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Dáil Éireann debate -
Tuesday, 28 Jun 1966

Vol. 223 No. 9

Finance Bill, 1966: Report and Final Stages.

Amendment No. 1.

Before we come to that, I want to deal with an intimation I gave to Deputy P. Byrne last week about his amendment on section 21. That amendment concerned the writing into the legislation of a provision for errors in returns made for income tax purposes by companies.

For corporation profits tax.

Yes. Such legislation is already on the Statute Book in respect of income tax payable by individuals. I told him I would have an amendment made to meet the spirit of his amendment. I also told him that what he sought to have done was, in effect, being carried out. However, I did not have time, nor would I have time for some weeks yet, to draft a suitable amendment. I think I did give him to understand last week that if it were not possible for this Finance Bill, an appropriate provision would be introduced in the next Finance Bill.

Meanwhile, I think the Minister undertook that the relief from error would be given concessionally?

Yes, as it has been hitherto.

For the purpose of clarification, I should like the Minister to understand that it has not invariably been given in the past.

My understanding is to the contrary but to the extent that it has not been given, I can assure the Deputy that it will be given in future.


I move amendment No. 1:

In page 5, after line 57, to insert a new section as follows:

"Where a person proves, to the satisfaction of the Revenue Commissioners, that he has incurred expense on himself, his child or any dependant (for whom a dependent relative's allowance is granted for the year in question) arising out of the disability or illness in hospital of himself or that dependant there shall be allowed as a deduction from the income of that person before assessment, the vouched expenses so incurred in excess of £50 per person and up to a maximum of £300 per person provided that such person likewise proves that an application to the Voluntary Health Insurance Board for insurance against such disability or illness was prior to the beginning of such income tax year declined by such Board."

This amendment relates to the allowances for tax purposes of the costs of illness. It has been what I might term a hardy annual over the years and various Ministers for Finance have from time to time provided one reason or another why the amendment could not be accepted at the time it was introduced. Bearing all these excuses— and I use the word "excuses" quite deliberately—in mind, the amendment now before the House has been drafted with a view to meeting each and every case made by the Minister and his predecessors in office against the concession that is involved.

May I take the various parts of the amendment and make it clear where the amendment does meet any genuine objection that could be made by a Minister for Finance? The amendment reads:

Where a person proves, to the satisfaction of the Revenue Commissioners that he has incurred expenses....

In other words the onus of proof is put on the taxpayer and the Revenue Commissioners are entitled to demand in each individual case the type of proof they require so that they will be satisfied the expense has been incurred. In offering that, I must confess that I think the amendment goes even further than it should go in leaning over backwards to suit the Minister and the Revenue Commissioners. It is quite clear on the face of the amendment now that the Revenue Commissioners will have ample power to reject the fake claim and to allow only the genuine claim.

The amendment further goes on to limit the proof of the illness to the taxpayer himself. Consider, however, the position of his child or of any dependant for whom the dependent relative's allowance has been given. Incidentally, I note, just as I see that, that there seems to have been a clerical error, from the first drafting I made, of the wife being dropped out. It was in my first draft, when I was making it more legible perhaps. I may have dropped it out myself or it may have got dropped out later on, but obviously it would be appropriate to have the allowance also in respect of the wife. The position of the child does not perhaps go far enough because there would be the case of a child in the legal sense of the term but not in the tax sense of the term, a person over 16 years of age who was an invalid and who was not, therefore, still able to be at an educational establishment, who would not qualify for the tax allowance for children and yet obviously might be a person who would be causing the taxpayer very substantial sums in illness. The dependant is limited to the tax code's own definition of "dependant", again narrowing the desirability specifically to meet the objections that were made from time to time.

The Minister, also, or his predecessor —I forget which—indicated at an earlier stage that the Revenue Commissioners would find great difficulty in satisfying themselves where the case of illness was one in a person's home, and so on. Accordingly, to meet that point of view, the relief here is narrowed specifically to the expense arising out of disability or illness in hospital. The case has been made in earlier discussions that the effect of such a relief would be to ease the lot of the person who was a taxpayer and not to make any amelioration in respect of the lot of the person who did not pay income tax. The special provisions of the Health Act make it clear that that cannot be, that it is limited to hospital treatment. Under the Health Act, the provisions now are that there can be a special case up to an income limit of £1,200. The overwhelming percentage of the cases that this would cover would be persons in excess of that figure and to whom the argument that was there heretofore, when the Health Act's limit was fixed at £600, would not now appear to be relevant.

The case was made through the years, also, that it would be impossible administratively to cover this if every little tittle-tattle of expense was included. We were never anxious to provide that. We were never anxious to provide relief in respect of the big cases, the heart-breaking cases which virtually all of us, as Deputies, must have met from time to time. Hence, the sum we suggest on which relief should be given is a sum in excess of £50 per person per annum up to a maximum of £300 per person per annum. The relief that would be there, in those cases, would be well worth while for the taxpayer and certainly would not lend itself to any type of small administrative problem by reason of small bills or fake bills being sent in.

The Minister last year, went on to make the case that if this was allowable, it would do damage to the Voluntary Health Insurance Board. We have no desire to do anything that would in any way damage the success of that scheme, a success of which we on this side of the House are justly proud. It is one of the things that will be there, no matter what may come, as a monument to the enthusiasm, zeal and new thinking that was infused into the Department of Health when Deputy T.F. O'Higgins was Minister for Health from 1954 to 1957.


Hear, hear.

We have provided, therefore, that an essential proof in a case such as this is that the applicant will prove he asked the Voluntary Health Insurance Board to cover him and that they refused. They do refuse and, indeed, they must refuse, of necessity, to take the type of case where there is a chronic illness. This relief will be of assistance mainly for the chronic illness—it is really more—the chronic illness we were thinking of when we put it down for discussion in the House and, we hope, for the Minister's acceptance. The manner in which a family, almost well off, can suddenly see all their savings going by reason of the illness of some member of the family, or a dependant for whom the family is responsible, when they are outside the terms of the special provisions of the Health Act, is something that I am sure the Minister has met, as indeed we have met it. It is appropriate that the hardship case should be met by the Minister.

In an effort to ensure that he would have none of the objections to the amendment which he has voiced and which his predecessor, the former Deputy Dr. Ryan, voiced, on earlier occasions we have restricted this amendment almost to the bone. We have, in addition, left the decision on the proof of evidence to the Revenue Commissioners rather than leaving it open because we felt that if it were left open, the Minister might take the line that it would be difficult to avoid false claims for relief under this section. If there is any other reasonable way in which the Minister tells the House that he must have additional power for the purpose of detecting and preventing false claims for relief, then we are willing to look at any such suggestion by him most sympathetically. Nobody is anxious to start anything that would mean a false claim for relief but there are genuine cases of hardship in this regard and we feel this to be an appropriate way of meeting them.

Since last week I have very carefully read the report of the Minister's remarks on the earlier amendment which Deputy Sweetman tabled. When reading it, my feelings were a mixture of sympathy for the Minister and, at the same time, anger. I felt sympathy because I felt the Minister was on such a sticky wicket producing such lame arguments against this reasonable proposition and anger because this amendment has been before the House on five or six occasions and because speakers from all sides have spoken in favour of the principle, because the amendment is designed to give effect to a recommendation of the Income Tax Commission and, above all, because it is such a Christian proposition that we should strive to ameliorate the lot of the seriously ill as far as the impact of taxation on them is concerned. It is terribly disheartening to think that such general agreement could be expressed for the principle and that yet we should time after time batter our heads against a stone wall. I find it particularly disheartening, because, as I said before on this Bill, one came to expect a certain attitude from the Minister's predecessor which ill becomes the present Minister.

The Minister is apprehensive that if he concedes the case for a special allowance in respect of sickness expenses, this will open the door to a wide field of claims for other special allowances. I find it hard to believe that the Minister is really convinced that this is a valid argument. Sickness and all that springs from it is something for which there is no parallel in the range of afflictions and needs for which one can reasonably make a request for tax allowances. The Minister is under a grave misapprehension in so far as he appears to believe, from the tenor of his remarks last week, that we are seeking relief under this heading for surtax payers. The Minister—I quote from the Official Report for 21st June, 1966, volume 223, at column 911—said:

The person who would be liable to pay a very small amount of income tax possibly would not benefit to the same extent as a person who would be in the surtax bracket. Therefore, to that extent, the State would not come to the assistance of all its citizens equally.

There is no reference to surtax in Deputy Sweetman's amendment or anything to suggest that the allowance would automatically rank for surtax as for income tax. Indeed, the provisions of the Finance Act, 1959, which extended certain personal allowances to surtax payers were restricted and confined. The surtax relief is confined to the personal allowance. We have the precedent with which the Minister should be familiar, the income tax relief for insurance premiums and for voluntary health premiums do not rank equally for income tax. It does not rank at all for surtax. In any event, we are not seeking this relief for surtax payers. The maximum effective relief which would be available to any income tax payer under the terms of the agreement would be £105. In order to obtain that relief, a taxpayer would have to be suffering tax on at least £300 of his income at the standard rate of income tax.

As I stated last week, and as I stated before, this matter is the subject of considerable attention in the Fifth Report of the Income Taxation Commission. The Commission preparing its report had before it a memorandum from the Revenue Commissioners which opposed, in principle, reliefs such as this and, broadly speaking, made the same case as the Minister made last week, that this would open the door to other claims for special classes of persons and for special circumstances. Notwithstanding that memorandum from the Revenue Commissioners, the Income Taxation Commission went on to recommend at paragraph 96 of the Seventh Report that "a taxpayer who incurs expenses on himself, or on any dependant, arising out of disability or illness which is serious and likely to be permanent, should be allowed the vouched expenses in excess of £50 p.a. per person and up to a maximum of £300 p.a. per person". In other words, the Income Taxation Commission rejected the case which had been made to it by the Revenue Commissioners, the case which the Minister has now regrettably revived.

The Royal Commission an Taxation and Profits in England recommended a relief also on the lines which we are now seeking. The terms of that recommendation are also set out in the Report of our own Commission at page 30 of the Seventh Report. It is true that the Report of the Royal Commission in Britain in this connection has not been accepted by the British Government, but that is not at all a valid precedent for our Minister for Finance to go on. We all know the range of health services which are available without means tests, or without any discrimination whatever, in Britain and we have no parallel in this country. To that extent the case for this amendment is very much greater indeed than it is in Britain. The theory, the doctrinaire theory, which I believe has inspired the Revenue Commissioners in their approach to this, is that income tax should be a non-discriminatory tax which does not take account of special circumstances affecting one class of person or another and that the reliefs granted under the income tax code should be confined to broad categories of persons, such as married persons and persons with dependent relatives: in general terms, that the reliefs should be simple to administer and uncomplicated.

Our amendment is far narrower in its terms than was recommended by our own Commission, to the extent that Deputy Sweetman has confined the reliefs which are sought to disability or illness in hospital. We are getting away from the terms of our Commission's Report on even narrower and more circumscribed lines and to that extent the amendment should be all the more acceptable to the Minister, even if it falls far short of the demands of equity and justice. The relief sought is confined to those who are seriously disabled or so seriously ill as to be confined to hospital. Furthermore, it is confined to those who have been refused by the Voluntary Health Insurance Board. Those who are normally healthy, who are not predisposed to illness, are, generally speaking, accepted by the Voluntary Health Insurance Board.

It seems to me very wrong to discriminate in the tax sense against the seriously ill or those with a predisposition to illness; but that is what we are doing. Surely equity demands parity of treatment as between those who are acceptable to the Voluntary Health Insurance Board and those who are not? By accepting our amendment, the Minister will be giving parity of treatment to those who have been turned down by the Voluntary Health Insurance Board. That is all we are seeking. It is a very modest proposal. It falls far short of the amendment which we tabled here some years ago and which was criticised then by Fianna Fáil because it did not go far enough.

The Minister suggested last week that the cost of this amendment might be some few million pounds. That is utterly absurd. Perhaps it is a bit foolhardy to endeavour to estimate the cost, having regard to the limited knowledge available to us in relation to the tax yield and the number of possible claims, but, nonetheless, I shall be foolhardy enough to suggest that the cost would not exceed £100,000 a year in terms of tax. The need for this relief has increased over the years significantly and substantially, and particularly this year because of the increase in the standard rate of tax. Those who are sick and infirm and who are liable to tax will now be asked to pay even more tax than they paid in years past. That is a disgraceful state of affairs. It is because we believe that a basic principle of justice and equity is at stake that we persist in putting down this amendment year after year and we shall continue to do so so long as we remain in this House.

As I have said on several occasions, the willingness of successive Ministers for Finance to co-exist with inequity is altogether wrong. It is a willingness which must be opposed at every possible opportunity. There is a certain principle of equity at stake. I believe there is even more than that involved. That is the fifth or sixth occasion on which discussion has taken place here. If parliamentary democracy means anything at all, surely the time has long since passed for acceptance of this amendment, backed as it is by the official report of a Government Commission; surely this amendment should have long since been written into our legislation? If there is some dead hand of bureaucracy opposed to reform behind the Minister, then it is time the Minister cast that off, took an independent line and exercised his own undoubted intelligence and sense of fairplay in matters such as this.

At the outset I want to say that one's personal feelings ought not to determine what one regards as fair and just legislation. There are many facets of administration and legislation, facets with which one, as a Minister, would have a personal sympathy but in respect of which one could not ensure that, by adopting a suggestion made, fairplay would result all round. This is one of the principal difficulties in relation to income tax relief in respect of expenses incurred in illness.

I realise that Deputy Sweetman has very adroitly tried to circumvent, I must say very fairly, all the arguments that successive Ministers for Finance have put forward in refusing to accept amendments such as this. The first difficulty that must be overcome is to avoid giving an unfair advantage to one particular category of taxpayer in relation to one particular aspect of unavoidable personal expenditure. The income tax code has written into it certain personal allowances which operate, as far as one can devise, fairly as between one taxpayer and another. To pick out one aspect of personal expenditure, no matter how difficult it might be for the taxpayer, would inevitably give rise to claims for allowances in relation to other forms of personal expenditure. Last week we had a number of amendments seeking relief for education, travel to work, and so forth. These are all unavoidable personal expenditure. If one were to yield to the very genuine, I have no doubt, entreaties of the Opposition for tax relief in respect of expenditure on illness, one would inevitably have to face similar entreaties for tax relief on other forms of expenditure. I shall not analyse the wording of the amendment, although, as Deputy Sweetman says, there is one obvious omission.

That may have been my own mistake. I wrote that amendment down here last Wednesday because I was so disgusted with the Minister's reply.

The Commission on Income Taxation did make recommendations, with a limit of £50 at the lower end and £300 at the upper end, as in the amendment, but it did not differentiate between hospital and other expenses; to differentiate between these would, I think, introduce an important element of unfairness into the system.

It did last year.

I am dealing with the amendment as it appears, and in that respect we have had statements from other members of the Opposition who highlighted the expenditure incurred in an illness outside hospital expenses. To limit it to hospitals would create advantages for people who are lucky enough to get into hospital. There are many people who at the present time are lucky to get into hospital; there are many illnesses which are not regarded as active illnesses and, therefore, not requiring hospital treatment. These sufferers from illness are usually either not admitted in the first instance or asked to leave when they become non-active patients. If they are discharged from hospital and continue to suffer a protracted illness at home, then the terms of this amendment will not in any way relieve those responsible for paying their medical bills.

Everybody is aware that it is possible for people to incur medical expenses outside of hospitals by way of medical attendance, appliances, and drugs used and administered in the home, as much as if that person were in hospital. Therefore, the amendment, even though I admit it was sought to widen it in former years, would create that distinction as between taxpayers who would have dependants in hospital and taxpayers who would have dependants ill at home. There is the other difficulty, which I repeat, that this amendment, or any amendment of this nature, would inevitably benefit people who are better off more than those who are less well off.

The amendment would not benefit surtax payers at all.

The Deputy is wrong. Of course it would benefit surtax payers.

As income tax payers.

It would not affect their surtax liability.

It would not rank as a surtax relief.

It would operate to reduce the income of a person who might otherwise be in the surtax bracket.

It would only reduce his income for income tax purposes, but not for surtax.

Supposing a person was liable for surtax and the operation of the amendment reduced his liability from the surtax range to the ordinary range, surely this would affect surtax payers to that extent?

It would not affect surtax payers any more than life insurance premiums do.

Let me take a couple of examples to indicate how people who are better off would benefit much more than less well off people. In the first instance, there are people who would not qualify at all for ordinary health benefit, free or semi-free hospital treatment, and who may not be paying income tax at all. Even though the limit of qualification was raised recently to £1,200, there are many people earning in excess of £1,200 with families who are not income tax payers and, therefore, would not benefit at all by the amendment proposed. For example, a man earning £1,565 a year and having, say, six children, would not benefit at all by this amendment, because he would not be liable for income tax. If he were earning £2,000, the relief under the amendment would amount to about £26 5s; if he were earning £5,000 his relief would be about £47 10s; if he were earning £6,000, his relief would be £60, and so on.

Up to a maximum of £105.

Nevertheless, that indicates that the higher the man goes, the greater the benefit it would be for him. There is one other problem in the income tax range. As the Deputies are aware, if a dependant had an income of £180 a year in his own right, then the taxpayer of whom he is a dependant would not be entitled to a dependant's allowance and, therefore, would not qualify for relief under the section. There are a number of other anomalies on which I do not like to go into too much detail. Take a man who has two or three children injured in an accident at their home—maybe on a swing or a seesaw. If the three of them have to go to hospital for a period and the cost of the hospitalisation, although perhaps less than £50 in respect of each of them, totals almost £150 then the taxpayer will not qualify. Even if only one child is injured and the hospital expenses amount to less than £50 but over a period of, say, three or four years, the hospital expenses amount to £200 or £250, the person of whom the injured child is a dependant will not be entitled to relief.

If the State is to provide assistance of this nature to people who suffer injury or whose dependants suffer injury or contract a disease by reason of which they must go to hospital, then it ought to be fair. Under the system proposed, or under any system that could be reasonably devised, it would be most difficult to ensure that that relief could operate fairly under the income tax code. As I said at the outset, no matter what one's personal opinions or personal sympathies are, one must regard such a proposal objectively, and if it is not fair, if it does not operate generally, then it ought not to be enacted.

I am surprised and disappointed at the reply of the Minister to this amendment because, with all due respect to his predecessor, the former Deputy Ryan, who is now a Senator, he did show some sympathy for the idea behind this amendment over the past two or three Budgets for which he was responsible. His difficulty seemed to be trying to devise some method by which people who suffer real hardship could be assisted under the income tax code. It seems to me from what the Minister has said that he has sought out very special cases to show that either some people would not get any benefit under this proposal or that those people who could be regarded as being fairly wealthy would benefit where they should not benefit. I accept the Minister's argument in respect of those specific cases but I think he should—in his capacity as Minister for Finance—be one of the first to admit that there should be some relief in respect of people who have to incur severe medical expenses, not alone for one year but, in many cases, a number of years.

I would be concerned about certain people in the middle income group, those people who are in insurable employment or those whose income does not exceed £1,200 per year as per the recent arrangement by the Ministers for Social Welfare and Health. It is true that if they have to go to hospital they do not have to meet the full charge, but it is also true that they do have to pay to the extent of 10/- per day. It is true also that under the present system they have to meet the expense of a doctor and they have to meet what has now become the very heavy expense of purchasing drugs or medicines. I am sure Deputies Sweetman, Ryan and P. Byrne would not mind, if the Minister gave an indication that he would introduce a new proposal in the Seanad in the Finance Bill, at all changing to some extent because, as it is, the Minister seems to have closed his mind completely to any relief whatsoever for those who had to pay heavy medical expenses.

It is not a good argument for the Minister to say that if he assented in respect of this amendment, he would have many other types of people asking for similar concessions. He quotes education as one example and says that people would be looking for increased allowances in respect of the education of their children. Whether that is desirable is not being discussed here but the plain fact is that when one compares health with education, the higher education, secondary or university education, need not necessarily be absolute as far as parents are concerned. It is desirable that every child should get an opportunity of developing himself to the extent of getting a secondary education and, possibly, a university education but ill health is something in which one has no choice; ill health and the incurring of heavy medical expenses are impositions on a family. Many of us know families who have been beggared by reason of the illness of the breadwinner, his wife, children or some other dependant of the family.

One of the things which attracts me about this amendment is that this concession is to be applied to those who have been refused admission to the Voluntary Health Insurance Scheme. If we had not a Voluntary Health Insurance Scheme, I suppose there might be a legitimate objection by the Minister because then he could say that these people should be able to provide— although I would not go along with this —and keep on providing for such ill health of any member of the family. The people to whom this applies in the main—apart from those mentioned by the Minister in the surtax group, those who could be regarded as being wealthy—as far as I can see are those who could be severely handicapped and hurt in their financial position by heavy medical expenditure. Some of the people I have in mind, those in insurable employment, those who even at the present time pay income tax in the middle income group, may have little nest eggs either in the Post Office, bank or in some other savings institution. I suppose it would not be unreasonable to say that some of those people would have, maybe, £200, £300, £400, £500 or £600 in the family fund but a long illness would deplete these financial resources very quickly.

The concession proposed in this amendment is not a big one. I do not know if the Minister has tried to find out how much approximately it would cost per year. I do not think it would cost a fantastic amount. Like Deputy P. Byrne, I could not hazard a guess as to what it would cost but the question has been put up in Dáil Éireann so often I am sure it must be possible for the Minister's advisers to tell him approximately what it would cost. We have spent long hours on discussions of proposals in this House which would cost relatively small sums. As far as the Labour Party are concerned, we do not want these concessions applied to people who can well afford the expense for which it is proposed there should be some income tax relief, but we genuinely believe that, in relation to the type of person Deputy Sweetman has in mind here, this concession should be granted.

I am disappointed that the Minister has appeared to have closed his mind on this. We all know that his predecessor, Deputy Ryan, had a very easy way in this House when it came to discussion and in his efforts to try to get from one stage of a Bill to another. I would plead with the present. Minister to give further consideration to this, but if there should be an upper limit over which this income tax relief should not apply, I would go with the Minister then. But I would be concerned with the man in the middle income group, that he should be helped and should not have his financial resources depleted by reason of the ill luck of having ill health, either himself or any dependant in his family.

May I congratulate the Minister on the very first-class Opposition speech which he delivered from the Government benches? I can only assume he is rehearsing for the day, which is not too far distant, when he sits on this side of the House and some other Minister for Finance is introducing an amendment such as the one now before the House for discussion.

This amendment is primarily a Government amendment. It is tabled in this particular restricted form by Deputy Sweetman simply to meet the objections raised to it on other occasions in the case of the more liberal allowance which we in Fine Gael have been advocating for people unfortunate enough to suffer from ill health, which can be a tremendous personal burden but can also be an extremely difficult family burden. That is what Deputy Sweetman this year, and other years, together with the other members of the Fine Gael Party, has been asking this House to consider.

It is rather disappointing, as Deputy Corish has said, that for the first time in this particular year, we find something less than sympathy from the Minister for Finance. The Minister's approach to this is something like a person standing on the bank of a river who sees a few people drowning and who decides that he will not endeavour to save any of them because he could not save them all. That is exactly the attitude of the Minister. It was also the attitude of his predecessor: that because he could not save everybody in the water and bring them all to the bank at the one time, he would not make any effort to save them at all.

The Minister has asserted that it would be wrong to give this benefit to those who could benefit by it because there would be some who would not benefit at all. I do not want to be too morbid but may I remind the Minister that under our present death duties code we do not have to pay estate duty on funeral expenses. If we carried the Minister's argument to its logical conclusion, this is wrong because some people will avoid having this benefit because they disappear, their bodies cannot be found to be buried and when their estate is being administered, this advantage of not having to pay estate duty does not arise because they have no funeral.

If we followed the Minister's argument to its logical conclusion, we would also do away with the advantage now applied to funeral expenses because some people who live beside a graveyard have a very small funeral bill. The coffin can be carried from the person's home to the graveyard but the people who live at quite a considerable distance away would have funeral expenses which would run into a few hundred pounds. That kind of illustration shows how unworthy is the Minister's argument when he says that no benefits can be incurred unless they can be applied to all and sundry. If that is a valid criticism, it can be said that there are a number of allowances in the income tax code which it can be said do not apply to all citizens because all citizens are not paying income tax. If that is to be the type of argument which we can expect in regard to all requests for allowances in future, it seems that we can never seek any reliefs in the income tax code. The Minister said last week that this amendment could cost a few million pounds.

Not that amendment but the general amendment.

That amendment was put down in the name of Deputy Cosgrave. If that was going to cost a few million pounds, it would mean that one-tenth of the income tax payers in this country are suffering from serious illness. We find that unacceptable. If it is so, it is all the more reason for accepting this amendment. If such a large proportion of our people today have such high medical expenses, and they are forced now to pay income tax on those expenses, then the case for the amendment cannot be rebutted.

The Minister last week made a most unworthy suggestion with regard to this amendment which has been adequately dealt with by my colleagues here today. I would like to refer to a number of allowances which at present apply in regard to the income tax code, which if the Minister's argument is serious, should not be given. Allowances are now permitted in respect of expenses incurred in the full-time education of children. This is clearly something which does not benefit the poor, who either do not pay income tax or they have not their children receiving full time education so there is no advantage for them here. Are we to understand from the Minister that he proposes to do away with this particular allowance because, in his view, it does not benefit all our people and should not be applied at all?

Again, allowance is given in respect of interest paid on house purchase mortgages. If the Minister is serious in his objection to our amendment, then we can only presume that he proposes to do away with the allowances given in respect of the interest paid in respect of such mortgages. Again, this is something which applies only to the well-to-do people. The poor have not enough money to take out a mortgage when they want a house.

Allowances are also given in respect of life assurance premiums and in respect of premiums paid to the Voluntary Health Insurance Board. Irrespective of whether or not a person insures himself to the point of luxury, he will be given the allowance. Likewise, if a person insures himself and his family in respect of Grade A treatment and institutional services in the very best and most luxurious nursing home, he will get allowance in respect of every premium paid. This again indicates how fallacious is the Minister's argument that we should not accept Deputy Sweetman's amendment because it does not apply to everybody.

There are many allowances in the income tax code in respect of all kinds of services which people can get for themselves and their children, which to some extent are optional—they are certainly not obligatory—and if it is given in respect of those cases, then there is a clear case for giving allowances in respect of unavoidable expenses for hospital treatment. We agree entirely that it would be better to extend the scope of the amendment so as to provide for medical expenses outside hospital. If you confine this to hospital treatment, you will probably find that people will be advised by their medical advisers to go into hospital when in fact it might be better and cheaper to treat them at home.

The restrictions in our amendment of £50 up to a maximum of £300 per person are put in simply because we know that on all other occasions when we have put in such an amendment, we have been told that we were too generous. It is less than fair that we are to be pilloried on this side of the House because we have kept within the suggestions made by successive Ministers for Finance. It would appear that no matter what we say, we in Fine Gael will not be allowed to win by any Fianna Fáil Minister for Finance who will abuse us if we are too generous and if we are less so will tell us that it cannot be accepted because it does not give benefit to everybody.

Does the Deputy consider what I said abuses him?

It does.

The Deputy is getting very thin-skinned.

Neither I nor my colleagues mind, but we do not think it is right that there should be complaints with regard to this side of the House simply because we say there is lack of sympathy, or if there is sympathy, there is no action on the part of successive Ministers for Finance in the present Administration.

I must confess I am bitterly disappinted with the Minister's reaction. It is the job and function of the Revenue Commissioners to collect tax and it is the job and function of the Revenue Commissioners to do what they can to ensure that the laws in question have a uniformity but it is the job of the Minister for Finance, for the time being, while giving the most complete and careful examination to the advice tendered to him—advice, as I have said on many occasions before, which is unbiased—to make up his own mind. If successive Ministers for Finance, down through the years, were to submit to what I might call the advice of the Establishment, then we would have no amelioration to meet difficult cases of one kind or another in the tax code.

I said last week, and I repeat now, that the statement by the Minister for Finance last week and the statement made here today is merely a reiteration by him of the advice tendered to him to which he has not applied his own mind in any way at all. I pay the Minister the tribute of thinking he has a mind of his own. I only wish he would apply it in a case like this and not accept, without proper consideration, the Establishment view.

Our whole system of Government is based on the assumption that we will have a skilled force of personnel, technically equipped, skilfully equipped to advise Ministers and the Government, and the advice they give is technically very good. There are occasionally mistakes but the State has been extremely lucky in the manner in which the higher civil servants have through the years devoted themselves to the job of advising fearlessly in pursuance of their duty, without fear or favour. But Governments as we know them fail if Ministers do not make objective assessments for themselves, if Ministers do not take the advice offered to them and superimpose what they are supposed to superimpose, that is, their ordinary commonsense and the commonsense of the community.

If we were to have here merely the technical advice and the skilled advice of the Civil Service ruling us, then the composition of the Government would be the permanent Secretary of each Department. That is not the type of government we have and, while paying the fullest tribute, as I have, to the Civil Service, I hope that will never be the type of government we will have. The type of government we have is one in which the representatives of the people are supposed to go in and sit down with the technical advice they have but not to accept it blindly, parrotwise.

The speech made by the Minister for Finance today and his objections last week to any ameliorations for this class of harried taxpayer is, quite candidly and frankly, merely a reflection of the advice of the Establishment. I referred last week to the manner in which advice was given to me by the Establishment, honest and sincere advice, which I overrode at the time and which, I think, the present Minister for Finance and everyone will agree, I was quite right in overriding in relation to the provision of incentives for exports by tax reliefs. It was at the time a breach of the accepted functions of the tax code. This amendment we put forward today is a breach of the existing tax code. That is why it has been put down.

The Minister would be wise to accept the sincerity of the advice tendered to him here and to utilise his commonsense and the commonsense of the community rather than the technical advice of the Establishment. Deputy Ryan made a perfectly fair comparison. If you see three people in danger and you cannot rescue all three, you do not go to the rescue of any one because to do so would be singling one person out for an unfair favour. Of course, that is nonsense. No humane person of commonsense would take that line in relation to three people drowning, but the excuse the Minister gave us for resisting this amendment is that it is not sufficiently broad in its application and that therefore it must be rejected. His predecessor on numerous occasions said that an amendment of this kind was much too universal for him to be able to administer.

The Minister for Finance has done himself a disservice in refusing to be big enough to accept the principle here. I do not mind about the wording— any wording that may be submitted, from either side of the House, might not exactly accord with the entire tax code. However, the principle is one which should be accepted. It is one that will be accepted when, as we hope, the people will be given an opportunity in the very near future of providing a different Government, with a different Minister for Finance.

Amendment put and declared lost.

I move amendment No. 2:

In page 27, Second Schedule, to delete the following:—

“For every gallon of Perfumed Spirits













I put this down, as I promised, for the purpose of giving the Minister an opportunity of explaining why there is a three-tiered customs duty in relation to spirits and only a single excise duty.

I have made some study of the questions posed by Deputy Sweetman last week. In the first place, all home spirits, including whiskey, gin, vodka and liqueurs, are paid at the rate of £11 15s 11d the gallon, computed at proof. That duty is provided in section 9 (3) of the main Bill. I think the Deputy knows how the proof gallon is arrived at. There are strengths over and below that proof gallon strength. This is how the differential is applied in the case of imported spirits. If the Deputy will look at the third definition in the Second Schedule, he will see that for every gallon computed at proof of spirits, the computation is at the full rate.

It goes by the generic term of Scotch whisky.

Imported gin, brandy and vodka.

Is brandy not a different proof?

It is the same proof as whiskey.

It has very much more strenuous effects at times.

The second definition deals with every gallon of liqueurs, cordials, mixtures and other preparations in bottle entered in such manner as to indicate that the strength is not to be tested. Contrary to what Deputy Byrne suggested last week, liqueurs are of higher strength than ordinary whiskey.

Irish-made liqueurs?

Mr. Lynch

They may or may not be but the duty is variable according to the strength—whether it is above or below proof. Normally speaking, imported liqueurs come in at a strength not more than 35 degrees over proof. It avoids examination of each particular consignment or bottle, as the case may be. The 35 degree over proof is regarded as a very safe level from the Revenue point of view. That will explain the difference between the £13 5s 6d and the £17 18s 5d. The £13 5s 6d refers to 30 degrees under proof and the £17 18s 5d to the 35 degrees over proof.

Do I take it that the figure of £17 18s 5d—I have not worked it out—is 135 per cent of £13 5s 6d?

What about the top one?

That is scent. That is usually higher proof spirit than the liqueurs. It is usually about 60 over proof. Customs duty is imposed on that basis. They are usually very expensive. As the Deputy is aware, they come in small containers and in such a way as not to be easily tested for proof strength.

They will perhaps have evaporated before you come to the stage of testing them?

That is very possible.

Is £21 4s 10d 160 per cent of £13 5s 6d?

It is. I should say in this connection there are some home producers of perfume. If they use potable spirits as such they are charged on the spirits. In many cases they use methylated spirits, which indicates that the potable aspect is removed and there is no excise duty on methylated spirits so used.

Surely methylated spirits is never potable? It may be drunk in certain cases, with dire results, but it is never potable in the strict sense of the word—even in "Red Biddy".

Methylated spirits is regarded as non-potable and is not liable to excise duty.

We learned a lot from that.

Amendment, by leave, withdrawn.
Bill received for final consideration.
Question proposed: "That the Bill do now pass".

I want to raise on the Fifth Stage a matter that seems to be particularly appropriate to the Finance Bill for the purpose of giving the Minister an opportunity of elaborating on the explanation which I am sure must have been brought to his notice today. The Finance Bill is the measure through which the Minister for Finance crystallises his Budget suggestions. This Finance Bill deals with his Budget proposals except the last proposal of the recent second Budget this year, which is to be dealt with in a Finance (No. 2) Bill, I understand. The discussion on the General Resolution No. 3 of the last Budget proceeded on the basis of certain trade figures. We were all amazed this morning to see that the trade figures that were issued and on which this House fashioned its debate have apparently now been ascertained to be incorrect, incorrect to the extent of £1,800,000 in one month.

I would like the Minister to take advantage of this Fifth Stage to explain to the House the circumstances in which that error crept in. It does without question invalidate some of the considerations given to the general Budget debate during the past couple of weeks. I am sure, immediately this error was found, it was brought to the Minister's attention and that he will be in a position, therefore, to give the appropriate explanation now.

The Minister will realise also that this matter is one of very great importance because there is in the compilation of our economic statistics a very large percentage of figures at the end of the year put in as being balance not otherwise accounted for. If that balance not otherwise accounted for could be influenced to the extent in one month alone, of a variation of this size, then it does raise some question as to the general accuracy of the figures. Candidly, it leaves me wondering somewhat whether I was unfair once when I somewhat acidly expressed my views to a colleague when he challenged the accuracy of the figures in all.

There is, I know, a prevalent view that there must be something wrong with the general statistical figures in relation to our balance of payments, because over the years if we were to accept completely the accuracy of the figures given, we might very well find that the basic position should have got even worse than it has. We were accepting the position up to now that while there may have been some error, there was bound to be some margin of error and the margin of error perhaps cancelled itself out. But when it comes to an error of this magnitude, the House is entitled to be told how it could arise and to be satisfied beyond question that even if it did arise, as it did in the returns for May last, the method of verification thereafter was such as to make it absolutely certain that any error in the future, whether made by reason of human frailty or perhaps computer frailty, would certainly be picked up at some stage before the figures fall to be assessed as the basis for economic policy.

This error, even though it is a welcome error in the event, was brought to my notice and I have asked for an explanation of it. As the Deputy says it impinges largely on the General Resolution No. 3 which we have been debating over the past couple of weeks. It is my intention to deal with it in reply to that general debate. I have not yet got the explanations for which I have asked to deal with it fully just now.

It would be fairer to those who have still to speak if they knew of it in advance.

If I get sufficient information in advance, I will try to devise some means of informing the House.

With the leave of the House, we could allow the Minister to intervene to give an explanation on the General Resolution.

On the next Bill, yes.

With the leave of the House, on the General Resolution, if he gets the information.

Question put and agreed to.

This Bill is certified a Money Bill in accordance with Article 22 of the Constitution.