I do not think I need speak at great length at this stage. The Bill contains a number of sections, but the main sections are those which impose a petrol duty and an additional duty, both customs and excise, on sugar. Those duties are imposed for the purpose of providing a sum of £750,000 which will be required this year to meet the additional relief that is being given to agricultural land by way of partial de-rating. I think the other matters that are in the Bill are more or less Committee matters and I need not deal with them at this point. There is no substantial change in the Bill except that involving the imposition of these two additional taxes.
Finance Bill, 1931 (Certified Money Bill)—Second Stage.
I wish to make a few remarks of a very general character. We are exceedingly fortunate in the very conservative attitude which our Minister for Finance has adopted ever since he was put in charge of our national finances. I think that now, above all other times, it is necessary to pursue that policy. I observe that from many quarters suggestions are made that money should be spent in order to make money, and that the State resources should be asked to do what private enterprise, private money or corporate money, should do. I hope that now, above all times, particularly in view of the intensely anxious state of Europe and the tendency that we now see in our sagging revenue, the Minister will be more vigilant than ever, not to borrow money where he can possibly avoid doing so, and I think he should endeavour to keep expenditure down to the very lowest possible limit. In fact, our Minister for Finance should adopt the good old tradition of Gladstone in finance, and harden his heart against the idea of permitting the State to aid private enterprise by means of its financial resources—to allow State moneys to be utilised in doing the things that private enterprise, if it is so minded, and if it sees any profit in it, will do. I will ask the Minister to have regard to the desirability of assessing through one office only persons who are liable for income tax, and who up to now have had to deal with a number of offices. It is very awkward to have a number of tax inspectors raising different assessments against an individual. Would it not be possible to arrange some machinery so that a person, whose income tax assessments ordinarily come through a number of offices, will have his business entirely transacted through one office?
I am glad that Senator Sir John Keane has expressed so admirably and so clearly the views and intentions of those who think as he does on matters of private and public enterprise. He appeals to the Minister not to allow himself to be led away by those who ask public authorities to devote their time and attention and money to services which private enterprise will do if so minded, and if it sees any profit in it. There one comes across the essential difficulty that some of us find ourselves up against. Many of the things that private enterprise would do if it were so minded, but does not do, have to be done. The question is, how are they to be done if private enterprise does not see enough profit in the doing of them? If private enterprise does not do them, then some public authority must step in and do them.
The business presented to us in the Finance Bill ranges over a very wide field. I have no doubt that in the course of the discussion many of the smaller matters will arise and will be dealt with. I want to deal with one or two aspects of the Bill and the policy embodied in the measure as a whole. At the end of April the Minister produced the Budget, of which this, when it becomes law, is the statutory embodiment. At that time he made provision for raising a tax revenue of about £21,000,000. Looking at the figures that are presented to us in public documents of one kind or another, I wonder whether, in the middle of July, the Minister would still be inclined to present the same Budget, or whether he would give us this reassurance that, even as he sees things to-day, there would not be very much modification in his Estimates. I hope that he would, and I am led to invite that reassurance from certain figures that have been published, particularly those which I read in this morning's paper. They indicate a fall in excise from £1,855,000 to £1,205,000 in the fourteen weeks from the 1st of April. I do not know whether that is a mere book-keeping difficulty, whether the big decline of 35 per cent. in excise as compared with a year ago indicates any very important change in the financial situation—that is, the industrial situation as well as, incidentally, the financial situation—or whether it is merely an apparent fault arising through book-keeping. I would like to have some assurance on that point if the Minister will be so good as to give it.
I think it is worth while drawing the attention of the Seanad to another significant set of figures which has been published. I refer now to the figures representing the exports for the first four months of this year. The later figures have not been published, I think. For the first four months of this year there was a decline of 18.8 per cent. as compared with the first four months of last year. The decline was partly due to a fall in live-stock exports. One fears that since the end of April there may not have been any improvement. In other agricultural products, such as butter, bacon and eggs, there was a decline during these four months of 17 per cent. and, in the case of non-agricultural products, there was a decline of 35 per cent. That figure is mainly due to a falling off in the export of tractors. Unless there has been a recovery since the end of April, one feels rather doubtful as to whether we are going to go through this year as satisfactorily, from the point of view of revenue and, consequently, from the point of view of national prosperity, as was anticipated in the early part of the year. I hope the Minister will be able to give us some assurance on that point.
The big decline in the export of tractors rather indicates the inadvisability of depending upon that kind of industry, that is the type of industry, no matter how prosperous it may be, which relies mainly on an export trade. It is, in consequence, subject to rather erratic movements abroad and, perhaps, to some extent, erratic movements in the minds of the proprietors. One would think that, in the matter of policy, attention ought to be directed towards the development of that kind of industry for which there is a very general market at home. Of course, that entails a clear view of what should be the tariff policy. Ministers have at various times shown us that there has been a steady improvement in industries, mainly those which have been subject to a protective tariff.
What about the others?
Against that plea there is put forward a demand for very much more rapid increase and development in these industries by means of a very much higher protective tariff. There one comes up against Senator Sir John Keane's doctrine that we have to make it profitable and that we have to encourage and stimulate private enterprise to make it profitable enough in order to induce people to invest their money. We have to go a long way towards ensuring a higher average profit in this country than can be got by investors who are seeking other markets.
I do not champion the views of private people who want tariffs. I think that it is a very dishonest demand.
The Senator referred to the services which private individuals would do if so minded and if they saw any profit in it. I think it is fairly common ground that the average investor seeking an industrial investment will not put his money into Irish enterprise unless he expects more than the average profit he can feel sure of getting if he invests his money abroad. It is in view of that common ground that high protectionists advocate very much higher tariffs with a view to stimulating the industrial life of the country and producing a much more rapid development than we have so far seen.
I do not ask for a very high tariff policy at all. I do not think it would be good for the country to inaugurate a high tariff policy simply in the hope of inducing private investors to invest in Irish enterprise. I would rather urge the Ministry to devote their attention to a policy which would see that the revenues provided by the tariffs that at present exist should be devoted towards stimulating and encouraging the industries that are protected instead of, as at present, being used to relieve the income-tax payers of some of the burden that they used to bear. A million pounds revenue from tariffs devoted directly to the development of those industries would lead to a much more rapid extension than would be brought about by the normal development of private capitalism and would be much more satisfactory to the country as a whole than a high tariff policy.
I am not going to enlarge on that argument at the moment, but I will endeavour to relate what I have said to the Finance Bill in so far as it indicates the tendency of governmental policy within recent years. At various times I have said that Government policy in regard to finance has tended to relieve the wealthy and impose an added burden upon the poor. That policy is repeated in this Bill. When we pointed to the fall in income tax and the rise in revenue from duties upon clothing, boots and common articles of consumption, Ministers pointed to the remission of the duty on tea and the reduction in the duty on sugar. I have gone into the figures very closely and examined the incidence of those taxes upon the various classes of the community. I say emphatically that the tendency since 1925 has been to relieve the rich, the income-tax paying classes, and to impose an additional burden upon the poor; one might say even the very poor.
I suppose as a background to this question one ought to have some idea of the taxable capacity of the country. One must, of course, have an idea of the national income. There has not yet been any authoritative estimate of the national income made; but the nearest approach to an authoritative estimate was published in the report of the De-rating Commission as an appendix. While this is not given as authoritative, it nevertheless represents, I have no doubt, a careful estimate of the national income. Without any definite knowledge at all, except the knowledge of the composition of the De-rating Commission, I suspect that the estimate that is given in this appendix comes from quarters which might be relied upon as, at least, semiofficial. That report contains this sentence:
No reasoned estimate of the national income of the Saorstát appears to have been published. There are grounds, however, for thinking that our national income is in the neighbourhood of £170,000,000.
That is considerably higher than some estimates that have been made would lead us to believe. Taking it, however, as an approximate figure, it does give us ground for assuming what is the taxable capacity and relative ability to pay of the wealthy classes on the one hand, and the poorer classes on the other hand. If we take into account £170,000,000, and if we look at the Revenue Commissioners' returns, we find that the income-tax paying classes have an actual income of round about £53,000,000 per year for the last few years. It is important to note that the income-tax paying classes comprise not more than one-tenth of the community. The Dáil was given an estimate of about 75,000 individuals who are paying income-tax in the Free State. Assuming that each individual income-taxpayer is responsible for three other persons, we get a figure of about 300,000 persons.
One-tenth of the population, therefore, enjoy £53,000,000 or about 31 per cent. of the total national income, leaving the other nine-tenths of the population to enjoy the remaining 117 million pounds. It is a fairly generally agreed proposition that, in thinking of taxation, one has to think only of the incomes which are above the bare cost of subsistence. If we take 30s. per week as the figure below which no person should be obliged to pay taxes —30s. per week per family which should not be taxable—we get this result in taxable income, that one-tenth of the population has a taxable income of 52½ million pounds and the other nine-tenths has a taxable income of say 75 millions. These figures are very important if we want to consider the burden that the present methods of taxing the public lays upon the relative classes. The income tax paying class with a taxable income of 52 million pounds has levied upon it direct and special taxes, taxes derived from income on property, estate duties and the like, and if we add to that the sum which is derived from the class of taxation which falls solely or mainly upon the richer classes we get about 7 million pounds of what might be called the special taxes that fall upon the income-tax paying class.
Of course that class, representing one-tenth of the population, bears its share of the general taxation, but if the position is examined it will be found that the working-class elements, and the poorer elements among the farming community, bear a very much heavier burden per family in taxation. A very much larger proportion of their income goes in taxation than is the case amongst the wealthier classes of the community.
Since 1925-26 there has been a remission in the taxation falling upon the income-tax paying class of about £1,380,000—that is taking this year's estimates and comparing them with the year 1925-26. But if we take those taxes which fall upon all consumers in common, the decrease has not been more than £207,000. These are very important facts. The decline in the taxation falling upon the general mass of the people between the years 1925-26 and 1931-32 has been £207,000. The decline in the burden falling on the income-tax paying classes in the same period has been £1,380,000.
On this particular Finance Bill we are asked to agree to an enactment which raises the duty on sugar by a halfpenny per lb. Of course, there have been certain variations in the duty on sugar over the last few years. Leaving out of account the preferential rate given, there was a reduction in the duty from 2¾d. per lb. in 1924-25 to 1d. per lb. in 1925. That was raised in 1929 to 1¼d. per lb., and it is now sought to raise it by another halfpenny. How will that increase affect the ordinary working-class community and the small farming community? There was a complete abolition of the tea duty in 1925. Time after time we have been told that the remission of these two heavy breakfast table duties has wiped out the burden imposed by the duties on boots and clothing. I think that if one were to take the trouble to examine the figures given in the Report of the Cost of Living Committee, a Committee which very closely analysed a very large number of working-class budgets taken from all over the country, and relate them to the present position, one will find that, so far from the imposition of taxes being balanced by remissions, there is a clear net loss in the case of the ordinary small family in the towns of at least 7d. per week. That is a very moderate estimate. I have taken the tea consumption which was found to be prevailing in working-class families, and find that the remission of the duty on tea is equal to, within a very small fraction, 3d. per week per household. The remissions on sugar up to this year would amount to about 7½d. per week per family. Part of that remission is now being re-imposed.
The net result of both the tea and the sugar remissions will from this time forward mean relief to the extent of about 8d. per week per working-class household, speaking on the average. But as against that we have to consider the duty on clothing and boots. I am taking it as a fair statement that only about 15 per cent. of the tariff which is imposed upon boots and slightly more than 15 per cent. of the taxes on apparel—taking into account the 20 per cent. which is imposed on certain classes of clothing—fall upon the average working-class family with an income of, say, 50/- per week. That amounts to 1/3d. per week, so that, by setting the 1/3d. against the 8d. given in relief by the tea and sugar tax we have a net loss of 7d. per week falling on the ordinary working-class household in the towns in respect of these two items alone. That takes no account of the effect of the duties on soap, candles, blacking, furniture, and the like, so that one is not speaking at random when one says that the tendency of the Government's policy in regard to finance has been to relieve the wealthy, and to impose additional burdens upon the poor.
I take it that on the discussion of another Bill opportunity will be afforded to examine what is the effect of this increased sugar tax upon that part of the community which lives outside towns—the agricultural community. I will not enter upon that now, except to say that fully one-third of the farming community will lose rather than gain by the system of de-rating which is to be met by this additional tax. It is important to remember, too, what proportion of the income of the income-tax paying classes is derived from earnings, and what proportion is unearned income. There, again, when one is thinking in terms of taxation, and of the social effects of taxation, it is important to remember that, of the 53 million pounds which is the actual income returned by the Revenue Commissioners of the income-tax paying classes, about 23 million pounds is unearned.
The cry is often heard that the country is overburdened with taxation. We hear from spokesmen of the farmers, of industrialists as well as of the working people that there must be a reduction of taxation. I have argued here and in other places that the field for a reduction of expenditure, if one is going to have in mind the social needs and the absolute necessities of the people, is very limited indeed. I would suggest to those who are constantly crying for lower taxes to take into account the burden that is imposed upon the producing elements within the country by this income-tax paying class, which derives 23 millions of its income from investments and other sources except that of earnings.
When one takes into account the changes in the value of money since the year 1925, when the present general policy of a reduction in income tax was inaugurated, the position is that the greater part of the burden of this unearned income falls on this country, although a good proportion of it is derived from investments outside the country. That burden is increasing with every rise in the purchasing power of money, and with every fall in prices, so that the place to look for a slackening in the weight of taxation is to the taxes drawn by those who have power, not from governmental sources, but by the manipulation of finance and the general policy of capitalist enterprise. It is that unearned income of the wealthier classes that falls heaviest on the working populace of the country, whether it is a wage-earning populace, farmers or industrialists. It is that unearned income that gives an opportunity for reducing the weight of taxation which falls upon the earning classes. I would suggest to the Minister that if he is going to try to stave off the risks and the dangers that will come to this country if we do find it impossible to avoid participation in the general collapse that sometimes seems imminent it is in the direction of relieving the masses and of imposing heavier burdens, if necessary, upon the wealthier classes that he must go. Certainly the present burden which falls upon the mass of the people is too high compared with that which falls upon the wealthier classes, the income-tax paying classes.
I think we all agree with the complimentary references that were made by Senator Sir John Keane and by Senator Johnson to the Bill before us. We all appreciate the spirit in which it was introduced in favour of meeting fairly the variation in taxes as between direct and indirect taxation. I am not so sure that we all agree with the indications given to the Minister as to the policy which he ought to pursue in the future. It was rather indicated to him that he should be very slow to take any step which would foster or promote industry at the cost of the taxpayers.
Senator Johnson referred to the tax on tea and sugar. He treated both as if they were in the same category. In my opinion both are entirely distinct. Tea cannot be produced here. Sugar is in a different position, because, to a very large extent, it can be produced here. It is one of the few commodities which we can produce and for which the country is specially suited. A very small proportion of sugar is produced here at present. I think that one of the finest things the present Government ever did was to take steps to show that sugar can be produced successfully in the country. What is the position with regard to sugar in England? One-fifth of its entire consumption of sugar is produced in the country. One can realise what that amounts to when one thinks of what the population of England is. I think that at least we ought to be able to produce one-third of our requirements of sugar.
To encourage the production of sugar in England the Government there paid altogether in bounty a sum of about thirty million pounds. The acreage under beet in England rose from 16,000 acres in 1925 to 346,000 in 1930. The amount paid in wages yearly in the beet-growing districts amounted to £1,500,000. The cost per ton of sugar on a farm in England is £1 9s. 9d., and in Germany, £1 7s. 5d. If these countries consider it worth while to pay large sums to encourage the production of sugar, then I suggest that we should do the same even if it may cost us something in the way of a bounty. There is a fine outlet here for all the sugar we produce. I hope the Minister will not accede to the suggestions put to him by Senator Sir John Keane and Senator Johnson. I hope he will not hesitate to place a higher tariff on sugar and take every step which he is satisfied ought to be taken to foster and increase the growth of sugar here.
At present we have one factory. If we had three or four factories in existence the result would be to transform the whole country. Every penny spent in bounty would go back to the producer. Even if the price of sugar increased it could not be said to weigh heavily on the poorer classes, because the establishment of such factories would benefit the working classes, the agriculturalist and every other class. In an indirect way it would benefit those engaged in transport.
What I want to indicate to the Minister is that it should not go forth from the Seanad that all the members of this House are of the opinion that nothing should be done to foster industry in this country and that no increased money should be spent for that purpose. I for one do not think that is the view of the Seanad as a whole. Neither do I believe that it is the view of the country. I do not think that any Government going to the country with such a policy would win the approval of the country. I do not agree with the attitude taken up by Senator Johnson of putting tea and sugar in the same category. Tea cannot be produced here, but sugar can. That is why I think beet growing should be encouraged.
I do not propose to deprive the Minister of the opportunity of dealing with Senator Walter Nugent's analysis of the sugar position. Before going on to deal with the general aspects of the Bill I want to refer to one or two points. I want to know from the Minister if, in view of the petrol tax that it is proposed to impose, whether he would consider making certain allowances off the road tax on motor delivery wagons or vans. However one may feel about those who use motors for joy riding—the tax in that case might be defended as a luxury tax—industry is in quite a different position. It has to bear a great deal of taxation at the present time. This additional tax on motor delivery lorries will undoubtedly increase the cost of distribution. While I cannot see any way whereby any drawback or concession could be given of the tax on petrol to any specific owner, I think that some alleviation might be given in the case of the road tax as a set-off against the petrol tax which will undoubtedly mean an additional charge for delivery.
Senator Johnson dealt with the sugar tax. I think his analysis of that was reasonable and that a considerable percentage of the money to be devoted to de-rating is going to be taken from the people de-rated by the imposition of this tax. In the main I agree with him that if increased taxation is to be got it should be looked for from those who have big incomes, whether earned or unearned. On that I would not confine myself to people who have three, four, five or six thousand pounds a year of unearned income, but would include those with incomes of from five to six hundred a year. They could pay a little more. In view of the difficulties that the country is facing, that it inevitably will have to face, we should have, I think, a more equitable division of responsibility.
I would like to have some explanation from the Minister of Section 30, which proposes an amendment of Section 33 of the Finance Act of 1929, which deals with the Corporation Profits Tax. This section proposes to amend Section 33 of the 1929 Act by the substitution of the figure "1934" for the figure "1931." That sub-section absolves from the payment of Corporation Profits Tax a public utility company "which by or by virtue of any Act is precluded in respect of the whole of the trade or business carried on by it either from charging any higher price or from distributing any higher rate of dividend than that authorised by or by virtue of such Act, to any of the profits of such company." There is some specific reason, obviously, for the introduction of this change of date, and I would be interested to know what it is. It has been suggested to me that it aims at a specific purpose. I assume that we will get from the Minister the reason for the change. It will be then for members of the House to say whether they are satisfied or not.
I am rather glad the debate has taken the course it has, because it is so seldom we get an opportunity in this House of discussing freely definite and fundamental social policy. I do not know that Senator Sir John Keane was wise, from his own point of view or the point of view of the elements he represents, in giving the advice that he did to the Minister. It seems to me that some people never learn. Whatever lessons may be taught to intelligent people throughout the world at the present time, and goodness knows they are numerous enough, nothing seems to enter the mentality of certain people who approach the Minister with a request that he ought to harden his heart and not borrow any money. The suggestion was to leave the whole thing to private enterprise to see if there was any profit in it. Many things have happened since 1914. Many things are going to happen in this country in the future.
Is the position that we are to take up to be this: that we are to sit down and compel the Minister to harden his heart—in other words, to close the purse strings and not to increase income tax beyond 3/- in the pound? That might be a wise policy but, taking the long view, it might be a foolish policy. Last night a most important meeting, representative of all classes, was held in this city. Many of those present were specially interested in the question of housing. The position was pointed out that you have in this city between 60,000 and 70,000 people living in one room. Yet I have no doubt Senator Sir John Keane would tell the Minister to harden his heart as regards getting money to relieve that situation. We have deplorable slums, not only in this city but in every country town. We have a deplorable system of drainage, and yet we have a banking system here that, proportionately, is making more money than any other banking system that I know of in the world. We have America glutted with money and with every possible kind of organisation for the development of industry. We have production beyond anything over conceived of. We have people to buy, but they have no money to buy. This is the time selected by Senator Sir John Keane and people like him to tell us not to touch anything unless there is money in it. The Minister and the State are to harden their hearts. What I would like to know is: is the Minister to work in the interests of the financial people of this country or in the interests of the people as a whole? On many occasions I have put various suggestions before this House dealing with finance, the cost of money to the State, the profiteering that goes on in money in the State. Some of these suggestions have been scorned and other have been laughed at, but we are still living in the conditions that I have described on many occasions. Have we any public responsibility at all for the under-dogs of the population, and has the Minister?
The Minister for Industry and Commerce said in the Dáil that it was not the function of the Government to provide employment. It is not the function of the Government to provide houses, or to provide even a dole, but it is the function of the Government to imprison or jail any person who steals or who commits other offences. If there is no employment, if there is no dole, and if we cannot create employment, will Senator Sir John Keane tell us what we are to do as a State when certain elements in the community, if they cannot be provided with work, will take very good care that they are provided with food? I am not suggesting that that is the position here to-day, but I am suggesting that we are drifting towards that position. We would be blind to, and ignorant of, what is going on in the world if we did not realise that that drift is coming this way, and coming pretty quickly. I suggest that it is the duty of the State to take responsibility for every citizen of this State, and I would appeal to the Minister not to heed such doctrine as was handed out to him to-day by Senator Sir John Keane. In one way, it might be a good thing if he did, because it might bring things to a crisis when crises, and serious crises, are on everywhere else. Those of us who take some interest in foreign affairs, and in what goes on elsewhere, know that money, wealth and so-called productive capacity do not mean prosperity or the well-being of the community. At present there are six or seven millions of people unemployed in the United States, where they have practically all the money they want, and all the industry they want. We know that President Hoover's great doctrine was "Leave it to private enterprise." I have read analyses of most of President Hoover's statements since he took office, and they show him now to be a man who did not know anything about economics or sociology. The position in America to-day is due to his "Leave it to private enterprise" attitude, "American psychology is the psychology of the individual," and so on. Senator Johnson analysed certain figures on, I think, a wage of 50/- per week.
A family income of 50/- per week.
I would feel very much happier than I do if I thought that the family income in the Free State amounted to 50/- per week.
I took those families which have an income of 50/- per week.
I understand, but that is unconsciously misleading, because it may create the impression that the family income here is 50/- a week. It is nothing of the sort, and I should not like it to be thought that it was. Taking everything into consideration, and allowing for time out of employment, I should say that the family income in rural Ireland would be nearer 25/- a week. 50/- a week might be the average family income in Dublin, though I doubt that. I think we might take it that 25/- per week throughout the country, and not more than 32/6 in Dublin, taking into consideration time out of work, would represent the family income. That is what we are facing here. We have the position in Ireland that even though a man is employed 52 weeks of the year, the people are not being afforded a decent Christian standard of living. Moreover, with industry as it is, it is almost impossible for anybody in industry here to pay a wage which will afford a decent Christian standard of living. They may pay the best wage they can. I am not arguing that. But we ought to face up to the fact as it is, and if we are honest and decent about it we ought to be prepared—those of us who have more than the others—to sacrifice a great deal in income tax. I would suggest to the Minister that he should go the whole hog on income tax, and take it from those of us who have it, when we have it. There is no satisfaction in living in a Christian community if you know that you are living four times better than you ought to be in comparison with the under-dog. Senator Johnson must remember that a wage of 30/- per week on the Shannon scheme for workmen living in huts, who had to provide their own food, and maintain their families afterwards, was defended here. We may not be able to maintain a Christian standard of living, but do not let us be hypocrites. Let us own up to it. Do not let us listen to such rubbish as: "Harden your hearts; keep your money in the Bank of Ireland." What good will it do there, if it ceases to function, as it has ceased to function elsewhere? Perhaps the Minister will waken up and do what I suggested some time ago—get money at 2½ per cent. It is the cost of money which is holding up everything. The amount we are paying in interest at present is making an appreciable difference in the rents of houses at the present time, and is proving a great obstacle to the development of housing. I am very glad that Senator Sir John Keane brought this point up. It gives some of us an opportunity to bring home to the Minister the real condition of affairs. One does not know what to do with people of that type—whether to ignore them or to forget about them or to pray for them. They are riding a very dangerous horse at the present time, and it would be well for them to waken up to what is occurring elsewhere, and to realise that there may be a possible drift here.
Senator Connolly made one suggestion to the Minister which I do hope the Minister will not act upon. He suggested that because of the tax of 4d. per gallon on petrol, the road tax on motor lorries should be reduced. The position really is that motor lorries are not paying anything like the tax they should pay. At the present time, transport, as between road and rail, is on an absolutely uneconomic basis. Up to comparatively recently, commercial vehicles were paying less——
Might I explain that I referred only to delivery lorries and not to motor omnibuses?
Commercial vehicles were paying less than 5 per cent. of the taxation required for the upkeep of the roads and, so far as the trunk roads were concerned, they were doing about 80 per cent. of the damage. Senator Connolly suggested that these lorries, made in England, should be taxed even more lightly than they are so that railway men, who make railway engines and wagons here, should be thrown out of employment. That is really what his suggestion means. About 4,000 railwaymen have lost their jobs as a result of the development of road transport and less than half that number have been employed in road transport under worse conditions. They have to work longer hours than they had and they have a generally debased standard of existence. Acting on Senator Connolly's suggestion would certainly not develop Irish industry, help Irish workers or tend to relieve unemployment.
Very little has been said about tariffs in this debate up to the present. In fact, Senator Connolly quotes the United States as an example of a country with several millions unemployed notwithstanding its exceedingly high tariffs. Of course, he did not say that that was the cause. The prosperity of the United States was attributed here at one time to its very high tariffs and now its poverty is attributed to the incapacity of the President. We have had another example recently of the effect of high tariffs in the Customs Union which has created such consternation in European countries—the Customs Union about to be effected between Germany and Austria. They have seen that the splitting up into scores of little entities of the economic systems of Europe is simply threatening to bring about the downfall of the whole lot. We read every week of commercial treaties being signed and negotiations taking place between various nations with a view, if possible, to counteracting the effects of too many tariffs.
I should like to emphasise, particularly, the suggestion made by Senator Johnson, that income derived from tariffs should not be used for ordinary State purposes—that the amount which the consumer pays to encourage industry should be devoted to modernising our industries, to enabling them to take advantage—or rather to insisting on their taking advantage—of the tariff wall so as to equip their factories to turn out commodities of the type and at the price suited to Irish consumers. As it is, they simply lie behind that tariff wall and use it as a protection for inefficiency; they raise the prices to the extent that the tariff permits them, and they do nothing to bring about that great prosperity which we are told we can only have with tariffs. Industries with the advantage of a 33? per cent. tariff are going into bankruptcy. They are being outsold and generally outdone in the home market by foreign competitors.
The cost of money has been suggested as one of the causes of the failure of Irish industry. I doubt that, because there is a general disinclination to invest here. That was shown when the sugar beet factory was first being established. We could not get Irishmen to invest in what was really a gilt-edged security. Then the Trade Loans (Guarantee) Act has not been availed of here to the extent it should have been. It has been left practically untouched. I do not think there is any desire to go to the banks and borrow money for the purpose of exploiting industry. The only tendency is to go there when the parties are pretty well bankrupt in order to pay debts that they would not otherwise be able to meet. I do not think that they are prepared to use money no matter at what price they get it. I should think that one of the best means of helping Irish industry would be to use the money derived from tariffs for the development of industry through the instrumentality of a Development Commission, on which there would be industrial as well as financial experts— to try to organise and rationalise industries, help them to instal up-to-date machinery, instead of the archaic machinery most of them possess at present; provide them with better marketing facilities and agencies especially in the case of those which have an export trade. In that way the money which the consumers of these tariffed articles are paying could be utilised to develop industry along economic lines. The trouble at present is that most of these Irish commodities are turned out in such small quantities that they cannot be sold at an economic price. They are not advertised to the extent that they should, be, and the bonuses and various percentages given by cross-Channel and other competitors induce the retailer to give preference to the imported article. A lot of that could be counteracted by utilisation of the £1,000,000 or so that we get from tariffed goods. It is by going along these lines, rather than by increasing the amount of tariffs or making them more numerous, that we are eventually going to reach prosperity.
I should like to support Senator Connolly's contention that the solution of the slum question not alone in Dublin but in Cork, Limerick and Waterford, is a matter for the Government. The existence of these slums would be a disgrace to any country and I think that we cannot shield ourselves behind the local authorities. Dublin has done a great deal and deserves credit for what it has done, but the whole public health question is bound up with the question of housing. There is no use in trying to improve public health conditions by social action—by looking after the women and infants, for instance—if the housing is bad. I hold that the question of the slums is a question for the Government and I hope that the Government will tackle it in a proper way.
I am not going either to praise or blame certain Senators who have spoken. As far as taxation is concerned, the great fault is that taxation is twice as high as it should be. The opportunity to remedy that, I hope, will come one of these days when the Minister hands over his job to somebody else. I hope the poor will get the benefit of the reduction to as great an extent as, if not greater than, the richer classes. But the first thing to do is to reduce taxation wholesale. I have pointed out several times that this country is taxed twice as highly as Great Britain. The Minister has never been able to controvert that statement.
I should like the Minister to explain a matter which is referred to here, and which very few people know much about. This question of the Irish Church Temporalities first arose, I believe, about the year 1869, when the Irish Church was disestablished. I presume that that is so, because there was a large Church fund established at that time. From time to time it was devoted to various purposes, such as the universities, the relief of destitution, and so on. I do not know what the state of affairs is now. Perhaps the Minister would be good enough to tell us how matters now stand, whether there is any money now left, as there seems to be from what is set out in the Bill, and perhaps he would make a general statement as to what the provision in the Bill really refers to.
I shall refer to some of the points of detail first. Senator Sir John Keane asked was it not possible to have all assessments for income tax made in one office. In the course of my Budget speech, I referred to the work of the Departmental Committee which had been considering the simplification of the income tax code, and I pointed out that a report of a drastic character had been received. One of the means of simplification that the Committee aimed at dealt with this point and their report is under consideration. Every reform of that character involves difficulties and sometimes it is not possible to carry out reforms which might mean a loss to the revenue. I cannot say yet exactly what changes it will be possible to make, but I believe that we will be able to carry out a considerable measure of simplification. I do not think that it would be possible to make an allowance in respect of motor delivery vans because, as Senator O'Farrell has pointed out, the commercial lorry and delivery van are amongst the vehicles which do most damage to the roads. The whole of the Road Fund is being spent on road repair, road improvement, and road maintenance. If we gave an allowance to these vans and lorries, the income of the Road Fund would be reduced. The amount available out of the fund for the improvement of roads would accordingly be reduced and the charge falling on the ordinary ratepayer—particularly the agricultural ratepayer—would be increased. I think that in doing that we would be defeating the object for which the petrol tax was imposed.
A question was asked about the Corporation Profits Tax. The position simply is that ever since the Corporation Profits Tax was imposed certain classes of enterprise have been exempt—public utility enterprises of various sorts, the most important being of course the railways. That exemption was nominally temporary but it has been extended at intervals of three years. What we are doing in this Bill is extending it for another period of three years. I think it is fairly clear that some of the most important enterprises concerned cannot afford to bear a new impost at the moment. In any case, in view of the fact that none of these enterprises has, so far, borne the Corporation Profits Tax, failure to extend exemption would, in fact, amount to an extension of the scope of the Corporation Profits Tax. It is a tax which gives a reasonable yield with very little trouble, but I would not favour its extension.
With regard to the Church Temporalities Fund, the position is that the Department of Agriculture was residuary legatee of the Church Temporalities Fund. Various funds had a charge on that fund—the Teachers' Pension Fund and others. The remainder is available to the Department of Agriculture. Recent legislation has practically disintegrated the old Department of Agriculture and now we have the Vocational Education Act. This legislation will give to the Department of Finance the powers which the Treasury had of fixing the amount of this residuary sum which, from time to time, can be taken for the benefit of the Exchequer without over-charging the fund and so endangering the income of the other bodies who benefit by it.
Will the Minister say how much the amount is?
I have not the details at the moment. If the Senator wishes I can get them for him.
I merely asked out of curiosity.
Senator Johnson suggested that the revenue raised by means of tariffs, instead of being devoted to the general purposes of the Exchequer, should be used in some way for the development of industries. I do not know any satisfactory way of developing industries other than by the imposition of tariffs. It is true that full advantage may not be taken of a tariff. It is true that a particular tariff may be unsatisfactory in various respects, but, at any rate, the tariff does this—it works automatically. You may have lobbying when a tariff is in question, but once the tariff is imposed it operates automatically, and you have no trouble as between one firm and another. When you come down to dispensing money to particular firms you are up against all sorts of trouble. There is hardly anything more difficult than to get State money wisely dispensed for the benefit of industry. No matter how wisely you get it dispensed there is always great difficulty in getting satisfactory results. There is practically no head of a business enterprise who will not become foolish if you give him easy money. If you take the best-conducted enterprise in existence and give that enterprise money for rationalisation, new plant, or something of that sort, you may take it that a great deal of that money will be misspent.
What of the beet factory?
I will deal with the beet factory if the Senator wishes. Along the lines of assisting a firm to do its own business, you can do nothing that will give you a reasonable return for the money spent.
Reference has been made to the Trade Loans (Guarantee) Act. We administered that Act as carefully as we could. We set up a committee and we tried to use all sorts of checks. Nevertheless, not only is most of the money which was granted under that Act going to be lost but it is going to produce no results at all. Looking at the matter now, I think that it would have been much better if we had not attempted to assist industries in that way and if that Act had not been passed. One or two industries may have got slight benefit from it. Even so far as they are concerned, I am not sure that they would not have done better by facing up to their difficulties at the beginning and getting the capital necessary in some other way. Some of the industries which received facilities in this way—even some of the most promising of them—are not at all happy that they raised the money in this manner. The sums they got are only a small proportion of the whole. So far as most of the money is concerned, we were driven to helping lame dogs that ought to have been allowed to die and leave room for others. Where you have the State doling out money in this way what you are driven to inevitably is assisting industries which are in a comatose state and which should not be assisted in any way. All sorts of pressure can be used. The magnificent premises are pointed out, the number of people working and who will be thrown out of work if the factory is closed will be urged, deputations of workers will attend and eventually the money will be given. The industry may only be enabled to stagger on for a few years, eating up the taxpayers' money and keeping other enterprises out of the field. I am very chary about accepting any proposals for direct interference in industry simply because a Government Department or a public authority cannot deal on a businesslike basis with the questions which arise, cannot take the facts simply as they are and disregard all the personal factors.
There was reference made to the sugar beet factory, and I think it was suggested that we should have many more such factories. I should like to see many more sugar beet factories, but not at the present price. I think we are not really at the end of the experimental stage as regards sugar beet, because I feel certain that when the ten-year period shall have expired it will not be possible for the sugar beet factory to carry on without assistance from the State, or some form of subsidy or equivalent to a subsidy. The point that will have to be determined then is: "What is a reasonable amount to pay?" While the amount that is being paid had to be paid, and, I believe, was quite justified in order to get the thing going, to bring people in to start an absolutely new industry and to encourage the growing of a crop to which people were not accustomed. I think it would be quite unjustifiable to continue paying in perpetuity, or for 30 or 40 years, anything like the sum that is at present being paid. It is at the end of the ten-year period that the whole question of beet prices will become very serious. Although there was what might be called a nasty hold-up this year, the question of the price of beet has not yet become a serious question. It will certainly become a serious question when this enormous subsidy has to be reduced to something like reasonable terms, and I think it would be unjustifiable at the present time to make any arrangements for the starting of another factory. The time for that would be at the end of the ten-year period, if something like a reasonable subsidy on which the industry can be carried on can be arranged. That will mean, I think, that the owners of the factory will have to tighten their belts, and that the farmers will also have to tighten their belts. The factory owners, presumably, by that time will have written off the price of the factory. That will be only wise, and nobody can blame them for it. They will be in a position, from the point of view of writing off any depreciation, to do with a smaller subsidy, and probably they will have to do with a great deal less. At that time, the farmers will have to do with a smaller price than has yet been offered. That is my private opinion. I think it will be time enough to discuss the extension of the beet factory when that point shall have been reached.
I do not like high tariffs, because I think that high tariffs are, broadly speaking, wasteful. There are probably a great many articles which you could have manufactured on a large scale here, by means of a 100 per cent. tariff, but if you put on a tariff of 100 per cent. they would be manufactured wastefully.
If anybody knew that there was money to be made in it, factories would be put up in the wrong position, and the wrong sort of building would be erected. The whole industry would be started in a most slipshod manner, and it never would be efficient except by accident—that is, somebody doing the thing right. If they put on a high tariff, industries would be organised on the most inefficient and expensive basis, and because of that, there would be a continual burden on the taxpayer.
I find there is quite an amount of confusion of thought upon the question of the burden that is imposed by a tariff on a commodity. Something like £250,000 per annum is collected by means of the boot tariff. People thought that was a burden of £250,000 on the public. The amount collected, however, enables other taxation to be remitted, and the tax on tea, which yielded something like £250,000, was remitted when the boot tariff was imposed. The real burden comes when a certain proportion of the things are sold to the public, and no revenue comes into the Exchequer. The time when the real burden of the tariff would be felt would be when all the boots required in this country were made here and no revenue came in, and yet the people were paying approximately 15 per cent. more than that if there was no tariff. If a tariff is too high you very quickly reach the point when you have no revenue coming in, but when you have a substantial burden on the public. The real way to proceed with tariffs—I think it is necessary to have tariffs, and I think it is necessary to develop the industrial arm in this country—is by imposing the minimum tariff that would do to make it necessary for the firms carrying on the industry to keep struggling and to seek after efficiency in every way. The machinery we have adopted is the best practical method of doing that.
No commission will be able to get at all the facts, and no commission will be ever able to foresee all the results of its recommendations, but you will get an impartial and reasonably efficient investigation of the matter by means of the Tariff Commission.
If you have no Tariff Commission you are certainly going to be placed at the mercy of interested parties, and you would have lobbying carried on— dangerous to public morality. I have known people to be very active, in no improper way, for the imposition of tariffs but when you look at the reason for their zeal and activity you would see that the imposition of the tariff might change them from being moderately poor to being fairly rich. You could point to people with a factory not worth £5,000 where it would jump to £40,000. If you have no machinery for investigating tariffs, and leave it to the matter of Parliamentary pressure, then, a dangerous situation would be bound ultimately to arise. I do not think that the Government, in a State organised like ours, can undertake to provide people with employment. We can undertake to prevent people starving, and we can undertake to see that destitute people are relieved. I am convinced that no Government organised on a democratic basis, and I might add no Government at all, could undertake the function of running industries and providing everybody who needed employment with it. It is going to the other extreme to say that the question of employment is a matter for private enterprise. In practice, the Government can foster employment not merely by tariffs and financial policy but by direct action, such as action in connection with the Shannon scheme, even action in connection with drainage, and action such as has been taken in connection with housing. A good deal has been done to provide better housing accommodation for the people and undoubtedly there remains a great deal more to do. I do not know that the fault for the fact that so much remains to be done can be definitely laid to the door of any section of the community, but I do think that if the problem is to be solved, there must be general co-operation, and it will not be solved by simply throwing the burden on the shoulders of the Government. There are very many interests concerned, and if there is to be speedy improvement in the situation all those interests must be prepared to co-operate with the Government, and I think the people who are carrying on any crusade with the matter would be well advised to pay attention to that particular side of it, because this spirit of co-operation is not very easy to get and attempts that have been made before this to produce that co-operation have not been strikingly successful. I hope they will be more successful in the future. It is not a question of providing money.
If you provide a good deal of money —I am thinking of substantially greater sums than you have been providing here before—you would have difficulties in the way of increasing costs. While it is a big problem which has been receiving the attention of the Government, and in which the State must be as active as it can, I think there has got to be a general spirit of co-operation in regard to it, and anything that can be done to get that spirit of co-operation will be well worth trying.
I wish to ask the Minister one question. Does he accept full responsibility for the Board of Works? I do not want to make a speech on this subject but I do hope that the Minister would enquire very minutely into the working of this Department which has given great dissatisfaction. It is a Department that requires investigation; I could say a good deal on the matter, but I will leave it to the Minister to reply.
May I ask the Minister one question? Would he please define the "co-operation" he proposes to seek?
Perhaps he might like to do that.
Would the Minister tell us whether there is anything remarkable in the decline in excise returns?
I will. It is too early in the year to make any prophecy with regard to the Revenue position and I know that there have been certain abnormal factors reducing the Revenue yield in the early part of the year, which I do not believe will continue to operate during the remainder of the year. The Senator referred to the question of beer duty, or excise revenue which was affected by the beer duty. I have several times explained that the revenue from beer duty was liable to the widest fluctuation because it depended not on the consumption of beer, but on the policy of brewers in regard to building up or reducing stocks. If brewers are increasing their stocks there is an artificial increase and no revenue in beer. If, on the other hand, there is a decrease of stocks we are liable to get a revenue temporarily much less than is represented by the consumption and consequently, for a limited period, very wide fluctuations may take place in the beer revenue which do not represent anything of a permanent character.
With regard to the Board of Works, the only thing I could do would be to investigate any complaint that the Senator would address to me. There is a Parliamentary Secretary in charge of the Department of Public Works and the Government and the Minister must accept responsibility for the various activities of the Board of Works. They, of course, carry on a varied type of duty, and a difficult type of duty. For instance, if the Senator is thinking of drainage works, what we have discovered is, that everybody clamours for drainage works and, when completed, everybody says that the position is worse than before it was carried out. It would be hard for any Department to give satisfaction on the question of drainage. I do not know how deep-seated the alleged universal dissatisfaction may be, but I would be glad to hear the Senator's complaint in regard to the matters he has in mind.
Senator Foran asked me about the sort of co-operation I referred to, and I think he knows something of conferences which were held between the employers and workers in the industry and, in fact, of the impossibility of getting very far with them.
Question: "That the Bill be now read a Second Time"—agreed to.
Committee Stage fixed for Wednesday, July 22.