Seanad Éireann debate -
Wednesday, 17 Jul 1935

Vol. 20 No. 7

Public Business. - Imposition of Duties (Confirmation of Orders) Bill, 1935—(Certified Money Bill)—Second Stage.

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

Minister for Finance (Mr. MacEntee)

This Bill proposes to confirm four Orders which were made under the Emergency Imposition of Duties Act, 1932. The House is aware that Orders made under this Act cease to have statutory effect on the expiration of eight months from the date of their making unless, in the meantime, they have been confirmed by an Act of the Oireachtas. The four Orders which this Bill proposes to confirm are Orders Nos. 58, 60, 64 and 66. Order No. 58 imposes an Excise duty of 10/- in respect of every pig carcase, or part of a pig carcase, used for conversion into bacon for sale. It was made on the 30th November last, and this Order would lapse on the 29th July next unless previously confirmed by legislation. In my Budget statement I indicated that when the Bacon Marketing Board is set up and is fully functioning, I shall take steps to reduce, and, ultimately, to remit the duty on pig carcases in the current financial year. It is not anticipated, however, that any remission of this sort will be possible before the 29th July next, and, accordingly, it is necessary to confirm the Order under the present Bill.

Order No. 60 was made on the 4th January, 1935, and imposed a Customs duty of 33 1/3 per cent. ad valorem on inks of every kind. When this Order was first made there was an existing Customs duty of 37½ per cent. with a 25 per cent. preferential rate, but despite this duty, which was intended to be of a protective nature, the imports of writing inks had shown at the date of the Order little or no reduction. As the bulk of the imported writing ink came from Great Britain, it was felt that the degree of protection should be increased, by replacing the ad valorem duty of 37½ per cent. with a preferential rate of 25 per cent., by a Customs duty at a flat rate of 33? per cent. In view of the establishment of a factory at Palmerstown, County Dublin, for the manufacture of printers' inks of all descriptions, definite evidence was received of efforts by certain printing ink suppliers to send abnormal quantities of printing inks into the Saorstát, and in the interests of the new industry it was decided to cover inks of all kinds and an Order was made accordingly. There is a licensing clause contained in the Order under which it is intended to permit of the importation, free of duty, of such portion of the normal requirements of printing inks as the home industry is not in a position to supply.

Order No. 64 was made by the Executive Council on the 15th February, 1935. It imposes a Customs duty of 25 per cent. ad valorem on cutlery of various descriptions. This duty was imposed for the purpose of checking the forestalling which it was felt would take place in anticipation of the imposition of a high tariff to protect the newly-established factory at Newbridge. By a Financial Resolution in the Budget series, an additional duty has been imposed upon cutlery at the rate of 75 per cent. ad valorem with a preferential rate of 50 per cent. The present position is that, pending production by the new factory, normal imports will be admitted under licence free of the 75 per cent. duty, but for revenue purposes they will continue to be subject to the 25 per cent. duty imposed by the Emergency Order. When the new factory is in a position to meet the demands in full, it is proposed to remove the 25 per cent. duty, and imports will then be subject to the higher rate mentioned as licences for free importation will not be granted. Meanwhile, it may be necessary to maintain the present position until after the 14th October, by which date the Order must either be confirmed or lapse. It is proposed to confirm the Order under the present Bill.

Order No. 66 was made by the Executive Council on the 12th February, 1935. It imposes an Excise duty of 7½ per cent. on the retail price of tyres for motor cars and steam cars. This Excise duty was imposed to offset, in part, the anticipated loss in Customs duty attending the operation of the Control of Imports Order on these commodities made in view of the imminent production of up to 80 per cent. of the Saorstát's requirements at the factory of the Dunlop Rubber Company, Ltd., Cork. The existing Customs duty on rubber tyres and tubes is 33? per cent. ad valorem, and, accordingly, it will be seen that the new emergency duty to replace the revenue formerly derived from the Customs duty on foreign manufactured tyres will only partially compensate us for the loss thereby sustained. I may say, with regard to this Order, that up-to-date the yield from it has been infinitesimal as the manufacture of tyres has not yet, I understand, passed the experimental stage. As I have already indicated, the earliest of these four Orders must be confirmed by the 29th July and, accordingly, the Bill must be law before that date.

Mr. Baxter

With regard to the Order dealing with the imposition of a tax of 10/- each on pig carcases, the Minister has told us that from the point of view of collecting that tax this Bill is not necessary until the 29th July. In addition, he said, that when the Pigs and Bacon Marketing Board commences its operations he intends to reduce this tax of 10/- very considerably. In view of these two statements I would urge on him to drop that part of the Bill altogether. The amount of money that he is going to collect in the period between the end of July and the commencement of operations by the Pigs and Bacon Marketing Board will be very small indeed. The Minister has not given us any indication as to the amount by which he proposes to reduce this tax of 10/- per carcase. Doubtless, the Minister is aware of the fact that at the present time the pig trade is going through a very difficult period.

A sum of 10/- per carcase represents approximately 6/- in the cwt. of pork, and 6/- of the farmers' profits are very welcome to him to-day. Those who live close to the Border know that if pork is 61/- or 62/- per cwt. and pigs 46/- to 48/- they will appreciate the fact that 6/- would do something towards improving pig production and bringing the figure here closer to what our neighbours across the Border get. In other districts I believe there is a condition of chaos with regard to pig prices, particularly in the southern counties, within the last four or five days. At the best of times there was very little profit in pig production, and because of that farmers got out of it quickly. Perhaps they lost money by getting out of it, because when production was considerably reduced, they rushed back to it again and worked on uneconomic prices. The difficulties they are experiencing with regard to the cost of production are such that they are making no money. I believe they are barely covering cost of production. Under the best of conditions and with best prices they were not even covering the cost of production, but they are in the industry because there is very little in other branches of farming. There is no need to stress for members interested in farming what 10/- a carcase means to a man at the market. When such a sum is being collected from pig producers by the Minister for Finance, that is something, in my view, that it is difficult to justify. If it is the Minister's intention, as he states, to reduce the 10/- very considerably when the Bacon Marketing Board starts operations, I urge that in the interregnum the tax should be dropped altogether, or reduced to the figure which the Minister intends to be collected when the Board starts to operate. In my view, the tax is an unjust one. It is a tax on production which should not be imposed, and I believe that the farmers who are paying it are those who are most needy. The tax is discouraging a type of production that should be encouraged, and the amount of revenue which the Minister is going to collect from it is so small, that it will not compensate for the discouragement and loss incurred by pig producers. If it is the Minister's intention to reduce the amount of the tax later he should have done so in this Bill, or dropped the tax altogether.

Miss Browne

As I come from a pig producing area, I wish to support Senator Baxter. The price of pigs to-day in southern areas is 33/- per cwt. live weight. That is an absolutely uneconomic price. Last week young pigs were practically unsaleable at fairs, so that there is great force in what Senator Baxter said. People are very disturbed about the Pigs and Bacon Bill which, of course, is a Merchants Bill, the effects of which are going to fall heavily on producers.

Mr. Johnson

I should like if the Minister gave a little more information about the cutlery duty. I take it from the Minister's statement that the term "cutlery" applies to cutting materials, knives, scissors, swords and bayonets, and I am wondering whether it is expected that the factory which is to be started, or such existing factories as there may be, are going to produce and to supply the market with the whole range of cutlery goods in demand at present; and whether the Minister is making any arrangements whereby the quality will be assured. The same remarks apply in regard to the quality of inks. There is a good deal of complaint about many things that are being produced under these protective tariffs, that the quality, irrespective of price, is not as good as it ought to be, and that some means should be adopted whereby manufacturers should be checked in some way if not producing the quality that competition would ensure. The fact there are only one or two firms in any particular industry which is protected gives an inducement to those businesses to be a little careless about quality, and it seems to me if the Minister can speak for the Department of Industry and Commerce, that we should have some information as to what kind of check, or what kind of stimulus is being applied, to ensure, when tariffs to protect industry are in operation, that the quality is not going to be allowed to remain at a low level, but rather will be improved steadily from the beginning of these industries' activities.

Mr. MacEntee

With regard to the Emergency Order confirming the increased duty on pig carcases, and the point raised by Senator Baxter, I am not in a position to agree to the withdrawal of this duty altogether. I do not know whether the Senator recollects the circumstances in which it was first imposed. The need for it arose from the fact that the prices for Irish bacon in the British market were so unfavourable, as compared with home prices, that there was great difficulty in getting bacon manufacturers here to fill the British quota and some steps had to be taken which would reduce the possibilities of the home market, and give increased attraction to the British market. There was no machinery for regulating exports and supplies, and pending the institution of such machinery, and the necessary organisation for it, this method was devised, that an Excise duty should be levied, more or less on the lines of the butter legislation, on all pig carcases converted into bacon for sale, and that out of the proceeds of the levy, with a further subvention from the Exchequer, a bounty should be paid on bacon exports. That is the basis of the present Order. In the course of time it was found, notwithstanding the Excise duty originally imposed, and the bounty originally granted, that the home market still remained the more attractive one, from the manufacturers' point of view, and the bounty was increased with a corresponding increase in the Excise duty. Provision has been made in the present year's Estimates for payment of the bounty at the increased rates, pending such time as the whole position will fall for reconsideration when the Bacon Marketing Board is set up. Provision has been made in the Estimates for paying the bounty at the enhanced rates and, as an offset against that, when expenditure was being considered, we took into account and took credit for the increased revenue which we should receive from the Excise duty on pig carcases.

Following representations made by the Minister for Agriculture, I have agreed, as I stated in my Budget statement, to forego in due course a considerable part of the Revenue from the Excise duty at a cost to the Exchequer of £240,000, and I had to find compensation for that in the form of other taxation. It would not be possible at this stage to recast the whole Budget and to face the loss which dropping the Emergency Order would impose. We would have to make it up in some other way. We should be robbing Peter to pay Paul. I am strongly impressing on the Seanad that as soon as the Board is set up I have undertaken immediately to consider the position, as well as forego in the present financial year something like £240,000 which we expected to derive from the Excise duty on bacon. If the Senator would like to pursue the matter further, possibly he could do it on the Committee Stage, when the Minister for Agriculture, who originally moved in it, will be here, and possibly will be able to deal with it in greater detail.

That applies also to the duty on cutlery. All the considerations applied not merely to that duty, but to other protective duties which were imposed for the purpose of fostering home manufactures. I quite readily concede that the considerations which Senator Johnson has mentioned are important and if necessary they may be fully debated here. Again, that may be more properly done on the Committee Stage, when I anticipate the Minister for Industry and Commerce will be here to deal with matters of that kind.

Question put and agreed to.

Committee Stage ordered for Wednesday, July 24th.