I move that the Bill be now read a Second Time. This Bill is long overdue. The last revision of Deputies' allowances took place after the war in 1947 when practically all salaries and wages were revised upwards. Since then there have been several increases of wages and salaries. We are just emerging from the seventh round. The allowances to members of this House have stood still while the increases of the intervening five rounds were being provided for most salary and wage earners.
It is within the power of members of the Oireachtas to fix the remuneration of themselves and of Ministers and other officers and nobody can say that that power is used either too frequently or irresponsibly or extravagantly.
The Government decided some time ago that the question of revision of salaries and allowances should not be further postponed and I am now asking the House to approve the Bill to implement that decision.
In 1923 the allowance for Deputies was fixed at £360 per annum, free of income tax—free of income tax because £360 was considered at that time to be necessary to meet a Deputy's expenses and there was no element of salary in it. In 1938 it was decided that the expenses of a Deputy had increased and his allowance was fixed at £480. In 1947 this was increased to £624 in line with the general pattern of increases at that time.
When the remuneration of Deputies was first considered in 1923 there was no experience of the time that might be required to fulfil their duties, and, consequently, a sum for expenses with no element of salary was agreed. The duties of a Deputy since that time have increased enormously. The expansion of social services since the 1930's, the many provisions connected with housing, the great variety of schemes introduced to help agriculture—to mention just three Departments—have made the Deputy's attention to the needs of his constituents much more onerous. Legislation is more voluminous and more complicated and every year Dáil sessions tend to become longer. While the job of a Deputy cannot strictly be regarded as full-time, it is, on the other hand, impossible for him to hold another full-time position. A farmer or a business man can pay some attention to his business as well as attending to his duties as a Deputy. A professional man, if he is conscientious in the performance of his political duties, must inevitably neglect his own profession and suffer a consequential loss of income. The manual worker or the office employee must vacate his position when he becomes a Deputy and must try to live on his Deputy's Allowance.
If the Deputy had got increases pari passu with others his remuneration would now be more than 50% higher than it was in 1947. Not only is the Deputy entitled to an increase to meet the higher cost of living but he could make a good claim for a revision of his basic pay on grounds of increased work and increased responsibility.
I am satisfied that the present conception of paying a Deputy only for his out of pocket expenses is unjust and that Deputies should be paid for their time as well as being recouped for expenses.
The Bill provides £1,000 per year and the Deputy will be exempt from Income Tax on whatever part of that sum that is agreed for expenses arising out of his duties as a member of this House.
I have been asked by some Deputies what the change will mean and I have been told by some others that the change will mean no increase for them. Some Deputies say that £625 did not cover their expenses while others are doubtful if the Revenue Commissioners will allow them more than half that amount. I am not, of course, in a position to say what amount may be agreed for expenses, but if we take the mean of these two and assume the amount allowed for expenses to be £450:
A single man with no other taxable income will pay less than £70 in Income Tax.
A married man will pay less than £20.
If a Deputy has £1,000 from other sources he will pay £330 if single and £270 if married.
If he has £2,000 from other sources he will pay £680 or £610.
Deputies hitherto got an allowance for expenses but no reward for their time. Henceforth it is proposed to give them some small reward for their time and the right, like every other taxpayer, to claim for relief of Income Tax on expenses.
In some quarters there is a belief that Deputies are a prosperous class. They are regarded as a good mark by those who solicit subscriptions for a worthy cause. We have some well-to-do Deputies amongst us but their fortunes were not made in Leinster House. I have been in public life for more than forty years. I have known many who came into this House and who went out again. I have never known one to go out better off than he came in.
Senators were treated the same as Deputies in 1923 but in 1938 their allowance was reduced to 75 per cent. of the amount paid to Deputies. The same relative position has been maintained but I believe that in the end this Bill will be less favourable to Senators because their expenses will probably not be agreed at the same level as those of Deputies.
If a Senator has no other income except his allowance as a Senator— his bill for income tax will be very small and his gain will be substantial, but if he has say £1,000 taxable income from other sources his gain will be relatively small and if his income from other sources is £2,000 or more his case is problematical.
A Minister's salary was fixed at £1,700 in 1923. Of this amount he was allowed £360 free of income tax for his expenses as a Deputy. The remainder was taxable income. To-day a Minister has £2,125 of which £625 is free of income tax. It is proposed in this Bill that a Minister would receive the Deputy's remuneration fully taxable except for whatever amount may be exempted for his expenses as a Deputy. In addition, it is proposed he should be paid £2,000 fully taxable, of course, making a total of £3,000.
Making the same assumption in reference to expenses as I did in the case of Deputies, a Minister, if he has no other income and is unmarried, will pay about £620 in income tax. If he has £1,000 from other sources his income tax would be about £1,150 if single, and £1,050 if married, and if he has £2,000 from other sources the amounts would be about £1,650 and £1,570.
Ministers got no increase since 1947 and I do not think I need labour the point that the present salary is inadequate. There are many instances to my knowledge where Deputies on assuming Ministerial Office were compelled to surrender more remunerative means of livelihood and thus suffer a financial loss. Most of us live up to our incomes whatever they may be and it is not easy to retrench on personal expenditure, with the result that Ministers have sometimes had to encroach on their savings or run into debt to maintain their standard of living when they took office.
It is true that some Deputies find their income increased as a result of occupying Ministerial Office, but are they financially better off? A Minister has a full-time job. He must live in Dublin. He is obliged to maintain a fair standard of living. His duties take him not only to his constituency but to places outside his constituency. He is expected to pay his way, in fact, to do a little more than his share of the casual entertainment that follows many of those meetings.
A Minister is asked to many functions, political and non-political, and he cannot be so churlish as to refuse them indiscriminately. He may be, and usually is, treated hospitably, but my experience is that you often have to pay sometime, somewhere, somehow, for free hospitality.
A Minister's job requires constant attention and it entails a high degree of responsibility. Positions in industry of less importance are much better remunerated. A Minister is the head of his Department and he should be the most highly paid person in the Department. In 1923 a Minister had £1,700. The Secretary of his Department had £1,463. Now the Minister has £2,125 and the Secretary of his Department has £2,825. The Bill increases a Minister's remuneration by about 40 per cent. but his net income will not go up by anything like 40 per cent. when income tax is deducted.
Increases proposed for Parliamentary Secretaries, for the Ceann Comhairle and the Leas-Cheann Comhairle are proportionately the same as those for Ministers.
Since 1947 the cost of living has increased by 44 per cent. The wage rate in industry has increased by 70.7 per cent. The farm price index has increased by 44 per cent. and the income per head of those employed in agriculture by 89 per cent. for agricultural labourers, and by 79 per cent. for farmers and the members of their families working with them. The national income has increased by 73 per cent. There is no index figure for social welfare benefits but the amount spent on social welfare has more than doubled since 1947.
Various representations have been made from time to time about the desirability of having some form of pension scheme for members of the Oireachtas. It will be for the Houses themselves to consider this matter. I have provided in this Bill, that, if a joint Committee in the Houses formulates a pension scheme, power is made available for the Minister for Finance to make regulations prescribing that whatever deductions are deemed to be appropriate by the scheme may be made by the Minister from the members' allowances. If no agreed scheme emerges the section will, of course, be inoperative. If a scheme does emerge the power to arrange for deductions will be available and there will be no need to introduce a separate statute.
The Bill proposes an increase in pensions for Ministers and Parliamentary Secretaries. If a Deputy severs his connection with his business or profession or occupation for a number of years he is not likely at the end of his period of office to resume at the point where he left off and certainly not at the point he might reasonably expect to have reached if he had not interrupted his career. The ex-Minister is entitled to compensation from the State for this loss of income. This principle was recognised in 1938 and certain scales were laid down. It is proposed to increase these scales for those who serve more than five years. If a Minister has served more than five years he must necessarily have been elected for at least two terms of office and the disturbance caused to his former occupation is all the greater. The increased scales will go part of the way to compensate ex-Ministers and Parliamentary Secretaries for the losses mentioned. I know that the new scale will not provide full compensation in all cases.
The payment of allowances to Leaders of the Opposition to enable them to pay office staff which is necessary to facilitate them in the discharge of their Parliamentary duties has been accepted in principle by the Dáil and has been enshrined in our statute law. It has been represented that these increases first provided for in 1938 are now inadequate. In response to these representations I indicated that I was prepared to give sympathetic consideration should an opportunity of doing so present itself. I am availing myself of this legislation to increase these allowances. In doing so there has been a certain change in approach. Instead of a stated amount for each specified Party a gross amount is now being provided to be allocated in the proportions set out in the text of the Bill. The allowance will, as heretofore, continue to be a charge on the Central Fund.
I have so far seen little comment on this Bill and any criticism I have received is more against its parsimony than its generosity. If this is the verdict I feel the Government have been right in their approach. The labourer is always worthy of his hire but due regard must be had for the taxpayer who has to pay the hire. In formulating these changes the Government have not at any time lost sight of the interests of those who are being asked to foot the costs.
There are those who are prone to take a subjective view of human nature, and who cannot believe that Deputies will be fair to the taxpayer when they come to review their own allowances. I am quite satisfied that this House will approach objectively the conflict in interests between the taxpayer and themselves with a view to reaching an equitable solution.
Involving, as it does, the amendment and repeal or, as the case may be, the partial repeal of various sections of earlier statutes I have thought it well to circulate with the text of the Bill a White Paper explaining what sections are being changed or altered and setting out how this new Bill fits into the earlier legislative pattern.