Seanad Éireann debate -
Wednesday, 10 Jul 1929

Vol. 12 No. 21

Finance Bill, 1929—Second Stage.

Question proposed: "That the Finance Bill, 1929, be read a Second Time."

Mr. Johnson

This motion gives an opportunity to the Seanad which it is deprived of by the fact that the Budget statement is made in the Dáil. I think the opportunity should be availed of to make some general comments upon the tax system and the finance scheme that is at present operating and, with the permission of the House, I propose to analyse somewhat the position. The Bill makes provision for finding a sum of twenty million odd pounds as tax revenue. The Minister's statement on the Budget showed that the estimated tax revenue was £20,436,000, and the non-tax revenue £3,528,000. For the purpose of the figures I have to place before the House I want to deduct the revenue which is received for the Post Office services. That is to say, we have £22,193,000 to deal with on the side of revenue. The Minister for Industry and Commerce made a statement in the Dáil a week or two ago that was very pertinent and extremely important in respect of this matter. He pointed out that by the figures produced by the Census of Production on the industrial side, and also by the figures which were provided by the Statistics Department with regard to agriculture, we had a net agricultural output in 1926 valued at £53,500,000, and in respect to other productive activities the estimated output was £31,500,000, that is to say, a total of £85,000,000 was the agricultural and industrial output of this country in 1926. We may add to that, sums received as dividends on foreign investments, £12,500,000; pensions paid by the British Government to citizens of the Saorstát, £2,100,000; emigrants' remittances estimated at £2,200,000, or roughly let us say, £17,000,000 under these heads, making a total money value of £102,000,000. There may have been changes and some additional amounts; there may have been changes in market values for 1928 and 1929 as contrasted with 1926, but one might say, in round figures, that the sum upon which the State can draw is round about £100,000,000 to £110,000,000.

We are now asked in this Bill to provide amounts for making up a sum of £23,000,000, of which £20,500,000 is to be tax revenue. I think that is a very important fact that 20 to 25 per cent. within one or two per cent.—it does not materially alter the argument—of the total earnings of the country are taxed for the purpose of expenditure under Government auspices. I think it is well that Senators and the country generally should appreciate that as a very important fact. It is a very high proportion. When I say that I am not asserting for a moment that it is badly spent, that it is unwise or unjust or uneconomic to draw from the total fund such a sum to be expended for Government services. I can conceive, and I think I could argue successfully, that a great proportion of that money is more wisely, more judiciously, and more economically spent for the welfare of the country than it would be if it were spent by the individuals who earned it.

The purposes for which this money is collected have to be taken into account. I find from an analysis of the estimates and expenditure according to the finance accounts of previous years, certain very important details that I think the House should be made aware of. I am taking the sum provided for in the Estimates, added to the sum which will be expended out of the Central Fund. When one hears, as one does hear, so much about the cost of Government, I point out that what are Governmental services strictly, such as the costs of the Departments, army, police, prisons, law courts, and revenue, is rather less than £6,000,000 or 25.2 per cent. of the total expenditure for various national services. I said it is possible that the money expended through Government channels is more wisely, more beneficently and more economically spent than it would be if spent by the individuals who originally earned it. I want to support that by certain figures. I take it that no one will openly avow that there should be a reduction in the amounts spent on old age pensions. Few will assert that the amount spent by the State, that is the State contributions to unemployment insurance, should be reduced, that the housing grants should be reduced, or that the State contribution towards health insurance, hospitals, sickness prevention services or local government should be reduced. These various items which must be met if we are to keep up our reputation for humanity and civilisation, would otherwise fall upon individuals, either through the rates or through private charities. At present they are moneys collected by the State and expended by the State, as I aver, more economically and beneficently than would be the case if the money was paid out by the individual.

The total cost of social services is £3,368,000, or 15½ per cent. of the total expenditure by Government. Then we have what I call economic services—aids to rates, local loans, public works, beet subsidy, road fund, agricultural credit, agricultural grants, local taxation grant. Land Commission and a deficit on the Post Office. These are services which are not strictly Governmental responsibilities in the old and narrow sense, but they amount to £4,477,000, or 19 per cent of the total expenditure. Property losses and personal injuries amount to £513,000, or 2.2 per cent of the total expenditure. Debt charges, including the annuity to the British Government in respect of local loans, amount to £2,555,000, or 10.8 per cent., and pensions amount to £2,061,000, or 8.7 per cent. I give these percentages because I am drawing special attention to the fact that the services I have enumerated under the heading of social services, economic services and aids to the rates, as well as education, amount to 53 per cent. of the total expenditure. So that in fact, when we are dealing with government proper it is only 47 per cent. of the sum in question which may be charged as Governmental expenditure.

These facts, I think, should be taken serious note of by anyone who is inclined to discuss the problems dealing with taxation and with national expenditure. The fact that we are spending so large a proportion of the national income through Government channels forces us to ask the question: What is to be the tendency, and how are we going to minimise the burden so that this high proportion of the total revenue collected by the State can be reduced? I am very firmly convinced that it is not by a reduction of the national charges we are going to make any improvement. In fact, I believe that the inevitable tendency which cannot be resisted will be to increase and not reduce the amount that has to be nationally raised by taxation or otherwise. I venture to prophesy that as we proceed, perhaps in the very near future, we shall find that the tendency of politics here will be to range ourselves on one side or the other of the proposition that the social services and the economic services, paid for out of Government funds will have to be increased, certainly maintained, and that the charges will almost inevitably rise rather than fall. One side will say that the maintenance of these economic and social services is paramount and essential, while the other side will say that at all costs they must be reduced. I think that will be the issue upon which parties will decide future political alignments.

The Bill before us deals not so much with expenditure as with revenue, and here again we ought, I think, to analyse the figures which have been presented to us from time to time, and I make the attempt to put before the Seanad certain results of the analysis which I have been able to make. I am taking the figures for 1927-28, which are the latest figures submitted to the Oireachtas. I do not think the present year's figures will vary very much. They will vary slightly here and there, but in general it will be found that these figures will be applicable to the present year's expenditure as well as 1927-28. An analysis of the accounts for that year shows that of the total sum received— £20,356,000—by tax revenue, 65 per cent. was received through customs and excise, whilst 35 per cent. are in a group which I call taxes upon property and property-owners, such as income tax, estate duties, corporation profits, licence duties, motor vehicle duties, etc. Taking that classification I find that the propertied class, if I may use the term, paid in that year 36.50 per cent. of the total tax revenue of the country. Taking a similar classification for Great Britain, they paid 62 per cent. of the total tax revenue of that country. The duties upon intoxicating liquor and tobacco—this is a very important figure, and I ask the House to take note of it—totalled 49.50 per cent. of the tax revenue of the country for that year. That is to say, what may be called voluntary taxation, taxation which may be thrown off by the individual and may not be incurred if he so wishes, amounted to half the total tax revenue of the country. The taxation on clothing and household goods provided 6 per cent., food 4½ per cent., pleasure, entertainments and sundries 3.50 per cent. I think these figures are illuminating, and will help the Seanad to get a better perspective when dealing with the problem of taxation and how that bears on the community. Possibly some of my friends will say that I am giving a handle to the propertied class, and announcing to them the fact that they are bearing a grievance inasmuch as though they only constitute a small proportion of the population they bear 36½ per cent. of the total taxation. I make the very rough—it is not scientific— estimate that the class which bears this income and property tax constitute not more than one-tenth of the population.

The Minister for Finance, some three or four years ago, made the statement—he did not assert that it was scientifically accurate—that the number of income tax payers in the country was probably from 60,000 to 65,000. I do not know whether later experience has confirmed or altered that figure, but, accepting it as fairly reliable, I think we may take it that that class of the community, with their families, would constitute round about one-tenth of the population of the country. I ask the Seanad to bear this fact in mind that, according to the Revenue Commissioners' returns, the total income of income tax payers for the year in question amounted to £53,000,000. That is to say, that half the total national income was appropriated by—I am not using the term in any invidious sense—or shall I say, enjoyed by one-tenth of the population.

I want to draw attention to the direction and the tendency of our fiscal legislation in recent years. For the financial year 1923-24, a married couple with three children, enjoying an income of £2,000 a year, all of it derived from investments, paid in tax £393. For the current year they would have paid £236. That is to say, they will have saved, comparing this year with the year 1923-24, a sum of no less than £157. A similar family, with an income of £5,000 a year all of it derived from investments, would have saved £588 for the year 1929-30 as compared with the year 1923-24. Bear in mind that during this time the incidence of taxation has fallen with increasing weight upon the poorer sections of the community. During that period when food and other household taxes, small proportionately as they are, have been increasing, the call upon the wealthier taxpayers has been very greatly decreased. When one thinks that in these four years a married couple with three children with an income of £5,000 a year, all derived from investments, will have saved the sum of £588 in the payment of tax while the poorer sections of the community are having their taxation increased, one feels rather ashamed at the tendencies.

Sir John Keane

The Senator has made the statement that, while taxation on income derived from investments has decreased, the taxation on the food has increased. The Senator has made that statement in general terms, but I should be glad if he would particularise and give us some details.

Mr. Johnson

I have taken the statement made by the Minister for Finance in the Dáil a few days ago, when he asserted that the tax upon a certain commodity at the port would be increased by ten, fifteen, or twenty per cent. before it reached the consumer. What exactly it will be I cannot say. If the Senator is trying to get me to make the admission that taxation upon food falls more heavily upon the poorer elements of the community, then I admit that at once.

Sir John Keane

The Senator has compared the present year with the year 1923-24, and says that since the latter year taxation on the poor has been increasing. I have asked the Senator to develop that point by giving the House some figures.

Mr. Johnson

I have not got the figures before me, but I am taking the fact that the total revenue of the country derived from taxes on foodstuffs—customs and excise—has increased as compared with that year. Taking the year 1925-26, and comparing it with the year 1929-30 the relative figures are that 61 per cent. of the total revenue was derived from customs and excise duties in 1925-26 and about 67 per cent. in the year 1929-30.

Mr. Barrington

Might I ask the Senator what he alludes to as food? If all this revenue comes under the head of customs and excise, it seems to me that all of it might not be considered as food.

Mr. Johnson

I think sugar is usually considered food, and, for finance purposes, even beer would be considered as food, as well as jam, currants and raisins. I want to deal now with the class of people who are not deriving their income from investments, and to make a similar comparison to show the tendencies of our income tax laws and of our legislation generally. I want to refer to earned income. I find, comparing this year with the year 1924-25, that a man and his wife and three children, with an income of £400, will have had a reduction in his income tax of £2 5s. 0d. a year. In the case of a similar family, with an income of £500 a year, the reduction will be £7 15s. 0d. Where the income is £600 a year the reduction will be £11 5s. 0d., and if it is £700 a year the reduction will be £27 7s. 6d. When we come to the £1,000 a year man, his reduction will be £73 10s. 0d. When you compare those reductions with the concurrent tendencies in Great Britain—perhaps it would be better if I were to take Northern Ireland for the purpose of this comparison—where the Free State income tax payer had a reduction of £7 15s. 0d. on an income of £500, the man in Northern Ireland had a reduction of £12 odd. When we come to the £1,000 a year man, in the Free State the reduction is £73 10s. 0d., while in the case of a man in Northern Ireland or Great Britain, with a similar income, the reduction is £39. My point is that the tendencies in this State have been to reduce the proportionate burden upon the wealthier section of the community and, at the same time, to restrict and lower the social services. The tendency to reduce the social services, concurrent with the tendency to reduce taxation upon the wealthier section of the community, is to me an indication that we are not appreciating the relative values of human life and property.

I do not want to go into details in respect to the present Bill, but I thought it well to point out these particulars and to give some indication of the facts which lie below the figures that are frequently placed before us. I think that what I have said clearly indicates a difference of outlook upon social and economic policy and necessarily also upon our fiscal policy. I have said that the big fact of taking some 20 to 25 per cent. of the total national revenue to be spent through Government channels, considered alongside what I believe to be the necessity for increasing rather than reducing the social economic services which are paid for by the Government, shows the importance of concentrating upon the productive activities of the country, and how necessary it is that there should be a speeding up of such activities as can be effected by Government policy to ensure greater agricultural and industrial production. There must be a larger fund than one of one hundred and five or one hundred and ten million pounds out of which to pay for these social and economic services. I do not know whether at this stage it would be in order for me to discuss whether the Government policy, both on its agricultural and on its industrial side, is satisfactory towards the increasing of that national production.

Cathaoirleach

I think the Senator will have a better opportunity to discuss that on the Appropriation Bill.

Mr. Johnson

I thought so, and therefore I will not proceed on that line. I ask the House to take serious notice of some of the figures which I have given, particularly the figures which I have just quoted in regard to expenditure—that at least one-half of the sum spent on national services, whether raised by taxation or otherwise, is spent on services which would otherwise have to be borne by the individual or through the rates, and if it were not so borne it would mean that there would be a considerable decline in the social standard and the moral qualities of the people of the country. The conclusion that I want to enforce by further argument on another occasion is, that there should be a very keen concentration upon the absolute necessity for increasing the total fund out of which these revenues have to be drawn.

Colonel Moore

What I have to say will, perhaps, be a little more definite than what the last speaker had to say. Unfortunately, the Minister for Finance is absent from the House just now, but I want to get information from him as to some figures here. I notice that in the Estimates for 1929-30, provision is made for spending £29,540,000, whereas the revenue is only estimated to produce £24,500,000. That leaves, roughly, a deficit of £5,000,000. The deficit last year was something in the neighbourhood of £4,000,000. The question of this very large expenditure, which Senator Johnson seems to approve of, touches everyone, and perhaps all of it may not be necessary. Taxation must be based on what the people can afford to pay. I want the Minister for Finance to explain, to a superficial observer like myself, why the sum of £1,170,000 is paid to the British Government for pensions to ex-members of the Royal Irish Constabulary.

Cathaoirleach

The point that the Senator is raising would, I suggest, arise more properly on the Appropriation Bill, which gives details of the expenditure, than on this Bill, which only deals with excise and customs duties, income tax and matters of that sort.

Colonel Moore

What the Cathaoirleach has said may be quite true, but I do not understand it. What I am endeavouring to do now has always been allowed here. In fact, I have done it myself on several occasions. What I am trying to do at present is to get some information from the Minister. We very rarely have the opportunity of seeing him here, and if a Senator does not avail of his presence to get information on points such as I am dealing with, then that opportunity may not come again for a long time. I want the Minister, if he would kindly do so, to give me an explanation on the point I have raised. I do not profess to be very well up in these matters and that is why I am anxious to get the information. I have heard that the Minister did give an explanation of this in the Dáil some days ago, but as the official report was only issued this morning, I have not been able to consult it. As far as I know this matter has never been explained in the Seanad. The payment of this sum of £1,170,000 to the British Government for pensions to the Royal Irish Constabulary ought to be considered as a non-party question. It is a mere matter of finance and of law. I am not going to raise any division on the question, but am merely asking for information. What I have to say on the matter I will put in this way: In the Treaty of 1921 there were two Articles which dealt with finance, Article 5 and Article 10. Article 5 has since been abolished by the arrangement arrived at in 1925. Article 10, which remains, deals with pensions to public officials and to the police. Perhaps I had better read Article 10.

Mr. O'Farrell

On a point of order: I am afraid that if we get mixed up in a discussion as to the manner in which money is spent on the Bill before us, which only deals with the manner in which money is to be raised, we shall never come to an end of our discussion. I suggest that the Senator is out of order in raising the matter on this Bill.

Cathaoirleach

I would suggest again to Senator Moore that the question he is raising could be more properly discussed on the Appropriation Bill, which gives details with regard to expenditure. I submit that point to the Senator for his consideration. The point of order that Senator O'Farrell has raised is germane to the question before the House. Questions with regard to expenditure by Government Departments can be raised on the Appropriation Bill next week, and I would suggest to Senator Moore that he should avail of that opportunity to discuss this point.

Colonel Moore

If the Cathaoirleach rules me out of order, of course that is an end of the matter.

Cathaoirleach

I did not rule the Senator out of order.

Colonel Moore

I do not know what the position is then. I am not ruled out of order and I am ruled out of order. I do not want to trespass on the time of the Seanad. The Minister for Finance only comes before the Seanad about twice in the year, and my position is that I want to avail of this opportunity to ask him for information on this matter. It will not take very long.

Cathaoirleach

The payment of a certain sum of money by a particular Department could be raised more properly on the Appropriation Bill than on this Bill. I am in the position, of course, that I cannot tell what is at the back of the Senator's mind when he refers to certain Articles of the Treaty, but if he wishes to take his chance now to develop his argument I will rule on the point of order when I have heard what he has to say.

Colonel Moore

I have developed a similar line of argument before without being stopped, but if the Cathaoirleach rules me out, of course that ends the matter.

Cathaoirleach

Would the Senator let me hear what he has to say?

Colonel Moore

What I want to say is that Article 10 of the Treaty prescribes that the Free State must pay certain pensions to discharged judges and police.

Cathaoirleach

That point could be raised on the Appropriation Bill.

Mr. Johnson

On a point of order, I submit that these payments come out of the Central Fund, and are not touched on in the Appropriation Bill.

Minister for Finance (Mr. Blythe)

Pensions and superannuation allowances are provided for in the Appropriation Bill.

Mr. Johnson

But judges?

Mr. Blythe

Judges are not.

Cathaoirleach

Would Senator Moore continue?

Colonel Moore

I have been ruled out.

Cathaoirleach

What I ruled was that the question of pensions could be raised more appropriately on the Appropriation Bill than on this Bill.

Colonel Moore

The only question that I wanted to raise was that relating to pensions to the R.I.C. If that is ruled out, I sit down.

Cathaoirleach

I think that the proper time to argue that question would be on the Appropriation Bill.

Mr. Barrington

The procedure laid down in this Bill will, I believe, have the effect of very materially simplifying questions in regard to the collection of revenue, and with that I am in thorough accord. There are two sections in this Bill which, I think, injuriously affect this country and to which I wish to direct the Minister's attention. I would appeal to him that he should, either by regulations to be made for administering the Bill when it becomes an Act, or by some modifications of the Bill itself, make such alterations as will carry out the objects I wish to bring to his notice. Section 10 provides that if a man sells, shall we say, £1,000 worth of War Loan, on which, of course, he is taxed at present, and re-invests that money in England he will be unaffected. But if he sells £1,000 worth of Saorstát Eireann Loan and re-invests what it realises in the Free State, he will be subject to double income tax. That is to say, he will have to pay income tax on what he received in the preceding year on his £1,000 worth of Saorstát Eireann Loan. But, if he re-invests the money in Irish securities, the income tax arising from the investment will be deducted at the source or before he receives anything. Therefore, he will be in the position of paying double income tax for the time being. That, I suggest, will give rise to a great deal of trouble, as well as to a certain amount of discouragement to people to invest their money in Irish securities. I am endeavouring to address myself to the subject divested of all technicalities, as they might conceal the real meaning.

Clause 12 takes power where a business is discontinued to go into the accounts of that business for the preceding year and, where it is found there is any shortage, to collect extra revenue. That is quite right; but it takes no power, if the business has not developed to the amount of the tax, for giving a refund to the taxpayer. It seems to me that is a little bit unfair. I am only putting these things forward because, perhaps, they may have escaped the Minister's attention, and so that he may see his way to correct the matter in some way. Obviously, if he taxes a man for revenue that has escaped taxation in the previous year, he should also have power to refund in a case where more taxation than was justified had been levied.

Mr. Wilson

The value of Senator Johnson's figures would be very much more enhanced had he included the poor rates when he was dealing with social services. If he had included the rates he would find that a very considerable amount is spent on social services, and that the percentage would be very much greater than he has indicated. I again want to deal with the old question of the basis of assessment for income tax as regards the farmers. The present law is that the farmer is taxed on the annual rateable value of his place. That would appear to be just, but in the way the income tax operates it means that the farmer pays twice, because he is first charged as an owner under Schedule A, and then as an occupier under Schedule B. The result is that he is paying income tax on the basis of twice his valuation. It is considered by many people that the rateable value of a farm is roughly the amount of income derived from the farm. There can be no question about it but that it is unjust to charge a man income tax twice on his income. The Minister may say that the farmer has the option of coming under Schedule D. Most farmers are not good bookkeepers. The farmer is a manufacturer as well as a shopkeeper. In connection with manufacturing firms there is a costing department. The farmer is not skilled in bookkeeping, and is not able to calculate the cost of production, and he lets the Revenue Commissioners carry on with the basis of assessment under the Bill, which works out very unfairly. He sends on the papers to an income tax expert, and he pays more to the income tax expert than to the Revenue.

I suggest that the Minister should make a farmer liable for income tax on half his valuation. That was about the position before the war I want the Minister to get back to that, and at the end of the year he will be just as much in pocket. Under the British regime payment was on one-third of the valuation. I raised the question of the assessment of rates on agricultural lands before but very little attention was given to it. I consider that there is a great injustice inflicted upon the occupiers of land by reason of these rates. Farmers have been taxed for the purpose of providing food for the poor, subsistence allowance to able-bodied workmen, and other matters of that kind. Surely that is a State job and should not be dependent on the income of the farmers, for that is what it amounts to. The farmer pays rates on his valuation, which is his income. A shopkeeper in a town pays rates, not on his income, but on the value of the house he occupies, but the farmer has to pay rates on the rateable value of his holding, which is not income, as well as income tax. If the Minister had to pay 5/- or 6/- in the pound income tax out of his salary then he would understand the position of the farmer.

Take the case of the small holder with a valuation of £30. He will probably pay 5/- or 6/- in the pound on that. Take the case of a person with an income of £1,000 a year. He might live in a house with a valuation of £30, and he will pay, say, 5/- in the pound on the £30 towards the upkeep of the social services, and the £1,000 is left untouched. Is that just? This is an English system. It came into vogue in England in the time of Queen Elizabeth. It was due to the fact that the poor used to get subsistence allowance from the monasteries, and when these monasteries were dissolved by Henry VIII. this iniquitous law was introduced. In England they have now found that it was wrong, and they have now abolished rates on lands. We want the Minister to abolish them here, not because England has done it, but because it is just. Community services should be paid by the community—services such as the care and maintenance of the mentally defective, the destitute poor, and unemployed able-bodied workmen. These are national services and the burden of their upkeep should be borne by the taxpayers rather than by the ratepayers. Why should the farmer above any other class be obliged to maintain the poor and pay for the upkeep of public institutions? I hope the Minister will give us an indication that as far as reasonably possible this matter will be tackled. If some new rearrangement of local government is necessary the farmers will not much regret a curtailment of local authorities in the country areas. With regard to the loss which would follow the de-rating of land, I think the Minister when dealing with it last was exaggerating. Twopence extra duty on sugar would meet the whole thing, but I do not believe that Deputy Johnson would agree with that.

Mr. Connolly

I would like to refer to several matters that are covered by the Finance Bill, to make certain suggestions, and to ask one or two questions. We all appreciate the various points made by Senator Johnson, and I think we also appreciate the difficulty of the Minister for Finance when he realises that however desirable these social activities are the bill must be footed. In connection with the death that took place last year of a former prominent citizen there was a considerable loss of death duties. I think it might be claimed that he had acquired a very considerable amount of his large fortune through the activities of his business operations in the Saorstát. I think it is rather a hardship when such an event occurs that the State wherein most of this money was accumulated should not to any degree share in the very heavy death duties which were due on his decease. I suggest that that is a matter the Minister for Finance should consider. I would suggest that it is a possible source of revenue to the State. If the matter cannot be dealt with in any other way, then I think he ought to seek some protection in the creation of a company law whereby it would, practically speaking, be impossible for a nonresident to have such large interests, and to give the benefit of these interests, including income tax, death duties, and so forth, to a State or country outside the place where the money was made. I think it is a hardship in the case of a huge concern making huge profits for many years and having accumulated interests here that the State should suffer from the absenteeism of the main proprietors, or any of them, with the resulting loss of income tax and death duties.

As to income tax itself, there always seems to me to be an anomaly in the incidence of taxation as regards the allowances granted to fathers of families. The first child, I believe, is allowed for at the rate of £36 a year, and subsequent members of the family are allowed for at the rate of £27. I venture to suggest that the position should be exactly the reverse, namely, that as a family increased there should be an ascending scale of allowances, on the ground that while a man of a certain income might have one child without any great inconvenience from the point of view of income, as his family increases the proportionate value of the income earned diminishes. I suggest that the taxation should be entirely the reverse. Let it be small for the first child, and be gradually increased in the case of subsequent children.

Senator Johnson has discussed social services. I for one am in complete agreement with him. I think that if we realise the tendencies and necessities of the position that we must increase rather than decrease our social services. That is why we must have a certain amount of sympathy with the Minister in finding the necessary money to do these desirable things.

There is the question of unemployment insurance, and what is called the dole that is given as corresponding to the insurance payment to the unemployed worker. It may be premature to raise this issue, but I think it would be a desirable thing for administrators, members of the Dáil and Seanad, and all citizens, to see if we cannot visualise the position whereby we would eliminate the dole altogether and have a form of guaranteed employment—that is to say, that every able-bodied citizen would be provided with work. There should be no difficulty, in my opinion, in organising economic and reproductive work within the country. Surely when we have so many big jobs, such as forestry, drainage and the development of untilled land which is lying derelict and is not in many cases being economically exploited—when all these things are faced there should be no difficulty, in my opinion, in assimilating all the unemployed or potentially unemployed. It would improve the character of the people of the country if when a man is out of a job the State could place him in employment. The present unemployment exchanges could be made a bureau of distribution of man power, and perhaps a guiding force within a particular area for the utilisation of such man power.

I think we are all agreed that the system of the dole is a pernicious one. Men after being a period on the dole become unemployable. Their character seems to go, and they frequent the betting offices and the publichouses and stand at the street corners. A former decent citizen who is unemployed for a certain period and gets the dole, after hanging around becomes unemployable. When such men get employment, and I speak from experience, it is practically impossible to get decent work from them. It is not adding to the dignity of our citizens to put them on the dole. That is a system that does not improve the character of the people we want to see employed. At the same time we must realise that we cannot leave them to starve. Senator Wilson has spoken with regard to the farmer. There may be a great deal of justification for his argument—I have no doubt there is. I am far more concerned to know what is to be done with the human element employed by the farmers, the agricultural labourers. At present they are nobody's children. They are not paid the dole, and how a great many of them live in the off season I do not know. They come in shoals to me when the harvest season is over. They get employment from March until the end of October, and then they have to drop off. That is a thing that does not help to make good or decent citizens.

I would like to know in what way the problem has to be solved. I contend all of that labour could be assimilated; but it is a difficult problem. It should be faced in a non-party spirit, and tackled in such a manner that it would not be looked upon as charity, but a measure of national duty. I cannot speak with regard to the potential development possible in agriculture, but I can speak with some experience as regards industrial development, and I want to say here and now that the industries of the country are in a very delicate condition indeed. The future is not at all bright. People talk of a protection policy, and argue that by tariffs we are increasing the cost of living and not getting anywhere, and that we are encouraging an uneconomic and slovenly development. There may be something in that. I ask Senators to consider what manufacturers are up against in this country. In the first place, we are catering for a market slightly under 3,000,000 people—a very limited market indeed. We are also catering for one of the poorest buying populations in the world, that is to say, that the buying capacity of this small group of under 3,000,000 in the way of manufactured articles is less than, perhaps, any other community that has any pretentions to civilisation. The result is that the manufacturer in this country is expected to produce as good an article at as cheap a price in competition with the mass-producing manufacturer, who is catering for, in the case of England, Scotland and Wales, 40,000,000; and in the case of the United States, 110,000,000, and with a large export trade.

Whether we like it or not, we will have to face it: Are we going to develop from the point of view of industrial development of this country? If we have made up our minds that we prefer not to, well and good. If, on the other hand, we want a reasonable amount of industrial development and manufacturing production going on, then we have to face the question of tariff walls, and higher tariff walls than we have at present. Even with tariff walls, and I say this after serious consideration and a number of years' experience, industry is not going to be established except at somebody's cost. When the manufacturers try to develop they find that they are up against the competition of manufacturers in mass-producing countries. Whether the manufacturer, or series of manufacturers, are going to stand the gruelling business of losing money annually on industry I do not know. Whether it is the national duty to stand by a national industry until developed I do not know. One or the other must be done if we are to have an industrial future. Therefore, when people talk of the possibility of raising revenue from tariffs, and the hardship inflicted on the main body of people by the imposition of tariffs, they have got to realise it in these terms. There is a point in the economy of the State below which we cannot go. Senator Johnson has dealt very fully with that.

There is one other matter which I will touch on merely in an interrogative way. Recently, there was a tariff imposed on woollen goods. There was a subsequent amendment whereby cloths to a certain value were to be admitted free. That, I believe, was as the result of arguments put up by the Woollen Manufacturers' Association, or agents, I do not know which, but I understand of that cloth there is needed about 1,000,000 square yards in this country. The factories had already laid themselves out to make that cloth, which I believe is mainly used for the ready-made trade. I would like to ask the Minister what is the position with regard to this matter. In conclusion, I would like to stress the necessity for taking action with regard to company control in this country, so as to prevent not only the loss of income tax but heavy death duties.

Mr. MacLoughlin

My chief interest in the Finance Bill is in regard to Section 23 which raises the exemption limit on imported tweeds from 1/6 to 2/6 per square yard. As the Seanad will remember, the Tariff Commission investigated the question of tariffs on woollens for a period extending over two years. They visited a good many mills in this country and across Channel and made themselves acquainted with the conditions of output and capacity. They made an unanimous recommendation that there should be a tariff of 25 per cent., or 20 per cent. with the Imperial preference, on tweeds weighing seven ounces and upwards, and that goods costing 1/6 per square yard and under should be exempted. This recommendation was adopted unanimously by both Houses of the Oireachtas. It met with very little opposition, if any at all, but as soon as the terms of the recommendation and the report were made known, the ready-made manufacturers made a case that the Irish woollen mills could not produce a cloth suitable for their trade, and that the raising of the tariff from 15 per cent. to 20 per cent. on imported ready-mades was altogether inadequate to meet the case.

After two months' pressing the matter was referred back to the Tariff Commission, with the very curious result that the exemption limit was raised from 1/6 per square yard to 2/6 per square yard. This was a complete surprise to the woollen manufacturers, because the decision of February was revised in May, almost before they had time to look around them; and it was more surprising considering the fact, as disclosed in the Report, that the Commission had gone very exhaustively into this question of cheap cloths for ready-mades; that, in fact, they had studied every aspect of the question, and they produced costings in the Report showing that, even assuming that the contention of the ready-made manufacturers was correct, that they could not get suitable cloths in this country but would have to import them and pay the duty on them, they would still have from 1/9 to 5/11 per suit to their advantage as against imported ready-mades.

The woollen manufacturers contend that the case made by the ready-made people will not bear investigation, because they say that they are quite able to manufacture cloths suitable for ready-mades. They admit that they could not manufacture the very cheap end of the material, costing 1/6 per square yard, but they say that they could manufacture cloths from 1/10 to 2/6 per square yard, or from 2/10 to 4/- per trade yard. It is the admission of these cloths at from 1/10 to 2/6 free of duty that is causing all the trouble, and that, according to the contention of the woollen manufacturers, does away with all the beneficial effects of the tariff; in fact the woollen manufacturers say that the ready-made people never placed an order for these cheap cloths—that they never went to the mills and gave them a firm order. One of the mills has made the statement that since the tariff was passed in February they had made from 1,000 yards to 1,500 yards weekly of these ready-made grades, and they were getting the cloths gradually introduced when the change in the tariff suddenly and unexpectedly took place, with the effect that the trade in these cloths ceased and orders for over 12,000 yards were cancelled. I think only one firm of ready-made people were approached to see if they could make up the cloth, and it was found so satisfactory after one order that this additional order of 12,000 was placed which was cancelled after the exemption was given.

I understand the attitude of the Minister is that as soon as he is satisfied that the woollen manufacturers are able to make cloth for the requirements of the ready-made trade, he will have the tariff readjusted to what it was originally. He has declared that his policy is to have as much cloth made in this country as is possible.

Senator Connolly said that 1,000,000 yards of this cheap cloth was required annually, that Irish mills have gone into this question and they state that, as at present equipped, they are able to produce and would guarantee 900,000 of the 1,000,000 yards at prices varying from 1/10 to 2/6 per square yard. They are prepared to give a definite guarantee. Twelve out of the twenty mills that applied for this tariff will guarantee that they will produce a certain yardage every year and, further, that they will start delivery within eight weeks from the receipt of a firm order. All this cloth would be made from Irish wool, spun into Irish yarns, and if it is the policy of the Minister to get as much cloth as is possible made in this country, I would invite him to adjust his exemption limit so as to have this 900,000 yards made from Irish cloth instead of having English shoddy substituted for it. I suggest, therefore—and I have put down a recommendation for the Committee Stage —that the period during which it would be fair that the exemption would operate should be reduced from five years to one year, because if the Minister maintains the exemption at 2/6 per square yard for five years, as is contemplated in this section, he will seriously impair the measure, not only by decreasing employment, but by opening the door to fraud. Everybody knows that there are unscrupulous traders who will certainly find means for evading the tax, and false prices in invoices are not entirely unknown to the officials of his Department. Very few people who are not experts would be able to tell the difference between cheap tweed at 1/6 and 2/6 a yard, and it is extremely difficult for anyone —and it might puzzle some experts— to tell the difference between cloth at 2/6 a trade yard and cloth at 4/6 a trade yard, and cloths costing a 1/- more. Therefore, this exemption may allow in tweeds at any price up to 6/- per yard, because it is a great temptation to certain traders across the Channel to send in goods costing 5/- and 6/- a yard and have them invoiced at 4/- and 5/-. I believe that even at the present time it is being done, that tweeds are being invoiced as faulty or damaged, so that the sooner the door is closed to that kind of fraud the better.

I would like to refer to a matter that was raised in the Dáil by a respected member of the Labour Party. He made the charge against certain Irish mills that they were importing yarns instead of making them at home. I think that that charge was based on an entire misconception of conditions in the woollen trade. It is a common practice for mills to specialise in the spinning of yarns and for other mills to specialise in weaving and finishing, the latter buying their yarns from the spinners. In making worsted cloths yarns are never spun in the mills that weave and finish. That is also the case in Scotland, where mills making the higher class Scotch tweed invariably buy their yarns instead of making them, because the making of them is a highly technical process requiring great skill in the dyeing and also requiring very expensive machinery. One carding machine required to deal with the finer grades of wool costs anything from £4,000 to £5,000, so that the small mills, whose machines are worn out or which are not able to deal with the finer yarns, must buy them.

Large mills with up-to-date machinery occasionally receive orders for cloth for which they cannot produce the yarns, so that when we examine this there is not so much in the charge as there would appear to be. The mills do not swell their profits by buying yarns, because they lose the profits that they would make by manufacturing the yarns, and I do not think there is any evidence that would warrant the Deputy in saying that manufacturers are not meeting their obligations to the community. At any rate, the yarns for these classes for which I am advocating the raising of the exemption will all be made at home. I hope that the Minister will reconsider the exemption limit and that he will give that help to the business that the Tariff Commission originally found due to it, because we must recognise that, after agriculture, this is the basic industry of the country.

Mr. Connolly

With regard to the point that Senator MacLoughlin has raised as to the spinning, several years ago one of the largest woollen manufacturers in the country explained to me that he had endeavoured to get all the woollen manufacturers to combine to establish and run one or two spinning mills to make their own yarns, but that he was unsuccessful. I think when these people are getting a tariff some pressure ought to be brought to bear upon them to try to combine to get the spinning of their yarns done in this country, and I think when they are able to combine to get a tariff the Minister might suggest to them that they should combine to an equal extent to have the spinning of their yarns done here. It appears that there would be hardly sufficient demand from any one mill to justify it in establishing a plant for its yarns, but if all the mills combined it could be done.

Mr. Douglas

I want to ask the Minister for an explanation on a question which is quite different from that which we have been discussing. It deals with Part II. of the Bill. I understand that in the main, except as otherwise provided, Part II. comes into force on the 6th day of April, 1930, and that that in effect means that income tax on profits earned in a trade or profession for the year ending April 5th next will not be taken with the average of the previous two years, but that income tax will be paid on the full profits for the year ending on April 5th next and will be due in January, 1931. In Section 14 a very fair and, I think, adequate provision is made for losses. It is provided, if I read it correctly, that in any year of loss that loss will be deducted from any of the following six years as soon as may be, and it is further provided at the end of Section 14 that this will apply to the year ending 5th April, 1930. Now all of that seems to be adequate and satisfactory. But what is not quite clear to me is what will happen in the case of a trade or profession where there was a loss in the year ended April 5th, 1929, or in the year ended April 5th, 1928. If there was a loss in the year ended on April 5th, 1929, for the sake of argument, that loss would, of course, be taken with the average, and although there was a loss in that year the firm concerned would pay some income tax, assuming that it had a profit in the previous two years. They would, therefore, get a certain amount of redress, but they would not get full redress, if my reading of the Bill is correct, in so far as the change takes place on the 6th of next April. In other words, if there was a loss in the year ending April 5th next, they get full redress for that loss; if the loss happened in the year that ended on April 5th last they will get only part of that loss, because the average system will not be continued. I would be glad if the Minister would say if that is correct, and if so, does he not think that it might be met? If my reading of the Bill is correct, it seems to me that Section 14 ought to be extended to provide for losses in the two previous years, in so far as those losses have not been met by an adjustment on the basis of averages.

There is a matter in connection with the new motor duties that seems to me somewhat harsh, although it will probably only apply to a very small number. Under the Bill the tax which was paid last January for the full year expires automatically on the 30th June, and a new licence has to be obtained at the new rate. The unexpired portion is allowable as a set-off against the new tax; but if the owner of a bus —and it applies in some small cases —does not feel that he can make a profit and pay the new tax, and does not take out a new licence, he gets no set-off and he loses the balance. He must take his bus off the road unless he pays the increased duty, but if he feels that he cannot pay the increased duty, then the licence which he took out for a longer period than the six months— in some cases for a year—will be useless. He will lose the licence and also the money, which I think is rather a hardship.

Mr. Brown

On the subject of income tax, there is a matter to which I would like to refer, because it entails a very real hardship to the taxpayer, and in some cases really amounts to a denial of justice. It has to do with the appeal from an assessment, and it applies specially to assessments under Schedule D, affecting profits of a trade or profession. Income tax under Schedule D is assessed by the Inspector of Taxes. When the taxpayer gets that assessment he is told, very properly, that he has a right of appeal if he is dissatisfied with it. Formerly —and, indeed, I think still—there were two ways of appealing. He could go to the County Court Judge, and now to the Circuit Judge, and his alternative was to go before the Special Commissioners.

Mr. Blythe

To the Special Commissioners first and then to the Circuit Judge.

Mr. Brown

Yes, that is so, but when he has gone before the Commissioners he can get them to state a case and go to the Circuit Judge.

Mr. Blythe

On a point of law, or of fact, he goes to the Circuit Judge.

Mr. Brown

What I am saying applies only to an appeal on a point of law. He goes before the Special Commissioners, two very experienced gentlemen, who hear him in a back room in the Castle, where he goes with his solicitor, if he employs one, and his counsel. He is met on the other side by a very experienced Revenue official and an inspector, and the case is argued out round the table, in the absence of the Press and of everybody else, absolutely in camera; and the matter is duly decided by the Commissioners.

If either side is dissatisfied with the Commissioners' decision on a point of law, they have a right to go by what is called a case stated to the Circuit Court. The case is stated by the two Commissioners. It states the facts, the figures, and the arguments that were presented to them on both sides, and it states, shortly, the question of law which is to be decided by the Circuit Court. That is stated with the utmost fairness to both sides. I have never known a case, in my very long experience, where the Commissioners did not state a case absolutely fairly. Before they finally state it, they send a copy of it to each side, and they are willing to listen to any suggestions that may be made to them as to how the case might be better stated. But when it comes into Court, the case stated is heard with the public and the Press there. It is a very great hardship on many taxpayers to have their private affairs, the figure of the income from their business or from their professions, discussed in open court.

The result of that is that a great many taxpayers do not go by way of appeal in a case stated on a point of law, simply because they do not like to have their affairs discussed in public. I have known many cases of that kind in my own practice. I have known a case or two where the Special Commissioners decided in favour of the taxpayer, where they stated the case entirely in favour of the taxpayer, a case involving some hundreds of pounds of actual tax, not of assessment, that the man would have to pay if their decision was wrong, and I have known at least two cases where men refused to go on with the appeal, although having a case stated in their favour, simply because it would expose their affairs. That is a very great hardship. I was going to say that it was a sort of statutory blackmail, but, of course, there is nothing in the nature of blackmail in it, because the Revenue officials, just like the Commissioners, are absolutely honest, honourable and fair-minded men, but they have a zeal, and a very natural zeal, in working for their Department. It sometimes reminds me of the zeal that is spoken of in Scripture—"The zeal of your house has eaten me up." Be that as it may, there is this real hardship, a real denial of justice because a man does not like to have his affairs exposed to the public. The remedy for that would be very simple—that on the application of either side the appeal should be heard in camera in the Circuit Court. There could be no objection to that. The Court reporter would be there to take down the legal arguments, and if the case is worth reporting he would do it for the Law Reports. That is very fair, because it is reported, not in the name of the taxpayer, but as X., Y. or Z., and nobody knows about it, so that as far as that is concerned there would be no objection to hearing cases of this kind in camera. I have put down a recommendation to that effect which I hope to move in Committee.

Colonel Moore

I cannot enter into any of these technical questions at all, because they are quite a novelty to me. What I want to refer to is this: American ladies who have come over here assure me that they can buy garments in the United States for one-third of the price they must pay for them here. I do not know anything about that myself, but I have been definitely assured of that.

Mr. Wilson

Is the Senator in order in speaking a second time?

Colonel Moore

I have not spoken at all before. I have been told by these people that they are warned before they come to Ireland not on any account to buy dresses here, because they are three times as expensive as in the United States and not of such a good quality.

Mrs. Wyse-Power

That is not so.

Colonel Moore

I do not know if that is so or not. Perhaps those who are experts in the matter might tell me.

Sir John Keane

This is the first Finance Bill discussion I have taken part in in which somebody has not congratulated the Minister for Finance. As one who has not usually done that, I should like to congratulate him on a record Budget—he has left things alone—because I have a great belief in the blessings of tranquillity, not only in law, but in administration; and, further, I believe if we allowed our financial masters to work and shut out Parliamentary discussion for a couple of years, possibly the country would benefit. If this Budget is an indication of tranquillity, I hope it will be also a headline for other legislative measures. I do not propose to follow Senator Johnson into his academic and interesting arguments on the burden of taxation. I will not for a moment accept his view that social services are, necessarily, always properly provided by the State, and are always wrongly provided by the individual. I would rather accept the view that money spent by the State is generally wastefully and uneconomically spent, that it is expended on account of all kinds of pressure and lobbying, which is really inimical to good business.

On the figures supplied, I would point out to Senator Johnson that apparently taxation on food and clothing combined is only ten per cent. of the total taxation raised from Customs and Excise. Of course that is assuming that you do not consider alcoholic drink as a necessity or as coming within the category of food. I shall be very glad, also, to avoid this opportunity of entering into a discussion on the tariff question, believing that the whole thing is utterly and entirely unsound; in fact, it is one of the few things that reconcile me to the advent of the Labour Party on the other side of the Channel. They have decided that they will not have anything to do with tariffs or safeguarding.

Coming to the measure itself, I would ask the Minister to consider the hardship that could prevail in business in proceeding abruptly on to the previous year's basis in the case of trade. Under the English Act they are not doing that; they allow a year of transition. I have put down a recommendation to that effect. One cannot draft amendments to the Finance Bill without assistance, but the effect of my amendment would be that during the two years 1930 and 1931 it should be optional in the case of traders only to have the right to go either on the three years' average or on the previous year. In the English statute there are two pages of closely printed matter dealing with that. I do not suggest my amendment meets it, but it could be done if the Minister wished to do it and the draughtsman set to work. I would ask him as a matter of principle to consider the codification of the Income Tax Acts. We are working on a series of statutes that have been scattered over twenty-one years. I think the last codification was in 1908.

Mr. Brown

In 1918.

Sir John Keane

Well, eleven years. We have had a change of Government in the meantime, and the income tax law has become more and more complicated. I suggest when they have got over the difficulty of altering the basis that the Minister should get his officials to work on the codification of these Acts. It is perfectly bewildering to try to follow some of these clauses. Take Section 4 (1), for instance:—

Assessments under Schedules D and E of the Income Tax Act, 1918, except—

(a) such assessments as the Special Commissioners are empowered to make under section 124 of the Income Tax Act, 1918, or under Rule 7 of the Miscellaneous Rules applicable to Schedule D of the said Act, or under Rule 7 of the Rules applicable to Schedule E of the said Act.

Take Section 5 (8):—

Sub-section (2) of Section 10 of the Finance Act, 1927 (No. 18 of 1927), shall be construed and have effect as if a reference to sub-section (7) of this section were substituted for the reference therein contained to sub-section (3) of Section 136 of the Income Tax Act, 1918.

Of course, this is another tax on the taxpayer. He must, unless he is extraordinarily brilliant, consult an expert. You have the legal profession and the medical profession, and now you have the profession of income tax experts, practically as necessary as either of the others and, of course, a burden to the taxpayer. I would like to ask the Minister something about another matter. I will not criticise him, because on the face of it he could hardly stand up to criticism. It has reference to Account No. 22 in the Finance Accounts, the statement of capital assets and liabilities. I do not suppose it purports to be anything except a traditional account; it has been there always, and was carried over from the old regime. It sets forth the debt, and then a certain number of what are called capital assets. Of course, they are entirely fixed assets. The expenditure, for instance, on the Shannon Scheme is taken as a capital asset, but that is no more a capital asset than all the buildings and all the physical property that the State possesses everywhere, and it is nothing more than a general arbitrary selection of assets. Some of the assets seem exceedingly doubtful. For instance, the asset of one million advanced to the Unemployment Fund. Will that ever be repaid?

Mr. Blythe

It is being repaid at £300,000 per annum.

Sir John Keane

I fancy it will rather mean a subsidy. Surely the Unemployment Fund must be a heavy drain on the State. I accept the statement that it is being repaid. It is being repaid out of the surplus of the Unemployment Fund. If that is so I accept it, but I am surprised. But surely, of far greater value would be a statement—it could only be an estimate—of the revenue assets and liabilities for—I think— there may be a real danger in not revealing them. For instance, one knows that all accounts due by the State are not settled by the end of the financial year. I do not suggest that it happens, but there is a danger that if things were tight a large number of current liabilities would be held over, the taxpayer would never know anything about them, and the Budget position would not be a true one. The same thing applies, of course, to revenue assets. I imagine there must be very considerable sums not collected on account of income tax. The date when payments should be made is past, and the payments have not been made. I know that a very large sum of money is owing there. I hazard the guess that probably the exact details with regard to the Conjoint Office are not known. The figure most probably runs into £1,000,000. I will come back to that.

I suggest to the Minister that if he is to add to the utility of these accounts he should include, if only an estimate, a statement of the revenue—assets and liabilities. I am not going to labour the form of the accounts. I have done so previously, but I say that until the Minister gets into the position where he can decentralise administration he will never get a true psychology in financial affairs. He will have the Departments warring with the Department of Finance. One knows the continual war that goes on between the spending Departments and the Minister for Finance.

I would ask the Minister to say something about the Conjoint Office. The Conjoint Office is deplorably slow. I know cases where it has the figures for three years and not even an assessment has been given. The fourth year is now going on, and the figures have been asked for again. Surely that must represent a considerable sum of money to the State. Surely it has power to make representations to whoever is responsible for the delays that occur. It is very hard on taxpayers who have the misfortune, or good fortune, to be dual residents that they should have three or four years' liability piling up and that they should have to make provision to meet it. On account of three years' taxes being unassessed my estimate of £1,000,000 being due to this country by the Conjoint Office or through its services is not excessive.

I have a recommendation down to delete Section 17, but that is merely for the purpose of arguing it in further detail. Possibly the Minister may be able before that time comes to give some information to the House as to these very vague terms to which I have referred or to give some definition of them. Section 17 (2) says:

Nothing in this section shall affect the basis of assessment in the case of any office or employment held or exercised occasionally or intermittently in Saorstát Eireann by a person who is not continuously resident there.

"Occasionally or intermittently" are the words I stress. They may have a meaning in law, but I should say if lawyers get hold of them they will become exceedingly vague, and still more "continuously resident." We know what "ordinarily resident" means, but now we have these new terms which are very vague. The Minister will agree that they should not be included in the Bill if they are liable to provoke indeterminate litigation.

Mr. Jameson

I agree with a great deal of what Senator Sir John Keane has said about the Minister not having made any great change, which is highly commendable. I notice that in Part IV. of the Bill, dealing with Corporation Profits Tax, he has retained a thing which he promised me years ago would be altered at the earliest possible moment. It was a tax which was established to get war profits. It is a war tax of the most undoubted character, and I do not see how anyone could defend its retention in this Bill. The tax applies only to a few large firms in this country. All public utility companies are let off. I will not labour the point, as I am sure the Minister knows what has been said against it as well as I do, and has his own reasons for keeping it on. But I would say that with a tax which has such an extremely bad foundation, it would be much better if some other means were found of getting revenue from the same firms. It is an unjustifiable tax on an industry which was put on for purposes that long ago ended, and it should now be got rid of. I think it is a great blot on the present Bill, but I will not say any more in that respect now. I suppose the Minister's answer will be that he cannot do without the money. Some other means ought to be found of dealing with the matter.

Senator Johnson said that we should speed up agriculture and industry. As far as I know, agriculture is being speeded up, and on the right lines. The market outside this country is being watched, our goods are being pushed and advertised, and it is there probably that our farmers are going to make their money. Senator Connolly has rightly stated that we have a very small market in this country, but if we think that we are going to establish considerable industries in the Free State, depending entirely upon the inhabitants of the Free State, we are making a great blunder. If we speed up industries by putting duties upon goods which the mass of the people require, such as clothes and boots, undoubtedly the cost which Senator Connolly says someone must bear, will be borne by the poorest people—the working classes. It is at their expense these things are going to be done. We are told that a great deal of employment will be given, but it is an experiment, and I would suggest that where the Government proceed to speed up by putting on duties, they should be extremely careful about what they do. The people who may be injured have no voice in the matter at all, or, probably they do not know much about it. It is for the Government and those concerned with the taxation of the country to see that any experiments that are made are very carefully watched, and that the cost of materials across the water and here are always looked into. The reason why the cost of living here is higher than in Great Britain should be looked into very carefully also. The speeding up of industry in our home market by such measures as these is risky and dangerous, and the people who are paying the cost do not know that, and have not much chance of saying anything for themselves.

I would suggest that if the Free State is to go ahead in industry it must look to the large markets of the world, it must follow what is going on at the other side of the Channel. We must join in Empire marketing arrangements which, I believe, our agricultural people are doing. The State ought to look after the industries which are trying to establish themselves in markets abroad and, if it can, help them. I know that some measures are being taken along these lines, but I know also that money is not, to any great extent, being supplied to assist in what I might call the State advertising of goods produced in the Irish Free State. We have a great handicap to make up when we go across the water. The State should help us to get over that handicap. I am sure that something could be done in that respect. Take the steamer that recently went round Scottish and English ports with exhibits of Irish goods. That was only a small tentative display, but similar things could be done on a larger scale. I do not believe that any money whatever is being spent at present by the State in assisting such schemes. I hold that the fostering of the export activities of Irish industrial enterprises is one of the very best ways that the Government could assist industry here. That would be better to my mind than risky experiments. We have had an exposition of the woollen experiment by Senator MacLoughlin. I doubt if any Senator could understand what it was all about.

Mr. Connolly

Oh, yes.

Mr. Jameson

Without a special knowledge of the business he could not.

Mr. Connolly

It was very simple.

Mr. Jameson

I would as soon attempt to give an exposition of the spirit trade. It showed one thing quite clearly: that there was a tremendous amount to be said, and that it was a very big matter. Even when the Minister tried to help one section he was probably injuring another section. That was evidently quite clear. You should look at that sort of difficulty and danger, and also look at the position they are in at present in Great Britain, where all the enterprises that have been assisted and helped by way of preference are in the greatest doubts, whether the duties are or are not going to be taken off, and whether the people who put their money into these industries will lose it, and also their business. From the point of view of the ordinary business man the fostering of enterprises by these artificial means is a risky and a dangerous thing. We should rather try to foster the foreign trade in the industries we have. We will never have any large industrial activity in this country unless we can get foreign trade—trade outside what we can do amongst our own small population.

I mention these matters because remarks made on the subject would lead one to believe that a great many people believe that a great industrial revival can be secured by fostering industries by means of these duties. It is a dangerous thing, and I hope the Government will never go far along those lines without doing what I understand they always do—carefully considering each case, making it a tentative one, and never adopting as a general policy the establishment in the Free State, by protective duties, of certain industries which they hope to foster.

Mr. Blythe

I can only deal briefly with the points that have been raised. Unfortunately, I did not hear all Senator Johnson's speech, as I had to go to the Dáil, but I understand that he argued that our tax policy was wrong, because the proportion of revenue that came from what might be called the property owning or wealthier classes was less than in Great Britain. It is so because of the circumstances. The fact is that there are not the accumulations of wealth here that there are in England. I remember pointing out once before how a 5/- income tax here only produced about one-fourth of the revenue per head of the population that a tax of 4/- or 4/6 would produce in England. That is, that no matter to what extent we put on income tax here we could not get the same proportion of our total revenue out of income tax as is got in England. The reason is not in the policy of taxing wealth less heavily than in England, but simply the difference in circumstances. I do not think I need go any further into that.

I agree with Senator Johnson that there is what I regard as an inevitable tendency to increase national charges. There is a demand from almost every quarter for new State services of some kind, and that demand, however it may be resisted, must lead from time to time to new activities, whether they are social or whether in the nature of economic development, undertaken by the State. While we must take care and proceed as carefully as possible in that direction, I think that tendency arises out of the increasing complexity of modern life, and that it is a tendency which is going to continue for a very long time.

Senator Barrington raised a question about the possibility of a man being doubly assessed. He suggested that if, say, War Loan was sold and invested in Land Bonds, the owner of the income might be doubly assessed under the new arrangement. There is provision in Section 151 of the Income Tax Act of 1918 to meet that case, and the taxpayer would be entitled to relief as a person doubly assessed for the same cause. With reference to Section 12, where a business is discontinued, I think what is provided there is simply the converse of the position when an industry is started, and it seems to me to be a fair provision. There is a similar provision in existence in Great Britain. If we had not the provision that is set down in that section, we might find that businesses were nominally discontinued after a year, when they had made large profits, and nominally re-started, by some technical trick, in order to avoid liability for tax. It is necessary, therefore, to have means of getting tax from revenue that has been actually earned in the business. As I say, we have a converse provision for the advantage of the taxpayer in the case of a business which has just commenced operations.

The question of farmers' income tax has been argued very often in the Senate, and I have pointed out here before that, so far as farmers, who have no other source of income than their agricultural profits, are concerned, the question of income tax is of no importance. I have gone into it, and I think I once gave an estimate of the amount we get from such farmers in the whole Saorstát as being less than what would be required to pay the cost of the electric light in the Dáil and the Seanad for a year.

Mr. Wilson

That is my argument. If you reduce it you would have no trouble at all.

Mr. Blythe

It really becomes important when it affects farmers who have other sources of income—shops, investments or other things. The owner of a business premises is liable to income tax under A and D Schedules in the same way as a farmer is liable under A and B.

The question of rates on agricultural land is a very much bigger question. As to the actual rating system itself, I think that is rather outside the scope of the Finance Bill. So far as the question of de-rating is concerned I have not very much to add to what I already said. It is obvious that local government would have to be radically reformed if we were going to undertake de-rating. In my opinion, local government, as we know it, would have to be abolished because, as I pointed out, de-rating is a very much bigger proposition here from every aspect than it is in Great Britain. If we were to abolish local government there is no doubt that the cost of services now carried on by local bodies would increase tremendously. I believe that a great deal of that increased cost would be wasteful.

For instance, if any central authority tried to administer home assistance the expenditure would easily be treble, or perhaps quadruple the present expenditure. Again, I believe that if roads were controlled by the central authority we would be continually having the type of debate described in the Dáil as "a bog road debate,"—everyone getting up and asking why particular roads were not improved—so that people condemning expenditure one day would be asking for expenditure for their own districts the next day. I believe that the cost of roads, if run by the central authority, would increase very much beyond the present level, and I do not think that increase would be justified. The same thing applies to mental hospitals and to practically all the other services. It is a question as to whether some new form of local government could be evolved, which would prevent the whole pressure for increased expenditure falling on the Minister for Finance, and, at the same time, prevent people who were actually controlling the money from developing a spirit of recklessness which would be liable to arise if they had no responsibility for raising it. It is really a big question on that side, apart altogether from where we would find the £2,000,000 or so that would be required to do it on the present basis of expenditure. I do not know whether 2d. on sugar would go very far towards providing the income. It must be remembered that the increase would fall very heavily on people who could not afford it, while some of it would go towards the relief of others who were much better off. The raising of the revenue would be a difficult thing. In my opinion, it would not be fair to concentrate on a single tax and it would be necessary to try to get it by a number of taxes which would spread the burden as well as it could be spread.

I have indicated before that the question of de-rating, simply from its political aspect, requires further consideration. There is a demand for it. That demand, because there is de-rating in the adjoining areas, is bound to continue. The Government must consider the whole thing in the most thorough way, and, if there is a method of doing it, which I hope will be beneficial to the community, that method should be adopted. After further examination if it proves that, on the whole, in our circumstances the adoption of de-rating would be harmful we would have to stand on that.

Senator Connolly mentioned the question of the loss on death duties. We did certain things with a view to getting death duties in the case indicated. As a matter of fact, very large sums could have been saved to the estate of the deceased if the methods which were pointed out in our legislation had been adopted. However, they were not. There was a loss of revenue to the Exchequer here, and there was a very big loss to the estate. It is difficult to know what to do. It is necessary for us, when so many people here have investments in England, to have some form of double tax relief so far as death duties are concerned. If we had no such thing people who have investments in England, and who could manage to live in England, who have not many investments here, except perhaps houses, and who live here because they spent their lives here, and even made their money here, would go to England, and we would lose all, so that it is necessary to have a system of double tax relief in respect of death duties with Great Britain.

Sir John Keane

Has the Minister ever considered the question of having death duties on the same basis as income tax? Has that been explored?

Mr. Blythe

We are very anxious to have that, but unfortunately the British Exchequer is not willing to make an arrangement with regard to death duties similar to that made with regard to income tax. The arrangement that was come to was the best possible arrangement that it was possible to get agreement on when the matter was discussed. It has been touched upon from time to time with a view to re-opening it, but at present I do not see any possibility of doing that.

Taking the double tax agreements as a whole, they are very favourable to us. The income tax arrangement is extremely favourable to us, but the death duty arrangement is unfavourable to us. On balance, the existing agreements, as they stand, are in our favour. They are very good agreements, from our point of view. There are firms which have been registered in England, and even though they own property here they are controlled in England. I do not know that it would be easily possible to get any arrangements made which would cause firms to change their residence or domicile. We have adopted a provision whereby there is an increased rate of Corporation Profits Tax payable in the case of a firm which has no colonial register established here. I think the result of the arrangements made a couple of years ago will be that firms which carry on business here, and have shareholders here, will establish these colonial registers here. In that case, we will get the whole of the death duties falling due in respect of shares held by someone resident here, and on the colonial register of a company established here. One death did occur two or three years ago where a very substantial sum would have come into the Exchequer if the firm, in the shares of which most of the estate was invested, had actually been on the colonial register here. As it was, they were liable to tax in England and they were liable to tax here. We only got the proportion that was due to us under the double tax relief arrangement.

Mr. Connolly

Might I ask would not that apply in a case where the shares in question passed to a nonresident in the Saorstát—that is to say, where the shares belonging to the deceased would pass to a person living, say, in Great Britain. Would not the tax be enforced on them?

Mr. Blythe

It does not matter how the duties pass. It is a question of where the deceased was domiciled and where the shares were situate.

Mr. Connolly

Is it not possible, in a sense, to protect ourselves in the case of an individual belonging to a company whose main manufacturing business is situate in the Saorstát? Would it not be possible for us to protect ourselves by some system of control such as the maintenance of a residence in this country where the company is operating?

Mr. Blythe

I am afraid that we can do nothing in that case beyond what we have already done, that is, by an adjustment of the Corporation Profits Tax to force the company to establish a register here or, in default of establishing a register here, to pay excess duty here year after year.

Mr. Connolly

In other words, might I suggest that it would be possible to make it uneconomic for them to do otherwise than to register here?

Mr. Blythe

Than by establishing a register here? That has already been done. That would give us the entire death duty in the case of shareholders resident and domiciled here. Of course, it will not affect the shareholders outside the country as it would if the register was actually registered and controlled here. I do not want to discuss this individual case, but the firm, in fact, is registered outside the country. Senator Connolly mentioned the matter of children's allowances. I agree that there is no reason why the allowance for the first child should be greater than in the case of the others. It is intended, when revenue considerations permit, to increase the children's allowances somewhat. It is intended to make the allowance for all children the same. There is no dole, strictly speaking, here now. We have applied the system of the dole only to uncovenanted benefit. At present the only benefit that is paid is the covenanted benefit arising out of stamps put on cards in respect of the worker who gets it. I do not know that that covenanted benefit is such a bad thing as the Senator seemed to suggest. I know that the dole, when continued over a long period of years, had undoubtedly a demoralising effect on people, and if there had been any other way of meeting the situation that had arisen then the dole would have been entirely indefensible. It is not easy to give guaranteed employment, and above all, it is not easy to give employment that is economically reproductive. The Senator mentioned forestry and drainage. Forestry is not an economic proposition. I would say that about half the money spent on afforestation is lost. As regards the other half, at best only 50 per cent. of it is reproductive. So far as drainage is concerned, it is highly unproductive. There are very few drainage schemes that will give any substantial return at all. Those few are being attended to, and along with the others that are not so good will soon be finished with.

A great deal of the drainage work to be done may improve a little land, but when you take into account the cost of that improvement it would be little better, from the point of view of reproductive results, than if you were simply to spend money in employing men to dig clay out of a hole and to throw it back again. Probably that would give a certain amount of employment, but that is about all you could say for it. As to a great deal of the drainage work that one hears suggested, it would be very difficult for the State to find economic reproductive employment on that for people who might be out of work. Then, as regards whatever employment the State might give, a great lot of people would not be fitted for it. Furthermore, if they undertook that kind of work for any period of time it might, to some extent, serve to unfit them for their normal occupations, in the way, for instance, that certain people who do fine work with their hands would be rendered incapable of doing that work if they had to handle a pick and a shovel for any period.

The question of providing employment, instead of giving an allowance to a person who is out of work, is a very difficult one. If you were simply dealing with seasonal unemployment, I could not see any great objection to the unemployment insurance system. If, for instance, a man is working at a trade in which he is liable to have two or three slack months in the year, it is quite reasonable that he should continue to live in the place where his normal employment will be provided, and that he should receive an allowance and wait for the time until normal employment for him will become brisk again. There is the problem of dealing with people who have been long periods out of work, and of people who have, perhaps, never been in work owing to the abnormal economic circumstances that have existed during the past few years. That is a very difficult problem. If we are to solve it, and I think we must face it, we can only solve it as a result of big expenditure. I do not believe that we can solve it on any basis of giving men work that will pay for itself. If we are to face it, we must do so by deciding to provide employment, and make up the loss from the point of view of the Exchequer. There, again, you are up against great difficulties. If you take men who are unemployed and set them, at the expense of the State, to produce something, the making of desks, for instance, immediately you have the people who are normally engaged on that trade on the war-path. From that point of view alone, this matter is full of tremendous difficulties. At one time there was some suggestion made to this effect, that instead of paying unemployment benefit to people out of work that a contribution on a wage percentage basis should be given to firms or local authorities that would employ them. There is a great deal of objection to that, and after a good deal of consideration it was dropped. I am not sure whether the proposal was defeated in the Seanad or not, but at any rate it was dropped. I think that the proposal to drop it was actually made here in the Seanad.

I agree entirely with what Senator Connolly says about industrial development. I believe that we must have industrial development here. I think I said before that there is no possibility of employing more people here on the land than are at present employed on it. They may be differently distributed on the land, but I do not think that more people can be employed on the land than are employed on it at present. Perhaps if circumstances were better less would be employed on the land. I think that if there is to be progress, whether by way of increasing population or anything of that sort, there must be industrial development. I think it is a worthy kind of national expenditure to set up industries here which will hereafter become rooted and be a permanent source of employment. I agree entirely with Senator Connolly that, taking this question as a whole, somebody has got to pay. You may sometimes impose a tariff which will lead to the setting up of an industry at no cost to the community, but that is the exceptional case. In general, if we take a group of tariffs we find that for the industrial progress made and the results obtained from them the community have to pay. The Government has had in mind the other side of the case, which was put by Senator Jameson when he said that we ought to move carefully in the matter.

It was because we felt that the agricultural producer, who is our main producer, is having a difficult time, and that he can only bear a limited burden in return for future benefits that may come to the country by way of increased industrial activity, that we set up the Tariff Commission. We set up the Tariff Commission so that proposals for tariffs might be examined, and so that the implications of them, so far as possible, might be clearly seen before they were imposed. Nothing has occurred which would change our attitude in regard to that matter. We feel that it was right, and is right, to use tariffs for the increase of industrial activity, but on the other hand we must use those tariffs with some moderation or they may, on the whole, result in an economic loss rather than in an economic gain to the country.

Senator MacLoughlin talked about the changes in the woollen tariff. The position there is that the woollen manufacturers gave the Tariff Commission to understand that the cheaper cloths, cloth valued at more than 1/6 per square yard, which are required by the Wholesale Clothing Manufacturers' Association, would shortly be produced by them to the extent, or nearly to the exent, required by the Wholesale Clothing Manufacturers. When a tariff had been imposed, and when discussions took place about this particular matter, the woollen manufacturers then said that these cloths could not be produced for a considerable time. When the woollen manufacturers had made that statement the Tariff Commission came to the conclusion, and we accepted their recommendation, that the exemption limit should be extended temporarily, and consequently the second Financial Resolution dealing with woollens was introduced. The woollen manufacturers recommended an increased tariff on wearing apparel. The Tariff Commission felt, and I think myself they were right in their attitude, that no further increase should take place in the tariff on wearing apparel, except following an application for an increased tariff, and after a full consideration of that proposition.

Mr. MacLoughlin

I think the Minister is wrong in saying that the woollen manufacturers recommended that. I think that all they did was to acquiesce in the suggestion.

Mr. Blythe

Quite. They acquiesced in the suggestion. The two bodies came with the recommendation to the Tariff Commission to increase the tariff on wearing apparel. The Tariff Commission did not accept that but instead increased the exemption limit. The woollen manufacturers were surprised, and, I suppose, annoyed at the change. The Minister for Industry and Commerce and myself have had interviews with them since. We have had interviews with the Wholesale Clothing Manufacturers, and I must say that it is extremely difficult to find out what are the real facts of the matter. I know that I met a deputation of about eight or ten woollen manufacturers. I asked them would they be able to supply to the extent of, say, 80 or 90 per cent. of the cloths between the limits of 1/6 and 2/6 per square yard that might be required by the wholesale manufacturers. They told me that they would be able to supply that proportion in about eighteen months. A day or two after I had a letter from them saying that they would be able to supply them in six months. It is extremely difficult, as I have said, to get at what are the real facts of the position. The Wholesale Clothing Manufacturers on the other hand doubt whether a reasonable proportion of the cloths that they require in these grades will be available for them for a very much longer period. I have already stated in the Dáil that our desire is to cover woollen cloths to the greatest possible extent by the tariff, and to have most of them made here. That was the view that was taken, too, by the Tariff Commission in making their original recommendation.

I would be quite willing, at any time, to alter the terms of the woollen tariff back to that which was fixed in February last if I were satisfied that the woollen manufacturers could supply somewhere nearly approaching the whole of the requirements of the Wholesale Clothing Manufacturers along those lines. It may be that point will be reached well inside of five years. It may be that the manufacturers will make a bigger effort and that their efforts to meet the requirements will be successful, but I have no hope myself that they will be able to do it within a year, in spite of their own statement which is now made that they would be able to do it in six months. In view of the previous statement of theirs, I doubt that very much, but I certainly would have no objection to shortening the period to two years. If the manufacturers had not made an effort before the end of two years to meet the requirements of the trade, we would certainly have to put a section in the Finance Bill continuing the present exemption limit. On the other hand, if the manufacturers had risen to the requirements of the situation it would be possible for us to let the provision dealing with woollens to lapse and have the 1/6 exemption limit restored.

Mr. MacLoughlin

What does the Minister mean by rising to the requirements of the situation? Does he expect manufacturers to make tweeds without having definite orders for them? Up to the present the ready-made people have never put down definite orders.

Mr. Blythe

I am afraid they are like two spancelled goats, and that it is very hard to get any agreement between them. I do not expect them to manufacture cloth for which they have no orders. What they can do is, they can get out samples and offer them and show that they are prepared, not merely to take orders at some future time, but that they are prepared to take orders as soon as the Wholesale Clothing Manufacturers will give them.

Mr. Johnson

Can the Minister say anything on this point, whether it is definitely guaranteed that the cheap woollen goods made by Irish manufacturers will be made of all Irish wool as the Senator has stated.

Mr. Blythe

I had no guarantee that they will not be made from cotton.

Mr. MacLoughlin

That is entirely wrong. The Irish mills cannot deal with cotton. In this case the yarns must be made entirely from the coarser qualities of Irish wool.

Mr. Blythe

That is a point that I personally have not examined. I think the position is, that in certain grades of cloth Irish wool will be used, but I am not in a position to say that Irish wool will be used in all the grades. Some of the cheap cloths are, to the fingers, really fine cloths.

Mr. Johnson

The Minister can see that the matter is of some importance in the consideration of this question. It has general economic reactions.

Mr. Blythe

It has. At present we are very desirous that they should make those cloths. We are very desirous that we should be able to restore the tariff to the original scope, but on the other hand, I believe that some of these Wholesale Clothing Manufacturers have very recently extended their industry because of the wearing apparel tariff. We are satisfied that some of them could not continue if they were deprived of a substantial portion of the protection that is given them by that tariff, so that we must have some assurance that the woollen manufacturers will be able to meet the greater part of the demand of the Wholesale Clothing Manufacturers, if not at the British price, then at something near that, before we could go back to the original position. I think myself that the two year period is not too long. It is not as if it were an industry which actually existed to any extent that was in danger, or was a branch of industry that was in danger of disappearing. In actual practice there has been comparatively little manufacture of these cloths, and that by only one or two mills. There is only one small mill that was prepared to specialise in them.

Senator Douglas asked a question about allowing for losses that had been incurred in business in the year ending the 5th April, 1929, or in the previous year. That is a matter I would be prepared to consider. There is time enough to consider it between now and this time next year. An amendment, if considered necessary, could be introduced into the Finance Bill next year and could take effect then. The same thing would apply to the point raised by Senator Sir John Keane. That is a point that, if thought desirable, could be introduced by way of amendment in next year's Finance Bill. With regard to the point raised by Senator Brown about the hearing of appeals in camera in the High Court and Circuit Courts, that is a matter that was brought to my notice for the first time in the Dáil this year. I had never heard any complaints myself in regard to that matter before. I have not yet had an opportunity of consulting people who, I think, ought to be consulted about it. I would like, for instance, to have the point of view of the judges on the matter. So far as I am concerned myself I do not see any great objection to it provided it takes place at the instance of the taxpayer. It would perhaps be a rather new procedure to have laid down that if an important point of law—a point of law of fundamental importance—should arise that it should be argued in camera in the courts. I do not think that I could come to any final decision on that at this stage of the Bill. I am interested in it rather from the general public point of view. I see no objection to it from the revenue point of view. Of course, I could not introduce anything like that into this Bill because if I were to do that, then, to begin with, I think, perhaps it would no longer be a Money Bill. Perhaps the matter can be discussed more fully when it comes along later.

Senator Sir John Keane raised the question about certain items in the finance accounts. These accounts are of a limited scope showing certain capital assets and liabilities of the Exchequer and not of the State. I think that if you want to show capital assets and liabilities of the State there might be a great deal of dispute as to where the line would be drawn. A Conjoint Office was established in 1926. There were very considerable arrears at the time due to the existence of cases which were not easy to settle in the absence of such an office. The arrears which then confronted the officers dealing with the work have not yet been overtaken. It does not mean that we are out of revenue in respect of cases that have not been dealt with because there have been payments on account. There have been very substantial payments on account in cases that have not yet been disposed of. There are certain cases in which I am afraid the Conjoint Office will always be a bit slow. These are cases where acute differences of opinion arise between the two revenues. I do not know whether anything can be done that has not been done to have the work hurried up. Both revenues are naturally anxious to have the work hurried up.

There is always a demand when it comes near the end of the year for money, and I think the Conjoint Office gets conjoint pressure. The words to which Senator Sir John Keane objected, "employment occasionally and intermittently exercised," are words which are actually in the British section, and I presume that they are good words for the purpose. They were at any rate adopted by the draftsman who had all the considerations before him. It is necessary, of course, to deal with employment which is occasionally or intermittently exercised, otherwise on the basis of the preceding year you could have a man earning income this year and not earning any the next, and again earning the next year a very substantial sum with no income tax liability at all.

Sir John Keane

Does the same apply to the words "continuously resident"?

Mr. Blythe

The words "continuously resident" are also, I think, in the British section, but I am not so sure of that. So far as Corporation Profits Tax is concerned, I have never regarded that as a tax suitable for permanent retention in our scheme, but it is a tax which gives a substantial sum, and which serves certain other purposes. It is a tax which in certain cases gives us the equivalent of death duties which we could not otherwise recover. I had one or two proposals for getting the equivalent of these death duties by taxes other than the Corporation Profits Tax, which, perhaps, if adopted, would have resulted in some substantial diminution of revenue which we could not have afforded at the time. I hope it will be found possible before very long to drop the Corporation Profits Tax and to get a substantial part of the revenue which at present comes from that tax levied on another basis. I do not know. I have not given very much consideration to the question which was raised by Senator Jameson, that of advertising abroad. It is a matter which has had the attention of the Minister for Industry and Commerce and the Minister for Agriculture. I think a fair amount has been done one way or another, not necessarily by newspaper advertisement but by exhibitions, and so forth, for agricultural products. I do not think as much has been done for industrial products. There is, I think, only a certain small number of industrial projects in connection with which money could be profitably spent.

Some of the products of our industries do not sell abroad, and have no hope of selling abroad. They cannot meet the ordinary competition with which they are faced at home without tariff protection. So far as they are concerned, any expenditure in regard to them by way of State advertisement would be useless. As regards the others, I think exactly the same theoretical case can be made out for expenditure as can be made for expenditure by way for community expenditure in the imposition of tariffs. I think in both cases one can urge some objection. One can urge there are risks that even with community expenditure in the protecting of home industries one should not take. These industries may not take root, and the money that people were forced to expend on them for a period may turn out to be lost. So far as the export industry is concerned, it may happen that legislation outside and changes in tariffs by another country may cut off the export trade. There is a risk there that the money expended may be lost. Therefore, I think there are risks in both directions. I think that the same sort of case in principle can be made out for extending the export market of an industry which is really in a position to compete abroad as can be made for helping an industry at home which is going to occupy the home market.

Question put and agreed to.

Committee Stage ordered for Thursday.