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Dáil Éireann debate -
Tuesday, 20 Jun 1950

Vol. 121 No. 14

Committee on Finance. - Finance Bill, 1950—Report Stage.

There have been five amendments offered. Four of them are, obviously, amendments which should have been offered in Committee, and are not in order on Report. The fifth one is in order.

May I ask apropos the first of these amendments which have been ruled out of order, whether the Minister would consider an amendment of that sort—it does not touch on duty but it does touch on the question of title—if it were moved in the Seanad?

I would be bound to resist it.

The Minister knows the difficulty for solicitors and lawyers generally which would arise since there is no finality about the adjudication side.

Amendment No. 5.

I move amendment No. 5:—

In page 9 between lines 14 and 15, before Section 17 to insert a new section as follows:—

(1) Sub-section (1) of Section 13 of the Finance (No. 2) Act, 1947 (No. 33 of 1947) is hereby deleted and in lieu thereof the following sub-section is substituted and shall have like force and effect:—

(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 first day of December, 1950, be at the rate of ten shillings for every fifty pounds of the amount or value of the consideration in lieu of the rates immediately theretofore chargeable.

(2) References to sub-section (1) of Section 13 of the Finance (No. 2) Act, 1947, contained in the other sub-section of the said Section 13 shall be construed as references to the new sub-section (1) inserted by sub-section (1) of this section and the provisions of the said Section 13 shall be construed accordingly.

This amendment is an effort to get the Minister to face up to the situation in regard to this 5 per cent. stamp duty. Deputies will remember that this particular tax was brought forward in 1947 as part of a scheme to provide moneys for the subsidisation of foodstuffs. It was an effort to take money from a point in the economy in which there was inflation and to use it to reduce the cost of living and so prevent an inflationary spiral due to an increase in the cost of living causing greater wage and salary increases, these increases again adding to the cost of living.

Over a long number of years the stamp duty on the transfer of property stood at 10/- per cent. That was put up to £5 per cent. and the Minister at that time opposed the increase very vigorously. He recently admitted that he did not remember he opposed it. As a matter of fact, when I was referring to it on the 3rd May this year on the Budget statement, Deputy MacEntee, at column 1671, said:

"Would it be in order to ask the Minister if it is a fact that, when this stamp duty was first introduced, he opposed it?"

The Minister's reply was:

"I do not remember."

It is strange that the Minister did not remember. This stamp duty was not put on 16 or 18 years ago. It was put on only a couple of years ago. The Minister had to study this particular section of finance legislation because he has introduced several amendments to it. He has, even in this particular Bill which we are discussing, introduced further amendments in order to tighten it up. The Minister does not remember now that he opposed it, but when it was under discussion in the Dáil in 1947 the Minister, at column 1072, said:

"It means there will be a rise in the already swollen prices paid for houses."

If it meant, according to the Minister's view in 1947, a rise in the already swollen price for houses, does it mean that to-day, and is it to secure a rise in the already swollen price for houses that the Minister has introduced it? If the Minister was convinced in 1947 that that would be its effect, he surely has a very short memory if he forgets that such a disastrous consequence was likely to flow from a tightening up of legislation designed to secure the 5 per cent. The Minister was not the only member of his Party, or of the group of Parties associated with him, who opposed this 5 per cent. very bitterly. The Taoiseach, then Deputy Costello, at column 1065 said:

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

Was the Taoiseach talking with his tongue in his cheek when opposing the 5 per cent. stamp duty at that time? Did he really believe that it would make house property dearer and the provision of houses for people with only limited means impossible? If he was not talking with his tongue in his cheek when he expressed those sentiments, is it for the purpose of making houses dearer, and for the purpose of making the provision of houses for people with only limited means impossible, that his Government is now promoting the amendments to the Stamp Duty Act which are designed to secure that any loopholes that were in the original legislation should be closed?

The Minister for Agriculture intervened—he was then Deputy James Dillon—and he also expressed dissatisfaction at the increase in the stamp duty. He expressed his dissatisfaction in his usual exuberant fashion. He called it "a landlord's tithe"; he called it "a dirty fraud" and "a dirty deceitful game, a piece of flat-footed incompetence,""a shuffling and coltish way of dealing with the problem." He went on to call it "a dirty wrangle,""a vicious and mean jab at those who were defenceless."

Notice taken that 20 Deputies were not present; House counted, and 20 Deputies being present,

I am glad that I have succeeded in getting some of the Deputies who are supporting this Coalition Government on this particular measure into the House because some of them may prove so bold as to speak their minds on this particular matter. A number of them were at one time of the same mind with regard to this 5 per cent. stamp duty as was the then Deputy Dillon. They, too, like him, regarded it as a "dirty fraud," and "a dirty deceitful game," and so on. We would like to know from them now if they have changed their minds in this matter. Do they still regard it as "a dirty fraud?" If they so regard it, why are they supporting the Minister for Finance in imposing it upon the country? Have they any respect for the opinion the present Taoiseach then expressed? He said it would make houses dearer and houses for people with limited means impossible. Do they still believe that? Is that the reason they are supporting the Minister for Finance now?

The Minister for Finance cannot sidetrack the issue by saying that he did not remember opposing this particular stamp duty. I told him that I would remind him of his attitude in the past upon the matter at the conclusion of his Budget statement. I did so remind him on the Second Stage of the Finance Bill. He has had time in the interval to look up the matter. He must know that the quotation I have given is accurate. He must know now that he then believed this stamp duty would cause a rise, to quote his own words, in the already swollen prices being paid for houses. Is the Minister for Finance satisfied that the costs of houses to those who are looking for them are so low that it is no harm to cause a rise? Will he now admit that his opposition to the 5 per cent. stamp duty was purely fraudulent? The purpose for which that stamp duty was imposed was clearly and carefully explained at the time. The members of the Dáil were asked for their co-operation. The co-operation of those who are now supporting the Government was sought in order that we might successfully grapple with the then inflationary pressure and do something tangible towards reducing the cost of living. The money that was gained as a result of the increase in stamp duty was applied directly to a reduction in the cost of living. The Minister, in his answers to recent parliamentary questions, has quite clearly shown that that policy was effective. He has quite clearly shown that the increase in stamp duty and the other moneys collected under the Supplementary Budget of 1947 had the effect of reducing the cost of living between the autumn of 1947 and the spring of 1948. There are a number of Deputies here who were at that time promising a much greater decrease in the cost of living than the Government of the day thought the taxpayers could afford. Some of them actually promised 30 per cent. reduction.

That is not related to this amendment.

Before devaluation.

Devaluation has taken place since. There has been a very big devaluation in the credit of the Coalition Government and the Parties who support it.

And that is not related to this amendment.

There has been a particularly big devaluation in the belief that the people put in the words and opinions of those Ministers who have been in control——

If that is your view, you will get a shock on 20th September.

Let us have it. One of the things about which Deputy Sweetman and others are particularly careful is that the people will not be allowed to express their opinions.

They will be allowed to express them in no uncertain fashion on 20th September next.

They will express their opinions on a lot of local matters.

I would like to hear the Deputy's opinion on this amendment.

My opinion has already been stated on this particular matter. It would be interesting for the House to have the Minister's opinion on this matter. It would be particularly interesting to have his opinion on the opinion he expressed about this matter in 1947. It would be interesting to have his opinion on the opinion that the present Taoiseach then expressed and on the opinion of the present Minister for Agriculture when he described the stamp duty here as "a dirty, contemptible, vicious and disedifying proposal, well worthy of the mind of the Minister for Finance who has conceived it and, to my way of thinking, a disgrace to the House that adopts it, 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." There, the Minister for Agriculture, then Deputy Dillon, was expressing in his own inimitable way the opinion of all the members of the present Coalition Government. It is all very well for Deputies on the Government Benches to smile now and to say that they will not have to face the people for another couple of years. Even if the people's memory is short, I think they will retain some recollection of the complete volte face in the opinion and attitude of the Coalition Government on this particular matter. It is not as if the Minister were short of cash. The Minister feels that he can raise about 50 per cent. more cash for public expenditure than the previous Government felt they could raise. He has, as everyone knows, adopted a very facile way of raising money; he does not have to raise it through taxation. He does not have to ask the taxpayers of this year to pay for the expenses of Government. He can postpone it.

That has nothing to do with this amendment.

I know it has not.

Nothing whatever.

It has this much to do with it——

It has no relation to this amendment.

This amendment suggests a method of raising money from the public as the Minister has alternative ways of raising money. He has exercised his power to raise money in an alternative way to the nth degree already. He surely should not, instead of proceeding with his borrowing to the tune of another——

That has nothing to do with this amendment. The Deputy has been told that already. The full Budget does not arise on this amendment.

I am not attempting to discuss the Budget. I am discussing this amendment.

The Deputy was not discussing the amendment and my word must prevail. Alternative methods of raising money have nothing to do with the amendment.

This amendment is an effort to get the House to forbid the Minister raising money in the way in which he proposes to raise it in the stamp duty.

That is quite in order.

The Minister, of course, will have to tell the House, if this amendment is carried, how he will raise the money otherwise. I think that it is really too bad that the Minister feels that he can browbeat, not only his colleagues on the Front Bench into supporting him without any explanation of his change of front but that he also feels that he can also browbeat all the other smaller groups into supporting him in this regard. The smaller groups that have made possible the election of this Government have been all against the imposition of taxation of any kind. They have been very much against the imposition of this tax. They were going to borrow all the money that was required for government—some of them were going to print it—but now they are prepared to stand behind the Minister in raising money in this way. It is no harm to remind them that the Minister himself, even though he does not now remember it or has conveniently forgotten it, was very much opposed to this particular matter.

That is the fourth time the Deputy has told us that.

The Minister has not had at any time given any explanation to the House as to why he has changed his opinion. It is a matter of some moment because many hundreds of thousands of pounds are being raised in this way. People who have to pay this tax will be very dissatisfied unless the Minister can explain to them that it is absolutely essential that the money should be raised in this manner. It is bad enough for the person who has to pay a 5 per cent. stamp duty to fork out the cheque the Revenue Commissioners may demand from him, but it is worse if there is not a word of explanation from the Minister as to why the money should be raised in this way. No one wants to see the price of houses increased. If the Minister is of the opinion that the continuance of the stamp duty will add to the price of houses, he should tell the people why he wants the price of houses raised. The Taoiseach also, I think, should intervene in this debate to explain to the people why his Government is attempting to make it impossible for people of limited means to buy their houses. We all know, of course, that the Taoiseach and the Minister for Finance in 1947 were talking with their tongues in their cheeks. If they had given any study to the matter they would have realised that the effect of the duty would not be what they were prophesying it would be. As a matter of fact it has had a completely opposite effect from that which they then foretold. However, if the inflationary situation which this stamp duty was designed to meet has passed—and the Government's actions in the matter of raising funds for Government expenditure show that they believe, or at least that they are prepared to hold that it has passed—I think this stamp duty should be dropped. It was never meant to be permanent. It was meant merely to cope with an inflationary situation. The methods by which the Minister has sought to maintain this stamp duty, while he was acting completely in opposition to the spirit in which it was introduced, has driven the Minister to all sorts of expedients. He has given the Revenue Commissioners additional powers exceeding anything they have ever had—power to refuse to give a clear certificate to anyone paying the duty, lest they might discover afterwards that he was subject to a higher duty. Deputy Little has already referred to that on the Committee Stage.

The Deputy is discussing an amendment which was ruled out of order.

I am not and I do not propose to discuss it. I am only saying that the methods by which the Minister is attempting to collect this particular duty, in face of what he said about it in the past, are anything but desirable. If the Minister would drop this particular duty at the present time, he could allow the Revenue Commissioners to give a clear certificate to lawyers and others that they have paid their stamp duty fees. That in itself would be a very desirable outcome. Not only did the Ministers I have already quoted oppose the stamp duty when it was being imposed but the Minister for Industry and Commerce spoke at great length on it. He opposed it very vigorously and he wound up by saying: "I can see no case, good, bad or indifferent, that can possibly be made for this increase." He said he could see no case, even after he had been listening for days to the case made for it at that time. If he could not see any case for it then, he certainly has made no case for it since. The Minister for Industry and Commerce and the Minister for Finance are asking the Coalition Deputies to walk into the Lobby to support the Minister in the absence of any case being made for the continuation of the stamp duty at the present time. I think that that is not only bad administration of the Department of Finance but bad government. It should be explained to the people why the Government feel that the particular duty should be imposed. They all have collective responsibility for it. One of the promises the Taoiseach made was that the Government would act in the spirit and the letter of the Constitution in regard to collective responsibility.

The Deputy is not keeping to the amendment.

Even if the Minister could not see his way to accept the whole of this amendment, I should be glad if he would let the House know whether he himself would not introduce an amendment and make a concession to a certain degree. If he cannot see his way to reduce the £5 to 10/-, perhaps he could go at least some of the way towards meeting the matter.

Even though he could not relieve the transfer of all houses from the 5 per cent. duty, perhaps he could see his way to relieve new building, that is, building taking place at the present time or that will take place during the next couple of years, of the burden of the 5 per cent. and allow the 10/- rate to apply there. The people of the country are spending a great deal of money on housing. We know the only way the housing shortage can be relieved, other than by mass emigration, is that a number of new houses should be built. Even if the stamp duty were left on old houses, houses built two or more years ago, it would be an encouragement to people to get ahead and build new houses for sale if the duty were reduced now to 10/- on new houses built. The duty was aimed largely, as was explained at the time, at the transfer of old houses from one person to another in a period during which the prices were going up by leaps and bounds. We all know that in 1947, houses changing hands within a few months had very much increased in value. There was a real gain for some speculators to come in, buy houses and re-sell them within a couple of months. That particular sort of transaction was killed by the stamp duty. Now that the supply of building materials has improved, more new houses are becoming available and there is not the same demand for the old houses that went to famine prices in 1947. The Minister, I think, could very well, from the point of view of getting more new building and getting it rapidly; reduce the £5 to 10/- in regard to the new houses, as I have indicated. I hope that when the Minister is concluding the debate on this particular amendment he will give the explanation I have asked for. I have reminded him exactly of what he said when the stamp duty was first being imposed. I think the House and the country are entitled to know his present attitude, to know whether he really meant what he said in 1947 and, if so, whether he is carrying on this particular duty irrespective of the ill-effects which he then foretold simply in order to get money.

We all want to see the Government collecting the amount of money that is necessary to run the country but we want to see it raised in ways in which it would have the least possible ill-effects. It would be a grave hardship if houses were made dearer, as the Minister foretold, by a £5 duty of this kind. If the Minister is still of that opinion, he should seek to repeal that particular duty. If he does not believe it, well, then, it is a different matter. At any rate, an explanation is due from the Minister as to his attitude.

The remarkable thing about this duty is that if the House were free to vote on it there would be an overwhelming majority against it. Strong objection has been taken, not merely to the duty but to the way it is being imposed by, I may say, certainly the whole of one section of the legal profession, solicitors and the Incorporated Law Society. Members on the Government Benches made fairly effective speeches in dealing with it last year. Still the duty remains now purely for financial purposes, without regard to public interest or to respect for the law. The hardship to people buying houses is obvious. You will not get any sort of a decent house for people with modest means under £2,000. Just think of the duty on a £2,000 house, at the rate of 5 per cent. According as the price goes up, it runs up to a big sum for, say, a young person in clerical employment. For a member of the professional classes, who would pay perhaps £5,000 for a house, the duty would be £250. It just makes all the difference for a person who can scrape together a certain amount of money and who can get loans up to a certain proportion of the price of the house to have to meet the price. It becomes impossible for him when a duty of this kind has to be paid. The fact that the Minister has already remitted it in Section 16 of the present Bill indicates in a factual way that he believes what he originally said, that this duty is a bad tax. It was quite justifiable as an emergency tax for a year or two but, as a continuing tax from year to year, it is just a bad tax. The Minister was pretty shy when I asked him to give a clear exposition of Section 16 the other day. He said it was obvious on the face of it. He might have told us how much the Revenue Commissioners anticipate will be the loss on the remission given in Section 16.

Section 16 does not arise.

It is a remission of the 5 per cent. duty and I am arguing from the remission to the 5 per cent. duty. It remits the 5 per cent. duty where public bodies and utility societies are involved and it is an indication of a dawning sense on the part of the Minister. I would like to encourage him to go farther now that he has gone that far. It has, of course, obviously led to the legal profession, in protecting their clients, evading the law. I mentioned the other day that evasion of the law on the part of lawyers. Lawyers are supposed to be officers of the court. It is their duty to stand over the repute of the law and if they go in for evading the law it brings disrepute upon the law. The Minister, in reply, said that lawyers would starve if they did not spend their time evading the law. That brings one back with a shock to the kind of cynicism that existed in this country before we got our freedom, when lawyers were unfortunately subject to an attitude of mind which was entirely foreign to the country or to our instincts, who simply were in the law for what they could make out of it without any reference whatever to the public interest. It was exactly that attitude on the part of the lawyers which inspired Pearse with such hatred of the cynicism attaching to the law at that time.

That, I hope, will be shaken off because, not merely does it bring the law into disrepute but it is also economically bad for the country. Fair bargains make good friends and knit society together properly and if our legal leadership breaks down that sort of confidence people have in contracts, and so on, and if evasion of the law takes place, obviously it will have a bad effect on business. If that standard is set, it leads to what the Americans call the shyster lawyer who, departing from the law and evading the law, drifts into the position of being able to defend criminals and to create a criminal class.

The effect of a tax like this is that each year the Minister must bring in what you might call Draconian measures to stop the gaps. There were clauses brought into the 1949 Act. Section 27 was one which covered about four printed pages. That was the first time, I think, in which powers were taken by the Revenue Commissioners to set aside the effect of the adjudication stamp. That was one of the measures which was consequential on this evasion of the law and it has given a dictatorship to the Department of Finance which they can enforce. It is true that here and there you get a sub-section where the commissioners take power to remit the penalties if they like, showing that they have complete power in the matter.

It is all very well to say that the Revenue Commissioners are very sensible men and will not enforce their powers or impose unfair penalties. If, by any mistake or chance, the particular document is not stamped in time, the duty can be doubled and in case of the 25 per cent. duty—which, of course, does not arise in this section except as being consequential on what I am saying—you would have to pay 50 per cent. of the whole price of the house as penalty. The thing is simply fanatical and it is not at all uncertain that some time or other you might not get a Revenue Commissioner who was fanatical enough to impose such hardship upon the people.

Does that arise on this amendment?

It arises in this way, that these Draconian measures follow the evasion and the evasion arises out of the fact of the hardship of the tax. There is the difficulty for lawyers, when they are taking part in the transfer of property, of not being certain that it is only the 5 per cent. and not the 25 per cent. that might have to be paid. The Incorporated Law Society made representations, sent deputations to the Minister and have done all that one could reasonably expect from them. They cannot go on strike. They cannot start a revolution. They cannot do anything that is unconstitutional. They are officers of the court. In their attempt to defend their clients and also to preserve sound conveyancing they have done all in their power to try to bring reason to the mind of the Minister.

The Minister, himself, has two views on it. When he was free to express his view, he was against this tax. At present he is in favour of it. I suggest to the Minister that he should meet the profession as far as can be done when this Bill comes before the Seanad, reduce this tax as much as possible and, at the same time, remove those clauses which are putting a blister upon any transfer of property.

Major de Valera

The idea in these amendments——

There is only one amendment.

Major de Valera

The idea in the amendment is simply to restore the position where the tax was 1 per cent., or, as on the scale below £500 under the old Act, in the case of an Irish citizen, and to leave the 25 per cent. in the case of a foreigner. There is an objection to the tax in regard to Irish citizens disposing of property at home and that objection is threefold. It is objectionable from the point of view of the individual citizen. It is objectionable from the point of view of public policy. It is objectionable from the point of view of the legal profession.

When this tax was initially proposed, all these objections and points of view were advanced. It causes me a certain amount of amusement when I recollect that on the occasion that this tax was introduced by the then Minister for Finance objections were voiced by some of us who were supporting the then Government equally with the present Minister, who was then in opposition. Although I seldom find myself in agreement with the Minister, that was one of the occasions on which, on one point at least, we were in agreement, because it was foreseen both by him and by some of us that the particular system would stimulate evasions and lead to consequences objectionable from the public point of view.

What exactly is the position? I have said that there were three objections. The objection from the point of view of the individual citizen is that it is, in effect, a tax on his property which comes into operation if it has to be disposed. It is a tax which affects the value of his property, because if a person is going to bid £1,000 for a house and knows at the same time that he will have to provide, as the purchaser, £50 for tax, he will take that into account and will reduce his bid to £950. It, therefore, has a reducing effect on the value of the property to the vendor or owner. It is, therefore, as a first point, objectionable as a tax on the value of property to the individual.

It becomes particularly objectionable when one recollects that for many small people, people who are not in the opulent class, people who are in fact in a relatively struggling way, one of the main ways of saving, one of their assets, an asset to be there for their dependents if anything should happen them or after their death, is the purchase of a house. A house is a very important part of the property of such small people and this is a tax which hits them severely and which comes into operation at just the critical time, when it is desirable to realise their assets by selling or when the house has to be sold after the death of a father to secure money for his dependents.

A number of arguments can be advanced from that point of view and there are other arguments which can be advanced from the point of view of people looking for a house to buy. The young married couple are frequently mentioned in this connection, but there are many people who, when getting married, regard the purchase of a house as one form of investment which is something in the line of an insurance as well. Apart from the difficult problem of securing accommodation, there are often strong arguments for buying a house, if they can. Here straight away the State steps in and by imposing this tax makes it more difficult for these people and, as they would be the purchasers, it works out that it taxes them at the critical time, at a time when we should be encouraging them instead. It is a peculiar thing that in many ways we encourage the development of families. The Minister himself administers a code where relief is given in respect of children for income-tax purposes and there is also the system of children's allowances. While we do that, here is a case where we tax the setting up of the unit of society, the family.

And the "we" is very appropriate in that context.

Major de Valera

I will deal with this objectively, without following the Minister on that at the moment. The "we" I will explain in a moment, too. In regard to the individual, it is a tax which, unless there is strong justification for it, should not be imposed. From the public point of view which is the second objection, a code of this nature stimulates ingenuity towards evasion, as was pointed out when the tax was introduced. I think I remember the Minister saying across the House to me when I mentioned that a number of ways of evading it could be found: "Do not give them away," but the point is that there were evasions, as has been proved by the very introduction of the section last year and the section this year and as anticipated by anyone with experience of the business, evasions induced by increasing this tax to a point which made it considerable, so considerable that it was worth while seeking methods of evading it. Then with the inherent difficulties of making any such provision watertight, as the tradition of our law lies, it was manifest that such legislation would provoke these attempts at evasion, would provoke distinctions and would result in loss to the State through evasion and loss to the individual through legal costs in particular cases and to complication and difficulty in administration, quite apart from the repercussions on public morality, even though it is not considered immoral to evade a tax. These are the objections from the public point of view and they, too, are substantial.

In all these circumstances, such a tax should not be imposed, unless there are very strong reasons for imposing it, and these reasons should be something more than the expediency of raising money, since money can be raised in other ways. It requires something more than a need for funds on the part of the Minister to initiate such a tax or to maintain it.

The Minister spoke of "we." The point is that, in 1947, when this tax was imposed, there were two specific reasons, apart from the need of the then Minister to finance the subsidies on the foodstuffs which were then subsidised, to justify this tax. Some Deputies, including the present Minister, even in face of these reasons, did not think them sufficient to override the reasons I have already given. The Minister of the day did, but, in any event, there were these two reasons to be given and let us see the force of these reasons at present. The first was that, after the removal of certain controls, in the unstable and excited situation that naturally followed on the cesser of hostilities and the apparent start of a move towards normality, there was a tendency to speculative dealing in property. There was a tendency on the part of some people to speculate and purchase property and to have property changing hands with profit to the negotiators at any particular time.

That situation was aggravated by the attitude of some more cautious people who had brought property earlier and who felt that perhaps this might be the time to get out and by the very definite shortage of accommodation, due very largely to the influx into the City of Dublin, coupled with the fact that, owing to emergency restrictions, building had been practically at a standstill during the war. All these circumstances conspired to make it desirable to put some curb on the transfer of property and naturally a tax of this nature, a tax on transfer, would suggest itself and it had something to commend it in these circumstances. That was the view of the Minister at the time and much could be said in its favour, as it was said then. Therefore, in that regard it resolved itself into a question of whether that need plus the need for money, was a stronger argument than the arguments against it. People to this day will have differences of opinion on that but what I want to urge on the Minister is that, whatever weight was to be attached to that argument in 1947, the same weight does not now attach to it, if any weight at all does attach to it.

In fact, on the Minister's own showing, the only case that can be made for the tax at the present moment is that he requires the revenue. No case can be made from the point of view of a tax on the individual. No case can be made from the point of view of public policy, as in the working of it it has actually been proved that there are pernicious aspects associated with it. There is no reason in regard to the speculation in property, as the price of property has fallen to more normal levels and no undue speculation is taking place. These reasons do not apply. Take all the arguments together and assemble them and ask the Minister to take his own arguments, which may surprise him. However, to keep this on a purely objective plane, let us suppose we take it that his arguments at that time were sincere. Let us take his own arguments with the arguments now advanced and ask him what is the case for keeping it on. It is no answer to me to say: "You put it on." We did, under another set of circumstances; and even if the Minister said that we put it on and we were wrong, and even if we were wrong, it is no answer to the case now for removing it. It is no justification for the Minister to say that we put it on, whether we were right or wrong, if it is wrong in the present circumstances to keep it there.

Those are the main arguments for removing this tax. The argument in regard to the 25 per cent. tax is not really relevant to this amendment, except in so far as it explains the form in which the amendment is proposed, and it is relevant to that extent. The point is that this amendment leaves the 25 per cent, there on the non-national. At that time, there was a good deal of talk, again from the Minister and his Party and associates, as to the danger arising from the purchase of land in this country by persons from outside. That danger was represented as being of very great magnitude, by people on both sides of the House. Since the change of Government, some Minister— I forget which, perhaps it was the Minister for Lands—has said that there is no serious buying up of property by non-nationals. Be that as it may, at the moment the Minister is not being pressed to remove that tax. There may be still a case for keeping the 25 per cent. tax there on non-nationáls, although perhaps it even more than the 5 per cent. tax gives rise to an attempt to evade the Acts by all sorts of legal artifices.

The essential thing is that here we have an annual Bill in which the Minister is free to revise this matter and for the second time he is forced to complicate an already complicated code because he wishes to close a loophole where he knows that, even as it is, evasion is going on. Everyone who knows anything about it knows of certain cases, the Scotch case and the English case, which have been more or less tacitly followed here, and evasions of the spirit of the tax by the device of two agreements in certain cases. That has been acquiesced in actually by the stamping authorities. There is a further difficulty arising from the alterations in respect of adjudication, and so forth. All these things are piling up. There is a dissipation of effort and of the community's money and in the last analysis unnecessary costs. It results in a certain flow of money to the Minister, which, while considerable, is not of such huge magnitude that the Minister should not be able to compensate for it in abolishing the tax.

Therefore, in all sincerity and as objectively as one can do it, conscious of the past, conscious of the arguments that have been advanced, conscious of the Minister's present difficulties, conscious of all the facts of the case, I think one can urge and press on the Minister that now is the time to restore the position in regard to transactions in property amongest nationals at home to the position obtaining before the Finance (No. 2) Act was passed.

Section 16 has been brought into the argument, not on the amendment but probably in relation to it. There is no loss on Section 16. It was never intended to catch the particular type of transaction, that is now exempt, under the Finance Act of 1949. The reason for relief—the relief was always intended to be there—is that the consideration paid for the houses acquired from the bodies mentioned in Section 16 was always the actual cost and there was no profit on the transaction at all.

On the amendment proper, Deputy Little has called this a harsh and oppressive tax, as driving a lot of lawyers to the position where they may shortly be described as shyster lawyers. When the Deputy resumes his practice, as I suppose he has, and when this goes ahead in the inner lawyer's circle, he ought to be made president of the shysters' association, as it was he who put on this "harsh and oppressive" tax.

I know Deputy de Valera wants to deal with the point objectively and is thinking of the past—but certainly he was thinking of it rather hurriedly and put it from him as quickly as possible. No one on that side of the House can speak with any sincerity about the removal of this tax. It was put on by them. Deputy de Valera—transferring his remarks into language that will be understood—means: "We of Fianna Fáil operated this peculiar device; while we were administering a code intended to give relief to families through family allowances, we were at the same time taking an opposite course and preventing the provision for families by this oppressive tax."

I do not agree that lawyers are necessarily shysters because they think of ways, perfectly legitimate ways, around taxation. We expect lawyers to do that and we meet them on each Finance Act and try to mend the loopholes they have found. No one can say they are acting in any immoral or dishonest way. Deputy Little has used the word "shyster." Deputy de Valera does not agree, but it is Deputy Little's phrase that I am borrowing in this argument. The lawyers are perfectly entitled to do that. They have found two ways—probably there are others— and in so far as they make any great hole in the tax we will take steps to meet them year after year. We do not do it restrospectively: they get for their clients the benefit of the good legal advice they gave on the particular methods they adopted to find a way around the phraseology of the Act. I do not think there is anything wrong in that—I have been in the legal profession—that they should do this and I think it is absurd for the Deputy to use the language he has used about them.

With regard to the main argument of the effects that it is producing for us here, the tax—so I am told by the people who put it on—has bad social repercussions, is bad from the angle of the individual and is bad nationally. It was all these things when it was put on. I assert that it has less of these things now, as the circumstances have changed. I wish that Deputy de Valera, in a cooler moment, would read his own speech to-night and I think he would realise that he uses a good deal in the way of argument that fortifies the application and continuance of the tax, that could have been used to damn the tax when first put on. He said that hostilities have ceased, that there is an approach to normality, but there are speculators around and house property is very scarce, that it is because house property is scarce that the speculation has started. House property is no longer as scarce as it was. There are houses idle.

In those days, the situation being that house property of a particular type was scarce and that people who wanted houses could be held up to ransom by the owners of houses who wished to sell them, I objected to the tax on the grounds that it was going to be transferred to the purchaser. That was the case in those days but it is no longer the case. The case which is now supported by Deputy Vivion de Valera and Deputy Little was made in 1947 on the No. 2 Finance Act in these words by the then Minister for Finance, Deputy Aiken, in column 1070 of the Official Report of 29th October, 1947:

"I think 5 per cent. is enough. In other circumstances, if there was a bigger inflationary trend, perhaps the right thing to do would be, as Deputy McGilligan suggests, to go further. But I think 5 per cent. is enough at the moment."

Then I interrupted—

"To cheapen houses?"

—and he replied:

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

In column 1916, on 13th November, 1947, the then Minister for Finance, winding up the debate, 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."

Remember that that is the result which was claimed for the tax in those days when house property was scarce and house property was changing hands quickly. It was the man who had bought the house at a high price who could hold up the purchaser to pay a high price. In the situation now, without the slightest doubt the 5 per cent. is going to come from the vendor. I am taking it from the Excheuer. It transferring it to the Exchequer. It may have been believed but I did not credit it then; I did not think it a likely result in those days but circumstances have changed.

The Minister said that he did not remember opposing it.

I made that interruption to the Deputy to try to make him say what he said on that tax. I argued that that tax was not going to be paid by the vendor. That was the gist of the argument used by myself, the present Taoiseach and the then Deputy Dillon, but circumstances have changed. Go around the city and you will see houses of the £5,000 type billed at less than half that and they do not find a purchaser.

That is because of the tax.

Indeed it is not because of the tax. There are other circumstances. That situation having arisen in which there is a superfluity of house property of a certain type, there is no danger that the tax will be paid by the purchaser. There was not merely the danger, but almost the certainty, that it would be paid by the purchaser in 1947. That is my reason for continuing it.

Major de Valera

The Minister's argument is that because it is a tax on the vendor he justifies it now?

If I am asked to give the money back to those vendors who held the purchasers up to ransom and then burned their fingers later I say that there is no case for giving it back. The case is made that it is imposing a hardship on purchasers but I do not believe that is the case. I believe it was the case in 1947. I gave £6,000,000 back on the taxes on beer and tobacco and having given those remissions I do not see why I should be expected to give £480,000 back to the vendors of houses. I do not propose to give it.

Amendment put.
The Dáil divided: Tá, 51; Níl, 68.

  • Aiken, Frank.
  • Allen, Denis.
  • Bartley, Gerald.
  • Beegan, Patrick.
  • Boland, Gerald.
  • Brady, Seán.
  • Breen, Daniel.
  • Brennan, Thomas.
  • Burke, Patrick.
  • 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.
  • Friel, John.
  • Gorry, Patrick J.
  • Harris, Thomas.
  • Hilliard, Michael.
  • Kennedy, Michael J.
  • Killilea, Mark.
  • Kilroy, James.
  • Lahiffe, Robert.
  • Lemass, Seán F.
  • Little, Patrick J.
  • Lydon, Michael F.
  • Lynch, John.
  • McCann, John.
  • McEllistrim, Thomas.
  • MacEntee, Seán.
  • Moran, Michael.
  • Moylan, Seán.
  • Ó Briain, Donnchadh.
  • O'Grady, Seán.
  • O'Reilly, Matthew.
  • Ormonde, John.
  • O'Rourke, Daniel.
  • Rice, Bridget M.
  • Ruttledge, Patrick J.
  • Ryan, James.
  • Ryan, Mary B.
  • Ryan, Robert.
  • Sheridan, Michael.
  • Smith, Patrick.
  • Traynor, Oscar.
  • Walsh, Richard.


  • Beirne, John.
  • Belton, John.
  • Blowick, Joseph.
  • Brennan, Joseph P.
  • Browne, Patrick.
  • Byrne, Alfred.
  • Byrne, Alfred Patrick.
  • Coburn, James.
  • Cogan, Patrick.
  • Collins, Seán.
  • Commons, Bernard.
  • Corish, Brendan.
  • Cosgrave, Liam.
  • Costello, John A.
  • Cowan, Peadar.
  • Crotty, Patrick J.
  • Hughes, Joseph.
  • Keane, Seán.
  • Keyes, Michael.
  • Kinane, Patrick.
  • Kyne, Thomas A.
  • Lehane, Con.
  • Lehane, Patrick D.
  • MacBride, Seán.
  • MacEoin, Seán.
  • McFadden, Michael Og.
  • McGilligan, Patrick.
  • McMenamin, Daniel.
  • McQuillan, John.
  • Madden, David J.
  • Mulcahy, Richard.
  • Murphy, William J.
  • O'Gorman, Patrick J.
  • O'Higgins, Michael J.
  • Davin, William.
  • Desmond, Daniel.
  • Dillon, James M.
  • Dockrell, Maurice E.
  • Donnellan, Michael.
  • Doyle, Peadar S.
  • Dunne, Seán.
  • Esmonde, Sir John L.
  • Everett, James.
  • Fagan, Charles.
  • Finucane, Patrick.
  • Fitzpatrick, Michael.
  • Flynn, John.
  • Giles, Patrick.
  • Halliden, Patrick J.
  • Hickey, James.
  • 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.
  • Sheehan, Michael.
  • Sheldon, William A. W.
  • Spring, Daniel.
  • Sweetman, Gerard.
  • Timoney, John J.
  • Tully, John.
Tellers:— Tá: Deputies Kennedy and Ó Briain; Níl: Deputies P.S. Doyle and Kyne.
Amendment declared lost.
Question—"That the Bill be received for final consideration"—put and agreed to.
Question—"That the Bill do now pass"—put and agreed to.

This Bill is certified as a Money Bill in accordance with Article 22 of the Constitution.