Finance Bill, 1963—Committee Stage (Resumed).

Question again proposed: "That Section 46, as amended, stand part of the Bill."

Mr. Dillon

When I reported progress, I was drawing the attention of the House to the fact that, despite Deputy Seán Flanagan's optimistic prognostications, the Minister for Finance anticipates there will be an increase in the cost of living. He says to protect the recipients of social welfare benefits from the impact of that rise in the cost of living, he is making special provision for increases in old age pensions, widows' pensions and other benefits.

If this increase in the cost of living ensues, the inevitable result will be a general rise in the costs of production, with special reference to industrial production, with a consequent diminution in our competitive capacity in the export markets, in which we are finding it progressively more and more difficult to operate profitably. We already have an adverse trade balance of £105 million plus for the past 12 months of our trade. If our competitive capacity for industrial exports is injured by this new taxation, the prospect of our reducing that adverse trade balance grows more and more remote.

I am aware it has been the philosophy of Fianna Fáil for some years to have no regard to the cost of living and to say simply that it must be allowed to rise. But, sooner or later, the people of this country must reconcile themselves to the fact that, if we are to compete in foreign markets for industrial goods, unless we keep costs of production down, we shall be completely blotted out of foreign markets, more especially if these foreign markets become more and more automated in their industrial processes, which reduces their dependence on paid labour. In effect, this creates a situation in which their machines are competing with our men.

The more we raise the cost of living to our own society, the more we increase the inevitable costs of labour and personal service of every kind, with a consequent increase in our costs of production and a reduction in our competitive capacity. These facts are so elementary and obvious that it should not be necessary to reiterate them in this House, but the Budget proposed by the Government, the Finance Bill, with special reference to the section we are now discussing, all contribute to an increase in costs which is going to injure the economic life of this country, in my submission, very gravely.

The true evil of this tax is that it operates to increase the cost of living. But the passing of this increased cost to the consumer is not altogether a simple operation. It is going to wreak a good deal of havoc in the process of being passed on. Is there any reasonable Deputy who accepts it as equitable that, if you are dealing with a shopkeeper doing a business of £250 a year in a grocery shop, this turnover tax is the equivalent of going to that shopkeeper and telling him that as and from 1st November, he will be charged corporation profits tax at the rate of 62½ per cent before income tax? We go on to say to him in so far as he is able to pass it on to the customer, but the net result of that notice to a great many medium-sized shopkeepers—all of whom are employing a certain number of assistants —will be a notice to quit. They simply will not be able to carry on.

This morning, a Fianna Fáil Deputy said it was illusory to suggest to shopkeepers that they would be subjected to repeated inquisitions by inspectors of the Revenue Commissioners. I do not think that is true. I think the Revenue Commissioners must, in the discharge of their duties, conduct a very strict inquisition. At present the whole basis of the collection of income tax is founded on the certified accounts of chartered accountants. In the vast majority of cases, the Revenue Commissioners accept such accounts as adequate evidence of the true profit earned by a business firm for the purpose of assessing income tax.

It is quite true that shopkeepers who get these certified accounts for the purposes of income tax will have them accepted by the Revenue Commissioners for the purposes of the turnover tax. But those who know rural Ireland know that the vast majority of shopkeepers there do not employ chartered accountants at all. They have now two alternatives. One is to settle with the Revenue Commissioners themselves their monthly liability to turnover tax, or else employ—at considerable expense— chartered accountants to prepare returns and certify them to the Revenue Commissioners. In either event, the cost in time and in convenience, and indeed in money, is a very substantial item for a small businessman.

This whole proposal strikes me as being so grotesquely unjust that I find it hard, understanding it intimately as I do, fully to express to the House how unfair it is. Many Fianna Fáil Deputies may profess to misunderstand the demonstration of 10,000 shopkeepers against the tax in Dublin. They did not come here for fun and they are not the type of people who ordinarily resort to public demonstration. Deputy Seán Flanagan was the first Fianna Fáil Deputy frankly to admit that, to his personal knowledge, a great part of the demonstrating shopkeepers had been ardent supporters of Fianna Fáil. They did not come to demonstrate for any political purpose but because they feel they are being unfairly treated. I believe that if Deputies will wake up to the fact that in a grocer's shop this tax represents the equivalent of a corporation profits tax of 62 ½ per cent on all profits, they will realise that a very savage injustice is being done.

Quite apart from the outrage being perpetrated on this considerable body of respectable citizens, I suppose there are Deputies who have asked what is to become of them? If some go, will not others benefit? I think that is true. This will accelerate the pace at which the ordinary shop will disappear in favour of the multiple self-service shop which tends to grow in our cities and country towns. It is true that the collection of this tax is much simpler for a self-service shop operated by a large corporation such as those at present arriving from Britain and buying up sites all over this country.

As another Deputy pointed out, under the self-service system, a customer collects her parcels and on leaving at the door, has her bill made up. In the course of that transaction, it is relatively easy for the self-service store to pass on this cost by adding 2 ½ per cent to the total bill. On the contrary, the average shop involving personal service is obliged to quote prices for each article purchased by the customer and, in effect, finds it progressively more and more difficult to collect the tax. If it were physically possible for many of these people to absorb the tax, I am sure in defence of their own trade they would try to do so, but it is economically impossible for a grocer to absorb a corporation profits tax of 62 ½ per cent and survive.

A great many will not survive and we shall have the pleasant feeling of having eliminated a number of our neighbours from their traditional livelihood, the pleasant achievement to our credit of having broken up a considerable number of respectable families in rural Ireland who have earned their living in the distributive trade. We shall have the satisfaction of knowing that we have put out of jobs a number of assistants. Some will be young men and women but many will be people in middle age who will find adaptation of their lives to the new regime a matter of considerable difficulty. To those who are, in any degree, familiar with rural life particularly, and urban life also, these are prospects that cause considerable concern. They carry conviction to my mind that the whole proposal is iniquitous and unjust.

As Leader of this Party I want to deal with the silly propaganda propagated by Fianna Fáil who begin by saying that this tax raises £10.5 million. It is said that this money is needed—where do the Opposition propose to get it, if not through the turnover tax? The answer is perfectly simple. I do not believe that it costs or should cost £63 million per annum more to run the country in 1963 than in 1957. If this tax is implemented, it means that the Exchequer is receiving £63 million pounds per annum more than it received in 1957. I want an opportunity to examine that figure.

I assume that Fianna Fáil Deputies are aware that there is no greater crime in politics than that of the Minister for Finance or Government colleague who would disclose Budget secrets before Budget Day. I assume Fianna Fáil Deputies know that more than one British Chancellor of the Exchequer has been forced to resign from public life as a result of such revelations. And the reason is simple: if such revelations were permitted, the opportunities for individuals greatly to enrich themselves as a result of advance information would be multiplied. They can so enrich themselves because they, as individuals can anticipate the tax as nobody else can but it follows from that, that if everybody can anticipate every sort of revenue contemplated by a Government, then that form of revenue produces nothing at all.

If it is true that after an examination and assessment of the national resources, it is necessary to raise this money, there are many ways in which a Government can tax but none is productive if announced six months in advance, thus giving everybody an opportunity of evading or defeating it. As I said, and I want to repeat, having given most careful examination to this whole problem, I am satisfied that if additional revenue was necessary there are at least four possible methods open to the Government, and two of them were rejected by this Government in favour of this infamous tax. I say that without the advantage of any prior consultation with the experts of the Department of Finance or with the Revenue Commissioners whose business it is to submit proposals to the Minister for Finance when an increase in revenue is necessary for the essential purposes of the Government.

I am aware that no rational Deputy of the Fianna Fáil Party or indeed of any other Party in this House is ignorant of the facts which I am now stating. I am aware that that will not prevent the Deputies of the Fianna Fáil Party continuing to thump tubs and proclaim that unless the Opposition are prepared to offer a substitute for this tax proposal, they are not in good faith. I want to tell some of these Fianna Fáil Deputies who still retain some remnant of conscience even after their association with the Party to which they now belong, that that kind of conduct degrades themselves and does a genuine disservice to democratic politics in this country. Any arguments put forward by a responsible public man which he knows himself to be fraudulent in some measure degrades the public life to which we all belong.

I want to recall again a further evil element in this tax. It is a tax which, according to the Government's White Paper on Direct Taxation laid before the Houses of the Oireachtas on 19th April, 1961, operates to place an additional burden on persons in the lower income ranges. "It bears more heavily on married couples, especially those with family responsibilities. A sales tax," it says, "might tend to have an inflationary effect."

However, that is not the end of it. It was Deputy Colley who directed our attention to another interesting characteristic of this tax. He pointed out that it had one beautiful quality: it had no point of diminishing return.

Mr. Colley

May I interrupt the Deputy? Deputy Dillon made that point previously. He must be attributing somebody else's speech to me because I did not say that.

Mr. McGilligan

Did the Deputy not say it was flexible and could be enlarged?

Mr. Colley

No.

Mr. McGilligan

He did.

Mr. Dillon

I read the Deputy's speeches with close attention. They are usually worth reading and, as I say, he suffers from the very serious handicap of sitting where he does, but when he talks, he often drifts apart from the Fianna Fáil Party line, being fundamentally an honest man.

I agree with Deputy Colley this tax has in it that great danger to the lower income groups in our society, that unlike the tax on tobacco, unlike the tax on spirits or on beer, this tax has virtually no point of diminishing return. This tax is to fall mainly on food, fuel and clothing. The point of diminishing returns for this tax is when our people are in rags or when our people are hungry or when our people are cold, and until that time comes, there is no prospect of diminution.

Mr. N. Lemass

God bless the day when Deputy Dillon was an Independent here and supported a tariff on clothing, making it quite clear that it would fall on the poor people of Ireland and that it would be——

Mr. T. Lynch

That is only Lemass claptrap.

Mr. Colley

May I interrupt Deputy Dillon? I think I have discovered what Deputy Dillon is referring to. What I said was that the criticism that this tax could be increased was a criticism which could be levelled at any tax.

Mr. Dillon

On beer and spirits.

Mr. Colley

When introduced—that could be said about any tax when introduced.

Mr. Dillon

I do not think I unfairly misinterpret the Deputy when I point out that the logical sequence of his thought is that other taxes have a point of diminishing return, that this tax has in it the exquisite quality that its only point of diminishing return is when our people are in rags and experience hunger or are cold.

Mr. Colley

It is rather different from what I said.

Mr. Dillon

It is the logical sequence of the Deputy's thought.

The attractive facet of this tax is supposed to be that it bears on all the place where the diminution of the yield will begin is when those least able to afford it can bear the burden no more, and it is perfectly certain that the diminution in yield from consumption must begin amongst the people with the lowest income. They are the people who will first know cold, who will first know rags and patches, who will first know hunger in some degree, and it will be long after they have become familiar with such things that the well-to-do in this country will begin to cut down on their purchases of food, fuel and clothing.

Do we want a tax of that kind of application? The Parliamentary Secretary to the Minister for Lands did not want it. He spoke to the Boyle Dáilcheanntar a fortnight before the Budget was introduced and he said: "There are ill-intentioned people travelling throughout the country traducing Dr. Ryan, a mild and kindly man and a patriot to boot."

Dr. Ryan

There is nothing like that about the Deputy.

Mr. P.J. Burke

The Minister was a solider of Ireland when soldiers of Ireland were few.

Mr. Dillon

This was the very tone of the Parliamentary Secretary to the Minister for Lands who went on to say that this gentle heart had in contemplation nothing but a tax on jewels, furs and luxuries. "I want to warn you" he said "that evilly-disposed people will misread his intention and when they do, remember they are anti-national". He has changed his tune. That is poor Deputy Colley's difficulty. He is not so supple and finds it harder to change his tune than the Parliamentary Secretary. This is perhaps one of the reasons why he is not a parliamentary secretary. He should watch Deputy Lenihan's supple performance because he is now as passionately concerned to defend the tax as just and good as he was to condemn, when speaking to his own constituents, as the nightmare of a diseased mind any attempt to traduce the reputation of this mild and gentle patriot, Deputy Dr. Ryan, who would never dream of anything so evil as a sales tax of general application.

Mr. Colley

I did not read the Parliamentary Secretary's speech but I trust Deputy Dillon's version of it is more accurate than his version of what I said.

Mr. Dillon

I think the Deputy will find, on reflection, that both versions I have given to the House are substantially accurate and revealing. What makes me a little uncomfortable—and for the moment I am not referring to Deputy Colley—is how does a man like the Parliamentary Secretary to the Minister for Lands reconcile this with his conscience? How does he go back to Boyle Dáilcheanntar and say to them: "Everything I told you this week-end I now want to deny. I told you a tax such as is now proposed was unthinkable. I want to deny that now and to say that it is sound public policy. I told you that the present Minister for Finance was the kind of man who would never dream of such a piece of legislation. I want to tell you now that he has begotten and given birth to this horror amongst us." He will remind the people of Boyle that he said this was something for which the Fianna Fáil Government could never stand, and that anybody who said they would defend such propositions was anti-national. How will he rebut that charge? He must go back to Boyle and do in Boyle all the things he said represent treason to the State. But he will do it. It often makes me wonder what does it mean to be a member of the Fianna Fáil Party.

I remember in the old days we used to hear from old men the famine song, but it was always a song that was sung in derision: "They sold their souls for penny rolls and lumps of hairy bacon". I wonder would I be unduly severe on the Parliamentary Secretary to the Minister for Lands if I said that it appeared to me that, comparing his performance today with his asseverations of a month ago, he has sold his soul for a penny roll and a lump of hairy bacon?

Quite apart from what the Parliamentary Secretary does or says, or does not do or does not say, this fact remains: if this tax is implemented, a number of decent business people in this country will be driven out of business. If this tax is implemented, the remainder, who stay in, will be under a permanent compulsion either to get certified accounts prepared for the Revenue Commissioners or to submit to pretty regular monthly or bimonthly inquisition by the officers of the Revenue Commissioners who test their returns. The fact remains that the practice of self-service stores will grow to take the place of the existing shops driven out of business and these self-service stores, operating on a very narrow margin of profit, cannot afford to carry out of their profits a corporation profits tax of 62½ per cent, which is what this tax represents. It will, therefore, be passed on to the public with two consequential results: first, the cost of living will resume its upward trend, with the inevitable increase in our costs of production and the consequences that will have upon our foreign trade. But there is another consequence of an increase in the cost of living which I regard as just as grave and which the Fianna Fáil Party only too readily try to forget.

There are thousands of small farmers in this country who are working up to 14 hours a day and whose incomes are not going to expand, for they are virtually fixed by the measure of subsidy available from the Treasury to maintain their existing levels of reward. All of them will bear the impact of this increase in the cost of living. It is one more twist of the screw to bring them lower down the scale than they have been heretofore. I know that some of the new philosophers of the Fianna Fáil Party believe that it is a good thing to sweep them off the land. I know that certain members of the Fianna Fáil Party accept the philosophy of the infamous Lord Lucan—the "great exterminator" is how he is known. He believed that the right solution for Irish agrarian difficulties was to clear the people off the land, divide the land up into 500 acre holdings, and then hire the people back to work as servants on their own homes under Scotch factors. Our people's grandfathers took him up on that and, when the dust died down, it was Lord Lucan who was gone and our people who remained. Now the grandsons of these people are to be told that their standard of living is too low, but we are going to make it lower still because the money is needed and there is no other way to get it except through their food, through their fuel and their clothing. It is from that source we will take it in ever-growing degree and, if they cannot meet the charge, why, then, let them clear off the land and make way for those who can work it more economically.

I think you are all gone daft. You are living in a kind of foolish fairyland. The fact that the Taoiseach's countenance appears on the covers of Time intoxicates you all. The opinion of any rambling correspondent of an American news magazine, who lands here for a fortnight and takes a photograph of the Taoiseach, his children and his grandchildren, and all the whole nice party, holding forth upon us, persuades you everything in the garden is lovely and that you have earned the approbation of those who count. The only people who count are the people of our own country.

An Leas-Cheann Comhairle

I do not think either Ministers or Deputies should be referred to as stooges.

Mr. Dillon

Sir, I mean a person who knows nothing of his job and who comes in here to do what he is told, who knows nothing whatever about the issue here involved, who is afraid to face the people, and afraid to bring the issues to the only tribunal capable of determining them. We are asking you to go to the country and submit this legislation to the people. We will accept the verdict, whatever it may be. I dare you to do this but I know you will not because you are afraid.

Dr. Ryan

This is just scurrility, Dillonism.

An Leas-Cheann Comhairle

Deputy P.J. Burke.

Mr. Carroll

Could I make an observation?

An Leas-Cheann Comhairle

What is the observation?

Mr. Carroll

I hope I will not have to beg three minutes from some speaker after six hours of a debate as I recently had to do.

An Leas-Cheann Comhairle

Since the debate on this section started, only one Government Deputy intervened.

Mr. P.J. Burke

It was not my intention to intervene but I felt I had to do so after listening to the leader of the main Opposition Party and his usual dishonest tactics and his failure to discuss this on its merits without dragging the names of the Taoiseach and his family across the floor of the House. It was unworthy conduct, far from gentlemanly conduct. We would like to have listened to a constructive debate, but this was a personal attack, first, on the Minister for Finance and then on foreign correspondents who come here. I am sure if foreign correspondents visited Deputy Dillon, he would also receive them but of course there is no such thing as clean debating in this House with a few Deputies. All they can do is to introduce filth and personalities. That is the leader of the Opposition, the gentleman who is supposed to be Taoiseach one day, by misrepresentation. They are trying it here.

Deputy Dillon was shedding tears for the people and talking about what they are going to suffer because of this turnover tax. What did the people suffer when he was a Minister in the inter-Party Government in 1957, when we had to take over the Government? What did the workers, the poor people, the old age pensioners, trades people and farmers suffer? As far as the farmers were concerned, there was no money for the relief of rates or for grants or loans. We are facing our responsibilities and if we are beaten by the people because of a decision which we have taken in the national interest, we will go down with our colours flying and we will come back again. We are not going to run away from our responsibilities and we have never done so. We put the national interest first. We are not taking away the purchasing power of the people. We are leaving it with them. We are trying to spread the taxes as fairly as possible over every section in order to ensure that the national prosperity will be safe during our time and for posterity.

We have to listen to the double dealings of that gentleman over there. Recently I asked a number of questions about promises which he made at the Fine Gael Ard Fheis. If all his promises were put into operation it would cost approximately £77 millions. To illustrate the dishonesty that is going on, may I point out that he was going to do this without increasing taxation at all, supported of course by the Labour Party. Of course they are not a Labour Party at all. They should move over with Fine Gael.

Mr. P.J. Burke

Deputy Dillon shed tears for the small shopkeeper but he did not cry for them in 1957 when they could get no credit from the banks, when the credit squeeze was on. They could not get a "bob".

Mr. Harte

They did not want it, but they need it now.

Mr. P.J. Burke

Deputy Dillon also cried for the small farmer and shed tears as only a man like him can shed tears with such hypocrisy. But the small farmers could not get any credit from the banks, the Agricultural Credit Corporation had no money for anybody, and there was general despondency amongst the small farmers during his term of office. Today he tells us that we are going to put the small farmers out of business and that we are going to put people off the land. We are a national organisation concerned with every section of the people, irrespective of class or creed, and we want to leave this country better than we found it.

This does not arise on the section.

Mr. Carroll

You will get it now. This has been referred to as a purchase tax. Deputy Sweetman went into the matter very carefully this morning and said it was an additional tax. I am not opposed to taxation but I am certainly opposed to any tax on foodstuffs and I will stick to that, regardless of the consequences. The decision to have a sales tax was a wise decision. A sales tax operates in the United States and Deputy Sweetman gave quotations from the United States and Canada when dealing with the matter earlier and said that it had been increased from three per cent to four per cent.

He pointed out that by virtue of the fact that we have not got the same monetary system as these countries, it would create great difficulty here. My suggestion to the Minister is that there is nothing to stop us adopting the system of tokens which is used in America in the transport undertakings. A person could buy three hundred of these tokens for 21/- which is the equivalent of three dollars. It would only cost a trifle to set up such a system and the housewife would then be able to purchase these tokens to take care of her small expenses. We tried that system in Limerick in 1920 and I am sure it would get rid of all the difficulties for the shopkeepers who may have to bring in an accountant or to employ additional staff. The fact that we have not got the decimal system here should not give the Department of Finance any headache at all.

On the last occasion on which I spoke on this matter, I said that a man with six or seven children can buy a pair of shoes for one child this week and for another child next week, but he cannot stop their appetites. The same amount has to go out every week for food and there is no avoiding it. Why did we have the recent demonstrations in the city of Dublin? We had them because these people were making the only legal protest they could against the increase in food prices. Under this tax, you are going to increase the cost of clothing, food and fuel.

I am not opposed to the raising of taxation. There are many mothers now who decide to purchase a washing machine in order to save labour. Tax that, by all means. Tax bicycles and all the things that are not absolutely necessary. We are Teachtaí Dála; we are messengers to this House from the people and the people's message is that they do not want this tax on food. I have heard no complaint from anybody except about the tax on food.

The Minister has now become aware of the wisdom of introducing PAYE. It now amounts to 4s. 9d. in the £ and I do not think there would be any outcry if that figure were raised by 2½ per cent. I do not think there would be any great outcry if it were increased by 5 per cent.

I do not detain the House very long on these occasions and I have no wish to indulge in the type of debate that is becoming all too common in this House. If the Minister and his experts would consider the suggestions I have made, they would eliminate any necessity for the facetious suggestion by the Tánaiste, a former Minister for Finance, that the manufacturers take a match out of each box to meet this turnover tax. I know that facetiousness is indulged in ad lib in this House but I would point out that this occasion is much too serious for that type of facetiousness.

Deputy Sweetman made a serious contribution to the debate today. He went into the problems involved as a Minister for Finance would do, possibly anticipating that he himself would be in that position in the near future. It is contributions of that description that people want to hear, not this harking back to 1957. Sometimes I wonder if Deputies are not skipping a century and referring to 1847. There is a saying in the west: "We never died a winter yet." Neither did we die in 1957. There are many ways of producing the money needed without taxing foodstuffs and I think the Minister for Finance would do well to listen to the cry of the people in that respect.

Mr. T.F. O'Higgins

I should like to add a few words to what has been said in relation to this tax. I think it is manifest even to the most ardent supporter of Fianna Fáil that this tax is contrary to public opinion.

Mr. Booth

What taxes are not?

Mr. McGilligan

Why not test it?

Mr. T.F. O'Higgins

The Government, in introducing this tax and in going ahead with it, do so in the full knowledge that if by the simple expedient of getting into the car provided for them by the taxpayer, the Taoiseach took a drive to Arus an Uachtaráin and asked the President to dissolve Dáil Éireann tonight, with the dissolution of this Dáil would come the dissolution of the turnover tax, and if Deputy Booth misunderstood what I said earlier, I hope he understands that. It is manifest to all that a Government who ask this Dáil to pass this tax are a Government acting in the teeth of the wishes of the whole of the people outside.

Mr. Booth

Still nonsense.

Irrespective of cost, the people have to suffer for it. You might remember what day this is, what took place on this day. It was the establishment of the right of the people of this country to govern this country. The Parliamentary Secretary said he had got a mandate to govern the country. If the Fianna Fáil Party think they are the masters of the Irish people, they are making a sorry and a sad mistake. "We have a mandate to govern", the Parliamentary Secretary said. What they mean is that if they do not stick together at the bottom of the barrel, that is the end of them. That is what the Parliamentary Secretary meant and that is why the only concern of the Fianna Fáil Party and those who tack themselves on to them now is to make novenas that this debate will finish quickly and that this Dáil will be adjourned, not dissolved. This is a bad tax. Mind you, the Irish people may not at times be vocal, may not at times express clearly what they desire to be done, but they are the last people in the world one should try to cod.

Mr. Meaney

The Deputy's Party won there.

Mr. T.F. O'Higgins

I accuse the Minister for Finance of being too cute by far in introducing the Budget this year. When they wanted to get this money, they were not prepared to do the decent thing—to face up to the bills that had to be met, and cut down accordingly.

At the same time, the Minister for Finance was caught—unguardedly, I have no doubt—saying to the shopkeepers when they went to him on a deputation : "Look, you pass that tax on." There were two voices. The shopkeepers were told : "You pass that tax on to the long-suffering poor people of Ireland: pass it on". At the same time, the Minister for Justice was saying to the people: "We are imposing no taxation on the price of bread or anything else." They were too cute: they were far too cute, but they did not cod the people——

Dr. Ryan

Do not misrepresent.

Mr. T.F. O'Higgins

——neither the shopkeepers nor anyone else. I suggest that one of the things wrong with this tax is that it is not fair and I mean fair from a taxation point of view. It will not be borne by all sections of the people equally. Its impact will be inequitable and it is therefore socially unjust. I should like to explain what I have in mind. I say it will have a different impact on different payers and accountable persons, and so on.

There are many shopkeepers in this country who run two or three lines. They may have a grocery business attached to a bar trade or attached to a drapery business. Many of these —I do not say all of them—particularly the bar cum grocery, will decide —I know they have decided in many places—to carry the grocery items at the same price and to carry the turnover tax in the bar. The customers will not like it. However, if there are two or three publicans in a small village and they all agree to do the same thing, it will be carried on all right. But what will the effect be on the two or three other small grocery shops? They will have no other line. If the bar of soap continues to be sold in the shop that has a licence at 1/4d and, across the way, by reason of the turnover tax, it must be sold at 1/5d, and if other grocery items are increased in that way, the inevitable result will be that the shopkeeper with the single line cannot compete and must close up.

Fianna Fáil have expressed surprise because, up and down the country, vehemently, with determination, all sections of those engaged in the retail trade, even dyed-in-the-wool supporters of Fianna Fáil, have expressed their determination to oppose this tax. One reason is that it is inequitable. Some 25,000 or 30,000 small grocery shops that have no other line will find now, with conditions as bad as they are, that they cannot compete against the other shop immediately beside them which, by reason of the more general kind of trade done there, can carry the grocery items and carry the turnover tax without increasing prices. That is why this tax is unfair. That was part of the thought that went into its formation.

There is no obligation on any shopkeeper to pass on the tax. The only shopkeeper who will pass on the tax is the one who has to do it—the shopkeeper who can find no other way of retaining his trade and meeting his liabilities to the Revenue Commissioners. That is the small, single-line shop and that represents 25,000 or 30,000 tiny little businesses in this country. Maybe they should not be there. I suppose these new masters of the Irish race will say that. Maybe they are some sort of residue from bygone days. Even so, they are there. They are maintaining to some degree a small family or perhaps maintaining in frugal comfort a mother or a father, the rest of whose family have already gone away. These are being pushed out of business by this tax. They cannot compete. That is why this tax is unfair. It is inequitable. It is socially unjust.

That is why, last week, some 10,000 or 15,000 big and small shopkeepers came up here, peacefully, constitutionally, to demonstrate their determination, to express their opposition to this tax. I saw them and I hope Fianna Fáil Deputies saw them. I hope they recognised amongst their numbers many former supporters of Fianna Fáil. That is why the Fianna Fáil Party at the moment have butterflies in the stomach. They know well their organisation has gone to pieces——

Mr. Leneghan

There are tablets for everything except that.

What has Deputy O'Higgins got against a blue shirt?

Mr. T.F. O'Higgins

Nothing whatever. I am proud of the fact that the Blueshirts were in this country. By reason of the fact that they were there, we have a free Irish Parliament now.

Irrespective of what new tax might be proposed by any Government, it would be bound to be criticised. Certainly, if a Government were in a position to ask for the views of any section in relation to any tax initially proposed, there would be a reaction against it. Most people are fundamentally fair and reasonable. If the Government felt they could make a case that the money was needed and if the people felt there had been a careful watch on national expenditure and requirements and that the end result was that a particular sum of money had to be obtained, then fairminded people would begin to examine whether the way in which the money was to be raised was the proper way or not.

I want to apply that to the case now made by the Government for this tax. It would not be in order for me to discuss whether the case made originally in the Budget, that the yield from this tax of £10 million or £12 million is needed, is correct or not. I must assume for the moment it is. I suggest that, if that is so, the fairer way of introducing a broadly-based purchase tax is to tax every article as it is received by the retail trade. If that is done, the loaf of bread, the tin of peas, the small article in the grocery and other lines will go into the shop at precisely the same price.

Mr. N. Lemass

And be dearer to the public?

Mr. T.F. O'Higgins

That is just the point. Deputy Lemass makes the case for me. That is part of the duplicity behind your tax. You speak with two tongues. You say you are not taxing and then you say you are. With a tax imposed in that way, it follows that the article will be dearer. There is no doubt about it. The result will be the same in either case.

Mr. Lenihan

It will be much dearer to the consumer.

Mr. T.F. O'Higgins

The Parliamentary Secretary wants to say something? If the taxation were imposed at the source in that way, the people would know. There would be no concealment. You would know, to the extent of whatever the percentage might be, how much an article had advanced in price. It might not be popular, but there would be no concealment whatever. As far as the retail trade are concerned, they would carry on. Everybody would be equal. The ordinary rules of competition would apply.

What is happening now is that the same result is going to be achieved. All these things are to go up in price—some of them, in the grocery line particularly, a great deal more than 2½ per cent, because the percentage there at present is so slim that this imposition is bound to have a disastrous result on food prices. At the same time as that is happening, Government Deputies will be going around their constituencies saying: "We are not taxing anything." That is double dealing as well as double speaking. It is dishonest and cowardly, but the very pleasing thing about it is that it fools no one. It is because it fools no one that the Taoiseach is afraid to take either a midday or a midnight journey to the Phoenix Park.

Mr. Leneghan

He is not afraid of you.

Mr. T.F. O'Higgins

I had occasion previously, Sir, to refer to the noise on my right. It is disorderly. I suggest you make efforts to deal with that Deputy. His contributions to this House have been of uniform standard—the bottom of the barrel.

Mr. Lenihan

Were you listening to Deputy Dillon scraping the bottom of the barrel earlier on?

Mr. N. Lemass

The very bottom.

Mr. T.F. O'Higgins

It is easy to sympathise with Fianna Fáil Deputies at present. This proposal is contrary to the views of the people. It is understandable it should be so. The tax itself will have an unfair impact. If it had to be imposed, it could have been imposed in a different and fairer way. Whatever the position may be, I have little doubt that, if this tax is operated, it will cause considerable dislocation of our economy and will have a very serious impact on living costs. For that reason, I read with interest, and indeed with some admiration, what I thought was the noble stand being taken by a Deputy who tabled an amendment dealing with the impact of this tax on an essential article of food, namely, the bread of the poor.

Mr. Leneghan

Batch bread, which only ducks eat.

Mr. T.F. O'Higgins

Certainly, that action seems to pinpoint in a very definite way the clear impact of this tax. I do not see that amendment on the Order Paper now, but it is worth referring to the fact that the Deputy who tabled it will have his opportunity today, not merely of saying he is tabling an amendment of that kind and getting due publicity for it, but of having the courage of his convictions and of walking into the Lobbies and saving the bread of the poor of this city from being increased in price.

Parliamentary Secretary to the Minister for Lands (Mr. Lenihan)

I feel it should be reiterated here that we got from the Irish people last October 12 months a mandate to govern this country. Implicit in that is the adoption of whatever measures of taxation or otherwise we deem essential from time to time to carry on the programme of expansion which was the main platform in our election campaign in 1961. That programme of expansion has achieved a considerable degree of success and the second Programme of Economic Expansion is now in course of preparation designed to set out the target of national development over the next few years up to 1970 with an overall aim of securing 50 per cent rise in national income by 1970. In aiming at that target, any Government facing up to their responsibility must adopt the taxation measures considered necessary in a particular situation to sustain the economic programme. Faced with that situation, in the recent Budget, the Minister for Finance, among other taxes, decided on this measure in the section we are discussing, the turnover tax designed to yield £3 million or £4 million in the current year and £11 million in a full year.

I feel that a logical way to approach any examination of the section we are discussing is to examine possible alternatives to this tax. Are Fine Gael in favour of increased income taxation in substitution for the turnover tax? Are they in favour of increasing income tax by 2/- or 3/- in the £? Are they in favour of increasing by 1/- or 2/traditional items of taxation such as beer, cigarettes, spirits or petrol? They have not faced up to the problem in this debate that at this juncture it is necessary, irrespective of who is in Government, to adopt a more broadly-based tax system rather than continue depending on forms of taxation that have reached the limit.

If income tax were pushed any further, it would be a depressing element in our community and the limited forms of indirect taxation have also reached their limit of taxable capacity. Therefore, any responsible Minister for Finance seeking necessary additional revenue to sustain the economic programme must look around for a more broadly-based system of taxation such as that known as sales tax or purchase or turnover tax. It is in existence in most countries and is accepted as a tax that is not psychologically depressive. In our case, it stands at the low rate of 6d. in the £ or 2½ per cent over a whole range of commodities.

Mr. M.J. O'Higgins

To start with.

Mr. Lenihan

We decided on that form of turnover tax because of the low incidence of taxation involved. There are other forms of such a tax that might have been adopted but any close examination of them reveals that you limit your tax to selected articles and you are driven to the conclusion that the incidence of a tax on selected commodities would be too high and defeat its purpose. The turnover tax was selected as the least depressing and most broadly-based and therefore equitable in our circumstances and designed to yield the maximum revenue.

Fine Gael some months ago began their opposition to the Budget proposals by opposing absolutely any form of increased taxation, a typical Fine Gael starting point. As an inherently conservative Party, their first cry was: "Cut down Government expenditure!" Deputy M.J. O'Higgins on the Second Stage and Deputy T.F. O'Higgins just now implied that the Government should have gone through various items of Government expenditure and pruned them.

Mr. M.J. O'Higgins

Would that be a crime?

Mr. Lenihan

On the latest statement issued by RGDATA, their only quarrel now is in regard to the form of collection. There is public acceptance, even by a naturally vested interest organisation like RGDATA, of the fact that increased taxation of some kind is necessary in order to sustain the Government programme of economic expansion and that if there is to be increased taxation it should be of a broadly-based sales tax nature. Even Deputy T.F. O'Higgins comes into the House and for the first time in this debate a Fine Gael speaker accepts the fact that increased taxation is necessary and he also, following the RGDATA lead, makes the point that the form of collection is the thing that is wrong. It is now acknowledged that increased taxation is necessary because any retrenchment of Government expenditure would cause a depression and a slump. There is universal acceptance by Fine Gael and everybody in the country that this tax proposal is necessary as being the least depressive type of tax and now the only quarrel is in regard to the form of collection with which I propose to deal.

We have decided to collect the tax at the retail outlet level. RGDATA suggests it should be collected at manufacturer level. If the tax is imposed at retail level, there can only be an increase of 2½ per cent because that is the last point of sale but if this tax is put on at manufacturer level, the manufacturer will add his percentage profit, the wholesaler will add his percentage profit and so will the retailer. To anyone who understands ordinary mathematics that will mean not 2½ per cent but an increase of perhaps eight per cent or ten per cent.

Mr. McLaughlin

On a point of order, may I tell the Parliamentary Secretary we are still receiving telegrams——

An Ceann Comhairle

That is not a point of order.

Mr. Lenihan

I should like to see forestry development increased in County Leitrim out of the increased revenue.

Mr. A. Barry

What about the sale of fur coats?

Mr. Lenihan

It is the duty of the Government to face up to their responsibilities. Fine Gael throughout this debate have not faced up to their responsibilities. It is all very well for Deputy Corish to say that it is not the duty of an Opposition to present an alternative policy.

Mr. Corish

I was quoting the Taoiseach.

(Interruptions.)

Mr. Lenihan

I am not concerned with who said it. The issue today is that the Fine Gael Party, through the declared pronouncements of its Leader, have offered themselves to the Irish people as an alternative Government, not with Labour any more. Incidentally that is a very good thing for Labour. Fine Gael have offered themselves as an alternative Government, and again we have Deputy O'Higgins and Deputy Dillon emphasising the fact that Fine Gael now regard themselves as an alternative Government in this House and in the country. It is all very well for Fine Gael as long as they are resigned to Opposition to be indifferent but when they now have the ambition once again to participate in the Government councils of this country, they will have to do better as far as the people are concerned. They will have to present their alternatives to this and every other section of this Finance Bill, alternatives that can be seen, examined, assessed and adopted by the people.

That has not been done by Fine Gael. They have not faced up to their responsibilities in that respect. They have no policy except the conservative policy of retrenchment and cutting down in regard to Government expenditure. As I said on the Second Reading of this Bill, the Labour Party are thinking much the same way as ourselves in acknowledging that Government expenditure is necessary and further expenditure is necessary in the fields of social and economic development. They have not gone the whole way with us in facing up to their responsibilities which would involve a declaration of a policy such as that of this Government, that if such an expansion is to be brought about by Government investment, the necessary tax measures must be taken to sustain that Government action and to sustain that expansion.

I believe that will be the issue in Irish politics in the future: whether people believe in the future of the country, whether they believe that in our circumstances it is necessary for the Government to take a decided lead in ensuring economic growth, and, above all else, whether they believe that in order to do that, we need to devise a taxation system to ensure the revenue necessary for such development. The people who believe that way are primarily in this Party and, to a certain extent, in the Labour Party. They are not in the Fine Gael Party and Fine Gael are now presenting to the public an image of a Party concerned only with obstructive criticism and opportunist expediency.

Mr. Tully

Despite the rather left-handed compliments paid to the Labour Party by the Parliamentary Secretary to the Minister for Lands, I should like to explain that we in the Labour Party still think this Bill ill-conceived. As a matter of fact, it appears to have been pretty badly planned. The evidence of that is that, following the Second Reading debate, the Minister found it necessary to bring in a number of amendments. It is not unusual, as we all know, to find amendments being brought in, but it is rather unusual to find amendments of the sort the Minister found it necessary to bring in.

I refer in particular to the amendment which was accepted by the House to-day, the amendment in relation to the tax on sports. It was proposed to tax the GAA, the Rugby clubs, the soccer clubs, and so on, of this country. The Minister used as an excuse for his amendment today the fact that he found at the last minute that, as they would be taxing only the big matches in Croke Park, Dalymount Park, etc., the amount of tax collected would not be big enough to bother about—a pretty good excuse. But surely the Minister in introducing the Bill must have known from the very start what in fact he was taxing; he must have known what the position was. Or is it a fact that he hoped he would get away with it without anybody noticing until the Bill became law, and then there would be nothing anyone could do about it except grumble?

The executives of these bodies obviously made their presence in the Minister's office felt because, following the reference here on Second Reading to this particular aspect of the proposed tax, pressure was brought to bear to have the position remedied. I am very glad these bodies made themselves felt because, God knows, we are taxing a great many things but if we start taxing sport, and the national pastimes in particular, we will be sinking to a pretty low level.

One extraordinary thing is that during the Second Reading debate and also in today's debate, with the exception of Deputy Seán Flanagan who made quite a good contribution, as he usually does, the only person who contributed was Deputy P. J. Burke in one of his rare visits to this House. He proceeded to throw mud all round, and particularly at the Labour Party. Deputy Burke should remember that there are people in this House who have been attending the debates and taking part in them day in and day out. Their concern is to try to improve legislation and the cheap sneers by certain people, particularly by way of interruption, are just not good enough. If Deputies get a rock back, as Deputy Burke did today, they should be men enough to take it and not get annoyed about it and become personal.

Mr. Carter

Deputy Burke is in the House every day.

Mr. Tully

Deputy Sweetman referred today to Caldor and said that he did not quite agree with the proposals he made because of the fact that they seemed to be all right on paper until one started looking at them a little closer. We must remember that Caldor suggested that this tax should replace other taxes not be additional to them. That is an important point because the proposed turnover tax does not, in fact, replace other taxes; it is in addition to them.

The Parliamentary Secretary to the Minister for Lands is quite correct when he says that the Labour Party are prepared at all times to stand up to the fact that, if we want something, we must pay for it; and, if we must pay for it, the money must come from some source, and the only point on which we differ is as to where the money should come from.

I was amused to hear the suggestion made that since RGDATA seemed satisfied with the way the money could be collected, everything in the garden was lovely and we should not bother any longer about the tax. I am not quite sure what Deputy T.F. O'Higgins said, possibly because of the interruptions, but I thought he was putting across a point of view he did not really hold; but the point of view I got was that he also felt it would not be so bad if the turnover tax were put on at wholesale level. Now whether RGDATA believe that, or Fine Gael believe it, I want to make one thing very clear; we in the Labour Party will not agree to a turnover tax at any level when that tax affects food and clothing.

Deputies

Hear, hear.

Mr. Tully

I want to make that very clear because the suggestion seems to be that if certain small, or not so small, pressure groups can be satisfied, then the members of this House should be satisfied. The issue cannot be dismissed as lightly as that. The tax in itself is bad. The idea of the tax is bad. As someone said earlier today, 2½ per cent this year: what will it be next year and the year after? The whole principle is wrong. While it is not our job, as Deputy Corish said, to say where the money is to be found, most certainly it should not be found by way of a turnover tax.

Another amusing thing occurred here today, particularly during Question Time and in the earlier part of the debate. When questions were being answered, some Ministers seemed to be prepared to say that we are having a wonderful upsurge in the economy of the country and productivity has nearly got out of bounds. In the next breath, they were explaining why it is necessary to have a White Paper on a wages standstill or wage pause. One or other is wrong. Either the economy is booming and the workers are entitled to a share in that booming economy, or things are going wrong and the Ministers in charge of the particular Departments should be prepared to come into this House and say where the economy is going wrong, or else resign. We have had far too much of this cod, which reached its zenith when the Parliamentary Secretary to the Minister for Lands proceeded to say what we expected before 1970.

Is it not a fact that at the present time wages are tied down in the Government service? Is it not a fact that generally throughout the country wages are tied down because of instructions given that in no circumstances are wages to be increased or hours of work improved where that reduction would have an effect on wages? We are told that whether the cost of living goes up or down, this situation must continue. The Minister for Transport and Power said today that it was quite all right; if you had a tribunal you could go to the tribunal, make your case and get an award, which would be a fairly good award. That was grand. There was no objection by the Government to that being done. But dare the State or semi-State body pay that award until the Government said they could do so? Is it not all like a comic opera ? You can go to a certain stage and then, when the question of £ s. d. comes into the picture, these bodies must hold their hand until the Great White Chief waves his wand and says: "You can go ahead."

I want to make this very clear, and for two reasons; no matter what happens, as we expect there will be a further increase in wages if this turnover tax comes into operation, the Labour Party and the trade union movement here will get the workers' share out of it. Have no doubt about that. That will be done, whether or not the Government consider they may have certain trade union officials in their pockets.

People talk here about 6d. in the £. A great many people have been talking as if the only way in which people buy goods is in £s worth. How many of our people buy not in £s but in sixpences, shillings and two shillings ? I do not think the Independent Deputy's suggestion of having farthings or half-farthings, or token coins, or anything else, will solve the problem. Poor old people, many of whom are depending on non-contributory old age pensions of 32/6 per week, some of them because the Minister for Social Welfare has put into a Bill a clause which was never before included in a Bill, are not going to be carrying around little bags under their arms full of small coins so that they will not be diddled when they go in to buy something in a shop.

It brings it down to the level of the Tánaiste when he suggested that the tax could easily be worked by taking one match from a box, that the shopkeeper could get a clean box and put the extra matches into that box and sell it and in that way the turnover tax would be collected. It is that type of thinking that has produced the turnover tax, which is supporting it and which will put the people into very sore straits if they do not have second thoughts pretty quickly.

The Parliamentary Secretary said it was a tax that was accepted. It is a far cry from the proposal he made before the Bill was introduced when he said that he felt sure that the tax could only be on expensive cars, fur coats, and jewellery. Nobody would object to a tax being put on those commodities but when we start to talk about taxing such things as batch bread, butter, margarine and all the small things necessary to life and then say there is nothing wrong with that and that the money must be found, it is a very different matter.

I was amused at one of the arguments advanced by the Parliamentary Secretary. Usually he is a clear speaker and follows his arguments pretty well to the end but sometime I must ask him how he works it out that if something is bought at wholesale level at £1 and is then sent to the retailer who adds his profit to it and it is then sold with the 2½ per cent tax added to it, it will cost less than if the 2½ per cent had been added at the wholesale level.

Mr. Cunningham

That is elementary mathematics.

Mr. Tully

We would want to be indoctrinated with the Fianna Fail system of mathematics before we could understand that. Fortunately, that has not yet happened. If you buy something from a wholesaler at £1 and the retailer adds 5/- and then adds the 2½ per cent tax to the 25/-, it is going to cost the consumer more than the 2½ per cent on the £.

Mr. McGilligan

Surely that is elementary.

(Interruptions.

Mr. Tully

If the Taoiseach or the Fianna Fáil Whip will give permission to some of these Fianna Fáil Deputies to explain this, perhaps they will do so later on.

Mr. Treacy

That suggestion is an elaboration of the matchbox trick.

Mr. Tully

It is. One other point which should be considered carefully is what is likely to happen in regard to prices. We heard a lot about RGDATA and I appreciate that they are going to have a certain amount of trouble. They seem to be satisfied that they can get out of it, but I am not satisfied that the small trader will get out of it, even with the new facilities which the Minister is giving him. I should like to know in what way the Minister proposes to arrange the collection of this tax so that there will not be overcharging. The Minister is on record as having said that it did not matter what happens, the traders were entitled to collect the extra amount, and he did not care how they collected it. In the Irish Press of 29th May, 1963, he is reported, in a statement issued by the Government Information Bureau, as having said that there would be no obligation on traders to bear any portion of the turnover tax and that they would be at liberty to pass it on to the consumer by adjusting prices or quantities.

Some years ago, when the inter-Party Government were in power, the Opposition raised an outcry and accused the then Minister for Industry and Commerce, Deputy Norton, of reducing the size of the loaf. Fianna Fail claimed it was a shocking thing to do and that anybody who did it was not entitled to be in public life. The truth is that the loaf was not reduced but now apparently it is quite a respectable thing to do because the Minister admitted this evening that his officials had been meeting manufacturing bodies with the idea of arranging adjustments in weights and sizes. It appears that the bar of chocolate can be reduced by a little bit and that that will take care of the 2½ per cent. I have no doubt that the marker for the icecream will also be changed but you will have trouble with the lollipops and you will be in trouble with fruit.

Deputy T.F. O'Higgins referred to a trader who runs a public house and a shop and said that he was going to transfer all the cost to the public house. That may be so, but I think the people who would be going to the public house would not do so for long because they would find another premises where the prices were not increased. Finally, as far as the Labour Party are concerned, we are opposing the turnover tax on the principle that it is wrong and in no circumstances, whether it be at retail, wholesale or other level, will we agree to support a tax on food or clothing or the necessaries of life.

Dr. Browne

We have already dealt in some detail with our objections to this tax. The glib self-assurance of the Parliamentary Secretary, Deputy Lenihan, on this whole matter of tax is disturbing. He appears to assume that there has been some easing of tension with regard to RGDATA and that everything now is all right and that they will have little to worry about.

Our objection to the tax is based on three points. The first is that it is a tax which accentuates the unjust difference of taxation on the general public, as opposed to a minority of wealthy persons, by increasing indirect taxation. The second objection is its long-term implications. Those probably will have the most serious results of all. There are also the implications that the Government have come asking for an unprecedented sum of money, £11 million or £12 million, in the form of taxation. That has the clear implication that both organised industry, the wealth-creating potential of industry, has failed on the one hand, and the wealth-creating potential of agriculture, on the other hand, has also failed. The result is that the Government are faced with this dilemma, this crisis in the country's economic situation.

The position of the Minister is merely that of an accountant who is trying to make both ends meet in a bankrupt situation and he has introduced this particularly unjust and dangerous tax because, I think, there is nothing else left for him to do. This is a measure of the failure of the Government's actions over the years.

Because of that, they are forced to take this politically very unpopular decision, this politically very dangerous decision. It is a direct result of their failure over the years to organise industry and agriculture so that enough money would be created that it would be possible to leave taxation as it is or even reduce it, while, at the same time, increasing social benefits as they say they are anxious to do.

The Parliamentary Secretary to the Minister for Lands is seriously mistaken if he thinks that we are facing a time of easement. When the Budget was announced by the Minister for Finance, I was astonished by the Press reaction at that time. It is evident also that the Parliamentary Secretary and the members of the Government were astonished and delighted by the tone of the headlines of the time, by the announcement that there was to be no increase in taxation, that cigarettes and beer had escaped. The general feeling among them then was that they had got away with it. When I was speaking on the Budget, I pointed out that there was one paper, The Kerryman, that came out in the strongest critical terms of the imposition of this tax and announced its full implications to the public. I said then that I believed it was only a matter of time before the national Press began to understand the full implications of the tax and that then there would be a tremendous storm of protest which would quite likely drive the Government out of office.

Possibly the Parliamentary Secretary to the Minister for Lands is right in thinking that there is going to be some easement of the situation but I think he is quite wrong if he underestimates the situation by thinking that this is the end of the story as far as the turnover tax is concerned. He says that the present opposition to the tax is largely organised by RGDATA but it would be wrong to assume that, because that is likely to be satisfied, the public are also likely to be satisfied. The fact is that the public have not yet felt the tax and will not feel it fully until early in the new year. It is then that the Government will face, if still in office, their greatest crisis and, what is more important, the country will find itself in its most serious economic condition.

This tax is being introduced as a crisis measure at a time when all the indicators put out by the Government went to show that we were operating in conditions of economic stability. We have seen the report of the Central Bank which makes very disturbing reading. It shows a deficit on our external account of nearly £13½ million in 1962. It shows a falling off in exports. It shows a fall in the increase in the volume of output to a mere 2½ per cent. It shows that the volume of agricultural production is unchanged and the whole picture is one which is particularly disturbing. They make the point that this position of falling exports and stagnation in agriculture, this failure to develop our economy at the rate at which it should be developed, happens at a time when the terms of trade are in our favour.

The Government faced a period in which import prices remained stable and a period in which export prices increased by three per cent. If ever they were to make a success of this system in which they appear to believe, this system of private enterprise and capitalism, surely it was in the past few years and particularly since the Taoiseach came into office. The Minister for Finance now demands an extra £12 million which he knows is practically political suicide for himself and which is likely to lead to the fragmentation of the great political organisation which Fianna Fáil once represented. Surely he would not have done this if the economy of the country were not in a dangerously serious position. That situation has arisen at a time when the economic potentialities were at their very best.

This is the situation in which the Minister now takes this step, the end result of which will be that referred to by Deputy Tully a few moments ago, a legitimate demand, which cannot be put aside, for wage and salary increases and those will be substantial wage and salary increases. There can be no doubt about that. There may be some compliant trade union leaders but there will be a number of them who will understand their responsibility to the workers of all sections and they must insist that if the Government fail in their social and economic policies, then the scapegoats cannot be the people concerned, whether the white-collar worker or the manual labourer. In this instance, the trade union leaders must insist, as I am sure they will insist, that there must be substantial wage and salary increases in order to compensate for the substantial increase in the cost of living which must follow this tax, encompassing every single commodity.

One of the points made by a number of Government speakers was in relation to the sacrosanctity of tobacco, beer, petrol—that they could not be touched any more. They ignore, of course, the fact that they are being touched by this tax. We have seen already that the civil servants have submitted their legitimate wage and salary demands based on a cost of living increase of seven or eight points. They have decided they will wait until November, or whenever they are satisfied they have determined the true increase in the cost of living arising from the imposition of this turnover tax. They are to put in a wage claim which will involve something between £1 million and £2 million, a very substantial wage demand for such a relatively tiny sector of the wage and salary earning classes.

Do the Government fully understand the very serious implications of the inevitable trend which must follow this decision ? Do they appreciate that the implications of these increases in wages and salaries can mean only one thing ? The sad thing is that, there being no price controls, our prices will go up in order to meet the new wage and salary demands, and there will be inflation when the workers realise how little their income is worth. However, we will have something far worse. We will have the effects of the progressive elimination of tariffs, the reduction of protection in various directions, in quota and tariff restrictions, and the opening of our country, of our industries and our agriculture, to outside competition from industries very much better organised than ours, industries which we cannot compete against even now when all the economic indicators are in our favour.

Up to now, our industrialists could operate in a community in which, as the Report of the Central Bank points out, labour costs were low as compared with European labour costs, where fringe benefits were low compared with those in Europe, where payments were high for those fringe benefits compared with the payments in Europe, where taxes were relatively low. We have had that type of social fabric, in many ways comparable with Japan of which it was said they could undercut easily because of their cheap labour. Our industrialists were operating with cheap Irish labour yet we were never able to make a serious lodgment in any of the markets abroad.

Even with that scandalous advantage of being able to exploit the worker, we failed to develop export opportunities. To fail to do so with all those facilities is, of course, the most serious indictment of Irish industrialists, of their failure to organise our industry so that the unfortunate workers could maximise productivity by means of proper mechanisation. One after another report indicts the industrialists for having failed the workers. The result of that failure is that the worker must now again pay in this turnover tax and in nine months' time, when he gets his wage or salary increased, he will find that any chance he might have had of benefiting from our industries breaking into the European markets will have been completely eliminated.

The Government will then have no alternative but to come to the Dáil and tell us the same stories about agriculture stagnating, about industrial output not increasing, about exports not expanding sufficiently. The result is that they must ask the consumer for more money by way of heavier and heavier taxation. With emigration at its present level, of course, we are taxing a continually reducing people who can less and less afford to pay those taxes. It all goes back to the basic failure, to which none of the Government or Opposition speakers has referred at all, to organise our society so that it would be possible for us, by increasing the inter-use of land, labour and capital, so to increase the national income and national product that we would not need these appalling penal taxes.

I have some sympathy for the Minister coming in here demanding this money and taking all the opprobrium and appearing to shoulder all the responsibility for the total failure of his colleagues over the past 30 years or so. He is asking a shrinking population to provide greater and greater taxes, without the compensation of any significant advance in social services. The basic failure lies, of course, in the fact that you cannot operate private enterprise capitalism successfully to achieve your objectives.

It is no good for the Taoiseach to say he is going left. He may be with his heart, giving slightly better benefits to the aged and the sick, but he simply cannot do it and try, at the same time, to operate private enterprise capitalism. The fact is that private enterprise capitalism has achieved its objective in Ireland; it has made a lot of money for a few people; it has given prosperity to a few families in this country. That is what it was intended to do. In the United States, they have much the same problem as we have: they have this five per cent unemployment rate, with 30 million living on the edge of poverty, because President Kennedy, a man with a great heart who would like to change those conditions, is unable to do so because his society is organised on the same lines as ours——

Mr. Leneghan

Castro can do that.

Dr. Browne

——and I believe that most of the politicians here would probably like to do it for our own people. We have had the position here in Ireland for many years that we have had surplus labour. At present we have 40,000 or 50,000 unemployed. We have had anything up to 80,000 or 90,000 of our people unemployed. This is money used in a negative sense. It is money lost in paying out unemployment assistance and unemployment benefit. There is no return to the community for it. I am not opposed to that but, from the point of view of creating wealth for the nation, it is completely negative. There is also the fact that these people could be positive producers. Instead, they are a drain on our society.

In addition, the best part of one million people emigrated one time or another. They are more people who could be creating wealth for our society and who have not been given the opportunity of doing so because the organisation of industry requires only a certain number of people, quite a relatively small number of people, in order to create a lot of wealth for a family, one family, whoever it may be —Guinness, Jacobs, or Rowntrees or any of these others. The result is that we have not been able to provide employment and we must find whatever money we require for better social services from this tiny salaried and wage earning group—and this burden is increasing each year as time goes on.

There is an alternative. I can understand a certain amount of the exasperation of the Government in facing the criticism of the Opposition. They say they want more benefits and, on the other hand, they do not want to pay more. However, that is not the equation. It is possible to find the money otherwise than through this system of taxation.

Take countries such as Denmark, Switzerland, New Zealand, Sweden, Norway—most of these countries have found it possible to organise what are basically agricultural communities and to bring a maximum measure of social justice to their population. I believe it is regrettable that this tax will be introduced. If only the Minister understood and if the Opposition understood that the failure has been the failure, not of a profit and loss account on the part of the Government, but a basic failure in regard to industry.

Industry has been organised in a particular way. It has produced a lot of money for a few people but it has not produced it for the mass and it can produce it for the mass only when the mass own and control that industry, because then they have a vested interest in seeing that the total amount of wealth required for themselves—for better health services, for the care of old people, for better educational services for their children and so on—will be created. The minority of wealthy people who own and control newspapers here and dominate political life here are not concerned for the mass but for their own individual family and the small group around them. That is the type of society we have created here for the past 40 years: there should be no misunderstanding about that.

The serious decision for the time being is the 2½ per cent turnover tax but the very much more serious decision is the one which will come in from nine to 18 months' time when, I believe, there must be very considerable, industrial unrest that will, no doubt, be solved as a result of struggles of one kind or another that should not have to take place by the unfortunate worker—strike action, labour difficulty, conflicts, of one kind or another. However, without a doubt, they must come and after those must come the increase in prices which will make it quite impossible for us to earn the wealth to have the things the Parliamentary Secretary talked about—better educational facilities, health, social welfare, and so on.

I believe that is the great failure epitomised by the decision to introduce this tax. For the Minister, it is an insoluble dilemma, using his present economic terms of reference. It is a question of trying to do certain things with too limited resources and they are too limited because of these people in a particular firm or organisation in industry and agriculture. Until the Minister or somebody in Opposition decides to make the fundamental change referred to years ago by Mr. de Valera, the former Taoiseach, going outside the existing system, we shall not solve our economic difficulty.

It is the old story of the loaves and fishes, of too few loaves and fishes to feed too many. In this case we lack the Divine power to increase them and to make it possible to look after our people properly.

Mr. McGilligan

I want to speak about four main points in connection with this legislation. A variety of hares have been started which it would be very pleasant to chase but it would take too long and there will be other opportunities to deal with these rather irrelevant matters. I am not concerned at the moment with any discussion on whether this tax should have been imposed at retail or wholesale level. When reporting, the Income Taxation Commission said the Revenue Commissioners considered that a tax at retail level was the ideal one, and they said they considered it very difficult to administer. If any extra cost arises from paying it at that level, no doubt it will be on the consumer as well as the 2½ per cent.

Also, I do not feel inclined now to argue as to whether there is some expansion which requires new financing. I should like to know where the new expansion is. The Government secured office by a promise of 100,000 new jobs in five years. Instead, there are about 50,000 fewer people employed in this country than there were when they took over. If that is what is called expansion, then I think that financing of that type of manoeuvre or performance would hardly be worth while considering.

The significant fact about this year's Finance Bill is that the Government want to extract from the people in the year that we are in £17 million more than they got from them last year. There has been a lot of talk about whether Deputy Colley said this tax was flexible or so on. It does not matter whether or not he said it. I thought he, too, was merely echoing what he had been properly taught in the Party room.

This tax has been boosted by Fianna Fáil spokesmen as being a new system and they are celebrating, while we are mourning, a new system of taxation. We were told in his Budget speech by the Minister for Finance that the good old reliables — food, drink, oil, and income tax — had reached saturation point and that, as more revenue was required, we had to look for a new system of taxation.

In this Budget we are dealing with a revolution in regard to the system of taxation. We are now going to tax the necessaries of life. I remember, years ago, on another Fianna Fáil Budget, when we objected that the necessaries of life were being taxed, one of the Ministers of that Government, now deceased, said: "What is left to us to tax except the necessaries of life." That is what we were reduced to, according to him, and that is what we are reduced to now.

This is a new system of taxation. The others, according to the Minister, in his Financial Statement, are not dependable and, without a more dependable system of revenue, it would be impossible to proceed with any programme of tax reform — and the new system is the turnover tax. That turnover tax is not likely to reach the stage of diminishing returns quickly. People must eat; people will drink; people have to cloth themselves; people have to warm their houses. So long as these things are necessary or nearly necessary, then if an excessive turnover tax hits these things, the period of diminishing returns is far off.

The calculation has been made and accepted that the turnover tax in a full year will bring in £11 million. Of that, £7 million is to come from food, clothing and fuel. A sum of £4 million might come from items not nearly so necessary as food, clothing and fuel. Why not face it and admit it? We are now taxing food, the food people must eat to sustain life. A calculation has been made by a trade union economist who has often spoken on economic matters with a great deal of certainty and figures backed up by results afterwards. He has calculated that the greater part of that £7 million will come from people who are either State-supported or on very low incomes or else middle-class people. A sum of £7 million out of that £11 million is to come from food, fuel and clothes. That is the new system. If the Minister for Finance finds he wants more money, he still has an increase possible in the turnover tax. If it is kept on food, fuel and clothes, he can get his increase, because the people cannot avoid buying these things. Therefore, the period of diminishing returns is far off and this is what the Minister for Finance desires—a dependable tax.

That is the situation. This is the new system. We are leaving the old reliables of beer, spirits, petrol and income tax. We are coming now to something we can depend on for increases in the future. We start at 2½ per cent. What it can go to can best be left to the imagination—what the Department of Finance have in store if they are allowed to manage or mismanage things in the future.

I have been asked to say what is the alternative. I do not think there is an alternative required. I do not know for what this money is wanted. I turn to the Explanatory Table issued with the Budget and I find the revenue the Minister is looking for is to come as follows: £2 million from revenue balances; £3 million from corporation profit tax, which means this retrospective tax adding on 50 per cent to the previous level; income tax and surtax, rents and anti-evasion measures, £1 million; turnover tax, £3½ million. That is all that is required this year. It will be greater in a full year.

I turn now to the other side. We are giving away £1.7 million by way of subvention to Agriculture; £1.9 million for Social Welfare and the £12 million for public service pensions. We can call the reliefs to Social Welfare and payments for public service pensions, £2 million. A question was put in the House asking why not remit the turnover tax on food, fuel and clothes. The Minister's answer was that would rob him of £7 million of the tax, but it does mean he can get £4 million from the turnover tax on articles not food, fuel or clothes. He has £3 million from corporation profits tax. That makes £7 million. That would more than pay for the Social Services money. Maybe there is £500,000 in it.

Mr. Colley

I do not think the Deputy is allowing for the fact that the figure he has taken for Social Welfare is only for the remainder of this year.

Mr. McGilligan

Multiply £2 million by three. You get £6 million. You can get £3 million from corporation profits tax and £4 million from the turnover tax without taxing food, fuel and clothes. You have £1 million to spare.

Mr. Colley

In a full year?

Mr. McGilligan

In a full year. That is my calculation. Work it out. We are talking about elementary mathematics. That is the most elementary mathematics I have come across in this Budget. I do not know for what this money is required. We are dealing with this as if everybody had passed both sets of calculations. I do not believe in that at all. In other years, the Minister allowed quite a big amount of money in respect of over-estimation errors. It is astonishing that in the highest Budget he has ever brought in he allows this year only £2 million. It could easily be £4 million. In my time as Minister for Finance, I often challenged the Departments to spend the money they put up to me at the beginning of the year as what was required to meet their operations during the year. They never spent the money. Go through the reports of the Revenue Commissioners. You will find one item recurring again and again: "Carried over balances." This year, the modest sum of only £2 million is allowed for errors of estimation. I believe that will prove to be illusory and that it will be £4 million or £5 million. It must be, in a Budget of this type.

It is supposed to be necessary, when objecting to a tax on food, to suggest some other tax. I remember being faced with that challenge in 1947-48, when all my colleagues, together with those who belonged to Labour and Clann na Poblachta, campaigned in the country against the taxes put on by the Supplementary Budget of 1947 —taxes on beer, spirits, entertainments and oil. We said they were not required. We said we would find something else to tax instead of them. We were not a fortnight in office until we decided to carry out our promises with regard to the reduction of the taxes on these four items.

Mr. N. Lemass

I can deal with intelligent interruptions, but when I get mumbled incoherencies from the back benches, I do not know what to answer. We got rid of these taxes by emergency orders. We had to face up to meeting what was a deficit in the Budget. The present Taoiseach, then Minister for Industry and Commerce, said the taxes we remitted were necessary in order to provide subsidies. He said we were faced with the dilemma of either reducing the subsidies or finding new methods of taxation. Speaking on 9th March at columns 228 and 229 of the Official Report he said that there were only four dependable sources of revenue, of which one was tobacco, another beer and spirits and another income tax. He said that presumably, having reduced certain taxes on entertainment, beer and spirits, we were not going to be cynical enough within a month to put them back again. His calculation was that we would have to turn to income tax.

At column 229 he said:—

The yield of income tax is roughly about £1 million for every 6d. in the £ tax and to replace the £4 million or £5 million which the supplementary duties upon beer, tobacco and cinema seats would reap in a full year, would mean an increase in the standard rate of income tax by about 2/6d. in the £1.

That is what we were faced with. We had taken off taxes on beer and spirits and entertainment and all the then Minister for Industry and Commerce, now Taoiseach, could say was that we would have to put 2/6d. on income tax.

He had not to wait very long to see the falsification of his hopes. In my first Budget, we allowed for a loss of £7 million through the relief of taxes on beer and tobacco. We allowed for a loss of £1 million by the remission of 6d. in income tax. We allowed for other reliefs that were minor but amounted to £.5 million. That was £8.5 million. In addition, we increased old age pensions at a cost to the State of £2.5 million. We gave subventions to the Garda, the Army, the teachers and others, costing £1.8 million. We gave an extra tea ration which we had to subsidise at a cost of £1.5 million. Those items add up to £4.8 million. Adding that to the revenue we had lost by remission of taxes, the whole thing amounted to £13.5 million. We did not put on one extra tax. We remitted more than £13.5 million and there was no extra taxation. The reason was that the Fianna Fáil Government had gone mad, as I think they have gone mad this year also. They exaggerated their likely expenditure and then looked around for a method of financing expenditure and put on taxes in a Supplementary Budget on beer and spirits and so on.

That was the calculation made to us, that it would take 2/6d. in the £ even to carry the loss of beer and spirits and so on instead of which, in our first Budget, we were able to remit £13.5 million and not one extra penny of taxation levied on the community. Fianna Fáil will never know how that was done and I do not propose at this late stage to try to teach them. I do not believe this money is required but if it is and if I am faced with that position, I should think of other ways of raising money instead of taxing food, fuel and clothes.

My second main point is that this is an exhibition of old-time Fianna Fáil policy. The Commission established to deal with income tax said in their Third Report that they were in favour of a certain type of purchase tax. They had been asked to report on it as an alternative or part alternative to income tax and very precisely in the pages of the report they say that they are only concerned with supplementing, not finding an alternative to, the levying of income tax which everybody then thought was very high. As they say themselves, it was not the income tax system that was wrong but the rate at which it was levied and they suggested a remission of 2/-in the £ in income tax to be made up by purchase tax.

Very precisely they recommended— those who did recommend it—the exclusion from purchase tax of goods essential for agricultural production, goods essential for industrial production, all exports agricultural and industrial, food, particularly essential food and fuel and, among a whole lot of other things, household non-durable goods. Their recommendation, as an alternative to 2/- in the £ on income tax, was to put on a purchase tax of a particular type, excluding food and fuel. Whether the non-durable goods include clothes or not, I do not know. It is difficult to point out what they mean as they give so many definitions of various things.

That recommendation was carried by the votes of six people on a Commission of eleven. The other five reported dead against it. They said it in one phrase that is easy to understand and is found six lines from the bottom on page 75 of this report. It is brought in incidentally but it is a marvellous phrase. It indicates the hostility there was to the tax that had been proposed. They say : "A purchase tax under any disguise is a wage cut." Those ten words, 13 syllables, are full of meaning. Is it accepted that a purchase tax is a wage cut? As this discussion has gone on since the introduction of the idea of a purchase tax, we have heard a lot about disguises but the background is that it is a wage cut. It is accepted as such.

Mr. K. Egan

Almost all taxes answer that description.

Mr. McGilligan

Would 1/- in the £ on income tax be a wage cut?

Mr. K. Egan

Yes.

Mr. McGilligan

On what part of the community? There are 175,000 people who pay income tax. They would be charged but the others would not. The men who said that were well-known economists in trade unions. I could describe them all as well-read men. They were put on the Commission to examine this problem, to consider the use of purchase tax on different levels and the different types of tax. A minority, by only one, wound up by saying that they were against purchase tax and gave a recommendation that purchase tax under any disguise is a wage cut. It is a wage cut. What is the reaction to that? It is a demand for increased wages. Is that going to be resisted? If so, are we not in for a period of very heavy industrial disturbance and upset also in the ranks of the Civil Service, Garda, teachers and the Army? This is, I think, where Fianna Fáil policy outcrops clearly.

We had this booklet, Closing the Gap. The concluding paragraph was understood by us to mean, and we stated it more than once, that there was to be what would amount to a standstill order on wages. That was denied. Paragraph 21 is worth quoting in full. It says:

In the light of considerations set out in this White Paper, the Government deem it necessary that Departments and State-sponsored organisations should not accede for the present to any claims for increases in wages and salaries, or for changes in conditions of work having the same effect, which would arouse expectations of similar increases in other employments. They trust that there will be a full appreciation of the fact that the Government should not, in respect of persons whose remuneration is provided directly or indirectly from public funds, or whose employment arises in the provision under statutory authority of public services, follow a course they are convinced would be contrary to the national interest. It is not envisaged that conciliation and arbitration procedures should be put in suspense but rather that the findings should be considered in relation to their possible reaction in other sectors and, if necessary, not applied until this can be done without damage to the national economic interest.

That meant a standstill order on wages and salaries. Does anybody deny it?

That was bad enough—no increases in remuneration. Then on top of that, we now have a purchase tax or a turnover tax. Even when wages are cut, there will be a standstill. We are getting back again to that immoral situation which prevailed here for many years when certain people were prevented from getting increases in their salaries or emoluments through arbitration proceedings, while outside people, through being organised and powerful, could get such increases. The Army, the Garda, ESB employees, civil servants, all these categories, because they were under Government control, were denied this opportunity.

This is in accordance with the whole policy. When we were in government in 1948, we found the draft of the standstill order, the new standstill legislation that was coming around, the "Industrial Emergency Bill, 1947," the long title of which was: "An Act to make temporary provision for regulating the alteration of remuneration and conditions of employment," and then there was the legislation. The Minister for Industry and Commerce was given control of wages which were to be kept at a particular level. The Minister in charge of this was the Taoiseach, then acting as Minister for Industry and Commerce. It was made illegal for any employer to grant more than a particular wage; secondly, the protection of the Trade Disputes Act was withdrawn from any strike the purpose of which was to compel an employer to pay any wage that he was prohibited from paying by the earlier section, and the footnote was : "PS. The duration of the Bill will be two years." And the last remark is: "Penalty should be severe. Seán F. Lemass."

That was the policy. There were standstill orders up to 1947. Then they had been removed and this was the rod that was in pickle if Fianna Fáil had gained office again after 1948. During the course of one of those election campaigns, the Party to which I belong made considerable use of a statement made by a previous Minister for Justice, now Senator Boland. We produced a photographic reproduction from the Irish Press of Mr. Gerald Boland's speech in which he announced Fianna Fáil's determination to prevent wage increases: The idea was that you had to keep wage increases for Government employees and State-subsidised industry employees down because if you did not, the increases might spread to other workers. There had to be a good example shown by coercing those who were under your thumb. According to this Minister “the increases in civil servants' salaries would cost about £700,000 in a full year. The Army, Garda and teachers are also entitled to increases but the total cost is not yet disclosed. Local Government officials will naturally expect increases as will workers all over the country.”

There was the terrible situation, that once the Civil Service had got an increase, workers all over the country would look for it. Senator Boland's conclusion was: "This was the situation which Fianna Fáil was determined to prevent and would have prevented if three of the six lost Dublin seats had been held, for that would have given Mr. de Valera a majority on February 18th last."

This is what went on through the years. There was a standstill in wages during the war and there was an Industrial Emergency Bill after the war. They lamented that teachers, Guards and all these other people got increases, which would have been prevented if Fianna Fáil had retained a majority. Then in 1952, the then Minister for Finance, Deputy MacEntee, produced the Budget which cut out most of the subsidies but left a few for picking up later and they were picked up later. This time they produced the White Paper Closing the Gap and the way the gap was to be closed was by not having increases in emoluments. People in Government employment cannot get increases because that might spread and other people might also get increases.

History is repeating itself again. When the subsidies were cut out, it was the same as imposing taxes on the majority of the community because if you made dear the things that people bought because they have to live by them, it was the same as if their wages were cut. A lot of the subsidies were sliced off in 1952; some of them were sliced off later and we now have the White Paper announcing a standstill. Having achieved that purpose, even though it was denied as being the purpose, they now come to the point where they are going to cut wages, because a purchase tax in any disguise is a wage cut, and that cannot be denied.

What are we in for—a whole lot of discontent amongst State personnel? The civic guards are at the moment very disconsolate because their claims have been fobbed off. Only yesterday, we heard that a report was received from the new arbitration group and that probably will not be considered, once the House rises, until the House meets again. The teachers are putting in a claim and the civil servants are promulgating another. Even if their demands could be met immediately, they can make still further demands because once there is a purchase tax on food, fuel and clothing, that amounts to a wage cut and people will not be prevented from looking for increases particularly when they hear all the talk there is at dinner tables about the prosperity of the country.

One item in particular has been talked off in this connection, that is, the ease of collection. The Minister for Justice gets almost into a mood of ecstasy when he talks about the new electronic computer which makes it easy to extract the money from your pockets. With this machine, it is the easiest thing in the world to collect money; in fact, you will hardly know the money is being taken from you. However, electronic computer or otherwise, this £11 million extraction is going to involve somebody in a bit of discomfort.

The ordinary pickpocket is generally described as being what is known as a light-fingered gentleman. He can get a hand into your hip pocket or into a side pocket and remove your wallet and you will hardly notice the disappearance. This is a pickpocket tax and £11 million will be extracted, notwithstanding the fact that the Government doing this passed their test the other night by only one vote. Is it right that the Government, after the shaking they got from North-East Dublin, should enter on a new field of taxation founded upon the mumbled incoherencies of Deputy Lenihan when he was discussing this?

Acting Chairman (Mr. MacCarthy)

May I remind the Deputy we are on Section 46?

Mr. McGilligan

I have been talking about Section 46 the whole evening up to date. Is it right to introduce a completely new experiment in the field of taxation after a defeat in North-East Dublin, and relying upon Deputy Leneghan and Deputy Sherwin?

Mr. Sherwin

What about the four Independents?

Acting Chairman

Could we get back to Section 46?

Mr. McGilligan

All we are asking the four Independents to do is give themselves a little walk into the country and then we will abide by the decision. It is a slight exercise and it will do the Deputies good.

They achieved their objective by creating what might be described as social unrest by the sort of tactics we have been watching on the far side in this debate, threats of kidnapping, bullets——

Mr. S. Collins

All due to imagination.

Mr. N. Lemass

That is the Fascist approach. Deputy Dillon believes that, if he can defeat this section, not only will he become Prime Minister but he will become the great dictator and he is such a vain man that he believes he would fill the bill.

It would be a good thing for traders to look back at the record. Once Mussolini achieved power, he attacked the very people who financed him and made it possible for him to gain power.

Mr. S. Collins

RGDATA used to be good pals of Fianna Fáil.

Mr. N. Lemass

Let RGDATA realise by what manner of man they are being led. When my wife saw a RGDATA poster on the shop where she deals, she said "I am sorry; I will take my business elsewhere". I hope that other housewives who are in favour of continued expansion, more employment, better wages and better conditions will do the same thing. If they do, the posters will quickly disappear out of the windows. The surprising thing is that most of those who display them are amongst the exempted groups.

I do not know whether traders believe the repeated allegation by Fine Gael that small traders will be pushed out of business because they will not be able to compete. It will be the supermarkets, and Mr. Quinn, and all the other people who led them through the streets. Who are trying to get monopolies? Who are trying to open supermarkets? Are the Government trying to take them over with the 2½ per cent tax? If anybody puts them out of business, it will be the large combine very often financed from outside the State.

I was surprised to see the Labour Party lining up with big business in this matter but as their former leader would only be eligible to be a member of the Federated Union of Employers, it is perhaps not so surprising.

Mr. Wilson, the leader of the British Labour Party, on July 8th last speaking to the Transport and General Workers Union, advocated a pay pause and an economic policy based on expansion. That is what we are doing here. It is on that policy that we should get the support of Labour.

Mr. S. Collins

You are very anxious for it.

Mr. N. Lemass

Deputy Dillon has come in here and attacked the Independents. I wonder does he remember that he was at one time an Independent Deputy supporting a minority Fianna Fáil Government? There was nothing wrong with doing that. I am quite sure there were no pressure groups when he decided to vote for some tariff legislation. In Volume 41, column 1269 referring to a tariff on clothing he said:

I do not propose to vote against them——

that was the Government

——because their defeat would hopelessly and unnecessarily embarrass the Government... . I do say this, that this tariff above all others is going to hit the poor and nobody but the poor.

Then he marched into the lobby with Fianna Fáil. If another Deputy is going to do that today, it is not right. Deputies realise that this legislation is not going to hit the poor so that their actions are far less blameless than Deputy Dillon's.

I have many more quotations from this illustrious Leader of the Fine Gael Party from time to time but to quote them all would be ridiculous. For instance, he came in at that time as an Independent fighting against these tariffs on clothing and at column 383, Volume 41 he said:

Let him put back the tax on tea. Tea never did anybody any good. It is purely a luxury, and if they drank less tea they would be a great deal better off. Those who cannot resist this stimulating draught, let them pay for their stimulation.

At column 2037, in Volume 42 he said:

Any person who feels that the 4d. tax will place a strain on their resources can, without depriving themselves of a luxury, arrange that their children will not have tea.

General MacEoin

Give us the quotation about the light beer.

Mr. Sweetman

And the Egyptian bees.

Mr. N. Lemass

I should like to know if the Leader of the Fine Gael Party has the same views today. Tea was one of the commodities to which he did not refer on Committee Stage. He did refer to it on the earlier Stages. Does he still consider that this is a stimulant——

Mr. M.J. O'Higgins

Would the Deputy give the year of the quotation?

Mr. N. Lemass

1932-1933.

Mr. M.J. O'Higgins

The Deputy was not much interested in the proceedings here then.

Mr. N. Lemass

But I know my history, and the history of the O'Higgins family, if it comes to that.

Mr. Sweetman

We know quite a lot about your personal history, too.

Acting Chairman (Mr. MacCarthy)

I think this debate has become too personal.

References to scurrility do not help, either.

Mr. N. Lemass

Having got that off my chest, I will go on to say that some of the present taxes are 2/6d. on 20 cigarettes, 2/9¼ on a gallon of petrol, 3¾d. on a pint of beer and 2/1d. on a glass of whiskey. Fine Gael will agree that these taxes are high enough. In 1946-47, we had it from Deputy McGilligan, Deputy O'Higgins, Deputy Dillon and practically every Fine Gael Deputy that some taxes were unnecessary, that they would cut down, that they would close the vehicle factory at Inchicore and go back to retrenchment. We in Fianna Fáil are only interested in economic expansion and in bettering the conditions of the workers. We want harmony between employers and employees. We want the people to realise what we are doing. We publish our programmes in advance; we report on them every year so that nothing is hidden. The thing we have to decide to-day is whether expansion or retrenchment is to be the policy. I am surprised that the Labour Party have not come in with us on that issue because anyone who comes in with us on it is doing the right thing in the interests of the nation.

Mr. Sherwin

I met a friend today at an old comrade's funeral and he said to me: "I never heard so much about nothing". He was referring to the campaign against this Bill. If one examines that campaign closely, one finds that people are making a mountain out of a molehill. Two groups are interested in the defeat of this Bill. One is the political Opposition because for the first time they have managed to get support that they could never hope to get again. They have got support from certain small groups and from Independents who are frightened out of their lives because it would appear that public opinion is against this Bill. The question of right or wrong does not enter into it at all. It is only a question of whether it is popular to be against the Bill.

Not only have the political groups who aspire to Government got the support of the smaller groups and Independents but they have managed to get the monied group as represented by RGDATA behind them also. About a week ago, we saw these monied people representing, from £80 million to £100 million, in this city. They were allegedly concerned with the poor but that is a lie because a document issued to Deputies today has not a single reference to the public or to the exemption of food from these proposals.

Mr. M.J. O'Higgins

This amendment will do that.

Mr. Sherwin

The Opposition have aligned themselves with this monied group who hope to save themselves from any close examination by the Revenue authorities that might disclose something they do not wish to have disclosed. So we have two parties very anxious to defeat this Bill. We have the Opposition who, for once in a lifetime, have found such support that they are satisfied that if they could defeat the Bill, they would be in power for the next five years and we have the monied crowd who hope to save big money as a result of its defeat. It should be obvious to anyone that if the monied crowd are to save money, the people in need must necessarily lose.

Simple people believe that if this Bill were defeated, it would mean the end of taxation. They forget that we would have just as much taxation if there was a change of Government, whether it be by turnover tax, sales tax or any other form of tax. There would still have to be £11 million collected from the public. It is the consumer who pays and who always pays but this turnover tax gets at a lot of people whom a sales tax would not get at. A sales tax would mean that the Government would put so much on certain goods but the monied crowd would put it on to the public and a little more along with it. It would still have to come from the people. This tax gets at profits, at deposits in the banks, at gambling, at entertainment and all sorts of other services. Little or nothing escapes this tax and, because a certain amount of competition between the business community will be caused, it is held that the competition will force them to lose.

If we are to get a substantial amount of money from the monied crowd, someone must gain. The public must gain. It is elementary commonsense that the public must gain. A sales tax could not be less than 1/- in the £ because this tax embraces so many things that if the same amount of money were to be obtained from a single sales tax, it would have to be increased or doubled to get it. It is quite easy to explain it. If ten people booked a room for a meeting and the cost of that room was 10/-, they would be expected to pay 1/each but if twenty people booked the room, it would only cost them 6d. each. When a thing is as all-embracing as this tax, we can afford to leave it as low as 6d. in the £ but if it were a sales tax, it would probably have to be 1/- in the £, with a probable increase in income tax in order to get the same amount of money.

One has to have something within in order to have faith. One cannot withstand the barrage of bribes and threats unless one believes. I believe that the Minister will get the money he requires and if he does not, the poor will be the poorer and, instead of giving the social services needed, the Government will only be able to give out buttons. I believe that at the end of a full year the Minister will be able to give many benefits to people in need and that is the reason why nothing will shift me from my stand. There was a grand alliance to defeat the Bill. The monied crowd thought this was a grand chance, a chance that would never come again. The extraordinary thing is that the rank and file of the Opposition prayed that the Government would win. My attitude is clear.

Mr. Sweetman

You have proved that.

Mr. Sherwin

Never mind. I am always in the corner of the fellow on the floor. All my life I have been trying and winning. There have been five reductions in differential rents in Dublin in ten years and I got the five of them. In the past two years, through my agitation, I have got the cripples an extra half-crown. Do not worry. I shall always be in the corner looking for a little more, but I will not do anything silly if I do not succeed. I can always wait and get more in my own time.

What was the RGDATA solution to this problem? I have looked it over. It does not contain a suggestion that there should not be a tax on food. They suggest a sales tax on all goods. They are the crowd who helped to win Dublin North-East. The alliance is cracking up now. It is each one for himself from now on and here you have a last minute effort by this monied crowd, hoping that the Government may change their minds and have an all-embracing sales tax. They are not worrying what people will have to pay for food. In the latter part of their circular, they talk about half the traders being exempt from registration, meaning that in their case the suppliers would have paid the tax. They are concerned, first of all, about a sales tax on all goods, but if there is to be a turnover tax, that they be exempt from the necessity to divulge information. In other words, their whole concern is for themselves all the time.

I wonder what the Opposition's solution is? If in Government, what would they do about the RGDATA proposals? They will not repudiate them now. There may be another election and they want those people on their side. They are gravely mistaken. Once this becomes law, the alliance is finished. I am prepared to admit this form of taxation is a bit of a nuisance but, in my opinion, it must right itself. It always does.

I would suggest to the Minister that he should have a smaller coinage. I do not know whether this is possible or not, but I am told that if enough farthings were put on the market, it would ease things considerably. This RGDATA circular says that the big stores will charge nothing extra for foodstuffs, that they will put it all on the larger articles. What they are saying is that the working classes will benefit by increased social allowances but will pay no extra tax under this Bill. Actually, these increased benefits this year were intended only to cover the cost of the turnover tax to individual householders in the poorer sections of the community. No one could expect an increase in benefits in a year when we were facing a deficit of between £6 million and £7 million, so any increased social benefits given were aimed at covering this tax. I believe there will be a further increase in the benefits next year and I do not think there will be any increased taxation. I believe this tax will bring in a lot more money than the Minister expects because a lot of people will be found out in the same way as people were found out when PAYE was introduced.

RGDATA say that the people will be charged nothing extra in the big stores, but they then go on to weep for the little shopkeeper. All this talk sounds very phoney to me. Why all those tears for the ordinary people if they are to get foodstuffs without extra tax and at the same time, increased social benefits? How are the people to suffer if that is so, as RGDATA says it is? Supposing the shopkeeper does suffer, why should the people worry? Was this an idea to excite the people to march? I say the Dublin North-East by-election was won by fraud. You had one man in the Opposition telling the man in the street how much the turnover tax would cost him and you had RGDATA saying the big stores would not show the tax at all.

Still, you are asking me to turn against the Government—I who have enough "savvy" to understand all these arguments and who am convinced of the need for revenue. Do not forget all the Private Members' motions for increased pensions for retired Gardaí, retired teachers, State pensioners, Army pensioners, and so on. The money sought now is to help to meet people whom you have been promising to assist. If there is money there, those people may be met but if money is not there, they cannot be met. We must keep all the people on social services in mind. We must keep in mind an enormous number of people who cannot get what they want until the revenue is there to give it to them.

You are trying to put it over on the simple folk that if you get into office, they will not have to pay any taxes, that some crowd known as the higher-luxury group will pay it. How many of them are there? I have heard it suggested that it should be imposed on fur coats. How many fur coats are sold in the year?

Mr. Rooney

Ask Deputy Leneghan.

Mr. Sherwin

You should know— not my associates, anyway. This is a ridiculous sort of suggestion. Of course, it is not broken down. It is the usual stuff you get from politicians for the simple folk who do not think in that overall sense in which we fellows think because we have to think that way. Yesterday, Deputy Dillon talked about housing. We are not supposed to talk about housing but I shall say a few words on it. I found out this about Deputy Dillon. He can get away with murder. He can ramble and tell us about the past and the future, crack jokes, and so on. But, if we try it, we are often told we are out of order. Yesterday, Deputy Dillon spoke about housing. He referred to the buildings falling in the city. I am the only representative in Dublin who gave evidence at that inquiry. Why? Because I know all about it. I have spoken about this before. The majority of Deputy Dillon's representatives know very little about it. Do not forget that the evidence I gave was in front of all the corporation officials who could contradict me. I said I brought 500 people out of dangerous buildings. In the allocations section last year, I brought out 2,000 altogether.

Deputy Sweetman wants to know what I do or do not do. I am telling him what I do. I could spend all day and night telling him. That is why, if you examine this whole question, I can see the wood from the trees and, with no feasible alternative by the Opposition, I had no alternative but to vote for the Bill. I am prepared to admit that there is a certain amount of nuisance involved but it will be surmounted. If there are very serious defects, the people concerned will meet the Minister and I believe they will be ironed out.

The fact is that we want the revenue. There will be further need of revenue in the future because there will be greater demands on it. We were told the money we formerly got on imports will gradually decline, so, whether or not we like it, we need some form of taxation to meet the demands. It has been brought home to us that as far as certain goods such as beer, cigarettes, and so on, are concerned, we have reached the limit.

If I try to get something and do not succeed, I try again. If you want me to tell you a lot more about what I have done for those people, I shall tell you but you had better be careful. I am a fellow who has to work hard because I am on my Pat Malone. I work all day, Sunday, Saturday and so on. You do not. None of your crowd does it much, either. I do not earn one penny outside this House because I gave it all up for full-time work here. You would not do that. I am damn certain you would not.

I have a letter here from Limerick— not from one of my constituents. He tells me he has been informed, in regard to bread, that shopkeepers will not put any money on batch bread, that they will put a little on fancy bread, so that bread will be just the same in price. He went on to say that he is aware that the RGDATA crowd, especially the Fine Gael side of it, paid some of their workers to come up to Dublin and gave them a free tricket—£2 each —and in many cases they raised their goods by five per cent to pay for it.

You are not talking about the business people—profits up by 58 per cent last year. I was looking at the paper the other day. Despite Unidare's profits in Finglas, there is cribbing over 2½ per cent. But they will not have to pay. Maybe it is that the other fellows are not so honest about this big percentage of profits and that that is why they are objecting. I am very suspicious about all this business.

I shall not detain the House. I know Deputy Dillon is anxious to come in and have a go at me while I am sitting down. If he does, I shall get up and have a go at him. I want the Opposition to know this much. If, at the next election, whenever it is, the Opposition are returned to power, I can assure them that if I think they can function as a Government, they will get my vote. There is one for you.

Mr. McQuillan

Will you be there?

Mr. Sherwin

Do not worry. I am damn well certain. It has been said among some of the Opposition group that, if they were in the Government's position, they would rather Sherwin a thousand times than some of the other Independents, because he would not rat on them easily.

Mr. M.J. O'Higgins

I do not want to exaggerate the importance of Deputy Sherwin in any way. I think it is a most unfortunate set of circumstances that has catapulted himself and his colleague behind him into the particularly unique position they occupy here this evening.

Mr. MacEntee

Do not forget that one of them catapulted Deputy Lindsay out of the House.

Mr. Leneghan

And I will put him out, too.

Mr. M.J. O'Higgins

We invite him and the Taoiseach to give the people an opportunity tomorrow of deciding what catapulting they will do. I do not believe this Government have any right in these circumstances to endeavour to push this tax down the throats of the people. Surely it is not right, when the House is exactly evenly divided on a drastic new tax measure such as this, that, because Fianna Fáil have acquired and continued to get the support of two Independent Deputies, they should endeavour to force this through? Even with the votes of those Deputies, they can secure the support of only one-half of the membership of this House. Is it right in those circumstances that any Government should try to change so drastically the entire tax system and framework of this country?

It is at least open to doubt whether this Government, under the Constitution, are entitled to remain in office to-day. It is laid down in the Constitution that when the Taoiseach fails to retain the support of a majority in this House, he should resign. On a vote that it was agreed was tantamount to a vote of no confidence on the Second Reading of this Bill, the Taoiseach did not get the support of a majority of Deputies. He got the support of half the Deputies, which is not a majority of the House.

Mr. MacEntee

This is good old Blueshirt propaganda.

Mr. M.J. O'Higgins

We heard that kind of speech from Deputy Noel Lemass, and to the eternal credit of the Minister for Finance, let it be said he went out while Deputy Lemass was making it. Of course, he cannot go out while his second-in-command is sitting beside him to make the same type of speech. At least it is open to doubt whether this Government are entitled to remain in office in view of the vote taken on the Second Reading of this Bill. It certainly is questionable whether any Government in any country are entitled with the support of only half the full representation of Parliament drastically to change the tax system. It is admitted on all sides —even by Deputy Sherwin, who is described in one of today's papers as the lynchpin of Fianna Fáil—that public opinion is against this tax and that the people do not want it.

Surely one of the basic essentials of any democratic system of Government is that the voice of the people will be heard in the Parliament of the people? Is the voice of the people being heard in this Parliament today? If it is being raised, is it being listened to? Do Deputy Leneghan and Deputy Sherwin not know that the vast majority of the people are against these Government proposals? Is it not manifest in the only constituency in which the people had an opportunity of passing judgment on these Government proposals, Dublin North-East, that the people voted against them and, without reflecting in any way on the individual candidate, that the Government sustained as humiliating a defeat as any Government in office sustained at a by-election? Is it any wonder, in face of that, we have the kind of bad-tempered speech we heard this evening from Deputy Noel Lemass?

Dr. Ryan

I thought you were going to say from Deputy Dillon.

Mr. M.J. O'Higgins

If the last two speeches are to be taken as samples of the arguments put forward in favour of these proposals, it is an excellent demonstration of how completely bankrupt the Government are of arguments in favour of them. I want to make it quite clear—and I think in view of what Deputy Sherwin said it is necessary to do so—that neither I nor any of my colleagues in these benches hold any brief for any trade organisation. But we recognise the right of RGDATA or any other trade organisation under the Constitution to make known their views on Government policy, legislation and proposals. We are entitled to defend their right to assemble peacefully for the purpose of protesting against these Government proposals. They are entitled to do that without being threatened, as they were threatened by the Taoiseach, with bloody noses if they voice their opposition to Fianna Fáil.

Do they claim today that is the mandate they got at the last election? I do not think any of them do. In the present circumstances when, even with the assistance of Deputy Leneghan and Deputy Sherwin, they are able to secure only half the votes in a full House, with the knowledge that the people are against these proposals, with the knowledge that no Fianna Fáil spokesman at the last election sought a mandate from the people for this tax or for any tax on the basic essentials of life, would not the decent thing to do be to go to the country now and to submit this issue to the people at a general election?

If the Government are as confident as they pretend to be, if Deputy Sherwin feels the Government are entitled to be confident that the people would back these proposals, what are they afraid of? I understood from some remarks made by the Taoiseach some time ago that he is all out for the excitement of a general election. Why does he not indulge his propensity for that excitement now and let the people decide?

Mr. Sherwin

Did you go to the country when you cut the old age pension by a 1/-.

An Leas-Cheann Comhairle

Deputy Sherwin should let Deputy O'Higgins make his speech.

Mr. MacEntee

At least respect the Chair.

(Interruptions.)

Mr. M.J. O'Higgins

The Chair can hardly be unaware of the fact that Deputies on the opposite side quoted reports from as far back as 1932. I am referring to a speech of the Taoiseach last month. The Taoiseach was reported as saying that he believed that the Irish people had developed political maturity. He said he was willing to stake the political future of the Government and of his Party on their judgment and did not think he was taking any risk whatever. I invite the Taoiseach to allow the people to exercise their intelligent judgment on this political question of the turnover tax in this Finance Bill. Of course, as long as he retains the support of two Independents which enables him to secure the votes of half the House, he will not do that. He will not stake the future of his Party or of the Government on the intelligent judgment of the Irish people on this political question.

We are dealing with a section of the Finance Bill relating to the turnover tax. The first point I want to repeat, for the benefit of the last speaker in particular, is that the turnover tax will increase the cost of living. If allowed to go into operation, it will increase by 2½ per cent the prices of all goods and all services coming within its scope. It will do that without making the slightest differentiation between luxury goods and Deputy Sherwin's batch bread. It will not make the slightest differentiation between the person who at the end of the week, must spend all his weekly income on domestic needs and the person who is able to put away three-quarters of his weekly income in savings or spend it on luxury goods requiring only a quarter of it for domestic needs.

This tax will mean that 2½ per cent more must be paid for the basic essentials of food, fuel and clothes and on the Minister's own calculation, of the £11 million he hopes to raise from this tax, about £7 million will be taken from the people buying these items. The operation of the tax will be complicated. Many think it will be unworkable. All those considerations are relevant to the section we are discussing. Deputy Sherwin has followed faithfully in the footsteps of the directive apparently issued to the Fianna Fáil Party at their recent meeting that a good argument whenever a Fine Gael speaker refers to the turnover tax is to ask: "What are you going to do instead?"

Mr. Sherwin

I should like to hear that.

Mr. M.J. O'Higgins

Deputy Sherwin should remember that in 1947 the Party he is keeping in Government at the cost of the turnover tax introduced a Supplementary Budget in which they put savage impositions on a number of commodities. Fine Gael, in common with other Parties, opposed them and they were told in effect by Fianna Fáil that the money had to be found, that the country was facing a crucial period and that money was needed to keep the ship of State on an even keel and that if there was a change of Government and if a new Government dared to abolish the taxes Fianna Fáil had put on in their Supplementary Budget in 1947, the country would have to face vast new taxation and the Government would have to put up income tax by 2/6 in the £.

Deputy Sherwin describes himself as a veteran and I am sure he remembers this as well as I do. The change of Government came about and inside a fortnight, I think, the inter-Party Government, under Deputy John A. Costello, remitted all those taxes imposed by Fianna Fáil in 1947. They gave social welfare benefits also.

Mr. MacEntee

They did not.

Mr. M.J. O'Higgins

At the end of 12 months, they had given either in benefits or in remission of Fianna Fáil penal taxes £13.5 million without putting on a penny extra taxation.

We shall put the present Government out of office at the earliest opportunity and do it with the support and goodwill of the people of the country.

Minister for Finance (Dr. Ryan)

Deputy O'Higgins spoke about the mandate the people gave us. The mandate the people gave us was to rule this country, as my colleague, the Parliamentary Secretary said, but I remember the mandate they gave us in 1957. I have a very clear recollection of the mandate they gave us at that time: "Do what you like, but for goodness sake, do not let that Coalition back," and we are determined to keep that promise we gave the people at that time that they would never come back again.

Most of the Fine Gael speakers say that the people generally are against this tax. Why, therefore, do Fine Gael think we are going on with it? Can they suggest any reason whatever if the people are against us, and they say we know they are against us? If that is true, what reason can they give for this tax being put on? Is it not obvious the only reason they can give is that we think it is for the good of the country that it should be done? There could be no other reason and I defy any Deputy on the Fine Gael or Labour side to suggest any other reason why we are going ahead with this tax.

We do not believe there is this great feeling against the tax at all. There are a lot of vocal protestations but we will not be intimidated by any organised opposition to this tax. I think we are to be congratulated because we are going to fight this intimidation from the point of view of principle and, to use Deputy Dillon's words, it is a much more pleasant feeling to fight a thing like that than to be selling our souls for penny rolls——

Mr. Dillon

And lumps of hairy bacon.

Dr. Ryan

Deputy T.F. O'Higgins made a long speech against this tax generally but he did not like to end his speech without throwing a sop to RGDATA. He went on to say that if this tax must be imposed, it would be better to impose it at the wholesale level. I should have imagined that speakers from Fine Gael and Labour would not consider any modification of this tax, that they considered it was wrong and that was the end of it. However, the attitude of the fine Gael Party is that whatever your principles may be said to be, at the same time, do not lose a friend. They do not want to lose their friends in RGDATA so they put their point of view forward before this debate ends.

Question put.

The Committee divided: Tá, 72; Níl, 71.

Tá

Aiken, Frank.
Allen, Lorcan.
Bartley, Gerald.
Blaney, Neil T.
Boland, Kevin.
Booth, Lionel.
Brady, Philip A.
Brady, Seán.
Breen, Dan.
Brennan, Joseph.
Brennan, Paudge.
Breslin, Cormac.
Briscoe, Robert.
Burke, Patrick J.
Calleary, Phelim A.
Carter, Frank.
Carty, Michael.
Childers, Erskine.
Clohessy, Patrick.
Colley, George.
Collins, James J.
Corry, Martin J.
Cotter, Edward.
Crinion, Brendan.
Lemass, Noel T.
Lemass, Seán.
Leneghan, Joseph R.
Lenihan, Brian.
Lynch, Celia.
Lynch, Jack.
MacCarthy, Seán.
McEllistrim, Thomas.
MacEntee, Seán.
Meaney, Con.
Medlar, Martin.
Millar, Anthony G.
Crowley, Honor M.
Cummins, Patrick J.
Cunningham, Liam.
Davern, Mick.
de Valera, Vivion.
Dolan, Séamus.
Dooley, Patrick.
Egan, Kieran P.
Egan, Nicholas.
Fanning, John.
Faulkner, Padraig.
Flanagan, Seán.
Gallagher, James.
Galvin, John.
Geoghegan, John.
Gibbons, James M.
Gilbride, Eugene.
Gogan, Richard P.
Haughey, Charles.
Hillery, Patrick.
Hilliard, Michael.
Kennedy, Michael J.
Kitt, Michael F.
Lalor, Patrick J.
Moher, John W.
Mooney, Patrick.
Moran, Michael.
Ó Briain, Donnchadh.
Ó Ceallaigh, Seán.
O'Connor, Timothy.
O'Malley, Donogh.
Ormonde, John.
Ryan, James.
Sherwin, Frank.
Smith, Patrick.
Timmons, Eugene.

Níl

Barrett, Stephen D.
Barron, Joseph.
Barry, Anthony.
Barry, Richard.
Belton, Paddy.
Blowick, Joseph.
Browne, Michael.
Browne, Noel C.
Burke, James J.
Burton, Philip.
Byrne, Patrick.
Carroll, Jim.
Casey, Seán.
Clinton, Mark A.
Collins, Seán.
Connor, Patrick.
Coogan, Fintan.
Corish, Brendan.
Cosgrave, Liam.
Costello, Declan D.
Costello, John A.
Coughlan, Stephen.
Crotty, Patrick J.
Desmond, Dan.
Dillon, James M.
Dockrell, Henry P.
Dockrell, Maurice E.
Donegan, Patrick S.
Donnellan, Michael.
Dunne, Seán.
Dunne, Thomas.
Esmonde, Sir Anthony C.
Everett, James.
Farrelly, Denis.
Finucane, Patrick.
Flanagan, Oliver J.
Gilhawley, Eugene.
Governey, Desmond.
Harte, Patrick D.
Hogan, Partick (South Tipperary).
Hogan O'Higgins, Brigid.
Jones, Denis F.
Kenny, Henry.
Kyne, Thomas A.
Lynch, Thaddeus.
McAuliffe, Patrick.
MacEoin, Seán.
McGilligan, Patrick.
McLaughlin, Joseph.
McQuillan, John.
Mullen, Michael.
Murphy, Michael P.
Murphy, William.
Norton, William.
O'Donnell, Patrick.
O'Donnell, Thomas G.
O'Higgins, Michael J.
O'Higgins, Thomas F.K.
O'Keeffe, James.
O'Reilly, Patrick.
O'Sullivan, Denis J.
Pattison, Séamus.
Reynolds, Patrick J.
Rooney, Eamonn.
Ryan, Richie.
Sheridan, Joseph.
Spring, Dan.
Sweetman, Gerard.
Tierney, Patrick.
Treacy, Seán.
Tully, James.

Tellers:— Tá: Deputies J. Brennan and Geoghegan. Níl: Deputies Crotty and Tully.

Question declared carried.

SECTION 47.

Dr. Ryan

I move amendment No. 23:

In subsection (3), page 31, to delete "£500" in line 13 and substitute "£250".

Amendments Nos. 23, 25, 26, 27 and 28 might be taken together because they all have the one purpose.

No, but they are being discussed together.

Let Deputy Leneghan move that amendment.

Mr. Leneghan

I cannot hear what is going on down there at all.

My amendments is not designed to help out these people but I do realise that there are many people who have a much higher turnover than they are believed to have. Many of these people have not got the means of collecting this tax. They are one-or two-men businesses, or perhaps a business run by a man and his wife, or perhaps a man and his sister. They have no method of calculating the tax and of dealing with it. I feel that if the figure were raised to £750, it would smooth out the grievances of many of these people and I hope the Minister will agree to it.

Mr. S. Flanagan

I would like to support Deputy Leneghan on this amendment.

Mr. O.J. Flanagan

This is another one.

Mr. S. Flanagan

If Fine Gael are so pleased and excited about having lost the last division, they should contain themselves. The House is still in session and up to Section 65 of the Bill will have to be dealt with tonight. I should like to support Deputy Leneghan on this amendment. A number of people have misgivings about this matter, for the reason that they are afraid of having to keep books and of having to do complicated returns in order to pay the tax. I should imagine that over 80 per cent of the businesses in the average small town would be covered by this amendment, that is, businesses with a turnover of £9,000 a year or less. It would give them the opportunity to opt out and thereby divest themselves of all trouble in connection with the tax.

For reasons that I can appreciate, this would mean putting additional work on the wholesaler but it is, perhaps, not unfair to say that the wholesaler is well equipped to look after book-keeping matters. It is only a matter of channelling some additional material into a machine or of having it otherwise recorded. It cannot be said that a shopkeeper with a turnover of £9,000 or less is altogether a small trader. I would regard him as having a reasonably sound business because he would have a profit of anything from £1,000 to £2,500.

Mr. O'Sullivan

What?

Mr. S. Flanagan

£1,000 would be a profit of 11 per cent or 12 per cent.

Mr. O'Sullivan

The Minister says the grocers have up to 30 per cent.

Mr. S. Flanagan

Any business with a profit of £1,100 a year upwards is a reasonably-sized business and it would allay the fears of a lot of people if they were allowed to opt out if they did not have a turnover of more than £9,000.

Mr. Dillon

The Minister for Finance proposes that the exemption of traders be reduced from £500 to £250 a month. Deputy Leneghan proposes that the exemption be raised from £500 to £750 and Deputy Flanagan supports Deputy Leneghan. I understand that Deputy Sherwin is associated with Deputy Leneghan's amendment. So we have the fifth and sixth wheels of the Government wagon now proposing a direct negative to the proposals of the Minister for Finance. The Minister is proposing to reduce the exemption from the level of £500 to £250 and Deputies Leneghan and Sherwin are proposing to raise it from £500 to £750. Let us put this to the issue now so as to determine how honest they are. They will get a chance in the Lobby of demonstrating not only their honesty but their independence——

Mr. Leneghan

Get a blueshirt for him.

Mr. Dillon

——and I invite the people of the country to contemplate their humiliation.

Mr. Sherwin

As I put down an amendment similar to that of Deputy Leneghan, I take it I will be permitted to discuss this. One of the arguments used by the shopkeepers was that they did not want this accounting. They said it would entail extra staff. They would prefer that this tax was deducted at source. A shop with a turnover of between £600 and £700 a month is not a very big business and a lot of those people do not have all that much money. Many of them who drink and gamble a little, live from week to week. They do not want the responsibility of holding on to the money. They find it itchy. They would like this money taken away in dribs and drabs. We know that before the introduction of PAYE many people found it imposible to hold on to money with which to pay their income tax. Now they have no difficulty. The same would apply to small shopkeepers, and it is in their interest that I would ask the Minister to accept this.

That is so.

Mr. S. Flanagan

Withdraw it.

Mr. O'Sullivan

There will be no more withdrawing.

They are two direct opposites. How can the Minister say he can alter this in any way? He refers to the one set of figures—£500 down to £250 or £500 up to £750. It is on exactly the same lines.

Mr. M.P. Murphy

Does this amendment not mean that shopkeepers with a turnover of more than £3,000 must now be registered and be responsible for the collection of the taxes on retail sales? The opposite amendment means that shopkeepers with a turnover of less than £9,000 will be exempted from registration and will not be responsible for the collection of tax at retail level. Is that not the difference—that one amendment states that shopkeepers having less than £3,000 are exempted from collecting the tax on retail sales? The alternative amendment suggests that the figure £3,000 should be £9,000. Does this not involve a big number of shopkeepers—all those within the £3,000 to £9,000 turnover bracket?

Does it not include all those shopkeepers? Is that right or wrong?

Dr. Ryan

It is wrong.

Mr. McGilligan

May be Deputy Leneghan could explain.

Mr. Leneghan

Nobody could explain to you.

Mr. Sweetman

Let us have it out, then.

Mr. W. Murphy

Deputy Leneghan has put the Minister in an awful quandary.

If amendment No. 23 is out, amendment No. 24 may not be moved?

An Ceann Comhairle

That is so. Amendment put and declared carried.

Mr. Dillon

Votáil.

The Committee divided: Tá, 71; Níl, 68.

Tá

Aiken, Frank.
Allen, Lorcan.
Bartley, Gerald.
Blaney, Neil T.
Boland, Kevin.
Booth, Lionel.
Brady, Philip A.
Brady, Seán.
Breen, Dan.
Brennan, Joseph.
Brennan, Paudge.
Breslin, Cormac.
Briscoe, Robert.
Burke, Patrick J.
Calleary, Phelim A.
Carter, Frank.
Carty, Michael.
Childers, Erskine.
Clohessy, Patrick.
Colley, George.
Collins, James J.
Corry, Martin J.
Cotter, Edward.
Crinion, Brendan.
Crowley, Honor M.
Cummins, Patrick J.
Cunningham, Liam.
Davern, Mick.
de Valera, Vivion.
Dolan, Séamus.
Dooley, Patrick.
Egan, Kieran P.
Egan, Nicholas.
Fanning, John.
Faulkner, Padraig.
Flanagan, Seán.
Gallagher, James.
Galvin, John.
Geoghegan, John.
Gibbons, James M.
Gogan, Richard P.
Haughey, Charles.
Hillery, Patrick.
Hilliard, Michael.
Kennedy, Michael J.
Kitt, Michael F.
Lalor, Patrick J.
Lemass, Noel T.
Lemass, Seán.
Leneghan, Joseph R.
Lenihan, Brian.
Lynch, Celia.
Lynch, Jack.
MacCarthy, Seán.
McEllistrim, Thomas.
MacEntee, Seán.
Meaney, Con.
Medlar, Martin.
Millar, Anthony G.
Moher, John W.
Mooney, Patrick.
Moran, Michael.
Ó Briain, Donnchadh.
Ó Ceallaigh, Seán.
O'Connor, Timothy.
O'Malley, Donogh.
Ormonde, John.
Ryan, James.
Sherwin, Frank.
Smith, Patrick.
Timmons, Eugene.

Níl

Barrett, Stephen D.
Barron, Joseph.
Barry, Anthony.
Barry, Richard.
Belton, Paddy.
Blowick, Joseph.
Browne, Michael.
Browne, Noel C.
Burke, James J.
Burton, Philip.
Byrne, Patrick.
Carroll, Jim.
Casey, Seán.
Clinton, Mark A.
Collins, Seán.
Connor, Patrick.
Coogan, Fintan.
Corish, Brendan.
Cosgrave, Liam.
Costello, Declan D.
Costello, John A.
Coughlan, Stephen.
Crotty, Patrick J.
Desmond, Dan.
Dillon, James M.
Dockrell, Henry P.
Dockrell, Maurice E.
Donegan, Patrick S.
Donnellan, Michael.
Dunne, Seán.
Dunne, Thomas.
Esmonde, Sir Anthony C.
Farrelly, Denis.
Flanagan, Oliver J.
Gilhawley, Eugene.
Governey, Desmond.
Harte, Patrick D.
Hogan, Patrick (South Tipperary).
Hogan O'Higgins, Brigid.
Jones, Denis F.
Kenny, Henry.
Kyne, Thomas A.
Lynch, Thaddeus.
McAuliffe, Patrick.
MacEoin, Seán.
McGilligan, Patrick.
McLaughlin, Joseph.
McQuillan, John.
Mullen, Michael.
Murphy, Michael P.
Murphy, William.
Norton, William.
O'Donnell, Patrick.
O'Donnell, Thomas G.
O'Higgins, Michael J.
O'Higgins, Thomas F.K.
O'Keeffe, James.
O'Reilly, Patrick.
O'Sullivan, Denis J.
Pattison, Séamus.
Reynolds, Patrick J.
Rooney, Eamonn.
Sheridan, Joseph.
Spring, Dan.
Sweetman, Gerard.
Tierney, Patrick.
Treacy, Seán.
Tully, James.

Tellers:—Tá : Deputies Brennan and Geoghegan; Níl : Deputies Crotty and Tully.

Amendment No. 25 is consequential on No. 23.

Dr. Ryan

I move amendment No. 25:

In subsection (3), to insert the following new paragraph before paragraph (b):

"(b) (i) Subject to subparagraph (ii) of this paragraph, a person who sells goods in the course of business, other than a person to whom paragraph (a) of this subsection applies, may at his discretion elect to be accountable for tax on the moneys received by him in relation to the activities in which he engages in a case in which those moneys have not in any month exceeded, and are not likely in any month to exceed, £500, and unless he so elects and subject to paragraph (d) of this subsection, tax shall not be chargeable and he shall not be accountable for tax on those moneys.

(ii) Subparagraph (i) of this paragraph shall apply if, but only if, not less than 90 per cent of the moneys received are received in respect of the sale of goods which have been procured by the seller from a person accountable for tax in respect of his sale of those goods."

Amendment agreed to.

Dr. Ryan

I move amendment No. 26:

In subsection (3), page 31, line 21, to insert "or paragraph (b)" after "paragraph (a)".

This is also consequential.

Amendment agreed to.

Dr. Ryan

Mr. Coogan

Tell the people how you codded them about the fur coats.

Question put.

The Committee divided: Tá, 71; Níl. 68.

Tá

Aiken, Frank.
Allen, Lorcan.
Bartley, Gerald.
Blaney, Neil T.
Boland, Kevin.
Booth, Lionel.
Brady, Philip A.
Brady, Seán.
Breen, Dan.
Brennan, Joseph.
Brennan, Paudge.
Breslin, Cormac.
Briscoe, Robert.
Burke, Patrick J.
Calleary, Phelim A.
Carter, Frank.
Egan, Nicholas.
Fanning, John.
Faulkner, Padraig.
Flanagan, Seán.
Gallagher, James.
Galvin, John.
Geoghegan, John.
Gibbons, James M.
Gogan, Richard P.
Haughey, Charles.
Hillery, Patrick.
Hilliard, Michael.
Kennedy, Michael J.
Kitt, Michael F.
Lalor, Patrick J.
Lemass, Noel T.
Lemass, Seán.
Leneghan, Joseph R.
Lenihan, Brian.
Lynch, Celia.
Carty, Michael.
Childers, Erskine.
Clohessy, Patrick.
Colley, George.
Collins, James J.
Corry, Martin J.
Cotter, Edward.
Crinion, Brendan.
Crowley, Honor M.
Cummins, Patrick J.
Cunningham, Liam.
Davern, Mick.
de Valera, Vivion.
Dolan, Séamus.
Dooley, Patrick.
Egan, Kieran P.
Lynch, Jack.
MacCarthy, Seán.
McEllistrim, Thomas.
MacEntee, Seán.
Meaney, Con.
Medlar, Martin.
Millar, Anthony G.
Moher, John W.
Mooney, Patrick.
Moran, Michael.
Ó Brain, Donnchadh.
Ó Ceallaigh, Seán.
O'Connor, Timothy.
O'Malley, Donogh.
Ormonde, John.
Ryan, James.
Sherwin, Frank.
Smith, Patrick.
Timmons, Eugene.

Níl

Barrett, Stephen D.
Barron, Joseph.
Barry, Anthony.
Barry, Richard.
Belton, Paddy.
Blowick, Joseph.
Browne, Michael.
Browne, Noel C.
Burke, James J.
Burton, Philip.
Byrne, Patrick.
Carroll, Jim.
Casey, Seán.
Clinton, Mark A.
Collins, Seán.
Connor, Patrick.
Coogan, Fintan.
Corish, Brendan.
Cosgrave, Liam.
Costello, Declan D.
Costello, John A.
Coughlan, Stephen.
Crotty, Patrick J.
Desmond, Dan.
Dillon, James M.
Dockrell, Henry P.
Dockrell, Maurice E.
Donegan, Patrick S.
Donnellan, Michael.
Dunne, Seán.
Dunne, Thomas.
Esmonde, Sir Anthony C.
Farrelly, Denis.
Flanagan, Oliver J.
Gilhawley, Eugene.
Governey, Desmond.
Harte, Patrick D.
Hogan, Patrick, (South Tipperary).
Hogan O'Higgins, Brigid.
Jones, Denis F.
Kenny, Henry.
Kyne, Thomas A.
Lynch, Thaddeus.
McAuliffe, Patrick.
MacEoin, Seán.
McGilligan, Patrick.
McLaughlin, Joseph.
McQuillan, John.
Mullen, Michael.
Murphy, Michael P.
Murphy, William.
Norton, William.
O'Donnell, Patrick.
O'Donnell, Thomas G.
O'Higgins, Michael J.
O'Higgins, Thomas F.K.
O'Keeffe, James.
O'Reilly, Patrick.
O'Sullivan, Denis J.
Pattison, Séamus.
Reynolds, Patrick J.
Rooney, Eamonn.
Sheridan, Joseph.
Spring, Dan.
Sweetman, Gerard.
Tierney, Patrick.
Treacy, Seán.
Tully, James.

Tellers:—Tá: Deputies J. Brennan and Geoghegan; Níl: Deputies Crotty and Tully.

Will he be prosecuted on two counts—non-registration and non-payment of the tax?

Dr. Ryan

He will be prosecuted for not registering and there is, of course, a penalty for not paying the tax.

Question put and agreed to.

SECTION 49.

An Leas-Cheann Comhairle

Perhaps amendments Nos. 29 and 30 could be discussed together.

Dr. Ryan

I move amendment No. 29:

In subsection (1), page 32 to insert "or hired" in line 21 after "sold", to delete "seller or provider" in line 26 and substitute "person from whom the goods were bought or hired or by whom the services were provided" and to insert "or hire" in line 29 after "sale".

The Bill mentions the hire as well as the purchase of goods. This is to ensure that registered persons will be entitled to have goods hired to them free of tax in the same way as they are entitled to have goods and services free of tax. This is for people who are below the tax limit. Within the limit, they will be entitled to hire goods as well as buy them.

Amendment agreed to.

Dr. Ryan

I move amendment No. 30:

In subsection (2), page 32, to insert "or hired" in line 43 after "sold" and to delete in line 47 "the seller or provider" and substitute "that person".

Amendment agreed to.

Yes, the current retail price.

Mr. Dillon

Mr. Dillon

As this section stands at present, a shopkeeper can send his wife outside the counter of his shop or commission her to act as a customer and I know of no provision in the law of this land that prevents a grocer or draper or furniture dealer putting any retail price he likes to the customer at the other side of the counter. There is no reason under the existing law why the proprietor of a cut-price shop in Dublin, desiring to attract to himself a particular customer whom he knows can give him a big amount of business, cannot say to that customer that he will quote him any price he likes in order to attract him. How do you then effectively legislate in the terms of Section 50 if you cannot prevent a shopkeeper from telling a customer that he will sell him a parcel of goods for 6d.? So far as I know, the shopkeeper is entitled to sell those goods at 6d. if he wants to do so.

There is no statutory definition of a retail price and there is no obligation on anyone to sell goods at a profit. I suggest to the Minister that Section 50 is unenforceable and that any attempt to enforce it would be unjust. You cannot say to a grocer that he must sell goods to his wife or to anyone else at a price that would make him a profit. We all know that there are retail distributors selling goods at prices substantially below cost. How can the Minister say that the shopkeeper who sells to the public below the retail price is breaking the law? It is fantastic to pass laws in this House which have no meaning. Anyone with any experience of the retail trade knows that Section 50 has no meaning.

Mr. A. Barry

What about the publican who drinks whiskey out of his own bottle?

Dr. Ryan

We all know the price of whiskey.

Mr. A. Barry

But how do we know how much he drinks?

Mr. Byrne

May I suggest to the Minister that he is cutting across the established procedure of the Revenue Commissioners in their dealings with retail traders who are accustomed to keep accounts of goods drawn from their own stocks for their own use which are accounted to them at cost price. You cannot make a profit out of yourself. You are asking these people to pay a retail tax on goods sold to themselves.

Mr. Corish

Possibly the grocery trade is not the best example. I do not know a lot about the purchase of groceries but I do appreciate that in respect of many of the articles bought by the ordinary housewife, tea, sugar, butter, jams and jellies, there is some regularity in the price. I do not think it is fair that the owner should have to pay the tax on the retail price of goods used by himself but it is fair that he should pay it on the wholesale price. As I said, the grocery trade is not the best example but there is great variation in price in the hardware trade and in the drapery trade. I suggest that the Revenue Commissioners are going to have a difficult time if they try to establish the retail price for all the commodities in a hardware shop or a drapery shop. You cannot say that such-and-such is the retail price of any article in a small town.

If this tax is to be collected every month, the inspectors will have to determine, for the purpose of a proprietor taking goods from stock for the use of his family, what is to be the retail price of hundreds of articles in a hardware or drapery shop. I think the Revenue Commissioners' job could be done much more easily if the tax in respect of these people were related to the wholesale rather than to the retail prices.

Mr. Sweetman

Related to the cost price.

Mr. Corish

Yes, to the cost price.

Dr. Ryan

This is a retail tax and, therefore, it would appear illogical not to take that tax at the retail price. It can be taken at the current retail price and I do not think there will be any great difficulty at arriving at what is the current retail price. I agree with Deputy Dillon that a man can sell his goods at any price he likes. A man can sell tea at one shilling a lb, if he wants to, but if he starts that, his business would become so big that he could not deal with it. The Revenue Commissioners hope that this will work out by coming to an arrangement with the persons concerned. They can agree to take the figure of £6 or £7 a week and that will be the end of it.

Mr. Reynolds

The Minister will find it very hard to get any agreement with the business people of this country after the introduction of this tax.

General MacEoin

Is the Minister not creating a very dangerous precedent? The Revenue Commissioners can say to me: "We will settle with you for £5 a week". But they do not like Sweetman——

It is making the law silly.

Dr. Ryan

Mr. Dillon

Or to anybody. The fact is it is common knowledge to anybody reading the Garda Review that a list of shops is given to members of the Garda Síochána in which a specified discount is given. The INTO publication gives a similar list of shops where members of that organisation are given a specified discount. It appears to me that under Section 50 the shopkeeper will find himself in the astonishing position that while he is entitled to sell goods to members of those organisations, he is not entitled to assess the value of the goods at the same rate in respect of his own family. There are well-established trade practices through which a shopkeeper's staff buy goods at a marked down price of five or ten per cent below retail prices. Is it seriously argued that a shopkeeper serving his own family is not permitted to allow goods to them at the same prices as he sells to members of his staff?

While I condemn this tax unreservedly, if it is to be enacted into law, let us make it a thing that law-abiding citizens in this country can observe. That being so, I suggest Section 50 be omitted from the Bill. To suggest that we in Dáil Éireann deny to a shopkeeper the right to charge his own family the lowest price at which he has sold to anybody coming into his shop is fantastic. It is utterly wrong to place such an obligation on a body of people who are, after all, self-respecting, decent, law-abiding, whose rights should be regarded with some respect by this Legislature.

Mr. M.J. O'Higgins

The Minister quoted paragraph 10 of the pamphlet to the effect that reasonable estimates of withdrawals will be accepted. It has already been pointed out, and I think it must be emphasised again, that neither what is in the pamphlet nor what the Minister says is the law. What will be the law is what is in Section 50 of the Bill when it becomes an Act, not what is in the pamphlet. Irrespective of what is in the pamphlet or of what the Minister may say, it is open to the Revenue Commissioners or any other authority concerned to say in later years: "The law is what is set out in Section 50 and that is the only law that will be applied in this respect. No longer will we do business on the basis of estimates, however reasonable they may be".

It is necessary the House should understand that clearly. I accept the proposal that it should be accepted on the basis of the shopkeeper's estimate, but we must understand that that may not continue to be so. Assuming the Minister is able to satisfy the House on the question of a definition, if that is possible, of the retail price current at the time of the withdrawal, the other consequences of which I speak may occur later and this idea of agreeing on an estimate may go by the board.

Secondly, I want to get clarification from the Minister on this point. Section 50 deals not only with the withdrawal by a person for his own use but with the withdrawal by a person of goods from stock for his own use or for the use of any other person. The Minister must know that very frequently in this country where sales, bazaars or functions of one sort or another are run in aid of charities, it is quite a common custom for businessmen to give gifts out of stock. We do it by way of food for consumption at a function or flowers for decorating a church, or so on. I should like to know from the Minister if those will be chargeable now with tax as withdrawals from stock, even though they are not for the person's own use and are intended purely for charitable purposes of that sort.

Mr. S. Collins

This is the longest lasting stock that I can remember.

Mr. Briscoe

Mr. Dillon

You are quite wrong.

Mr. Briscoe

Mr. Briscoe

The Deputy is in business himself and he knows. He can make any blend of tea he likes to sell at any price he likes. As the Minister said, if he is going to have a retail shop to sell tea at 1/- a lb., he will not be able to deal with the trade and how long can he last if he pays his wholesaler the price for the tea and sells it at about a quarter of its cost? Is that not all nonsense? Deputy O'Higgins is a professional man and I can understand his having some difficulty until he studies the matter a bit more. But the arguments used, in my opinion, are just nonsense.

Mr. Barron

May I take it that a shopkeeper who buys an article at a certain price and then sells retail at a profit must put himself in the position of a customer coming into his shop or does it mean that he must pay tax on what the article cost him as a shopkeeper?

Mr. Briscoe

On his retail price.

We can have it where we like. If we like to have it on this, that is our affair.

It may be so. We have to lay down some rule. I do not think it will cause any great difficulty at all. There is no great difficulty about the amount or quantity being used, taking the wholesale price and making up what it all amounts to. In this particular case, they agree on the quantity that may be used. They say the current retail price is so and so and come to an agreement. I do not see why there should be so much difficulty put in the way of this section.

Mr. Rooney

Supposing the retail price of the domestic article amounts to £20. That price includes, perhaps, £4 profit. In other words, to that man the actual cost was £16. But 2½ per cent on the current retail price of £20 would be 10/- whereas in fact the cost of the article to him was £16, on which the tax would be 8/-. He is therefore charged 2/- in respect of a profit he never made.

Mr. Corry

I dealt already with the point made by Deputy Dillon when speaking on the Budget. I know shopkeepers in Cork selling butter at 3/11 a lb., for which they paid 4/4, in order that the customer coming in may be got to buy a pair of nylons or some other drapery goods on which there is a profit of 50 per cent if they are Irish goods and 63 per cent if they are English goods. Those are the people who are saying they will have to close their doors if they have to pay this 2½ per cent.

Mr. Donegan

That is a ridiculous assertion. Everybody knows that in the drapery trade there is a mark-up on goods of from 20 to 25 per cent. Deputy Corry's assertion does not do himself or anybody else any good. We have the Minister admitting that six horses and carts could be driven through a section of this Bill.

Dr. Ryan

I did not admit that.

Mr. Donegan

You said "perhaps" in reply.

Mr. M.J. O'Higgins

Does the Minister agree with the point made by Deputy Rooney that the position under this is that a proprietor of a shop is now being charged what to him is an artificially high price on which tax will be levied? The position is at the moment that, if he withdraws goods from his own shop for his own use, he does not charge a profit against himself. It does not seem reasonable if this law is to be operated that he will have to regard himself as paying himself a profit and then charge himself tax on the profit as well.

Question put and agreed to.

SECTION 51.

Mr. Sweetman

In regard to my amendment No. 31, I assume the Minister is not going to do this and therefore I am not moving my amendment. He is not going to breach the privilege of the client?

Dr. Ryan

I do not see how it could be done.

Mr. Sweetman

I am advised it could be done, but I am assuming that is not the intent.

Amendment No. 31 not moved.

Section 51 agreed to.

SECTION 52.

Dr. Ryan

I move amendment No. 32:

Before subsection (3), to insert the following new subsection:

"(3) Where it is shown to the satisfaction of the Revenue Commissioners that—

(a) any part of the taxable turnover of an accountable person in any month consisted of moneys paid under a contract entered into before the 1st day of August, 1963, which provides for the sale or hire of goods or the provision of services at prices or charges fixed before that day, or

(b) any part of the taxable turnover of an accountable person in the month of November, 1963, or any of the four months next following that month consisted of moneys received in respect of goods sold or hired or services provided before the 1st day of August, 1963, the Revenue Commissioners may repay the tax paid on that part or, at their discretion, allow it to be set off against the tax payable in any month."

The points arising on this amendment have already been discussed and I do not think there is any necessity to discuss them again.

Mr. Sweetman

I move my amendment to amendment No. 32:

To delete "1st day of August, 1963" where these words twice occur and substitute "1st day of November, 1963".

Question put: "That the words proposed to be deleted from amendment No. 32 stand".

The Committee divided: Tá, 71: Níl, 68.

Tá

Aiken, Frank.
Allen, Lorcan.
Bartley, Gerald.
Blaney, Neil T.
Boland, Kevin.
Booth, Lionel.
Brady, Philip A.
Brady, Seán.
Breen, Dan.
Brennan, Joseph.
Brennan, Paudge.
Breslin, Cormac.
Briscoe, Robert.
Burke, Patrick J.
Calleary, Phelim A.
Carter, Frank.
Carty, Michael.
Childers, Erskine.
Clohessy, Patrick.
Colley, George.
Collins, James J.
Corry, Martin J.
Cotter, Edward.
Crinion, Brendan.
Crowley, Honor M.
Cummins, Patrick J.
Cunningham, Liam.
Davern, Mick.
de Valera, Vivion.
Dolan, Séamus.
Dooley, Patrick.
Egan, Kieran P.
Egan, Nicholas.
Fanning, John.
Faulkner, Padraig.
Flanagan, Seán.
Gallagher, James.
Galvin, John.
Geoghegan, John.
Gibbons, James M.
Gogan, Richard P.
Haughey, Charles.
Hillery, Patrick.
Hilliard, Michael.
Kennedy, Michael J.
Kitt, Michael F.
Lalor, Patrick J.
Lemass, Noel T.
Lemass, Seán.
Leneghan, Joseph R.
Lenihan, Brian.
Lynch, Celia.
Lynch, Jack.
MacCarthy, Seán.
McEllistrim, Thomas.
MacEntee, Seán.
Meaney, Con.
Medlar, Martin.
Millar, Anthony G.
Moher, John W.
Mooney, Patrick.
Moran, Michael.
Ó Briain, Donnchadh.
Ó Ceallaigh, Seán.
O'Connor, Timothy.
O'Malley, Donogh.
Ormonde, John.
Ryan, James.
Sherwin, Frank.
Smith, Patrick.
Timmons, Eugene.

Tellers:—Tá: Deputies Brennan and Geoghegan; Níl: Deputies Tully and Crotty.

Question declared carried.

Barrett, Stephen D.Barron, Joseph.Barry, Anthony.Barry, Richard.Belton, Paddy. Byrne, Patrick.Carroll, Jim.Casey, Seán.Clinton, Mark A.Collins, Seán.Connor, Patrick.Coogan, Fintan.Corish, Brendan.Cosgrave, Liam.Costello, Declan D.Costello, John A.Coughlan, Stephen.Crotty, Patrick J.Dillon, James M.Dockrell, Henry P.Dockrell, Maurice E.Donegan, Patrick S.Donnellan, Michael.Dunne, Seán.Dunne, Thomas.Esmonde, Sir Anthony C.Farrelly, Denis.Flanagan, Oliver J.Gilhawley, Eugene.Governey, Desmond.Harte, Patrick D.Hogan, Patrick (South Tipperary).Hogan O'Higgins, Brigid.Jones, Denis F.

Blowick, Joseph.Browne, Michael.Browne, Noel C.Burke, James J.Burton, Philip. Kenny, Henry.Kyne, Thomas A.Lynch, Thaddeus.McAuliffe, Patrick.MacEoin, Seán.McGilligan, Patrick.McLaughlin, Joseph.McQuillan, John.Mullen, Michael.Murphy, Michael P.Murphy, William.Norton, William.O'Donnell, Patrick.O'Donnell, Thomas G.O'Higgins, Michael J.O'Higgins, Thomas F.K.O'Keeffe, James.O'Reilly, Patrick.O'Sullivan, Denis J.Pattison, Séamus.Reynolds, Patrick J.Rooney, Eamonn.Ryan, Richie.Sheridan, Joseph.Spring, Dan.Sweetman, Gerard.Tierney, Patrick.Treacy, Seán.Tully, James.

Amendment No. 32 agreed to.

Section 52, as amended, agreed to.

Sections 53 and 54 agreed to.

SECTION 55.

Dr. Ryan

I move amendment No. 33:

To add to the section the following new subsection:

"(5) Where an order which was made before the passing of this Act under Section 12 of the Court Officers Act, 1945, contains a reference to levy under a certificate issued under Section 7 of the Finance Act, 1923, that reference shall be construed as including a reference to levy under a certificate issued under the said Section 7 as extended by this section."

Amendment put and declared carried.

Section 55, as amended, agreed to.

SECTION 56.

Dr. Ryan

I move amendment No. 34:

In subsection (2), page 35, line 45, to delete "or (4)".

Amendment agreed to.

I move amendment No. 38:

To add to subsection (2):

"but no order shall be made under that Act for the purpose of increasing the rate of the tax or extending the classes of activities or goods in respect of which tax is for the time being chargeable."

Amendment agreed to.

Dr. Ryan

I move amendment No. 39:

To add to the section the following new subsection:

"(3) Section 39 of the Inland Revenue Regulation Act, 1890, is hereby amended by the insertion of `turnover tax,' before `stamp duties'."

Amendment agreed to.

Section 64, as amended, agreed to.

Section 65 put and declared carried.

The Dáil adjourned at 10.40 p.m. until 10.30 a.m. on Thursday, 11th July, 1963.

Dáil Éireann debate - Wednesday, 10 Jul 1963

Finance Bill, 1963—Committee Stage (Resumed).

Deputies

Dáil Éireann debate -
Wednesday, 10 Jul 1963