Finance Bill, 1946—Second Stage.

An tAire Airgeadais (Prionnsias Mac Aodhagháin)

Tairgim go ndéantar an Bille Airgeadais, 1946, do léamh den dara huair. 'Sé príomh-chuspóir an Bhille seo ná éifeacht do thabhairt in aghaidh na bliana airgeadais ar fad do na Rúin Airgeadais lenar ghlac an Dáil tar éis na Cáinfhaisnéise. Mar is eol do na Teachtaí, ní bhíonn éifeacht reachtúil ach ar feadh thréimhse teoranta ag na Rúin a ritheann an Coiste um Airgeadas den Dáil.

Cuireadh adhbhar furmhór na bhforálacha eile den Bhille fé bhráid na Dála cheana san Oráid Cáinfhaisnéise. 'Na dteannta san, tá forálacha ann a thugann cómhacht chun faoiseamh ó diúitéthe áirithe, a tugadh fén Acht Cómhacht Práinne, 1939, do coimead in éifeacht. Bhéarfad tuairisc níos cruinne ar na forálacha san ar ball agus ar chúpla mion-rud eile atá san Bhille.

The main purpose of this Bill is to give continuing effect to the taxes and duties embodied in the Financial Resolutions passed by Dáil Eireann following the Budget. As Deputies are aware, these Resolutions have statutory effect for only a limited period under the Provisional Collection of Taxes Act, 1927. The majority of the provisions have been either the subject of Financial Resolutions or were referred to in my Budget speech of last month.

Opportunity is, however, being taken in this Bill to incorporate in ordinary legislation certain revenue provisions at present in force under emergency powers legislation and also to amend the revenue laws in minor ways for convenience in administration. It is not, I think, necessary for me to go into these provisions fully at this stage as Deputies will have ample opportunity later of examining each of the sections in detail. For the present, therefore, I trust that the House will be satisfied with a brief reference to the various sections of the Bill as introduced.

Part I—Income-tax—Section 1, which corresponds to Financial Resolution No. 1, passed on Budget day, is the customary "charging" section which provides for the imposition of income-tax, surtax and excess surtax for the year 1946-47. It also makes provision for the continuance in force of the existing enactments relating to those taxes.

Section 2, which was covered by Financial Resolution No. 2, repeals Rule 8 of Schedule E of the Income Tax Act, 1918, and is designed to remove an old and obsolete provision from the income-tax code.

Section 3 is a relieving section, introduced to bring up to date the existing exemption from income-tax in respect of wounds and disability pensions and gratuities granted under the Army Pensions Acts.

Section 4 is also a relieving section. It extends, by reference to the emergency years 1939-40 to 1945-46, the period within which losses incurred in a trade or profession can be carried forward for income-tax purposes and deducted from subsequent profits. The section will benefit those concerns which, because they fared badly during the emergency, did not make sufficient profits to absorb the losses carried forward.

Section 5, to which reference was also made in the Budget speech, provides for a special allowance in respect of revenue or capital expenditure on scientific research in the industrial field. Revenue expenditure within the scope of the section will be allowed as an expense in computing the profits of the trade, while the allowance in respect of capital expenditure will be spread over a period of five years.

Section 6, which was foreshadowed in the Budget speech, provides for a special allowance in respect of capital sums expended in the development of mines. The allowance will extend to sums expended on searching for, discovering and testing mineral deposits, and on the construction of works whose value is likely to be little or nothing when the mine finally ceases to be operated.

I come now to Part II dealing with customs and excise. Section 7, which corresponds to Financial Resolution No. 3, provides for a basic increase of 12/6 the proof gallon in the rates of duty on foreign spirits and for an increase of 12/6 the proof gallon in the case of home-made spirits.

Section 8, which corresponds to Financial Resolution No. 4, provides for an increase in the full rates of customs duty on wines to double the existing rates, which were imposed in 1930, and for corresponding preferential rates in respect of wine produced in and consigned from countries within the British Commonwealth of Nations. The ratio of the preferential rates to the full rates varies from 50 per cent. to 70 per cent.

Section 9, which corresponds to Financial Resolution No. 5, provides for the termination of the existing customs and excise duties on sugar and molasses and for the continuance of the duties and drawbacks on glucose and saccharin.

Section 10, which corresponds to Financial Resolution No. 6, provides for a reduction as from 1st June, 1946, in the rates of customs and excise duty on mineral hydrocarbon light oils from 1/3 to 9d the gallon and from 1/1 to 7d the gallon, respectively. The oils to which the duty applies include petrol, benzol, white spirit, etc., but the bulk of the customs duty is received from petrol. As there is no production of home refined oil at the present time the effect of the reduction on excise duty is nil.

Section 11, which corresponds to Financial Resolution No. 7, provides for similar reductions in customs and excise duties on hydrocarbon oils. The scope of the duties include such oils as crude mineral oils, fuel oil, diesel oil, gas oil, paraffin oil and turpentine, but in view of provisions for rebate, the duties are, in effect, chargeable only on oils intended for use in propelling motor vehicles. As there is no home production of this oil at the present time the effect of the reduction in excise duty is nil.

Section 12 incorporates the provisions of Emergency Powers (No. 217) Order, 1942, which enables second copies of certain cinematograph films to be imported at half the existing rate of duty. The main consideration which gave rise to this concession in 1942 was transport difficulties in this country, which still remain. In addition, a world shortage in films, which is likely to continue for some time, has a bearing on the position. The question of withdrawing the concession will be considered when there is an improvement both in transport facilities and in the supply of films.

Section 13, which was foreshadowed in the Budget speech, abolishes as from 1st August next the entertainments duty on payments for admission to céilidhthe and dances.

Section 14 follows on the Government's decision to establish a customs-free airport at Rineanna for which purpose a Bill is to be introduced by the Minister for Industry and Commerce. The section provides (1) that all goods imported direct from abroad into the customs-free airport shall not be liable to duty, and (2) that any goods removed from the airport to any other part of the State shall be chargeable with duty in the ordinary way.

Section 15 is designed to incorporate in ordinary legislation the provisions of Emergency Powers (No. 303) Order, 1943. This Order exempts gifts of food from the provision whereby customs duty is charged at the fixed minimum sum of 2/6 (or 1/- in the case of goods from the United Kingdom or Canada), if the duty on any individual class of goods contained in one consignment or parcel would amount to less than 2/6. The effect of the section is that imported parcels of food sent as gifts will be charged only with the actual duty without regard to the minimum duty.

Section 16 provides for the exemption from package duty of (a) goods imported as gifts, and (b) goods for the personal use of the importer brought in by the importer or his servant or a member of his family. Under Emergency Powers (No. 348) Order, 1944, the package duty on gifts of food is at present suspended. It is considered that extension of the exemption in the manner indicated and its incorporation in ordinary legislation would make for convenience in revenue administration and remove a possible source of irritation.

Section 17 provides for permanent exemption from customs duty of goods imported by the Irish Red Cross Society as gifts or on loan from a Red Cross organisation abroad and imported solely for the purposes of the society. Since September, 1942, exemption from customs duty has been allowed under an Emergency Powers Order in respect of any article supplied to the society by a Red Cross organisation in any other country.

Section 18 provides for the exemption from customs or excise duty of articles required for use in connection with the establishment and maintenance of international air services using Irish airports. The main purpose of the section is to implement the customs provisions of the draft Convention on International Civil Aviation drawn up at Chicago in November, 1944, and ratified by the Dáil on 19th April, 1945. Section 21 of the Finance Act, 1936, and Section 20 of the Finance Act, 1941, which are being repealed, provided for similar exemption but in respect of transatlantic air services only.

Section 19 provides for the exemption from payment of customs duty of articles required for rescue, salvage and repair of damaged aircraft registered in another State. The section will apply only where the goods are imported temporarily. If they are not exported in due course duty will become chargeable. The purpose of the section is to implement agreements on this subject adopted by each member State at meetings of the Provisional International Civil Aviation Organisation in Montreal last January and February.

Section 20 is identical with Emergency Powers (No. 273) Order, 1943, which reduced the minimum quantity of beer, wine and spirits which may be sold by wholesale dealers to licensed retailers. The Order was made on receipt of representations that, since the legal minima were originally fixed, the increased cost and scarcity of liquors made it difficult for small retailers to purchase and for wholesalers to distribute available supplies. These conditions will, so far as can be foreseen, obtain for a considerable time to come and it is therefore proposed to embody the terms of the Order in ordinary legislation. The position will be reviewed when the supply position returns to normal.

Sections 21 and 22 provide for amendment of the statutes under which excise duty on refreshment house licences and tobacco dealers' licences, respectively, is charged by reference to the "poor law valuation" of the premises. The sections provide for the charging of the duty by reference to the valuation of premises under the Valuation Acts. The amendments, which are purely technical, are necessary consequent on the substitution of the municipal rate for the poor rate in the county boroughs.

What would be the effect?

Nil. It is purely technical and will have no effect on the amount of licence duty payable.

Section 23 repeals Section 32 of the Excise Management Act, 1827, and is intended to be in substitution therefor. It rectifies defects in the 1827 statute which has been found to be insufficient and inappropriate to present conditions.

Part III—Corporation Profits Tax— Section 24, which applies only to accounting periods ending on or after the 1st January, 1941, enables assessments to corporation profits tax and excess corporation profits tax to be made at any time. It also provides that, in the absence of a return of the necessary information, the Revenue Commissioners may make an assessment according to the best of their judgment. This section corresponds to Financial Resolution No. 8 passed on Budget day.

Section 25 provides that profits arising on or after the 1st January, 1947, shall not be chargeable to excess corporation profits tax. Deputies will recollect the announcement I made in this connection in my Budget speech. Section 26 is a "construction" clause for corporation profits tax (including excess corporation profits tax).

Part IV—Miscellaneous and General —Section 27 applies to certain cases where proceedings in revenue matters are taken in the High Court or in the Circuit Court for the recovery of a tax or penalty which is due and payable for the benefit of the Central Fund. The section, which specifies the form of execution order to be granted in such cases, is designed to remove certain defects and archaisms in the existing form of the Order.

Section 28 enables effect to be given to the proposals in the Budget statement regarding the interest rate on Post Office Savings Bank and Trustee Savings Bank deposits. At present, the position is governed by Section 7 of the Post Office Savings Bank Act, 1861—which fixed the annual interest rate on Post Office Savings Bank Deposits at 2½ per cent.—and Section 5 of the National Debt (Supplemental) Act, 1888—which prescribes that interest on a deposit in a Trustee Savings Bank shall not exceed 2½ per cent. per annum. In lieu of the fixed statutory rate of 2½ per cent. for the Post Office Savings Bank, it is proposed to take power to prescribe by Order such rate or rates as may be considered desirable from time to time. Section 29 is consequential on Section 28.

When the Bill becomes law, it is my intention to make an Order fixing 2 per cent. per annum as the interest rate payable on deposits in the Post Office Savings Bank not exceeding £300 and on the first £300 of larger deposits; in the case of deposits exceeding £300 the interest rate will be 1¼ per cent. on the amount of the excess. The Trustee Savings Banks will continue to be free to fix their own interest rates subject to the limitation imposed by Section 29 that the rate shall not exceed the rate for the time being appropriate to a deposit of like amount in the Post Office Savings Bank.

Deputies will recollect that in my Budget statement I informed the House that the third issue of Savings Certificates was being withdrawn on the 8th May and that a new issue of lower-yielding Certificates would be introduced. The necessary printing arrangements are in hands and I expect the Department of Posts and Telegraphs will be able to make the new issue available to the public about the end of this month.

Section 30 establishes the Transition Development Fund. In my Budget statement last month, I indicated to the House in some detail the purposes for which the fund might be utilised. Sub-section (3) describes these purposes in short compass. Before the summer adjournment, I hope to present an Estimate to the House to enable the money to be advanced to the fund as provided in the section.

Section 31 provides for the repeal of the enactments which are cited in the Fourth Schedule. As I have already mentioned, the repeal of Section 32 of the Excise Management Act, 1827, is consequential on Section 23 of the Bill and the repeal of Section 21 of the Finance Act, 1936, and Section 20 of the Finance Act, 1941, is consequential on Section 18.

Section 32 is the customary care and management provision. Section 33 is the usual section relating to the short title, construction and commencement of the Bill.

The Minister has given us in brief outline the meaning of each section in the Finance Bill. I was rather hoping, with regard to some of the more important and newer sections, that he might have given us some fuller information. I am sure the House would welcome fuller information with reference to Section 6, which deals with an allowance for mining development. I should like to know why the Minister has decided to make this allowance. I do not want to be taken as objecting to it. I assume this has been made as a result of certain representations to the Minister or to the Department of Finance. Are we to take it as an indication that there will be more activity in respect of mining? Has the Minister any information that attempts are being, or will be, made to touch what I may call virgin soil as distinct from the wellknown areas which are supposed to have mining possibilities? Fuller information on this matter will be welcomed by the House and by the country.

As long as we can remember, we have been hearing or reading about the mining and mineral possibilities of this country. We know that a great many surveys have been made and that there have been borings and explorations. It is time, after a quarter of a century of native government, that there should be placed before the House some clear statement as to the decisions, if any, which have been reached regarding mining and mineral possibilities. We know that there were some very optimistic views as to what this country contained. We were told we had fairly large supplies, ranging from oil to gold. One matter on which we would welcome a statement is our coal development possibilities. We should like to know if the Government are satisfied that all that can reasonably be done with reference to the production and distribution of coal has been done; whether they have any reason to believe that production figures can be improved, and whether we can hope that such an improvement will come within a reasonable time.

At one time there were rather optimistic hopes about certain parts of the country, particularly Arigna. My recollection is that many people, including Deputies on the Government Benches, were optimistic. Most people were hopeful that we would get in Arigna two of the things we are mainly in need of, coal and iron. A great deal of work has been carried out in Arigna over a number of years and it would be useful and enlightening to the House if we could get some statement on that subject.

Does the Deputy expect to get it from this Minister or the Minister for Industry and Commerce?

So long as I get it, I do not care from whom it comes. I am merely putting this matter to the Minister for Finance because, apparently, he feels that there are fields still to be explored. Apparently the Minister and the Department are satisfied—and if one is to believe all one hears about the Department of Finance, it is not easy to satisfy them —that such further surveys as are to be made are worthy of their benediction. If what we hear about the Department is true, there is apparently some hope. But they should not keep all the information to themselves. The Minister should give us the information which he has at his disposal and which was sufficient to satisfy him and the Department.

There are other points that one might touch upon, but I do not propose to do so now; I think it is better to leave them until the Committee Stage, when the House will consider the Bill section by section.

There are, however, some rather important points on which I would like further information. I am intrigued about this Transition Development Fund. It sounds good, but I would like to know what it means and when will it be given effect to. Is it merely a pious aspiration put into this Bill? How much money will be spent on this development fund in the coming year and upon what will it be spent? To what extent will it give additional employment? To what extent will it give full employment to those who are now partially employed? The Minister has been very modest about the proposal. He said that there is some legislation to be introduced —I am not quite sure whether it is in connection with this, or in connection with civil aviation.

There will be a special Estimate for this fund.

When is it likely to come along?

It will come along this session, before the Dáil adjourns for the summer.

This is a very important matter and a large sum of money is involved. I should like to know from the Minister whether we can take it that before the special Estimate is introduced the plans in connection with the Transition Development Fund for the coming year will be available and will be made known to the House.

I come now to the interest on Post Office Savings. I think this is definitely a step in the wrong direction. It is something that should not be done. It is a very bad thing that any step should be taken which will cut across whatever thrift there is in the country. God knows that thrift in these days is not anything like what it should be. We know that money seems to have lost any sense of value that it ever had.

We know definitely that we have inflation in this country. We know that there is every incitement, every inducement, and every temptation for certain sections of our community to flash money around as if notes were mere scraps of paper. We know that other sections of the community are at their wits' end to make a £ note stretch as far as a 10/- note did six or seven years ago. We have the two extremes. We have a very substantial section and, strange as it may seem, that is the poorest and most crippled section, whose sheet anchor always was the Post Office Savings Bank. I think it is foolish—I do not want to use any other word—and bad national policy that this gesture—I do not think the Minister means it other than as a gesture—should be made at the expense of people who use the Post Office for their savings. Perhaps the Minister would be good enough to say what is the existing rate of interest in the Post Office on sums in excess of £300.

Two and a half per cent., up to £2,000.

The position then is that, on sums up to £300, the rate of interest will be 2 per cent., and on amounts in excess of £300 the rate will be 1¼ per cent., so that the present rate of interest on sums in excess of £300 is being cut in two. That seems to me to be very drastic on that section of the community that should be encouraged rather than discouraged to use the Post Office Savings Bank. It would be time enough for the Minister to get money from these people, and to give only 1¼ per cent. when the Government is able to get money at the same rate of interest from other sections and other institutions.

They are able to get it much less.

The Minister says they will be able to get it much less than 1¼ per cent. I take it that local authorities will be able to get it likewise. We will deal with that on another occasion.

I want to express my disappointment that in this Bill there is no measure of relief of any description for the class we have been talking about, the very poorest. I refer particularly to people dependent on old age pensions and blind pensions. I think we are not doing our duty when we give substantial relief to people in respect of charges, which only operate after they have been allowed a sum which will, at least, give a decent livelihood, shelter and enough to eat. I do not think there is any section of the community so much pegged down to the income which they had in 1939 as old age pensioners and blind pensioners.

Taking even the official figures, which we know do not completely represent the full increase in the cost of living, there has been an increase of 70 per cent. over and above the 1939 figures. To people who have to purchase, as those dependent on small pensions have, in the smallest quantities the cost is proportionately greater than it is on those who can purchase in a more advantageous way. Perhaps that is not fully as true under war conditions, when most people are rationed, as in normal times, but even in the abnormal times that we have gone through in the last six years, there is a certain amount of truth in it. It seems to me that we might easily, out of the £3,000,000 which the Minister had to dispose of, have found a portion sufficient to give some relief to sections which are at the bottom of the larder, and are barely on the existence level. The Minister will probably say that they are not entirely dependent on the 10/- a week, that they have vouchers for this, that and the other thing. I do not agree with vouchers. To be quite frank, I do not agree with the manner in which the additional 2/6 is administered. In that respect, I should like to remind the Minister that the machinery, out of which the extra allowance is administered, does not allow it to be paid for the complete year, and that there are periods, as far as certain blind pensioners and old age pensioners are concerned, extending to three or four months, when they do not get the extra 2/6.

All Parties in this House and in the country would have been satisfied with less reliefs than those which were given, if the difference was given for the relief of really necessitous people. I do not think that there is any case the Minister can make against the giving of such relief. From the point of view of bare justice they are entitled to it. We all know the purchasing value of a 10/- note to-day. That is the maximum pension that a blind pensioner or an old age pensioner receives, while many of them are in receipt of less than that sum. But for the charity of neighbours, and the well-known work of charitable institutions and societies, it would mean for them a level of starvation, that would compare unfavourably even with that which obtains in certain countries on the Continent to-day.

That is the greatest blot on this Budget and this Finance Bill, and I appeal to the Minister to consider favourably, even at this stage, the granting of some addition to those who are in receipt of the smallest pensions in the State. They are badly in need of it. Their claim is a just claim and one the satisfaction of which would appeal to every section of the community. I do not believe there is any section in the House or outside it which would object to the Minister satisfying that claim, in so far as he possibly can. I do not want to make any unreasonable demands on the Minister or the Department in this connection, but what would be less than justice would be acceptable and would be very helpful to them. The Minister will admit that, on the basis of the increase in the cost of living, or on the basis of the reduced purchasing power of their pensions, they are entitled to some consideration. The other minor matters which I want to raise can more appropriately be raised on Committee Stage.

I want to refer to a matter with which I dealt last year concerning excess corporation profits tax on the smaller companies. Under Section 13 (1) (c) of the Finance Act, 1944, the Revenue Commissioners have a discretionary power of deduction in cases where the paid-up capital of a company is or exceeds £15,000, but in cases in which the capital is less than £15,000, the total deduction to be allowed shall not exceed a sum representing 3 per cent of the paid-up issued capital of the company. A case has been brought to my notice of a company formed in September, 1943, to take over an existing business which had been carried on by a trader and his family and which had been in existence for a number of years. For the trading year ended 31st August, 1939, the members of that family were paid salaries of approximately £190 per annum each. By Section 13 of the 1944 Finance Act, the total directors' remuneration allowed in respect of excess corporation profits tax must not exceed £150, that is, 3 per cent. of the paid-up capital of £5,000.

If the company had not been formed, the salary paid by the trader to the members of his family would probably have been as high as the 1939 figure of £190, and it is likely that, in many cases of this kind, increased salaries were paid as a result of increased profits during the war in the case of certain companies. A company of the kind I refer to is rather harshly treated under this section. It is desirable from many angles that traders should form companies of this kind, but, if the company had not been formed in this case, they would have succeeded in getting higher remuneration and would have escaped the penalties of Section 13.

I should be glad if the Minister would consider that case, because, when I raised it last year, the Minister said that if a case were brought to his notice of injustice and hardship being caused by the operation of the section, he would have it considered. I do not know whether I can get the permission of the trader concerned to give the actual name or to have the company dealt with by the Department, but, as the law stands, the Revenue Commissioners have no power to allow any deduction and I suggest that it is a matter that should be considered. I do not think it would operate unfairly against other members of the community if the discretionary power which the Revenue Commissioners have in respect of a paid-up capital of £15,000 or more were allowed to relate to smaller companies. It is desirable that these smaller companies should be facilitated in every way and it is desirable that this discretionary power should be given.

One of the other matters to which I want to refer—both have been referred to by Deputy Morrissey—is the section dealing with the allowance for mineral development, Section 6. Recently the Minister for Industry and Commerce referred to the fact that Mianraí, Teoranta, would likely be wound up in the near future and that the phosphate rock development in County Clare—I think, at Doolin—was unlikely to continue much longer, for two reasons: first, that better quality phosphate could be imported at a lower price, and secondly, that it was desirable, in view of a possible future emergency, that whatever deposits remain should be allowed to remain in case they should be required at a later stage. In view of the fact that Mianraí, Teoranta, is likely to be wound up in the near future, I should like to hear to whom this concession or assistance is likely to be granted and what type of mineral development is contemplated.

The other matter on which I seek information is the Transition Development Fund. Sub-section (3) of Section 30 sets out:—

"The Minister may apply the fund for any purpose for or towards the cost of which public moneys are provided and which is conducive to the development or improvement of capital resources."

We have had for a number of years, and apparently are likely to have for some years in the future, State or semi-State boards of one kind or another. One which comes to my mind is the contemplated Pigs and Bacon Board, and I wonder is it intended, in the event of such a commission or board being set up, to make an advance from that Fund to that board. Another board to which an advance might be made—and I think it would be undesirable in either of these cases so to use the Fund—would be that in respect of air development. As a result of contemplated legislation, the capital of the new company may be increased, and I do not know whether the legislation will incorporate a provision to that effect, but, at any rate, those are the types of boards which come to mind in this connection, and I think the House should have some information as to what exactly this Fund will be used for. It has a very high-sounding and progressive name, but, so far as pigs and bacon are concerned, if advances are to be made to such a board, the Fund should be known as the transition decline fund, in the light of previous experience. I should be glad to hear from the Minister what particular development he has in mind in the coming year.

I find it rather difficult to follow the case Deputy Cosgrave made about the smaller companies with a capital under £15,000 and the relation of such companies to excess corporation profit tax, but if he will give me particulars, either mentioning the name of the company or setting out in detail the factors which affect a non-named company, I shall be glad to look into them, and see if there is any case of hardship which could be met.

I am afraid that, without having any further details at the moment, unless there is an amendment of the law, it will be difficult to give any allowance in the particular circumstances of this case.

I shall be glad to examine any information or any facts which the Deputy may put before me, but he will realise that the excess corporation profits tax code is very complicated and I cannot give him now a "yes" or "no" answer regarding it.

Deputy Morrissey referred to Section 6 and wanted to know whether this was an indication of the Government's hopes that more mining development would take place in the future. The future of mining development is really a matter for the Ministry of Industry and Commerce. All I can say is that this section was designed to facilitate any possible development in mining. Mining is a very hazardous business; but, if people are prepared to put their money into it, we are undertaking by this section to give them greater reliefs than are ordinarily given to companies or individuals who undertake work in the open air. Once a person has to go underground for the purpose of following up a mineral he incurs a lot of expenditure and it very often happens that his preliminary expenditure is wasted because the minerals are either non-existent or are not there in sufficient quantity, or sufficiently easy of access, to pay a dividend. It is for the purpose of encouraging people to take these hazards that Section 6 has been inserted in the Bill.

In regard now to the Transition Development Fund, which was mentioned by both Deputy Cosgrave and Deputy Morrissey, in my Budget statement I gave a few illustrations as to the manner in which I propose to utilise this Fund. This Bill merely legalises the establishment of that Fund and legalises the putting into the Fund of a sum not exceeding £5,000,000. Later on, when this Bill is passed into law, I propose to introduce a new Estimate for this Fund and on the introduction of that I propose to place before the Dáil, in as great detail as I can, the various purposes for which it is hoped to use that Fund during the coming year. This sum of money is being provided in this way because it is not possible exactly to foresee when, or in what quantity, or for what purpose the money will be required. It is brought forward in an effort to encourage every possible development during this transition period. If there is a housing project, for instance, which cannot be completed owing to shortage of certain materials, I will be prepared, out of this Fund, to give every possible assistance to local authorities to assist them in the erection of the houses and to bear the capital charges on the Fund until the houses are completed. Now, in regard to housing, one would need to be a prophet in order to compute how much will be required out of the Fund because so many uncertain factors are involved—the greatest of which, as Deputies in this House are well aware, is the uncertainty of supplies of essential materials from abroad.

Since the introduction of the Budget we have authorised the Department of Agriculture to accept certain applications which have come in for farm improvements. About £60,000 is involved in these. If this transition fund did not go through this £60,000 would have to be met by a Supplementary Estimate; but I took a chance on its going through and I have authorised the Department of Agriculture to accept these applications on that understanding. I felt that it was essential, particularly during this period when there are so many men looking for employment and so much valuable work to be done in the line of farm improvements, that every possible encouragement should be given to the farmers to improve their lands.

Deputy Cosgrave asked two specific questions as to whether this fund would be utilised for the Pigs and Bacon Board and as to whether it would be utilised for the Air Board. I do not see how the Pigs and Bacon Board could draw upon this Fund, or for what purpose it might be suggested that could be done. Before many months I anticipate there will be legislation before this House for the reorganisation of the Pigs and Bacon Board and for the purpose of giving it new powers. At the same time I am quite sure that the Minister for Agriculture will seek through the Dáil such funds as he considers necessary for that Board to enable it to carry out its functions. With regard to the Air Board, I cannot see in that connection either for what purpose the Air Board could call upon this Fund or for what purpose the various air companies could call upon it. Very large sums of moneys have been made available for the building of airports, for the purchase of equipment, aeroplanes and so on. I think that all such expenditure of that nature can more properly be met out of the Votes specially passed by the Dáil for their development. Apart from Boards, such as Deputy Cosgrave referred to. there is a multiplicity of purposes for which I think the money could usefully be spent. I think, however, that the Transition Fund will principally be drawn on by local authorities and I would like the local authorities now to go ahead and get in tenders for the building of cottages and houses in order to proceed as far as they possibly can with the available material and the available unemployed in their districts. I would like to see the job of housing our people in a reasonable fashion completed as soon as possible. Great strides were made in the housing campaign before the war. We rehoused in five or six years about one-fifth of the entire population and, if we go all out on the job, I believe that within a few years we can have our people reasonably housed if the materials become available in any quantity. That is not going to be the end of house-building because, if we had a certain standard of houses, I am certain, our standards would rise very quickly. We have all seen in our own day how the general standard of life has improved and people are not content with it—they want a higher standard still. I think trade unions and builders who are connected with the building industry will be cutting their own throats if they try to take advantage of the present situation to drive up housing costs. I hope the builders will be prepared to do an efficient job at a reasonable price and that the building workers will be prepared to give a reasonable output at a reasonable price. If we get these two things —if we have hearty and willing cooperation from both the master builders and the building workers—we can build houses to let at a reasonable price, even at the present time.

Would the Minister say on what terms money from this Fund will be made available to local authorities?

The general proposal is this: If there is a scheme of houses that can be completed—let us take that as an example—and if the local authority gets a firm and reasonable tender from a builder to complete the houses within a certain specified time the local authority will get the usual pre-1938 subsidy; it will get any loans required from the Local Loans Fund at 2½ per cent., instead of at 4¼ per cent. as in 1938, and over and above that, it will get out of the Transition Fund, where necessary, a grant—not a loan—an absolute grant, sufficient to bring the rent down to a reasonable figure in relation to the present wage income. The money advanced out of this Transition Development Fund would be by way of outright grant, not by way of loan.

The only other point that I should reply to is the one regarding the Post Post Office Savings Bank deposits will rissey also referred to old age pensions but we have had that matter out on many occasions here during the last three months. Deputy Morrissey says that the cutting of the interest rate on the Post Office Savings Bank deposits will result in reduction in thrift. I hope it will not, that proper thrift will continue. I do not want to see people thrifty at the expense of their health or the health of their children but, if people can reasonably put away some money to be spent at a more appropriate time, I think they should do so. I believe it is a big encouragement to the poorer section of the community that they are being allowed, in this era of low interest, 2 per cent. for deposits which they can draw upon within a couple of hours' notice by telegram or on a few days' notice over the counter of the post office. Over £300 it is proposed to pay 1¼ per cent. and, effectively, on, say, a deposit of £500, that means an interest rate of 1.7 per cent. A person who has £300 and under gets 2 per cent. A person who has £500 will get 1.7 per cent. interest per annum. Even a person who has £1,000 in the Post Office Savings Bank, withdrawable on demand, will get a rate of interest of 1.475 per cent—as near as does not matter to 1½ per cent.

As I pointed out in my Budget speech, we have got the agreement of the commercial banks that if loans from the public and the Post Office Savings Bank and receipts from taxation do not meet the outgoings from the Exchequer during the financial year, we will be able to get three months bills from the banks at 1? per cent.; and, having regard to the fact that money going out from the banks in that way is liable to reappear with them on time deposit, to the extent of 80 per cent. of their original credit, and having regard to the other unavoidable expenses, that rate of 1? per cent. yields a very, very small net percentage of profit towards overheads to the commercial banks. I do not know whether Deputy Morrissey, before he made his speech to-day, consulted with his colleagues on this matter or not.

I said specifically, I think, that I was speaking my own mind on the matter.

I wish to goodness Fine Gael had one mind.

It is enough to have Fianna Fáil dominated by one mind without having Fine Gael dominated by one mind.

I wish they had a corporate mind.

There are enough "yesmen" on that side of the House.

I do not care whether it is made up of one person or by all of them.

I know what you want—a mentality equal to your own— which says "yes" when father says "yes" and "no" when father says "no." Thanks be to God we have a little bit of independence over here.

The people of the country are entitled to say "yes" or "no" to various policies. What is the policy of Fine Gael in regard to this matter? That is what I want to know.

You have been told that.

Is it high interest or low interest?

You will hear that also. You know what it is and you followed it two years afterwards.

Are we to take it it is low interest?

You will hear all that.

I do not know whether the Deputy is keeping it a secret for the people in Cork, but I shall listen in to hear what he is saying in Cork.

Cannot you admit that you sat on the Fine Gael policy for two years and then adopted it?

I am trying to find out now——

You are trying to cover up your tracks.

——in regard to this matter, whether the Fine Gael Party as a Party are standing for a low interest policy or a high interest policy.

If you have forgotten, read the Dáil Debates.

He has not forgotten. He is trying to pretend that the present policy is his own.

At one time three months Exchequer bills were on the basis of 5 per cent. under the Cumann na nGaedheal Government. We have succeeded in making an arrangement to get them at 1? per cent.

Of course the war had nothing to do with it.

I want to see that the ordinary people are provided with facilities to put their money on deposit in the Post Office Savings Bank and I want to get it at such a price as will enable me to re-lend at a rate of 2½ per cent. for 50 years in order to get housing going. In relation to the local loans for these purposes, I want to reduce the actual charges appropriate to 4¼ per cent. for 35 years which were issued up to now and which cost about 2/1½d. per £100 per year, down to 1/4d. per £100 per year. I think that the Deputy cannot expect me to pay more for money than we get for it out of the local loans. Those people who do not want to deposit their money in the ordinary commercial banks, who do not want to keep it in the stocking or in the thatch, if they want to deposit up to £300, even for each member of the family, we will give them 2 per cent. on it in the Post Office Savings Bank. We intend to issue in the very near future, in substitution for the old savings certificates, a new issue which will give them, on maturity, in 11 years £2/10/1 per cent.; in other words, 16/- rising to £1 in 10 years or to one guinea in 11 years. I think that those who want to save and invest their money and get interest on it should be very glad to have the option either of placing on day-to-day deposit in the Post Office Saving Bank up to £300 at 2 per cent. or buying savings certificates which will yield them £2 10s. 1d. per cent. in 11 years. At any rate, in present circumstances we cannot do any better.

I hope that in present circumstances when goods are in short supply people will not spend their money foolishly, outbidding each other for the supplies that are available. I wish to goodness that people would give prices a chance to fall in certain respects and that, instead of competing with each other for the short supplies available, they would put their money into the Post Office Savings Bank or into the commercial banks or into the new issue of savings certificates which I hope will be available about the end of the month.

I invite the Minister between now and the Committee Stage to read what he said on this matter two years ago.

If the Deputy would get in touch with the rest of his colleagues it would be a good idea.

Question put and agreed to.
Ordered: That the Committee Stage be taken on Tuesday, June 11th.