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Dáil Éireann debate -
Tuesday, 13 May 1952

Vol. 131 No. 10

Finance Bill, 1952—Second Stage.

I move that the Bill be now read a Second Time. A Cheann Comhairle, Dáil Eireann in Committee by its vote on the General Financial Resolution having approved of the general structure of the Budget for the current year and having so reported to the House, it is now possible to proceed to give legislative effect to that decision. Since there can be no doubt left in any responsible quarter that additional revenue must be secured if the current Budget is to be balanced, and since the Opposition Parties agree with the Government that a balance must be secured, it would appear that the only question which might profitably be discussed at this stage is whether the additional revenue can be raised more equitably, more certainly, more conveniently and more economically by other means than those provided in the Bill.

In concluding the debate on the General Resolution I assured the Dáil that full consideration had been given to every practicable alternative to the measures proposed in the Bill, and I said that every one of them had been rejected for sound, practical reasons.

I think that should go without saying; for naturally no Minister for Finance—at least none who knows his business—would seek to get money in the harder way if he could get it in an easier one.

Now, there is no system of taxation which will leave in the taxpayer's pocket what the Government takes out of it to pay for the public services. There are, of course, certain financial anaesthetics—and they were liberally availed of by our predecessors—which will facilitate a dishonestly-minded Administration in taxing the citizen unawares or which will delude him with the belief that nothing is being taken from him while all the time his future, his future earnings, his toil and his labour are being mortgaged to sustain a factitious prosperity engendered by uninhibited spending.

It is because such measures were resorted to cover the three years 1949-51 that we are taxing the people to-day to pay for Deputy Dillon's day-old chicks.

But using such anaesthetics does not change the final result except to render the service more costly to the taxpayer, who pays not only the original cost of it, but in interest on the borrowed money pays for the anaesthetic as well. And the anaesthetic often costs as much and sometimes even more than the actual service.

Therefore if a Government is concerned with the interest of the taxpayer, and places this interest above considerations of Party, it will meet the cost of the public services as they arise; it will not put off until next year or many subsequent years the payments which should be made in this.

That is why the suggestion that the Government this year should deliberately budget for a deficit which was made by the Irish Trade Union Congress in its statement of the 22nd April, is to be deplored. It is truly regrettable that a body professing to speak for trade unionists should seek to condone a practice which, while it would enable us in this Government to follow the practice of our predecessors and evade our immediate responsibilities to the nation, would impose much heavier burdens on the workers and wage earners in the end.

It would be well for the politicians who seek to use these trade union organisations for their own ends to realise that the workers are not so simple as to be taken in by such proposals.

They know, and none know better, that borrowing money is a costly proceeding which should be avoided if possible; they know it is a bad thing for the State, just as it is for the individual to have resort to borrowing to meet current expenses and they know too that it is always the borrower who pays heavily in the end.

However, there is this to be said for the authors of the statement: They, like Deputy Larkin and other members of the Labour Party, recognised that a substantial increase in tax-revenue must be secured if the public services are to be maintained.

Even Deputy McGilligan, the Fine Gael ex-Minister for Finance, has been driven at last to admit that a greatly increased tax revenue must be secured by increases in the rates of taxation.

He knows, has known in fact since 1948, that the pace could not last, that borrowing to meet current expenditure could not continue and that eventually the financial problem would have to be faced up to, as we are facing up to it to-day.

His own speeches when he was Minister, and the departmental records prove that he had run down departmental stocks, he had appropriated the surplus account of the Post Office Savings Bank, he had raided the Widows and Orphans' Pensions Fund, but he knew on May 2nd, 1951, that he and his colleagues of the late Coalition were at the end of their tether.

That is why they requested the President to dissolve Dáil Eireann on May 7th, 1951, rather than face a debate on the Budget which they had introduced only five days previously on May 2nd.

They ran away from the crisis then. If instead of that they had faced up to it and brought in an honestly balanced Budget—a Budget in which due provision was made for the expenditure which they knew would arise during the year—it would have cost the taxpayer less and our task this year would be much easier.

If this Budget is more onerous in fresh impositions than otherwise it might have been, it is the Opposition and not the Government which must carry responsibility.

However, be that as it may, the fact remains that when the Budget for the current year was being prepared, it must have been clear to all sections of the Dáil that, as the Irish Trades Union Congress has admitted: "Certainly a most difficult problem existed in relation to the prospective gap between estimated expenditure and revenue."

It is not, therefore, the need for increased taxation to close the gap which the Irish Trade Union Congress questions, but the form the taxation takes.

Perhaps in discussing that issue we should remind ourselves that the primary purpose for which taxation is imposed is to raise revenue.

It is not imposed, as Deputy Corish seemed to suggest in his speech on the General Resolution, to prevent people from wearing mink coats or to put Chrysler cars off the road.

We may not like mink coats or their wearers, nor Chrysler cars and their owners, but it would be unjust to tax them merely to gratify a social spleen.

It is true, of course, that an alteration in an existing tax or the imposition of a new tax does induce social reactions, but these are not always what may have been anticipated.

Take for instance Deputy McGilligan's dance tax. Dances were first taxed in the Budget of 1932, in which the entertainments duty was extended to cover all forms of entertainments including dances for which an admission fee was charged.

When it was proposed to extend duty to dances, Deputy McGilligan's gorge rose like a fiery balloon and like red lava from his mouth there came a frothy torrent of invective against those who dared to tax the sacred rhythm of the dance.

Deputy McGilligan's dislike of the tax on dancing was shared in all quarters of the House, so that when the present Minister for External Affairs in his then capacity as Minister for Finance repealed it in 1946, its repeal was generally welcomed except by two peculiar people; Deputies Dillon and Cafferky opposed it: the first because in the words of a once popular dance tune he was "in the mood"; and the second because he believed that any person who paid more than 2/- for admission should be described by an unmentionable name. The reference, Sir, is column 1694, Volume 101 of the Official Debates of the 12th June, 1946.

However, the important point in this connection is that when one of them had the hardihood to challenge a division on the section repealing the tax the two Deputies could not get even three others to support them, and the repeal was carried with the virtually unanimous approval of the House; and I may say that, in the face of the facts, it could scarcely have been otherwise, for as the then Minister for Finance stated at column 2355, Volume 100 of the Official Debates of 8th May, 1946, in regard to this tax and on his reasons for repealing it:

"There is one duty which has been operative for some years which, as well as being difficult to collect and costly to administer, is a cause of irritation and a source of dishonest practices—the entertainments duty on ceilithe and dances. 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."

Deputy Corish is also reported on this matter at column 102, Volume 101, of the Official Debates of 15th May, 1946. He had his own somewhat peculiar approach to the problem and that approach he partly described as follows:—

"Another concession which should appeal to the younger folk in the country is the abolition of the dance tax in its entirety. I am for and against"—

Mr. Facing-both-ways—

"the abolition of this tax and I think my argument is very reasonable. There are in this country, more so than in any other country in Europe a number of societies, religious, semi-religious, and charitable, who run dances frequently for no purpose except to raise funds for the benefit of the community and for such things as Catholic action, boy scouts, etc. Dances are also frequently promoted by sports clubs and football clubs. I am in thorough agreement with the abolition of the tax so far as these people are concerned because if the Minister and his officials knew what it cost to run a dance at the present day they would certainly realise that a whole lot of money cannot be made for these societies if a tax is levied."

With that, of course, every one of us will agree. They were very sound reasons and it was a very good speech. So, with the general acquiescence of the Dáil, this tax. so difficult to collect, so inequitable in its incidence, so anti-social in many of its consequences, was repealed in 1946.

Then in 1949 came Deputy McGilligan to reimpose it. In that year, in which he claimed to have a substantial surplus, in which he not only reduced the standard rate of income-tax but the rate of corporation profits tax on foreign companies—he did not do anything so far as that particular tax was concerned for native undertakings— granted a reduction, which was not passed on to the consumers, in the customs duty on Commonwealth tobaccos; reduced the customs duty on foreign wines, on foreign newsreels, and on diesel oil for steamrollers, Deputy McGilligan reimposed the entertainments duty on dances. We may very well ask ourselves why, and marvel, too, at Deputy McGilligan's explanation. The reference is column 477, Volume 115, of the Official Debates of 4th May, 1949:—

"I see no reason why this form of entertainment should escape its contribution to the public revenue."

Deputy McGilligan, in 1949, saw no reason why dancing should not be taxed but, in fact, the boot was on the other foot. The onus surely lay on the Minister for Finance of the day to show why it should be taxed. Is there anything immoral in dancing? Is there anything more immoral in dancing than in, say, playing cards? Yet a person may pay 10/- to go to a bridge drive. He can play contract for any stakes he likes, even for £1 a point if his friends agree, and the bridge drive at which this can take place can be held for any cause whatsoever, even, say, to advance Shintoism in Scotland or the Isle of Man. Yet, under Deputy McGilligan's dispensation as it stands to-day, this entertainment will not be taxed. But let him try, under the Coalition code, to run a dance for a local football club or hurling club, a Labour club, or a Fianna Fáil cumann or a Fine Gael branch, and at once he is in trouble.

Dancing, as I pointed out in the Budget speech, is the only form of entertainment in respect of which duty is levied on payments by those taking part in the entertainment as distinct from mere spectators. The whole business is riddled with absurd anomalies. For instance, if a person goes to a ballroom not to dance but to watch the dancing, he is taxed. On the other hand, if he goes to a theatre to watch dancing on the stage he is not taxed. He cannot watch his neighbours, he cannot watch even his own children dancing on a ballroom floor without being taxed, but he can watch foreigners dancing all night in a theatre and not be taxed. He cannot dance with his wife or his fiancée in a public hall unless he pays entertainments duty; but he can, if he likes, enter for an all-in wrestling competition and in this, if he is able, he can gouge his opponent's eyes out, break his jaw, knock him unconscious and invite every sadist in the city to gloat over the spectacle—all this he can do free of tax.

Deputy McGilligan, when Minister for Finance in 1949, deliberately induced the Oireachtas to legislate to create that absurd position. He even carried the absurdity further, because in Section 13 of his Act of 1949 he provided that if you attended a public dance in a place not situated in, or within three miles of, a town with a population of 500 you could, if the good Lord spared you, dance till Doomsday free of tax. Thus, if you built a hall in an appropriate position three miles and one yard from the boundary of the City of Dublin your dances would be free of tax, even if your admission fee were £5 a head; while if your dance hall happened to be in a working-class district in Dublin and you were charging even 1/- for admission, your patrons would be taxed.

The fact of the matter is that Deputy McGilligan's legislation in 1949 was class legislation with a vengeance. Under it, provided the necessary conditions and formalities were complied with, dances could be run in country mansions and would be free of tax no matter how high the price of the ticket, but a struggling football club or literary society could not run a dance free of tax in a parish hall in the village, if the population of the village at the last census were returned at 501 persons, or more. Is there really any justification for singling out this form of entertainment in the way it has been singled out, and was singled out by Deputy McGilligan and his colleagues in the Coalition Government?

Furthermore, as was to be expected, experience has proved that this provision for which Deputy McGilligan was responsible cannot be equitably or even uniformally administered as between one centre of population or another. The exemption from the dance tax, as this tax is popularly named, is related to a town with a population not exceeding 500 persons. But in the whole country there is not a village or town with a fixed statutory boundary that has so small a population. In these circumstances, therefore, the officers of the Revenue Commissioners who have to administer the law are at the mercy of the census-taker. So are those who run dances and who are responsible, under heavy penalties, for the due collection of the tax. Thus we may have the experience—in fact we have had the experience—of the returned populations in those small towns moving up and down, according as their boundaries change one way or the other or become delimited one way or the other at the taking of the census in the bona fide judgment of the person who is responsible for the taking of a census in a particular area. Could there be anything more inconvenient for the taxpayer than that?

He is quite uncertain at certain periods whether or not he is responsible for paying tax. How could he ever know, therefore, how he stood in regard to his liability under Deputy McGilligan's code unless, of course, and this is what has been happening, he built his dance hall in a remote and lonely place which was more than three miles from anywhere. In fact, that is what has been occurring under the law as it stood since 1949. Large public dance halls are being erected in these lonely places. The public who like dancing, the adolescent as well as the adult, are being attracted to these dance halls from the cities and towns because, being free of tax, the proprietors of these halls can give their patrons better value in the matter of popular bands and longer hours of dancing. Therefore, these halls are increasing their business. Frankly, I do not think, speaking from a sociological point of view, that that is a desirable development.

I do not take an unduly narrow or puritanical view in this matter, nor would I suggest for a moment that the great majority of people who attend dances whether they are held in the town or the country are not sober or well-behaved.

However, we all know that there are some who are not and that the toughs and the drunks are more likely to be difficult to deal with and to control when the dances which they afflict are run outside the urban limits. We know too that this type of person is a menace to himself and to others when he is on the road behind a steering wheel of a car in the early hours of the morning. If anything happened to him some people might say: "The devil mend him," but what about the innocent users of the road to whom he is a menace, and a menace which is growing under Section 13 of Deputy McGilligan's Finance Act, 1949.

Does the Minister now suggest that the local authorities are licensing dance halls that are a growing menace in the country?

I have not said anything of the sort. What I said was that Deputy McGilligan's Section 13 has fostered what is becoming a grave social evil in this country.

Does the Minister suggest that local authorities are licensing——

The dance halls have nothing to do with it. What is happening results from the fact that drunken men and women are driving——

The Minister is arguing here that there are badly conducted dance halls in this country, licensed by local authorities and under the observation of the police.

The Minister should be allowed make his speech without interruption.

I am getting under the Deputy's skin. What the Deputy is responsible for is now being brought home to him.

I am underlining some of the Minister's statements.

The Minister is merely explaining the bribe which his Party got. That was a barefaced bribe.

Deputy MacBride's Party got £500, and the Deputy went out afterwards and made a speech for it.

That is a barefaced lie. That is why he is trying to explain away his removal of the tax.

The Minister is entitled to make his statement without interruption, unless he gives way.

The encouragement which Deputy McGilligan gave to this sort of thing in 1949 has proven to be anti-social in its consequences and should be discontinued. Section 13 of Deputy McGilligan's Finance Act of that year is a striking example of what I had in mind when I said at the beginning of my speech that, while a tax might induce social reactions, these are not always what may have been anticipated. This ill-considered tax, we all know, was drafted as a sop to those who would have opposed the reimposition of the dance tax on the grounds that it was a tax on rural amenities. I suppose that those who were placated by it felt that it would brighten the life in the country. Instead, as I have already shown, it has been fostering a social evil.

So much for one tax which the Opposition have advocated with a sow-faced disapproval for a harmless and innocent pastime—a disapproval which ill-accords with the idolatry with which some of their members have worshipped the porter-barrel—throughout this debate. Apparently some members of the Opposition would prefer that the young should drink rather than dance. That, however, is not our view.

In replying on the General Resolution I took occasion to deal with the tax to which a somewhat extended reference has been made by the Trades Union Congress. I refer to the excess profits tax. This tax is an excellent example of the propaganda value of a name. It exemplifies how a questionable proposition can be put over provided it is called something which is likely to have a popular appeal. On first thoughts nothing would seem to be fairer in its incidence and easier in its application than a tax on excess profits. Yet experience has shown that this is not, in fact, the case. Excess profits tax has been shown to be so arbitrary in its application, so uncertain, so unfair as between one taxpayer and another, so easily and readily evaded that it is universally admitted to be a bad tax.

In this connection, might I repeat again what Dr. Dalton said about it when, as Chancellor of the Exchequer in a Socialist Government, he asked the Labour majority in the British Parliament to abolish it altogether in April, 1946? Stating in the House of Commons, early in October, 1945—the reference is to column 1897, Volume 414 of Hansard—his reasons for first reducing and ultimately abolishing the then existing excess profits tax, Deputy Dalton said——

There is no Deputy Dalton.

I beg the Deputy's pardon; I know he is meticulous about his facts. The Deputy is so meticulous about his facts that in 1948 he made a grave charge of corruption and then ran away from it.

This is the Second Reading of the Finance Bill.

I am sorry if I did say Deputy Dalton. I will say Dr. Dalton.

It is like the petty point that Deputy MacBride would raise.

He is not a Deputy of this House. Why not admit it?

For a long time you were not a Deputy either and you were very nearly not being one the last time.

Maybe so, but I am at the moment. Tell us where to laugh

The Minister for Finance on the Second Reading of the Finance Bill.

Dr. Dalton, M.P., Chancellor of the Exchequer, said in October, 1945:—

"Moreover, once the standard profit has been earned, this tax encourages extravagant and wasteful outlay, and even downright dishonesty, since if this expenditure were not incurred it would be the Treasury and not the owners of the business who would take the money. Under those conditions this tax works against incentive and against efficiency."

But Dr. Dalton said something even more significant when he finally abolished the tax in April, 1946, for then he expressed the hope:—

"that it will stimulate private enterprise to put its best foot forward and to go flat out on an expansionist course."

Now what does this expression of hope imply except that an excess profits tax discourages industrial development and therefore prevents the increase of opportunities for employment? These were the views expressed by Dr. Dalton in 1946. Since then the Labour Government of that day have become the British Opposition to-day, but their views on the character of this tax have not changed. Indeed, I think it may be said, they have become more emphatic.

Speaking on the British Finance Bill as recently as the 7th of last month, Mr. Callaghan, who was a member of the last British Labour Administration, said this:—

"I now come to the excess profits levy and the profits tax. The Chancellor of the Exchequer cannot be feeling too happy on this subject. He has been shot at from behind and we shall note with considerable amusement how he deals with the situation. Let our position be quite clear. The Trades Union Congress told the Chancellor of the Exchequer before he prepared his Budget that the proposed excess profits tax was a wasteful tax. They had derived that knowledge from their experience of the six years during which the tax had operated. My right hon. friend, the member for Bishop Auckland (Mr. Dalton), very soon educated the country on the shortcomings of any excess profits tax over a long period."

The reference again is to Hansard, Volume 498, column 2330. Mr. Callaghan went on to say this and I hope it will be noted:—

"That is no doubt why the Chancellor of the Exchequer is most anxious to disclaim any responsibility for a tax which is wasteful in its incidence, has bad effects upon industry and particularly on the younger industries, and which, in short, does nothing except multiply the number of bureaucrats—I think that is the right term—and puts all the accountants in the country on overtime. It achieves, at the expense of a great many man hours and by using a very blunt instrument, the result that can be achieved by increasing the profits tax or the income-tax. Why this tax should have been thrust upon us at the present time is beyond my comprehension."

Mark those words: "It achieves, at the expense of a great many man hours and by using a very blunt instrument, the result that can be achieved by increasing the profits or the income-tax."

We have chosen in this Budget the latter of the alternatives suggested by this former Labour Minister and we have chosen it for good reasons. But in the light of this strong condemnation of the excess profits tax both in its earlier form as in 1946, and as it has been reintroduced in Great Britain, is it not, to say the least of it, very strange that the Trades Union Congress should now have come out in advocacy of it? The truth, of course, is that in this instance the political propagandist overbore the economist who prepared the original draft of the statement. There is, however, a certain irony in the Trades Union Congress references to profits tax and one may wonder if these references were not intended to sting those members of the Labour Party who were Ministers in the Coalition. There were three of them in Deputy Costello's Government and, according to themselves, they dominated the Cabinet. Yet while they were in this position of great power they allowed Deputy McGilligan, when he was Minister for Finance in 1949, as I have already stated to the House, to reduce the corporation profits tax on foreign-owned companies carrying on business in this country even though they did not maintain a register of their shareholders here. These companies had their rate of corporation profits tax reduced, while Deputy McGilligan and his Labour colleagues were taxing the innocent pastimes of our young people in every city, town and village with a population of more than 500.

If a Fianna Fáil Government were to do such a thing as that the ex-Tánaiste would blow himself up like a gasometer and the Labour Party would have the crowds out in O'Connell Street screaming to them that Fianna Fáil were taxing the poor and relieving the rich, were taxing the Irish and relieving the foreigner. But let us not forget that is what Deputy Norton did when he was Tánaiste in 1949 and Deputy Dunne and Deputy Corish supported him. There was no talk then on the part of Deputy Dunne of carrying the battle into the streets, no rabble-rousing rhetoric from platforms in O'Connell Street, no window smashed in the principal thorough are of our city when this was being done by Deputy McGilligan—by Fine Gael— with the help and co-operation of the Labour Party. Clann na Poblachta and Clann na Talmhan. When that was being done, Deputy Corish, like Deputy Norton, was, as Deputy Dillon jeered: "as mute as mice."

The truth can be sacrificed every time.

But let me revert now to this question of profits tax and in that connection let me repeat what has already been stated on more than one occasion as to the effect which the changes in the income-tax, as proposed in the Finance Bill, will have on the general body of the taxpapers.

Here are the truly significant facts:—

Of the 188,500 individuals liable to income-tax for 1952-53, 170,500 will pay less tax than formerly. Only 18,000 will pay more. In other words, more than 90 per cent. of them will benefit from the 1952 Budget proposals.

Of the 151,500 Schedule E taxpayers —and as everybody knows, that is the Schedule under which remuneration in respect of employments is taxed— 145,000 will pay less than formerly. Only 6,500 will pay more. Over 95 per cent. of Schedule E taxpayers will be better off under the 1952 Budget than they were under any Coalition Budget.

Of the 135,000 unmarried taxpayers, over 123,000 will benefit. Less than 7,500 will pay more.

Of the 27,500 married taxpayers without children, over 22,500 will benefit. Less than 5,000 will pay more.

Of the 25,500 married taxpayers with children, almost 20,000 will benefit. About 5,500 will pay more.

Yet, notwithstanding the widespread reduction in the actual imposition on the taxpayer, we shall get this year an additional £910,000 from income-tax, mainly, as I said in my Budget speech, out of company profits.

We have in short done what the Labour Party in Great Britain are suggesting the British Chancellor should have done and imply would have done if it were not for other influences, taxed profits through the income-tax.

Doing this we have avoided the use of the excess profits tax or levy, as it is now called in Great Britain and have not been so foolish as to resort to a tax which even convinced and thorough going Socialists admit "is wasteful in its incidence, has bad effects upon industry and particularly on the younger industries and which, in short, does nothing except multiply the number of bureaucrats—I think that is the right term—and puts all the accountants in the country on overtime."

It has also been suggested by these Labour critics of the Budget that we should have secured more from surtax payers.

Well, with some slight mitigation due to the increase in earned income relief and in the reduced rate relief— which together, have resulted in reducing the income-tax burden upon over 90 per cent. of the income-tax payers— the surtax payer will pay his income-tax at the full standard increased rate.

But I wish to say a word on this question of surtax which may not be out of place.

Surtax as it is paid in this country is a tax where an increase in rate might quite easily result, not only in a reduction in tax yield, but a reduction in employment and in a reduction in investable resources.

A glance at the section in the report of the Revenue Commissioners will show that the number of really substantial surtax payers in this country is very small—is, in fact, I should say, judged by even the most modest standards, less than 700.

Most of these probably derive their income from business, investments or other property outside this country and beyond our control.

Many of them are not anchored here like a man who is in a job here or whose business and activities are confined to this country.

Some of them have come to live here, to spend their money here, to give employment here, to pay their tax here, because they like this country and like to be among our people.

For that pleasure, they pay not only their income-tax at the standard rate, but on top of that they pay also their surtax at the rates appropriate to their income, and these additional rates range from 5/- in the £ to 8/6 in the £, according to the sector of the income on which it falls.

Many of these people could quite readily decide to live elsewhere, could give employment, spend their income there, invest their savings there and pay their tax there.

In these circumstances, there is a limit beyond which it would be not only inequitable but positively imprudent to increase the surtax rate in order to get additional revenue.

Of course, if the purpose was to drive them out, then an excessive increase in surtax would be as good a weapon as any, by it they could be made to go and take their possessions and their incomes with them.

We will give them a bounty for living in this country.

There is no question of giving anybody a bounty. They come here to live without any bounty. The question is whether, like the man in the fable, you will do as Deputy Corish wants to do and then find yourself without anything in the end. As I was saying, it is quite easy to drive them out if you want to do so and the surtax weapon would be as good as any, and by it they could be made to go and take their possessions and their incomes with them. But I do not think that is quite the purpose the Trades Union Congress had in mind when they advocated an increase in the already very steep surtax rates. At least, if it were, they did not have the courage to say so. Let us now come to the question of estate duties in regard to which the Trades Union Congress say:—

"At present the maximum rate of estate duties, etc., is 53 per cent.; in Britain it is 80 per cent. The rates for the middle and higher ranges could well be raised considerably to provide more revenue for the Exchequer."

In that connection the following points have not been brought out by our critics and they are very significant and ought to be adverted to.

(i) the 80 per cent. mark in Great Britain to which the Trades Union Congress refer, is reached only when the estate is of the value of £1,000,000;

(ii) for estates up to £20,000, the rates in this country and in Great Britain are the same;

(iii) while the rates diverge from this point onwards, the divergence is gradual, being only 5 per cent. at the £50,000 mark and 9 per cent. at £100,000;

(iv) much of the difference in estate duty rates as between the two countries is offset by the fact that legacy duty and succession duty continue to be chargeable here, although these duties were terminated in Great Britain as from the 31st July, 1949.

But, as in the case of surtax, so too in the case of estate duties. We have to keep in mind that though large fortunes are extremely rare in this country, as compared with others, these fortunes are highly mobile.

So long as their owners are domiciled here, we can collect estate duty on them in due course. If their owners divest themselves of that domicile and assume another, we cannot. So common sense dictates that, taking the long financial view, our estate duty code should induce the owners of large estates to make their domicile here, rather than drive them elsewhere.

That is so-called prudence.

I am not saying that Deputy Hickey is not as good a citizen as the rest, but as Minister for Finance, I would prefer, from the point of view of the general public, to have the income-tax which is paid to the Exchequer on an income of £100,000 than any income-tax which Deputy Hickey pays. I think it would go a long way further to maintain and meet the cost of the social services and the public services than the tax which Deputy Hickey pays. I know Deputy Hickey wants to dwell on the fairy gold about which he dreams so much but we have to deal with hard cash and to deal with men who have hard cash.

I am irresponsible.

Of course, you are. That is precisely what I am saying.

Then I come to the last suggestion which the Trades Union Congress has made—a suggestion which it frankly recognises is absurd from a financial point of view, whatever demagogic appeal it may have. The Trades Union Congress want a purchase tax on luxuries, but then go on to admit that "the revenue from it might not be very substantial." Let us look at that suggestion as practical men who last year had to face an increase in the cost of administering this country of £3,600,000, of which almost £2,000,000 was in respect of the Civil Service. Let us examine the suggestion that I should bring in this tax, the advocates of which admit that the revenue from it might not be very substantial. Will somebody tell me why a Minister for Finance should introduce a new tax requiring new machinery to collect it, a tax which is readily subject to abuse and evasion, as a purchase tax is, unless he were reasonably certain to get a substantial revenue from it?

The job of a Minister for Finance, of the person who holds my office, when he imposes taxes, is to get money readily and with certainty. Experience has shown that a purchase tax cannot be readily and certainly collected but, on the other hand, can readily be, and certainly is, evaded. This applies even when it is imposed on the buying and selling of a widespread range of articles in general use. This is very much more the position when the tax is to be confined to some articles which are deemed by someone to be luxuries. How am I to define what is a luxury?

For instance, if I were to accept this proposal of the Trades Union Congress, how am I going to frame a definition of a luxury which would not be as full of loopholes as a sieve is? Is the make-up, for instance, of an actor or actress a luxury? If it is not a luxury, how are you going to distinguish between it and the make-up sold, say, to a lady on which, at any rate, luxury or no luxury, a tax of 100 per cent. is already levied? Is the motor-car which a commercial traveller uses for his business journey a luxury? If it is not, does it become a luxury when he takes his family out in it for a drive on Sunday? If it becomes a luxury on Sunday, and is not a luxury during the remainder of the week but is a necessary part of his commercial and business equipment, must we legislate to make him pay a luxury tax every Sunday? A luxury tax in our circumstances, apart altogether from the difficulty of definition, if one could devise a system under which it could be imposed and collected and would not be evaded, would have to fall mainly on imports, few of which can be described as luxuries and many of which are already subjected, as I have pointed out, to high rates of custom duties to afford protection to native manufacturers. So far as the luxury tax fell on home produced goods, it would be a direct threat to trade and industry. Whatever its incidence, it would raise the price level, curtail demand and inevitably react on profits and, therefore, on employment.

These are the proposals which have been put forward by a body which has had the courage and the candour to admit that there is a substantial gap between revenue and expenditure to be bridged this year, and that our task is a difficult one. I have examined each and every one of them and not one of them, from the point of view of the Minister for Finance and the taxpayer, offers any advantage whatever over the measures which are proposed in the Finance Bill. These measures are those which are best suited to our needs and to our circumstances. Nobody will deny that they are going to be difficult to accept but there is no way out. We have been borrowing and borrowing for the last three years. We have doubled the national debt. We have more than doubled the amount which we must provide in this Budget for sinking fund and interest, the amount which we must raise under various heads for sinking fund and interest charged to the Supply Services and sinking fund and interest charged to the Central Fund. It has risen from £4,000,000 to £9,000,000 over the last three years. It is quite clear that we could not go on evading our responsibilities in this way and failing to meet our obligations honestly as they arise, continuing always to resort to borrowing. It has got to come to an end some time. Were this the last thing that Fianna Fáil ever did, it is going to come to an end this year.

What is coming to an end?

A Deputy

Fianna Fáil.

I am perfectly certain that if Deputy Costello were sitting over here, if by any misfortune, by any punishing stroke of Providence, Deputy Costello were put here, there is not a single measure, a single tax, imposed in this Finance Bill, he would repeal.

I would repeal every one of them if I were over there.

He would remove £10,000,000 in ten minutes.

As Deputy McGilligan, in a burst of candour, speaking this day fortnight said he had been told——

Would the Minister give the reference, please? If the Minister purports to quote what the Deputy said, he must give the reference.

I am not quoting what the Deputy said: I am paraphrasing his words. They are on the record.

Would the Minister give the reference?

He said he was warned—that he had been given advice, which he said was impeccable, that he would require many more millions than he budgeted for last year. He said in my hearing "seven millions". I looked up the record and found that the "seven" had been altered to "several". I took it down as "seven" as I was struck by the figure, since £6.68 million was the deficit on last year's Budget.

Is the Minister suggesting that Deputy McGilligan altered the record?

I heard him say "seven" and now it is "several". You may have altered it, or someone else. I do not know. What I know is that I heard him say "seven" and it now appears as "several". Whether it is "seven" or "several", it is a confession that Deputy McGilligan was advised before he brought in his Budget on the 2nd May, 1951, that he would require additional taxation to the tune of seven or several million pounds—Deputy Costello can take it one way or the other—and he went on to say: "I was told it would be necessary"——

On a point of order. In a matter that the Minister stresses so vitally, would the Minister quote the column in the debates so that we may refer to it?

The Deputy can refer to my speech concluding the debate and he will see it there.

On a point of order——

I am not giving way when there is no point of order.

There is nothing in the Minister's statement here that would direct us to the paragraph in his speech when concluding the debate, where the alleged statement by Deputy McGilligan is. I submit that it is due to the House that if the Minister is referring to a matter which he considers of serious importance here——

That is not a point of order.

The Chair having ruled, will the Deputy be good enough to sit down?

As that is the ruling, I sit down.

Now that that point has been disposed of——

That is the insincerity, the futility. The Minister is trying to deceive.

There is no good in the Deputy trying to create a smokescreen.

No. I am trying to wipe away a deception.

I am coming to the real point—this is what the Deputy is anxious to evade—which is that Deputy McGilligan admitted in the course of the debate on the General Resolution that he was advised when he began to pursue this question of the seven—or several—millions deficit further, that it would be necessary to put an increased tax on beer, spirits, tobacco——

That he was advised?

——and that rather than do that he came into this House and presented the Budget—which was a false Budget—a Budget which Deputy Lehane, who voted against the Budget Resolution on last Thursday week, declared to be a dishonest Budget—and that rather than face the music on that dishonest Budget brought in on the 2nd May, 1951, Deputy Costello, then Taoiseach, fled to Árus an Uachtaráin and asked for and secured the dissolution of the Dáil on 7th May, 1951. That is what is behind the position which we are in now.

What are you going to do?

We are doing the honest thing; we are doing what the gentlemén opposite failed to do, we are doing our duty to our country and by the taxpayer.

May I ask a question before the Minister sits down? The Minister spent about 35 minutes in his justification of the abolition of the dance tax, but did not spend two seconds on his justification of the abolition of the food subsidies. We wonder why.

May I put this point in answer to the question? I was keeping strictly within the rules of order. There is nothing in the Finance Bill about food subsidies.

In the rather heated atmosphere which accompanied the speech of the Minister for Finance and the turmoil which surrounded him, I found it difficult to hear occasionally what he was saying. I am speaking subject to correction but I understand, a Leas-Cheann Chomhairle, that he stated that if I were over there in charge of an Administration faced with the problems that he alleges he has to face, I would have brought in the very self-same Budget and the same provisions as there are here.

That is not what I said. I will tell the Deputy what I did say. I said that if by any stroke of ill-fortune the Deputy were to be translated from the position in which he is now to these benches there is not one single tax, not one single imposition in this Finance Bill, that the Deputy would repeal. That is what I said.

Taking the alleged correction, that if by any stroke of misfortune or ill-fortune I were translated to clear up the appalling mess the Minister has created and found myself faced with what he is asking the country to do, I would resign the next minute, rather than proceed with any single provision in the present Budget. I would be no party to any provision in this Budget. I think these taxes are cruel and unjust and that they will prove so. I believe that I have proved it and that I will do so again to-day. I want to emphasise that I would not be a party to any single one of the provisions brought in here by the Minister which would have the effect of increasing the cost of living on the people, increasing the cost of bread, butter, tea and sugar——

There is nothing in this Bill about that.

——instead of the standard of living we gave them, as a result of what the Minister calls the "factitious prosperity engendered by uninhibited spending".

I am rising to a point of order. I have already pointed out, in response to a question by Deputy Corish, that there is nothing in the Finance Bill in relation to subsidies.

Sir, on a point of order, does the Minister suggest to you that in the discussion of this Finance Bill the subsidies, as well as the general economic position in the country, are not open for discussion?

Quite obviously the Minister is afraid of any such possibility. I want to point out that I never mentioned subsidies.

Again on a point of order, which I think is essential if this debate is not to be interrupted by the Minister getting up to say we are not allowed to discuss the withdrawal of the subsidies, can I have a ruling on that?

These things are relevant in so far as this Finance Bill is concerned, on the Second Reading.

Now that the Minister has further interrupted the course of this discussion, wholly unnecessarily, I am anxious to repeat, in spite of his alleged point of order, that I would not be a party in any Administration—either as head of it or as a member of it—to the unjust, cruel and entirely unnecessary provisions of the Budget which he has brought in and which are to be given legal effect to in this Finance Bill. I would not stay one second in office, nor would I be associated with anybody in office who would be responsible for a Budget or a Finance Bill of this kind.

I levied the charge here, in the speech I made the day after the Budget was introduced, that the taxes being imposed by the Minister were cruel and unjust because they were unnecessary. I gave reasoned arguments, facts and figures in support of the charge I then made. I alleged, and I proved the truth of my allegation, that it was the aim of the Budget proposals to create a surplus and to conceal that surplus from the people. In doing that the Government created wholly unnecessary hardship and suffering. To-day I repeat that allegation but before I proceed to give further arguments and replies to the various points that were made by the Ministers in the course of the Budget debate in refutation of the points made by me I want to make this comment: the tone of the Minister's utterances right throughout the length and breadth of his speech to-day give added proof, if proof were needed, of the charge that we made and that we now repeat. The Minister's utterances give ground for the conviction that we hold that the dominant purpose of the provisions of his Budget and of this financial Bill is an endeavour to discredit his predecessors in the last Government.

The Minister made use of certain phrases: "dishonest administration;""a false Budget" and in particular the phrase to which I have already referred, "a factitious prosperity engendered by uninhibited spending" and still other phrases suggestive of fraudulent and dishonest conduct on my part and on the part of my colleagues, particularly Deputy McGilligan. Out of his foetid imagination he drew the allegation that I went to the Park and asked the Uachtaráin for a dissolution of the Dáil because I was afraid to face the criticism of the Budget proposals introduced by my colleague the Minister for Finance in my Administration, Deputy McGilligan. Nobody will believe these charges, coming from the foul imagination of the present Minister for Finance against my colleague, Deputy McGilligan.

Perhaps the Deputy will tell us why he did ask for a dissolution.

We were not afraid to face criticism. What had we to fear? We introduced a Budget which was passed by the representatives of the people here. We then went to the people and submitted our proposals to them but not because we were afraid of any criticism, any investigation or anything of that kind. The Budget had nothing to do with the dissolution. It is a well-known fact that we went to the people last year because we refused to increase the price of essential commodities to the people. We were pressed by certain sections to increase the price of milk which would in effect increase the price of butter. We refused to do that and, rather than accept dictation from a certain section of the people and from certain Deputies here, I went to the park and asked the Uachtaráin for a dissolution of the Dáil. What happened then?

In order to try to secure the votes of some of the farming community the Minister and his colleagues offered a bribe at the expense of the taxpayers. They carried out that promise last year when they increased the subsidy by £600,000 at a time when they were openly stating we were on the verge of ruin. The Minister increased the subsidy and at the same time the price of butter in repayment for the votes he and his colleagues had sought in the general election, and he paid that bribe at the expense of the taxpayers.

Having put that additional burden of £600,000 on the people and having gone round the country shouting that there was a crisis and nothing but financial ruin facing the country, he now has the hardihood to come in here and advance arguments for the removal of the subsidies on bread and butter and all the other essential commodities to which he referred. I want clearly now and specifically to repeat the charges that I made on the Budget proposals. The Budget had for its aim the creation of a surplus. That aim is now further implemented in the Minister's proposals enshrined in the Finance Bill before us to-day. Corroborative proof of our complaint that that is the real aim of the Budget and of this Finance Bill is to be found in the items I enumerated in the course of my speech on the Budget on 3rd April last.

The Minister comes in here to-day and tries to have it both ways. He works himself up into his old fury about this so-called factitious prosperity engendered by uninhibited spending and the frightful consequences of borrowing. The Minister cannot have it both ways. From late summer of last year until the early autumn we were warned of an impending crisis. Then in the autumn we had the discussion on this famous or, shall I say, infamous White Paper which emanated from the Minister's own Department. In the inter-Party Government we had the dual Budget system. We initiated that system and the result of it was that the people reaped greater benefits and enjoyed a better standard of living generally, a standard that is now being threatened by the Minister's present proposals. That dual budgetary system was attacked in every place in which it could be attacked and in every speech made by the Minister and his colleagues. Last July we were told by the Minister that we as a Government had an unwieldy capital programme. We were told not so very long ago by the Minister himself when he announced his intention of floating a loan that we had been putting the country into pawn.

Having been told that our capital programme was too big, that it was improper for us to borrow and that we had borrowed both improperly and improvidently, that the country was on a spending spree, that there was a rake's progress which was continuing, and other eloquent phrases of that kind, what do we now find? The Minister has a capital programme of £35,000,000, a programme as great if not greater than the capital programme we had. How will it be financed? The Minister cannot have it both ways. He knows very well he cannot finance that capital programme of £35,000,000 by borrowing and that is why he waxes so eloquently in his invective against borrowing. He knows he cannot get the money necessary by borrowing and so an endeavour is now being made to create a surplus, a concealed surplus, in order to finance that capital expenditure of £35,000,000.

But the Minister cannot have it both ways. The Minister said that the inter-Party Government had an unwieldy capital programme. The Minister's programme is as big if not bigger than ours. He said in the course of his speech that he would finance that programme in the same way as we financed our programme. He cannot do it by borrowing because, if he borrows, he will have to eat his own words and all the fine principles he enunciated in proof of his financial rectitude over the last 12 months. If he continues our system, then he is putting the country further into pawn and the rake's progress will continue; the spending spree will continue. He has inveighed against borrowing in eloquent terms. If he does now what he alleged was the proper thing to do when he was in opposition, and which he has expressly or implicitly repeated to-day, he will have to finance his capital programme by means of taxation and by doing what we allege he is doing through the medium of his Budget—creating a surplus and concealing it from the people. He has not the courage to say to the people: "We believe that is the proper method and financial rectitude requires such a method of financing the capital programme out of revenue and not carrying out any more capital projects than the amount of revenue produced each year from taxation warrants or permits."

I have no doubt, and I proceed now to prove again, that the Minister's aim is to create a surplus on current account this year. On the night before I made my speech, following on the all-day discussion on the Budget proposals, I took six items which had then appeared as justifying the charge I made that the Minister was budgeting for a surplus. I gave particulars of these six items, and not merely did these items disclose that that charge was valid, but they disclosed that the charge was implicit in the charge that taxation was being imposed in circumstances of extreme cruelty, and that it was wholly unnecessary in this Budget. The Minister and his colleagues endeavoured in the course of the Budget debate to deal with the various arguments which I put forward. I will have occasion, in the course of the remarks I have to make, to deal with most of those purported answers, and with the allegation I made and the particulars that I gave. In particular, I will have to deal with the Minister's own attempt to answer some of the charges. I emphasise the word "some" because it is of great significance that the Minister did not attempt even to answer the arguments and the facts that I had put forward. In the course of his speech, in replying on the Budget debate, he contented himself merely, by verbal gymnastics, to endeavour to get round or circumvent the rules of parliamentary propriety and by suggestions that there was trickery involved in my charges, that there was dishonesty in those charges, concealment, misrepresentation and failure to disclose matters of that kind. That is what passed for argument, but invective and personal abuse are no answer to reasoned argument or to a case based upon reason.

The Minister ended his speech on the Budget debate by amusing himself with these verbal gymnastics, but I am convinced that he left the people of the country perfectly satisfied, or at any rate the vast majority of the people perfectly satisfied, that I had established the case which I made on the morning of the 3rd of April this year. Neither the Taoiseach, nor any of the Ministers, nor the Minister for Finance has, in trying to refute the charges I made, shown that any of the particulars I gave were in any way without foundation.

The Minister, in the course of his reply on that date, made great play with the Trades Union Congress document. At columns 940-1 he savours his words and his invective as if he were savouring some old wine. He repeated the words in the Trades Union Congress document as if there was some allegation against me or some disproof of what I had said. He utilises a phrase in the Trades Union Congress document to pour scorn on me. I listened with some amusement to-day to the Minister pouring invective and scorn on every single item in that document issued by the Trades Union Congress on which he was forced to rely when replying to some of the arguments I had put forward. Every one of the suggestions put forward in that document was refuted to-day by the Minister with scorn and invective. The only thing that was left to him was the phrase that he used at such great length at the close of the debate on the Budget proposals on the 1st May last. The quotation that he relied on is to be found at column 941 of the debate of the 1st May, 1952. I will re-quote it:—

"Firstly, it is necessary to discover whether or not the figure of £15,000,000 constitutes the gap in the current Budget. We do not doubt for a moment, despite suggestions to the contrary, that the various Estimates both of revenue and expenditure were made as accurately as forecasting of this nature would allow."

That is the statement which the Minister relied on to refute the suggestions which I made and now remake, that there are embodied in this Bill proposals which are going to extract from the people's pockets, at great expense to their lives, their fortunes and in unemployment and in their future, a sum of between £9,000,000 and £10,000,000 at a very conservative estimate. It is very wholesome that bodies, like the Trades Union Congress, should issue documents of the kind to which I have referred. We appreciate the quality of the contributions which they make from time to time. We regard that as a very sane and a very healthy manifestation of public life in this country.

The Minister says that he has refuted all the suggestions made. I am going to show, first of all, that the statement that was made by the Minister, and that was relied on by him, does not mean what he said it meant, and, secondly, that, even if it did, it is of little validity. Nobody doubts what the Trades Union Congress said—the author of that document did not doubt it—that the estimating of both revenue and expenditure is made "as accurately as forecasting of this nature would allow." Everybody knows that the estimating and forecasting of expenditure is made as accurately as forecasting of that kind will allow. It was on that basis, and on that estimation, that every figure that is given was put forward in this House. Every official advising the Minister, and every Department that lent its aid to the formulation of the Budget or to the Estimates on which the Budget is based, were doing their best honestly and competently, but were doing it "as honestly and as accurately as forecasting of this nature would allow." But forecasting of this nature does not possess the accuracy which the Minister and his colleagues claim for it.

I gave the experience of Deputy McGilligan and of my colleagues in our time in Government, that forecasting of this nature always showed that it was conservative—an overestimate. In any event, even if the Minister could read into that phrase in that document that it meant what he said it meant; and that it was a repudiation of the arguments which I had put forward, my answer is that just as in the case of an opinion given by counsel, however eminent as a member of the Bar, it is worthless unless it gives the reasons on which it is based. It is on the reasons on which the opinion is based that weight is to be attached to it and on which the validity of the opinion is to be judged. No reasons are given that this statement means what the Minister alleges it means, and since no reasons are given I am entitled to say, without in any way endeavouring to flatter either Deputy McGilligan or myself, that both of us have far more experience than the author or authors of that document as to what goes on in connection with the preparation of Estimates and the formulation of a Budget such as we have here before us. I think there is nobody in this House at present who has had more experience than Deputy McGilligan has on matters of that kind. I, personally, had, as Head of the Government for three years, the closest possible contact with him as regards the formulation of financial policy and the examination of the Estimates. Even before those three years, in various and different capacities, I had considerable experience in the last 30 years in connection with matters of that kind. I think we are entitled to say, therefore, that Deputy McGilligan and I, at least, have intimate and personal knowledge of what goes on and, to that extent, our views are worth rather more than those of a person who has no experience or intimate knowledge of the kind that we have. But we all know what happens in a general sort of way and those who have had experience of administration in government or of being connected with Governments know what actually happens in the preparation of these Estimates.

Although the endeavour was made to get an alibi for the Minister and his colleagues by saying that in making the charges we made and in putting forward the particulars we gave, we were in some way making reflections on the competence of the Revenue Commissioners or the officials of the Department of Finance or any other Department of State, I want to repeat that there is no intention whatever of doing anything of the sort.

Deputy McGilligan in his speech on the Budget proposals on 29th April, 1952, Volume 131, No. 4, columns 551-552, gave first of all his appreciation of the competence, honesty and integrity of the Revenue Commissioners and of their experience and of the value of the advice that they gave to him. At the end of his remarks, at column 552, he said:—

"On many occasions I have had discussions with the Revenue Commissioners on these matters. It was explained to me that the statistical information did not allow any better or closer estimate than was given to me."

He had already shown that in the course of a number of years the Revenue Commissioners' estimate in connection with the buoyancy of the revenue or the amount that would be received from taxation had been very much out. They were very conservative in the estimate and a very good thing it was. Nevertheless, they explained to Deputy McGilligan, as he stated in the passage I have read, that the statistical information did not allow any better or closer estimate than was given to him.

Each year that I had any responsibility for the finances of this country, every single item of every Estimate came before me as the Head of the Government and as a member of the Estimates Sub-Committee and was examined in my room with a fine comb. Everybody was put through his paces. Every Minister, not merely his officials, had to come before us and justify his figures. Notwithstanding that, notwithstanding every effort we made to keep down the Estimates, to get them to give closer approximations, in every single year that we were there there was at least £2,000,000 saved on either economies or overestimation.

This is not so.

The figures are there.

I will proceed to show it and I will proceed to show that there was £2,000,000 saved in the course of the year 1951, in the course of the remarks I will make. The Minister will hear what I have to say later on and I will give figures. He may adopt personal invective and abuse in his effort to try to answer the arguments that I have made—thereby showing the poverty of the material that he has to hand—and to answer the allegations on which we found the case that we make that this is a false Budget unnecessarily imposing unjust taxation on the people.

I want to refer to the fact that every year, so far as my recollection serves, towards the close of the financial year, there goes forth from the Department of Finance under the hand and seal— certainly under the hand or with the authority—of the Minister for Finance, an appeal, if not a direction and order, to every Minister to save during the course of the then ensuing few months every single penny that can be saved. Accordingly, economies are effected in that way.

Now let me deal very quickly with the statement made by the Tánaiste, the Minister for Industry and Commerce. Speaking on the 3rd April, after I had spoken, the Tánaiste, the Minister for Industry and Commerce, purported to deal with my allegations and he said:—

"Deputy Costello's calculations were based upon such obvious fallacies that, I am sure, most Deputies saw them at once, and that it is not necessary to expose them further."

That was his contribution at the beginning of his speech. If it was not necessary to deal with them any further than that and if they could be just tossed aside in that way, the Taoiseach himself had to be brought in and practically every single other Minister in the Government had to be brought in and finally the Minister himself had to try to answer them and each and every one of them and all of them together failed to answer the allegations and the proofs that I put forward in establishing them.

Further on, at column 1290, the Tánaiste said:—

"I will admit that there is a possibility that the Estimate may be slightly wrong."

The £10,000,000 that I have stated here, which is an overestimate for which unnecessary taxation is being imposed, is only 2 per cent. of the entire Estimate. I think that could be well held to be within the definition or description of the Minister for Industry and Commerce as an Estimate being slightly wrong. Then he goes on to say:—

"Our experience suggests that the margin for error is not much more than 5 per cent. one way or the other."

Over all the services.

In the course of the debate, when one of the speakers on this side of the House, I believe, was speaking, the Minister interrupted, as he has tried to interrupt me here just now, to suggest that that phrase of the Tánaiste meant that it was over all the Estimates. The Minister for Industry and Commerce is one of the most astute debaters in this House, one of the most experienced. Why did not he say so? Let it be so. I will give the Minister a present of it. Let it be 5 per cent. over all, leaving aside "one way or the other." A 5 per cent. error on £94,871,623 would be about £5,000,000.

Let Deputy Mulcahy get out his sliding rule now.

Now the Minister says it must be one way or the other. Let us go back to our experience of what happens. In some respects, in some Estimates over the years, there was overspending; in others there was considerable underspending. As Deputy McGilligan said—certainly I know that that is the position—in certain Departments, although they had money to spend and wanted to spend it, they were not able to spend it, and there was that saving on overestimation and there were economies that would be effected during the course of the year because moneys could not be spent and were not spent for reasons over which perhaps the Minister in charge of the Department had no control or because of circumstances unexpectedly arising or other matters of that kind. That was the general principle. Let us come down and have a look at particular instances and see how those principles have worked out in the years with which we are dealing. The case is conclusively proved.

We gathered from the speech of the Minister for Finance when introducing the Budget that the Minister had intended to introduce an autumn Budget last year, but was frustrated in his endeavour to place that particular imposition upon the people by the exposures made by people from this side of the House, speakers who exposed the fallacies that underlay the scaremongering of the speeches of the Minister and his colleagues. At column 1134 of Volume 130 of the Official Debates of the 2nd April, 1952, the Minister said:—

"When the attention of the Dáil was directed to the seriousness of the situation, the existence of the problem was denied and Ministers were accused of scaremongering and of panic. These circumstances alone made it quite impossible either to float a loan ..."

I want to emphasise this because this is where the autumn Budget which we frustrated was to come.

"... or to raise the necessary finance by imposing taxation."

The first statement in that quotation is inaccurate, in any event—"the existence of the problem was denied." We forced the Minister's colleague in public here in this Dáil on the debate on the Supplies and Services Bill to accept the description I had given in Cork a few days previously that there was no crisis but that there was a problem. The Minister, in indulging in what he has accused us of, trickery and misrepresentation, must needs allege that we denied the existence of the problem, when we denied the existence of a crisis and taught him and his colleagues that there was no crisis but that there was a problem. As a result of our teachings, this country was saved by us from the impositions of an autumn Budget last year, in circumstances in which they would be entirely unjustified and in which any argument that would have been put forward would have been based upon an utterly false case.

To prepare the way for that, however, the Minister for Industry and Commerce had not let his colleagues down at that time. He had not made the great recantation which he made here in the House of agreeing that there was no crisis but that there was a problem. A White Paper was issued from the Department of Finance under the auspices of the Minister for Finance as a prelude to the autumn Budget that was to affict this country and Deputies are well aware—they have often been repeated—of the figures given at that time to justify the case being made that the country was facing a serious crisis by reason of the gap in our balance of trade.

I ask Deputies to remember that that document was prepared for the same Minister, under the auspices of the same Minister and by the same Department as prepared the proposals in his present Budget and the arguments by which he has sought to justify the cruel impositions he has placed on the people by the Budget. We were told at that time that there was a deficit and a gap in the balance of payments of something of the order of £70,000,000. In the course of speeches which I made here and elsewhere, I exposed the fallacy of that statement and the falsity of that figure, but it was not necessary for me to do because it was done by the Central Statistics Office. The latest figure produced—and I say the latest figure because a variety of figures have been produced, from £70,000,000 down to £62,000,000 and finally to £61.9 million; what the ultimate figure will be will be a matter of interest—up to to-day is the figure of £61.9 million—a difference of £8,000,000.

I would ask Deputies to appreciate that, when that White Paper was being published, the Minister and his advisers had, or ought to have had, accurately before them every single detail for a period of nine months of the year. There were only three months of the year to go at the time when that false figure—I apologise for the word "false"; I should say "inaccurate"— of £70,000,000 was given, a figure which was subsequently shown to be inaccurate by £8,000,000. In that document, which was prepared for an autumn Budget, there was an error of £8,000,000, or 13 per cent., an error of 13 per cent. in a calculation in a White Paper supposed to have the authority and cachet of the Minister for Finance and to bring conviction to the minds of the people that there was a crisis and something calling for very drastic action last October and November. There was an error of 13 per cent. and that—if I may use the expression used by the Trades Union Congress—is a measure of the accuracy with which forecasting of this nature can be done.

And that calculation was made on the most favourable assumptions.

As my colleague says, they made that error on the most favourable assumptions. They told the House that they had the full details to ensure accuracy as to nine months and they had only to estimate for three. Last February or early in March when the Book of Estimates was introduced purporting to estimate for the Public Services for the forthcoming financial year, they had perhaps 12 months to forecast. Is it to be assumed that they are to be better in their forecasting when they have 12 months to forecast, having made an error of 13 per cent. in a vital calculation at a time when an effort was being made to panic the people of this country, to show that there was a financial crisis?

Every time that Ministers, and particularly the Minister for Finance himself, have made prognostications with regard to matters of this kind, whether the balance of payments or the financial situation or any part of the financial situation, all these prognostications have been in the one direction. They have all been pessimistic and calculated to represent, or, as I say, to misrepresent, the situation as being worse than it subsequently proves to be. I give that as pretty cogent proof, as pretty sound support for the argument I have made for a saving of £2,000,000 on overestimation, because that is a conservative figure I have put forward. I believe it is too conservative but I am standing on it for safety because I should prefer to understate rather than overstate the case. £2,000,000 is only 2 per cent. The Revenue Commissioners told my colleague when he was Minister for Finance, as he quoted here, that they could not do any more accurate forecasting than they did and everybody accepted that as being honest and perfectly genuine from people who occupy a position of complete integrity and objectivity in connection with the duties they have to fulfil. A 2 per cent. allowance for overestimation and economies, because they bulk the two together, is a very small estimate indeed.

Let us see what they did with the Book of Estimates this year. When Deputies are considering and when the public are considering the truth of the allegations I make and which I repeat, that this Budget—whether it will achieve it or not, I do not know—aims at the creation of a surplus by imposing entirely unjust and unnecessary taxation, I want them to consider these matters in connection with this book. The Book of Estimates presented to the House by the Minister for Finance bears on its face the sum of £94,871,623 as being the estimated sum required for the services of the State during the financial year 1952-53. That figure of £94.8 million does not contain any provision for social security. It does not contain any provision for old age pensions nor does it contain any provision for extra children's allowances. It is a figure voted for capital services and Supply Services and has nothing to do with nor does it contain a single figure in reference to social security, children's allowances or old age pensions. That figure of £94.8 million contains the figure for capital services. If Deputies will look at the third page of that book they will find that the Estimate for capital services, "calculated on the same basis as in the 1951-52 Volume of Estimates", is £9,276,516. In order, therefore, to find out what are the real Supply Services for the forthcoming financial year you have got to deduct that figure for capital services, £9,276,516 from the £94,871,623 and you will get £85,595,107 or £85.59 million. That is the figure that is required for next year according to the Estimate in February last. £85.59 million is what the Minister and his advisers estimated would be required for Supply Services but into the Supply Services there was pushed this King Charles's head of the Minister's, our old friend, the fuel subsidy, £2.4 million of that fuel subsidy, I think, had to go in when we come to consider the amount of real capital services with which it has to be compared for the previous year. For 1952-53 the amount is £85.59 million.

Now let us take the figures for the previous year, the last year in which Deputy McGilligan was in office as Minister for Finance. If Deputies will look at Table I of the White Paper called "Tables in connection with the Financial Statement, 1952," it will be found that there were issued for the service of the previous year sums amounting to £90.4 million in all. That figure is the second figure on the last column, looking at Table I from the right. There is a significant footnote to it, footnote A, which says: "This includes £2,727,323 for arrears of fuel subsidy to the 31st March, 1951." I think I did in error state that the £85.59 million included the fuel subsidy. It does not because it was paid the previous year. That £90.4 million was spent in the last year of Deputy McGilligan's administration. It will be found at item 4 on the expenditure side of Table I that capital services were included in those issues of £90.4 million, capital services to the extent of £9.7 million, actually £9,753,499. You must deduct the capital services for the full amount of the issues to get the Supply Services, including the fuel subsidy. £9.7 million deducted from £90.4 million gives you £80.7 million. The fuel subsidies were paid in that year. They were obviously not ordinary Supply Services. You deduct £2.7 million from that last figure and arrive at a figure of £78.0 million, actually £78,000,000. That was the amount of money that was actually spent, according to these tables which I have in my hand, in respect of the last year of Deputy McGilligan's administration as against £85.59 million to be spent on the same services—precisely and concisely the same services comparable in every way. Deduct £78,000,000 from £85.59 and you get a figure of £7.59 million.

Where did that figure come from? Can the Minister or any of his officials justify such an enormous increase as that in the Supply Services from last year to this year—an increase of £7.59 million, a 10 per cent. rise? Comparing figures comparable with figures in the last year of Deputy McGilligan's régime, these figures are £7.5 million over the same or corresponding items for the last year of Deputy McGilligan's régime.

It is also significant to remember that last year every possible debt that could be thrown up was paid for by the present Minister in an effort to widen the gap or allege to widen the gap in the deficit he alleged to be in Deputy McGilligan's Budget. During the year just ended, the increase in the Civil Service remuneration was paid and the fuel subsidies were paid and a certain amount of capital expenditure disguised as current debts was also paid and the arrears were paid.

Does the Deputy want us to borrow from the Civil Service also?

The Minister will listen. Merely rising up to interrupt or using personal invective does not make any difference to me, I can assure him. The majority of the people are convinced of the truth of the allegations I made and they will be still more convinced at the end of my remarks. I will not permit the Minister to interrupt with these irrelevancies because irrelevancies they are. A rise of £7.59 million was a remarkable rise—a remarkable increase in the Book of Estimates for the year 1952-53 which I have in my hand. It was £7.59 million in excess of the corresponding expenditure in the previous Book of Estimates. What do we find in this Book of Estimates? The Minister spoke of trickery and misrepresentation with regard to the figures I gave but what do we find in this book?

If Deputies will look at the beginning of the book they will find a table headed "Statement showing the Net Audited Expenditure on Public Services for each year from 1943-44 to 1950-51, and the Estimated Net Expenditure in 1951-52 and 1952-53". I regret I have given the wrong reference. It is to the abstract I wish to refer. It is at page 11 of the book and not at the table I refer to. The net increase for this year's Supply Services over last year's Supply Services is alleged to be, misrepresented to be, £615,970 instead of £7.59 million.

Is that invective?

I am proceeding to show and have shown that it is misrepresentation and, of course, the reason for it is obvious. In that abstract the Minister purported to tell the people of the country that he was increasing the Supply Services for this year only by £615,970. I have demonstrated that he has increased them by £7.59 million. Of course the Minister was at extraordinary pains to conceal that remarkable rise. He introduced Supplementary Estimates instead of deducting them and he made a mistake again by overestimating. I want to emphasise this as a proof of what I am saying. He introduced Supplementary Estimates to the amount of £11.4 million. What did he spend? He spent only £7.59 million, yet we are told that the forecasting, the estimating by the officials of the Minister's Department is so accurate that I cannot criticise it or if I do that I am reflecting upon the competence of the officials. In a few months, at the end of the financial year, Supplementary Estimates were brought in to the extent of £11.4 million. Although they wanted to show that we were profligate and left debts behind us and spent money on everything whether it was proper or improper all they spent was £7.59 million— an error of 15 per cent. in the estimation. That is a high percentage at a time when one would think that the Minister for Finance would be able to assess very accurately what was wanted. That error was made at the close of the financial year when all the information was available.

I want to make another somewhat startling point: with six weeks only of the financial year to come, this Book of Estimates is £4,000,000 inaccurate. The estimate made for expenditure for 1950-51 was £94,255,653. That does not include certain Supplementary Estimates brought in after this book was published. It includes some of them but there were still some to come. £90.4 million was the actual expenditure, as appears in the table in connection with the Financial Statement of 1952, leaving a difference of £3.8 million. That is practically £4,000,000 and it comes to over £4,000,000 if one takes into account the Supplementary Estimates brought in subsequently. Of course the whole purpose of that proceeding was obvious. It was an attempt again to suggest that Deputy McGilligan was dishonest, that his colleagues were dishonest, that they were attempting to defraud the public and ran for cover to a general election. It was also an attempt to make the case that there was that big gap between expenditure and revenue which required and called for the cruellest possible imposition of taxes as a necessity. I referred to this matter also. Everybody knows in connection even with trading accounts that at the end of the financial year when the business accounts are being made up there is room and proper room for discretion as to what will be brought into course of payment during the year, what debts will be paid, what debts will be left over, what debts will be collected and what debts will be left for collection during the year. In the same way exactly or almost exactly with public finance, it is well known that the Minister for Finance can either anticipate or postpone expenditure and also determine the degree of receipts. I would like the Minister for Finance to tell the House how much money was held on the closing day of the financial year in this year in the various departments of the revenue which was not paid into the Exchequer. We have referred to £1.9 million or £2,000,000 which was to carry over. What became of that? What carry-over was allowed this year?

What carry-over did you get in 1948?

We did not get as much as that.

You do not know anything about it.

I know as much as the Minister does.

At any rate it is published. Let us have the present year.

Deputy Costello is in possession.

I have dealt in fair detail with the provision for overestimation. I think that the particulars I have already given justify the charge that there is at least £2,000,000 which should not be imposed this year. I have given more details now than I gave on the last occasion. I suggest that not merely will these charges be unanswered but that they are unanswerable. The people will resent that, those people who have to pay more for their bread, more for every essential commodity they consume, and even those people who have to pay taxes on what might be termed luxuries, although the Minister does not know what a luxury is—beer, tobacco, and all those things. They will resent having to pay an additional burden. That sum of £2,000,000 is there which should not be there and they will resent being asked to pay additional taxation to meet it.

Also in the course of the remarks I made during the discussion on the General Resolution of the Budget I referred to reserve stocks, and I want to deal with this matter very shortly. In the tables issued in connection with the Financial Statement, 1952, it is clearly set forth in item 3 of Table 1 that the provision for reserve stocks is £1.8 million. That figure is deducted in the expenditure item but there is also a separate figure in that column of expenditure, voted capital services, item 4. The Minister, in his speech introducing the Budget at column 1131, gave figures for reserve stocks £1.1 million, the figure I have given.

He admitted by the manner in which it was set out in his speech that it was an item appropriate to capital services. I presumed, when I was making my speech on the occasion of the discussion on the General Resolution, that it was proper policy to make the provision for reserve stocks in the circumstances that existed last year. I presumed that that policy would be continued. I know it has been continued. It is true that provision is made throughout the Estimates for the various Departments for those reserve stocks. Scattered throughout the Book of Estimates and included in the £94.8 million for public services for the financial year 1952-53 is some sum of money for reserve stocks. I presumed, as £1.8 million was a proper figure for reserve stocks last year and, in particular, as £1,000,000 was not capable of being spent because goods could not be got, that that proper and prudent policy would be continued and that the same figure would appear somewhere for reserve stocks in the Estimates for the various Departments this year. What was the ministerial reaction to that suggestion? Did we get any reasoned argument to refute my suggestion or to show that the reasoning behind it was unsound? We did not. With the table of the Financial Statement, 1952, in front of him, the Tánaiste said, according to Volume 130, column 1293 of the Official Reports of the 3rd April, 1952:—

"I could not follow Deputy Costello in his reference to deductions from the cost of supply services in respect of reserve stocks. May I say that the cost of each of the supply services has been accurately calculated and there has been deducted from that cost every item of expenditure which Deputy McGilligan last year chose to describe as capital investment? There is, therefore, no element in that sum which could be so described and, in so far as any expenditure is contemplated upon reserve stocks in this year and that expenditure could legitimately be described as an investment, then the amount has been deducted in calculating the bill which the taxpayer has to meet."

Obviously, the Minister for Industry and Commerce was confused. He tried to make the case that the reserve stocks were in the Vote for capital services, although he had in front of him the table of the financial statement, showing that the item for reserve stocks was in a separate number in the expenditure side of the table from voted capital services.

The Minister for Social Welfare, Dr. Ryan, speaking on this matter in Volume 130, column 1527 of the Official Reports of the 4th April, 1952, said:

"Deputy Costello went on then to talk of £1.9 million and he spoke of reserve stocks. I cannot quite make out what he had in mind...."

Then he proceeded to show that he had not the remotest idea what the point was, and was merely confused. He gave the whole show away when he very suitably remarked:

"At any rate, I will leave the matter at that because I do not know enough about it to deal with it further."

The Minister for Social Welfare said that he would leave the matter at that because he did not know enough about it. That was his contribution to the debate.

The next contribution we had was from the Taoiseach. Speaking at Volume 130, column 218, of the Official Reports of the 23rd April, 1952, the Taoiseach dealt with this matter in a very unilluminated fashion. He said:

"The next point Deputy Costello dealt with was that there should be £1.8 million for reserve stocks as there was in the previous Budget. He did not condescend to tell us why the provision this year for stocks should be precisely the same as last year."

The Taoiseach showed by that statement that he had not the remotest idea what the point was. My point was not that the provision for reserve stocks should be the same this year, but that this year there was no provision for reserve stocks. Nobody else dealt with the matter, as far as I can find out, and it was left at that. Though the Minister for Finance dealt with some of my allegations at very great length, he never said a single word about this point. We heard the Tánaiste saying that he did not understand it; we heard the Minister for Social Welfare saying: "I will leave the matter at that because I do not know enough about it to deal with it further"; we heard the Taoiseach making the wrong point, and the Minister for Finance, in his two and a half hours' speech, completely ignoring this point. At that time there must have been some notion about what it was all about. We are entitled to say and the people will assume that the facts I have referred to clearly demonstrate that there is an admission of the validity of the argument I made that £1,000,000 should be allocated for reserve stocks.

The Minister for Finance, in the course of his final oration on the Budget, made great play with what, I think, he called my fraudulent misuse of the table explanatory of the current Budget. The point I am dealing with is a reference to the item £1,000,000 which we say is unexplained and overestimated for in connection with social services and other current services. The Minister said that if I wished to be honest and truthful, thereby implying that I was neither honest nor truthful, I would have read out this phrase, "other current services", which was before every Deputy's eyes and which was in every Deputy's hands in connection with the Budget.

You have purported to quote from it.

I did not do anything of the sort. I referred to the provision in item 4 of £3,000,000 for the Social Welfare Insurance Bill, 1951. I did not add: "And for other current services."

You did not.

That is why the Minister called me fraudulent, untruthful and dishonest.

Certainly. I want to say, Sir, that I do not think I used the word "fraudulent".

I used the words "fraudulent, untruthful and dishonest", and your answer was: "Certainly."

If the Deputy wishes to put that gloss on his actions, he is at liberty to do so.

Everybody knows that that is what the Minister intends. In any event, he indulged, in the course of his oration on the final discussion on the Budget, in verbal gymnastics in an effort to circumvent the rules of parliamentary propriety. I move the adjournment of the debate.

Debate adjourned.
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