Dáil Éireann debate -
Tuesday, 21 Jun 1966

Vol. 223 No. 6

Finance Bill, 1966: Committee Stage (Resumed).

NEW SECTION.

Mr. P. Byrne

I move amendment No. 6:

Before section 8, but in Part I, to insert a new section as follows:—

"Rule 9 of the Rules applicable to Schedule E contained in the Income Tax Act, 1918, is hereby amended by the substitution of ‘reasonably to incure expenditure for the appropriate performance' for ‘to expend money wholly, exclusively and necessarily in the performance'."

This amendment is designed to provide a measure of relief for salary and wage earners. Before making my case for the amendment, I want to draw the attention of the Minister and of the House to the context in which this amendment has been framed. Wage earners and salary earners are the most important single section of the tax-paying community. Numerically, they amount to about 90 per cent of the total number of taxpayers. Over the past several years, the total tax collected from wage and salary earners has increased very substantially indeed, particularly since the introduction of PAYE.

As I mentioned here on section 1 last week, there is an old maxim of the law to the effect that equity is a stranger to income tax. I have suggested that the Minister's predecessor was too readily prepared to live with that situation. We have a tax code— again, as I mentioned last week— which was never designed for our circumstances and for our times, a tax code which was first introduced to this country in 1853, having originally been drafted away back in the first decade of the last century by the then British Prime Minister, Sir William Pitt. In so far as there are anomalies, inequities and injustices in that tax code which relate to wage and salary earners, it is even more desirable in this case, in simple justice, to rectify these anomalies and inequities because of the inequitable extent to which we are leaning on wage and salary earners for direct tax revenue.

This amendment appears to be somewhat technical. It is an amendment of Rule No. 9 of the Rules applicable to wage and salary earners— Schedule E Rules—as laid down in the British Act of 1918 which is still in force in this country. I shall read the Rule: it is quite brief. It is:

If the holder of an office or employment of profit is necessarily obliged to incur and defray out of the emoluments thereof the expenses of travelling in the performance of the duties of the office or employment, or of keeping or maintaining a horse to enable him to perform the same, or otherwise to expend money wholly, exclusively, and necessarily in the performance of the said duties, there may be deducted from the emoluments to be assessed the expenses so necessarily incurred and defrayed.

From the reference to keeping or maintaining a horse, it may be surmised that the Rule is of very long standing. In fact, it is intact in the 1918 Act as it was in the British Act of 1853.

That brings to mind a picture of the Minister coming into Dáil Éireann riding his horse or being driven by his coachman behind a pair of spanking bays. It is as antiquated as that, as are, indeed, other Rules in the tax code. I have said here, time without number, that such Rules are quite unsuited to these times and to our conditions. That Rule is a very restricted rule. It has the effect of depriving wage and salary earners of tax relief in respect of legitimate expenses incurred by them in the earning of their salaries and wages.

The amendment I have drafted is as recommended by the Income Tax Commission. This Commission reviewed the British background of this Rule and had a look at the decisions of the various Royal Commissions which considered this, amongst other matters. The British Royal Commission of 1955 stated there can have been no part of the tax code which has been so regularly the subject of unfavourable notice as this Rule 9. It has been variously described by learned judges as "jealously restricted", "strictly limited" and "a very narrow and strict Rule". These are quotations from the Report of the Royal Commission, which also give the references to the cases from which the learned judges' remarks are quoted. In one case the provisions of the Rule are described as "notoriously rigid, narrow and restricted in their operation". In the test case, Bolan v. Barlow 1949, the learned judge in Britain declared:

A great number of these cases have produced in my judgment extremely hard results.

It is a Rule which undoubtedly causes a considerable amount of hardship when applied to particular cases. It is a Rule—and this is a most important point—confined to wage and salary earners. It is not a Rule applied to business people taxed on a different part of the tax code and entitled to considerably more latitude and discretion in deciding what expenses they incur in the earning of their profits.

It is not unfair or untrue to say that for all practical purposes wage earners and salary earners are not allowed any expenses as of right. In some cases by concession they are allowed a limited sum in respect of tool money and overalls. These are the restricted examples that occur to me. A worker cannot claim his trade union subscription as an allowable expense for tax purposes. A salary earner who is a professional person, a member of the expanding group of managerial persons, cannot even claim his subscription to his professional association. If he does not pay it, he will be struck off his professional roll and no longer qualified to hold his job. Let us say he is an architect in the Board of Works or a lawyer in the employment of Deputy Sweetman.

I think there is an unanswerable case for this amendment. Under the present Rule, the Revenue are forced into the anomalous position of making very unreal distinctions as between what an employee is obliged to incur in the performances of his duties and what it is desirable he should incur. There is great emphasis in this Rule on the physical performance of one's duties. If an architect, for example, ceases to be a member of the architects' institute he will not be physically unable to prepare plans or make drawings, but he will cease to be an architect. That is an example of the unreal distinctions made under this, not to speak of the broader range of cases involving expenditure on books for their professional learning, on tools and protective clothing and involving for certain types of salary and wage earners perhaps the provision of secretarial assistance and of a motor car.

I do not want to labour the case. As I said on a previous amendment this evening, the fact that our Income Tax Commission considered this matter at length, considered the pros and cons of the various courses of action and came up with the proposal which is involved in my amendment, in itself should be sufficient for the Minister. Bereft of technical details, the nub of my case is that wage and salary earners and individual taxpayers are a section of the community who in equity are most harshly and indeed unjustly treated by our tax code. The implementation of this amendment would be an instalment of justice for these sorely afflicted people.

Mr. J. Lynch

The fact that this Rule is framed in what might be described as old verbiage does not necessarily mean it is bad wording. The reference to the horse obviously indicates that it is over a century old, but the essential words, the words Deputy Byrne seeks to amend, are expenses incurred "wholly, exclusively and necessarily" in the performance of his work or job. These words are as relevant now as they were 50 or 100 years ago. I do not think time has changed the purpose of those words, nor is it necessary now to change the effect of the words. I do not think we need bandy about the recommendations of the Commission on Income Taxation because I have been using them as they suit me and Deputy Byrne has been using them as they suit him. Therefore, so far as the Commission are concerned, their recommendations can cut both ways.

Mr. Sweetman

I seem to recall it was the Minister adduced them first.

Mr. J. Lynch

Maybe I have been guilty of that, but nevertheless the fact is we have used the recommendations as it suited our own particular case. Of course, our Commission followed the recommendation of the Royal Commission, as Deputy Byrne said, even though that Commission's recommendation, in the form Deputy Byrne now proposes, has not been adopted in Britain. Deputy Byrne cited a number of cases, the case of the architect employed in the Office of Public Works, or a solicitor employed by a private practitioner, but that is not the full case because in the case of the architect, if he is obliged, as a condition of employment, to continue his contribution to his professional organisation, then it would be an allowable expense, being a condition of employment. It is the same with a solicitor. The trade unionist does not necessarily have to pay his contribution to his trade union as a condition of employment.

Mr. P. Byrne

In many cases he will lose his job if he ceases to be a member of the union.

Mr. J. Lynch

It is not a condition of employment.

Sir Anthony Esmonde

It is in some cases. Employment is conditional on being a member of a union in the fertiliser factory in Arklow.

Mr. J. Lynch

I am not familiar with the conditions of employment there. In any event, the words which Deputy Byrne wants to introduce instead of "wholly, exclusively and necessarily in the performance" would widen the whole scope of the kind of allowances a person can seek in mitigation of his obligation to pay income tax. It would certainly create a whole volume of new case law, create much difficulty in administration and would certainly reduce the tax income from this source. I forget if Deputy Byrne made any reference to the workman who has to have overalls cleaned and tools provided but I think he did, and I think he accepted that these are regarded as expenses necessarily incurred and therefore qualify for an allowance. I believe that to change the wording would certainly open up the prospects for avoidance of income tax and would have the effect of reducing the income from this source. As the Deputy is well aware, the words "reasonably to incur expenditure for the appropriate performance" are so wide that it would be very difficult to establish what was not reasonable and what was the appropriate performance of one's functions. The old definition "wholly, exclusively and necessarily in the performance" is a fair one and one which can be measured accurately and which gives the minimum prospects of avoidance.

I know that the payment of income tax is not something that people welcome in any sense but I would not go as far as Deputy Byrne has gone, to say that it is grossly unfair as operated in this country. On the contrary, I think our income tax code is much less onerous than that of many other countries. I do not think it is in any way inappropriate to our circumstances. The fact that this form was introduced by Sir William Pitt in 1853 does not necessarily mean that the form in which it has evolved as of now is necessarily inappropriate to our circumstances because for almost half that period, or perhaps less than half, we have been introducing our own Finance Acts and——

Mr. P. Byrne

Cogging them from the British.

Mr. J. Lynch

——we have gradually moulded our tax legislation to suit conditions as they are and as they emerge from time to time. I regret I cannot accept the amendment.

Mr. P. Byrne

As to the moulding of our own legislation, there was considerable discussion here on section 17 of the 1963 Act which, like so many other provisions brought in here in various Finance Bills, was no more than a schoolboy's cog of the British law. Now, in the Commission's report, in paragraph 231 of Chapter 4, there are set out six examples of what the Commission considered to be fair expenditure incurred by employees and office holders and which were held to be inadmissible. I am not going to detain the House by reciting those clear-cut examples but rather would I ask the Minister to study them at his leisure. It is true that the recommendation on this matter which was made by the Royal Commission in 1955 was not implemented by the British Chancellor, in its entirely at any rate, although a provision somewhat analagous to my amendment in respect of professional subscriptions was brought in in a British Act some five or six years ago. Broadly speaking, the Minister quite rightly says that the British Chancellor did not implement his own Commission's recommendation. That, to my mind, is no proper precedent for the Minister to quote. The Minister has not adverted to my comments on the context in which this amendment has been framed, the great need to give an instalment of justice to wage and salary earners. There is a dead hand of conservatism on tax reform in this country and in dealing with the Minister's predecessor, one was beating one's head against a stone wall in advocating reasonable, fair and just reforms as recommended by our own Commission. It is most disappointing to see that the present Minister for Finance is following that particular precedent.

Sir Anthony Esmonde

I understood the Minister to say it would be impossible administratively to meet any of Deputy Byrne's requests.

Mr. J. Lynch

I did not say "impossible"; I said "very difficult".

Sir Anthony Esmonde

I understand from what Deputy Byrne said that wage earners are not entitled to any travelling expenses to or from their place of employment, that that is not covered by existing legislation?

Mr. J. Lynch

Deputy Dunne has an amendment down to that effect.

Sir Anthony Esmonde

We have been talking about old Acts and at the time these Acts were passed, most employees lived on the doorstep of their employment. Dublin city was about one-tenth its present size. Today a great many employees—and I am very conscious of this fact as, I am sure, is every other Deputy —have to live a very long way from their employment. Some have to spend up to £1 a week at least on public transport. It is said that there are administrative difficulties in the way but it would seem to me that it would not be administratively very difficult for an employee to claim the amount he spends on public transport each day going to his place of employment from his home. I do not see why the Minister could not favourably consider granting that as an allowance. It might go some way towards meeting the wishes of Deputy Byrne.

Mr. S. Dunne

Might I just mention—I do not want to delay the House—that I have an amendment down in these terms?

An Leas-Cheann Comhairle

I was about to point out to Deputy Esmonde that his point would arise relevantly later on on Deputy Dunne's amendment.

Sir Anthony Esmonde

I apologise.

An Leas-Cheann Comhairle

Is the amendment withdrawn?

Mr. P. Byrne

No; the amendment is not withdrawn.

Amendment put and declared lost.

Mr. P. Byrne

I move amendment No. 7:

Before section 8, but in Part I, to insert a new section as follows:

"In connection with any assessment for liability to income tax where a person proves that he has incurred expenditure by way of fees paid to an educational establishment for the instruction of his child, step child or legally adopted child there shall be deducted from the income to be assessed the expenses so incurred subject to a maximum deduction of £75 in respect of each child and provided that the child is not entitled in his own right to an income in excess of one hundred pounds per year."

This is a very fair and, I think reasonable amendment. I hope the Minister will accept it. This country is very poor indeed from the point of view of natural resources, natural wealth, mineral wealth and inherited wealth, such as are possessed by other industrial countries. If one looks at the matter objectively, one must come to the conclusion that our greatest source of national wealth is the brainpower and talent of our young people. I said here last week that it was time to sit back and take a long, hard look at the principles upon which personal allowances are based for tax purposes. There is a personal allowance for a child engaged in full-time education of £120 a year; that was increased this year by £30 to £150. Presumably it is intended to cover the upkeep and maintenance of a child at school or university. It is not nearly enough. Ten years ago day secondary school fees were approximately £20 per year; today they are £60, £70 and £80 per year. In UCD, when I was doing Arts and Commerce, a three-year course, the fee was £20 per year. It is now in the region of £75, nearly a fourfold increase. Students' digs ten years ago were 45/- to 50/-per week. One could get really good digs at 50/- per week. Now digs are costing £5 and £6 per week.

There is very little State assistance given to education here as compared with the standards prevailing in Northern Ireland and Britain and a scale of tax allowance analogous to that applied in the North or in Britain falls far short here of equity and fairplay. In the tax code as applied to business people, very sound encouragement is given for capital investment. If an industrialist buys a new machine, he gets in the year of purchase substantial tax relief. That is in the national interest because it enables us to build up capital and develop our country. If the Minister thinks that an increase of £30 this year in the allowance for school-going children and university students is either a realistic or worthwhile relief for parents providing education for their children, which is made available by the State in other countries, then he is grossly misleading himself, his Party and this House.

That, briefly, is my case for this amendment. The allowance is grossly inadequate compared with 1939. The £ today is worth about 6/8 as compared with 1939. Caught in the tax code today is a type of person who would not have been paying any tax on an equivalent income in real terms in pre-war days. The Minister's predecessor made the point several times on amendments similar to this that, rather than bring in ad hoc reliefs, he would prefer to lower the standard rate of tax. We know the Minister cannot lower the standard rate of tax and I would make the case that the really urgent need now is to provide relief for individuals. Indeed a standard rate of tax substantially in excess of the present one could hardly be objected to if it were accompanied by a firm scale of personal reliefs designed to restore effectively the pre-war position and ensure that the small man, who contributes so much in the way of indirect tax and, in particular, the family man, coping with all the trials and tribulations which afflict people today who are trying to bring up children and educate them, is relieved.

Mr. J. Lynch

Much of the comment I made in dealing with the amendment about medical expenses would be relevant to this amendment as well. The amount of subvention by way of grants and other assistance that the State has given to education over the past few years has increased more than proportionately with the increase in overall taxation. I cannot give the Deputy the exact figures now, but I could prove that, if challenged. While we still may not be paying as much in educational subventions as other countries are, we are increasing them relatively.

Our big difficulty here is that not only is our tax base not very broad but the number of taxpayers we have is not very great. The Deputy is aware that about 30 per cent of our people are engaged in farming and, by and large, farmers are not income tax payers. Some of them pay under Schedule B, which is a very limited sum, and some who are engaged in other activities pay on their income from those activities. Therefore, the number of people who pay taxes is very limited and the more reliefs we give, the more we have to burden these people with taxes, whether income or indirect taxation.

Because I found it necessary to increase the standard rate this year, I thought it was desirable to give some form of relief, and the one I thought best to introduce was increasing the child allowance from £120 to £150 for children of 11 years and upwards. I did that in order to help people who were sending their children to secondary and vocational schools and to universities. This might appear at first sight to be a modest increase in the allowance, but it costs the best part of £500,000 in a full year. That is as far as I could go, this year at any rate; I am not suggesting that in a future year I could not bring in the specific allowance Deputy Byrne has suggested.

Again, while I presume Deputy Byrne does not claim anything special for his drafting of this amendment, it would, in effect, cover a very wide range of instruction and education. The Deputy simply says: "...where a person proves that he has incurred expenditure by way of fees paid to an educational establishment for the instruction of his child..." How would one define "an educational establishment"? There are many people who are getting national and secondary education practically for nothing. I admit there are secondary school fees but they are very limited. The same applies to vocational education. Some of these people might like to send their children to a deportment class where they might get full-time instruction, and while deportment may be a worthwhile subject, the Deputy's amendment would allow relief in respect of up to £75 in fees paid for this purpose. I know that is an extreme example, but I have gone as far as I can this year, having regard to the difficulties it would raise for the Exchequer and particularly having regard to the fact that the taxpayers as they now exist would have to bear the increased burden if we were to increase reliefs as suggested by the Deputy.

Mr. Sweetman

Yes, but not increased by reference to the class.

Mr. J. Lynch

Not that class.

Mr. Sweetman

Compared with the others.

Question put; the Committee divided: Tá, 49; Níl, 67.

Tá

Belton, Luke.Belton, Paddy.Burke, Joan T.Byrne, Patrick.Clinton, Mark A.Cluskey, Frank.Collins, Seán.Connor, Patrick.Coogan, Fintan.Corish, Brendan.Cosgrave, Liam.Costello, Declan.Costello, John A.Creed, Donal.Crotty, Patrick J.Dockrell, Henry P.Dockrell, Maurice E.Donegan, Patrick S.Donnellan, John.Dunne, Seán.Dunne, Thomas.Esmonde, Sir Anthony C.Farrelly, Denis.Fitzpatrick, Thomas J. (Cavan).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.L'Estrange, Gerald.Lindsay, Patrick J.Lyons, Michael D.Murphy, William.Norton, Patrick.O'Donnell, Patrick.O'Donnell, Tom.O'Hara, Thomas.O'Higgins, Michael J.O'Higgins, Thomas F.K.Pattison, Séamus.Reynolds, Patrick J.Ryan, Richie.Sweetman, Gerard.Treacy, Seán.Tully, James.

Níl

Aiken, Frank.Allen, Lorcan.Andrews, David.Blaney, Neil T.Boland, Kevin.Boylan, Terence.Brady, Philip.Brennan, Joseph.Brennan, Paudge.Breslin, Cormac.Briscoe, Ben.Burke, Patrick J.Calleary, Phelim A.Carty, Michael.Childers, Erskine.Clohessy, Patrick.Collins, James J.Corry, Martin J.Cotter, Edward.Crinion, Brendan.Cronin, Jerry.Crowley, Flor.Crowley, Honor M.Cunningham, Liam.Davern, Don.de Valera, Vivion.Dowling, Joe.Egan, Nicholas.Fahey, John.Fanning, John.Faulkner, Pádraig.Fitzpatrick, Thomas J. (Dublin).Flanagan, Seán.

Foley, Desmond.Gallagher, James.Geoghegan, John.Gibbons, James M.Gilbride, Eugene.Gogan, Richard P.Haughey, Charles.Healy, Augustine A.Hillery, Patrick J.Hilliard, Michael.Kenneally, William.Kennedy, James J.Kitt, Michael F.Lalor, Patrick J.Lemass, Noel T.Lemass, Seán.Lenihan, Brian.Lenihan, Patrick.Lynch, Celia.Lynch, Jack.McEllistrim, Thomas.MacEntee, Seán.Meaney, Tom.Millar, Anthony G.Molloy, Robert.Mooney, Patrick.Moore, Seán.Moran, Michael.Nolan, Thomas.Ó Briain, Donnchadh.Ó Ceallaigh, Seán.O'Connor, Timothy. O'Malley, Donogh.Smith, Patrick.

Tellers: Tá, Deputies L'Estrange and T. Dunne; Níl, Deputies Carty and Geoghegan.

Amendment declared lost.

Mr. S. Dunne

I move amendment No. 8:

Before section 8, but in Part I, to insert a new section as follows:

"Amounts paid by individuals for transport to and from their places of employment by bus or rail shall be deductible from incomes for the purposes of tax assessment."

Deputy Byrne, in his treatment of his amendment, has very capably outlined the position of the income taxpayer generally in the community. While the Minister claims that our income tax code will be said to be less onerous than that of other countries, the fact remains that the section of population which is required to pay income tax in this country are mainly the wage earners and salary earners and it is to the condition of the wage earner that I want to address myself in dealing with this amendment.

The cost of travelling to and from employment has become a very big item in the cost of living which workers have to face in these hard times. That is particularly true in respect of workers who live on the perimeter of this city or in Dublin county, or, indeed, of workers who live on the fringes of other cities or towns throughout the country who must travel considerable distances in many cases to their places of employment.

Bus fares, of course, are extremely high as we know and only recently they have again been very considerably increased, again accentuating and sharpening the problem of living for the people to whom I refer. Take the example of a man who lives on the edge of Dublin city, who is working in some industry either at the centre of the city or on the far side of the city, and it will be found that, as a general rule, his bus fare, that of a man who is usually the head of the household, is seldom less than £1 a week. Take the part of my constituency to which I have so often referred, Ballyfermot, and look at the position of the worker living there and not at the extreme end of it either. He will require to pay, for travel from the shopping centre in Ballyfermot to O'Connell Bridge, 1/- there and 1/-back. That is two shillings per day for that journey and he is working a five day week, so it amounts to 10/-per week. But more often than not he has a second bus trip to make to his place of employment, possibly out to the southern or northern suburbs, if he works in an industry or factory of one kind or another. So it is quite possible to find such men suffering an effective wage reduction of up to £1, and sometimes much more than £1 a week, within the Dublin city area by reason of the exorbitant bus fares charged to workers for the use of buses.

This problem is magnified when one thinks of workers travelling to Dublin from places in the county more or less remotely situated. There are many examples of people who travel from, say, Balbriggan to Dublin by rail or, indeed, who travel from Drogheda, County Louth, to work in Dublin and back in the evening. Here we have instances where the cost of travel on the ordinary wage earner bears exceedingly hard.

If I mention the situation in Dublin particularly it will be understood that I do so because it is long accepted by students of transport here that the bus travelling population of this city and county subsidise by their bus fares the transport system in a general way in the rural areas. It has long been argued that transport nationally cannot be made an economic proposition and the Government have on every conceivable occasion at the instrumentality of certain very prominent public officials, who shall be for the nonce at any rate nameless, lost no opportunity of increasing the already too high level of bus fares. It is in order to try to get some relief for such of the bus-using public as are required to pay income tax that I put down this amendment.

Deputy Sir Anthony Esmonde in the course of his remarks on a previous amendment pointed to that very important fact as it affects the position of workers nowadays and distinguishes workers as a class or social group from workers of other days inasmuch as it was true that up to more or less what can be described as recent times wage earners were to be found living very close to their place of employment, clustered as it were around factories or other centres where work was available. The passage of time has changed that. Housing development, such as has occurred, has been largely suburban. Clearances of the slums have resulted in the transfer of many thousands of working class families to houses in locations four or five miles from the city centre. This has brought about these modern conditions in which costs of travel are an integral part of the cost of living for the average worker, but there has been no recognition of this fact by the Government.

I do not know if, in fact, costs of travel are ever taken into account by statisticians when computing the cost-of-living index. I would rather doubt it. It is high time that this was taken into account. It is merely as an initial step in that direction that we seek to have this principle embraced in this Finance Bill—the principle of making allowance by way of income tax at the beginning for workers who have to pay these high bus fares and rail fares for getting to their place of employment.

In my view, the burden of income tax falls upon the working people, the wage earners particularly and the salary earners, to an extent that is unjustifiable. As Deputy Byrne said, it is completely inequitable. There are large sections of the population of Ireland who get away with the payment of no income tax of any kind whatsoever. I do not think it is an exaggeration to say that in many cases their economic condition is extremely comfortable when you take it in comparison with the situation of the workers to whom I refer, and the details of whose living costs I instanced last week when we were dealing with the General Resolution which is related to this Bill.

I am moving this amendment because I believe it is high time that notice was taken of the position of such people. A beginning should be made in the direction of affording them some relief. I do not think that the relief suggested here is extraordinarily great, nor do I believe that if it is permitted to these workers it will seriously impair Revenue receipts. I hope that the Minister will receive it favourably and so contribute to an easement of the struggle which these people are now having in order to live.

Mr. P. Byrne

We welcome this amendment. We tabled one very similar to it two years ago. Since that time the problem which it endeavours to cater for has been considerably aggravated by rising transport costs.

Those of us who are involved in Dublin housing problems are only too well aware how reluctant our people are to accept Corporation housing in far outlying places such as Coolock, Ballyfermot and Finglas. Ballyfermot is known in the vernacular as Bally-far-out. I have known of many cases where persons sorely in need of housing would put up with inadequate accommodation in the city area rather than accept housing in these outlying areas. These people have absolutely no discretion and no choice in the location of their houses.

If an affluent businessman chooses to live in Greystones or Skerries the Minister and the Revenue Commissioners could very fairly ask: "Why should we provide a tax concession for an individual who chooses to move out to live in the rarified atmosphere of an exclusive far-out suburb?" That argument is a good one in those circumstances, but it cannot at all be related to the city worker compelled against his own personal preference to accept housing far out from his place of work. It is, of course, a most sacred principle of the tax rules that the expense of travelling to one's place of work by a wage earner, a salary earner or a business person, must never be allowed for income tax purposes. That has been elevated to the position of a most sacred doctrine.

As Deputy Dunne said, bus fares can be a most significant item in the family budget of a worker, not only for himself in travelling to work, but for his wife in going to the shops, and for his children in going to school. By reason of our ill-conceived lack of planning in our housing development we have built houses in places like Ballyfermot and Coolock, and we have failed to provide them with all the peripheral amenities which are customarily provided in other countries, shopping centres, schools and churches.

The bus bringing children from Ballyfermot or Finglas to the Whitefriar Street National School is still running after donkey's years since the people were sent out to that area. While the children are granted reduced fares—I think it is still a 1d. fare—in the morning time and in the evening, that is not available to them at lunch time. It is true to say that bus fares are a very considerable burden on the pay packet of many a Dublin worker and salary earner.

The tax code makes no allowance whatever for these expenses which must be incurred before the taxpayer can have a taxable income. To my mind, it is only a matter of simple commonsense. We are wholly in favour of the amendment and are most happy to support it.

Mr. Cluskey

I will not detain the House very long but I would like to support the amendment. Deputy Dunne has mentioned the fact that bus fares to a worker who finds himself living in some of the suburban housing schemes is a major item of the family budget. As a member of Dublin Corporation who is placed in the position of interviewing people regarding housing problems, I have possibly a far greater insight than others into just how big an item in the family budget bus fares are. I have knowledge of very many families who were evicted from houses, due to their dangerous condition, and who were offered alternative accommodation, if they were fortunate enough to be in the category to whom it is offered, for whom one of the major problems was the question of bus fares, the expenditure of the husband getting to his work and home at night. This expenditure completely debarred him from going home at lunchtime for a meal and he had the additional expenditure involved in having a meal away from home or had to take a very meagre lunch with him to his place of employment.

As was mentioned by the previous speaker, the wife finds that in some of those housing estates which we have around the perimeter, all facilities are not available. This is particularly evident in the newer estates. It is necessary for the wife to make frequent trips into town. There is also the question of children who are attending schools adjacent to their former places of residence. Those children also have to be catered for. This situation has been very greatly aggravated by the recent happenings in Dublin with regard to housing. We found it necessary, due to houses collapsing, to condemn hundreds upon hundreds of houses and absolutely no account could be taken of where a person would be offered alternative accommodation. No account could be taken at all of where the man worked. Bus fares are a very large item of expenditure and we feel this amendment is very worthy of consideration. It would mean quite a substantial amount to the people in question and would mean very little to the Government by way of revenue. The amendment should be accepted by the Government.

Mr. J. Lynch

The amendment refers specifically to people who travel to and from their place of employment by bus or rail. The amendment asks that the cost of such travel should be deductible, as an allowance, for income tax purposes. The amendment takes no account of people who travel by bicycle, by foot or by car. Therefore, at the very outset, it raises difficulty of administration as to whether the person who travels by bicycle or the person who finds time to walk, has in fact travelled by bus for the purpose of this claim.

As Deputy Byrne has said it is a principle of income tax regulations that the cost of travel to and from the person's place of employment has not been allowable as a deductible allowance for income tax purposes, because the position was many years ago that a person, by and large, lived where he liked. If a person lived in a far off place very distant from his place of employment, it was in many cases a matter for himself. It still is a matter for many people who are working for wages and salaries.

This amendment takes no account of wage earners, as Deputy Dunne describes them, as opposed to salary earners. The man Deputy Byrne referred to living in Greystones or any of those well-known, desirable suburban places, could still be a wage earner or a salary earner. He could live as a matter of choice in such a place. He would be entitled to an allowance in respect of his bus or train fare much as the Ballyfermot resident would be entitled to it, if the amendment were accepted. It would obviously give rise to great administrative difficulties as it takes no account of other modes of travel. It would also be a way of making false claims. I am not inferring that people living in Ballyfermot would engage in malpractices. Incidentally, Ballyfermot has been referred to many times in this House as an example of many things but there are other places such as Spangle Hill and Mayfield in my own constituency where people have to travel long distances to work.

Mr. S. Dunne

They have not been mentioned as often as Ballyfermot.

Mr. J. Lynch

The people in those areas are not always as voluble in their regard, or else are so happy they do not require to have their cases mentioned.

Mr. T.F. O'Higgins

Maybe they do so out of respect.

Mr. S. Dunne

Maybe they are dumbfounded.

Mr. J. Lynch

The Deputies serve them well and without having to raise their difficulties in the House. Deputy Dunne referred to the family he instanced in the House last week, the person earning about £12 10s a week. The Deputy was able to produce that person's outlay as amounting to something in excess of £13 a week. Of course, that person would not be relieved at all by the provision the Deputy wants to bring in.

Mr. S. Dunne

I did not suggest he would.

Mr. J. Lynch

People earning more than that would not be brought in. That person with two children had roughly £12 10s a week. In order to be caught for income tax and therefore to qualify for the relief in Deputy Dunne's amendment, such a person would have to earn much more than £12 10s a week. A person with three children would have to earn £1,000 odd a year, over £19 a week, before paying income tax. That person would not be entitled to claim, either, under Deputy Dunne's amendment. That person with three children would have to calculate bus fares in his budget, assuming his children had to travel to school, assuming he had to travel to his place of work and that his wife one day a week would have to buy things in town which would not be available locally. Therefore Deputy Dunne's amendment would create relative hardship on that person as against the man with no children on similar income who would be getting an allowance in respect of bus or rail travel on his way to and from work.

Mr. S. Dunne

If the Minister wishes to widen the scope of the amendment, I am quite agreeable.

Mr. J. Lynch

I am not suggesting it should be widened; I am merely pointing out the shortcomings of the Deputy's amendment. I have given a couple of examples of the difficulties. The amendment takes no account of workers travelling by bicycle or motor car. They go to work now not only by push bicycle but by motorcycle and motor car, especially to and from building sites. When I was Minister for Industry and Commerce, I visited a factory and the factory manager complained about lack of space for proposed expansion. The bulk of the workers were not in that day for one reason or another. I pointed to a huge site where one or two cars were parked and asked: "What about that?" He said: "The workers would never let me. That place is a car park and it is full on an ordinary working day".

Mr. S. Dunne

Some of them find it cheaper to run a car than pay the greatly increased bus fares.

Mr. J. Lynch

This was a rural area. People going to a factory in a rural area must find a mode of transport other than scheduled bus or rail services. I should point out that this is an allowance that has not been given except to a limited extent in Britain in war time to workers who had something to do with the war effort. At the end of the war it was immediately withdrawn because of difficulty of administration. That difficulty would always arise in relation to this type of relief. It would help people in the income tax bracket and would not give relief to people who were not but who still had to pay increased bus fares.

Mr. S. Dunne

The reason I mentioned bus and train users is that these people, certainly in Dublin and I am sure in Cork and Limerick and similar areas, are paying extraordinarily high rates for travel by way of bus and rail fares—those of them who are commuting, as the Americans have it, to work. As well as paying high bus and rail fares to semi-State bodies, they are refused an allowance for income tax purposes in respect of these fares. In my view this allowance is due to them. One would like to have—at some future date one hopes it would be possible—an amendment of the finance legislation which will embrace the various categories mentioned by the Minister—those who use cars, mopeds or motor bicycles and who have to buy petrol at greatly increased prices as a result of the mini-Budget. That apparently is not conceivable now. It was in order to accept the principle in small doses, so to speak, that I put down the amendment. I regret that the Minister has not seen fit to accept it because it would have been a step in the right direction.

Amendment put.

The Committee divided: Tá, 49, Níl, 66.

Tá

• Belton, Luke.
• Belton, Paddy.
• Burke, Joan T.
• Byrne, Patrick.
• Clinton, Mark A.
• Cluskey, Frank.
• Collins, Seán.
• Connor, Patrick.
• Coogan, Fintan.
• Corish, Brendan.
• Cosgrave, Liam.
• Costello, Declan.
• Costello, John A.
• Creed, Donal.
• Crotty, Patrick J.
• Dockrell, Henry P.
• Dockrell, Maurice E.
• Donegan, Patrick S.
• Donnellan, John.
• Dunne, Seán.
• Dunne, Thomas.
• Esmonde, Sir Anthony C.
• Farrelly, Denis.
• Fitzpatrick, Thomas J. (Cavan).
• 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.
• L'Estrange, Gerald.
• Lindsay, Patrick J.
• Lyons, Michael D.
• Murphy, William.
• Norton, Patrick.
• O'Donnell, Patrick.
• O'Donnell, Tom.
• O'Hara, Thomas.
• O'Higgins, Michael J.
• O'Higgins, Thomas F.K.
• Pattison, Séamus.
• Reynolds, Patrick J.
• Ryan, Richie.
• Sweetman, Gerard.
• Treacy, Seán.
• Tully, James.

Níl

• Aiken, Frank.
• Allen, Lorcan.
• Andrews, David.
• Blaney, Neil T.
• Boland, Kevin.
• Boylan, Terence.
• Brady, Philip.
• Brennan, Joseph.
• Brennan, Paudge.
• Breslin, Cormac.
• Briscoe, Ben.
• Burke, Patrick J.
• Calleary, Phelim A.
• Carty, Michael.
• Childers, Erskine.
• Clohessy, Patrick.
• Collins, James J.
• Corry, Martin J.
• Cotter, Edward.
• Crinion, Brendan.
• Cronin, Jerry.
• Crowley, Flor.
• Crowley, Honor M.
• Cunningham, Liam.
• Davern, Don.
• de Valera, Vivion.
• Dowling, Joe.
• Egan, Nicholas.
• Fanning, John.
• Faulkner, Pádraig.
• Fitzpatrick, Thomas J. (Dublin).
• Flanagan, Seán.
• Foley, Desmond.
• Gallagher, James.
• Geoghegan, John.
• Gibbons, James M.
• Gilbride, Eugene.
• Gogan, Richard P.
• Haughey, Charles.
• Healy, Augustine A.
• Hillery, Patrick J.
• Hilliard, Michael.
• Kenneally, William.
• Kennedy, James J.
• Kitt, Michael F.
• Lalor, Patrick J.
• Lemass, Noel T.
• Lemass, Seán.
• Lenihan, Brian.
• Lenihan, Patrick.
• Lynch, Celia.
• Lynch, Jack.
• McEllistrim, Thomas.
• MacEntee, Seán.
• Meaney, Tom.
• Millar, Anthony G.
• Molloy, Robert.
• Mooney, Patrick.
• Moore, Seán.
• Moran, Michael.
• Nolan, Thomas.
• Ó Briain, Donnchadh.
• Ó Ceallaigh, Seán.
• O'Connor, Timothy. O'Malley, Donogh.
• Smith, Patrick.

Tellers: Tá, Deputies Pattison and James Tully; Níl, Deputies Carty and Geoghegan.

Amendment declared lost.

Sections 8 and 9 agreed to.

Progress reported; Committee to sit again.