I will not hold up the House longer than a moment and will then move on to the sections of the Bill. This Bill must be seen in the light of the high inflation we have at the moment and the inability of people to obtain money. This is a taxation Bill and the people cannot obtain money. There is not a shortage of houses at the moment. There is a plentiful supply but the people cannot raise the necessary finance to move into them.
Section 3 deals with the structure of the new tax and section 6 deals with the increased personal allowances. These allowances have been completely eroded by inflation. As I pointed out last night, we have an inflationary figure of 20 per cent. We also see that the value of the £ from February, 1973 to March, 1974 fell by 17 pence. Personal allowances have been completely eroded by this. Before the framing of the budget negotiations were held with various organisations, such as NITRO. In the Government's effort to sell the last national wage agreement the Minister promised substantial relief. His views of substantial relief are at variance with mine. I believe what the average person would consider substantial relief is not reflected in the table in section 6 of this Bill. It seems a question of more unfilled promises.
The Minister for Labour gave one of the reasons why the national wage agreement was not being accepted at a function at which I was a guest also. It was that the majority of workers were Fianna Fáil supporters and hence they were stalling this Bill. The Minister said this at a Chamber of Commerce function in Wicklow town. The public in general, relying on the promises of substantial relief in the budget, accepted the national wage agreement. We looked forward to these promises being fulfilled but they were not.
I now want to deal with various income tax reliefs given. We see that under the Income Tax Act, 1967 the amount deducted for 1973-74 in allowances for a married man was £494. If to that we add the unearned income allowance of one quarter of that we get £618. The Minister purports to allow £800, an increase of £180 approximately. That is a miserable sum in these days. While it might be £180 on that section, in the case of a fairly average married couple with no children, who have the burden of a mortgage of approximately £6,000 at 11¼ per cent, the figure would appear to be £675. Under the old system they would have been allowed £675 at 35 pence which would allow them £236 approximately. Under the new rate they are allowed £675 at 25 pence which, in my calculation, works out at £176 approximately. If I were to balance it up to the nearest pound it would be £177 which would work out at a loss to them of £60. Again, it is trick-of-the-loop and nothing more.
It is estimated that at first glance they should obtain substantial relief, but when we get down to budgeting we find that their loss in the allowance under this heading is approximately £60. There is an overall meagre saving, perhaps, but we must deduct the new contributions by employees under the pay-related benefit scheme. This is of benefit to some employees which is a good thing, but we must bear it in mind as an added stoppage from the employee's wage packet. When that is taken into account, does it show a favourable or an unfavourable balance?
The dependent relative's allowance is raised in this section from £60 to £80. Let us try to adjust this figure of £80 in real value terms. With inflation at 20 per cent and the £ having dropped 17 pence this brings the figure down to £53 which is much less than the value of £60 last year. This shows a net loss over all. I am sure this calculation could be carried out on each of the substitutions. I am sure we would work out an interesting calculation of the substitution of £409 for £347. It is sufficient to work one mathematical problem to see that the substitution of £80 for £60 is negligible.
Section 28 deals with farming profits and restriction of personal allowances and paragraph (a) refers to the rateable valuation of land which exceeds £20. This runs contrary to the general idea which we, as a party, wished to introduce and which we thought would be better for the people of rural Ireland, that was, to have farmers engaged in part-time industrial employment. We saw this as a method of enabling the farmer to build up his farm and to improve his living standards, and to increase capital investment. It would also provide an opportunity to the small man to purchase a holding which became vacant nearby. If he were to do that now, his valuation would probably be increased to above £20. This is a disincentive. There is no incentive for the man who wishes to be progressive and who wishes to develop as a farmer, who wishes to add to his holding and is keen to work in some industrial plant and eventually return to full-time farming.
Approximately one month ago the National Manpower Service in conjunction with AnCO introduced a scheme to encourage more farmers to participate in off-farm employment. This is the trend in progressive EEC countries. A pilot scheme was to be introduced in Kerry. What about the small farmer whose valuation is under £20? If he wishes to participate in this scheme this could mean a loss of investment by the National Manpower Service and AnCO.
Does the Minister think that man will become involved in this project? Will he be interested in getting some training from AnCO to develop his talents on the industrial side? It would be a waste of AnCO's money, money which comes from the State. It would be very interesting to hear the Minister for Agriculture and Fisheries and the Minister for Industry and Commerce on this issue. I am sure they are more conversant with it than I am, but I do not suppose they will offer us some way of allaying this man's fears.
There is a general understanding that this Bill is a forerunner to a more sophisticated Bill which may be introduced next year in which the threshold will be lowered. I regret the silence of Deputies on the Government benches. Some of them probably represent more small farmers than I do. Many of them represent the small farmers on the western seaboard who are directly affected by this measure. I said that the pilot scheme was to be inaugurated in County Kerry. Will the Kerry Deputies speak on behalf of their constituents?
We must consider whether this Bill is at all relevant to the needs of the community at present. Is it related in any way to the problem which people have to face? I am sure that the poorer sections of the community would like to have seen in this Bill some form of subsidy to help them to provide their basic requirements at reduced rates. Meeting with my constituents, I discovered that this was one of their problems. Where are the Labour Party who claim to be more closely aligned to the people than others? Are they circulating with the people? The people are not looking for luxuries but basics. They would have preferred the Government to introduce a system of subsidies which would enable them to obtain cheaper food. That is not in this Bill.
The middle income group would prefer to have seen something in this Finance Bill which would ease their mortgage repayments. There is nothing in it to that effect. Are their views to be ignored? They anticipated and hoped that there would be some provision in this Finance Bill which would discontinue the tax on building societies so that rates of interest would drop down to what people in this income bracket would regard as manageable: 9 to 9½ per cent. Their views are not represented.
This would appear to be a Bill which looks to the future. The Minister should bear in mind that the future is built on the present, and the present is not so good. The reliefs offered in Table VI are miserable. Hope is expressed for the future, but time is running out.
Last night I asked the Minister if he would estimate what the trade deficit is at present and I paused for a reply. The Minister was quick to take me up on remarks which I based on comments I read inThe Irish Independent and The Irish Times this morning. Perhaps he is in a better mood now to give his estimate of the trade deficit. His estimate in April last was £140 million.
There are in the Minister's speech such laudable statements as that the tax burden will be spread more equitably throughout society. These are grand lofty thoughts, and it is a feature of this Government that some Ministers have shown a great command of English. Where are the basics? The thoughts are well dressed up but the content is more important than the dressing.
In conclusion, I would suggest that this Bill is not relevant to the present needs of our society. The best thing the Minister could do is to take the advice of the IFA and other Deputies who have spoken, and withdraw this Bill. He should then come back here with a Bill which is in some way relevant to our needs, a Bill which would be basic but which at the same time could reform the tax code moderately, if the Minister so desires. Maybe the Minister is so taken up with the question of reform that he is overlooking the day to day necessities. One could be carried away and so remote from everything that this could happen. This is not a with-it Bill, and I would call on the Minister to withdraw it.