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Dáil Éireann debate -
Wednesday, 14 Jun 1950

Vol. 121 No. 12

Finance Bill, 1950—Committee Stage (Resumed).

Debate resumed on amendment No. 3:—
Before Section 6 to insert a new section as follows:—
(1) Notwithstanding anything contained in any previous enactment the excise duty referred to as entertainments duty in and chargeable under Section 1 of the Finance (New Duties) Act, 1916, as amended by subsequent enactments shall not be charged or levied on payments for admission to any ball or dance on and after the 1st day of August, 1950.
(2) Sub-section (2) of Section 10 of the Finance Act of 1948 shall not be construed as including any ball or dance.—(Deputy Aiken.)

As both sides of the House seem to be very anxious to speed up the business of the Dáil, I think if the Minister were disposed to accept this amendment, it would speed up matters so far as this Bill is concerned. I think, however, it would be too much to hope that he would accede to that request. I must say that I am somewhat disappointed at, or that I regret, the absence of Deputy Aiken because I should like him to have placed before the House the information he must have in his possession as to why, during the boom period, he caused this entertainments tax on dancing to be withdrawn. He must have had a very good reason for it because at the same period he, as Minister for Finance, put a tax on the workmen's pint and on cigarettes. There must have been some very cogent reason that prompted him to suspend or withdraw the dance tax at that particular period. If we had that information, then we could ask the present Minister to give the House an explanation as to why, during a period of depression, he has reimposed the tax.

From the information which was placed before the House yesterday at Question Time and the discussions last night, it has been disclosed that the Minister not alone got what he looked for from this tax but practically twice that amount. It seems to me that the Minister has found the hen that lays the golden egg. I am inclined to suggest to him, from my personal knowledge of this business, that the golden-egg hen may be like those hens who, when placed under a battery, lay five or six eggs a day for a week and then give up the nest altogether. I suggest that the effect of this tax upon dancing may be that the golden-egg hen will, like some others, turn into a pullet. Last night from the opposite benches there was a suggestion—possibly anyone did not take it too seriously—that this amendment was introduced because the Minister represents a constituency in which there are more ballrooms situated than any constituency in the city. As a matter of fact, I think there are about 20 licensed ballrooms in the constituency which he represents. There are none at all in the constituency which I represent. As a matter of fact, he has three times the number of ballrooms in his constituency than there are in any other constituency in the city. In view of that fact, I must admire his courage in continuing to impose this tax, believing, as he does, that it is necessary to enable him to balance his budget and for the upkeep of revenue. I am sure he is convinced that the money is there and that they are in a position to continue, but I hold quite a different view.

While there are a lot of ballrooms and dance halls and hotels licensed for dancing in the Dublin North Central constituency, there are, at the same time, a lot of people living there who object to dance halls and dances, and who object to music and musicians. They would like to see this particular form of amusement wiped out altogether. I am afraid that the reimposition of this dance tax is going to go a long way to do that. I appeal to the Minister to give the matter more consideration, because I believe it deserves a lot more consideration. It has a lot more far-reaching effects than actually appear on the surface. The fact that the Minister may collect the amount of revenue he has budgeted for in respect of this tax this year, or possibly a little more, does not prove that the people engaged in the business, whether they be the proprietors or the promoters, are making any money at all.

Is it in order, a Chinn Chomhairle, for me to continue, and to refer to the second amendment which stands in my name?

They can be disposed of separately.

Very well. I again appeal to the Minister to give further consideration to the matter.

Will the Minister not consider the abolition of the entertainment tax where charitable organisations are concerned?

The Deputy is repeating verbatim what he said yesterday.

This is a last appeal——

The Deputy may not repeat what he has already said. That matter is relevant to amendment No. 4.

Since I spoke here last night in connection with this matter, I have met some people who are concerned with the organisation of dances. Their opinion is, as a result of their experience, that no ordinary club will be able to carry on.

The Deputy is repeating verbatim what he said last night.

I am not, altogether.

I was listening to the Deputy last night and I say that he is repeating what he said then.

I would ask the Minister to consider the request I made last night regarding the position of charitable organisations—organisations which are well known and which are doing good work which the State should be doing.

This House ought to consider whether or not the dance hall form of entertainment has not, in fact, now become a business which one can regard to-day as an industry from the point of view of the employment it gives. Whether the Minister agrees or not, I have been informed from most reliable sources that some of these dance halls are put into the position now of giving only part-time employment to a number of their workers, including the musicians. Surely, if the Minister and the Government thought it wise to reduce the tax on spirits that had been imposed by the previous Government—thus giving an additional lease of life or a new and additional form of business in the shape of lounge bars—it would appear to be unreasonable that young people, apart from the industry involved in it, who can only find a reasonably cheap form of entertainment in these dance halls should have imposed on them this tax which is a sort of method of getting back some of the tax which had been remitted in respect of beer and spirits.

Deputy Fitzpatrick mentioned that some people object to dancing and to music. I would say that some people object to a particular type of dancing and to a particular type of music, but it is not fair to say that we in this country object to dancing as such or that we are lacking in an appreciation of music. I feel the Minister ought to have regard to the situation. In the City of Dublin, in particular, we have a great number of dance halls. They give considerable employment particularly to those who are in the musical profession and who, we know, find it very difficult to obtain a sufficient amount of work in this country to keep them constantly employed. We all heard the discussion on the Estimate for the Department of Posts and Telegraphs, and we know that in a great many cases our musicians are very underpaid as compared with the payment which they might get if they were carrying on their profession outside Ireland. I hope the Minister will recognise that whatever the amount that comes into the Exchequer from the tax which this amendment seeks to have remitted, while in a sense it is not so very heavy, it bears unreasonably heavily on the people affected by it. I would ask the Minister to meet the situation and to see if, by remitting this tax, the prosperity he spoke about yesterday will not find its way also into that line of business and those who depend upon it for their livelihood.

Deputy Fitzpatrick pointed out that in the Minister's constituency there are quite a number of dance halls. As a matter of fact, they are very widespread all over the city. As I said before, whether we are concerned about the dancing aspect of the matter or not, the fact is that these businesses are there. Over a long number of years they have given definite employment to the ordinary attendants in these halls and to the musicians who, at the moment, are certainly working only part-time or half-time. I should like to repeat that it is unfair to impose on the backs of the young people, in the shape of this tax, the payment of a tax to make up portion of the tax remitted in respect of beer and spirits.

I support this amendment, and I should like to draw the attention of the Minister to the state of affairs which exists in Cork in connection with this tax. Practically every hurling, football and rowing club —and also organisations that are carrying out very useful social work—runs dances or Céilís in the City Hall, Cork, principally on Sunday nights. They depend largely on the profits they make out of running these functions to carry on their organisation for the rest of the year. The renewal of this tax last year had the effect of increasing the price of admission to the City Hall from 6d. per head to 1/6 and 2/-. The Minister should consider it from the point of view that it is hardly fair to the people attending the dances. It has not been increased in all cases to that exent, but most of the people running dance halls have increased it from 1/6 to 2/-. I do not think it is worth the bother and trouble and expense that this tax causes. Charitable organisations and social workers are depending to a large extent on the profits made at dances to carry on their organisations. The Catholic committee and other organisations hold dances every year, and the Minister would be doing good work if he agreed to the amendment.

I would like to point out to the Minister and the House that this problem varies as between the cities and the ordinary country towns. In country towns usually there is one hall which is generally the parochial hall, in which all functions for that particular unit of the community are held. That hall caters for all the local clubs, football clubs, fishing clubs and clubs of all kinds. All these organisations depend on that particular hall. During the last four or five years in virtually every country town modern halls have been erected, and large sums of money have been subscribed towards their erection. Many of these halls are very much in debt. I have been reliably informed that, due to this tax, clubs are not now using the hall in the local country town, but where possible, hold their functions in a country hall which is outside the three-mile limit. That is a very undesirable practice. It would be far better that the Minister should at least exempt from tax dances that are held for the support of any particular club in country towns. I do not know what effect it would have on the revenue, but I know that it is impossible for a country club in a country town to run a dance in the local hall and make a profit on it now. The hiring of the hall, insurance and light will cost from £12 to £20 for the night. The band, which possibly has to come a considerable distance, costs £20 to £25. With the tax on top of all that expense, the club finds itself running its dances at a loss.

The result has been, to my own knowledge, in a number of western towns at all events that where a club can find a hall outside the three-mile limit, they take over that hall and you have the town coming to the country for the functions, to a country dance hall that has not the same amenities or facilities that are available in the town. That is an undesirable practice. The Minister should reconsider this whole question. Whatever case may be made for taxing commercial dance halls or for taxing dances run solely for profit, the Minister should amend the position so that these clubs and charitable organisations can hold their functions and get some special permit whereby they will be exempt from tax.

It seems to me that there is a devastating air of unreality with regard to our discussions here. We have Deputy after Deputy from the Opposition condemning the Minister with regard to this entertainment tax. If their remarks were to be taken seriously, one would imagine that dance halls in the city and throughout the country were deserted, that musicians were unemployed and that some desperate calamity had befallen those who desire to attend dances. I was astonished to hear Deputy McGrath referring to the City Hall in Cork. My only experience of the City Hall in Cork in the matter of dances is of attending a very crowded one. I would agree that it was a very fine dance.

What is the situation? I wonder does Deputy McGrath or Deputy Briscoe or Deputy Moran, or any of the other Deputies who have taken part in this discussion, appreciate that they are discussing and criticising the very same tax that was imposed by them and maintained by them from 1932 to 1946.

And taken off by us.

I will deal with Deputy Burke shortly.

Taken off by us.

For 14 years that tax was there and was clamped down by Deputy Burke and all the rest of them.

And taken off in 1946.

It was maintained by them while they were in power, with one exception. In the case of the ordinary charitable organisations, for whom Deputy Moran pleaded and to whom Deputy McGrath referred, there was a particular provision that, if the expenses exceeded 30 per cent., no remission would apply. There was no effort made under the Fianna Fáil dance tax to deal with the rural ballroom or with rural areas.

Was not it abolished by us? What is the use in talking?

I do not know what sort of noise is coming from Deputy Burke.

He is a jitterbugger.

Fourteen years' repentance is welling up in him.

The position now, with regard to the tax that is being criticised by the gentlemen who are shedding crocodile tears, is that the Minister has made an effort to have regard to the charitable clubs and charitable organisations on the one hand and the country areas on the other.

That clause never mattered.

What clause never mattered?

The 30 per cent. and the 50 per cent.

Never mattered?

Does anybody else agree with that?

May I give Deputy McGrath some of my own experiences?

And I will give you some of mine.

Before I became a member of this House I was in the emergency services. I had occasion from time to time to organise dances in this city for the purpose of raising funds to provide necessary equipment and other amenities for members of the emergency services. Time after time, under the Fianna Fáil tax and under the Fianna Fáil law, I was compelled to pay tax with regard to those dances. I do not know if that experience has been shared by other Deputies but I know it was shared by members of the F.C.A. at that time. I am glad to say that this Minister who has been— I will not say pilloried because I would not regard the puny efforts of the Party opposite as carrying any weight—but who has been criticised, certainly has shown a regard for that particular situation and he has ensured that these organisations will get exemption on very fair ground, provided their expenses do not exceed 50 per cent. I should have thought that the changes he has made would have received commendation and praise from the Opposition. I can well understand Deputy Fitzpatrick making his complaint here. He at least comes with clean hands.

What is the implication?

The implication is that Deputies have been told not to interrupt. They will know the implications if they continue to do so.

Deputy Fitzpatrick, when he comes in here to complain about this tax, can at least say: "I never imposed such a tax and I was always against it." I can certainly praise Deputy Fitzpatrick in that respect, and I think he is the only Deputy who has opposed this tax who is entitled to say what he did say. It takes considerable audacity for Deputy Burke, however, who did his best to close every dance hall in County Dublin——

And I helped to abolish the tax.

——and Deputy Briscoe who chased through the City of Dublin in his endeavour to close all the dance halls for a period of 14 years up to 1946, to make the references they made here to-day.

I wonder would the Deputy tell us about the snow on the mountains last year.

I ask Deputy Burke to withdraw from the House. He has no regard for the advice of the Chair that he should not interrupt.

Deputy P.J. Burke withdrew from the House.

Now that we have got rid of the snow, we can continue. Deputy Briscoe has attempted to make a case on behalf of the young people, on behalf of those who desire to have decent legitimate entertainment. Let Deputy Briscoe have no doubts about the young people—they are well able to look after themselves— and so far as dances are concerned, whether it is 1/6 or 2/- will not make the slightest difference.

Not to you.

And I hope Deputy McGrath will remember that. It will not make the slightest difference to the ordinary young people. If they want to have a night's dancing, they are not going to be stopped because of 6d.

I hope they will read that.

Deputy McGrath has been warned about interrupting.

Deputy O'Higgins has been quoting me.

The Deputy has been warned about interrupting. That is all I have to say for the present.

Might I remind Deputy McGrath that, when he talks about young people of Cork City or anywhere else, he is talking about young people who, if they go out to buy a seat in a picture-house, pay less now than they did when his Government was in power? That is something the young people remember. If they go to a dance once a week or once a fortnight, their feet will not be stopped from dancing merely because there is a difference of 6d. in the ticket. The proof of it is that these young people are dancing more now than they were 12 or 18 months ago. The figures given by the Minister in reply to a parliamentary question yesterday show that this tax has yielded a greater revenue than was thought feasible at the time, the reason being that more people are dancing. In view of all that, what, in the same of common sense, is the reason for all this wailing we have heard from Deputy McCann and others about the dance halls?

Ask Deputy Fitzpatrick, who owns a ballroom. You could not have been listening to him.

I am asking Deputies to tell me the reason for all this wailing, including the wailing we have heard from Deputy McGrath.

The Deputy obviously did not listen to the discussion at all. He knows nothing about it.

I know that it took me only one minute to realise that a lot of nonsense was being talked by the Opposition.

Deputy Fitzpatrick spoke against the tax for three quarters of an hour yesterday.

It seems to me that we have heard a very barren discussion in so far as opposition to the tax has made itself manifest. We have had different Deputies making speeches in which, I feel, they did not believe at all. Each of the Deputies who spoke against it, including Deputy McGrath, were parties to the imposition of a far more serious tax. Each one of them, with the possible exception of Deputy McGrath, who has not been as long in the House as Deputy McCann or Deputy Briscoe, not only was a party to the imposition of a more serious tax, but maintained it for almost the entire period of office of Fianna Fáil.

The previous Minister took it off when the viewpoint was represented to him——

The Deputy has no right to interrupt.

It is on a point of order.

It is not a point of order.

And what the Deputy was about to say was not even a correct statement.

Is Deputy O'Higgins not repeating himself and inciting me to interrupt?

I thought Deputy McGrath had more self-control than that.

Reviewing the opposition expressed, it seems to me that we are listening to a discussion of a wrong, if it be a wrong, which is far less damaging to the people than the tax which was maintained by the Opposition.

The Deputy is repeating himself now.

I was merely repeating the sentence I was saying when interrupted by Deputy McCann and Deputy McGrath. I do not think that any excuse can be put forward by the Opposition by saying that the tax was removed by them in 1946, because it is well known that the Minister who removed the tax in 1946 said he was removing it because he found difficulty in collecting it, and not because he thought the tax was wrong or a hardship in any way on the musicians for whom Deputy McCann has been singing his song. The people we represent here have witnessed, in relation to this small measure, the greatest display of political hypocrisy that this House has seen for some months.

In spite of the valuable advice given by Deputy O'Higgins, I do not think this Dáil or any other assembly can accept the principle that, because a tax has been enforced for a number of years—even if it were enforced for 20 years or 200 years—we are not fully entitled to discuss the reasons for the tax and to question the Minister as to the reasons for its continuance. If the Dáil is not to be allowed to express its opinion on the annual financial proposals of the Minister as to why taxation is necessary, as to why taxes should be remitted, imposed or continued, then the Dáil has no function whatever, and the sooner we close down and go home, the better for us all. An extraordinary thing in modern Parliament is that, while a vast amount of time is devoted to discussing ways in which money can be spent, not nearly enough time is devoted to considerations of how the money is being collected and, perhaps, also, more time might be given to discussing the manner in which it is expended, when collected, and to discussing whether it is being expended to the best advantage of the community. The charge against this Party was that we were a Party of squandermaniacs who had imposed heavy taxation upon the people unnecessarily. I would remind Deputy O'Higgins and anyone else who thinks with him that during an emergency period such as during the war a Government is fully justified in maintaining taxation at a fairly high level.

At present we are dealing with an entertainment tax and that only.

I am surely entitled to reply to Deputy O'Higgins's point that the tax was maintained by us during the emergency.

I did not make that point. I said from 1932 to 1946.

When the Government was confronted with the war situation from 1939 onwards, which Deputies now conveniently forget, not knowing what the future may hold, they were not going, unless there were very strong reasons indeed, to remit taxation. They had special services, which I need not go into, to maintain during the period. At the first opportunity, the tax was remitted. The present Minister and Government, which has boasted so much and so loudly of having remitted taxation, came along at the same time that they reduced taxation on alcoholic liquor, thereby encouraging the consumption of drink throughout the country, as the figures have shown——

That is not relevant.

Am I not entitled——

To discuss the effect of a tax or remission of a tax on alcohol is not relevant to entertainment tax.

I think I might even argue, but I have no wish to question your ruling, that there is some comparison between the different ways in which people spend whatever money is available to them to spend on entertainment. In matters of this kind, there must be some regard to the social effects of remissions or impositions of certain classes of taxation.

On that contention, every Deputy would be entitled to argue on every item of the Budget the social effects—which is a ridiculous idea.

Why did you put on the tax in 1942?

Why did we take it off in 1946?

Leaving these considerations aside, the case I made in introducing this amendment is the inequality between the treatment of dance halls or ballrooms in rural areas and in cities and towns. Either the Minister believes this form of entertainment should be taxed or he does not. If he believes it should not, why is there a discrimination between halls in rural areas and halls in cities and towns which, as has been shown during the course of the discussion, have higher overheads and higher expenses?

I can congratulate Deputy O'Higgins on achieving at least one object by his inciting speech, that is, in getting a Deputy put out of the House. Beyond that, it had no effect whatever. He stands up there and blatantly accuses this side of being guilty of hypocrisy.

Is it in order for Deputy Lynch to state that I put a person out of this House? The Deputy has made a statement that I had a Deputy removed.

That is not a correct statement.

Is that a point of order?

It is not a correct statement.

It is a point of order, to this effect, that the Deputy has no power to have another removed.

I said he was a party to having him removed. If that is not what I said, that is what I meant to say.

He was not. It was the Chair.

He did that by inciting repeatedly the Deputy interrupting him. If there is anything wrong in that, I withdraw, but I do not think there is.

I think I am entitled, in all fairness, to point out that it surely is wrong to say that I incited any breach of the rules of procedure of this House or was party to the expulsion of any Deputy.

Is that a point of order?

He unashamedly accuses this Party of being guilty of hypocrisy in advocating the removal of this tax on dance halls. He asserts that he and his Party are the only people who can stand up here and speak with conviction on any point. I deny that entirely on behalf of each one of my colleagues on this side who spoke for the removal of this tax. The mere fact that the tax was enforced for a period of administration of government by this Party is no argument against its maintenance by the present Minister for Finance. In fact, Deputy O'Higgins's argument completely fails, inasmuch as the tax was removed in 1946. If a Government had a tax and found that it was wrong even after five, ten or 15 years, they were perfectly right in coming before the House and the public and honestly admitting that it should not be there. They are more than right when they come into this House on this occasion and argue in favour of its removal, argue in favour of their own decision in removing it.

Deputy O'Higgins said that the difference between 2/- and 1/6 was infinitesimal in so far as it affected the ordinary young person. Deputy O'Higgins possibly came of parents better off than the average person to whom Deputy McGrath referred a while ago as attending the City Hall in Cork every Sunday night. These people are working boys and girls in Cork, and the advance of the tariff from 1/6 to 2/- is an appreciable amount as far as their weekly incomes are concerned. I myself came of a big family, and our resources were not very great. I can assure the House that I would attend 100 dances at 1/6 if I could find them as against a dozen at 2/-. Deputy O'Higgins referred to that City Hall on his only visit, and misinterpreted or misconstrued what Deputy McGrath had to say. No one denies that the attendances at the City Hall in Cork for the city dances are substantial. It is nothing to see 1,000 or 1,200 there. Deputy O'Higgins says he saw the number at a Fine Gael dance in Cork. From my knowledge of the young people of Fine Gael in Cork, I can only say that there were a lot of young people there besides Fine Gael. Even if every young supporter of Fine Gael between 21 and 35 were attending that dance that night, they would hardly fill the cloakroom.

I have experience of running dances, as well as Deputy O'Higgins. I ran dances, not individually but as a member of a committee of a club during the period when the dance tax was enforced, and can give concrete figures. I can remember very well at least one occasion when out of over £100 collected the club that I represented was able to get only between £35 and £40 in gross revenue from that function. One hundred pounds represented an attendance at that dance of about 800 people at 2/6. The tax was 6d. and the dance-hall proprietor took 1/- of the remaining 2/-, leaving the club to pay the band, all the necessary advertising and all the other incidental expenses, leaving a net profit of £20 or £25—and that out of a gross take of over £100. The appeals to the Minister from this side of the House are largely devoted to trying to ensure that the tax on dances, at least in so far as it affects bona fide clubs and charitable organisations, should be withdrawn or that there should be some exemption in their favour.

I have no sympathy—or rather very little—with professional dance-hall owners. I am not saying that with reference to Deputy Fitzpatrick. I have friends who own dance halls in many parts of the country and they tell me quite straightforwardly that it is a profitable undertaking, in fact that it is one of the few undertakings at present which, once the initial cost of erecting and equipping a dance hall has been met, just cannot lose. However, these dance-hall proprietors run the vast majority of the functions on their premises on their own behalf. With the exception of parochial halls a very small percentage of the gates is given to the clubs, Muintir na Tíre or so on.

The Minister might well say in reply to the point I made that it would be impossible for him or for his inspectors to judge which is a bona fide organisation, hurling or soccer club and so on, but I say to him that that could very easily be overcome. Almost every bona fide club, hurling, soccer or rugby, is affiliated to some association or union or branch of some association or union. It would be quite easy for the inspectors or officials of the Revenue Commissioners to check up. They can get authentic information at the headquarters of the associations as to which is a bona fide club and which is not. That would prevent an unscrupulous dance-hall proprietor from advertising a dance on behalf of Red Rovers or Black Wanderers, saying that it is run on behalf of a club, when that dance is being run purely on behalf of himself by which means he would hope to evade paying the tax. I would appeal to the Minister in all sincerity to consider the suggestions which have been made from this side of the House that these bona fide organisations and clubs should receive some remission.

The Deputy understands that that is not the amendment.

I know that it is not quite the amendment.

It is not all the amendment.

What I am suggesting to the Minister is bound up with the amendment and as we know that the Minister is obviously not prepared to accept the amendment in its entirety I might offer him some little amelioration—what we would be prepared to accept.

Returning to the position I know best, the running of dances in Cork, I would like to say that every Sunday night is taken up by some club. The city hall officials are very careful in selecting the applicants for the hall on each occasion on which it is let. I have no doubt in my mind that every time the city hall is made available to these clubs it is doing some useful work in some direction, social, cultural or athletic. It is a great hardship on clubs and organisations which have few, if any other, means of gathering funds if they must increase the cost of admission and so severely restrict the attendance. That 6d. extra or 1/- in some cases is a serious thing for the ordinary working boy or girl. If Deputy O'Higgins wishes to maintain this tax he should come out openly and not do it in an underhand or halfhearted manner. He should tell the people that he is in favour of putting an extra 6d. on their entertainment.

Did he not take it off pictures?

He had nothing to do with taking it off pictures and that tax would probably have come off in any case. If the Minister for Finance ever moves on to further fields Deputy O'Higgins will make just as efficient a Minister for Finance as the present Minister in the matter of imposing extra taxes on the people if this is his attitude to-day.

On the amendment, Deputy Derrig complains of an implication which he reads into Deputy O'Higgins's speech, that is, that the Dáil has no right to discuss this tax. Deputy O'Higgins never said that. He did say that it required a good deal of brazenness on the part of Deputies opposite to discuss this tax when for 14 years they had maintained it. Deputy Derrig's second effort was the war. War was not on or about or threatening in 1932.

The economic war.

The economic war, I see. As long as the Deputies could keep up any type of war, the tax was necessary. From 1932 to 1939 the tax was kept on whether there was a war on or not. In 1939 it was not a question of putting it on in order to restrict people from spending money in a particular way. It was just maintained and it was kept on for the whole 14 years. I want Deputy Lynch to understand the argument of this side of the House, that is, that it does require a considerable amount of impudence for Deputies who, for 14 years, supported this tax now to amass all the arguments of this despairing type which they have thrown around the House. I am told that this tax is likely to cause and has caused unemployment; did it do it for 14 years? I am told that it is destructive of the amenities of life; was it destructive for 14 years? I am told that it represents a kill-joy attitude; is that the way Deputies label themselves for 14 years?

People were better off then.

You were better off; do you think so? We invite evasions by keeping the tax on; we are creating immorality in the country by inviting people to evade legitimate taxes; is that the way in which Deputies realised they were acting for 14 years? Finally, we are not favouring charities; we are not favouring culture or athletics and other sorts of social gatherings; again, do Deputies remember that that charge lies against them over the whole period from 1932 to 1946? If these arguments are real, certainly they were not discovered last year or cannot have been going on all the time. That is why I say, when I hear all the mournful nonsense which is put about the House this year, last year and the year before, that it does argue a fair amount of hypocrisy, real hypocrisy, of people who do not believe in what they are saying because if they did believe in what they are saying, they should all be here in white sheets, with ashes on their heads, on account of their shocking conduct for almost a decade and a half.

When the tax was removed in 1946 a number of owners put up their prices.

I am particularly annoyed to hear Deputy McGrath and Deputy Lynch speaking on this matter because Deputy Lynch, in any event, certainly countered some of the arguments regarding the lack of facilities for amusement.

With regard to the wane of dancing which has been spoken of by other Deputies, he stated that it is no uncommon matter to see 1,000 to 1,200 boys and girls at the ballroom referred to by Deputy McGrath. He told us that the Cork people found it necessary to increase the cost of the dance hall in order to restrict the attendance. You cannot have it both ways. Dancing, we are told, is going down, is on the wane. It is very odd that in Cork you can have 1,000 to 1,200 young people gathered together on a Saturday night. When Deputy McGrath was questioned by Deputy Davin as regards the charge for the dance hall, he said that the charge was £20 a time. Then, when Deputy Davin multiplied £20 by 52 weeks, Deputy McGrath replied that it is a big hall, and that its upkeep is an expensive thing. Then Deputy Con Lehane asked if the Cork Corporation had considered increasing the charges when the tax was taken off, and the Deputy replied that the charges had been increased, but that was not because the tax was done away with. The increased charge did happen to coincide with the year in which the tax was done away with. Deputy McGrath pointed out that everything was going up, and then he mentioned that the city manager said it was desirable that a better class of person should be encouraged to patronise the dances in that hall—that it was desirable to have respectable young people, and not to have the ordinary knock-abouts.

That is what the manager said.

I hope the manager will be pleased that he has been quoted by Deputy McGrath, and that he has been correctly reported. The tax, anyhow, was not given back to the dancing community, but the charge for using the hall was increased. The Deputy stated that the city manager said it was because he wanted to keep out certain knock-abouts and restrict the dancing to a better type of attendance. Deputy Lynch said that they found it necessary in Cork to increase the charges in order to restrict the attendance. How, in the face of all that, could it be argued that this is a tax that is going to be destructive to the amenities of social life?

Could I inform the Minister——

The Deputy will have the right to speak afterwards and he can say as much as he likes. So much for Cork. I have an advertisement here with regard to a dance hall which is described as being inside the Dublin area. I am not referring to a dance hall within any reasonable distance of this House. They advertised that 190,000 patrons a year use their dance hall. I was asked last night would there be any unemployment brought about by reason of the dance tax, and I waited for some time to hear some proof brought forward to show that unemployment had been caused. I have taken out a number of those who have been registered as unemployed, as between musicians and vocalists. There were 32 people registered as unemployed, men and women, in 1947; there were 33 registered as unemployed in 1948; in 1949 it rose to the amazing total of 36, and in 1950 it reached the figure of 37. That means that the number went up from 32 in 1947 to 37 in 1950.

I am told that dancing is on the wane and that dance halls are closing down because the managements cannot meet the expenses and the people who want to keep dancing going are being done out of legitimate profits. We are told that individuals and even clubs are taking themselves off to dance halls in the rural areas where dancing is free from tax. I made it free from tax in those areas. The figures for last year were requested. Detailed figures are not available which would indicate what was derived from the tax in the period before 1938. The figures are available for the half-year of 1938, but I omit them. The rate of tax is the same. I made a remission previously with regard to areas, and this year I am making a further remission. In 1938-39 the amount collected was £53,000, and in the years up to 1945-46 the amounts collected were £56,000, £56,000, £68,000, £88,000, £114,000, £132,000 and £148,000. That represents the revenue derived in the years up to 1945-46, and that was the highest year.

Having remitted the tax in regard to the rural areas, I calculated I would get about £150,000, a bigger return than was usually got from the dance tax. For last year, I calculated on £65,000 or £75,000; I got £105,000. The forecast made was not merely realised, but a 20 per cent. addition of revenue accrued to the State. That does not argue that dancing is going down. This year I calculated I would get £150,000. Perhaps I will not get it now because of the reduction in the charges, but £150,000 was looked for. It may go down to £120,000. Working on a nearly comparable basis, I look in the year ahead of us to get more money than we ever got from this tax before.

There is nothing to indicate that dancing is going down or anything like it. Last year the remission was given for the rural areas. It was calculated that that was going to cost £35,000 in an eight-months' period, or £40,000 in a full year. If I did not give any remission, I would be lucky to get £170,000. That is a good deal up. Deputy Fitzpatrick described the years 1946, 1947 and 1948 as boom years. Notwithstanding all the evasion that is going on and notwithstanding all the talk about people running off to the rural areas and all the caoining about dancing being on the wane and declining steadily because of the tax, I believe that we will get our forecasts working out pretty accurately. I believe we will get more money from this tax than we ever got before. With those figures of the amount of money that is to be collected, nobody can say that there is any likelihood of the amazing amount of unemployment that has been paraded so much in the House.

Let me come back to the tax as it now stands. In 1932 the tax was first put on and it remained there, with Fianna Fáil supporting it up to 1946. It was taken off in 1946. Why? Not because it was causing unemployment and not for the various reasons that were given in the House, if we except one, and that is the evasion aspect. The then Minister for Finance, moving the abolition of the duty said:—

"There is one duty which has been operative for some years"—

That was a euphemism—he might have said 14 years.

—"which, as well as being difficult to collect and costly to administer, is a cause of irritation and a source of dishonest practices";

There is not a word about unemployment or devastation in the country or anything like that. All these things were left off the list of the excuses given by the then Minister for Finance.

"the entertainment duty on céilithe and dances."

Then he swings into another point that I assert I have met:—

"Charitable and educational organisations are entitled to a rebate of the duty, provided they keep their expenses within 30 per cent. of their takings, which, judging from the correspondence regarding the matter, they find difficult. The incentive to evasion of this tax by organisations who want to raise funds, often for desirable local objects, causes bad feeling between the revenue officials, who are only carrying out their duty conscientiously, and the public generally, particularly the younger people. I feel that the duty tends to promote dishonest practices and impedes local initiative, and I propose to abolish it as from 1st August."

Then he gave some figures, and went on to say that

"the abolition of the duty should result in a reduction of the admission charges by approximately 20 per cent."

Of course it did not do any such thing.

Would the Minister give the reference?

I have not the exact date, but it was a speech made by the then Minister on the Finance Act, 1946, Section 13. Will Deputies consider that argument—that

"it was difficult to collect and costly to administer."

An analysis showed that the difficulty with regard to collection and the cost, where it was costly to administer, occurred in the rural areas. For that reason, and for another reason as well, the rural areas were exempt last year. An examination did show that, even when it was described as costly, the cost of collection was 2 per cent. It is under 2 per cent. now with the rural areas left out. The remarks of the then Minister for Finance, with regard to the difficulty of collection, were directed entirely to the rural areas, and later when he went on to speak of the bad feeling between revenue officials and the young people, that, too, had reference entirely to the rural areas. Now, we are not getting any tax from the rural areas and, to that extent, we have met the two points that were made. We have taken off the cost of collection and the difficulty in regard to bad feeling.

The other part of the case made by the then Minister for Finance was with regard to charitable and educational organisations. I had quite a volume of correspondence about that. I think I can say that 95 per cent. of the representations made to me personally or by deputations or by letters were in relation to the expense ratio in regard to the exemption from the tax in respect of charitable or other types of organisations. It was represented to me that in these days the expenses had risen, and that the old limit of 30 per cent. had no relationship to modern times. When I tried to discover from the people who came to me what limitation they themselves would consider one within which expenses could reasonably be kept I was told 50 per cent. I am not saying that many of those who told me that had made any real calculation. I think what they really had in mind was the expense ratio in England and in the North, where it is, I think, 50 per cent. They took that, I suppose, as their model. I have taken that figure, and I believe that the 50 per cent. does give a reasonable approach in the matter of dances for charitable or other purposes. I believe that in doing that I have met the points which the last Minister for Finance had urged as the reasons that operated in his mind when taking the tax off. Dancing is on the increase according to the returns. It has been the object of the revenue for all the years since 1932, with the exception of a small period in between, to get revenue in this way. For the reasons that I have given, I think it is a legitimate way to get revenue. It certainly is a more desirable way to get it than some of the ways which have been suggested to me. We will try it out this year on this 50 per cent. for charities

One does get a certain feeling of annoyance when the main attack on this is launched by Deputy Derrig on the grounds of inequality: that, in remitting the tax on the rural areas and in maintaining it in the small provincial towns and in the larger centres, there is something immoral, something unethical—that this division as between town and country is a thing that should not be accepted. When the tax was first mentioned, the clamour that came from all sides of the House was the unfairness of it to the rural areas. It was urged that the people in those areas had not very many ways of amusing themselves—that it was the one way in which people in the local small towns had of amusing themselves. The plea was also made that folk were drifting away from the rural areas to the towns, and even from the towns to the bigger centres. It was put to me, from the other side of the House, that a desirable movement to stop that drift would be to allow this type of entertainment and pictures if they could be had by travelling people—to have the pictures and dances free from tax. I agreed to that and, having agreed to it, it is now being urged that there is something vicious in having this tax.

I have yielded to the other point that was put to me about dances for charitable purposes. The point made was that the 30 per cent. did not meet modern charges. I have improved that by allowing 50 per cent. for the period of a year. That is somewhat experimental, and I can see what will happen to it. If the tax does not yield it, and if I can get any further cases that are well-established in which real charities have been hampered in getting their funds replenished, the matter can be considered.

Deputy Fitzpatrick came back to his old point that it would save costs by having the tax on the ballroom proprietors instead of having it on the individual dancers. We tested that out last year when the Deputy made the suggestion. Deputies would be astonished to find how heavy the tax would be on the proprietor of a dance hall, say, in a provincial town. If I were to look to get the tax in the way in which the Deputy has suggested I cannot see what difference it could make. If a dance hall proprietor is charged a licence duty of £300 or £400 a year he is going to get that back some way or other. Clearly, he is going to get it off the dancers. In that way the dancers will pay the proprietor of the dance hall and he will pay it to the State. As it is at the moment, the dancer pays in a more direct way to the State.

If I were to accept a lot of the argument that has been put forward in the House I would be led, I think, to believe that it was founded on some misconception or misrepresentation of what the last Minister for Finance said. I was told last year that he said it cost £85,000 to collect £80,000. He never said that, and he was never advised that that was the case. The records have been searched and no such figure can be found. The only thing that I can find in condemnation of the tax is the phrase that "it was difficult to collect and costly to administer". The cost is 2 per cent. It is a very fair ratio between costs in respect of all taxes collected by the State. If it were more costly, I could see some case for what Deputy Fitzpatrick has said. If he wants to pursue the matter I can leave it to him to work it out. I do not think his suggestion would ease the situation for small halls.

This tax has been sanctioned by practice over the last 14 years. It is not having any damaging effect so far as entertainment is concerned because people are enjoying entertainment more and more. The State is getting a trifle more as a result of this extra amusement. So far as I can see, it is not causing unemployment from any side. In these circumstances, I cannot see that any case whatever has been made against the tax.

Major de Valera

I am glad that for the greater part of his last contribution to this debate the Minister dealt objectively with this matter. I can see that there are points for and against the imposition of this particular duty in this particular case in present circumstances. I think this is a matter with which one should deal objectively. I am sorry that the Minister has fallen into the same error as some other Deputies of arguing this on what somebody said about a particular tax in the past. I do not want to follow into that line of country. It is notable that people, against whom there is a large volume of evidence upon which the charges the Minister made can be based, are the first to make these charges themselves. If, on a change of view, a change of face and a change of language, hypocrisy can be argued, then the Minister on his own record is in a very weak position. I am sorry he is going out. I have his record here on this point. He has run.

He got tired.

Major de Valera

In 1932 this tax was first imposed. I am sorry the Minister has run out, but he heard me as he was going out. It is a pity he would not stay and take his medicine. In 1932——

You were a small boy then.

Major de Valera

In Volume 43 of the Official Report of 5th July, 1932, here is what the Minister, then Deputy McGilligan, said when making the case against the imposition of this tax:—

"If they do not get money from the dances at the end of the year, they will have to raise money in other ways and they will probably have to increase their charges of admission to the games. That is not the biggest argument that can be used for excluding dances and balls from the scope of the entertainment duty."

He goes on then to talk about the actual position, and at column 157 here is the case he made then in regard to employment:—

"The dances give a very big amount of employment. I should say that, of casual waiters alone, from 200 to 250 will be definitely laid off work if this dance tax is persisted in."

Let me pause here to deal with the figures he has given now. He says that there is now no problem in that regard. Let me take him objectively on this point. Deputy Fitzpatrick, supporting the Minister and his Government and the possessor of very special knowledge in this particular respect, has made his case on that point. I think it should at least be considered. Deputy McCann this year and, more particularly, last year proved the case he made in that regard by quoting facts and figures. The case made by both these Deputies has not been specifically answered. Apparently their facts are not contradicted, though an attempt has been made to sidetrack them.

I said at the outset that this is admittedly a debatable point and one that must be considered objectively. The case made by these two Deputies should at least be answered and the reasons given for not acceding to their request. What answer has the Minister given? He gave certain figures. He said there were less than 40 in each case. The significant thing is that, as far as trend is concerned, the allegations made by the two Deputies I have mentioned are substantiated. The second significant point is that, in actual numbers, the figures are small, but the percentage increase is large. That is a further indication in support of these Deputies.

There is a question, then, that I would like to ask the Minister, or the Parliamentary Secretary who is deputising for him at the moment. These figures relate to the unemployment register; is that not true? Is it not true that if these musicians only lose one night in the week they do not sign and they are, therefore, ineligible? The case made is not that these lose full employment as artistes; it is that they lose a certain amount of that employment with a consequent reduction in remuneration and in their standard of living. I take it Deputy Fitzpatrick will agree with that. Therefore, the figures the Minister has quoted do not adequately answer the case made by either of these Deputies. In so far as they show a large percentage increase, they fully substantiate what these two Deputies have said; and the Minister has not answered them.

Again at column 157 of Volume 43 the Minister, then Deputy McGilligan, made the following statement:—

"There is an economic problem attached to this and it is, again, I think, part of the light-headedness of the whole arrangement that when a number of young men and women are seen tastefully, or perhaps, fancifully attired, in a ballroom, it should be immediately assumed that that represents luxury and should be taxed. There seems to have been no appreciation that these dances give employment through the catering and restaurant trades and that, by this tax, employment is going to be considerably decreased, because, undoubtedly, dances cannot survive on the same rate of admission if the tax goes on and the dancers are going to refuse to come if the price of the admission ticket is raised. That is the first point."

He goes on then to develop that. In quoting that against him now, I think there is something in the figures he has given in regard to return, and I think there is a point in his favour in regard to the buoyancy of the tax, a fact which would nullify the suggestion that dances would not be patronised. On the other hand, having regard to the case made by both Deputy Fitzpatrick and Deputy McCann, there is an important point which has not been met.

As a Deputy representing a city constituency, and, more particularly, as a Deputy realising that one must look at the good of the country as a whole, why should there be discrimination in regard to the city or town dweller as against the country dweller? We may not have adverted to that point when the remission was given last year in regard to the rural areas. There is a case to be made for entertainment in the rural areas, but why should the city and town dweller be in a worse position in regard to entertainment than the country dweller? The opportunities for relaxation for many city dwellers are very few and less comfortable, shall I say, than for the rural dweller. In the winter months, certainly places of entertainment in Dublin actually fulfil something more than merely supplying entertainment. They are often a refuge, particularly for the people living in our overcrowded tenements. I can, of course, hear Deputies say that there is a flight from the land and that we must do everything we can to encourage our people to stay in the country. All right, give that point its weight, too. The two points should be considered.

The next point to my mind is more serious. It is one I can remember as having been raised before I came into the House at all, and it has often been referred to as a moral problem, in relation to the motor car. Dances organised in purely rural areas, such as those held in what would be called "out in the country," in an isolated spot or a relatively isolated spot, are associated with difficulties of supervision, with lack of amenities, and with certain temptations to certain types of person who, having got away from their own environment, are relatively unknown. That gives rise to a problem which I need not expand, but it has been discussed here at various times. Because of the very fact that in towns and cities the halls are situated in crowded localities, that there are many people around, that there are facilities and amenities, that by reason of their very location they are much nearer to the supervision of the Gardaí, these problems do not arise. There is not the same temptation for a person to go from one dance to another as out in the country. Generally speaking, there is that particular problem in regard to rural dances. It is undoubtedly a fact that if you give preferential treatment in regard to the tax on dances that are held out in the heart of the country as against dances in the towns, you will tend to stimulate the holding of dances in such locations for the purpose of evading the tax and consequently that problem, if that problem exists, as we have been assured by many responsible citizens that it does exist—as I say it arose in regard to the motor car—it should be adverted to in relation to this tax, and the Minister should give an answer to it.

This amendment has been put down to bring about a discussion on that problem. The facts of the situation are that undoubtedly the tax was there for 14 years. Our experience while it was there is a useful one to advert to. Equally it was removed in 1946, and our experience in that regard is worth adverting to also. Again the reasons given by the Minister for its removal in 1946 are worth adverting to. A further qualification of that is that when the Minister gave his reasons for its removal in 1946, he said the difficulty about its collection was due to the fact that many of these dances were held in the rural areas. The Minister met that by the adjustment he made last year in regard to rural areas. Our answer to that is that so long as you are up against this further difficulty, it is questionable whether your solution is the best or most desirable one or the best approach to getting revenue. I think that is the way the case lies. Although some of us dislike trying to base an argument merely on what somebody else said, we have to deal with the question on the facts of the situation and objectively in present-day circumstances. I might again legitimately remark that it is a funny thing—I am sorry that neither Deputy O'Higgins nor the Minister is here—that if you look back on the records of the people who were quickest to make allegations about dishonesty, twisting or improper motives, very often you will find in the records of these same people the largest amount of evidence for basing such allegations.

Listening to Deputy de Valera, one can only come to the conclusion that he has no idea of the conditions under which amusements are carried on in rural Ireland when he compares conditions in the rural areas with the conditions in the City of Dublin. Dances in the country are held only occasionally. To my knowledge, many of the musicians who run dances in the country are people who are employed at other occupations during the week and who run a dance band as a side line. They go to these country halls only a very odd time. On the other hand, look at the dances held in Dublin City. You see crowds going to the halls of the city. You see motor cars parked outside the Gresham Hotel bringing crowds to dances where the admission prices range as high as 30/- to 50/-. We hear Deputies complaining bitterly of this tax now but when the tax was first introduced they were in power and they never said a word. It did affect the poor people just as much then as it does now. Deputy Briscoe mentioned that the Minister removed the tax from drink. We all know that you cannot do without a drink but you can do without dancing.

Major de Valera

It depends on your point of view.

That is a personal point of view.

I should like to see ceilidhe dancing free of tax, and also to see outdoor dancing exempted. When I passed through Kerry some months ago I was surprised and delighted to discover a crossroads dance in progress when I stopped at a certain crossroads—a fine healthy thing out in God's pure air.

Did you join in?

I am a bit too heavy for that, but you could do it. I suggest that it is a waste of time for Fianna Fáil Deputies to put up an argument against this tax when they did not do so for the 14 years it was in operation while they were in office.

We did remove it.

You kept it on when times were worse than they are now and when the workers' wages were pegged down. I think the dance halls in the City of Dublin have become a bit of a racket and people are making big profits out of them. The prices of admission to dances throughout the country range from 2/6 to 5/-, from 5/- to 7/6 and even from 10/- to £1. What do these dances mean to the poor people about whom we hear so much talk? You know yourselves what they mean for any man who has a big family. If he has boys and girls, one of the greatest worries he has is these dance halls. I think that you should try to control the prices of admission to these dance halls instead of asking about the tax which is put on them. Take the case of a man who has four boys who attend a dance once a month to which the admission price is 5/-. That means that he has to pay £1 out of his pocket every month. There is no control over prices of admission. Tell me of one dance manager in the country who reduced his prices of admission when the tax was reduced. The price remained and that was that. When the tax was increased in respect of, among other things, amusements in the Supplementary Budget which was introduced by Fianna Fáil we did not hear much protest from Deputy Major de Valera or from any of those Deputies who were then sitting on this side of the House. Not one of them said one word against these increases. The pictures are more important to the working man than dancing.

They are more damaging, too.

The working man likes to go into the picture house and rest himself after his hard day's work. He pays his 4d. and goes in. The majority of the people do not worry about dances at all. I would point out that in the case of a person who knows how to dance, no price will stop him from going to dances. He will go because there are other attractions—not the dance alone. Is that not true? That alone is not bringing them to the dance. If I were the Minister I would stop jitterbugging, jazz and foreign dances in this country because they are ruining our young boys and girls. The sooner Deputies cease to refer to debates which were held in this House in the past, the better.

It does not suit.

Forget about these debates. After all anybody can go back on the past.

Would the Deputy advocate the closing of lounge bars?

Who opened them? I was never in a lounge bar in my life. There are very few of them in rural Ireland. They are almost all in the city.

You helped to remit the tax on liquor.

They do not affect us at all. I believe that the less talk there is on that, the better for the Deputies on the Opposition side of the House. There seems to be a craze for dancing. We are constantly hearing about dances being run for this, that and the other. That shows that there is money in it. Fianna Fáil go around the country organising Fianna Fáil dances. Fine Gael does likewise.

So does Labour. Why? Because they are making a profit. Therefore, it is not affecting the people at all. I feel that it is wrong to delay the time of the House in discussing this matter—especially Deputies of the Fianna Fáil Party whose Government a few years ago imposed extra taxation in their Supplementary Budget. These Deputies had nothing to say then.

I think that Deputy O'Leary is right when he says that there is no point in prolonging this argument, because it would appear that the Minister's mind is definitely made up. The Minister has failed to answer the arguments advanced by myself, by Deputy Fitzpatrick and by other speakers on this side of the House. He says that our arguments are based on a misconception, but his reply is based on a complete misconception. He fails completely to understand the position.

I made a simple statement that unemployment had increased since the reimposition of this tax. Deputy Fitzpatrick, speaking later, substantiated my statement by saying that the musicians, who formerly had been employed six nights a week, and other personnel of ballrooms, are now being employed only three nights a week. The Minister quotes unemployment figures. With his long experience he must know that the figures which he quoted mean nothing in regard to this case. Musicians, as Deputy Fitzpatrick said, are paid at the rate of 7/6 per hour. For working four hours a night that would amount to 30/-. They earn, say, £9 a week if they are working full time. However, if as is happening now and has been happening for some time, the number of hours they work per week are cut in half, their income is reduced from £8 or £9 a week to about £4 10s. a week. That is the position. No person who is working for one night as a dance musician and earning 30/- will bother to go to the labour exchange and sign on there. He does not do it. He goes to the Federation of Irish Musicians. There is a register there and I understand that, in the ordinary way, those who sign it are sent out as jobs or engagements come in. I made that submission on the basis of a brief which was given to me by the Federation of Irish Musicians. The Minister says he doubts my statement. If the Minister doubts my statement then he is doubting the word of the representatives of some hundreds of musicians in this city.

There is another aspect to the matter. Since the tax was taken off there is no doubt at all about it but that, in the City of Dublin—I am speaking of the City of Dublin only because that is all I am intimately acquainted with—numbers of ballrooms and dance halls have come into being and are giving employment to musicians and others. We have very talented musicians in this city. I know two people who won senior awards for violin playing at the Feis Ceoil and who are now earning fairly substantial salaries as dance-band leaders in this city. We get numbers of musicians from our schools and particularly from the Municipal School of Music, of the committee of which I happen to be chairman. I know the potentialities and I know what has happened. I know that numbers of people have got employment. There are numbers of good musicians who would never have got employment if the dance-hall business had not come on in the way in which it did after the tax was remitted. I repeat the statement that unemployment has been caused on a fairly wide scale and that the majority of the musicians are working on very short time. Some of them are working only two nights a week and others three nights a week. If the Minister thinks it is worth while to collect £100,000 a year and to cut people's wages in half, then I can only say that the sooner the Minister and the Government of which he is a member go to the public and test public opinion the better.

I opposed this unpopular and irritating type of tax when it was originally imposed by Deputy MacEntee when he was Minister for Finance in the Fianna Fáil Government. I argued in favour of its abolition last year because it was, like every new tax which is imposed, unpopular and because I thought it was a very irritating type of tax in the way I know it to be administered in some parts of the country. I also opposed it because I thought that the amount to be collected was costing too much. I must admit that, from the figures given by the Minister for Finance to-day—and previously given, I think, too—there is very little ground left for further argument on that. If it is costing only less than 2 per cent. to collect £150,000 in this financial year, then the cost of collection is not worthy of so much time being wasted on it. Every Government, no matter what kind of a Government it may be, that claims to be a democratic Government, when it wants to look for more money to carry on essential services or to develop the resources of the country, is bound to look to the people with the money, the people who can afford the money, to find the increased taxation that must be found from time to time. When a democratic Government goes to look for more money for the purposes I have mentioned, it has to get the people who have the money and impose a tax where the cost of collecting that tax is going to cause the least possible confusion and where the cost of collection is kept down to a minimum. It is only natural to assume that, before people go to a dance, to a race meeting, to the cinema or to some other form of amusement, they will, if they are sensible and ordinary citizens, make proper provision for their food, clothes and the payment of other essentials such as rent. If they have money left for amusement, there is nothing wrong, from a democratic point of view, in looking to such people for whatever increased taxation may be necessary in order to provide for the needs of the poorer section of the population.

What I want to know from Deputy Derrig, Deputy Major de Valera and my old friend, Deputy McGrath, from Cork City, is why this tax was originally imposed in 1932. What was the main purpose of going to the people who patronise dance halls to collect another £100,000 or £150,000 from them? Why was it imposed at that particular period? Deputy Derrig, Deputy Major de Valera and Deputy Lynch and every other Deputy sitting on the Fianna Fáil Benches who has spoken to-day have evaded that very important point. I must confess, as one of those who have been described as the seven sinners at the time, that although I was opposed to the tax, which was introduced by Deputy MacEntee in his first Fianna Fáil Budget, I had to swallow the pill and walk into the Division Lobby, very reluctantly, and vote for the imposition of the tax. But I opposed it.

Major de Valera

Then you will have to swallow the pill again.

I would like to hear from Deputy Major de Valera, if he speaks again on this matter, as I am sure he will, what was the main purpose of imposing the tax originally in 1932. Whoever suggests that dancing is becoming unpopular must surely be convinced, on the figures given by the Minister for Finance this evening, that that is not so. Quite accidentally, I visited a modern dance hall, situated in a rural area on the boundary of two or three constituencies, last week. I was informed that as many as 920 young men and women attended a dance recently in that up-to-date hall which my colleague on the opposite side, Deputy Beegan, knows better than I do. I am not sure whether or not the registered capacity of the hall was exceeded by the attendance of 920 persons. In this particular case the young men and women left the provincial towns and went out into a rural area to enjoy themselves, as they are entitled to do, to the extent of 920. That does not show that in the area that Deputy Beegan comes from dancing is becoming unpopular.

If this tax is to be continued and if there is any justification for its continuance, from my point of view, it should not be applied to the organisers of dances which are for the purpose of getting funds for either political, social or charitable organisations. The majority of dances held outside the four principal cities, are, to my limited knowledge—I may be corrected on this —held for the purpose, not of putting more money into the pockets of the organisers or promoters, but for the purpose of finding money that is essential for the maintenance of political clubs, social clubs and charitable bodies.

You are not correct in that.

Am I not?

I had my eye wiped. It is not unusual for a Deputy, even Deputy Donnellan, to have his eye wiped on an odd occasion. I was staying in an hotel in a provincial town in my constituency. I had intended retiring at the ordinary time when a gentleman asked me if I would go to a dance which was being held in a particular hall. It is a very decent hall, which is run by professional ballroom owners. I asked what the dance was for. I was told: "It is the poor man's dance." I was given the impression, by the words used, that the dance was for the purpose of raising money for the St. Vincent de Paul Society. I could have got free admission to the hall but I insisted on paying for myself and my friends, being under the impression that the profits would go to the St. Vincent de Paul Society. I discovered, before the dance was half way through, that it was for the purpose of putting more money into the pockets of the poor people who own that fine ballroom. They made a good thing on it for the night. I would have liked to have been able to get in touch with the Minister for Finance and to say to him: "In view of the attendance here to-night, there is a good deal of money to be scooped up here, and get at that type of person."

Having listened to this debate for a considerable time, having very definite views on this particular tax, having opposed it in 1932 when it was originally introduced, having argued in favour of its total abolition last year, I would like to hear from Deputy Derrig, Deputy Major de Valera or anybody else on the Fianna Fáil Benches what was the real reason for its imposition in 1932 and what are the reasons for its abolition to-day if its introduction was justifiable in 1932.

Major de Valera

Deputy Davin has invited a rejoinder. I happen to have the volume in regard to 1932 here, but, looking objectively at this problem, the situation is that it was imposed in 1932; there have been 14 years' experience of its working. There was sufficient experience of its working to have it abolished in 1946, for reasons then given, some of which have been quoted by the Minister. The Minister tacitly admitted the force of some of these arguments for its abolition in 1946, but he says that he met those by the arrangement which he has made for exempting rural areas and his proposal in regard to charities. Now, admittedly, that is a case. As I have said, I see in this definitely a debatable problem, but, again, the point remains that the steps that the Minister took are not a completely unobjectionable approach or obviation of the reason why that tax was abolished after 14 years' experience of it.

Secondly, a strong case has been made by both Deputy McCann and Deputy Fitzpatrick which has not been answered. It is not enough to try to sidetrack the argument by saying that that is a dishonest approach. I have quoted the Minister in 1932 in that regard. The net position is whether it is better for the House to adopt this amendment now, putting the position back to the 1946 position, or to find the money as the Minister proposes to find it. The Party in opposition here have moved this amendment and have advocated the case on that. We say that that case has not been completely answered.

One can add very little to the debate beyond that because, after all, it is the factual position at the present moment that we are concerned with, not an analysis as to anybody's motives in the past.

Do you want the tax back on the cigarettes?

There are many approaches to this particular problem. I think the most reasonable one has been taken by Deputy Fitzpatrick in the suggestions he has made to the Minister. These suggestions clearly are suggestions that are put forward by the persons who organise dances in the way in which they ought properly to be organised, by the provision of first-class halls, with first-class amenities. The provision of these halls, which are necessary from the point of view of the social life of the people, is a very expensive business. There are different types of dances, but, so far as ballroom dancing, properly organised, in Dublin and other cities is concerned, dancing is, as it were, just part of the particular business. There is the employment of the musicians, very excellent employment; there is the employment of other staff such as waiters, waitresses and attendants of one kind or another. These dances give considerable and valuable employment almost all the year round. The imposition of the tax has undoubtedly led to the closing down of some of the first-class ballrooms in Dublin City and it has undoubtedly led to the disemployment of musicians and of other persons generally employed in connection with dances.

These ballroom proprietors do not say to the Minister: "Abolish the tax entirely." What they say is: "Instead of charging it on the admission charges per head, put a specific tax of whatever amount you will on the dance halls." There is a lot to be said for that. By the imposition of such a tax, the ballroom proprietors will know where they stand and the organising committees of different functions will be called on to contribute a particular proportion of the impost, but, nevertheless, the business of dancing will go on, and, while it goes on, the employment that goes with it will continue. I would very strongly support that recommendation to the Minister. It would save a lot of checking, of testing and of holding people up now and again to find out whether they had paid the tax or not. It would obviate and avoid that type of inconvenience to the ordinary people attending dances.

It may be that the Minister will not get the same revenue as he gets at the moment, but he will get a very substantial part of it and it is a matter for him to consider, from many points of view, whether it would not be better to lose a portion of the revenue he is getting, if, by doing so, he ensures that there will be no disemployment of musicians, waiters, waitresses, stewards and other people generally employed in connection with dancing.

I agree with what Deputy Davin has said. Most of the dances in rural areas are organised not just for the sake of dancing alone, but for the purpose of financing political organisations, social organisations, athletic clubs, football or hurling clubs or swimming clubs. The main source of revenue of these organisations has been the dance. I had some practical experience recently in connection with the organisation of such functions for the purpose of obtaining funds and the fact is that the net result to the promoting club is very small. The natural result of that will be some form of tax evasion, and there is tax evasion everywhere. From a general social point of view, it is demoralising to the community if groups here and there through the country organising dances for very good social purposes, such as the maintenance of a football team or an athletic club, are drawn into illegalities or drawn into adopting some method of avoiding the tax. That is bad from the general point of view, and I would ask the Minister to reconsider the whole matter in the light of the contributions made by the different Deputies. If the Minister does that, he will probably come to the conclusion that it would be worth giving a trial to the suggestion put forward on behalf of the ballroom proprietors by Deputy Fitzpatrick. It would be well worth a trial and it may bring him in an amount very close to the amount he is getting from the tax imposed and collected in the way in which it is imposed and collected at present.

Amendment put.
The Committee divided: Tá, 54; Níl, 65.

  • Allen, Denis.
  • Bartley, Gerard.
  • Beegan, Patrick.
  • Boland, Gerald.
  • Brady, Seán.
  • Breathnach, Cormac.
  • Breen, Daniel.
  • Brennan, Thomas.
  • Breslin, Cormac.
  • Briscoe, Robert.
  • Buckley, Seán.
  • Butler, Bernard.
  • Carter, Thomas.
  • Childers, Erskine H.
  • Colley, Harry
  • Collins, James J.
  • Crowley, Honor Mary.
  • Davern, Michael J.
  • Derrig, Thomas.
  • De Valera, Eamon.
  • De Valera, Vivion.
  • Flynn, Stephen.
  • Gilbride, Eugene.
  • Gorry, Patrick J.
  • Hilliard, Michael.
  • Kennedy, Michael J.
  • Killilea, Mark.
  • Kilroy, James.
  • Kitt, Michael F.
  • Lahiffe, Robert.
  • Lemass, Seán F.
  • Little, Patrick J.
  • Lydon, Michael F.
  • Lynch, John.
  • McCann, John
  • MacEntee, Seán.
  • McGrath, Patrick.
  • Maguire, Ben.
  • Maguire, Patrick J.
  • Moylan, Seán.
  • O Briain, Donnchadh.
  • O'Grady, Seán.
  • O'Reilly, Matthew.
  • Ormonde, John.
  • O'Rourke, Daniel.
  • O'Sullivan, Ted.
  • Rice, Bridget M.
  • Ryan, James.
  • Ryan, Mary B.
  • Sheridan, Michael.
  • Smith, Patrick.
  • Traynor, Oscar.
  • Walsh, Richard.
  • Walsh, Thomas.

Níl

  • Beirne, John.
  • Blowick, Joseph.
  • Brennan, Joseph P.
  • Browne, Patrick.
  • Byrne, Alfred.
  • Byrne, Alfred Patrick.
  • Coburn, James.
  • Cogan, Patrick.
  • Collins, Seán.
  • Commons, Bernard.
  • Connolly, Roderick J.
  • Corish, Brendan.
  • Cosgrave, Liam.
  • Costello, John A.
  • Cowan, Peadar.
  • Crotty, Patrick J.
  • Davin, William.
  • McAuliffe, Patrick.
  • MacBride, Seán.
  • MacEoin, Seán.
  • McFadden, Michael Og.
  • McGilligan, Patrick.
  • McMenamin, Daniel.
  • McQuillan, John.
  • Madden, David J.
  • Mongan, Joseph W.
  • Mulcahy, Richard.
  • Murphy, William J.
  • O'Donnell, Patrick.
  • O'Gorman, Patrick J.
  • O'Higgins, Michael J.
  • O'Higgins, Thomas F.
  • O'Higgins, Thomas F. (Jun.).
  • Desmond, Daniel.
  • Dillon, James M.
  • Dockrell, Maurice E.
  • Donnellan, Michael.
  • Doyle, Peadar S.
  • Dunne, Seán.
  • Fagan, Charles.
  • Finucane, Patrick.
  • Flynn, John.
  • Giles, Patrick.
  • Halliden, Patrick J.
  • Hickey, James.
  • Hughes, Joseph.
  • Keane, Seán.
  • Kinane, Patrick.
  • Lehane, Con.
  • Lehane, Patrick D.
  • O'Leary, John.
  • O'Reilly, Patrick.
  • O'Sullivan, Martin.
  • Palmer, Patrick W.
  • Pattison, James P.
  • Redmond, Bridget M.
  • Reidy, James.
  • Reynolds, Mary.
  • Roddy, Joseph.
  • Rooney, Eamonn.
  • Sheldon, William A. W.
  • Spring, Daniel.
  • Sweetman, Gerard.
  • Timoney, John J.
  • Tully, John.
Tellers:—Tá: Deputies Ó Cinnéide and Ó Briain; Níl: Deputies Doyle and Connolly.
Question declared lost.

I move amendment No. 4:—

In line 31 to delete all words after "1950" to the end of the section and substitute "by the deletion of the words `and that the expenses in respect of the entertainment did not exceed 30 per cent. of the takings in respect thereof.' "

I hope that the Minister will see his way to accept this amendment, even if he accepts it only on an experimental basis for the next 12 months. I cannot see any justification—and I never did— for what I term the means test on charities. When the Revenue Commissioners are perfectly satisfied that an entertainment is run for a charitable institution there should be no means test as to the amount of the expenses. I have got many explanations for this 30 per cent. being introduced originally. It was suggested to me that the reason for introducing that clause that the expenses of an entertainment run for charity should be kept under 30 per cent. was to prevent individuals, either the promoters or ballroom proprietors, from organising dances themselves for a genuine charitable institution and arranging with that institution that they should hand over a percentage of the profits.

I would point out to the Minister that if that is the main reason for maintaining this percentage clause, whether it be 30 per cent. or 50 per cent., the individual it aims at eliminating will still be there, and that there is a great reason why genuine charitable organisations should take individual promoters or proprietors into their confidence and association for the purpose of protecting themselves, because the individual promoter can at any time make out a balance sheet or report in such a way that the Revenue Commissioners cannot find any flaw. If the incentive is there to evade the tax and if the promoters are running the dance for a charitable organisation there is nothing to prevent them if they have an attendance of 400 from making out their returns showing that the attendance was 200. That reason has not been given to me officially but it has from time to time been submitted to me outside this House.

I would point out to the Minister that by maintaining this clause not alone is he putting the promoters of genuine charitable functions to great inconvenience and annoyance but he is also imposing great inconvenience on the revenue officials. The procedure that has been adopted and that will continue to be adopted under this clause is that any committee organising a dance to raise funds for a charitable institution must first go to the nearest revenue office and apply for exemption. They fill in a form giving the approximate number of people they expect will attend and the price of admission. If the Revenue Commissioners are satisfied that it is a genuine charitable function they will give the exemption but they will take from the promoters a deposit. Where the price of admission is 3/- and the number of people expected 400, the Revenue Commissioners take from the committee a deposit of at least £15. When the returns are sent in if they are not under the stipulated percentage the Revenue Commissioners will have sufficient from the deposit for the tax.

Before the function is held the committee are faced with the deposit of, say, £15 to the Revenue Commissioners; they must pay a deposit of £5 or £7 on the ballroom they are engaging, and they must pay for the printing of dance tickets, so that before they get one penny they must have at least £25 in hand. Where are they going to get that? If the function is for a genuine charity the practice has been to go to various people and secure from them a subscription. Some years ago when the committee running a dance for a charity solicited and secured subscriptions from supporters the subscriptions were taken into account as portion of their income and the tickets they sold to people who were not going to the dance but who bought one to support the charity were also taken into account. I am not quite sure but I understand that the present system is that when the Revenue Commissioners are tallying the percentage the only money they take into account as receipts is the money paid into the cash box for tickets on the night of the dance. They may have very good reasons for that. They may feel that if the committee wanted to evade the tax or get back their deposit they could claim that a number of tickets were sold to people who did not turn up and they could put down the names of individuals who gave them subscriptions of £1, £3 or £5 towards the initial expenses. One might be inclined to feel that those subscriptions were never handed in. If they were never handed in, I would like to ask the Minister how does he think that any committee that got together for the purpose of holding a function for charity can get the initial expenses? They have to deposit with the Revenue Commissioners a sum equivalent to £15 where they expect about 400 people to attend. They have to pay the deposit on the ballroom and they have to pay for the printing of the dance tickets and a certain amount of advertising. Consequently, they must get subscriptions and they must raise money somewhere.

In view of all these obligations, and all the trouble that is given to the committee and to the Revenue Commissioners, I think that this means test —and I cannot call it anything else— is not justified and I ask the Minister to accept this amendment, at least for the period of one year, and where the Revenue Commissioners are satisfied— and they must be satisfied—to give them power to give exemption to committees running charitable dances. I am perfectly satisfied from what I know of charitable institutions that they will not lend their names in such a way that anybody can make money out of them. This matter warrants a certain amount of consideration. It is the cause of great annoyance.

The Minister made a passing reference to charitable dances and said he was losing a lot by increasing the percentage from 30 to 50 per cent. I do not agree with him. He may undoubtedly be making it more convenient and comfortable for committees that set out to raise funds because they will know at least if they take £20 on the door they can spend £9 19s. without losing the deposit and if they take £40 they can spend £20. Anyone with knowledge of organising these functions will know that you cannot book a ballroom, open it up that night and people will be found outside waiting to get in, waiting for the place to open so that they can go in and dance. Like every other business, it has to be well organised. Where charitable functions are well organised, they give a good return to the promoters, but where the promoters are hampered—and I claim that they are by this means test—it will be practically impossible for them to run a dance and run it straight.

Even charitable organisations have had to adopt the method I suggested for the purpose of getting back the deposit. Take any group of people, select representatives from each Party in this House, for example, and form them into a committee to run a dance, say, for some member of the House or a charitable institution outside. If they have to deposit £15 or £25, when they come to make up that deposit a certain human feeling will enter into the matter. They do not consider they are doing anything wrong. They set out to raise money for a charitable institution; they do not set out to raise money for the revenue, and when it comes to making a return they may feel inclined to increase the receipts by increasing the number who attended or reduce the expenditure by arranging with the band leader or someone else to say that he got only £5 where you paid £10 or £15.

I think the Minister should accept this amendment and carry out an experiment, say, for 12 months. I know the ability and the power and the influence of the Revenue Commissioners to find out whether people are attempting to use charitable organisations for the purpose of making money for themselves. The Revenue Commissioners are quite capable of dealing with them. I trust he will accept the amendment and try it out for experimental purposes for one year.

Major de Valera

It appears that Deputy Fitzpatrick has made a strong case for the amendment. I do not propose to repeat what he has said. I commend it to the Minister. It strikes me that essentially what is involved here is that when giving this exemption to charity there is a consciousness either that certain evasion could or would take place or that the function, nominally charitable, could in effect work out as lucrative for a particular business interest. The provision that is complained of is one that naturally suggests itself to somebody dealing with it on paper. We all know that that type of thing does not work out in practice. It seems from what Deputy Fitzpatrick said as if it is so in the present case. The revenue officials, who have to determine whether a thing is bona fide charitable or not, will in the last analysis be put to a certain general investigation and on top of that they must consider the bona fides of the promoters.

The bona fides do not enter into it.

Major de Valera

From what Deputy Fitzpatrick says, they do.

Does the Deputy know what the amendment means?

Major de Valera

I think I do. The bona fides enter to this extent. As Deputy Fitzpatrick suggested, there may be a temptation to pay a certain amount to a band and on the basis of that hand over a certain figure to the Revenue Commissioners. If such matters arise, perhaps it would be better for the Minister to take the risk that is involved and avoid complications of the sort that the Deputy mentioned.

Risk of what?

Major de Valera

I may have misunderstood Deputy Fitzpatrick.

I think you have not read the amendment.

Major de Valera

I have. The Minister's amendment is by way of relief, raising it from 30 per cent. to 50 per cent. Deputy Fitzpatrick's amendment is simply the deletion of any percentage.

If every dance in Dublin were run for St. Vincent de Paul, there would be no dance tax— that is what it comes to. If every dance in Dublin gave St. Vincent de Paul only one pound at the end of the night, it would be exempt.

Major de Valera

I quite appreciate that, but is there not a case even in that regard to be made for Deputy Fitzpatrick's amendment? Is there not a case, even supposing that only a small sum were to be given to charity?

Only one pound from every picture house and every dance hall.

Major de Valera

Even if there was only that, it would mean a very substantial amount. What is going to happen in a case like this is that people will not promote these things or permit them to be promoted for a valid charitable purpose.

There is no question of permission. When the net proceeds are devoted to a charitable purpose, then there is no tax. If the managers of picture houses agree that for the future they will give a half per cent., or .05 is taken for charity—that is the position.

Major de Valera

I can see the Minister's difficulty.

It is not my difficulty.

Major de Valera

Deputy Fitzpatrick has made his case for this amendment. The second point is that the Minister is making a case which can be equally met by another procedure. The submission of an amendment of this nature does not purport to be an exhaustive suggestion to the Minister. We are always satisfied if the Minister will say that he will take the spirit of it and will meet the case as best as he can. The Minister, for instance, could do that by dealing with the people who actually promote the dance and seeing that a certain percentage goes to charitable purposes. Deputy Fitzpatrick has made his case in regard to the particular form of this. I quite admit that the Minister may have to make some other arrangement to avoid the pitfalls which he sees. If he will not accept the amendment, and if the section is allowed to stand as it is, he could bring in an additional protective section saying that where the dance is bona fide promoted by and for a charitable purpose—if he wants to define a charitable purpose to suit himself he can do it—that then this limit in regard to expenses would not be there.

The Minister has raised some pertinent points in regard to the amendment. Taking what both the Minister and Deputy Fitzpatrick have said I am wondering if the case could not be met by a further section to be introduced by the Minister on the Report Stage on the lines I have suggested.

The section in the Finance Act of 1943 which is being amended by my own amendment in the Finance Bill is this:—

"Whenever it is shown to the satisfaction of the Revenue Commissioners that the whole of the net proceeds of an entertainment held on or after the 1st day of August, 1943, are devoted and will be applied to educational, philanthropic or charitable purposes and that the expenses in respect of the entertainment did not exceed 30 per cent. of the takings in respect thereof, the Revenue Commissioners shall remit..."

I propose to amend that by having it read in this way:—

"Whenever it is shown to the satisfaction of the Revenue Commissioners that the whole of the net proceeds of an entertainment held on or after the 1st day of August, 1950, are devoted and will be applied to educational, philanthropic or charitable purposes and that the expenses in respect of the entertainment did not exceed 50 per cent. of the takings in respect thereof, the Revenue Commissioners shall remit...."

That is my amendment. To that Deputy Fitzpatrick moves that the section shall read this way:—

"Whenever it is shown to the satisfaction of the Revenue Commissioners that the whole of the net proceeds of an entertainment held on or after the 1st day of August, 1943, are devoted and will be applied to educational, philanthropic or charitable purposes the Revenue Commissioners shall remit...."

That means without any evasion and without anything in the way of bad conduct on the part of any charitable organisation. That is, to ask that cinemas, dancing, greyhound racing, cine-variety shows can be run on the basis that the whole of the net proceeds, after the proprietors have subtracted what they think are their expenses, will go to charity, and that then there is no tax. What is in question here is £1,300,000. I need not get one penny of that tax if the amendment were passed. Suppose every dance in the Gresham were run on that basis, and that the whole of the net proceeds were to go to a charitable organisation. If £5 were the whole of the net proceeds, it would go to charity, and then there is no tax to be paid. The same thing would apply to cinematograph shows and other classes of entertainment for charitable purposes. What the amendment means is that if the whole of the net proceeds are to go to the Vincent de Paul Society, then there is no tax paid. That is what is being discussed, but I do not think that is what is meant.

It is not. I do not know how the Minister can adopt that attitude towards the amendment. I am sure he understands that is not what is meant. It was not contained in any suggestion that was made in support of the amendment.

No, but it is in the amendment.

What I am suggesting is that by trying to keep the expenses under 30 per cent. or 50 per cent. is no guarantee that people will not evade the tax if they can. What I am suggesting as a remedy is that the means test should be abolished. It is a question of where the Revenue Commissioners must be satisfied.

That is not the amendment. Where it is shown to the satisfaction of the Revenue Commissioners that the whole of the net proceeds are going to charity, that is all they have to be satisfied about.

I would be satisfied if the Minister would accept my view on the matter and if he would put it in legal form. I have told the Minister that the 50 per cent. gives no protection to the Revenue Commissioners.

Because there will be evasion?

If I allowed this there would be no tax paid at all.

I have not a legal mind but I have practical knowledge, and people with practical knowledge oftentimes hit on the truth, while the legal mind may float around it. I am recommending to the Minister that the percentage is no guarantee. I want to leave it in the hands of the Revenue Commissioners that, where dances are organised for a genuine charity, there will be no means test.

The difference between us is just what is in the two amendments, and I do not think it is capable of being patched up. I should have mentioned this before. The 30 per cent. and the 50 per cent. are no standards because the people would evade. I want that fact remembered. We are thinking here of charitable, philanthropic and educational societies. Whether it is 30 per cent. or 50 per cent. they will evade it. They will either increase the receipts or lower the expenses. The Deputy says the people would not lend themselves or their names to any evasion. Now, we are both talking about the same people.

No, we are not.

We definitely are. The question is as to whether it is an educational, philanthropic or charitable purpose. That is where the case rests. The Deputy's point is evasion. There may have been evasion with regard to the 30 per cent. and the temptation to evasion is less at the 50 per cent. I do not pay much heed to Opposition Deputies speaking about evasion because they allowed that temptation to grow for 14 years and they did not even bother to change it from the 30 per cent. to 50 per cent.

Now, the test with regard to a charitable organisation is that expenses ought to be lower than they are in the case of the commercial enterprise, because, in the former, people give their services free. Therefore, in the old days it was thought that if one could keep one's expenses below the 30 per cent. level, one had a good case for saying that the rest was charity and that the organisation was a charitable one. We quite recognise that the expenses of hiring a band, and everything else, have gone up and we have decided on a figure of 50 per cent. I have taken 50 per cent. as an interpretation of the expression of opinion given to me by quite a number of people who came to see me on deputations. When I told them that it was a question of raising the expenses limit in an upward direction, 50 per cent. was the suggestion I got. We are trying the 50 per cent. for experimental purposes this year. The Deputy must realise that the difference between us is either 50 per cent. or nothing. There is a limit to the expenses that may be charged before one can call it charity. The Deputy's amendment is "nothing" because it lays it down that when the net profits go to a charitable purpose there should be no tax. Then it is open to the managers of every picture house and dance hall to say: "From this time on no entertainment, no greyhound race, no cine-variety show, no dance hall will be run except on condition that the whole of the net profit, after we take our expenses, goes to charity." From that moment, I lose £1,300,000. That will be the effect of this amendment. The Deputy says he will accept any change I may like to make, but it is for him to suggest an alternative. If he thinks 50 per cent. is not enough, does he want 60 per cent.? I think a 20 per cent. advance on 30 per cent. is not a bad advance for an experimental year. Whatever the expenses are, as long as there is 1/- over and above the net profit, and that goes to charity, then there will be no tax coming to the State. I could not possibly accept that. That would not merely wipe out the tax on dances, but on all entertainments, greyhounds, cine-variety shows and the theatre.

Major de Valera

One can appreciate the Minister's point. The whole of the net profits, as the Minister has pointed out, would be open to a dangerously wide interpretation if the following words were not there. On the other hand, the Minister has been a little hard on Deputy Fitzpatrick, who has a very good point on the merits. The Minister has asked him if he can make any suggestion. Frankly, it is difficult to see how the section as it stands can be amended.

I suggest again to the Minister that he should consider between this and the Report Stage the introduction of a section to the effect that "where an entertainment is organised by and for the purposes of a recognised charitable organisation". Of course, I recognise then that he will have to define certain well-known charitable organisations, such as the St. Vincent de Paul, certain Church charities, and so on. There would be nothing wrong then in giving the Minister a deciding power as to what does or does not constitute a charitable organisation.

The St. Vincent de Paul Society is a recognised charitable organisation. Under that amendment, if the St. Vincent de Paul Society decided to run every dance, dance proprietors would lend themselves to that in their own interests and there would be no tax.

Major de Valera

Up to a point the Minister is right.

Up to every point.

Major de Valera

No. The Minister is going too far with it. Prima facie, there is a strong case for exemption in the case of a dance or fête run by the St. Vincent de Paul Society—I merely take that as an example—for their own purposes.

But you did not say that. You said by or on behalf of.

Major de Valera

I said by and on behalf of. "And" is what I said.

That is not what I heard you say, and that will not suit Deputy Fitzpatrick.

Major de Valera

It may not. The Minister is a bit hard on Deputy Fitzpatrick. These people will want to make the maximum profit and that will be the Minister's actual safeguard. The evil the Minister fears will not eventuate because these people will want to make all the money they can on these dances and so on. I throw that out as a suggestion of a possible way of resolving the difficulty, a difficulty which undoubtedly exists from Deputy Fitzpatrick's point of view and also from the Minister's point of view.

I ask the Minister to consider the matter. I do not ask him to give actual guarantees now. I do not think there would be evasions, if it had first to be clearly shown to the satisfaction of the Revenue Commissioners that the function was for a genuine charitable purpose. I am not thinking in terms of cinema proprietors, the managers of commercial ballrooms or the promoters of commercial dances. I am thinking of committees established for the purpose of implementing the work of a charitable institution. If they clearly demonstrate to the Revenue Commissioners that it is for charitable purposes, then the Revenue Commissioners would be the deciding factor. I regard the Revenue Commissioners as a pretty tough factor.

Major de Valera

There is another point——

Apparently the Revenue Commissioners have been got over in the past because evasion has taken place.

I would like——

Major de Valera

There is another point——

I have nothing to say against Deputy Fitzpatrick's proposed amendment. I believe Deputy Fitzpatrick to be quite sincere and genuine. I would draw the Minister's attention to the fact that all over the country it is a common practice to issue complimentary tickets. I speak now on behalf of the people who will benefit by this tax. I do not see why they should be either penalised or victimised whilst others can bring grist to their own particular mill and avoid the payment of tax by issuing complimentary tickets. I would like the Minister to take that into consideration in relation to this particular tax.

Will the Minister consider the matter?

I am raising it to 50 per cent. There appears to be about 49 per cent. of a difference between the Deputy and myself. I might as well write 99 per cent. in there.

Acting-Chairman

Is the Deputy pressing the amendment?

I am asking the Minister if he will consider it.

I will consider the 50 per cent. this year.

There seems to be some confusion. I shall not press the amendment.

Amendment, by leave, withdrawn.
Section 6 agreed to.
Section 7 agreed to.
SECTION 8.

Major de Valera

I move amendment No. 5:—

Before Section 8 to insert a new section as follows:—

(1) In this section the expression "firearms certificate" means a firearms certificate granted under the Firearms Act, 1925 (No. 17 of 1925).

(2) The excise duty in respect of a firearms certificate imposed by Section 40 of the Finance Act, 1925 (No. 28 of 1925), shall, in the case of any such certificate coming into force on or after the 1st day of August, 1950, be charged, levied and paid at the rates specified in the Second Schedule to the Finance Act, 1925, in lieu of the rates specified in the First Schedule to the Finance Act, 1949.

The situation in regard to this amendment is that under the 1949 Act the Minister has increased the tax payable in respect of firearms. The effect of the amendment is to bring back the rate payable in respect of firearms to what it was previously. The real bone of contention is that utilitarian type of firearm—the shotgun—which is, I understand, a matter of some importance for farmers. The amount payable in respect of that was seriously increased by the Minister last year.

By how much?

Major de Valera

I am just going to find out.

From 5/- to 10/-.

Major de Valera

Exactly, doubled. It was doubled last year. The Minister may be quite contemptuous about the doubling of the 5/- fee on firearms but it is one of these very irritating things——

Do you know what happened?

Major de Valera

No.

There were more guns licensed than ever before.

Major de Valera

I should not be a bit surprised at that but it has nothing whatever to do with the tax.

It drove people into getting guns.

Major de Valera

That point merely obviates any argument that it has decreased the number of guns. I think the number of guns would have increased in any event but the point is that it is an irritating tax on farmers and it is doubtful whether it is really justified, having regard to the use to which this type of firearms is put. A case might also be made in respect of the .22 rifle but some of the farmer Deputies can give more explicit information on the subject than I can.

The schedule in regard to firearm certicates shows that the rate for rifles, including miniature rifles, was increased from 5/- to £1 and for shotguns from 5/- to 10/- in one case doubling, and in the other case quadrupling the amount payable. It seems to be, as I say, merely an irritation and it is proposed in the amendment that the increase should be nullified.

Originally the proposal for this increase came, not from the revenue side, but from the Department of Justice. They made the case that, as the rates had been unchanged since 1925, in relation to the value of money an increase was overdue. An estimate was taken from various sources to ascertain whether if the rates were increased there would be any falling off in the number of certificates taken out. Last year I estimated that I would get £30,000 in a full year. In fact I got £40,000.

Amendment put.
The Committee divided: Tá, 53; Níl, 63.

  • Allen, Denis.
  • Bartley, Gerald.
  • Beegan, Patrick.
  • Boland, Gerald.
  • Brady, Seán.
  • Breathnach, Cormac.
  • Breen, Daniel.
  • Brennan, Thomas.
  • Breslin, Cormac.
  • Briscoe, Robert.
  • Buckley, Seán.
  • Butler, Bernard.
  • Carter, Thomas.
  • Childers, Erskine H.
  • Colley, Harry.
  • Collins, James J.
  • Corry, Martin J.
  • Crowley, Honor Mary.
  • Davern, Michael J.
  • Derrig, Thomas.
  • De Valera, Eamon.
  • De Valera, Vivion.
  • Flynn, Stephen.
  • Gilbride, Eugene.
  • Gorry, Patrick J.
  • Harris, Thomas.
  • Hilliard, Michael.
  • Kennedy, Michael J.
  • Killilea, Mark.
  • Kilroy, James.
  • Kitt, Michael F.
  • Lemass, Seán F.
  • Little, Patrick J.
  • Lydon, Michael F.
  • Lynch, John.
  • McCann, John.
  • McGrath, Patrick.
  • Maguire, Patrick J.
  • Moran, Michael.
  • Moylan, Seán.
  • O Briain, Donnchadh.
  • O'Grady, Seán.
  • O'Reilly, Matthew.
  • Ormonde, John.
  • O'Rourke, Daniel.
  • O'Sullivan, Ted.
  • Rice, Bridget M.
  • Ryan, James.
  • Ryan, Mary B.
  • Smith, Patrick.
  • Traynor, Oscar.
  • Walsh, Richard.
  • Walsh, Thomas.

Níl

  • Beirne, John.
  • Blowick, Joseph.
  • Brennan, Joseph P.
  • Browne, Patrick.
  • Byrne, Alfred.
  • Byrne, Alfred Patrick.
  • Coburn, James.
  • Cogan, Patrick.
  • Collins, Seán.
  • Commons, Bernard.
  • Connolly, Roderick J.
  • Corish, Brendan.
  • Cosgrave, Liam.
  • Costello, John A.
  • Cowan, Peadar.
  • Crotty, Patrick J.
  • Davin, William.
  • Desmond, Daniel.
  • Dillon, James M.
  • Donnellan, Michael.
  • Doyle, Peadar S.
  • Fagan, Charles.
  • Finucane, Patrick.
  • Fitzpatrick, Michael.
  • Flynn, John.
  • Giles, Patrick.
  • Halliden, Patrick J.
  • Hickey, James.
  • Hogan, Patrick.
  • Hughes, Joseph.
  • Keane, Seán.
  • Kinane, Patrick.
  • Lehane, Con.
  • Lehane, Patrick D.
  • McAuliffe, Patrick.
  • MacBride, Seán.
  • MacEoin, Seán.
  • McFadden, Michael Og.
  • McGilligan, Patrick.
  • McMenamin, Daniel.
  • McQuillan, John.
  • Madden, David J.
  • Mongan, Joseph W.
  • Mulcahy, Richard.
  • O'Donnell, Patrick.
  • O'Gorman, Patrick J.
  • O'Higgins, Michael J.
  • O'Higgins, Thomas F.
  • O'Higgins, Thomas F. (Jun.).
  • O'Leary, John.
  • O'Reilly, Patrick.
  • O'Sullivan, Martin.
  • Palmer, Patrick W.
  • Pattison, James P.
  • Redmond, Bridget M.
  • Reidy, James.
  • Reynolds, Mary.
  • Roddy, Joseph.
  • Rooney, Eamonn.
  • Spring, Daniel.
  • Sweetman, Gerard.
  • Timoney, John J.
  • Tully, John.
Tellers: — Tá: Deputies Kennedy and Ó Briain; Níl: Deputies Doyle and Connolly.
Amendment declared lost.

I move amendment No. 6: —

Before Section 8 to insert a new section as follows:—

The entertainments duty chargeable on payments for admission to a céilidhe, ball or dance shall be reduced by 50 per cent., where it is shown to the satisfaction of the Revenue Commissioners that professional Irish dance musicians are engaged.

I am moving this amendment because I am perfectly satisfied that the reimposition of the dance tax caused unemployment, principally among what are known as professional dance musicians. Professional dance musicians serve what might be termed a new form of society that has come into being as a result of the increasing popularity of dancing which started about ten years ago and the erection in the country of a number of larger ballrooms. Ten years ago we had, especially in Dublin, no large ballrooms at all, and as far as I remember we had no people working full-time in ballrooms who could be termed professional musicians. Prior to that, 20 years ago, before the advent of the motion pictures, quite a number of very good professional musicians were employed in the theatres. The majority of them were dismissed and some of them were taken into the picture houses during the time of the silent films. With the introduction of the talkie motion picture, the services of the musicians were dispensed with. Recently, quite a number of people — some of them were people who were originally employed in theatres and picture houses — started again to find reasonable employment in the ballrooms where they were engaged nightly. Three years ago there were eight ballrooms in the city giving full-time employment to dance orchestras every night in the week. During the past couple of years one of them has closed altogether and one ballroom, where there used to be dancing during the summer, has discontinued that practice, while some others have reduced the number of nights when dancing is held from seven to three or four. The result is that great hardship is inflicted on those people who were earning their living as full-time musicians.

In addition, some professional dance musicians went around the country attending dances in the cities and larger towns. Up to recently, they were well paid. They claimed that their livelihood was threatened by the reintroduction of the dance tax. Their organisation, the Federation of Irish Musicians, placed their case before the Minister last year. Due to some misunderstanding, the Minister did not receive it or, certainly, did not receive it in time. This year, they put a statement before the Minister in which they set out in very definite form that their fears of 12 months ago were only too well founded. They take, for example, four ballrooms in this city. They claim in their statement to the Minister that their men employed as professional musicians in these ballrooms; over a seven-months' period, had their hours of employment reduced by 6,222. That represented a total loss in money, at the rate of 7/6 per hour, of approximately £2,400.

That is a rather serious matter for professional musicians in Ireland. They are a type that are not being encouraged. I had to complain in this House before that they were not getting the encouragement they should get from Radio Éireann. I now have to complain that another Minister is depriving them through the reimposition of this dance tax of the opportunity they had of earning a very profitable living.

There is another form of invasion into their territory in respect of which they have a grievance. It is the position whereby English dance orchestras are allowed to come over here. Some Irish promoters, but principally English promoters, book ten or 12 ballrooms and bring over English bands and, because they are advertised as broadcasting orchestras from the B.B.C. and have been heard over the radio, the people in this country, foolishly enough, go to hear them. They do not realise that, in going to hear English orchestras, they are depriving Irish musicians of an opportunity to earn a livelihood. The Minister should give some guarantee or protection to Irish musicians.

I suggest that where professional musicians are employed the tax would be reduced by 50 per cent. I know there are certain difficulties in this because, while a number of larger ballrooms in the cities employ full-time professional musicians, there is another section of ballroom proprietors who employ part-time musicians, men who follow some other avocation during the day and take up a job in a dance band at night. That is the difficulty I see in the Minister accepting this amendment without giving it very serious consideration but, on the other hand, I can point out to him that these men have a federation of their own and that, to my personal knowledge, at least four ballrooms in this city employ full-time professional men who do not work during the day and who have no other means of livelihood. Their means of livelihood has been taken from them.

They claim, through the federation, in a memorandum submitted to the Minister, that the reimposition of the dance tax has interfered with them to a great extent. They have also complained, if not to the Minister, to me and to Deputies who represent the City of Dublin, that the position whereby foreign dance orchestras are allowed to come in here is detrimental to them.

I would ask the Minister to give this matter very serious consideration. I hope, although it may be too much to hope, that he will accept this amendment. I had great hope that he would have accepted my previous amendment but he found a lot of legal difficulties to it. I hope that, if there are any difficulties in regard to this amendment, they will not be legal difficulties and that I will be able to argue with him on man-to-man terms.

The position of those men who are employed as professional dance musicians — and there is a great number of them — deserves some consideration. They deserve some protection. They have made their case to the Minister. There is no need for me to delay the House in reviewing it. I have quoted the figures. They have given the Minister the names of the ballrooms in which they have been engaged. They claim that they have lost £2,400 in wages in four ballrooms over a period of seven months. That is a very serious state of affairs that well merits the serious consideration of the Minister.

It would be interesting and very important to get the Minister's mind on this amendment and the succeeding amendment. The whole question of a profession which has the least means of defending itself is involved. It is a profession which is extremely useful to the community in general, not merely in Dublin but in other big centres of population and wherever they go all over the country for the purpose of carrying on their profession. It is rather an anomaly that we should have penalised their work to such an extent that it is easier for an English band with a name or reputation to come over here and play than it is for these people to reach that height of proficiency that they would have equal claim on the popularity of the people.

As to the details of the amendment or the way in which the Minister may deal with it, it is a matter really for himself, his draftsmen and the Revenue Commissioners. But, having regard to it in the context of the present situation in Ireland, where we want to make life as attractive as possible for visitors, it is not merely a matter of amusement but is a matter of serious business.

There is more dancing than ever there was.

That does not matter.

We are making life more attractive.

That sounds to me as a platitude.

You will not recognise it as a fact?

Here is a tie-up that makes it more difficult than if they were to get the concession.

What concession?

The concession would have this effect, that it would favour very much the development of interest in this country by visitors. I would like to know what the Minister's attitude towards this is.

The Deputy was not here when this matter was discussed earlier. If I kept the tax on dances in the way in which Fianna Fáil had it, my estimated revenue next year would be £175,000. I have made certain remissions. I lost £35,000 or £45,000 through exempting the rural areas. If Deputy Little had been here earlier, he would have been disgusted, he having been one of the promoters of this scheme of brightening life in the countryside, to hear Deputy Derrig all out against it, saying that it was unfair and iniquitous discrimination as between town and country. However, the Deputies are taking the first step towards a coalition. Having a little freedom of mind and differences of opinion, they will, after a year or two, coalesce.

Here is the comparison I want to make. On the comparable basis, £175,000 would be the revenue gathered in this year from the tax. In 1945-46, the highest year under Fianna Fáil, it was £148,000; in 1944-45 it was £132,000; and in the year before that, £114,000, after which it tapers away to the £50,000 level. The tax being the same, if the revenue is greater, I argue that it means there is more dancing.

More transport.

More dancing. This is a tax on dancing and therefore it is more dancing. If I had not made these remissions with regard to the 50 per cent. expense ratio, costing about £30,000 and the other remission costing £45,000, I would be getting far more than ever was got in any period under Fianna Fáil. I think that argues that there is more dancing, and, if there is more dancing, I cannot understand how it is that there is any unemployment amongst dance bands or people who officiate at these functions.

Apparently there is.

Who says there is? There have been statements made by the Federation of Irish Musicians about their loss of £2,600 between so many people.

And Deputy McCann.

Deputy McCann I do not regard as an authority. He was one of the great "keeners" in 1948 and last year. "Dancing was going to `pot' and they would all be killed by this"— but the duty brought in more money even though the rural areas were exempted, and that argues more dancing. I have the returns here with regard to unemployment. The number of musicians and vocalists registered as unemployed in 1947 was 32. It went up to 33 the next year, to 36 the next year and to 37 in the following year.

They do not mean a thing.

That is the return of the people who register and we have the dance returns. In addition, we have this enormous development with regard to people who say they had 190,000 patrons last year and advertising that as being the biggest they ever had. That is the situation with regard to dancing generally.

I do not know exactly what the special problem is that Deputy Fitzpatrick has in mind. The phrase on which his amendment pivots is "if professional Irish dance musicians are engaged", and in that case he wants the duty remitted. From my information, there are very few cases in which there are non-national musicians employed. If the advent of English dance bands became in any way serious, we could have another look at this matter, but I have not got any information that it is. I cannot parade myself as being a special authority in this matter, but I go occasionally to these functions, and, in the past 12 months, I do not think I have ever been to a function at which an English dance band was advertised.

You do not even read the papers.

I do, and I see an odd one advertised, but, in comparison with the number of dances run, they are very small. If there is a suggestion that we adopt a new form of protection and tax the foreign dance musician or musicians coming in from outside, we can consider it, if it becomes an evil. The point of the Deputy's amendment is the word "professional" and he wants the tax remitted where the band is composed not of amateurs but of professionals. That is going to put him and the officials of the Revenue Department to considerable trouble. I shall have to get from him a definition of "professional", but perhaps that is not the Deputy's point at all.

Professional dance musicians are men who earn their living by playing in a dance orchestra and who have no other job.

There are very few of those, I should say.

There are quite a number.

It shows how little the Minister knows about the position. There are 100.

Maybe, but the majority are not.

The majority are.

They are people who have other occupations. Remember that Deputy Fitzpatrick puts it very far — they are not to be occupied at anything else except their dance band work. Again, I should have to get figures in that regard. For the moment, I could not think of accepting this because it would mean, on the information I have, which is to the effect that in the main Irish nationals are employed at these dances, and as there is no definition of "professional", that I would be remitting the tax, as to half, in respect of pretty nearly the whole of the dances held in the country, and no case has been made for that yet. However, if the Deputy will leave it over, I can look into it, particularly if I get figures showing that there is any evil in respect of foreign dance band musicians coming in here or anything really evil in having people who are otherwise occupied at certain times playing as dance musicians. I am not sure that it would be desirable to drive the whole thing into the hands of what the Deputy now calls the professional dance musician. It used to be the situation in the old days that by far the great majority of those who played in dance bands were people with other occupations during the day who came into the dance band in the evening. Those were the days when dances on the whole ran to a much later hour in the morning than the average dance now does.

Major de Valera

The Minister has given the list of figures of the registered unemployed, but he was not here when the point was made in answer to that. In so far as these figures show anything, they show that the number of unemployed in that profession increased and that the percentage increase was considerable.

A real scandal.

Major de Valera

The Minister can wave that aside or be contemptuous, if he likes, but, in so far as these figures show a trend, they show an increase in unemployment in that category and a relatively large percentage increase; but the real point about these figures is that the repercussions on that type of people, as Deputy Fitzpatrick and Deputy McCann pointed out, is to deprive them of a certain amount of their work and a certain amount of their remuneration, but still to leave them employed within the meaning of the Unemployment Assistance Acts and they either cannot or do not register. In other words, the registered unemployed in that regard are no indication whatever of the hardship that group of people are suffering. So much in answer to the figures adduced by the Minister.

I am relying on the returns from the dance tax, which show much more dancing.

Major de Valera

That is another point. The Minister says there is much more dancing. That does not necessarily prove anything either, because one can immediately think of reactions to such a thing as a tax like this which will not be such as to show in either the number of people attending a dance or the number of dances held, but may very well show themselves in a counterbalancing reduction of the expenses incurred in the running of these dances. I quoted, when the Minister was out, what he said in 1932 about this tax and a lot of his own arguments could be turned against him but that is neither here nor there. The point is that it may be that these people are being victimised through being the point at which the tax is recouped to the sponsors of dances. I do not know. I merely got up to make the point in reply to the Minister's figures, since he was not here when it was made previously.

Mr. Byrne

Might I support the plea made by Deputy Fitzpatrick and ask the Minister to give the matter consideration and to agree that, where there is a full band of 12 or 14, getting good wages, a full concession be given? Where there is a reduced number in the band, he could have a grading and allow a percentage according to the number of people employed. In many halls where dances are run for charity or by sports organisation trying to raise the wind, you find a band of six people. We might not ask the Minister to give full remission where there is a small band, but only 50 per cent. If he could work out a scale, so that a hall engaging a full band of 12 — the most I have seen—would get full remission and where there is only seven or eight a reduced remission; and if it goes down to a lesser number than six, then 50 per cent. I think it could be done. It was suggested to the Minister once before and favourably commented upon. If he would meet Deputy Fitzpatrick in that way and meet those anxious to see that the musicians get employment and more working hours, I think he would be doing good work.

Recently in Dublin one of our leading bands, an excellent band, has broken up and those able to earn a good living in entertaining our people handsomely with good music are seeking employment in other directions. If this remission were given, that band might be able to get together again. If the Minister cannot accept the amendment, he should give Deputy Fitzpatrick and those supporting him and the musicians and the union a little encouragement that the matter will be considered.

The point I made in the Minister's absence this afternoon was that the figures the Minister quoted meant nothing in relation to the argument put before the House. The question of 32 or 33 musicians registering as unemployed has no relation whatever to the question. Prior to the reimposition of the duty, there was full-time employment for practically every member of the Irish Musicians' Federation — which, I would remind the Minister, is a registered trade union with a negotiating licence and which caters for full-time musicians. The musicians of whom I am speaking are the dance band musicians on practically full-time employment. I said I did not want to make any exaggerated statement. The case we made here was that these men were losing a certain number of hours per week. Where they were employed for six nights in the week, now they are being employed only for three nights and in some cases for two. They work for, say, four hours in the night and are paid at the rate of 7/6 an hour, which is 30/- per night or, say, £9 per week. If you cut their hours in half, you have that man's week's earnings. That is the point I made. That is why I reminded the Minister that the statement submitted by the Federation of Irish Musicians related to man hours and did not relate to the number of individuals who had been disemployed. They do not sign at the labour exchange. The majority of these men will look for work and travel to any part of the country where they will get an engagement. There is a register kept at the offices, which the Minister may inspect or see a copy of. It contains the names of all the musicians. It must be kept, and when an engagement comes in one of the men on the easy list will be sent out. It is not a question of going to Gardiner Street and signing. They do not do that, since if a man works for a night he will earn 30/- and quite obviously if he is earning £3 or £4 a week it is useless for him to go to the labour exchange, as he will not get any supplemental allowance. It is quite useless for him to sign as a dance musician when the work is not there. The submission I made was that there was full-time employment for these men. The Minister doubted the submission that unemployment has come about by the reimposition of the duty. He doubts me. I asked him did he doubt Deputy Fitzpatrick. I do not know whether he does or not. I am speaking, as I said earlier, as one who has been briefed by the Irish Federation of Musicians and if he doubts me he doubts the representatives of the organisation which represents some hundreds of musicians in this city. Last year he refused to see these people and discuss the matter with them. If he could get closer to them and were prepared to meet them and listen to them, he might turn a more sympathetic ear.

It is easy for people sitting in snug comfort, with two or three positions and incomes, to say that it is nothing to have men's livelihoods cut in half. I am not speaking here in the sense of caoining or wailing; I am representing here, as I am entitled to do, the views of my constituents, and I will continue to do that. If the Minister took a trip through his own constituency more often and could get nearer to the people whom he is supposed to represent here, he would have a different viewpoint on this question, as he has on a great many more.

As a representative of rural Ireland, I believe there was never such a boom in dancing as there is at present. In the small town from which I come, with a population of 2,000, we have two dance bands and they are not idle, as there is scarcely a night when they have not an engagement. If there is a small bit of hardship caused in Dublin, after all, Dublin is quite able to bear it. If they are professional musicians, as Deputy McCann says, surely they could relate themselves to some other class of gainful work during the couple of days in the week they would not be engaged, just as the bands do in rural Ireland; except in the case of the extreme professional bands such as Mick Delahunty's and Pat Crowley's, which are absolutely professional? I think it is a nonsensical argument pure and simple. There may be some musicians idle in Dublin but in the rest of Ireland, as far as I can see, and I see the provincial and weekly papers, it is nothing but dances, dances, dances.

I submit to the Minister that the increased revenue which he contends he is getting, and will get, is due to the more strict enforcement of the stamp duty on admission. It is not indicative of increased dancing.

That is a grand theory, but it does not bear any examination. Deputy McCann is terribly worried about unemployment, particularly amongst dance people. In 1938-39, Deputy McCann had the tax kept on, at a time when it was bringing in less than £53,000. Next year, on the comparable basis, it will bring in three times that. Does Deputy Kennedy think that three times the amount brought in in 1938-39 is due to that enforcement? I think it is ridiculous. If there is unemployment being caused, when there is so much dancing that a tax of a particular type will bring in £175,000, what must the unemployment have been when dancing was reduced to such a point that the revenue was only £53,000 and Deputy McCann's heart did not bleed?

The case is completely different.

It is not. There was far more unemployment amongst these people.

There are far more people in the business, and have been since the war.

More people in the business? Are they hiring more dance bands?

There are far more musicians in the business.

Far more and there are more in employment.

There are more musicians on the job.

Over a period of years it has become more popular. It goes in cycles in the dance business.

It is certainly going in a great cycle at the moment. £175,000 would come in in comparison with £53,000 in 1938-39; yet people are talking about unemployment.

Major de Valera

The Minister's view is that nobody is suffering?

The Deputy can take it that I do not believe these "keeners" who talk about vast unemployment in dance bands.

Major de Valera

Deputy McCann and Deputy Byrne.

They are up against those figures and I have the number of people registered and they are all pointers. On the 7th June, 1947, when there was no tax 32 people registered as musicians and vocalists unemployed. The number in that particular section has risen to 37.

Major de Valera

Fifteen per cent.

I do not care what percentage it is. That is the figure of unemployed musicians. There is such an amount of dancing that the same tax brings in three times what it brought in 1938-39.

The war years brought people into the business.

The Deputy is saying that the people went into the business, and also that more people are unemployed. Why does he not take the jump with me to last year when the tax went up from £108,000 — £140,000 would be the comparable figure — up to £175,000. "More unemployed." The point is that as the tax went up there were more employed and there is more dancing still this year; we forecast it.

Deputy Byrne's point about full bands is not the amendment. I do not know how it works out. The Deputy probably did not mean it but he suggested that with a full band of 12 there should be full remission of tax. Every dance hall would have 12 people as it would be worth their while in order to get the remission. To have a variety of people in groups of 12 in employment would not, I think, be worth while.

There is more dancing. Deputy Keane was right when he said that dancing had gone up and up.

There are more dance bands.

Of course there are; there must be. Deputy McCann said in 1948 without any tax being put on that dancing was on the wane. I was told last year when the revenue did not show any slackening: "Ah, that is because before the tax went on people made contracts but they will never make them again."

I was speaking about Dublin.

I know the Dublin situation too and there is no falling off in dancing in Dublin. The amazing thing to me is: if dancing is falling off and the tax is the same how do I get more revenue? That is the poser I put.

Deputy Fitzpatrick made a case regarding imported musicians if I might call them that. I do not believe that there are many. He also made a case for professional musicians versus semiprofessionals or complete amateurs. I would like to look into the matter but I am not accepting the view that a professional is at all times to be preferred to a semi-professional. A person who is able to eat under two headings might be quite a desirable person. However, I will get the figures.

I did not suggest that he is to be preferred but I did suggest that a professional musician, a man with no other form of employment should get priority treatment. I am anxious that those people should not be put on the unemployment line.

I would like to help the Minister to clear his mind about the number of people who have registered as unemployed. The information I have presented to him was handed to me by the Federation of Dance Musicians and it sets out the number of man hours lost by four dance bands employed in four ballrooms in the city of Dublin and the amount of money they lost. I do not suggest that one or two men were knocked off but I suggest that where they played four hours a night they were reduced to three hours and where they played seven nights a week they were reduced to six. It worked out that the four dance bands lost 6,222 man hours and £2,400. That is information given to you and the Federation of Dance Musicians does not just make the case; they give you the names of the ballrooms where the people were employed. If necessary it would be quite an easy matter to check up and find out if these particulars are correct or not. You can accept from me however that I happen to know that the figures are correct. In order to give professional musicians a chance I will bring to your notice——

To the Minister's notice.

I beg your pardon.

I suppose the Deputy understands that he is supposed to be addressing the Chair. I have nothing to do with dance bands.

Through you, Sir, I bring this position to the notice of the Minister. There was also something of which he is apparently not aware: there are a number of English dance bands coming into this country, getting well paid for playing in the country, and going away. I do not know, but I suggest that the Minister is not able to secure from them the income-tax he is losing where Irish professional dance musicians are knocked off. I am satisfied with the assurance the Minister has given that he is prepared to look into the matter of the invasion of English dance musicians and into the question of professionals versus semiprofessionals.

I would not call it an invasion; there might be a few.

We do not agree to the withdrawal of the amendment.

Question put: "That leave be given to withdraw amendment No. 6."
The Committee divided: Tá, 68; Níl, 56.

  • Beirne, John.
  • Blowick, Joseph.
  • Brennan, Joseph P.
  • Browne, Patrick.
  • Byrne, Alfred.
  • Byrne, Alfred Patrick.
  • Coburn, James.
  • Cogan, Patrick.
  • Collins, Seán.
  • Commons, Bernard.
  • Connolly, Roderick J.
  • Corish, Brendan.
  • Cosgrave, Liam.
  • Costello, John A.
  • Cowan, Peadar.
  • Crotty, Patrick J.
  • Davin, William.
  • Desmond, Daniel.
  • Dillon, James M.
  • Dockrell, Maurice E.
  • Donnellan, Michael.
  • Doyle, Peadar S.
  • Dunne, Seán.
  • Fagan, Charles.
  • Finucane, Patrick.
  • Fitzpatrick, Michael.
  • Flynn, John.
  • Giles, Patrick.
  • Halliden, Patrick J.
  • Hickey, James.
  • Hogan, Patrick.
  • Hughes, Joseph.
  • Keane, Seán.
  • Kinane, Patrick.
  • Larkin, James.
  • Lehane, Con.
  • Lehane, Patrick D.
  • McAuliffe, Patrick.
  • MacBride, Seán.
  • MacEoin, Seán.
  • McFadden, Michael Og.
  • McGilligan, Patrick.
  • McMenamin, Daniel.
  • McQuillan, John.
  • Madden, David J.
  • Mongan, Joseph W.
  • Mulcahy, Richard.
  • Murphy, William J.
  • O'Donnell, Patrick.
  • O'Gorman, Patrick J.
  • O'Higgins, Michael J.
  • O'Higgins, Thomas F.
  • O'Higgins, Thomas F. (Jun.).
  • O'Leary, John.
  • O'Reilly, Patrick.
  • O'Sullivan, Martin.
  • Palmer, Patrick W.
  • Pattison, James P.
  • Redmond, Bridget M.
  • Reidy, James.
  • Reynolds, Mary.
  • Roddy, Joseph.
  • Rooney, Eamonn.
  • Sheldon, William A.W.
  • Spring, Daniel.
  • Sweetman, Gerard.
  • Timoney, John J.
  • Tully, John.

Níl

  • Allen, Denis.
  • Bartley, Gerald.
  • Beegan, Patrick.
  • Blaney, Neal T.
  • Boland, Gerald.
  • Brady, Seán.
  • Breathnach, Cormac.
  • Breen, Daniel.
  • Brennan, Thomas.
  • Breslin, Cormac.
  • Briscoe, Robert.
  • Buckley, Seán.
  • Butler, Bernard.
  • Carter, Thomas.
  • Childers, Erskine H.
  • Colley, Harry.
  • Collins, James J.
  • Corry, Martin J.
  • Crowley, Honor Mary.
  • Davern, Michael J.
  • Derrig, Thomas.
  • De Valera, Eamon.
  • De Valera, Vivion.
  • Flynn, Stephen.
  • Gilbride, Eugene.
  • Gorry, Patrick J.
  • Harris, Thomas.
  • Hilliard, Michael.
  • Kennedy, Michael J.
  • Killilea, Mark.
  • Kilroy, James.
  • Kitt, Michael F.
  • Lahiffe, Robert.
  • Little, Patrick J.
  • Lydon, Michael F.
  • Lynch, John.
  • McCann, John.
  • MacEntee, Seán.
  • McGrath, Patrick.
  • Maguire, Patrick J.
  • Moran, Michael.
  • Moylan, Seán.
  • O Briain, Donnchadh.
  • O'Grady, Seán.
  • O'Reilly, Matthew.
  • Ormonde, John.
  • O'Rourke, Daniel.
  • O'Sullivan, Ted.
  • Rice, Bridget M.
  • Ryan, James.
  • Ryan, Mary B.
  • Sheridan, Michael.
  • Smith, Patrick.
  • Traynor, Oscar.
  • Walsh, Richard.
  • Walsh, Thomas.
Tellers:—Tá: Deputies P.S. Doyle and Spring; Níl: Deputies Kennedy and Ó Briain.
Question declared carried.
Amendment No. 7 not moved.
Sections 8, 9, 10, 11, 12, 13, 14 and 15 agreed to.
SECTION 16.
Question proposed: "That Section 16 stand part of the Bill."

Would the Minister explain Section 16?

All I can do is to read it.

That is terribly smart.

Are we to understand that the Minister's reply to a question put to him by a member of the House is that he is not capable of explaining the section, and that he cannot assist the House any further than by merely reading it?

Did the Deputy read it?

The Minister should not treat the matter so jocosely.

I think the Minister might have the courtesy to explain the concession which he is making in this particular section. We have this legislation by reference. He might tell us the significance of paragraphs (a) to (f) of sub-section (4) of Section 24 of the Finance Act, 1949. I think it would be rather an advantage if the Minister explained that. However, I am not pressing this.

In view of the fact that the Minister cannot give any information to the House, have we to take his word for it that he knows what the section means?

Question put and agreed to.
SECTION 17.

Major de Valera

I move amendment No. 8:—

Before Section 17 to insert a new section as follows:—

(1) The stamp duties chargeable on conveyances or transfers of lands, tenements and hereditaments under the heading "Conveyance or transfer on sale of any property" in the First Schedule to the Stamp Act, 1891, as amended by subsequent enactments, shall, on and after the 1st day of December, 1950, be at the rate of 10/- for every £50 or fractional part of £50 of the amount or value of the consideration in lieu of the rates immediately theretofore chargeable.

(2) Sub-section (1) of Section 13 of the Finance (No. 2) Act, 1947, is hereby repealed.

I think it would be convenient if amendments Nos. 8 and 9 were discussed together. The point involved is the same in both. The essential point to be remembered, in regard to these rates of stamp duties, is that in a particular situation resulting from speculation in house property at the end of, and towards the end of the war there was a strong case to be made for the duties which were imposed at that time by the Finance (No. 2) Act of 1947. There was a certain amount of speculation in and transference of property at that time which was having an inflationary effect on the value of property. It was putting up the price of houses. Superimposed on that, there was a complaint at that time, a complaint incidentally which was very strongly voiced by some members who are supporting the Government now, that there was a flood of non-citizens, of people from across the water, coming in here and buying property.

On a point of order. As I read the two amendments, the first proposes to insert a new section. Then there is a repeal provision. Part of the legislation which was repealed is the part which makes special provision for a case where the consideration does not exceed £500. That is not attended to in these amendments. The result of it is that, if the consideration were £300, the duty under the existing law would be 30/-. Under these amendments the duty would be £3. I suggest that is imposing a charge and that the Deputy is not entitled to move the amendment.

Major de Valera

I was going to deal with that matter on this amendment. I think I can show that it is not increasing a charge. Anyway, if such would follow and if the Minister were to accept the principle of the amendment a supplementary amendment could very easily meet that.

You cannot move this without the supplementary.

Major de Valera

This is, on the face of it, a reduction.

I am not familiar with all the clauses in the Finance Bill, but, on the Minister's showing, there would be a charge.

Major de Valera

On the Minister's showing it would, as it stands, in regard to between £500 and £1,000.

Where the consideration is under £500, you are imposing an up-graded tax.

Major de Valera

The intention here is to propose that the tax go back to the previous rate.

The Chair cannot deal with intentions. That is the unfortunate portion of it. If the amendment proposes a charge it may not be moved.

Major de Valera

Would the Minister allow me to parse the section?

What provision does the amendment make where the consideration is under £500? None.

Major de Valera

There is no provision where it is under £500. "In any other case where the amount or value of the consideration does not exceed £500"— that is what the Minister is referring to.

I do not know what the Deputy is reading from. I am reading his amendment, and that phrase is not there.

Major de Valera

The amendment is simply to replace sub-section (1) of Section 13 by a sub-section in identical terms. It is the sub-section that is repealed.

Would the Deputy read his amendment —"before Section 17 to insert a new section"?

Major de Valera

Before Section 17 of the present Act to insert a new section. The effect of the insertion of that new section is to substitute for sub-section (1) of Section 13 of the Act a sub-section in exactly the same terms but with a reduced rate. I say that the Minister is not accurate in what he says. I shall explain the reason for the way in which the section is proposed at the moment. The net effect is to change the words "rate of £2 10s. 0d." occurring in Section 13 to "a rate of 10/-". That is really what the effect is, and no other.

There is nothing in either amendment to say that they are in substitution for something else. Their purpose is to insert a new section. If the effect would be to impose a charge, then they cannot be moved.

Major de Valera

I submit that is not so because the only effect of this section is to delete sub-section (1) of Section 13 — in other words to repeal it — and to substitute instead this new section. The effect, though it is not done in that particular way, is to substitute instead a sub-section which is identical in terms and merely has the figure "10/-" instead of £2 10s. 0d. I submit the Minister is mistaken in what he has said in that regard. The net effect is that it simply deletes sub-section (1) of Section 13 and substitutes another provision. Now that can be done in either of two ways. One can do it simply by deleting the words "£2 10s. 0d. for every £50" and substitute therefor the figure "10/-", or one can do it in the way in which it has been done here. It amounts to exactly the same thing in either case because it only repeals that particular sub-section and the remainder of Section 13 stands fast. This new sub-section takes the place of sub-section (1) and the net legal effect is the same.

But the amendment does not substitute.

Major de Valera

I submit that, in fact, it does. I submit that if we adopt it the position will be precisely the same. As a matter of amendment, I submit it is immaterial whether you amend it in one way or the other. For a reason, which I shall deal with later, I think this method of doing it is probably preferable to the alternative method.

What about the case the Minister mentioned of £500? How does that affect it?

Major de Valera

Let me answer the Minister's £500 case. Sub-section (1) of this section shall not apply. I agree one would probably want thereafter consequential amendments.

That is the difficulty.

Major de Valera

For instance, it would be desirable in consequential amendments to go on and deal with the scale in particular that is already there.

Does that mean that, without consequential amendments, you are increasing the tax?

That is the trouble. There is a lacuna. It does not affect what the Deputy says. I take it that the Minister would oppose a charge. I think the Deputy himself has admitted that other consequential amendments would be required.

Major de Valera

Admittedly they would be required. I was going to suggest that. In brief, the intention was——

The Chair is not concerned with intentions. The Chair can only deal with what is there.

Major de Valera

What I am asking the Minister to do in this connection is to bring these duties — that is, in regard to the stamp duty in the case of Irish citizens — back to their old level; we would be content then to leave the 25 per cent. there. That was the difficulty.

The Deputy can argue that on the stamp duty sections.

As a matter of fact there is a flaw in the second amendment, since it sweeps the 25 per cent. away altogether. If you read the amendments together, they certainly seem to me to imply that the 25 per cent. is put out of legislation altogether.

The Deputy will have to deal with the question on the section.

I am sure that is not the Deputy's intention.

Major de Valera

I see the way it is. I agree with the Minister that sub-section (1) of this section would have to be amended to apply where this new section would not apply. Is not that the position?

The amendment flatly says that the 25 per cent. would go.

On a point of order. Perhaps the Ceann Comhairle would be able to enlighten us as to how exactly we can express our opinions now in view of this technical difficulty which has arisen on this very technical Act?

That is not my business. It is the business of those who wish to discuss the matter to put in an amendment which is in order. I thought this amendment was in order until the Minister pointed out certain facts to me. Now, it is out of order.

Usually when amendments are submitted to the office it is pointed out to Deputies, who have not got the expert assistance of the officials of the Department of Finance when dealing with this very elaborate and complicated code, that a particular amendment is out of order. I think it is bordering on sharp practice on the part of the Government to prevent us from expressing our views. There is a volume of very serious opinion on this question of the 25 per cent. stamp duty. If it is intended to shut us out from discussing that simply because of a technicality, it makes debate very difficult for us.

Nobody is doing that. Until the Minister pointed it out to me here quite recently, I did not know that there would be a charge. I am convinced now that there is.

I am not attributing it to the Chair.

It is not, therefore, the fault of the Chair or of the office.

I am asking if there is any way in which we can discuss this question?

Major de Valera

I have not got the Act here. I would want to look at the Finance Act. I think the difficulty might arise, as far as the Minister is concerned, rather in respect of sub-section (3). If my recollection is right the status quo ante in regard to the 1891 Act was that if there was a certificate under £500 there was an exemption comparable to the present case. I wonder is the Minister completely accurate? I am speaking from recollection now since I did not anticipate the Minister's objection. If my recollection is right the position under the 1891 Act was that there was a specific provision there which covered a case not exceeding £500. Would that not still operate in the position which the Minister is contemplating? In regard to the scale under sub-section (3) that would work out at less than 1 per cent. We suggest therefore that the exclusion of that scale would not operate to increase the tax. I should like, before completely accepting what the Minister says, that he should demonstrate that this is so. Let me make the point again. Under the 1891 Act is was customary, before 1947 so far as I can recollect, to include in conveyances a certificate to the effect that if the consideration was under £500 there would be exemption and that operated to take away the force of the stamp duty. That was equivalent to sub-section (2) (b) 1 in the present case. I would suggest that the Minister's technical point that this would increase taxation is not well founded in that case. In regard to sub-section (3), which is a completely new departure, is it not patent on its face that the reduction of 1 per cent. brings the reduction below the scale given in sub-section (3) and, therefore, there is no increase either?

I submit that before this is ruled out of order, it should be demonstrated that what the Minister says is correct. In answer to the Minister, I say that it is probable that the position under the 1891 Act and the other Acts dealing with it will still apply in the £500 case and, therefore, the Minister's objection is not valid. I am putting that in the form of a question and I am quite prepared to submit to the Minister's point if it can be demonstrated that he is right in his contention.

The effect of the second part of the amendment is to repeal sub-section (1) of the Act of 1947. That goes. The Act of 1947 then as far as sub-section (2) is concerned reads: "Sub-section (1) shall not apply —" but there is no sub-section. It is gone. Then we go back to the original section to see what is going to happen and the first part of the amendment says: "The stamp duty shall be at the rate of 10/-," but there is no provision for the transfer where the consideration is under £500.

Major de Valera

That is already the law under the 1891 Act.

The section does not make provision for that. This is a new section which followed the old legislation and makes provision for all cases and it does not make them subject to any exception. It simply says that the stamp duty chargeable shall be 10/-.

Major de Valera

I submit on the face of the amendment that all it does is to alter the rate, that there is no express repeal and there is no repeal by implication. Is there any way by which this matter could be referred by the Chair for a legal opinion — this ruling out of discussion?

If it does impose a charge — and I believe it does — it may not be moved except by the Minister.

Could it be ruled that sub-section (1) is in order and that sub-section (2) is not in order?

You are then altering the amendment before the House.

You are ruling out sub-section (1).

There is no sub-section (1) and the new amendment makes a new charge applicable in all cases.

Under sub-section (2) it makes a new charge: "The stamp duties chargeable on conveyances or transfers —" that refers to all cases.

Major de Valera

I am submitting with respect that in a case like this if a Deputy submits that a particular submission is correct and the Minister submits another contention, that the case should be proved. However, this is a purely technical point and we shall be able to discuss the merits on the section itself in regard to stamp duties. I take it that the Minister would not be willing to allow another amendment in this regard on report and I ask the Chair to rule on that matter formally.

Amendments Nos. 8 and 9 are out of order.

That being done, I wish to give notice that we intend to put down on the Report Stage an amendment which will have the effect of these amendments and which we hope will be properly drafted.

Question proposed: "That Section 17 stand part of the Bill."

Major de Valera

Section 17 deals with stamp duties on certain instruments in cases of reduction of rent. This is just another section from which it is apparent that all these sections are developing into a very complicated code of stamp duties. I think it is highly desirable that we should look back and see what the origin of these stamp duties was to ascertain, whether in the present set of circumstances, it is desirable to continue them then or whether it is better to get back to the relatively simple provisions ruling beforehand. These stamp duties were put on initially in very peculiar circumstances. As I was pointing out when the Minister made his point on the amendment which I was purporting to move, we had a very inflationary situation where houses were subject to speculation and where prices were rising because of the speculation in house property. These stamp duties were introduced as a curb. One of the reasons for introducing them, as was pointed out at the time, was to put a curb on that speculation and to try to prevent what was then a strong tendency towards an artificial rise in the price of property, particularly in the case of smaller houses. The second point, as I pointed out, was that there was at that time considerable complaints about people coming from England to buy up property and it was thought desirable to discourage them by a tax.

Section 17 deals with stamp duties on certain instruments in cases of reduction of rent. What has that to do with the point the Deputy is raising?

Major de Valera

As I was pointing out, if the Chair will bear with me, this point is coupled——

The Deputy might bear with the Chair when it is endeavouring to get in. I ask the Deputy to read the marginal note on the section which says "Stamp duties on certain instruments in cases of reduction of rent". Would the Deputy explain the connection of that with the sale of houses to foreigners?

Major de Valera

I will explain later. I was merely pointing out that this code is becoming——

Major de Valera

The section dealing with stamp duties is becoming complex and here is another one of these sections dealing with that. It is a question of stamp evasion in this case, evasion under Section 17. We already had a clause under the 1949 Act to deal with evasion last year. Here is another one. As far as the section is concerned it seems as if the Minister has no choice but to pursue this course as long as the stamp duties situation is left in the particular way in which it is. In other words, the rates are so high as to be a stimulus to evasion. I can foresee further evasions in the future. It would seem that, instead of enacting complicated sections like this, the simpler and more direct and more beneficial procedure for the community would be — instead of enacting sections like Section 17, Section 24 of the Act of last year, and so forth — to reduce the rate payable in respect of conveyances at home here to Irish citizens to the rate at which it was before and which apparently was working satisfactorily — 1 per cent. — without these complications of evasion.

It strikes me that that is the amendment which was ruled out of order.

Major de Valera

I submit that it is not. Here is a section dealing with an evasion. Last year also we had a section dealing with an evasion. I can anticipate that there will be more. We know of further evasions going on. The root cause of these evasions is that the rates of duty are so high as to be seriously affecting the conveyance of property and that there is a temptation to evade. The net kernel of the point on this section is that, the reasons for the higher taxes for Irish citizens having passed, the real solution would be not the continuing of an Act, section after section, each year to deal with the matter but to reduce the tax payable in regard to Irish conveyancing. You would thus solve the problem automatically and leave it in the state in which it was before. That is the net point in regard to these stamp duties.

This amendment, I submit, raises the whole question of stamp duties.

It is not an amendment. We are on the section. The marginal note reads: "Stamp duties on certain instruments in cases of reduction of rent."

Surely we are not bound to interpret a section by a marginal note? It is a principle of legal interpretation that the marginal note is given as a guide——

——to the section.

——to the section but it does not describe the section as a whole. If you refer to lines 15 to 21 you will find that an important principle is raised immediately: that where any money, stock or security is to be treated for the purpose of this Act as a lease of lands, tenements or hereditaments——

What is the Deputy saying about it?

We are entitled to raise the whole question of the justice and equity of the proposals contained in paragraphs (a) and (b) and the foundation in the principal Act on which they rest. We can deal with this proposal in two parts. The first proposal amounts to this: to assume that any money, stock or security moving in respect of certain transactions is to be treated as if it were a lease of lands, tenements, or hereditaments——

Gracious me. That is not there at all.

It is, of course. The instrument——

The instrument, not the stock or security.

—— is to be stamped as if the money, stock or security transferred were a lease of lands, tenements or hereditaments. I have stated the intention of the section and accordingly, since it is the intention of the section to apply a certain code of duties to a transaction of this sort, we are entitled to discuss on the section the justice and the merits of that particular code.

"...of lands, tenements or hereditaments which had been made in consideration of the rent reduced..." It deals with rent reduced, not the purchase of Irish houses or estates by non-nationals.

The point there is that one can make an actual purchase by way of securing an apparent reduction in rent. I gather from the section that if I enjoy a lease of lands or rent a property for the sum of, say, £300 per year, and wish to buy out my landlord's interest in that property, I can do it apparently not by purchasing the rent outright but by giving him such consideration in the form of money, stock or security as will induce him to reduce the rent from its original figure of, say, £300 per annum to £5. Proceeding from that what we propose to say is that this is an evasion of certain stamp duties. It is proposed to treat this money, stock or security as if it were actually money passing not in respect of a reduction of rent but in respect of an actual purchase of property. On that, the whole question rises. Since we propose to apply the code of stamp duties which are payable on the transfer of property from one owner to another to this transaction, I think we are entitled on this section to discuss the whole merits or demerits of the stamp duties. That is what Deputy de Valera has been asking.

Major de Valera

As Deputy MacEntee states, here is a case where a way had been found for avoiding the payment of the stamp duties imposed by Section 13 of the 1947 Act and by Section 24 of the 1949 Act, as the Minister himself stated. Here is, therefore, a positive move by the present Minister for Finance who, I remember, opposed the imposition of these duties initially in 1947 when he was on the Opposition Benches. He is now actually seeking to extend them and to apply them to cases to which they were not previously applicable. There are two points of view on that. The first is the point of view of evasion. If the code is to be there at all you have to block the loopholes or the thing becomes a farce. I will remind the Minister that for once he and I joined forces in regard to these sections in 1947 and, when I made the prophecy that these evasions would occur and that I could think of tricks, I can remember the Minister who was then on the Opposition Benches saying: "Do not give them away." Now things have changed. The Minister was then an Opposition Deputy and he could see quite clearly what would result and for that reason he opposed all these duties. Now, ironically enough, it is the Deputy who opposed the Bill at that time who is now the Minister who is trying to close the loopholes and make this work. At that time, in answer to the Minister's criticisms and the criticisms of his colleagues about this code, a case was made that there was speculation in house property, that the price of houses was going up through the buying and selling of houses, and that this would be a check on it. That case has largely gone now. I think it would be better to abolish the stamp duties on conveyances at home, that is, for Irish citizens.

The Minister, apparently, is of the view now that the 25 per cent. on foreigners should be kept. We would concede that you could keep that. Even though the Minister says that there is not such serious buying of property by foreigners as some people complain, still, it would be as well to keep that provision.

In regard to the buying and selling of houses at the rate of 5 per cent. duty, the case for having that duty as high as that is gone, other than the revenue case, and the proper thing to do would be to reduce the tax to the value at which it was before.

In other words, the only case that the Minister can make for keeping the stamp duty tax at its present value is revenue. That means that the people who are buying houses not in the built category or other exempted categories are saddled with this penal 5 per cent. and that heavy cost is on them. The case which was initially made for that cannot very easily be made now.

Taking these facts in conjunction with what is obviously the fulfilment of a prophecy which the Minister and myself made jointly, that these evasions would occur, and that the Minister now is chasing from year to year these evasions, the better proposal would be to reduce the rate, remove the temptation and then these evasions will not arise. This is one evasion. Last year was another. The Minister probably knows very well of many other evasions that are going on at the moment, evasions, technically honest and right in law, but evasions in the spirit.

Do not tell him any of them.

Major de Valera

That will possibly have to be the subject of further amendments. What is the attitude to be to this section? If you are going to deal with evasions at all, the fair thing is to try to keep the thing level. There is that case to be made for the Minister's section. On the other hand, it is very hard to see why, at the present juncture, the Minister should increase taxation in regard to conveyances. In other words, it means that where heretofore there was a way of mitigating that burden in particular cases, which could be invoked, that way is blocked and extra taxation is being put on. That is another way of looking at it.

Everybody will take his own point of view as to which is the better way of doing it. The net suggestion, the best one, would be as was intended in these amendments that were out of order, to abolish the existing rate and to go back to the old 1 per cent.

This is just one example of the kind of legislation which will have to arise from the principle. Every year, the Minister will have to bring in an unending series of amendments to the original section because evasions are certain to take place. In the debate last year the Minister, when I asked him about one particular point, where the Constitution had been raised by Deputy O'Higgins, said: "More luck to them if they succeed in beating the Department of Finance through the courts." That attitude, I suggest, is all wrong. If a law is so onerous that professional solicitors, in their conception of their duty to their clients, feel bound to try to evade the law, obviously, the law is contrary to public principle and public interest.

At present solicitors will tell one, from many experiences of the present onerous task, that it is stopping the sale of properties, especially in the case of people of moderate means. Nobody of modest means can get a house now at less than £2,000, and the duty on that of £100 is very severe. They just cannot find it. Anybody with any experience of that knows how difficult it is for people of those means to get the money to bridge the difference between what they have to pay for a house and what is due to be paid for the transfer of the property.

I know that the Minister has two views on this subject. He believes that he has to get the revenue from this tax at the moment but he has expressed his own view that he does not like the tax and he admitted in the discussion last year that the longer it goes on the more harm it is doing, especially in reference to closing one gap with regard to companies.

Just to take the view of the solicitors' profession on the matter, this tax involves what the Revenue Commissioners regarded as a necessity, that is, the removal of the determining authority of the adjudication stamp. So that it makes it extremely difficult and dangerous for a solicitor now to take part in the transfer of property because that adjudication stamp does not carry with it a final decision that the proper duty has been paid and, in connection with queries that might take place 20 years hence, a question might arise which would involve a large sum of money.

Then, again, especially with regard to companies, where a company is an owner of property or portion of a property, the solicitor has to go into the question very carefully, to make a research first of all into the files of a private company and, if there is a trustee of properties, he has to follow that up to find out whether certain people were aliens or Irish citizens. If he fails to arrive at the full information on the subject and makes a mistake, he is involved in very heavy penalties indeed.

The thing is as wrong as it could be in its present form. It was originally passed as an emergency measure to deal with a difficult situation that arose from inflation. It was not intended to be carried on for a long time. The Minister himself has admitted that it is a thing which should be got rid of. Yet, because he cannot find other resources from which to get the necessary finance, he is continuing what is really a persisting evil.

This stamp duty was denounced in tremendous terms by Deputy Dillon originally. It is worth repeating the phrases he used in particular. At column 1174, Volume 108, of the Official Reports, Deputy Dillon said:

"This is a dirty, contemptible, vicious and disedifying proposal, well worthy of the mind of the Minister for Finance who conceived it, and to my way of thinking a disgrace on the House that adopts it."

He did not say anything about the disgrace to the Government that continues it.

"It is a confession before the world that there can survive here a meanness of spirit that was unknown in this country in the darkest days through which our people had to live."

That was very colourful, but——

That referred to the 25 per cent.

It referred to the whole lot.

To the 25 per cent. Read it all.

The Taoiseach, whose language was rather more restrained, said:

"I believe this additional taxation will result merely in making house property dearer and the provision of houses for the people who have only limited means impossible."

The Taoiseach, whatever we may say about him politically, has had very considerable experience as a lawyer and has a keen sense of protecting his clients and, when he said that, he said a very sensible thing. I think the Government would be very well advised to try, as quickly as possible, to get rid of this tax. I think that the Minister, as a lawyer, largely agrees with us, but, as Minister for Finance, he feels that he is obliged to impose this taxation. I know that it means about £600,000, but I think he ought to use his resources. The resources of civilisation are not exhausted and he should find some other way, more healthy from the point of view of the public spirit of the community, from the point of view of public interest and public law, than insisting on a law which it is the duty of lawyers to try to evade, so far as they can.

Mr. MacEntee rose.

This is a conspiracy to talk it out.

I do not know whether I heard a whimper from the other side.

It was no whimper; it was a statement that this is a conspiracy to talk it out.

It is not, and, as a lawyer, the Deputy ought to know that.

It is extraordinary how great is the lack of concern which some fortunate members opposite show for their less fortunate brethren.

If this display of stupidity is meant to be evidence of concern, God help them.

I feel that there is not really any justification for this section. If this tax is being evaded, it is being evaded mainly because it is an unjust tax. According to a very eminent authority, now a member of the Government, when the tax was first introduced, it was a tax which would hit hardest the person who was looking to buy the cheapest house on the market to-day, and there was such a tremendous demand for the cheaper type of house, he went on, that undoubtedly the tax would not be effective in stopping the appreciation in property values, but would merely increase the hardship which that inflation was already imposing upon less fortunate elements in the community. The person who made that statement was a person who is very conversant with the property market and the general situation therein. He was no less a person than the present Minister for Industry and Commerce, then Deputy Morrissey. I agree with him. This tax was introduced as an emergency measure to deal with an emergency situation. The position now, according to the Government, has been reached where the emergency has passed and, therefore, the original justification for imposing the tax has passed also. Accordingly, any person who can evade this tax by any exercise of ingenuity is properly entitled to evade it.

I submit that the House should not co-operate with the Minister in trying to victimise people who, because their means are limited, are compelled, as the Minister for Industry and Commerce said, to buy the cheapest house in the market to-day. That is what the house is being asked to do. By a simple device, this 5 per cent. property tax can be avoided, and the question, therefore, arises whether we are entitled to deprive the thrifty, provident and hard-driven sections of the community who wish to house themselves of the remedy which their own wisdom and ingenuity have been able to devise for the situation with which they have been faced.

Take the position as it exists in Dublin to-day. So far as I can see, the normal run of small houses such as would be occupied by a young married couple sells around £2,250. If we deduct the first £500 of that price which is not subject to tax, we are left with a sum of £1,750 which is subject to tax, and at the rate of 5 per cent., under Section 13 of the 1947 Act, it amounts to £87 10s. 0d. Despite the appearance of things here, if you vote to deprive the people of the natural way of escape which they have devised for themselves from this iniquitous and now burdensome tax, you are voting, if you vote for this section, to ensure that every person who buys a house at £2,200 or thereabouts will be saddled with stamp duty to the amount of not less than £87 10s. 0d. That is the simple situation, and I do not think that, in present circumstances, we are justified in doing it.

The amount of money which the tax brings in, I am told, is comparatively little, and certainly in a Budget of £107,000,000 it does not constitute 1 per cent.; but it is a tax which falls most heavily upon the young people and the middle-class people who are trying to provide houses for themselves. The Government does not cater for these people, except in the limited way in which it was done under the Fianna Fáil Housing Act, 1948, when a substantial grant was made towards the cost of a house which a man erects or purchases for his own occupation. Beyond that, no subsidy is given to the middle-class person with an income of £500 or £600 a year who hopes to marry, settle down and found a family. It is therefore upon that particular element in the community that this tax presses most heavily. I do not think we are justified, from the social point of view, in maintaining it, having regard to the circumstances which I have outlined. If we did feel that it was necessary to pass some sort of sumptuary law to prevent people in present circumstances providing themselves with more housing accommodation than the public interest seemed to demand, we could do so, if we thought that wise. I am not saying that I think it wise; in fact, I would protest against it, as it would only put another limitation on the incentives which are so necessary to enable a man to give his best to the community. However, to meet that point of view, which I think might appeal to some members of the Government Party, if we did feel it necessary in some way to prevent people from providing themselves with more housing accommodation than seemed in present circumstances justifiable in the public interest, we could, of course, provide for the imposition of a tax of this sort.

If we did, I think the tax should be levied upon a value very much higher than the value which is under the present code exempt from taxation. There might be something to be said for imposing the taxation — I say there might be, I am not saying there is — upon a house costing £4,000 or £5,000. Again, one would have to take the circumstances into consideration. If the family were large and consisted of a number of persons engaged in productive employment, there would be justification for providing them with a larger house, costing a greater amount of money. If it were felt that something should be done to limit the demand upon existing building facilities. I suggest that a figure of £3,000, £4,000 or £5,000 might be taken as the limit below which the tax would not be levied. Certainly, there is no justification in present circumstances, with the demand for housing accommodation being as intense as it is, for imposing this duty upon the smaller type of house, the house consisting of two reception rooms, three bedrooms and a kitchenette, the type of house which young married people look for in order to start off their own independent household.

I think, therefore, that before the House decides to vote for Section 17, the House should hear from the Minister some justification for this section. May I here, on behalf not merely of the members of this House, not merely on behalf of the Opposition but on behalf of the people outside whom we represent, protest against the rather contemptuous way in which the several provisions of the Finance Bill have been thrown at this House by the Minister? There was a previous section, a very complicated one dealing with stamp duty, Section 16, where some explanation of the provisions was asked for by a Deputy on this side of the House and the only reply he got was the rather discourteous one from the Minister, to read the section. I challenge anyone to read that section, containing as it does references to previous Finance Acts, and be able to gather for himself from a simple reading what the meaning of the section is. What I have said in relation to Section 16 applies to an even more marked degree to Section 17.

As to the content of this section and the purpose of it, all the guidance and assistance that the House has been given by the Minister is to refer the House to the marginal note. The marginal note consists of 12 words, but the section itself consists of 75 lines of close print. That proposal expressed in 75 lines is supposed to be apprehended by the representatives of the people from a glance at one sentence of 12 words. That is the guidance which the Minister has given to the House, that is the assistance which he has given to Deputies of Dáil Éireann to consider this proposal. Without any guidance from the Minister, without any attempt to enlighten us as to the provisions, we have had on behalf of the people to try and disentangle what the real purpose proposed to be secured is.

As I have said, despite the marginal note — which I am not saying is designedly misleading but does mislead to the extent that it makes one regard this section as being just a mere proposal to stop up a little loophole — the section does make it impossible for the class of person to whom I refer, the person who wants to buy a small house, to avail of the natural escape from this unjust and oppressive tax which his own ingenuity and his own skill and the skill of his lawyers have opened up to him.

In conclusion, I want to express the hope that the Minister will not say that it was his predecessor in office who introduced this tax. When these stamp duties were first brought in, it was made clear that they were brought in as a temporary expedient for a temporary purpose, to check the inflationary trend in property values at that time, and in the state of emergency then to enable the Minister to make provision for the increased subsidies which were being provided on essential foodstuffs. That is all past. There has been no increase in subsidies on essential foodstuffs — that is being evaded, because we are now buying butter at 3/6, we are entitled to buy it, and in the same way we have bread, sugar and tea at two prices.

Surely that has nothing to do with this?

It has, because the circumstances which called these stamp duties into existence have entirely disappeared. The Government having abandoned the policy of food subsidies, is not justified in keeping on this tax, which was imposed for the purpose of raising the money to provide these subsidies. That is the position and I suggest, therefore, that before the House accepts this section we will demand some justification for it from the Minister and if that justification is not convincing, we will vote against this section.

The Minister, to conclude.

This tax has been described as harsh and oppressive. The date of its imposition was 1947. It was done by Fianna Fáil. It was harsh and oppressive—it was put on at that date. It was not put on to cheapen houses but was put on as a revenue tax. That was the purpose of it. On the 29th October, 1947, the then Minister for Finance, speaking in Dáil Éireann, as reported in column 1070 of Volume 108 of the Official Report said:—

"I think 5 per cent. is enough at the moment."

I interrupted him, saying:

"To cheapen houses?"

He said:

"Not to cheapen houses—to get money from the vendors of houses. It will not cheapen houses."

If you are looking for money from the vendors of houses, I reckon it should be described as a revenue tax. It was not to cheapen houses. In case there might be any doubt in the then Minister's mind, he returned to the point, as given on the 13th November, 1947, in column 1916 and said:

"It is the vendor whose price is going to be reduced by the 5 per cent. The 5 per cent., instead of going into the vendor's pocket, is going to go into the pocket of the Treasury."

I stand in his shoes receiving those 5 per cents. at the moment and the "harsh and oppressive tax" is described as such by people who are terribly anxious about the sellers of property, the people who have built houses and made any amount of money in recent years.

About the purchasers.

Its purpose was not to cheapen houses but to get money from the vendors. Deputy Little would have to roll into this with the usual exaggerated statement common to the debate on this tax. He said that it had almost brought to a standstill transfers of property. Deputy Little can do the sum for himself. £600,000 is got per year from the 5 per cent. tax and that means that property to the value of £12,000,000 changes hands in the year. If that is described as "bringing to a standstill transfers of property" language has no meaning.

I met a deputation from the legal side in 1949. About the middle of 1949 we discussed the reductions in the cost of houses and it was then agreed that the £5,000 house of a couple of years before was in June, 1949, selling at £2,500. If Deputies are afraid that the people who want to get these houses cannot get them because of the tax all they have to do is to wander through Dublin. There are numbers of the type of house from £2,500 to a figure about double that with boards up on the windows offering them for sale and there is quite a considerable amount of certain types of property surplus to the demand. In the circumstances I think it is wise to keep this tax.

A certain amount of evasion was practised last year but I do not regard it as anything immoral. I do not know how Deputy Little's indignation arises in connection with this tax. People are entitled to get legal ways out that will stand up in the courts and it is quite proper. It sharpens the ingenuity of the people and leads to good legal practice and leads to the creation of good lawyers.

It creates disrespect for the law generally; it is flouting the law.

If you pass legislation and people find a legal way out of it that is not disrespect for the law.

It justifies smuggling and all sorts of things.

Deputy Little as a lawyer would not have a very good practice if that is his idea.

The Sinn Féin funds case is a fine example.

That was on your side.

That was an attempted evasion by the Government of the Constitution and of course it brought them to heel.

I do not believe we can discuss that now, a Leas-Chinn Comhairle?

I do not see any disrespect in operations like this. People should be remunerated for ingenuity. After giving notice—and we gave notice —we stopped that. If this is got round in other ways we will see what they are and if we can we will stop them later on. When the tax was in operation as might be expected it blundered here and there, but we made it something that would hold water and it did hold water to the extent of £600,000.

Mr. Derrig rose.

I called on the Minister to conclude.

This is Committee.

It is Committee but I looked around the House for a Deputy to offer himself and gave plenty of opportunity but no Deputy offered. I called on the Minister to conclude and no Deputy offered himself.

May I put it to you that Deputy Moran offered? You may not have heard him.

He did not. He rose after the Minister had started.

Perhaps Deputy Collins will give me an opportunity of speaking? No Deputy offered to the knowledge of the Chair or made his intention evident. If Deputy Moran wanted to speak he could do so. I called on the Minister to conclude.

With respect, I did offer but the Minister offered himself at the same time.

The Deputy is not so shy that he could not make himself evident to the Chair.

Question put: "That Section 17 stand part of the Bill."
The Committee divided: Tá, 69; Níl, 59.

  • Beirne, John.
  • Belton, John.
  • Blowick, Joseph.
  • Brennan, Joseph P.
  • Browne, Patrick.
  • Byrne, Alfred.
  • Byrne, Alfred Patrick.
  • Coburn, James.
  • Cogan, Patrick.
  • Collins, Seán.
  • Commons, Bernard.
  • Connolly, Roderick J.
  • Corish, Brendan.
  • Cosgrave, Liam.
  • Costello, John A.
  • Cowan, Peadar.
  • Crotty, Patrick J.
  • Davin, William.
  • Desmond, Daniel.
  • Dillon, James M.
  • Dockrell, Maurice E.
  • Donnellan, Michael.
  • Doyle, Peadar S.
  • Dunne, Seán.
  • Fagan, Charles.
  • Finucane, Patrick.
  • Fitzpatrick, Michael.
  • Flynn, John.
  • Giles, Patrick.
  • Halliden, Patrick J.
  • Hickey, James.
  • Hogan, Patrick.
  • Hughes, Joseph.
  • Keane, Seán.
  • Kinane, Patrick.
  • Larkin, James.
  • Lehane, Con.
  • Lehane, Patrick D.
  • McAuliffe, Patrick.
  • MacBride, Seán.
  • MacEoin, Seán.
  • McFadden, Michael Og.
  • McGilligan, Patrick.
  • McMenamin, Daniel.
  • McQuillan, John.
  • Madden, David J.
  • Mongan, Joseph W.
  • Mulcahy, Richard.
  • Murphy, William J.
  • O'Donnell, Patrick.
  • O'Gorman, Patrick J.
  • O'Higgins, Michael J.
  • O'Higgins, Thomas F.
  • O'Higgins, Thomas F. (Jun.).
  • O'Leary, John.
  • O'Reilly, Patrick.
  • O'Sullivan, Martin.
  • Palmer, Patrick W.
  • Pattison, James P.
  • Redmond, Bridget M.
  • Reidy, James.
  • Reynolds, Mary.
  • Roddy, Joseph.
  • Rooney, Eamonn.
  • Sheldon, William A. W.
  • Spring, Daniel.
  • Sweetman, Gerard.
  • Timoney, John J.
  • Tully, John.

Níl

  • Allen, Denis.
  • Bartley, Gerald.
  • Beegan, Patrick.
  • Blaney, Neal T.
  • Boland, Gerald.
  • Brady, Seán.
  • Breathnach, Cormac.
  • Breen, Daniel.
  • Brennan, Thomas.
  • Breslin, Cormac.
  • Briscoe, Robert.
  • Buckley, Seán.
  • Butler, Bernard.
  • Carter, Thomas.
  • Childers, Erskine H.
  • Colley, Harry.
  • Collins, James J.
  • Corry, Martin J.
  • Crowley, Honor Mary.
  • Davern, Michael J.
  • Derrig, Thomas.
  • De Valera, Eamon.
  • De Valera, Vivion.
  • Flynn, Stephen.
  • Gilbride, Eugene.
  • Gorry, Patrick J.
  • Harris, Thomas.
  • Hilliard, Michael.
  • Kennedy, Michael J.
  • Killilea, Mark.
  • Kilroy, James.
  • Kitt, Michael F.
  • Lahiffe, Robert.
  • Lemass, Seán F.
  • Little, Patrick J.
  • Lydon, Michael F.
  • Lynch, John.
  • McCann, John.
  • MacEntee, Seán.
  • McGrath, Patrick.
  • Maguire, Patrick J.
  • Moran, Michael.
  • Moylan, Seán.
  • Ó Briain, Donnchadh.
  • O'Grady, Seán.
  • O'Reilly, Matthew.
  • Ormonde, John.
  • O'Rourke, Daniel.
  • O'Sullivan, Ted.
  • Rice, Bridget M.
  • Ruttledge, Patrick J.
  • Ryan, James.
  • Ryan, Mary B.
  • Ryan, Robert.
  • Sheridan, Michael.
  • Smith, Patrick.
  • Traynor, Oscar.
  • Walsh, Richard.
  • Walsh, Thomas.
Tellers:—Tá: Deputies P.S. Doyle and Spring; Níl: Deputies Kennedy and Ó Briain.
Question declared carried.
Sections 18, 19 and 20, inclusive, agreed to.
SECTION 21.

I move amendment No. 10:—

In sub-section (2), line 30, to delete "Account" and substitute "Fund".

This is a verbal amendment. The name of the fund is the Transition Development Fund. In sub-section (2) it is referred to as the Transition Development Account and the word "Account" should be "Fund".

Amendment agreed to.
Question proposed: "That Section 21, as amended, stand part of the Bill."

On the section, I wonder whether the Minister could not amplify the information he gave in his Budget statement regarding the operation of this fund? In the first place, I should like to ask whether the facilities are confined entirely to assisting house-building, and, secondly, whether the hopes that the Minister held out in his Budget statement of 1949, when he had then the intention of winding up the fund, as he still has, at a later stage, that building costs would have settled down sufficiently to obviate the need for such large supplements to the annually voted subventions for housing and public health services, are likely to be realised.

This year, this provision is being continued. We are now asked to loan a sum not exceeding £2,000,000 to enable the fund to be continued. It seems to me that no steps have been taken by the Government to effect a reduction in building costs. I think we are entitled to ask if money is being borrowed for the purpose of enabling the ordinary provisions under the housing grants to be supplemented by special loans covering the transition period, and to inquire what steps the Government are taking to reduce the necessity for such a call. If we were to accept the position that has been laid down by the Government in another connection, it might be suggested that there was a case for continuing this Transition Development Fund assistance perhaps for a very considerable period. The Minister, in the extract which I have read for the House, has suggested that he foresees the time when building costs may be reduced, thus rendering this particular assistance unnecessary. I should like to ask whether it is the intention to bring the operations of this fund to a conclusion, whether such reductions in building costs are effected or not. If it is the intention to continue the fund until such time as a reduction in building costs should occur, what steps are the Government taking to have these costs reduced? As the Minister has pointed out, substantial State aid is being given towards housing. The suggestion made by him in the Budget statement, that the differential renting system which the Government are encouraging in order to distribute more equitably the heavy burden of housing costs might not be necessary, if the Government were able to take other steps, of which the country has no information at present, so as to enable housing costs to be reduced.

The Transition Development Fund is being used for the payment of certain grants for housing. There have been certain grants made in connection with sanitary services also in connection with housing. At the time the fund was established, it was intimated to Deputies that they should submit various schemes for which the money under the Transition Development Fund might be used. There was not much in the way of suggestions made.

In the end, a vast amount of money was being spent on housing and on sanitary services. A small amount went towards Ceimicí Teoranta in connection with one experiment and some also went to the Sea Fisheries Association. These sums were infinitesimal in comparison with the amount that went on housing and sanitary services. The fund is being wound up. For the future, moneys for the objects for which these moneys were provided out of the fund, will be met out of voted moneys. It is expected—I have no information about it—that the Department of Local Government will make somewhat better schemes with regard to houses which are being built and the financing of them. The old system was complicated and there would appear to have been a certain amount of overlapping. Subsidies are being given under three headings: an annual contribution towards loan charges, capital sums which used to come out of the fund will now come out of moneys that will appear on the Estimates and the special interest rate which I promised to have made in order to reduce the 3¼ per cent. to an effective rate of 2½ per cent. The Department of Local Government, I understand, is thinking out some new scheme to replace the present complicated system of subventions. Deputies will be informed of that in due time. The differential rental will be pursued at the same time.

Question put and agreed to.
SECTION 22.

I move:—

In sub-section (3), line 49, after the word "Fund", to insert the words "or the growing produce thereof."

This phrase was omitted by a mistake, and I am asking the leave of the House to insert it.

Amendment agreed to.
Question proposed: "That Section 22, as amended, stand part of the Bill."

On the section, I take it that the amount specified here— £655,432 per annum for the next 30 years commencing this year—is to make provision for the amount of money borrowed in the preceding year, and that this does not cover the capital redemption and interest payment requirements, or the further sums which the Minister indicated in his Budget speech he was going to borrow.

It has nothing to do with previous borrowing. This sum of £655,432 is related to the £12,113,680 which is to be found on the face of the Book of Estimates.

For borrowings contemplated this year? I do not recollect that a similar section was provided in last year's Finance Act to cover the borrowings of the previous year.

There were no borrowings.

Borrowings were made. The Minister raised a couple of loans since the change of Government.

There is provision for that.

I take it that this procedure is normal in the sense that we are now providing a capital repayment provision and an interest charges provision for a sum of money to be borrowed to the extent of £12,000,000 odd in this year. I take it that, if in the same financial year the Minister has to have recourse to another borrowing, there will have to be an amendment brought in to this Act?

We have this novel situation, for the first time in a Finance Bill, that, under a special heading, we are borrowing capital sums for specific purposes and that we are specifically providing for this £12,000,000 odd loan as distinct from any other Government borrowings. Now, frankly, I cannot see the sense of that because whatever money the State borrows, every Government borrowing will have the same security and the provision in this manner for a specific item of borrowing brings about, in my opinion, a segregation as between one type of borrowing and another. First of all, it is clear to the House that this particular transaction is putting on to the Exchequer a cost of over £650,000 per annum. On the Budget debate I estimated that £750,000 would be equivalent to approximately 6d. in the £ on income-tax. I think the Minister agreed with that figure himself. Here, we have 6d. in the £ added in this particular way and it is bound to be repeated in this way as distinct from other borrowings. In the ordinary way, in the case of a Government loan, if the Government issue a loan the stock is redeemable within a certain period of years and the State is in the position at all time, through the assistance of the Government stockbrokers, to buy in stock if the price at which it can be bought happens to be favourable. In other words, if the price of Government stock issued at par and repayable in 15 to 25 years comes on the market at a time when that stock has fallen in value, because of certain circumstances, to 90 or 89, the Government is in a position to redeem as much of that stock as is available at the reduced price through funds available to the Exchequer because of Departments having balances. On occasions, local authorities and the State can create substantial savings in their commitments arising from Government loans.

In this case we are borrowing £12,000,000 and we are giving a guarantee that it will not be redeemed except in the manner suggested here by these agreed annual payments, at the same time covering the rate of interest which will be involved in it, irrespective of what the money market situation will be at any particular time within that 30 years. I would like to know from the Minister why he is adopting that particular method. It is quite novel in State finance. It is definitely making a commitment for the repayment of capital and the rate of interest, which, in the beginning, will be mainly interest charges because, I take it, that the calculation appertaining to the repayment of this £12,000,000 is similar to the calculations made with regard to other State or local authority borrowings; in the beginning of the repayment period interest charges are high and one is setting aside a very small amount of money for the purpose of redeeming the capital sum; gradually, towards the other end of the loan period, the amount set aside per annum for redemption increases. Why is the Minister taking this special step? Is it because this may be taken from the Counterpart Fund? If it is taken from the Counterpart Fund, it is again brought in in a manner which is, to say the least of it, unusual, and without a proper explanation to the House. I understand that the arrangement with regard to the Counterpart Fund is that when the Minister takes from the Central Bank the equivalent in sterling for moneys borrowed under Marshall Aid, side by side with that an undertaking is entered into whereby the State signs a series of promissory notes over the whole of the redemption period of that particular loan. In my opinion, if I am interpreting it correctly, that is equivalent to legislating here for a transaction done in that way. As I said before, I think the Minister should have given us a little more information than he did. We are not now dealing with an ordinary State loan which we can redeem at any time we like. We are dealing with a commitment under Marshall Aid and we are binding ourselves to the repayment of that commitment over a period of years at a stipulated rate of interest. There is no way out. There is no way of benefiting as we would in ordinary financial State transactions. In fairness to the House and to the country I think the Minister should give a little more detailed information of the commitments into which we are entering under Marshall Aid.

I specifically raised the point as to whether this was last year's borrowing or this year's borrowing for the purpose of eliciting from the Minister which it really was. It was as a result of his answer on that point—an interjection which was very helpful—that I came to the conclusion that this was, in fact, a Marshall Aid repayment becoming liable——

Would the Deputy allow me to interrupt him again?

Certainly.

The Deputy is completely wrong.

I would like the Minister to explain.

It has nothing to do with Marshall Aid as such.

Is this money borrowed from the public or from the Central Bank Counterpart Fund?

It is not borrowed at all yet.

The Minister wants to be smart on a technical point.

It is not borrowed yet.

The Minister said this was a provision for a borrowing of £12,000,000 which he intends to conclude in this financial year.

From where is the Minister getting the money? Will it be raised in the ordinary way? I would like the Minister to answer that question. Normally, the State issues a loan, whether it wants the money for capital requirements or to meet a deficit in the returns of the State as between income and expenditure, and it borrows money on short-term loans, under ways and means. If it wants to put a loan on the long finger, it borrows on the basis of issuing scrip to the public. In the issuing of scrip to the public there are likely to be, during the repayment period, opportunities where a certain amount of that money can be redeemed, thereby effecting a considerable saving in redemption subsequently.

That happens, too, in the case of local authorities. They have power to borrow money. It happens in the Department of Finance. There are officers there who have specific instructions to watch the stock returns from day to day and, if they have in hands a certain amount of cash not likely to be needed in the immediate future, they can opt to buy a certain amount of the State liability before the redemption date at a reduced price. In this particular section we are committing ourselves to a liability which is specified as to time and as to interest with no option whatsoever in the event of money markets so affecting the value of State loans as might make them an advantage to the Exchequer. The Minister says this has nothing to do with Marshall Aid. I do not know whether provision has been made for Marshall Aid interests. Perhaps the Minister would guide me as to that. We have begun—I do not know whether it is under this section of the Bill—substantial borrowings for Marshall Aid. Provision will have to be made for its repayment and for interest.

When has provision to be made?

In 1952, but we know that it is a liability from the moment the Minister enters into it.

Is that related to this section?

I am looking for information. I think this is a section which requires a great deal of clarification by the Minister. I am saying that this method of provision for the repayment of State loans is a novel one and I should like the Minister to give us some information about it. We do not know where we are heading for. We do know that we have this liability to a specific amount written into the Finance Bill. There will be other borrowings and we shall have added to the liability of the State considerably increasing annual payments and interest charges which very easily could go up, to an amount which would necessitate 1/-, 2/- or 3/- of an increase in the rate of income-tax. I ask the Minister—perhaps he can help me and if he does not want to help me, perhaps he will help the House—for this information. I am certainly not quite clear as to what is the meaning of this section.

I should like to support Deputy Briscoe's demand for further information in regard to this very important section. As Deputy Briscoe states, we have an entirely new conception with regard to the repayment of borrowings in this section. I think we are entitled to get some more information from the Minister as to what exactly he has in mind. Normally, as Deputy Briscoe has pointed out, when the Government is borrowing money, it is dealt with in the ordinary way through redemption from time to time by means of the funds provided for that purpose, but on this occasion a specific sum of money of very large dimensions, £655,000, is being set aside. Although in the Finance Act and the financial proposals of the Minister for a particular year, we deal only with the expenditure and revenue for that year, in this case we are placing a burden on the taxpayer, not alone for this year but for the next 30 years. That is a very unusual proceeding; in fact it might be described as revolutionary, and if the section were allowed to pass without comment it might very well be that Deputies, let alone ordinary taxpayers in the country, might not realise that they are not likely to hear any more about this £650,000, except that it is to appear in the account which is to be published annually and that it will also appear in the Central Fund. By appearing in the Central Fund it is established in a special position as having a special priority charge on the revenues of the State and upon our future production and taxable capacity.

Why is it that this particular borrowing transaction cannot be carried out in the ordinary way? Why is it necessary, before the Minister has gone to the lenders to look for the money, that he should come to the House now and ask us to pass into law a provision which will place this mortgage on the taxpayer for the next 30 years? We are told that borrowing is a very cheap policy. It is a very popular policy. It is very generous, indeed, to pay out large sums of money and have grand schemes but the settling up of the debts can be rather vexatious. This system brings to mind the words of the American humorist, Artemus Ward, who said: "Let us live within our means even if we have to borrow to do it."

The Minister has found it necessary to come forward with this proposal to establish this capital services redemption account, into which £655,000 will have to be paid for the next 30 years, to redeem the sum of £12,000,000 provided for in this year's Estimate and which will be spent this year. Up to the present such borrowing has been paid out of revenue. Last year, out of an expenditure of some £74,000,000, the Minister following on the practice of his predecessor in office, set aside the comparatively small sum of £600,000 to be borrowed but, during the year, some extraordinary change occurred in the Minister's mind and in his attitude towards borrowing and the principle by which a comparatively small sum of money, amounting only to a small percentage of the total budget requirements, was set aside for borrowing has been entirely departed from. Instead of borrowing a sum of £600,000 for the Supply Services this year, the Minister is borrowing over £12,000,000. Why is that necessary? Because the Government is unable to pay its way.

This section does not deal with the £12,000,000.

Oh, yes.

It deals with the capital services redemption account.

May I draw the attention of the Chair to the fact that the expression "capital services" means voted services which are to be met out of borrowings.

May I call your attention to the expression "capital services" in line 43? It is there stated that capital services means voted services which are to be met out of borrowings.

The Deputy is quite right but the section deals with the Redemption Account for the services.

It proposes to set up a redemption account.

It does not deal with the £12,000,000.

It is proposed under sub-section (3) to set aside a sum of £655,000 to redeem borrowings which, I understand from the Minister, are to be made to meet the cost of certain services referred to in the annual Estimates and according to the Book of Estimates the cost of these services amounts to £12,000,000. I think I am justified in making the point that the Minister has found himself in the position that he has been unable to pay for these services out of revenue and therefore has had to make this arrangement in order to enable him to borrow. The fact that he has had to make this special arrangement and now proposes to get statutory authority to pay into the Central Fund, not for this year but for 30 successive financial years, this sum of money indicates that the borrowing is not on all fours with previous operations.

There may have been in previous Finance Acts provision for Capital Services Redemption Account, but I have never heard of one having this particular provision in sub-section (3). I take it that the reason this account is being established is to give additional security for borrowings which would be unnecessary if the money was being applied for productive purposes. I should like to ask the Minister to let us know when he is replying what proportion of this annuity of £655,000 is attributable to interest and also how the figure of £423,000 in subsection (5) is arrived at. The position seems to be that the £655,000 may be invested in redemption towards defraying the interest on the public debt as to one portion and as to another portion of it towards investment in certain funds or perhaps in redemption of the public debt generally. I think the House is entitled to have a fairly full statement from the Minister and I hope it will not be considered an act of sabotage if we suggest that the Minister has been very improvident indeed when he has found it necessary to place this millstone around the necks of future taxpayers as well as over the present generation in order to cover the cost of services which could, in great part at any rate, be met from the revenues which come in in the ordinary way.

I stated in the debate on the Budget that there is a distinction in my view between borrowing for productive services likely to increase the wealth of the country and borrowing for other purposes. That was fully set out by the Minister in his Budget statement. In fact, if one were to go through the Budget statement one could make an admirable case against borrowing for other purposes. To give an example of the Minister's attitude, I quoted from a statement which the Minister made in the Seanad not very long ago—on the 26th October, 1949; column 142—when there was a discussion on the monetary policy of this State. Referring to the question of capital development the Minister said: "from one angle, it is very good to enthuse about capital development here at home..."

On a point of order. The Ceann Comhairle ruled all that out of order.

He did not.

That is not so.

When the light goes out there is darkness. If Deputy Corry were to go out there would be silence. The Ceann Comhairle said that this section dealt with the setting up of the Redemption Account and that the question of capital development was out of order.

I have no doubt that the Ceann Comhairle dealt with the matter that arose in a proper fashion. If I deem that the Deputy is out of order I shall deal with it as I think necessary. I do not think that he is out of order so far.

In this statement in the Seanad, referring to the large sums of money being put into circulation, the Minister went on to say: "Unless it were to lead to an immediate production of goods—and very little of this money as expended in this way is to lead to an immediate production of goods—there is bound to be inflation. So at once while I am pursuing this desirable course of making a tremendous increase in capital development, do not forget the other side, that I may be weakening the value of the Irish £ and, with the high rate at which Government expenditure is running, our capital account and current account and with our situation in respect of balance of payments, I am not too sure." The whole quotation is very interesting for those who wish to go back on it. But this is not capital development proper. This money is being borrowed in respect of services such as the provision of buildings— Iveagh House; office accomodation and staff restaurant: £27,000.

Not a penny piece of this borrowed money is going on that.

Is it not? Then the Minister will have an opportunity of explaining it to us. I understood that the redemption account which is now being set up and which provides for the payment of £655,000 into the Central Fund is to amortise the loans which have to be raised to cover that expenditure. Is that correct?

Not a penny piece is being paid for the restaurant out of borrowed money.

The Minister is going to borrow money to pay for these services. They are described as capital services. If the Minister means that the moneys are going to be provided out of funds at his disposal, well and good. The Minister had been so strong in his Budget statement on borrowing from current savings for this capital investment policy that it seems to run counter to the purpose which he had in view of avoiding inflation by getting the necessary moneys from savings.

You are dreaming about inflation since 1947.

Rip Van Winkle.

If we were dreaming about inflation in 1947 how many times has the Minister for Finance referred to the dangers of inflation? How many times has the Central Bank referred to the inflationary factors which exist? Why has the Minister in this statement in the Seanad and in the Budget statement which he made quite recently referred to the dangers of inflation in this large-scale borrowing programme which he has put before the country? I want to suggest to the Deputy and others who think like him that, just as we have reached, in the Minister's view, the limit in regard to taxation and nothing more can be got from the taxpayer and we are driven to borrowing, there will be a limit in due course to the amount that can be borrowed. The Minister has suggested —even more than suggested—that the whole of this capital programme may not be physically possible to undertake during the present year. Nevertheless, provision is being made for it. Deputy Davin says we are bothered about inflation.

What about your own Taoiseach on 15th October, 1947? He nearly cried about it that day.

I referred to the position, which the Minister promised to look into and in regard to which he gave me no definite answer, of the Transitional Development Fund. Take the question of housing, for example. He admits in his Budget statement that there is an inflationary situation already. I think the Minister has admitted that in his public statements. If the Deputy will bear with me, I will read him a paragraph—column 1634 —from the Budget statement:—

"The employment afforded by the housing activities of local authorities and private builders is in itself a great social advantage which has indirect benefits in many directions. On the other hand, the magnitude of the programme inevitably involves certain risks. The resources of the building industry are at full stretch. Skilled labour is still short, and our cement industry is unable to meet the unprecedented demand, with the result that large quantities of much dearer cement have to be imported. In view of the intensive building activity which is being generated by State assistance, building costs require special attention so as to ensure that no section of the community profits unduly from the urgent necessity, on social and health grounds, of improving the housing of the population."

Is that the quotation the Deputy is giving to show that I said there was inflation?

I am not saying that the Minister said in that extract that there was inflation.

Deputy Davin asked the question and you gave that quotation.

It is evidence of inflationary conditions if you have shortage of men and materials in regard to housing——

Of a risk of inflation.

——and you try to carry through a programme that is impossible to carry through. It is a legitimate deduction that you will have a certain amount of inflation.

You may make the deduction but do not say I said it.

The Minister's Budget statement is full of reference to the danger of inflation.

The danger of inflation, not to say that it was present.

The Minister is a very skilful tight-rope walker. He is very careful. He wants, if he wishes to do so, to be able to say that he has not proceeded with certain plans or schemes by reason of the danger of inflation but is not prepared to say definitely, in advance, that there is inflation.

There is danger of inflation. There are inflationary factors. If we are not careful in regard to the steps we take and the way we proceed, we are going to have inflation. Is that correct?

Is the Deputy quoting?

I am not quoting.

I wish the Deputy would quote.

There is any number of statements with regard to inflation.

Two years ago Deputy Lemass told us that there was deflation.

At column 1642 the Minister said:—

"It is necessary, however, to bear in mind that the realisation of sterling assets and the use of counterpart moneys are methods of finance unrelated to current savings and, as such, may have inflationary tendencies. Recourse to such sources must in present conditions, be cautious, and the greatest care will be taken by the Government in choosing the methods of financing its capital programme, to ensure that there will be no adverse consequences for the economy."

A good statement.

That would be worth reading again.

At column 1645 he has a further development of that thesis. The point, in any case, is that we are borrowing this year. Borrowing has become necessary because services which had been normally met out of revenue are now being transferred to the sphere of capital. As I was saying to Deputy Davin, just as there is a limit to the amount of work that can be physically accomplished and to the number of schemes that can be put in hand, there is obviously a limit to the amount of money that can be borrowed. If there is a certain limit to the amount of money that can be borrowed, I think the Deputy will agree that it would be more beneficial that moneys that have to be borrowed and which are described as in the nature of capital services should be allocated to purposes that will increase the national wealth, that will give employment and develop our resources and industries.

Relate that to your £11,250,000 for a Civil Service palace.

That has not seen the light.

That is right.

I went into some detail on the Financial Statement and I think the Minister has agreed to a certain extent with the thesis that if you are borrowing for unproductive works, as I suggest he he doing in this case, you have to make special provision. The fact that the provision is being made in this particular way and that it is so onerous in character is proof that the Minister is not satisfied that the purposes for which the borrowings are to be made are generally productive, and that they will ultimately contribute, either directly or indirectly, to the cost which is incurred in regard to them.

The Minister gave the Seanad a good deal more information with regard to the change that had taken place in his mind about this whole question of capital development and that enables him now to espouse with enthusiasm these grandiose schemes which, as I said yesterday, he was so ready to condemn only a few years ago. One of the reasons why he attacked these schemes was that they did not contribute to the supply of goods.

This is surely a machinery section—to do certain things.

It is a very important machinery section, one of the most important that has ever come before this House, a section which, in three or four lines, will place a burden on the Irish taxpayer to the extent of £655,000 a year for the next 30 years, and I suggest that we are entitled to examine, in detail, if necessary, the policy which has given rise to that. I suggested on the Budget statement that the opinion of economists elsewhere was that, if moneys were being borrowed for public works, it was assumed that abnormal works which would be met by provision from borrowing would only be required, in times of depression and when they were so required, in order to increase purchasing power in the country, they should be paid off within a comparatively short term of years; but in this case, in order to meet the expenditure on capital services, as the Minister terms them, amounting to £12,000,000 we are being asked to pay a very much larger sum.

If Deputies calculate what £655,000 for 30 years comes to, they will see that borrowing can be rather expensive. If we borrow £12,000,000 we pay back £19,663,000 and, therefore, for the original loan of £12,000,000 we have to pay back roughly £7? millions additional. That is in addition to whatever other charges we have to meet on normal capital services. The point I was making is that if we have to provide this huge sum to meet the cost of services which should be met to a much greater degree from revenue, if not altogether, there must be less money available when the Government goes into the market to look for money for the Electricity Supply Board or any of the other big capital development schemes which we believe will repay the country by adding to our productive powers and by adding to our wealth in the future.

It was suggested by the Minister for Defence when he attacked our Party recently for a campaign of sabotage, as he called it, worthy of the worst days of our extremely bad past, that we did not give the Government warning of what we intended to do or say in criticism of this policy but it is quite impossible to know what the Minister for Finance is going to do. In 1948, he has a mandate for retrenchment; in 1950, he forgets that mandate but discovers, with the Taoiseach, a new mandate, that is, a mandate to increase the national debt. The Government has discovered this wonderful secret of the national debt. You do not have to impose taxes; you do not have to retrench; you just borrow. So long as lenders are available, you pile up the national debt, which has increased by 50 per cent. in the past few years.

If that were being done on the basis of policies which genuinely gave employment in the really productive sense leading to permanent employment later on and to an increase in the wealth-giving resources of the country, there might be something to be said for it, but it has the disadvantage that a large proportion of our resources are being locked up in schemes which are not going to add to our productive wealth and that is going to reduce the amount available for the schemes which should be borrowed for and to which the Government should give a high priority in order to develop our national resources.

Every single item in the Board of Works Estimate that could be regarded as coming under the heading of building works has been taken as an item for which the Minister proposes to borrow. Even national schools and Garda stations, the cost of which should be met in the ordinary way annually from revenue and which in the past were always so met, are now to be put into the capital services category and borrowed moneys are to be spent in making substantial provision for them. That may look very well. It may be said: "Are you not relieving the present even at the expense of the future," but the point is that we are avoiding or evading our obligations if we are not able to meet in the normal way the services which we have met in the past, and, when the Minister talks of the fact that his professional friends have changed their minds with regard to what are the services which can be borrowed for, I would remind him that they condemned very strongly in the past the idea of allowing the deadweight debt of the country to be piled up, that is to say, the debt which is not giving a return reproductively, or which, as the Minister has said so often, relates to schemes which are not helping to pay for their cost.

The Minister was very critical of State boards and Government enterprises in the past and the basis of his complaint was that they were not paying their way. In his latest Budget statement, he has somewhat altered his position in that regard and he thinks he foresees a somewhat brighter prospect in regard to them——

I do not think I said that.

——and these Government schemes of capital development.

I doubt if I said that about the lot you left me.

You took them at their face value, anyhow.

The Minister ought to give the House the information to which it is entitled and state specifically what are the schemes which he feels are likely to pay for themselves, either now or within a reasonable period of years, and what are the schemes which are not likely to do so. But, in this matter of capital development, in the same way as the Minister has changed his attitude with regard to his mandate for retrenchment, he has also changed his attitude as to what the basis of the capital programme should be. Originally, the idea was that they should be remunerative, in the sense that they should, to a large extent, pay their way. Now the Minister has completely changed his attitude and is prepared to put projects, which he admits can only go into the sphere of capital services under the very vague and wide title of being socially desirable or socially profitable, in the category that the money can be borrowed for them. Sometimes the Minister condemns social services very vigorously and describes them as being concomitants of the servile State.

If you are going to borrow for the types of services that are included in this £12,000,000, I fail to see why you should stop there. Why not go further and borrow for health services or social services generally? The only thing necessary, apparently, under this new policy, is to select some arbitrary figure, say £66,000,000. Having regard to the fact that the Minister last year said that taxation was at its higest peak, that the community was paying 25 per cent. in one way or another to the national income for taxes and rates and contributions, apparently even the Minister cannot be driven any further in that respect. So he takes arbitrarily a certain figure, £66,000,000, which represents more or less what he is getting on the ordinary rates of taxation and says that everything over that will be described as capital expenditure. Perhaps it is not quite as simple as that and we may be unduly suspicious of the Minister, but it looks extraordinarily like it.

The most serious aspect of this particular section is that, except for the publication of an annual statement, we may never hear of this section again. Unless some Deputy wishes to query the annual account which is to be published in regard to it, he will not have an opportunity in the Finance Bill of raising the matter. In that way, it will not come under the review of the Dáil and its operation will not come under the observation of the public. I suggest that, because of the special way in which this clause has been introduced, because of the special provision that the payments should be made into the Central Fund, it is necessary that those who are interested in this matter should call attention now to what is being done. I stated that it was the general opinion of economists that if money was being borrowed in a period even of grave depression for public works, that money ought to be repaid as soon as possible during a period of recovery. The idea of borrowing money in times when there is a very high level of money in circulation and when, according to the Minister, the indices of prosperity are all in his favour and show that everybody is having a jolly good time, seems to be an extraordinary one, especially to incur borrowing on this very large scale for this particular type of service. There is no reason for that, that I can see. I am entirely against the principle of borrowing for these services in present circumstances, but if the circumstances were even other than they are and we were dealing with a situation with a depression facing us and we had then to go forward with some large scheme such as the provision of new Government buildings, may I remind Deputy Davin in that connection that while a great many of the Government schemes will give employment in rural areas it is not easy to devise schemes which will give employment to large numbers of unskilled labourers in the City of Dublin? It is only by large constructional works——

Large destructional works.

——that they can be catered for. Deputy Davin may laugh. I am not including the re-equipment of Córas Iompair Eireann in that category.

Or the destruction of churches.

There was no destruction of churches. Deputy Davin will not get me off on that red herring.

Ask your friends what about Spain and Russia?

There were a couple of hotels as well as a church to be knocked down.

Has a Deputy of this House who ran away from his post in the pre-Truce period a right to make observations such as that?

So far as Deputy Cowan is concerned, that is worthy of him. I never ran away from anything.

Dressed as a woman and hiding in a convent.

That is not so. There is no proof of that.

The Córas Iompair Eireann engine driver did not wait for him.

Deputy Davin should allow Deputy Derrig to proceed without interruption.

An old woman with a basket, running from the post of danger.

There is no truth in that statement and Stalin's agent knows it.

The Minister states that this is to provide for the borrowing of £12,000,000 in the coming year. Is the interest to be calculated at the rate of 2 per cent. per annum?

The sum that someone referred to, £423,000, is the interest at 3½ per cent. The rest is sinking fund.

The Minister for Finance is a very peculiar gentleman. When he is here playing to the gallery and to the Party which, according to Deputy Davin, has been responsible for designating him as the holder of his portfolio, he is very chirrupy; but when he is in the Seanad he is singing quite a different story. For instance, when he was dealing with this question of capital expenditure on the 26th October last and pointing out that in one financial year the sum had risen from £700,000 to £7,500,000, he said:—

"But sending that money into circulation through the hands of the community, into which the money must get when expended, has, of course, a very definite inflationary effect."

When Deputy Derrig was speaking, Deputy Davin seemed to feel that any reference on his part to this danger of inflation was rather ridiculous.

A dream.

Nonsensical, a dream. Now, I suppose one may deal with matters in an imaginative and figurative way when in opposition. That is how Deputy Davin used to deal with this question when he was in opposition, but when one becomes Minister for Finance he ought to cease to dream. According to Deputy Davin, when the Minister for Finance was speaking in the Seanad on this important question of the monetary policy of the State, he appeared to be dreaming — as he did point out that the effect of this heavy capital expenditure, mainly of borrowed moneys, had a very definite inflationary effect. Was the Minister for Finance dreaming when he said that?

As the ex-Minister is dreaming now.

Was the Minister for Finance dreaming when he said that? That is the question that has to be answered by Deputy Davin. If the Minister for Finance was dreaming when he pointed to the fact that there was a very definite inflationary risk is Deputy Davin going to continue voting so that the finances of this State may be handled by a dreamer? But let me go on with the quotation:—

"Unless it were to lead to an immediate production of goods— and very little of this money as expended in this way"——

He was speaking of the money to be spent last year and I will come to the money to be spent this year in respect of which £655,000 is going to be charged on the Central Fund each year for 30 years.

"—— there is bound to be inflation."

Do the words of the Minister for Finance spoken on that occasion carry any weight with Deputy Davin? They do carry weight with me because it is quite clear to any person who has been watching the trend of prices particularly in recent months—the prices of bacon and meat are spiralling as are those of other foodstuffs and clothing is going up that we are at the beginning of a definite inflationary spiral such as the Minister for Finance anticipated when he spoke in the Seanad on 26th October last. In this inflationary situation are we justified in flooding the market with more money because that in fact is what we propose to do when we propose to spend £12,000,000 upon works—whether they are meritorious or otherwise is a secondary matter—which we do not propose to procure out of the available purchasing power of the community? The Minister was almost beating his breast on that occasion as he appeared in sackcloth and ashes before the Seanad; for he went on to say:—

"So at once while I am pursuing this desirable course of making a tremendous increase in capital development, do not forget the other side, that I may be weakening the value of the Irish £ and, with the high rate at which Government expenditure is running, our capital account and current account and with our situation in respect of balance of payments, I am not too sure."

Will the Deputy give the reference?

Column 143, Volume 37 No. 2 of the Official Report.

On a point of order. Is this distinguished ex-Minister for Finance entitled for the third time— on the Budget, the Finance Bill and now—to repeat himself in the way he is doing?

It is getting the Deputy.

I am not repeating my words but the words of a member of this House which carry more weight and greater conviction apparently to Deputy Davin than mine do; I am repeating the statement of the Minister for Finance himself. If I can I will get back to commenting upon the passage I have just quoted. He said:

"Do not forget the other side, that I may be weakening the value of the Irish £."

What happens when the value of a currency is weakened? At once prices begin to rise. Nobody I think to-day, despite the cost of living index figure as it is called, is prepared to get up here and deny that the cost of living has considerably increased over the past six months. There is no person who notes the trend of prices who does not anticipate that it is going to increase at a considerably accelerated rate in the very near future. That, I take it, is the justification for the demands which the workers whom Deputy Larkin and others represent in this House are about to make. We have, therefore, evidence that the fears which the Minister for Finance expressed when he spoke in the Seanad last October were justified and that in fact they are already beginning to materialise in a concrete form, in a form which affects every one of us and affects particularly the people whom we represent in this House. The Minister then went on to say:

"We are not too strong, possibly, to present ourselves to the outside world and claim that our £ is better than the English £. People here are accustomed to look across the Channel and see all the defects in the situation in England and complain of all the money that they are circulating, causing inflation and weakening the purchasing value, internally, of their own currency; but we are following very much the same programme at home."

Now it is not Deputy MacEntee, a member of the Opposition, who is expressing himself in these terms, but the present minister for Finance, who is responsible for putting the proposals contained in Section 22 of the Finance Bill before the House. Having mentioned that a member of the Seanad said that he agreed that one may take the risk, and even though in the short run what you do may have an inflationary effect, it may be necessary to take the risk in order to get certain desirable objectives achieved, the Minister went on to express himself on the point:—

"We have weighed that risk and have taken the risk, but it is not a very happy side of our situation and it may be—"

and I hope that those who have been accusing us of damaging by our criticisms the public credit will weigh and ponder very carefully what the Minister for Finance himself had to say concerning the effect which the Government's present policy was likely to have on the investing public, when he continued in these terms:—

"—it may be that the investing public has surveyed the position and come to its own conclusion, and maybe that was why subscriptions did not roll in for the last loan in such volume as they might have."

What was true or what the Minister surmised might have been true in relation to the reactions of the investing public towards the last loan is likely to be made more true and much more pronounced when the investing public see that the Minister proposes to do what Section 22 provides.

When they read your poster.

The Deputy is helping now.

That poster would not have been issued and could not have been issued except for the policy which Deputy Davin and his colleagues are pursuing in relation to the management of public finance. You have been playing ducks and drakes with the public moneys since you came into office and now of course the chickens are coming home to roost. However, I do not want to be sidetracked on that issue. I want to get back to the point I was making. The effect of the provisions of Section 22 of the Bill will be to weaken public confidence in the credit of the State. I believe that these provisions will deter investors from investing in our future loans. It is bound to do that, because they see here a proposal to saddle the State with an annual burden of £655,000, with a total payment over 30 years, making almost £20,000,000 in respect of a sum of £12,000,000 that is going to be spent this year. Those who have money to invest, those who have lived prudently and providently all their lives and have earned their money hard and saved thriftily, are going to look askance at the prodigality with which the public finances are now being handled.

This £12,000,000 is going to be spent this year and, ultimately, the taxpayers will have to find almost £20,000,000 to repay that debt with interest. What is it going to be spent on? We have that set out here in the section. Sub-section (1) provides that the expression "capital services" means voted services which are to be met out of borrowing, and in sub-section (3) of the section we find that a sum of £655,000 is to be provided to redeem borrowings and interest thereon in respect of capital services and it shall be charged annually on the Central Fund.

We have, as an indication of what these capital services are, a note supplied with the Estimates for Public Services. It is headed: "Note regarding Capital Services", and it points out that the total of these services, which are voted services and which are to be defrayed out of borrowed moneys, is £12,113,000. It goes on to issue a warning that this does not represent the full expenditure of the State, through one agency and another, which has to be met out of borrowed moneys. I am merely saying that by way of footnote to the fact that, included in the volume of Estimates for the Public Services, there are services amounting to a total value of £12,113,000, the cost of which is to be defrayed out of borrowings, and these borrowings are to be met by a charge on the Central Fund to be paid every year of £655,452.

Let us see what that means. The first thing that means is this, that next year the taxable capacity of the community to defray the cost of corresponding services is going to be reduced by that amount. The £655,000 may be taken, roughly, as equivalent to 6d. in the £ on the income-tax. If, therefore, the expenditure, not upon these services for which we are borrowing this year, but the expenditure upon the services for which we are taxing this year, is to be maintained at its present level, if we are to continue old age pensions at their present level, and if we are to continue widows' and orphans' pensions and the normal expenditure upon education and all the other services at their present level, we shall have to find, in order to do that, an additional sum over and above what we are raising in taxation this year, an additional sum of £655,000.

That is a considerable sum. It represents nearly a quarter of the tax upon petrol and upon hydrocarbon oils, light and heavy, which we were discussing yesterday evening; it represents virtually 6d. in the £ on the income-tax. I cannot say what it means in relation to the tax on tobacco or beer or spirits, a proposal to increase which would make the Government Party stand aghast. But the Government Party had better face up to this fact, that when the section goes through, next year, if they are going to maintain public services at their present level, they will have to find out of taxation an additional sum of £655,000, over and above what they are proposing to find this year.

Let us consider to what extent we are justified in imposing this charge on the Central Fund in respect of these services. In order to do that it is necessary for us to consider the services in some part. The first of these is Public Works and Buildings, and we see there, under the heading "New buildings and works of reconstruction", that a sum of £800,000 has to be borrowed. There, so far as the capacity of this Dáil to appraise the wisdom of borrowing for that purpose is concerned, we are brought to a standstill, because when we turn to page 9 and look at sub-head B, New Works, Alterations and Buildings, we find the sum total of the New Works, Alterations and Additions to be provided in the year 1950-51 is estimated at £1,166,000. All we know is that out of all the building that is to be done for the President's establishment, the Houses of the Oireachtas, the Departments of Finance, Justice and Education, as well as every other Government Department, amounting in all to £1,166,000, we are going to borrow £800,000.

We do not get any further information on that from the Minister, and the public, therefore, are not in a position to judge whether it is wise or unwise to borrow that £800,000. I think it is unwise to borrow it, for the reasons I suggested. The State ought not to do any more in one year than it can afford to pay for in that year. The State is not in the position of a man who buys a house, as was at one time suggested. The State is a continuing organisation which must, in each year, make provision to maintain itself out of the resources available to it in that year. It is a living organism.

Could you come back again and save the State?

We saved your bacon in 1939 and in subsequent years.

Ah, do come back again.

You saved Ward's bacon, too.

If Deputy Davin would only stop clapping his wings and squawking like a frightened jackdaw, I would be able to get on to the point I was about to develop. I move to report progress.

Progress reported; the Committee to sit again.
The Dáil adjourned at 10.30 p.m., until 10.30 a.m., on Thursday, 15th June.
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