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Dáil Éireann debate -
Wednesday, 2 Jul 1947

Vol. 107 No. 6

Committee on Finance. - Finance Bill, 1947—From the Seanad.

The Dáil went into Committee to consider recommendations from the Seanad to the Finance Bill, 1947.

I move that the Committee do not agree with the Seanad in the following recommendation:—

Section 2—That a new subsection as follows be added to the section:—

(2) Notwithstanding anything contained in the foregoing sub-section, Section 18 of the Finance Act, 1920, shall be construed and have effect as if the words "in the case of a widow, two hundred pounds" were inserted after the words "two hundred and twenty-five pounds" where such words appear therein.

Deputies have seen the three recommendations made by the Seanad yesterday to this Bill. The recommendations proposed to the Bill would have cost several millions, if adopted, and the three which were passed by the Seanad would cost about £300,000. The first recommendation proposes to amend the law by increasing the personal allowance in the case of a widow from £140, as provided in the Finance Bill of this year, to £200. Deputies will realise that different widows may be in very different circumstances. A number of them may live in far better circumstances than a single person who is given a personal allowance of £140. The finance law makes the same provision for a widow with children as for a widower with children. Widows get an allowance for their children and they also get what is known as a housekeeper's allowance for a female relative, if they have one living with them to help them to take care of the young family. I cannot see any merit in this particular proposal and I, therefore, move that the Committee disagree with the recommendation of the Seanad.

Can the Minister say how much this recommendation would cost?

About £30,000 a year.

Surely the Minister will appreciate that there is no analogy between the case of a widower who is the family earner and the widow who is cut off from the family earner? There is no similarity between the two positions. The average widow who is deprived of her husband and her husband's earnings will, even if she is in good circumstances, have to curtail her expenditure. I think there is a strong case for treating her on the basis set out in the recommendation. The widower is in the normal case the wage-earner and even though he should lose his spouse, in 99 per cent. of the cases the family circumstances remain the same, whereas when the husband dies the widow is cut off from the husband's earnings and has of necessity to fall back on her capital and to curtail her expenditure. I think there is a strong case for considering the recommendation on that basis and having regard to the fact that it would cost only £30,000 I would ask the Minister to consider the matter.

We have not had the advantage of seeing the report of the debate in the Seanad but, as I understand it, the recommendation passed in the Seanad would substitute £200 for the personal allowance of £140 in the case of a widow.

That is what it proposes, but from a technical point of view it does not exactly do that. That is the general idea.

When we were dealing with these matters in Committee, I moved an amendment that would double the current single personal allowance, that is, that would give a personal allowance of £240 to persons who up to the present had an allowance of £120. I think we made a very strong case for it in relation to the cost of living at the present time and the general difficulty of people, particularly people on the lower income range. I would like very much to support the reminder given by Deputy Coogan to the Minister that it is quite unrealistic to speak of the widow as being in anything like the same position, from the point of view of her financial position, as the widower. I think the Minister, when he considers that this is only a case of £30,000, might very well do something to meet some of the various classes whose case was argued here so very much and, I think, supported by every Party in the Dáil and whose case was so well argued in the Seanad that the Minister has to appear back here in the Dáil to discuss these three amendments. I would press very much on the Minister that the case is so strong that it is rather unreasonable on his part to refuse to accept an amendment much more modest than the amendment I put forward here in the Dáil and that it is unreasonable for him to refuse here so modest an amendment which has been made by the Seanad.

Deputy Mulcahy and Deputy Coogan are arguing as if the financial circumstances of all widows were alike.

All bachelors are not alike, either.

No, that is so. Some widows are much better off than unmarried ladies and some widows are much better off than unmarried men and than widowers. There is no means test in this. There is nothing to say that we are to increase this personal allowance for widows in certain circumstances when they are below the average. It proposes to give all widows a like increase in personal allowance from £140 a year up to £200 a year. Some of them may, from any point of view, be in less need of it than widowers, unmarried women and unmarried men whose personal allowance is now at £140 a year. Even though I am arguing as if this amendment would legally effect the idea which was at the back of the Senator's mind who moved it, I hold that it does not do so. I do not think there is any reasonable case for this amendment.

Surely the Minister realises that when he speaks of some widows being much better off than other people that that "some" is a very small percentage of the whole when the ordinary run of incomes is taken into consideration.

Is the recommendation, then, not accepted?

I think it should be, Sir.

Question put and agreed to.

I move that the Committee do not agree with the Seanad in the following recommendation:—

That before Section 3 the following new section be inserted:—

3.—Section 4 of the Finance Act, 1936 (No. 31 of 1936) shall be construed and have effect as if the words "eighty pounds" were substituted therein for the words "sixty pounds".

This recommendation proposes to raise the children's allowance from £60 to £80. We had a long discussion here in the Dáil on that matter. I am satisfied myself at any rate that an allowance of £60 per child is fair and reasonable having regard to the £140 personal allowance made for a single person. If Deputies are in a generous mood and if Senators are in a generous mood there is nothing to stop their proposing increases in allowances for children and going up and up each year. It is not so long ago since the allowance for children was £40. I think the increase to £60 was a very big advance.

When was it that?

Will the Minister say when it was £40?

I have not got the exact date——

Give us the year.

It was £50 in 1932.

It went up to £60.

Yes, but when was it £40?

It was £40 at one period. As recently as 1932 it was £50 and it was put up to £60. If we go on putting it up the position will soon be that the allowance per child will be the same as the personal allowance for a single person, or more than half the personal allowances made for a married couple. I think the £60 in relation to £140 is good enough. I consider that that contribution which the single people have to pay is all that should be asked of them. If the situation were such that we could contemplate raising the personal allowance and the married allowance higher than the present figure then we could again have a look at the children's allowance but while they remain at the present level I think this is good enough.

When the Minister talks of the allowance made in respect of children and relates it in some way to the personal allowance made to the taxpayer himself, he introduces into the matter a conception that I have not yet been able to understand. I have understood, up to the present, that when allowances were made to taxpayers because of the fact that they had a family consideration was given to the fact that it is expensive to maintain children in the home, to feed, rear and educate them and lay the foundations of launching them into life. I fail to see at all why the allowance that is made to a parent taxpayer in relation to a child should be related in any way to the personal allowance made in respect of a taxpayer. I never heard the idea mooted before and I do not know where the idea has sprung from. The fact is that from 1932 to 1936 a £50 allowance was made in respect of each child. Over that particular period— from 1932 to 1934—the standard rate of income-tax was about 5/- and 4/6 per year after that. Now the standard rate of tax is 6/6. From 1936 parents have been given an allowance in respect of children at the rate of £60 per child. The income-tax has been substantially raised since then and the cost of maintaining a family or of keeping an individual child has been more than doubled. When we argued this matter in Committee I pressed the Minister to increase the allowance in respect of children to £120 a child, emphasising the fact that the parents who, in present-day circumstances, had to maintain their children in health and in a reasonable amount of comfort and to educate them were having a rather distracting time of it.

I suppose there is hardly any middle-class family in the city, living under city conditions, that is not in one way or another running into debt at a time when the cost of living seems to be increasing and increasing. Since we argued this matter in Committee I think the cost of living has been shown to have gone up another ten points. I asked at that particular time that the £60 allowance be increased to £120. The recommendation made by the Seanad is that the £60 be increased to £80. I should like to ask the Minister what it would cost for that concession.

About £150,000 per year.

I think the Government must be completely blind to the difficulties of family rearing at present in view of the general cost of living, blind to the problems that exist, when they refuse to make a concession to the extent that the Minister now mentions. I strongly press the Minister to accept the recommendation from the Seanad and to increase the children's allowance from £60 to £80.

The Minister for Finance listened-in this evening to a three-hour speech by the Taoiseach in which he pulled back the economic and fiscal curtain and showed us the new Ireland that Fianna Fáil was going to usher in. He told us that we were on the threshold of a land which was likely to be flowing with milk and honey, in which all the evils from which we now suffer will disappear, all the hardships which are visited on the people will be dissipated in the course of time and a vista of prosperity opened for us such as we never experienced before or contemplated. The Taoiseach had only finished making that speech and left the centre of the stage when the Minister for Finance comes in to whistle an entirely different tune. The Taoiseach as Dives has gone and the Minister for Finance as Lazarus comes to tell us that there is no money for this relief and that, no matter what the Taoiseach said, the Minister does not believe one word of what was said. He still has the hard, stern task of collecting revenue and he is not satisfied that it will come like the manna that the Taoiseach talked about this evening.

I have never had much use for a Second Chamber and least of all for the Second Chamber we have here as it is constituted at present. I was not responsible for re-creating it; the Government had that responsibility. But, if they are still willing to spend the present amount of money on the Seanad, at least they ought to pay them the honour of taking some notice of what they said, especially on an occasion, perhaps an unusual occasion, when they do something useful and valuable. I think the Seanad have done that in this instance. They were able to do it because, I suppose, the Minister's legionaries were not there in force. If they were in force, I suppose the Seanad would not be permitted to do it. This proposal to increase the allowance for children is intended to give relief only in respect of two children by increasing the amount from £60 to £80. I understood the Minister to say that it would cost about £150,000.

About £150,000 annually.

That is not a very big sum. It is an insignificant sum if the Taoiseach's El Dorado is anywhere within sight. As this allowance has not been increased since 1939 when it stood at £60, surely the Minister ought to recognise that the cost of living has increased by 72 per cent. in the meantime, according to the Government's own figure, and that there is some case for stepping up this allowance in respect of children by 33 per cent. That is all the recommendation proposes to do—to grant relief to the extent of £80 instead of £60 for children in respect of whom the relief has not been extended since 1939, a period from which the cost of living has increased by 72 per cent.

We heard from the Taoiseach a dissertation on the value to the nation of more children, the asset which they were to the nation and the benefit which would ultimately accrue to the nation by encouraging earlier marriages and increasing the population. It is rather ungracious on the part of the Minister for Finance so soon after that speech to come in with his cold financial cynicism and say: "That is all very fine, but you are not going to get any more no matter how many children you have. So far as I am concerned, I have the same tax-gathering outlook on your incomes, and your difficulties in rearing and educating children in these days make no impression on me."

I think £150,000 is a very trifling sum in respect of income-tax relief, especially when we know that the Minister last year gave away £3,000,000 in excess corporation profits tax to a collection of gentlemen who have certainly made no claim that I know of which would indicate that they could not continue to pay that tax on the same scale as during the war. Whilst they paid it, they clearly indicated by the profits they still had that they were suffering no real hardship. When you come to the lower and middle-income groups who are seeking a relief of £80 instead of £60, the Minister becomes stony-hearted. The gentlemen who constitute our hierarchy of profiteers and financiers can get away with £3,000,000 but the ordinary person earning something more than £500 per annum cannot get relief on the modest scale suggested here.

I think the Minister is acting in a rather unsympathetic way towards this recommendation. Having regard to the fact that the Seanad did something useful on this one occasion, that the Taoiseach has foreshadowed the land of promise which we are about to enter, that the amount involved is small, that the cost of living has gone up by more than 70 per cent. since the allowance was last increased, the Minister might very well on this occasion meet the relatively trifling charge involved to the State by accepting the recommendation.

I hope Deputy Norton will read the speeches made by some of his friends in the Seanad in regard to certain surtax and excess corporation profit tax reliefs, and so forth.

When I introduced the Budget I presented the two sides of the account. I stated that we were going to spend a certain sum of money during the year and showed how I proposed to raise that sum. Last year we gave a relief in the standard rate of income-tax. This year I proposed to the Dáil—and the Dáil accepted my proposal—increasing the personal allowances. We could have devoted the same amount of money to increasing children's allowances or to some other purpose. But it is my personal conviction that the allowance of £60 per year for a child is both fair and reasonable in relation to the personal allowance of £140 for a single person.

It is, of course, too low.

We have to have regard to our circumstances. I showed to the Deputies both sides of the bill. It is all very fine for them to start cutting down taxes and proposing increases in expenditure. They can do that with perfect immunity and freedom but I cannot do that when it comes to balancing my Budget. I have got to find out, if we cannot cut down expenses, how we are to raise taxes. I do not want to argue this entire case all over again. I think £60 per child is reasonable enough. If we come to a time when we can increase the personal allowance or give other reliefs of that nature then we can examine at the same time the question of children's allowances.

Question put.
The Committee divided: Tá, 57; Níl, 30.

  • Aiken, Frank.
  • Allen, Denis.
  • Bartley, Gerald.
  • Beegan, Patrick.
  • Blaney, Neal.
  • Boland, Gerald.
  • Bourke, Dan.
  • Brady, Brian.
  • Breathnach, Cormac.
  • Brennan, Thomas.
  • Breslin, Cormac.
  • Briscoe, Robert.
  • Buckley, Seán.
  • Burke, Patrick (Co. Dublin).
  • Butler, Bernard.
  • Colley, Harry.
  • Corry, Martin J.
  • Crowley, Honor Mary.
  • Daly, Francis J.
  • Derrig, Thomas.
  • De Valera, Eamon.
  • De Valera, Vivion.
  • Flynn, Stephen.
  • Fogarty, Andrew.
  • Gorry, Patrick J.
  • Harris, Thomas.
  • Hilliard, Michael.
  • Humphreys, Francis.
  • Kennedy, Michael J.
  • Killilea, Mark.
  • Kilroy, James.
  • Kissane, Eamon.
  • Lemass, Seán F.
  • Little, Patrick J.
  • Loughman, Frank.
  • Lydon, Michael F.
  • McCann, John.
  • McCarthy, Seán.
  • MacEntee, Seán.
  • Moylan, Seán.
  • O'Briain, Donnchadh.
  • O'Connor, John S.
  • O'Grady, Seán.
  • O'Reilly, Matthew.
  • O'Rourke, Daniel.
  • O'Sullivan, Ted.
  • Rice, Bridget M.
  • Ruttledge, Patrick J.
  • Ryan, James.
  • Ryan, Mary B.
  • Ryan, Robert.
  • Shanahan, Patrick.
  • Skinner, Leo B.
  • Smith, Patrick.
  • Traynor, Oscar.
  • Ua Donnchadha, Dómhnall.
  • Walsh, Richard.


  • Beirne, John.
  • Bennett, George C.
  • Blowick, Joseph.
  • Cafferky, Dominick.
  • Cogan, Patrick.
  • Coogan, Eamonn.
  • Corish, Brendan.
  • Costello, John A.
  • Davin, William.
  • Dockrell, Henry M.
  • Dockrell, Maurice E.
  • Donnellan, Michael.
  • Fagan, Charles.
  • Flanagan, Oliver J.
  • Giles, Patrick.
  • Halliden, Patrick J.
  • Heskin, Denis.
  • Hughes, James.
  • Keating, John.
  • McAuliffe, Patrick.
  • McMenamin, Daniel.
  • Morrissey, Daniel.
  • Mulcahy, Richard.
  • Murphy, Timothy J.
  • Norton, William.
  • O'Higgins, Thomas F.
  • O'Reilly, Thomas.
  • O'Sullivan, Martin.
  • Redmond, Bridget M.
  • Sheldon, William A. W.
Tellers:—Tá: Deputies Kissane and Kennedy; Níl: Deputies Murphy and Corish.
Question declared carried.

I move that the Committee do not agree with the Seanad in Recommendation No. 3:—

That before Section 3 the following new section be inserted:—

3.—(1) Notwithstanding anything contained in any other Act the relief to which a taxpayer shall be entitled in respect of a female relative residing with and maintained by him shall be relief from tax upon sixty pounds.

(2) This section shall be deemed to have been in force during the year commencing on the sixth day of April, 1946.

This is a recommendation that would cost about £125,000 a year. As Deputies will see, there is no limitation as to income at all in this particular recommendation and the best we can calculate is that it would cost about £125,000. There are many suggestions that Deputies and Senators could make, and Deputy Mulcahy might say that as this will cost only £125,000, why not give it? But if all the recommendations that people might think of in the way of relief from the paying of income-tax were put together, the total would come to a pretty considerable sum. I do not think the Dáil should accept this particular recommendation.

I think the Minister has to acknowledge that the allowance granted to an income-tax payer in respect of the maintenance of a female relative was fixed at a time when £25 was considerably different in point of value from what it is now. These allowances have been largely outmoded in the light of the increase in the cost of living. I agree the Minister has had his whole Budget conceived possibly in the spirit of the wages standstill Orders and the economic conditions which flowed from that situation and, while he made some slight advances in the matter of relief for income-tax payers by raising personal allowances in the case of married and unmarried persons, nevertheless he has done so only to a very limited extent, to an extent that can scarcely be said to be commensurate with the rapid increase in prices.

I feel there is some case for a revision of the allowances paid to a person responsible for the maintenance of a female relative for domestic purposes. Could he give any indication as to whether this question will be examined with a view to bringing these reliefs more into conformity with the new values attaching to money by reason of the fact that the purchasing power has declined in consequence of the substantial rise in prices over the 1939 level?

In framing a Budget a Minister for Finance has always, if he has any money to spare or any money which he can collect from the taxpayers, to consider the best use he can make of the surplus by way of provision of new services, helping existing services or giving reliefs. In framing the Budget for this year I considered that the best use we could make of the money available, after making the calculations I have indicated, was to increase the personal allowance by £20 and the married allowance by £40. Had we gone into all the trimmings that I could suggest and that many others have suggested from time to time, we would have frittered away the amount left for giving reliefs and we would not have been able to make the adjustment of the £20 in the case of a single person and £40 in the case of a married person. Having balanced all the suggestions, I came down in favour of that straightforward general relief rather than any particular trimmings. It may be that next year—and I hope we will be in a position next year to give some reliefs—we could consider trimmings such as these. I will consider that matter next year. That is not committing myself to any promise that anything will be done about it, but it will be considered.

Question put and declared carried.
The Dáil went out of Committee.
Reported: "That recommendations Nos. 1, 2 and 3 were not accepted.
Report agreed; Seanad to be notified accordingly.