(Cavan): The first proposal in this Bill is to increase company taxation and to increase it drastically. The effect is to increase taxation on companies by 16 per cent. Companies whose trading year ended on 30th April, 1969—as is the case with a number of companies such as Carrolls, Heiton Holdings Ltd., and so on—will be caught over three years. In the year ending 30th April, 1970, they will have to provide 74 per cent of their income in taxation as against 50 per cent for which they had budgeted. These companies, and many companies like them, will have less money to plough back into their business. As the Minister knows, the money that is ploughed back into the business provides for expansion, provides for more employment, provides for general development. Instead of being good for the economy, this step is bad for the economy; instead of providing for more employment it will curtail employment.
I dealt, the last day I spoke here on this Bill, with the wholesale tax and motor taxation. Section 5 provides for payment of interest at 8 per cent per annum on redemption moneys of certain land bonds which should have been drawn on 5th May, 1970, but were not drawn until 27th October, 1970, and will not be paid until 1st December, 1970. That is a reasonable proposal. It is only just that the Government should pay interest to holders of land bonds as a result of the failure to pay or draw the bonds on 5th May, 1970.
But many other people have lost money arising out of the bank strike which paralysed the country this year. The effects of it will not be fully felt for, perhaps, a very considerable time to come. There are many people of modest means whose lands were taken from them by the Land Commission, who did not voluntarily sell their lands and who were paid not in cash but in land bonds bearing 4 per cent, 6 per cent or 7 per cent years ago. These wretched land bonds, which they were given at the rate of £100 worth of bonds for every £100 worth of land and which they did not want to take but which the law compelled them to take, are now as low as, probably, £60 or £70. These unfortunate people cannot sell these land bonds unless they do so at a great loss. They are not even getting the interest they were promised on them. Under the law they are entitled to interest on 1st July. That interest was not paid; it has only been paid in the past few weeks.
The Minister should have done as I requested him to do by way of parliamentary question earlier in the year. He should have made provision to compensate these people and he would not be over-generous in doing that: he would only be just. Many of these people are not wealthy: they are people who had modest holdings—not all small holdings—and who had their lands taken from them by the Land Commission and, under the law, the Land Commission said: "We will take your lands, whether you like it or not, in the national interest; we will pay you, whether you like it or not, in land bonds and you will find a market on the stock exchange for these bonds because if nobody else will buy them the Government stockbroker will buy them." We know the price the Government stockbroker will pay for these bonds. As I say, they have fallen, certainly the 4 per cent ones, between £50 and £60 per £100. Even those issued recently are well below par. It is manifestly unjust that these people should be deprived of the interest they were legally entitled to get on 1st July and which has been held back from them for nearly six months. In many cases this is the only income these people have. I believe these bonds are trustee securities. I urge the Minister even at this stage to bring in an amendment to compensate land bond holders.
This does not stop at land bonds. It applies also to all Government loans, and national loans dealt with through the Bank of Ireland. All of these are in the same position. People who should have got dividends in last May or June did not get them. They were deprived of them for six months. Many of these are poor people, many are widows enjoying—if that is the word—income under settlements. The trustees of those settlements were obliged to invest moneys in trustee securities and all these national loans, exchequer bonds and so on are trustee securities. The Minister for Finance should compensate such people in some way because it is unjust that they should be kept without their money. I know that in the case of loans processed through the Central Bank payments have been made but in the case of those operated through the Bank of Ireland payments were held up for approximately six months.
The Minister should also avail of the introduction of this Finance Bill to deal with the complications arising out of the bank strike which should never have taken place. The matter was of such national importance that the Government should have dealt with it immediately in last April or May and should have taken steps to bring the parties together or introduce legislation, if necessary, to ensure that banking facilities did not break down. It is only now the enormity of the mess created by the bank strike is beginning to manifest itself. We are told that it might well be next year before people know how their accounts stand. Some people also unreasonably availed of the bank strike to stop cheques and in that way bring pressure to bear on people with whom they had dealings.
The banks should not be allowed to arrange things to suit themselves regarding payment of interest on overdrafts and so on. The banks were closed at the end of April and we are told they think it will be possible for them to calculate overdrafts accurately enough up to 30th June and that they will charge interest up to that date. I think that will be fairly accurate, accurate enough not to injure anybody very substantially, but I am also told that the banks will take the balance on all overdrawn accounts as at 30th June and apply what they call a delayed value dating system and the balance as at 30th June will be the balance on which people who have overdrafts will pay interest up to some unknown date next year. That is quite unreasonable and the Minister should do something about it. The banks opened on, I think, 17th November and even if on that date people who had overdrafts lodged perfectly good cheques on local banks they will not get credit for these cheques against their overdrafts until some date in the new year, a date the banks will decide.
The Minister should have taken the opportunity, when introducing this Bill, to do something about that. I do not know what the legality of it is but that is the procedure being adopted by the banks.
The banks closed at the end of April, which is a time when many people, for instance people in seaside resorts getting ready for the summer season and suppliers to the agricultural community giving credit for buying for the spring sowing, would have substantial overdrafts which normally would have been reduced by September, October and November. Those people will now be compelled to pay interest on those overdrafts up until some date which we have not yet been told.
It would be possible in my opinion for a bank manager to look over a person's account for the last three or four years and, taking one year with another, to come to a reasonable conclusion as to what the state of that account would be at any given time. The Minister should insist that an average of two or three years would be taken and that it would be left to the discretion of the manager, who has a knowledge of his customers and of the working of his customers' accounts, to decide what interest would be charged. The banks have said they will charge full interest on the overdrafts as at 30th June last until whatever date they in their own wisdom and in their own arbitrary way will decide.
This matter has given great concern to people in the country. The Minister should speak with the banks and if that does not work he should introduce legislation because the Government must take considerable responsibility for the bank strike and for the evils which have flowed from it.
I dealt with the general effect of this Bill on 25th November. The purpose of the Bill is to deal with inflation. The Government have been borrowing abroad for some years. The Governor of the Central Bank advised against this foreign borrowing and said it is one of the ways of aggravating inflation because it injects money into the economy which has not been earned or in respect of which goods have not been produced. I would like the Minister, when replying, to deal with the Government's policy on borrowing and to tell us whether he thinks it is a wise policy or one which is in the interests of the economy and whether he intends to pursue this policy. This is a policy which goes on year after year. The Minister has exhausted his borrowing powers at home and he now goes abroad. I always thought this was fraught with danger. I do not hold myself out as a financial expert but when I see such an authority as Dr. Whitaker advising against it and pointing out the dangers of it I think it is time to stop it.
The Minister should outline Government policy on having two Finance Bills every year. In the first place it makes it very difficult for the ordinary business people of this country to plan a year ahead. They do not know what taxation they will be liable for. They make arrangements at the beginning of the year on one basis and they find that is all wrong. They then have to have another "go" at it. The social welfare recipients are also affected by those two Budgets every year. We are usually told at the time of the spring Budget by the Minister for Finance, and later by the Minister for Social Welfare, who usually intervenes in the debate, that the social welfare classes have been more than cushioned against the taxes imposed in the spring Budget.
We are told that over and above the indemnification to them for the taxes imposed they have been given generous allowances to increase their standard of living but then invariably for the last few years we have another Budget in the autumn which in one way or another has a "go" at the social welfare classes. There is usually an increase in motor taxation and that imposes extra hardship on the social welfare classes. This year the wholesale tax is increased which imposes a severe hardship on people in poor circumstances if they are to have any enjoyment in life and have to buy any goods which are classed as luxury items.
This year the Post Office increased their charges and CIE, a State-sponsored body, substantially increased fares which also hit the social welfare classes. If one were to go into all those increases with a fine comb one would find that the increases promised the social welfare classes in the spring Budget of this year, which did not come into operation until August, October or next January, have already been gobbled up by those increases I have been speaking about. The old age pensioner, the widow, the recipients of unemployment benefit and sickness benefit, will have to wait until next April or May to get another promise of some relief from the taxes that have been introduced in this Budget and the increases in charges introduced by the Department of Posts and Telegraphs and CIE, which promises will not come to be implemented until August or October of 1971 or perhaps January, 1972.
This is being dishonest with the people. It is really practising deception. There should be one Budget each year. We had the rather unusual circumstance this year that we had two Ministers for Finance, each operating a different policy. It is significant that one of them should arrive in the House at this time as I have been talking about two Budgets and two Ministers for Finance. I was saying that there should be only one Budget and Deputy Haughey who has just come into the House—who comes into the front bench, into the Taoiseach's seat——
