Vol. 191 No. 1
I move amendment No. 1:
In page 4, between lines 35 and 36, to insert the following section:
"Subsection (3) of section 21 of the Finance Act, 1920, is hereby amended by the substitution of ‘eighty pounds' for ‘sixty pounds'."
I do not think I need delay too long on this. It is really a compromise on a proposal made by Deputy Russell to increase the allowance in this respect from £60 to £120. I am proposing to make it £80.
The Minister would not take it when I tried to make a bargain between himself and the Deputy the other day.
I thought over it afterwards.
I move amendment No. 2:
In page 8, between lines 10 and 11, to insert the following section:
"(1) In this section—
‘the Act' means the Charities Act, 1961;
‘gift' and ‘charitable gift' have the same meanings as they have in the Act.
(2) This section applies to every gift made before the 1st day of July, 1961, which, if it had been made on or after that day, would, by virtue of section 50 of the Act, have been, to the extent provided in that section, a charitable gift.
(3) As respects the year 1961-62 and subsequent years of assessment, section 37 of the Income Tax Act, 1918, shall have effect in relation to a gift to which this section applies as if the gift had been made on or after the 1st day of July, 1961."
I explained on the Committee Stage I was bringing in this amendment. The position is that Section 50 of the Charities Bill provides that in the case of a gift for the maintenance of a grave or memorial the money provided, to the extent of £60 per annum or £1,000 lump sum, will be free of income tax. That section applies from the 1st August, 1961. This amendment is to bring in such moneys provided before the 1st August, 1961, as if the gift had been made after the 1st August, 1961.
Amendment No. 3 is out of order.
Nobody told me.
I am sorry. It has been ruled out of order as it involved a proposal of some importance which was not effectively before the Committee on the Bill.
We had a long discussion on the Committee Stage on expenses under Schedule E, and this is an expense under Schedule E.
The Chair was of the opinion it was not effectively considered, if it was mentioned at all.
I shall say what I want to say on the Fifth Stage. There might be a letter for me I have not yet seen.
I understand amendment No. 4 will not be moved since 5a is a substitute amendment.
I have not seen any 5a.
This amendment is in substitution for amendment No. 4.
This has just been written by hand this moment. It is not on the green sheet.
There was a mistake made. The amendment is the same.
I beg your pardon. I said "Repeat my amendment" and it is repeated by reference to the earlier print of the Bill. I do not want any misunderstanding about this. I was told about this change on the telephone to-day.
Amendment No. 5. I understand the Minister will recommit the Bill in respect of Sections 31 and 32 and amendment No. 7.
I do not mind about Section 32. Section 32 follows Section 31: Whatever we do for Section 31, we must do for Section 32.
I move amendment No. 5:—
In page 20, line 28, after "acquired" to insert "exclusively".
Both amendments Nos. 5 and 6 are put down because the matter was overlooked in the original drafting of the Bill. The word "exclusively" should have been put in the same as it has been put into other subsections to deal with the same point. Subsection (2) paragraph (c) (i) of Section 31, on page 18, line 36, states:
... that the property is property which is being acquired exclusively for the purposes of an industry other than agriculture....
That word "exclusively" should have been repeated in the two places here where it is now proposed to insert it, in page 20 and page 24.
The only thing I want to be quite clear about in relation to this is a case somewhat as follows. An industry buys, shall we say, 20 acres for its initial development. It puts its factory on the 20 acres so as to ensure it will have enough land to expand at a later stage if it succeeds in attaining its hopes and ambitions. During the stages when it is growing, so to speak, obviously if it is using ten acres to start with, the other ten acres should not go to waste. Probably the remaining part of the site will be utilised for agricultural purposes until such time as the industry is ready to expand. I appreciate that there is the three-year period. What I want to be quite clear about is that where a company buys a site, which it requires for an industry now, the use of the word "exclusively" does not mean it cannot at the same time buy reasonable ground for expansion.
I do not think there is any doubt about that at all. It is simply a matter of looking at it in a commonsense way. For a person who wants ten acres for an industry it would be obviously prudent to take 20 or 30 acres, if he could get it. That would be allowed. What we want to exclude is the case where a small industrialist wants five acres but buys 300 acres and says he is buying it for his industry.
I move amendment No. 5a:
In page 21, between lines 37 and 38, to insert a new subsection as follows:—
"( ) If before the 1st day of September, 1961, notice in writing is given to the Revenue Commissioners and a person proves to their satisfaction that a contract for the sale of any lands, tenements and hereditaments was completed before the 20th day of April, 1961, and the Revenue Commissioners are satisfied that the conveyance or transfer executed on or after the 20th day of April, 1961, gives effect to such sale, and does not give effect to a sale in respect of which a contract was completed on or after the 20th day of April, 1961, then, notwithstanding anything in the preceding subsections of this section, the stamp duties chargeable on such conveyance or transfer shall be the same as if this Act had not been passed."
This is a repeat of the amendment we discussed on Committee. I may as well tell the Minister that since it was discussed in Committee I have had very strong representations made to me to repeat it because of the immense hardship that is going to be involved. I have before me a case from one of the most reputable firms of solicitors in this city—not my own, let me add— in which a contract was made on the 11th June, 1960. But the contract was subject to the vendor getting possession from the purchaser of a house that was on the property. The vendor and the purchaser agreed, out of consideration for the occupant of the house, that time would be given to the occupant to go out of possession and, in consequence, it was not possible in the circumstances to complete the contract before Budget day this year.
As the law stands, when that contract was entered into in June, 1960, it was subject only to three per cent. stamp duty, but because the two parties did not take the occupant of the house by the scruff of his neck and peg him out without consideration of where he had to go, the stamp duty is 25 per cent. That is harsh beyond question but, in addition to being harsh, I have some doubt in my mind as to whether the imposition of stamp duty in a case such as this after the contract has been completed is constitutional. However, that is neither here nor there; it is not my pigeon.
I want to tell the Minister also that I am advised that there are other similar cases and I want to draw his attention to the phrase that I included on the last occasion, namely, "a person proves to the satisfaction of the Revenue Commissioners." I am perfectly happy to leave this matter to the opinion of the Revenue Commissioners as to whether it was or was not a genuine contract. I accept at once the Minister's anxiety that any amendment providing for a contract of this sort should not be utilised for evasion, should not be utilised by people attempting to back-date documents. I would not countenance that for a second but where there is a genuine contract already in existence—it may have been in existence, as in the particular case to which I referred, as far back as 11th June, 1960—there is undoubtedly a case to be met which should in honour be met so that the Government would not put the parties to such a contract in a position which they did not visualise at the time they came to agree on the contract.
I mentioned the last day that one of the methods would be an impressed stamp. Possibly there might be some way of getting over that by a person having a certain number of stamped blank pages and being able to utilise them afterwards for a contract. However, the safer basis would be to provide that a person should prove it to the satisfaction of the Revenue Commissioners. There are a number of ways in which the Revenue Commissioners could satisfy themselves. They could, for example, call for the cheque by which the deposit was paid. If it had been paid by cheque, not merely the date on which it was drawn but also the date on which it passed through the bank would be clear on the face of it. They could call for the correspondence books of the solicitors dealing with the matter and see whether in fact there was such correspondence at that time so as to make it clear that the contract was, in fact, executed before 19th April. They could provide that one of their requirements before they would accept it as being proved to their satisfaction would be that the parties concerned, and perhaps the solicitors as well, would execute statutory declarations which, if they were wrong, would mean that the people completing these statutory regulations would be guilty of perjury and could be sent to jail.
There is a combination of circumstances which the Revenue Commissioners could fairly lay down to the effect: "Before we will accept the proof as being to our satisfaction, we want to see this, that and the other." I am not prepared under any circumstances to cavil at the strictest proof being required but I do think that, where there is a contract made according to the law, a Government has not the right, and we in this House have not the right, to amend that contract and provide penalties under it— because this is a penalty—which will affect the parties to the contract and which they could not visualise at the time they entered into it.
The Minister suggested on the last occasion that coming up to Budget time people thought this was certainly going to be included. Did they think it was going to be included on the 11th June, 1960, more than a year ago today? Was there any indication from any member of the Government, the Minister for Finance or anyone else that there was any likelihood of such a provision being inserted in June, 1960? The Minister knows perfectly well that there was not.
I do not stand at all on the wording of this amendment, but I think the Minister is in honour bound to provide that where a person satisfies the Revenue Commissioners by any method of proof that the Revenue Commissioners require, that person is entitled to be put in the position in which he was before the Minister of his own volition altered the law. Let the Revenue Commissioners call for the contract. Let them call for the correspondence or for the postage books that show that that correspondence was duly entered into at the appropriate time. Let them call for the cheques that show that the deposit was paid, see the dates on which those cheques were paid through the bank. Let them call, if they wish, for any receipt that was issued. Let the Revenue Commissioners satisfy themselves that the receipt issued was one issued in proper sequence, issued on the date on which it purports to have been issued. Let them put on that whatever form of words the Minister considers appropriate to give the widest possible discretion to the Revenue Commissioners in assessing the proof whether it is in the form "are of the opinion" or that the person "must prove to their satisfaction."
I am not interested in the form of words at all. I am interested in the principle that if a person can satisfy the Revenue Commissioners by whatever means the Revenue Commissioners decide—and I leave them to be the judge that there was a genuine contract—we have not got the right in this House by unilateral action here to change the position without giving a person so injured by a heavy penalty the right to show that there was a genuine contract in existence which he ought to be allowed to honour as it was on the day the law took effect.
First of all, I would like to make a correction in something I said the last day. I said to the Deputy that in regard to the meeting between the Revenue Commissioners and the Incorporated Law Society, they left the Incorporated Law Society satisfied. The Deputy said that was not his information. His information was correct. I am sorry. What I should have read in the note was that "the Revenue Commissioners are satisfied that they will meet any point the solicitors raised." I read it too hastily and made that mistake. I want to correct it because the Deputy was right in his information at the time.
In this case, as I announced on the Budget, the axe must fall on that day with regard to the 1947 companies. I think we must stick to that; we cannot possibly depart from it. I do not want to go over the whole ground again. I think that all those who were availing of the 1947 companies must have been well aware long before Budget time that something was almost certain to be done to deal with that particular form of avoidance of stamp duty.
In June, 1960?
Long before the Budget came in——
I have a contract here for June, 1960.
Take a case in relation to June, 1960. I quite admit that there was no suggestion at that time that any changes were being made. Again, the people who were dealing with that case should have realised before the Budget came along that it would be more prudent for them if they completed their transaction so as not to be caught out, as they certainly are caught, according to the Deputy.
How could you get possession if——
I do not know about that. There are, of course, many cases which come under the Revenue Commissioners of the kind where the axe falls on a certain day and there is no way out of it. Sometimes we have a hard luck case where an import duty is imposed. Another point I want to make is that it is almost impossible to be sure that there is not fraud in some way or other in regard to concessions which have been made. I was impressed by the Deputy's case in connection with the impressed stamps. There was an impressed stamp sent to me, dated 8th February, 1961, on a blank sheet which was bought in the post office, the position being that the Revenue Commissioners have supplied these blank sheets with impressed stamps to the post office for sale. They are sent from time to time as they are required. Therefore, the impressed stamp would be absolutely useless. I only mention that to show that whatever next step we might take we would probably be up against fraud there, too. I think that, on the whole, even though there may be more than one hard case, we will have to stick to the Bill as far as this item is concerned.
There are two points I should like to raise. I did not quite catch what the Minister said. I understood his brief on the previous Stage to be that the Revenue Commissioners——
The section that deals with adjudication.
But not this section, not in relation to the point at issue now?
No.
The Minister made the case that in relation to many contracts for the importation of goods, the people concerned always feel that they are liable to sudden fluctuations in rates of duties and that because duties may be altered in relation to imports, that was, therefore, a precedent for stamp duties being altered in this case. If I understood the Minister, that was the case he was making. I do not know whether I am correct in my understanding of the Minister. He said that contracts were varied in relation to imports by duties being changed from time to time because that was an accepted situation. Then the position was that this should follow the same rule. I do not know whether I correctly interpreted the Minister.
I did not speak of contracts. I said that in other ways, you have this hard story. For instance, if an import duty is put on and a person has goods coming in to which this duty applies, he has to pay it. There is no way out of it.
I accept that is what the Minister meant. That is the experience and the practice and that is the system that is being built up over the years. Everybody knows that if they are going to import anything they are taking the risk that the duty may be changed. That is their fault. What is the situation in relation to this duty? There was only one other case in which this duty was ever imposed and that was in the Finance Act, 1947. In relation to imports, it is always understood that anybody who imports any goods is taking the risk that a duty may be imposed. That is the pattern. Anybody who does has damn well got to put up with it or lump it. That is the precedent which the Minister quoted.
The precedent here is exactly the reverse. There was one case only in which this duty was put on before— the Finance (No. 2) Act, 1947 and the precedent there was that there was a saver for genuine existing contracts. Anybody dealing with the matter up to Budget day was absolutely entitled to say the situation was dealt with before they were going to wipe out the pre-1947 exemption. Obviously, they must follow the precedent that the Revenue and the Minister for Finance laid down in 1947 that there would be a saver for existing contracts. Anybody who was dealing with the matter was entitled to feel and think that because it had been dealt with in that way in 1947, it was going to be dealt with on the same basis on this occasion.
The Minister has the 1949 Act which deals with leases. I have not got it to hand and I cannot remember whether the saver was put into the 1949 Act as well but it certainly was put into the 1947 Act dealing with conveyances. It is certainly putting it back in the only part of this legislation that is in any way relevant at all.
I want to put this to the Minister. It is not worth the ha'porth of tar involved to get the name of being a person who breaks an honourable arrangement. It is not worth it for any Government coming to this House and to the country to say in relation to the whole law of property: "It does not matter a hoot what the law is at any particular time; if it suits me, I am going to break it and I am going to break it in such a way that I am going to put retrospective taxation on the people involved."
There is nothing in this section which makes it worthwhile to break that principle. The Minister and I had immense arguments two years ago in relation to retrospective taxation on certain other aspects. We went on for days and days on the subject. Eventually, the Minister saw the force of the argument that Governments should not do that sort of thing. This is not going to mean anything in the shape of a revenue. It is not worth a hoot. However, it will mean a great deal from the point of view of an honourable precedent. Without injuring himself in the slightest, the Minister could take steps to ensure that the Revenue Commissioners would call for all the proofs which they, in their absolute discretion, think necessary. Then, if they get all the proofs they think necessary they would pass it and if they do not get the proofs, they would reject it and make the person pay the extra 22 per cent.
I cannot add very much more. I do not agree with the Deputy that this is retrospective. It was brought in on the day the Budget was introduced. If, for instance, I had said in the Budget that the 25 per cent. will now be increased to 35 per cent. from this on, that would not be looked upon as retrospective because it applied to any transaction that took place from that time onwards. I do not think this is very much different from that type of proposal.
In the 1947 Act, the putting of heavy stamp duty on the purchase of property was a very novel proposal, especially as it was to achieve a certain purpose. For that reason, the Minister at the time felt he should insert some saver for cases that were in course of completion. In the 1949 Act, that was not repeated. The 1949 Act was a strengthening of the 1947 Act, making some changes both on the retrospective and liberal side but there was no saver in the 1949 Act. I do not think a good case can be made that there should be a saver in this Bill in this case.
I think the Minister is creating a gross injustice. It goes bad in the name of a Minister for Finance to do so.
I move amendment No. 6:
In page 24, line 12, after "acquired" to insert "exclusively."
This is the same as before.
I move amendment No. 7:
In page 25, between lines 3 and 4, to insert the following section:—
"Where the Revenue Commissioners are of opinion—
(a) that on or after the 1st day of August, 1961, or the date of the passing of this Act, whichever is the later, lands, tenements or hereditaments have passed into the beneficial ownership, possession, occupation or control of any person (in this section referred to as the occupier), and
(b) that the passing has resulted from any arrangement or arrangements the main purpose or one of the main purposes of which was the avoidance or reduction of liability to stamp duty under the Stamp Act, 1891, at the rate provided for by subsection (5) of section 13 of the Finance (No. 2) Act, 1947, or subsection (5) of section 24 of the Finance Act, 1949,
the following provisions shall have effect—
(i)(I) the Revenue Commissioners may by notice in writing require the occupier to deliver to them, within thirty days after the date of the requisition (or, in the case of an appeal under paragraph (vi) of this section against a decision of the Revenue Commissioners not to cancel the requisition which is decided in favour of the Revenue Commissioners or is withdrawn, within thirty days after the date of the decision or withdrawal, as the case may be) a statement in writing containing such particulars as they may require in relation to the passing, and
(II) the occupier shall comply with the requisition,
(ii) the statement shall——
(I) be charged with the amount of stamp duty with which it would be charged, and
(II) be subject to the statutory provisions to which it would be subject,
if it were a conveyance or transfer on sale of the fee simple interest in the lands, tenements or hereditaments, free from all incumbrances, made to the occupier for a consideration in money equal to the value of such interest and executed on the date of the passing, due allowance being made for the amount of any stamp duty already paid in relation to the passing: provided that if, within thirty days after the date of the requisition under paragraph (i) of this section, the occupier shows cause to the satisfaction of the Revenue Commissioners why the requisition under paragraph (i) of this section should be cancelled, the Revenue Commissioners shall cancel the requisition and the statement, if any, delivered pursuant thereto,
(iii) the provisions of subsection (8) of section 31 and subsection (8) of section 32 of this Act shall apply in relation to the statement,
(iv) where the occupier has not complied with the requisition under paragraph (i) of this section and has not shown cause to the satisfaction of the Revenue Commissioners why the requisition should be cancelled, the Revenue Commissioners may prepare a statement in writing of the particulars in relation to the passing as they appear to them and deliver a copy thereof to the occupier and, upon delivery of the copy, the statement shall be deemed to be the statement delivered in accordance with the requisition under paragraph (i) of this section: provided that—
(I) if, within thirty days after the date of the delivery to him of the copy aforesaid, the occupier shows cause to the satisfaction of the Revenue Commissioners why the statement should be cancelled, the Revenue Commissioners shall cancel the statement, and
(II) if, within thirty days after the delivery to him of the copy aforesaid, the occupier shows cause to the satisfaction of the Revenue Commissioners why the particulars contained in the statement should be modified, the Revenue Commissioners shall modify them,
(v) (I) subject to clause (II) of this paragraph, if, at the expiration of thirty days after the date (being, in case an appeal is brought under paragraph (vi) of this section, a date after the date of the determination or withdrawal, as the case may be, of the appeal, and, in any other case, a date after the date of the expiration of the time for any appeal which may be brought under that paragraph) on which the Revenue Commissioners have notified the occupier of the amount of duty chargeable on the statement, the statement is not stamped in accordance with paragraph (ii) of this section, a sum equal to twice the amount of the duty unpaid shall thereupon be a debt due to the Minister for Finance for the benefit of the Central Fund by the occupier,
(II) clause (I) of this paragraph does not apply to a statement delivered in accordance with the requisition under paragraph (i) of this section the cancellation of which has been effected by the Revenue Commissioners or directed by the Court on appeal under paragraph (vi) of this section and, in the case of a statement the particulars of which have been modified by the Revenue Commissioners or have been directed by the Court, on appeal under the said paragraph (vi), to be modified, clause (I) of this paragraph applies to the statement subject to the modification effected or directed as aforesaid, and
(vi) where the occupier fails in showing cause to the satisfaction of the Revenue Commissioners why the requisition under paragraph (i) of this section should be cancelled or why the statement prepared by the Revenue Commissioners should be cancelled or why the particulars contained in the statement prepared by the Revenue Commissioners should be modified, an appeal shall lie to the High Court from the decision of the Revenue Commissioners."
This is a new section which it is proposed to insert. Although it is a long section, I do not think there is any difficulty in understanding it. I shall just run through the section. First of all, it lays down the conditions on which the Revenue Commissioners can interfere. Where they have reason to believe that a transaction went through that should have been submitted to them for adjudication in the ordinary way, they may ask for particulars. They may ask for a statement from the purchaser or the person who has the property and they may ask for a statement to be submitted to them within 30 days. If there is an appeal in the court against this and if the appeal is lost, then the Commissioners will operate the 30 days again, or if there should be an appeal put down for the High Court and the appeal is withdrawn, then the Commissioners will operate the 30 days from that date. That is as far as subparagraph (i) (1) is concerned.
Then it goes on to say that the occupier shall comply with the requisition to submit the statement as requested. If and when the statement is received by the Revenue Commissioners and they believe it should have been assessed at the 25 per cent. stamp duty, then they will charge the stamp duty on the statement, the same as they would on a conveyance of any kind, unless, in the statement which is submitted to the Revenue Commissioners, it is obvious that it is not a case they should stamp. Then the Revenue Commissioners can cancel their proceedings and that is the end of it.
The next paragraph says that if any false statement is made by the person concerned, he is liable on conviction to a fine of £500 or six months' imprisonment, or both. Then we come on to subparagraph (iv). If the person does not reply within 30 days, then the Revenue Commissioners may themselves prepare the statement that he should have prepared and may send this statement, with the assessment for stamp duty, to the person concerned. He will be liable for payment of this duty within, I think, 30 days, unless, again, he shows reason why he should not be assessed at this high rate of duty. Alternatively, he may point out that the assessment should be modified as it is too high. That will be rectified, if it seems it should be rectified, by the Revenue Commissioners. If there is no reply within 30 days, then they can send him a demand for twice the duty assessed on the property and he is liable for this duty at that particular rate.
Subsection (II) of paragraph (v) just points out that the Revenue Commissioners will not assess the person on any statement that was cancelled by them or rejected by the courts or on any statement that was modified by them. It should be modified accordingly in the assessment they make.
The last paragraph gives the person the right of appeal to the High Court against the decision of the Revenue Commissioners.
The Minister said— I do not think he meant it—that in any case where it was perfectly obvious to the Revenue Commissioners that there was nothing in it, they would cancel the requisition. The Revenue Commissioners will act in a semi-judicial capacity and assess the merits of the case. It is not a question of whether it is perfectly obvious or not but whether they bona fide come to that decision.
I am not clear about certain matters —"that the passing has resulted from any arrangement or arrangements the main purpose or one of the main purposes of which," paragraph (b) in the second paragraph. Does that cover the case of the mortgagee going into possession in the manner I indicated?
I believe it does.
How is the Ulster Bank ever going to lend any money hereafter to any of its customers? The Ulster Bank is an extern unqualified person and a bank wants to be able to go into possession. I want the other case covered but I do not want the ordinary flow of commerce hindered at the same time. The Northern Bank would be in the same situation.
I want the Deputy to take note of certain words in the second line of paragraph (b), "or one of the main purposes of which was the avoidance or reduction of liability to stamp duty". I do not think the banks could be accused in that regard.
That depends entirely on by whom the purpose was intended. It might have been the purpose of the borrower, but it would not have been the purpose of the bank. This is a very strong section but I think it is only with a strong section that you can cope with this situation. For that reason, without accepting it as a precedent for other matters, I am not going to object. What happens in respect of breaches of the law as the law was before 19th April, 1961?
It refers only to a transfer.
I know this section does, but what is the Minister going to do about breaches of the law before April, 1961?
If there were breaches of the law, I think we can deal with them.
Is the Minister going to take steps to do so?
I certainly would like to do so, if I heard of a case.
The Minister has only to look at Stubbs' Gazette for the last year and he will see the number of fake companies formed for that purpose.
I should like to have a look at that. I do not know much about the law——
Will the Minister direct that attention be given to it?
Yes.
Final Stage?
It there any objection to taking it now?
If the Minister had answered my question today, I would not have had the slightest objection. I put him a question asking for clarification in respect of Section 9 and he refused to answer it.
But I have not got the information.
Well, now, the Minister must think I am a very naïve person.
What are we discussing now?
We are on the motion that we take the Fifth Stage.
All right.
The Minister must think I am a very naïve person. I do not think he is so naïve that this section was put in without his knowing what contributions were going to be allowable. Sections just do not wander into a Finance Bill like that, without somebody knowing something about them. I admit the Minister for Social Welfare does not make the certificate until after the Bill becomes an Act, but I am sure everybody from the Revenue Commissioners down—and I will take a bet it is in the Minister's brief— knows what the approximate effect of this is going to be, that in relation to cards stamped at the industrial rate, the allowance will be so and so and in relation to cards stamped at the agricultural rate, the result will be so and so.
I refuse to accept that there have been no discussions, no tentative conversaziones as between Social Welfare, and Finance and Revenue, and even perhaps that the Minister might have had a whispered word with the Tánaiste about this on some occasion. Not merely do people know what it is going to be at the top but the information has percolated down to the bottom. If the information has percolated down to the bottom, it is not unfair that members of this House should ask what is going to be the effect of this section before they are asked to pass the section blindfold, because that is what the Minister is asking should be done, that we pass Section 9 without any indication from him of the amount involved. That is not the way to deal with this or any other Bill.
As far as I and the Revenue Commissioners are concerned, we have not got the final decision of the Minister for Social Welfare.
No, I do not expect a final decision.
To ask for an approximate figure would be difficult because the whole thing is very small. I do not know what the aggregate is going to be but I remember one time when I was Minister for Social Welfare that the figure was 1/6d. at that time. A sum of 24/- or 25/- altogether, or something of that nature, was involved. I do not know what it would be now but half of that would be put on the insured person. It would be a comparatively small amount. I do not think it can make a great deal of difference to our receipts from income tax for the year. We have not got the final figure and therefore——
Would it be £3 a skull?
I imagine it would not be more than that.
Would it be £5 a skull?
I am told it might be £4.
For the industrial or the agricultural rate?
It might be over £4. I do not know whether it will make a difference to the agricultural rate.
The stamp is different.
The stamp is different but he gets the same rate.
Is the Minister telling me there have been no discussions as to what this involves?
I am sure there were discussions.
The question is that the Bill do now pass.
I thought we were discussing a motion to take the Final Stage. I want to make some remarks on the final stage.
Since the Bill was discussed earlier, I came across a case in respect of which the Bill itself covers certain matters, but the amendment that I put down for today was ruled out of order on the grounds that it was not discussed as such on Committee Stage. I came across the case of the livestock corporation which is financing certain farmers in just the same way as banks finance farmers, but doing it slightly differently by reference to hire purchase. The position in relation to hire purchase is that they are properly allowable as a deduction from Schedule D assessments but not allowable from either Schedules A B or E. The position therefore is that if a person who is stocking his farm borrows from the bank, he is allowed his bank interest for the purpose of an offset against his tax. If he borrows from the livestock corporation for the purpose of stocking his farm he is not allowed because the loan is taken on the basis that the payments that he makes to the livestock corporation are payments of a consideration for hire rather than interest as such. The payment would be allowable under Schedule D but is not allowable under Schedules A, B or E. Quite frankly I think that is a mistake remembering that the payment is made for the purpose of increasing agricultural credit and the Minister said several times that he is very anxious to ensure increased agricultural credit. Yet, in this particular instance, credit is not allowable as an ordinary deduction in the way that other deductions are.
On the Budget and on this Finance Bill I have made it clear that, in my view, the proposals of the Government fail in relation to several matters. One of the things in which they fail is that they have no inducement whatever in these proposals towards helping people to achieve the increased productivity so urgently necessary if we are to compete at all in the world of tomorrow. I recently came across some figures for increased productivity since 1955 in other countries. We must accept that we have not had as much success in increasing productivity here as other countries have had.
In addition, we have had to make up a good deal of leeway. Since 1955 productivity has increased in Italy by 33 per cent.; in France by 26 per cent.; in Holland by 22 per cent.; in Western Germany by 20 per cent. since 1955, and the productivity increase in Western Germany from 1950 to 1955 was absolutely phenomenal and startling. Since 1955, productivity has increased in America by 16 per cent. and in the United Kingdom by 9 per cent. These figures are based on some recalculation that was made of statistics prepared by the Deutsche Bank of Germany, starting with 1950 as a base level and then recalculating to 1955.
We are inclined here to measure our productivity on Britain and it is significant that her productivity has increased by only 9 per cent. as compared with 20 per cent. for Western Germany, 26 per cent. for France, not to mention Italy with 33 per cent.— more than three times that of Britain. There may be certain circumstances in relation to which the Italian figure is not properly comparable because of the position in Southern Italy. Be that as it may it is clear that on those figures we have a long way to go. We have a position in which it is absolutely essential we should speed up if we are to keep our place, much less improve it, for our exports in the future.
This Bill introduced by the Minister on behalf of the Government does nothing by way of inducement towards the desired end. In fact, it has already been stated on Second Reading and on the Committee Stage, the amendment in relation to corporation profits tax in Section 6 can act as a deterrent. We must remember, too, that in this Bill we are incorporating into our taxation code a structure of direct and indirect taxation that does nothing to make it easier for our people to compete on reasonable terms with the member States of EEC and in the European Free Trade Association. The figures given in Appendix 5 of the division of direct and indirect taxation show that there is considerable room for us to mend our hand and to provide that our people will not be put in a worse position by Government taxation than their competitors abroad. For these deficiencies, the Minister must accept responsibility. The Bill, because of these deficiencies, is not up to the standard the people had a right to expect.
In an earlier discussion the Minister referred to the levies and said that, when they came in in 1957 and since, they had abolished most of the levies. I had not then the figures to my hand, but the fact is that in the Minister's first year, 1957-1958, he collected £2,490,000 in levies and £692,000 in customs duties which he had substituted for levies, making a total of £3,182,000. In 1958/1959 he collected in levies £1,788,000 and in customs duties that he substituted for levies £1,535,000, making a total of £3,323,000. In 1959-1960, he collected in levies £1,586,000 and by customs duties that he substituted for levies, £1,855,000, making a total of £3,441,000. In 1961, the financial year just ended—I have not got the exact breakdown between the two— on the Minister's own figure the total is approximately £3,000,000 as between levies, which were estimated originally as being £1,120,000, and customs duties which were estimated at being £1,855,000, making a total estimate of £2,975,000, which, in fact, works out at virtually the same total, though there may have been some slight change in the individual breakdown of the figures for that year.
In the four years, therefore, the Minister has collected over £13,000,000 by way of levy or by way of customs duty which he substituted for levy. I ask the people who are going around canvassing in the shops for Fianna Fáil to remember that their Minister for Finance collected £13,000,000 though canvassers told the shopkeepers in 1957 that if they elected a Fianna Fáil Government they would not have to pay any more levies. Only the other day I heard a shopkeeper reminding his customers of that, after the discussion in this House. Thirteen million pounds' worth of duties had been collected by broken Fianna Fáil canvassing promises.
With regard to hire purchase, the instalments are not regarded as interest though, strictly speaking, they are supposed to include an element of interest. The position would require analysis and consideration before anything could be done. I do not know if it would be wise to touch it in the manner advocated by the Deputy. I do not think it is right for the Deputy to say there is no inducement whatever to help productivity. There is, first of all, of course, the very, very substantial inducement of the reduction of 8d. in income tax, which is a very good incentive indeed to workers and salary earners of all kinds. Then, of course, there are the other things like the increase in earned income allowances and a few smaller items dealing with income tax which should be helpful also.
I agree with the Deputy that the more we are up against competition with other countries the more important it is to see that our taxation is kept down to the level that they have, if we possibly can, but it is not an easy matter to compare one with the other. A good advocate could certainly make the case that we pay more but an equally good advocate could make the case that we pay less. It is very difficult to arrive at the truth or what would be a just appraisal of that particular question. On the whole, I think we are not paying any more taxes here than they do in most European countries and, on that score, I do not think we will be prevented from competing with other countries if we drift into an association of that kind.
The Minister used the right word—"drift"—because that is what the Government are doing. It is his word, not mine.
That is right. I do not know if any other point was raised by the Deputy. That point with regard to higher taxation here is not proven and perhaps if I had got notice I could make a very good case that our taxation is lower than in other countries.
The Minister for Finance is supposed to be always on notice.
This Bill is a Money Bill in accordance with Article 22 of the Constitution.
