Dáil Éireann debate -
Wednesday, 22 Jun 1960

Vol. 183 No. 2

Finance Bill, 1960—Committee Stage (Resumed).

Question again proposed: "That Section 19 stand part of the Bill."

Mr. Sweetman

This is the section by virtue of which the additional penny per packet of 20 cigarettes was imposed in the recent Budget. I can remember the Minister, or rather the Minister's colleagues, some three years ago wailing and bemoaning in relation to the price of cigarettes. The Minister put on, I think, 2d. in 1957, and another 1d. came on as a result of an increase in margins following the other impositions which flowed from the Minister's action. In consequence, the situation now is that the packet of cigarettes costs 4d. more than it did when the Minister took office. It is difficult to reconcile that with the shrieks and the wails we heard from this side of the House in 1956-57. However, some people seem to be able to reconcile anything with their previous statements. Certainly, the mere fact that they have turned their back on one promise such as this is nothing to Fianna Fáil.

As I said last night, the increase in the consumption of tobacco last year was purely an increase over the two preceding years. It is still some one per cent. under the consumption for 1957, ten per cent. under the consumption for 1956 and seven per cent. under the consumption for 1955. I have said on more than one occasion before that the method by which so much of our State finances and Exchequer revenue is derived from tobacco is a most unhealthy thing. It means that the Exchequer revenue in any year is at the mercy of a small variation in the consumption of tobacco.

As well as I can recall, tobacco represents in this coming year, on the estimates I have made, some 27 per cent. of tax revenue. Perhaps the Minister would be in a position to tell us whether that is correct or what percentage of the revenue as a whole is the customs duty on tobacco? It is in or about 26 per cent. or 28 per cent.; let us call it 27 per cent. It is very unhealthy for the State finances to be dependent as to 27 per cent. for its yield of revenue on one item, and particularly an item which might suffer considerable fluctuations, perhaps, for health or similar reasons. I do not know whether that is something about which the Minister can do very much but it is certainly not healthy and I think it is desirable for us to examine, therefore, with some care the changes in trend in consumption to which I referred.

It is a fact that tobacco consumption has never got back to the figure of 1953-54. In the last year available to 31st March last year, there was a reduction of 12 per cent. on the 1953-54 consumption. I do not know what the experience of other Deputies is but certainly, going around the country, I find more men refusing cigarettes at meetings and that sort of thing than I used to.

I am told, however, as against that, that there is considerably more smoking by women. I do not know whether the Minister has had any investigation into the trends, whether he has made any analysis or whether the tobacco companies have made any analysis which they made available to him, but, as I say, having regard to the position that tobacco represents 27 per cent. of the whole national tax revenue, any variation in the habits of the people as regards tobacco could cause complete chaos in the national finance account, if that variation were sufficiently large. It is, therefore, desirable that we should know as much as possible about it. Before enacting this section, I hope the Minister will give us some information about it.

The section does not include a provision for the taxation of tobacco stocks. I presume from what I can learn that prices were increased immediately after the Budget and, therefore, the initial amount that will accrue in respect of the increase after the Budget for stocks in hands then which had passed out from bond will, of course, be there and will enable the companies concerned to meet the charge that will fall upon them when, no doubt, the Minister deals with the tax on tobacco.

Dr. Ryan

I think that the experience in these revenue taxes usually is that, when there is a very big increase in duty, consumption goes down. There was a very big increase in 1956. Let us take 1956 and 1957 together. In 1956, the price of ten cigarettes went up by 5d. and in 1957, it went up another 2d. That is 7d. altogether. That had the effect of bringing consumption down. There was no further increase until this year and consumption has started to go up again. I do not expect that the increase this year will make any appreciable difference in consumption. If it takes the usual trend, we may expect some increase in consumption—not, perhaps, this year but after this year.

I am not in a position to give the Deputy any figure with regard to what percentage tobacco represents in our revenue. His figure of 27 per cent. may be correct. We are not, however, likely to be threatened with a complete stoppage of that income. Consumption may take a different trend over the years and tobacco consumption may go down but it will be fairly gradual, if it does, and we shall not suffer a loss of half or quarter in any one year. On the whole, it is a tax that nobody can find very much fault with. It is at least a semi-luxury and a person who is not too well off can avoid using tobacco and thus not have to pay tax. There is a lot to be said for taxes of that kind on semi-luxury commodities such as alcoholic drinks and tobacco.

With regard to stocks, the usual practice, I believe, of the Revenue Commissioners has always been to disregard stocks and when the tax is taken off, the person who holds stocks to sell at a reduced price suffers the loss. When the tax is increased, the person who holds stocks reaps the advantage. It has always been held that, taking one thing against another, the fairest thing on the whole is to disregard stocks when there is any change of tax. There was a departure from that in some recent cases when a tax was put on tobacco. It was departed from because of the stringency of the Exchequer situation.

Mr. Sweetman

I was not suggesting it should be departed from on this occasion. I was suggesting it was nice to have——

Dr. Ryan

I am giving the history. In 1956, the amount taken in on stocks was £266,000. In 1957, the amount taken in was £101,000. It was calculated, therefore, that if we extended the duty to stocks this time, we might have got about £50,000. We thought it was better if we could afford to go back to the old principle of not touching stocks on this occasion.

Mr. Sweetman

Is the rebate in subsection (5) the equivalent of the entire additional duty? Is the rebate on hard-pressed the whole of what is being put on or not?

Dr. Ryan

No, the rebate is to bring the increase down to ld. per ounce. If we do not give this rebate, the increase will be probably 1½d. or 2d. per ounce. By giving this, the increase will be 1d. per ounce.

Mr. Sweetman

The increase in duty is 1d. per ounce?

Dr. Ryan

The increase in price.

Mr. Sweetman

Subsection (5) gives a rebate of only ½d. or ¾d.—something like that. Is that it?

Dr. Ryan

Yes, 4d. per 1b. or a farthing an ounce.

Mr. Sweetman

A farthing?

Dr. Ryan

About a farthing an ounce.

Mr. Sweetman

The old age pensioner is getting a farthing from you and he has to pay an extra 1d. an ounce?

Dr. Ryan

Yes.

Mr. Sweetman

The Minister gives him a rebate of only a farthing?

Dr. Ryan

Plus 1/- to buy more tobacco.

Mr. Dillon

The sum of 1/- will not purchase much tobacco today.

Mr. Sweetman

I do not think the Minister is doing himself justice——

Dr. Ryan

His price would have gone up by a halfpenny.

Mr. Sweetman

The Minister chose that figure and not I. It is great to know that the old age pensioner got 1/- for the purpose of paying an extra 1d. an ounce for his tobacco. No doubt tomorrow in similar places in the country, if it happens in Wexford, Deputy Browne will be able to say—

Mr. S. Browne

You took a shilling off them, too.

Mr. Sweetman

I think most of them realise that what they had then was worth more than what they have now. They will have the pleasure of paying the extra 1d. an ounce for their tobacco and this is the Government who complained bitterly that these people were being charged too much three years ago. I am not quite sure exactly how much the increase on hard-pressed tobacco was since 1957, but I think it works out at about 3d. per ounce. If I am not right, the Minister will check me very soon. What is being done now represents half the increase of 1957 and if the present increase is 1d. then that would mean that the increase in 1957 was 2d. and that accordingly hard-pressed tobacco is 3d. dearer than it was.

Mr. Dillon

I am interested in what the Minister says. This represents an increase of 1d. an ounce, that is about 2d. for half a quarter of tobacco.

Dr. Ryan

Yes.

Mr. Dillon

I thought of this increase in tax mainly in terms of cigarettes. It is an interesting thing when one comes to think of many old age pensioners in the country buying half a quarter of tobacco and paying 2d. extra for it. I do not suppose it is unreasonable to calculate that some old age pensioners would buy two half quarters of tobacco in the week. Is it not an odd thing how the world has changed? Very few people in this House would have approved, some years ago, of taxing the old age pensioner to the tune of 4d. a week in the Budget and declaring it to be an insignificant imposition. When you come to think of it, it is not such an insignificant imposition, is it? If you are allowing him 28/6d.—and nota bene I am putting on the 1/- he is to get on 1st August—4d. additional tax out of that constitutes quite a formidable burden.

Mark you, another interesting facet of this is that while he has to wait until 1st August to get this 1/-, he has been paying 4d. a week since we passed the Financial Resolutions. I wonder is that sound practice? I doubt if it is, but it certainly is not sound practice to do it without even thinking about it. I wonder if Deputy Browne, when this proposal was first mooted to him, realised that every old person in Enniscorthy who smoked tobacco was to be asked to contribute in this Budget 4d. a week over and above what he had been contributing heretofore?

Mr. S. Browne

Yes, but when you took off the 1/-, you also increased the tax on tobacco in the same year. Do not forget that.

Mr. Dillon

I do not think anybody at present in this House was here when there was an adjustment made in the old age pensions in 1931.

Mr. Galvin

I can show the Deputy a telegram from a person in Castle-townbere when the old age pensions were reduced.

Mr. Dillon

It fascinates me that Deputy Browne has to look back over a period of 30 years to find a subject on which he feels he can legitimately criticise the Opposition in this House. I sympathise with him in his dilemma but I think he would be told by his more experienced colleagues in the Party that the relevance of events relating to 1931—30 years ago—to the proceedings today is remote. We are dealing with a situation that obtains today and it is worth remembering that the events of which the Deputy speaks relate to a body of our people who are now, the youngest of them, gone to their reward. The youngest old-age pensioner, the Deputy will readily calculate, in 1930 is now in Heaven unless he has received the centenarians' bonus.

We are talking about the old age pensioners for whom we are responsible now, and while I sympathise very largely with Deputy Browne's eager solicitude for old age pensioners of 30 years ago, I cannot help asking myself does he find it easier to take the 4d. off them by subterfuge in 1960 than it was to take the 1/- off them by legislation 30 years ago? I am not sure that I approve of either course. The fundamental difference between Deputy Browne and myself is that I am prepared to say that I think the course adopted in 1929 and 1930 was a mistake and should not be repeated but Deputy Browne's view is that what was done in 1930 was highly undesirable because everyone understood what we were doing but the desirable thing is to do the same thing but do it in a way that nobody adverts to. Perhaps Deputy Browne would give us the benefit of his counsel, coming as he does from County Wexford, and tell us what is the fundamental difference between taking 4d. off old age pensioners through tax on his tobacco and taking 1/- off him by reducing his pension? Is not the net result very much the same? If you add to that that you have taken 6d. off the old age pensioners through the medium of an imposition of 3d. a 1b. on butter this year, and consider that that 3d. was added to a tax of 7d. a 1b. on butter that was put on before, it now appears that we are taking ?d. off his pension.

Deputy Browne has drawn my attention to a more interesting aspect of the situation. I feel with him that the reduction of the old age pension in the old days was a mistake and one that none of us would wish to fall into again. Deputy Browne recalls, and I think recalls rightly, that there is 2d. taken off the pension in this proposal of the Minister; that there was 3d. taken off the pension in the proposal to increase the price of butter—Deputy Browne is quite right—and that prior to that—and here is something which Deputy Browne has forgotten—7d. was taken off the old age pensions through the medium of an earlier increase in the price of butter.

An Ceann Comhairle

Surely that does not arise.

Mr. Dillon

Surely it arises on taxation.

An Ceann Comhairle

We may not discuss all taxation. We cannot discuss income tax and all the other forms of tax on this Section.

Mr. Dillon

I thought that what Deputy Browne said was interesting.

An Ceann Comhairle

I am not interested in what Deputy Browne says; I am interested in what Deputy Dillon is trying to say.

Mr. Dillon

Yes.

An Ceann Comhairle

But I cannot allow him to proceed on that line.

Mr. Dillon

Perhaps the Chair will allow me to say that it is as old as the Scriptures that not by bread alone man lives but it is important——

An Ceann Comhairle

That is not in Standing Orders.

Mr. Dillon

It is not in Standing Orders except in those of humanity and while it is true that men do not live by bread alone, they have to have it to survive. Deputy Browne might reflect on that when he is thinking on the tax on tobacco. Would I be permitted to say this? Deputy Browne will probably agree with me that if we named the essentials for an old age pensioner's life, we would say that they are tea, bread, butter, milk and tobacco.

I would ask Deputy Browne to examine his conscience when he is troubled in his sleep about the shilling taken off the old age pensioners 31 years ago. Would he sit up and look at his colleague in the representation of Wexford and brood on how much he has taken off the old age pensioners through the medium of bread, flour, butter and tobacco in the very recent past, in fact in the last couple of years?

Dr. Ryan

I must say that I can never understand why members of Fine Gael think that an old age pensioner on 29/- a week can find the money to smoke four ounces of tobacco and consume 4 1bs. of butter, and how such pensioners can afford to consume probably more tobacco and butter than any other section of the community. That is the type of argument that the Leader of the Opposition has to make in order to say something. It is exaggeration and with no relation whatever to the matter before the House. It is purely Dillonesque oratory.

There was no subterfuge in this. It was announced that there would be an increase in the price of tobacco. It was also announced that there would be increases in the prices of butter and bread and that, in order to compensate old age pensioners for the increase in the price of bread, butter and tobacco, they would get an increase of 1/- a week which was more than sufficient to cover any increase. The old age pensioner, if he smoked four ounces of tobacco in 1956, paid 4d. an ounce more for it, fourpence an ounce put on by Deputy Sweetman. He also got a smaller loaf. That is subterfuge if you like. They did not increase the price of bread but they gave a smaller loaf. The old age pensioner was told that he could do with a smaller loaf. Subterfuge, says Deputy Dillon, who was a member of the Government that introduced that subterfuge of a smaller loaf at the same price. The subterfuge was that they did not increase the price but gave a smaller loaf.

Mr. Dillon

I am always impressed when I see an old campaigner take the floor. The Minister has rushed to the defence of Deputy Browne. He is a tough old campaigner and he knows how to cover up the rents in his garment much better than Deputy Browne. Nevertheless, I would have liked to hear Deputy Browne on this matter, but I cannot allow a certain observation that has been made to pass without comment. The Minister resents the suggestion of subterfuge, and he says that he announced the tax on tobacco. He surely did. How else could he impose it unless he adopted the idea of imposing taxation without any reference to the Budget? He put threepence on the pound of butter without any reference whatever to the Budget.

He admits that he put threepence on the pound of butter, 20/- on the 10 stone bag of flour and fivepence on the loaf and then he says that there was no subterfuge. I say that there was subterfuge. I say that the former Taoiseach went to Belmullet and told the people there that Fine Gael were telling lies about him and his Party. He said: "We never do the things that Fine Gael say we are going to do."

Dr. Ryan

We are back to Belmullet now.

Mr. Dillon

We are back to Belmullet and the Minister does not want to follow me. The same night the present Taoiseach went to Athlone. I am now dealing with the point made by the Minister that about these things there was no subterfuge. He went to Athlone that same night and asked how categorical could his denial be of the suggestion that they would put a tax on bread, butter or flour.

Mr. Booth

He said: "that it is our intention". Say it right.

Mr. Dillon

Is that subterfuge or does the Machiavellian mind of Deputy Booth say that it was not his intention to make those increases? Deputy Booth is an apt pupil of the man who first brought him into public life. You say on Monday that it is not your intention to do a thing and you say on Tuesday that that is entirely different from saying that you are not going to do it. Is that subterfuge?

An Ceann Comhairle

This section is concerned with the tax on tobacco. Surely we are travelling far away from it when we open the discussion to such divergent matters as flour, bread and butter? The Deputy might as well talk of the motor tax, income tax and surtax.

Mr. Dillon

If a tax is imposed on a particular section of the community, surely it is not illegitimate to say that that section of the community is already bearing a very heavy burden?

An Ceann Comhairle

I cannot allow a detailed discussion of these other matters on this section.

Mr. Dillon

I always bow to the ruling of the chair.

An Ceann Comhairle

Therefore I should have no further difficulty in confining the discussion on this section to the tax on tobacco.

Mr. Dillon

The Chair will advert to the fact that the Minister intervened with great emphasis to say how he resented the suggestion that the imposition of this tax was a subterfuge and I felt bound to remind him of his record in that regard in other matters.

An Ceann Comhairle

And I endeavoured to equate what the Minister said and what Deputy Dillon said and to strike a fair balance. I think we can leave the matter of butter and bread now.

Mr. Dillon

So long as I have dealt with the Minister's statement my purpose is served. I feel that I have illuminated the mind of Deputy Browne of Wexford and therefore I feel that I have done a useful service, if not to Dáil Éireann, at least to Deputy Browne.

Question put and declared carried.

SECTION 20.

Question proposed: "That Section 20 stand part of the Bill."

Mr. Sweetman

This section, if I understand it correctly, is for the purpose of providing new methods whereby the Revenue Commissioners will be able to determine which is rebate petrol and which is petrol used in the ordinary way for road transport purposes. The Minister should give us some broad indication of the new proposals that the Revenue Commissioners propose to adopt. One of the procedures proposed is that of colouring the petrol. I presume that a "prescribed marker means that a coloured substance will be used, but I think the House should get what I may call a lay description of what is proposed.

Dr. Ryan

As the Deputy may be aware, this proposition has been under consideration for a long time. Discussions have been going on with the petrol companies, and they are now about to introduce a system that will mark the diesel—that is the non-taxed diesel—and it will be kept by the distributors in separate containers. If, after the diesel is marked, it is found in the fuel tank of a road vehicle, it will be prima facie evidence of an offence. This would have been brought in sooner if the petrol companies had been in a position to co-operate—not that they were non-co-operative—but they found it impossible to make the necessary arrangements. These arrangements will be made during the year, and this section enables us to make regulations as soon as the preparations are made by the petrol companies. Colouring matter will be used.

Mr. Sweetman

I can see that it will immediately increase considerably the delivery charges for the oil concerns. I think the Minister said this applies only to diesels although I think my argument would apply otherwise, but the present situation is that if a retailer is going to sell rebated diesel and ordinary transport diesel, he orders from the wholesaler who supplies him with what he wants. I do not know what the appropriate quantity is, but suppose he wants 250 gallons of each, will it mean that two lorries will have to go to him? Will there be two tankers, one carrying the coloured diesel and one carrying the uncoloured diesel? The situation at present is that the same tanker can go down carrying both, and deliver 250 gallons in the rebated tank, enter that properly in the customs book showing that it is a rebated delivery, have the customs book ready and properly available to show to the Revenue Commissioners, and there is only one journey for the tanker. Obviously it is cheaper to send one tanker to deliver 500 gallons than two tankers each to deliver 250 gallons. So far as I understand it, this will inevitably be the result of the procedure the Minister is now about to introduce.

I want to be quite fair to the Minister, and I can see some difficulties in the existing procedure. It is troublesome in relation to proof that rebated diesel has not been improperly used. Undoubtedly, with this colouring method, we will get quite substantial additional transport charges in the delivery of these diesel oils. If that happens on the one hand, will we, on the other hand, get the benefit of reduced administrative costs? I presume it is the rebated oil that will be coloured. At present there are a pretty substantial number of forms and books to be kept, and once the rebated oil is coloured, will that procedure be abolished? Otherwise, it would seem to me that the situation will be that we shall have further additional transport charges, and get no compensatory cut in administrative costs.

The necessity for dealing with it in this way arises, I suppose, from the fact that the Minister feels there is pretty widespread evasion of the rebate. That may be, but I should have thought the loopholes could have been plugged up, and evasions prevented, without at the same time putting on the industry the additional transport charges that inevitably must arise from this. I should like the Minister to tell us what cut there can be in administrative costs to offset the increased transport charges.

Dr. Ryan

I must say the Deputy has made a very good case with regard to the fact that it would be very difficult to avoid an increase in costs. However, I have good reason to believe that it will be done without increasing the costs. This is a small proportion of the business of the oil companies, and when we speak of their doing this without increasing the cost, it may be a factor to be dealt with on some future occasion. It may have some influence on prices, but it will be a very small influence I think. As soon as this scheme gets going, it will be possible to lessen the record keeping, and we hope, when it is running smoothly, to abolish record keeping. I do not think at the moment we could promise on behalf of the companies that they would abolish it entirely, but they will be able to do so as soon as it is working in a smooth manner.

Mr. Sweetman

What is the proportion of the rebated oil used as against the total oil? Is it a big proportion of the total? Is it all rebated at the one figure?

Dr. Ryan

The diesel we speak of is free of tax.

Mr. Sweetman

Is there not some which is chargeable at a lower amount of duty as well?

Dr. Ryan

Not since the penny was taken off. There is a rebate on petrol, of course.

Mr. Sweetman

Yes.

Dr. Ryan

The total is 168,000,000 gallons and 12,000,000 gallons is the figure for the rebate.

Mr. Sweetman

About one-fourteenth.

Dr. Ryan

About eight per cent.

Question put and agreed to.

SECTION 21.

Question proposed: "That Section 21 stand part of the Bill."

Mr. Sweetman

This is the section that follows the Financial Resolution we discussed yesterday. Is that not so?

Dr. Ryan

No; it does not follow on what we were discussing yesterday.

Mr. Sweetman

Is this not the section that deals with the tricycles?

Dr. Ryan

That is correct.

Mr. Sweetman

I did not quite gather the Minister's explanation about why a tricycle was not a tricycle, and why a tricycle was a four-wheeled vehicle. Would the Minister mind explaining where he has lost the extra wheel? It was something about measurements but I could not quite hear him yesterday.

Dr. Ryan

Some of what we propose to call tricycles are made in this country now—some in Dundalk and some in Cork. They are not exactly tricycles within the dictionary meaning because they have two wheels close together behind. It is proposed to treat the two wheels as one for the purpose of road taxation. In the Road Traffic Act, 1933, a definition was given that where two wheels were running close together and where the centres were less than 18 inches apart they were treated as one wheel. We are aiming at the same thing here for road tax. It will mean that the road tax will be £8 on these vehicles. If the clause were not passed the road tax would be £14 upwards.

Mr. Sweetman

There can be no possibility of an increased duty in any shape or form arising under this section?

Dr. Ryan

No. The maximum for a tricycle is £8.

Question put and agreed to.

SECTION 22.

Question proposed: "That Section 22 stand part of the Bill."

Mr. Sweetman

I want the Minister to give me the estimated yield from the Orders that are being included here. There are several different Orders. It is not merely the levy section alone. There is a special Order for hydrocarbon oil. I should like the Minister to explain how that arises. Does it arise purely because of the transference of revenue to a large extent from customs duty to excise following the opening of Whitegate?

Dr. Ryan

Yes, the first two deal with hydrocarbon oil. No. 69, which is the first one mentioned, was brought in on the 17th June, 1959. Under that, the Excise Duty was raised to the customs duty level so as to ensure the same revenue from Whitegate oil. In January, 1960, an extra 1d. customs duty was imposed in order to protect the Whitegate oil.

Mr. Sweetman

Can the Minister give the estimated figure for the third and fourth ones?

Dr. Ryan

I am afraid I cannot. I would have to get a question on that because it would take some time to prepare them. Perhaps I might explain what these are. The most important of the duties, No. 89, is the Order of the 28th April which made various changes in levies and duties. It removed a certain number of levies. It changed a certain number from levies to duties and also took off a certain number of duties. There is a very long list of items. I do not know whether or not the Deputy wants me to read them out.

Mr. Sweetman

From razor blades to lawn mowers.

Dr. Ryan

Yes. Razor blades, lawn mowers, clothing, furniture, fresh fruit——

Mr. Sweetman

Drinks and suitcases.

Dr. Ryan

——a number of fabrics of various kinds, picture frames, ornaments and fountain pens. Then levies were reduced on a number of things. The aim there was to bring all levies down to the 45% 30% level. Those that still stayed at 60% 45% after the first list was taken out were reduced to 45%/30% and the 37½%/25% levies were brought down to 25%/16?%

Under the first category, we reduced from 60%/45% to 45%/30% the levies on fancy ornamental articles, perfumery and toilet preparations. The second one was tinned salmon. As well as that, there was a list of articles on which protective duties were imposed where levies were removed. These are such things as refrigerators, cloths, pouffes, printed paper, paper towels——

Mr. Sweetman

Paper doyleys.

Dr. Ryan

Yes. Fountain pens. That was that list.

Mr. Sweetman

What about cake decorations? Were they not included also?

Dr. Ryan

Yes. That is in the list too.

Mr. Sweetman

Wreaths. We would willingly give it to the Fianna Fáil Party on their demise—not on the demise of any individual member but on the demise of the Party as a whole.

Dr. Ryan

Wheels?

Mr. Sweetman

Wreaths.

Dr. Ryan

All right. We shall give this to the Fine Gael Party— flowers and wreaths.

Mr. Sweetman

We would have the flowers and you would have the wreaths.

Dr. Ryan

The duty was terminated on bananas.

Mr. Sweetman

The Minister slipped on a few in his time.

Dr. Ryan

The duty on newsprint is suspended, as it were. Newsprint will be licensed in free of duty unless our own manufactured newsprint starts to fill the market. To the extent that it fills the market, it will be taken up by the newspapers and the remainder will be licensed in.

The next Order was in respect of newspapers and periodicals. Back in 1933 a duty was put on daily papers coming in but certain papers were exempt from that duty where the circulation was under 1,000. That exemption was given specially to allow certain papers in which we thought were valued by certain people here. The Financial Times is one example and the London Times is another.

These two papers—I do not know about others—have gone over the 1,000 circulation mark. A request was made that the level should be raised and we have raised it to 2,000. Any daily paper under 2,000 circulation is free of duty. In 1956, a duty was put on papers coming in over the Border. They would be weekly papers, principally. A year or two ago, I brought in a measure to exempt these papers from duty. We imposed, instead, a duty of ¾d. per dozen copies to put them on a level with our weekly papers here which were paying the levy on newsprint. Now that the levy on newsprint has gone, we are taking off the ¾d. These are the Orders.

Mr. Sweetman

I find it difficult to understand that the Minister had not got the estimated yield of the new duties. I want to raise the general question before coming back to this section in its application this year.

Dr. Ryan

I am sorry that I did not know exactly but under the third, the change from levies to duties means a reduction in income of £550,000.

Mr. Sweetman

I have that figure. It was given in the Budget.

Dr. Ryan

I am afraid I have not any more at the moment.

Mr. Sweetman

I do not understand this. This has happened for several years running now. The printed Estimates of Receipts and Expenditure are published on the Friday or Saturday before the Budget. This year, I think, that was somewhere about the 24th April. These include an estimate for customs duties; they include a levy estimate at the rates in force on the date the estimates are published which was the 24th April this year. Then the Minister came along and made an Order on Budget day, three or four days afterwards, on the 27th or 28th April. In his Budget speech and in his Budget explanatory table he sets out the amount that the Exchequer was to lose from levy revenue at £550,000 but he did not set out—I think that figure is right.

Dr. Ryan

Yes, that was the reduction.

Mr. Sweetman

That is the amount that was to be lost, the amount of the reduction in, levies, but at the same time in the same Order he imposed certain additional customs duties and those additional duties were not included in the printed estimates of receipts. They could not be included at the time because the estimates of receipts in relation to customs duties are based on rates of duties in force prior to the Budget. Therefore, it seems to me that the Minister has taken off the reduction, in the levies in his Budget and that he has not added, as he should have done, the amount of the additional revenue that he will get from the new customs duties that he has added.

It might be thought that that is not a significant sum but it is happening every year. In 1957 the amount involved, as found in the outturn, was £692,000; in 1959 the amount involved for the whole lot was £1,535,000, and for the additional Orders that were made that year. On Budget day, therefore, it was approximately under £1,000,000, about £900,000. Last year it worked out at about £320,000. Those are all increases that the Minister knew on Budget day would accrue to him but the House was not told about them.

I do not think that is either fair or proper because the Minister told the House on Budget day that the Government had made this Order. It was circulated to us at the time of the Budget. In his Table explanatory of the Budget he deducted the amount of the reduction in special import levies by that Order. If he took one part of that Order he should have taken both parts. The other part of the Order means that there has been an increase in customs duty anticipated revenue, over and above the anticipation, that was there when the Estimates of Receipts were published.

If that is not the case it means that the Minister, when he was publishing the Estimates, took this additional substantial customs duty into account in the revenue figures. I do not know whether or not that is the explanation. I would shudder to think it was the explanation because if it were, it would mean that the publication is untrue as it sets out on the front of it: "The estimate of revenue for the year 1960-61 is based on the tax rates at present in force." In case there was any doubt about what "at present in force" meant, it was put in italics to bring it more clearly to our attention.

It seems to me that what the Minister has been doing all these years is building up a little nest egg for himself in this way. I am quite sure that the Revenue Commissioners made an estimate of what would be involved in this Order. I had some experience of the Revenue Commissioners' estimating and when you give them enough time to make an estimate it is amazingly accurate; the variation would not be more than one or two per cent. on the estimate if circumstances remained unchanged in the meantime. I am positive that in the discussions before the Budget, and in the making up of this Order, the Revenue Commissioners fulfilled their duty and gave the Minister an estimate as to what this reduction meant on the one hand and what the increase meant on the other. The Minister has given us only half the picture; let us have the other half before we go on with the section.

Dr. Ryan

I must say that I should like to have a little notice to reply to this whole matter. One must remember that in the case of the bigger items like apparel and clothes, there was both a levy and a customs duty. We took off the levy and left the customs duty so that we could assume that the revenue would remain much the same there. Perhaps the estimate showed that more would come in because there would be less to pay but we can assume that is would be much the same. That arises on some of the bigger headings. As far as my recollection goes I do not think we foresaw very much increase in customs duty as a result of the changes——

Mr. Sweetman

Oh, I have the figures—£692,000 in the first year. That is a fair amount.

Dr. Ryan

I do not know about that.

Mr. Sweetman

The Minister gave me the figures in reply to questions. I shall give the Minister the figures again. They were £692,000 in 1957-58; £1,535,000 in 1958-59 and £1,855,000 in 1959-60. The first figure is a true increase for that year but in the case of the second and third figures you must deduct what you got in the previous year to get the actual increase. It is a cumulative total.

Dr. Ryan

There may not be very much increase this year. These figures are for the last three years.

Mr. Sweetman

To be quite honest, I think I have stumbled across—and I use the word "stumbled" deliberately, from my own point of view—the fact that the Minister built himself into his estimates a nest egg each year without disclosing it at all. I am quite sure that the Minister has got some estimate of what the additional customs duties will yield this year. Surely the Minister cannot look the Ceann Comhairle in the eye and say that he never saw an estimate for this, that an estimate was never sent across by Revenue to the Department of Finance? Surely that is not the case? The Minister would be a very bad Minister for Finance if he did not see what the estimate was before he made the order.

I shall take a further bet that not merely did the Minister get the global estimate but that he got the estimate for the individual heads and items as well because he must have got it. He should have got it. It was proper that he should get it and it was proper that he should consider the estimate for the individual items in order to decide whether it was worth while keeping additional duties in certain respects or whether they could go. Of course he must have had it to see whether they were matters of substance or not.

I am not going to be so rude as to suggest to the Minister that he made up his mind on these duties without seeing what the effect of them would be. Of course, he considered the effect of them and determined that they were to be imposed after seeing that effect. I do not know but I suspect also that probably as well as these that are now imposed, there were some others put up for consideration, and I am pretty certain that in relation to any others put up for consideration the anticipated yield from them was also put up so that the Minister could decide whether it was better to impose them or better not to bother.

I am as certain as I am that I am standing here that this total figure is available and that it does not need very much putting together. I would go even further and say that I would be surprised if it is not in the Minister's brief. Of course, it may have a little red note attached to it. I am not interested in it to the nearest £10,000. I am interested in it only to the nearest £50,000. That is giving the Minister a pretty wide ambit. I do think the House is entitled to be told before it is asked to pass Section 22 what the third order there, No. 89, will mean by way of additional cost to the community to the nearest £50,000 or so.

Dr. Ryan

I have not got any estimate. If I had, indeed, I would not mind giving it to the Dáil. I have a very vivid recollection—the Deputy is quite right—of the estimates of the various levies that it was proposed we should remove and I had to give very serious thought to how far we could go there and how far we could afford to go. Any changes in the big items, like clothes and so on, were by taking off the levy and leaving the customs duty as it was and, therefore, there was no expected increase in income. I do not remember that there was any duty put on where any substantial income was promised to me in balancing my Budget. However, I should like to look into that matter and, if possible, deal with it on the next Stage, if the Deputy would be satisfied with that.

Mr. Sweetman

I shall put down an amendment on Report Stage to delete the order from the section and that will give the opportunity of having a full discussion on it. I should like the Minister to indicate to the House why it was that in the past four years, including this year, the House has been misled—and I do not mean misled in an unpleasant sense—in relation to this matter. Each year the estimate of receipts and expenses has been published on the basis of the law then in force.

Dr. Ryan

That is right.

Mr. Sweetman

Each year thereafter an Order has been made as an integral part of the Budget adding certain customs duties. It is not a protective duty that is being made for exclusion purposes. During the course of the year, most of the duties which would come up are protective and in the nature of exclusions therefore. The Minister made Orders in 1957, 1959 and 1960. I cannot remember whether he did make a similar Order in 1958 but he certainly made one in 1957, 1959 and 1960 and I do not want to hold up the House by checking on the 1958 one. In each case he made as an integral part of his Budget Statement an order imposing certain duties, not for protective purposes but for substitute purposes, instead of levy.

The first one was made in the Budget of 1957 by him. In none of the three cases was the fact that such an order would substantially vary the Budget figure brought into the Table explanatory of the Budget. In 1960—the other day—one part of the order made was brought in on one side of the Budget Statement; the other part that should have been brought in on the other side was not. In 1957, it was referred to in the Budget speech but it was not brought into the explanatory Budget Table. In 1959, the position is that one part of it was brought in to the extent of £220,000 but in regard to the other side of the picture, according to the best calculation I can make, a bigger figure, £320,000, was not brought in. I do not understand the reason for that.

The procedure is wrong and the Minister is at fault in failing to report to the House the true and proper balance. I accept without question that the printed Estimates of Receipts and Expenditure were made out on the basis that is included in that printed document, that is to say, at the rate in force when it was issued. It is unquestionably a fact that after the publication of that document, the yield from customs revenue as part of the Budget in each of the three years in question was varied and yet the Minister did not include it this year, in 1959 or in 1957.

The non-inclusion of that item when it is so substantial is pretty misleading. We have before us that in 1957/58 the item that was not included brought in £692,000. In 1958/59, I cannot tell how much was brought in. The total amount including what was changed the year before was over £1,500,000. Certainly the change in 1958 that was not brought in to the explanatory Budget table must have represented about £500,000. It is interesting to find that there are sums of that size which the Minister does not think worth while bringing to account in his Budget Statement. Again in 1959/60, last year, I believe the figure to have been about £320,000. I cannot tell what the figure is this year.

The Minister has been good enough to say that he will give me the information on Report Stage. I shall not press any further for the figure for the current year but I ask the Minister to give us also an explanation as to why sums of such magnitude—and I think the Minister will agree with me that a sum of £500,000 is not a trifle—were omitted for the three earlier years from the explanatory Budget Table. There must be some explanation. Perhaps the Minister wanted to hide away a little nest-egg or maybe nobody thought it could happen. I blame myself for not having criticised the Minister about the omission long ago, and I suppose if I could not, others could not either. However, it is a fact and I trust we shall have a full and complete explanation on the Report Stage.

I should like to see also what part of the yield of £1,535,000 in 1958/59 arose from customs duties imposed instead of levies after 5th April, 1958. In the first year, it is clear and cannot be challenged that the amount omitted from the explanatory Budget Table was £692,000 because it is from figures that the Minister himself has given me in answer to Parliamentary Questions. For the second year, I do not know the figure. For the third year, all I can do is subtract one from the other and we have not yet got the information for this year. It is immaterial to me whether I put down a Question in that regard or whether the Minister gives us the information on Report.

Dr. Ryan

I prefer to give it on Report Stage.

Mr. Sweetman

Very good; we shall leave it until then. The printed Estimates of Receipts this year estimated a receipt of £1,675,000 from levies. The Budget Statement indicates that of that sum levies to the extent of £555,000 are being remitted. That leaves a net levy yield this year of £1,120,000, if my arithmetic is correct. Apart from that, if I take last year's figure for customs duty which is being imposed in lieu of levy, then we see that the amount is £1,855,000. That means that in this year of grace, 1960/61, we are going to have collected in levy and in quasi-levy, as I would describe the customs duty in lieu of levy, moneys to the extent of something over £3,000,000 by the time we have the additional figure which the Minister has been kind enough to say he will give us on Report Stage.

I wonder did any of the Fianna Fáil Deputies, when they were canvassing the shopkeepers up and down the country in 1957, tell them that three years after they assumed office, they would still be collecting £3,000,000 in levy. They trooped up and down the country canvassing the shopkeepers and I challenged them to deny that one of the, things on which they obtained votes in all parts of the country, from Enniscorty to Donegal, was the statement that levies were unnecessary and that they would soon see to their removal. Three years afterwards, when everything is going beautifully for them, they are getting something over £3,000,000, approximately 75 per cent. of the amount which I collected and for which they gave me such abuse.

What would the shopkeepers have said in 1957 when the Fianna Fáil canvassers knocked on their door and told them: "We are sorry we shall be able to remit only 3d. out of every shilling. That is the best we shall be able to do for at least four years"—because these figures will be operative until next year's Budget? I do not think the shopkeepers would have paid much attention to them.

Recently having forgotten to buy a message my wife asked me to get that morning, I went into a shop in Crumlin, a shop in which I had never been before. It was about Budget time. I heard the shopkeeper having an argument with another customer about the price of something. The customer was reminding the shopkeeper that he had told his customers in 1957, when he was working for Fianna Fáil, that the duty would come off. It was not, in fact, a duty. She was being unfair in calling it a duty. It was a levy. I waited until the customer had gone out and I asked the shopkeeper whether it was true that he had said the levy would come off and he told me that he had been led to believe by the Fianna Fáil organisation, of which he was then a part, that the levies would be taken off immediately Fianna Fáil became the Government. He also told me that, because they failed to keep their promise, he had left them and would never support them again.

It was not just a question of intention, in case certain Deputies might be tempted to say it was; they had promised they would do this. They announced that it would be done if they were returned to office. Here we are, three years later and running into the fourth year, and next April something over £3,000,000 will have been taken out of the pockets of the people in levy and quasi-levy. This is a rather interesting sidelight on yet another promise which put Fianna Fáil into government. Again, we have the broken promise. The people involved are mainly the shopkeepers. Shopkeepers were very important to Fianna Fáil at the last general election because they were vocal. I do not blame them for being vocal if they felt things were hurting them. But it was not a question then of just one vote; it was a question of all the customers being influenced.

Mr. Booth

Is all this on Section 22?

Mr. Sweetman

All on Section 22. The £3,000,000 is imposed under Section 22.

Mr. Booth

It is nice to be back on the section again.

Mr. Sweetman

It is all back on the section, and I think the Leas-Cheann Comhairle is quite well able to look after the debate. He was quite well able to control the debate long before Deputy Booth came into this House and he will be quite well able to control it long after Deputy Booth has gone. Mark you, Sir, from what I hear in Dún Laoghaire at present, it will not be long before Deputy Booth is gone. The figure of £3,000,000 in levy and quasi-levy in this year is an interesting sidelight. We shall have more about it on the Report Stage.

Question put and agreed to.

Section 23 agreed to.

SECTION 24.

Question proposed: "That Section 24 stand part of the Bill."

Mr. Sweetman

Does this mean that each separate title will not be aggregated unless it is more than £5,000? I think it means that, but I am not sure. If it does not mean that, what does it mean?

Dr. Ryan

It is the aggregate of unsettled property.

Mr. Sweetman

If the aggregate of unsettled property does not exceed £5,000, then it is not aggregated. Is not Section 23 the section that covers the unsettled property and Section 24 the section that covers settled property?

Dr. Ryan

Section 24 deals with succession duties and Section 23 deals with death duties.

Mr. Sweetman

No. Line 4 reads: "such property for the purpose of estate duty". Section 23 deals with property passing under the will. Section 24 deals with property that is settled otherwise than by the will. If the property passing other than by the will does not exceed £5,000, it is not liable, but what I am not clear on is whether the free estate, as we term it, and the settled estate are aggregated or whether the effect of Section 24 is to prevent aggregation, unless both the free estate and the settled estate exceed £5,000.

Mr. Booth

Exceed £5,000 each.

Mr. Sweetman

Yes. I do not like being technical, but I should like to know what we are passing.

Dr. Ryan

Section 24, as I read it at first, dealt with the payment of succession and legacy duties but it does appear now, reading it again, to deal with the aggregation of unsettled property, subsection (1).

Mr. Sweetman

Aggregation of settled property surely.

Dr. Ryan

The settled property under £5,000 will not be aggregated with other property.

Mr. Sweetman

And what value has settled property got to have in order to be aggregated?

Dr. Ryan

£5,000, I suppose.

Mr. Booth

Surely it cannot be aggregated with unsettled property if the unsettled property is less than £5,000? Does it not then come out at more than £5,000?

Dr. Ryan

It is exempt to £5,000.

Mr. Sweetman

Then you get two exemptions?

Dr. Ryan

That is correct.

Mr. Sweetman

What I want to know is quite simple. Can a man leave £4,999 of property unsettled by his will, and £4,999 of property settled by his marriage settlement, and pay no estate duty?

Dr. Ryan

Yes, he could.

Mr. Sweetman

And the subsection is the marginal relief subsection, is it not?

Dr. Ryan

Yes.

Mr. Dillon

We fully appreciate that this is a difficult subject. The general understanding of subsection (4) was that it represented exemption for certain purposes on £5,000 passing under a will or settlement, but we know now that in certain circumstances that could be made to operate to exempt a sum of £9,998 provided steps were taken in time to pass one-half of that sum by will and one-half by settlement.

Dr. Ryan

Yes, that is correct.

Mr. Sweetman

Does the phrase "settled otherwise than by the will" cover the survivorship?

Dr. Ryan

Otherwise than by will?

Mr. Sweetman

If a sum of £4,999 is on deposit in the joint names of two people, one of whom is deceased, leaving out the question of by whom the money was provided—assume it was provided by the deceased—is that settled otherwise than by the will?

Dr. Ryan

Not always, I believe.

Mr. Sweetman

If that is the only sum, other than free estate of the same value left by the deceased, is that sum free from estate duty?

Dr. Ryan

If it is under £5,000, yes.

Mr. Dillon

If that is so, may a layman ask does this mean a situation could arise that as a result of a joint deposit receipt, plus a marriage settlement, plus a will, a sum of approximately £14,900 could pass free of estate duty? To put it another way, could three sums under £5,000 be exempted under this section?

Dr. Ryan

They could.

Mr. Dillon

The reason I ask this question is that we are all familiar with the fact that it becomes the duty of any prudent family solicitor, on perusing the relevant sections of a Finance Bill of this character, to advise his clients to the best of his ability to take the maximum advantage of our law and we ought at least foresee, in the light of our proposed legislation, what a prudent family solicitor could do for the benefit of his clients under the terms of that legislation. I think it would be true to say that 99 per cent. of Deputies would look at Sections 23 and 24 and interpret them as meaning to operate to exempt the first £5,000 of estate from certain estate duties. It now looks as if, by a full user of the exemptions provided, a skilful family solicitor could provide that approximately £14,900 of estate may pass without liability to these taxes.

It is even suggested that, by further examination of the section, within the law an even larger sum might secure this exemption. We are all in favour of reducing taxation but, when we put our hands to taxation, I think the main care requisite for the purpose is to know the extent to which we propose to make the reduction because we have got to bear in mind that, if we are reducing taxation for one section of the community, we are increasing it for others. We ought to try to spread the burden equitably. Perhaps the Minister would tell us had he in mind when originally introducing this section that it could operate to relieve an estate of £15,000 from succession duties?

Dr. Ryan

I cannot say that I saw it in that light. What I did say was that £5,000 would apply where £2,000 did apply before and I had in this the possibility of £5,000 on each side, settled and unsettled. The example the Deputy has given me now is a bit new. I am told that could happen too. It could go to £15,000.

Mr. Sweetman

I should like a little bit more elucidation on this. When a person dies, for the purposes of calculating estate duty the title under which that person, or rather the next person becomes entitled to the fund, means that they may or may not be treated as what is called a separate estate. Am I to understand the effect of subsection (4) is that each separate title under which funds pass now carries an exemption, provided that the fund in the case of that separate title does not exceed £5,000?

The position, of course, is not that we are exempting duty for the first £5,000 because if the estate is of £6,000 it does not mean that duty is paid only on the £1,000 excess. Duty is paid on the whole £6,000 once it goes over £5,000 but, if there are three or four separate titles under which money passes on the death of a person and not one of those four exceeds £5,000 of itself, is there any duty payable even though the total of all four may be in excess of £5,000? If this exemption is to be a separate estate exemption then I think that the number of settlements that could be involved is legion. It would be just as well that we should be reasonably clear. Section 14 of the Finance Act of 1951, as far as my recollection goes because I have not got the section before me, was the separate estate section. I am sure Deputy Booth will remember that from his erstwhile days.

Mr. Booth

Sorry, I do not.

Mr. Sweetman

If it is the separate estate section then I think the position is somewhat different from what the House anticipated.

Dr. Ryan

The Deputy quoted the 1951 Act. What I am doing here is increasing the limit of £2,000 in the 1951 Act to £5,000. As Deputy Dillon suggested, that means it could amount to three sums of £5,000.

Mr. Sweetman

Or four or five or six.

Dr. Ryan

We have not got to four yet. This section deals also with succession and legacy duties and it makes the same change in the 1951 Act by raising the limit of £2,000 to £5,000.

Mr. Dillon

The Minister says he can follow the argument up to three but he doubts if there is a fourth category in existence. Would I be right in believing that Section 24 operates to abolish succession and estate duties effectively in respect of estates up to £14,950, provided the family solicitor makes the proper settlement in time to acquire for his client the benefit of this section?

Dr. Ryan

I understand succession duty and legacy duty are paid on different types of property.

Mr. Sweetman

I think Deputy Dillon really means estate duty.

Dr. Ryan

As I said in regard to the position mentioned by Deputy Dillon, it is possible to go as high as £15,000 but you cannot go further.

Mr. Sweetman

Could the Minister explain why you can go to £15,000 and not further? I thought you could go to £10,000 or else go ad infinitum. I can see the point of the argument up to two, but I cannot see the argument of beyond two being restricted. You either have settled estate or free estate. It is quite clear that if it is neither settled estate nor estate exceeding £5,000, there is exemption. Beyond that I am not happy.

Dr. Ryan

If the Deputy goes back to the 1951 Act, he will see that £6,000 is the limit there. It is not stated that way but you cannot go beyond that.

Mr. Sweetman

Is there an overriding limit?

Dr. Ryan

No, but it is drawn in such a way that you cannot exceed that.

Mr. Dillon

Am I right in saying that the effect of Section 24 now is that it is possible on an estate of £14,900, properly handled, to pay neither legacy duty, succession duty nor estate duty?

Dr. Ryan

That would be correct.

Mr. Dillon

Therefore, that kind of estate is free of all such charges?

Dr. Ryan

Yes.

Mr. Sweetman

But you have got to take away £10,000 of your property in order to do it.

Mr. Booth

And, human nature being what it is, they will not do that.

Mr. Dillon

I do not want to create endless puzzles for the Minister—that is not my intention—but if a man and his wife put £5,000 into the bank in their joint names, does that amount to a settlement for the purposes of this section? I think it does.

Dr. Ryan

It does, yes.

Mr. Dillon

And passes to the survivor.

Question put and agreed to.

Sections 25 and 26 agreed to.

SECTION 27.

Mr. J.A. Costello

I move amendment No. 7:—

In subsection (1) before paragraph (b) to insert a new paragraph as follows:—

"(b) The description of ‘goods'; in section 10 of the Act as amended by this Act shall include ‘services' and the expression ‘goods' shall include the produce of agriculture, horticulture and fisheries; and the expression ‘services' shall mean services whether rendered by an individual or a company in consideration of which payments are made or agreed to be made by a body or person resident outside the State."

The purpose of this amendment is to widen the scope of the definition of "goods" in the Act of 1956 so as to include goods of a non-manufacturing character and also to include services. I dealt very shortly with this point in the speech I made on the Budget debate. It seems to me that the whole purpose of the incentives that were given under the 1956 Act was to provide some sort of urge to people to get abroad and seek for new markets for any class of goods, although in the Act itself, they were confined merely to goods of the type that could be described as manufacturing goods. In principle, and particularly now that the experiment—if it can be called such—that was initiated in the Act of 1956 has been proved so successful to the economy of the country, I think there is a strong case to be made for the widening of the scope to include agricultural goods, goods that could be described as horticulture and also fisheries.

If, for instance, a man gets out and by his own exertions and initiative, gets a market abroad in any country in the world, say for cheese manufactured in Ireland, he may develop through his initiative a very valuable export market. I have spoken in this House on more than one occasion on the desirability of increasing the manufacture of different kinds of cheeses. It has been done successfully since the War in some of the continental countries, particularly Denmark. If a person gets a new market for that, surely he will be conferring a great benefit upon the State and the economy of the country and would be entitled, in equity, to the same incentive as is given for manufacturing goods. I quite appreciate that when goods are manufactured in the ordinary way by the effort of Irish industry, that gives increased employment. But, similarly, in the case of processing of agricultural and horticultural goods, there will undoubtedly be, in the first place, money brought into the country which will be spread throughout the country and there will of course be a certain amount of employment, increasing as the market develops.

I do not see that there is any case in principle against this amendment and there may be a very good case in practice for it. I took the case of cheese, but I could also instance the case of honey. I am taking some examples outside the ordinary agricultural exports of the traditional character, examples such as cheese, honey and even apples. If he could have an export trade in apples or—perhaps this is not of very great import but it illustrates the point, because I want rather to keep off the ordinary traditional agricultural exports—take the case of a person who starts a fox fur or mink farm. Passing through the country recently, I saw a notice on a door indicating a mink farm. In my view, the raising of fur bearing animals is within the definition of agriculture. I have a very considerable body of authority for that proposition. If somebody produced furs from minks, reared and cultured in the country, it would form an export trade of a very valuable character. Surely there is a case for extending the benefits of the Act in that respect?

In the second portion of the amendment, it is suggested that the word "goods" should be widened to include "services". I do not want to name a particular firm, individual or individuals, who would come within the scope of the amendment, for obvious reasons. Casting the cloak of anonymity over the person I have in mind, there is a company operating in the city of Dublin which does a very valuable and a very considerable professional business of a very scientific character throughout the country. The particular individual who is the motive power in that happens to be a man of wide learning and scientific achievements. He is engaged as the expert not merely in this country but abroad. He goes abroad with his expert knowledge and applies the remedies, which his company has been formed to disseminate in Ireland, in England. The result is that he, with his services rendered in England, gets money in England or elsewhere as the result of his services for an Irish company operating from Ireland.

He or his company ought not to be deprived of their initiative. It is a matter of considerable initiative, enterprise and scientific achievement. Matters of that kind could be multiplied, though not very widely. Other examples could be given. Let me take a case in which services are provided. Suppose a distinguished author writes a book in Ireland, has it published in America and that it becomes a good book or even a best seller. The amount of royalties that come from that foreign country to this country as a result of that man's services is every bit as valuable to this country, in principle at all events, as the export of sewing machines or articles of that kind. I think what I have said covers most of the underlying principles in this amendment.

I should like to think that it might be possible to let all sorts of scientific people here, even those people who specialise in such modern crafts as radio and television, operate from here and export their goods and services abroad. In that case they would be conferring precisely the same benefits on the Irish economy as is done by the export of manufactured goods to a very considerable extent. In those circumstances, they should get the same incentive as is given manufactured goods.

Dr. Ryan

When Deputy Costello was speaking in the debate on the Financial Resolutions he mentioned four points—I took a note of them at the time—in relation to which he thought we should extend this export relief provision. First of all, he thought that the relief should not be confined to goods manufactured from Irish material but should extend to goods manufactured here from imported materials. The Deputy was mistaken there. The relief does apply to goods manufactured here from imported materials. He has, therefore, not put down the amendment to cover that particular point.

The amendment under discussion covers the two points be made. It also covers the case where a painter or a writer sells the product of his brains abroad. His fourth point which concerned the passing on of the relief to shareholders is dealt with by amendments Nos. 8 and 9. Therefore, on these two points, No. 2 and No. 3, made by the Deputy in that debate, agricultural produce if manufactured, comes under the provisions of this scheme for the relief of tax on exports. The Deputy mentioned cheese. Cheese would certainly come under it. Butter, cheese, condensed milk, canned meat, canned or frozen fruit, vegetables and fish would come under it.

Mr. Dillon

Did the Minister say dressed meat?

Dr. Ryan

No; I would be doubtful about that. I do not know. The only agricultural produce that does not come under it are livestock. There would be a certain doubt in the case of dressed meat. I would be inclined to think that it would not come under it but here there would be a certain doubt. I think, therefore, that the points made by the Deputy in advancing his argument in regard to agricultural produce and horticultural produce are already covered.

The Deputy mentioned a fox farm. Last year, we added to the list a fish farm. I presume that in a fox farm the object is to produce furs and have them treated before export. That would undoubtedly be regarded as an exporting business and would rank for the benefit of this scheme.

The Deputy mentioned honey. I would be very doubtful about honey. There is no manufacture in honey, as far as the human being is concerned. I do not think we could bring this in as manufacture in order to qualify honey for the benefit of export in this case. In any event, I think honey does not arise because up to the moment I think we are able to use our own honey and we have hardly got enough even as it is.

Mr. Dillon

Oh!

Dr. Ryan

The Deputy mentioned the case of an author. That is fraught with many difficulties. It is quite true, of course, as the Deputy says, that if an author produces a very good book, it may bring in a very considerable sum of money in royalties—perhaps, more than is brought in by some of the manufacturers with whom we are dealing under this Bill. It is very hard to know where to draw the line becuase if we are to come down to the product of human skill, or however it may be defined, it will be very hard to draw the line. For instance, if you had a very eminent physician and a person comes in from outside to be treated and goes out cured, that would not be covered. If we try to bring human skill into it at all, I would be very doubtful about the possibility of covering the case of an author or any income from a source of that kind.

I am thinking of the agricultural and horticultural side. We have practically covered everything the Deputy has in mind. But on the other side the services to which the Deputy referred would, I am afraid, give rise to endless difficulty. It would certainly require very much more consideration than I could give it since receiving the amendment or at this stage. I would, therefore, have to resist the amendment as far as that part of it is concerned.

Mr. J.A. Costello

Would the Minister consider the matter at his leisure?

Dr. Ryan

Yes.

Amendment, by leave, withdrawn.

Question proposed: "That Section 27 stand part of the Bill."

Mr. Dillon

In connection with this section, I am glad to note that it is a development founded—as, indeed, the whole of Part IV of this Bill is founded—on the Finance Act, 1956. I thought the Minister would give us a little dissertation for the benefit of the Deputies behind him when he was introducing this Part of the Bill and pay tribute to the fertile mind that first produced the principles on which these concessions are founded. I repeat, the relevant reference is the Finance (Miscellaneous Provisions) Act, 1956. We hear a great deal of oratory at present about expanding industrial exports, and I note that Part IV of this Bill is designed further to expand these exports which derive apparently from some change in the inducements provided under the law enacted by this Oireachtas.

Part IV of this Bill emphasises that the foundation of all this structure is the Finance (Miscellaneous Provisions) Act of 1956. Knowing the habitually generous—and I speak ironically—attitude of the Fianna Fáil Party and its Members, I would have expected the Minister to embark on a discussion on this Part of the Bill and pay a glowing tribute to Deputy Sweetman who was Minister for Finance and responsible for the introduction of the Finance Act of 1956. In fact, I think he might have cast his eye from the Front Bench to the second row and said that the administration responsible for this brainwave deserved well of the country, that he was following in their footsteps and was glad to report a considerable expansion in industrial exports which in some manner compensated for the catastrophic fall in agricultural exports which had eventuated since the present Government took office.

Donnchadh Ó Briain

Why did they want you out of office?

Mr. Sweetman

Because you told a lot of untruths. I cannot use another word.

Mr. Dillon

This is a question I am glad to answer. The present Government got in, if the Parliamentary Secretary is not yet aware of it, on foot of three falsehoods.

An Leas-Cheann Comhairle

Surely this does not arise on Section 27.

Mr. Dillon

Your intervention, Sir, spares the Parliamentary Secretary a full reply to his inquiry. If on another occasion you were to permit a full discussion, I should be very happy to answer how the Parliamentary Secretary got where he is now.

An Leas-Cheann Comhairle

Section 27.

Mr. Dillon

Having, I hope, moved the Minister to paying tribute which is overdue, I should like to ask him one or two specific questions. When dealing with the amendment which Deputy Costello submitted, he explained that as he understands the legislation at present, it does apply to a number of processed exports which derive from agriculture and horticulture and he mentioned that it would in his judgment cover most of the articles to which Deputy Costello referred. Amongst the articles which Deputy Costello mentioned were apples. Apples are processed as the Minister knows in the constituency next to his own, in Dungarvan, and there is a considerable volume of exports. It occurs to me does the operation through which we put the apples at Dungarvan amount to processing?

Dr. Ryan

I could not answer that. I should be inclined to say "no."

Mr. Dillon

I see the Minister's difficulty. It is hard to answer, because it is an expensive process. You have to collect the apples; they are wrapped; they are stored in an expensive gas storage and they are packed. I do not think packing apples for transport can be described as processing. I could make a case that wrapping them is processing, but I could make an even stronger case that the storage, which as the Minister knows is a very expensive operation, being gas storage, is certainly processing. I am faced with this difficulty that, by analogy, if you acknowledge these procedures to be manufacturing processes and render these apples when exported liable to the benefits envisaged in the Finance (Miscellaneous Provisions) Act, 1956, as amended by this Bill, you come slap up against the problem of eggs. Does the storage of eggs qualify them? I do not doubt that the manufacture of liquid eggs and their export would be recognised as a manufacturing process, but does the actual storage of eggs qualify them?

Dr. Ryan

I should say "no."

Mr. Dillon

Perhaps the Minister would consider this specific question of apples. I think there is a processing there which ought to benefit that product if the Minister's interpretation of the proposed legislation which he has given us is correct.

Dr. Ryan

Of course, it is very difficult to express an opinion on some of these things. I suppose they will have to be decided as they arise. As the Deputy will admit, it will be some time before we shall be looking for an export market for apples.

Mr. Dillon

Oh, no; we export a good deal of Bramley Seedlings.

Dr. Ryan

To some small extent; at the same time our market is not completely filled. The case will come up for individual decision. As the Deputy knows last year we had to include two processes which were not obviously included before—fish farming and mushrooms. As I explained, that is the way most of them will have to be decided in future where there is any doubt.

Question put and agreed to.

SECTION 28.

Question proposed: "That Section 28 stand part of the Bill."

Mr. Dillon

For what period does Section 28 extend the proposals of the Finance Act? What is the effect of the section?

Dr. Ryan

The effect is that at present these benefits would expire in about 10 years' time. This is to extend the benefits to 1974/75 so that any company or persons doing an export trade and deriving benefit, or expecting to derive benefit from these sections could claim benefit for 10 years before 1974-75, and of course for less than 10 years if they started after 1964-65. That is all the section deals with.

Question put and agreed to.

SECTION 29.

Question proposed: "That Section 29 stand part of the Bill."

Dr. Ryan

This is a continuation. It tails off over a period of five years, giving less relief each year for the five years.

Question put and agreed to.

SECTION 30.

An Leas-Cheann Comhairle

Amendments 8 and 9 in the name of Deputy J. A. Costello have been ruled out of order.

Mr. J.A. Costello

Without in any way questioning your ruling, Sir, there are one or two points I should like to bring to the notice of the Minister. The first amendment was concerned with the power of giving a company authority to create new shares which would not attract the benefit of the relief in income tax. It is obvious that if a company were getting that benefit from 1956 onwards people might have bought shares in that company on the basis of getting that relief. The object is to enable a company to issue additional shares which would deliberately have as one of their conditions that the relief would not be passed on. That is the point I want to make.

Dr. Ryan

I shall look into that. I understand that the amendment has been ruled out of order but I should like to look into the point.

Mr. J.A. Costello

The Minister was good enough to look into the point which I made regarding the second amendment on the Budget speech. Although the amendment has been ruled out of order, perhaps the Minister would again look into the matter.

Dr. Ryan

I shall.

Question proposed: "That Section 30 stand part of the Bill."

Mr. Sweetman

The effect of Section 30 is, as I understand it, to provide that if an exporting company sells its business to a new company it does not get a new lease of life of export free tax concessions. Is not that very broadly the answer?

Dr. Ryan

That is right.

Question put and agreed to.

SECTION 31.

Question proposed: "That Section 31 stand part of the Bill."

Mr. Sweetman

I want to draw the attention of the Minister to subsection (2) and to contrast subsection (2) of Section 31 with subsection (6) of Section 9. The Minister, when he was insisting on retaining subsection (6) of Section 9, said that he did so because he wanted to keep the section as it was in order to remit the question of penalties to the Income Tax Commission. In subsection (2) of Section 31 he takes an entirely different attitude. There is no question of a continuing penalty here at all.

I think that in relation to Section 31 there is no need for a penalty at all because the penalty that will arise if the books are not produced in support of the claim is that the company will lose the relief. I do not understand how there is any necessity for any penalty at all in Section 31. If the documents and the records are to be produced because the company is getting a relief, is it not well settled in our income tax laws that if a person has to produce books and documents for the purpose of getting a relief and does not produce them when he is asked to do so, he does not have a penalty imposed on him but he loses the relief? I do not see why that well-settled practice has been departed from.

Dr. Ryan

There are two points I should like to make on this section. There is, as the Deputy says, power in the Revenue Commissioners not to allow the relief if the person does not produce the documents, but the Commissioners are afraid that there might be certain circumstances where they could not refuse the company although, at the same time, some official of the company might refuse to produce some documents. That may or may not alter matters, but from my own point of view I should like to see this going in.

A person might claim certain exemption from income tax on the grounds that he had exported his goods and had not told the whole truth. When the Revenue Commissioners suspected that he had not told the truth, he might say that he would not produce the documents, but the he would withdraw the claim for relief. I think that in a case like that such a person should be penalised. He should not have the opportunity of trying to defraud the Revenue Commissioners and then, when found out, just sliding out of it. It is a different thing from income tax. This is a case where a company is claiming the advantage of this law, and I think we need not be as careful about the company's feelings as we would be in the case of an individual.

Mr. Sweetman

Surely the general provision is here in the income tax Acts by virtue of which anyone who submits a false return is liable to a penalty? Surely those general provisions could carry over into this and if anybody put in a false claim or a fraudulent claim they would be amenable under the general provisions rather than under this provision and the penalty provided would be much more substantial? So far as a company might be concerned the penalty of £50 provided for here might be very small when compared with the amount of tax relief that would be available to a substantial company.

Dr. Ryan

That is true.

Mr. Sweetman

I do not think that the Minister's argument is a good one. It seems to me that a much better line of country is that if an official of a company will not produce the documents required, he should be told that the company will not get the relief. That is a far greater penalty than the £50. It would be a very small export business, indeed, where the tax relief would amount to only £50. There would also be the stigma of prosecution and the deterring effect on other people that a prosecution might have but all that would be trifling compared to the loss of the relief. There does not seem to me to be much force in what the Minister has said having regard to the penal powers of the Revenue Commissioners.

Question put and agreed to.

SECTION 32.

Dr. Ryan

I move amendment No. 10:—

In subsection (2), page 21, line 23, to delete "mineral" and substitute "mining".

This is a drafting amendment. By mistake, the word "mineral" was put in the Bill instead of the word "mining".

Amendment agreed to.

Section 32, as amended, agreed to.

NEW SECTION.

Mr. Russell

I move amendment No. 11:—

Before section 33 to insert a new section as follows:—

"Section 6 (1) of the Finance Act, 1946 is hereby amended by the addition after the word ‘minerals', where it occurs in the definition of ‘mine', of the words:—

‘or an open pit or open cast excavation made for the purpose of getting any of the minerals specified in the Schedule to the Finance (Profits of Certain Mines) (Temporary Relief from Taxation) Act, 1956, the Minerals Development Act, 1940, or any mineral added to such Schedule pursuant to the provisions of the said Act'."

This amendment is similar in terms to an amendment put down by Deputy Sweetman to the Finance Bill last year and supported by me on that occasion. Briefly, it seeks to extend to open-cast mining the same privileges and allowances as are at present enjoyed by underground mining operations. In subsection (1), Section 6 of the Finance Act, 1946, there is a definition of the word "mine". A mine is stated to be an underground excavation made for the purpose of getting minerals.

My amendment would have the effect of extending that definition to ensure, as I have stated already, that the benefits accruing to the operations of mining by underground methods will be extended to the same operations where open-cast methods are employed.

Perhaps I should explain the difference between underground mining, which enjoys benefits under the present legislation, and open-cast mining which I wish to include in the same benefits. Underground mining is generally understood to include sinking shafts, driving tunnels underground from the shafts, extracting ores by underground operations, and bringing that ore through the tunnels and through the shafts generally for further processing or treatment. Open-cast mining is generally understood to mean the excavation of a quarry-like opening generally on a sloping site, and the taking out of the ore in one operation. Open-cast mining might be described as carrying out, in one operation, what underground mining does in two operations, sinking shafts, extending underground tunnels and then excavating the ore.

I took the trouble of looking back at the discussions which ensued on this section of the Finance Bill last year, and at that time the Minister undertook to give consideration to the case made by Deputy Sweetman and supported by me. I feel the time is now very opportune to include in this Finance Bill the concession which I am seeking for open-cast mining operations.

It has been stated that the open-cast method of mining is a cheaper method than the underground method of mining, and there is certainly some substance in that argument. However, it is also true to say that in preparing for the open-cast operation, considerable expenses are involved which are not incurred in the underground operations. There is, first of all, the question of the acquisition of the surface rights from the land owners. Naturally that must be done on a far wider basis. If one is going to open a very large quarry, or make a pit-like opening on the side of a hill or a mountain, obviously one takes in a greater expanse of land than if one is merely sinking a shaft which may measure only ten feet square.

There is a further point. The open-cast method generally entails the employment of a substantial number of very expensive mechanical contrivances —dumpers and mechanical shovels— and approach roads and possibly bridges have to be built taking in a very large area before the operation itself can be properly undertaken. Therefore, I think it is correct to say that even though at first sight the underground operation may appear to be more expensive and generally is, in fact, taking the operation in toto, and the preparations for the actual mining, the open-cast operation is also a very expensive undertaking. There is also the fact that certain types of ore bodies, due to their very nature, can be mined economically only by the open-cast method. I think the Minister would agree it would be very unfair to penalise an operation of this kind just because it was not economical to excavate the ore by the underground method.

In the United States and Canada, no distinction is made between open-cast mining or underground mining and, indeed, so far as I am aware, no distinction is made between any types of excavation in either of those countries. As the Minister is aware, in recent years, certain American and Canadian interests have taken a deep interest in mininig in this country. It is very desirable that we should bring our legislation into line with that of the United States and Canada and thereby encourage these outside interests to come in and invest substantial sums of capital in developing mining in this country.

There is the further point, too, that recent exploration work in certain areas has disclosed the fact that there are substantial reserves of ore bodies containing certain types of ores and minerals which I think I am correct in saying were not visualised when the 1940 and 1946 Acts were under consideration. Having regard to that type of mineral—barytes is one—we should bring our legislation into line with the normal practice outside the country.

To obviate any objection that might be raised on the grounds that if a concession such as this is granted, it might be taken to apply to quarry owners or sand pits, I should like to make it clear that it is intended to apply only to such minerals as are described in the Acts concerned. I feel the Minister should accept the amendment and I know, from my personal knowledge, that a concession of this kind would be of considerable benefit to the expansion of mining in this country. I therefore ask the Minister to accept the amendment.

Mr. Sweetman

Last year, when I put down an amendment somewhat of this nature, Deputy Russell came to my assistance. I am glad to be able to return the compliment now. We hear these days, and correctly so, that one of the most vital needs to any increase in the standard of living is an increase of productivity. Unless we succeed in increasing productivity in every aspect of our national economic life we shall not increase our standard of living. The sooner we all face that situation and realise and accept it the better.

It seems to me, therefore, that it should be axiomatic from that to say that any mining operation should be carried on by the most efficient method. For certain mines, underground working may be the most efficient. For others, open cast mining may be the most efficient. I suggest it is wrong that we should have the deterrent against open cast mining that exists at present by reason of the fact that it does not qualify for the tax relief. The Minister is entitled to say I did not include it when I was introducing the Bill in the initial stages. That is perfectly correct. When we were introducing these two Bills in 1956 we were to a large extent pioneering inasmuch as we were attempting to see how far tax inducements of this nature would assist the drive for greater production.

I never suggested then and I do not suggest now that the measures we then introduced were the be-all and the end-all of the matter. We did not suggest in any way that they were complete, that they were perfect or that they were the last word. I concede to the Minister that, in many respects, he has improved the measures since then. Experience has shown that it is desirable to extend and to amend the provisions we then started out on. That is inevitable.

Whenever anybody in any walk of life starts something new he never gets it right the first time. As experience accumulates one sees the necessity to expand, to correct, to amend. We are all agreed that in present circumstances we must increase productivity. This is one of the ways in which it must be done. It would be quite wrong to endeavour to induce a person to win minerals by underground mining if in fact open cast mining were the correct method.

It might well be that, to win certain minerals, open cast mining would be less expensive and more efficient than underground mining but that if it had to suffer income tax open cast mining would be more expensive than the underground mining. To leave the position as it is would mean that in such circumstances the person concerned, because of the tax provision, would probably win the minerals underground even though it was not the most efficient method but because the underground method carries a tax concession it is slightly cheaper than the open cast method.

That is a bad thing to do in the national interest. It will not improve our overall economic position. Apart from all that, I think we are all clear that the type of mineral wealth we have is virtually everywhere a rather low grade mineral. If it were a high grade mineral we would not have had to introduce the tax concession in 1956 to induce people to mine. We have only low grade deposit in practically every mineral if not in every mineral. That being so, it is even more desirable that we should endeavour by every possible means to ensure that the minerals are won by the most efficient method.

I appreciate that a case may be made—I think it is a spurious case— that in the open cast method a person is better able to foresee the results than in underground mining. I admit frankly that that case was made to me in 1956 and that I was somewhat influenced by it. But, thinking it over, and with the experience before me now of what has happened in the interval, particularly in relation to Avoca, the important thing to consider is not what lies before the person in the production end but what will lie at the marketing end.

Whether you work underground or open cast, the elements of the cost of production of your mineral can reasonably be foreseen. Modern methods enable us to plot the way in which a seem of minerals runs. There is not the same element of speculation as to what will be at the other end of the tunnel.

The Minister and his Party have always used the argument, in relation to Avoca, that they have found everything that was there and that its development thereafter was not a hazard. The Fianna Fáil Party always used that argument when they wanted to claim credit for what was done at Avoca. What is sauce for the goose is sauce for the gander.

If that is so in relation to the present day, then the methods of assessing the field of minerals, the run of the seams and the percentage of ore in them are so accurate that there is not the same difficulty and chanciness in doing underground work as there was before.

I think that the Minister should accept this amendment because it is becoming clearer every day that, at the present-day prices of minerals on the international market, our deposits are of a nature that will be marginal at all times. They will not be won unless there is quite a considerable inducement because of their marginal nature. The gamble in relation to a mining venture in Ireland is not so much a gamble as to whether the minerals are there but as to what is likely to be the price of the minerals when they have been brought to the processing stage for sale.

A case might be made, perhaps, if we were considering open-cast mining under, say, some of the really fertile soil. The Minister could then say, I think, that the difference between underground working and open-cast working was that the fertile soil remained there in the second case and would be of national use during the process of working the minerals. We all know that is not the case in regard to any minerals of any consequence in Ireland; they occur either on the sides of a mountain or hill or on ground that is virtually useless for anything else except possibly for planting but even that is doubtful. Certainly, the usefulness of the ground beneath which underground workings are carried out is so trifling as not to warrant consideration.

I think Deputy Russell's amendment is a good one; just as I thought my own amendment was a good one last year. I did not check the exact wording but I think it is virtually the same. I press the Minister very strongly, first in the interests of productivity, secondly, in the interests of getting out the minerals and also to satisfy the sentiment there is in this country about mineral production. There has always been a sort of sentimental feeling that "there's gold in them thar hills". I am not suggesting that there is gold but there are other minerals to be won and we should all like to see such minerals as may be there produced. Any inducement that can be given towards that end should be made available.

Very often in these cases, the reason a Minister does not give away on an amendment like this is that he feels he is giving away some revenue. I do not think the Minister is giving away any revenue in this case. He can circumscribe the relaxation in favour of open-cast mining to make sure it does not include any salvage working, if that is what he is afraid of. Unless he gives this concession for open-cast mining in relation to the minerals visualised by Deputy Russell in putting down this amendment we shall not have that work at all. The minerals will remain there and, even if found, will not be won and the consequent employment for the people who would be engaged in this work will not be made available. If our minerals were of such a high grade that we could be satisfied that they would be won without the inducement offered in this amendment I could understand the Minister resisting it. That is not the case. The fact is that as we all know, as the Minister knows and as everyone who studies any of the reports knows, such minerals as are available are of a very marginal ore percentage. They are so marginal that if the price goes down at all there is a danger of a complete stoppage of operations.

I do not believe there is any justification for believing that any single mineral would be found in Ireland in such a way that experts on the subject would tell us that a variation in the cost of production or a variation in what they might find at the end of the tunnel is not what deters them from going ahead with the job. What deters them is the price of the finished product. For copper, it may be £200 today, £240 next week, £300 a fortnight afterwards and back again to £175 three months after that. That is what puts the element of gamble into mining. That is what, above all in Ireland where our ores are low grade, acts as a deterrent to development. I think it was to offset that deterrent that the Bill was originally introduced by us in 1956 when the concessions were first given. The concessions have proved themselves in the three or four years since then; they have also been improved in that period by the Minister and the Minister would be wise to add to that improvement now by allowing open cast mining this concession.

Dr. Ryan

The Deputy in the opening of his speech said I might scold him for not including this in his original Act. I must say I have no intention of doing so; I have sufficient experience to know that in initiating legislation, especially in a new field like this, one can never cover all contingencies that it might appear afterwards should have been covered and legislation invariably requires amendment as time goes on.

Last year, Deputy Sweetman introduced amendments much like the amendment that Deputy Russell has now introduced. I stated then that I had an open mind on the matter but if I did, I was not aware that there was any case in which the relief of underground excavation was causing any concern. Recently, I was told that advances have been made in open-cast technology and there are now actually many more cases where open-cast mining would be attempted rather than underground work as a result of these advances and it is possible that open-cast mining might be resorted to in this country, although as I said last year, I did not know of any case where open-cast mining would be operated.

I agree with both Deputies who have spoken that if it is more profitable to use open-cast mining rather than excavation we should do whatever is necessary to encourage that development and, to whatever extent there is any risk, there is less risk in the case of open-cast than in the case of other forms of mining. In addition to this, the Minister for Industry and Commerce has now told me that he has a case where he may ask for this relief for open-cast mining. I am therefore inclined to agree that an amendment should be made to the Finance Act on the lines suggested by Deputy Russell.

I had no time, however, to consider the form or the scope of the amendment or to what minerals it might apply. We would have to give some consideration to the question of the minerals to which it would apply. I am, therefore, suggesting to the Deputies that if the amendment were withdrawn, I would undertake to have a clause in the next Finance Bill, the Finance Bill, 1961, but it will be retrospective to include any work done during this financial year, 1960-61. That is the best I can do at the moment. It is better in a case of this kind to give it proper consideration and so on and to include whatever minerals we think should be included. At the same time, we are not preventing any work that is going on or injuring anybody if we make it apply to the present financial year.

Mr. Sweetman

Except that if you do not define the minerals to which it will apply, nobody will know. I could see the Minister's point of view in relation to the detailed working out of the clause but you would have to say categorically whether it will apply to copper, lead, zinc, tin—at least give certain minerals to which it will definitely apply—because unless you do that, the people concerned will not know until this time next year whether it will apply to them or not.

Dr. Ryan

Does the Deputy mean that we would have to give notice now?

Mr. Sweetman

Yes, you would have to.

Dr. Ryan

As soon as possible, yes.

Mr. Sweetman

Otherwise, they will not start.

Mr. Russell

I accept the Minister's undertaking, provided he covers the point made by Deputy Sweetman. There are, as the Minister knows, in the Mining Acts, what are known as scheduled minerals. The list is very short and would cover the types of ores which I had in mind when I put down this amendment. I thank the Minister and beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Section 33 agreed to.

SECTION 34.

Question proposed: "That Section 34 stand part of the Bill."

Mr. Sweetman

Is this in connection with P.A.Y.E.?

Dr. Ryan

Yes. These drafts will be supplied to employers.

Question put and agreed to.

Section 35 agreed to.

NEW SECTION.

Mr. Russell

I move amendment No. 12:—

Before section 36 to insert a new section as follows:—

"Notwithstanding anything contained in any other enactment, as and from the passing of this Act, stamp duty shall not be payable by an Irish citizen in respect of houses the market value of which at the date of purchase does not exceed £2,500."

The purpose of this amendment is self-explanatory. It is to relieve houses the market value of which at the date of purchase does not exceed £2,500 of the present rates of stamp duty. I say "rates" because there are several rates within that limit. The question of stamp duty on the purchase of property goes back quite a long time. I think I am correct in saying that in the Finance Act, 1909-10, stamp duty on the transfer of property was introduced for the first time. That was at a figure of one per cent. on all transactions, irrespective of the amount involved. In the Finance Act, 1947, certain changes were made in that respect, including the exemption from any tax up to a figure of £500. Purchases over £1,000 were subject to stamp duty at the rate of five per cent. and provision was made to charge 25 per cent. in the case of non-nationals.

In the Finance Act, 1951, some further changes were made. The duty up to £500 remained the same and the charge on the value of houses in excess of £1,000 was reduced from five per cent. to three per cent. In the Finance Act, 1954, some further changes were made which had the effect of introducing a sliding scale up to £2,500 and above that continuing the charge of three per cent. In the Finance Act, 1956, there were certain further amendments, the chief one being the abolition of the 25 per cent. tax for non-Irish citizens.

I feel the time is now opportune for the Minister to make a further concession and, as suggested in my amendment, exempt purchases the value of which does not exceed £2,500 from any stamp duty whatsoever. I particularly have in mind the number of houses which are being purchased at the present time by young married couples. Quite a number of houses built under the S.D.A. loans change hands from time to time and, as the thing stands at present, if the house is purchased by private treaty, the purchaser has to pay on the value of the goodwill, that is, the actual value of the house plus the outstanding amount of loan due to the corporation or county council. This represents quite a substantial amount to a young couple whose finances may not be too strong at the time. For that reason, I would ask the Minister favourably to consider the amendment. If the house is purchased on the open market, in addition to paying the stamp duty, the purchaser has to pay auctioneer's fees.

In England, houses which do not exceed £3,500 in value are free of stamp duty. I have not gone as far as that figure in my amendment. I took the view that a reasonable start to cover the major portion of house property sold in this country would be £2,500. In asking the Minister to accept the amendment, I feel sure that it would be a very valuable inducement towards a broadening of house ownership and would be of great benefit to a section of the community we would all like to see becoming house owners at an early stage, particularly young married couples.

Dr. Ryan

Deputy Russell has given some account of the changes that were made in stamp duty. Since the war, changes in stamp duty have been substantial on these smaller properties. I am afraid I cannot agree to accept the amendment because it appears to be almost impossible to frame any section or clause that would include houses and not include land. If we ever do anything of this kind, we shall have to take land and houses together and deal with them at the same time. I have no objection to that at all if we could afford to do it, but it does make the thing a bit more costly than the amendment proposed by Deputy Russell would cost, if it were possible to implement it. I calculate that if we had to include land as well it would cost the Exchequer about £200,000. Anyway it would be impossible at this stage to consider it. I have attempted to balance the Budget and I could hardly afford to provide a sum of £200,000 at this early stage of the year.

Mr. Sweetman

Could the Minister not take it out of the little nest egg I discovered he had earlier today?

Dr. Ryan

All the nest eggs will be needed. I do not like saying to the Deputy I shall definitely consider this next year although I can say I considered it this year, but found the difficulties so great, including that of cost, that I did not do anything about it in this Budget which has just gone by. It is one of those items that are considered to some extent in nearly every Budget. It was dealt with, as the Deputy has outlined, in 1947, 1951 and 1954 and appears to be due to be dealt with soon again in some Budget. The best I can promise the Deputy, therefore, is to consider this matter next year if times are a little better than they have been this year. I did give a definite undertaking in the last case to consider including a matter in the next Finance Bill, but in this case I can only express a hope that I can consider it next year.

Mr. Russell

If the difficulties are so great as the Minister suggests, how was it that so many changes were made in those years in regard to the transfer of house property?

Dr. Ryan

Lands as well as houses were included all the time in those changes.

Mr. Russell

In the Finance Act of 1956 it was decided to abolish the 25 per cent. for non-Irish citizens. There were certain conditions included and one was that the property being conveyed or transferred was being acquired for private residential purposes and did not include land exceeding 5 acres in extent. Could some provision such as that not be made?

Dr. Ryan

That might be a way of dealing with it all right.

Mr. Russell

If it could be done for non-Irish citizens, can we not do something for Irish citizens?

Dr. Ryan

In dealing with such a question my own inclination would be to provide for both land and houses. The only difficulty left is the cash, whether we could afford to do it.

Amendment, by leave, withdrawn.

Question proposed: "That Section 36 stand part of the Bill."

Mr. Sweetman

This is a desirable innovation but I would press the Minister to go considerably further and in relation to many other aspects to provide that the fees that are payable can be paid by adhesive stamps rather than by impressed stamps. This section provides that probate registrars can stamp their documents by adhesive stamps instead of impressed stamps. At the Four Courts there is an enormous amount of time wasted in queuing up to get impressed stamps put on legal documents. I am not talking of the big stamp duty on conveyances but of the half-crown stamp that has to be impressed on an affidavit before it is filed. The Minister could ease the situation in this way. Everybody comes at peak periods and cannot do otherwise because the clerk is in the court when the court is sitting. When the court rises at lunchtime every clerk down from the different courts always has some documents to stamp. They must all rush to get them stamped as they cannot be stamped over the valley period. A great deal of this irritation and frustration could be avoided if the Minister would extend the use of adhesive stamps. I know certain representations not necessarily on this Bill or on this part of the Bill but on a fairly wide scale, will be made in that connection to the Minister and I hope when he does receive these representatives he will give their suggestions his sympathetic consideration.

Dr. Ryan

Yes.

Question put and agreed to.

Sections 37 to 39, inclusive, agreed to.

SECTION 40.

Question proposed: "That Section 40 stand part of the Bill."

Mr. Sweetman

How does Section 40 tie in with Section 33?

Dr. Ryan

Section 33 deals with the initial allowance.

Mr. Sweetman

According to Section 33 the holiday camp is brought in under the exemption but does it now come in for the one-tenth instead of the one-fiftieth exemption as well?

Dr. Ryan

Yes, the holiday camp is covered by both.

Mr. Sweetman

It qualifies under Section 40 as well?

Dr. Ryan

Yes.

Question put and agreed to.

Section 41 agreed to.

SECTION 42.

Question proposed: "That Section 42 stand part of the Bill."

Mr. Sweetman

I wish to raise a point that arises in relation to the care and management of taxes. I intended to raise it on an earlier section but forgot. However, I think I am in order in raising it now. The people who were employed in Radio Éireann were, until the 31st May, civil servants. Accordingly under the procedure for collecting income tax from civil servants they were subject to deduction of income tax from their pay up to the 31st May. On the 1st June they became employees of the new Television authority.

As such they cease to be civil servants, so far as I can understand the situation, for the purposes of the Income Tax Act. It seems to me there is a considerable difference in their position vis-á-vis the ordinary employee. The ordinary employee has had half his tax, his July instalment, remitted because of starting P.A.Y.E. in October. The civil servant does not come under P.A.Y.E. at all because he has always suffered tax by deduction. These people are in the position now that for two months of this year, they were civil servants and for the four months before P.A.Y.E. starts, they are not. I want to know what provisions the Revenue Commissioners will make under the care and management section for these people to ensure that they will not be treated worse than if the Television Authority date had been 31st March.

Dr. Ryan

I am afraid we have not got a decision on this yet. I am sure they will be dealt with sympathetically. We shall have a decision as soon as possible.

Mr. Sweetman

Does the Minister think he will be able to have a decision before the Report Stage?

Dr. Ryan

Yes.

Mr. Sweetman

Perhaps he will be good enough to indicate when the general decision is being made so that I can consider whether or not it is necessary to put down an amendment?

Dr. Ryan

Yes.

Mr. Dillon

I should like to raise a point on this section. The section states:—

All taxes and duties imposed by this Act are hereby placed under the care and management of the Revenue Commissioners.

It used happily to be the case that the Revenue Commissioners were responsible for collecting taxes but now they have passed over a considerable part of the collection of taxes to the employers under the P.A.Y.E. system. For the first time, it is laid down that employers are to act as income tax collectors for no reward at all. I think this House has completely failed correctly to evaluate the consequence of that procedure. I do not know what economy will accrue to the Revenue Commissioners in their administration of taxes by the operation of P.A.Y.E. but I imagine it must be substantial because the income tax collector in rural Ireland, and until recently in the urban areas, too, got his remuneration on the basis of the number of assessments for which he was responsible. Now a large number will be taken off his roster and these people will pay hereafter through the medium of P.A.Y.E. and he will therefore be no longer responsible for their assessment.

On the other hand, the employer will be faced with the necessity of employing additional staff. I know of one case in the city of Dublin where an employer has about 120 employees liable under P.A.Y.E. He approached the problem with some apprehension. and he ultimately made up his mind he would have to get a junior clerk to do the work. The junior clerk was in receipt of £6 or £7 a week. He was charged with responsibility for P.A.Y.E., but it became manifest at a very early stage in the proceedings that he was quite unable to deal with P.A.Y.E. The employer was told that he would have to get a responsible person to deal with this work or the whole thing would go haywire and, if it went haywire, he might find himself in trouble.

I should like to make it clear—I think it is due to the Revenue Commissioners to make it clear—I have myself found, and most people with whom I have spoken have found, that the officers of the Revenue Commissioners down the country have been extraordinarily co-operative, helpful and courteous in their efforts to assist individual employers to understand how the thing should be done. I should like to pay that tribute to them. I was so much impressed in my own personal experience that I directed the responsible person to write to the Revenue Commissioners expressing our appreciation of the help we had received. Nevertheless, we have to face the fact that, if you charge an employer employing 120 men with responsibility for collecting this tax, and he finds it involves the employment of a senior clerk in order to do it right, it is unreasonable to lay a charge of anything between £300 and £400 a year on an employer to relieve the Revenue Commissioners of work they did heretofore and give the employer no compensation to help him meet the charge upon him.

I am told that in Great Britain there is a provision whereby employers who discharge their duties under P.A.Y.E. can recover from the Inland Revenue some compensation related to the number of assessments they collect. I would urge on the Minister that he ought favourably to consider devising a similar scheme for here. I admit that the procedures in Great Britain are very much more complicated than they are here. Our Revenue Commissioners, fortified by the British experience, ingeniously evolved a very much simpler system, or so I am told, and the volume of work here probably will not be as great as in Great Britain. But there is work involved and, where there is a considerable number of employees, the work involves a disbursement of a substantial annual sum and I put it to the Minister that he ought to take some steps to compensate employers. There must be some corresponding economy in the cost to the Revenue Commissioners in employers collecting this not insubstantial volume of revenue.

Dr. Ryan

I do not think there will be very much saving to the Revenue Commissioners as a result of the change over to P.A.Y.E. Eventually there may be, but there will certainly not be any saving for a few years. I have examined these forms, and, making a fair guess at the time it should take to make an entry for each employee, I do not think it would employ a person full-time at all in the case of 120 people. There might be a little bit of trouble in the initial stages but, once experience is gained, it should not take an intelligent junior clerk more than half a day. There is a ready reckoner supplied. There are only three or four columns to fill in— wages paid to date, amount deducted, and what should be deducted now to make up the total tax due. I should think the work in the case of 120 employees would not occupy more than a Friday afternoon or a Saturday morning.

As the Deputy said, we have had, of course, the experience of the system in England, including the experience that employers are paid there. Our Revenue Commissioners were naturally inclined to follow the British pattern but I met some of the organisations which speak for employers and I found they were averse to being paid. First of all they did not want to be tacit tax gatherers for the Government and, secondly, they did not want the responsibility that might go with payment. One or two accepted it voluntarily and carried it out to the best of their ability but would not accept payment. Therefore, I do not think we should be asked to consider any compensation for employers for any extra duties that may fall upon them in these cases, and I honestly believe the extra duties will be very small when things get moving.

Question put and agreed to.

SECTION 43.

Question proposed: "That Section 43 stand part of the Bill."

Mr. Sweetman

Subsection (2) of this section states that Part I of the Act shall be construed together with the Income Tax Acts and subsection (3) states that Part II, so far as it relates to duties of customs, shall be construed together with the Customs Acts. Part IV is to be construed together with the Income Tax Acts again, and Part V with the Stamp Acts similarly. Why does nobody construe the death duty provisions with any of the Death Duty Acts?

Dr. Ryan

It is just not mentioned; that is all.

Mr. Sweetman

There must be some reason for it.

Sir Anthony Esmonde

It does not mean that the Minister is not going to bother with death duties.

Dr. Ryan

It does not make any change in the legislation; it only changes the amount. Is that not right?

Mr. Sweetman

I think it makes much more change in certain respects. Perhaps the Minister would find the answer to that conundrum before Report Stage.

Mr. Dillon

Does subsection (7) act as a kind of an omnibus to cover any specific omissions?

Dr. Ryan

Yes.

Question put and agreed to.

First and Second Schedules agreed to.

THIRD SCHEDULE.

Question proposed: "That the Third Schedule be the Third Schedule to the Bill."

Mr. Sweetman

I cannot understand why the Third Schedule is presented in two Parts.

Dr. Ryan

I believe there is a reason for that.

Mr. Sweetman

I assume there is, but I do not know what it is and I should like to know. The second Part is the death duty section.

Dr. Ryan

The First Schedule, as the Deputy will see, is customs and excise——

Mr. Sweetman

We are on the Third Schedule.

Dr. Ryan

I thought it was the First.

Mr. Dillon

It applies to the entertainments duty. Subsections (1) and (6) of Section 14.

Mr. Sweetman

I think it is the death duty section.

Dr. Ryan

Is it Section 41?

Mr. Dillon

No, Section 14 of the Act of 1951.

Mr. Sweetman

Section 14 of the Finance Act of 1951, as far as I can remember, is the death duties section. It completely puzzles me to know why the death duties section is put in a separate Part away from the others. We all know death is something separate but that is not the answer. There must be some reason for it.

Dr. Ryan

In Section 41?

Mr. Sweetman

No, 14, not 41.

Dr. Ryan

I am saying Section 41 of this Bill explains it. It states:

"The enactment specified in column (2) of Part II of the Third Schedule to this Act is hereby repealed to the extent specified in column (3) of that Part"

and continues:

"Paragraph (a) of this subsection shall have effect only in relation to persons dying after the 27th day of April, 1960."

It comes in at a different date.

Mr. Sweetman

I am afraid I do not quite follow the Minister. Perhaps I shall see it when I think about it.

Question put and agreed to.

Title agreed to.

Bill reported with amendment.

An Ceann Comhairle

Next Stage?

Dr. Ryan

Next Tuesday.

Mr. Sweetman

Tuesday week—is that not what the Minister said yesterday?

Dr. Ryan

No, I said next Tuesday.

Mr. Sweetman

I thought the Minister said yesterday he was going to leave it because of the double-taxation arrangement he had to bring in. I thought he was going to leave a long time between Committee and Report Stage.

Dr. Ryan

I thought I was leaving a long time.

Mr. Sweetman

When is the Minister going to give us the new section?

Dr. Ryan

You will have that tomorrow. We shall leave the Bill until Wednesday and see how things go.

Report Stage ordered for Wednesday, 29th June, 1960.