With regard to this whole question of charging 25 per cent. stamp duty on purchases by non-nationals, the object is to make it more expensive and more unattractive for non-nationals to purchase agricultural land. These section are designed only to deal with agricultural land. We have, as Deputies are aware, excluded land within the urban area; we have excluded a house standing on less than five acres of land and we have excluded land purchased for an industry. As I say, our only aim is to make it unattractive for a non-national to purchase agricultural land and to make it, as it were, more competitive for the Irish buyer of land to get land in opposition to the non-national. Whether we succeed or not is a question that I cannot answer at this stage. My only object in putting in these clauses was to see that as far as possible there was no avoidance or evasion of the law. Perhaps other cases will crop up as time goes on where again we shall find avoidance of the law and if so we must deal with these different cases.
There is no way as far as I know of dealing with this thing in a thorough fashion, short of giving very full power to the Land Commission to say: "You must sanction every sale and reject those you think are not in the interests of agriculture," or something of that nature. That would be a drastic step which I think no Party would like to take unless, of course, the matter became very much more serious than at present. Another thing which I should like to say is that if we do enter the Common Market that matter will all go by the board because it is part of the Common Market scheme that there must be free access to all citizens of other countries to our own country and free access of capital, so that we would have to face that if we wanted to join the Common Market.
Deputy Cosgrave complained that P.A.Y.E. was a very complicated system. All I can say is that when we were drawing it up, as far as I could understand the matter—it is very technical of course—we did adopt a system which is much less complicated than the system in England. When I brought the Bill before the Dáil and when I thought I might be asked to explain the scheme up and down, I must say that as I got an understanding of it at the time I thought it was comparatively simple. Any person I have asked about it who is dealing with the system, an employer who is dealing with the matter himself, or an employee dealing with it on behalf of his employer, has told me in every case that it was not complicated and in fact has been simplified as far as possible in all the circumstances.
Deputy Booth spoke about the increased duty on motor parts. Our desire was to simplify the duties of motor parts and to cut down the number of duties as far as possible. It was an honest calculation of the Revenue Commissioners that the new duties, provided there are the same number of cars coming in this year as last year, will give exactly the same revenue. There may be more cars coming in and there may be fewer; in that case we will collect more duty or we will collect less, but the calculation was on the assumption that we would have the same imports this year as last year.
Deputy Booth also referred to the matter which I have mentioned already where companies are now paying their corporation profits tax on all profits over £2,500 and they will then pay income tax on the total profits. Up to this, as I said, the amount paid on corporation profits tax would be deducted before income tax was calculated. Deputy Booth says he is doubtful whether most companies would be as well off this year as last year because, he very wisely said, the Revenue Commissioners would be inclined to make a change that would favour the Exchequer. I said when bringing in the Budget that any company earning a profit under £52,000 would be somewhat better off this year on account of the reduction in income tax, but if they earned over £52,000 they would be better off only to a very insignificant amount. On the previous occasion I mentioned what the amount was on £100,000 but I forget now what it was, something like £200.
Deputy Declan Costello says that the Budget gives only £600,000 to social welfare and £1.2 millions for income tax payers. He said that for that reason it was a Tory Budget. One does not mind being called a Tory but one would like to know why that name is given to this Budget. It would be a pleasant thing for any Minister for Finance, and I am sure he would get the applause of certain people if he did so, to give all the surplus he had to social welfare recipients. He would have done nothing in that case towards creating more employment and, after all, as another Deputy said, the unemployed are not seeking social welfare but jobs. If the Minister for Finance were doing his job properly, he should devote at least some of that surplus to the provision of employment for the unemployed. That would not be done by giving the whole surplus as extra benefits. Furthermore, if that were done for, say, two or three years in succession, there would obviously be no increase in revenue over these years. There would be stagnation of the economy here and we could do nothing to build up the country and give employment to those now idle or to improve the lot of those who are employed by giving them a better standard of living. If that is what a Tory approach means, I am all with Deputy Declan Costello and his idea of how to manage finances.
Deputy Costello went on to say that in our capital Budget, we had also shown great conservatism, that we had reduced the amount for housing. First, I should like Deputy Costello and Deputy Ryan to settle the difference between them because Deputy Ryan told us that no more houses are necessary in Dublin city and that there are too many vacant at present. I do not believe that story, of course. Apart from that, I want to say that what is put into the capital Budget is the estimate of what will be used for housing. There is no use in my putting in £10 million or £15 million, if it is not going to be used. I have put into the Budget what I think will be used and if Dublin or Cork Corporations and other town councils go ahead with more building and tell me —or whoever is here next year—that more money is required, I am sure more money will be given.
Let nobody think that because the amount is lower now than it was, say, five or six years ago, it is Government policy that fewer houses should be built. It is merely an estimate of what is required for housing in all circumstances. I have certainly never given a direction to the Minister for Local Government to keep the bill down. In fact, the Minister for Local Government has increased his grants in many directions under this Government and he has made these increases with—I shall not say without any— little resistance by me.
The next point Deputy Costello made was that we had any amount of money for what he called prestige spending. He mentioned the air companies. It is a phobia with Fine Gael that too much money is being spent on air companies. I do not know why Fine Gael are so much against air companies. It is one thing for which they always attack Fianna Fáil—"no money for old age pensions, no money for the farmers but always money for air companies." I wonder why this hostility is shown to the air companies? I imagine that if we had closed down the air companies and said that there were British, American and other companies coming in to take people away from here by air and if we had put no money into those companies, Deputy Costello would say that I was a Conservative or Tory Minister for Finance.
Whatever money will be put into the air companies will be put in on the calculation, as far as it can be made, that it will be money well invested and will pay dividends. If we have made a mistake—well, I suppose we have made more mistakes than that—but that is the basis on which the money is being invested.
In regard to direct taxation, Deputy Cosgrave said that Mr. Declan Dwyer had complained that in our system of grants and concessions for industry, we had favoured the new man coming into the industry as against the industrialist who had been there all the time, and that we had built up those industrialists by these grants and concessions which were introduced. The concession on income tax on export profits was brought in as an inducement to people to export more. It was not introduced as a reward for those who had built up exports. To that extent Mr. Dwyer is right. I do not think it would be favourably received by Deputies if Deputy Sweetman, when he brought in this concession first, had brought it in as a flat rate for all industries because it would look like rewarding people for a business that was obviously profitable when they were exporting at that time.
It must be said that the concession was to be made for all increases in exports so that the exporter who was already established as such, was, after all, in a better position to build up exports than the man coming in for the first time and was more likely to benefit by the concession than the man coming in for the first time. For all his increased exports, he would get the concession. Apart from that, this particular complaint was made when I first became Minister for Finance and we thought there might be something in the point. We introduced a 25 per cent. relief for existing exports, so that the man who was previously exporting and who goes on into more exports now, can take either the 25 per cent. flat or take the 100 per cent. on his increased exports, whichever he likes.
Deputy Dillon said that Fianna Fáil believe that this country can survive irrespective of the agricultural industry, or, in other words, that we are prepared to let agricultural fall into bankruptcy and that we think, according to him, that we can make the country survive even in that case. There are a few points that Fine Gael will dwell on very much coming up to the general election and one is that Fianna Fáil are not interested in agriculture, but the one class of people they will not get to believe that are the agriculturists themselves. They may get people in cities to believe it or those who take an academic interest in economic affairs but why, or how, can they make that accusation against Fianna Fáil? Everybody knows it is very hard for a Minister for Finance to make ends meet, but even so, we are endeavouring to provide £8 million more for agriculture than was provided in 1956-57, the last year in which the Coalition Government were in office. That money is provided for various purposes and we believe that the only way we can help agriculture is to help farmers in their production.
We have given liberal subsidies for fertilisers and so on in order to enable farmers to get more out of the soil, whether crops or grass, so that they can produce more on their farms. In addition, we have provided more for price incentives.
There were certain price incentives under the previous Government. We have increased the price incentives for milk products and also for top grade bacon, and we have over the past year brought in price incentives for beef. I do not know of anything else we could usefully do for agriculture. I am certain of course that no one from the Fine Gael side has suggested anything else we could do. They are trying to persuade the country that we are doing nothing for agriculture, and trying to give the impression to the country that they would do a whole lot more, without saying what they would do. I do not think that will carry much weight with the country people, unless Fine Gael tell them what they will do. They have not said anything of that kind. After all, the farmers are a very big class, and we all agree that they are not doing as well as we would like to see them doing, but it is unfair to the farmers, if Fine Gael have some policy up their sleeve and do not tell us what it is, in order that we can improve the lot of the farmers now, and not wait until after the next general election to do so.
What I would call a rather undesirable type of propaganda is coming from Fine Gael, and Deputy Dillon is the man who is spearheading it. He talks about what we have done for industry, which we have put on its feet, contrary to what some Fine Gael Deputies say. He says we have made industry prosperous and have done nothing for the farmers. In other words, he is appealing to a very low instinct in the farmers and trying to create a feeling of jealousy in them by saying they are not doing as well as every other class. That is a very bad thing to do because, after all, if the farmer is not as well off as the others, he should be left fairly content as he is, and this feeling of resentment and jealousy should not be stirred up against the people in the towns because the farmers are not doing as well as the people in the towns.
We, of course, had not the same opportunity of doing that, whether or not we would have done it, because when the Coalition were in office, we could not draw the attention of the farmers to the fact that the people in the towns were doing well, because they were not doing well. I am appealing to Fine Gael not to try to stir up this feeling of jealousy amongst the farmers. Deputy Dillon is a very impressive speaker. I can quite see that if he were speaking, his audience would be convinced that the farmers were never so badly off as they are at the present time. But why are they paying so much for land? Land was never so dear. The farmers may be very good supporters of Fianna Fáil, but I am quite sure there is no Fianna Fáil farmer who would pay £1 more for a farm than he thought it was worth, for the sake of boosting Fianna Fáil. He pays for it because he thinks the land is worth it, and because he has confidence in the future of agriculture, and he buys the land to make his living on it.
Under the Coalition back in 1956, every other farmer one talked to was in the doldrums. He was called in by his bank manager and told: "You must pay something off your bill." In the past few years, the bank managers have been saying: "Do you want any more money for your business?" Bankers are not fools; bankers do not give money in order to boost Fianna Fáil, but because they know there is a future in agriculture. The objective opinion of the bankers and the farmers that agriculture is progressing and will progress is much more useful than the pessimistic propaganda of Fine Gael.
Deputy Corish talked about the income tax reliefs and said that he was dissatisfied. He quoted figures to show that a single man earning £1,000 a year got much bigger reliefs than a married man on the same salary. It is inevitable unless we make some big changes in the system that when we bring down income tax, the single man will get a bigger relief. Of course, when it goes up, he pays more than the married man, because as every Deputy knows, the married man is exempt at a higher level than the single man. Therefore, when income tax goes down, the single man gets more out of it than the married man.
Deputy Corish also talked about indirect taxation and said it was unfair, in a way, to the less well-off person because he has to pay his share of indirect taxation in a higher proportion than the better-off man. First of all, I should say that Deputy Corish is right when he says that of our total revenue 70 per cent. comes from indirect taxation. I remember saying in my Budget speech that I was very much inclined, so far as it was possible, to change from direct taxation to indirect taxation, for the reasons I mentioned earlier to-day, that we would get better results from building up the economy by taking less from earnings and putting a tax on spending instead.
However, Deputy Corish may be right when he says that the poor man will have contributed a certain amount on tobacco or a pint of beer in indirect taxation. Let us take the three big items of indirect taxation: tobacco, alcoholic beverages and petrol. They make up four-fifths of the entire amount collected in indirect taxation. I do not say that a person on a low income should not have a smoke or a drink, but at least he can regulate his spending on those items to a moderate amount, if he so wishes.
I mentioned elsewhere, not here, that our total revenue from income tax is almost equivalent to the amount paid out in social services, if you like to put it that way. In answer to another point raised by Deputy Corish, we are taking income tax from people and giving it out in social services. If the income tax payer pays 6/4d., he is doing well and helping his brethren, and the more wealthy man who must pay 13/10d. at the top of the surtax rate is helping his brethren also. While the rate of income tax and surtax is lower here than it is in England and in other places, it is still a fairly substantial amount to take from a man's earnings.
As Deputy Corish pointed out, it is true that the amount of money collected by way of revenue is very much higher now than it was in 1956/57. I think it is higher by about £20,000,000 as far as I remember but, if you take the Departments mentioned by Deputy Corish—that is, Education, Health and Social Welfare—and if you add to them the Department of Agriculture, these four Departments between them are taking £16,000,000 more than they did in 1956-1957. Therefore, apart from these four the amount coming in in extra revenue now as compared with 1956-1957 is a fairly moderate amount. It is not true, as Deputy Corish said, that those in receipt of social welfare benefits are worse off now than they were three or four years ago. The one class usually mentioned in this connection is the non-contributory old age pensioner. From 1st August next he will have 25 per cent. more than he did in 1956-1957 and the cost of living has gone up, as far as I recollect, between 14 and 16 points.
Deputy Corish wanted to know what would happen to the industries established in the undeveloped areas. The point made by the Deputy was, of course, that they were obviously uneconomic, otherwise they would not have got the very large grants they did to induce them to go into these areas, and they are obviously competing at a disadvantage in operating in these areas. He asked what will happen to them if we go into the Common Market? I do not know. It may be that the industries which are operating in remote areas may have certain advantages. We only hope they will be able to carry on even if we do go into the Common Market.
Deputy Russell spoke of our tax on undistributed profits and he advocated something that has been advocated very often before; he said we should have a lower tax on undistributed profits. The reason he thinks that should be done is because our profits are low by European standards. While admitting that our profits are lower. I can only answer the Deputy by saying that our taxes are also comparatively low by European standards. It must be remembered, too, that we are giving exceptional treatment by way of grants, loans and so on to industries starting here. Taking our treatment of industries generally, I do not think we can be accused of treating our industries less generously than industries are treated in other European countries.
Deputy Russell said that a good case could be made for the abolition of corporation profits tax. I do not know. It must be remembered that corporation profits tax and income tax combined amount to just a little over 40 per cent. I do not think you will find another country in this part of Western Europe where taxation is so low. It has been argued of course that in very wealthy countries they can afford to pay bigger taxes because their businesses are bigger and they have better profits. On the other hand, in countries which are not so wealthy money is required more for the Exchequer, and so on. If you take the company as compared with the individual, I must admit I think the individual here is badly treated as compared with the company. The individual, if he is in business, pays income tax on profits, and he pays surtax as well. He may actually pay as much as 13/10 in the £. The most that the company will pay is 8/4 in the £.
I agree with Deputy Russell that the three prerequisites to progress in industry are education, capital and productivity. Deputy Russell thinks the Budget did not go far enough in encouraging these. My only answer to that is that it went as far as our resources would permit.
Deputy Donnellan spoke about local rates. For some while past I have been thinking the time has come when the whole question of financing local authorities should be examined by some independent body to see if a better system could be found. I do not know whether or not a better system can be found, but I think the matter should be examined. I suppose that is not likely to happen now until a new Government takes office.
Deputy Barry said that serious thought should be given to conditions in towns like Fermoy. In answer to a Parliamentary Question not so long ago, I heard the Minister for Industry and Commerce state that he had the whole system of grants and the present division as between undeveloped areas and other areas under review to see if a better system could be evolved. I know the Minister is examining into that and he may, or may not, produce a scheme in due time.
Deputy Ryan said that, while we are talking about the great progress the country has made, people's incomes are falling all the time. Now that cannot be true. After all, total national production is going up and it could not go up if incomes were going down. Secondly, the yield in income tax is going up and it could not go up if incomes were going down. Deputy Ryan will have to find some other cause for what he regards as the great depression in the country.
He also advocated our doing more to encourage people to buy Irish shares as opposed to foreign shares. He asked me to supplement what Deputy Sweetman did when he was in office. I must say I was not aware that Deputy Sweetman did anything while he was in office. I may be wrong in that, but the system of giving relief in income tax on the interest from Irish shares was brought in by my colleague, Deputy MacEntee, when he was Minister for Finance.