Finance Bill, 1963—Second Stage (Resumed).

Question again proposed: "That the Bill be now read a Second Time."

Debate resumed on the amendments moved by Deputies Sweetman, Corish and Dr. Browne.

Mr. Faulkner

During the debate on the Vote on Account and on the Budget, the Fine Gael Party were asked by us what reduction or economies they would effect in the Book of Estimates. Apart from stating that Government expenditure was too high, they did not make a solitary suggestion as to what reductions could be made. Therefore, it is only fair that we should be in the position to state that the Fine Gael Party find it impossible to effect any economy in the Book of Estimates as it is at present before the House. We can add to these estimates, then, the costs of the various promises which Deputy Dillon has made over the past couple of months. At the Fine Gael Árd Fheis, he promised a health service which, according to a reply received in this House, by Deputy Burke from the Minister for Health, would cost £30 million. He also promised interest-free loans for farmers, which, according to a reply to Deputy Burke by the Minister for Agriculture, would cost approximately £7 million. Since then, he has stated at a Fine Gael Party meeting that he would reintroduce the Local Authorities (Works) Act which would cost a further considerable sum and, on top of all this, he has stated he would, if returned to power, remove the turnover tax. This leaves us with the very important question as to where the Fine Gael Party would get the money to pay for the running of the country and to pay for all these extras which have been promised by the Leader of the Opposition.

The "All this and Heaven, too" attitude of the Fine Gael Party may have been all right up to the present but now that they have put down in this House a very important motion, which, if carried, would cause the defeat of the Government and result in a general election, they must go further and state where the money to run the country would come from if they were returned to power and where the money could be got to pay for this extra expenditure proposed by their leader. It is not enough now to say it is no function of the Opposition to state where they will raise the money, because at a time such as this and on a very important motion such as this, I feel that the people are entitled to know where each Party stand, not only what the Party state they will do but also how the Party intend putting their policy into effect.

The Fianna Fáil Government have, in their Book of Estimates, shown the country what they intend to do during the coming year and in their Budget Statement and in the Finance Bill, they have shown how they intend collecting the money to put this policy into effect. The Fine Gael Party have told the people of the many things they will do but when it comes to pointing out how they would put these into effect, what taxes they would levy, they come to a full stop.

It has already been stated by members of the Fine Gael Party that it is no function of theirs to state what taxes would be levied by them. Lest this be stated again, as I have no doubt it probably will be, the Fine Gael Deputies ought to take into consideration the fact that it is not only members of the Fianna Fáil Party here who are asking them how they would put this policy into effect— that, in fact, in leading articles in every one of the national newspapers, Deputy Dillon has been severely criticised for not stating how he intends to implement the programme which he has adumbrated. He has still failed to do this. I have no doubt that the people will interpret just exactly what this means—that whatever taxes he has up his sleeve he has no intention of letting the people know what they are until in the most unlikely event he is elected to Government. I have no doubt that the people will not buy a pig in a poke.

In so far as the Labour Party are concerned, they have voted with the Government on the Vote on Account and by so doing, they have supported Government expenditure. As they said in their motion, they are willing to support any reasonable taxes.

Mr. Crotty

Except the turnover tax.

Mr. Faulkner

Of course, this is too simple and too naive an approach. What kind of tax would they be likely to support? What would a reasonable tax consist of? I have no doubt that no matter what tax this Government brought in, the Labour Party would find some excuse for voting against it. As I said in my speech on the Budget, I cannot understand why the Labour Party should be so far out of line with what appears to be the basic thinking of Labour Parties in Europe, such as the Labour Party in Sweden which was responsible for introducing a turnover tax and in fact wherever a turnover tax was introduced in West European countries, it was introduced by a Labour Party. I can only come to the conclusion that the Labour Party here are more concerned with a short-term popularity programme than with the future of the economy of the country.

It is clear from the attitude of the Opposition Parties that they accept that it is not possible to make a reduction in the Estimates as they are before the House. It is clear from the Fine Gael Party's attitude because they have not suggested, or are unable to suggest, any reductions in the estimated expenditure and also from the fact that they have proposed many new schemes which they say they will carry out if they are elected to power and it is also true from the Labour point of view because Labour voted with the Government on the Vote on Account. Therefore, the question now arises as to where the money is to come from if Parties come into power who decide they will abolish the turnover tax.

What are the alternatives? It is generally accepted in the House and in the country that it is not possible any longer to get the necessary amount of money from increases in the taxes on cigarettes or liquor or petrol. We are faced here with the law of diminishing returns. It is generally accepted, I think, that to increase the price of any of these articles would not bring in very much more money than we are getting from them already.

I do not think anybody has openly stated he would be in favour of increasing income tax, although there were some veiled hints from some of the Opposition. The only other suggestion as to an alternative is one that has been rather broadly hinted at by members of the Opposition: a tax on luxury and semi-luxury goods. This type of policy has a very popular ring. To cloud the issue further with regard to this type of tax, Deputy Corish again resurrected his Jaguars and fur coats—I suppose to give the impression that this was the type of luxury his Party were thinking about. I have no doubt when he made that statement he could hear people saying he was perfectly right. I have no doubt he would be right, were we able to get sufficient money from a tax of that kind. But Deputy Corish knows perfectly well that if we were to confine ourselves to these articles, the income would be negligible. So that, in fact, when we speak of tax on luxuries and semi-luxuries, as well as putting a tax on Jaguars and fur coats, we would, also, have to bring within the tax net a very wide range of goods if we were to come anywhere near getting sufficient money from this tax to meet our requirements.

We would have to draw into the net goods such as clothes, except of the very cheapest kinds; furniture, except again the cheaper types. We would have to tax all types of electrical goods, and so on. Secondly, we would have to put on these goods a tax large enough to provide an amount of money similar to that which would be gathered from the turnover tax. It has been estimated that the tax necessary in such circumstances would be approximately 25 per cent. If we were to do this, we would have, in effect, a tax system such as the purchase tax in Britain—a tax which has damaged some of Britain's industries almost beyond repair and which the British themselves are most anxious to get rid of and have replaced by a turnover tax.

However, we do not have to leave home to see the effects of putting a tax on semi-luxuries. In 1956, the Coalition put levies on raw materials which priced goods produced by Irish firms out of the home market and brought about wholesale unemployment. One industry which comes to mind in my constituency was severely hit by these levies. The tax on raw materials put up the price of the finished article and led to the employment in that industry being reduced to approximately 200. When we came to power and removed the levies, the number employed in that factory rose and today there are about 900 employed there. Not a single article made in that factory could escape the tax suggested for luxury goods. If a tax of 25 per cent were put on each article manufactured there, we would have a return to the 1956 position and wholesale unemployment, because of inability to sell the goods at the increased prices.

This would apply, in part, to every industry in my constituency. As I said, it is a highly industrialised constituency, and it is my duty to see to it that a tax which would throw a very large number out of employment is avoided. In my first year here, in 1957, I noted the hardships and misfortune attendant on unemployment. It was indelibly impressed on my mind and I decided to endeavour to see to it that Government policy would provide as many jobs as possible and would not allow what happened in 1956 to occur again.

It is only right that the workers in my constituency should be made aware of the very grave dangers that would face them if this suggested alternative were put into operation. This talk of a tax on luxury and semi-luxury goods appears reasonable, but it has dire consequences so far as employment is concerned. I am not speaking of something which might happen but of something which without doubt would happen. We would have exactly the same set of circumstances as we had in 1956 and 1957. During the past two years, the industries in my constituency have developed a very worthwhile export trade, helped by their sales on the home market. If anything were to happen to those home market sales, if the goods were priced out of the home market by having to add 25 per cent to the price, it would undermine their export markets. We would have the same result as they had in Britain with the purchase tax.

The increase in taxation is required to help expand the economy, and that means providing more jobs. I should like to look at my constituency again on this point. We have three factories being built in Drogheda at present and a fourth factory is about to commence. In the northern part of the constituency, we also have proposed industrial expansion. This is proof positive of the success of Fianna Fáil policy there. This is the type of success people are willing to further. Even those who are in safe and permanent employment themselves are anxious about the future of their children and that more jobs will be available for them when they grow up. I have no doubt that they will be willing to pay for this. Nobody with the interests of our children and the unemployed at heart can object.

To revert to the question of possible reductions in the Estimates, I note as reported in today's paper, the Irish Independent, that Deputy Donegan stated here that one thing a Fine Gael Party would not do if they came to power was to spend £5 million on airplanes. I shall not go into detail in regard to this matter, except to remind the House of the havoc wrought by the first Coalition when they sold the transatlantic planes and prevented us from being one of the first on what is now our best-paying route. I should like, however, to comment on the manner in which the Fine Gael Party try to be all things to all men. I wonder how many Fine Gael Deputies from Limerick would support this statement? It is not a month since we had a furious hubbub from a Fine Gael Deputy from Limerick, Deputy O'Donnell, in relation to Shannon Airport, who stated that the Government were doing nothing to try to keep that airport open. Now we have another member of that Party criticising the Government on their efforts to help in providing competitive planes on the transatlantic route, which are an essential for keeping Shannon Airport open.

On the other hand, I wonder if Deputy Donegan would agree with the contention of Deputy Sweetman that £2 million of Government money was wasted in Dundalk, money which had been used to try to secure the employment of 1,000 men in the DEW there and to save the economy of the town. It all goes back to this question of being all things to all men. It appears necessary in Fine Gael circles when they wish to attack the Government on an awkward topic, to get a Deputy from Louth to speak about Shannon and a Deputy from Kildare to speak about the Dundalk Engineering Works, so that the finger of scorn cannot be pointed at the Deputy of that particular area.

In putting on this new tax, the Fianna Fáil Government concerned themselves, as usual, with the poorer sections of the community, with those who are dependent on social welfare and unable to fend for themselves. By increasing the various social benefits, particularly children's allowances, the Government have succeeded in cushioning the sick and unemployed and the family from the effects of this tax. Despite what has been said by many speakers on the opposite side, I repeat that these social welfare adjustments will cushion the weaker sections of the community against this tax.

Deputy Corish said that the percentage of national income devoted to social welfare is now less than in 1957. He has said that on a number of occasions but the answer is that there are fewer people unemployed now than in 1957 and consequently there is less money needed for unemployment benefit and assistance. He also said that we assumed the amount of money for children's allowances was adequate. We assumed no such thing. We are always most anxious that all social benefits should increase and not only that, but when possible, we have on many occasions increased them. Fianna Fáil introduced the children's allowances and only Fianna Fáil ever increased them. During the office of the two Coalitions, not a farthing was given towards increasing children's allowances. Therefore, it is peculiar to find a Deputy who was a member of the Government at that time now criticising children's allowances as inadequate. Further increases in these allowances will depend on the growth of national income. We were anxious to ensure that raw materials generally should not be taxed and we saw to it that purchases by farmers for further production would be exempt. I think it is well to repeat that.

The concession which the Minister has granted to those whose turnover is less than £500 to decide for themselves whether to register or not will be appreciated because while the tax must still be paid, it will remove from some 25,000 to 30,000 people the responsibility of having to collect the tax.

We are anxious as always that the economy should continue to expand and more jobs become available. When the people have an opportunity of considering all the aspects of this turnover tax in a calmer atmosphere, I believe they will appreciate the reasons for it. My constituency with its expanded industry with its new factories being built there is an example of what we want to see continued. We never want to see the country return to the conditions of 1956.

Mr. Dillon

You never will because 300,000 people have gone.

(Interruptions.)

Mr. Leneghan

For some time, I have not said very much here because I had more or less come to the conclusion that if a Deputy wants any type of advertisement, he must be very much akin to the lunatic fringe in this country, but in view of the campaign of gross misrepresentation that has been carried on here for some weeks past, it is only fair that I should make my point of view known.

One of the elementary truths emanating from this campaign is that while the Front Bench members of Fine over a month ago that he considered Gael are so actively trying to intimidate Independents into voting against the Government, their backbenchers are twice as active trying to ensure that we shall vote for the Government because we all know well that if next Tuesday the Government were to fall as a result of anybody voting or abstaining from voting, there would not be enough hearses in the city of Dublin to carry home the corpses of Opposition members who would die of heart attacks.

Mr. M.E. Dockrell

Nonsense.

Mr. Leneghan

Go down to the bar and you will hear it every night. I do not want to go down in history in any historical novel, but in dealing with this matter we should start at the foundation. I am not so young as not to remember when the first decent foundation was laid in this country and that was at the first entrance of Fianna Fáil to power. I go back to my constituency to demonstrate. Up to 1933, with the exception of a few big shots who were only usurpers of our land and territory, there were very few people with a decent house in which to live. There were no roads, no work, no schools into which we could allow our children and we were certainly in a sorry mess.

Today that is completely changed and in my constituency we have perhaps the best houses in Ireland. We have a certain amount of work, good schools and the whole position has changed. The only occasions on which a halt was called to that march of progress were the occasions on which, what they call the inter-Party but which I prefer to call the bunkum Governments, were in operation, from 1948 to 1951 and from 1954 to 1957. In that period in my constituency all work halted. We could get no housing grants. Today in that constituency we are erecting a huge factory in Ballina: we have the most modern power station in Europe. We have the colossal Moy drainage scheme, the Grassmeal Company and the peatland Experimental Station at Glenamoy, and we have large forest and fishery development schemes.

The Leader of the Opposition stated the grassmeal project initiated by the Fianna Fáil Government purely a form of spite against the present Senator Lindsay. In the course of his longwinded speech, he clearly indicated that if he were returned to power, which God forbid, he would remove that industry in the same way as he removed industries on a former occasion. That industry is giving much needed employment in Mayo. I am sure no one in Erris doubts Deputy Dillon now because in 1954 the first action taken was to close down every single industry which existed in North Mayo. I can assure Deputy Dillon that he and others like him are most unlikely to get a future mandate from the people of North Mayo to implement more of that kind of nonsense, putting the people back into poverty and destitution. The fact that some member of Deputy Dillon's family was not taken to very kindly by the people of Mayo is no reason why Deputy Dillon should walk rough-shod over the people of that county now. To-day we have sources of employment. We have employment given in a very fair and reasonable way. Let us look into the past methods of giving employment.

An Ceann Comhairle

That is a matter of administration which does not arise on this Finance Bill. This is a Bill for collecting taxation. The Deputy will have an opportunity of raising the other matter on the appropriate Estimate.

Mr. Leneghan

I just want to point out that up to 1933 anyone who wanted to get employment in Erris had to get a blue card, just like the cows have now. If a man were not properly tagged by Fine Gael, he would get no work at all. Do not forget that you sent out to me in the middle of the night the son of a Black and Tan spy to try to intimidate me and other councillors from even being associated with a vote of sympathy to the relatives of people who had been shot trying to remove the Border.

An Ceann Comhairle

This is very far from the Finance Bill.

Mr. Leneghan

Of course, a great many things have been said that are not relevant to the Finance Bill. A good deal of play has been made with the turnover tax. I would ask those who oppose it to state specifically what their alternative is for raising the necessary finances. So far, they have given no alternative. One Deputy goes outside of this House and says he would spend £100 million more. He has not indicated the means whereby he would get that money. Under the turnover tax, a section of the community who have been effectively dodging the regulations of the Revenue Commissioners for years will in future be roped in. Publicans are tax gatherers all their lives but no one has ever protested on their behalf. It is extraordinary that people should come in here to try to justify those who are making higher profits than publicans being exempt from the tax net, advocating that they should make no returns of any description and should continue, as they have been doing for years, to dodge paying taxes, thereby making the burden of taxation all the heavier on other sections of the community. If I am to believe what I hear, this £6,000 must cover a great many of them. Surely these shopkeepers will be in no different position from that in which they would be, were the Government to tax specific articles? This tax will actually put the small shopkeeper in a much better position than his financially stronger competitor, and rightly so.

The scare about the banks is a lot of bunkum. The banks are well able to look after themselves. I do not think we need worry about them. It has been stated, too, by certain people here that the Irish are not able to govern themselves. Certain Deputies do not appear to have any respect for the ordinary common Irishman at all. The fact is Irish people live quite successfully in foreign countries; they have proved themselves good and progressive citizens. They are fully capable of measuring up to the requirements of the Governments of these countries. I believe they are equally capable in their own country, despite the aspersions cast upon them by members of the Opposition here. I deprecate these aspersions. One would think this was a nation of parasites. It is unfair that people should come in here and cast such aspersions on Irish workers.

I do not believe our people are worrying about this 6d in the £. Honest, hardworking people need certainly not worry about it. The élite sections of the commercial community who have got away with murder under the tax code for years back may have cause to worry. I urge these people to accept their responsibilities and live in honesty and security here, or else cease their activities, and let honest men take over. There are plenty of substitutes for them. They cannot have it both ways. They must know that unless money is in circulation, they will go out of business. We do not want to return to the situation that existed in 1956 when it was a case of "May God help us; may God help them; may God help whoever will come after."

Progress costs money. Money does not grow in the ground. Are we to heed the prattlings of the Opposition and stay the onward march of progress, and stagnate, or are we to be realistic in our approach? Are we to continue along the well-charted course towards better times? We must go forward. I believe the people will be prepared to march and to make progress. There is only one Party in this House, in my opinion, who ever made any progress, that is, the present Government Party. We know the ridiculous promises made by other Governments. We saw how those promises went up in smoke. These present tactics are obviously just the ridiculous utterances of those who are incapable of shouldering responsibility. They are catchcries to mislead the people, if the people can be misled. I do not think they can be misled at this stage and I am not going to be influenced by the decision in North-East Dublin where only half the people voted and I expect most of those were taken out in ambulances. At one time voters were taken out of the graveyard; in this case, ambulances were used.

Mr. Dillon

Has Deputy Corry any comment to make?

Mr. Leneghan

I would ask these people who have made the fantastic promises that have been made at various meetings in the country over the past few months where they will get the extra millions. Where will they find the money? Would they state specifically where they will collect the money? If they do not state that, in all fairness to everybody, they should cut out this nonsensical campaign in which they have been indulging for so long. Would they place taxation totally on drink and tobacco, or are they so foolish as not to know that drink and tobacco are just as essential to many people as milk and butter are to others? Deputy Dillon may laugh at that but if he takes the votes of the general public, he will find that I am right. I remember reading in a paper on one occasion where a Deputy on one side of the House said that he understood that most children were reared on new milk but judging by the activities of some of the interrupters, it was obvious that they had been reared on vinegar. He may have been right. If those people were reared on vinegar, the vinegar was just as difficult to get for them as the new milk was for others.

What was regarded as a luxury 20 years ago is no longer a luxury. It is no use saying that it is. Our standards of living have completely changed. We must march with the times. A man who will come in here and draw up a Bill whereby certain articles are taxed is not being realistic, honest or fair to the public.

The whole case for extra taxation and Government policy has been completely misrepresented. The people who are carrying on the ballyhoo are not the poor by any means but the rich and their pseudo-eloquent disseminators of unrealistic political theories in this House. Many Deputies have not a clue as to what they are talking about. Many Deputies do not speak to their constituents except during election campaigns when they are forced to do so. Many Deputies are completely out of touch with reality and do not even live in their constituencies and believe that the things that are suitable in one constituency are ideal in another. They are not. A man who does not live in his constituency should have his head examined. He should be kicked out.

Anybody who remembers the 1954-1957 chaotic times must be of opinion, unless he has a short memory or no memory at all, that any person possessed of common sense would prefer to pay a considerable amount and to live in security than to dodge the column in regard to taxation, as has been going on, and to have over his head, apart altogether from the question of emigration, the cold hand of retrogression and stagnation which was the position during that period.

It is easy to get up and criticise the Government but not a single person here has yet stated where the money needed will come from. It would seem as if all the members of the Opposition have been elected purely and simply by shopkeepers. I doubt it. In my constituency, which is not by any means the most affluent, I have heard no grumbles from anyone except a few shopkeepers. When they asked me to a meeting, I said that certainly I would be delighted to go to the meeting but that along with the shopkeepers and the publicans, the public must also attend. I said that I would bring with me to that meeting three advertisements by Todco, The Golden Goose and another supermarket. I said that if they would explain to me how the prices advertised could be charged by those people and they could still make a very sound profit, I would be on their side. Needless to say, I was not taken to the meeting.

Mr. Crotty

They were not all shopkeepers in Dublin North-East.

Mr. Leneghan

It would seem as if nobody elected any of you except shopkeepers. You are talking, not for the public, but for shopkeepers and the type of shopkeepers you are talking about is the person who has been defrauding this State for years. Those people who are so sure of themselves the calumniators of the Government, are the very people despised by Irish voters when it came to a chance of returning them to this House.

There is no use in anyone in this House talking about minority Governments because except during the periods that Fianna Fáil formed the Government with their own Party, there has been no Government in this country formed by one Party since the State was founded.

Mr. Crotty

Why do you not join them and be finished with it?

Mr. Leneghan

If I got you on my own ground, you would not repeat that. You talk about minority Governments. What kind of Governments were formed from 1922 to 1932? What kind of Governments were formed during the two periods of Coalition Government? Surely your memories are not so short that you do not remember the Farmers' Party, Clann na Poblachta, Labour Party, the NPD, who changed their name, like yourselves? You are trying to cod the people but you cannot cod me. You have the effrontery to come in here and talk about minority Governments. Will you name one occasion on which Fine Gael or their predecessor, Cumann na nGaedhael, formed a Government on their own without the support of other Parties? Is there any man who can answer that question? Of course there is not. It is unadulterated humbug that you are going on with. One gang go around at night in the bar, chasing us out to vote against the Government and others are going behind your back begging us to vote with the Government or there will not be enough hearses to carry the corpses home.

Mr. Crotty

The Deputy must be getting a lot of free drink.

Mr. Leneghan

I have not been in that bar. I would not give it to you to say that you gave me a free drink. I did not get any free drink from you or your ilk. I would want to be very daft and have a very short memory if I were to heed the type of hypocrisy which those people who try to calumniate the Government are now carrying on. Anything constructive which was done in this country was undoutedly done by the Party now in power and it is absolutely futile for people to denigrate or ridicule those people who tried to improve the country.

The two cases are there. The concrete facts are on the one side while on the other, there is nothing but theory and nonsense. We have only to look across the country to see it. Let the people who do not see it come to my constituency and I will very quickly show it to them; I will show them what has been done since 1956. We should take no notice of this intimidation from the Fine Gael Party. There is nobody in the Labour Party, so I do not mention them. I am glad to say that, drink or no drink, we have not been swung over. We are not prepared to sell our souls for either power or notoriety. At least I am not. Others may be, but I do not speak for them. I place this country and its people above all personal ambition.

If those in Fine Gael prophesy the results of the next election as accurately as the last, I am not worrying too much. I expect there are administrators here who are prepared to sell the country but as far as I can see, they are not on the Government side. It is a sad day and a poor reflection on the state of our political standing in this country that so many are prepared to ignore our glorious past and jeopardise our political and economic future for the extra piece of silver that has been added to the proverbial 30. I do not think this 6d. in the £ tax will be an influencing factor in the political future of the country.

Mr. Belton

First of all, I should like to point out that I was sent here by the people of Dublin North-East, having campaigned on a platform, the main plank of which was the abolition of this turnover tax. Into that by-election, Fianna Fáil poured more money than did the other three candidates together. The answer from the people was one vote out of every three. In the last general election, they had one vote in every two. Surely this must show the Government the feelings of the people of the country? Dublin North-East is the largest constituency in the country and we now know the feelings of the people there.

First of all, I submit it is morally wrong to tax rich and poor at the same level. It is likewise unfair to ask traders to put something on one article and nothing on another. The only fair conditions in which a tax of this kind could be administered would be under a decimal coinage system, which we have not got here. The big worry about any new tax is, first of all, how much extra it takes out of the average worker's pay packet; secondly, will it affect production and exports; and thirdly, will it lead to unemployment?

In the explanatory memorandum, the Minister says the tax will be at a reduced rate for the first £1,000 and that the full tax will not be payable until the turnover reaches £2,600. Of course he is misleading the people. The full effect of this tax will be felt straight away on every £100 of turnover. The importer, the manufacturer, the wholesaler and retailer will have to pay 2½ per cent tax on their replacements and on repairs to machinery. Therefore, these people will have to increase their charges and when it comes to the retailer, he must add on three per cent at least in order to maintain his present level of profits.

Coming to the worker, if his spending power is drastically cut, he must demand higher wages. That has been the position here for years. Earlier in the debate, it was admitted from the Fianna Fáil benches and elsewhere that 80 per cent of the retailers are small men, many of whom do not get a proper income from their businesses. Therefore, in order to keep up with the standards of living that have been achieved, through increased wages, many of them will be forced to add not 2½ per cent but as much as seven per cent.

The Minister said that certain rents would not be taxed. He forgot, however, to say that the purchase of new houses will be taxed and that in fact it will bear the full 2½ per cent. I estimate that 80 per cent of the revenue from this new tax will come from food and the grocers will be the main collectors. It can therefore be called a wiping out of profits tax because it will have the effect of completely eradicating profits, particularly in the drapery trade which is so susceptible to weather conditions. In a bad year, drapers will have to increase prices by as much as ten per cent to wipe out the average effect of this tax. In effect, the tax will ruin small Irish traders who will have to make way for the big foreign concerns. It is an increase in taxation and there is no similar increase in any other country in Europe. For this reason, this tax reduces the impetus of our export drive and cuts across what the Minister has done to assist that drive by way of tax concessions.

From all the talk there has been about corporation profits tax, many people think that this is a country of millionaires, but there may be ten, 20, 30 or 40 companies who merit this tax. There are few Government-sponsored companies who merit it but the majority of companies in this country are controlled by one person or by a group of people who barely get a good living from them and plough back whatever is left over. As long as I have had an interest in business, the Government have always encouraged the growth of limited companies and the creation of capital rather than the bringing in of foreign capital. Now the Government have increased the corporation profits tax and retrospective payments are to be asked for. People who have paid their dividends will now have to try to get that dividend back. Two or three years hence, there will be very little money left in these companies.

It has been stated that the corporation profits tax will bring in £3 million approximately and that the sales tax will bring in £10½ million. Rents and fares are put at £1 million, various services at £2 million and health services at something over £4 million. That is a total of £6 million which leaves £8½ million. We are told that that is to be applied to the expansion of our economy, but, to my mind, at a time when there is little difference between expansion and inflation.

The Fianna Fáil Party have stated that there is no pay pause but, nevertheless, wages are not increasing. Surely the taking of 5/- a week out of a pay packet of £10 is a pay pause? Under this tax, money is being taken from the workers. There is only one good thing that I can see about it, that is, that it will be the end of Fianna Fáil.

Dr. Ryan

Might I be permitted to correct a statement made by Deputy Belton? There is no tax on houses.

Mr. Belton

Is there no tax on the building of new houses?

Dr. Ryan

There is no turnover tax on the sale of houses.

Mr. Belton

A wholesaler supplies materials to a builder for the building of houses and the builder then sells them. Is there no turnover tax anywhere along the line?

Dr. Ryan

As far as possible, the builder will get his raw materials free. Cement, sand and gravel will all be free.

Mr. Belton

I am sorry; I withdraw my statement in that regard.

Mr. Browne

Each year, we are afforded an opportunity in this very important debate to assess Government policy. I have listened to the speakers in this debate from the beginning and, apart from the Taoiseach who had to defend his policy, the other Government speakers could have said all they had to say in five minutes. The Taoiseach was well supported by the Fianna Fáil backbenchers but when he left the House, his backbenchers followed him into the corridor for fear they might have to listen to the story from this side of the House. The backbenchers of the Fianna Fáil Party have done a great disservice to the Taoiseach and the Cabinet in that they have failed to inform them of the reaction to the Budget throughout the country.

I propose to deal with the sales tax in a constructive manner. It is quite obvious to me that the taxes proposed in the Budget must eventually filter through to the consumer. Following on that, there must, of necessity, come a rise in the cost of living. As a result of the rise in the cost of living, our capacity to export must be affected. At a time when we should be gearing ourselves to meet the competition of European countries, this must have a drastic effect. This 2½ per cent tax is going to decrease the purchasing power of the worker and to reduce his wages. Whether we are professional men, businessmen or ordinary workers, we all depend for our livelihood on the rewards which flow from our efforts and the blow contained in this sales tax is that the purchasing power of our earnings will be reduced by a minimum of 2½ per cent. I believe that that will ultimately become five per cent or 7½ per cent.

No effort has been made by the Government to vindicate these proposals. Speeches have been made and pamphlets have been issued, but, to my mind, the best comment that could be passed on this sales tax was recorded in the Dublin North-East constituency where a majority of two to one of the electorate voted to reject it. I think Deputy Belton will concede that, apart from his personal popularity in the constituency, the main issue at stake was the acceptance or non-acceptance of this sales tax.

The Government tell us that the consumer will not have to pay anything and we have had Fianna Fáil Deputies coming into the House since the Budget was introduced and saying that the Fine Gael Party have not said what they would do if they were in office. There is no moral or other obligation upon the Leader of the Opposition or the Opposition Party to tell the Government how to run their business. That is their privilege and their responsibility. I want to reaffirm what our Leader, Deputy Dillon, said. If we are returned to power the sales tax will be abolished. There are other ways and means of collecting taxes than the sales tax.

When you had 14 you ran out, and you had been only two years in.

Mr. Browne

An election in the morning does not upset me. I am quite prepared for an election at any time. It is my duty to answer to my constituents at any time the Taoiseach or this House decides to dissolve Parliament. It is like an appendix operation. If I were called for an appendix operation in the morning, I would not mind, but I should hate the unpleasantness. I do not mind facing the electorate of North Mayo but, like any Deputy, I do not like the bother attached to it. Otherwise, I have not the slightest fear of facing the people of North Mayo in the morning. If and when an election is declared, I shall be only too delighted to be on the hustings with my colleagues. Things are not as well in North Mayo as it has been suggested they are.

Mr. Calleary

Never better.

Mr. Browne

The Deputy had an opportunity to make a speech and it was not too well accepted down in North Mayo. Let him behave himself now and act like a gentleman.

Quite a lot has been said about industries. What are the main industries in this State? They are the Shannon Scheme and the sugar factories which Deputies opposite called white elephants. There has been quite a lot of talk in this House about all Fianna Fáil have done for North Mayo. Were it not that Cumann na nGaedheal founded the Shannon Scheme, they would never have dreamt of rural electrification in Ireland today. Not one word was mentioned about that, by Government speakers.

Another thing mentioned was the Moy drainage. You had been 20 years in Government in this House before you decided to drain the Moy. However, if the inter-Party Government had been returned to power six or seven years ago, the Moy drainage would have been accomplished three years earlier. That was the only reason you drained the Moy. Were it not for the fact that the inter-Party Government came in, the Moy would not be drained today.

I want to tell Deputy Calleary something which I am sure he knows as well as I do. There are more shortcomings in the Moy drainage scheme than the Government are aware of. How many people have to come to me, to Deputy Calleary and, I am sure, to Deputy Leneghan, saying: "How is it that this drain or that drain has been left out." There are more drains left out than are being done.

An Leas-Cheann Comhairle

I am afraid the shortcomings of the Moy drainage scheme cannot be dwelt on now.

Mr. Browne

I apologise but I hope that, in passing, I got my point home.

Mr. Dolan

You did not tell us how you would get the money.

An Leas-Cheann Comhairle

Order. Deputy Browne.

Mr. Browne

It is extraordinary that notwithstanding all that has been said about the honey and bee country we live in down in North Mayo, emigration was never higher from Mayo than it is at the moment. In fact, passed by Ballina Railway Station on my way to Dublin on Tuesday morning. Without exaggeration, I saw about 400 to 500 people boarding the train to go to Scotland and elsewhere to try to eke out an existence. That is what I saw in this honey and bee constituency we have heard so much about from Fianna Fáil.

Not bad at all. I agree with you.

Mr. Geoghegan

You objected to the factory in Ballina.

Mr. Browne

You can tell them that in Galway but do not come to Mayo to tell them that. I was one of the special committee of five who dealt with the factory. It would be very hard to object to it and yet to be on the committee.

Mr. Calleary

Who proposed you? I was a member of that committee.

Mr. Browne

Deputy Calleary was not at the meeting at all the night the committee was formed. It might be well for that to be reported, too—just throw it in for good luck. To conclude my contribution, I want to protest in the strongest terms possible on behalf of the traders of Charlestown, Swinford, Foxford, Ballina, Killala, Belmullet and Crossmolina against this turnover tax. Deputy Calleary said the people in North Mayo would not mind paying it. They tell me they do. I did not go out to any crossroads to protest. I am simply making use of my constitutional right to protest on behalf of the traders of North Mayo here in Dáil Éireann. The farmers marched in Mayo before, when they were overtaxed in rates. I would not be surprised if the traders are compelled to march. Could I even at this eleventh hour appeal to the Minister to modify the Budget? He would be doing good for the country and for himself. He would be doing something to maintain the Fianna Fáil seat in North Mayo, which otherwise, I am afraid, will be lost. I would ask the Minister to consult his backbenchers, men like Deputy Dolan. Ask Deputy Dolan what is the reaction in Cavan. I am sure he will find they have "reactors" there.

There should be great buoyancy in Government revenue if this tax is imposed. Surely then the Minister must concede that a miserable halfcrown is no compensation for the poor old age pensioner? The Minister will have excess revenue next year, because he has told us he will get £7 million or £8 million, and all Governments underestimate. I would appeal therefore to the Minister to increase the pension by 5/-.

Mr. Crinion

When taxes are introduced, especially new ones, to keep the country going, nobody likes them. Here is a tax which is small and broadly-based. This year, the Minister had to find £67 million. If he had turned to the old taxes on cigarettes and drink, it would have meant a very high tax on some of these commodities. If he had taxed luxury goods, it might have meant £10 on a television set, £100 on a car and so on. The Opposition are calling for a tax on luxury goods, but, if it were put into operation, we could not hope to keep the same number of people employed in industry. People intending to buy these articles would wait until they had some more money.

Realising that, the Minister imposed a broadly-based tax that will not be felt to any great extent. Two and a half per cent represents only 6d. in the £. A mountain is being made out of this tax. A working man who spends £10 a week on his household will have to pay an extra 5/-. It is said that this tax will not be covered by the children's allowances. A shilling increase in children's allowances is the equivalent of £2. I know of no family who spend £2 on a child every week, unless they are in a very high income group. We would all like to give more to the old age pensioner, but we must face realities and have regard to what it would cost. The extra 2/6d. they are getting more than covers the two and a half per cent tax. Social Welfare benefits are being increased over and above the two and a half per cent. We have consistently given an increase to social welfare recipients for the past six years. Even if the prices of all commodities are increased, which I do not believe will happen, we will still have the old 6/11d. and 19/11d. in the different shops.

When we returned to office six years ago, there was a feeling that the country was beaten, and unemployment had gone over the 90,000 figure. The first thing we did was to devise a five-year plan for economic expansion. That is the only way we can hope to provide work for our people. The more money in circulation, the better for the country. People are enabled to buy the necessaries of life, as well as some of the luxuries. All over the world, the number of people on the land is decreasing. I believe this is due in part to the number of children remaining on in secondary and vocational schools until they are 15, 16 or 18, instead of leaving school at 14. Around 70 per cent of the children are going to school now up to 15 and 16.

Where can you look for employment for these people but to industry. You cannot provide it on the land. A factory can employ 200 or 300 people. How much land would you require to employ that number? It would run into thousands of acres. Employment must be provided either in factories or in the building industry. That was our idea in economic expansion. It has gained momentum in the past five years and we have seen the results. National income has been consistently increasing; there is more employment and we have more than achieved the target set. This morning, the Taoiseach told us that the new five year plan will be issued in a few weeks. We must keep moving and unless we go forward, we go backward. We feel Ireland is going forward and we are planning to continue that trend. That needs money and the Minister has found that this broadly based 2½ per cent. tax will give sufficient money without overburdening anybody.

If we do not go ahead but cut down here and there, what would we have? Our national income would fall and the shopkeepers who are the main opposition to this tax because, to some extent, it is directed towards them, would feel the pinch if economic expansion did not increase. Last year, the increase in the retail trade was seven per cent and it also increased in the previous year. Shopkeepers like to see a turnover increase. They remember in 1956 when the people were unemployed, there was little money circulating. Therefore, they they are prepared to pay the tax, although they do not say so, rather than have recession. We had tremendous opposition to another Bill last year but once it passed, we heard no more about it. This will be much the same. The Minister has eased the burden on the shopkeeper to some extent by providing that if the turnover is less than £50, they will pay only 5/-tax well under 2½ per cent. They need not keep books and may pay in the form of stamps. If the turnover is £100, they pay 17/6.

When the Bill was proposed, many shopkeepers felt they would not be able to keep books but now they need not register if their turnover is less than £500 a month. That covers a big number of shopkeepers. They can pay 2½ per cent to the wholesaler or, if they wish, they may register and pay it themselves. They have the option. There is now nothing to compel the small shopkeeper to keep books. I knew one man who was saying that it would cost about £22 for him to get an auditor but he will come under this concession and will not have to register. He can pay the wholesaler and have no worry. He will be free to apply the increases as he likes.

Not all commodities will increase in price. One manufacturing firm last week sent out a letter stating they were providing for an extra profit on their commodities to cover the 2½ per cent. A shopkeeper is a businessman and will know what can be increased. When the Minister put an extra penny on cigarettes last year, he got no extra revenue. Naturally, the shopkeeper will think twice before increasing the price of cigarettes. Butter is protected because we have a situation in which we are eating 48 lbs. of butter per head, an extremely high consumption which many countries would like to achieve. Next highest is England with 38 lbs. An increase in the price of butter could easily turn a section of the people over to margarine at a lower price and not greatly different in taste. At the International Conference of Agricultural Producers, the President, a Dutchman, said he would like to know how Ireland was able to achieve such a high butter consumption.

Already 90 per cent of the retail traders pay income tax and their income is known to the Revenue authorities. They have been keeping books and it will not mean much extra to them to deal with this 2½ per cent turnover tax which will only apply to cash sales. They will be able to decide what articles can provide the tax. If some associations did more to see how the tax could be implemented and prices agreed in some cases or the quantities reduced in others, they would do much more good than by going about the country protesting.

If a law is passed, it must be accepted, and naturally this Bill will be passed like any other. People have until November to work out the operation of the tax. Even on the box of matches, it will work out right if you take one or two matches out of each box. That will cover the 2½ per cent, leaving the price unchanged. While some items will go up, there will not be a big difference in price when the Bill becomes law and people get down to seeing how it can be implemented.

Under the Programme for Economic Expansion, one sees factories and extensions to factories going up everywhere. The grant scheme is encouraging industrialists to modernise and expand. These new factories will create new jobs. Indeed, quite a number of our people have been returning from England and even from America. They find conditions here as good and the pay likewise as good as in these other countries.

Money is, of course, needed to establish these factories. Thirty years ago, we were depending solely on agricultural exports. Today we have the three prongs of industry, agriculture and tourism bringing in roughly the same amount of money each year. If two of these prongs were removed, what would be our plight?

Mr. Dillon

Is tourism bringing in as much as agriculture?

Mr. Crinion

Expansion requires money: a good business firm always ploughs back some of its profits. A farmer likewise ploughs back some of his profits into his land to improve the land and its fertility and to leave it in a little richer condition than that in which it was handed on to him by his father. Economic expansion will bring in more money. It will give an opportunity of improved social welfare benefits. Will anybody contend that we should not help the unemployed, the sick, the aged, the widow? From November, the first child will be in receipt of an allowance. Some have asked why not give the increased benefits immediately. We should like to do that but we must wait until we have the money. The increases will come three months later than usual this year because the pattern in the past was to give the increases from the month of August. It was not possible to give them earlier than that because legislation had to be introduced. This year the tax will come into operation in November and, therefore, in November we will have the money to provide the increased benefits.

There has not been any comment on education. The sum provided for education has gone up to £21 million this year. There has been a marked increase in the numbers of children going on to vocational and secondary schools. The increase is roughly 70 per cent. Parents like to give their children a better education and a better chance in life than they may have enjoyed themselves. The unskilled men in Bord na Móna—some of them have graduated into drivers — have sent their children to vocational schools. Quite a number of these children are now apprentice fitters and electricians. Some of them who have finished their apprenticeship are earning £11, £12 and £13 a week, perhaps, a bit more with overtime. They are earning far more than their fathers did before them at the same age.

These young men will, when they marry and have families, want to give their children a better education still. They will want their children to have secondary education and possibly go on to university. As I understand 70 per cent of the younger people are all either in professions or else white collar workers. That is the pattern, too, in Cork and other cities. We should like to have the same facilities in the rural areas. We cannot ask for universities but we can have more secondary and vocational schools. Secondary schools are being built at the moment at Maynooth and Kilcock. One will be a secondary top and the other a completely new school. It is prefabricated. Building started early this year and the school will open in September. There is a vocational school in Killucan. Another is to be built at Tyrrellspass. There is a new vocational school in Kildare. Education is no load to carry and it is a way of keeping the child of 14 or 15 out of mischief. At that age, he is not able for much manual work. With a little more education, he is equipped to better his position in the future.

For new industries, qualified personnel are required. Criticism has often been expressed of the policy of bringing in foreigners. It must be remembered that they have the markets and the technical know-how, and can link with their large sales organisation. We have not had the experience and naturally must encourage foreign industrialists to establish industries here. Every other country in Europe is doing the same thing. Substantial grants are given to persons to establish factories in this country. Technicians and apprentices are required to operate the factories. They can be trained through the vocational schools and the universities. In years to come the factory management will be Irish. Such factories provide us with the opportunity of competing for European markets. The plant and machinery in them is of the most up-to-date kind. It is a difficult matter to modernise old factories. We have the advantage of starting with new factories, new machinery and new techniques, which will increase our competitiveness in Europe.

Some years ago, it was suggested that it was only big concerns that would survive in Europe but it would now appear that factories of the size that would employ 200 or 300 persons can be much more competitive. In such factories there is personal contact between management and labour. The very large manufacturing concerns such as Fiat in Milan and Fords of Dagenham are continually in trouble in regard to management-labour relations. The smaller concern is much more flexible and there is much closer liaison between floor and management. I was impressed on the occasion of a tour to the Shannon Industrial Zone to find that factories are being built on a reasonably small scale and that the management-labour relations are very good. One American concern there is engaged in manufacturing parts for the satellites that are going up.

Mr. S. Dunne

On a point of order, I do not want to interrupt Deputy Crinion, but surely this is a long way from the matter which is supposed to be under discussion, the Finance Bill and the sales tax?

An Leas-Cheann Comhairle

I think the Deputy is endeavouring to tie this up with taxation.

Mr. S. Dunne

It is fascinating but tortuous.

Mr. P. O'Donnell

Which planet is he trying to get on to?

Mr. Crinion

It takes money to provide grants for industries and in order to get the necessary money taxation must be imposed. I am giving an idea of the factories which have been established in Shannon and which are providing employment for 1,200 people. In 1959, there was nothing but marshland there. In the American firm to which I have referred, the foreman was expected to report to the management every Monday morning and to give a detailed statement about any problems affecting the employees. The personal problems of the employees may affect output in the factory.

An Leas-Cheann Comhairle

Factory management would relevantly arise on an Estimate but is not relevant to the Finance Bill.

Mr. Crinion

I am sorry. We must ensure that our industries can compete in foreign markets. Exports have been encouraged by such means as income tax concessions. The Minister mentioned last February that he was going to impose a purchase tax which would be broadly-based. We have heard very little about that. Some people thought that new cars would be affected and there were increased sales of cars during the spring.

The proposed turnover tax will bear equally on all the people. Recently, there was an increase in the price of milk to the creameries, which cost £1,200,000. That has to be paid for. Nobody will deny that the cost of milk production has risen in the past ten years. The farmer must get his share of the national cake. More money is required if we are to expand our economy and we must consider how that money can be secured. Nothing should be allowed to interrupt the general flow of improvements and the general increase in productivity that has being going on. Once such things are interrupted, it is difficult to get them moving again. It is not as easy as switching the engine of a car on and off. We saw the difficulties in 1957 when we came back into power and it took well over a year to get the country moving again. Naturally, we are anxious to see that such a situation does not recur. Because of that, the Minister found that the safest and easiest method was to introduce this turnover tax. It must be remembered that it will be one of the cheapest taxes to collect and will cost only about one per cent. Ninety per cent of the retail trade are already keeping books so that they will not have any extra books to keep. Therefore, practically all of the money will go to the Revenue Commissioners and will be used to provide the extra £4 million required for social welfare. We feel that this tax is one which will cause the least disruption of the national economy and still provide the money needed.

Mr. S. Dunne

Since the discussion on the turnover tax began, I have heard many apologies from Fianna Fáil and other speakers but I must say that Deputy Crinion has beaten them all. For instance, he says that the grocer who is selling more matches can, to bring the price of the matches within the ambit of this tax, do so by taking two matches out of every box. That conjures up a picture of some 20,000 to 30,000 grocers each taking two matches out of every box in order to enforce the tax. This asinine idea as advanced by Deputy Crinion—I say, with all respect to him, that it is asinine —is indicative of the fact that the Government find themselves at sixes and sevens about this proposal.

It is obvious to me that this proposal to impose a 2½ per cent tax on retail goods, with certain exceptions, was introduced without due consideration and proper reference to the implications it must have. There is an obvious revolt—a revolt of the bourgeoisie, if you like, but there is a middle-class shopkeeper revolt — against this tax. Many of the people who are revolting so vocally and sending telegrams, to the benefit of the Department of Posts and Telegraphs, are Fianna Fáil supporters, who, I have no doubt, will remain Fianna Fáil supporters, even if and when an election comes which I hope will be when the Dáil runs its whole course and not one day before that. But these people who are revolting have a case. How is the medium operative in any line of business, selling any common or garden article used by the people, who has a staff of five or six, or perhaps one or two, or even 20 or 30 people, to keep monthly records of his turnover? How is he to administer it and how is he to have the money paid and proper accounts kept without employing additional staff? That in itself is not a bad thing and I am in favour of it, but some of these people are working on a fractional profit.

Small shopkeepers who mainly depend on groceries are living very near the line. With bad debts and extended credit, they find life a battle. The gross profit in such cases would not be much more than 5 per cent. Is such a person to employ additional staff to arrange for the collection of the tax, and cut down his own profit? Is it not obvious he will not do that and that he will put it on to the consumer? Who is the consumer? He is the ordinary man on the street who has to work hard for an average wage of £10 or £12 a week.

If some of the shopkeepers carry out their threat that they will not enforce this tax, what are the penalties and how are the Government to force them to do it? Must we visualise an army of inspectors going through their records? I cannot see it working and that is why I said previously that it is quite obvious that this tax was not given the consideration it should have received. In fact, it is rumoured that when the idea of a sales tax was first mentioned by the Taoiseach earlier this year as a portent of things to come, the general idea then, even among the Government Party and their supporters, was that the tax would apply to a limited range of articles which did not include essentials of life and did not include food. Now we find that the tax includes the essentials which even the poorest sections must buy.

We are told that the old age pensioner will benefit by the tax. To what extent? Somebody boasted that he would make 10d. a week, that he would get 2/6d. and the tax would take 1/8d. thus leaving him 10d. That was the boast of the Government Party. That is something we should be ashamed to mention. A sum of 2/6d. in relation to the old age pensioners is something we should be sick and tired of mentioning in this House because we have exhibited the greatest collective meanness in our dealings with these people of any Parliament in the free world. The manner in which these people have been treated is disgraceful and every year you have the miserable 2/6d., or something along those lines, being given to them, and politicians boast about it. They boast about it in this House as if it were not the shame I believe it to be and, in my view, everybody in this House believes it to be.

We are to have a vote on this and use has been made of that by the principal Opposition to suggest that there should be an election. Personally, I disagree utterly with what Deputy Sweetman is reported to have said yesterday, that there were many people in this country demanding an election. I am in contact with as many people as Deputy Sweetman and I hear no demand for an immediate election. I want to add to that, in case there is any doubt about my feelings in this matter, that I would regard Deputy Sweetman's appointment as Minister for Finance as a national disaster of the greatest magnitude.

A protest must be made against this tax because it will mean a wage reduction for the workers in every sphere. Not alone will it be passed on in the form of increased prices but there will be unscrupulous people who will profiteer on this tax and increase prices beyond what is necessary to meet the tax. The persons who will pay this tax are the ordinary workers, the ordinary housewives of Ballyfermot and Walkinstown and the workingclass areas of the city and country, the farm labourers and road workers and the people in the social welfare classes. I believe it will mean for those people an effective reduction in the purchasing power of their wages of from eight to ten shillings a week. That is my summation of the position.

Because of that and in order to ensure that my attitude is clearly understood, I am going to vote against the Government on the question of this tax. I do not want that vote against the Government to be taken as an indication that I am wishful to see the return to office of the principal Opposition Party. I am not any more enamoured of them than I am of the existing Government. There is clear evidence on all sides that the young people and many of the older people are coming to a realisation of the fact that their true interests can no longer be catered for by Parties who have the 19th century conception of political matters and that they have not been looked after effectively in the political situation that has been allowed to exist in this country for far too long, a situation in which political differences, in the main, are nothing more than personal animosities or differences between individuals and the pursuit of power on both sides.

Any difference there might be between them would be a slight social advance which Fianna Fáil have over Fine Gael. The people are gradually coming to realise that their interests lie in the general direction of the Labour representatives. Even the Taoiseach has recently talked about the move to the left.

Acting Chairman (Mr. Cunningham)

The Deputy is getting away from the terms of this Bill.

Mr. S. Dunne

I do not want to be irrelevant because there has been a sufficiency of irrelevancy. I want to indicate that this tax will bear very heavily on the mass of the people. In voting against the Finance Bill, I want to make clear that I do so in order to express, on behalf of the people of my constituency, their opposition to this move on the part of the Government which must mean an increase in the cost of living. I cannot see why the Government did not take heed of the public outcry which has arisen against this tax and amend these proposals in such a manner as to ensure that the shopkeepers will not be made into tax gatherers but that the tax will be collected, if necessary, at source.

The farmers have been granted exemption from this tax to a large extent. They are an important political entity and no Party who wish to remain in power can afford to offend them because they are so large a unit in the political situation. However, foodstuffs should also have been exempted from this tax because a tax on foodstuffs is something that the people will feel very gravely.

I should like to ask what steps are being taken to prevent profiteering. What apparatus could possibly be conceived to ensure that there will not be profiteering other than some colossal, Gestapo-type mass examination of the accounts of all shopkeepers? This is the flaw in this business and it seems to me that for a Party with a long tradition of political agility, Fianna Fáil have blundered badly and in a very elephantine manner.

I do not think the vote will produce the defeat of the Government but, if it does, the present Administration are in for a severe setback when they go to the country. I am not voting against the Bill for the purpose of securing that end. I am one who wants to see some Dáil lasting to its full term. Anyone who has fought several general elections, as I have, knows what a general election is. Nobody dislikes a general election as much as a politician and comments have been made in the Press that there is nothing a politician fears more. I will say that while I do not fear a general election, there is nothing everybody in this House dislikes more than a general election. There is no demand in the country at the present time for a general election but if that situation comes about, then the Government have only themselves to blame because they have acted in a very foolish way in bringing in this tax in the way they have.

I suffered for a half an hour listening to Deputy Crinion, who is a decent man but hard to take. He was able to relate education to this Bill through the geniality of the Chair, which is always very fair. He talked about education as it affects Dublin city but we all know that when a Deputy is at a loss for something to say, it is always well to bring in Dublin. Deputy Crinion talked about education and said that in one area which was brought into existence 30 or more years ago, there was now the proud boast that over 70 per cent of the children leaving the schools went into the professional or white collar occupations. That, to my mind, is an attitude of mind that should be discouraged. The professions and white collar occupations, by and large, are the least productive of all. What we should bring about is the encouragement of the trade craftsman, the manual worker, because these are the real productive workers.

I shall not pursue that line because the Chair might say it is not in order, but in the dim, distant future, anybody reading the Dáil Debates will not get the idea that I contributed to this obscurantist, 19th century foolish notion that there is something wrong with the skilled, the manual worker.

Mr. P. Hogan

(South Tipperary): One cannot but wonder whether Deputy Crinion is as simple or naive as he appears to be. If he is, he has my sympathy. His suggestion, as a method of implementing the 2½ per cent turnover tax, of removing two matches from every box sold over the counter must be very heartening to the Minister for Finance, and a Party with such elegant back-benchers must surely look forward to the forthcoming general election with tremendous confidence. He also brushed aside the turnover tax as being just a little tax, a mere sixpence in the £. Deputy Crinion happens to be a wealthy man, I believe. If tomorrow morning the Land Commission moved in to divide his land, Deputy Crinion would have a different tune.

Acting Chairman

The Deputy is getting away from the Finance Bill.

Mr. P. Hogan

(South Tipperary): Sixpence in the £ is something to be reckoned with by the poorer sections of the community who have only a few pounds to spend. It is extraordinary the different types of interpretation which have been placed on this tax. During the recent by-election in Dublin North-East, the various Fianna Fáil propagandists interpreted it in two different ways. If they happened to be talking to a housewife on her doorstep, they told her this tax was of no significance to her, that the shopkeepers would have to carry it. When they went to the shopkeeper, they said: “Why does it bother you? The consumers will have to carry it,” trying, in effect, to have the best of two worlds.

I want to digress for a moment to another aspect of this Finance Bill. Up to the present, the matter under discussion has been the turnover tax exclusively. Of course, it is the kernel, the most important aspect of this Bill, but there is one other aspect to which I should like to draw attention. It is the question of the banks being required to make returns of everybody's dividends, if these dividends amount to £15 or over. There seems to be an epidemic of high morality invading the Fianna Fáil Party recently, and a virus like that, in such a new medium, can be calamitous.

The reason offered for this section in the Bill is that it is designed to uncover tax evaders. There are tax evaders; there have been and there will be tax evaders. They have been in this country and in every country in the world and they will always be there. One cannot, of course, lock horns with the Minister when he states his concern is to uncover tax evaders, but one must suspect the Minister in his methods, if he looks for information which one may think is unnecessary. The preservation of the confidential nature of banking business is an important matter in our society. Traditionally here, our farming community, our country people, have to put their money into the local bank, because, unlike their counter-parts in other countries, they are not sufficiently well-up in investment know-how to deal in trusts, shares and stocks. The opportunity for investment has always been limited here. The practice has been to place the money in the bank and our country people have, down through the years, tended to be secretive about these transactions; in fact, they would not let their left hand know what their right hand was doing in banking business. It is a serious matter to upset the confidential nature of transactions of that nature.

This matter could be considerably ameliorated if the Minister had thought fit to introduce certain exemptions. I will mention four instances for his consideration and these refer in general to sections of the community who, by the nature of their occupations and service, are not in a position in any practical measure to become tax evaders. First of all, there are our Civil Service and our local government officials. Why must the Minister go into the bank to find out when a higher civil servant has, through his years of labour, accumulated the not terribly considerable sum of £1,500? He would be a very poor type of civil servant, unless he was a spendthrift, who in his senior years could not accumulate £1,500. Why does the Minister want to know it? He could never evade income tax. His returns are made automatically. Possibly his taxable money is deductible at source.

Then you have people on PAYE. Their income is vouched by their employers and is taken from them periodically. These are people who, in general, are not tax evaders and are in no position to become tax evaders. If any of these people arrive in the happy position of exceeding over £1,500 per year—I suppose few of them will—why does the Minister want to know it? These people cannot be tax evaders. If he is trying to introduce the regulation to uncover tax evaders, why not exempt this section of the community?

Again, take the farming community. In this country, the farmers do not, in effect, pay income tax under Schedule D. A very small percentage may have to pay on three-fifths of their valuation, which is readily vouchable. Farmers who engage exclusively in husbandry cannot become tax evaders in any worthwhile sense. Why does the Minister want to know what every farmer has in the bank? Why does he want a list of every farmer who has a deposit of £1,500 and upwards, a deposit which may have been there for three generations, which may be there for various purposes—to buy land for his sons or to educate members of his family?

(South Tipperary): The Taoiseach today gave us a very impassioned performance. As an exhibition of outraged virtue, I doubt if it has been bettered by Miss Christine Keeler in a recent legal tangle with Mr. Gordon. He told us many things. We had the usual talk about increased productivity, gross national product, tying up income and wages to production and so on—the usual Micawber outlook that prosperity is around the corner. He also told us that about half of the population will not have their position worsened by this turnover tax. When the Taoiseach admits that about half of our population will not have their position worsened, I suppose we may conclude that in the Taoiseach's mind half the population will have their position worsened.

His chief bitterness was directed towards RGDATA. He accused them of now becoming a political Party. It seems that in the Taoiseach's mind and heart no free society or free organisation in the country has the right to protect, to meet, to organise or even to march.

Dáil Éireann debate - Thursday, 20 Jun 1963