Finance Bill the Minister makes provision for a refund of motor duty where a person has not used his car for the full taxation period.

I would suggest to the Minister that he should make provision for taxing cars monthly during this present emergency. The Minister may say that that would be a rather costly method of taxing cars but when one considers that the normal number of registration officers still hold office, and that there has been undoubtedly a very considerable reduction in the number of vehicles taxed during the present year, the adoption of my suggestion would not result in imposing on them any undue increase in work.

I put down a question to the Minister for Local Government and Public Health some time ago to ascertain the number of private cars taxed during the present year as compared with last year and I was informed that last year 45,456 private cars were registered whereas this year only 18,883, or a little over one-third of the number for last year, were registered. The number of goods vehicles registered was approximately the same as last year—10,081 as against 10,453. The number of small passenger service vehicles registered last year was 4,445 while this year the number is 386. The number of large passenger service vehicles was 813 last year and this year 677. Bearing in mind that there has been a very substantial reduction in the number of vehicles registered, I would suggest that my request to have cars taxed on a monthly basis is very reasonable. It is not fair to ask a person to tax a car for a quarter or for six months as the case may be, when he does not know what the petrol position in any particular month may be.

Mr. O Ceallaigh

That is being considered.

Mr. Hughes

I am glad it is being considered, and I hope the Minister will see his way to make some arrangement of that kind because it would be a very useful concession.

Mr. Esmonde

I do not think we can congratulate the Government upon many of the provisions of this Bill. In removing the fog screen of the war situation which exists, and leaving aside any question of the increased expenditure caused in this country as a result of that situation, we must look at our financial position from the point of view of other services for which taxation has to be imposed. There was, perhaps, some excuse to be offered for the first two or three years of the period of office of the present Government, by reason of the fact that they were serving their time to the business of government. Having spent almost ten years in office, they should now be seasoned and hardened practitioners in the art of government. So far as the position to-day is concerned, they have endeavoured to hide themselves behind the necessity for levying a considerable amount of taxation for the purposes of the necessary defence of this country but, even if we exclude all those items which are properly referable to the defence services, there is still an increase in the amount of money ordinarily required to finance the government of the country.

As far as I can make out, there are four broad reasons for what everyone will admit is the very unsatisfactory condition of our finances to-day. The first is that the Government have not made any real or determined effort to deal with the unemployment situation, and unemployment in any country runs hand in hand with bad finances. The less unemployment there is, the more robust is the financial condition of the country, and it is the duty of every Government that accepts the responsibility of office, especially a Government such as the present Ministry, which pledged itself to remove the evil of unemployment, to see that unemployment is solved. I criticise the Government for the manner in which they have tackled that problem. They have been in office for a considerable number of years, they have been returned on a number of occasions by a majority vote, and they have had the goodwill of all Parties in this House, practically to the extent sometimes of removing all opposition or criticism, but their approach to this unemployment problem has been entirely wrong. A patch has been put on here and there, but the problem itself was never really properly tackled. It should have been tackled in a big way and in a bold way. Instead of that, a patch was added here and there, as I say, with the result that the position at present is worse than ever.

I instance as just one case in point the fact that to-day there is a big decrease in the number of people engaged in agriculture, as compared with a few years ago. Obviously there is something wrong there. The cause of that decreased employment in agriculture is the manner in which the Government have approached the problem, which is one not only of finding employment for those who are unemployed but also one of keeping people already employed in their employment. If they look round the world and examine the activities of statesmen in other countries who have had the wisdom, the foresight and the energy to approach the problem of unemployment properly, they would profit very much by an examination of what has been done. They would see that the unemployment problem is not something that can be cured by a small work scheme here or a little factory there. The unemployment problem in these countries was tackled by statesmen of vision, who utilised the whole resources of the State and the whole economic life of the country in the process of finding a solution.

The second reason for our present position is the consistent failure, year after year, to assist our main industry, agriculture. I have already instanced the fact that there are many thousands at present out of employment who were employed in agriculture a few years ago. If ever an industry deserved good treatment at the hands of any Government it is the agricultural industry in this country, but, as everybody knows, the members of all Parties in this House have complained from time to time of the way in which that industry has been treated. If the Government had only realised that agriculture was the largest industry in this country, and given it fair play, I do not think we would be in the position we are in to-day.

The third reason, I submit, is the fact that in sponsoring and endeavouring to foster new industries—with which I am not in disagreement at all: I should like to see as many small industries as possible in every country town—the Government did not direct their attention sufficiently to the class of raw materials which would be used in those industries. There is any number of industries which could be run in this country on the raw materials which are capable of being produced here, but the general idea behind the policy of the Government was to transfer to our country towns the little branch factories which were being run in highly-industrialised districts of England or Continental countries. But in those countries the necessary raw materials for carrying on those industries were produced on the spot, whereas we are now faced with a position in which those raw materials are not available, with the result that many of those factories have had to be closed down or run on short time. I think the Government will profit from the experience gained during this war, when the necessary raw materials for those industries are not forthcoming; but my quarrel with them is that, in the building up of industry here, proper regard was not had to the raw materials producible in this country. I think we should follow the example of other countries similarly situated to ourselves which, instead of importing raw materials from abroad, make use of their own materials for the purpose of giving employment to people who would otherwise be unemployed.

The fourth reason is an obvious one, and that is that our expenditure has increased. It has increased beyond the figure that is reasonable, having regard to our circumstances at the present time. Apart from the amount of money that is necessary for the purpose of arranging for the defence services of this country, our expenses generally have increased. No one can deny that. The Government are doing, at the present time, what no single sensible individual in this country is prepared to do, and that is to increase household expenses. Every sensible individual, every sensible head of a family in this country at the present time, is looking around for ways and means of reducing household expenses. The Government is doing the exact opposite. I think every sensible person in the country has been able to effect economies here and there, but we find that the Government has not been able to do so.

We have now reached the stage when the people in the country have almost lost faith in Parliamentary institutions. They have certainly lost faith in the Government. It is a strange thing that the Government is not prepared to do what every business firm is doing, what every single individual is doing—trying to effect reasonable economies. I sympathise with the Government on the fact that they have to find a considerable amount of money for defence purposes. Whether that money is being wisely spent or not is another matter, but everybody agrees that it is necessary that this country be defended. Leaving aside the defence services altogether, can the Minister for Finance say that our expenses generally have not been unreasonably increased, taking everything into consideration? I realise the difficulties of the Minister for Finance himself, who is asked by each individual Department to produce more money for the running of that Department, but it seems to me that, after nine or ten years of office, this Finance Bill is a complete admission on the part of the Government of their utter failure so far as the governing of this country is concerned.

General Mulcahy

Nothing could show more plainly that the hand which is on the steering wheel of this country is completely dead than the episode which took place in this House to-day when the Minister was dealing with the changes that he is making in his taxation proposals. Before we came to discuss the Budget, on the Vote on Account and in the course of another debate which took place about that time we called the attention of the Government to the fact that, approaching the Budgetary period, they should review the position in the country as a whole, so that they would make their taxation proposals with a clear picture before them—or as clear a picture as they could get—of the kind of country they were taxing, and the kind of conditions prevailing in the country for which they were preparing their fiscal policy. When the Minister came before us with his Budget speech, we had to express disappointment because of the fact that his speech did not show that there had been any systematic examination of the situation such as we suggested ought to take place, or any systematic expounding of the general economic conditions in the country such as we expected should be given to the House when a Budget of such huge dimensions was presented to it. The complete change which we have had to-day shows that the Government as a whole faced the consideration of its Budgetary proposals without any idea as to what the circumstances in the country were, or what kind of situation we were facing.

We often hear expressions of opinion from members on the opposite benches about the democratic way in which this country is governed, and, if we were in a normal situation to-day, we might sit back and purr a bit over our general spirit of democracy when we heard the Minister reminding us that he was making changes, but that, under a proper system of democracy, arguments should be listened to and things done arising out of the pooling of the general arguments. We might be very flattered particularly on such a rare occasion as that on which those expressions are made here accompanied by action which is in conformity with them, but I do not think the brightness of that one bright spot in the debate should blind us to the real seriousness of the situation. The real seriousness of the situation is that the Government presented us with a Bill here for the purpose of carrying on the financial affairs of this country without knowing the condition of affairs here. It is true, as we have argued here, that the burdens which the Minister was proposing to impose on industry in the form of corporation profits tax and excess profits tax were going further to dislocate the situation here. I think the situation is one of the greatest possible gravity.

Deputy Cosgrave has pointed out that debt is accumulating and that the policy which some people have argued here and for which some of us see no other way at present, the policy of borrowing, is wrong. He has pointed out the enormous amount of public debt imposed on the country. We all have to realise that, and I think that we have to realise, in addition, that that burden of debt is being piled up on a very rickety foundation. We have already pointed out, looking back over the last ten years, that in the year ended March, 1932, the amount of money taken from the taxpayers' pockets was £21,286,000, and the amount of rates taken out of the ratepayers' pockets for the same year was £4,677,567. In the year ended March, 1940, there was an additional sum of £7,538,000 taken from the taxpayers' pockets and an additional sum of approximately £2,000,000 from the ratepayers' pockets, so that to taxation and rates amounting to £25,963,567 in 1932 there was an addition of something like £9,500,000 in the year ended March, 1940, with amounts of varying sizes in the years between. Now we are adding an additional piece of taxation to it, but the position is that debt has been piled up and increased in a country in which taxation is still mounting in that way and the economic condition was being weakened as a result, so that a higher amount of taxation and debt was being piled on a country which economically was not in a position to bear it.

Deputy Esmonde pointed out that agricultural employment was decreasing for some years, and Deputy Cosgrave has shown a falling off in the normal increment of numbers of persons employed as indicated by the national health insurance contribution fund. When you come to review it, the trend in the matter of agricultural employment under this policy and under conditions of such increasing taxation and increasing debt is appalling. In the year 1934 there were 579,409 male persons in agricultural employment. In the following year there were 6,000 less, and in the following years there was a further number of 13,000 less, 4,000 less, 19,000 less and 7,000 less, so that between 1934 and 1939 there was a fall of 48,500 males employed in agriculture, according to the census taken in June every year. That had increased by 13,000 in 1940. That was the agricultural side of the picture: a fall between 1934 and 1939 of 48,500 male persons employed in agriculture in June of each year.

As Deputy Cosgrave pointed out, by 1938 we had come to a point at which the normal increment in employment, measured by persons in full-time occupation, of 11,000 persons added every year, was stopped, and at which there was a fall of 1,000 such persons as between 1938-39, and no doubt assisted by the conditions brought about by the war, it was down by 6,000 in 1940. You had agricultural employment falling in that way, and the normal increments in general occupations such as those covered by national health insurance brought to a standstill at the end of the period, with the Government taking more taxes from the people by way of ordinary taxation and rates. On top of that, the debt about which Deputy Cosgrave spoke is being piled, and it is in such economic conditions as are reflected by that situation before the war ever broke out that we are facing war conditions. It is obvious, in view of the condition of industry, that industry could not bear the shock given to it when the Minister brought forward his proposals with regard to corporation profits tax and excess profits tax and the retrospective action of these taxes.

The Minister, having made such an advance towards practical proposals in the Finance Bill, there is another matter not yet dealt with which I should like him to consider before we reach the Committee Stage and in respect of which I should like him to tell us what exactly is likely to be the effect of the excess profits tax proposal. The Minister for Industry and Commerce, in dealing with this matter on the general Resolution on 14th May, had a number of things to say about the excess profits tax. At column 467, he said:—

"We say that, in view of the national need, they must surrender a very large part of them——"

that is, companies who wish to make excess profits must surrender a very large part of them.

"——and that so far as the remainder of their share of these profits is concerned, it must be put aside for a rainy day, with the view that, when the post-war reconstruction period comes, these profits will not be spent, will not be squandered, but will be there to help these manufacturers and employers to reorganise their businesses and maintain their workers in employment, and to avoid the disastrous catastrophies which characterised the post-war slump of 1920."

The Minister had dealt with some of the conditions which faced industry in Great Britain after the last war, where the circumstances were such that in order to cover up losses in the years after the war, they were enabled to get back some of the moneys they had paid by way of excess profits. Excess profits tax, corporation profits tax and income-tax, the Minister says, are going to take 75 per cent. of these excess profits. He said that 25 per cent. will be left and that that 25 per cent. is not to be squandered but is to be kept for the post-war reconstruction period. I should like to put one case to the Minister with a view to ascertaining what is likely to happen.

Assuming that a firm has been making £16,000 profits, that means that it has £1,600 with which to pay off its capital invested and that kind of thing. It is making £16,000 profits in the standard year, and let us say it comes to make £20,000 in the first year for which it is liable for excess profits tax. Of the £20,000, £4,000 is excess profits. The Minister takes £2,000 of that as excess profits tax. Then, under the corporation profits tax of 10 per cent., he takes £1,700, and then, from the remaining £16,300, at 7/6 in the £ income-tax, he takes £6,112 10s., leaving what is left as profits, to that particular firm, £10,187 10s. for the first year in which it meets excess profits. In the previous year, when it was subject to an income-tax of 6/6, and when it was making £16,000 profits, it paid £825 in corporation profits tax, £4,931 17s. 6d. as income-tax at 6/6, it had £10,243 2s. 6d. left as profits. That firm, in the year in which it is paying excess profits tax on £4,000, is going to find itself left with actual profits in hand of £55 12s. 6d. less than it was able to keep in the pre-war year. That is the firm that has now to continue its work under the difficult circumstances of having to meet the disastrous conditions which characterised the post-war slump after the last war, similar conditions being expected here in this country after the present war.

I think that before the Minister imposes a 50 per cent. excess profits tax—together with the corporation profits tax, he is going to take in all 75 per cent. of the excess profits from these firms, and without making any provision that any part of that is going to be available for the repayment of losses that may arise in the post-war slump—he ought to review the situation and state clearly to the House that that is what he intends. If he intends to take that taxation, then I should like the Minister for Industry and Commerce to tell us what he means by saying that the 25 per cent. is to be kept unexpended and kept there as a nest-egg to meet the difficulties that are going to arise. The difficulty that we have here is to get members of the Government Party to realise the position and their responsibilities.

I appealed before, and I had to appeal before over the heads of Ministers, to the members of the Government Party, to review the situation, to realise its seriousness, and to realise their particular responsibilities in it. Their position is made just as difficult as ours is by reason of the fact that the situation, instead of being discussed here as we pleaded to have it discussed—and pleaded several times to have it discussed here in Parliament—is very often, from its most serious aspects, discussed outside, and not even from the Government members do we get a reflection of the seriousness of the situation. We really have to turn to the Cork Examiner of to-day, and read the summary of the situation by the Minister for Supplies last night, in order to appreciate in full the seriousness of the situation. In the Cork Examiner of to-day we find that the Minister told the Dublin City constituencies, Fianna Fáil Executive, in the Central Hotel, Dublin, last night, that the situation was very serious. Speaking of the industries, he said:

"In the greater number of them, and those, unfortunately, which provided the greatest number of livelihoods, the prevailing conditions are so uncertain that a substantial reduction in output or in the work available, involving reduced employment, was unavoidable."

He went on to say, with regard to the building industry:

"The available stocks were now very limited, and so one could count the days in which building operations on any substantial scale would be possible. They could eke out their supplies and confine their use for essential purposes, but a complete stoppage of building trade employment appears unavoidable unless circumstances should change fundamentally.

"A stoppage of building would eventually close down all industries producing building materials, and adversely affect a number of others."

He then went on to speak of the transport position:

"Their public transport organisations were dependent on imported fuels—coal, petrol, and fuel oil.... An extensive reduction of services may be unavoidable, perhaps even at times a complete stoppage, with the resultant disemployment of thousands of workers."

He then goes on to speak of some other industries, but the industries which provide the greatest number of livelihoods, such as our building industry, are likely to be brought to a standstill with the resultant effect of creating further disemployment in those industries that lead up to and feed the building industry, and the Minister thinks that in connection with the transport services we may even at times have a complete stoppage.

If the Minister looks at what is left of the taxation that he proposes, he will see that it is his intention to take £374,000 from additional taxation on petrol. Surely, at a time when our difficulties with regard to transport are so great that they can be referred to in terms anything like those used by the Minister, these are hardly the times in which to increase the cost of transport by the additional taxation that is here. But we are tied up in an almost impossible situation. The Minister told us to-day that one of our difficulties is the relatively stagnant market that we have for agricultural exports. Our export of live animals for the first four months of this year, I think, is down by more than £3,500,000. In these circumstances we find the Minister for Industry and Commerce telling us that we are going to have rising prices, that we cannot avoid them, and that the crisis is likely to come in three or four months, and we have the Minister for Supplies telling us that some of our principal industries—particularly those industries giving the greatest employment—are going to be so badly hit that we will have very considerable unemployment, that our transport is going to be terribly prejudiced by the lack of fuel, and we have a standstill order for wages, and the Minister, on top of that situation, is piling on this taxation on the one hand and borrowing on the other.

The only thing that it is clear must be done is that money must be borrowed. Let us realise here, however, with our responsibilities in Parliament that in putting the Minister into a position that he has to borrow, preventing him injuring industry further than it is necessary to do it and forcing him to borrow even moneys additional to the amount he is borrowing, our responsibility does not end there.

We must find out who is selling this country. We must find out what is wrong with the administrative grip that should have a grasp of the situation. We must find out why it is possible to have this Budget so completely changed as it is. The Budget as originally framed was presented to the House on the 14th May and was then subjected to the criticism of Deputies and of people in touch with the industrial and commercial life of the country. Why has it been so completely changed?

I can sympathise with the Minister for Finance, who had to face a serious situation, to frame a Budget and bring forward taxation proposals when in the position that he could not get from the Minister for Industry and Commerce, from the Minister for Supplies, or from any other Minister around him, any clear picture of the position in the country, simply because not one of them knows it. The Minister has a collective responsibility for the position in which the Cabinet find themselves when faced with the financial aspects of the situation, but every Deputy has a responsibility, too. While we are all gratified that the Minister has changed his step with regard to taxation on industry, while we are satisfied that the additional and unnecessary blow is not going to be struck, it leaves us, or should leave us, with a more serious appreciation of the situation than we had before; it leaves us in a position in which we must be completely convinced that there is no Minister in any Department affecting the economic or financial life of the country who is doing his work or who is keeping himself informed of the position.

On the other hand, we see that the situation is going in the direction of which the Minister for Supplies spoke last night. What are individual members of the Government Party going to do about it? Are they satisfied that the situation is being properly handled? Are they satisfied that this country is being treated in the way in which a country run by democratic institutions should be treated? We have not been told what the situation is. The only interpretation anyone can get, arising out of what has been discussed here to-day, is that the Government know very little about the situation that is confronting them. They have presented a bill to the country which it cannot bear. They have piled taxation and debt on the country during the last ten years; they have put men off the land; they have reduced the normal increment of employment here. That is what we know of their administrative capacity and their handling of economic and financial affairs in the past.

We know the way in which they faced up to the most serious situation this country has ever experienced. They framed a Budget, presented it, and could not stand over it. It came out of the realm of secrecy which surrounded the Cabinet deliberations, it was brought up here for criticism, put before the commercial and industrial community, and altered to the extent which we observe to-day. No matter how gratified we may be by the change in the Minister's policy, we must be appalled at the situation it discloses. There is no man here who can shed his responsibility when facing the serious situation that exists, and on no people does the responsibility rest more heavily than on the ordinary members of the Government Party.

Mr. O Ceallaigh

A suggestion seems to have been made by some of the Opposition speakers that I attempted to introduce a new Budget to-day. I made a fairly long speech when introducing the Finance Bill. I thought the courtesy I paid the House would get a better reception. I went in great detail—greater detail than usual—and made a long statement, longer than usual, so far as my recollection goes. One does not expect much in the way of appreciation in this House—he would be a very foolish man indeed if he did —but I did go to a good deal of pains and trouble because there were particular aspects of the Bill that I thought the House would have a special desire to have explained in a detailed way, particularly the parts relating to the corporation profits tax.

I paid very great attention to the criticisms that were made, some of them very strong, of certain parts of my Budget statement, forecasting what would be in this Finance Bill. I realised when I brought in that statement that there were certain propositions in it that were likely to be strongly criticised. I frankly say I did not realise to the full extent that I realise now what the extra burden of taxation would mean for certain industries. In addition to the criticism that I heard here—most of it informed criticism, and which I am very far from resenting—I met quite a big number of deputations representing all kinds of industries, representing various classes of citizens, and various people representing what I might call businesses more than professions, that were affected by the propositions in the Budget. They asked to see me and I heard them at great length and I got information in a detailed, precise, reliable form that was not available to me before.

As a result of the information that people were kind enough to give me, it was necessary to make some alterations. Those people came from different parts of the country, and they represented chambers of commerce, boards of directors, boards of management, and councils of different kinds. All of them were sympathetic and courteous. Some of them felt very strongly that they were going to be badly hit. Even those who were likely to be worst hit expressed sympathy with the Government and the Minister for Finance in the circumstances in which they found themselves. Of course, they hoped that in putting certain aspects relating to their particular interests before the Minister, aspects that might not have been put before him earlier, they would convince him that to follow the line he suggested with regard to certain taxes would not be helpful to the country as a whole. I was very deeply affected by some of the statements made and figures put to me, particularly with regard to the difficulties which would be raised for some new industries in this country. I can cite the example of the Industrial Credit Corporation, whose directors came to me and put before me figures relating to a long list of industries, some old and some new. They put those figures to me to show that, in their opinion, the effect—particularly the retrospective aspect of the corporation profits tax—would be to close down, perhaps, some of those industries which were giving good employment and paying good wages. I told those people—not alone the Industrial Credit Corporation, but similar bodies, chambers of commerce, and so on—that I would examine carefully and sympathetically the figures put before me and the statements made. As a result of that examination, I come here with this Finance Bill shorn of some of the propositions which I put to the House in the Budget statement on 7th May. I am not a bit ashamed of that. I said that I believed it was good democratic practice and policy, and I think that is true.

It is not the first time I have made changes in Bills as a result of hearing discussion in the House. As Minister for Local Government I have done that very often and I do not take any particular credit for it. What are we here for? If the Minister proposing a Bill is at all times to get up and stick his heels in the ground and say that he refuses to change that proposition—no matter what criticism there may be and no matter who may be criticising— he is not doing his best for himself or for the country. I have always been open to reasonable argument on any Bill I ever have brought in here, as far as I can recollect. I have not always adopted the suggestions made, but have endeavoured to be reasonable and have listened to criticism. If I felt that a good case was made against a proposition of mine, I never hesitated to say to my colleagues in the Government, and afterwards in the House, that I thought a good case had been made and that a change was indicated. That is what I did this time.

Deputy McGilligan was particularly interested in the newspaper tax. No Minister for Finance is a sensible Minister for Finance if he—to use a hackneyed phrase—"kills the goose that lays the golden egg". If he kills the taxpayer he is not fit for his position. With regard to more than two daily newspapers a number of weekly newspapers would have gone out of existence. I saw that when the figures were presented to me, and I was satisfied. One or two of them might not have continued at all under present circumstances, but the figures convinced me that, if the tax were put on, it would be made certain they would not last another year. I include the Irish Press in this and the Deputy would not like that I should kill the Irish Press.

Mr. McGilligan

Not at all.

Mr. O Ceallaigh

For very good reasons, he would rather not kill it. The Deputy would not wish me to kill any other paper, whether it criticises him justly or unjustly. No Deputy or anybody else would want the Minister for Finance to put 400, 500 or maybe 700 men out of employment and that is what would happen if I continued the newspaper tax. I am not ashamed to say that, even though the Irish Press is included.

I do not know what Deputy Cosgrave was referring to when he talked about the "particular courtesies" that were absent. I am not aware of any courtesy that was wanting on my part with regard to this Bill or the speech I made to-day. However, after a long experience in this House of Deputy Cosgrave, I would say that the charge of want of courtesy comes with very bad grace from him, even if there were any want of courtesy, which I deny. I hope I was not guilty of any want of courtesy to him or to anybody else. Deputy Cosgrave and Deputy McGilligan talked about the profiteer, and said we are now letting the profiteer get away with it.

Mr. McGilligan

I said the people that the Minister calls profiteers.

Mr. O Ceallaigh

The Deputy used the word "profiteers" more than once. I did not call them profiteers at any time.

Mr. McGilligan

The Minister did.

Mr. O Ceallaigh

Read it.

Mr. McGilligan

I would not like to interrupt this speech.

Mr. O Ceallaigh

That is an unusual courtesy on the Deputy's part.

Mr. McGilligan

The white sheet is so glistening that I would not like to darken it.

Mr. Norton

Would the Minister like to re-write the Budget speech?

Mr. O Ceallaigh

The Deputy expressed his thanks to me for the changes I had made. Is that not so?

Mr. McGilligan

I have a halo around me.

Mr. O Ceallaigh

It is one that does not fit the Deputy very well.

Mr. McGilligan

I have not much practice.

Mr. O Ceallaigh

No more than myself.

Mr. Norton

There is a boot not far from the bouquet.

Mr. O Ceallaigh

In the talk which Deputies McGilligan and Cosgrave, and others, indulged in regarding profiteers, I failed to find a suggestion that I would regard as a practical working one to deal with profiteers, wherever they are. A Minister for Finance in putting on taxes cannot segregate the profiteers. How is he to define the profiteers? It is not easy.

Mr. McGilligan

Did you ever read the report on Ranks?

Mr. O Ceallaigh

I did not.

Mr. McGilligan

If you do not want to find profiteering keep off that report.

Mr. O Ceallaigh

Is it not true that when I brought into my opening Budget statement a suggestion that I was going to get after them to some extent—not to the extent that the Deputy thinks—he was one of the most vigorous in denouncing retrospective taxation?

Mr. McGilligan

Not in regard to them.

Mr. O Ceallaigh

How can you get one cent from them?

Mr. McGilligan

The Minister for Industry and Commerce said he was going to get after them.

Mr. MacEntee

The Deputy is wrong.

Mr. O Ceallaigh

The Deputy objected very strenuously to retrospective legislation.

Mr. McGilligan

May I read what the Minister said about the millers and about the bacon people:—

"We are going to deal with them in another way; in a very drastic way."

Mr. O Ceallaigh

When I attempted to deal with them to some extent, the Deputy was one of those who protested vigorously.

Mr. McGilligan

I did not.

Mr. O Ceallaigh

The Deputy cannot deny it. He said that retrospective taxation was intolerable. I do not want to accuse Deputy McGilligan of being one of the profiteers' defenders or protectors. He cannot deny that you cannot get what were called, on the Deputy's benches, "ill-gotten gains", unless you do so retrospectively. It could not be done at any time. It is necessary to know that they made profits, and to see balance sheets, and it would take any Minister for Finance at least a year before he could get in any money. Therefore it would have to be done retrospectively, and if that is to be done Deputy McGilligan will have to drop his objection to retrospective legislation.

Mr. McGilligan

I have always dropped it with regard to them, and I have said so.

Mr. O Ceallaigh

They were included in this Budget and I was going to get something off them.

General Mulcahy

They were allowed a very high standard.

Mr. O Ceallaigh

I would get something off them whatever the standard. I would have got a share of the profits but I would not be allowed to do that by Deputies opposite.

Mr. Norton

Why?

Mr. O Ceallaigh

As far as they could register a protest against retrospective legislation they did so.

Mr. Norton

What about the members on your benches? They were all right. They have not deserted you?

Mr. O Ceallaigh

I found a difficulty. I am as anxious to get after profiteers as Deputy McGilligan, whether they are bacon curers, flour sellers, brewers or tobacconists. I do not care who they are if I can only get after them and get a share for the public purse. I would be glad to do it, especially if, as is claimed by those on the opposite benches, they are ill-gotten gains. I would be very happy to get even the dirty money into the Treasury and use it for national purposes. I do not know how any Minister is to try to segregate profiteering from the expansionist industrialist that Deputy Cosgrave spoke of. I can see no other way than allowing the Revenue Commissioners to decide what were excess profits and what were excess expansionist profits. Deputy Cosgrave made a plea for the honest industrialist who expanded business and gained extra profits, that he should be allowed to get these profits for the purpose of the business and to give greater employment.

It would be a most difficult job and a very invidious one to ask the Revenue Commissioners to decide which were expansionist and which were unjust excess profits. I imagine that they would not like to be given that task, even if it were possible to decide which were honest expansionists and which profiteers. Some other time when the subject is debated I should like if Deputy McGilligan would expand his views on the matter a little further, and maybe between us we could find a way that he would not object to in principle as being retrospective, or that others would not object to for some other reason, to get after the ill-gotten gains that the Deputy is so fond of talking about.

In view of what I said, I am surprised that Deputy O'Sullivan should say that no serious notice was taken of the criticism put up by the Opposition to the Budget statement. I have given evidence of the fact that I took very serious notice of their major criticism, by mending my hand to such a considerable extent in relation to certain aspects of the taxation proposed. Deputy Cosgrave talked about the dead-weight debt here. Unquestionably what is called dead-weight debt has been added to to some extent during the nine years he referred to. He quoted figures to show that during the last four years we have added £10,000,000 to the dead-weight due to housing and unbalanced Budgets. I got the figures showing the dead-weight debt added to in the last four years. They are, Budget deficits, £3,175,000; State housing liability, £3,150,000; capital expenditure, £2,326,000, or a total of £8,651,000, not the £10,000,000 that Deputy Cosgrave spoke of. There is £1,500,000 of a difference, but to a financier like the Deputy that is not much of a difference. The sum added during the last two years, £2,326,000, I do not regard as being, properly speaking, dead-weight debt. Neither would I charge the housing debt of £3,150,000 as dead-weight debt. In my opinion that is good capital investment and brings a return that is valuable to the country in a variety of ways. Even if it is to be classed as a dead-weight debt that raises no financial return, it is a type of investment that we must continue, and that I believe we must expand as time goes on.

In 1932 I started out with a Housing Act that was passed here and that I hoped was going in a few years to end the housing problem. That was my ambition; that was the ambition of the Government. But we are far from having achieved that end, though we added considerably to the capital debt of the country, and to the so-called dead-weight debt. Far from having satisfied the housing demands, we find we will have to continue that work. Whatever Government is here for the next ten years must do as much as we have done, or maybe more, however, we may find the money to carry on the housing policy or some similar housing policy until proper housing accommodation is provided. There is not a week or a month that the Dáil meets that there are not complaints about the number of insanitary schools. I read a leading article in a newspaper—not what is called the official Government organ, and not the official Opposition organ—denouncing the Government for allowing 300 insanitary schools to remain in existence. I cannot give the exact figure, but I am certain that during the last nine years we have built several times the number of new schools that were provided by the previous Government during their ten years of office. We have probably built four new schools for every one they provided. Despite that we have not provided enough, and the country is clamouring for many more. Money will have to be found if they are to be provided, even though by doing so you add to the dead-weight debt of the country. Deputy O'Sullivan was vigorous in his demands for economies to-day. Yet I am as certain as that I am standing here that the Deputy would be one of those who would hammer vigorously at the door of the Department of Education for new schools for his constituency. What is true of him is true of other Deputies in every part of the House. They are all out for economies in general.

Mr. Corish

For everything only what they want themselves.

Mr. O Ceallaigh

They are all out for economy in the abstract, but while that is so-to take two examples—they all want, at the same time, more schools to-day, or family allowances tomorrow. We have Deputies on the Opposition Benches clamouring for both. Up to a year ago or so there used to be a great demand for money for roads. I, as Minister for Finance, am glad that there has been a good deal of talk about the necessity for economy. Some Deputies indicated where they thought economies should be effected. I do not object in the least to that. When an individual Deputy comes to me to make some demand for his own constituency, I should like to be able to point out to him how inconsistent he was in doing so, since he had joined in the general demand for economy. I am glad, as I have said, that speeches have been made pointing out the necessity for a rigorous examination of expenditure in all Departments. These demands have not helped me much up to the present to secure economy, but I would say, not only to Deputies opposite, but to Deputies elsewhere in the House, that they should keep up this demand. If they do, I may be able to have a better backing for economies where it is possible to secure them.

Mr. Norton

What about the £2,000,000 saving that Deputy Cooney spoke of? Has that ever been implemented?

Mr. O Ceallaigh

I think the £2,000,000 is the other way now.

Mr. Norton

So do we, but Deputy Cooney had a scheme to save £2,000,000.

Mr. O Ceallaigh

I do not think he ever gave it to us in detail.

Mr. McGilligan

It was made to a meeting of his constituents in Grangegorman.

Mr. O Ceallaigh

That was very appropriate.

Mr. P.J. Fogarty

It should have been made inside.

Mr. O Ceallaigh

The Deputy is not the only one who has made foolish statements. Deputy McGilligan himself made some from election platforms.

Mr. McGilligan

I do not like to see the blushes mounting on the other side.

Mr. O Ceallaigh

Deputy McGilligan must admit that for any foolish statements the Deputy made he had got the right kind of audience.

Mr. McGilligan

That is quite right. The Minister is getting better.

Mr. O Ceallaigh

Deputy McGilligan and Deputy Cosgrave dealt at great length with the question of the Army. Well, I am not Army-minded any more than, I think, Deputy McGilligan is. I hate, like the devil, to see money being wasted. I have no desire to spend any money where I think it is not going to do national good, but in present conditions I think an increase in the Army strength is necessary. I think, too, that the Army is effective for the job it has got to do. I am not an expert on the matter. Deputy McGilligan may know more about it than I do. I say that in all seriousness. If it were put to me to decide what equipment the Army, or a part of the Army, needed, I would not know anything about it. I want to say to Deputy McGilligan and Deputy Mulcahy that if they were so keen on seeing that the Army was properly equipped and wanted to look into the sums that were being spent this year, they had all this information before them. It was given in the greatest detail to Deputy Mulcahy and his colleagues in confidence.

General Mulcahy

If the Minister would join the Defence Conference for a couple of meetings he might understand the situation better.

Mr. O Ceallaigh

Thanks very much for the invitation. I did not know that the Deputy had the power to invite me there.

General Mulcahy

I am making the suggestion to the Minister.

Mr. O Ceallaigh

As I say, the detailed Estimate and figures were supplied to the Deputy. Deputy Cosgrave complained that he was not given the opportunity of pointing out where £3,000,000 could be saved. He said that he was not informed. If he was not, that is not my job.

General Mulcahy

Deputy Cosgrave did actually examine the Estimate. What he complained about was that the Estimate was passed through the House at a time when he could not have any information that it was coming on: that it was taken and passed and sandwiched in between two sections of the Agricultural Estimate.

Mr. O Ceallaigh

The Deputy's point is that Deputy Cosgrave's complaint was that he was not told when the Estimate was coming up for discussion. Well, whose fault was that? If his colleagues knew—they had made arrangements about it—why did they not tell him? We are not to blame for that.

Mr. McGilligan

Have we leave to discuss it now?

Mr. O Ceallaigh

The Deputy discussed it at great length.

Mr. McGilligan

I did not.

Mr. O Ceallaigh

I beg the Deputy's pardon.

Mr. McGilligan

Is it possible to give one figure—the proportion to be spent on equipment to the rest of the expenditure?

Mr. O Ceallaigh

The Estimate is passed.

Mr. McGilligan

And everyone was asked not to breathe a word on the matter.

General Mulcahy

I would like to repeat what I said a moment ago, that if the Minister would join the Defence Conference he would understand the situation, and he might make more progress than is being made here.

Mr. O Ceallaigh

Why is Deputy McGilligan, and why is Deputy Cosgrave, hammering at this thing if their Party representatives have all these figures in front of them?

General Mulcahy

I could give many an answer to that.

Mr. O Ceallaigh

When you had the Estimate here in the House, why did you not insist on discussing it?

Mr. McGilligan

Because there was a definite agreement that it should not be discussed.

Mr. O Ceallaigh

If there was, why is it being discussed now?

Mr. McGilligan

We are not discussing it. The vital figures have been withheld.

Mr. O Ceallaigh

They have not been withheld. They were given in greater detail to the Defence Conference than they had ever been given to this House.

Mr. McGilligan

May I have that figure—the proportion of the amount spent on equipment to all the rest?

Mr. O Ceallaigh

That is not a matter for me. The figures, as I have said, were given in greater detail to the Defence Conference than they had ever been given here.

Mr. McGilligan

And they cannot be discussed here?

Mr. O Ceallaigh

In view of that, why is the Deputy objecting?

Mr. McGilligan

Did not your people say that they should not be discussed?

Mr. O Ceallaigh

If I am correctly informed the boot is on the other foot. The suggestion, if I am correctly informed, that there should be no discussion came from your colleagues.

General Mulcahy

That is not so. There was general agreement.

Mr. O Ceallaigh

That is what I was informed. At any rate, they agreed to it. Is not that so? If Deputy Mulcahy, Deputy O'Higgins and Deputy Dillon agreed to that, what are they complaining about now?

Mr. Norton

There was general agreement not to discuss the Estimate.

Mr. McGilligan

Not to discuss it, but that does not mean to accept it.

An Leas-Cheann Comhairle

The Army Vote was passed long since and the matter does not now arise.

Mr. O Ceallaigh

So far as I am personally concerned, I would say to Deputies opposite that they could go into the Vote in the fullest detail.

General Mulcahy

In the House?

Mr. O Ceallaigh

Personally, I do not care where it is gone into.

An Leas-Cheann Comhairle

Deputies must remember that the Estimate has been passed and that it cannot be discussed now.

Mr. McGilligan

We are not discussing the Estimate proper; we are discussing it as a weighting factor in the Budget.

Mr. O Ceallaigh

Deputy Cosgrave complained that he did not get notice as to when the Estimate would be taken and he suggested that we were responsible for that omission. If anybody is responsible, it is Deputy O'Higgins or Deputy Dillon or Deputy Mulcahy. They did not inform their chief that the Army Vote was to come on that day.

General Mulcahy

Very well; leave it at that.

Mr. O Ceallaigh

It was not up to us to give Deputy Cosgrave notice. Deputy Mulcahy asked me earlier to-day what the betting tax would yield. In the current year, it is estimated that the betting tax will yield £26,000, of which about £1,000 will come from the totalisator. Deputy Dockrell suggested that we should vary other taxes and make further allowances. He was hopeful, if we did as he suggested, all grievances would be removed. What an optimist he is! He also referred to deferred expenditurne on renewals and repairs. That matter can wait. It will be time enough to deal with it this time next year. I hope the war will be over then and that we shall be in a better position to deal with it. Deputy McGilligan asked a question about income-tax. A shilling in the £ income-tax still produces, roughly, £1,000,000 in a full year.

Mr. Norton

Does every 1/- do the same thing?

Mr. O Ceallaigh

Up to the present, 1/- has brought in a round figure of about £1,000,000.

Mr. Norton

The incidence of the tax would alter its productivity.

Mr. O Ceallaigh

That is true.

Mr. McGilligan

Have you the detailed figures?

Mr. O Ceallaigh

In 1941-42, this additional 1/- will bring in £780,000.

Mr. McGilligan

The sum of £320,000 was given under the head of "income-tax and surtax." In the Budget speech you add: "I cannot, therefore, count on receiving more than £300,000 in the current year." That was with an increase of a shilling in the income-tax.

Mr. O Ceallaigh

The dropping of the proposed corporation profits tax has an effect on that.

Mr. McGilligan

Can you adjust the figures I mentioned?

Mr. O Ceallaigh

I have a note here which says, "The £320,000 quoted by Deputy McGilligan was £750,000 as reduced by the original charge to increased ordinary and excess corporation profits tax. With the revised proposals the income-tax yield will be about £760,000."

Mr. McGilligan

In a full year?

Mr. O Ceallaigh

This year.

Mr. McGilligan

Are we to take it that the increased surtax will yield £20,000?

Mr. O Ceallaigh

That is what we had hoped, but it will yield nothing this year.

Mr. McGilligan

Can the Minister give us the figures for excess corporation profits tax as opposed to corporation profits tax?

Mr. O Ceallaigh

I have not got those figures.

Mr. McGilligan

Can we have them before the Committee Stage?

Mr. O Ceallaigh

If the Deputy sends me a note of the figures he requires, I shall have them sent to him. Deputy Mulcahy asked me to give an example of how the corporation profits tax and excess profits tax would work out. In the case of a company with a supposed chargeable profit of £20,000, the standard being accepted as £16,000, the excess of £4,000 would be charged in this way—ordinary corporation profits tax at 2/- in the £ (10 per cent.), £400; excess corporation profits tax (50 per cent.), £2,000; income-tax on £4,000, minus £2,400=£1,600, at 7/6 in the £, £600; total £3,000. The 25 per cent. the Deputy asked about is left with the company. The total charge amounts to 75 per cent.

General Mulcahy

When the calculation comes down to the end, 25 per cent. of the excess profit is not left with the company.

Mr. O Ceallaigh

That is the result of the tax in that case. I am sorry I could not meet the requests of a number of other people who made strong representations regarding taxes that should be modified or abolished. I know that some of these taxes, such as that on tobacco about which Deputy Cogan spoke, is very steep. I know that it hits every class of the community and that, particularly, the tax on plug tobacco is a heavy tax on the poor. But tobacco is, after all, a luxury. Tobacco is a thing that people can live without. It is a comfort to many—that much I know.

Mr. Norton

Like the profits you are dropping.

Mr. O Ceallaigh

They would be a comfort but not to so many.

Mr. Norton

You are losing £500,000 on them.

Mr. O Ceallaigh

I would like to have that £500,000, but I was satisfied that the effect on the employment situation would be so serious that I could not stand over it. I met that situation then by dropping the retrospective part of my proposition about the tax. I would like to have made other modifications and other changes that would ease the burden. The burden is heavy, but we are living through difficult and dangerous times, and if we escape this period of emergency bearing nothing but these burdens and other burdens that may arise out of the emergency—heavy burdens though they may be—as long as we keep in a neutral situation, I think we will be lucky.

General Mulcahy

The accent is on the "neutral".

Mr. O Ceallaigh

As long as we keep out of the war.

General Mulcahy

Our neutrality extends to more than the war. The whole circuit is neutral.

Mr. O Ceallaigh

As long as we can keep out of the war. There are calamities like what happened in Dublin a week or so ago. These will cause us heavy burdens, too. There are hundreds of families rendered homeless. We are pledged to see that these people are compensated. They will not be compensated fully, even those who survive. But the burdens that we have to bear now in this abnormal situation and the burdens that we may have to bear, even recognising that our neutral position may be maintained, will be heavy, and taxation, therefore, to meet the situation must be heavy, and perhaps heavier still. If we are able to get away merely with taxation and keep our people fed, clothed and housed, and keep outside the zone of war we certainly, on the whole, will be escaping lightly.

Mr. McGilligan

Will the Minister tell us something about the change over of the betting tax? He promised to say something about the argument that was used.

Mr. O Ceallaigh

We will have that on Committee.

Mr. McGilligan

Could he even give us a hint of it?

Mr. P.J. Fogarty

Why was not the Deputy here when the Resolution was discussed?

Mr. McGilligan

I was here.

Question put and declared carried.

Committee Stage ordered for Wednesday, June 18th.

The Dáil adjourned at 7.45 p.m. until 3 p.m. on Wednesday, June 11th.