Whatever may be said either for or against these Budget proposals, I think it can be said with justice and fairness that the present Budget is not an economist's Budget. Rather it recalls those days when a Budget was regarded merely as being national housekeeping and it does not reflect the position that has come to be expected and hoped for, that a Budget is presumed to be regarded as an instrument of economic policy.
The view that this is not an economist's Budget received support from the speech of the Taoiseach when he said that the Government could, if they had so wished, have brought in this year what he called a standstill Budget. In column 1178 of the Dáil Debates of 11th April, 1962, the Taoiseach said:
The Government were in the position that they could have produced a no change Budget, involving no votes in the Dáil, no increases in taxation, no increases in benefits for anybody.
I do not know why that should be regarded as a statement of something that is desirable. It can be deduced from that statement that were it not for the pressure from the farmers' groups and the pressure from those people speaking from all sides of the House for the old age pensioners, the public service pensioners and others, we would not have had in this Budget even the ungenerous provisions which are being made for the old age pensioners, for the public service pensioners and, to some extent, for the farmers.
The general policy of the economists towards derating was brought very forcibly home to us when, in the difficult circumstances we were encountering in 1956, the Capital Advisory Committee told us and advised us, with a bland unconcern for political practicalities, that we should take away from the farmers the amounts of subventions being given to them for the relief of rates and to spend that money in other forms of assistance to the agricultural industry, on the ground that the provision of these subventions to local authorities is not directly related to increased production. The Committee went on to say that it is an historical fact that the very substantial reliefs afforded to farmers between land purchase and relief in rates have not led to any increase in agricultural production.
Doubtless, those statements were strictly accurate, but anything further removed from practical politics could not be conceived. I cannot see any Government surviving, if they put such proposals into operation. What this Budget means is that the Government have now brought in these proposals for derating, notwithstanding the fact that if you look back on the years from 1933 onwards, you can remember the clamorous voices from the Government Benches speaking against the large farmers who were at that time pressing for full derating. The Government, at that time, were equally loud in stating that they would never accede to these proposals because they elected to give any relief that could be given to the small farmers. Now they propose to give relief by way of derating which at that time they considered should not be done.
It is very desirable that the agricultural industry should get assistance but the form in which that assistance should be given is another matter. I think that, on reflection, the Government will come to the conclusion that they have not in fact given any substantial relief to the farmers or any lasting relief to the farming community. Rates have a habit of going up and they will go up again. What the farmers want is some relief from their overheads. They want some help to increase their production and to be in a position to meet the keen competition they have to meet at the moment and will have to meet in the future. They do not want to get rid of the rates, and they will not, except for a very short time, get rid of them by these proposals. Next year, there will be further increases in rates and further demands by the farmers, coupled with the fact that they will want additional subventions for other purposes. The proposal to help the farmers in this way was misconceived and will be quite useless except for a short time.
It would be better for the Minister to approach this problem by tackling it locally, in order to find out what is causing the ever-increasing rates. We have created in this country what has become almost a colossal body in the local authorities. Their staffs are increasing daily; their activities are increasing almost hourly; and their demands are ever on the upgrade. It might have been a very good thing if the Minister had decided to examine the whole structure of the local authority system. It has become almost the equivalent of the national Civil Service. This small country with its meagre resources cannot afford the large national Civil Service we are carrying at present, but on top of that, we have a never ending increase in the local authority services. Some steps could have been taken in a practical way to relieve a lot of the unnecessary expenditure by local authorities, to cut down in some way the burden of the rates instead of adopting the temporary expedient that the Government have taken.
They could have done something that might be more easily achieved and could have been achieved in a shorter time than by an examination of the local authority structure. They could have examined into what is really causing the increase in rates and how far our expensive programme on road work is contributing to that increase. I referred to that matter when I spoke on the Vote on Account and it seems to me that we are pouring out money to an extraordinary extent on the roads.
There is perhaps an even more important field in which research would have produced fruitful results. I think it is admitted that one of the prime causes of the increase in rates is the burden of the Health Acts on local authorities. On this side of the House proposals were put forward, with financial arrangements made public, by which that burden could be decreased. Over the years, the Government have adhered to their system which has resulted in very heavy burdens upon the local ratepayers, an ever-increasing burden and one that, unless it is arrested, will never stop. Would it not have been far better if, during the past 12 months since the general election, when this matter of the cost of the health services was brought into the public eye and debated in public, they had had a quick look at it to see how rapid steps could be taken to reduce the impact of the health services on the ratepayers? But, apparently, the line of least resistance was taken because that is what the derating of agricultural land is and what I think is perhaps the most serious objection of all to the present proposal is that it does what the Minister's Department looks upon with utter horror—it creates a precedent.
Inevitably, it will mean more demands for increased derating, leading inevitably to complete derating of agricultural land. That is a topic that can be, and has been over the years, discussed hotly on both sides. The Minister and his Party apparently have changed their attitude on that, but I think it cannot be denied that however desirable derating of agricultural land might, in theory, and in some respects, in practice, be, nevertheless, it does not bring complete relief to the small farmer or anything like the relief it brings to the large farmer. That is one indication that this Budget is not an economist's budget. The derating of agricultural land is almost economic heresy, but whatever views they might have and however they might justify them along the lines of the speech made by the Taoiseach justifying these particular proposals at the present time, owing to very great difficulties that agriculture is facing abroad, whatever justification there may be for that, your official economist or financier looks with horror upon any proposal for human improvement schemes such as old age pensions or the giving of relief to civil service pensioners. And those are the two proposals.
I do not object to the Minister bringing in these proposals and however economically unsound they may be I think he was bound to bring them in this year, certainly the proposal regarding civil service and public pensioners in particular and also in regard to old age pensioners and other social classes. There was too much demand in the country for him to overlook it but if that demand had not been there we would undoubtedly have had a standstill Budget. If that be so why the necessity for taxation? That is the next question that obtrudes itself in any discussion on this Budget. We had the Minister for Finance saying, and taking pride in the fact, that revenue over the past year was very buoyant. At column 1575 of the Dáil Reports of the 10th April, 1962, in introducing the Budget he said:
Tax revenue was very buoyant last year and non-tax revenue also exceeded the Budget Estimate. The buoyancy was such that it covered the excess expenditure, as compared with the Budget Estimate, of £5.3 millions on the Supply Services and £0.54 million on Central Fund Services. It was short only £700,000 of making good the Budget adjustment of £3,000,000 for errors of estimation.
If the Minister had not to face claims for services he has met in this Budget I have no doubt he would have come in and said: "The Estimates are very good and the Estimates for next year may be even better but we shall stand still this year. We are in theory only £700,000 short. That is only the gap. That can easily be made up." I have no doubt if that were the position he would have provided for overestimation not a sum of £2,000,000, as he is providing, but something in the region of £2,700,000 to bridge that gap and we would have been told that everything was grand.
But he had to have taxation. I believe it was deliberate policy to have taxation and that even if he could have anticipated getting additional revenue next year or by various devices known to the financier bridged the gap he said existed or would exist in consequence of the proposals in this Budget, I believe he would have introduced taxation because I think this conclusion is inescapable. From my experience I can detect the note I have heard so often in matters of this kind—"people are asking for services; let them see, if they want the services they must pay for them." Therefore, I say these proposals for new taxation in this Budget were deliberately imposed; that no effort was made by economies, adjustments or by means other than increasing taxation to meet the expenses necessary to fulfil the proposals in the Budget. It was necessary that people should be told and that it should be brought home to them in a painful way "if you want to increase social services you must pay for them." I have no doubt, in my own mind at all events, that is the reason for the additional taxation this year and not that it could not be avoided.
Would it not be possible to look at the revenue as it stands at the moment or as it stood at the end of last year? Last year they got something like £45,000,000 more than the year before. Do not forget—and I am afraid that it is often forgotten although the effects are still being felt every day in the ever-rising cost of living—that the Government have the benefit of something like £8,000,000 or £9,000,000 which used be used for the purpose of food subsidies to keep down the cost of living. They have had £45,000,000 in the past year and almost certainly when the PAYE system comes into full operation they will get a very considerably increased yield in income tax, more than they got last year. No account is being taken of that. I think it has been estimated in some speech made by a Deputy here that £2,000,000 increase in income tax revenue will accrue in the current year from the operation of PAYE, the effect of prising income tax from people who escaped the claims before this system was devised and put into operation.
There is a fruitful source of future revenue if, as we are told by the Government, this country is ever-increasing in prosperity. The Taoiseach said we are only at the beginning of it. According to his speech we had prosperity of a kind that we never had before and we are only at the beginning of it. Why not, in the interests of increasing our export trade and of increasing agricultural production, do without taxation this year and estimate on the increased yield from income tax that will almost certainly accrue if the Government's proposition that we are in a prosperous state and only at the beginning of prosperity is in any way based on fact? Why not take a little more in over-estimation? A sum of £3,000,000 was over-estimated last year. That was only put out of operation or anticipated operation because of two unexpected matters which arose in the course of the financial year.
One was the rise in Civil Service wages and the other was that certain requirements of the farming community, amounting to over £5,000,000, had to be met. Surely it is fair to say that those two items will not arise in the course of this financial year, so that the amount of money involved there could easily have been charged towards the increased benefits that have been given in this Budget to the farmers and the public pensioners.
But apparently no action of the sort was taken. There was a sum of £3,000,000 for over-estimation last year. This year only £2,000,000 is provided under that heading. I remember the discussions on the infamous Budget of 1952 when it was said that £2,000,000 was too little as a provision for over-estimation. But look at the amount of money that was sought to be provided in that Budget of 1952. It was millions short of the colossal sum in the Book of Estimates this year. When you could take £2,000,000 in over-estimation when there was only £70,000,000 to be provided, what could you take when you have £140,000,000? Surely there could be at least £500,000 extra for over-estimation?
I must say I was surprised to hear the Minister for Finance say that the loss on the abolition of the entertainments duty for this year alone would be £450,000. That, according to my reading of the Minister's speech, represents the loss in a portion of the year only. What will it be in a full year? Presumably, it will be something in the region of £1,000,000. What we are doing then, in order to give old age pensioners and others 2/6d. a week, some ungenerous allowance to other public pensioners and a not over-generous provision for farmers, is that we are doing without this pretty large sum in entertainments duty. I should like to know from the Minister what proportion of the revenue from entertainments duty was applicable to cinemas alone and what proportion was applicable to dancehalls and other operations subject to entertainments duty. What I really want to get at is this: if the Minister is correct, and I believe him to be correct, that the cinema industry is deserving of relief, what would it cost to give the cinema industry this relief and still retain the taxation on dancehalls?
The Taoiseach in his speech just tossed aside this question of the entertainments duty. He said it was a bad tax and always had been a bad tax and a difficult one to administer. I do not think that I have ever heard, with the possible exception of income tax, of any tax not having been difficult to administer, but this tax to which I refer produced a fair sum of money which would go a long way towards meeting the payment of relief to social welfare classes.
I think the people who go to these dances and other such functions subject to entertainments duty could well afford to continue to pay for their amusement in order to provide a subvention that would assist the old age pensioners. Would it not have been far better for the dancehall proprietors and the people who attend these dances to continue to pay this tax, knowing that while they were getting their own amusement, they were helping to give very much needed assistance to their rather distressed neighbours?
This matter has been treated far too lightly. The Taoiseach tossed it aside. What we are tossing aside is something in the region of £1,000,000. I may be wrong in that figure, but if the abolition of the tax over a portion of the year is to cost £450,000, it must be in the region of £1,000,000 in the full year. Whatever it is, we should have been told here how much the yield is in respect of cinemas—in respect of that portion of the industry which is suffering because of competition from television and other sources. Then relief could have been given to that section, but mere difficulty of administration should not prevent the flow into the revenue of a pretty substantial sum which could have been used to meet the extra provision for old age pensioners, public service pensioners and farmers.
I think we are entitled to press the Minister to say precisely what is involved. I do not want to resort to this old controversy of whether there were political motives or otherwise in the background, or to say whether this tax was abolished because of subscriptions from dancehall proprietors, but the public are entitled to know what is the real reason. Otherwise, they will undoubtedly remain convinced that the real reasons are political and not economic. We are entitled to know what is involved in taking away the tax from dancehalls and other amusements of that kind, what is the amount per annum involved. Would this tax not have helped considerably the Minister's task to do justice to these public pensioners who have been having a very thin time during the past 20 or 30 years?
Perhaps it would be ungenerous of me if I did not acknowledge that the Minister has done something for these people, and I do acknowledge it. I have been interested in these people for many years. As I said when speaking on the Vote on Account, the only pledge I gave during the last general election campaign was that I would do all I could for them. They have no great political importance; their votes do not count for a whole lot, and I accordingly acknowledge that the Minister is entitled to a measure of thanks for having considered their just claims, even if not as fully as was expected.
However, these people are entitled to know why it is that their claims are being met only to the extent of one-third. These people will have in the back of their minds the grievance that people who can amuse themselves at dances and other forms of entertainment have been relieved of the taxation which would have made it possible for the Minister to meet the claims of the social welfare classes much more generously. Other people who partake of tobacco or intoxicating liquor will have to pay the amount it is proposed to extend in relief to the worse off sections of the community.
Again, I acknowledge the Minister's performance of his duty in giving even 2/6d. a week. It may be criticised as ungenerous but at least it is something. The whole question of the old age pensions should be looked at again. If the proposals of my former colleague, Deputy Norton, in the first Social Services Bill he framed, in the inter-Party Government, had been put into operation, there would have been a great easement on the taxpayers in respect of the cost of old age pensions and other costs of that character allied to contributory and non-contributory pensions.
Much of the demand for increased old age pensions arises from the fact that the system is so administered as to cause hardship and create difficulties for old age pensioners. I suggest to the Minister that he might reconsider the whole problem. I know that to grant even 1/- a week to the old age pensioner would cost the taxpayer a very large sum of money, and 1/- is a very small amount indeed to an old age pensioner. Under the present system, there will undoubtedly be no thanks for any Government for increasing the old age pension by 1/-, 2/-or even 2/6.
I remember being shocked when I was not very long in the House on hearing the then Minister for Finance, Mr. Seán T. O'Kelly, subsequently An tUachtarán, introducing his Budget proposals and giving an outline of the way he proposed to find the money for the things he was doing. I remember him saying that he was banking on balancing his Budget in a number of ways, and in particular in one way: in the administration of old age pensions, he hoped to save so many hundreds of thousands of pounds which he needed. On reflection, that appeared to be a most extraordinary procedure.
The old age pensioners are entitled to a certain amount of money, subject to a means test and they are also subject to an inquisition. I have heard it stated again and again in this House that old age pensions are not supposed to be sufficient to maintain an old age pensioner in food and lodging. How are they to be maintained? Quite a number of them have a gratuity or a pension from their employers of a not very substantial character from their point of view. Once they get the old age pension, even the employer who wishes to continue to give them that gratuity or pension either reduces it or takes it away altogether because there is no use in paying it when it is only in ease of the revenue.
The Minister's officials carry out a cross-examination amounting to an inquisition: "How much did you earn this week? How much did your children contribute to you? How much did anyone else give you? What have you in the bank? Have you any pension?" From that point of view, there is no use in the employer continuing to pay him a pension and consequently it is taken away from him. If the old age pensioner's children contribute anything to him, it is inquired into and calculated as part of his means. All sorts of devices have to be resorted to. The children of old age pensioners who wish to help their parents have to give them food or clothing. There are all sorts of devices which lead to demoralisation and sometimes a certain amount of prevarication, not to talk about lying.
I know the Minister's officials have their duties to perform but I also know from personal experience that the old age pensioners are subjected to inquisitions which are sometimes torture, and some of them would prefer not to get a pension at all. If the matter were approached in a different way, there would be less constant demands for increases. If it could be arranged that small pensions given by former employers and contributions in cash or in kind by relatives or friends, and even some little income from doing a little work, were not taken into account in assessing their pensions, they could get them in comfort without prevarication or demoralisation, and they would not be subject to constant inquisitions.
The same applies, perhaps in greater degree, to widows in receipt of non-contributory pensions. Widows whose husbands contributed from their wages can work and earn as much as they like, and get as much income as they like, but the woman whose husband did not contribute or had not sufficiently contributed before his death, which may have been untimely, has a very small sum of money to maintain herself and her children and she is not allowed to work. I deliberately use the words "allowed to work" because of the fact that every penny she gets is inquired into and taken into account as part of her income.
I myself know widows who have non-contributory pensions who say they cannot work and will not work because of the annoyance and misery they go through as a result of the inquisitions that are carried out. Would it not be far better to let them work as much as they like? Is it not good that they have the industry and the desire to work to maintain themselves and their children and to better themselves and their children? They want to avoid the constant inquisitions: "How many days' work did you do last week? How much did you get? Did you get any other contributions from this, that or the other?"
They throw their hats at it and say: "We will not work at all; it is not worth it," and they live not very frugally but on the wrong side of the starvation line because of the fact that any money they earn is taken into account in assessing their pension. If an approach were made to letting these people work, if they can, to letting old age pensioners work if they can, to letting people keep the pensions they get from their former employers and the subventions they get from their children or from good-natured people, there would be at least less constant demands for increased old age pensions and there would be really less case each year for increasing pensions.
In the course of the Taoiseach's speech, I certainly gathered the impression—to me, it was implicit in his somewhat cryptic statement—that the Taoiseach and the Government would dearly like to control wages and demands for increases in remuneration. At column 1790, Volume 194 of the Official Debates, having spoken of the feeling of discontent among the farming community about the rises in wages and remuneration, the Taoiseach said:
There is at least an arguable case that if the Government have responsibility for co-ordinating all the factors affecting the nation's economic progress and can influence or regulate all the other forces bearing on the country's economic health, they should also have power and responsibility in the field of wage and salary levels.
He went on to say that it had never been the policy of the Government to seek or to exercise powers of that kind but is it not implicit in what he said?
There is at least an arguable case that if the Government have responsibility for co-ordinating all the factors affecting the nation's economic progress and can influence or regulate all the other forces bearing on the country's economic health, they should also have power and responsibility in the field of wage and salary levels.
It is arguable but quite impossible, whatever responsibility the Government may have. In a further statement continuing this speech on those lines, he said that:
the Government have a duty to promote widespread understanding of the national circumstances, understanding of the consequences of any particular course of action that may be proposed or in progress, and an obligation to speak clearly and honestly to the people on those matters and to encourage reasonable behaviour be every section.
If that is the responsibility of the Government, to see that, to put it bluntly, unreasonable demands for increased remuneration are not made in circumstances not justified, is there not an equal, if not a stronger, obligation on the Government to see, by their policy and their action, that they do not create circumstances which will give rise, or almost inevitably give rise, to further demands for increased wages or remuneration? Will not the results here of increased taxation inevitably lead to increases in wages?
Increased taxation always bears heavily on various sections of the community. These two taxes, the taxation on tobacco and beer, were put on because, first of all, they are very easily collected and secondly, because they bear on the largest number of the community. That is going to increase the demands for increased wages. There is no doubt about it. These items of drink and tobacco enter into the calculation of the cost of living, perhaps not as very serious items but ones which are very relevant and sufficiently relevant to have increased wage demands based on them. There is also going to be increased employment necessary and, therefore, an increased burden upon the public and the licensed trade. That is not something which the Government in present circumstances should have permitted themselves to do. They are creating conditions by this Budget which will inevitably lead to further demands for increased wages and other remuneration.
There is one section of the community to whom I should particularly like to make some reference. It is very easy, and I realise how easy it is, for me to get up here and say that this, that, and the other should be in this Budget. I could have spoken eloquently on the fact that this Budget does not appear to reflect the notion that the Government have any serious realisation of their responsibility in existing circumstances in regard to education, particularly in the field of secondary and higher education in modern circumstances. However, I shall pass from that and just say a few words for the particular class in the community in whom I have been most interested all the time since I became a representative in this House, that section of the community on which you cannot put a label at the monent. It used to be known as the middle class but you cannot label it that way now because some of the middle classes are really the aristocrats of this country.
I once heard a well-known patriot say that he belonged to the lower rung of the middle classes. That section is known as the white-collar workers, which is a misnomer and certainly is not comprehensive. I speak for all those people who are dignified by the fact that, instead of getting wages, they get a salary. I do not think I can define them any further than that. Why the money which they get every month is called a salary and why that differentiates them from the people getting what are called wages every week, I do not know. They comprise that vast section of the community, the selfemployed, shopkeepers, clerks, typists, and all those people living on their savings, all that class in the community who have not got their hands out to this Government or any Government looking for subventions but asking only that conditions be created which will not make matters more difficult for them. These people own their own houses and they have mortgages on them. They employ every possible device to own their own houses; yet we cannot give them the little relief that would be involved in doing away with Schedule A tax, as it has been done away with in England.
The Minister can correct me in this if I am wrong, but I understand that the Income Tax Commission has recommended that that tax be done away with. It is quite unjustifiable. It is a big burden on the class of people about whom I am speaking. The tax I am talking about is Schedule A on owner-occupied houses which are subject to 5/4ths for income tax purposes. The poor law valuation is increased to 5/4ths so as to produce a national income. I described it here many years ago as the Revenue Commissioners' nightmare. At all events, there is no reason why that little relief should not be given to them to ease the burdens placed on them over the years. The cost of living has gone up and will continue to go up. The cost of postage and telephones has increased. For commercial travellers, who come within this class, the cost of their transport has gone up, whether they travel on the railways, by bus or in their own private cars. These people try to put aside, for their old age and for their families, moneys by way of savings through insurance policies, and they find that, having spent years paying large premiums, the money they eventually collect as the proceeds of their policies has been devalued. Money is going down in value every day.
The cost of coal, electricity and all the necessaries of life are going up. Very few people have any concern for that class of the community. We have in this House many people who can speak for the farming community as the basis, as it is, of all our prosperity and on which everybody relies. The workers have trade union representatives in the Dáil and other sections of the community are represented here, but very few can speak for that class of the community who have been undergoing severe hardship during and since the war. I am not asking for money for them by way of subvention. I have drawn attention in this House repeatedly to the fact that, while industrialists with their tariffs and provisions for depreciation of their machinery are well looked after, those people have to rely on their health and bodily vigour as their sole machinery to keep them going and have nothing but this which is an essential part of their livelihood.
It would be well if the Minister would take some opportunity of giving some easement to that class remembering that they have not got their hands out for money. Hardly any other section of the community is not looking for money: "Give us something; what are you doing for us?" The Minister knows the cry at election time: "What did you ever do for us?" They are only asking that you refrain from increasing their difficulties. They got a little relief last year by way of income tax relief but all the other elements I have mentioned are pressing hard upon them and on behalf of that section of the community, whom in fact I largely represent in my constituency, I once again make an appeal to the Minister.
I have already spoken like a voice crying in the wilderness about death duties. I noticed with pleasure that the yield from death duties this year has shown a slight tendency to go down; may it go down altogether. It would be good business for this country if we did away with these duties altogether. At least, from the point of view of the people for whom I am speaking, I would ask the Minister to increase the relief from death duties for the savings they have accumulated with painful effort over the years.
There is one last matter I want to mention. I very much dislike doing so. Last year, one Deputy made the basis of his speech an attack upon the misery and ruin brought on the country by the inter-Party Government. I had not intended to speak along the lines I did at that time, but he provoked me. I dislike speaking about the inter-Party Government and what they have done because that is past history. The reason I gave at that time was that if I did not make some comment on it, it might be interpreted as an admission. For the same reason, I am making one or two comments on the Taoiseach's statement.
The Taoiseach said, by way of interpolation, at column 1793, of the Official Debates:
The damage that was done to this country in the last disastrous year of the Coalition Government, 1956, was not the pulling down of industrial employment or farmers' incomes. It was the destruction of the confidence of our people in the future of our country.
That is a statement I cannot let pass. It is a statement that was irresponsibly made by the Taoiseach. If he had taken any steps to inquire if there was any truth in that, he could have inquired from his own officials as to the basis upon which Government policy was framed at that time, and if he had any decency and candour, he would have left that out or at least noted there was no truth in it.
I want to make this comment on it now. The Ministers of this Government should realise there are no political tricks—there were at one time— now in making allegations of that sort against the actions of the inter-Party Government. The Deputy who made that attack in this House just a few short months before the general election lost his seat. Perhaps the Taoiseach would take a warning also. There were no political tricks in it. He lost his seat. It should be realised it would be far better, from the point of view of creating public confidence in this Government as well as in any Government, that Ministers, and particularly the Taoiseach, should refrain from making irresponsible statements of that kind.
