Dáil Éireann debate -
Thursday, 24 Jul 1941

Vol. 84 No. 17

Appropriation Bill, 1941—Second and Subsequent Stages.

Minister for Finance (Mr. O Ceallaigh)

I move "That the Bill be now read a Second Time."

The Appropriation Act is a routine and an essential feature of our financial system. In its general from it is stereotyped. It serves the two-fold purpose of (1) authorising the issue from the Central Fund of the balance of the amount granted to meet the cost of the supply services for the current financial year, and (2) appropriating to the proper supply services and purposes the sums granted by Dáil Eireann.

In the first respect this Bill is complementary to the Central Fund Act, 1941, which authorised the issue from the Central Fund of the proportion— £12,350,000—of the total of the Estimates for the current financial year which had been granted on account by the Dáil; the further release from the Central Fund provided for in Section 2 of the Bill will make available for the service of the current financial year the total amount asked for in the Estimates and Supplementary Estimates for the Public Services and granted for these purposes by the Dáil.

In the second respect the Bill is designed to give final and statutory effect to the Vote on Account and to the Supply Resolutions agreed to on Report by Dáil Eireann following the detailed consideration of the Estimates and Supplementary Estimates in Committee of Finance; to that end it provides that each grant voted for the service of the current financial year shall be expended upon the service to which it is appropriated as set forth in the schedules attached to the Bill and in accordance with the Resolutions of Dáil Eireann. The Bill also provides for the formal appropriation of such of the supplementary and additional grants for 1940-41 as were voted after the Appropriation Act of that year had been passed. The present Bill covers, in addition, the issue out of the Central Fund of the sum of £20, being the amount voted by Dáil Eireann to make good excesses on the grants for Old Age Pensions, £10, and Gaeltacht Services, £10, for the year 1939-40. The Appropriation Act, like the Central Fund Act, makes provision for borrowing by the Minister for Finance; the combined total up to the limit of which he is authorised to borrow is the total of the sums authorised to be issued from the Central Fund by both Acts.

Mr. Cosgrave

The subject matter of the various measures in this Appropriation Act has been so recently before the House that it is not my intention to detain the Minister or the House very long in the observations that I have to make. After the report of the Banking Commission, it was the general impression that some alteration would take place in the terminology of this Bill. If we take this Bill and the previous Appropriation Act— the one which was passed last March— we find that the Minister is entitled to borrow, in the whole year, something like £40,000,000, and his borrowing powers under this are something like £24,000,000. That is a rather antiquated method of dealing with a matter of this kind, and it ought to be brought up to date. I think that the Minister, or his predecessor, undertook to look into that matter within the last year or two.

The second matter to which I wish to refer is the size of this—reference has been made to it already—which is £40,000,000, or almost £41,000,000. It does not appear likely that the present position of industry or commerce in the country is equal to an expenditure of that amount, and the sooner the Minister takes the Government into his confidence, and gives them that information, the better. By reason of our overspending for the last four years now, there has been a very considerable addition to the sum that has to be provided annually for interest and Sinking Fund. It must be now somewhere in the region of £600,000, and when the sum here is added to it— that is, the sum that we spend this year and which the taxation will not bring into the revenue—you have over £1,000,000 to be provided annually until that overspending in these five years has been cleared off. Almost every year I have referred to that, and I do not propose to say any more about it now.

The final thing I would say is that during the last 12 months, starting some 14 or 15 months ago, there have been many addresses by Ministers, from the head of the Government down along the line to the last Minister who has spoken on the matter, and when they make their addresses they are usually very pessimistic. They are always warning the people, exhorting them, telling them that there are worse times coming and generally, giving them the "creeps" with regard to what the future holds for this country and for the people of the country. Now, it may be quite correct that there are hard times in store for us all and for the country. At the moment, people are enduring hard times by reason of the shortage of quite a number of commodities. There is a shortage in some of the things which are most prized or most needed by people, such as fuel and tea, and a few of the people also appreciate the quality of the bread that they are now consuming. Now, in a time of war people require to get a little exaltation of spirit now and then. They require to see that those who are inresponsible, representative position would imbue them with courage instead of endeavouring to frighten them, and let us hope that in the months that are to come Ministers will bend their energies in that particular direction rather than the other.

I am not speaking now entirely as a politician, although, on every occasion here for the past three or four months, when I stood up to speak on a matter of that sort, I intended to draw attention to it, but my attention has been riveted to it by conversations that I have had with professional men— medical men—on that subject. They say, in effect: "Take a foot-rule. If the last inch is going to mean something particularly hard for the people, then give them at least the satisfaction of having the other 11 inches—in other words, the other 11 months of comfort —and they will probably be better able to meet whatever discomfort or hardship may come in the last inch." What I am saying now is not being said in any unfriendly spirit. I am saying this because I think it would be for the good of the people if that were done. It is possible that, owing to the cares of office and the fact that Ministers have not the opportunity of mixing so much with people, by reason of their duties and difficulties, they may not realise the necessity for that, but I think that in such times as we are now passing through, it would be much better to ensure that the people's courage would be kept at its maximum point.

Mr. Dillon

Before the Minister winds up, there are one or two minor points I want to mention.

An Ceann Comhairle

I should like to point out, in case there is any misapprehension, that only the Second Stage of this Bill is ever discussed.

Mr. Dillon

There are only one or two minor matters I want to mention. One is something I touched on a few days ago, and it relates to the growing practice of Departments so to draw Estimates as to enable them to short-circuit the Comptroller and Auditor-General. This practice of adding notes to the foot of Estimates declaring that those sums will not be accounted for to the Comptroller and Auditor-General and that the balances will be surrendered to the Exchequer or not surrendered to the Exchequer at the end of the financial year, is a thoroughly bad practice. It may be necessary in certain exceptional circumstances, but it should not be allowed to grow on the scale on which it has been growing. What actually happens is this: When the Comptroller and Auditor-General attempts to ascertain whether moneys have been spent in accordance with the Appropriation Act, he is simply told that all the Appropriation Act required was that the accounting officer should hand over these sums of the money to the persons specified in the Estimate and, when he is in a position to satisfy the Comptroller and Auditor-General that he did that, all further inquiry is blocked. When the matter comes before the Committee of Public Accounts, if any attempt is made to extract from the accounting officer information as to the ultimate disposition of those moneys, we are told that there is no obligation on the accounting officer to follow those moneys beyond the point at which he handed them over to the person designated in the Estimate. It is really an adaptation by the administrative Departments of a plan evolved by the Government. The Government, when they wanted to carry out certain enterprises without being subject to Parliamentary criticism, set up semiautonomous companies and, when you proceed to ask about the activities of those companies, the Government state: "We are not obliged to answer for the actions of independent companies". The Civil Service caught on to this brilliant scheme and said: "If you remove the expenditure of public money one step away from the accounting officer you avert any criticism by the Comptroller and Auditor-General." This is a somewhat technical and complex problem but it is one to which I want to direct the attention of the Minister, because it comes peculiarly under his Department.

There is another problem which was very exhaustively debated last night and emphasis, I think, put on the aspect of it that strikes me. I want to re-emphasise it now. That is the question of the payment for grain. I approach it from the point of view of supplies. Everybody in this House knows that I was never in favour of the wheat scheme. There is no use arguing the merits of that now, as we are committed to it.

An Ceann Comhairle

The difficulty is that as prices were discussed on a motion recently decided, it is closed. The Deputy may refer to it briefly.

Mr. Dillon

I do not want to raise the question of oats or barley.

An Ceann Comhairle

Matters which can be discussed in detail on Estimates should not be raised now. The Deputy should be brief and general.

Mr. Dillon

I propose to be both. I do not want to touch on oats or barley, as what I desire to say with regard to them was said by Deputy Hughes last night. There is one feature about wheat. We are committed to the wheat policy; we have embarked on the policy; and the vital consideration now is to get the wheat into the mills. That is the important matter. It would be a catastrophe if, having spent the immense sums of money we have in order to get wheat produced, the wheat did not turn up for bread consumption. I can recognise that the Minister for Finance is bound to play a substantial part in reviewing the guaranteed price to be paid for wheat. I recognise that he is solicitous, as he certainly ought to be, to prevent an additional burden being put on the community. He will naturally think that they are already bearing as heavy a burden of taxation as they can conceivably bear. But it would be a disaster if, in his solicitude to prevent an abuse of that character being perpetrated, he went so far as to drive the wheat that has been produced into the feeding craw of the live stock of this country at this stage. I therefore urge on him strongly to recognise the vital necessity for a wide gap between the guaranteed price for wheat and the guaranteed price for the other grain crops produced, lest the price of the meal mixture composed from the grain crops should approximate or surpass the price which farmers can realise for wheat, thus inducing farmers to use wheat for feeding live stock.

I would like to remind the Minister in the most general terms of the advice which his leader's political master has set down. Machiavelli, in his writings on the Book of Livy, says: “Although there are many good men in this world, a prudent Legislature will always assume when legislating that all men are bad.” I am certain that the great majority of farmers in this country will desire, having grown wheat, to make it available for human food. But it is the marginal fellow who is the danger. Even at 40/- per barrel, we will get the bulk of the wheat; but it is the marginal fellow who would feed flour to pigs if he thought he could do it without being found out.

An Ceann Comhairle

I would remind the Deputy that if this matter is raised by him I cannot preclude other Deputies.

Mr. Dillon

There are only two methods—inducement and compulsion. I think it is too late for compulsion, and I invite the Minister to reflect on the advice of Machiavelli. The last matter I want to refer to is this: I desired to ask two Parliamentary questions to-day relating to supplies, but they were not in the office in time. I venture to direct the attention of the Minister to them, because I think they are urgent. One is that oat millers in this country in certain areas have been using motor power for their mills composed of crude oil. Crude oil is ordinarily used for buses or vehicles of that kind. I know of one mill which had to close down and nearly 500 men were dismissed because there was no oil to keep the mill at work. I should be glad if the Minister for Finance will direct the attention of the Minister for Supplies to that matter, so that I can find out what should be said to them, or whether there is any chance of getting the wherewithal to keep the mill going.

The next matter is that, at an early stage, the Minister for Supplies indicated that petrol would be scarce, and if persons desired to put a balloon on their motor-cars and use gas he would be glad to see them keep their cars on the road in order to keep garage hands employed. Subsequently he was obliged to say that the coal shortage was so acute he could not allow them to get any more gas bags for motor cars except under licence. I want to ask the Minister for Finance to request the Minister for Supplies to make a statement as to whether the Government wishes people to put, on commercial lorries and other vehicles that may be put off the road through the scarcity of petrol, gas-producer plants.

There is no use in your putting such a plant on a lorry if the Government does not want you to do it, because ultimately anthracite coal may not be made available to you. But if the Government feel that there is sufficient anthracite to permit of keeping a large number of lorries on the road with gas-producer plants, they ought to say so now. On the other hand, if they think that they cannot foresee any hope that anything like a prolonged supply of anthracite coal may be made available, they ought to say so now. So far as I can find out, most people in this country are anxious to do anything that will help, but the difficulty very frequently is that they cannot find out what the Administration wants them to do.

Mr. Fagan

As a big live-stock feeder, and as one who knows that farmers are in the habit of buying cake for that purpose, I have come to the conclusion that wheat is the cheapest and best feeding for live stock. I want to warn the Minister that farmers will not part with their wheat for 2/- per stone when they can do better by feeding it to their live stock. Farmers are not going to pay 3/- a stone for other feeding stuff when they can avail of their own wheat for that purpose.

Mr. O Ceallaigh

I am sorry that I am not competent to deal with the question of feeding stuffs for cattle. That is a subject on which I am entirely ignorant. I could not speak with any authority on it, and it might be very foolish on my part to make any remarks in reply to Deputy Fagan and Deputy Dillon, both of whom know more about that subject than I will ever know. I certainly will call the attention of the respective Ministers to the questions raised by Deputy Dillon and Deputy Fagan with regard to the supplies of wheat. There is one thing that interests me as Minister for Finance when the subject was mentioned, and that is: Where is the money to come from if the guaranteed price of these commodities has to be raised and if farmers are to get better terms? We would all like to see them doing well, because when they are doing well, generally speaking, everyone else is doing well. That is my problem. What is the price of bread going to be if the cost of wheat goes up? This question has been already raised in the Seanad: If the price of bread goes up, how will poor people buy it if the Government does not subsidise it?

Mr. Fagan

Dear bread is better than no bread.

Mr. O Ceallaigh

The people will have to get bread. These are the reactions that follow an increased price for wheat and other corn products which have to be discussed, as they often are, by the Executive. Like everybody else, I have an interest in seeing that the people are fed. I have an interest, just as many other Deputies have, in seeing that the poor will be able to get bread, but we have to try to balance things as best we can. As far as the Minister for Finance is concerned, he has to try to see what burden this country can bear in that way. In his brief remarks Deputy Cosgrave reminded us that our bill for this year amounts to £40,000,000. It is a terrible bill. It is a huge bill for the running of this country, and I realise, not only as Minister for Finance, but as an ordinary Deputy, and as an ordinary taxpayer and ratepayer, what the cost of living is, and what the cost of keeping a house going amounts to. It is very heavy, and it is growing more burdensome every day.

Mr. Hickey

And provision is not made in that connection to help those in need.

Mr. O Ceallaigh

I am sure in the Deputy's view the provision is not adequate. In my view it is not adequate in every case, but we have to try to measure out our resources as best we can, and to be fair. For the last couple of days I have been pummelled and attacked because I was not generous enough. I was told I was a skinflint, that I was tight-fingered, and every other adjective to describe one who holds on to the cash was used. On other days recently, some of the same Deputies told me that I was entirely too generous about spending, and that I had no control over the Exchequer. There are some people and some newspapers out for economy, and, at the same time, out for generosity— Deputies almost in the same speech and daily newspapers in the same issue.

Mr. Hickey

The fault is that you are not master in your own house.

Mr. O Ceallaigh

We are sufficiently master here to control our own finances. Nobody can say that we must spend this or that we must spend that. In this House we are complete masters in that respect.

Mr. Hickey

Except that you do not control the issue of credit.

Mr. O Ceallaigh

It is not true to say that we are not in control here. The expenditure and the raising of money is our own affair.

Mr. Hickey

But you are paying a big price for it.

Mr. Dillon

Instead of printing it off on the printing press?

Mr. Hickey

There need be no printing off.

Mr. Dillon

I do not know where else it could be got.

Mr. O Ceallaigh

I would like on occasions, such as the Compensation Bill that we were discussing earlier in the day, to be generous. It would suit me personally to be generous and to give out money freely. No matter what way we look at it, even from the purely political point of view, seeing that I am a Deputy for Dublin, I am bound to get the reactions in my own constituency of what Deputy Cosgrave described as my skinflint attitude. But I have my duty to do as Minister for Finance, and I have to try to see how far I can afford to go in the interests of the community as a whole, and in the interests of the Exchequer, without being unjust. I may be too narrow in my views; I may be ungenerous, but I cannot help myself in that matter. I try to be just. I agree with Deputy Cosgrave and others that £40,000,000 is an enormous amount to expend, but it does not nearly satisfy what many Deputies demand. They would like the amount to be more. There are schemes of one kind or another for social upliftment and for the social benefit of the people that, like every other Deputy, I would like to see introduced. I know that Deputy Dillon speaks on that question very often, also Deputy Hickey and others in the different Parties, but we will have to wait for a day when there is more certainly as to the future.

Mr. Hickey

We can appreciate the limitations.

Mr. O Ceallaigh

We will have to wait until the future is something that we can rely upon more than we can at present. I have not made any public addresses for a long time, except to speak here, but in public addresses the Taoiseach and others of my colleagues have seen fit to speak sometimes in a pessimistic tone, and to warn the country that, moderately happy as we are at the moment by comparison, it might be that we would be much worse off in the future. I think it is wise to warn the people that conditions may change and that we may be worse off. A year ago, we were in a very happy position. There was then no shortage of petrol and there was as many motor cars on the road as ever there were, even though the cost of petrol had gone up since the war. Tea and fuel were plentiful, and a variety of other things which are now running short and which have disappeared from our tables; our factories and our workshops were then available. That position could not last with the development of the war. Now we are moderately comfortable. The winter is coming upon us and fuel, as Deputy Cosgrave reminds us, is scarce. I hope we shall be able to make arrangements so that the fuel which has been made available, the turf and the timber which have been cut, will be so distributed that those homes in places where there is no turf near at hand will be at least enabled to have fuel enough to cook their meals.

Mr. Byrne

It will not be allowed into Dublin.

Mr. O Ceallaigh

I understand there has been a restriction for some time for some reason—I cannot say what the reason is—but fuel is coming in. I was told yesterday that it is coming into the city at present at the rate of more than 100 tons per day, and is being stored.

Mr. Byrne

Not for household use.

Mr. O Ceallaigh

It is coming in and it is being stored. I believe that householders as well as every other class will get their share when the time comes. I agree that, while it may be necessary to warn the people that, although they may consider themselves badly used these times, worse may be in store for them, it would be wise and probably helpful to the country to cheer the people up more, if we have any foundation for words of cheer. I think we have good foundation for words of cheer and hope and optimism to our people in the fact that this awful calamity of war has lasted two years and we have not yet been involved, thanks be to God. Our prayer and our hope is that that state of affairs may continue. Deputy Cosgrave mentioned the Banking Commission's recommendations that a change of terminology in relation to the Appropriation Bill was necessary. I have not looked into that matter. I certainly made no promise in that regard and, if a promise was made, it must have been my predecessor who made it, but I shall look into the matter to which he refers. With regard to Deputy Dillon's point as to the Comptroller and Auditor-General, I agree that he should have the right to control and the right to audit, but there may be a purely technical point and the secretary of a Department— it may relate to a kind of independent or semi-independent company—may say: "I am not responsible and I do not account for this matter".

Mr. Dillon

Such an institution as the Turf Development Board, the Industrial Alcohol Company and a whole string of such institutions.

Mr. O Ceallaigh

I think their accounts are audited by the Comptroller and Auditor-General.

Mr. Dillon

Not in the case of the Turf Development Board.

Mr. O Ceallaigh

I thought they were audited in all these cases.

Mr. Dillon

No.

Mr. O Ceallaigh

If it is an independent company, the Secretary of the Department of Industry and Commerce will answer: "They are provided with their cash and I am not responsible."

Mr. Dillon

Exactly, and that practice should not be allowed to grow.

Mr. O Ceallaigh

I shall look into the matter, but I do not know whether we can control it or not. I agree with the Deputy that, so far as public money is concerned, when we give out the money we ought to follow it and see where it is spent. The country, through the Committee of Public Accounts, ought to be satisfied that the money is being spent for the purposes for which it was given.

Question put and agreed to.

Bill put through Committee without amendment, and received for final consideration.

Question proposed: "That the Bill do now pass."

Mr. Dillon

Will the Minister bear in mind to inquire of the Minister for Supplies in regard to the matters I raised?

Mr. O Ceallaigh

I shall certainly call the Minister's attention to the two points the Deputy mentioned.

Mr. Dillon

I am very much obliged.

Mr. Hickey

On the final stage of this Bill, I propose to quote a statement made by the Minister in the Seanad on the 9th instant in respect of excess profits. The Minister has spoken to-day of his difficulty in getting money and he has asked where the money is to come from. I think the Minister should examine the statement he made himself in the Seanad, in the course of which he gave examples of companies making excess profits which he was not able to get from them, because of their method of putting them to reserve. The Minister said:

"I will read these examples. Example 2 is an actual case. Company B was registered six years ago, and has a nominal capital of £5,000. Its original issued capital was £3,000 held by its three directors, members of one family. Profits for six years were £35,000 after payment of directors' fees, £15,000; profit standard, £5,000 and reserves (part), £3,000. The company's nominal capital is now increased to £20,000, reserves are capitalised to the extent of £3,000, and bonuses issued to directors are £2,000. New capital issued to directors in lieu is £5,000. If the recommendation were accepted, a deduction of £300 in respect of an artificial transaction would be given. The capitalisation of the £3,000 reserve involved a loss of surtax on this sum.

"The third example is also an actual case. Private Company C was registered four years ago with a nominal capital of £5,000 and issued capital of £5,000. Profits for six years were £75,000 after payment of directors' fees which were substantial but not exceptional and the profits standard was £13,500. The last balance sheet disclosed reserves of £45,000. If the nominal capital were increased and reserves capitalised and issued to the shareholders, a deduction of £45,000 at 6 per cent. could be claimed in a chargeable accounting period."

An Leas-Cheann Comhairle

From what is the Deputy quoting?

Mr. Hickey

I am quoting from Volume 25, column 1727, of the Seanad Reports. The Minister went on to say:

"These are four cases typical of a number of these private companies and typical of the way they could treat their reserves by capitalising them and escaping the tax. Private Company D, another actual case, was registered six years ago with a nominal capital of £10,000 and an issued capital of £10,000. Profits for five years available were £60,000 after payment of directors' fees, which were substantial, but unexceptional, and the profits standard was £12,500 approximately. For the last of the five years the dividend distribution was 180 per cent., amounting to £18,000."

Mr. Dillon

Are not tariffs and quotas a blessing?

Mr. Hickey

Yes.

Mr. Dillon

You voted for them.

Mr. Hickey

The Minister talks of the difficulty of getting money. He talks about encouraging people to be of good cheer, but I am afraid he is going a wrong way about it. If Deputy Dillon says we voted for tariffs——

Mr. Dillon

And quotas.

Mr. Hickey

And quotas.

Mr. Dillon

Yes.

Mr. Hickey

We did it in the best interests of the country but Deputy Dillon would not agree that those people who have these quotas are not being controlled as they should be.

Mr. Dillon

That is a result of your voting for them.

Mr. Hickey

It is not the result of out voting for them because we have no control over the tariffs and quotas. When the Minister says that we are pretty well off, I am afraid he is being too complacent about these things. If we are going to have any kind of security or any kind of equal sacrifice among the sections of the community I would suggest to the Minister that he should deal more drastically with the people who are making excess profits.

Mr. O Ceallaigh

I think the Deputy probably has read part of my statement in the Seanad, as he has picked out those items, but if he has read the thing through, he has found out that I was arguing in favour of being allowed to tax these people. An effort was being made to allow these people, to a certain degree, to go tax free. My effort was to see that they should pay the taxes that were added this year for certain classes of companies.

Mr. Hickey

Is that being done sufficiently?

Mr. O Ceallaigh

If certain amendments had been accepted in the Seanad, that type of company to which the Deputy has just called attention might have escaped, but the amendments were not accepted and these companies will pay their share of the tax as a result of the attitude I adopted.

Mr. Hickey

Will the Minister have sufficient power to do the right thing with those people?

Question put and agreed to.

An Leas-Cheann Comhairle

This Bill is certified by the Ceann Comhairle to be a Money Bill in accordance with Article 22 of the Constitution.

The Dáil adjourned at 5.25 p.m. until 3 o'clock on Wednesday, 17th September, 1941.