Having had personally some considerable and rather painful experience of what it means for a Government, and particularly for a Minister for Finance in a Government, in difficult financial and economic circumstances to frame a Budget, I rather tend, even in Opposition, to have considerable sympathy for a Minister for Finance faced with the difficulties with which the present Minister is faced. I regret, therefore, that having considered the matter very carefully, I am convinced that the proposals in this Budget are not for the good of the country as a whole and that they will not help, even in tendency, to bring about the prosperity, advancement, and expansion in industry that is so urgently required in the conditions obtaining at the moment in the country and outside.
In the concluding sentence of the Minister's speech in offering this Budget to the House the other day, he recommended the Budget "as a set of responsible and equitable measures designed to keep our national finances in order, to be fair in the allocation of benefits and burdens, and to promote the higher rate of economic growth which is the key to greater prosperity for a larger population." It would have been a pleasure for anybody to agree with that recommendation but it is utterly impossible, when the facts and circumstances facing the country at the moment are calmly and dispassionately weighed, to agree to any of the propositions set out in that concluding sentence. I personally believe that the conditions in the country at the moment, conditions of finance, economics, and the outside facts impacting upon our conditions here in international affairs generally face this country with a situation of great gravity for the solution of which, I believe, all the energies of all sections of the people combined together in goodwill, working together in a patriotic endeavour, are required to bring this country out of the condition of jeopardy in which it is at the moment and I regret that I cannot see in this Budget any help towards securing that co-operation from all sections of the community which, in my view, is urgently required to solve the problems and difficulties that confront us at the moment.
While I have, therefore, from conviction, to make certain criticisms of this Government, I think at the outset it is proper that we should recognise that there are certain benefits in the Budget itself, benefits which unfortunately are largely offset by some of the other provisions of the Budget.
In particular, from my personal point of view as representing a city constituency in which there are many officials, civil servants, pensioners of one kind or another, I am glad that the Minister did see fit to give even a small measure of additional justice to the old Civil Service pensioners. I am very glad of the increase, particularly for the first child, in children's allowances. The old age pension increase is again a small figure of almost a traditional amount of 2/6d., largely unfortunately offset by the impact of the cost of living and by the impact of the further rise in the cost of living which, in my view, will inevitably flow from the provisions of this Budget.
I regret that the Minister did not see fit to give a further measure of justice to a particular section of pensioners who are, in my view at all events and from my experience, in a very distressful condition. I have spoken here before of the position of the widow who has a non-contributory pension. She has a pension of a particular amount and she gets a little increase this time but, by virtue of the administrative control over the earnings of such a widow, she is not in fact allowed by work or by her own labour or by the assistance of her kith and kin to increase that pension without the danger of having the amount paid by the State reduced. That is a matter that should receive very serious consideration, and has not.
Last year, I pointed out that I appreciated from experience the fact that when old age pensioners get 2/6d. which, as I say, is a traditional figure now when an increase is given, nobody thanks any Government for giving that amount but very few realise that while 2/6d. a week is an insignificant amount for an old age pensioner, it costs the taxpayer a very considerable and inordinate relative sum, a tremendous amount—over £500,000—to give that 2/6d. Nobody realises that. I did suggest last year to the Minister that some consideration should be given to the matter to see if by other devices the old age pension could be increased, not perhaps by direct subvention from the Exchequer but by other devices which would enable the old age pensioner to supplement that income without having the official, doing his duty, often very harshly, inquiring into the means and the circumstances of the particular pensioner. The old age pensioner and, in particular, the widow I have referred to who gets a non-contributory pension, are simply harrassed by official inquiry and by official interference to the point that they find it is not possible to work and, indeed, they are forced to cease endeavouring to obtain work because of the fact that their pensions will be decreased as a result of the inquiries of the officials.
I am not casting any aspersions on these officials. Their inquisition is of a very searching kind and I know personally that their inquiries have resulted in illness, worry and anxiety to old age pensioners and widows with non-contributory pensions. If it were possible to find some means by which widows and non-contributory pensioners and old age pensioners could work or get assistance from their kith and kin or charitable associations and get their pensions without having the fear of inquisition and the danger of their pensions being reduced, there would not be such a clamant demand for an increase of pensions and criticisms of this small amount of the traditional 2/6d. every time it is granted.
Some business people give their employees a pension when they retire. Very frequently, they are not adequate pensions. They have been earned by hard work over 30, 40 or more years. When these pensioners reach the age of 70 years and get the old age pension, their pensions from the firms are reduced. That should not be allowed because those firms advanced through the efforts and work over an extended period of their pensioners. Those people are entitled to pensions and they are also entitled to old age pensions.
If some device could be found, and if there were less inquisition as to whether the St. Vincent de Paul Society or some charitable person was assisting an old age pensioner with money or food, they might be able to have a little more income coming in, and there would be less demand for old age pensions, and less demand on the Exchequer. I spoke to deaf ears last year, and I suppose it will be the same this year. However, I am glad that the pensioners whose interests I represent here are getting some little amelioration. I regret it but in my view and the view of most people outside the House who have no political axe to grind, the effect of this proposal will be to increase the cost of living and reduce the purchasing power of old age pensions, widows' and other pensions given under the Budget provisions.
So far as I have been able to judge in the past two days from my contacts outside the House, the dominant mood of the public is not merely one of understandable shock at the increased taxation—because that is what it is in effect—that will be caused by the imposition of this new turnover tax, by the imposition of the additional corporation profits tax and by the change in taxation on residences, but also of wonderment as to how on earth this Budget which aims at securing economic expansion can hope in any way to secure the economic expansion that is so urgently required. There is a mood of shock, bewilderment and confusion. No one seems to know what the effect of this new turnover tax will be. Deputy Dunne has referred to what has been our experience in the past two days of the endless queries and questions which were put to us as to whether this, that and the other thing in such and such circumstances are covered by this tax, what it means and how it will be enforced, in what circumstances does it cover this particular commodity and that particular service. No one seems to know where we stand.
That confusion which is, of course, primarily directed at the effects and scope of the new turnover tax is also relevant to the corporation profits tax and to how it is hoped to increase economic expansion, increase employment and bring prosperity all around, as the Minister claims. The turnover tax is a new tax and to practically everyone except some expert economists and financiers, it is an unknown tax. The ordinary people, even if they are not economists, are familiar with the words "purchase tax" and "sales tax". They know what they mean in a vague sort of way. They know about them because they have heard so many discussions about the effects of purchase tax in England. Sometimes purchase tax in England is increased on certain commodities and sometimes within a certain range of commodities, it is reduced. People have heard of a purchase tax through the radio, television and the newspapers. They know vaguely that there is something which is called a purchase tax, but very few of them except the expert economists, while they know there is such a thing as a sales tax, have the remotest idea of the difference between a purchase tax and a sales tax.
I would venture to say that until the Minister made his Budget statement, 90 per cent of the people had never heard of, much less understood, what a turnover tax is. Is it any wonder, therefore, that there is such bewilderment, confusion and alarm amongst the general public as to the possible scope and effect of the new tax? I think the Minister can be subjected to criticism because of the fact that he introduced this tax in his Budget without giving any explanation. He merely imposed it, and said it would produce £3½ million in four months and £10½ million or £11 million in a full year. To justify it he answered Deputy Norton by saying: "I want the money."
In that context, the last sentence of the Budget speech in which the Minister recommended the Budget to the Dáil because it was designed "to keep our national finances in order" is justified only by virtue of the fact that it will keep our national finances in order by bringing in a vast amount of money. Apparently it is necessary to get a vast amount of money from a tax that is unknown and which, because of the fact that it is unknown, like all unknown things, creates the utmost fears, anxieties and dismay in the minds of the people likely to be affected by it. The Minister should have told the House the history of this tax and the difference between this tax and a sales tax or a purchase tax. In my opinion, it was his duty to have educated a good many members of the House who required education— including myself—and also the general public.
Comment was made earlier in this discussion on the Budget leaks—if they can be so called—that took place some months before the actual introduction of the Budget; where they came from, whether in fact they were leaks in the technical sense, and whether they contravened the convention that the secrets of the Budget are not disclosed before they are given to Parliament. There is no doubt that public interest was aroused by the speeches of the Taoiseach and others in connection with the imposition of a new tax. In the newspapers and amongst the public generally, there were discussions as to what on earth this tax would be. Everyone was more or less resigned to the fact that we would have something like the English purchase tax, and those who had more knowledge of the matter and had, perhaps, read more were still more confused when they remembered the various economic documents and White Papers and what other Ministers had said about not accepting the recommendations of the Income Tax Commission on the imposition of a purchase tax. The general feeling was that it would be something like a purchase or sales tax, whatever that was. Then the Minister came in with his new tax which no one understands except a few expert economists.
In an intervention, the Minister controverted a statement by Deputy Dunne or one of the members of the Labour Party that the continental countries did not tax foodstuffs in connection with the imposition of this retail tax. That is a matter of controversy. So far as I know, that was the first time the Minister mentioned Norway and Sweden where this tax has been imposed. I think the House and the people were entitled to know the nature and scope of this tax. To my knowledge, this tax has never been imposed in England. It was got from the Continent.
My belief and conviction is that it is only the expert economist and financiers in the Department of Finance who recently investigated and produced this tax instead of a purchase tax and a sales tax who know where it came from. The House is entitled to know and I think that even belatedly in his reply the Minister should tell the House and the public where it came from. What is the justification for this tax, what is its scope and what would be its effect in our conditions? What is the experience of the impact of this tax if it exists in other countries?
I gather from what the Minister said by way of intervention that it exists in Norway and Sweden. I did not know it existed in these countries. When I was in office and when we were facing a serious financial position, I expressed the view that I would not touch any of these taxes. I am not criticising the Minister for bringing in this tax with my tongue in my cheek while thinking that I would bring it in myself if I were in office. In the present circumstances and conditions of this country, it is not proper to bring it in. When we were in office and facing a serious crisis, we did not bring in such a tax.