Dáil Éireann debate -
Wednesday, 8 Jul 1953

Vol. 140 No. 5

Finance Bill, 1953—Committee.

Section 1 put and agreed to.

SECTION 2.

Mr. H.P. Dockrell

I move:—

Before Section 2 to insert a new section as follows:—

Sub-section (1) of Section 22 of the Finance Act, 1920, as amended by Section 5 of the Finance Act, 1944 (No. 18 of 1944), and as amended by Section 7 of the Finance Act, 1949 (No. 13 of 1949) (which relates to deductions in respect of dependent relatives), shall be construed and have effect as if "one hundred pounds" were substituted for "twenty-five pounds" and "fifty pounds."

I think it is quite evident that the time has come now for the dependent relative allowance under the Income-Tax Acts to be increased, and this amendment increases it from £50 which it is at the moment to £100. I think at the same time that the Minister should also consider increasing the marriage allowance and in fact that all the allowances now allowed under the Income-Tax Acts should be increased. I want to press the Minister to do that.

Mr. MacEntee

I regret that I could not accept this amendment. As the Deputy is aware, the allowance for dependent relatives stands at an order of £80 and is at least about one-third higher than it is in Great Britain. This proposal contained in the amendment would cost the Exchequer about £385,000 in a full year, and with the steps which we have had to take to balance the Budget this year it would be quite impossible to make a concession of that magnitude.

Mr. O'Higgins

I would like to support the amendment, and I think that any Deputy will appreciate that the allowances under the income-tax code, particularly in face of rising prices, do require a constant review, and the matter mentioned in the amendment of the allowance in respect of a dependent relative is now quite inadequate in face of the falling value of moneyand the rising cost of maintenance and matters of that kind. The amendment is worthy of the Minister's consideration. He should make some suggestion to increase in some way the present allowance, which is completely inadequate.

Mr. MacEntee

Last year we granted very considerable reliefs to income-tax payers in various categories. We brought in an extended reduced rate relief, we increased the earned income allowance and we increased what is described as the age relief allowance also. I would be very glad indeed to concede the principle involved in this amendment and to increase the allowance granted in respect of dependent relatives, but it is just not possible in our present financial circumstances to do it. We cannot find approximately £400,000 in this year for the purpose. We could only find it by taxing some other commodity, and I do not think any section in the House would wish to see the taxation increased on any particular commodity. I think we will have to await the outcome of this year before this can be considered again.

I should like to direct attention to a misstatement when I replied first to Deputy Dockrell. I said that the relief here was at the rate of £80. In fact, it is not, it is £50; but the income limit of the dependent relative is £80.

Mr. O'Higgins

I do not think the Minister can be serious in suggesting that the granting of this relief or the modification in some way of the hardship, as suggested in the amendment, is going to place a burden on the taxpayer of £400,000 or anything in that region. We all know that this year and at the moment the Minister is proceeding to save £3,500,000. It is not unreasonable to suggest that this relief should be granted, even if it is necessary to absorb portion of the £3,500,000 the Minister hopes to save this year. There is no taxation needed.

Mr. MacEntee

The Deputy must wait. We must save that £3,500,000 andwe cannot save it by giving away £400,000.

Amendment put and declared lost.

Mr. MacEntee

I move amendment No. 2:—

In page 2, line 37, before "clause (A)" to insert "clause (A) of paragraph (i) of sub-section (1) and in".

This is merely a drafting amendment. As the original Section 32 is drafted, if it were not for the reference to paragraph (i) of sub-section (1), the concession might only apply to those whose income is in excess of £1,000. The idea is to allow every income-tax payer to have the benefit of the concession, so it is necessary to insert these words.

Amendment agreed to.

Section 2, as amended, agreed to.

Section 3 agreed to.

SECTION 4.

Question proposed : "That Section 4 stand part of the Bill."

Mr. MacEntee

The Money Resolution refers to this section and on this you can debate the general principle. As I have already said, the principle is, first of all, to give a more rational scale of duties with better and more logical gradations, to reduce the incidence of duty at the lower rates of charge up to 2/-, to maintain the existing incidence of duty on what may be described as the higher scale prices, up to 3/6d. It will, in fact, preserve that incidence up to the point where the admission charge is 5/- and then the duty becomes slightly heavier, about 1½d. heavier. When we reach 7/- a further point is reached and the incidence becomes slightly heavier. At 13/- the same thing happens and at 18/6 again we have an increase of the incidence of duty. Above 18/6 the incidence will tend to increase with the admission charge.

These are practical difficulties in devising a practicable scale which cannot be overcome. It is clear that, so far as admission to cinemas in this country goes, rates like 5/-, 7/-, 13/6 and 18/6 are not of any practicalimportance; but because of the fact that if these admissions were ever charged there would be the increase which I have mentioned in the incidence of duty, it is necessary to put down the Financial Resolution.

Mr. Cosgrave

The Money Resolution and the section are identical?

Mr. O'Higgins

Where does the 5/-come in?

Mr. MacEntee

It follows in consequence of the proviso that where the admission exceeds 1/6 it is 1/- for the first 1/6 and 3d. for every additional 3d. up to 5/-.

Question put and agreed to.

SECTION 5.

Question proposed : "That Section 5 stand part of the Bill."

Mr. O'Higgins

I take it Section 5 is intended to give exemption to certain organisations of a charitable kind?

Mr. MacEntee

No, not of a charitable kind, but to organisations connected wholly with amateur sports like amateur basket ball. There are two sports involved here, amateur basket ball and amateur cycle roller racing. I understand that people who are interested in cycle road racing indulge in cycle roller racing during the winter months and run competitions and races just as if they were racing on a track or road.

Mr. O'Higgins

Why is it necessary to deal with merely these two sports? Is there already a general exemption?

Mr. MacEntee

We are merely adding these two. All other sports participated in by amateurs have already been exempted from the entertainments duty. These new sports spring up from time to time.

Question put and agreed to.

Section 6 agreed to.

SECTION 7.

Question proposed: "That Section 7 stand part of the Bill."

Mr. Norton

I take it the interpretationof this section is that where a town has had a population of over 500 at the latest census but that at the previous census the population was less than 500, then for the purpose of ascertaining the population of the town or village for entertainments duty you proceed by way of assuming that the town will have the benefit of whatever goes with the type of population which is less than 500 for two years from the 1st September, 1953.

Mr. MacEntee

The general purpose is that where a cinema has enjoyed exemption from duty by reason of the fact that, so far as the 1946 census was concerned, the population of the town in which it was situated was less than 500, it will continue to enjoy the exemption for two years as from 1st September this year. The reason for that is this. A very difficult problem arises because the area in which a census is taken sometimes varies and other changes may take place. Institutions are left out all right, but there may be a large temporary influx of population and the population is recorded as it stands on one particular night. I am hoping that before the two years have elapsed we shall find some more rational basis for giving a concession of this kind to cinemas in small towns and villages.

There are no legal statutory administrative boundaries to these towns and, in some cases, it has been a matter for the convenience of the census-taker as to what area has been included in the town or village concerned. That has led to certain very extraordinary anomalies. In some cases, the population of a town or village has jumped from, say, 470 in 1948 to almost 600 in 1951. That has been a fairly common occurrence. In one case down in Wexford, Rosslare Harbour, the population, according to the census-taker, jumped from 496 to 572. The figures, of course, did not represent any real increase in the population of the area. They merely meant that the person who took the census included in Rosslare Harbour area an outside townland which had not been taken into account before.

Mr. Norton

There are two aspects of this problem which I want to raise.

One has been adverted to by the Minister. I have in mind one particular case, and I suppose it is typical of others which will be found elsewhere. In this particular small town with a population of less than 500, the only cinema, which provided a pretty poor living for the owner but did provide some amusement for the residents, particularly in the long dreary winter nights, had exemption from entertainment duty prior to the last census. Then the last census was taken and, although nobody locally could discover any substantial difference in the town in question, its population shot up by over 100. Nobody knows where they came from. In fact, many people thought the population might have gone down because of emigration.

I understand the increase in population was due to the fact that at the time the census was taken a number of turf workers migrated into the area. But, because they came in temporarily during the census, the local cinema owner, who was getting a very precarious livelihood from trying to run the cinema with a population of 500, now finds he comes under the scope of this section. The town is now out of the category of having a population under 500 and, while he gets some temporary relief so far as this section is concerned, for the future he will have to pay 48 per cent. of his takings. Not 48 per cent. of his profits, which might be understandable, but 48 per cent. of his takings will now be annexed by the State simply because at the time the census was taken a number of people were temporarily living in the town. I think that is unfair. I do not think it was ever intended that the calculation should proceed on such an adventitious basis. I think there ought to be provision for review where there is a clearly explainable case for the temporary increase in population.

Aside from that, I think rural Deputies will share my view that there is something to be said for making it possible for the small cinema proprietor to carry on in the very small town or village. It is notfair that his livelihood should be related to the sparsity of the population. It is not fair that the question of whether a cinema will be in the town or not should depend upon the paucity of the population there. We ought to recognise as a matter of social policy that it is desirable to have cinemas in small towns and villages in order to provide some local entertainment for the people, as people will not stay in these places if there is not a cinema to provide entertainment for them. People, will not stay in these places if their winter nights are to be nights of unrelieved bleakness and I think, as a matter of social policy, we ought to do whatever is possible to keep the cinemas in these small places as a social amenity for the people.

I do not think we are doing it in the best way by the device set out here and which has been in our previous Finance Acts. I do not think it is a matter of political approach. I think it is a matter of social approach to the problem of people living in a small town or village. I should like to see the Minister approach this from an entirely different point of view. For instance, in the case of some cinemas, I think the whole method of fixing a stamp to the admission ticket is an archaic arrangement. It does not make sense. It is certainly not fool proof and is capable of any kind of manipulation. The revenue officials cannot properly supervise cinemas in small places. It would be far better if the approach were that the proprietor of a cinema in a small town would pay an annual licence fee of say, £50 or £100, just as you pay a road licence for running a motor-car. Once you pay the licence fee you are free for the next 12 months. That would obviate the necessity for constant supervision by revenue officials. It would mean fewer false statements in the preparation of returns and, at the same time, it would provide a cheap administrative method of getting whatever revenue the State as a matter of policy desires to get from cinemas in these places.

In the meantime, I think the Minister might without any real loss ofrevenue, particularly if he has something in mind from the point of view of changing the method of assessing the duty in these cases, increase the figure of 500 to 1,000. I do not think the loss of revenue would be very much. If there is to be a change, let us have a change on some more rational basis than we have at present. The figure of 500 was really an arbitrary figure when first put in there. There is nothing more special about the figure of 500 than there is about the figure of 600.

I am not making a case for the town or village with a population above or below 500 but, generally, for the really small places where it is desirable to keep cinemas for the entertainment of the population and where the provision of a cinema ought not to involve the possibility that the hopeful cinema proprietor will lose whatever capital he puts into the erection of a building suitable for a cinema and the purchase of the necessary gear and equipment for operating it. I think we ought to work it on a better method than is enshrined in this section. Then I think the Minister could without any real loss of revenue move an amendment to this section pushing the figure up from 500 to, let us say, 1,000, and let him in the meantime review the matter with a view to, generally speaking, providing better facilities for the operation of the cinema in the small town or village.

Mr. MacEntee

I am very anxious that these entertainments and amenities, or sources of entertainment which the rural people enjoy, should be preserved, but at the same time I cannot overlook the fact that over £1,000,000 is secured out of entertainment tax levied mainly on cinemas, and I cannot allow that sum to be eaten into by gradually increasing the population limit for tax-free entertainment. The whole difficulty, as Deputy Norton has said, is occasioned by the fact that under the Act of 1949 the qualification for exemption is the population at the last census. It is, as I already said, a very imperfect basis, but I have not been able to think of any other, and in the meantime inorder that those persons who have enjoyed the exemption will not be any worse off by reason of the figures secured by the 1951 census, we are extending it for two years as from the 1st September. We are extending the duty-free exemption which they enjoyed prior to the publication of the census figures. In the meantime we can examine this, and see what we can do about it.

I would not pledge myself at all to accept the proposal to bring the limit to 1,000, but that will be examined along with other matters. If I did increase the limit from 500 to 1,000, I would then be told about the town that had a population of 1,100 or perhaps 1,500 and so on, and we would also have complaints. Do not forget that to some extent people would say that if you raise this population figure too high people would be able to build larger cinemas outside the three-mile limit which would, by reason of the fact that they were getting lower rates and perhaps charging lower prices, be able to attract numbers from the cinemas in the small towns. It is a problem which is not easy of solution, but we want to try and preserve the country cinemas.

In regard to those which are situated in towns with populations exceeding 500, we are doing something in the new scale, to which the Dáil has just agreed. This is an attempt to deal with the problem of the cinema in the village. All we are asking here— and I think we should get it—is that we should be given a breathing space of two years in the hope that in that time we will be able to hammer out a better scheme than at present exists.

Mr. Norton

Might I bring this consideration to the Minister's notice? Is it not the position that where a town has a population of over 500 the entertainment duty for a cinema in that town is exactly the same as that paid by a cinema in the City of Dublin. In other words, in the case of the fellow running a small cinema in a town with a population of 501 in what might be described as a rural area, the rate of entertainment duty for that small cinema is the same rate that obtains in the City of Dublin?

Mr. MacEntee

In fact, it will not be, Deputy, because rates of admission are lower and the incidence of duty on lower rates of admission is less burdensome than on higher rates.

Mr. Norton

The position in the matter is this: if a cinema in the City of Dublin, say, charges an admission fee of 2/- there is a certain rate of entertainment duty paid on that. If a cinema proprietor in a small village wishes to charge the same fee he has to pay the same rate of duty. He can only avoid the impact of the higher entertainment duty by keeping his cinema prices down to the very lowest level, and of course if that happens, you can understand the kind of comfort and entertainment you get where cinema proprietors try to run shows based on 4d. or 6d. admission.

Mr. MacEntee

Make it 9d. or 1/-.

Mr. Norton

Well, what is the difference between the city and the rural area if the charge is 1/-?

Mr. MacEntee

There are very few cinemas in Dublin that would afford great luxury at admission prices of 9d. or 1/-.

Mr. Norton

That does not disturb my argument—that the rate of duty for admission charges is the same as in Dublin for small areas throughout the country. Obviously, there is something defective in the line of State policy that produces that inequality. I do not think it is fair that a fellow trying to run a cinema in a small place should have to measure up to the same standard of entertainment as a fellow in Dublin, nor do I agree that it is reasonable that he should pay the same rate of entertainment duty as a large and heavily capitalised undertaking in the city. Perhaps the section in the Bill does provide a breathing space for those who are now operating cinemas in towns where the population is now above 500 but was below that figure at the previous census. But again, the whole question of the levying of entertainment duty on cinemas of that kind is, I think, one which calls for early revision, unless you aredeliberately going to make war on the small cinemas because they cannot possibly hope to survive if these rates of duty are made operative once they pass the 500 figure nominally. I wonder is it possible for the Minister to take power in this section either here or in the Seanad, whereby, when there are some artificial factors to increase the population such as migration into an area, allowance would not be made for the fact for the purpose of assessing the population of the town for the purposes of entertainment duty? It is unfair that a temporary influx of people a month or so before the census is taken should operate to disturb the whole population figure in the town for the purposes of taxation under this section. If the Minister would take power to examine cases of that kind where there is clear evidence of artificial factors operating to increase the population of a town, it might help to remove anomalies which at present arise there and which the Minister admits himself.

Mr. MacEntee

I do not undertake to do anything more in relation to entertainment duty this year—anything more than I am doing. It is true that an influx of population of that sort into a town might deprive the cinema proprietors of the exemption which they enjoyed under the law as unamended but with the section as we have it now they will continue to enjoy that exemption for at least two years. On the other hand, we can also take this into consideration—that if there is such an increase in the population of a town and even though it were to be temporary as indicated by the Deputy, it is very likely that the cinema proprietor's business would benefit considerably. He may lose one way but he gains in the other way. Whether he loses or gains, in the situation as it is now, he will continue to gain for the next two years, and in the meantime I would hope that the next Finance Bill will contain more satisfactory proposals for dealing with the problem of the country cinema.

Question put and agreed to.

SECTION 8.

Mr. MacEntee

I move amendment No. 3:—

Before Section 8 (but in Part II) to insert a new section as follows:—

(1) Paragraph (3) of Part II of the Schedule to the Finance (Excise Duties) (Vehicles) Act, 1952 (No. 24 of 1952), is hereby amended by the addition thereto of the following provision:—

"Where a farm is carried on as part of or in connection with—

(a) a hospital, sanatorium, convalescent home or similar institution,

(b) a mental institution within the meaning of the Mental Treatment Act, 1945 (No. 19 of 1945),

(c) a monastery, convent or similar institution, or

(d) a college, school or similar institution,

the person carrying on the farm shall be regarded for the purposes of this paragraph as being a person whose chief occupation is farming."

(2) Sub-section (1) of this section shall be deemed to have come into operation on the passing of the Finance (Excise Duties) (Vehicles) Act, 1952.

(3) The appropriate repayments shall be made having regard to the foregoing provisions of this section and the repayments shall be made in accordance with such directions as may be given by the Minister for Local Government.

Under the Finance (Excise Duties) (Vehicles) Act, 1952, a special rate of duty for tractors used for haulage in connection with agriculture was allowed. In order to prevent an abuse of the concession, it was necessary to confine it to persons whose only or chief occupation was farming. It happens, however, that very large farms are run in connection with hospitals, schools and religious institutions. While it could not be said that their only or chief occupation is farming, nevertheless, as the tractors in thesecircumstances would be used mainly for agricultural purposes, it is proposed to grant the reliefs set out in the section.

Amendment agreed to.

Dr. O'Higgins

I move amendment No. 4:—

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

From and after the passing of this Act the duty of excise imposed by sub-section (2) of Section 3 of the Finance Act, 1920, shall be charged, levied and paid at the rate set out in sub-section (2) of Section 6 of the Finance (No. 2) Act, 1947, in lieu of the rate set out in sub-section (2) of Section 8 of the Finance Act, 1952.

I move this amendment for very obvious reasons. It, in effect, asks that the last increase in duty on whiskey be remitted and that we return to the position as it was in 1950. The reasons prompting this amendment are that there has been a drop in consumption, a drop in production, a fall in employment and, above all, a fall in revenue. The only possible defence that can be made for the imposition of a duty by a Minister for Finance is that it will secure increased revenue. If a heavy duty, in fact, results in a drop in revenue, then there is no justification whatsoever for such a duty. If that drop in revenue is associated with a fall in employment and a considerable drop in production, then the case for remitting such duty should not require to be made in an assembly such as this. We have every Minister and most of the Deputies going around this country preaching more and more production and saying that the only possible solution for our adverse balance of trade, for our unemployment and to check emigration, is increased production. Here by an act of the Minister for Finance, well-intentioned at the time, we reduced production in hopes of increasing revenue but, after a year and a half's experience, we find that we have reduced production very, very considerably and that in addition we have reduced revenue by nearly £500,000.

Any amount of artificial aids aregiven in this country to stimulate and bolster up industries of various kinds. The necessity for industrial activity is obvious but most of our industries, or very many of them, are not native in the fullest sense of the word. They are engaged in processing articles, the raw material of which comes from abroad. The distilling industry, however, is native all along the line from the time the grain of barley goes into the soil until the finished article is consumed. The farmer gets his whack, the agricultural labourer gets his share, likewise the distiller and the employees of the distiller. The transport people get their turn distributing the finished product all over the country and then the licensed trade proprietor and the assistants in that particular trade all draw their share from the industry. All along the line, the product is Irish and the employment is Irish. There is nothing foreign from beginning to end. If by a tax we reduce the amount of production and at the same time reduce the revenue from that particular product, then it is time to lean back and examine the situation.

On the Second Reading of this Bill, the Minister put forward the case that the reduced consumption and production were due to a withholding or a hold-up by the distillers, in hopes of some remission later on. It is very difficult to believe that that would be done for such a very long period of time. There was also a suggestion of advance buying. I do not think there would be enough credit or money behind the licensed trade to engage in advance buying on the gigantic scale that would have to be done to account for the fall in production since the imposition of this second duty on whiskey. The Secretary of the Distillers' Association published communications which appeared in the Press contradicting the Minister's assertion. There was another statement made by the Minister that Irish whiskey was being sold as Scotch whiskey. That produced a contradiction by the Secretary of the Scotch Whiskey Distillers —a rather indignant one, because the suggestion, of course, charged them with illegal practices.

The fact of the matter is that the production and consumption of whiskey have fallen. That means that there is a considerable drop in employment. There is a considerable drop in the distilleries' purchase of barley from the farmers. In the distillery zones a permanent, regular and reliable centre for the sale of barley was the distillery and as a result of the reduced market, there is dislocation in the industry, in an industry that requires a chance and which has got very few chances. Markets are more frequently upset and destroyed than they are built up and maintained. Here, for some peculiar reason, a Government that is supposed to be anxious for increased trade, increased production, increased employment, increased consumption for things native to the country such as barley, by a deliberate act imposes a duty that results in a drop in revenue, a drop in employment and a drop in consumption and production.

A case, not a serious one, may be put forward by the Minister to the effect that anybody advocating a remission of this particular tax is advocating drunkenness or alcoholic excess in this country. Every one of us deplores drunkenness. Nobody has any use for the drunkard. Anyone in the licensed trade will tell any of us that the drop in consumption is not because the drunkard is becoming a total abstainer. The drunkard will go without his meals and without new clothes rather than go without his liquor. It is the rather abstemious man who used to take two or perhaps three drinks a day and reduced them from three to two or from two to one. That is where the reduction lies. That man was doing nobody any harm and he was doing himself no harm. It was a little comfort in his life. He cannot afford it now. There is where the economy is. Whatever case the Minister may make, let him not attempt to make that case.

The Minister's idea in imposing this tax was not to cure drunkenness or to make people more temperate. According to his own calculations, when he imposed the tax he hoped to get an extra £1,500,000 per annum. Instead of getting that much extra—I think the amount was £1,200,000—he actually got £400,000 less than he got with thelower rate of duty. I am advocating that he should return to the lower rate of duty and get approximately £500,000 more money.

Mr. MacEntee

First of all, I want to take this opportunity of saying that I accept the statement made by the representatives of the Scotch Whiskey Distilling Association. I have not been able to substantiate the statements which were made to me and which I made in this House in regard to the export of Irish whiskey and of Irish whiskey being sold as "Scotch". A considerable amount of Irish whiskey is exported for blending purposes. Much of it is immature whiskey which would not be sold here. I am not prepared to go further than to say that it is exported. Perhaps it may be blended elsewhere with Scotch whiskey though not sold as such.

The second thing which I should like to do is to correct a misstatement— unwittingly made. I think—by Deputy Dr. O'Higgins. We did not expect to get either £1,500,000 or £1,200,000 as a result of the increase in the duties on home-made spirits. We expected to get something of the order of £750,000, which is a substantially smaller sum than that which the Deputy has mentioned. It is quite true that we did not reach that yield last year. As is well known there was a decline, an actual fall, in the revenue of a substantial amount. I venture to say, however, that the reduction in the amount of whiskey cleared from bond was much greater than the actual reduction in consumption and that there was, as Deputy Dr. O'Higgins has reminded me, a substantial amount of forestalling over a period of a year. I am glad to say that our experience in the first quarter of this year would appear to bear that out.

Mr. Sweetman

Is the Minister talking of this calendar year or of this financial year?

Mr. MacEntee

I am talking of this financial year. In 1950-51 the clearance in the first quarter was of the order of 166,000 gallons. In 1951-52 it was 161,000 gallons. Last year—1952-53—it fell to 105,000 gallons. To whatever cause that decrease may be ascribable, the fact is that the clearances this financial year have so increased by almost 50 per cent. so that, in the first quarter of this year, the clearance from bond amounted to 155,000 gallons or almost 50,000 gallons more than last year and very little less than in 1951-52, 1949-50, 1948-49 or 1947-48. That is the position. Apparently the revenue in 1952-53 suffered by reason of the fact that there had been excessive clearances in other years. But now, when these unduly large stocks have been, shall we say, liquidated, the position is becoming normal.

Mr. Sweetman

Surely they were always liquid?

Mr. MacEntee

They only went into liquidation in the first quarter of last year. The position now would appear to be repidly reaching normal. As I have said, the clearances have substantially increased and would indicate that our estimates for the revenue from the spirits duty in this particular year will be fulfilled.

Mr. Cosgrave

Deputy Dr. O'Higgins dwelt on a number of aspects of the effects of the heavy rate of duty. The Minister's figures show that last year there was probably some anticipation of an increase in taxation by reason of the increase in the number of gallons withdrawn for home consumption. It was 87,990 gallons in the month of March last year—which was somewhat larger than that of February and January. The kernel of the problem is the effect which a substantially increased rate of taxation is having on the distilling industry. Over a number of years, the Distillers' Association have made representations to successive Ministers for Finance in regard to the serious burdens which the industry was obliged to bear. While that case had considerable force — and figures were produced to show the effect of the increased rates which spirits were carrying—the Minister for Finance always countered with the reply that if an alteration were made the revenue would suffer. That applied not only to the quantity of whiskey which was allowed for home consumption butit applied with considerable force to any demand for a relaxation in the amount allowed out for export.

The revenue returns for last year show that the arguments advanced in the past by the Revenue Commissioners no longer hold good because last year there was a fall in the consumption of home-made spirits by over 200,000 proof gallons, and a fall in revenue from all spirits of between £300,000 and £400,000. Deputies on all sides have on numerous occasions expressed approval of the efforts made to develop and assist industrial expansion. If a new factory is opened, there is always a flourish attached to the ceremony. The Minister concerned, if a Minister is invited, dwells on the importance of providing additional employment, on the improved prospects for the locality and on the skill and initiative of the promoters, and very many forms of protection have been provided by way of tariffs, quotas and State assistance of one sort or another. These industries, if they offer the prospect not only of producing articles which we require at home, but of an export trade, receive commendation from all quarters of the House and from the community as a whole.

Here we have an old-established industry, an industry which uses as its raw materials the produce of Irish farms, which provides Irish farmers with a cash crop, which not only ensures a type of agricultural production that should be welcomed but makes raw materials available for us, no matter how external influences may affect us, how trade may develop or how import prices of raw materials may change and which provides direct employment not only in the distilleries but on the farms, with consequential employment in transport and so forth. It is an industry with a long established tradition of products of high quality which have not only maintained their place in the home market but have succeeded in getting a foothold abroad. It is, I think, significant that a number of the smaller distilleries have seriously curtailed their production programme because of the effects of the present high rate of taxation.

From time to time during discussions on this matter, reference has been made to the fact that the distillers have not availed of the opportunities that presented themselves and some suggestions have been made to the effect that they have not increased production. I have some figures here which, I think, refute that suggestion. They are figures for the production of home-made spirits and for stocks of home-made spirits in bond. For 1943/44, the production of home-made spirits was 1,240,000 proof gallons; in 1944/45, 1,583,000; in 1945/46, 1,792,000; in 1946/47, 1,471,000; 1947/48, 1,263,000; in 1948/49, 1,840,000; in 1949/50, 1,975,000; and in 1950/51, the last year for which I have figures, 2,078,000. Stocks in bond for the ten-year period from 1942 to 1952 increased from 7,599,000 to 11,000,000 proof gallons. Each year showed some increase, and, in the ten-year period, there was an increase of over 3,000,000 proof gallons held in bond.

It is only right to say that when the reduction in the rate of duty on beer and tobacco was granted by the inter-Party Government in 1948, the Distillers' Association made representations requesting a reduction in the duty at the time. These representations were renewed during the subsequent years of the inter-Party Government, and, while it was not found possible to accede to them, it is true to say that there was an alleviation in direct taxation, as it affected the industry. Since the representations were made, the duty has been increased from 137/- per proof gallon to 176/- by the Budget of 1952 which is re-enacted and continued in the Finance Bill now before the House.

I believe that the problems facing the industry can only be surmounted by a reduction in the rate of duty, and I think the House will join with me in expressing the view that not merely should there be a reduction in the duty, but that the statement published by Córas Tráchtála in to-day's Press that there has been a reduction in the export of whiskey must give the House and the country serious concern, that this old-established industry should be facing a decline, a decline at a timewhen feverish efforts are being made to provide more industrial development, to increase production and to provide employment. I suggest to the Minister that the terms of the amendment should be accepted and that an alleviation of the present high rate of taxation is an essential prerequisite to the continued prosperity of this industry.

Mr. Norton

I support the amendment, and I do so because I think the speech made by the Minister for Finance on the Budget this year is in itself a strong reason why the remission of taxation suggested in the amendment should be conceded. If the Minister or the Government decided to embark on a crusade for the extermination of the Irish distilling industry, we could understand it as a line of policy. If the Government said: "We want to annihilate the distilling industry," it would be all right. One might disagree with that line of policy, but at least one could understand the mental and psychological approach, but is that the policy of the Government? What is the Government's policy in relation to the distilling industry? As has been pointed out by previous speakers distilling is one of our oldest industries and one that gives considerable employment of a very valuable character. It is one of the few industries which employs a very high proportion of male workers. It is one of those industries which to a very large extent is personally controlled, the type of industry which shows towards its workers a greater appreciation of craftsmanship and skill than operates in the public company type of industry where the incentive to invest money is governed largely by the dividends yielded rather than by pride in the products of the particular industry.

So far as distilling is concerned it gives considerable employment in the tillage counties through the growing of malting barley. It provides a good cash crop for the farmer and it enables him to sell that crop to folk who on the whole pay pretty good prices for it and pay their debts regularly. It provides a good class of employment. The employment consistsmostly of adult male workers and wherever distilleries have been established there has been considerable stability in employment. In every one of the distilling industries trade union agreements have been implemented between the employers and the workers regulating wages and conditions and the level of the agreements reached is pretty high.

So far as the value of the products is concerned, it represents a very high percentage of our total industrial production. So far as relations with the workers employed in the industry are concerned there has been a long period of industrial peace and a willingness to recognise that it is desirable to promote good industrial relations. No figures produced to show releases from bond in the last three months can disprove the fact that the distilleries are now passing through a bad time. A goodly number of workers have lost their employment. A goodly number of assistants employed in public houses have lost their employment. A goodly number of farmers who had good contracts for the growing of malting barley in years gone by are not finding it so easy to enter into such contracts now. Generally speaking, because of the increased duties imposed in the Budget of last year and continued in the Budget of this year, the distilling industry is now going through one of its most critical periods.

If the Minister says that the purpose of increasing taxation on spirits last year was to raise revenue, then his efforts in that direction have been a failure because the duty yielded from the increased taxation was lower than the duty yielded when the impost was not so heavy. The Minister hopes that he may make good some of the shortfall in revenue which he anticipated last year. The Minister's guess last year proved to be hopelessly inaccurate. Indeed, this is not a field in which the Minister's guesses have been conspicuously successful. I could quote—indeed, I will quote on the next stage of this Bill—some of the Minister's prophecies as to what he would get last year in respect of the increased duty on spirits. The Minister,of course, completely miscalculated the market. Now he apparently refuses to see what every distillery and every publican in the country could have told him would happen, namely a considerable falling off in the consumption of spirits with a consequential falling off in the amount of duty.

From the point of view of revenue I do not think the Minister will lose anything by accepting this amendment. From the point of view of encouraging distilling and helping the distilling industries I think the Minister would be doing a good day's work in accepting this amendement. We must remember that distilling is really an all-Irish industry. The raw material is indigenous. All the processes associated with distilling are entirely Irish. Distilling probably makes the least demands on the Department of Industry and Commerce for protection, for assistance, for guarantees or quotas. Some industries which import commodities and merely make holes in them or undertake some slight fabrication are constantly looking for more and more protection and more and more assistance and because they are apparently influential enough they can get any kind of assistance they ask for.

Here we have an old-established Irish industry which does not trouble the House or the public with its wails and its woes. Yet, because apparently it can manage to carry on in this unexciting way from the point of view of public controversy it is singled out by the Government for the imposition of a heavy code of penal taxation, an imposition which must retard the industry and in the long run yield to the Exchequer substantially less. I do not think that the Minister would in any way indent on State finances by accepting this amendment. He ought to recognise now as a result of his experience in the past financial year that it was a mistake to put this new burden on the distilling industry with consequential additional unemployment in the industry and in the auxiliary industries and services associated with it. A review of what happened last year should induce the Minister to recognise that there is no longer any justification—indeed there never wasjustification—for the imposition of last-year's burden.

Mr. S. Collins

The issue raised in this amendment is a simple one. It is based on an analysis of the reasonable way in which to raise revenue and what may be anticipated in the normal way from a too severe tax imposition. There is very clear evidence before the Minister in this particular instance that one can over-tax an industry to the deteriment of the anticipated financial yield. It is quite obvious now that the Minister has over-reached himself and, instead of being able to maintain the level of revenue, he has reduced it considerably. That would be unimportant if the issue involved had not serious consequences but in this particular bit of savagery the Minister has almost succeeded in extinguishing one of our oldest traditional industries. That is something to which the House should direct its attention in a rather deliberate way. In accepting this amendment the Minister will not lose anything. At any rate he cannot do worse. It is a simple mathematical theory that if one over-taxes one is bound to suffer a substantial fall in revenue. If, on the other hand, one taxes at a reasonable level one is likely to find buoyancy at that level. That was proved conclusively by the last Government. When they took it upon themselves to remit certain penal taxation it subsequently transpired that the remission did not in fact cost the State anything because the general yield more than justified the confidence of the then Minister for Finance that instead of causing any serious loss of revenue it was going to maintain and did, in fact, increase the yield.

We have got to examine this whole situation against the background of three paramount factors. This particular taxation hits not only the industry itself and its employment potential but also the farming community. It also hits what has been aptly described by Deputy Cosgrave as certain ancillary employment that normally flows from the carriage of barley. We had an election contest recently in East Cork. In one town in that constituency there has been a tremendous curtailment of employmentas a direct consequence of this tax. It involved the discharge of between 30 and 40 male workers. That certainly is not indicative of any intelligent effort by a Government to arrest the rising growth of unemployment.

I venture to hazard a guess as against a guess by the Minister that if this amendment is accepted it will infuse sufficient hope and life into the distilleries to take many people off the unemployment queue and at the same time ensure that the now apparent substantial decline in contracts to Irish farmers by maltsters will be arrested. It is quite true—the Minister knows it is true and Deputy Corry who was here a moment ago but who has gone out knows perfectly well that it is true in the Cork area any-way—that there is a decrease of more than 50 per cent. in certain areas in the contracts being offered by maltsters this year for barley.

Let the Minister, although he may not be of an agricultural turn of mind, analyse the position for himself. In the general overall revenue you are going to have a considerable diminution in the cash available to farmers in respect of a cash crop which they normally produce. This taxation to my mind was savage in its initial conception because it hit the type of industry that was traditional and least equipped to withstand this type of strain. As adverted to by Deputy Norton, many of these industries were family industries in which there was a pride of craftsmanship and a family tradition. It is something absolutely essential to the way of life in certain areas where families grow up in anticipation and expectation of succession. The son succeeds the father and a nephew an uncle within the system of employment in these distilleries. There is a pride of achievement and work in them. The standard of the products ranks fair with the standard of goods produced in any other type of industry in this country. I think it is a travesty on the people that we should by an Act of this Parliament permit the gradual extinction of this type of industry. It isa type of industry which once gone is impossible to replace.

Too often in our history have we seen certain traditional types of craft and industry blotted out never to be revived and this particular industry is one of considerable value to our agricultural industry in so far as it is one of the few real industries the raw materials for which can be found here. In my opinion it is something that the Minister might consider outside the realm of politics altogether. It should be considered as the basis for maintaining an employment potential in certain areas throughout Ireland where otherwise it would not be. In the light of two successive Budgets, I would impress upon the Minister that it would be infinitely better to see relief given to an industry that needs relief and which has an honourable and decent record in this country than to give it, as we found in two successive Budgets, to ballroom proprietors.

In the light of the general economic policy of the present Government the time has come to try and pound, not from the point of view of political advantage, a little bit of ordinary common sense into them and arrest their willy-nilly flight into economic degradation and bring them back to the reality of saving, as they can save, at no loss of revenue to the State. I suggest they can save by accepting this amendment. Many traditional distilleries throughout this country have been a mainstay in rural areas not only in regard to the immediate employment they give but because they are a source of hope and employment to families who grow up round those traditional distilleries.

I press the Minister to accept this amendment with a view to maintaining employment where it is badly needed. We do not want any increased flight from the provincial towns or rural areas. I impress on the Minister that he should accept this amendment to maintain that industry in production. He should accept the amendment because by doing so it will be a near certainly that will enhance his revenue yield. Finally, the Minister should remember that in the ulti-inmate analysis once this type of industry is annihilated by his tax policy it will be impossible to revive it.

Mr. McQuillan

I do not know whether it would be possible to get the Minister to change his mind on this matter. I should like to suggest that I do not believe the Minister, or any member of his Party, would like to see the distilling industry destroyed. I know that is not the intention of the Government, but it has to be pointed out that the very serious impositions in the last two Budgets have done considerable damage to the industry. If the Minister and his colleagues are serious about keeping the industry going, and if they are not prepared to accept the amendment before us, then I think they should find some alternative way of keeping the industry alive. In other words, if we are not going to allow the Irish people to consume this excellent beverage at a reasonable cost, then I suggest we should take steps to make it available to other nations and thus protect the distilling industry here. Let us have it one way or the other.

The trouble that I see is that this decision to increase the burden on the distilleries was taken at a time when it was most difficult for those concerned to try and break into the world market. I think it must be apparent to every member of the House that, in the past, our distillers have been very conservative, and that when they had good times they neglected to a great extent to drive home the advantage they held and so secure a permanent market in other countries. The trouble is that we are paying to-day for their conservatism. It is not the members of this House who are going to suffer.

I have dwelt in other debates on the value of the distilling industry to the farming community. If anyone takes the trouble to look over the debates they will find that other Deputies have also mentioned the benefits which this industry confers on the farming community. It is agreed by all of us that the distilling industry is based on agriculture, and, if one likes to put it this way, one can say that the distilling industry is about the one industrial arm of agriculture that we have. Tomy mind it has been most neglected. Everything that goes to the making of whiskey is of benefit to the farming community, to those who are employed on the land and to those engaged in the towns in the distribution trade.

The growing of malting barley provides a rich cash crop for the farmer. The whiskey is made by the distiller from this barley and the residue, the grain that is left after the distilling, goes back to the farmer and provides him with an excellent feeding stuff. In addition, we know that within the last couple of years a number of distilleries have perfected a system whereby they are able to utilise all the waste products available after distilling. Heretofore, they had to be discharged into the river but now, as I say, due to the system which they have perfected, these waste products, when processed, provide excellent feeding for pigs, Therefore, there is no waste whatever from the time the seed goes into the ground for the growing of the malting barley until the bottle of whiskey, which is the final result, is placed on the table or on the counter before a customer.

Everything connected with this industry means profit and wealth for the farming community, for their farm workers, for those employed in the distilleries and those engaged in the distribution trade. In addition to all that, the distilling industry provides a first-class income for the Exchequer. Again, the money which is raked in from it by the Exchequer can be utilised for very beneficial purposes for the community in general. There can be no question but that the impositions in the Budgets in recent years have been damaging to the industry generally.

I read in the newspapers recently that the Minister had been congratulated by certain pressure groups, as one might describe them. They congratulated him on turning the people of this country into a bunch of teetotallers. I have no intention of levelling criticism at those people because everyone is entitled to be in an organisation as long as it is not a secret organisation. What I do want to say, however, is that I think someof those people should show a little more charity instead of congratulating the Minister on cutting down the consumption of liquor. I wonder did they consider for a moment that the efforts of the Minister in this regard have thrown many of their comrades, boys and girls throughout the country, out of work and left them on the dole or else put them on the emigrant ship? Now that they have got their way, so far as the Minister is concerned, I think they should show a little more concern for the unfortunate individuals who have lost their means of livelihood. I want to impress on the Minister that he should help in every way possible to try to find an alternative market for Irish whiskey.

In my own constituency, particularly in the southern portion of the County Roscommon, quite a large number of small farmers there have been growing malting barley for the past 40 years. The land that they utilise for the purpose is not suitable for the growing of wheat. It is not good land for that purpose. The farmers I refer to are looked upon as being some of the best tillage farmers in Ireland. This year, the firms which give them contracts for the growing of malting barley have reduced the contracts by over 50 per cent. That means a reduction of 50 per cent. in tillage in that area because it will take time before those farmers will be able to change over to an alternative type of tillage. I believe that the same thing applies in other areas which have been noted for the growing of malting barley. Therefore, one result of the impositions in recent Budgets will be a reduction of 50 per cent. in the acreage under the growing of malting barley. That is taking place at a time when appeals are being made, and rightly so, for an increase in the tillage programme.

I am merely mentioning these things to the Minister. I do not know what he is going to do about this amendment. I mention them for the purpose of impressing on him that if he is going to stick his heels in the ground with regard to the amendment and not accept it, he must ensure that the distilling industry is not going to suffer,that employment will not decrease and that tillage will not decrease. I am suggesting that his colleagues and himself in the Government must take immediate steps to ensure that alternative markets be made available for Irish whiskey in other countries, and that the time is ripe for a complete overhaul of the industry so that we can get co-operation amongst the distillers themselves with a view to initiating an energetic drive comparable to that undertaken some years ago by the Scottish distillers when they, more or less, captured the world market. I am offering that alternative to the Minister because I feel that neither he nor his colleagues would endeavour at any time to destroy the distilling industry.

Mr. Burke

I have been rather disappointed with some of the points made in the course of this debate. We are all anxious to see everything in the garden lovely. None of us likes to see anybody hurt by taxation, but when I heard the word "savagery" used and implications made that these impositions were for some purpose other than trying to raise taxation, I was forced to rise and say a few words on this amendment. There has been a good deal of reference by the Deputies opposite to the Budget of 1952. They were the people who were responsible for this taxation in 1952. But now, of course, they are on the opposite side of the House. I say that they were directly responsible for the taxation that we were forced to impose. We found ourselves in such a very awkward position in 1952, with our Minister for Finance having to handle a very ugly job, that taxation on spirits and other things had to be increased. The Minister, and every other Minister, knew very well at that particular period that they had to do some unpopular things. No Government wants to do that, but the situation was such that we had to put the interests of the country before the interests of our own Party if the economic position of the country were to be put right once again. We do not want to carry on the policy of expediency that was adopted by the Opposition from timeto time. They may laugh about it but they are very good at mispresenting facts and I have often congratulated them for that.

An Leas-Cheann Comhairle

Deputy Burke might come to the amendment.

Mr. Burke

As a matter of fact, I am merely answering some of the points that were made already. We realise thoroughly that anything we have done is essential. In imposing this taxation we realised that some one was going to be hurt as a result. This matter has been kept under review. I have met a number of representatives and have discussed the matter with them and I have great sympathy for their position. Nevertheless it is outrageous to have Deputies standing up here and referring to the action taken as savagery, implying that the Minister, a political Party or a Government would dream of taking such a step unless it was a matter of urgency. A Government must endeavour to pay its way in the same way as the ordinary housekeeper would. We have to try to clear away the legacy we inherited from the inter-Party Government when they left office.

Mr. O'Higgins

This is widening the discussion.

An Leas-Cheann Comhairle

The Deputy is getting away from the amendment.

Mr. Burke

I am not. I am coming to the point.

Mr. Norton

The Deputy ought to have respect for the Chair.

Mr. Burke

I am sorry my intervention in this debate has ruffled the members of the Opposition so very badly. I would be very sorry to hurt their feelings to that degree. The truth is very bitter and the truth in this matter is that the Deputies on the opposite side of the House, as a result of their conduct, are responsible for the introduction by the Minister for Finance of a Budget of this kind.

An Leas-Cheann Comhairle

We are discussing the amendment.

Mr. Burke

I am discussing it also and pointing out that the Opposition are responsible for the remedial measures taken by the Minister.

Mr. Sweetman

I take it I will be allowed to take the same line.

Mr. Norton

Will the Deputy tell us why we had to impose this tax on spirits and give a gift of £140,000 to the dance hall proprietors?

An Leas-Cheann Comhairle

Deputy Burke will address his remarks to the amendment.

Mr. Burke

When Deputy Norton was speaking on this matter he should have dealt with the merits of the case instead of trying to introduce red herrings, at which the Deputy is very adept. None of us likes to impose taxation on spirits or on anything else. We like to see everybody happy. I want to emphasise that the people who are responsible for this state of affairs are the Opposition.

Mr. O'Higgins

This is the fourth time.

An Leas-Cheann Comhairle

The Deputy has said that at least three times.

Mr. Sweetman

The Minister for Finance has not been well and it is not fair of Deputy Burke to inflict that type of nonsense on him the first time he comes back. The Deputy had not read the amendment and did not know anything about it. When Deputy Dr. O'Higgins was proposing this amendment he gave certain figures and when the Minister replied immediately afterwards I understood the Minister to say that the figures given by Deputy Dr. O'Higgins were not correct. I think the Minister mentioned a figure of £700,000.

Mr. MacEntee

That is true. I quoted the total, the home-made and the imported.

Mr. Sweetman

In the Budget speech of 1952, at column 1142, Volume 130 of the Official Debates of 2nd April, 1952, the Minister stated in the paragraph dealing with spirits (I do not think I need read the whole paragraph):—

"... Accordingly, the excise duty on home-produced spirits is to be increased by £1 19s. per proof gallon, with corresponding increases in imported spirits. This will raise the price of whiskey by 6d. per glass, again, as in the case of beer, allowing some margin for the trade. By this means, I expect to get an additional £1,020,000 this year."

That was the figure Deputy Dr. O'Higgins mentioned as the expectation and that was the figure that the Minister contradicted. Now let us look at the result.

Mr. MacEntee

I think the Deputy must realise that his amendment relates only to home-made spirits and we are discussing home-made spirits.

Mr. Sweetman

Deputy Dr. O'Higgins referred clearly to the total consumption.

Mr. MacEntee

The amendment is directed to one thing and Deputy Dr. O'Higgins' remarks were apparently directed to something different.

Mr. Sweetman

Let us get the net figures. If the £1,020,000 was divisible as to £700,000 for home-made spirits and £320,000 for imported spirits, I am quite happy with that. But will the Minister now come along and break down the other figure, because when the Minister was speaking on the Budget this year on the 6th May, 1953, he mentioned the figure for the reduction of the spirits duty receipt as being as much as £1,500,000 short.

Mr. MacEntee

That is home-made and imported.

Mr. Sweetman

Will the Minister give us the break-down of that figure because if we want to compare one with the other we must compare like with like? That is my only point. If you are going to take the home-made figure solely in one instance, you must also take the home-made figure in the other. The Minister also produced some figures in regard to drawings from bond for the first three months of the financial year, this year and the three previous years.

There undoubtedly was some hope this year that the Minister would in his Budget see the error of his ways and repent of what has been described, and correctly described, as the savage imposition that was put on in 1952, even though Deputy Burke does not like that word. It is a very fair and adequate description and there is no doubt whatever that some part of the 155,000 gallons which have been taken out of bond this year does represent a make-up in stocks where stocks have been allowed to decline because of hope that the Budget would show some relief. However, it is nonsense to say that the difference involved is purely a difference now between 155,000 gallons and 161,000 gallons in 1951-52. It is purely a nominal difference and trade has gone back to the level of heretofore.

The Minister has only to go into any licensed premises—I say that without meaning any improper suggestion—and he would know, as I would know, if I went in, whether what was taken out of the bottle was as he would like it to be or not. He would get what he wants now but two years ago he would have found difficulty because the supply of whiskey was on quota and it was not possible to get it because the supply was not there. Now the supply is there. Anybody who goes into a licensed premises to buy whiskey now is regarded as such a benefactor by the owner of the premises that he would almost throw his arms around his neck so small are his sales at the present time. That is perfectly patent to anyone going around the city. The value of licensed premises has come down in a most startling way. Profits of the licensed trade are down. That will hit the Minister again in income-tax and, in respect of those licensed premises that are owned by companies, in corporation profits tax. It is a very short-sighted policy. It will mean that the Minister will lose the amount involved in taxation, which on expectation was £1,500,000 on total spirits and, if I may take the same percentages for home-made spirits as the Minister took for expectations, it would be seventenths of £1,500,000, which would be roughly £1,050,000.

That has been the effect so far as the tax is concerned. There has been a startling effect, as Deputy McQuillan mentioned a moment ago, in regard to contracts for barley. So far as Kildare is concerned the allocations by the maltsters and distillers to farmers for barley have declined this year in certain cases. One purchaser of barley for malting purposes is giving a contract for one acre where last year he gave a contract for five acres. In other areas there is a drop of 55 per cent. In one area in mid-Kildare it is down to 20 per cent. of the area allocated for malting barley last year. The effect of that will be very substantial.

This industry, both on the industrial arm and the agricultural arm, gives very good, sound employment. It seems ridiculous, when we are pampering other industries, that we would knite this one in the back. The industries which have no protection and no quotas to keep them alive are those we should go out of our way to assist and we should see to it that they will not be taxed out of existence. That is the only effect of the Minister's impositions last year and the continuation of the increase this year will mean the end of the distilleries, particularly of the smaller distilleries, with consequent substantial unemployment in industry and on the land.

The Minister should think again on this matter. He should be honest and admit that his estimates and his expectations of last year were all wrong, that his estimates based on the first three months of this year will not be right. He should make an effort to save these industries in the only way in which they can be saved, that is, by the reduction of this excise duty.

I do not think it is strictly relevant but, in view of the comment made by Deputy McQuillan on the policy of the distilleries, perhaps I would be allowed to say that up to a couple of years ago one of the reasons why the distilleries were not able to export or build up an export trade was that the Revenue Commissioners refused to give them export allocations. Their export allowance was on quota. It was for the purpose of ensuring thattaxation would be kept up here that they were not allowed to export as much as they liked. Even in one year, the last year in which there was restriction in this way, the delay in the announcement by the Department of Industry and Commerce of the amount which the Government would allow the distilleries to export was of the order of seven months. As well as I recollect they asked for this information at the beginning of September. It was the end of February before they got an indication of what the export quotas would be.

It may have been necessary from the point of view of revenue that the export quota would be reduced but it is not fair, on the one hand, that there should be restriction on the amount that they are allowed to export, as there was in those days, and that then we should come in and hit them for not having exported.

I shall not quarrel about the restriction on exports. If there was not enough for our own people it was probably right to restrict exports. But fair is fair and it is not fair now to accuse those who run the distilleries of sabotaging a national effort, of not having looked after the national interest when, in fact, they were trying to export and the Government Departments concerned, for good and sufficient reasons, were not prepared to allow them to do it.

When we compare the export possibilities of Irish whiskey with those of Scotch whiskey we seem completely to forget that Irish whiskey has built up a name on potstill distilling and that Scotch whiskey has built up a name on patent still distilling. While there might be a difference of taste and palate, I am quite sure the members of this House, if offered a choice, would prefer a potstill brew. We must remember that potstill whiskey requires at least seven years to mature while the patent still whiskey is fit for sale after three years. It is, therefore, a very much less expensive process to build up substantial stocks of patent still whiskey than to build up the same stocks of potstill whiskey. The Scotch distillers are in the luckyposition that they have to carry heavy stocks for export for only three years. It is comparatively easy to foresee how a foreign market may go in three years. It is almost impossible to estimate how a foreign market may go after seven years. If the Irish potstill distilleries are to build up a stock for export seven to ten years hence it is very little encouragement if there is the risk that the export market may then be gone and the double risk that, in addition, the home market is seriously declining and is being driven down.

By attacking the home market in the way that the Minister did in his 1952 Budget he also prevented any possibility of escape for the distillers by building up stocks for the export market. It was an unwise course of procedure in 1952. We said so then. Time has shown that our prognostications at that time were right. The Minister would get just as much revenue by reduced taxation. That would not really affect the person who indulges to excess. It is the person who drinks a limited amount who has had to suffer during the past 12 months. He ought for their sake and for the sake of the workers in the industry to have another look at this matter and go back to where we were, with beneficial results to the pocket of the revenue as well as to everyone else.

Mr. O'Higgins

I think that Deputies who have listened to the discussions we have had here or who have interested themselves in this matter of the spirits tax must realise that there could not be the clamant criticism throughout the trade outside this House in every part of the country unless there was something very seriously wrong. I would like to remind the Minister that at the moment the bottle of whiskey which is sold at something around 36/- or 37/- a bottle carries taxation to the total of 22/- a bottle. In other words by successive taxation we have now reached a stage in this country where one of the most famous of our own native products is taxed by our own native Government to almost 75 per cent. of its cost. Nowthat is a very serious situation. The whiskey industry in this country. I suppose, is now about 100 years old.

It was only some 30 or 40 years ago that we had a number of quite famous distilleries in the country. Through actions of successive Governments— and I am not suggesting for one moment that the entire condition of the industry is due completely to the action of the present Minister—the number of distilling units in the country is now a mere handful and can be numbered on the fingers of one hand. Throughout the last 30 or 40 years this industry has dwindled and dwindled and dwindled, and now the stage has been reached where there is a last ditch fight by those engaged in the production of Irish whiskey, not against Scotch distillers, not against Canadian distillers, not against rye whiskey from the United States of America, but against an Irish Government and an Irish Minister. I do think that that calls for some active consideration by Deputies in this House. I am not endeavouring to urge a particular case on the Minister on behalf of the particular distilling units. The ramifications of any old-established industry in this country are wide. Those who are being injured at the moment are not merely the producers of the whiskey but there are many thousands of others who directly or indirectly are engaged and interested in this Irish industry.

There are 13,000 publicans in the country, 13,000 publicans who have as much right to live and to earn their livelihood in this country as anyone else, 13,000 publicans who are very seriously affected by this taxation. In addition there are many thousands of persons employed in the licensed trade who have their employment seriously jeopardised by anything which affects the trade. I am not in a position to give figures, but the Minister may have the figures, and I am quite certain that the employment of many assistants in the licensed trade in this city has disappeared in the last 12 or 18 months. There is in addition the very high employment content in the distillation of potstill whiskey itself. I know that in my own constituency or rather in the Midlands the number of personsemployed in two local distilleries has been reduced by well over 75 per cent. in the last 12 months. In addition there is also the fact that with booming conditions in the whiskey trade there is a vast employment content in the distributive section of the business that has been very seriously affected in the last 12 months or so. I mention these matters because a suggestion was made, which I thought myself an extremely unfair suggestion, on the Second Reading of this debate when I raised this particular matter, by Deputies in this House that anything was good enough for the distillers, that they had their golden days and now it was good enough if they have to suffer. It is very wrong if we should approach matters of such importance from that narrow bigoted point of view. The facts are that we in this amendment are fighting not merely for the primary producers of whiskey but also for the livelihood of thousands and thousands of inoffensive citizens in this country.

When I mention these matters I do not want anyone to think that our case for this amendment can be confined merely to its effect on employment. There is no industry as important as the whiskey industry, which is native to the country, which has grown up with the country and which started off a new world-famed drink and which could not have grown to the importance it has attained unless all the raw materials were available here at home; and the parlous condition of the whiskey industry at the moment is reflected by the position of the agricultural industry in the Midlands. Around the distilling units in the Midlands there has grown up a very fine tradition of the growing of malting barley. In the Counties of Kildare, Carlow, Leix, and Offaly and even up as far as Roscommon there is a traditional policy engaged in by the farmers of the Midlands who depend on the malting barley crop as a cash crop vitally associated with the production of whiskey. I move to report progress.

Progress reported; Committee to sit again.