The basis of the Bill is, of course, the White Paper giving the Estimates of Receipts and Expenditure which was circulated on 9th May last. According to the figures the total expenditure on Central Fund and Supply Services was estimated at £30,654,220, of which £4,729,269 was for Central Fund services, and £25,924,951 for Supply. The figure for the Supply Services includes items totalling £3,379,800 which do not appear in the Estimates prepared for 1932-33 by the outgoing Government. These items were: for the Old Age Pensions Act of 1932, £479,800, representing an increase over the original Estimate for old age pensions for 1932-33 of that amount. Housing grants represent an increase over the original provision for 1932-33 in Vote 41 of £360,000; milk for necessitous children, £100,000; loans for housing purposes which, again, were increased over the original provision for 1932-33 by £1,340,000; the Land Bill, 1933, £150,000; to meet the deficiency in respect to Land Bond Fund payments resulting from the decrease in the annuities from the moratorium granted last year and this year, £800,000; and additional provisions for damage to property compensation, £150,000.
In the figure for the Supply Services there was also included £2,450,000 for the payment of export bounties and subsidies. In the Estimate for Central Fund expenditure there was included £320,000 to cover the interest and sinking fund charges on a new loan which, it is anticipated, we shall have to float this year. The increase in this figure was offset to some extent by savings on Exchequer Bills, which, including the £1,000,000 issued by our predecessors, were all redeemed at the close of the financial year.
In addition to the items to which I have just referred, however, there are other features of the Government's policy for which provision had to be made. To deal with the unemployment situation as it found it, the Government, on first taking office last year, had to adopt emergency measures and to provide, out of abnormal sources of revenue, considerable sums for unemployment relief. Since then the Government has come to the conclusion that it will be necessary to introduce a measure to deal with the problem of maintenance for the unemployed this year. The new scheme, it is hoped, will go far to relieve the local authorities of the burden of providing assistance for the unemployed. In order to initiate it the sum of about £450,000 net will be required, and for this provision has had to be made.
In addition to this provision, it is to be noted that in the Estimates to which I have referred, particularly in Votes 8, 41 and 54, generous assistance amounting in all to £2,806,000, is being provided by way of grants and loans to encourage and finance constructive expenditure, and so to provide employment, as follows:—
Out of the Local Loans Fund:—
|
For Arterial Drainage Loans |
£40,000 |
|
,, Public Health Loans |
200,000 |
|
,, Housing of Working Classes Loans |
£1,000,000 |
|
,, Loans under Labourers (Ireland) Acts |
500,000 |
|
,, Loans under Small Dwellings Acquisition (Ireland) Acts |
200,000 |
|
,, Loans under Gaeltacht Housing Acts |
40,000 |
|
,, Loans under Vocational Education Act |
30,000 |
|
,, Loans for Minor Works |
13,000 |
|
,, Loans sanctioned but not provided last year for works, mainly housing, to be executed this year |
318,000 |
|
,, Contingencies |
13,000 |
|
Out of Vote 41. For Grants for Housing Purposes |
370,000 |
|
Out of Vote 54. For Grants for Housing purposes in the Gaeltacht |
82,000 |
While it is anticipated that the amount provided for free grants for housing purposes will render effective for their purpose the loans for housing, it is considered that some further assistance may be required to stimulate the local authorities to proceed with public health works. Accordingly, in addition to the sum of £150,000 for unemployment relief which already appears in the Estimates a further £250,000 will be provided making £400,000 for public health and relief works generally.
Then there is the peat scheme. The sum of £100,000 has been devoted for the drainage of bogs, the construction of bog roads and minor works of a like character or ancillary thereto. The sum of £50,000 has also been set aside for the organisation and development of the peat industry, with the special objects of securing improvements in the method of winning, marketing and utilising turf. The total amount thus to be provided for the initiation and encouragement of works to give employment, apart altogether from the housing grants of £452,000 and the loans for various purposes amounting to £2,354,000, already referred to, is £550,000. In addition to the foregoing provisions, the Dáil has granted the sum of £25,000 in order to provide native fuel for necessitous homes in districts where such fuel is not usually available.
The complete programme of expenditure on Central Fund and Supply Services, therefore, amounts to £31,529,220, £4,729,269 being for Central Fund Services and £26,799,951 for Supply. As against this expenditure the total revenue for the year from tax and non-tax sources was not expected to be more than £26,440,000, representing decreases of £1,732,000 and £1,818,935 in tax and non-tax revenue, respectively. As regards non-tax revenue, the decrease is anticipated to occur almost entirely among the miscellaneous items, and in that category is more than accounted for by a decline from £2,969,000 to £800,000 in the receipt from pre-Treaty land annuities.
As regards tax revenue, the principal decrease in the Estimate as compared with last year is on the Customs side, and this is almost entirely due to the increasing protection and increasing employment afforded by the new duties which were imposed for that purpose last year. Nevertheless, as I have said, it has been estimated that the total revenue for the year will not exceed £26,440,000, which amount is to be set against the prospective expenditure of £31,529,220, leaving £5,089,220 to be found. I feel safe in allowing for over-estimation on the Supply Services a sum approximately equivalent to 1½ per cent. on the figure of £25,924,951, at which those services stand on the White Paper. The expenditure side of the account is thus reduced by £388,220 to £31,141,000.
As I have already pointed out, among the additional services for which provision is covered is the sum of £800,000 to meet a deficiency which arises in the Land Bond Fund, by reason of the moratorium which has been granted in respect of the May-June gales of this year, and the permanent reduction in the land annuities. Of this amount £226,000 arises from the reduction in the annuities. It is a deficiency which henceforward will recur yearly. It must be met, therefore, out of revenue. The remainder, however, is a capital liability which is wiped out by taking an equivalent amount from last year's surplus but leaving a surplus still remaining of £607,000 which is appropriated in the following manner.
Last year a sum of £550,000 which for many years has represented the normal contribution to the Local Loans Fund, was provided out of nonrecurring revenue. The same course was followed this year, and a similar amount to last year is provided out of the balance of the surplus. The provision of the two sums of £534,000 and £550,000 respectively, virtually absorbed the surplus and left us with £57,000 which we have appropriated for the general purposes of the Budget, leaving a further £3,560,000 to be found. I have already informed the Seanad that there is being provided this year £2,450,000 for export bounties and subsidies. Against this expenditure, however, certain assets have been created and on the security of these assets it has been decided to borrow £1,225,000 and to use it to defray one half of the cost of the subsidies. There is still a balance remaining, but included in this balance there is an outlay which is to be made for "services unusual in their magnitude and generally unusual also in their character." Outlay of this nature may properly be defrayed by borrowing. In this year's Estimates the items of this kind which have to be provided for are:—(1) the provision, amounting to £256,000, required to provide compensation for damage to property and property losses and for the completion of the repayment of the Dáil Eireann (Internal) Loan; (2) £1,600,000 required for loans to local authorities mainly in connection with housing schemes, and (3) £85,000 required for the completion of the Barrow drainage scheme. These amount to £1,941,000, and after deducting them and the other items to which I have already referred, there remains £394,000 still to be found.
As I have already indicated to the Seanad, in connection with the Public Services (Temporary Economies) Bill, it is the desire of the Executive Council to avoid imposing additional taxation. Accordingly when it became clear that unless firm and definite steps were taken to reduce expenditure in the public services, it would be necessary for us to increase taxation heavily or, failing that, to reduce the expenditure on social services drastically—alternatives which in present circumstances are equally unthinkable—the Public Services (Temporary Economies) Bill was introduced. As a result of the passage of that measure, which, I trust in the circumstances as I have recited them, will not be longer delayed, we hope to be in a position, after allowing for loss of income tax as a result of that measure, to reduce expenditure during the present year by a net figure of £270,000. We are still left with a gap between revenue and expenditure of £124,000. To provide this £124,000 a tariff has been imposed on apples, pears, plums, cherries, strawberries, raspberries, currants and gooseberries. Our proposals in this regard, however, envisage a general licensing system during the seasons in which homegrown fruit will not be available. Therefore, the tariff is expected to bring us in only about £25,000. Further proposals by the Minister for Industry and Commerce for protection for a number of articles which are duly set forth in the Schedule to the Bill, together with an expectancy of revenue from cement, in accordance with the general principle of the Cement Bill now before the Oireachtas, and the proceeds of a tariff of two-fifths of a penny on daily newspapers imported into the Saorstát, will bring in a revenue, it is hoped, of £115,000, leaving us with a balance at the close of the current financial year of £16,000.
These proposals, as I have said, form the basis of the Bill now before the House. In addition, however, to the provisions necessary to give effect to these Budgetary decisions, the Bill proposes to make certain changes in the law relating to the collection and administration of the revenue. I propose to explain these changes briefly at this stage, on the presumption that if the Seanad desires to discuss them in detail an opportunity for that discussion will arise on the Committee Stage. By far the greater part of the new proposals relates to the general administration of the customs and excise laws and will be found in Part II of the Bill, Sections 14 to 16, Sections 19 to 28 and Sections 32, 33 and 35 inclusive. The remaining innovations will be found in other parts of the Bill. Of these, Sections 2 and 3, which are in Part I, relate to income tax and surtax, and Sections 36 to 39, which are in Part III, relate to excess profits duty, while Sections 42 and 43, which relate to stamp duty, will be found in Part IV, and Section 44, relating to the general provisions of the measure, in Part V.
Section 2 proposes to grant relief in certain double taxation cases and the necessity for it arises in the following way. Persons resident in Great Britain and also resident in Saorstát Eireann are entitled to a measure of double taxation relief under the provisions of the First Schedule of the Finance Act, 1928, the underlying intention being to relieve such persons completely of the tax of one of the countries, the cost of such relief being borne between the two Exchequers. Owing to differences in the method of assessment of the two countries, it occasionally happens that the existing legal provisions do not enable complete double taxation relief to be granted. If this occurs in the case of a wealthy Englishman, it tends to operate to induce him to give up his residence in this country. The result might be that there would be serious loss to the Saorstát Exchequer, in addition to a certain economic loss to the country as a whole. The section is therefore designed to give the Revenue Commissioners discretionary power to grant further relief in such cases and to see that persons whose main place of residence and main centre of life are in England are not mulcted through taxation for maintaining a residence in the Free State.
Section 3 is consequential on the provisions of the Public Service (Temporary Economies) Bill, and is designed to enable the income tax assessment on State employees for the year 1933-34 to be adjusted by reference to the reductions imposed by the Economies Bill. Section 14 of the Bill provides for the importation, free of duty, of trophies and cups, bowls and shields or articles of a similar type which Saorstát competitors have secured in contest outside Saorstát Eireann. Section 15 is occasioned by the operation of the Agricultural Produce (Cereals) Act, 1933, under which many articles are prohibited to be imported, except under licence from the Minister for Agriculture or the Minister for Industry and Commerce. The duty on most of the articles is removed by a new section, and where such is not the case the intention is to exempt the article still dutiable and which the Minister will decide to admit under licence.
Section 16 provides for a drawback on the exportation of blended tea. It appears that an export trade is springing up in this blended tea in the Saorstát. Hitherto the blend had to be performed in bond to secure the benefit of the drawback. The new provision will enable this operation to be carried out on private premises. Of course that concession is secured by a number of very stringent safeguards which would protect the revenue. Section 18 makes provision for charging an annual excise duty of £15 upon moneylenders' licences. As possibly the Seanad may be aware, the Minister for Justice yesterday introduced, as a Government measure, a Bill to license moneylenders, and Section 18 is the consequential provision in the finance law following upon that.
Section 19 of the Bill proposes to grant certain exemptions from entertainments duty. Section 20 grants a reduction of five guineas in the licence duty imposed upon rectifiers or compounders of spirits. Section 21 arises out of the position created by the imposition of the Emergency Duties Order No. 5, which provided amongst other things for the removal, as on and from the 24th December, 1932, of the 20 per cent. ad valorem emergency duty payable on imported motor cars and parts thereof, and the admission, from the same date, of non-British motor cars and parts at the preferential in lieu of the full rate. As a result of this concession traders found themselves with motor cars on hands which had borne the emergency duty or the full, as distinct from the preferential duty. The position was that they could secure a refund of the difference between the full and the preferential rate by exporting and re-importing any cars affected, but they could not obtain relief from the emergency duty, because the emergency order imposing the duty made no provision for drawback on exportation. In these circumstances the traders asked that they should be relieved of the necessity of exporting cars, and also to be refunded without incurring trouble or expense, the amount of the emergency duty paid on unsold cars in stock. It has been decided to grant this concession, and Section 21 gives effect to that decision. This section also contains a provision affecting all classes of goods in respect of which licences to import free of duty may be issued. In many cases licences were not issued immediately on application, because the merits of the case had to be explored. Importers, being unable to wait upon the decision, paid the duty and took delivery of their goods, and subsequently the issue of a licence was recommended by the Department of Industry and Commerce or the Department of Agriculture, as the case might be.
It was found that the refund and the issue of a licence was not strictly legal and paragraph (b) of the section is intended to regularise the matter and to cover any refunds which may have been made. Section 22 is similar in scope to Section 21. Section 23 provides for relief from conditions on payment of duty. It was found that importers who were granted a licence to import goods, free of duty, under licence, for use which was deemed to qualify for such free licence importation, sometimes wished to utilise the goods, or portion of them, for some other purpose and to pay the duty. The provision is introduced to cover such cases. Section 24 makes general provisions for a drawback and Section 25 relates to the re-importation of goods. This section is a general one for this and for future acts and it is intended to make provisions known as the "re-importation provisions" which hitherto have enabled a home-made article, or articles on which duty has once been paid, to be exported and re-imported without further payment provided no drawback was paid on exportation. Section 26 continues that provision in respect of certain articles as does Section 27.
Section 28 provides for the repayment of duty on return or destruction. It is intended to provide limited powers of relief in certain cases of which the first is the case in which articles are found, on importation, to have been damaged in transit or not to be in accordance with the order, the second being that in which articles are destroyed in the Free State without having been used for some such cause as having become obsolete. Section 29 and Section 30 deal with the modification of the tariffs, all of which are set forth in the Schedules to the Bill. Section 31, I might say, repeals the duties on oats, oatmeal, maize, wheat-meal, wheat flour and bread, which were imposed under the statutes enumerated in the Schedule. These articles are now prohibited to be imported except under licence and, where a licence is issued, it is desired to free the goods of duty. Duties on similar classes of goods were enforced by Emergency Orders and these have also been withdrawn. Section 32 gives the Revenue Commissioners power to determine the category or class to which an article belongs. It has been found that, owing to the increased complexity of the customs laws, there has been certain overlapping of tariffs at many points and doubt sometimes arises as to the heading under which an article is liable for duty. Furthermore cases have arisen where an article, not specifically designated as free, falls accidentally within the ambit of a general dutiable class. Under this section, it is proposed to give the Revenue Commissioners discretion in such cases and power to determine the heading under which the charge on an article, if any, should be raised.
Section 34 gives the Revenue Commissioners power to determine the value of dutiable articles and goods. Section 35 is a penalty section in respect of breach of the regulations or conditions. Sections 36 to 39 are intended to strengthen the law relating to excess profits duties. Section 36 is a section to remove doubts and to confirm that the law is as it has hitherto been acted upon. Section 37 gives statutory effect to the decision, given in the House of Lords, so far back as 1922, and which has hitherto been acted upon by the Revenue Commissioners in this country and Great Britain in respect of assessments of excess profits. Section 38 provides for the issue of a certificate of discharge in certain cases, and Section 39 for the assessment of executors and administrators for excess profits duty. Section 40 provides that, where an instrument is chargeable with ad valorem duty in respect of money in any currency other than the currency of Saorstát Eireann, the said duty shall be calculated on the value of that money in Saorstát Eireann currency. Section 41 provides a consequential change in the law following the repealing and replacing of the Public Charitable Hospitals (Temporary Provisions) Act, 1930, by the measure which the Oireachtas has just had before it. Section 42 proposes to exempt receipts which have been given by county registrars. Section 43 exempts from stamp duty, in certain cases, corporations which were previously unlimited, and which were made subject to Corporation Profits Tax by the Act of 1932. Section 44 gives power to the High Court to issue an originating summons in the case of a debtor who owes money to the revenue of Saorstát Eireann but who resides not in this country but in Great Britain. These are all the principal provisions of the Bill and, as I presume that the Seanad would like to have further time to consider them, it would, possibly, be better for me not to take up any more time at this stage but to allow any further points that may require to be dealt with to be developed by the members on another occasion.
