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Dáil Éireann debate -
Wednesday, 2 May 1979

Vol. 313 No. 12

Finance Bill, 1979: Second Stage (Resumed).

Question again proposed: "That the Bill be now read a Second Time."

I was making the point before Question Time that the economic climate of receptivity for the terms of the national understanding has not been improved by the measures of this Government in their budgetary strategy over the last few years and notably the most recent one.

Our tax system, far from becoming more progressive, has instead become regressive. In fact, the burden of taxation being carried this year by the PAYE sector will be greater than last year. Despite the benefit of the allowances mentioned by the Minister in his budget, PAYE earners generally will continue to pay a larger amount of their income this year by way of tax. Far from that discontent being dispelled rather I see it remaining a potent factor embittering industrial relations in this next year or two unless there is a constructive response by the Government in this Finance Bill. I do not believe that the Government in their budgetary strategy have helped to encourage a climate of support for the national understanding. It is important from the country's point of view that an agreement along those lines should be won from the trade unions. But this Government in their general policy have not assisted the winning of that understanding and support.

There is a question I should like to ask. We do not know yet why the terms of agreement with the farmers have not been included in this Bill. We do not have them before the House. A question that must be asked also is why the provision in the national understanding for this increased grant at Christmas of £175 is not in the Finance Bill before us. I am not aware at this point that there is any such provision in the Bill. I should like to ask the Minister whether there is any intention to introduce such an amendment to the Bill. This is the figure of £35 million referred to earlier. I should like to know whether there is any such intention to include it in the Bill. It will be said that there is no point——

Dublin South-Central): The Minister said in his statement that there is the intention to introduce an amendment on Committee Stage.

Then, presumably, if there is not agreement on the national understanding, such an amendment will be introduced.

(Dublin South-Central): The Minister has mentioned that in his statement.

What I am pointing out is, then, that it would be the Minister's intention to amend that element of the Bill in the event of no understanding being reached. I presume that would be his intention. That is one question answered.

The other question I should like to ask is in relation to the agreement with the farmers' leaders. While we do not have details of it here the point will be made that since it will not take effect until next year we do not have any reference to it here. The same logic does not appear to obtain in relation to the taxation of the new social welfare categories. Again, in their case it will not take effect until next year, but we do have reference to it in section 10 of the Finance Bill.

Section 10 of this Finance Bill makes liable to tax the benefits of the disabled, the unemployed, maternity allowances and even the deserted wives' benefit. It is true that on the passage of this Bill the 100,000 people who depend primarily on these benefits will be liable to tax next year. The logic does not seem to hold up that there is provision in this year's Bill for their liability to taxation next year, whereas we have no provision in the Bill, as yet, for similar arrangements in relation to the farmers. One wonders what is the reason for this inconsistency, whether it lies in the fact that there is no final position in relation to the farmers' situation generally. I have referred to the obvious unfairness of making liable to taxation the benefits of these 100,000 extra persons and I do not see how any Government with a serious commitment to social justice could have embarked on that course. Surely, the point can be made that this Government, far from acceding to the demands for tax reform, have extended the tax net to ever new categories. Apparently it is all part of the philosophy of this Government of making the poor pay for the services even more extensively than heretofore.

The criterion I have adopted in relation to this budget and Finance Bill is: what constructive contribution the budget and the Bill would make to improving industrial relations. I answer that I cannot see the nature of the constructive contribution because it has not brought the kind of relief generally sought by PAYE wage and salary earners. It has left them the sole recourse of making increased wage claims. Therefore, the budget, since it did not lighten their tax load, does little to improve industrial relations. That has been my major criticism of the budget and this Finance Bill. In context there has been a good deal of criticism of individual members of the Government for their handling of industrial relations issues. I think the present Minister for Labour at times has been unfairly criticised in this connection.

I must remind the Deputy that we are getting into a field that does not arise on this Bill. We will have a full debate on industrial relations tomorrow.

I am seeking to defend the Minister for Labour.

The Deputy cannot defend him during a debate on a Bill which deals with taxation, not industrial relations.

That Minister has not been assisted in his task by a budget and Finance Bill which does not lighten the burden of taxation on those liable to PAYE. The discontent will not disappear and the trade unionists who marched recently to express their dissatisfaction with the present tax system will continue to look for relief in their tax burden. The Minister is fooling himself if he thinks that a cosmetic exercise in increasing allowances will meet the case. I do not believe it will because the allowances he has given will be eroded by inflation during the year. Many people believe that inflation this year will be in excess of 12 per cent and may be nearer 15 per cent. There is no point in selecting a quarter and saying that inflation is less in that quarter. Increases in commodity and oil prices, factors which are, admittedly, outside our control, will help erode the increased allowances granted by the Minister in the budget.

Some of the actions of the Government such as abolishing the subsidies on food have worsened the inflationary situation. Many of the Government's policies are in conflict with each other. If, in an effort to make the budget terms more attractive, the Government attempted to raise revenue by removing the food subsidies and increasing indirect taxation they did so at the cost of embittering many of the lower paid workers with families. It is reckoned that the removal of the food subsidies meant an extra £2 to £3 per week to the food bill for families of four or five children. The proportion of such a family's budget spent on food is higher than that spent by families with higher incomes. That is another illustration of how one aspect of the Government's policy is at variance with over-all Government policy which has been described as an effort to improve industrial relations so that the new national understanding will be accepted by all sides.

There is a contrast in the budget between an administration that had all the answers and one that now appears to have very few, between an administration that seemed to be action-packed and one that now appears to be paralysed by inaction and between promises beforehand and disappointment in office. They now have a community at war with itself. With their over-all majority they raised expectations beyond realistic levels at one point and at another point, in an effort to maintain consistency with their preelection behaviour, were forced into giving rewards which could not be defended on economic grounds. We must all depend on the Government to give leadership at a difficult time. They are dealing with a difficult issue, that of tax, but so far, by their maladroit handling of the situation, they have contributed significantly to dividing town and country. If that division does not become a permanent one it will be due more to the maturity of the leaders of the PAYE sector than any action or leadership on the part of the Government. Because of Government decisions the increasing growth of previous years has been wasted, leadership has been squandered.

The Government now seek a national understanding between unions and employers at a time of rising inflation when their manoeuvrability on the tax front is severely limited. In the Bill there is evidence that the Government still do not understand the gravity of the situation because they have extended the tax net and brought in new categories. I do not think the PAYE sector will be satisfied that the Government are serious about coming to grips with their quarrel. Nobody is seeking the abolition of income tax, and that was made clear, but people are seeking a fair deal all round. They have not been getting that from the Government who have been partial in their treatment of sections of the community as we know from their action in relation to the wealth tax, the reduction in capital gains tax and the penalties in the form of the abolition of the food subsidies. At a time when we are looking for moderation in wage expectations the standard of living of lower income families is attacked by the abolition of food subsidies. That was deliberate Government policy and they cannot blame external forces for that increase.

It is true that the Minister for Economic Planning and Development has hinted that if the rate of inflation is as high as predicted by some forecasters the policy of phasing out food subsidies may be reviewed but, as far as we know, the policy of continuing to phase out those subsidies will be carried out. That does not enhance the Government's reputation for fairness in their dealings with various groups. The discontent over the tax issue has been spontaneous. It arose as a mass manifestation of discontent. The Government have proved to be insensitive to the issue and it remains open to question whether their lack of understanding on this issue means that they cannot give leadership during the present troubled times. It is in the interest of the country that we get an agreement on orderly wage negotiations in the coming year. If the Government want the PAYE sector to accept their concern about their plight they should undertake a greater review of the tax system.

The Government who are planning to control overtime are forcing employees to seek more overtime even though two-thirds of the pay paid for it will go in extra tax to the State. Employees must do this because of the increase in the cost of living. If the failings I have mentioned are not rectified by the Government the winter of industrial discontent will be followed by a summer of a similar character. None of us wants that. I do not envy them in their task of attempting to improve the situation.

There is widespread discontent in the public service. The Government have attempted to rule the wages system in the public service in a different way from the way the private sector have been allowed to operate under the last national agreement. The Government on all sides face a good deal of trouble and they will be tested in the months ahead. They inherited an economy which was improving on all fronts. Now they have come to the half-way mark in their parliamentary life. They face a great deal of difficulty, much of which is of their own making. They will be watched very critically in the weeks ahead for the kind of leadership which has been so sadly lacking up to now.

The interesting thing about the debate taking place at the moment is that it is not about poverty or the lack of money but relates to wealth and the distribution of wealth. Any debate which concentrates, as this one has done very markedly, on taxes and on the payment of taxes can mean only one thing, that people are working and that they are concerned about what is happening to the money they pay into the central fund for the running of Government. This is in marked contrast to budgets under previous regimes and is in marked contrast to the evolvement of the country over many years. It is very heartening for any Minister for Finance to find himself in the position of seeing the aims of the budgets introduced by him having an effect and the people pouring back to work. We are now in a situation where people are more worried about taxation than about looking for jobs.

The manifesto put before the people is seen to be taking effect by the budgets which have been introduced since Fianna Fáil came back into office. Workers all over the country knew that would happen when they went to the polls. Fianna Fáil recognised that and will continue to do so. The poor, unfortunately, will always be with us and, conversely, the wealthy will always be with us. The relativity between wealthy and poor has been harped on in this debate. A man earning £2,000 a year might consider a man earning £4,000 a year extremely wealthy, while a man earning £4,000 a year might consider a man earning £8,000 a year extremely wealthy. A man earning £8,000 a year would obviously regard a man earning £16,000 a year to be in a different category altogether. All those people are worried about the rate of taxation they have to face up to and what is happening to their money. The man earning £2,000 a year could in his own way be wealthier than the man earning £16,000 a year. Our society gives the individual an opportunity of expressing himself and of expanding. No budget can legislate for that expansion.

We have evolved a system of house ownership and of house tenure which is perhaps unique in the world. It gives an opportunity to the man in the very lowest income group to own his own home. We can contrast the person on a relatively low income with a happy family life running his house and garden in a satisfactory manner with a man on a very big salary working extremely hard, perhaps dissatisfied, very seldom at home and joining the rat race of monetary compensation rather than being able to live his life in conformity with his situation.

All budgets are an attempt to improve the society in which we live. The budgets presented by Fianna Fáil have attempted to improve everybody's life. We cannot improve anything by legislation. We cannot say to a person that he or she must do this or must do that. We can suggest to that person that if he or she does such a thing it will improve his or her standard of living. The Government can give people an opportunity but it is up to them whether or not that opportunity is taken. We can lead the horse to the water but we cannot make him drink.

Fianna Fáil have presented two budgets since they came back to power and have created special conditions for people. Those who have taken advantage of them have improved their way of life. Fianna Fáil have been spectacular in the conditions they have offered to the farming community. The larger farmers have grasped this opportunity and have found a place in the economic sun after many decades in the shade. Fianna Fáil have given this sector an unrivalled opportunity to improve their lot. This has led to total confusion within the farming ranks in relation to what they want. The Government in their wisdom have recognised this and have tried to ensure as far as humanly possible that whatever taxation system was devised and implemented was suitable to the progress of that industry.

We have had various protests and observations by the farming community. One is justified in saying that they hardly know what they want. One section want one form of taxation while another want a different form. We have had various observations in relation to levies, rates, the keeping of books and everything else in relation to what a just form of taxation for that sector would be. The Government have always consulted every section of the community, not least the farmers. They may have been unwise to consult them after the budget announcement but, aware as they are of the need for democracy to be seen to act and for every possible chance to be given for the ordinary progress of our society, the Minister for Finance offered to implement a taxation system which might be more acceptable. The underlying factor must be recognised, that a just contribution must be made by the farming sector to our taxation system. This was construed as being indicative of weakness. It was in fact indicative of concern.

I am glad to see that the concern of the Government for the progress of the farming industry, on the one hand, and, on the other, ensuring that that industry contributes its just share of taxation have been recognised. I am sure that responsible farmers will face up to their social obligations and will contribute to our progress in an orderly fashion.

On the other hand, it is the unions' legitimate function to improve their members' conditions. The Minister in his wisdom obviously consults with the trade unions involved and looks on them in the same impartial light as he looks at other sectors of the community when formulating policies in relation to worker taxation and to the contribution of the PAYE sector to our economy.

In this context it is legitimate to observe that there has been a marked difference between the two PAYE demonstrations which took place recently. Yesterday's demonstration was not in the same vein as the earlier march. To an impartial observer it seemed that the more recent demonstration, while reasonably substantial in number, was not substantial in representation. Yesterday's march seemed to have a preponderance of unions which were not Irish based. It is legitimate to ask members of such unions where their allegiance lies. Does it lie with this country or with the unions which are controlled by outside interests?

The majority of our trade unions, our farming and management institutions are Irish controlled. This is something to be proud of. It is a lamentable situation if a telephone call from another country can bring workers out on the streets to object to our taxation system. It is regrettable that these skilled men do not have the ability to control their own unions and their own destinies. It would benefit everybody if the situation were rectified.

We all know that English interference in Irish affairs has always been disastrous. This type of interference is equally disastrous in relation to industrial relations and attitudes towards budgets which Governments have to implement. This point should not be glossed over. Many of these trade union leaders have made a mess of the situation in England. Are they to come and do the same here? This is something which no Minister for Finance can budget for, but it is something we must recognise.

I know that many of the people who marched yesterday did not want to but they did so on the instructions of people who do not live on this island. This should be questioned and should also be a cause for concern. Is there a sense of responsibility towards the whole community within the trade union movement? The trade union movement caters for people who earn relatively small incomes and those who earn substantial salaries—from £2,000 to £16,000 a year. All are catered for by different sections of the trade union movement. It is regrettable that certain sections of the trade union movement say that because their managements are making very substantial profits those profits should be immediately dispersed among the members in that business. There are methods available within budgetary control to make sure that profits are dispersed and used for the benefit of the whole community. If a business or trade is capable of generating substantial profits I seriously suggest that that should not be a spur to the workers in that industry to look for sectional advantage. There is a heavy responsibility on the more affluent sections of trade unions to look objectively at this situation in relation to the rest of the community.

I would like to comment on certain professional attitudes to work and taxation. I make no apologies for referring to the attitude of certain sections of teachers. Recently we had children sitting down to do examinations not knowing if they would be corrected. The excuse put forward was that the pay for these duties was not adequate and that the teachers were taxed at an undue rate. This is in stark contrast to the attitude of that profession a decade or two ago when it was considered an honour to do this type of work. These payments are over and above the substantial salaries of these teachers and are obviously subject to taxation. Taxation of this kind gives teachers an opportunity to make a contribution to the community at large. I would ask the teaching profession to have another look at their attitude in this regard. This is a profession of the highest standing and it can only remain so as long as teachers recognise their pupils' requirements. The children cannot fight back. They do not have a lever to use when teachers refuse to mark examination papers. I exhort teachers to refrain from that type of action and to look again to their professional standing.

I say the same about some civil service grades. The Minister has claims for salary increases of up to 40 per cent. This is totally at variance with the attitude of any budget. We have the sorry spectacle of people in the same grades earning the same money, but in one Department they are working efficiently and happily, while in another Department they are extremely militant and looking for something which it is not possible to give them. It is a pity this sectarian difference has evolved and that this attitude has developed in our society. The budget that we have put forward has as its underlying theme the opportunity of giving everyone a chance to progress. It is a pity that certain sections look for things which are totally out of line with what is happening in other areas. It throws the whole system out of gear and no budget can legislate for that type of attitude. Certain sections of professional people are undoubtedly making very large sums of money and one questions where those sums are being invested. Anyone who is in a privileged position has a moral duty to himself and to the country to look to performance in relation to income and expenditure to ensure that he takes note of the needs of society and not just of himself.

One section of the community has not been mentioned in the budget. In Irish we call them Duine le Dia, the unfortunates who may be mentally handicapped, geriatric cases or those who have no ability to look after themselves but are dependent on the taxpayer and on the dedicated people who give their lives in the service of such people. I refer to the religious in institutions who are so conscientious——

The whole question of taxation naturally is in order but the Deputy is going outside it at times. These matters should be related to taxation as this is merely a taxation measure.

The point I was making is that the people who provide these services save the taxpayer considerable sums of money. If people were not prepared to devote their lives to this type of activity, taxpayers would be faced with heavier bills than they are at present. Instead of talking of 30 or 40 per cent we might be talking in terms of 60 or 70 per cent taxation in order to provide this type of service to our people in need. I suggest, with the Chair's consent, that this is within the realms of taxation and is relevant to the discussion.

We live in a complex society and what one person does may have an effect on ten people around him. If we have a position where a man is prepared to work for nothing he is saving another man, who may be extremely selfish, from paying heavier taxes. Recognition is due from the House to such people. Anybody paying tax must look at the services that are being provided for his kith and kin. We cannot legislate for tax for every human contingency. Society is dependent on the good qualities of people who are not self-seeking and are prepared to sacrifice themselves in the service of the community. There are many people with no other thought in mind but what they can get out of the system. During the debate we have heard of nothing but the cutting up of the cake. We hear people saying they want something else and something extra. Very seldom do we hear of the person who is prepared to give his life without complaining in the service of the community. That is relevant to taxation and budgetary presentation.

Very few comments were made about the Minister for Health's scheme. That is rightly so. It is so successful that no criticism can be justified. In relation to the provision of money, the Minister's scheme has meant that very often there has been a real lift in income to those on the lower income levels. If a man is on a salary scale where he is paying a relatively small amount of income tax and is able to benefit from the scheme it puts him on the same income level as a man on a higher income level who would have to pay for these services out of his salary. This attitude towards taxation is a human one which we can be proud of and which elevates people in different ways. These are all relevant points in a discussion on taxation.

We are a caring Government. That is seen in the various presentations of the budgets and in their operation. There is no doubt that this will continue to be so. In the presentation of this budget we must take account of our entry into the EMS. The immediate and dramatic effect of our entry was the repatriation of external assets and a very substantial inflow of currency. It meant a dramatic turnaround in the availability of funds to building societies and enabled Irish money to come back home and be used for the benefit of our people.

Future budgets can take account of the fact that money will now tend to stay at home and local investment will undoubtedly take precedence over investment abroad. It will help to contain inflation and give an opportunity for investment in local business. It will help to stabilise our economy in general and make us more self-reliant. The variations in the value of our currency abroad will be of less effect when these things come into being. There is no doubt that there are many areas for profitable investment of funds at home. This, taken into consideration with the attitude towards trade unions, farmers, money and our social attitudes, adds up to what we hope will be a national understanding that will give an opportunity to all to participate in the progress of the country. Without these complexities coming together in an orderly fashion there can be no progress. When one section of the community gets out of line with another it leads to an imbalance. It is like a car running with one wheel flat and three wheels pumped up.

We have the ability to create conditions for smooth running and this is taking place at present except for people who look to their own selfish interests. The response necessary in order to enable this budget to be successful must get away from self-interest and get back to a sense of dedication to the progress of the country. Consumer interests, living wages and proper taxation are all things which any budget must take note of. This budget undoubtedly does that in every degree and its implementation will mean the improvement of our society.

I intervene to ask a question which, following Deputy Fox, I think is very appropriate—are we a nation or a state? Are we living in the island of Ireland or in a separate nation from the northern state? Deputy Fox, for example, spoke about "the affairs of this nation", "this little country of ours", "our country", "this country". He spoke of our entry to the EMS. We have the Government talking about a national understanding. Is it a national understanding or do the Fianna Fáil Party understand what "national" means? I, as a northerner, am sitting here totally confused. I have often heard that people north of the Border had a crisis of identification not knowing if they were Irish or British; I do not know if I am part of the Irish nation or what I am part of, listening to Fianna Fáil speakers. I am satisfied they do not know. My clear understanding is that I am Irish and that this island consists of 32 counties. We listened to Deputy Fox and Deputy Moore earlier using such terms as "this nation", "this country", "the Irish people", the "Irish economy" and "this little island of ours". Then we hear the Government talking about a national understanding. In what direction are we going? The taxation system of any country is the basis of an economy and the economy is so interwoven with its politics that it is impossible to separate them.

I think that the Fianna Fáil title of "national understanding" indicates that they do not understand what "national" is about and that this narrow definition of the word exposes the pseudo-republicanism that party pretends to possess. There is no point in their saying that these are merely loose terms. Paisley uses a loose term when he says he is proud to be an Ulster man and excludes Donegal, Cavan and Monaghan. He knows what he means. The sooner the House and a Government party mandated to lead this country in the right direction economically and politically, understand this the better, so that the societies in the island of Ireland will learn to live with each other. There is no use in running away from the politics of this just because there is an economic advantage. That is the role of a coward. Our contribution to the development of the Irish nation in the fullest and broadest sense can never get off the ground if we talk as Deputy Fox did about "our country", "this country", "this little country of ours" and so on and so long as other Fianna Fáil Deputies follow that line of thought and so long as the Government in their attempt to come to terms with their taxation troubles and the unrest in the country produce a white or a green or any colour paper called "national understanding". It is not national understanding. The nation covers the 32 counties, the entire island of Ireland and the Irish people and this is the nation of Ireland. The Government should make up their mind in what direction they are going. Is it one of two states in Ireland or is this the nation? I have my mind made up. It is totally inconsistent and downright bloody dishonest and the height of hypocrisy to talk about nationalism in one sense and using the term——

The Deputy should now get on to the Bill. As long as I am in the Chair and as long as every other Ceann Comhairle has been here, Deputies from all sides of the House have referred to this as "our country". The Chair sees nothing wrong in that. This is not a political debate; it is a taxation debate.

I am not responsible for other Members of the House but only for what I say myself. I feel so strongly about this that it is time I expressed my views, which I believe to be dead in line with where we are going. I believe the Cabinet have lost direction, that the Taoiseach no longer wants to lead and that Fianna Fáil have been interrupted in their long dream of Irish nationhood and in their green dreams of economic miracles and suddenly have to face the reality of today and Ireland awake. Whether the Chair disputes——

What the Chair is disputing about is that this is a taxation debate and nothing else. The Deputy is getting into a political debate as to how we should address the House, whether we call this "our country" or not. A Deputy from any part of the House may speak about "our country"; what he means or does not mean is his own business. That has always been accepted. I ask the Deputy to get on to the Bill before the House. I do not want to interrupt him.

The Chair is quite entitled to draw attention to the fact that he thinks I am out of order, but I believe that I am very much to the point because trading, taxation, economics and policy are so interrelated that there is no way in which one can separate them in this small island and be logical. For example, take the matter of breaking with sterling, a matter that was rushed through the House. I believe that, whatever the Taoiseach, the Tánaiste, and the Minister for Economic Planning and Development knew about it—and I have grave doubts about their degree of understanding of it—no other member of Fianna Fáil fully understood what it was about. We had the brilliance of Deputy FitzGerald and the information he could give to Deputy Barry and whatever information the Labour Party could extract from the media, from the Taoiseach, the Tánaiste and the Minister for Economic Planning and Development and this House took a decision which affected everybody living in the State. It took a deliberate decision which affected the value of the pound in one's pocket. Is this not taxation, foreign trading, economics and policy, or would the Chair explain why I am not in order? That one mistake will cost not alone individuals huge amounts of money, but also every small business trading with Britain or Northern Ireland, importers and exporters, will be paying less income tax to the Government because their profits will be cut due to the fact that the amount of money they need to pay more for imports will be greater and the value of their exports will be less.

Is the Deputy advocating that we should keep the link with sterling?

Leave Deputy Harte to deal with taxation matters.

I am advocating that, yes, and if your pseudo-republicanism prompts you to think that is wrong or that I am less Irish than you are——

The Deputy should address his remarks to the Chair and Deputies should not interrupt. The debate in which the House is now engaged is on taxation.

The taxation matters before the House are very relevant to what Deputy McCreevy has said. I believe that the decision to break with sterling was the most blatant insult to Irish people living in Northern Ireland that any southern Government has ever offered. The Government should ask the ordinary, decent people, the ordinary traders who live there, and deal with cross-Border customers. If I go into Strabane, for instance, to buy a box of matches——

That has nothing at all to do with taxation.

It is not a taxation matter. The Deputy will have to relate only to taxation.

Are the Government saying that it will not cost more to import tobacco therefore making it dearer to buy?

The Deputy can deal with excise duties on tobacco, but that is that.

I am making the point that breaking the link with sterling will make it more expensive to import tobacco. Is that not relevant?

It is not taxation. We are dealing with taxation in the State on tobacco.

Is it not relevant that——

It is not the importation of tobacco or the price of tobacco, but the taxation on tobacco that we are dealing with.

Is it not relevant that firms paying corporation profit taxes will have to pay more money to import the materials to manufacture their wares and to export them again and that they will end up with less profit. Is that not of direct relevance to taxation?

Taxation on goods, yes. We are dealing with taxation on goods not the price of goods.

The Bill deals with corporation profits tax, income tax and every other type of tax. In our trading with Britain last year we imported £1,830 million worth of goods and we exported £1,395 million of goods and in the first week of the break with sterling that cost the Republic of Ireland £90 million. Because of that decision, firms paying income tax or corporation profits tax will have less profit. I am in order in saying that the break with sterling has caused economic convulsions that counties here are not yet aware of. When I cross the Border or when anyone else crosses the Border and wishes to buy simple little things such as a box of matches and puts down a punt on the counter, the shopkeeper must make up his mind if he will charge 6p for the punt and then 2p for the box of matches or if he will accept the punt at its full value and give 98p change. An ordinary cross-Border visitor who wishes to buy an ice-cream for his child and leaves down an Irish punt may be charged for the punt as well as the ice-cream. When I gave an example some Deputies on the other side said that I was too emotional about this. I was exposing, as I call it, the pseudorepublicianism, this green nationalism that no other group of people outside of the soldiers of destiny possess or have the right to possess.

The Deputy has suddenly discovered it. When the Deputy sat on this side of the House he did not have much republicanism or nationalism in his blood, did he?

Deputy Harte will have to talk to the Bill before the House. We are not discussing the EMS, the break with sterling or the value of the £ on this. They are not before the House at the moment. We debated those matters for hours on a previous occasion. We are debating the Finance Bill which is solely a taxation measure.

The Finance Bill, as I understand it, deals with exports and imports.

It does not deal with exports and imports, it deals with taxation and nothing else. Deputy Harte will have to stay on taxation. The Chair should be obeyed once in a while.

Page 26 says

...and, in the case of all imported beer,...

That is only excise duties, taxation on beer.

My argument is that it will cost more to import beer because of the break with sterling. Is that correct or not?

We are dealing with taxation on beer.

What would Deputy Harte's argument be if things were the other way round?

Exactly the same as it is now. If I am allowed to answer that——

No, Deputy Harte. Deputy McCreevy will keep out of this debate. Deputy Harte on the Bill before the House.

Let him make his own speech without interruption, do not help him out.

I am talking on a Bill before the House——

The Deputy has not said one word on the Bill before the House for the ten minutes during which he has been speaking.

I am talking about taxation.

The Deputy has not talked about taxation up to now. The Chair is patiently waiting for the Deputy to talk about taxation.

The Deputy wants to be put out as usual.

I have never said anything rude to a female in my life and it is not my intention to break that rule.

I am delighted to hear it.

The Deputy has had little manners since she got a State car.

Is the Deputy jealous?

Deputy Harte should obey the Chair and everybody else is to stay out of this matter.

In talking about taxation I am relating the break with sterling to the fact that any company now importing goods from Britain and exporting goods to Britain will have a reduced profit. Is that relevant or not?

It is not relevant. We are dealing with taxation and nothing else, and in the manner in which the Deputy has been dealing with it for the last 15 minutes it is not relevant. We are not dealing with the break with sterling or the EMS on this Bill. We dealt with that for hours in previous debates here.

Does this Bill not deal with corporation profits tax?

In the State, yes.

I am dealing with the effects that the break with sterling will have on those companies now paying corporation profits tax whose profits will not be as good this year as they were last year if they are trading on the import/export market.

The profits of some companies will be higher.

The Deputy can make his own speech.

I will call Deputy McCreevy next.

This will have adverse effects on taxation here and the Government are not yet aware of it. Do the Government understand all the implications of this? There is bitterness, disappointment and anger in the minds of all the people more particularly the people in this State because of a stupid shortsighted mistake by a Minister who says he is proud of what he has done. The Chair tells me that it is not in order to debate the cost of importing and exporting because it is not relevant to taxation.

It is in order to relate all these matters to taxation. The Deputy has not been trying to do that, he has been talking about the break with sterling, the EMS and the rest of it. I did not interrupt the Deputy when he related his remarks to taxation and I shall not interrupt him when he does so.

The point I am trying to make, one that the Chair has difficulty in following, is this: trading and economics, taxation and politics are so interwoven that one influences the other. If we cannot see that clearly ourselves let us look at some other country that is far removed from us, a non-aligned country such as Yugoslavia. That country puts forward the argument that unless the West buy goods from them and unless they buy from the West, if they are compelled to do their trading with the East they cease to be non-aligned. That picture is clearly seen by everyone who listens to the argument from this distance. I am trying to relate that thinking to the natural trading between this part of the country, Northern Ireland and Great Britain. I am saying that if we start to interfere with the economics of the matter without considering the politics we are not fully committed to the mandate which the people of this State have given us not alone to have proper taxation but to build a society that is fair, reasonable and open.

The Chair will see my difficulty in trying to bring the Chair along my way of thinking. If we do anything that makes it more difficult for industries, traders and manufacturers to deal with our fellowcountrymen north of the Border, not alone are we destroying the politics but we are charging that manufacturer, trader or commercial business with extra taxation. This point is relevant. Fundamentally, it is the most important issue in the debate. If it is not relevant to talk in a Finance Bill about the pound note in one's pocket, will the Chair tell me the meaning of "relevant"? I am talking about £1, one punt, which is no longer worth 100p in the Six Counties of Ireland. That must be relevant.

It is not relevant. We are dealing with taxation and nothing else. It is relevant in some other debate, a political debate or otherwise. It was relevant when we dealt with the EMS, the break with sterling and the other matters we dealt with previously. In this Bill we are dealing with taxation and the taxation policy of the Government.

A lot of nonsense was spoken this morning, about whether we should tax some items and so on, I am talking about a fundamental matter—the £1 note in one's pocket. If that is not relevant to the Fianance Bill I have been misled.

An Leas-Ceann Comhairle

It is not relevant. The Chair has already told the Deputy so. The amount of pounds paid in taxation is relevant to this debate.

Taxation is money and that is what I am talking about, whether that money is what we had before the break with sterling or what we have now. I am talking about money.

The Deputy is going too far. We are dealing with taxation and the Deputy can deal with any matter of taxation in the Bill. We are not going to deal with sterling, the break with sterling or with the EMS. The Chair has shown tremendous patience but the Deputy is going too far.

I do not know why the Chair is trying to muzzle me.

The Deputy must not argue with the Chair. He should deal with the Bill before the House.

I am not arguing with the Chair. I am saying I am in order.

The Chair has told the Deputy he is not in order. He has not been in order in the past 15 minutes. The Chair is asking him to deal with the Bill before the House.

If I cannot talk about £ notes in a Finance Bill the judgment of the Chair is wrong.

The Chair's judgment is the judgment that has been given during the years on Finance Bills. The Chair's judgment is not wrong. The Deputy may talk about the amount of £s paid in taxation and that is all.

I have given examples of companies doing business in Britain and Northern Ireland who buy goods for manufacture and re-export. Those companies will pay more for their imports and get less for their exports. That directly affects taxation because if the company have less profit the Government will not be able to collect corporation profits tax or income tax. I am asking for guidance: is that not in order?

The Chair will not stop the Deputy when he is in order. I have not done so yet.

I want guidance on the matter. Is it in order for me to refer to the fact that companies that pay——

It is in order for the Deputy to deal with any matter of State taxation, Government policy on taxation and taxation matters generally.

So it is in order?

It is in order until the Chair tells the Deputy it is not in order. The Deputy is in order when he deals with taxation matters.

How can I explain to the House the difficulties that these companies will experience if I do not refer directly to the problem they have now, one that was foisted on them by this short-sighted measure? I referred earlier to the pseudo-republicanism of this Government. I have letters from companies not only in Donegal but in other counties sent to me by hand giving details of the difficulties they will experience because of the break with sterling.

We are not going to debate the break with sterling. It has been debated on three occasions in the House. I am asking the Deputy to bear with the Chair and to accept the ruling of the Chair.

Those companies have gone to the bother of writing to me to explain their difficulties of staying in business. They pay corporation profits tax and income tax and their employees are liable for PAYE. Is the Chair telling me that I cannot explain their difficulties to this House? I believe I am being muzzled. I believe the Chair is being unfair.

The Chair is not muzzling the Deputy and the Chair is not being unfair. The Chair is merely asking the Deputy to be relevant. Surely the Deputy will accept the rulings of the Chair sometime or other?

I will accept the rulings of the Chair when I believe the Chair is being fair.

If the Deputy is accusing the Chair of ruling unfairly, he will not get away with it. He will withdraw the remark that the Chair is ruling unfairly.

If it is offensive, I will withdraw it.

For 20 minutes you have been challenging the Chair on every decision given, and that is not good enough. I am asking the Deputy to deal with the Bill.

I am trying to explain that I am dealing with the Bill before the House.

You must accept the rulings of the Chair. Whether the Chair is right or wrong, the Chair is the sole judge of order in the House. The Chair will admit that the Chair can make mistakes, but generally, knowing the business of the House and having given rulings for donkeys' ages, we know what we are about.

I do not want to be in conflict with you. I am doing my job as I understand it. I have been trying to convey to the House the views of people in my constituency and of others who have approached me on certain difficulties arising from the Finance Bill to people engaged in cross-Border trade and in trade with Great Britain. They have explained the difficulties they have because of the exchange rate. I know, Sir, that it was difficult for you to accept that I may be speaking, but would you please convey to me——

The Chair has told the Deputy that the exchange rate was dealt with in a previous debate in the House.

The Bill that is to be the instrument of taxation between now and 1 January 1980, which will directly affect the economy of business people and others—are you seriously telling me that I cannot talk about it?

The Deputy should not be questioning the Chair. He has made his point several times on the break with sterling and the EMS, most of which was not relevant. I am asking him to get to the Bill.

I am talking on the Bill.

The Chair will decide that. I am asking the Deputy to accept the Chair's ruling.

I do not wish to be awkward with you and I honestly accept that the Chair makes mistakes and that the Chair has often brought a Deputy's attention to the fact that he may not be in order, but when the Deputy explained the relevance of points he was making, the Chair usually allowed the Deputy to make those points. You have not been helpful to me.

I have been most helpful. I have allowed you to make points on the relationship of the Irish punt with the pound sterling and on the EMS and other matters and I am now asking you to get back to the Bill.

How can one talk about economics or taxation without going into other issues stemming from them? I am trying to develop an argument on the needs and wants of people in regard to the health services and in regard to social welfare and national defence. These matters have been referred to already in the debate. The particular matter I want to talk about is the effect of the break with sterling on the relationship between North and South.

The EMS and the break with sterling do not arise.

I am suggesting that the break with sterling and the EMS affect people both North and South. I do not say this disparagingly, but I honestly do not believe that you appreciate it.

If you are not going to obey the Chair, I will have to ask you to discontinue.

You are ruling out any discussion.

I am ruling out irrelevant discussion.

If I talk about a pound note you are telling me I cannot talk about it on the Finance Bill. If that is your ruling, I will accept it and go on to other matters; but if you are telling me that the Chair has given a ruling that I cannot talk about the value of the pound——

The Chair has ruled. Please accept the rulings and do not try to twist the rulings that have been given. Please get back to the Bill.

I am talking about the Bill.

Go on to the Bill and do not be arguing with the Chair. The trouble is that the Chair is being too quiet for the Deputy.

I know it is embarrassing but I will come back to it. For the sake of 30 pieces of silver the Government have lost interest in the politics of a quarter of the Irish people and for that they do not deserve my respect or the respect of those who put them there. I will go on to taxation. We have had 150,000 people marching in the streets of this city and in the country about taxation. Is it relevant to say that in another part of Ireland people have marched for different reasons but they were not listened to? I will repeat what Deputy O'Leary said: piecemeal attempts, like saying "We will give you an increased personal allowance", will not chase away the threat of street politics. The first civil rights march in Northern Ireland was well conducted. It brought on the streets professional people, self-employed people, traders, as did the anti-PAYE march in the streets of Dublin a couple of months ago. They did not march for the sake of marching but because they had grievances. If we do not learn from the mistakes of Northern Ireland, unless there are radical changes in the taxation system in this part of Ireland those people will come out to march again and the next march might be as orderly as yesterday's or the one a month ago and the following ones might be as orderly but, mark my words, when people start street politics there cannot be orderly walks all the time.

That brings me to the point. Why have people all of a sudden changed? Why are they publicly demonstrating? Why have they changed in the short period since this Government came into office? Is it not because the floodgates were opened psychologically by the infamous Fianna Fáil Manifesto of 1977 which stated that there were no problems, that there was no need for Deputy Cosgrave's Government to have hairshirt budgets? Fianna Fáil had all the answers. They would provide the jobs and give cuts in taxation. They would do away with farmer taxation. They would do away with every other form of severe tax that the Coalition Government imposed.

Any fair-minded person asked to write an account of the politics of the 1970s would record that the year 1974, internationally referred to as the year of inflation, caused economic crisis not alone here but in every part of the world, and particularly in western Europe. It was not of our doing; it was not of Fianna Fáil's doing. But that party are not terribly interested in the economics, the politics, the trading or the relationship between North and South. Their deep concern was to get back into office—as Deputy James Dillon used to say, to get close to the loot. That has been the experience in the two years since Fianna Fáil came into office. There was no unrest prior to 1977. There were no protests in the streets. There may have been people looking for jobs, but they are still looking for jobs. The only jobs that have been created that I know of are in the public service. Any Minister for the Public Service could open the floodgates and employ 100,000 more people in the public service. What of these other jobs that were to be created?

It could be argued and argued successfully that our pound has held strength with most of the currencies in Europe. But psychologically the break with sterling not alone affects the politics and the economics of this country but also its whole well-being. There is now a currency curtain between North and South which every day of the week people on both sides of the Border experience. A farmer who sells his cattle may be getting a few shillings more, but he is reminded that the pound in the North is worth more than his. The shirt manufacturers who manufacture shirts and send them to Northern Ireland or Britain will not benefit to that extent. They will be told that an agreement was entered into and that they will be paid what it says in the agreement, but when they go to buy the materials to make those shirts they will cost more.

Deputy Fox said that the Fianna Fáil Government were a concerned Government. I wonder how concerned they are when the few leaves of misunderstanding are pulled off and one tries to get down to the nitty gritty. Last week a constituent of mine, a small farmer, came to me. He told me that his unemployment assistance was reduced by £10 per week. I would imagine he did not vote for the Government the last time because I know his politics. I wonder how caring a Government they can be when they allow situations such as this to exist? Take for example this small farmer who lives on a small holding, the PLV of which is £3.50. His rates would have been £42 last year. The new Government's manifesto said that they would do away with rates but he had already got 25 per cent off, so he had been paying £32.50. He drives an old secondhand car with £50 taxation. That has gone as well under the Fianna Fáil Manifesto. Any person who was not committed to politics, as this man was, would have been tempted to vote for Fianna Fáil because no tax on motorcars and no rates on houses would mean a saving of approximately £72. But now, because this man's unemployment assistance has been reduced, it is going to cost him £500 a year.

Unemployment assistance cannot be discussed on this measure.

I am not dealing with unemployment.

The Deputy has certainly been dealing with unemployment assistance for the last few minutes. I told the Deputy several times.

I am talking about taxation. Deputy Fox mentioned the caring Government that Fianna Fáil are and I am pointing out that they are not so caring.

The Deputy will not deal with unemployment assistance and rates on this Bill.

I have not attempted to nor do I want to.

I do not know to whom I must have been listening for the last few minutes.

I am merely saying that Deputy Fox talked about a caring Government, a Government who would watch over all the needs and cares of the people of this State. That sounds nice. Most people would say that is right, that all the Ministers in the Cabinet are decent, honest-to-goodness people. They would not—and I say this most sincerely—maliciously attempt to harm anyone. I am not suggesting that they would. I am merely saying that the Cabinet have lost direction, that the Taoiseach appears no longer to want to lead, that the Government are adrift and so far away from reality that we have decent Deputies like Deputy Fox saying, and believing he is right, that his Government are a caring Government.

Let me say that when Deputy Fox was speaking he was speaking with a balanced fairness that I could not take exception to. However, in case there are other people who might say that Deputy Fox is right, I am merely pointing out that I do not think the Government are a caring Government after all. That is why people are marching in the streets. That is why farmers are objecting to the taxation being put on them. This Government, who Deputy Fox says are so caring, have given presents of millions of pounds to the wealthy here. Yet the ordinary person who pays tax under the PAYE system and who until now paid his motor tax and his rates and may have been persuaded or tempted by the Fianna Fáil Manifesto in the last election to change allegience, all of a sudden discovers now that by the taxation method the Minister for Social Welfare has introduced he stands to lose £500 a year. That is not very caring.

I do not think anybody could accuse the Coalition Government of not doing their best in the years between 1973 and 1977. I do not believe that anybody could dispute the great effect which the oil crisis of 1974 had on everything we do, on the electricity we burn, the transport we use, the clothes we wear which are manufactured from man-made fibres. It was the effect of the oil crisis which caused the difficulties of the inflation period between 1974 and 1977. When the Government were in Opposition they had no sympathy for the Coalition Government. The only thing they thought of then was getting back into power. The young Deputy from Kildare is a backbencher of the Fianna Fáil Party and is one of the 84 cogs in the Fianna Fáil Party machine. He will soon realise that there are people closer to the loot than he is who do not have to stand for election, who parade the corridors of power. Politics is not about how many seats a Government get and whether that Government get into power with a few extra TDs. This all boils down to the system of taxation where the wealthy can be excused large payments while the young man with 12 children, one of whom is being educated as a priest, has his dole cut by £10 a week because the Minister for Social Welfare says that his standard of living is too high.

Some day Deputy McCreevy will understand what I am talking about. I heard more senior Members than I making the same points in the House 15 years ago. One of the weaknesses of the system we operate, which is called democratic but should be more properly called political, is that the democracy which backbench Government Deputies in this Dáil talk about does not exist. They are part of the political system. If the Minister for Finance pushes a Bill like the one before the House at the moment he pays very little attention to the claims of his backbench Deputies. Courtesy demands that he listen to them but the tacateers, the people who push buttons and throw switches, who can stop the economic growth or accelerate it will be listened to. They are the faceless men whom nobody knows. They do not have to stand for election or face defeat. They do not have to be elected but they are always around. I believe they were around when the Fianna Fáil Party were in Opposition and they felt the draught because they were not close to the loot.

I ask the Deputy to come back to the Bill. Everything he has said for the last few minutes has nothing to do with the Bill before us. Allegations should not be made about people seeking "the loot" around the place. If the Deputy has charges to make he should name people. That sort of allegation should not be made. If the Deputy knows there is something going on that should not be going on he has a method of dealing with it. It should not be thrown across the House. It certainly is not relevant on a Bill like this.

My understanding is that we cannot name in Parliament people who are not here to defend themselves.

If the Deputy has an allegation to make against people who are nameless he knows how to do it and to deal with it. He will not be let name people in Parliament. It has certainly nothing to do with the Bill before the House to talk about mythical people who are going around seeking "the loot" around the House.

It appears to me that if I come in here and praise every section of this Bill it is in order but if I come in to criticise it it is not.

The Deputy is entitled to criticise every section of the Bill. He is entitled to deal with what is in the Bill and what could relevantly be put in the Bill but he is not entitled to come in here and deal with all sorts of other matters on the Bill before the House. Nobody knows that better than the Deputy.

A few moments ago I was debating with you the effects which the break with sterling would have on the firms which deal with Great Britain and Northern Ireland, on corporation profits tax, capital gains tax and income tax and you told me it was not in order.

I did not tell the Deputy anything like that. I told the Deputy when he was dealing with taxation matters he was completely in order. Taxation matters which affect the State and Government policy on taxation are in order. I have said on numerous occasions that this is completely a taxation Bill.

I accept that and I submit to you that this will have grave effects on the many companies who directly import raw materials from Northern Ireland and from Great Britain, manufacture goods here and export the finished articles. They will lose a lot of money because of extra costs. This has a direct bearing on the Finance Bill.

The Chair has already ruled on these matters. I mentioned the word "taxation" and the Deputy is trying to use it as a means by which to bring in everything under the sun. The Deputy will have to stay on the Bill and on taxation matters.

That is what I am talking about.

Do not argue with the Chair. Accept the rulings of the Chair. Every other Deputy does. If the Deputy does not want to do that he better sit down and discontinue his speech.

When it reaches a stage when a Deputy cannot talk about the simple pound in his pocket and cannot talk about the effects the economic mistakes of the Government have on taxation and on our import and export dealings, when I am being muzzled by you, it would be better for you and me——

Your are not being muzzled.

Please resume your seat.

I am leaving the House in protest because your ruling is so unfair. I could not stay any longer.

A Finance Bill should represent one of the most important documents laid before the House because it sets forth any changes the Government make in the taxation system. While the budget debate gives us an opportunity to discuss general Government policy, the creation of jobs and so on, the Finance Bill is better dealt with on Committee Stage and on Second Stage.

People are concerned about the level of taxation they are paying. Therefore this year's Finance Bill is more relevant and controversial than ever before. While it is fair game for Opposition speakers to make political points against the Government, each speaker so far has referred to the radical changes in taxation which are needed to prevent people from taking to the streets. As the last speaker said, the danger of street politics is all around us if changes in our taxation system are not made.

If people want to pay less tax they must accept fewer services. There is no point in any politician promising that people will pay less taxation and later saying that there will be increases in social welfare, better health services, better roads and so on. As politicians we may have failed the people by giving them the impression that they can have these services free. We should tell them the truth. They get nothing free. Anything provided by the State is paid for by taxation. For short-term periods the Government may finance their budget deficit by borrowing from abroad or internally. All that money must be repaid. The only way this can be done is by taxation. Whether this taxation comes from companies, individuals or some other way, ultimately it will be paid by the people.

In future general elections will be fought on the basis of what "goodies" the people will get. I am very concerned about this. If people think that by putting out one Government and putting in another they will be better off overnight, they are on the wrong track. If we encourage people to think like that we cannot expect them to do anything but rebel when we put harder options before them. For as long as I am in politics my message to the people I represent will be that services provided by the State are paid for by taxation.

It galls me to hear the Opposition speaking about changes being made in the PAYE taxation system and saying that people are paying too much taxation when they had four years to do something about it. A few figures at this stage would be relevant. While people can prove anything by juggling figures, there are certain figures which are indisputable. When the last Government came to power for the tax year 1974-75 the married allowance was £800; in their last year, 1977-78 it was increased to £1,100, a 37½ per cent increase. The cost of living in that period doubled. These people talk about indexation of allowances but that was the time to do something about it. If allowances had been indexed to the cost of living, the tax-free allowance in 1977-78 would have been greater than £1,100. As a result of this budget the 1978-79 tax-free allowance for a married person has been increased to £2,230. In the 18 months since we took office the cost of living has fallen. While people may dispute that inflation was reduced because of world markets or because of Fianna Fáil policies, no one can dispute that while we have been in office inflation is lower that it was when the last Government were in power. While the Coalition were in power they increased the tax-free allowance by only 37½ per cent and so far we have increased it by 100 per cent.

In the tax year 1976-77 the average industrial worker paid 16.6 per cent of his income in taxation. As a result of this budget the average industrial worker will pay 12.6 per cent of his income in taxation. That is an improvement in the level of taxation for these workers. If this is true one might ask why the people are taking to the streets because of taxation. Apart from any specific matter which may have caused their anger and brought them to the streets, we as politicians, have to face certain facts. In my opinion, the people are marching because they want more personal disposable income—to spend more in the public house on Saturday night, or at the races and so on. They do not feel they are getting value for the money which is being taken out of their pay packets every Friday night. I am sure that if PAYE taxpayers saw their money going to feed an old age pensioner or to a deserted wife or people in need, they would say their money was well spent; but, unfortunately, people see an evergrowing amount of money taken from their pay packet and going into the Exchequer coffers. They do not feel they are getting a proper return.

A lot of people feel that the civil service is grossly over-staffed and these people have to be paid for out of taxpayers' money. The taxpayer does not think he is getting the best return there as services are getting worse. The PAYE taxpayer feels that he is paying more than his fair share of tax. I suppose we all feel at one stage or another, whether in politics or business, that we are paying more than the person beside us or that we are getting a hard deal from the Opposition or the press and the others are getting it easier. That is a normal reaction.

PAYE taxpayers are saying that they are paying more than the self-employed and farmers. I have heard people say that the PAYE system is not working. Unfortunately for the people on the system, it is working too well because they are the only people it is easy to collect tax from. They have no way of avoiding paying tax because it is collected at source. They never get the money into their hands to do anything with it. It is paid over by employers at the end of the month. For the self-employed and for companies the method of calculating their income is not as exact and the same set of rules do not apply. Unfortunately, what people and trade unionists are saying when they say that the self-employed are not paying their fair share is that if they had the same opportunity they would try to fiddle their tax as well. We must ask ourselves why people think like that. People think that the self-employed, who have the opportunity of calculating their own income in a different way, abuse that calculation and fiddle as much as they can. That is a symptom of our society.

There may be ten out of 100 people who abuse the social welfare system but they give the whole system a bad name. People are inclined to say "Look at the abuses in the social welfare system. There is John X who has a job and is drawing unemployment assistance". They forget about the 90 people who are genuinely unemployed and are not abusing the system. The same applies to taxation. It is the 10 per cent of self-employed people who do not pay their fair share of taxation who give a bad name to all the self-employed. I do not say that 10 per cent is an exact figure.

The self-employed have a lot of problems. They do not have the same regularity of income as people on the PAYE system have. Their tax is computed by a different system, but by and large the self-employed person, who is the bane of the PAYE taxpayer, is paying the correct amount of tax. I would not be so innocent, as an accountant, to say that some people who are self-employed do not evade tax. However, the number is grossly exaggerated. It is impossible for a self-employed person who might evade tax by off-setting his receipts to accumulate a large amount of money because the tax inspectors are very much on the ball and if a person has shown his income as being only £5,000 and then turns up with £40,000, £50,000 or £100,000 out of nowhere, he is hammered on that. He has to pay not only the tax he should have paid on it but interest and penalties as well. To accumulate large sums of money when one is self-employed is simply not on. The abuse of the taxation system is not as great as is imagined.

The figure given for taxation paid by those on PAYE is in the region of 85 per cent and the self-employed usually contribute only a very small amount. Included in that figure are directors of all types of small private firms. In theory, if all self-employed people formed themselves into limited companies, the companies would pay corporation tax and the money taken out by directors would be taxed under PAYE directors' tax. No taxation at all would be collected from the self-employed.

The figure of 85 per cent grossly distorts the amount contributed by the self-employed because included in it are large amounts of money collected by directors of private family-owned companies. When people speak of self-employed people they usually mean those who run their own companies. Such people also pay PAYE and are included in the figure, but that is a point which is always forgotten.

It is difficult to speak about the Finance Bill without referring to the national understanding. Since the budget and the national understanding there has been a greater crack down on people who do not pay tax, namely, the self-employed. I read recently that the Revenue Commissioners are considering publishing the individual returns of groups of people. I do not mean that they will publish any individual's tax but rather the income of certain people in society—for example, doctors, solicitors and accountants. By doing this they hope to encourage people, who see Mr. X, a doctor down the road, with an average return for income of say, £10,000, who has a very high standard of living and goes on a continental holiday twice or three times a year, to report this to the Revenue Commissioners and that this will help the Revenue Commissioners in catching up with tax evasion. What I have seen and heard from the Minister and the Revenue Commissioners is to the effect that this should help and that the ordinary person who pays his correct tax has nothing to fear but that the person who is evading tax should worry about it. Consequently, there is nothing for the man who is not breaking the law to worry about. In the past few months also there have been reports in the papers about tax spies and people giving information to catch out their fellows. I am totally opposed to such an idea.

I do not believe that the publication of returns of groups of people is the way we should approach the tax evasion problem. We do not allow people to drive while drunk because the police are not able to catch them. We make laws more stringent and get more police and hope they will be able to catch them. I am not prepared to advocate a system by which everybody will be a tax official and be writing letters to the inspector of taxes saying that Mr. X. or Mrs. Y have bought new coats or cars. That is not the way an economy should make progress. It is part of what I call the politics of envy. Whether it is the farmer who is getting better off or our neigbour we should encourage people to become better off and not try to knock them. It may even make the burden of the Revenue Commissioners more difficult. If we want to catch people who are evading tax I suggest that we should have more tax inspectors, but I would not advocate a system of people rushing in every day to the local inspector, in effect spying on their neighbours. Whether this is oldfashioned or not, the whole idea is abhorrent to me and I do not agree with it.

There are many points in the Bill which perhaps can be dealt with on Committee Stage. I welcome particularly section 6 which gives allowances for expenditure on residential premises. I understand the idea is that the householder who does some improvements to his house such as installing insulation will get tax relief on the labour element in that expenditure. That is a worthwhile scheme with the relief extending to the excess over £50 subject to a maximum of £450. While I commend the idea in reading through the section I doubt very much if the scheme will get the support it deserves. A person who wishes to claim for this expenditure must first apply to the inspector of taxes on the prescribed form. Section 6 and the Second Schedule must be taken together as the Schedule sets up the system and procedure. I feel that while this is a good idea it will become bogged down in massive bureaucracy. In the Second Schedule we have almost five pages setting out various ways to prevent the system being abused. I sympathise with the Revenue Commissioners in trying to device a system that will not be abused but I think the complicated bureaucracy involved may render this worthwile idea inoperable.

Paragraph 2 of the Second Schedule states:

Where an individual wishes to claim a deduction under section 6 in respect of the labour cost of qualifying work carried out or to be carried out by a registered person, he shall—

(a) make an application on the prescribed form to the Revenue Commissioners for a form on which to claim the deduction (in this paragraph referred to as "a claim form") bearing the name of the registered person, and

(b) complete the claim form (which shall be issued to him by the Revenue Commissioners if they are satisfied that the form ought to be issued to the said individual),

This is an application on a prescribed form to the Revenue Commissioners to get a form on which one can make a claim. It is not the claim form. There are about three pages dealing with the claim form. The Revenue Commissioners may not even issue the claim form: they will not issue it unless they are satisfied that a form ought to be issued. Nowhere in the section or the schedule can I find how they will decide whether it should be issued or not. I should like to know why it should not be issued. According to my reading of the section a person who wants to get his improvements done and make a claim must first get a prescribed form from the Revenue Commissioners. He then makes applications for what I shall call the claim form on which to make the claim. That form will not be issued unless they are satisfied it ought to be issued. This is before he begins to get down to his claim.

When he gets the form he has to do a lot of things set out on pages 32, 33, 34, 35 and 36. Presumably most of this expenditure on residential premises will be carried out by ordinary people on PAYE who wish to improve their houses. Since it is subject to a maximum of £450 it will not be a very big job. They must contend with this bureaucracy before they get started. The allowance will not be paid at all unless the work is done by a registered contractor. I have a good deal of experience of contractors dealing with taxation problems. These registered contractors, as far as I can ascertain, are not the same people as contractors to whom a sub-contractor's certificate of authorisation is issued. There is very involved legislation in relation to sub-contractors. Under section 6 of the Second Schedule, we are now creating a new form of contractor, a registered contractor, to whom people will be able to go to have a house repaired and they would possibly qualify for tax relief. There will be so many types of contractors and so many different certificates that builders and other people will be totally confused.

In order for a person to become a registered contractor he must go through an elaborate process. The procedures are listed out in a number of pages and the penalties if he does not fulfill all his obligations are also listed. Paragraph 5 of the Second Schedule sets out in very simple terms how a person can become a registered contractor. Paragraph 5 (1) says:

5. (1) The Revenue Commissioners shall on application to them in that behalf on the prescribed form by a person issue to the person a certificate (referred to in section 7 and in this Schedule as "a certificate of registration") if they are satisfied that the person or, in the case of a partnership each partner, is resident in the State.

Paragraph 5 (2) states that the Revenue Commissioners will keep a record of these people and that a list of them will be displayed at each office of the National Manpower Service and also in the offices of the Inspector of Taxes. According to paragraph 5, the Revenue Commissioners will issue to each person who applies to them a certificate of registration provided he is resident in the State. It seems quite simple, yet there are three pages showing how this person can get the certificate, why it will be taken from him and various other things. If it is so simple to obtain a certificate why are all these paragraphs necessary? Paragraph 7 relates to the reason for the cancellation of a certificate. What is the reason for paragraph 7 (a), which says:

(a) a certificate of registration was

issued on the basis of false or misleading information,

Surely it is not an elaborate process to discover if a person is or is not resident in the State. Paragraph 7 (b) says:

(b) a certificate of registration would not have been issued if information of which they became aware subsequent to its issue had been available to them at the date of its issue,

What information is referred to here? What information could the Revenue Commissioners become aware of? The only qualification is that a person must be resident in the State. Paragraph 7 (c) says:

(c) a person, to whom a certificate of registration was issued has permitted it to be misused,

I cannot see how these certificates could be misused; there would be no reason for misusing them. They are not the same as subcontractors certificates, because anyone can get these certificates if he resides in the State. However I am prepared to concede paragraph (c). Paragraph 8 also refers to false or misleading information and so on. This goes on for pages. The kind of contractor who would take on small jobs will not go to the Revenue Commissioners for a certificate of registration. People in the subcontracting business who have been hassled about subcontractors certificates and who have been unable to obtain sub-contractors certificates will not go through the same procedures to secure a registered contractor's certificate. These certificates are not needed by people who work on small house extensions and improvements because they are dealing with people who will pay them straight off.

As far as I can see, this section was put in to get tax evaders into the tax net. The idea behind this will fail because the ordinary individual will not go to the bother of getting a registered contractor's certificate. The big contractors will not do this type of work which will only be done by the small contractor. At the end of the year we will find out that the amount of money saved by the taxpayer through the section will be negligible because people will not go through all these procedures relating to the issue of certificates of registration.

On Committee Stage will the Minister cut out this paraphernalia in paragraphs 7, 8 and 9 and leave in only paragraph 5 setting out how they will be issued? The Revenue Commissioners are trying to guarantee against the failure which they had when they issued subcontractors certificates in 1970, when so many were issued and the system was so widely abused. It is now almost impossible to get a subcontractors licence because the legislation is so tight. The Revenue Commissioners are trying to do the same thing here to guarantee against failure. If the section is to work the Minister must cut out a lot of these thinks about how a subcontractor gets a certificate of registration.

In this Finance Bill there is no provision about legislation regarding sub-contractor's certificates of authorisation. The certificates were introduced in 1970 and the idea was to prevent the "lump" system on building sites. Until that time very few people who worked for builders paid any tax. A few building companies operated PAYE but most of the people were "lumpers" and were classified as self-employed. They worked in groups and moved from job to job. The Revenue Commissioners never caught up with them and, consequently, the people concerned never paid tax. Following legislation enacted in Britain, in the 1970 Finance Bill the Revenue Commissioners were authorised to bring in certificates. It was easy to get the certificates in 1970. All a contractor had to do was to promise to submit his accounts at the end of his first year of trading and he got the certificate. I do not think the figures were published but in the case of the 7,000 certificates issued in the Dublin area only 20 per cent sent in their accounts. The system was so widely abused that it became a joke. In 1973 the Revenue Commissioners withdrew about half the certificates in the Dublin area and various Finance Acts tightened the legislation making it difficult to get a certificate of authorisation and also making it difficult to abuse the system.

I sympathise with the inspectors of taxes. Because there was such abuse of the system I accept that there was a need to tighten up the legislation. I do not blame the Revenue Commissioners for withdrawing the certificates but we have now reached the stage where we have gone to the other extreme. The Revenue Commissioners now have a practically foolproof system regarding the certificates. Any person who has a sub-contractor's certificate can get jobs from builders and local authorities because the person paying him does not have to worry about the tax. If a person has not got such a certificate and does a job for a builder or a local authority, the principal contractor is obliged to deduct tax at 35 per cent before he pays him. Some people are prepared to work that system but the majority of larger builders and employers prefer if a person has the certificate. The Revenue Commissioners are quite severe on the principal contractor and if he pays without deducting the tax he has to pay tax on the sub-contractor's behalf.

Since 1976 a better system has been in operation. Now a principal contractor has to apply to the Revenue Commissioners for a construction payments card and if the Revenue Commissioners change their minds they can refuse to issue the certificate. The principal contractor is not allowed to pay the sub-contractor until he gets the construction payments card. The Revenue Commissioners have an exact record of the whereabouts of each sub-contractor. After 5 April the principal contractors who are issued construction payments cards are obliged to return them to the inspectors of taxes. It is practically a foolproof system and I wish to commend the inspectors of taxes on their foresight.

The system is working well but it is almost impossible to get a sub-contractor's certificate of authorisation. The Minister may tell me that if a person has an established place of business, if he has a satisfactory tax record and if the Revenue Commissioners are satisfied that he will comply with the rules they will issue him with a certificate. Unfortunately the position is that it is a difficult job for even the most genuine person applying for such a certificate to get it. Perhaps it is because of the bad experience of the Revenue Commissioners but they make it nearly impossible for a person to get a sub-contractor's certificate. Anyone with such a certificate knows that he must comply with the rules because the certificate is of considerable value to him in that he will get work that would not be given to him otherwise. The certificates are like pieces of gold. Even if there was abuse it would be for only one year because after 5 April the Revenue Commissioners can take it from a person.

The issuing of these certificates and the rules made have meant that many jobs that could be created are not being created. I know many sub-contractors who are willing to keep books properly but they are not able to get the certificate. It is all very well for the inspector of taxes to say that if a person has not got the sub-contractor's certificate he can get the tax stopped and that he can come each month to get back his money. It is not possible to pay wages and to pay for materials throughout the month when one gets only 65 per cent of the money that one should get. It is not possible to do this in any medium or large business.

I put to the Minister that at least 5,000 new jobs would be created in the private sector overnight if inspectors of taxes had a more relaxed way of issuing certificates, if they did not turn down applications straight off. The system used is keeping down the numbers who could otherwise be employed. The Minister should bring to the notice of the Revenue Commissioners that they should ask inspectors of taxes to have regard to the job-creative potential of issuing certificates quickly.

There are sections in the Bill relating to the taxation of farming profits. The main change in this regard is in the lowering of the liability threshold from £60 to £50 and increasing the multiplier from 90 to 125. All this has been overshadowed by the announcement on Tuesday that from 1980-81 there will be a new taxation system for farmers. Since 1974 the taxation of farming profits has been a recurring budgetary problem, and I admire the previous Government for tackling farming profits. Sooner or later some administration had to set about doing it.

Talking about farmer taxation, the majority of people living in Dublin have the impression that Irish farmers drive around in large cars, have big houses and make plenty of money. That impression has been created by the sight of a few farmers coming to Dublin for big matches, but unfortunately the majority of them, 90 per cent, do not drive around in big cars and do not enjoy a high standard of living. Many farmers would like to have the incomes city people think they have. People have misconceptions about farm profits.

Until 1972 there was no reason to tax farm profits: although technically they were liable for tax since 1969, the tax had never been collected. It is only in the last ten years that farming has developed properly. People are inclined to think of the £900 million farmers have got since we joined the EEC and of the big prices they get for cattle and other agricultural produce. However, if a person had £10 a week and he got a 100 per cent increase in his wages, he would still have only £20 a week. The base from which farmers started was very low. Farmers' profits have increased rapidly in percentage terms, but if recent studies are anything to go by, it is only now that average industrial wages and average farm incomes have become about the same, though perhaps farmers are still a little behind. We should remember that before we go off half-cocked talking about the millions farmers are making.

On the other hand, it is not fair for the farming organisations to be all the time saying the opposite, that farmers are not making money, and crying and whinging no matter what kind of increase they get. Up to seven or eight years ago farmers were not enjoying a reasonable living. My people are farmers and, although I am not a farmer, I live in a farming area and I understand about work on a farm. I know that farmers do not like union leaders and people in cities week after week giving out about taxing farmers who, they say, are making millions, and treating them as public enemy No. 1. On the other hand, they do not particularly care for leaders of their own organisations saying they are not doing well enough. The ordinary farmer is a very balanced and fair-minded person. If he makes money he works hard for it. We have had a hard winter. There is no great joy in getting up at 5.30 in the morning with snow on the ground and going out to milk 30 or 40 cows or going out to feed cattle through the snow. Of course there are some substantial farmers with a large labour force, but they represent not more than 5 per cent of the total farming community.

It has to be recognised that the amount of tax collected from farmers is not in proportion to the tax collected from other sectors. Last year the income tax collected from farmers with valuations of more that £20 amounted to about 5 per cent of farmers' incomes, and the percentage collected from other sectors of the community was 17. A Government could not allow such a situation to continue. If a farmer makes a profit he should pay income tax, but if he does not he should not pay income tax.

Hear, hear.

The only fair system is to tax farmers on accounts. I say that 90 per cent of Irish farmers are prepared to accept that system. All people should be on the same tax system. Otherwise we will have continuing trouble.

Hear, hear.

If farmers are not taxed on the same basis as everybody else the finger will always be pointed at them. Nobody will deny that tax at 50 per cent is a disincentive, whether it be the TD, the industrial worker or the farmer who pays it. If we are all paying tax on the same basis then we all have the same crib and we cannot say that another section of the community are not paying their fair share. I have always advocated that farmers should pay tax on accounts. The recent proposals of last Tuesday go some way towards that. In principle I do not object to the lowering of the threshold to nil because then we will be operating on the principle that if a person is making a profit he pays tax. It was proposed to drop the threshold to £40 in the year 1981. There are farmers with valuations well below £40 making a lot more money than farmers with valuation in excess of £40. Therefore, I am in favour of dropping this system altogether. On previous occasions I have said that it would not be worth the trouble of collecting such a small amount of money. I have no objection in principle to the lowering of the taxation threshold regarding farmers' profits down to £20 or even less but because of the administrative costs involved in collecting a relatively small sum of money I am in favour of doing away with the national system.

The notional system is very attractive to farmers who are in intensive production of some sort. They are usually the most hardworking people who are more often not involved in farmer politics. When the discussions were going on between the farming organisations and the Government, the farming organisations came up with the idea that if before 1 May they could agree on another system of taxation the idea of a levy could be dropped. The farming organisations had meetings with their branches throughout the country. About 10 per cent of farmers in the various organisations favoured the retention of the notional system but 90 per cent of the farmers were in favour of the accounts system. In my own county of Kildare and probably in county Meath also the majority of farmers were in favour of the accounts system. Farmers agree that they pay far more tax under the accounts system but that it is the only fair way. The notional system is attractive to farmers in intensive production, particularly in dairying, who make large amounts of money. We would all like to have a notional system in all our businesses. If in my business I could pay my tax by multiplying my age by a certain figure I would know each year what I had to pay but if everybody else is paying on the basis of their profits they are going to point the finger at me and say I am not paying my fair share of tax. Equity demands that all farmers be on the same system of tax and that the notional system be done away with.

There was another announcement last Tuesday concerning a resource tax. I strenuously opposed the idea of a wealth tax although I was not a Member of this House at the time and I am against the idea of a resource tax. The amount of £3.50 per £ of valuations over £70 is not going to break anyone and it is only going to bring in £7 million out of the total expected return from farmers in 1980 of £100 million, so really we are speaking about a small amount of money. I know farmers are not too worried about the amount of money; they will regard it as an extra form of rates although it will be paid as tax. But I do not like the principle and I would not like to see it extended. I say that regardless of the fact that some of the more prominent members of the IFA are in favour of a resource tax in principle. A resource tax has some merits. It would lend itself to approval by the Government because we could calculate each year the amount of money that would be brought in. It would be very easy to administer and we could show exactly how much money we could get each year. But the logic of a resource tax is that it may prove very attractive because there will be greater movement of land which is not in production at the moment; it will be worked better or sold to more productive farmers. It will also mean that the higher the resource tax goes the more will farmers engage in the more profitable enterprises such as milk production. One would want to be mad to engage in the winter fattening of cattle where the gross return would be about £30 per head and at the same time have to pay a high resource tax; the small return as against the large amount of money that has to be put into winter fattening of cattle would make this very unattractive. In fact many farmers are getting out of it and going into cereal production and other farming activities. If the idea of a resource tax is pursued to its logical conclusion and we keep putting the amount up people will get out of the low-profit ventures, the winter fattening of cattle and, since milk is at the moment the highest yielder, they will go into milk production. But there is an over supply of milk in the Community.

Apart from all that, if we are to create the jobs that we have been speaking about in budget after budget and in economic debate after economic debate, we will have to encourage industries which have some relation to agriculture, and the production of cattle is the area where we will have the greatest amount of by-products so far as the creation of jobs is concerned. Consequently I do not like the idea of a resource tax at all. I am glad I heard the Minister say that if farm accounts prove that tax can be collected from farmers he would not be too keen on the introduction of a resource tax either.

The other matter I want to speak about is the restriction on capital allowances. At the moment normal wear and tear is allowed on machinery, buildings and so on, but if a person buys a new machine he can write off as much of it as he likes in the first year. It is proposed to restrict this in 1980-1981. The impression has gone abroad that this is going to kill off all kinds of initiative. It simply means that a person will not be able to write off the whole value of a new piece of machinery in the first year but he will still be able to write off the normal wear and tear throughout the life of that machine or whatever it may be. Some farmers who know the principle of this a little better than other farmers do not think it is a bad idea at all because the idea of free depreciation is a slight contradiction when one talks about the creation of jobs. Free depreciation was brought in in 1971 and the idea was to encourage farmers to reinvest in new plant and new equipment. On the other hand if one invests in new equipment one is cutting down on the labour force. We want to create more jobs but by giving firms and companies access to free depreciation we are really inviting them to replace men by machines. In the budget of 1971 farmers benefited like everyone else. This new proposal is not the traumatic thing which farmers think it is going to be. All it means is that after claiming free depreciation the farmer will still have 30 per cent of his taxable profit.

It depends on the cost of the machine whether or not it is 30 per cent. If a man has a taxable profit of £12,000 and buys a new tractor for £40,000, under normal depreciation he is allowed write off 25 per cent, that is £10,000. This means that he has £2,000 taxable profit, which is probably wiped out by personal allowances, so that he probably pays no tax that year. As far as I understand it, the restriction on those capital allowances means that that man is able to claim his normal wear and tear but the discretionary element is restricted. Therefore after writing off the discretionary element, a man will still have 70 per cent less taxable profits. This will probably come up in next year's Finance Bill. It is causing a lot of confusion among people throughout the country. I should like to emphasise that people will still be able to write off the cost of machines as they have always done.

The announcement about farming taxation should have been accepted by the farming organisations. I would go along with them if they said that they would accept this system but that they would talk about cash allowances and that the idea of a resource tax would be postponed. The Government possibly might have been influenced by this. The resource tax is estimated to bring in only £7 million, which is not such a large amount. I believe the farming organisations did a disservice to our farmers in not accepting the package. I have put on record my reservations about one item of it. When farmers understand it better I am sure they will find that the cash allowances are not really a big thing. I believe it is only a technical matter and could be open for negotiation. The majority of farmers are in favour of having all farmers on accounts and of the abolition of the notional system. The IFA and the ICMSA could have said they were willing to accept this package with some reservations.

They did not get that choice. They had to accept it all, including the resource tax.

I understand the farming organisations did not say anything good about the package. The farmers I know were willing to accept accounts and the abolition of the notional system. They were a bit confused about the capital allowance and some of them were not too happy about the resource tax, even though this year it is not too bad. They felt, however, that it would be bigger next year and also the year after.

My impression is that farming organisations did not welcome the package. Perhaps they have their own reasons for that. I am sure that the leaders of those organisations do everything in the interests of farmers but I believe they were mistaken in not accepting the basic principle of the taxation, which is lowering the threshold to £40 and putting all farmers on accounts. We would not have had the reintroduction of the levy last Tuesday if the farming organisations had accepted the package. I do not like the levy. Before there was any amendment to it I said I was against the idea of it. The Minister for Finance agreed earlier this year that the levy would not come into force on 1 May if the farming organisations accepted the new system of taxation, but they said they would not. I am afraid the reintroduction of the levy is because of their attitude. The farming organisations could have accepted the package without any loss of face or without any serious injury to agriculture.

The only logical way we can progress is by the accounts system for farmers. If a farmer makes £50,000 a year he pays a large amount in taxation, but if he does not make any money he does not pay any tax. I believe that the amount of money which will be collected by the abolition of the notional system will at least equal the amount of money collected from farmers in 1978, even though I understand that there are less than 20 per cent of them on the notional system. The people on the notional system are making big money. Nobody seems to have any sympathy for the man who can fatten his cattle and who has a large acreage but who might not be making the same amount of money as the man who has half that acreage but has very intensive milk production. If everybody was in milk production we would not have any meat factories. I believe that there are far fewer cattle in the country than the number given in the official figures because there are cattle being killed in factories which are not fit for killing. Our cattle numbers have deteriorated. I am sure the Minister for Agriculture will do something about increasing the number.

The reintroduction of the levy, although it will only be for one year, will likely result in a number of redundancies in meat factories. I believe there will be some spinoffs to the Revenue Commissioners by the introduction of full accounts for all farmers.

Many agricultural contractors will be brought into the tax net. Since farm taxation was brought in only the big agricultural contractors, who were registered for paying tax, did all types of work. There are thousands of agricultural contractors doing jobs for farmers who are below the tax threshold. The first thing those agricultural contractors ask farmers is whether they are paying tax and if they are not they will do the job. This might lead to a number of them getting out of contract work, which will probably mean that the cost of agricultural contractors will go up because there will be fewer people in the business.

I also believe that the Revenue Commissioners will gain more money from rent from the letting of land. At the moment if a person is on the notional system of taxation he will not be claiming the rent he pays for his land. In 99 cases out of 100 the person receiving the rent is not returning it and the Revenue Commissioners are none the wiser. Under the full account system that money will show up in the lessor's books and the lessee will have to pay tax on it.

There will be a spin off in regard to farming taxation. In Ireland there are a large number of split rateable holdings. A farmer may have a £100 valuation in three different rate demand notices, £45, £45 and £10. As the Revenue Commissioners only work off the rate notices, these people have not been caught but now they will be caught in the tax net. This will put more money into the coffers of the Minister.

A number of farmers have jobs in factories and have farms with valuations of less than £60. They do not usually return this land on their PAYE forms but they will be caught by the account system for their jobs and their farms. The introduction of full accounts for farmers should mean that farms will be better managed. Most progressive farmers have kept accounts for years, but the ordinary farmer has not. When they have to keep an account system for the taxmen most farmers will adopt a better accounting system to tell them how their various enterprises are doing. This should lead to better farm management.

The media have done the country a disservice by trying to forment the division between urban and rural Ireland. It is not in anyone's interest to try to create such a division. Nowadays people do not have time to read the leading article or the full report and are inclined to form their opinions from the headlines in the various papers. It does not do anyone any good to see a headline like "Who Runs The Country" one day and the following day the headline "Surrender". That has improved neither the lot of the PAYE worker nor the farmer. All it has done is to give the people in the towns and cities a hate figure—the farmer. I am a firm believer in the freedom of the press but it is not responsible journalism when editors print such headlines.

Section 38 refers to the increased penalties on illegal bookmakers from £100 to £500. This is a subject in which I have an interest and I agree that the penalty should be increased. The £100 penalty has been in existence for a number of years and is not realistic. Why are there unlicensed bookmakers? The reason is that if you bet off-course you have to pay a 20 per cent off-course betting tax. On a £5 bet that is £1. That is a bet in itself. That 20 per cent tax does not go back to racing; it goes directly into the coffers of the Department of Finance. There is a case for reducing this tax. If the Government cannot reduce it to 10 per cent, a proportion of it should go back into racing. The only money the Racing Board get comes from the levy on course bookmakers—6 per cent. If a portion of the 20 per cent tax were given to the Racing Board, racing, prize money and facilities could be improved. As I said, I would be in favour of the Government reducing this tax to 10 per cent. If the off-course betting were so reduced I am sure more money would be collected by the Revenue Commissioners because an immense amount of money is spent on illegal betting. People are not prepared to pay this 20 per cent, but they are prepared to bet illegally.

Earlier I mentioned the PAYE protest. These people are campaigning about the present tax system because they feel they are not getting a fair deal. A PAYE worker should be allowed travelling expenses to and from his work because the self-employed get this concession. Most people who have to travel distances to work have to spend a great deal of money maintaining their car—petrol, repairs and so on—and these should be tax deductible expenses. They are deductible for a self-employed person. There is a very strict definition for allowing travelling expenses to the PAYE worker. Among other things, they must be necessarily incurred in the performance of his duties. It is that phrase "in the performance of his duties" which has rendered it impossible for the appeals commissioners to give a decision in favour of allowing them. That phrase means that, whereas one needs a car to get to one's place of employment, one does not need a car in the performance of one's duties. The self-employed come under a rule which says "wholly and inclusively incurred for the business". It is a different section and allows certified people to claim travelling expenses. The Revenue Commissioners might say that it is a difficult job to police allowances for travelling expenses, but that it not a reason why it should be thrown out. People who have to incur travelling expenses in order to get to their work should be allowed for it.

Short-term social welfare benefits are also to be brought into the tax net. I have no objection to that in principle because some people work from April until September, then find some reason to be unemployed and claim back tax. It might help to stop that situation. If we tax short-term social welfare benefits we should allow the amount taken out of the person's pay packet as an expense in computing his net income. Until this budget, a person was allowed a very small part of the social welfare stamp as a tax free allowance. Last year it was £64 and a few years ago it was £48. I have never understood why it was so low. It represented the pension part of the social welfare stamp. Now there are no social welfare stamps. Since we have extended the principle of taxing social welfare benefits we should allow them as an expense in computing a person's income. A person who has a gross wage of £80 has at present to pay tax on that and he then has to pay his social welfare contribution. His social welfare contribution of £6 or £10 should be deducted from his gross income and he should only pay tax on £70. It should be regarded as a superannuation contribution. It was not possible to do this before, but now that a person will be taxed on social welfare benefits they should be allowed as an expense in full against that person's gross tax.

That principle is extended further in this Bill. What is income for one person is an expense on another person. In this Bill we will allow the contribution for permanent health benefit schemes to be a tax free allowance but we are going to tax those as well. Since we are going to tax benefits payable under the Social Welfare Acts we should allow the total social welfare contributions as an expense. I would commend that to the Minister.

There are a number of matters which are better dealt with on Committee Stage, including losses. A single parent family will now get an extra allowance of £250. That is only fair. When a married man who has a large tax free allowance dies his widow, who takes over the reins, gets a very much reduced tax free allowance. I would make the case that the opposite should happen and that the widow's allowance should be at least equal to the married allowance. That is something which has puzzled me for a long time and I do not see any reason for it. I commend the section which increases the widow's allowance and also gives an extra £250 to a widow who has children.

I commend the Minister for increasing the interest from £2,000 to £2,400, but it is not high enough. In 1973, when this relief was allowed, a special consideration had to be taken into account. There was no capital gains tax legislation at this time. That was one of the reasons why the interest restriction was put at £2,000. Prior to that one could have unrestricted interest relief. There was a tax avoidance measure where a person could make a large capital gain, pay no tax at all and during his income in the previous year have unrestricted interest relief and end up paying no income tax or capital gains tax. When the capital gains tax legislation was introduced I thought the case would have been made that this should be increased, but it was not. Irrespective of that, interest relief of £2,000 in 1973 represented a borrowing by which one could buy a very large house, but nowadays the interest relief of £2,400 would not buy a large house at all. There is a case to be made for increasing the limit above £2,400.

I would like to feel that, when we are discussing measures such as the Finance Bill or other matters, the contributions by the Government back benchers and by the Opposition would be taken into account in shaping future legislation. Since I came into the House I found that Government decisions put legislation on the table. The Members of the Opposition get up and ridicule and make as little as they can of them and it often seems more important to score cheap political points off one's opponent whether on the Opposition or Government side of the House than to make any constructive kind of contribution. I would like any good points I have made in my contribution to be taken account of and whereas it is fair game to make political capital——

Is the Deputy concluding?

Yes. The Finance Bill, as a continuation of the Government's policy since it came into office, is a good one and I commend it to the House.

Debate adjourned.