Has the Minister anything to say on the section?
Committee on Finance. - Finance Bill, 1952—Committee.
Question proposed: "That Section 1 stand part of the Bill."
Except that this is the usual charging section which provides for the imposition of income-tax and surtax for the current year and for the continuance of existing enactments in relation to income-tax and surtax.
Would the Minister say what is the estimated increase in revenue that is likely to flow from the variation in respect of income-tax?
The effect of this particular section is being considerably amended by the alterations in the earned income allowance and in the reduced rate relief allowance all of which, of course, reacts to reduce the yield from this particular section.
I assume that the Revenue Commissioners advised the Minister on the basis of the proposed alterations in the allowances before giving him the estimated revenue on the basis of income-tax at 7/6 in the £. I would be glad to know if the Minister would indicate to the House the estimate the Revenue Commissioners gave on the basis of the increase in income-tax for the coming year.
I will get that for the Deputy. I would have assumed that we could discuss this matter more relevantly on the various sections which follow. The net yield from all the impositions in this year will be £910,000. The income-tax code is being amended not merely by Section 1 but by Sections 2, 3 and 4 of the Bill. The position in respect to these taxes is this, that in a full year if it were not for the very significant modifications which we are proposing in the general code, a simple increase in the standard rate would represent an additional revenue of £2,800,000. However, the reliefs provided for in this Bill substantially change the incidence of the tax and accordingly the position in a full year should be, after allowing for these reliefs, that 6,000 companies will pay £900,000 extra; 7,000 surtax payers will pay £650,000 extra; 11,000 individuals whose income, if earned, is above £900 per annum and below £1,500, will pay £100,000 extra; 170,500 individuals will get a net relief of £867,000, leaving retained in the Exchequer £783,000 in a full year. So the Deputy will realise that, despite the increase in the standard rate, we are granting very substantial income-tax reliefs to the general body of income-tax payers. In this connection, perhaps I might say a word or two upon some points which were made, particularly by Deputy Corish, and others in the course of the debate on the Second Reading of this Bill.
I was asked why I did not tax companies, why I did not increase the corporation profits tax, and why I did not impose the excess corporation profits tax. I quoted two leading authorities on the subject—a former Labour Chancellor of the Exchequer and a former junior Minister in the Labour Government. Both of these pointed out that the excess corporation profits tax was, in effect, a tax upon marginal earnings and, therefore, a disincentive to increase production. Not only that, they also maintained that it was a tax which laid itself open to fraudulent evasion and that, if we really wanted to tax company profits, the right sort of tax to impose for the purpose of getting after profits while at the same time avoiding the disincentive effect of the excess profits tax and not opening further avenues of evasion was income-tax, income-tax is the tax to be relied upon. The figures which I have given to the House to-day, in response to Deputy Cosgrave's query, amply substantiate that. I think, perhaps, I had better quote them again. Of the gross amount of tax which we hope to collect this year, no less than £900,000 will come from 6,000 companies.
Is this for a full year or for this year?
It is for a full year.
Did the Minister say 6,000 companies?
6,000 companies will contribute £900,000 by way of tax in a full year; 7,000 surtax payers will pay £650,000; 11,000 individuals whose incomes exceed £900 per annum and are below £1,500 will pay £100,000. Of course, these will be mainly single persons. The average increase in their tax will be of the order of £9 per head, per annum. As against this 170,500 individuals will get a net relief of £867,000, leaving the amount to be retained in the Exchequer at £783,000.
Will the Minister indicate the figure for £2,800,000 which he spoke of before?
That would be the unrelieved, unmitigated burden imposed by an increase of 1/- in the £ in the standard rate of income-tax. As I pointed out, we are changing the incidence of the income-tax substantially in favour of the wage earner, the housewife and the employed person with a small income. That is, in effect, what we are doing and, at the same time, as I pointed out, we hope to bring £783,000 into the Exchequer in a full year.
The Minister mentioned that the net yield this year would be £910,000, on the basis of the alteration in the rate of income-tax, taking into consideration allowances. Later he mentioned the figure of £783,000. Is that the figure for this year?
The net figure is £910,000 for this year.
£783,000 is the figure for a full year. This year you will get nearly £1,000,000 more.
I will put it this way: this year the full incidence of the tax will not fall on some incomes; similarly all the allowances will not be effective in some cases.
The Minister has told us that this is just a normal paragraph in this Bill. However, the imposition of 1/- in the income-tax is not only by no means normal, but, coming in a year such as this when the industrial and commercial life of the country are suffering owing to the increase in the bank rate with the resultant unemployment and dislocation of business that would generally follow therefrom, particularly in this country, it is an outrage. To lift that unmitigated burden of £2,800,000 a little bit off the ordinary person whose income is less than £900 per annum and to throw it over, to the extent of £900,000, on 6,000 companies and on 7,000 other people, to the extent of £650,000, is just planting that burden on people whose business will be, to some extent, a little bit dislocated as a result of it, but who are in the favourable position of being able to pass this additional burden on to those to pay for the services and for the cost of providing for these companies. I submit to the Minister, while he throws aside the idea of the Labour Party, that taxes should have been put on companies in other ways, that the taking of £900,000 from 6,000 companies, in this particular way is just as hard a blow to them and will create the same difficulties for them as if this money was taken from them in the guise of tax with another name.
I am opposed to the imposition of this additional income-tax at the present time. I feel that the manner in which the Minister has distributed it, instead of helping the economic situation generally if the money were required, will bring the blow to bear at a focal point in the organisation of our employment and our industry in a manner that will dislocate the machinery that employs people and gives them their living. In my view, what the Minister has done in this case is not a mitigation of the blow, but it is an attempt at hiding the fact that the blow has fallen.
I want to protest also against the increase in income-tax provided for in this section. This is one of the taxes imposed by the Budget to which statutory effect will be given by the Finance Bill when this Bill becomes law. In my own view, it is wholly unnecessary. The Minister for Finance, when he was introducing his Budget statement on the 2nd April this year, having reviewed the financial position of the country, the requirements of the revenue in the coming year and all the necessary moneys that were to be put into it to meet the required expenditure is reported at column 1144, Volume 130, No. 8 of the Official Reports as saying:
"But a further sum of £800,000 or so must be found if the estimated current outlay is to be fully covered and for this I must look to the inland revenue."
In a Budget of the size which he introduced, a sum of £800,000 is a comparatively small item. Having gone through a variety of taxes, and having indicated that he intended to take away the food subsidies and to impose taxes upon other commodities, what might be regarded, in some senses at all events, as essential commodities, he then proceeded towards the income-tax payer to recover the comparatively small sum of £800,000. I assert that that sum could have been easily found by other means without putting an additional penny on the income-tax. That sum is a small amount. As a justification for the imposition on income-tax, it used to be said that it was the fairest tax. Modern conditions have belied that which some years ago was taken to be a truism.
The Minister tries to justify the imposition of this increased tax by pointing to the increased reliefs which he proposes to give. The whole proposal is reeking with an air of political expediency. The only reason why income-tax was increased was that the Minister was taking away the food subsidies and proposed to tax beer, spirits, tobacco, petrol and other commodities and, according to his lights, it would not lie with him to say that he left the income-tax payer untaxed in that set of circumstances. That is the only reason why the increased income-tax is imposed this year. There was no necessity for it. The sum of £800,000 could be easily got by some savings on various sub-heads, by the overestimation which inevitably occurs in various Departments, and by savings that could be effected during the course of the year. But, of course, it would have been politically unsound tactics for the Minister to leave the income-tax payer untaxed at a time when he was increasing the tax on essential commodities, directly and indirectly. That is the only reason for the increase in income-tax this year.
There is no doubt that the rate of income-tax when it passes beyond a certain point becomes a burdensome imposition on the people. Income-tax at the present time is not what it used to be some years ago, a tax upon the rich. There are very few people now, whether they work with their brains or with their hands, in business or at a profession, who escape or who ought to escape liability for income-tax. The worker now has to pay it upon his earnings and practically every section of the community has to pay it directly or indirectly. The imposition of too great a burden undoubtedly leads to a slowing up in initiative, in enterprise and inevitably leads to increased tax evasion.
I have said that income-tax used to be regarded as the fairest tax. Because of the widespread net which is flung at the present moment and because there are many loopholes in that net and because of its heavy imposition, there are large numbers of people in this country evading their liability, thereby increasing the burden on those people who by reason of their circumstances or their conscience have to pay an additional imposition.
Increasing income-tax beyond a certain point undoubtedly leads to increased evasion—that is a matter that could be remedied; it is a matter that could be dealt with by increased staff in the Revenue Department, by a greater spurt of energy, on the part of those whose duty it is to assess and collect income-tax—but a greater evil perhaps than that is the fact that burdensome income-tax such as is proposed to be imposed by this section leads to the slowing down of private enterprise, thereby causes unemployment, leads also to the eating into their capital by people who are unable to meet their liabilities because of the burdensome effect of increased income-tax. It leads above all things to the fact that what we require most in this country at the present moment, savings by the people, becomes almost impossible.
The Minister, towards the end of his Budget speech, paid lip-service to the desirability of the Irish people having increased savings. With taxation of this kind, with an income-tax of the height of this proposed imposition, savings become almost impossible. Not only do savings become impossible but there is an inevitable frittering away of capital which ought to be employed in productive enterprises.
If there is any economic urgency at the present moment it is the desirability of increasing the savings of our people. We want the savings of our people for the purpose of carrying on those capital schemes which are necessary for the development of our underdeveloped resources. The only real way, according to the Minister himself, to finance those capital projects is through the savings of the people. With burdensome taxation of this kind, those savings become impossible. With the general attitude of the Minister and of his Department towards saving, there is no incentive to our people at the present moment to put aside their earnings in the form of savings or to give them to the State for investment in projects which will increase the productivity of the land and of our industries. These are some of the outstanding vicious characteristics of this particular type of taxation.
It is no use for the Minister to say that he, by raising the tax, is giving reliefs to certain people. The proper tax policy is two-fold, in my submission to Deputies. In the first place, the economic policy of the Government must be directed towards increasing the national income so that, from the same or lower rates of tax, increased yield of revenue can be got and, secondly, out of that increased yield of revenue the necessary reliefs that are purported to be given by this Bill can be given without increased taxation.
It is little use for some people to get increased allowances if, at the same time, they are offset or nearly offset by increased taxation. The policy is to increase the national income so as to increase revenue by the imposition of the same or less rate of taxation and, out of that increased revenue, to give the necessary reliefs so urgently required and which will enable some free money to be available in the economy for savings, which the people will give to a Government that has a proper economic policy for investment in productive capital enterprises for the development of our undeveloped resources.
We have just had an extraordinary exposition of what you might call facing both ways—Mr. Shell of the Opposition——
Mr. who?
Mr. Shell of the Opposition, facing both ways—this way and that, simultaneously, protesting against a proposal which in fact is designed——
Very good spirit, Shell.
That may be but it is not the sort of thing you swallow easily, no matter how good it may be.
There are things we are against swallowing.
We had this excellent example of facing both ways. Listening to the speech, first of all, of Deputy Mulcahy, one would have thought that I had not been at pains to explain to him in the simplest terms possible—terms which I hoped he would understand—that there was no use conducting this debate on the basis of the stark yield—to put it that way —which would be derived from an increase in the standard rate of tax. As I pointed out, the effect of such an increase will be considerably mitigated by the reliefs which it is proposed to extend to the taxpayer under Sections 2, 3 and 4 of the Bill—and one must take into consideration those reliefs because they cover the whole general body of individual taxpayers, the surtax payer as well as the individual taxpayer in the lower ranges of income—and the net effect of the increased allowances which we are proposing will be, even in the category where increased tax will be paid, to reduce the yield from the bare standard increase in the standard rate —to put it that way again—from £2,800,000 to £1,650,000.
The yield is further very greatly reduced by the exceptionally large number of individual taxpayers who will benefit from two of the reliefs, and in some cases from all three reliefs, conceded by Sections 2, 3 and 4 of the Bill. The point is that the general purpose of this scheme is to provide relief for over 170,000 taxpayers. Of course, in order to do that, we have to compensate the Exchequer by securing the money for these reliefs in some other way. I pointed out what we intended to do. Six thousand companies will pay in gross £900,000 extra—that is at the average rate of £150 per company per annum. I do not think that that can be regarded as an undue burden on industry, having regard to everything we have been told by Labour Deputies and by Deputies of some other Parties including, I think, our friend, the former Minister for Finance, about the excessive profits which these companies were making. If the companies are making these substantial profits, they can at least pay an average increased tax of £150.
Then we have 7,000 surtax payers and they will contribute £650,000. That will work out on the average about £95 extra per annum. I do not want to be taken as suggesting that I regard that as a light imposition on the average surtax payer. I do not. Quite frankly it is a substantial increase in his burden. As against that, I have to consider the situation of the general taxpayer. I have been concerned to relieve the wage earner, the salaried worker and the middle class generally from some of the burdens they have been carrying under our predecessors. I think I have done it with some success and I am sure with full regard to the canons of social justice. Let us see what we have done. I shall give one or two examples, taking them almost at random.
Take the unmarried person whose earnings run from about £300 to £500 a year. Naturally, of course, if he is at the bottom of that particular scale, the total amount which he will pay will not be very substantial. Under our predecessors he was paying £16 5s. but under this Government, which is supposed, according to certain Deputies in the Labour Party, not to be concerned with the interests of the wage earner, he will pay substantially less. He will pay almost 25 per cent. less— £12 15s. That is to say there will be a net gain to him arising out of the change in the income-tax code of £3 10s. If he is a man who earns about £8 per week, which would give him in round figures about £425 a year, under Deputy Costello's Administration he would have paid £48 15s. and under the present Taoiseach's Administration he will pay £38 12s. 6d. That is a net gain to him of £10 2s. 6d. If he earns £450 a year, even as a single man he will now pay only £44 5s. as against £55 5s. which he would have paid under the last Government—a reduction of £11 or a gain to him of about 20 per cent. That class comprises generally the industrial wage earner, the shop assistant, the clerical worker, the junior civil servant and Gardaí.
Then we come to the married person with an income of £650 a year who has no children. Under the Coalition, that taxpayer would have been paying on an earned income of £650, £61 15s., and under the new scheme he will pay £47 16s. 3d., a net gain to him of £13 18s. 9d. He gets a relief of almost £7 per head for himself and his wife.
That will not meet the increased price of food.
It will do a great deal more. The increased expenditure imposed on a person by the reduction in the food subsidies has been closely calculated and works out at an average of 1/6 per head per week—less than £4 a year. As against that this married person will save £13 18s. 9d. on his income-tax. It will compensate not merely himself and his wife for the increased price of foodstuffs but will leave a substantial sum over. Again, taking the married couple with one child, if the husband's total income is £750 a year, provided always that his income is earned, his tax under the Coalition would have been £61 15s., whilst under the present administration it will be £45 18s. 9d., leaving him a net gain of £15 16s. 3d., or almost £16 a year. There is no use, therefore, in getting up and saying that we are imposing undue burdens on the taxpayer. What we are, in fact, doing is relieving very substantially 95 per cent. of the individual wage earners in this country. I want to emphasise wage earners—taxpayers under Schedule E. Apart altogether from taxpayers under Schedule E, over 90 per cent. of individual taxpayers in general will benefit from the proposals embodied in Part I of the Finance Bill. It is all very well for Deputy Costello to get up and talk about the burdens we are imposing on industry but let us not forget that, when Deputy Costello talks in this way, what he is objecting to really is the reliefs we are giving to the taxpayer. That is the point. He is objecting to the fact that in our proposals the companies which he used to talk about as making inflated profits, the surtax payers, the wealthy classes we hear about from the Labour Party, are being taxed in order to relieve the burden of over 95 per cent. of the taxpayers on the Schedule, 95 per cent. of the wage earners. Deputy O'Sullivan does not like the truth but that is the truth. Fine Gael Deputies do not like the truth; it does not appeal to them. They are only pre pared to get up and go through the masquerade that Deputy Mulcahy and Deputy Costello performed a few minutes ago in protesting against this scheme which is going to give substantial reliefs, as I said—I repeat it so that Deputy O'Sullivan will come to recognise the force of it—to the general body of individual income-tax payers, particularly the wage-earning and salaried classes.
It will be passed on to the wage earner.
You have been taking it off him; we are giving it back to him.
What about the increased price of foodstuffs?
That is what Deputy Costello is objecting to and that is what Deputy O'Leary is objecting to. Deputy O'Leary is very solicitous about road workers and others. Does he not know that under Deputy McGilligan the road worker had to pay income-tax and under Deputy MacEntee he will not have to pay income-tax? Is not that the real essence of this matter, that you are now so blind in your partisanship that you will not even take these facts into consideration? In any event, that is the position and I do not think there is anything else I can add at this stage.
There are one or two remarks I want to make on the Minister's alleged answer to the points I made. The Minister accused me of facing both ways. I accuse him of either facing no way or facing backwards. He did not answer any of the points I made. I should like to underline the point I made at the outset, that this increased income-tax is purely a matter of political expediency. He did not answer the criticism I made that a sum of £800,000 only was required, according to himself, to balance the Budget when he put on this increase of 1/- in the £. It was entirely unnecessary and that amount could be got otherwise. He did not answer the point I made that if we are to give these reliefs which he says he is giving and which I say are entirely illusory, the way to give them is not by additional taxation but by an increase of national income. He can give these reliefs without increasing income-tax. That was our policy and we did it.
The Minister says—of course it is purely politics—that the purpose behind this section is to provide relief for 170,000 income-tax payers. I wonder how many of these income-tax payers will believe a single word of that—that the purpose of increasing the income-tax to 7/6 in the £ is to give relief to income-tax payers. Does anybody believe that any of these reliefs will go the entire way, or even a considerable part of the way, to ease the burden imposed by the increased prices of foodstuffs and other essential commodities? Beer is an essential commodity to the working man and tobacco is very nearly an essential commodity. The Minister did not take these matters into account. They were left out of his calculations, just as they were left out by his predecessor in the Government which preceded my Administration when making up the cost of living index figure. It did not suit them to have beer, tobacco and cigarettes included in the index figure, as the cost of living would be shown to have increased from time to time rather catastrophically. In his calculations to show the reliefs he was giving no account was taken of these increases and the increases in absolutely essential foodstuffs.
The Minister also did not take into account that the inevitable result of the proposals in the Budget and in this Bill taking away the food subsidies will be to cause a widespread demand for increased wages and, if there is that widespread demand, there will be further income-tax on these increased wages. Did the Minister take that into his calculations? Of course he did not. These reliefs are purely illusory. He speaks about the wealthy corporations and companies and the surtax payers. These are the people who are very well able to sustain a certain amount of income-tax over and above what ordinary people are, because they are able to pass it on, as Deputy O'Sullivan said, to the consumer. The wages earners will demand increased wages to try to compensate themselves for the increased cost of living, and on their increased wages there will be a further increase in income-tax, which will to a considerable extent neutralise the allowances purported to be given in the Budget. The wealthy corporations and the surtax payers can pass this on to the consumer, and will pass it on in the form of increased prices, and those increased prices will have an impact on those people who, the Minister would have us believe, are getting these allowances.
Our policy was the proper policy, namely, to increase the national income and get additional revenue by means of the same or less taxation and give reliefs without increased taxation. That was our economic policy and we succeeded in it. We reduced income-tax several times while we were the Government, and last year Deputy McGilligan, as Minister for Finance, increased the allowances and reduced the tax. That was our progressive policy.
This Finance Bill indicates a deflationary policy which will hit everybody in the community, rich and poor. The Minister did not take into account when making the political case he made this afternoon, that this increased taxation was for the purpose of increasing the allowances to wage earners, that the effect of the Budget and of this Bill and the increase in the income-tax will be to increase unemployment. The unemployed man is not in the least bit particular whether the income-tax is 7/6 or 1/- in the £ as he has no income to pay income-tax. That fact was not taken into account by the Minister when he said that the income-tax was increased for the purpose of giving benefits to wage earners. The impact of this tax on those people who employ wage earners and the general policy in this Bill will cause unemployment. I think the object of the policy behind the whole scheme of the Budget and of this Bill is to cause unemployment. Where there is more unemployment, there is less taxation to be paid by the unemployed. No amount of arguing about allowances to wage earners is any solace or comfort to the man who is unemployed as a result of the policy enshrined in a section of this kind.
The Minister was in Carlow the other night and over a cup of strong tea he was telling us to read the military correspondent of the London Times in order to make ourselves alert to the things we ought to be doing in this country. We are to pay great attention to what is happening outside this country from a military point of view. He was reading the tea-cups. I wonder are we to pay any attention to what is happening outside this country from the economic point of view? The fact is that the Minister, while appearing to follow an almost ready-made budgetary formula taken from Great Britain, is applying it to this country in a way in which the results will be entirely different. The British Government have applied a budgetary policy to their country which is intended to shut down and to drive employment from certain normal classes of industries into industries that they require for their armament proposals and industries in which they require to develop an export trade. We have been hit by the bank rate side of that policy here with the result that our normal industry is being disturbed, employment is being reduced and short time is developing. As a result of the impact of the bank rate on this country we are in danger of accentuating the type of thing that is happening in other countries.
When dealing with the Budget I drew the Minister's attention to an article in the Manchester Guardian by Bertrand de Juvenal. He pointed out in that article that there was a strong tendency towards a slump in the world and that even the arguments that were being advanced against the probability of a slump were so concentrated as almost to point to the inevitability of it. Summing up the situation in a way that we can readily understand, he suggested that what was happening was that unemployment was developing, short time was developing and a slump was coming. while the remedies of the budgetary policies of the Governments concerned were such as would hasten and accentuate that slump. He argued that what was necessary was an easing off of taxation. He indicated that what would inevitably happen under the budgetary policies employed by various countries at the present time would be that when the impact of the real slump came the Governments of these countries would start out on their own initiative and create all kinds of public works to try to keep employment going. The result would be that Governments would dig deeper and deeper into the people's resources. strengthen the power of the State and officialdom over the people and eventually enter into a worse situation than that into which they might necessarily go if they took the proper remedial measures. The Minister is imposing an additional 1/- income-tax here. He tells us that he is easing the burden on the income-tax payers generally. It will not help an income-tax payer to have his burden eased if as a result of the impact of the additional tax on the employing machinery his employment is rendered insecure and he is put either on short time or driven into unemployment, driven into unemployment perhaps in economic circumstances which, once his employment is terminated, will not make it easy for him to climb back again.
Section put and agreed to.
SECTION 2.
I move amendment No. 1:—
In sub-section (2), page 4, to insert before paragraph (b) a new paragraph as follows:—
(b) "six hundred pounds" were substituted for "five hundred pounds" wherever the latter words occur in paragraphs (a) and (b) of sub-section (1), and.
The general purpose of this section is to increase from £500 to £600 the overriding limit under which at the present moment the age relief is given.
Amendment agreed to.
Section 2, as amended, put and agreed to.
SECTION 3.
Question proposed: "That Section 3 stand part of the Bill."
I should point out, because I think it is important that we should realise what is being done in regard to these sections, that this section in the Bill will increase the limit in relation to a dependent relative. At the present moment where a taxpayer maintains at his own expense a relative of his or of his wife, who is incapacitated by old age or infirmity, or who maintains his wife's widowed mother, whether incapacitated or not, may claim a deduction of £50 for income-tax purposes in respect of each person whom he so maintains. However, there is a condition attached to that. The deduction can only be granted in a case in which the total income of the maintained dependent relative does not exceed £50 per year from all sources. In this section we are proposing to raise this annual income limit from £50 to £80 per year, which will be a substantial advantage to many taxpayers.
How many?
It will, because they will get the allowance.
I said "How many?"
I cannot say.
It would be a couple of thousand?
Probably much more. I cannot say exactly, but there are a considerable number of people who do maintain dependent relatives.
Will it be a couple of thousand?
Perhaps.
Does the Minister know?
I do not. I know that there is a substantial number. I do not know the number of hairs on the Deputy's head but, looking at him, I know there is a substantial number there.
Mr. Byrne
Would the Minister state whether, if a widower brings in a distant relative to look after his children, he will get an allowance in respect of such relative?
Not under this section. That does not arise under this section. This section relates to a dependent who is incapacitated by old age or infirmity from maintaining herself.
The Revenue Commissioners have the figures for the number of people affected. Can the Minister not get the figure?
I have not got it available.
Can he get it?
I can, and, if the Deputy wishes, I will give it to him either in reply to a question or on another stage of the Bill.
I am entitled to ask for the figure.
I just have not got it now.
Question put and agreed to.
SECTION 4.
Question proposed: "That Section 4 stand part of the Bill."
Again, this section represents a very substantial concession to a considerable number of income-tax payers. Under the existing law, as the House is no doubt aware, the first £100 of taxable income—that is, the taxpayer's statutory income after effect has been given to the various deductions and allowances—is chargeable at one-half of the standard rate of income-tax and the balance is chargeable at the full standard rate. This allowance is generally referred to as the reduced rate relief. For the present year and, I assume, henceforward, under Section 4, which is now before the House, the first £100 of taxable income will be charged at two-fifths of the standard, that is, 3/- in the £ instead of 3/9 as at present, and the next £100 will be charged at 6/- in the £ instead of 7/6. The balance, of course, of the taxable income will be charged at the full standard rate of 7/6 in the £.
Question put and agreed to.
SECTION 5.
Question proposed: "That Section 5 stand part of the Bill."
Will the Minister say what is the purpose of Section 5?
Section 5 repeals an exceptional concession which was granted in the Finance Act in 1941. It repeals Section 2 of that Act. As the Deputy is aware, under the double income-tax agreement between this country and Great Britain, usually spoken of as the residence agreement, a person who is a single resident in this country and not in Great Britain is exempt from British income-tax. As regards the double resident I do not think I need tell the Deputy what the term means. He is assessed to tax by both countries and both countries afford their share of the double tax relief. It was found, due to circumstances which existed in 1941, that some taxpayers who would normally be double residents were unable to comply with the conditions attaching to the relief. Section 2 was introduced in the Finance Act of 1941 to cover that particular circumstance. We do not feel that it is any longer necessary to make provision for that circumstance and, accordingly, I am proposing to repeal the section.
Is there any loss arising from this?
None.
Question put and agreed to.
SECTION 6.
Question proposed: "That Section 6 stand part of the Bill."
Will the Minister tell us what the effect of this section is going to be, what part of the tax that proposes to impose through this section is going to fall on industry, what part is going to fall on transport and what part is going to fall on the ordinary private car users?
I am unable to make the analysis which the Deputy suggests. The net effect of sub-section (1) will be to increase from 1/4 to 1/8 per gallon the duty on mineral hydrocarbon light oil. The effect of sub-section (2) will be to reserve for the Exchequer the saving which arises from the fact that all the output of the industrial alcohol factories, which the Deputy on occasion has gibed at, is now being exported at a reasonable profit to Great Britain.
The Minister proposes to increase the tax by one-fifth without having, as I understand, made any examination as to what the effect of it will be—as to what part of the increased taxation will fall on the transport system thereby adding to transport costs, and as to what part is going to fall on manufacturing industries, and how that will affect manufacturing costs? Are we to take it that the Minister has made no examination of the matter and cannot assist the House by giving to it the results of his examination?
I must correct the Deputy. I did not say that. I said that I had not made the analysis which the Deputy had suggested. When the Deputy talks about the transport system, I think he is aware of the fact that quite a number of transport vehicles do not run on mineral hydrocarbon light oil.
Some do. Are we to understand from the Minister that, while asking us to put additional taxation on petrol, he declines to give any idea to the House as to how this is going to affect the cost of transport and also manufacturing costs?
This tax applies to petrol which is used in agricultural tractors. I remember that, some years ago, when there was extra tax put on petrol, there was considerable agitation in respect to the petrol used in tractors. It left the position very awkward.
I do not think that arises on this section.
If it is petrol, it does.
It is.
Everyone knows that these petrol tractors use anything from ten to 16 gallons a day. Therefore, this extra tax is going to add to the costs of agricultural production. It will certainly bear very heavily on the very large number of farmers who are now using agricultural tractors. I should like to know from the Minister whether he gave any consideration to the possibility of exempting agricultural tractors from this increased taxation. It was done by his predecessor, Deputy McGilligan, as a result of representations made to him by the users of these petrol tractors. Having regard to the high consumption of petrol, even in their normal use, by these tractors, this increased tax will probably mean an added burden of from £1 to 30/- a week. That will mean anything from £70 to £80 a year. Consequently, I am anxious that the Minister should give the same consideration to the question of exempting agricultural tractors from this tax as was given formerly.
I am sorry that I did not get the figures which the Deputy quoted. Would he be good enough to repeat them? Will he say how many gallons per week these tractors use?
In a busy week, they would use 100 gallons.
And in a week in which they are not busy?
The Minister can take it that they would use half that amount.
I am afraid that, if the Deputy had a case, he has spoiled it by gross exaggeration. There is quite a substantial differential between petrol used for agricultural purposes and petrol used for industrial purposes. My information is that, in fact, the existence of this differential has been abused.
During harvest time these tractors are working day and night.
The Ferguson tractor, a petrol-driven tractor, uses about eight gallons a day when working during the ordinary agricultural hours. If working outside those hours, it would use ten gallons. Taking it that it works on six days a week, that is 60 gallons. With an increased tax of 4d. a gallon, that will amount to about £1 a week. I think the Minister must agree that that is going to impose a considerable hardship in tillage centres in Ireland. My own constituency in Wexford is an example. Quite a considerable number of Ferguson tractors are used in my constituency, and I should say that from 25 to 30 per cent. of them are entirely petrol-driven. I think the Minister ought to consider this. I do not think that this concession has been abused as he says.
In my constituency the majority of the tractors which are engaged on agricultural work are owned by contractors. They hire out the tractors which do the work for neighbouring farmers. An enormous amount of work is done by tractors hired out in that way. It is a great advantage to farmers that these tractors are available to them. It means that they can do with one horse and so can carry more stock on their land. As a matter of fact, during the busy time these tractors are working day and night. I have seen them working all over my constituency, and I must say that I have never seen anything occur which would force me to the conclusion which the Minister has drawn that there has been a gross abuse of this privilege. In fact, the result has been, I think, quite the opposite. The use of these tractors has encouraged increased agricultural production as well as a reduction in agricultural costs. I deplore the accusation that farmers are guilty of this abuse. If this is so, it should have been brought to light before now and some evidence shown that such abuse existed. I am living in an agricultural area where these conditions exist, and I can vouch for the farmers in my own constituency. No such abuse exists there.
This tax throws up a very important point for discussion. Within the last few years combine harvesters are being used extensively in this country. Most of those machines are using petrol and this tax will impose a great hardship on the users of those machines. An exemption has been given from any tax imposed recently to the users of tractors. That also applied to combine harvesters. The consumption of fuel in these machines is very large; they use up to 25 gallons a day, and if this tax is to be imposed it will mean a big increase in the cost of the running of those machines. I feel it would be very unjust if there is no exemption for these cases.
If the price were 1/4 per gallon, what would be the rebate?
It would be 8d.
The whole of the 8d. has been wiped out?
The 8d. is being maintained, but there is no additional rebate. I would commend to Deputy Rooney's study the figures submitted to us by Deputy Esmonde. Deputy Rooney said that a tractor, working normally, would use eight gallons per day. If it worked for six days a week it would use 48 gallons.
I said if it were working for seven hours a day——
Under pressure, it would use ten gallons a day. That is 60 gallons per week. That is far removed from 100 gallons.
He mentioned a light tractor.
The Ferguson tractor is the lightest tractor available. Many other tractors use a great deal more.
Deputy Esmonde also mentioned the Ferguson tractor was the one most generally used in Wexford.
He maintained that the light tractor will cost an extra £1 per week.
The point is that there is a very substantial concession already in existence. It is not possible to enlarge that concession, because if you enlarge it, you enlarge the opportunities for abuse. At least, you increase the opportunities for abuse.
Fourpence extra is going on to the farmer.
It will be a general increase.
Would the Minister say what would 1d. on the gallon of petrol bring in?
This 4d. is expected to bring in about £1,250,000.
I said that 1d. brought in £300,000 in a full year. That was the calculation always made.
That may have been the understanding but, in any event, presumably, there will be a reduction in petrol consumption, not necessarily in petrol for essential purposes but in petrol used for a great number of unnecessary purposes. One must allow for the possible reduction in petrol for purposes which are not essential. On that basis, in present circumstances, the estimated yield is £1,000,000.
On this Part. It has nothing to do with Section 7?
That is so.
The full amount charged here is 5½d.
It is 4d.
What about the 1½d.?
That is different. It arises under sub-section (2).
Does it not increase the revenue, and the revenue is only to be increased by £1.1 million under Section 6? What is the increase?
The position will be that we shall possibly get, in the whole section, under sub-sections (1) and (2), £1,400,000. Under sub-section (1), we shall get £1,000,000.
On £300,000 a 1d. brings in £1,650,000. In other words, there is an under-estimation in revenue of £250,000.
There is no under-estimation and the Deputy is well aware of that fact. We shall get in under the whole section £1,400,000. We estimate that under sub-section (1) we shall get in £1,000,000 in respect of the increase of 4d. per gallon in petrol.
You will get in £1,200,000 on the 4d. and £250,000. You will also get in another £450,000.
If we get in £1,450,000, surely the Deputy will not object to that.
It is an example of under-estimation.
The Deputy wants us to budget as he did. He wants us to over-estimate revenue and to have a deficit at the end of the year.
There will be a Budget surplus. The Revenue Commissioners' calculation was that 4d. brought in £1,200,000. In fact that was with the farmers' rebate, which has not been given this year.
Question put.
The Committee divided: Tá, 67; Níl, 58.
Tá
- Allen, Denis.
- Bartley, Gerald.
- Beegan, Patrick.
- Blaney, Neil T.
- Boland, Gerald.
- Boland, Patrick.
- Brady, Seán.
- Breathnach, Cormac.
- Brennan, Joseph.
- Brennan, Thomas.
- Breslin, Cormac.
- Briscoe, Robert.
- Browne, Noel C.
- Burke, Patrick.
- Butler, Bernard.
- Carter, Frank.
- Childers, Erskine.
- Cogan, Patrick.
- Colley, Harry.
- Collins, James J.
- Corry, Martin J.
- Crowley, Honor Mary.
- Crowley, Tadhg.
- Cunningham, Liam.
- Davern, Michael J.
- Derrig, Thomas.
- de Valera, Eamon.
- de Valera, Vivion.
- Duignan, Peadar.
- Fahy, Frank.
- Fanning, John.
- ffrench-O'Carroll, Michael.
- Flanagan, Seán.
- Flynn, John.
- Flynn, Stephen.
- Gallagher, Colm.
- Gilbride, Eugene.
- Harris, Thomas.
- Hillery, Patrick J.
- Hilliard, Michael.
- Humphreys, Francis.
- Kennedy, Michael J.
- Killilea, Mark.
- Little, Patrick J.
- Lynch, Jack (Cork Borough).
- McCann, John.
- MacCarthy, Seán.
- McEllistrim, Thomas.
- MacEntee, Seán.
- McGrath, Patrick.
- Maguire, Patrick J.
- Maher, Peadar.
- Moran, Michael.
- Moylan, Seán.
- Ó Briain, Donnchadh.
- O'Reilly, Matthew.
- Ormonde, John.
- O'Sullivan, Ted.
- Rice, Bridget M.
- Ryan, James.
- Ryan, Mary B.
- Sheldon, William A.W.
- Sheridan, Michael.
- Smith, Patrick.
- Traynor, Oscar.
- Walsh, Laurence J.
- Walsh, Thomas.
Níl
- Beirne, John.
- Belton, John.
- Browne, Patrick.
- Byrne, Alfred.
- Cafferky, Dominick.
- Coburn, James.
- Collins, Seán.
- Corish, Brendan.
- Dockrell, Maurice E.
- Donnellan, Michael.
- Doyle, Peadar S.
- Dunne, Seán.
- Esmonde, Anthony C.
- Everett, James.
- Fagan, Charles.
- Finan, John.
- Giles, Patrick.
- Hession, James M.
- Hickey, James.
- Hughes, Joseph.
- Keyes, Michael.
- Kyne, Thomas A.
- Larkin, James.
- Lynch, John (North Kerry).
- McAuliffe, Patrick.
- MacBride, Seán.
- McGilligan, Patrick.
- McMenamin, Daniel.
- Mannion, John.
- Cosgrave, Liam.
- Costello, Declan.
- Costello, John A.
- Crotty, Patrick J.
- Davin, William.
- Desmond, Daniel.
- Dillon, James M.
- Dockrell, Henry P.
- Morrissey, Daniel.
- Mulcahy, Richard.
- Murphy, Michael P.
- Murphy, William.
- Norton, William.
- O'Donnell, Patrick.
- O'Gorman, Patrick J.
- O'Higgins, Thomas F.
- O'Higgins, Thomas F. (Jun.).
- O'Leary, Johnny.
- O'Reilly, Patrick.
- O'Sullivan, Denis.
- Palmer, Patrick W.
- Reidy, James.
- Reynolds, Mary.
- Roddy, Joseph.
- Rogers, Patrick J.
- Rooney, Eamon.
- Spring, Dan.
- Sweetman, Gerard.
- Tully, John.
Tellers:— Tá: Deputies Ó Briain and Killilea. Níl: Deputies Doyle and Mac Fheórais.
Question declared carried.
SECTION 7.
Question proposed: "That Section 7 stand part of the Bill."
What is the effect of this?
The full scope of the duty as set out under sub-section (1) is comprehensive, but due to the effect of sub-section (2) it relates mainly to oil intended for use in propelling motor vehicles, that is, diesel oil.
That is diesel oil?
Yes.
On which the transport company mainly runs. What is the cost to them?
I do not know what is the cost to Córas Iompair Éireann. I do know this, that I anticipate that we will get £100,000 on this duty.
From the whole duty?
Yes.
Does the greater part of that come from the public transport service?
I presume it does.
£90,000?
I cannot say. It is not customary to consult interested parties before one imposes a duty.
But unless one is utterly regardless of one's responsibility as Minister for Finance, one does not make a promise to the dance-hall proprietors to take £100,000 off them and sock it on to the bus fares of the citizens of Dublin without inquiring as to what the impact on the bus fares will be. We had fortuitously the letter from the dance-hall proprietors on foot of which the Minister is taking off £100,000 from their back, but surely the chances that brought that letter into our hands setting out that one dance-hall proprietor had subscribed £250 to the Fianna Fáil Party funds and that they expected others to do better so that the full weight of their opinion might be felt, should not be depended upon to inform us as to what the repercussions of the transfer of that tax from the dance-hall proprietors to the fuel oil to be used in the buses for the Dublin and rural transport services are going to be.
Is it an extravagant demand that the House, having heard the Minister for nearly three-quarters of an hour, distinguishing between dancers and all-in wrestlers for the purpose of justifying the removal of the £100,000 from dance halls, should ask how fare-paying passengers on the buses can equitably be expected to take up the burden which the dance-hall proprietors so willingly laid down? Is it more necessary for the disciples of terpsichore to dance than it is for working people to travel on the buses? Does the Government commend as an equitable arrangement that bus fares should be raised in order that dancers may dance tax free? That would be a very good case relatively to the case that is made, because that is not the case he hopes to make. The case he is making is that bus passengers must pay the tax, not that dancers may dance free, but that the dance-hall proprietors may open their doors more profitably than heretofore, so that the reservoir from which the £250 came for the Party funds may be more adequately replenished for the crisis that lies ahead for the Fianna Fáil Party in two or three months. How much of this £100,000 is designed to help the staggering hulk of Fianna Fáil during the pending general election? Is it £10,000 they have promised, or £20,000 or £30,000? Come, let us canvass on the question, and I will make a deal with the Minister which I am sure my colleague, Deputy McGilligan, will adopt, if he will tell us what percentage of the £100,000 he has covenanted for as a subscription to the general election fund which Fianna Fáil will require about July or August. We will content ourselves by making estimates of how much the fare-paying bus passengers will have to contribute through this tax. I say nine-tenths is being borne by the buses in Cork and Dublin. What has Deputy McGrath of Cork to say, that public-spirited citizen who had aspirations to be Lord Mayor of Cork? Will he now defend the fare-paying passengers of Cork because they are going to be taxed in order to relieve the dance-hall proprietors? By a remarkable coincidence it is their contribution which is required to furnish this relief to the public-spirited dance-hall proprietors of Ireland. Come now. I think Deputy McGrath has a duty to us to intervene for the purpose of giving his blessing to this aromatic arrangement. Somebody had to bear the burden after all, or the poor dance-hall proprietors might not have coughed up the expected sum next July. Does Deputy McGrath think that it is the bus passengers of Cork who should have been called upon to pay it? I cannot see any other urban Fanna Fáil Deputy here at present.
None of them has the valour of Deputy McGrath. All the others have moved their blushing countenances elsewhere, but he can speak for them. He will speak for the city as will his colleague, Deputy Lynch. It will be a nice duet. The Deputy is dashing. He will dash while Deputy McGrath supplies the deep-sounding bass. Come now. Let us hear the pleasing tenorbass duet about "The Moon Hath Raised Her Lamp Above."
I was thinking you thought you were in the Theatre Royal.
It seems signally appropriate "The Moon Hath Raised Her Lamp Above" so that we will dance free, albeit that we pay a little extra to travel on the bus to the dance hall or to our daily work. I hope Deputy McGrath will not blush unduly. Let him stop grunting and rise to his feet and hail this noble use of the Budget, a great instrument of social policy. Let the people dance, albeit that they have to walk to the dance hall and walk back again, for if they dance they know they are making the dance-hall proprietor richer than he hoped to be by their subsequent contribution to the bus company when they travel from Crumlin to their work. Come now. I can speak only of Crumlin. Deputy McGrath can give us a similar picture for the City of Cork. It would be a shame if he did not give us a description of the happy light-hearted people of Cork making their modest contribution to replenish the depleted coffers of the dance-hall proprietors, so that they may be generous when next called upon by the disintegrated Party which at present governs this country on a minority basis. Come now. We will wait with interest. What a pitiful reluctance on the part of the Deputy.
Surely we are entitled to figures as to the charge on public transport vehicles.
I have given the Deputy the information in my possession. The Deputy was not very concerned about that aspect of the matter when, in his Finance Act of 1948, he increased the excise duty on diesel oil from 7d. to 1/- per gallon, nor at the time of the Finance Act of 1951 when he increased it by a further 2d. Therefore, in three years the Deputy who is so concerned about the effect of the increase in the rate of duty on diesel oil on the cost of public transport increased it by 100 per cent.
I do not think that any person need pay any attention to Deputy Dillon. He comes in here and makes the usual dirty charges which are associated with his name and of which the public are so tired. Whenever these charges were investigated elsewhere the Deputy has run away from them, or the court or tribunal has found that they have been made without any sense of public responsibility. I have no association with dance-hall proprietors. The only dance-hall proprietors I knew were a member of the Clann na Poblachta Party who sat in this House and the leader of Clann na Poblachta in a country constituency. Those are the only dance-hall proprietors with whom I have had any contact—to my personal knowledge. No promise or undertaking was given by me to them nor have I seen them. That is all I have to say regarding the disgraceful performance of Deputy Dillon here to-day.
What is the significance of the letter which the Minister for Industry and Commerce, Deputy Lemass, wrote to the dance-hall proprietors?
That is typical of Deputy MacBride. That is typical of the Deputy who two days before the polling in the General Election of 1948 used information which came to him in his professional capacity and on the basis of that information, as he said, charged the Government of the day with corruption. When he was pressed to have those charges investigated in the House a colleague of the Deputy had to stand up and lie publicly to protect the Deputy by saying that documents had been destroyed, documents which existed and which if they were produced would show how false the allegation of the Deputy was.
That is a statement which is typical of the Minister. It is an attempt to side-track the issue. It is completely untrue when he says that documents had not been destroyed which were destroyed.
They were not destroyed. They were in the Department of Industry and Commerce and were available to the Minister who said that they had been destroyed.
As a result of the disclosures I made prosecutions were brought and persons were convicted.
They were ordinary civil charges against ordinary private individuals and did not touch the Government one way or the other.
How much did the Minister collect from the dance-hall proprietors?
As far as I know, nothing.
Does the Minister deny that a subscription of £250 was sent, as was stated in that letter? Does he deny that Deputy Lemass, the Minister for Industry and Commerce as he is now, gave an undertaking to the dance-hall proprietors?
I have no responsibility for what any person may contribute to any Party funds. I have no more knowledge of contributions made to the Fianna Fáil Party——
He denies it when the subscription was in fact paid.
I have no knowledge of any contributions made to the Fianna Fáil Party funds any more than I have knowledge of subscriptions made to the Clann na Poblachta funds, the Fine Gael funds or any other Party funds. I do know this: certain members of the Deputy's Party were out touting very undesirable people to get subscriptions.
Does the Minister deny that his Party got a subscription from the dance-hall proprietors on foot of an undertaking by his Party? Does he deny that?
He cannot deny it.
The Deputy's Party got £500 from a lady who left the country.
That is a lie. It is untrue. I ask you, a Leas-Cheann Comhairle, that the Minister be asked to withdraw that statement, as it is untrue.
That statement I believe to be as true as the allegation the Deputy made in this House to-day.
The Minister has made a statement that I or the Party to which I belong received £500 from a lady who left the country. That statement is untrue. I ask you, Sir, to call upon the Minister to withdraw it.
I cannot ask him to withdraw. The Chair cannot give any opinion.
That is a deliberate lie by a disreputable Party hack.
Can that charge be made?
The Deputy has used an expression which he must withdraw as it is unparliamentary.
The Minister previously used the word.
No.
He did so. The Minister used the word "lie".
I did not hear the Minister use any such expression. Deputy MacBride used that expression. The Chair has asked Deputy MacBride to withdraw that expression.
An order imposed on one side of the House must be imposed on the other side.
Certainly, if the Chair had heard any such expression.
He has not denied that he used it.
The Chair did not hear it.
I assert that he said it and the Minister does not deny it. I am entitled to talk.
If the Minister has used any such expression the Minister should withdraw.
I said that a colleague of Deputy MacBride's was compelled to lie publicly in order to protect him. If you, Sir, consider that that expression in that form, and the use of the word in that context, is unparliamentary, I withdraw.
Does the Minister withdraw the statement he made that my Party or I had received a subscription of £500 from a lady?
No.
I challenge the Minister to prove his statement or to withdraw it.
The Deputy has a responsibility to the Chair in respect of the word "lie".
That was not a true statement. If the Minister has any sense of responsibility he will withdraw it.
Is the use of the word "lie" in that context permissible?
In the context in which the Minister used it it is not unparliamentary. I have asked Deputy MacBride to withdraw the expression he used towards the Minister.
I am very sorry that I had to use that word in this House, but it was the only alternative left to me having regard to the fact that the Minister was allowed to make a statement which is not true, a statement which he knows to be untrue. I regret that I cannot withdraw the word "lie" with regard to the Minister, who is an irresponsible person.
Deputy MacBride left the Chamber.
At this stage I would like to refresh the Minister's memory. The letter I desire to quote for the information of the House is signed by a gentleman, Seán F. Lemass, which I believe to be the style and title of the Tánaiste. It is dated 10th May, and the address is Dáil Éireann, Baile Atha Cliath. It is addressed to Miss K. Morrissey, secretary of the Irish Ballroom Proprietors——
If I might interrupt the Deputy, nothing in this section deals with ballroom proprietors.
With respect, there is £100,000 in the section and that is what interests the ballroom proprietors.
We are not dealing with ballrooms.
No, but with the source of the ballroom proprietors' interest in this Bill. The ballroom proprietors did not write to Deputy Lemass because they loved his lovely blue eyes; they were writing for £100,000, and that had to be found.
For £140,000.
I am saying no more than £100,000. That had to be found.
The Deputy cannot discuss ballroom proprietors on this section. The subject might be more relevantly raised on Section 14.
You would wish me to postpone the reading of the letter to Section 14?
It would be more relevant.
It merely makes my task a little more tedious but it makes it all the more informative for that. When we levy a tax we naturally ask ourselves for what is the tax. We do not levy a tax for the fun of it. The Minister for Finance has thumped the desk in front of him and the Tánaiste has thumped the desk and has asked in lachrymose accents: "Why do we raise these taxes? What is the reason for our having put these taxes on?" I explained that one of the reasons was to provide soft jobs for the Minister for Finance and the succession to Deputy de Valera's high position for the present Tánaiste, but that does not explain this particular tax. I think that this tax is designed to produce about £100,000. That is a significant figure. We think that it will probably produce a little more than £100,000. The more over the £100,000, the hotter we are getting, because we cannot divorce from the back of our minds that somebody was hoping to get £140,000. As we bridge the gap between the £100,000 and the £140,000, up over the horizon begins to appear the figures of the people who hope to get the £140,000.
Now, who are they? Are they the birds of the air or the lilies of the field? I do not think so. I know of only one body of citizens in this State who hope to get £140,000 out of this Budget. Who are they? Hush—we must not mention them until we come to Section 14. But we will then. They must be the only body of citizens in this State who, over their own signed manual, went forth to plunder the Exchequer and ended up enshrined in permanent glory in Section 14 of the Finance Bill. The only other person who has enjoyed this distinction is Admiral Lord Nelson and he had to win the Battle of Trafalgar to get it.
Perhaps the Deputy will now come to Section 7.
This has to do with the £100,000 which the Minister tells us is being levied under the section. He cannot tell us how. He cannot tell us who is likely to pay it or how much Córas Iompair Éireann, the national transport company, will have to contribute towards it. We are feeling our way around to find out. I quite agree that if the Minister were not the silly little man he is and had read out of the brief he has before him the measure of this burden on Córas Iompair Éireann, all this debate would have been unnecessary. He has the figure in his brief, but he is ashamed to read it. He is afraid that Deputy McGrath behind him would get a weakness if he heard how much the Cork bus passengers will have to pay for the purposes of Section 14. I am going to ask Deputy McGrath to do a public service. Will he take the Minister out and give him a dish of tea——
The public service should have been done in 1940.
——and tell him that when answering on the Committee Stage, he ought to answer frankly? Let him tell him that if he does not know the answer himself, he will find it in his brief, and that he will enjoy for this evening, if he will industriously read his brief, a guarantee that no one will comment on the fact that he is reading what he says, and not thinking it up. This, however, is certain— and Deputy McGrath ought to agree with it—we have a duty, before we consent to the imposition of this tax, to discover in how far the poorer sections of Deputy McGrath's constituents will have to contribute to it, and I think Deputy McGrath's conscience will prick him when he thinks that all they contribute is going to be turned to a certain purpose. Deputies from rural Ireland will recollect that, if you go into a shop to buy something and do not want to say what exactly is the purpose for which you want the commodity, you ask for "a ha'porth of aloes for a certain purpose". This tax reminds me in more ways than one of that ha'porth of aloes for a certain purpose. The purpose is so disreputable that no one dares to mention it in the House. The Minister wants £100,000 for a certain purpose. He is ashamed to tell us what it is, and he is ashamed to tell us from whom he is going to take it, because he is ashamed to confess the group to whom he is going to convey it. He is no more than a conduit pipe of £100,000 collected under this section.
And you are a sewer pipe.
It is the Deputy who has used that word—I did not. I said that he is no more than a conduit pipe of public money from the Exchequer to the certain purposes of Section 14. If Deputy McGrath chooses to describe a pipe engaged for that purpose as a sewer pipe——
Describing you as a sewer pipe.
——he is carrying on the analogy I employed when I spoke of the man who wanted a ha'porth of aloes for a certain purpose.
Mr. O'Higgins
The anger displayed by the Minister some moments ago and the extremely bad taste shown by him in his remarks in connection with Deputy MacBride show clearly the bad case which he and his Government have in relation to this tax and every tax imposed in the Budget. We can leave all that to the coming judgment of the people. We can, I hope, look forward shortly to an opportunity being given to the people to decide whether these taxes are justified and whether those who seek to impose them have the right to do so. I only want to refer in relation to this tax to the propaganda used by the Minister and his Party 12 months ago.
When the Finance Act of 1951 was before the House, the Minister and his colleagues spared no effort to create the impression that the Budget introduced by Deputy McGilligan in that year was in some way oppressive on sections of the people. They went as far as indulging in every form of ingenuity to find some section who were hit by the Budget. When, in the last Budget, hydrocarbon oil was proposed to be taxed, not by 2d., as the Minister said, but by a mere 1d., the Opposition case was opened by the Minister who became very eloquent on the effect of a tax on diesel oil on the poor people. I want to refresh the Minister's mind on what he said on 2nd May last year, when the former Government sought to increase the tax on diesel oil by a mere 1d. The present Minister said, in relation to the fuel being taxed:
"This is the fuel which the Minister informed us ... drives the buses which bring the workers of Dublin to work, the oil which drives the vehicles upon which most of those who have to live in Kimmage and Crumlin and who are earning their living in the City of Dublin have to travel twice and sometimes four times a day."
He went on to say:
"I am concerned with the fact that the people in Crumlin and Kimmage will have the cost of transport appreciably increased to them."
That was Deputy MacEntee 12 months ago when the then Government sought to impose a tax of 1d. a gallon on diesel oil—saying that he was concerned for the poor workers living in Crumlin and Kimmage. It is the same Deputy who now, as Minister for Finance, comes in to ask the House to tax diesel oil to the extent of 4d. a gallon.
I do not know what honesty can be behind either the views he now makes or the views he expressed 12 months ago. Deputy MacEntee, as Deputy MacEntee, was either dishonest on the 2nd May of last year, or as Minister for Finance he is now being dishonest to-day. What he said 12 months ago may have been true. If it were true, then he has no case whatsoever for imposing this tax now. If what he says to-day is correct, then his opposition expressed in this House to the previous Budget was dishonest opposition. There cannot be any way of reconciling both his expressions of opinion. We all know, of course, that the present Minister is a consummate actor. We all know that he dearly delights in saying something merely for the purpose of saying it. We can appreciate that his conduct 12 months ago as an Opposition Deputy was merely acting a particular part. Unfortunately, he now has to live up to the views he expressed and the opposition he followed when the previous Government was in power.
We are concerned with the fact that, in a very callous manner, he now seeks to tax "the fuel that drives the buses that bring the workers to work". He is doing that without being able to give this House any assurance that that tax will not eventually be passed on in the way of increased fares and, incidentally, be a further tax on the working-class people. He cannot give that assurance. He expressed himself previously as being concerned with the possible effect of this tax, and it does seem that, once again, the case which he is seeking to make is a bad case. I think that the badness of his case was the reason that we had this very regrettable display from him here to-day. I, Sir, think that someone on this side of the House—if no one on the other side does it—should protest in as strong a manner as possible at the conduct of the Minister here. He may not have infringed the rules of order, but he gave a display which certainly was not becoming in this Parliament, a display of bad manners, of bad taste and pettiness which discloses quite clearly that he has a very bad case and is afraid of what other people may think of it.
Mr. Byrne
I would ask the Minister, as I did before when the question of diesel oil came up, either to give a guarantee or to recommend to the Minister for Industry and Commerce that there should be no increase permitted on the bus fares of the ordinary working-class passengers in the Cities of Dublin or Cork. The Minister gave no guarantee. As far as I can see, instead of the bus company making a claim for increased subsidy to meet the tax, they will go to the Minister for Industry and Commerce and ask for sanction to increase the bus fares on people who are already heavily overtaxed and who, as a result of this Budget, will be more heavily overtaxed than ever in their lives before. I ask the Minister to give us a definite assurance that this tax is not going to be put on the people of the towns and cities who are using buses as a means of transport to and from their work.
We have in Dublin City, as the Minister and every member of the House knows, the municipality, the Dublin Corporation, seeking sites for housing. The next site that they will get for housing the people will be at least 4d. or 5d. away by bus from the centre of the city. That works out about £1 a week of an increase on some families in bus fares alone. It is a scandalous state of affairs if this is going to be the new way of taking extra money from the people using the buses. I appeal to the Minister to make a recommendation to the Department of Industry and Commerce that they shall not sanction further increases in bus fares in the City of Dublin or anywhere else.
I take it that the exemption of oil for agricultural tractors will continue.
There will be the usual differential, but this does not relate to agricultural tractors. It relates to diesel oil.
Some tractors use diesel oil.
The differential will be as before. The position is not changed in regard to diesel oil. I feel I should say something about the case that Deputy MacBride and others attempted to make here. Anybody listening to Deputy Dillon on occasion should know, of course, that he is what is known in country districts as a horse chemist, that is to say, that he deals in drugs and therefore is familiar with the specifics which the ordinary country people use for certain natural conditions. The Deputy, therefore, had to engage in that type of language and he had to have his self-purgation here to-day before he left the House. That is not to be wondered at. We know that the Deputy does boil over on occasions. We all take him here not too seriously, except when he endeavours to degrade the public life of this country by making charges of corruption against people against whom such charges have been levelled by him before. Yet on every occasion their honour has been vindicated by independent investigation.
What is the position? The tax which is imposed on diesel oil is closely related and is, in fact, part of the tax which is imposed on mineral hydrocarbon light oils by Section 6. It is necessary to impose this tax on diesel oil in order that the tax on petrol may be effective. If we have to increase the tax on petrol for any reason we have correspondingly to increase the tax on diesel oils. That is what my predecessor had to do. It is not because of the money that one gets out of this tax that you impose it but in order to make the tax which is the money-getter effective. That is what my predecessor had to to when he increased the duty on petrol from 9d., as it had stood from the 1st June, 1946, to 1/2 on the 5th May, 1948. He increased the tax on petrol again from 1/2 to 1/4 on the 3rd May, 1951. Because of that he had to increase the tax on diesel oil correspondingly from 9d. to 1/2 in May, 1948, and from 1/2 to 1/4 in May, 1951. We propose to increase the tax on petrol and, just as he had to do, we are increasing the tax on diesel oil accordingly.
I hope that blows sky high the charges which Deputy Dillon dared to level here that this was how we had to find money in order to remit the entertainments duty on public dances. I will deal later with that matter on the relevant sections. That is why we had to increase the tax on diesel oil — in order to make the tax on petrol effective, and it was for no other reason that it was done.
I am quite prepared to concede to Deputy O'Higgins or anybody else that it is undesirable that we should have to increase the taxes, but we have no other option if we are going to maintain the public services. If we are going to provide the social welfare benefits, pay the increases in old age pensions, provide the increases in the remuneration of civil servants, Gardaí, Army officers and Army personnel, and teachers of all classes, which followed inevitably upon the acceptance of the principle of arbitration and upon the acceptance of the arbitrator's award last year — for each and all of these purposes — we have to find the money. Therefore, while I concede that it is undesirable that we should have to impose a tax of this sort or a tax of any sort, nevertheless, it is much better that we should do that than borrow abroad in order to maintain the public services. We must have this tax if we are going to maintain this State — if we are going to build up this community and pay our way as we go. Despite what has been said about the undesirability of this tax — and, again, I concede it — we have to get the money and, that being so, we have to ask the people to accept the necessary burden of maintaining the State.
Mr. O'Higgins
Had the Minister to get the money last year?
My predecessor imposed those taxes last year.
Mr. O'Higgins
Why does the Minister not express to-day the opposition to those taxes which he expressed last year?
Because I was in opposition then. The Deputy is in opposition now.
Because the present Minister for Finance was in opposition then and had no responsibility.
It is the duty of the Opposition to criticise but the criticism should be helpful and constructive. It should not be disreputable in character or such as would be destructive of public life in this country — such as that which Deputy Dillon made himself responsible for here yesterday.
Mr. O'Higgins
What about the Minister's remarks here with regard to Deputy MacBride? Does he consider that that is conducive to good order in the House?
Question —"That Section 7 stand part of the Bill"— put.
The Committee divided: Tá, 68; Níl, 60.
Tá
- Allen, Denis.
- Bartley, Gerald.
- Beegan, Patrick.
- Blaney, Neil T.
- Boland, Gerald.
- Boland, Patrick.
- Brady, Philip A.
- Brady, Seán.
- Breathnach, Cormac.
- Brennan, Joseph.
- Brennan, Thomas.
- Breslin, Cormac.
- Briscoe, Robert.
- Browne, Noel C.
- Burke, Patrick.
- Butler, Bernard.
- Carter, Frank.
- Childers, Erskine.
- Cogan, Patrick.
- Colley, Harry.
- Collins, James J.
- Corry, Martin J.
- Cowan, Peadar.
- Crowley, Honor Mary.
- Crowley, Tadhg.
- Cunningham, Liam.
- Davern, Michael J.
- Derrig, Thomas.
- De Valera, Eamon.
- De Valera, Vivion.
- Duignan, Peadar.
- Fahy, Frank.
- Fanning, John.
- ffrench-O'Carroll, Michael.
- Flanagan, Seán.
- Flynn, John.
- Flynn, Stephen.
- Gallagher, Colm.
- Gilbride, Eugene.
- Harris, Thomas.
- Hillery, Patrick J.
- Hilliard, Michael.
- Humphreys, Francis.
- Kennedy, Michael J.
- Killilea, Mark.
- Little, Patrick J.
- Lynch, Jack (Cork Borough).
- McCann, John.
- MacCarthy, Seán.
- McEllistrim, Thomas.
- MacEntee, Seán.
- McGrath, Patrick.
- Maguire, Patrick J.
- Maher, Peadar.
- Moran, Michael.
- Ó Briain, Donnchadh.
- O'Reilly, Matthew.
- Ormonde, John.
- O'Sullivan, Ted.
- Rice, Bridget M.
- Ryan, James.
- Ryan, Mary B.
- Sheldon, William A.W.
- Sheridan, Michael.
- Smith, Patrick.
- Traynor, Oscar.
- Walsh, Laurence J.
- Walsh, Thomas.
Níl
- Beirne, John.
- Belton, John.
- Browne, Patrick.
- Byrne, Alfred.
- Cafferky, Dominick.
- Coburn, James.
- Collins, Seán.
- Corish, Brendan.
- Cosgrave, Liam.
- Donnellan, Michael.
- Doyle, Peadar S.
- Dunne, Seán.
- Esmonde, Anthony C.
- Everett, James.
- Fagan, Charles.
- Finan, John.
- Flanagan, Oliver J.
- Giles, Patrick.
- Hession, James M.
- Hickey, James.
- Hughes, Joseph.
- Keyes, Michael.
- Kyne, Thomas A.
- Larkin, James.
- Lehane, Patrick D.
- Lynch, John (North Kerry).
- MacBride, Seán.
- McGilligan, Patrick.
- McMenamin, Daniel.
- Mannion, John.
- Costello, Declan.
- Costello, John A.
- Crotty, Patrick J.
- Crowe, Patrick.
- Davin, William.
- Desmond, Daniel.
- Dillon, James M.
- Dockrell, Henry P.
- Dockrell, Maurice E.
- Morrissey, Daniel.
- Mulcahy, Richard.
- Murphy, Michael P.
- Murphy, William.
- Norton, William.
- O'Donnell, Patrick.
- O'Gorman, Patrick J.
- O'Higgins, Thomas F.
- O'Higgins, Thomas F. (Jun.).
- O'Leary, Johnny.
- O'Reilly, Patrick.
- O'Sullivan, Denis.
- Palmer, Patrick W.
- Reidy, James.
- Reynolds, Mary.
- Roddy, Joseph.
- Rogers, Patrick J.
- Rooney, Eamon.
- Spring, Dan.
- Sweetman, Gerard.
- Tully, John.
Tellers:— Tá: Deputies Ó Briain and Killilea; Níl: Deputies Doyle and Mac Fheórais.
Question declared carried.
I would like to raise a point of order. During the course of the debate on Section 7 a Deputy accused the Minister for Finance of having uttered a lie. He was asked by the Chair to withdraw the expression. He refused to withdraw it and he left the House. That Deputy re-entered the House on the division being challenged and voted in the division. I would ask you, a Cheann Comhairle, whether it was proper for that Deputy to enter the House and vote, having withdrawn from the House rather than obey the ruling of the Chair.
I put it to you that the Deputy was not ordered to leave the House.
Mr. Lynch
I did not say he was.
Deputy MacBride stood in his place and made the observation to the Chair that he regretted having made the observation.
He did not.
I have no doubt that the Leas-Cheann Comhairle acted in accordance with precedent and in accordance with Standing Orders. I do not see that any purpose would be served by opening the incident now with which the Leas-Cheann Comhairle dealt in a manner that he considered was in the best interest of order and decorum of the House.
Must I then lie under the imputation that I have told a lie? Deputy MacBride accused me of telling a lie in this House. He was asked by the Chair to withdraw it. He refused to withdraw it. He regretted, he said, that he could not characterise what I had said by any other word.
No official intimation has been conveyed to me as to what happened. I am perfectly certain that the Leas-Cheann Comhairle acted in accordance with established precedent and I am also certain that he acted in what he considered was the best interest of the order and decorum of the House. I cannot allow the matter to be reopened.
Mr. Lynch
That was not the point of order I raised. I asked whether it was proper for Deputy MacBride to reenter the House and vote in the division.
Deputy MacBride was not suspended by the House, as far as I know, nor by the Chair.
He withdrew from the House rather than withdraw the expression.
Deputies withdraw from the House on every occasion.
I put it to you that the Deputy withdrew from the House rather than withdraw the unparliamentary expression. Does the word "lie" still stand on the official record in relation to something that I said during the debate? I was challenged that I had stated that a person had had to lie in order to protect a certain Deputy. I stated to the Chair that, if the word was unparliamentary, used in that context, I withdrew it. Does the word "lie" still stand, in as far as it imputes falsehood in this House to me? I want to know if that is the ruling of the Chair, that that should stand.
The Chair is not making any such ruling. The Chair has been very explicit in what it rules. The word "lie" should not be used by any Deputy in connection with another Deputy. Every Chairman has made that perfectly clear and the House has endorsed that ruling on several occasions for the Chair. I do not see that any purpose can be served by reopening the incident.
May I be clear on this point — if a Deputy is ordered to withdraw an expression and if he refuses to withdraw it and leaves the House, he may return to the House at any time he wishes?
I will not rule on hypothetical cases.
This is not a hypothetical case.
No official intimation has been conveyed to me as to what happened. I must assume, and I am sure, the occupant of the Chair at the time dealt with the matter in the best interests of the order and decorum of the House and, so far as I am concerned, the matter is closed.
The Deputy refused to withdraw the expression and left the House.
That is not so.
May I, possibly, put an end to this discussion?
I do not think Deputy MacBride can be here at all.
Deputy Cowan may go outside. If I did use the word "lie" and the word "lie" is an unparliamentary expression, I withdraw it. I was provoked into making that statement and using that word.
Perhaps the Deputy would leave it at that and withdraw the expression.
Would the Minister now withdraw the allegation which he made, which was untrue?
I have nothing to add to what I have already said in the course of the debate. If Deputy MacBride pleads provocation, the Deputy was very provoking.
I want to have it on record that the word "lie" has been used to-night and has not been withdrawn — that was by the Minister —and it was ruled by the Chair that in certain contexts the word is permissible. I want that recorded.
The Leas-Cheann Comhairle said it was not used.
He said it was used in a particular context. The word "lie" is not unparliamentary, on tonight's ruling.
The word "lie" is unparliamentary——
I thought so.
——if it is intended to refer to a Deputy. That expression is unparliamentary.
It was ruled on by the Leas-Cheann Comhairle as being in order.
It is on record as being parliamentary.
Progress reported; Committee to sit again.