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Seanad Éireann debate -
Thursday, 3 Jul 1924

Vol. 3 No. 11

SEANAD RESUMES. - FINANCE BILL, 1924—SECOND STAGE.

Senator Sir Nugent Everard asked me if it were considered that the fiscal policy followed in this country for the last eighty years has been approved by its results. I do not know if anyone here will say that it has been approved by its results. The same Senator said the effect of the Protection experiment could not be tested, because in the interval before the taxes came into operation, a certain amount of dumping took place. I agree with him there, but I think the delay was due to the question of staff. It was not possible to recruit immediately a staff for this purpose. The whole attention of the staff had been strained by the setting up of the frontier on the 1st April previously. It was difficult at first hand to get a body of men trained. To throw on the staff at once the additional burden imposed by those taxes would have meant that goods would have got in and we would have been throwing sand in our own eyes. There has been a delay, but the delay was excusable, and was due to the question of staffing. The delay has to a point weakened the value of the experiment. That can be borne in mind when at the commencement of the next financial year the Government again consider this. Senator Sir Nugent Everard referred to this as a remedial measure against unemployment. Unemployment is one of the many items which I had in my own Department to tackle.

Almost every Government has this problem at the present time. It has to be approached from many angles. There is the bringing forward of certain utility work. That is an extravagant approach to it, because you get work done, not under the best conditions, but by unskilled labour. Then you have measures which go to the basis of this industry, such a thing as where you contemplate schemes to provide cheap power in the country. The Bill alluded to here, the Trade Loans Guarantee Bill, is one of the bigger approaches to the whole question of unemployment, and this item was pressed hard by my Department and the Finance Ministry as one means of tackling the unemployment question. It is not merely that you will have to have recourse to the dole only; it is a further fact that mere payment of what has been described as a dole in any country where there is a big amount of unemployment, must create a sense of insecurity which will affect men who will have enterprise in business circles.

The question of unemployment means more than the provision that has to be made in an extravagant and unproductive way by means of the dole benefit. It means the further thing, that if the courage and confidence of people who ordinarily would have enterprise is weakened, the credit of the country suffers. Senator Kenny said, and I agree with him, that this measure should have a certain result— and if that result is achieved the experiment to my mind, on that point alone, would have been a success— that we should arouse again the investing habit here. Surely, if we can attract either by Protection or the Trade Loans Guarantee Bill, the creators and directors of enterprises, it would be an immense advantage. We have some such men, but we have not sufficient number in the country. I think there should be no feeling of shame in admitting that there is any industrial weakness shown. It only means that we find ourselves in that particular position from no fault of our own. To censure us for being in our present position would be to pass censure on a victim of assassination for having died prematurely.

We have to help people who are orphaned by assassination, and there are two ways of doing it. I prefer myself the Trades Loan Guarantee Bill, but Protection can also be tried. Senator Douglas almost invited me to follow him into very difficult ground. I feel that this question of the power of the Seanad is not one I should touch on, but may I say this, that the Seanad has considerable power with regard to financial measures. They can make recommendations. These recommendations have to be considered by the Dáil, and are a direct way of bringing pressure on the Government. Indirectly, the Seanad can form public opinion, and can get the pressure of that public opinion to bear on the Government so that there is nothing to be gained by minimising the power of the Seanad in that respect. I was asked had the Government a trade policy. That is a very difficult question for me to answer at the present moment. I remember hearing from a friend of mine who at one time had to reside in Germany. He said he had never seen a town with more weather-cocks fixed on chimneys than the town of Heidelberg, but the only one which was accurate was one in the University, which was fixed by hand.

They found out what the prevailing wind was and fixed it to suit. He said further that there was a Chinese habit that if they desired in the early days to change the wind they set the weather cock to what would suit them, in the hope that that would affect any wind that blew. That is, apparently, what I am supposed to do here, to set up some standard to which things generally would approximate. I do not think it is possible to fix on any trade policy at the moment; we cannot say absolutely how we are going to master every economic circumstance. There may be certain economic circumstances which will defy mastering and which will be beyond control. All we can do is to collect all the information we possibly can about this country, collect all this information together and have our own point of view with regard to what would be a suitable policy in the circumstances. Until we get this research work done we can only proceed to clear the ground as much as possible. I hold this session has been the most economic session that the Dáil or the Seanad has had. There has been a lot of the type of legislation which is merely to fit the new machine to the new conditions.

While the ground to that extent is being cleared, there are other things to come. We have got to a point where we have measures with some economic bearing. I have already alluded to the Census of Production Bill, which I hope to have brought in next session. In regard to agriculture, the Minister for Agriculture has definitely introduced Bills aiming at the improvement of agriculture. One of them was given a Second Reading here to-day. These are his attempts to get better methods adopted by the agricultural community here and to remove these slipshod and haphazard methods to which Senator O'Farrell has referred. Senator Douglas referred to the postponement of the time in which these duties would come into operation, and said it was a blunder. I explained how it arose. It is a question of staff, and I regard it as having no bearing on the experiment. It has perhaps a certain bearing, and the fact of the postponement will have to be taken into consideration afterwards. The duty on motor cars was retained as a revenue-raising operation; it brings in about a quarter million of money. Senator Douglas referred to one point about which I was rather surprised— the question of trade representatives abroad. I feel that I should apologise in one way for the matter, because my attention has been so occupied with other things that I have not had much time to give the attention to that question which it requires.

I am not clear that any representative of ours abroad is paid a salary at the figure mentioned by him—I think he mentioned the figure of £300. I do not know of any representative who is in receipt of anything less than £600; several of them have considerably more, and have allowances in addition. It must be remembered that the position of these men is a peculiar one at the moment. They are rather observers than investigators. They are really watching the flow of events, because at the moment the main effort is being directed towards what is described as the only market. It is not the only market, but it is the main market. When we find countries with which we are in such keen competition directing their whole attention on the capturing of that market it seems to us right that we should use our best efforts to consolidate our position in that market before we proceed to alternative markets. It seems proper that we should concentrate on the market where we sell the greater portion of our produce. The trade representatives abroad are more for the future than the present—not so much for the immediate future even. I can see reasons why an expenditure of this kind on these representatives could be justified, and I should proceed to justify it later if the question was raised in the Dáil. It must be remembered that that House looks very sharply at any expenditure for which one cannot show an immediate and direct return. I doubt very much if any question of raising the Vote for the Ministry of External Affairs so as to allow an increased payment to those representatives would meet with the approval of the Dáil.

The question of alternative markets has been taken up here, as well as with our representatives abroad. Close connection is being maintained with the Consuls abroad, as well as those here, and in that way we get a certain amount of information about the likelihood or possibility of being able to find markets other than the English markets. Senator O'Farrell made one remark which surprised me; he talked of a period of prosperity under Grattan's Parliament. I at one time read the late James Connolly on Grattan's Parliament, and I understood him to be very far from convinced with regard to the prosperity that came about at that period. If there was any prosperity he put it down to the fact that the workers were merely slaves, and I do not know whether the Senator would be willing to get that type of prosperity now. He also stated with regard to the boot tax that the manufacturers here can only manufacture one pair in fifteen of those required. I think the estimate is, they can only produce 15 per cent. of the demand.

The estimate of the committee of experts is one in fifteen pairs.

I know there is an estimate that the production is 15 per cent. of the requirements of the Free State. I accept, however, what the Senator has said, that the committee of experts has given the other estimate. Senator Jameson has alluded to and has praised the Minister for Finance for his determination to balance the Budget. That is a much-abused phrase, but I am glad to find that the Minister's efforts should meet with the approval of the Senator. I think we should get away from the technical atmosphere round this phrase, and look at the matter in the ordinary way, that the rogue and the spendthrift is not going to get any further credit once his easy-going methods are discovered. That is the position the State is in; we had to say that we are not spendthrifts. Although a certain amount has been done in the way of funding debt which has accumulated by reason of extraordinary expenditure, the main policy should, I think, be to strain ourselves a little bit in order to get a good, sound, financial reputation.

The question of lowering income-tax to the scale in Great Britain or Northern Ireland has been raised. There is every desire to arrive at that position. But it is not possible to arrive at it at the moment. No effort will be spared to have taxation brought at least to the level of Great Britain and Northern Ireland. That matter is before the Government; it is their aim yet to achieve it. Similarly, with Great Britain in the matter of profit taxes, we cannot afford to drop that at the moment, but it is recognised as a tax on enterprise, and a very crippling and paralysing tax, but it is a matter of what we can do. Senator Gogarty talked of the rebuilding of the Four Courts. This is a point that has often been raised: "Why does not the Government proceed to rebuild the Four Courts and the Custom House?" The Government policy is easily stated. A certain amount of money has been set apart for the provision of houses. There is sufficient work in the country at the moment to keep the building trade at work for five to ten years in the matter of the burned out barracks, public buildings which were destroyed, and the necessary number of houses required to be built. The Government supplied a certain amount of money towards the building of houses because they thought that they could get houses built to relieve congestion, and get the people employed. They thought it better to proceed on the policy of getting houses built for the accommodation of people who wanted houses than to go on spending money on public buildings such as the Four Courts and Custom House by which you would have the Government Departments placed in a better position than they are. The question of re-building the Four Courts and Custom House has not been overlooked. It has been set aside for the moment, because it was thought better to set aside the money for the provision of houses in which people could live. The question of the re-building of the Four Courts will be taken up later.

As to Senator Gogarty's millionaire friends who may desire to settle in the country, I do not think I can pretend to give him an accurate answer on the question of taxes. If it meets his point I may say this—if an American comes to this country and remains domiciled in America, takes a house here, but is domiciled in America, that man will be charged here only on his remittances sent to this country.

How long is domicile given to him—should he stay three months—because some Americans would have a house here without living here at all?

One is domiciled in a country if he is living there for a period and intends to return to it. It is a very technical thing to define. The question of time does not enter into it.

I do not want any definite definition. I only wanted to have the matter cleared up for the benefit of Americans who would be thinking of taking mansions here.

If the Senator would put his query in a more detailed form it could be answered by the experts dealing with this matter, and such a statement could be circulated, and possibly would have the effect that the Senator desires.

Would the fact of taking a mansion in this country prevent him from getting an allowance in his tax—the point is if a man has a house he has to pay, but if he goes to live in an hotel he has not to pay? The man, say, has a domicile in America, and if he goes to live in a hotel in London he has not to pay. If he takes a house he has to pay.

That is to say you will always tax people who are living in your territory but not those who are away, otherwise it would be that if we lived over in America we would pay no taxes, and if the Americans lived here they would pay no taxes, so that they would come here and we would go there.

Motion—"That the Second Reading of the Finance Bill, 1924, do now pass"—put and agreed to.
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