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Seanad Éireann debate -
Wednesday, 22 Aug 1934

Vol. 19 No. 1

Public Business. - Imposition of Duties (Confirmation of Orders) Bill, 1934 (Certified Money Bill)—Second Stage.

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

The purpose of this Bill is to confirm certain Orders which have been made under the Emergency Imposition of Duties Act, 1932. These Orders are: Emergency Order No. 23; Emergency Order No. 25; Emergency Order No. 30, and Emergency Order No. 31. Emergency Order No. 23 imposed an additional customs duty of 4/8 per cwt. on sugar. These duties were imposed following representations made as to the necessity for protecting the sugar-beet industry against unfair competition from abroad. When Emergency, Order No. 23 came into operation it was found that the provisions in regard to stocks on hand on midnight of the 6th February would operate inequitably against the merchant who held dutiable stocks as against the merchant who was just about to import sugar. For example, a trader who imported, say, 20 tons of liquid glucose on the 5th February would be charged an excise duty at the rate of 4/8 per cwt., whereas if the article arrived subsequent to the imposition of the duty he would be charged at the rate of 2/1½ per cwt. A similar position existed in regard to sugar not exceeding 98 degrees polarisation, and also in the case of molasses. As it was not the intention of the Government to penalise traders in this way Emergency Order No. 25 was made. It provided that, in the case of sugar stocks in hand of a polarisation of not less than 98 degrees, molasses and glucose, the excise duty should be at the rate of 2/4 per cwt.

Emergency Order No. 30 revoked wholly a number of previous Emergency Orders, and, in part, the Emergency Imposition of Duties (No. 5) Order following on the inclusion of the duties previously chargeable under these orders in the Finance Act of this year. Emergency Order No. 31 was made on the 15th May, 1934. It imposed an excise duty of 5/- on every pig carcase, or part of a pig carcase, used for conversion into bacon for sale on any premises in the Saorstát. The circumstances leading up to the making of the order were briefly as follows: It was found that in practice bacon exporters were filling the bacon quota to Great Britain and Northern Ireland at a loss, owing to the fact that the price for bacon on the home market was substantially higher than the nett sum realised on bacon exported. As failure to fill the bacon quota to Great Britain and Northern Ireland would, or might, have been a serious matter in view of the probability that the quota in future periods would be reduced to actual exports, it became necessary to introduce arrangements which would enable exporters to fill their quota. Following on discussions with representatives of the trade, it was decided that the most equitable method of dealing with the situation would be to impose an excise duty on all pigs, alive or dead, used for conversion into bacon for sale, and to pay an increased bounty on exported bacon. These, briefly, are the four Emergency Orders which it is proposed under this Bill to confirm and which it is desirable should be done now.

As regards the Emergency Order dealing with sugar, I suggest that the House would like to have from the Minister a little more explanation with regard to that duty. As it is a peculiar method of raising money, arising out of the Minister's explanation, I should like to ask in what respect there was unfair competition. I understood him to say that the duty was put on to protect the beet sugar produced in this country against unfair competition. It is desirable that the Minister should explain the nature of the unfair competition.

Everyone admits that the last Budget was a good one, and that if one wanted to pick holes in it it could not be done. But I hope the people's eyes are opened now, when they realise that it is not one Budget we have in the year, but a series of Budgets. This Emergency Order puts a duty of 4/8 per cwt. on sugar. That really means putting a tax of £500,000 on the people. Because that did not come in under the Budget they do not realise that they are paying it. I am not saying that all the money is going into the Exchequer, but it will all be paid by the people. As the tax is not imposed on Irish manufactured sugar but on foreign sugar, that means that the price of the home article will also be raised, and that the people are paying £500,000 which was not dealt with in the Budget. The sooner it is realised that these Emergency Orders are really a series of Budgets, the better for everyone. Taxation is increasing. This Government are adepts at trying to increase taxation without letting the people know it, and they do so through these Emergency Orders.

I agree with Senator Bagwell that we should have a fuller explanation about the increased duty on sugar, because it is going to affect everyone, particularly the poor people whose interests this Government professes to have in mind. They said so at the Kildare by-election and at two general elections, so that, in justice to the poor, we should have a fuller explanation of the position.

Arising out of the duty on foreign bacon, there is a levy of 5/- a head on bacon pigs exported, the result being that that falls on producers. A quota has been fixed by England but we have failed to fill the quota, and the levy of 5/- a head is imposed in order to stabilise the export price between here and England and to fill the quota. In addition an increased bounty has to be paid by the taxpayers so as to maintain the quota. Producers here have to bear the impost of 5/- a head, and the general taxpayers have to bear an impost of something like 28/- per cwt. to maintain the export quota. The result is that there is a scarcity of bacon in this country. That was brought to my notice lately as a director of the co-operative society in Waterford. There is a scarcity of hard-cured bacon in the West of Ireland, arising from the exclusion of outside bacon, while there is an impost of 28/- a cwt. and a levy of 5/- a head on producers and consumers here. That requires some explanation. The people here have to bear the brunt of the cost because every producer and consumer is affected while, at the same time, cheap bacon is being supplied to people across the water.

I wish to know how this impost on consumers of sugar is going to benefit beet growers. When this Government came into power, I think it was the Minister for Agriculture announced with a great flourish of trumpets that they were going to put a tax on tea, because it was a luxury, and to relieve sugar which was a necessity, especially for the children of the poor. This is another quick change on the part of the Government, a case of robbing Peter to pay Paul. I expect a very strong protest from the Labour people, who are the bosses of the Government, about this impost on the poor.

I am sure the Labour people will be glad to oblige Senator Miss Browne on another occasion.

In connection with this duty on sugar, am I right in saying that the sugar produced in this country was not found sufficient, and that for that reason other sugar was brought in? How was it that if the sugar was imported in February, as I understand from the Minister it was, it was not included or referred to in the Budget which did not come along until May? He must have had notice of that, and must have known at the time that sugar would have to be imported and have to pay the tax. As a result the Minister has got rather a windfall, as I should call it, of £500,000. He has not told us what he is going to do with that money. Is it merely going to swell the surplus at the end of the year, or to be used for other purposes? If so, is the Minister in a position to tell us for what purpose the £500,000 will be used? It is a considerable sum of money. As I do not understand the bacon question I cannot discuss it.

I should like to refer to the matter from another angle, and to ask the Minister to give us specific figures as to what he expects the new retail price of sugar to be after the duty is imposed. I have been looking through certain retail prices for the last two years, and I was agreeably surprised to find that while a good number of articles have not increased in price, sugar, which is essentially consumed by the poor, has substantially increased. Speaking from recollection I think sugar was 2½d. per lb. two years ago, but I remember distinctly that the retail price now, according to an authoritative source, is 4d. per lb. If this duty will lead to a further increase, I think the Minister is placing a very severe and a hidden burden on the poor. I desire to reinforce what Senator Guinness said, that it is most unsatisfactory to have this duty put on at a time like this which, although it is passed on to the consumer as a hidden taxation, is in every sense a burden the same as indirect taxation imposed through the Budget.

I do not think Senator Sir John Keane should be astonished at the price of sugar going up. I think the Minister told us, when we adopted this policy of making our own sugar, and putting on a duty in order to keep other sugar which might compete with it out of the country, that the people would have to spend I think it was considerably over a million—I am speaking from memory— more on their sugar than if we had not established this local industry. I did not expect that this duty would have been imposed on the people until we were ready to produce our own sugar. What happened last February was that we were not prepared to produce our own sugar, but we were quite prepared to see that the citizens paid more for their sugar, and paid the money into the Exchequer. Therefore, this duty of 4/8 per cwt. was put on long before the local factories were able to supply the sugar that the country needed. The consequence of that, I take it, was that the Exchequer made out of the people in a certain time, while we were still importing sugar, something like half-a-million. As Senator Guinness said, that has not been budgeted for, and was not mentioned, as far as I know, in the Budget; but it is there, and is being paid by the people. Why it was put on before we were able to make our own sugar is a question that I should like to hear answered. It was only another method of raising revenue from the people of which no mention was made in the Budget.

If we are going to have Orders of this description made to raise money for the State without having been included in the Budget we can see that the Budget is of very little use to us. That is the important question which we ought to consider in discussing these Orders. There is an enormous number of them. We are only considering four to-day. They were issued between February and May last, and we are only hearing about them now. This is the first time we have had an opportunity of inquiring into them. I should have thought that when Orders like that were made, involving such a sum of money, we would have heard about them very quickly. What is the good of talking about them now when the public have paid the money, and it is in the Exchequer? How long is this to go on? I do not think that we are able yet to produce the amount of sugar required. I suppose this duty is now being paid by the citizens. What is the point of it? It is extracting money out of a lot of poor people. The justification for extracting the money will be clear enough when we get our factories established, and we want to get a market for the produce of the factories, but it is not clear now.

We have not been able to supply the sugar in the past; I do not know whether we are now; but the people have been taxed as if we were. The price of the sugar that the factories produce will be such that a duty of this kind, to prevent the importation of foreign sugar which would bring the price down so that our factories could not pay, will be required in order to keep the price of sugar up. Why should we have it now? I should like the Minister to tell us what the real situation is. We are considering now in August what was done last February. A large sum of money is involved. Why do we only get it now? What is the financial state of affairs? How long will it be before the factories can produce the sugar required, and the money will be applied in support of an established factory, and not be a mere addition to the revenue? These are the things that occur to one.

The Bacon Order, I take it, has something to do with the same kind of thing. The Minister, no doubt, will tell us what that means. The queer thing is that one of these—No. 30—is just one mass of revocations. Perhaps the Minister will tell us about it. It looks as if the people outside would say: "Here are a lot of duties that have been put on and have been running for a certain time, but for one reason or another it was found they were not working. Here is an Order revoking a whole pile of them." I think the Minister ought to give us a little insight into the operation of the system, and tell us how it works; what is the object of it, and why these revocations are necessary. These are things that the public are enquiring about, and the Minister should enlighten us.

As to the question of sugar, I think the Seanad will remember that there was such a thing as the Sugar Beet Bill and that it was agreed upon in the proposals then put forward that the public were to pay ½d. per lb. in order that the farmers who grow beet at 30/- per ton will be paid. The beet was sown last spring. It will be marketed very soon and the farmers will want the money. Probably this is the money out of which the Minister will be paying the farmers. If that is the case, I will not grumble. Anything you can give the farmers they are always very anxious to receive. I remember hearing about this ½d. in connection with the Budget. It is mixed up with the general beet proposals.

Is not the ½d. on already?

I think a great deal of this debate has proceeded on a misapprehension for which possibly I myself am somewhat to blame. I took it that the Seanad would have apprehended the circumstances under which the additional duty of 4/8 was imposed by an Emergency Order. It was in fact a non-effective duty. It was imposed in February when the Sugar Beet Company found itself in this position: that due to concerted dumping from abroad foreign sugar was being offered here at such a price as would have prevented the Sugar Beet Company from clearing its stocks at the normal figure—the figure at which they had been accustomed to clear these stocks in preceding years—and which would have left them with the whole output of last year's campaign on hands. It happened that the amount of sugar which they had in stock would carry us on reasonably until the commencement of this year's campaign. In order to ensure that these stocks would be cleared in the normal way this Emergency Order was made in February and provided for the imposition of a customs duty upon imported sugar and an excise duty on stocks of imported sugar, so that people who had forestalled and taken advantage of these low offers would not be able to take advantage, at a cost to the consumers, of the position which the Emergency Order would create.

Following the making of the order, representations were made which convinced me that it would be unfair to the importers who had already imported sugar and upon whom an excise duty would have been levied in the ordinary way, to charge them the full rate. The effective amount of the duty actually levied on imported stocks coming into consumption here was at the rate of 2/2 per cwt. The difference between the price at which this sugar had been delivered here—the imported foreign manufactured sugar—and the price which the ordinary wholesale distributor would have to pay for the Carlow factory sugar was something like 10/- a cwt. The importer was therefore mulcted to the extent of the difference between 2/2 and 10/-, but owing to the fact that the Carlow sugar was being sold at the old price, the price to the consumer was not increased. I am not in a position to say whether the price to the consumer will not be increased, but if it is increased in the future the Seanad must remember that it is an important element in connection with the whole sugar scheme that we should put on a duty of ½d. or ¾d. on sugar and that in the normal way this would be put on some time in November of this year. Consideration had also to be given to the Parliamentary arrangements which have been made, and which might prevent us from imposing a customs duty in the ordinary way in November.

The position which we are in is this: Some people have had to pay the excise duty. Those are the people who imported foreign manufactured sugar. The net burden imposed upon these people as compared with what would have to be borne by those who bought sugar from the Carlow factory is the difference between 9d. or 10d. and 2/2; it would amount to about 1/4 a cwt. Up to the present there has been practically no increase, due to the fact that the Carlow stocks are being liquidated. So far as the general consumer is concerned, there is no increase in the price of sugar, and so far as the Exchequer is concerned, we have only benefited to the extent of the 2/2 imposed as an excise duty upon the stocks of imported sugar. It is not a very considerable amount. It certainly does not come to £500,000. I doubt if we have got £40,000 or £50,000 out of it. We got it as an incidental circumstance and not as a major budgetary consideration.

The proposal to confirm the Emergency Order is due to the fact that I felt, in view of the statements made in the Dáil and Seanad that an additional customs duty would have to be imposed upon imported sugar when the sugar beet companies came into operation, it would not be the right thing to allow the emergency order to run its course and then reimpose this duty, as we would have to, by emergency order. I preferred to allow the Dáil and Seanad to discuss it. We are merely anticipating by a month or six weeks, due to the exigencies of Parliamentary time, a customs duty which we would have to impose in the ordinary way under our original proposals for the establishment of a sugar beet industry. The factories are under construction now and they will have to come into production in due course. It is my desire to keep to the lower of the two figures mentioned when the sugar beet proposition was before the Oireachtas.

With regard to the point raised about the excise duty imposed on bacon, I think the two considerations are, first of all, what was the effect of this imposition of an excise duty on the price to our consumers and, secondly, upon the price to our producers. I am told that there has been no increase in the price of bacon since the excise duty went on, and that there has been no decrease in the price paid to producers of pigs. So far as the mass of the population is concerned, the order has made no change. It has made important changes in regard to the bacon manufacturers. The position in which the Minister for Agriculture and certain bacon manufacturers found themselves was this, that there were some manufacturers unwilling to bear their fair share in filling the quota. It was impossible to get agreement between them, and this emergency duty was intended to make it less profitable for the bacon manufacturers to sell their bacon at home than it had been before the duty went on. We have heard a great deal about the British market. This imposition has been put on the bacon manufacturers in order to compel them to do their duty to the community, and to the farmers, and to fill the quotas allotted to us. It has had no other reaction. The price of bacon to the consumer has not gone up, and the price to the producer of pigs has not gone down.

Question—"That the Imposition of Duties (Confirmation of Orders) Bill, 1934, be now read a Second Time"— put and agreed to.

I beg to move:—

That notwithstanding anything to the contrary contained in Standing Orders 79 (1) and 85, the Committee Stage and Report Stage of the Imposition of Duties (Confirmation of Orders) Bill, 1934 be taken to-day.

I beg to second.

Before we decide that proposal, we ought to consider is it really a wise thing. We have had a lot of information from the Minister. He gave us very full information and everything is right, but to say that none of us ever wanted to say anything more after listening to the Minister is going a little bit too far. Perhaps the Senator has some real justification for taking this to-day instead of to-morrow. I do not know why we should break up our ordinary Standing Orders. If the Minister says he wants this Bill to-day, and gives us some positive reason, good and well; but to say that we should pass this as a matter of form after listening to the Minister, and without having time to think it over, seems to be rather straining the thing. We should have a more definite statement, before we pass this, as to why we should do this to-day.


The Minister informs me that taking the Committee Stage to-morrow will suit him quite well. I hope then that we will also take the remaining Stages of the Bill.

Motion, by leave, withdrawn.