I move that the Bill do now pass.
Finance Bill, 1941—Fifth Stage.
I think we have now reached the stage where the Minister, having listened to the various arguments on all the sections of this Finance Bill, has definitely made up his mind on every subject, and I am quite sure there is little use in repeating the various arguments and expecting him to change his mind at this late hour. I thought the Minister was very wise when he introduced the Budget. I thought the Budget was cleverly done, and nicely presented. As I said at the time, it was a great relief to the country, because they were expecting shocks and did not get them. But I do not think the Minister has been so wise since. There has been one very bad feature of the whole performance—even though some people may have been delighted with it—and that was the imposition of taxes and the subsequent dropping of them. Since this House came into existence, I do not think we ever had so many new taxes introduced in the Budget or the Finance Bill and subsequently dropped or subsequently changed.
It is rather extraordinary that the one new tax which the Minister left on is the one that, to my mind, was the least necessary of all. What surprises me was his change of mind about the betting tax. When I heard, first of all, the Minister's suggestions in the Budget about increasing the betting tax, there was a suggestion that it would be put on the totalisator, and I could see very good reason for that, because the point about the totalisator is that it is a purely mechanical system of betting. It is mechanical in the sense that a pool of money goes in; the expenses are taken out of it on a percentage basis, and the winnings are paid on a percentage basis according to the various amounts bet on each horse. The thing is so purely mechanical that the imposition of a tax would not have affected the position very much. There is this great difference in the case of the totalisator—there is always an extra gamble, because you never know what is going to happen. If you place a bet with a bookmaker you know what the starting price is, but with the totalisator yon take your chance. I felt at the time that, as far as course betting was concerned, there was possibly some justification for increasing the tax, because I visualised that the man who could afford to bet£100 could afford to make some contribution to the State. I found, from speaking to various bookmakers that, when the last Government imposed a betting tax, the representations which were subsequently made to them convinced them absolutely that the hookmaking industry or the racing industry could not stand the tax on course betting, iinfl tliat was the reason for its withdrawal at the time.
The Minister comes along now and increases the tax on the offices. I think that is unwise. The Minister seems to expect to get about £25,000. It is a terribly troublesome tax from the point of view of the individual who has to pay it. It is a terribly troublesome tax from the point of view of the method by which it is worked out. The most extraordinary thing at all was that, when this section was being debated on the Committee Stage, quite a number of people in the House who opposed the section started off by saying that they had never been in a starting price office in their lives, and never had a shilling on a horse. Well, I have been in starting price offices at times in my life, and know something about them, and I think the real resenitment against the increased tax is due to the way in which it hits the small individual bookmaker, the man whose clients bet a shilling or two shillings. The system there is that a man goes in to the bookmaker with one shilling, and puts that shilling on one horse, in the hope that if that horse wins he will be able to have five other bets.
If they all win, he is a small millionaire for the time being. If the first horse loses, there is nothing to go down, and the bookmaker solemnly collects 1/-. So far as the administration of this tax is concerned, if the Minister goes into a bookmaker's office, puts 1/- on A, credit 1/- B, credit 1 /- C, and credit 1/- D, and A loses, the bookmaker must pay the tax on the 4/- the Minister did not give him, but which he hoped to collect from the bookmaker. The bookmaker never could win on the credit bet. If the first horse won, the punter always won. The very minute you impose a tax on credit bets, the bookmaker must pay a tax on something he never hoped to get. That is one of the greatest and strongest objections.
Again, when the bets are being made up, and they are accounting for the credit bets, assuming that a person went in and put 1/- on one horse, and instead of crediting another 1/- he put the whole of the winnings on another horse, that is where the poor bookmaker gets into trouble altogether. If the first horse wins and there is£2 credit, the bookmaker never saw the £2, but must pay the tax because it is a credit bet. The most the bookmaker can hope to get is 1/-, and if the first horse wins he does not get it, while, if the first horse loses, he has to pay on the 4/- or 5/-. That is the smaller bookmakers' real objection to it. I really think it was not worth while, and there is always a danger in an annoying sort of tax like that, which will bring in only a small amount of money, that it might easily lead to evasion.
On the Committee Stage of the Bill, Deputy Victory was terribly hard on the bookmakers and their clients. He said they were a breeding ground for gangsters. That is very unfair. Like everything else in this world, things like betting, pictures, dances and "the dogs" are blamed always for all the social and economic evils a country has, without any justification whatever Deputy Victory is one of those people who would solemnly say he never was in a starting price office in his life. If he was not, he does not know whether they are breeding grounds for gangsters or not; and if he has, he is keeping bad company; so I do not know what to make of his argument. He referred to the dislocation of employment, to people who will lose their jobs and who would have to go into the Construction Corps. One of the biggest bookmakers has 110 offices and employs only girls: if they lose their jobs, surely Deputy Victory is not suggesting that these hundreds of girls be sent to the Construction Corps.
As far as I know, bookmakers—and particularly the bigger bookmakers— are very good employers and pay good rates of wages. That is quite understandable, as they must obtain a type of person who is reliable and trustworthy and they must pay a salary to meet that position. I suggest to Deputy Victory that he go back to his own constituency and that the next day there is a big race he go down to the local booking office and take a look at the people there and then talk to some of the lads coming in with messages and find out from whom they are bringing the bets. He will find that the sanctimonious and respectable people round the town, who are the source of social life, are having their bets.
Deputy Victory had better be careful.
Deputy Victory is quite right.
Does Deputy Linehan know that the Government has to subsidise horse racing in order to keep this industry going and that it is especially the bigger offices that are closing the gates?
Deputy Hickey knows that it is the starting price men who pay the £10,000.
Would Deputy Hickey consider what any single man with one office pays in revenue? He is contributing as an individual far more heavily than most of those who pay income-tax.
Is it not those who lodge the bets who have to pay the tax?
That is another popular misconception. If Deputy Hickey goes in and puts 1/- on a horse and the horse wins, Deputy Hickey pays the tax.
Yes.
But if he puts 1/- on a horse and credits 5/-, that is an investment of 6/- for If-, and if the first horse loses the bookmaker pays a tax on 6/-.
No.
Although the Minister is saying "no," every bookmaker is telling me that they have to pay, if they are credit bets.
If the first 1/- wins, yes.
Well, if the first shilling wins, the tax is paid, then the point is exactly the same, anyhow, because it is the bookmaker's own money that is being taxed. Deputy Childers said that Deputy Victory was quite right. I regret very much that the type of bookmaker operating in that constituency does not seem to be quite up to the mark. Possibly the only remendy there is to get some people into the business who will have a higher standard.
Neither Deputy Victory nor I suggested that bookmakers are in any way undesirable. He suggested that they could bear this tax and that, having regard to the general amount of betting, this tax is entirely equitable.
I will read Deputy Victory's remark, as given in column 2540 of the Official Debates:—
"I believe these betting offices, as I know them, are breeding grounds for gangsters."
That is no reflection on the bookmakers.
If not, it is a reflection on the clients. If you accept the position that this is an evil, it should not be there at all, and it is still more evil for the Government to be collecting tax on a breeding ground for gangsters. I am sure Deputies Childers and Victory would not approve of that at all, and I am surprised, that they allow the Minister for Finance to touch money coming from such a source.
The Minister must do something about the tobacco tax—not that he is going to take it off—in the way of supplies of tobacco, if he can, through the Department of Supplies. I do not expect him to go round the world and bring in supplies of tobacco, but if he does not even out the flow of supplies he will lose a lot of the tax. Most people—particularly cigarette smokers —have one favourite brand, and 99 per cent of them always buy that brand, if they can get it. The increased price has not stopped many people smoking, but many will be stopped by the fact that they cannot get their own particular brand. I have heard a number of people say that The Minister and I or anybody else in the habit of smoking Sweet Afton, Gold Flake or any cigarette of that nature, knows that when you go into a shop and cannot get your own brand you are offered some other brand. With the perversity of human nature, the purchaser is never convinced that the brand offered is as good as the one he likes—though it may be a much better cigarette. There is always the man who says that he can always identify a particular brand of tobacco with his eyes shut. As a smoker myself, I do not like the idea of having to change a brand every second morning.
The Minister must wake up and see that there is a more even flow of tobacco supplies if he is to collect the tax. Many people who would not cut out smoking owing to the increased price definitely will do so if they have to be chopping and changing brands. It is very irritating to them to have to do that, and they say to the tobacconist: "Is that all you have?" It is just a failing of human nature for a smoker to think his particular brand is better than any other and nobody will convince him that he is wrong.
The real trouble about the Finance Bill is that we have very abnormal taxation and, so far as one can see, right from the Budget statement down to the present, we do not seem to be having anything like abnormal expenditure. Admittedly, of course, the Defence Estimate accounts for quite a large proportion of this bill of £40,000,000, but I think the people expected, when facing this bill for £40,000,000, that something would have been done in an abnormal period like this to justify all this increased taxation. I regret very much that, simultaneously with the Budget and the Finance Bill, there was not something like a constructive policy carried out by the Government in the situation that is facing us.
Everyone realises that, with very little effort on the Government's part and only with the goodwill of a number of people, certain schemes have turned out to be a magnificent succes, and one of these was a scheme which the Government passed over to somebody else, namely, the turf scheme. What the Government did was to send for the county surveyors and told them to go and do the work, and they did it magnificently. That was a big job which was tackled very well. It shows what resources, particularly in manpower, we have in the country, if the people had any work to do. People went to the bogs this year who never saw a bog before. Even though these people may not be the most expert turf cutters, the scheme has had one great benefit in the rural areas, and that is that you have a healthier bunch of men than has been seen in the memory of any of us. You would think they had been on foreign service in the Sahara or some place like that they are so bronzed and fit looking.
When we are facing a period when we do not know what is likely to happen, I regret that the minor changes made in taxation, such as in the betting tax, may lead to a certain amount of unemployment. I think it is a great pity that, coincident with this request for huge sums in taxation, nothing constructive has been put forward by the Government by way of a policy to deal with unemployment.
I am convinced that when we are facing a situation when nobody can say with certainty what may happen, and when the country sees how very easily the turf scheme was got together and how quickly it worked under great difficulties such as shortage of transport, etc., the country would be willing and anxious that any extra moneys paid by way of taxation should go into a huge scheme for the relief of unemployment.
General policy, financial and otherwise, may be discussed in the debate on the Budget and on the Second Stage of the Finance Bill. On the Fifth Stage, however, discussion is confined to the actual Bill. Alternative social schemes may not be advocated.
I will not pursue that any further. There is just one other point I should like to make about income-tax. The real trouble about that, to my mind, is that it hits people in this country in an entirely different way from those in any other country. The trouble here is that 90 per cent of the income-tax payers are people who are not earning very much at all, people with a small country business who are not making great profits. The only sensible way to my mind of dealing with income-tax is not to impose it on incomes under£300 a year. I think that the imposition of the tax, very often on people with salaries or profits up to that amount who, owing to their occupation have to keep up a fairly high standard of living, particularly in cities, and who have to attempt to educate their families possibly in a way that is very often beyond their means, is far heavier on these individuals than a tax of 15/- in the £ would be on other people who have completely unearned incomes. There are a number of countries in the world, including I think the United States, where the exemption figure is higher than it is here, although in these countries the average rate of wages is much higher than in this country.
I should like the Minister some time or other, if he gets a chance, to go through the income-tax returns and find out what amount of money is collected from income-tax payers whose total income is less than 300 a year. It is possible that it may be a very high figure and that it might not be possible for the Minister to do what I suggest; it is possible, on the other hand, that the figure may not be so high. At any rate, if incomes under 300 were exempted, we would have a lot of people in a much happier frame of mind in regard to income-tax. I wish the Minister with his officials would go down the country some time, go into a country shop and look at the wholesale invoices, see the prices paid by the people who come into the shop and then come back and look at that man's income-tax return and see what profit his assessment was based upon.
The income-tax authorities seem to have an idea that anyone lucky enough to have a small country shop makes a net profit of about 20 per cent. on everything he sells. Anybody who has ever dealt with the income-tax authorities in connection with the income-tax of a small shopkeeper who it, not in a position to have his books properly audited or cannot afford to have it done, knows how extraordinarily hard it is to convince the income-tax authorities, for instance, that if the man buys a sack of meal wholesale at 18/6 he is very lucky he can sell it at 19/6, or roughly about 5 per cent. profit. In addition to that, he would be still more lucky if he got the 19/6 in cash.
The real trouble about income-tax is not so much the amount of the tax, as the fact that it is imposed on people with small incomes who can badly afford to pay it, and also this terrible method of collection by which the income-tax authorities profess to know more about people's business than the people themselves, I suggest to the Minister that the sooner the income-tax authorities get the idea out of their head that small shopkeepers make a profit of 20 per cent. on anything the better. I am sure that If some of the income-tax people who are dealing with these cases really believed that small country shopkeepers were making 20 per cent. profit on their turnover, although they may have good salaries themselves they would retire in the morning and start a country shop and have a much easier life.
I regret that the Minister gave way to the appeals made by the chambers of commerce not to tax the excess profits that, in his Budget speech, he told us were being taxed. He told us then that, from information he got from the Revenue Commissioners and the Prices Commission, he was satisfied that certain people were making excess profits, which he would take from them. Evidently, when the chambers of commerce got vocal, he succumbed to their appeal and withdrew that.
I have not withdrawn it.
Not entirely; you have eased it off.
The retrospective portion.
Yes. Deputy Linehan referred to the betting tax. I do not know anything about betting. I did not hear what Deputy Victory said about the effects of betting in Longford, but personally I do not at all disagree with what Deputy Victory is reported to have said, that the betting offices have a very bad influence on the young men and young women of the country.
I have seen those boys and girls going into betting shops to back horses and I think that has a most demoralising effect. I had some experience of how betting seems to have got into the minds of the people. I was discussing wage increases a short time ago for people engaged in pawnbroking establishments and I was surprised when I was told that the places had suffered very heavily within the past 12 or 18 months because of the falling off in English racing. I could not understand the relationship between English racing and the Irish pawnbroking business and I was informed that a considerable amount of the business carried on in the pawnshops could be attributed to the poor people pawning articles of necessity, in many instances, in order to get money to bet on horses. I think that the biggest mistake we ever made was to legalise betting in this country. That is a personal view and I have more reasons than one to regret that betting was legalised here. When it comes to the point that the pawnshops Buffer as a result of the falling off in English racing, then I think that Deputy Victory was justified in his remarks.
With regard to income-tax, I think that incomes of a certain figure should not be liable to tax. A single man who keeps sisters, and perhaps a mother, is liable to income-tax if he has£3 5s. or £4 a week. A man with£800, £l,000 or perhaps £l,500 a year—and we have some of them in this country—is allowed £60 free of income-tax for each child. I can imagine just as worthy a citizen trying to rear a family for the State, a man who has been unemployed for a considerable time and who has six or seven children.
Is the Deputy married?
I am.
Have you children?
I have, four children, and I know what it is to keep them in some kind of frugal comfort.
Good.
That is the reason I can appreciate the difficulties of those who are trying to rear a family and who are not being supported by the State. You have one man with a huge salary and he gets an allowance of £60 a year for each of his children, while the unemployed man will get an allowance of only 1/- a week for his child. In circumstances like that, where is the social outlook of this Government?
The same allowance is made to every income-tax payer.
It takes £60 a year to feed and educate the child of the rich man. Why should the man with six or seven children, the man who has no employment, be allowed only 58/- a year? And that allowance will be made only until the child is 14 years and between that and 18 years the State will not allow him anything to keep that boy or girl. A girl will not get anything whatever from the time she reaches 14 years until she has proved to the State that she has 204 national health stamps to her credit. The whole of our social legislation——
Social policy and consequent legislation may not be discussed now. The Deputy must confine himself to the Bill.
There should be a certain income that will not be liable to bear income-tax. Surely an income of £3 5s. or £3 10s. a week is small enough to keep a man from being taxed. I want to stress the point about allowing a man with £1,200 a year £60 for every child, while, on the other hand, we have a man who is not in employment allowed only 52/-a year for his child. Let us assume there are 100 men in a factory. There are two rich, eight comfortable, 60 poor and 30 starving. The leisured ten owning more than the working 90—that is how wealth is distributed here. You have the leisured ten owning the Press of the country telling us ceaselessly that any interference with their position is going to be a very serious matter. It is about time that we recast the whole of our outlook in regard to incomes, and we should lift the poorer sections up to a higher plane.
I observe with satisfaction that Deputy Hickey's eyes have been opened. I trust I shall be here to observe the flower of my planting wax and grow in his future speeches. This comparison between the income-tax payer and the man in receipt of 32/- a, week is most salutary and the more frequently it is made the sooner we may reasonably expect to have an obvious anomaly removed. But it is expedient to emphasise that although an anomaly exists, that anomaly could not be cured by the abolition of allowances at present made under the income-tax code to income-tax payers in respect of their children. The exigencies of Parliamentary procedure sometimes require one to present an argument in a form that is not readily understood by the public. I think Deputy Hickey will agree with me that neither he nor I am concerned to abolish the family allowance under the income-tax code; all we are concerned to ensure is that the family allowance system will be equitably administered for every section of the community.
I stated that eight years ago.
We cannot state it too often.
When in order.
The Deputy is changing his hand.
The Minister knows darned well that I am not changing my hand.
I will quote the Deputy's words.
I have already pointed out that it is not what somebody says but what somebody means that matters. The Minister knows as well as I do that in certain circumstances, under the rules of order here, it is necessary to present an argument in certain way in order to bring it within the terms of relevance. Nobody here wants to abolish the system of making allowances for an income-tax payer's family, but there are a great many who consider that it is not equitable to continue that system unless the family allowance system is made available to every section of the community. I want to reiterate that, but I apprehend that a full elaboration of the family allowance scheme is not relevant to the Fifth Stage of the Finance Bill.
The Deputy's apprehension is well founded.
For that reason I do not propose to pursue the matter in detail to-day, but it is valuable that, it should be mentioned, as it will be on divers other occasions in the future, until it is finally established in the social legislation code in this country.
I want to deal with three points arising out of this Finance Bill. The supply services of this country are costing a greater sum of money this year than ever before in the history of Ireland since the country was discovered by the Tuatha de Danaans. That is an interesting fact. That is the, fact. This community proposes to spend through the Government a greater sum of money than has ever been spent before by anybody since this island emerged from the Atlantic Ocean, when a prehistoric upheaval threw it up. This is an occasion on which we ought to collect our thoughts. I am going to suggest to the House that the activities of the Government for the last six or nine months make it abundantly clear that no Minister of the Executive has any clear idea of what his colleagues are doing or intend to do.
The only person in the Executive who knows what he wants, and who proceeds to go after it, whatever the consequences, is the Taoiseach, and the Taoiseach is a man who does not give a damn about money. His idea is that if he wants something he goes out after it and is not interested at all in what it costs. He is just bored if anyone says that it will involve the State in an appalling financial commitment. I submit to the House that to go on in that way is just daft. The worst possible thing we could do at the present moment is to drift. The best thing we could do would be to formulate a sound economic policy and a sound financial policy for the country. I have no hope that a Fianna Fáil Government is capable of doing that, none whatever.
They have not the will.
I do not think they have the capacity. They are all sober, respectable men, but I do not think they have the capacity. I have been telling the country that, but it did not believe it.
The people did not believe it.
There are 70 Yes-men sitting behind seven Ministers, but as long as the country gives them a majority they have the right to govern. No Government in Europe has a better title, because no Government in Europe was elected at a freer election by a better informed people. My colleagues and I informed the people of their belief of the incapacity of a Fianna Fáil Government. We left the people in no doubt and with their eyes open they chose them. We have to face that fact. The only trouble is that if they sink we have to sink with them. I do not want to sink. The worst thing we can do is to drift. The best thing we can do is to get a sound financial policy and pursue it deliberately. If we cannot have a sound financial policy the second best thing is to get some recognisable policy, some yard-stick by which proposed Government activities will be measured, some yard-stick to which schemes will be subjected when they come up for examination. I apprehend at the present time that one Minister starts one glorious scheme and another Minister starts another, and the Minister for Finance puts up a kind of running fight which always ends in the Minister for Finance being driven into the ditch until the Panzer division passes over whereupon he gets up, shakes himself, dashes off to another ditch, and presently another Panzer division comes along and the Minister again gets up and shakes himself. I think he is doing his beat, but it is having no effect.
He is not master in his own house.
He is not master. He is just throwing in his hand. I remember in the old days in this country the complaint always was that the Minister for Finance stopped everything and that we could never get anything done because the Minister for Finance refused to provide the money. That is a complaint naturally with which most of us had considerable sympathy. There is only one thing worse than that situation, and that is if the Minister for Finance is in a state of permanent panic, surrendering to every crazy demand made upon him, and telling the Dáil that so much could be raised by taxation, and that whatever the deficit, it would have to be borrowed. It is very easy to borrow so long as the money is there, but what a great many Deputies forget, and what all the people forget, is that borrowing does not only postpone payment to posterity, it does something else: it furnishes us with an annual burden of interest which has to be met and which is coming to constitute a very considerable proportion of our annual expenditure.
You cannot borrow yourself into prosperity.
That is as true a remark as was ever uttered by Deputy Hickey. I wish he would write it on a little piece of card and hang it over his bed, and every night when he says his prayers look up at it and read it, and when he gets up in the morning he should read it first thing.
I said that long before to-day.
I suggest that the next time he is Lord Mayor of Cork which, I hope, will be soon, be will issue a Christmas card and inscribe those blessed words on it: "Yon cannot borrow your way into prosperity. Yours very sincerely, the Lord Mayor of Cork."
I could tell the Deputy a story about that.
If the lord mayor will undertake to issue a card with that inscription I will go fifty-fifty to the limit of whatever number of cards is sent out. In a half-dozen words Deputy Hickey has stated what it is most important that this country should learn. I want to be clear on this. We are living in times when many of the arguments for orthodox finance have lost their validity. The old shell-backs in this country are still persuading themselves that old arguments, with which they felt able to convince themselves five, ten or 20 years ago, are still good enough, when they are not. It is very easy to do that, but it is a great disservice to this country that these people are too lazy to sit down to consider the situation in the light of the new revolutionary events which have taken place, and to work out a valid system which might be prudently pursued in the extraordinary circumstances in which we find ourselves. I am prepared to say that it is not possible to take a long view at the present time. Certainly I can find no economist either in literature or in the lecture hall to give me any intelligent forecast of the long-term view of the world finance at the present time. I do not believe there is any man in the world who has any coherent long-term view related to the revolutionary changes going on, but I that should not reconcile us to a decision to throw the oars and everything else overboard, if we are heading for the rocks.
It will be too bad if Caitlin Ní hUallafháin sinks. If we go on in this way CaitHn Ní hUallacháin will sink, and we will sink with her. Our job is to use the rudder and to employ such oars as we have to direct the ship of State as best we can now. That is all I ask, that the Minister for Finance should give us some evidence that he has assessed the immediate dangers and is deliberately pursuing a policy on which he has resolved, after a careful inquiry, and which to the beat of his considered judgment is the safest policy in the circumstances in which we find ourselves. I honestly do not believe he is doing that. I think he is allowing the situation to develop and trusting to God that something will turn up. I tell the House that I believe the majority of his colleagues are in the same position. They have simply thrown up their hands and said: "You cannot plan for the present situation, and we will have to wait to see what turns up." I impress on the Minister that that course is utterly fatal.
For good or ill, the country has chosen them, the lot over there, to run the country, and they have a perfect right, without seeking anybody's assistance, to determine what Government policy is going to be, but they know that if they want help, by way of consultation or discussion, all they have got to do is to ask for it. They know that all elements in this House are prepared to give them whatever benefit there is in such consultation and advice, leaving to them the undisputed right of determining what the policy is going to be in the light of that advice and counsel which they have sought. Therefore, it is their duty, with or without that counsel or advice, to map out a line of policy which shall be ascertainable by us all, and by which all proposals for public expenditure will be measured and controlled so that we may feel, for good or ill, we are going somewhere, and going there intelligently, and not as irresponsiblcs trusting to God that somebody else will do the job that we were sent to this House to do, and that they were given the powers of Govem'ment to undertake themselves.
Now, I suppose somebody has to say unpopular things. I am going to say something which I know will make me unpopular. I believe that this country should resist aggression whenever it comes. I believe the country should be prepared to pawn its shirt to preserve the independence of the State if anyone sought to abrogate that independence. But the clear resolution, calmly taken, to make any financial sacrifices that we are called upon to make in order to defend our independence to the limit of our capacity, should not make us all act like schoolboys, and, although we are genuinely and honestly prepared to pawn our shirts if by doing so our sovereignty can be preserved and our independence maintained, we should not plunge into expenditure just for the fun of having it to say that we spent the money. It is not necessarily true that defence plans upon which £10,000,000 have been spent are better than defence plans on which £6,000,000 have been spent. It is true that if we had 1,000,000 men in arms and equipped, as the German Army is equipped, our defences would be better than we can hope to make them with 100,000 men, but we have got to make up our minds to the fact——
As I said at the opening of this debate, discussion is limited to the contents of this Finance Bill of which the principles were approved when it was given a Second Beading. An appalling prospect would be opened if every Department of State were to be discussed, as Deputy Dillon is now discussing Defence. Other Deputies might desire to discuss other Departments. All such matters might be debated on the appropriate Estimates.
Deputy Dillon is a member of the Defence Conference and could, I suggest, express his views more usefully there.
The Chair is concerned not with the substance of any Deputy's speech but whether it is relevant. General policy is not in order at this stage.
I am not talking about general policy at all. I want to ensure that there will be money in the Exchequer to pay for the essential services of this country, the prime essential service being that of defending the sovereignty of our territory. I want to ensure that there will be money in the Treasury for that purpose.
On that argument it must be obvious to the Deputy himself that any member of the House might get up and discuss the administration of any other department of State with equal relevance or irrelevance. The principles of the Bill were approved on Second Reading, and, therefore, the debate is confined to what is in the Bill and not to the administration of any department.
I do not want to challenge the rules of order at all. This Finance Bill provides for the raising of certain sums of money by taxation, and for the raising of an indeterminate additional sum by borrowing. It did appear to me perfectly relevant to say that there were certain branches of the service which could be improved ad infinitum if you could limitlessly borrow for them and exchange your borrowing for the wherewithal to equip them, but there are other branches of the service which it is much better to keep within the limits of our available resources; to make up our minds that they must be kept within those limits, and to set our hands to the task of making them as effective and efficient within those limits as we possibly can, and not be yearning for an indefinite expansion which has to be dependent on the raising of resources that we know we cannot get, and that we never will be able to get. I believe that the Minister for Finance knows that as well as I do. I differ from Deputy Hickey. I think it is necessary to say that now. I am saying it, and anybody that does not like it can lump it, as far as I care
There are other people besides the Deputy who know what our military position is?
I am not talking about our military position. I am talking about our financial position. My sole concern is to ensure that this year and next year and for as many years as there is an emergency in the world, there will be functioning in this country the most highly efficient and effective Army that the people are in a position to put in the field for the protection of our sovereignty and independence against all comers. I am suggesting that the way to do that——
It has already been intimated to the Deputy that he may not discuss defence problems now.
I will depart from it now. The last thing that I want to touch upon is this: yesterday, in the discussion on the Price Control Order, I pointed out that, if we mean business, our prime concern must be to ensure that next winter no one in the country goes hungry. I will not proceed further on that. All I ask is that on this occasion, or on some occasion in the early future, the Minister for Finance will indicate to the Government and the House some co-ordinated policy on that matter. In the social sphere, we are appropriating £14,000,000 sterling upon expenditure and, therefore, I think we ought to have an assurance, either at the conclusion of this debate or on some early future occasion, under the three heads which I have set before the House this morning.
Deputy Dillon has been provocative in his lecture to this side of the House about finance. I fear that, if we were to follow the argument about the orthodoxy of our finance, we might come a cropper with the Chair. One thing that strikes me in the situation in which we find ourselves is that, whatever unit of currency we have here and to whatever other unit that is related—let it be the sterling or the Russian rouble or the German mark—the output per unit must be as great as, if not greater than, that which the unit yields in the country of origin, if we are to survive this crisis. Conditions being the same, a house here must cost not more than and, at most, the same as a house in Britain. If wages are the same, if the cost of materials and other things are the same, a house which costs£300 in Britain must not cost£375 here. I think that that is at the bottom of our finance. If it costs£1,000 in Britain to construct a road, it must not cost £1,200 to construct a similar road here. If it costs£100 to improve a farm in Britain, it must not cost£120 to effect a similar improvement here. We must have a labour output as good as that of the country with whose unit of currency we are tied up. Otherwise, we are heading for bankruptcy.
The Deputy might now come away from the realm of high finance to the proposals embodied in this Bill.
I have been inspired by Deputy Dillon's statement from the other side about new orders.
It is not incumbent on the Deputy to follow.
I am just speaking of the present order. If the Minister for Finance provides certain sums under the Finance Bill for housing, road making, turf saving and the giving of employment, our success, and the success of the nation, will depend on the output per individual for the money given. If we do not give a return equal to that given in other countries, we are heading for bankruptcy and I contend that we do not give that return.
Why tie yourself up with any other country?
Even if you have a unit of currency of your own, taking all the factors into account—the cost of living and everything else—the output of the Irish worker must be, at least, equal to that of the English worker or this country will not survive.
Why not put the idle fellows to work if we want more goods?
If you have the same system of laissez faire and ca-canny, even if you put all the idle fellows to work, you are still heading for bankruptcy. I think that the Labour Party should make up their mind to give co-operation.
We gave co-operation long ago.
The cost of the various items I have indicated is far less in other countries than it is here. Until we get them on the same basis, and until we get the same output per unit of currency as there is in respect of the other unit of currency, there will be no progress here.
We can remain as we are.
I shall try to be absolutely orthodox in my remarks, so far as the Chair is concerned. This is the Fifth Stage of the Bill, and I rise to ask the Minister whether he could, in the course of his reply, give to the House a statement as to what percentage of the income of persons receiving sums over£l,500 is taken by the State. The statement was made by members of the Labour Party that there is a small number of people with enormous incomes which somehow escape the net of taxation. I consulted a person who has an income of£25,000 a year, and who lives on an estate of £3,000 acres, in the West of Ireland. He showed me his accounts, and he paid, out of that sum, a total of£13,000 in respect of taxes, rates, and insurance against death duties. In addition, he paid£6,000 a year in wages, which left him a net income of 6,000, out of £25,000. It is, I think, very unfair that the people of this country should be given the impression that a small number of people are allowed to escape taxation so heavy as that. I should like the Minister, in his reply, to inform the House how many people have incomes assessable over£2,000 a year out of the total population, so as to give the people of the country a fair idea of the number of these plutocrats who actually exist—these people who are supposed to be grinding the faces of the poor. As far as I know, this is not a country in which there is an excess of wealth. Whatever excess of wealths there was has been slowly diminishing during the past 20 years.
In the course of the debate on the Trade Union Bill and the standstill. order, the suggestion was made to the public that the Minister for Finance, in limiting the retrospective portion of the corporation profits tax and excess profits tax, has, in some way, entered into a conspiracy with the capitalist elements of the population—that the Minister, in some way or other, considers that he is going to assist the Fianna Fáil Party and the country in the future by entering into a secret conspiracy whereby the rich will remain in rich and the poor will remain poor. The whole impression given by the Labour Party, in that connection, is that, for some reason or other, the Government from now on were to be in, a sort of secret society or conspiracy to assist the richer elements of the population at the expense of the poorer elements. So far as one can see, the present level of taxation in respect of corporation profits and excess profits will remove such surpluses as may arise from the war to a sufficient degree to justify the statement that the richer elements of the population are paying their share. At the same time, we have to recognise that the financial reserves accumulated in past years of prosperity remain with the owners of capital in this country and that, if you go beyond a certain point in taxation, you diminish the pool available for giving employment in a period of declining trade and declining production.
I myself, think that the people of this country have not been made sufficiently aware of the difficulties in store for us. The Minister for Finance is gambling, inevitably, upon a continuance of our normal economic life. He is assuming that life will remain entirely normal, though there will be certain reductions in trade and income. The fact remains, however, that the whole system of finance embodied in this Finance Bill and the whole revenue to be derived from taxation must be the result of successful production—particularly production for the purpose of our external trade. If as a result of this war continuing, our external trade slowly collapses, and if the huge volume of external income which comes into this country slowly diminishes, we shall have to revise entirely our ways of living. No matter what expedients we may evolve we may have to face a very serious situation, & situation in which money will never have the value it previously had.
I think it should be made clear to the people that this Budget is an improvisation based upon the knowledge of the situation we have at the moment and that if the war continues the situation may become far more serious. Deputy Dillon spoke about the necessity of planning an economic policy. I, too, should like to reiterate what I said on the Second Reading of the Bill, that we might consider planning for the future, remembering that whatever the result of the war may be, much of the under-pinning of our economic structure will be removed after the war and that many of the artificial aids to prosperity which we enjoyed before the war will no longer be available to us. I think that it should be made known to the people that unless a miracle happens conditions are not likely to improve in this country, no matter what the result of the war may be.
The ruling of the Ceann Comhairle compels me to cut down very much the remarks which I wished to make on the Budget. There is a whole torrent of words of wisdom that l should like to pour out but, unfortunately, the ruling of the Chair, prior to the ruling of the Leas-Cheann Comhairle, which I must obey, precludes me from saying all that I had wished to say. I am, however, of the opinion that no Budget could possibly deserve less the eulogy which Deputy Childers has given to it because surely never has there been a Budget in which there was less novelty of ideas. Never could it be more truly said that the Budget was one which could be framed in a quarter of an hour. What does it contain? The first idea was: "We shall increase income tax." It does not take an awful lot of thought to suggest an increase in income tax. That is the ordinary stand-by when increased revenue is required. The next idea was to increase excess profits, another commonplace. Then you come to the necessities of life to see how a tax on them can be utilised as a source of revenue. I would prefer to say that it did not exhaust the abilities of the Minister for Finance or the abilities of the officials of his Department to frame a Budget of this nature. I would venture to say that any man in the street could have framed this Budget and, in consequence, I do not see why Deputy Childers should give it the eulogy that be has given it.
It may be that a make-shift Budget is the right thing in the circumstances in which we find ourselves. It may be that to mark time is the proper thing when you do not know the direction in which you should advance. It may be that the Government does not know in what direction it should advance and that, therefore, it has decided to mark time. That may be a perfectly sound or unsound policy. This may be a time in our national history in which it is wise to mark time or it may be a period in our national history when it is destructive to mark time. These are matters into which I cannot go in consequence of the ruling of the Chair, but to say that it is an imaginative Budget or that its contents merit a eulogy is somewhat extravagant. It seems to me that only kindness to the Minister or a sense of loyalty to his Party could have encouraged Deputy Childers in a eulogy which was far more generous than the Budget deserves.
On the Bill itself, I am very much tied down, but I would point out even at this late stage—I am certain I am in order here—that Budgets have reactions and this Budget is likely to have serious reactions. Because it increases taxation, it must have reactions in every household in the country. It must have its reactions in well-to-do households because, in spite of what the Labour Party may say, it is no small thing if a man, suddenly called upon to pay an income-tax of 7/6 in the £ has either to draw upon his capital or, when his capital is exhausted, has to cut down his standard of living. It is no small sacrifice if he has been living in a large house to have to go into a small house, or if he has been used to keeping his children in expensive schools to be forced to send them to a cheaper school. Possibly a man who has intended to send his son to a university may have to say to that son: "I am not able to afford you a university education now," a decision which may cut a father very much to the heart.
It is a Budget which hits every class. When you come down to the working class, of course, it hits the working class harder still, but they have not a monopoly of the blows. No Budget, for instance, can hit me, circumstanced as I am, to the point of hunger, for the simple reason that I have got my own potatoes, my own oats and my own hens to lay eggs.
I have got these necessaries of life, and no Budget will drive me to hunger as long as it leaves me a few animals. It may hit the working classes of the towns harder, but they have not got a complete monopoly of the suffering, so I do not think it wise, or that it makes for peace in the country, for Deputy Hickey to tell poor people who are bearing these sacrifices that other people are bearing nothing at all.
I have not said that.
Your words seemed to me to convey that.
I said that taxation should be more equitably distributed.
There is one specific tax which I do not think brings in an enormous amount of money, and which, I think, the Minister might consider reducing. That is the tax on plug tobacco. I do not know whether the Minister is a smoker, but I am, and I know that it is very difficult indeed to give up smoking. You say give it up but you cannot cut it down, except to a very small extent. Take the case of the agricultural labourer in my own constituency who is getting 30/- a week. If he is a heavy smoker he will smoke six ounces a week. If he is a medium smoker, as most of them would be, he would smoke four ounces a week. Some of them may be able to do with two ounces, half a quarter as it is called, in a week. Take the average man who smokes four ounces a week. He has to pay ? for his ounce of tobacco. That means that he has to pay 6/- a week for tobacco, and 6/- makes a very big hole in a week's wages of 30/-
It may be said: "Let him give it up", but it is almost impossible for some people to give it up, and if the Minister could see his way to granting a modification of the taxation on plug tobacco, I do not think he would lose a terrific amount of revenue, and, even if he did lose revenue, what he lost in revenue he would get in content. The main thing in regard to the country— and, as far as he went. Deputy Kennedy was right in this regard—is to try to get the best output possible, within reason, from every working person. If a man is accustomed to smoking, and does not get his smoke, his output will be very much diminished. He becomes annoyed and irritable, and will not do as good work as he would if he had his smoke. The actual out put in work may be very much reduced by the effect of the man's feeling of aggravation that he has not got the money to pay for the particular dope, if you like, to which he has trained himself, and which he cannot do without.
Mr. Byrne
This possibly may be the last chance we shall have to raise the question before the House adjourns, and I should be glad to hear if the Minister is making any special provision to stem the rising tide of unemployment, and whether he is making any provision to make grants available to local authorities in order to deal with applications which may come to him from local authorities in Dublin and through the country.
The Deputy is altogether out of order. This Bill deals with the imposition of taxation, and not expenditure.
Mr. Byrne
But the Minister has to raise the money.
And the Deputy can deal with that point.
Mr. Byrne
I should like the Minister to keep it in mind, because he will have to settle that problem at a very early date.
The matter cannot be raised on this stage of the Bill.
It is rather late to make an appeal to the Minister to change any of the provisions of this Bill——
The Deputy cannot suggest any amendments to the Bill at this stage. On the Fifth Stage, a Deputy can deal only with what is in the Bill.
——but because it is rather late I want to express my condemnation of this Bill.
May I submit this to the Chair: if one cannot propose that anything should be put into the Bill or argue that anything should be taken out, what the devil can one argue? If we cannot argue about anything that is not in the Bill, or anything that is in the Bill, we can throw our hats at it.
Deputies can argue about what is in the Bill.
We will be allowed, at any rate, to express the opinion which most people hold of this Bill, the opinion that it was hurriedly, carelessly and inefficiently considered. We have the position in which a considerable number of the provisions of the Budget have had to be changed, involving a reduction in the amount of revenue raised and a consequent increase of, I think, over£600,000 in the amount which it is proposed to borrow. Surely the fact that such drastic changes have had to be made is, in itself, prima facie evidence that the Minister did not give this matter the consideration which its seriousness demanded. I consider, firstly, that the amount of revenue which it is intended to raise under this Bill is excessive. Having regard to the fact that the Minister has considered it desirable or necessary to borrow nearly£5,000,000, I do not think that another£1,000,000 would have made much difference and, therefore, I do not think the Minister was wise to repeat the burden of taxation in this year at all. He would have been much wiser if, having decided to raise a considerable amount of money by borrowing, thus adding to our national debt, he carefully considered the entire financial future of the country and how we are going to make ends meet financially.
There is urgent need for a drastic and sweeping improvement in our entire system of expenditure. This was clearly proved by the fact that we had to make special provision to get rid of a number of inefficient civil servants in one Department. If there were the efficiency which we are told exists in all Government Departments, that special measure would not have been required, and if inefficiency existed to that extent in one Department, are not the taxpayers and citizens entitled to feel that a similar amount of inefficiency exists in other Departments, and that there is a considerable waste of public money? I think people are entitled to demand that the man who holds the purse for the Government will insist upon that waste of public money being eliminated, and, by so doing, and by making arrangements for a reduction of future expenditure, be enabled to carry us over this year without increasing taxation. Since tile Minister has decided to increase taxation, we are at least entitled to expect that in making provision for increased taxes, he would be very careful not to select taxes which would press unduly on those who are finding it most difficult to live at the moment.
I am not one of those who suggest that the burden of income-tax upon our wealthier sections should be increased. I know that income-tax has repercussions upon all sections of the community, and that it is a dangerous thing to endeavour to obtain too large an amount of money by direction taxation, that it is a dangerous thing to cut too deeply into the income of any individual citizen or firm, because, by so doing, the incentive to develop industry and enterprise is killed. I do not for a moment suggest that, instead of imposing taxation on tobacco, the Minister should have increased income-tax. If he we're to consider any alternative to the increased tax on tobacco, he should have considered the spreading of the burden of taxation equitably over all luxuries, almost without exception. That would have required a considerable amount more of mental exertion on the part of the Minister and his officials, but it would have been more just and equitable to the entire community.
What luxuries has the Deputy in mind?
I am not one of those who hold that the Minister should single out a particular item and concentrate upon it for taxation purposes. That has been the custom in the past, and it was the custom under the British Administration also to pick out one or two commodities in common use and pile taxation on them.
What is not taxed in this country? Everything is taxed here, so far as I know.
I am making the point that it is unfair to pick out one or two items. Now, I do not think there is any item or commodity in this country which is taxed to the same extent as the working man's tobacco. I do not think you can name any luxury on, which such a burden has been imposed, with the possible exception, perhaps, of spirits or some other things like that which could be very easily done without. Just consider the enormous amount of money which the people of this country spend upon such articles as wearing apparel.
Also heavily taxed.
I admit they are heavily taxed, but not taxed to the same extent as tobacco.
Well, public decency prohibits that they should be. We cannot all go around bare naked.
Deputy Dillon has raised a question which I think can be answered very easily. Would public decency be offended in any way if the taxation on ladies' hats, for example, were increased!
They would not wear any.
I do not think that the amount of money which is spent on wearing apparel bears very much relationship to the quantity worn.
The Deputy cannot advocate new taxation at this stage of the Bill.
I am only pointing out, Sir, that the Minister has been unfair and unjust in concentrating upon one little luxury which the workingman enjoys, while passing lightly over an entire series of luxuries which the ordinary workingman and his wife and family are not in the habit of using.
Surely to God, his wife is entitled to wear a hat?
Deputy Dillon, of course, will insist on interrupting.
Deputy Cogan must be allowed to proceed.
If, however, the burden of taxation were spread over all purchased goods on a valuation basis, I think that the contribution which the poorer sections of the people would be called upon to bear would be very slight in comparison with what the wealthier sections would be called upon to bear, particularly if we exempt from such a tax absolutely essential articles of wearing apparel, such as strong boots—articles which cannot, under any circumstances, be done without. Now, I know that in Great Britain they have introduced such a system of taxation. It may be that it has not been as profitable from the revenue point of view as those who advocated it expected, but certainly it is more equitable, from the general taxpayers' standpoint, and I am suggesting therefore that luxuries which have been passed over should have been attended to and that tobacco should have been exempt from increased taxation. God knows, it was increased last year, and tobacco is dear enough at present. It must be remembered that the wages of the average workingman who works for a farmer would be about l7/- or 18/- a week, plus his board and lodging, or his board at any rate. Out of that he has to pay 5/- or 6/- for tobacco, and you can imagine what amount of mathematical dexterity is required to balance his and his family's budget upon what is left.
True for you. He must be like our Minister for Finance.
Unlike our Minister for Finance, he cannot, when he finds that he has made a mistake or that it is impossible to balance his budget, make an excursion into the future and borrow. The unfortunate workingman —perhaps fortunately for himself—has not the power to borrow to any extent. He and his family have got to live out of the few miserable shillings which he earns, and for that reason it is unjust, criminally unjust, for the Minister to have added to the direct burden which the workingman already had to bear in taxation on his tobacco. I do not think that tax could be justified on any standard.
We know that it is our manual workers who are probably the heaviest smokers of pipe tobacco in this country. It is quite natural to expect that they would be. Men who are engaged in strenuous work, men who do not as a rule get proper meals, are naturally inclined to turn to tobacco for comfort, and for that reason I suggest that it is most unfair for the Minister to have concentrated upon that commodity. He should at least have given the pipe smoker some concession, and even if it were necessary to continue the increased tax upon cigarettes, at any rate the pipe smoker, should have been exempt.
The Minister may be aware that at the present time some of the best material that we have in this country is being exported. I refer, of course, to our best manual workers. They are leaving this country in hundreds, and actually in thousands, at the moment, tor Britain. Everybody knows that in all our provincial towns offices have been opened where men are being recruited for work in Britain, and they are leaving because wages are so low-here, and prices so high that they cannot live. This tax on tobacco further reduces their wages, and the Minister should, realise what loss this country is suffering through the export of these men. Last night the Minister for Industry and Commerce commented upon the fact that there are thousands of unemployed in this country who are unfitted for manual work. Of course, that is true, because men who have been engaged in clerical or similar occupations are not fitted for manual work, and manual work is the kind of work that is most urgently needed at the moment for the provision of food and fuel. Unfortunately, the fact is that at the present time the men who are fitted for manual work are leaving the country, are being driven out of the country, while we are left with unsatisfactory material and with a, type of unemployed for whom it is extremely difficult, with our present resources, to find employment. I think the Minister will realise that he has made a very grave mistake in increasing the tax on pipe tobacco.
It is perfectly true, a has been said, that this Budget in many respects imposes heavy taxation, and if it is difficult for sections of our people to bear that heavy taxation I feel that the real difficulty is caused by the fact that in this country in its present relatively undeveloped state, the imposition of taxation does not yield a revenue which would be available if our productivity were extended, and our sources of wealth production intensified.
Deputy Fitzgerald-Kenney spoke of the burden of income-tax on certain classes in the community. It has to be admitted, of course, that the incidence of income-tax does make itself felt by classes in the community whose resources are easily measurable and who probably, while they have a margin, do not feel that margin is so great as to enable them to bear the heavy impost which our present rates of income-tax puts on them. I feel, so long as we continue to allow things to drift in the present unsatisfactory way, and so long as expenditure is to be maintained at the present levels, there is no escape from that heavy taxation except by the process of increasing our productivity, making available new sources of wealth for revenue purposes on the one hand and rendering it unnecessary to spend so much money wastefully, as we do to-day, to make up for our criminal laziness in not putting people into productive employment.
This Budget shows no real appreciation of our economic difficulties, and stall less appreciation of the difficult economic portents which manifest themselves to-day. We have to-day a very serious problem in respect of unemployment. In the cities and towns the unemployment problem is growing every week. Workers who formerly found steady employment in our secondary industries are being laid off, due to the shortage of raw materials and the shortage of such materials is throwing a new type of worker on the unemployment market. Unfortunately, the same shortage of raw materials will prevent that worker from being reabsorbed into the industry which he follows as an occupation. There is no hope that employment would be available to him in any other branch that industry due, of course, to the shortage of raw materials. If we pass from the towns and cities into the rural areas, we find that, apart from the employment which is now given—and it is only seasonal employment on turf-cutting— there is a diminution of employment. It may be said, of course, that the increased tillage does in fact provide additional employment. It provides, I concede, some additional employment, but we, in the main, in respect of agriculture, rely for productivity on the small farmer class and while the small farmer may be very anxious to till a certain minimum portion of his land, unfortunately, the impoverished condition of the farmer is such that he is not able to provide employment for agricultural labourers. Many of these small farmers, if they had sufficient capital, would be only too willing to offer employment to agricultural labourers but their economic position is such that they live a hand to mouth existence and, much as they desire to intensify cultivation of the land, it is not possible for them to provide wages for agricultural workers until such time as they can cash the crops which are the result of the intensified cultivation of their land.
We have got then a position in which we are faced with a new problem in an increase of unemployment, already bad, in towns and cities, and in the rural areas we have already a bad problem of unemployment which, I fear, is becoming worse due to the fact that rising prices and shortage of materials are depressing the standard of living of the small farmers who, in the main, are the sources of employment in the rural areas. What strikes me as lamentable is the fact that, in this Budget, although we are faced with that very serious problem of unemployment, although we have to raise taxation for maintaining a large number of unemployed, although we have to raise taxation for providing home assistance, and although we have to raise taxation for the purpose of maintaining sick and disabled people whose disabilities are in a large measure attributable to the fact that they have not regular employment, we do not seem to be able to take any telescopic view of the situation and to plan, tbrough our national finances, measures whereby it would be possible to avoid the waste of maintaining people in idleness and, at the same time, to intensify the development of our resources in such a manner as provide employment for our people and to create new sources of wealth in this country. I see no proposals whatever in this Budget for dealing with the problem of unemployment and, notwithstanding the very serious warnings which have been issued by chambers of commerce, very serious warnings which have been issued by employers' organisations who know the extent of the raw materials available in the country and who speak from their knowledge of what they are capable of producing, having regard to that shortage of raw materials, the Government do not seem yet to have appreciated the serious problem confronting the country and do not appear to have any plans whatever for dealing with that situation.
I do not want to be facetious and to go back on the pre-1932 Fianna Fáil ejection promises. I do not want, for instance, to talk of the plan which was going to put a very large number of people into employment. I do not want to make any detailed references to the contentions then advanced by Fianna Fáil that it had a remedy for unemployment and that there need be no unemployment in this country. I do not want to dwell in any detail on the Taoiseach's statement that unemployment need not exist here and that it was a problem capable of remedy here much more easily than in any other country. But I do suggest to the Government that if they believed these things, then they ought to make a serious effort now to put these policies into operation, because my fear is that the economic position in this country will become so serious that this or any other Government relying on the same outworn methods will be overwhelmed by an aggravation of our economic difficulties that will make it impossible to grapple with that situation. Once that situation gets out of hand I can foresee grave unrest in the country; I can foresee grave disorder in the country. While there is yet time and before the situation gets badly out of hand,I think the Government ought to make some serious effort to face up to that problem.
Our main difficulty seems to me that there is nobody thinking nationally. Each Minister is concerned—understandably enough—with the activities of his own Department. There is no national planning authority. There is no national thinking-box. There is no relationship between the activities of one Department and the activities of another in such a way as would indicate that a definite plan was being worked out, and there is no indication at all that Government Departments, moving in their own spheres, are working towards an agreed Governmental plan or agreed national plan. If every other country in the world regards it as essential that it should have a planning authority, that it is desirable to have a planned economy, what set of circumstances in this country enables us to dispense with that vital piece of planning machinery which most other countries in the world find it necessary to adopt? Here in this country we have no national plan. No real effort is being made to survey our industrial and agricultural possibilities. If one were to require any evidence of that, we bad it in abundance last year. Grain Importers, Limited, last year told the Government early in November that they could not charter a single ship to take wheat to this country in 1941. That was obviously putting up the red flag in regard to wheat purchases. One would have imagined, that the Government, if it were thinking nationally, and if it were acting prudently, would have utilised the time then available to insist upon increased tillage, and to insist upon an increased acreage under wheat. Nothing was done in November in that respect. Nothing was done in December. Nothing was done in January. but early in February when the weather became particularly bad, the Minister for Agriculture was released on the country, with some officials of his Department, to tell the county committees of agriculture to encourage the farmers to grow more wheat and to till more land. That is the method on which we relied for the production of essential foodstuffs for our own people. One would have imagined, knowing that we had practically no shipping at all, that in 1939 the Government would have said to themselves: "Since we have no ships at all to take wheat from those countries which have an abundance of wheat, and since we may be compelled to rely entirely on our own wheat resources, it is desirable that wheat cultivation should be encouraged in 1939," but there was really no serious effort to encourage wheat production until February, 1941, and, of course, when this year's harvest is gathered we will see the price we have to pay for the folly of neglecting our food production in the manner in which we have neglected it in the past two years. It is as clear as daylight that we will not get sufficient wheat in our own country this year to produce an all-wheat loaf, and I suspect that after next harvest we will get a loaf well laden with oats and barley. A few ships may now come in from Lisbon, but the bulk of those ships are capable of carrying only about 2,000 tons of wheat, and we need approximately 1,400 tons of wheat for our daily requirements. When we think of the trip from Lisbon to Dublin in slow tramp steamers, remembering that only about 2,000 tons of wheat can come on them, and that we consume 1,400 tons per day——
How does the Deputy relate those matters to the present Bill?
In this way—perhaps a little indirectly—that we are spending an enormous amount of money in this Budget, we are taxing the people very heavily for it, and we are doing that because we had not the good sense to foresee the difficulties which are now crying out for solution. I wanted to point out that this Budget is imposing very heavy taxation on the people, and that there is no escape from that taxation unless you increase productivity and make available new sources of wealth. I may, perhaps, have drifted from that theme into telling the Minister for Finance that it was necessary for him to be more vigilant, and to plan much more prudently and actively than the Government have so far planned. I will finish by advising the Minister for Finance to use his influence with the Government to insist on some type of national plan, some survey of what we are capable of producing, some survey of the way in which we can get people into productive employment. There is no more criminal form of waste than keeping men and women idle when work is available for them, and work is available for them in this country if we will only organise the work for the people who are available to do it. The Government have had a very generous measure of co-operation in respect of our defence programme. They have also been offered generous co-operation in respect of our economic difficulties. While apparently they are glad to have co-operation in respect of defence, they seem to spurn any offer of co-operation in respect of the solution of our economic difficulties, and to prefer in that sphere to pursue their own policy. I think their economic policy is a short-sighted one. I think it shows no evidence of development, and that it contains no grain of hope for the masses of our people who must depend on their daily toil as a passport to providing themselves with shelter and obtaining a reasonable quantity of food, fuel and clothing. No aspect of the Government's policy seems to me to contain any hope whatever in that respect. I do not think it is possible to continue much further this policy of economic drifting. Unless we are to be overwhelmed with economic difficulties which will be impossible of solution through long continued neglect, then I think the Minister for Finance ought to urge upon the Government the desirability of endeavouring to provide that national thinking box, and of endeavouring to develop new sources of wealth. I feel that it is along these lines he will be able to lessen the taxation in this Budget by spreading that taxation over a large number of people, who, finding new sources of employment and new sources of income, will be in a better position to bear it than the smaller number of people who are compelled to carry those impositions to-day.
Nobody is happy about this Bill; I do not believe the Minister himself is. We have now reached a point in taxation when one views with alarm the future position of the country. We have here practically a war Budget. The taxes which the Minister is imposing are practically akin to those in some of the smaller belligerent countries. We have not the advantage which those belligerent countries have—the advantage that while taxation is increasing there is at least a temporary increase in national income. There might have been some measure of satisfaction among people who do not look very far into the future if, together with this taxation, we bad the temporary prosperity which they have in other countries through the expenditure of money on war works and so on. We have none of those advantages. We have no vision of any temporary prosperity even if the war lasted four years or longer. As far as this country is concerned, this war cannot bring us any advantages in that direction, while we suffer all the disadvantages which war inevitably brings to every country.
Deputy Cogan suggested that one way out of the Minister's difficulty in imposing some of the taxes was to borrow a little more. I do not agree with that proposition. We have borrowed already—during past years and this year—much more than we can afford to borrow. Some of us should pay some regard to posterity. It does not look as if this country's position after the war will be—to put it in the simplest terms—very rosy. The Minister or any Deputy who has thought fit to give some thought to the future and to the conditions which will obtain after this Armageddon, can realise that the prospects in this little country of ours are not rosy. Any extra borrowing that we undertake will be at the expense of the people who direct the Government in the years to come. We have gone in that direction as far as—and further than—it is reasonable to go; perhaps further than it was safe to go, and nearly as far as it is possible to go. It is quite easy to suggest borrowing another two, three, ten, or £20,000,000, but if one takes into account the effect on future taxation of the borrowing and the interest on the borrowing, it does not need a very rapid brain to calculate the additional taxation in coming years.
There may be an excuse for borrowing in some particular circumstances. One heard the words "increased production" mentioned very frequently in this debate and Deputy Norton referred to that a few minutes ago. If one can increase production and increase the national income greatly, we might look with some equanimity at the years to come, but there have not been great efforts in that direction in past years or even in the present year. It is rather the other way about: instead of there being any efforts to increase production, this Finance Bill leads the other way round. To have increased production we must have a contented population, we must have contentment amongst workers who produce. Has this Finance Bill led to any measure of contentment amongst our workers? All day yesterday and the day before we had many arguments on that particular matter.
We have imposed in this Budget taxes which add to the discomfort of the worker. The tobacco tax is, to my mind, an unjust one at this particular period—unjust in its imposition and dangerous in its effect on production. Deputy Fitzgerald-Kenney referred— rightly—to the effect on the country of a contented working population. Is this burden, added to the many burdens which the producers and small farmers have to bear, one which will help to increase production? The worker and small farmer at the moment are suffering all the disabilities it is possible to suffer, even if we were actually engaged in warlike operations. They are suffering the increased costs of the various articles consumed or used. There are the disadvantages in many places of no fire and no light. In the summer season a small farmer may not be affected very much by the absence of light, but when the shorter days come—one must look two or three months ahead—the ordinary worker, as far as we can gather, will have no coal or candles. He will have to exist in a darkened room without proper heat, and, when the dawn comes and there are a few hours of daylight, he will be denied the comfort of a smoke.
Tobacco is more a necessity than a luxury. Several Deputies have pointed that out, yet the Minister says he cannot afford to reduce the tax. The Minister could afford to drop some of the other taxes when representations were made to him, and when the proper leg was pulled, he dropped the cider tax. Perhaps his excuse was that it did not produce as much revenue, but it produced some, and it was not as material to the worker or the producer as tobacco is. I suggest that he might have found a way to drop this. We are engaging in expenditure akin to that in countries engaged in actual war, and there may be some need for extra taxation, but the amount of money that the Minister gets out of the extra tax on the ounce of plug tobacco of the ordinary worker or small farmer could very easily be saved out of the Vote for the Defence Forces, without any material effect on that particular body.
I do not think the Minister himself will suggest that, if he were to crop off the amount expended on the Army, Navy and on items of war-like nature, there would be any material difference to the country. If the Minister had the will, the way was there. He is a man who is amenable to persuasion and, even belatedly, some concessions might be made. The plea has been made by almost every Deputy who has spoken—I do not believe there is any opposition to it even on the Government Benches—that it is an absolute injustice to put this particular 4d. tax on the workers' ounce of tobacco. You are inflicting on the worker increased prices for every commodity he purchases, and restricting any possible increase in his remuneration, without at the same time making any effective effort to control the upward tendency of prices. No Deputy with a serious interest in the condition of the people could silently give his assent to the Finance Bill.
The drastic proposals of taxation contained in this Bill are, to my mind, due to a large extent to the way in which the financial condition of this country has been affected by the existence of the unemployment problem. Several speakers have already adverted to that problem. I think it will be generally accepted that where there ie unemployment there is bad finance and unwieldy taxation.
I believe that the unemployment problem, if tackled in a big way, is to a large extent capable of solution. The effect of solving the unemployment problem would be that there would be greater resources from which taxation could be derived. By increasing the natural wealth of the country there would be a larger number of persons capable of beating certain classes of taxation to the relief of those at present being taxed.
The unemployment problem is not so serious as people imagine, if it were properly tackled. We have undoubtedly, in proportion to the numbers of our population, a very large number of unemployed. But, in proportion to the numbers of unemployed in other countries, where unemployment is rife, our figures are not so high. The problem that concerns the Government is so to arrange their finances as to bring about a situation by which the only persons unemployed will be those who are unemployable by reason either of old age or some infirmity. In order to solve the unemployment problem you must either turn those who are unemployed into workers on their own behalf, or workers on behalf of someone else, and the chief sources of employment in this country are agriculture, manufactures, transport, distribution, the professions, etc.
With regard to agriculture, the Government have been noticeably negligent in their treatment of that industry. Sufficient has been said about that already, and I think they realise the error of their ways. With regard to manufactures, I am all in favour of an increase of manufacturing concerns in this country and have always been so. The way the Government have dealt with the question has been to establish industries dependent upon raw materials that come from outside. I should like the Government so to arrange taxation, so as to facilitate employment, that we can make full and proper use of our natural resources, and these natural resources are confined practically to what we can produce out of the soil of the country.
I heard the other day of a man who is engaged this year in growing nine acres of peas which will subsequently be turned into preserved peas or packet or bottled peas. That will bring people into employment on the land where the peas are grown, people to transport the peas, and people to bottle or pack them.
If they can get the tins.
That is another matter altogether. I am suggesting that the Government have not properly explored the resources at the disposal of this country with regard to the production of raw materials.
The Deputy may not do that on the Fifth Stage of this Bill.
I am showing that the condition of our finances at present is due to a large extent to the existence of unemployment; that the taxation contemplated in this Bill is of such a nature that it will interfere with the solving of the unemployment problem; and that sufficient attention has not been paid to the production of the raw materials which I suggest we should produce — such raw materials as can be produced out of the soil of the country. I have instanced peas, but there are other vegetables and other crops that come up every year. We have, for instance, the use of our raw materials in connection with the bacon factories. I think the Government should now pay serious attention to developing those raw materials that are capable of being grown in the country, and subsequently being turned into some manufactured product. We have to plan for the future, and by advertising these finished products abroad we can find a market for them in normal times.
As an instance of how another country has dealt with a matter of this kind in such a situation, I might point out that large numbers of persons who had been engaged on the continent of Europe in growing grapes for the making of wine were immediately put out of production and employment when prohibition was introduced in the United States. But the State of California and the persons who were affected there did not sit down under that. They immediately found some other use for the grapes that were being grown, and by energy, by wise Government encouragement, and by advertising they were able to find another market for those grapes in connection with the manufacture of fruit cakes and fancy bread, which prevented the persons engaged in the production of those grapes from being put out of employment.
I think it is within the knowledge of Deputies that there has been a very great increase in recent years in the use of bottled and preserved vegetables for table purposes, and in that respect we have clearly a field which should be developed under Government auspices. Practically speaking, no attention has been paid to that aspect of the question. In addition to producing raw materials for food, with the advances made in chemistry and the increased knowledge people have nowadays, a great deal of the plant life of this country could be used for the production of synthetic materials. Therefore, I think it is a pity that more of our money is not usefully spent on investigating what particular plants are suitable, under chemical treatment, for being turned into useful raw materials or substitute raw materials. I believe that if the Government paid some attention to that aspect of the matter and kept up with the times, the unemployment problem to a very large extent could be resolved. If something like that is not done, no matter how much we may talk in the abstract and discuss ways and means for solving the unemployment problem, the debates that will take place on unemployment ten years hence will be exactly the same as to day, the only differenc being that the Unemployment situation will be worse.
I am very glad that Deputy Esmonde has introduced the question of the unemployed. Unemployment is one of the biggest items the Minister for Finance has to provide for in this Budget; our total provision for unemployment runs into some millions of pounds. I want to suggest very seriously to the Minister that his task this year in providing money——
This Bill does not provide for expenditure on unemployment; it deals with the imposition of taxation.
Is not this the Bill which provides the money which we spend on the unemployed?
Not for the expenditure of the money.
I am not talking about that. I am pointing out to the Minister that it would not be necessary to ask the House for the sum of money we are asked to vote if the Government were doing their job properly.
I think, with all respect, that I would be quite in order in doing that. I am contending that instead of having to provide money by way of unemployment insurance and unemployment assistance for 100,000 unemployed, if the Government were doing their job we would probably be asked to provide money for 30,000 or 40,000 fewer unemployed. Let me take one item. Fuel is a very serious matter for this country at the moment. From, what we have been told by the Government, it is going to be a much more serious-matter. The Government set out to produce turf and they said that we required at least an additional 3,000,000 tons. Anybody who has knowledge of the bogs and the work going on there knows quite well that we are not going to succeed in producing that much turf and the reason is that those who were charged with the production of turf cannot get the labour to do it.
We are faced with this position, that we cannot get enough fuel produced in the country because we cannot get men to do the work and at the same time we are asked here to vote money to pay men for doing nothing. We have a complete register of our unemployed. Not only is the register complete in regard to numbers, but it is actually classified and in it there is set out the former occupation of every unemployed man, whether he was an agricultural labourer, a mason or a road worker. The Government could, within 24 hours, put their fingers on any of the 120,000 unemployed. The register is readily available to the Government and there is ample work in the bogs to-day and for the next two months, yet we are asked to vote money to pay men for doing nothing. That position arises simply because the Government have failed to bring the work and the men together.
During the Minister's short absence I was stating that we are not able to produce enough turf to meet our requirements this year, and the reason is that we cannot get enough men to do the work in the bogs. That is the admitted position. We are asked to provide tens of thousands of pounds to pay men for doing nothing when there is plenty of work available. The Government can put their hands on a complete register of the unemployed. Why has that not been done? Why are we faced with this extraordinary proposal? We want at least an additional 3,000,000 tons of turf, and we have the men to produce it—it does not require machinery. We want that fuel very badly; it will be urgently required in the City of Dublin particularly. We want to produce enough for consumers in the cities and towns, but we cannot bring the unemployed men into the bogs. It seems there is something there that has to be answered, and if the Ministers primarily charged with dealing with unemployment were doing their job the Minister for Finance would not have to come here for the big sum of money he is asking.
I raised this matter as far back as February last. I suggested then that it was time to plan, that there was an enormous amount of work to be done in a comparatively short time—seasonal work. I indicated that the men were in the country though they might not be in the vicinity of the bogs; that there were skilled turf cutters and unskilled workers—the keyman is the man with the slean, but a great deal of the work is unskilled work, or work in which men can become reasonably proficient in a couple of days. If we have men unemployed, is it not appalling that people are going to be left without fires simply because these unemployed men could not be brought into the bogs to cut the turf? That situation could have been dealt with, and the Government have failed to deal with it. There is going to be a drain, not only on the Central Exchequer, but on the local rates, to provide unemployment assistance—a drain that need not be there. Perhaps the Minister for Finance will discuss that aspect with the Minister for Industry and Commerce and the Minister for Supplies.
There were many subjects discussed, perhaps not at great length, because the Chair intervened, but there were many other subjects mentioned that were not, in my opinion, strictly relevant to the Bill. In the circumstances, I think I would be correct in saying that there is not so much in the Bill that is very objectionable to the House; there certainly is not so much in it as to enable Deputies to enter into a relevant discussion because several speakers found it necessary to go outside the ambit of the Bill in order to find material to justify a speech. When the Budget proper was under discussion there was general praise, even from the Opposition, of the propositions put forward in it, propositions which are now, in the main, embodied in this Finance Bill.
"In the main" is good.
There were amendments.
There were.
There were amendments suggested by the main Opposition and I suppose that is to their credit and to mine, but I want to emphasise that evidently the Budget was not so very bad. This Finance Bill cannot be so very objectionable when speakers in the Opposition Parties, with the exception of one or two items, could not find anything very serious to object to and, in the main, had to rely on extraneous matters not strictly relevant to the Bill on which to make a case. Deputy Dillon started off. He knows Parliamentary tactics as well as any man could know them but even he rambled until pulled up by the Chair. I thought that he, with his ingenuity, would find plenty of material, without going outside the ambit of the Bill, or the strict interpretation usually adopted on the Fifth Stage, with which to denounce with his usual vigour and enthusiasm the Government and the Minister for Finance. Even he was caught out in this case. I agree with Deputy Bennett, Deputy Cogan and Deputy Norton who stressed very much the heavy burden that the present duty on tobacco imposes upon all classes of the community as a result of the increases in this Finance Bill, and particularly on those who are pipe smokers. I am surprised at Deputy Bennett's suggestion that I could easily find ways and means of taking the tax off pipe tobacco and getting the money elsewhere. Does it not stand to reason that it would be a very popular thing for any Finance Minister to do if he could do without the duty on pipe tobacco, and that he would be very happy to do it, and would go to extraordinary degrees of ingenuity to find ways and means of doing it? The Deputy may make up his mind that it is not possible to do it.
Was my suggestion possible?
It was not possible, if the Deputy realised what it would cost to adopt a suggestion Deputy Dillon made last year to reduce the price of plug tobacco. I adopted that suggestion, and this year a reduction of one penny cost over £200,000. If we took 4d. or 6d. off the price of an ounce of pipe tobacco, or off the Estimate that the Deputy indicated—the Army Estimate—would not that make a very serious proportion of the total amount spent on the Army?
It would.
Would not that have a very serious effect on our position?
On the assumption that you would not have any increased consumption at the lower rate of tax?
Even if you had an increase of 10 per cent., which would be a big increase, it would not go anywhere near making up the difference. Deputy Bennett is a reasonable man. If he considers his suggestion that the Minister for Finance should wipe out the tax on pipe tobacco, or a considerable portion of it, and if he finds that the Minister has not done so, the Deputy can make up his mind that there was a good reason for that.
The Taoiseach told us that he was going to take all taxes off. Do you remember these halcyon days?
I do not believe the Taoiseach ever said that, or that he ever dreamt it would be possible to remove such a tax. I do not agree with Deputy Cogan that a tax on tobacco is an unjust tax. It is not an unjust tax. If any tax is unjust it is not a tax on what is not an essential article of food. Tobacco is not an essential article of food. We can all do without it, and probably would be better off without it, especially those who smoke to excess.
It would be good for everyone except the Minister.
It would be bad for the Minister for Finance, seeing that we get £6,000,000 from it. I hope everyone will not cease smoking.
If people smoke too much plug it might be bad for them.
Mr. Byrne
Will they have enough tobacco to smoke?
That is a very important point. I am not too optimistic at the present time, but I hope we shall have supplies. I stated the other day that we had supplies of tobacco for eight or nine months. Some manufacturers have more or less. Generally speaking, I think it is true to say that some have ten months' supply. We have not got any tobacco in for a number of months. Previous to that there was a dribble coming, but unless we can arrange that the ships now in the United States will bring tobacco, I fear for the revenue. That is a very important consideration. I understand there is at present difficulty in getting certain brands of tobacco and cigarettes. Before Christmas, at the request of the tobacco and cigarette manufacturers, we reduced the amount allowed to be taken out of bond from December and I suggest that that led to a decrease in supplies. I hope there will not be any necessity for a further decrease. I am afraid there will be. I dislike the hardship that would be on smokers, but I also dislike the thought of a reduction in revenue. There is hope, and I am trying my best to get a certain proportion of tobacco put on whatever ships will be leaving America in the near future. I have not got any definite promise from the Department of Supplies.
Mr. Byrne
May I express the hope that if supplies come in there will be no hoarding and an equal distribution to retailers?
That is not a matter for the Minister for Finance. It is a matter for another Minister.
I repeat that I do not think the tax on tobacco an unjust tax. Another tax that a Deputy told us was unjust was the tax on what is called starting price betting. I do not consider that an unjust tax. I do not agree that a tax on any kind of betting is unjust. It is not an essential service. It can be done without and done without, probably, with benefit to individuals concerned.
The benefit to the individuals depends on the results.
Perhaps. Any kind of betting is not an essential of life or to the welfare of the individual. The tax on S.P. betting has existed since 1926, and there has been no protest against it until now when the suggestion was made to increase it. We have increased the tax by 2½ per cent., but I do not think that increase will make such an awful difference to anyone. When speaking on the last occasion we were discussing this Bill, I said I did not know a great deal about betting. I am not saying that I never put on a bet. I was at race meetings half a dozen times in my life. I do not object to them. If I had time I would go to race meetings, perhaps, more often. I do not think there is any justification for suggesting that a tax on betting, whether S.P. or anykind of betting, is unjust. I took the tax off Irish course betting, because it was put to me in the strongest possible language the first day the subject was mentioned, by the Leader of the Opposition and others, that a tax on course betting would have most serious effects on racing in Ireland, and on the horse breeding industry. I gave consideration to the representations that were made to me here and outside by those interested in horse breeding and horse racing, and I took the tax off the course betting. I thought that, in fairness to me, Deputy Cosgrave ought to have stood by me, to the end when I adopted his suggestion, but having led me up the garden, he left me there.
In fairness to Deputy Cosgrave the Minister ought to recall what he stated.
I am quite prepared to repeat and call the attention of the House to what he said, but, nevertheless, it was largely on his representations that I dropped that tax, and he dropped me.
Oh!
I am stating the facts, and will say no more on that.
The Minister did not follow Deputy Cosgrave's suggestions on other occasions as closely as he did on this occasion.
Whenever he made wise suggestions I always paid the greatest attention to them. I have got very few from him, but that was one, and I adopted it. I have no objection to saying where I got it, or that I adopted it. Deputy Hickey suggested that the excess profits tax was withdrawn. That is not so.
The retrospective part of it is.
Yes. Again, I want to say that I was pressed very strongly from all sides of tile House, as well as from outside, to drop the retrospective part of that tax. I had deputations coming to me about it from the Chambers of Commerce, the federation of Industries, manufacturers, individual industrialists in great numbers, and others. They all put it to me, as it was put to me from the opposite benches, that provision had not been made by any company to enable it to meet the retrospective part of this tax, and said that I ought to drop it. I did drop it after considerable hesitation. That meant that I had to drop a considerable sum of money,—well over half a million pounds.
That is all the more reason why the Government should drop the standstill order.
That does not follow. I was induced originally to put on that tax because of all the clamour we had in the House to get after certain classes of people who, we were told, were getting away with unjust profits.
There were certain individuals who, it was said, got unjust profits.
Certain types of industry were referred to. I can honestly say from my examination of some of these cases that the statements as to unjust profits have been grossly exaggerated. That is my honest belief. What was said was that certain companies had made big profits, that it would be worth while going after them for those big profits, and that in such cases an excess profits tax would be justified. Reference was made here in the House to certain types of industry that had made huge and unjust profits. On my examination of them I did not find that to be so.
The Prices Commission found it to be so in the case of the bacon industry.
I would be prepared to discuss that in detail at any time. I can say, from the figure that I have seen in regard to that industry, that in one particular year big profits were made.
I have no information about the industry other than that contained in the report of the Prices Commission.
I had the figures examined and I am satisfied that in one year the industry that was referred to made big profits. That may have been the year in which the report of the Prices Commission was issued. The profits made were almost up to 24 per cent. That was one year, I say, but if you take the same industry over a number of years these enormous and extravagant profits were not made in the bacon industry.
That was because their profit and loss accounts concealed them.
And because they put their huge profits into large capital expenditure.
The only thing I have to go upon is the company's balance sheet.
If the Minister is accepting that, then I say he is accepting a very unsafe criterion.
What else has one to go upon except the balance sheets?
The report of an independent auditor to investigate the accounts on the Minister's behalf.
It is not usual for the Minister to inquire into the private affairs to any firm. The revenue people do that. They have all the information. I may, from time to time, ask them for information in general about companies, but not about individual firms. It would be most unusal for the Minister to ask, or to get, information with regard to any private firm.
If the Minister gets a good costings accountant to do the accounts of the bacon curers and the flour millers over the past ten years he will be amazed at the results.
And a good many others as well.
I think that has been done. I want to say to Deputy Hickey that the excess profits tax has not been withdrawn. We hope to get a considerable amount of revenue out of it in the years to come.
According to the Minister for Supplies the other day, big profits do not mean profiteering.
They do not necessarily mean profiteering. Deputy Hickey also spoke about a worker with £3 or 3 5s. a week paying income-tax. No worker, with a maximum of £3 10s. a week, is asked to pay income-tax.
I said a single man with £3 10s a week.
If a man's earned income is £3 10s. a week he pays no income-tax.
That is news to me. I have seen such people pay income-tax.
It is news to me, too.
But suppose a single person has an earned income of £200 a year he will pay £6 10s.
I still maintain that a single man, earning £3 10s. a week, pays income-tax.
For the year 1940-41 a single person, with an earned income of £200 a year, pays £6 10s. in income-tax, and in the year 1941-42, the amount that person will pay is £7 10s.
A single man earning £3 10s. a week earns roughly £182 a year. For income-tax purposes, there is a personal allowance of £120, and one-sixth on earned income which is, roughly, £30. Therefore, that man pays a tax on £32.
In Great Britain and Northern Ireland, in 1941-42, a single person, with an earned income of £200 a year, will pay £32 10s., whereas the same person here will pay £7 10s.
What about those with the little nest egg in the post office?
Well, if people have a little nest egg there and are getting a little interest on it, they may have to pay some little tax. There are even some workers who have investment incomes. In 1941-42, a man here with an investment income of £200 a year, will pay a tax of £15. That is not an awful lot. The same person in Great Britain will, this year, pay £39.
I find here in the latest published report of the Revenue Commissioners that a person with an earned income of £l75 pays a tax of £2 6s. 10d., the exemption limit in that year being £150.
The Deputy was quite right in calling attention to that.
The single man earning £3 lOs. a week does pay income-tax?
Yes. Deputy Linehan suggested that we should not ask anybody with an income of less than £300 to pay tax. That would cost us a considerable amount of money. We get out of the person with £300 earned income £25 5s., and out of the person with £300 unearned income £48 15s. Deputies can imagine the loss there would be to the revenue if tax were not collected, in those cases.
I would apply it only to earned income.
I would apply it to no such income.
Deputy Childers asked for the number of people who pay income-tax at a variety of rates. He will find those figures in the Report of the Revenue Commissioners for the year ended 31st March, 1939. The figures are given in all the annual reports. In the volume for the year ended 31st March, 1939, which is the last report I have here, they are set out on page 193.
How many people are paying tax on incomes over £2,000 a year?
About 1,500.
There are 1,500 plutocrats in the country. That will afford very few pickings for Deputy Hickey.
What about those who have a net income of £8,500,000?
The Chair would like to hear the Minister.
If Deputy Hickey's Minister for Finance gets even all the money from those wealthy people, there will not be heavy pickings, especially if we go on with increases of taxation such as we have had in recent years.
What he cannot pick, he will print.
By the time he is Minister for Finance he will be careful of the printing machine, too.
Why not produce goods and services?
The Deputy is only saying what the Minister's predecessor in office used to say.
Deputy Cogan spent a considerable time in telling me that I allowed a lot of luxuries to go untaxed. I am surprised to hear that. The only item he mentioned was ladies' hats. It was just as good a suggestion as a Deputy made here some years ago when he was asked—as I should like to ask Deputy Cogan—to mention any luxury which had been overlooked. The Deputy suggested ladies' handbags. One suggestion is as sensible as the other.
He meant lipstick.
What would lipstick give you—in the way of tax, I mean? It would not give you very much revenue, whatever else you might get.
Whatever is to be said of a bad reputation.
I have heard that suggestion as to cosmetics over and over again. They are taxed and fairly heavily taxed.
They should be taxed more.
If we could get anything more out of it, I should not I mind, as Minister for Finance, putting on another 100 per cent. I do not think that we would get £5,000 a year out of it.
And it would spoil the scenery.
If it extinguished some of them, it might be useful to the country.
Deputy Norton and others talked a good deal about employment and unemployment. One statement I was surprised at Deputy Norton making was that no serious effort had been made to encourage wheat production until February, 1941. I had thought that we were at that since before we came into office—that we were trying to get wheat produced all the time, to the annoyance of Deputy Dillon, who thought it the most foolish thing imaginable. I do not think that he would regard it as so foolish now.
I do not see the wheat.
You would not have much bread on your table but for that wheat policy.
If you were where you are and if the wheat were not there, I would not.
I do not see where you would get ships to bring in the wheat.
We cannot argue that now.
I was surprised at Deputy Norton making that statement, that no serious effort had been made to encourage wheat production until February, 1941. If we were ever serious about anything, we were serious about getting all the food possible produced at home.
It is only fair to Deputy Norton to say that what he was referring to was the intensified drive for wheat production.
He did come along later and say that there was delay on the part of the Minister for Agriculture and, in asking for greater intensity of effort, he did make the statement to which I have referred. There may not have been the speed last autumn that would satisfy Deputy Norton. I should like to hear the Minister for Agriculture on that. Particularly since the war, everything that could be done in the way of propaganda—preaching and appealing by public meeting and over the radio, and by offering good prices—was done to induce our farmers to break up their lands and grow more wheat. I know that there is unemployment. I know that efforts are being made to get workers on to the bogs and that, in some cases, we have not got anything like the number of workers we should have got.
I presume that the Minister is replying to observations made regarding turf development and wheat production?
Yes. Arguments were raised regarding both matters.
On the ground that the Minister would not have to look for so much money if these matters were attended to.
The Chair is not interested in that aspect of the matter at the moment.
If we have not all the men that we should have on the bogs, it is because we are not dictators. That is one reason. We tried last summer, as an experiment, to get young men from Dublin to work under good conditions on a bog at Clonsast.
Mr. Morrissey
They never saw a bog in their lives before.
They were asked to go down to be trained.
Mr. Morrissey
They were paid by results.
I know that, but they were well fed and well housed.
You have 2,300 men in Cork who signed on to go to the bogs, but only half of them have gone out.
Men who are capable of work were asked to go out to Clonsast. As I say, you would want somebody like a dictator, or to put into operation a policy of dictatorship, to get some of them to go. There was an interesting report circulated recently dealing with this question of employment by the Drainage Board. Over and over again in this House we have been told that one of the things we ought to do is to bring in drainage schemes on big scientific lines. That report, an excellent report, as far as I am able to judge it, first of all tells us that drainage is entirely uneconomic. All these experts and other public men who gave their time to investigate that problem—and they did a good job—agreed that drainage is entirely uneconomic, but they recommend, nevertheless, that it should be carried out. They also said that, as far as providing large-scale employment was concerned, it could not be regarded as a success, as most of the large-scale drainage would have to be done by machinery, so that you can ignore drainage henceforth as a means of providing large-scale employment for those now drawing the dole or unemployed. It is all very well to talk of increasing our productivity. Drainage would increase the productivity of the land, but at an enormous capital cost to the Exchequer and to local authorities. Even if the recommendations in this report were adopted, having regard to the enormous sums that will have to be expended, drainage will not give anything like an adequate return in employment.
Mr. Byrne
Has the Minister any proposals to make in regard to the Dublin dockers, or Dublin industrial workers who have been thrown out of employment?
Deputy Norton talked about the want of co-ordination between departments. I do not think there is any justifiable charge that can be levelled against the Government in that direction.
Every project that is put up by any Department is examined by every other Department interested and also by the Minister for Finance eventually. Since I became Minister for Finance I have had many schemes put up to me for works of development, the development of this, that and the other thing. They all got very serious scrutiny and examination but it would be impossible for me, or any other Minister for Finance, to find the money in present circumstances for one-twentieth of the schemes that are put up.
You are not in a position to do so?
I am not in a position to do so.
Why not go about getting over that position yourself?
I do not know how I could unless the Deputy would urge me to start a printing machine on my own.
There is no question of a printing machine.
I should like to listen to the Deputy telling me in a serious way at some time or another how I am to solve that problem of providing the money necessary to finance even praiseworthy schemes.
You have a good idea yourself.
Stripped of all the finery it means printing in the end.
Some Deputy—I think it was Deputy Cogan—suggested that we should have borrowed more. Deputy Bennett also recommended further recourse to borrowing but even for a Minister for Finance there is a limit to the amount he can borrow. We have, as Deputy Bennett suggested, to think of posterity. Deputies when urging even good schemes here and when told of the difficulty of getting the money from any source always say: "Oh, well, the Minister can borrow it." The Minister cannot borrow, except within reasonable limits.
Why should you be in an inferior position to those from whom you usually borrow?
We borrow from our own people and the pool from which we borrow is not a bottomless pit. It is all very well for the individual who is supposed to have said: "What do I care about posterity, what did posterity do for me?" I do not know whether Deputy Hickey would adopt that slogan but there is a limit and I am obliged, particularly after dropping certain taxes this year from which I was going to get over £500,000, to borrow more than £4,500,000 this year. That is a very considerable sum of money in proportion to our expenditure for this year.
Men and materials will win this war—not money.
We are not in the war and we are not going to be in it, I hope.
You are not learning many lessons from it.
We are learning lessons. I am not ft hide-bound orthodox financier and if reasonable propositions are put up to me, to show me how we can get more money, how we can produce more here and develop our country with the resources we have, I shall be only too happy to consider them.
Would the Minister state briefly what his financial policy for the future is or hew he contemplates dealing with, the Budget for the year that lies before us, 1942-43? Can, he put forward any financial policy for the guidance of anybody? Has the Minister any forecast at all as to what the immediate future holds and how we must deal with it?
I thought I dealt with the outlook on the Second Reading of the Bill.
You do not intend to deal with it now?
No. We shall have further opportunities in the immediate future.
I hope so.
We shall have the Central Fund Bill on which there can be another debate on finance, when all the Estimates are passed.
Question put and agreed to.
This is a Money Bill within the meaning of Article 22 of the Constitution. The Seanad will be informed accordingly.
The Dáil adjourned at 1.40 p.m. until Tuesday, 1st July, at 3 p.m.