Committee on Finance. - Finance Bill, 1962. Financial Resolution—Tobacco. – Dáil Éireann (17th Dáil) – Tuesday, 3 Jul 1962

Minister for Finance (Dr. Ryan)

I move:

"(1) That the duty of customs on tobacco imposed by Section 20 of the Finance Act, 1932 (No. 20 of 1932), shall, as on and from the 10th day of August, 1962, be charged, levied and paid at the several rates specified in Part I of the Schedule to this Resolution in lieu of any other rates.

(2) That the duty of excise on tobacco imposed by Section 19 of the Finance Act, 1934 (No. 31 of 1934), shall, as on and from the 10th day of August, 1962, be charged, levied and paid at the several rates specified in Part II of the Schedule to this Resolution in lieu of any other rates.

(3) That the rebate on hard pressed tobacco mentioned in subsection (2) of Section 17 of the Finance Act, 1940 (No. 14 of 1940), shall, in respect of any such tobacco sold and sent out for use within the State by any licensed manufacturer on or after the 10th day of August, 1962, be at the rate of seventeen shillings and elevenpence per pound.

SCHEDULE.

DUTIES ON TOBACCO.

PART I.

Customs.

		£	s.	d.
Unmanufactured:—
If stripped or stemmed:—
containing 10 lbs. or more of moisture in every 100 lbs. weight thereof	the lb.	2	14	11
containing less than 10 lbs. of moisture in every 100 lbs. weight thereof	,,	3	1	0
if unstripped or unstemmed:—
containing 10 lbs. or more of moisture in every 100 lbs. weight thereof	,,	2	14	10½
containing less than 10 lbs. of moisture in every 100 lbs. weight thereof	,,	3	0	11½

		Full	Preferential
		£	s.	d.	£	s.	d.
Manufactured:—
cigars	the lb.	3	9	6	2	17	11
cigarettes	,,	3	7	6	2	16	3
Cavendish or Negrohead	,,	3	9	0	2	17	6
Cavendish or Negrohead manufactured in bond	,,	3	8	6	2	17	1
other manufactured tobacco	,,	3	7	0	2	15	10
snuff containing more than 13 lbs. of moisture in every 100 lbs. weight thereof	,,	3	6	6	2	15	5
snuff not containing more than 13 lbs. of moisture in every 100 lbs. weight thereof	,,	3	9	0	2	17	6

PART II.

Excise.

		£	s.	d.
Unmanufactured:—
containing 10 lbs. or more of moisture in every 100 lbs. weight thereof	the lbs.	2	13	9½
containing less than 10 lbs. of moisture in every 100 lbs. weight thereof	,,	2	19	9
Manufactured:—
Cavendish or Negrohead manufactured in bond	,,	2	15	9½

This Resolution is necessary because of the additional duty which was imposed on tobacco on 14th June by the Imposition of Duties Order which will expire on 9th August.

Notice taken that 20 Members were not present; House counted and 20 Members being present,

Dr. Ryan

This Resolution is designed to impose a duty that was mentioned in the Budget, as well as the amount mentioned in the Imposition of Duties Order, as from 9th August. It will mean that the duty on tobacco, as imposed by the Imposition of Duties Order which came into operation on 14th June, will remain the same hence-forward. It deals with both customs and excise duties.

Mr. Sweetman

Unless I entirely misheard the Minister, his explanation of this Financial Resolution is wrong, but I forgive him in view of the fact that he has been laid up and will not make the same remark to him as was made to me by a member of his Party when I was ill on a similar occasion. This Financial Resolution deals solely with the additional penny imposed on tobacco because it starts as and from 10th August, 1962. It relates solely to the supplementary Budget which the Minister introduced on the last occasion we had this measure before the House. The amalgamation to which the Minister refers is the amalgamation which will take place on the Report Stage. We earlier had a Financial Resolution on the primary Budget and this is the Financial Resolution which the Minister promised on the last occasion, unless he has gone back on his promise.

I would have been less critical of the Minister if he had had the good grace to withdraw what he said on the last occasion in Column 144 of Volume 196 No. 1. On that occasion, he said that this erroneous method, this improper method of imposing this taxation on tobacco had been used before by me in relation both to beer and tobacco. The relevant passage in the Official Report is:

Special Duties were brought in under it and these included beer and tobacco as far as I remember.

Mr. Sweetman: No.

Dr. Ryan: I may be wrong.

Mr. Sweetman: You are.

The Minister has since been proved wrong by the reply given on 20th June, 1962, at Column 580. He was referring at the time to the special import levies which had been introduced by me but which did not include beer, tobacco or spirits, the three main revenue duties. The extraordinary thing about it will emerge in relation to the previous usage of this Order.

There have been three previous occasions on which the Imposition of Duties Act, 1932, was used to deal with revenue duties—four including the one on 13th June. The other three were all for the purpose of remitting and reducing the duties quickly. On this occasion, the Minister used the method for the purpose of imposing an additional duty. Since that day, it has been accepted universally that the country was deeply shocked, first, by the proof and evidence given that the Government did not know their own minds from month to month, in that within a month they had to introduce another supplementary Budget and, secondly, that when they did it, they introduced this extra taxation by Government decree rather than by the normal practice and procedure that had operated in the case of these revenue duties—by Resolution of the House.

I understand and accept that the Order made by the Government was effective only until 10th June. That is immaterial. What is material is that it is entirely wrong that the provisions of the 1932 Act should be used for revenue purposes as they were on this occasion. The 1932 Act was introduced for the purpose of imposing protective tariffs in relation to home industries, for the purpose of ensuring that there would be a speedy method to prevent stockpiling and dumping, in anticipation of a tariff. It was used by me for the same purpose, to provide for a reduction in imports, but here, for the first time in the past 30 years, the Minister has utilised this procedure, not for the purpose for which it was introduced into the Dáil, not for the purpose for which it has been utilised in the past 30 years but, as he has been frank and open enough to admit, to provide an easy method for the Government to raise taxation. Whether it is on a permanent or temporary basis, that is improper and something that has never been done before.

As far as the Resolution itself is concerned, apart from making those comments on it, I think it would perhaps be better that the actual further discussion on the substance of the Resolution as apart from the method should be reserved until we come to discuss the new Section 5 which is being introduced by the Minister as amendment No. 2. I am always anxious to be orderly in so far as I can and it might be repetitious if I used the same arguments on both occasions. Therefore, we will reserve our other comments in relation to the matter until then.

There was also, in relation to the Financial Resolutions passed on Budget Day, a query addressed by me to the Minister on the subject of one of the forms of duty here provided. I have some doubt about the answer. I asked how much Cavendish and Negrohead is being manufactured in the country. The Minister said a small amount. Both must be manufactured in bond and I think the answer should be that there is none——

Dr. Ryan

None.

Mr. Sweetman

——and that therefore, shall I say, the Minister was chancing his arm on the last occasion. However, be that as it may, this is a fault which is very minor indeed compared with the manner in which the Minister has chosen in this supplementary Budget to utilise a procedure that was brought into this House for an entirely different purpose. I do not think it is going too far to say that the Minister, by so doing, by introducing revenue duties of this sort in this House, has broken faith with the House and has broken faith with the arrangements that were laid before it and the implications made in 1932 and again when the Act was amended at a later stage. The method is most undesirable.

The fact that the Government were unable properly to plan their scheme of financial arrangements for the whole year, or even for a part of the year, caused a very great shaking of confidence throughout the country. The people not merely feel that it was extraordinary that having introduced, first, a Budget in relation to postage and telephone charges and then the ordinary normal Budget to which we are accustomed the Government should subsequently, within a matter of six or seven weeks, introduce another Budget. Wherever one went in the country, either from supporters of the Minister or from opponents of the Minister, one heard the same thing said: "When they have done this on this occasion, what can we expect them to do in the future? The worst."

Dáil Éireann debate -
Tuesday, 3 Jul 1962