Dáil Éireann debate -
Wednesday, 23 Jun 1948

Vol. 111 No. 11

Committee on Finance. - Finance Bill, 1948—Final Stage.

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

Mr. Lemass

I think, before this Bill, which has for its purpose the increasing of taxation, passes its Final Stage here, that another opportunity should be given to those Deputies, who sought and obtained election to this House with the declared intention of reducing taxation, of protesting against it. These Deputies are sitting opposite me now on the benches behind the Minister. They are aware of the fact that they campaigned throughout the country on the need for a reduction of taxation; they are aware of the fact that they frequently reiterated their opinion that a reduction of taxation was practicable, and they are now dealing with a Bill introduced by a Minister of their own Party to increase taxation. Surely they will have something to say about it. I do not expect that any of them will be prepared to vote against the passage of the Bill. That would be to expect too much, but there are obvious reasons why they might think it desirable, if not actually necessary, to put upon record some protest, however feeble, against the imposing of increased taxation by the first major Bill introduced by their Government.

I am not going to assert, as they asserted, that an increase in taxation is always objectionable. An increase in taxation for the purpose of providing funds to finance some service which the public needs or the public desires is quite justifiable, but they opposed increases of taxation regardless of the purpose of it.

Mr. Timoney

That is not so.

Mr. Lemass

I do not know if the Deputy has yet joined the Party to which I am addressing my remarks. Personally I have no knowledge of the campaign which the Deputy fought, but I have ample knowledge of the general line which was taken by those people who opposed taxation regardless of the purposes for which that taxation was imposed. May I remind the Deputy that their principal campaign was directed against taxes which were introduced in order to subsidise food prices. Nobody, I am sure, will quarrel with the need for reducing the cost of food. I think not even for that purpose were they prepared to support proposals to increase taxation. Despite the fact that that was the purpose of the taxation they announced their intention of reducing it. We are now increasing taxation, and those who support this Bill are supporting an increase in taxation, and for what purpose? I submit that it is not sufficient defence for Deputies who took that line and who are departing from it to assert merely that the cost of public services is such as to require the imposition of new charges on the public. That is not what they told the people. They told the people that they could give them all the services they required, adequately and efficiently, at a lower cost with no extra taxation and no added impositions on petrol, fuel oil or anything else. An increase in taxation is objectionable when it is proposed by a Government supported by Deputies who secured election on a programme of reduced taxation. That brings in a question of faith and morals, a question of public faith in the integrity of public men. It is not moral to seek and obtain election on a programme to which it is not intended to adhere.

Captain Cowan

Is not that the programme of 1932, to reduce taxation?

Mr. Lemass

No, sir. The Deputy has been misled by Cumann na nGaedheal propaganda. Taxation is, of course, always objectionable when it is of such a character as to constitute a handicap to trade and one of the main taxes imposed by this Bill is a handicap to trade. It is a bad tax because inevitably it means an increase in the cost of the production and distribution of merchandise and will, therefore, be passed on with additions to the public. An increase of taxation is, of course, always bad at a time of rising prices and falling trade. I make that statement almost without reservation and we have here now a situation of rising prices and falling trade. Not merely are prices rising and our trade declining, but the Government is doing nothing about it. I do not think it is fair once again to remind the Deputies opposite that in addition to undertaking to reduce taxation they undertook to reduce prices and that since this Government came to office prices have risen continuously. Not one single price has been reduced over the whole range of the foodstuffs, which are generally regarded as necessities of life. These prices have risen as a direct consequence of Government activity or of Government inactivity and that rise in prices is associated with a decline in trade. I do not know if it is necessary to produce here statistical evidence of the stagnation in trade which is now developing. Everybody knows about that, except apparently the members of the Government. Again the Government is watching with complacent indifference and without apparently any idea or any intention of doing anything about it. Deputies on this side of the House might accept this Bill and might accept the increased taxation for which the Bill provides if there was any evidence of a worth-while policy behind it. We have had, however, from the Government no evidence of a policy. We have merely a mess of negatives. We know what they are against, but we do not know what they are for. I think it is high time that some effort was made to elucidate for the information of the public, for that section of the public who supported the Government Deputies, what precisely it is their aim to do.

We are receiving from different Ministers contradictory statements with no effort forthcoming from anybody to attempt to reconcile them. I have said that the cost of living is rising; I have protested against the imposition of additional taxes at a time when the cost of living was rising; I have protested against the particular tax which was inevitably bound to increase still further the cost of living; but let me say this, I cannot give the House any precise data as to the exact degree of the rise in prices which has occurred, because I do not know them. For some reason the publication of the usual quarterly cost-of-living index number has been delayed. Normally the mid-May number would be published early in June and it is now the end of June and the figure has not appeared. May I ask the Minister for Finance why there has been this delay in the publication of the figure and when it will appear?

I do not know if I would be in order in making any reference on this Bill to the announcement which appeared to-day concerning the trade agreement which has been made——

An Ceann Comhairle

That matter does not arise.

Mr. Lemass

——but I think some information should be given, and given soon, as to the precise significance of the limitation which the Government have accepted upon our hard currency expenditure. That is a matter which is all-important in relation to this Bill.

An Ceann Comhairle

The question of the agreement does not arise. It has to come up for ratification.

Mr. Lemass

I am not proposing to discuss the agreement. I want to impress on the Government the importance of giving early information on that precise matter. The absence of precise information is bound to have an adverse effect on trade and, therefore, an adverse effect upon revenue. The Minister based his taxation proposals following on his Budget statement on a certain assumption concerning the procuring of wheat at prices indicated in the draft agreement concerning wheat negotiated early this year in Washington. The indications are that that agreement is not going to be implemented. It is now fairly clear that the United States Senate will reject it and that, consequently, the arrangements contemplated for the purchase of wheat at fixed prices will not proceed. On the contrary, there was published this morning in the American papers a statement by a spokesman of the American Department of Agriculture to the effect that American exports of foodstuffs, regardless of any arrangement that might be made in connection with the European Recovery Programme, but particularly exports of grain, would be less in the next 12 months than in either of the previous two years. In these circumstances, in the absence of an agreement such as was contemplated and the diminution in American shipments, it is almost inevitable that wheat prices will rise higher than those contemplated by the agreement and those upon which the Minister based the cost of the wheat subsidy.

It is not a financial matter but clearly, having regard to the information which is now available, some reconsideration should be given to the desirability of expanding, or at least maintaining, our own wheat crop. I do not know if the announced commitment which the Government have entered into to arrange future wheat and maize shipments in consultation with the British authorities involves or implies the giving to these authorities of any right of veto or of limitation on our wheat purchases

Minister for Finance (Mr. McGilligan)

May this be discussed?

Mr. Lemass

I want to suggest that, if so, it is at least possible——

Mr. McGilligan

The Deputy is discussing it.

An Ceann Comhairle

It is not to be discussed.

Mr. McGilligan

It is being discussed.

Mr. Lemass

It is at least possible in such circumstances that our wheat imports will be less. Presumably, it would be difficult for the British authorities to maintain here at their expense a bread ration larger than their own. If that is so, presumably the basis of the Budget is altered, because the Minister informed the House that the basis of the Budget and the taxation proposals in this Bill were based upon a certain assumption concerning the quantities of wheat to be imported and the prices at which they were to be imported. If these assumptions are proved to be incorrect, the House is entitled to be informed as to the measures which the Government propose to take in the matter.

I want to protest also against a further development of the Government attitude to the Dáil in relation to financial matters. I protested previously against the remission of taxation by Government Order and without giving an opportunity to the Dáil to express its view on that proposal. I now want to protest equally emphatically against the Government's imposing taxation by an administrative decision and without previous discussion here or without the consent of this House. I refer to the increase in the postal charges. So far as I know, on no previous occasion in the history of this House has there been an increase in postal charges made without the matter being mentioned in the Budget statement and presented here as part of the Government's general financial proposals.

It is, in my view, sharp practice for the Minister for Finance to bring a Budget before this House, to get approval of the Budget from the House, to submit a Finance Bill to give legislative effect to the taxation proposals of that Budget and, at the end of that, to impose a new charge upon the public by Ministerial decision of which the members of the Dáil learned for the first time from a news item in the Press. I have expressed my view that the most important of all the powers possessed by the Dáil is the right to control the imposition of taxation on the public. If the Dáil surrenders in the least iota its power over public finance, its right to say whether or not a charge should be imposed on the public and how public money should be spent, then we are adopting a new conception of democracy. This experiment in democracy to which the Taoiseach has repeatedly referred has taken a new significance.

I understand fully that on this stage of the Bill I can refer only to what is in it. I am not at liberty to discuss what is not in it or what should be in it. I want merely to emphasise for the information of Deputies opposite that in the Bill are proposals to increase taxation and I want them to relate their support for these proposals in their own consciences to the means by which they secured election to this House.

Mr. McGilligan

The few words that have been said by way of what the Deputy aptly described as a feeble protest in connection with the financial proposals of the Budget have been based upon an assertion that the legislation that has been discussed carries an increase in taxation. The Deputy appears to forget that there are two parts of the Finance Bill which confirm Orders which reduce taxation. The reduction in taxation amounts to over £6,000,000. The proposals for taxation amount to round about £1,000,000. The Deputy who was recently a Minister left a situation in which, if he was still in control of affairs, the country would be faced this year with new expenditure amounting to over £10,000,000. The Deputy has despised, criticised and cast aside all efforts at economy. He would not have made them.

The Deputy now says that the wheat agreement is not likely to go through. I am afraid he is reading too much of the gentleman who calls himself "Dáil Reporter" and who writes in one of the papers. I do not know where he gets his advance information. But the Deputy who is now criticising the wheat agreement, thinking it may not go through, openly and not surreptitiously as in the Irish Press, stated that the wheat agreement would go through; that it was his development and that he was responsible for the conclusion of the agreement. It is difficult just inside of the space of six weeks to have it both ways. It could be done over six months, as we know from the Deputy's practice before. The period is too narrow. He catches up with himself so to speak. He approved of that agreement and indicated that it was certain to go through and that anybody who took credit for it——

Mr. Lemass

I said the reverse.

Mr. McGilligan

——except those who would give credit to Fianna Fáil were speaking falsely. Now, of course, it is at least cheap political tactics to go on the other line. I make this assertion just as boldly as the other assertion was made—one is as much without foundation as the other. Nobody knows what is going to happen. In any event, the Deputy's main point is that there is an increase in taxation. I invite him to consider the facts. His Government, if still a Government, would be imposing upon the people at least £10,000,000 of taxation. We know that £6,000,000 of that was to be achieved through taxes which the public so cordially disliked that they removed the Deputy and his colleagues from office. One of the aggravations which the Deputy has and which his whole Party shares with him is that we carried out certain pledges that were made in response to an active public opinion to which we were sensitive.

Mr. Allen

You sold out beforehand.

Mr. McGilligan

Deputy Allen is in his old frame of mind again, forgetting the sell out, unsuccessfully, which he and his colleagues made to big business. We were not selling out to any small group. We sold out to the public and, if the Deputy does not consider that, will he answer the question I have phrased often in this House before? When he speaks of selling out, he accuses one Party. We are an amalgamation of Parties, a coalition of Parties, a group. It is amazing how all the people forming the different groups all found themselves up against public opinion which opposed the taxes which we removed. If Deputy Allen were not so much under the control of his ex-Ministerial group, he would be more open to the sway of public opinion. It is because he was not so open, he now finds himself subjected to adverse public criticism.

Mr. Allen

The taxes had nothing to do with the result of the election.

Mr. McGilligan

I am glad to hear it. I thought it had. Then, it was some other matter, which we will probe later, which had made the public so antagonistic to Fianna Fáil. It was not these taxation proposals. I am glad to hear it. We feel otherwise. We feel we are responsive to public opinion both in remitting these taxes and in going on the line of economy, economy that cuts out extravagance and that saves the public of this State, not merely that £6,000,000, but an additional £2,000,000 or £3,000,000 which the Deputy who now speaks for the Party would have imposed on the people.

Mr. Allen

The same group are looking for another reduction now.

Mr. McGilligan

We will see whether the Deputy will support Deputy Corry after what people have said about the Deputy. That will all come.

Mr. Allen

I am opposed to him all the way.

Mr. McGilligan

Will Deputy Allen talk to the publicans' pal who is sitting beside him or keep silent?

Mr. Lemass

The Minister forgets that five of his colleagues offered to support that Bill in the life-time of the last Government.

Mr. McGilligan

Possibly, we will see how they vote in the House and we will see whether Deputy Allen is among them. Deputy Allen may find himself in strange company——

Mr. Allen

Not a bit.

Mr. McGilligan

Do not interrupt too soon—if he finds himself walking through the same lobby as I am. So mindful was I of the publicans that I will be found in a particular lobby against the Bill.

Mr. Allen

And so will I.

Mr. McGilligan

Grand.

Mr. Lemass

In all fairness to Deputy Allen, it should be said that he, more than anyone else, was responsible for the defeat of a similar proposal in the last Dáil.

Mr. McGilligan

All fairness to Deputy Allen but let Deputy Allen also be fair and recognise that there are arguments against his cheap-jack suggestion that the votes were swayed by what publicans could do. It was very cheap as far as the Deputy is concerned. The Deputy tried to sell big and failed. We sold to public opinion and succeeded. We sold to public opinion, not a trade.

Mr. Allen

We know whom you sold to.

An Ceann Comhairle

The Deputy must not interrupt.

Mr. McGilligan

Will the Deputy go home and read the manifesto about the Fianna Fáil election fund and just look at who were the supporters of that and will the Deputy go down and ask any of his constituents whether the promulgation of that particular piece of propaganda, which they as Ministers thought would be favourable to them, did not sway public opinion against the people that public opinion recognised as not merely having sold one year but for ten years back to a particular group? The Deputy ought to be sensitive to what I am saying. If he had been sensitive to it a year ago, he might have made a change, as some of his colleagues reminded him.

Mr. Allen

When you were below at the tribunal?

An Ceann Comhairle

The Deputy has been told he cannot interrupt.

Mr. Allen

Why is he addressing me?

An Ceann Comhairle

The Deputy started the interruptions.

Mr. McGilligan

I do not object to the interruption.

An Ceann Comhairle

The Chair does.

Mr. Allen

The Minister might not, because he is an adept.

Mr. McGilligan

As far as this has to do with order, I admit a superior authority. As far as it has to do with argument, I will not be browbeaten.

Mr. Allen

The Minister delights in interruptions.

Mr. McGilligan

The Deputy, who was the only one who had the courage to stick to his guns in this matter, has lamented the efforts at economy that have been made. I apologise for these efforts at economy. They have not been sufficient. I will go a good deal further, if I can manage it, on the same lines of cutting out extravagance because there is requirement and necessity here for money for productive purposes from the limited resources that this State has. It is only when one stops the wide gaps that have been created in any sound economy by Fianna Fáil that there will be any possibility of having money that can be applied usefully to development purposes and to socially desirable purposes. These are the objects we have and to them any money will be devoted. We must save and we will save on the Cushla Machree extravagance for which the Deputy was responsible.

I do, however, feel that it is not really tolerable to be addressed on faith and morals by Deputy Lemass and it is hardly tolerable to be spoken to by the same Deputy on the integrity that attaches to public office. Faith and morals and the integrity attaching to public office! All we have to do is to have about a five-minutes' silence to think back over the Deputy's relations to public office in the view of these principles. Deputies will recall them without any urge from me.

The Deputy has spoken of the one great tax I have imposed and the difficulty it is going to impose on the trade. I presume that is the petrol tax. The Deputy knows that in 1941 he had a tax on petrol of 1/3. I have not raised it as much. I am at least a penny short of that. If that tax on petrol is a handicap on trade and agriculture, if it is going to increase the cost of living and the costs in every trade and business, including agriculture, then the Deputy had it at a penny higher from 1941 to 1946. It is amazing that these criteria with regard to the hardship going to be imposed on people did not operate to prevent at least the back-benchers of the Party, who were moving amongst the people, from precluding the Minister, as he then was, from imposing this addition on the difficulties under which trade, industry, and agriculture in particular, were labouring at the time.

The Deputy fears that there is no developed policy with regard to trade or industry in this country. I do not know where the Deputy gets that fear of his. I have made statements here with regard to the attitude we have towards both agriculture and industry. We have shown signs of bettering both of these. We have removed certain handicaps. As the years go on, we will remove certain other handicaps by changing a policy which, through its extravagance, had raised taxation, that had imposed burdens well-nigh intolerable upon all the productive capacity of the country.

The Deputy says costs of living are rising. I do not know where the signs of that are. He complains that the index figure has been delayed. I do not know that it has but, if it has, I wonder is it because it is difficult to reconcile the new index figure with the figure which the Deputy when a Minister fathered in order to delude the people of the country by building up a new index figure, the relationship of which to the old was hard to discover, so that, by bringing about a reduction on paper, he could pretend that in reality the cost of living in this country had been reduced. I assert again, as I have asserted right through the debates that have taken place on the Financial Resolutions, that the cost of living in this country has been reduced since the 18th February and, if anybody hesitates to believe that, will he weigh in the balance that inside a few weeks of our coming to office we remitted taxation to the extent of £6,000,000, and that the only major tax I have imposed in this Bill is one of less than £1,000,000? How can anybody expect to be believed in this country when he clamours that the costs of living have been raised in the face of that calculation I have given and which is a sound calculation? It is hard to believe that anybody can be so simple as to accept the view that costs of living have been raised in this country when, in fact, taxes to the extent of £6,000,000 have been remitted and have been substituted by one major tax costing the people less than £1,000,000. That is a remarkable proposition.

Mr. Butler

How do you explain shop prices?

Mr. McGilligan

Even a person so low as to be expelled from the teachers' organisation ought to be able to understand that.

Mr. Butler

I wonder to whom does the Minister refer?

Mr. McGilligan

To the Deputy.

Mr. Butler

He is quite wrong.

Mr. McGilligan

If he has been reinstated, I will rejoice in his new dignity.

Mr. Lemass

If the Minister left out personal abuse we would get along better.

Mr. McGilligan

Possibly the Deputy feels he is on dangerous ground.

Mr. Lemass

I think the dignity of this House is being cheapened by the Minister's performance.

Mr. McGilligan

There is one point that hits the Deputy. He is very concerned about the wheat agreement and throws in his view that wheat will not be sent—maybe it will not—and about the whole question whether wheat prices will drop. In any event I promise this Dáil—not knowing very much about the future and not believing in prognostications in the way that "a Dáil reporter of the Irish Press” does—that wheat prices will not at least reach the level of the shocking bad bargain which the ex-Minister made in connection with that deal about Argentine wheat which was so much discussed in this House. It was a bad thing in any event, and a shockingly bad thing done on the day before the ex-Minister knew he was going to be removed from office, blistering the people of this country with a subvention amounting to in or about £2,250,000 for one bad deal in Argentine wheat. I will make no such bad deals, and by avoiding such bad deals, even if the wheat agreement does not go through, there will be no necessity to impose the taxation which would have been necessary if the ex-Minister was still able to make that type of deal over and over again.

The Deputy is very concerned about the rights of the Dáil in connection with taxation and referred to the postal charges. There is nothing irregular about those postal charges. The Deputy laments the fact that the Dáil is not empowered to deal with these. The Dáil will get an opportunity of dealing with them at the proper time. That such criticism should be put up by the expert person, the most expert over ten years in removing from this House immediate control of charges, puzzles me. Nobody was more expert than the Deputy, and no one more experienced than the Deputy in imposing taxes by Order, the Order having later to be confirmed. What has been done with regard to postal charges is quite regular. It has been done in accordance with the financial procedure of this State. If the Dáil wants to discuss these charges an opportunity will be afforded, sooner or later, to do so. Nothing irregular has been done, and the charges when they come to be discussed will be justified and the Dáil will be asked to accept them. Powers of the same type have been exercised over and over again, and exercised more particularly by the Deputy who has spoken than by anybody else.

If I had known of the particular expenditure against which these charges have to be set at the time when the Finance Bill was being introduced I would have mentioned them. Certain demands were made by civil servants. These demands have been, in part, met, and in order to meet them money had to be found. There was nothing more appropriate than to meet part of those charges, such part at least as devolves on the State, by having recourse to postal charges particularly when these have been running at a low level for many a day, one of the most significant of them running for a very long time at an ancient rate. I think I am entitled to take advantage of these in order to meet particular charges which have come upon me suddenly.

I hope the Dáil will accept the assurance from me that when I introduced the Finance Bill I had made no commitments in respect of civil servants. If I had known I would have mentioned them. If I knew and had not mentioned them that would be in accordance with the practice of the Deputy. I do not propose to adopt his practice or to follow the malpractices that the Deputy indulged in when he was Minister for many years. The Dáil will get notice from time to time of anything done subject to the control of this Bill, and if not it is because the Dáil has given certain powers to the Government. It did not give them by our gripping them. All these matters can be discussed on the Vote for the Post Office.

I present this Finance Bill to the people as a Finance Bill which, in fact, remits taxation. It operates to decrease taxation, and because taxation is being decreased it means a lower cost to the community. I give that in contradiction to what would have happened if the old Government was still in office. Not merely would the £6,000,000 which I am remitting still be in existence, or the £900,000 which I am looking for from petrol, but there would be, in addition, a sum of £2,000,000 or £3,000,000 extra which would have to be got. I ask the people through this House to believe—and I believe they will accept the situation as I have disclosed it—that taxation has been reduced and reduced substantially, notwithstanding advantages which the last Government never thought of giving and which are going to be given in abundance to the people who have a priority call on the means of the State.

Mr. Moran

What about the turf workers?

Mr. McGilligan

You put them out.

Question put and declared carried.

An Ceann Comhairle

This is a Money Bill within the meaning of Article 22 of the Constitution.