Public Business. - Finance Bill, 1935 (Certified Money Bill)—Second Stage. – Seanad Éireann (1934 Seanad) – Wednesday, 17 Jul 1935

Public Business. - Finance Bill, 1935 (Certified Money Bill)—Second Stage.

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

Minister for Finance (Mr. MacEntee)

I presume the House has already studied in detail the financial statement which was presented to the Dáil and the explanatory table which has been circulated. I do not suppose it is necessary for me to go into very great detail as to the Budgetary position, but there are one or two important facts to which I ought to draw the particular attention of the Seanad. The net expenditure on Supply and Central Fund Services, after making allowances for reductions consequent upon savings in the Estimates, and borrowing for capital purposes, is £30,326,000 for the current financial year, as compared with £29,419,250 for the last financial year. Reference to the explanatory tables will show that, whereas for the financial year 1934-5, we deducted for over-estimation the sum of £1,190,000, for the current year we are making allowance under the same head of only £950,000. That is to say, last year we felt justified in allowing approximately 4 per cent. for overestimation, while this year we feel that that allowance might be fittingly reduced to a trifle over 3 per cent., fixing the sum at £950,000. After making this allowance, we find that the net expenditure to be defrayed out of revenue for the current year is £29,376,000 as compared with £28,229,250 for last year, an increase in the estimated net expenditure for 1935 over that of 1934 of £1,146,750. The House will be interested to know how this increase arises. It is accounted for, in the first place, by the more conservative basis which we have taken for overestimation. The reduced allowance which we have made under that head alone accounts for £240,000. The balance is accounted for almost exactly by the increased provision which we are making out of revenue for, in the first place, export bounties and subsidies, which a glance at the two Budget tables — the table for 1934 and the table for 1935 — will show is £600,000. I should like to make this quite clear—that this year, out of revenue, we are providing for export bounties and subsidies £600,000 more than we proposed to provide last year. Last year, as the House will remember, the provision made out of revenue for this service was £750,000. This year it is £1,350,000. The second large item is the increased provision which is being made for the Department of Local Government and Public Health. That amounts to £253,000, and virtually all of that — £236,000 — is accounted for by the increased provision we are making for housing grants and subsidies. The third big item is the increased provision which is being made for the work of the Land Commission. That amounts to £132,000, of which, approximately, £88,000 will be expended in the improvement of estates. About £17,000 is due to the increased staff which has been found necessary in the Land Commission to carry through the accelerated programme of land division which the Government has undertaken. These three services account in the gross for about £985,000, and if we deduct from that about £32,000, which is proportional to the general overriding allowance I have made for overestimation in the Budget, we find that the net increased provision for these services in the current year over that of last year is £953,000. When we add that to the decrease — £240,000 — in the allowance we have made for over-estimation, we get a total sum of £1,193,000, which represents a slight increase in the estimated net expenditure for 1935 as compared with that for 1934. The difference of £53,000 is made up by corresponding reductions on some of the other Estimates. There are counterbalancing increases in other Estimates as well. The four figures which I have given represent the basis of the present year's Budget. It will be seen, therefore, that the increased provision which is called for this year is due, in the first place, to the more conservative attitude we have taken up with regard to over-estimation; secondly, to the fact that we are making a much greater provision out of revenue this year, as compared with last year, for export bounties and subsidies; thirdly, to the considerable increase in the Vote for the Department of Local Government and Public Health, due mainly to the increased provision we are making for the Government's housing programme, and, fourthly, to the considerably increased provision made for the work of the Land Commission in order to carry out the Government's policy of accelerated land division.

On the revenue side, the actual revenue for 1934-5 was £28,770,000. The revenue estimated for the current year, on the basis of the existing taxes at 31st March last, was £28,441,000. That was the estimate formed by the Revenue Commissioners. This figure has, however, to be reduced by £240,000, due to my undertaking to forego this year about that amount of revenue from the bacon excise duty. That leaves us with a net figure for this year's estimate of revenue of £28,201,000, representing a decrease, as compared with the actual revenue of last year, of about £569,000. As in the case of the expenditure side of the account, the steps which we are taking to make good this decrease in revenue are quite apparent. As I have already explained to the Dáil, we propose to make good our loss in respect of the bacon excise duty by the imposition of a customs duty of 6d. per cwt. on wheat, which will amount to £190,000. By a further extension of the duty on mineral hydro-carbon light oils to all other classes of mineral hydro-carbon light oils used in the propulsion of motor vehicles, we hope to secure £60,000. The total sum which we hope to secure from these two taxes is, therefore, £250,000, as compared with the £240,000 which we shall lose in respect of the bacon excise duty. There still remains, approximately, £320,000 of revenue to be made up in order to put us in the same position, from a revenue point of view, as we were in last year. The declining yield of certain duties is not a new or novel factor in our financial history. Since 1923, the yield of two important duties — the beer duty and the spirit duty — has declined year after year in rather startling fashion. In addition to the difficulties which would arise in that connection, we are faced this year with the fact that the Government policy of high protection is beginning to bear fruit. Various import duties which formerly were a considerable source of revenue to the Exchequer have begun to be much less effective from a revenue point of view owing to the replacement of the articles which were formerly imported by home manufacturers. I might instance the duty on boots and shoes, the duty on furniture, the duty on wearing apparel, the duty on glass bottles and, more important still, the customs duty on sugar. In order to put ourselves in the same position as last year, while making additional provision for certain of the services to which I have already referred, it was necessary to increase by 4d. per lb. the tea duty, so as to bring us in approximately £320,000. That still leaves a balance of approximately £624,000 to be provided. That has been provided by the duties of which you are already aware—an increase of ¼d. per lb. in the duty on sugar: an increase of 8d. per lb. in the duty on tobacco, an increase in entertainments duty on cinema seats, a series of miscellaneous customs duties and various changes in the law in regard to the annual tax revenue derived from house property. From the figures I have given, it is quite clear that, if it had not been for the increased provision which we are making this year out of revenue for export bounties and subsidies, the increased provision for the Government's housing programme and the Government's programme for the accelerated division of land, and the more conservative allowance which we felt bound to make this year in respect of overestimation, even with the provision for widows' and orphans' pensions, we should be able to get through this year without imposing any very heavy additional burdens on the people. However, as I say, we feel that so long as these export bounties and subsidies continue, the more necessary it is for us to meet a large part of them out of revenue. Accordingly, that provision has been made, and we feel that these facts are justification for the Finance Bill which is now before the Seanad.

With regard to the Bill itself, in view of the fact that the individual clauses of the Bill will be explained in detail during the course of later stages, it is scarcely necessary to refer to them at this stage except in a general way. Part I of the Bill consists of nine sections, relating mainly to income tax. Clause I is the usual clause specifying the rate of income tax and surtax for the year ending 5th April, 1936, and makes provision for the continuance in operation of the various enactments relating to this form of taxation. Clause 2 refers to the tax, under Schedule A, on houses in the first year of occupation, and is designed to bring such houses under assessment. Clause 3 relates to the increase in certain valuations for purposes of Schedule A — a clause about which there has been a great deal of discussion in the Dáil. Briefly, its purpose is that, as, in general, the valuation of most house property in the Saorstát does not represent by any means the real income which is derived from the ownership of such property, we propose, in order to enable a more equitable assessment of the tax to be made and in order to do justice to the general body of the taxpayers, to increase the valuation, for income tax assessment purposes, by 25 per cent. Sub-section (7) of Section 3 is a safeguard to the taxpayer which enables the Revenue Commissioners to ante-date, for the purpose of Schedule A, a reduction in the poor law valuation, where they are satisfied that such a reduction would give a more accurate measure of the real annual values, for a year prior to that in which the reduced valuation came into operation. For instance, if, following the enactment of this Bill, a taxpayer is not satisfied with his assessment and goes to the Commissioner of Valuation and asks him to revalue the building, and if it is found that the new valuation would give a more accurate measure of the income which would be derived from the building than the old valuation plus 25 per cent., then the Revenue Commissioners can ante-date the valuation for the purpose of making the assessment.

Clause 4 provides that income, derived from the operation of sand, gravel, or clay quarries or pits, will be liable to income tax in the same manner as income from other types of quarries is at present liable; for example, stone and slate quarries. Clause 5 arises from the passage of the Irish Nationality and Citizenship Act, and the Aliens Act. It, in fact, makes no material change in the law and is merely designed to bring the phraseology of this Bill into line with existing legislation. Clause 6 provides for a better assessment of builders' profits. Briefly, the position there is to ensure that, in the case of a speculative builder, the capitalised value of the ground rents which he derives from the development of building land will be taken into consideration in assessing his income for the purposes of tax. Clause 7 is designed to bring Section 7 of the Finance Act of 1932, which provided for relief in the matter of income tax in certain circumstances where money was invested in Saorstát companies, into conformity with the principles embodied in the Control of Manufactures Act. Clause 8, like Clause 5, arises from the passage of the Irish Nationality and Citizenship Act and the Aliens Act. Again, it makes practically no change in the existing law in that regard. Clause 9 provides that certain of the Revenue Commissioners' officers may grant the usual statutory allowances, deductions and reliefs in computing income tax liability. The necessity arises from a deficiency in the existing legislation which does not allow officers to grant reliefs after assessments have been made by the Commissioners, even though it is clear that a taxpayer would be entitled, in equity, to such relief.

Part II of the Bill consists of 20 sections dealing with Customs and Excise duties. Clauses 10 and 11 provide for the imposition of the duties set out in the First and Second Schedules of the Bill. Clauses 12 and 13 refer to the alteration of the duties on sugar and articles made from or containing sugar. Clauses 14 and 15 provide for revised rates of duty on fruit; and the next seven sections — Nos. 16, 17, 18, 19, 20, 21 and 22 — refer to the revised rates of duties on cutlery, clocks, tea, wheat, tobacco, hydro-carbon oils, and boots and shoes. Clause 23 deals with the exemption from duty of wireless telegraphy apparatus for the blind. Following certain representations, which were made by a philanthropic society, that wireless sets for the blind should be free of Customs duty, and clause 23 was designed to-provide that such exemptions could be granted subject to certain conditions which the Commissioners may impose. Clause 24 provides for the increase of the entertainments duty in respect of cinematographic exhibitions. Clause 25 provides for an amendment of the exemption from entertainments duties. It provides for an alteration in the conditions under which relief, which was granted under Section 19 of the Finance Act in the case of greyhound racing tracks, may be granted as it was found that certain tracks that came within the scope of the Bill had incurred considerable expenditure. Due rather to the manner in which the section was drafted, they were, I think, rather inequitably, excluded from the exemption which was granted to other tracks. With regard to Clauses 26 and 27: Clause 26 refers to the termination of certain duties of Customs, most of which have been replaced by other duties; and Clause 27 provides for the amendment of certain other Finance Acts mainly relating to Customs duties, and both clauses are consequent upon the general changes in the Customs law which it is proposed to make. Clause 28 gives a statutory authority for the present practice of charging duty on the value of alterations or repairs on the reimportation of dutiable articles sent abroad in order to undergo such operations. Clause 29 increases the general penalty for a false declaration in relation to Excise duty. It is designed to bring the law in regard to the Excise duty into line with the law which has been in force since 1915 in relation to Customs duty.

Part III of the Bill relates to death duties, and Clause 30 provides for the assessment of personal representatives of persons liable to death duty. Clause 31 will give the Revenue Commissioners power to make estimated assessments of death duties in cases where the persons liable to deliver an account of property for the purpose of the assessment of duty fail to do so. I may say that a similar power already exists in the case of income tax and that, as ample opportunities of appeal are provided for by the Clause, the taxpayer will be fully safeguarded against any injustice that may arise in the making of an assessment. Clause 32 relates to the assessment of death duty in the case of certain property previously subject to an annuity or other periodical payment; and Clause 33 is designed to stop a serious leakage in the death duty revenue which arises from the fact that people have a habit of placing money in joint names, payable to one of them on the death of the other. This clause provides that where this is done — that is to say, where money is placed on deposit in joint names and one of the parties dies — the banker may not transfer the deposit to the survivor or survivors until he is furnished with a certificate from the Revenue Commissioners that there is no outstanding claim on the deposit. Section 34 of the Bill, which consists of one clause, relates entirely to Corporation Profits Tax, and it provides for the continuance for a further period of three years of the temporary exemption hitherto granted to certain public utility concerns as, for instance, railways, building societies and the Agricultural Credit Corporation. I may say that not all public utility companies are entitled to this exemption.

In Part V of the Bill a number of miscellaneous and general provisions are contained. Section 35 extends the definition in Section 42 of the Finance Act of 1920, so that members of Saorstát Stock Exchanges carrying on business as dealers will be able to avail of the flat rate of transfer fee applicable to the stocks held by them in the ordinary course of business.

Section 36 raises from £3 to £4 the exemption limit in respect of stamp duty on wages receipts. Section 37 extends to import licences the provisions of Section 10 of the Finance Act of 1901, as amended. This section provides, among other things, that where Customs or Excise duties are imposed on any commodity and if a contract had been entered into involving the supply or use of that commodity, the contractor is entitled to recover in addition to the duty the amount of the contract or licence fee involved.

The two remaining sections, 38 and 39, are the usual ones relating to the care and management of the duties, the Short Title, etc.

Mr. MacLoughlin

I want to congratulate the Minister on the subdued tone of his speech. It no doubt reflects the almost pitiable lack of enthusiasm on the part of our friends on the opposite side and their faithful allies of the Labour Party.

The Budget, which is embodied in this Bill, struck eminent members of the Government Party in the other House dumb for a spell. It seems to have affected some of the most active members of this House with paralysis. I am not surprised. It is really the first Fianna Fáil Budget we have had the doubtful privilege of considering. In other years the present Government depended on the momentum provided by their predecessors. They were able to carry on without shocking their trustful admirers. This is their first "Sinn Fein" Budget and what a revelation in mal-government it provides !

To appreciate fully this effort at Fianna Fáil finance, it is necessary to cast a glance backwards. I do not ask our new Senators to use their race glasses. Let them just look back a couple of years when one of the virgin Budgets of the present Minister for Finance included this purple passage about a proposed tax:—

"It is a change, which, it is hoped like the grain of mustard seed will grow into a mighty tree beneath whose foliage luckier Ministers of Finance than I will sit at ease to catch the glittering prizes as they fall."

When in the course of my mining excavations I came across that sublime passage my only regret was that the Minister had not rendered his Budget in verse. If he had, he might now be occupying a gilded throne in the East — for there is an Omar Khayyam flavour about the passage which revives even in me memories of days when poetry was more important than politics. The Minister in that inspired passage almost rivalled old Omar.

"Here with a loaf of bread beneath the bough,

A flask of wine — a book of verse and thou

Beside me singing in the wilderness,

And wilderness is paradise enow."

The Rubaiyat almost suffers by comparison with the picture of the Minister sitting peacefully beneath the bough and catching "the glittering prizes as they fall." That was the happy picture of peace and contentment which the Minister painted for us a couple of years ago. Do we find him to-day reclining "beneath the bough" in a state of idyllic case and content? No. The mustard of the Minister's tree has turned to vinegar. He no longer sits at ease beneath its foliage to catch the glittering prizes, but comes forth in the guise of marauder. Omar's loaf is to be levied to meet the gas bill. His flask of wine will no longer intoxicate, because it will be unprocurable, and even the "book of verse" will pay toll. The Minister's Rubaiyat of a couple of years ago was merely a prelude to a story of loss, extravagance and waste unparalleled in modern history.

I do not want to weary the Seanad with figures. I know that many Senators on the opposite benches now prefer poetry. But let me, even at the risk of displeasing the poetasters and idealists, tell the story of the Fianna Fáil Government in £ s. d. In 1931-32 expenditure on public services amounted to £26,139,653. In the following year it jumped by £2,000,000 by way of signalising the advent of a Government pledged up to the ears to economy. In 1933-34 expenditure amounted to £31,551,598, and last year to £31,203.499. So that, for the privilege of being "Omar Khayyamed" in the Budget, we are paying £5,000,000 per year more than we paid under the unpoetic but economic administration of Mr. Cosgrave.

I will be reminded, of course, of all the social services with which we have been dowered by this Government; let them tot up their social services and see if the cost of the additional services to the Exchequer amounts to £5,000,000 a year. I will be told that there is tremendous industrial development. Let those who say so turn to the recent return on production which shows, that despite all the tariffs and all the regulations, the increased employment in 24 representative industries was 6,497, and the increased wages bill, £25,000 (out of a total of £4,000,000) as compared with 1931. With the increased taxation — I speak only of direct taxation and I do not include the recent oblique method of taxation — we could afford to give every additional man employed in these industries a present of practically £1,000 a year.

Concurrently with the spectacular increase in taxation, there has been virtually a collapse in our external trade. From 1931 to 1934 our total external trade has shrunk from £103,000,000 to £57,000,000, and our adverse trade balance, to which the Minister in his critical years attached so much importance, has soared from £13,000,000 to £20,000,000. We have been squandering money as if not only County Wicklow but the entire 26 Counties were carpeted with gold and, at the same time, we have been earning less and less. This Budget is a portent.

The Minister told us on one occasion here that "members of the Government had during the past 10 years one privilege — they moved among and associated with the common people." The Government's association with the "common people" has been of inestimable value to them. It has enabled them in the present Budget to search even the vest pockets of the "common people."

This is essentially a Poor Man's Budget, because it is the poor man who pays. That may be because there are no rich left. The Government have reduced those who were comparatively rich to a state bordering on poverty, and they now find it necessary to make poverty poorer. The people who, by reason of our boasted social services, are receiving free beef or unemployment assistance, are to repay the Government 4d. per lb. on their tea; ¼d. a lb. on their sugar; 6d. a cwt. on the raw material of their loaf; 8d. a lb. on their tobacco; and 50 per cent. more for whatever cinema entertainments they are able to provide themselves with on special occasions.

These are not the only taxes that press on the poor. We have in the Schedule to the Bill the coal tax and a whole series of other taxes which so far as I was able to discover were not explained to the Dáil.

Perhaps the Minister would deign to tell us in this House how much the Revenue taxes in the Schedules which were not specifically set out in the Budget are expected to yield. We are entitled at least to know the worst. There are, of course, other duties for the not so poor. To encourage people to own their own houses, valuations are increased for tax purposes to a new Fianna Fáil mathematical symbol — five-fourths.

There is a provision likewise to prevent banks paying to survivors — without Government authority — in the case of a joint deposit. I wonder if the Minister has thought of the reactions of that provision. He must be aware of how easy it is to have money transferred out of the country. A gentleman closely associated with him politically was so patriotic as to keep his account in an English bank up to recently. Does the Minister not think that if Fianna Fáil leaders choose to make English bankers their treasurers, the people with deposit receipts who are less patriotic may be tempted to do the same?

The Budget embodied in this Bill is the culmination of a three years debauch. One cannot indulge in a burst of dissipation without paying the penalty. This Bill represents part of the penalty for three years of political dissipation by men who are only now being sobered. The regretful thing is that it might have been a good Budget. Trade in England has improved. Improvement in British trade has always been reflected in this country. We have large investments in Britain. Our people have been receiving increased dividends on these investments but so great has been the diminution in home produced wealth that an effective income tax rate of 4/9 brings us in now only the amount that an effective 3/6 rate brought in during the administration of the Minister's predecessors.

The previous Government saved this country from the worst effects of the economic storm which swept not alone Great Britain but most of the countries of the world a few years ago. Favourably circumstanced as a result of that, this Government set out to create a storm of its own and it has succeeded in demoralising and impoverishing the people.

In practically every line this Bill is an illuminating negation of everything to which Fianna Fáil proclaimed devotion a few years ago. It increases the taxation which Fianna Fáil proposed to reduce by £2,000,000; it places a levy on sugar which an eminent political authority declared in 1931 to be an "absolute necessary of life, a tax on which falls heavily on the very poor." I do not know whether the author of this saccharine sentiment has changed his view since he partook of the sweets of office.

But here we have a tax imposed "which falls heavily on the very poor" and by way of supplement we have taxes on tea and rice and fruit and a score of other articles. Would not the poor be better off if they forfeited the social services of which we hear so much and were freed from these exactions in their tea and sugar, bread and butter, and every other item which they consume?

I do not like to conclude without offering a word of advice to the Minister for Finance. That advice will be more acceptable if I quote it, which I do.

"By comparison with Great Britain and Northern Ireland we are overtaxed beyond the limit of our capacity to pay. In such a situation what is the policy which the Minister has set before the House? Not to lighten the burden of taxation—not to give the country a chance to recuperate — but to continue to oppress it by maintaining taxation at a level which every factor of economic significance unites in proclaiming that the country is unable to bear. Expenditure must be cut down. Economies must be secured. There should be economies in the Army and the Civic Guards. There should be economies in the trimmings and trappings of the State and of the Executive. These must be further and ruthlessly cut. Let there be no skimming of the surface, taking only the scum of the waste, the mere saving of £172,000 where at least £1,000,000 is required, but a paring of waste and extravagance remorselessly to the very bones."

I offer this six year old advice to the Minister with the assurance that its authority is unimpeachable. At the time this advice was given we were spending £25,000,000. To-day we are spending £31,000,000, so that the advice is rendered more necessary to the extent of £6,000,000. The cost of the Army and Civic Guards has increased since, but nevertheless I am convinced that circumstances will shortly compel the Minister for Finance to adopt his own counsel and "pare expenditure to the very bones."

This is a bad Budget. It is the outcome of prodigality and waste. But there will be worse to come if the brake is not soon applied to the Fianna Fáil chariot.

Mr. Jameson

I should like to say a few words about the Budget and the Finance Bill. I suppose, Sir, we are allowed in this debate to discuss the Budget and that I will not be ruled out of order if I refer to the Minister's Budget speech in the Dáil and take it as my text. Is that right?

Leas-Chathaoirleach

It just depends to what part of the speech you refer.

Mr. Douglas

I hope you are not suggesting that the Minister went outside the subject in his speech.

Leas-Chathaoirleach

I will not answer a hypothetical question.

Mr. Milroy

On this point, is it not quite in order to discuss the Budget statement?

Leas-Chathaoirleach

This Finance Bill has been presented by the Minister, it has been spoken to by Senator MacLoughlin, and now we are going to have a speech by a very experienced Senator, Senator Jameson. He wants me to make a ruling before I hear anything he has to say.

Mr. Milroy

I think we ought to be clear that it is quite relevant on this matter to discuss the Budget. How could it be out of order to make any reference whatever to the Budget speech?

Leas-Chathaoirleach

I will not rule anything out of order until I hear it.

Mr. MacEllin

The Finance Bill, 1935, is before the House, and anything outside what is in this Bill is absolutely out of order.

Mr. Jameson

That exactly raises the whole question, and that is why I asked the Leas-Chathaoirleach are we to stick in everything we say to what is in this Finance Bill.

Leas-Chathaoirleach

It has been the practice up to the present in discussing any measure before the House for the speaker to confine himself to the sections of the Bill and to any observations that are relevant to those sections or to the general principle of the Bill.

Senator MacLoughlin spoke of our not keeping up the average of our balance of trade and how we were going down, but yet we find our own Government handicapping our manufacturers. Let us see how at the present moment anybody in the business that I am in is handicapped if he carries on his business in this country. Our North of Ireland and English competitors are free in the market when buying corn and everything of that kind. Their average payments must be infinitely lower than ours. They have no corporation profits tax. They are, in many ways, free of all the implications of all those taxes on everything we import. The duties on everything bear very heavily on business in this country and extraordinary difficulties have to be overcome in connection with everything that is imported. Therefore, we are carrying on business greatly handicapped by those things as against our competitors. I am merely pointing those things out to show the Minister what some of his regulations are doing for the manufacturers of this country. We all want people to come and manufacture here. We do not want to drive them out, but the existing state of affairs here will drive out all manufacturers who can afford to quit the country. If they can carry on their business elsewhere, where the conditions which we have here do not apply, they will go and it is a serious thing. Seriously it ought to be considered by the Minister whether they are not handicapping their own industrialists here far too much.

The next duty one comes to in the Budget speech is the sugar duty. This country has taken up the business of growing beet and making sugar. It was recognised by the late Government that it was going to cost the people who bought the sugar something over £1,000,000 a year. It is going to cost the people who buy sugar far more than £1,000,000. I think it will cost them about £1,500,000, and that tax, except the Excise part of it, is not included in the Budget at all. It means that, if this sugar arrangement had not been made, the people would have been saved the payment of this £1,000,000 or £1,500,000. But the people will have to pay that on top of all the other taxes they are paying for tea and other things. The Minister, at the close of his Budget speech, recognised the truth of a great deal of what I have said. In the course of his speech he said that this sugar experiment is one which will have to be watched. He urged that the people who grow beet and those who manufacture sugar, and everyone concerned, should do their utmost to bring down the cost of sugar to the people, and said:

"If this be not done, continued heavier taxation of other commodities will be unavoidable and the future of the beet sugar manufacturing industry will, to that extent, be uncertain and insecure."

That is how the Minister for Finance sees the position. This is a matter of very serious consideration for the country. The question is whether the country can afford it. I do not know how the Minister is going to deal with it in the future. At the moment this tax bears very heavily on the poorer classes of the people.

The Minister, in his Budget speech, also showed that the revenue was going down. We now have protective duties on an enormous number of things: on practically everything that we need in our lives. Some of these protective duties were put on for the purpose of getting factories established here to manufacture many of the things that we required. In a great many cases factories have been established, and the people, in the apparel they wear, have to pay the protective duties that have been put on. They are paying them, and more, in the boots, the clothes and the hats they wear. They are not paying them in the shape of Government duties, and, therefore, all that money does not come into the Budget. But are the people who have to buy boots and clothing getting them any cheaper because of that? I do not think that even the Minister himself would say that they are. The people are paying an increased price for Irish goods. They are paying a good deal more for them than they paid before the duties were put on. All this gives one an idea of the burden that has been put on the whole community in order to get these industries going. I am extremely doubtful about many of the statements made to the effect that the starting of these industries has given a great deal of employment, that they have helped to lessen unemployment, and that their setting up has resulted in great benefit to the working classes. I think that if we look into the question closely, and consider it merely from the aspect of the extra number of people employed, we will find that the gain to the people as a whole, when compared to the cost, is inconsiderable. It is becoming a very serious problem. The people of the Free State, under this system, are taking a very heavy burden on their shoulders. Senator MacLoughlin has explained the heights to which taxation has risen in this State. Senators must remember, too, that all these increased costs to the people — the heavy duties they are paying on the goods manufactured here — do not come into the £30,000,000 dealt with in this Bill. They represent some of the unrehearsed burdens which the people are bearing and which are not included in the Budget. I find that the non-tax revenue in 1932 was £3,400,000. It is now £5,210,000. I would like to know where I could get particulars of that.

Mr. Blythe

In the finance accounts.

Mr. MacEntee

I do not know whether Senator Jameson has seen the summary of estimates of receipts and expenditure which it has been customary to issue some days before the Budget statement. On page 4 of that summary he will find the principal heads of non-tax revenue set out: the postal service, the telegraph service, the telephone service, the currency commission, and miscellaneous items which include the land annuities.

Mr. Jameson

I thank the Minister. The Minister referred to the Local Loans Fund, but as I do not feel competent to deal with that, I do not propose to touch on it. I would like to have, however, some information about the Guarantee Fund and the collection of the annuities. I understand that it is out of the Guarantee Fund that grants are made to the local authorities. This is also the fund that is liable to repay to the Government the balance of the annuities which have not been paid on the 31st January. The present annuities, I am told, amount to about £2,100,000 a year. The amount of the arrears on the 31st January was, I understand, £716,000. Therefore, I take it the Guarantee Fund is going to be debited with that amount, and that if that debt were not there this £716,000 would be paid out in grants to the local authorities. If, because of the situation that exists, these grants are not made to the local authorities who have struck their rates for the coming year, what is their position going to be? The county councils and the local bodies estimated, when fixing their rate, for the coming year, that these grants would be available. If they are not going to be available, then these local bodies are going to be in a bad financial condition this year.

Probably the Government are going to lend them money. I do not know, because no announcement to that effect has been made. If the Government are not going to lend them money, then I do not know where the local authorities are going to get money to carry on their services, because, as we know, the accounts of most of them are heavily overdrawn at the moment. Even if the Government do lend them money this year then, undoubtedly, the local authorities will have to repay it next year, so that what we see in front of us is this: that the ordinary people of this country, in addition to all the other rates and charges which they have to bear, will have to pay a special charge to meet the deficiency caused by the unpaid annuities. That is a very serious question for the whole community. Can the community continue to bear not only the current expenses of running their local affairs, but also a special charge to meet the deficiency in respect of the land annuities? The position may not be as I have stated it, but I invite the Minister to deal with it.

The Minister spoke about borrowing and indicated, as an asset on which he can borrow, the arrears of annuities which have been funded and which amount to £4,700,000. If that is the security you have to offer in order to borrow, is it not painted with the same brush as the present annuities, one-third of which have not been collected? That seems to me to be a rather doubtful sort of security to offer to anyone for a loan. I am afraid the Government will find it rather hard to get lenders to advance money on a security of that sort. The lenders will naturally ask how they are going to be repaid eventually out of an asset which, at the moment, seems to be in much the same doubtful way as the collection of the original annuities.

With regard to the expenditure on export bounties and subsidies, the Minister said "it has been incurred in circumstances that are special and transitory we all hope and believe." That is a very pregnant sentence. Who, at the present moment, can say that the circumstances are "special and transitory"? If the position is not "special and transitory," then the Minister ought not to borrow. I admit that he is going along the right road this year, and instead of borrowing a large part of the money that he requires for export bounties and subsidies he is putting on taxation. This year, he is going to tax more and to borrow less. I think that is the correct thing to do. What position is the country going to be in if the situation, in relation to these export bounties and subsidies, is not transitory, because remember they amount to £3,000,000 on top of everything else that we have to bear? Can the country bear all this? It seems to me that even an enormously wealthy country could not stand all this taxation. We are getting no value for that money. Who, in this country, gets one farthing of value out of this huge payment? While we are sitting here utterly powerless to put an end to this state of affairs, one feels inclined to take no part in a debate like this but to ask: "What is the use of talking about it?" As long as that burden is there, and as long as these conditions prevail, it is hopeless to make speeches or to talk about these things. The country is heading straight for disaster, because our trade is being ruined, and a burden of taxation is being put on that the country cannot bear.

I have a note here about State investments representing a couple of millions. Really, I would rather see the Minister having investments in other things. The investments include the Industrial Credit Company and the Irish Sugar Company. The State should have its money where it could be realised quickly. All these kind of things are doubtful as to realisation for anybody who wants the money.

Now we come to the question of wheat in which, apparently, Senator Counihan is interested. This was debated recently on the Cereals Bill. In his Budget the Minister for Finance mentioned £300,000 or £400,000 which, if the Cereals Bill was not passed, he would have had to raise so as to pay an increased price to farmers out of the National Budget. I spoke against that the other day when I stated that that should be borne by the community, and not by the poor people who eat bread. When considering how our Government is dealing with the matter, it is no harm to look at what our neighbours across the Channel are doing, to see how they are paying a bounty to farmers to grow wheat. In Great Britain they put a tax on all imported flour, and out of the money they get from that tax, they pay a bounty to those who grow wheat. The ordinary individual is not taxed there at all. But our Ministry put a tax of 6d. per cwt. on wheat, representing £190,000, and use it to pay the bounty because they are going to lose another 10/- a cwt. Bread is going up in price because of the 6d. tax. The increase will be paid by those who eat bread. It is also to be used for dealing with people who are interested in pigs. In his Budget speech the Minister said that this was good for agriculture. I do not know if those who eat bread are going to be made to contribute to those who eat pigs. That does not seem to be a fair arrangement. It is certainly not the way the British people dealt with the question.

The British taxed wheat at a certain rate but the money is given to the home growers of wheat. By that method, according to the figures for 1933, the price of bread in Great Britain remains cheaper than anywhere else in Europe. When we have this arrangement made I would like to know what the price of our bread is going to be compared with the world price of bread. Compared with the price in Belfast, bread is at present a great deal dearer here. The Government should be careful about dealing with such a necessity as bread. Senator Foran spoke about this tax the other day and mentioned its implications. The policy that has been declared by the Minister for Agriculture is that he intends to go on until all our bread is made from Irish-grown wheat. A large proportion of the flour used here is foreign and is bought at a less price than that made from home-grown wheat. By putting 6d. per cwt. on wheat, the price is going to be raised. If our bread is to be made from home-grown wheat at 24/6 or, as Senator Counihan would like, 27/6 a barrel, the price of bread for the poor people is going to be such that I do not think anyone could say that they could possibly bear it. That is the declared policy. Where are we going? How can the people possibly pay? We are going to have a large proportion of the flour used here made from wheat, for which 24/6 has to be paid, and therefore the price of bread must steadily rise.

Mr. Wilson

Five years ago foreign wheat was 30/-.

Mr. Jameson

The Senator can deal with that as he pleases. I am dealing with the present position and the change that has been made, as a result of which the cost is being put on to consumers of bread. I am also pointing to the fact that the British by their policy are not putting the cost on to the consumer. They also arranged that the bounty paid to growers of wheat would not fall on the people in the way it is falling on them here. Export bounties and subsidies represented £2,705,000 in this country. We borrowed £1,500,000 last year, according to the Budget statement, and this year we are going to borrow £1,350,000, so that in two years we have £2,850,000 placed as a permanent debt on the country. I do not know what security was given for the borrowing. The Minister, no doubt, will deal with these borrowings. At any rate we have gone into debt to the tune of £1,500,000 and £1,350,000. We have no Prices Commission dealing with wheat. Although the Minister is getting a tax of 6d. from wheat imports, the price of wheat in the markets during the last month has fallen to such an extent that if our people got the benefit of the world price, the £190,000 that has been referred to, would be wiped out. Is there anybody watching the wheat position to see how the price of flour in this country tallies with what those who make the flour pay for the wheat? Are we getting the benefit which all Britishers are getting in the price of imported wheat? When speaking on this question a statement made by one member of the Dáil astonished me. He said that notwithstanding a fall in the price in the markets, the price of flour in this country was even now going up. If that is a fact surely somebody should know what justification there is for it. I should like to know from the Minister if the Prices Commission or any other body is watching bread-making, flour-making, corn bought for the making of bread, and the millers — no doubt excellent people — to see what our prices are, and whether we are getting a fair deal as regards the price of bread and the price of flour. That is undoubtedly a matter that should be seriously looked into.

The Minister has put a charge of 25 per cent. on ownership of property. He says that all our valuations are long out of date. That may be quite true in certain cases, but we all know that there has been an enormous amount of building recently. To say that the valuation of such property is out of date seems to me to be wrong. The Minister should seriously consider whether he should not put in some date, or do something in that way, so that recently built property would not have this tax imposed upon it. While Section 5 gives some power to the Commissioners to deal with that question. Senator Brown informs me that that does not affect the private owner. This question is very complicated and very difficult to deal with. The Minister should look into it to see whether it is not possible to have recently valued property exempted from the increased tax. The Government has tried to induce people to build, and to build largely, and when they have done so, to put extra taxation on them does not seem to be a fair thing to do. If the Minister has to look round to try to get money, this is one of the things where the amount involved is not very large, but where he ought to deal squarely with people who cannot be accused of having their property under valued.

Take the wheat question. No Irishman in his senses would grow wheat if he could find any other means by which he could make a penny. It is a hopeless policy, has been from the beginning, and will prove to be in the end. A great deal of the spring wheat this year is a total failure. I would like to ask the Minister now if he is prepared to pay any compensation to the unfortunate farmers who received bad seed which resulted in a total failure of the spring wheat crop not to mention the tax which has been imposed on the people's principal food. That food made from home-grown wheat is going to be inferior food as everyone knows—vastly inferior. Wheat is a tropical crop, which must be grown in tropical conditions. It can be classed with tobacco, another washout or, I should say, the scheme which did not end in smoke. Good wheat can only be produced in countries where it can be dried in the sun, and I have plenty of proof, after investigation, that wheat grown in this country, kiln-dried as it must be, will absorb moisture back again in the store, and it will be extremely difficult, in fact quite impossible, to store wheat. I will be told, of course, that when 8,000,000 people existed in this country they lived on home-grown wheat. I want to tell the Minister that very few of them enjoyed the luxury of eating it. I remember myself in the harvest——

Leas-Chathaoirleach

You will have to relate the growing of wheat to the Finance Bill.

Miss Browne

I am trying to do that, Sir.

Leas-Chathaoirleach

Tell me on what section you are speaking. There is a tax of 6d. per cwt.——

Miss Browne

That 6d. on wheat is an unjustifiable burden on the food of the poor and every other penny that is spent on wheat is an unjustifiable burden on the country. Every other penny is unjustifiable in the financial affairs of the country. It is going to be a failure and is throwing money away on a crop that cannot be grown. It is much worse than the sugar. The Minister for Industry and Commerce the other day contradicted me when I criticised the price of sugar on the poor. He said when beet was 46/- per ton for 15 per cent. of sugar the price of sugar was higher than it is now. That is not true; it is 4d. per lb. now and it was only 3d. per lb. then. The wheat this year is going to be a bad, uneconomic crop, and at the same time the beet-growing industry is going to be a failure. There is going to be no substitute whatever, no matter what schemes the Government may try, for the trade that was built up by the experience of the people.

We have had a considerable lot of argument put up by Senator Jameson. I missed the speaker before him but Senator Jameson might as well have come out at the beginning and told us that he was still standing up for the worn-out policy of free trade; that he was not in favour of the Fianna Fáil policy or of any part of the Fianna Fáil policy. Since I heard him last week avow his sympathy for the Labour Party and for the workers of the country, I thought he might have some little left for the next best thing, the farming community. I was amazed to hear him finding fault with the prices farmers were getting for their wheat on the ground that they are getting too much. He told us beet was a terrible thing altogether—a ridiculous proposition for the Government to go into the production of sugar —and he told us, by way of argument, that sugar could be imported at a far less cost than it could ever be produced in this country.

It is all right for Senator Miss Browne to look forward to the day when this Government will go out of office. There are a few other people looking forward to that day, and they ask what is to be done with the growing population and the workers of the country? Are they to be left idle and are we to continue to pay the workers of other countries to produce the commodities we require for ourselves? I say it is an insane policy for anybody to preach that we should import sugar or import wheat or any of those commodities while we have here in this country not only an abundance of suitable land but an abundance of suitable labour to produce those commodities for ourselves.

Senator Jameson, in his anxiety for the poorer people of the country, wants to know if there is anybody watching the price of flour or the price of bread. I think we dealt with that last week. I think Senator Jameson can make his mind easy. If ever there was a Government interested in the welfare of the poorer classes of this country it is the present Government. Since the Fianna Fáil Government came into power practically every item of legislation that was introduced in this House tended towards the betterment of the position of the masses of the people, and I think Senator Jameson should feel quite safe in leaving that matter in the hands of the Government.

We have had various pictures drawn of the state of the agricultural industry. I just came across a rather interesting statement made by Mr. Heffernan, Chairman of the Farmers' Party. I am about to quote from the Irish Independent of October the 12th, 1927. Mr. Heffernan, as you all know, was a Minister under the previous administration, and, therefore, must be accepted as a reliable authority by the members of the Opposition. Mr. Heffernan, describing the state of the farmer at that time, said:

"The economic conditions of the farmer have never been worse in living memory. By no means whatever can a farmer make income balance expenditure; he is faced with the high costs of living and of production, and the reduction of these must involve political action. High taxation, high local rates and excessive wages, in certain sheltered industries, were being passed on to the farmer, and, as he had no means of passing these costs on, they remained with him."

If, as is being argued by the Opposition, the conditions of the farmer have continued to grow still worse, they could not have been as bad as Mr. Heffernan described them at that period or they would not be in existence at all. Despite all the mournful pictures which have been painted here from time to time about the state of the country—"it is definitely heading for disaster," we are told by Senator Jameson, and we are told something worse than that by other speakers—we find that the people are beginning to look far more cheerful even than they looked during those ten years of progress and prosperity that we hear so much about. I have not the number of new automobiles registered in this country in the past six months, but when I drive into the city or into provincial towns I see everywhere new cars. On my way from Tipperary to Dublin the other day I think I counted 53 new Fords. The same thing applies to various other lines of amusement. The people are flocking in to enjoy themselves, and the only conclusion I can come to is that, human nature being influenced by economic surroundings, the people have really taken on a new lease of life. They see in this policy of protection a means of livelihood for themselves and their children, and I think it is ridiculous to hear the representatives of a hopeless minority—a minority even in their own Party— condemning here the wheat policy of the present Government.

It was only reasonable to expect that the land annuities would be hauled into this debate. We had statements from various people that the land annuities were being collected by the British the same as ever. That is a continuation of the argument we have heard from time to time in various places all over the country by apparently responsible persons. We are told that not alone are the farmers paying the land annuities once, but they are paying them twice.

Miss Browne

Three and a half times.

Mr. Quirke

Would the Minister please explain how he expects the new sub-section (5) of Section 3 to operate? That sub-section is clearly designed to try and remove what was a very serious blot. I refer to the proposed five-fourths taxation under Schedule A. The Minister, apparently, is admitting that there are a number of cases to be met. I personally know of quite a number of cases where the rent is not as high as the valuation, and where it would be grossly unfair to charge the five-fourths. I am not quite sure how this new sub-section is going to work. Is there to be some special official who will deal on some general principle with all cases, or is each inspector of taxes to deal with individual cases as best he can? Will there be any right of appeal? What exactly is the meaning of the word "rent?" Does that mean the profit rent or the net rent? The new sub-section speaks of "rent," and I take it that means profit rent, because it is only on a profit rent that that tax should be charged—that is, after allowing for repairs and other necessary expenditure.

The idea of the sub-section is a good one. It is definitely intended to try and meet a serious flaw in our present legislation. I have read it very carefully, and I wonder if it will work equitably as between different citizens. There are quite a number of people with small salaries who have recently bought their houses. Several of them have come to me to obtain advice and assistance with regard to this. I know that they have carefully calculated the gross amount of the payments that they will have to meet each year. In most cases these payments are as much as they can manage out of their income. This sub-section will press heavily on people with new houses where the valuations range from £10 to £20. In these cases the valuations have been fixed quite recently. Therefore, if this section operates to increase the amount of income tax that they will have to pay, irrespective of what their income is, it will work out very unfairly on them. It has to be remembered that they have already made their commitments for repayments in connection with the purchase of their houses over a period of 20 years, and that these repayments represent as much as they can afford. I am not sure that this new sub-section meets such cases. It may meet some cases, but not all. I think steps should be taken to exempt from this provision houses which have been revalued since 1917 or 1918. Presumably, the valuations have been made on a fair basis from that time onwards. At any rate, I can assure the Minister that quite a large number of people with small incomes are very perturbed at this increased charge on them. Admittedly, it may only amount to £2 or £3 a year, but to a young married couple, who have just managed to buy their house, it may mean a very serious addition indeed.

I notice that under Section 7 the Minister has made some alterations in the special rate of tax chargeable on Irish investments. I have always objected to this particular provision. I believe it is grossly unfair. It is better that it should be altered, as in this Bill, and therefore that there should be some restriction. The principle of this reduction in the rate of income tax is that, in effect, this Government says: "Anyone who invested money in this country before we came into power does not count and he will have to pay the full rate of income tax, but if you were patriotic enough to come in when protection was high, when it was safe for you to do so and to invest money here, then we will give you a specially reduced rate." That, to my mind, is not fair. We can see that this provision is intended to conform to the provisions of the Control of Manufactures Act.

I want to point out to the Minister that the policy which underlies this is bad, and that it is becoming peculiarly bad. It is common knowledge that amongst new issues recently quite a number have been issues of shares which have borne guarantees as to repayment, sometimes for a term of years, and sometimes a complete guarantee for repayment by an English company or some company outside this country. What, in effect, does this section mean? It means this: that a person who during, say, the past ten years put money into an industry here with no British or outside guarantee is told by this Government that he must pay the full rate of income tax whether the profits are divided or not; but the patriot who comes along and takes his money out of a British investment and puts it into an Irish investment, is only asked by this Government to pay a reduced rate of income tax. That, in my opinion, is not equitable. It is a bad policy, and I think it is time that the Government stopped it. At any rate, why the Government should give a special concession to shares which are guaranteed by an outside corporation is beyond me. I cannot find any reason for it, and I would be glad if the Minister would. The Minister is granting a concession to shares which have attached to them a specific guarantee. I am not objecting to the guarantee, but rather to the exemption to people who realise their money in some outside investment and invest it here. I do not know why these patriots should be granted this exemption, and why other people who put their money into industry here years ago should not be given the same consideration.

There is another matter that I want to deal with. I have raised this in previous years, and while I do so now I know that it is hopeless in the present financial position to expect any relief. Perhaps some day or other what I am asking may be done. The question that I want to deal with is the tax on undivided profits. I know of many small industries which are hit very hard by this tax. Anyone who has had any experience of the assessment of profits for business will know quite well that the assessable profit on which he pays his tax is at any rate higher than the actual money that he has in hands by way of profit at the end of the year. That is peculiarly the case in a new business. No matter how carefully a man may plan his original capital expenditure, he will very often find it necessary to incur further expenditure of a capital nature in order to develop his business. In the case of a small business, a man may find it necessary in order to develop his business to put three or four hundred pounds into it. That sum of money is not paid out by way of profit. It is spent on improving the business. It is, however, not so regarded by the revenue authorities. It is not regarded as expenses because the expenditure happens to be of a capital nature. Therefore, at the end of the year, he is told that, because he has spent three or four hundred pounds out of his profits, he must put down another £100 on which he has to pay 4/6 in the pound.

Senator Quirke thinks that we should not follow England in these matters, but may I tell him that we have adopted the British practice with regard to income tax charges? Of course, that practice has been in operation in England for a long number of years. The practice adopted in England with regard to undivided profits—in other words, the putting back into the business of some of your profits—was perfectly reasonable when the income tax rate in England was 2d. or 3d. in the £, and for a number of years 6d. or 8d. in the £. But at the present time, with the rate of income tax 4/6 in the £, it has become a crippling charge in the case of many small businesses in this country. I would be glad if the Government would try and find some way of meeting that. I know it is full of difficulties.

I would like to make it perfectly clear that I am not suggesting that a manufacturer should not pay on his own personal income the same rate as any other taxpayer. What I am suggesting is that it would be in the interests of the country to encourage the reinvestment of profits in business rather than the distribution of profits. I submit that to charge the full rate in these cases is bad policy as well as being in many cases a hardship. May I repeat what I have said: that the patriot who sells some British shares and puts them into a public issue here—shares guaranteed by a British company—gets a specially reduced rate, while in the case of a man who has been in business in this country for years: who starts a new industry and endeavours to develop it as best he can, has to pay the full rate of income tax even on the profits which he puts back into the business itself. I ask the Minister to explain how he regards that as being equitable. I am unable to do it.

The export duties in the Finance Bill are divided into two Schedules. While my knowledge is limited, I have a fair knowledge of these matters. The imposts in the First Schedule are intended as protective duties, and those in the Second Schedule are not; they are to be ordinary taxes. That would be quite understandable if there were not certain things included in the Second Schedule which are raw materials for some important industries, including those that carry on an export trade. When we deal with the Minister for Industry and Commerce, or go to meetings of commercial organisations at which he speaks, we are encouraged to develop the export trade that exists here. When we come to the Finance Bill we find, as Senator Jameson pointed out, that every difficulty is placed in the way of such manufacturers as we have with an export trade. If the Minister must choose some minor commodity that ordinary people use, in order to get a little more taxation, why choose an essential material for the linen trade? There are from 1,000 to 1,200 persons employed in the five linen factories in the Free State. The bulk of the finishing is done here. The essential finishing material must contain starch, on which the Minister puts a duty of £3 a ton. That means that the finishing portion of the trade must be sent outside, or the price must be higher. That will be all right under the tariff, as far as the portion of the trade here is concerned, but it will probably be a serious handicap as far as the export trade is concerned. In that trade you have keen competition with Scotland and Northern Ireland, and also competition with Belgium, and competition that cannot be met with Japan. The quality of Irish linens is such that they are able to hold their own. The principal competition is with Northern Ireland. It is friendly competition. If, in addition to the duty on coal, and the corporation profits tax, which affects larger industries, part of the essential raw material for finishing the products has to bear a duty of £3 a ton, I say that policy is all wrong. Previously, when duties of this kind were put on, which were likely to affect essential industries, the Minister provided a licence provision. In some cases there was a general licence provision, and in others a special licence, which provided that an article could only be exempted where it was not manufactured here or was required by a manufacturer as an essential part of the raw material. I am asking the Minister to agree to insert such a provision as far as Schedule II is concerned. I am only asking where it can be proved that the commodity charged cannot be obtained here and is required by the manufacturer for purposes of manufacture, that there might be free entry. Otherwise, this might easily become a serious matter.

I believe there are some other things affected. I can only speak of one of which I have personal knowledge. In Schedule II I find that 6d. per square yard is to be charged on linoleum. Possibly the object was to try to get as much duty as possible out of linoleum in a plausible way. The effect is to put something round about 50 per cent. on the poor man's linoleum and 3 per cent. or 4 per cent. on the rich man's linoleum. I should like to know if that was the intention, or if it was accidental. I know a little about the trade. The price starts at 1/2 and goes to 10/6 per square yard. In the Bill 6d. is being put on the 1/2 article and 6d. on the 10/6 article. The 10/6 article is only used by rich people and the 1/2 article is used by ordinary people who find linoleum to be the best covering for their floors. A rate of 45 per cent. is far too high. It is not a protective duty. Linoleum is not going to be made here. It has not been suggested by the Government that it will be made here. A tax of 45 per cent. on the poor man's linoleum is unreasonable and difficult to defend. A tax of 6d. on 10/6 linoleum could be defended without question. If taxation must be got, it is reasonable to put a tax on something that is a luxury. Personally, I do not trade in linoleum, but as it is allied to my trade I have a knowledge of prices. I suggest that the way this is done it is definitely bad. I wonder if it was done by chance and without proper investigation, or done deliberately. I admit that much more taxation will be got from 6d on cheap linoleum than from 1/- or 2/- on dear linoleum.

I have never been opposed to a very considerable development of Irish industry. Up to a certain point, I believe the policy of this Government in that respect has been justified. But I want to suggest that we have reached the stage at which I urge there should not be indiscriminate further development of industry, until there has been more consolidation of the industries that have been established. There is a danger that further development may hurt industries that have been already established, and there is a danger also that a further increase of prices may only lead to the destruction of what has been achieved. There does not seem to be any clear line of policy on the part of the Government. It seems to me that it would be perfectly possible to restrict the development of industry to such industries as could reasonably be economically conducted for a country with a population of 3,000,000, and to take certain other articles which are not so suitable for a country with 3,000,000 and to say: "We do not propose to manufacture these here; we will not tariff them. We will let you buy in the cheapest market with the understanding that they are going to be sold as cheaply as possible." That would be compensation for the fact that we must pay higher prices for the development of industries here. Senator Johnson suggested that the quality of the articles was not what it might be. That applies to every new industry in the initial stages. Unless you import skilled workmen and foremen, and unless you bring the whole thing here—which would completely defeat the object—you cannot get the same standard of efficiency at the beginning. Really, the danger is that where you have a tariff, even if it is a high one, the public will pay the extra price for the better article. When you have a high quota there is a danger that manufacturers may lose in the standard of efficiency, because their goods have to be taken as long as there is a demand. That is one of the dangers of the quota system. I sympathise with the difficulties of the Government. They want increased consumption for the things that are made here, but, if they increase tariffs, so as to prevent goods coming in, prices are liable to be too high. In many cases they will not tariff or introduce a quota system until it is too late, in the hope that prices will not increase. The Government should look into that. I am not making any specific charge, but I am asking that they should look into the question to see if the quota system is not effecting a general increase in prices.

Mr. Johnson

Most of what I have to say will be dealing with general financial policy rather than the details of the Bill. From the point of view of those members of the House who were always opposed to fiscal independence, this Bill, and the whole policy of it, is the most easily criticised Bill that could be brought forward. It is full of anomalies and departure from the strict orthodox finance of the old British system, and runs contrary, almost at every point, to what one might consider as in conformity with the fiscal union of Ireland and Great Britain. I give credit to those who advocated fiscal independence in the days before the Treaty that they counted the cost and, at least, did not overlook that the fiscal independence of Ireland involved the possibility, if not the probability, of retaliatory tariffs against Ireland by England. It seems to me it is inevitable that any far-sighted politician of those days must have contemplated and intended that special steps would be taken in this country to make it less vulnerable to fiscal and financial attack by Great Britain, by the development of industries, and by making the country more self-sufficient in the essentials. Therefore, a great deal of the criticism that has been directed against the policy of the Government in this Bill might be consistent with the policy of fiscal union, but it is quite inconsistent with the policy of fiscal independence. The only valid and sound criticism from those people might be as to the speed with which a policy of industrial development and agricultural change should be promoted. I could understand criticism on these lines, but I cannot understand criticism coming from advocates of fiscal independence, which strikes at the roots of fiscal independence, and would make this country for all time dependent on any British Chancellor.

In discussing this, and similar questions, it would be very valuable indeed if speakers would check their figures particularly and their facts generally. I have complained that it is a common practice to take figures that appear in the newspapers, or that were given by some irresponsible speaker, and to treat them as if they were established truth. For instance, one would imagine that Senator Jameson would always be most careful in such matters. He was not by any means correct in many of the statements he made, having regard to the arguments he built upon them, when quoting figures of taxation and revenue. It would certainly be desirable if there was more accuracy practised by responsible Senators in that respect. There has been a very great increase in the tax revenue estimated for this coming year as compared with 1931-32, the last year with which the previous Government was concerned, but not by any means the increase in tax revenue that was asserted. I will not deal with the figures now, but I say, without hesitation, that many of the statements made in regard to the extent of the change of policy and consequent upon it are quite unreliable, because they are not quoted with accuracy. I may mention also the reference to the increase in the cost of living. I am not sure whether or not Senator Jameson referred to it in precise terms but Senator Miss Browne did. I compared the British and the Free State figures, as given in the Trade Journal, which is quite impartial in its manner of setting out statistics. Taking 1931 as the base year, food prices have fallen from 100 to 92 in the Free State and from 100 to 91 in Great Britain. All items that go into the cost-of-living index calculation fell in the Free State from 100 to 95, and in Great Britain from 100 to 96. We have a great outcry about the increase in the cost of living. Those figures are a sufficient comment upon the inaccuracy and looseness with which statements of that kind are made.

My view upon the present Budget, and the Bill which arises from the Budget, is that they are unreasonable and unjust to a certain class of taxpayer. I make special reference to the difference of treatment between the income taxpayer and the consumer of tea. I pick out that particular item because it illustrates what I want to deal with. Last year, the Minister reduced the standard rate of income tax by 6d. in the £. At the same time, he reduced the duty on tea by 4d. per lb. This year, he has reimposed the 4d. per lb. duty on tea, but he has left the standard rate of income tax at 4/6. I make that bald statement and offer no comment upon the obvious injustice involved.

I pass on to what I conceive to be the explanation. Senator Blythe referred to it last week. I think I am right in saying, though I am not certain, that the Minister himself indicated somewhere some time that to raise the rate of income tax in this country above that prevailing in Great Britain in any year would not, in the long run, be productive and would have consequences which would be disastrous to the revenue. I am not very confident in saying that the Minister has adopted that view but I think I am not far wrong in making the assertion that that is his view, whether he has given publicity to it or not. It is that view that makes me raise some questions as to the course of events financially and fiscally. There is a certain expenditure on civil services, public services, social services and the like which may here and there, be reducible in time if the industrial, productive policy becomes completely successful, widespread unemployment is obliterated and certain services, due to general unemployment, are no longer necessary. But I do not think that one can say with confidence that there is much likelihood of any general reduction in the total State expenditure unless there is a very great departure from present-day policies. I do anticipate that that will occur on the spending side. That being the case, we have to look ahead and consider what will be the effect of a reduction in the British rate of income tax next year or the year after that. If the doctrine of equal income tax in the two countries be a sound one, then, presumably, the rate of income tax in this country will fall concurrently with that of Great Britain, with consequent loss of revenue. If the expenditure does not fall, as I imagine it will not, then one assumes that there will be a broadening of the basis of taxation, as the phrase is. That is to say, a greater proportion of the revenue and a greater absolute amount will be drawn from the consuming public through the taxation of consumption goods. At the same time, one may assume that the revenue from Customs duty will continue to decline inasmuch as, through the growth of the protective policy, there will be greater home production of consumable goods and a reduction in the import of such goods. It is because I see the shadow in this Budget, and in the policy that is running concurrently with the Budget, of a broadening of the basis of taxation by throwing charges directly upon the consumers that I am asking the Minister to give us, if he can, some idea of the long-term policy he is moving towards—if he has a long term policy. Is it his belief that industrial development here will so proceed as to ensure that the income tax derived from incomes from these industries will enable the revenue to be maintained without reduction.

Notice taken that 12 Senators were not present; House counted and 12 Senators being present—

Mr. Johnson

It is the Minister's hat we are talking about.

Mr. Milroy

It was only a metaphorical allusion.

Padraic O Maille

The Senator glories in the fact that we did not win the economic war.

Mr. Milroy

I hope as long as I am here I will be allowed to speak without this concentrated essence of frivolity which Fianna Fáil Senators seem to think is appropriate to the discussion of the Finance Bill. I have no doubt they would rather see this discussion enveloped with a cloud of triviality rather than it should get serious consideration. By enveloping it in that cloud of triviality the attention of the community might be diverted from the seriousness of what this Budget involves. But I say it was the same Minister who made both these statements, and, if we had won the economic war in January, 1933, I want to know what is the justification of a war Budget in 1935. The Minister, speaking on the Financial Resolutions in the Dáil, on the 25th April, 1929, made use of these words:

"Dwindling trade, smaller earnings, whether wages, salaries or profits, diminished savings and an overburdened, over-taxed community. In such a situation as that what is the policy which the Minister has set before the Dáil? Not to lighten the burden, not to give the country a chance to recuperate and recover, but to continue to oppress it by maintaining taxation at a level which every factor of economic signicance unites in proclaiming that the community is unable to bear."

The tax revenue for that year 1929-30 was £20,236,000. This year it is £23,231,000. So far as the average human perception can see "dwindling trade, smaller earnings, whether wages, salaries or profits, are still continued at an even more diminished rate.

Padraic O Maille

And emigration.

Mr. Milroy

I do not know whether the Government are claiming to have kept the people at home or not. We all know that the fact that there has been a cessation of emigration is entirely due to the emigration laws of the countries to which our people used to emigrate. But, with these conditions, how is the growing burden of taxation to be met with dwindling trade? In the same speech from which I quoted that extract the Minister said the adverse balance must be redressed. Well, it has been addressed, undressed and readdressed, but so far the only redressing which the Government is doing is to increase it to the enormous sum of over £20,000,000, and, unless the Minister expects to get a crock of gold at the foot of that rainbow in County Wicklow, I do not know how he expects to ease the burden of taxation on the citizens.

He referred to the effect of the industrial development upon Customs duties, necessitating new taxes. I want to say this and say it very emphatically that no one will be better pleased than myself if every claim that the Government makes for industrial development can be substantiated.

Padraic O Maille

Hear, hear!

Mr. Milroy

But we want to have some reliable data upon which to arrive at a definite conclusion. The evidence of the Customs returns, I think, does not bear out the contention of the Minister that there has been such industrial development here as substantially to diminish revenue that was secured from those sources. In 1929 the Customs receipts were £7,337,000; in 1930 they were in or about the same. This year the figure is estimated at £8,687,000. How could there be a deduction from that that the development of the industries has meant a reduction in revenue from that source? The argument based upon that is to me rather unconvincing and I would be glad if we had some data upon which we could know, without any question of speculation or contentious argument, what the position in regard to industrial development is. A similar argument was used in the Dáil and it was dealt with, I think, very effectively by indicating one business from which the subject might be examined and which seemed very definitely to negative the contention; that was in regard to the contributions to the Unemployment Insurance Fund. The figures, of course, do not come any nearer than 1934. I do not know that even the Government can provide us with statistics of a later date. They show that the Insurance Fund had been increased between 1931 and 1934 by something over £75,000. On the assumption that £4 represents a new worker in insurable occupation for a whole year, which is admitted, that figure would show an increase of people employed for three years of 18,750 or 6,250 per annum. I do not want to base any adverse argument on that. I would like to see any claim that the Minister can make of having secured sound industrial development in the State substantiated. There ought to be some rational way of ascertaining what the facts are. So far as I can see, the matter has been discussed in the arena rather of embittered controversy and different sets of figures are used to demonstrate different conclusions. I do not think it is a satisfactory way of dealing with a matter of the vital importance of this. I think it ought to be within the power of the Minister and the Government to give us the actual figures and facts upon which we can arrive at a definite and unchallengable conclusion as to what the position is in regard to the result of the attempts to stimulate industrial development. However, the matter is one which at the moment, I think, could hardly bring any consolation to the people who have to provide the necessary means by which this State shall be maintained.

This Budget is in direct conflict with the declarations of Ministers and of leading spokesmen of the Fianna Fáil Party prior to their accession to office. Before they were elected to office they definitely promised a reduction in taxation. They said that they had carefully examined the position and were satisfied that a saving of not less than £2,000,000 could be effected in taxation without diminishing the efficiency of the Governmental services. It is no answer to those who recall that, to say: "Well, some time in the future we hope to achieve that. But at the moment we are providing social services at an increased cost." That is no answer, because they undertook to run this State more efficiently on less revenue than was being raised before they came into office. One of their supporters, a member of this House who, I am sorry to say, is not present at the moment, went even further. Speaking on the Finance Bill of 1931 on the 15th July, Senator Colonel Moore said:—

"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."

Well, if Senator Moore's contention was correct, the State should have been run for something like £10,250,000. Instead of the happy result that the Senator anticipated a change of Government would bring, there has been an increase in taxation of £2,750,000. I did not see the Senator display any anxiety to-day in the matter of insisting on a drastic reduction in taxation, on the wholesale scale that he demanded in 1931.

The Minister to-day gave, I think, as his justification for the Finance Bill certain things. He referred to the acceleration in the division of land, the building of houses, widows' and orphans' pensions, and the export bounties and subsidies. With regard to the latter, can the Minister give us any idea as to how long they are likely to last? They are running into a formidable figure, and there is no indication, so far as one can see, of any grounds upon which, in the words of the Minister, we can regard them as "special and transitory."

I felt a certain amount of satisfaction in listening to Senator Johnson speaking of the objective of certain people in this country who aimed at the fiscal independence of the country. I do not quite know what element he was referring to. He said that certain people who at one time seemed to favour that now seemed to favour fiscal union with Britain or to be within a British Customs' Union. I am not sure whether I am doing Senator Johnson an injustice in thinking that the implication of his statement was that those who think that this conflict with Britain, involving export bounties and subsidies, is unnecessary and wasteful and should be brought to a termination are supposed to favour the idea that this State should be within a British Customs' Union, but if so I think I can at once dispel that argument. There is no necessary connection between the two. I want to say that I believe firmly in the idea of this State being separate, fiscally and politically, from Britain. But that does not necessarily involve a breach in the common relationship that we have with other States within the Commonwealth. I believe that it is possible to have that common relationship and still have a separate political, fiscal and national existence in no sense or degree impaired, diminished or obstructed by such association.

I say that this Government which plunged the country into this conflict, which has led to this annual expenditure of millions a year, blundered badly. To make a sort of defiant gesture, which some people take to be an assertion of independence, does not mean that it is always so. To secure fiscal independence, as I conceive it, it is necessary to build up an economic structure which can insist upon its independence in the sphere where fiscal matters are relevant. Surely, one of the most suicidal things with which to begin such an effort is that of destroying free access to one of those markets which gave us the most immediate outlet for the products that would enable us to build up the capital and the standard upon which to establish our industrial life. I think that in embarking upon this policy, and in continuing it, the Government are creating a very serious obstacle to the process of building up on sound lines a fiscal entity in this State: a fiscal entity which would be independent of external powers and external states. To continue and to accentuate that policy is to place an annual burden upon this State which is not only more than the people can rationally bear, but which it is unnecessary for them to bear. The obstructions that stand between our exportable surplus and our natural markets could be removed by the adoption of some commonsense methods; the bounties and subsidies would not be required, and the Exchequer would be relieved of that very substantial burden.

I think the Government are not to be congratulated on this Budget. I think rather that they are to be commiserated with. As an accompaniment to their efforts to secure office, they made certain promises, promises which experience has shown are impossible of fulfilment. Therefore, if they secured office on promises which they now realise cannot be fulfilled, then, to speak the plain, blunt truth, they secured office under false pretences. They promised to reduce taxation. Definitely there was nothing more emphasised by that Party; nothing was more continuously repeated and reiterated from platform after platform, that on their accession to office down would go the taxation of this State by £2,000,000. Not a single member of that Party or Government can get up and deny that. After three years in office, instead of reducing taxation, they have increased it substantially greater than the amount they promised to reduce it. They promised to remove unemployment. I do not say that they have not tried, but they have not yet produced any proofs that a serious inroad has been made upon the problem of unemployment. They promised that they would retain the annuities to derate the farmers. Definitely and emphatically that was mentioned.

Mr. MacEllin

Who made that statement?

Mr. Milroy

I say that the whole darned bunch and the whole Party did.

Mr. MacEllin

No responsible member of the Fianna Fáil Party ever said that.

Mr. Baxter

Only the irresponsibles.

Leas-Chathaoirleach

I would like to tell the Senator that "the whole darned bunch" is not a Parliamentary expression.

Mr. Milroy

Mr. MacEllin

As regards the linoleum, I think the method adopted was rather strange. I happen to have personal experience of an order for from £25 to £30 worth of linoleum before the Budget announcement. The party concerned made representations to the official in charge in the Department of Industry to get the linoleum in free as it had been ordered some months previously and had arrived on the day the duty was announced. It would not be released from the Customs. The letter the party concerned received was short and sweet and couched in nice terms but no facilities were forthcoming. It was lying some time in the Customs at Westport when by a strange coincidence and after all the correspondence, the person interested was informed that there was no duty on this particular class of linoleum and he got it free of duty. I do not know how that worked out.

Leas-Chathaoirleach

It does not come within the Finance Bill.

Mr. MacEllin

Such instances have happened and I suggest that the imposition on linoleum is not altogether in keeping with good policy and I think the Government would be well advised to reduce it considerably. As it is, it will defeat itself by reason of the price of the linoleum as sold across the counter.

Mr. Dowdall

I move: That the question be now put.

Leas-Chathaoirleach

I think that, in the general interest, the debate ought to be allowed to continue.

Mr. Blythe

Before we adjourned for tea, Senator Johnson was referring to the financial trend that was revealed by this Budget and he pointed out there must be more and more taxes on the necessities of life. He then went on to say that he thought the Government would be forced, or would be well advised, to depart from strict financial orthodoxy and currency methods. I was glad that no other Senator took the same line as Senator Johnson, and I was somewhat astonished that he should be the man to advocate this departure from strict financial orthodoxy and currency methods, because it seems to me that, if the Government ever does make the sort of changes to which Senator Johnson referred, it is the workers and the wage earners and the salary earners who will suffer first and suffer most. If a Government departs from financial orthodoxy, no matter what high schemes it has in mind, what is going to happen is that something like putting the printing press to work is going to take place as regards our currency. The experience of other countries has been that once that kind of inflation takes place it cannot be stopped at any moderate point and it inflicts extraordinary hardships and has a most demoralising effect. It is a kind of legalised robbery. It means that those who have put by savings are robbed of their savings, and that those who work for salaries or wages find the value of their pay decreasing, and whatever agitation goes on or whatever methods they may try to take to remedy the situation, they never can catch up with the rising cost of goods and so they are deprived of the necessities of life and their standard of living is depressed. I do not think that the Government can get out of any difficulties except in a most temporary way, by any of these unorthodox methods. I do not say that it was deliberately done, but so far as such unorthodox methods have been elaborated, they have been tried out and explored and it has been found that they are in the nature of, shall we say, strychnine. They may afford some temporary relief from the Government's point of view, but if they continue to require the dose, as they will, it is going to have fatal results for a great many people concerned.

It seems to me that the Government is facing up to an impasse, and I think this Budget shows they are facing up to an impasse. I do not think, however, that they can get out of it by any sort of financial sleight of hand. When they come to the impasse they have got to face the facts of the situation and to take normal and reasonable decisions. I am sure, as others have pointed out, that the Minister could have no personal satisfaction in putting a Budget like this before the House. In fact, it must have been a painful and disagreeable task for him. I do not want to say much about the structure of the Budget. The significant thing about it does not lie in the details but it lies in its general character and in what that general character reveals about the general economic policy, and even the political policy, of the Government.

There are one or two other matters to which I should like to refer, although they have been touched on by others. In the first instance, there is the proposal to borrow £1,350,000 for export bounties and subsidies. I do not think that it is legitimate for the Minister to borrow for such an expenditure in view of the attitude and policy of this present Government. If the policy of the Government were to bring the economic war to an end in this year, then it might be perfectly legitimate to borrow; but as the policy of the Government is to continue the economic war and not to negotiate or attempt any settlement, it looks as if, so far as they are concerned, the export bounties and subsidies are a permanent thing. They will go on as long as this Government is in office because the circumstances will continue to exist which make them necessary. Therefore, the whole of the export bounties and subsidies ought to be provided out of revenue in the same way as any other expenditure which falls to be paid out of this Budget.

There is one other thing I should like to say. I think that the Minister's deduction of £950,000 for general over-estimation is very large in view of other items which are set out in the sheet above it. For instance, take the reduction of expenditure in connection with the administration of the Old Age Pensions Act, which, I think, is £150,000, and in connection with the Volunteer Halls of £85,500, and so on. A lot of the things which might have enabled the Minister to set down such a big sum for over-estimation are already deducted from the total of expenditure that is to be provided out of taxation. I would gather from this two things: that the Budget position, if we look at it straight and fair, is something worse than is portrayed in the sheet shown by the Minister; so that, in reality, we are approaching very close to the impasse to which Senator Johnson referred. It is quite obvious that, with the trend of expenditure rising—and I do not think it is possible for the Government, without making very big changes, to prevent that rising—and with the yield of taxation tending to fall, more and more taxes must be imposed. There is a very formidable list in this Budget when we take into account that the Government has half the land annuities in so far as that half is collectable, and it has the amount which was formerly paid to the British Government in respect of Royal Irish Constabulary pensions and other pensions. That has all been eaten up, as it were, and now we have this considerable list of new taxes on the necessities of life.

If we look over the figures of the last few years, everything we see points to the fact that next March there must be a more considerable list. Before Senator Johnson, somebody here talked about the fact that income taxpaying people were not having the burdens imposed on them that tea-drinkers were having imposed on them, or something like that. Now, I think it is perfectly clear that, in the circumstances which exist here, an increase in the income tax above the British level would not benefit the Exchequer. I do not know whether the Minister thought of putting on an extra 6d. on the income tax. I do not say that I would advise him to do so, because I think that permanent harm would be done, that capital would be driven out of the country, and that owners of capital and income derived from capital outside the country would be driven out, and that the national or communal ownership of that capital would be lost. Therefore, I do not say that I would advise the Minister to do that. Perhaps, however, as the country is learning so much at so great a cost, it might be worth while to give a demonstration to everybody concerned as to what would be the effect of letting our income tax go above the level of the British income tax. As I say, it would be costly, but it seems impossible to get these financial and economic truths realised without actual experience and without the cost involved in experience. The position undoubtedly at the moment is that you have great numbers of people here with the major part of their property invested abroad, and you also have people who are only resident here for a week or two or for some short time in the summer or some other part of the year—people with a double residence, so to speak—and it seems to me, especially in present circumstances and under the present auspices, that if the income tax is put up so that these people have to pay 6d. more on all their income, some of them will not come here, and even the half we get will not be got at all. Some of those who live here will find a means of drawing their stakes and leaving the country, and the amount of income spent here by them will be lost to the country. It seems to me that the Minister for Finance cannot really afford to put up the income tax above the British level. It seems to me that if the income tax were put up in that way the Minister would not succeed in getting more money for the Exchequer, and all it would mean would be that the country would be taught a painful lesson.

The position, therefore, is, that, if expenditure is going to rise, and going to rise necessarily, and if the yield of taxation is going to fall, then we are up against the impasse to which Senator Johnson referred. We are up against extraordinarily and unbearably heavy burdens, especially on those who are poor and who are obtaining no sort of relief or public assistance—the people who are the back-bone of the country, the ordinary people, the wage-earners or the farmers, who are living by the sweat of their brow and producing all the real wealth of the country. Senator Johnson asks whether the Minister hoped to escape from this impasse by such a development of industry here, by such a rapid development of industry, as would give him new sources of revenue and cause new streams to flow into the Exchequer. I do not think that the Minister can hope, within any very short time, to obtain such new streams of revenue. If the agricultural purchasing power were not reduced as it is, then there would be very much greater prospects of success; but with the policy of the Government drying up agricultural purchasing power to the extent to which it has been dried up, then many industries, which should really be flourishing, are only going to live a sort of precarious existence under the shelter of the tariffs. They are not really going to be centres of prosperity under present circumstances. There can be no doubt at all about the drying up of agricultural purchasing power. There may be some doubt as to the extent of the drying up. And one must almost discount some of what is said by farmers generally as to their circumstances. If you are not a farmer yourself, you have to discount some of every farmer's grumbles because it has been a habit of farmers from time immemorial to make a poor mouth and say that they were getting no profit out of their work. In this connection, I remember, in the very early days of the Free State, we were discussing, by way of a joke, the question of coats of arms for the various departments of State; and I remember, when we were discussing the Department of Agriculture, the late Kevin O'Higgins suggested for a coat of arms for that Department a bull rampant, and so on. Somebody then asked what would be the motto, and Kevin said:—“Nothing pays.” Undoubtedly, the tendency is for the farmer to say that nothing pays. Apart from that, however, there is a great deal of evidence, and one hears it from all sorts of observers, and one also can be convinced by the statements of prices and so on, that many farmers are rapidly approaching something not far from destitution—many substantial farmers—and I think myself that one result of the drying up of the agricultural purchasing power is that as a result of this Budget a particularly substantial item of revenue which the Minister now relies on will largely disappear. It may be that some farmers who are not paying their annuities could pay them. But undoubtedly they could only pay them with much greater difficulty than formerly, and it will cause actual deprivation to themselves and their families. As far as I remember the figures, in March 1934, the uncollected arrears of land annuities amounted to something like £316,000. On the 31st March last, I think the figure was £800,000. In other words, there was an increase of £500,000 in arrears in the course of one period of 12 months.

Then, take the land annuities which appear in the weekly statements which are issued. Last year, there was at this time something like £138,000 collected, and this year there is something like £38,000 collected. So that, there is every indication that, whatever the Government may do in the way of putting pressure on, the annuities in fact are going to prove uncollectable as long as the British tariffs remain in operation. And if that £2,000,000, or whatever the Minister has reckoned on, has to be abandoned, then there are more taxes which will have to be imposed in the next Budget. There is every indication also that, no matter what the Minister may do in the way of administrative economies, the cost of social services is going to rise. All sorts of explanations may be given of the swelling of the figures of the unemployed, but I think that the Minister could not well explain away the actual increase that has taken place. The figures may have swollen beyond the actual figures. There may have been factors which magnified the increase in unemployment, but I think there is no doubt of the reality of the fact that there is a greater number of people unemployed now than there was 12 months ago. That cannot be accounted for by the stoppage of emigration, because, if emigration would clean out unemployment, then this country never should have had any unemployed for several generations. Emigration may relieve unemployment to some extent, but it also creates unemployment. If 1,000 people leave a district, then there are 1,000 less who are purchasers. There are 1,000 people less who require suits of clothes, boots and shoes, and so on, and who give employment generally to their neighbours around them. In any case, the increase has been too sharp to be accounted for by the staying at home of a number of people who, under the conditions of some years ago, would have emigrated.

Finally, the figures of the contributions to the unemployment fund do show that the actual number of people in work throughout the year has increased very little indeed. I know that the Minister for Industry and Commerce has referred to the number of insurance books current, but it is quite clear that you may have 51 insurance books current and it might only be one man's work, because all the people might only work one week in the year and you would have 52 books and only one job. I think the real test are the contributions to the fund and they show a very small increase in the number of people in insurable occupations, and that includes everybody except domestic servants and agriculture; and agriculture shows no increase. Accordingly, in spite of all these sugar factories and all the other things, there is really very little increase in employment. Some people have got jobs in these new enterprises, but the drying up of purchasing power and the increase in taxes have thrown out people here and there, so that the number thrown out is very little short of the number provided with work by the high protective policy of the Government. It seems to me when we come to the impasso, the only way that will provide relief is for the Government to recognise the need for the restoration of the agricultural market and for a restoration of the agricultural purchasing power as the only means of giving a chance to the industrial policy of the Government and the only means of avoiding this vicious circle, in which we are already, of increased expenditure, increased taxation, unemployment, and the various sorts of hardship we are going through. As it is, we are going to rob the Exchequer on the one hand of revenue and we are going to throw new burdens in respect of social services upon it.

There are one or two details that I should like to discuss, but perhaps it would be better to keep them for the Committee Stage of the Bill. I should like to say, however, with reference to Senator Jameson's remarks about the Corporation Profits Tax that one of the reasons why the former Administration was not in a hurry to take off the Corporation Profits Tax—although we admitted that there were strong arguments against it and although we admitted that it was a sort of differential income tax and fell on certain firms and not on others—was the fact that at that time the income tax here was substantially lower than the income tax on the other side; so that, even the people who had to suffer the Corporation Profits Tax had not the grievances which I think they now have when the tax has been brought up. Senator Johnson referred to the reduction of the British taxes. I think the income tax here was lowered simply because the British income tax was lowered. I think the sugar duty was taken off simply to appear as a balance when the income tax was reduced. Now income tax having been lowered the sugar duty is put on. The concession to labour in taxation policy as long as the economic war lasts, Senator Johnson will find, will be illusory because the Minister is going to have no alternative but to continue the sort of progress that is made clear in this Budget.

Mr. Baxter rose.

Mr. Fitzgerald

I had intended to speak too but I was going to make a suggestion that if any one of us speaks now we will not give the Minister very much time to reply. If he intends to reply to-night he would not be finished by half-past ten.

Leas-Chathaoirleach

I cannot closure debate on this Bill.

Mr. Baxter

I have no desire to embarrass the Minister.

Mr. MacEntee

If my wishes are to be considered, I have no objection to starting my reply to-night, if the debate be finished, and continuing tomorrow or resuming the debate tomorrow.

Leas-Chathaoirleach

We will hear Senator Fitzgerald afterwards.

Mr. Baxter

I have no desire to detain the House at any great length at this hour but there were some farmers here who had intended to make a case from these benches and they are not making it. I suppose if one were as charitable as a good Christian ought to be one would sympathise with every Minister for Finance who has to perform the odious task of introducing a Budget in any country, particularly in these days. Possibly we are not as charitably disposed as we ought to be. The truth is that there is so much to criticise in the Finance Bill before the House, there are so many reasons why this Bill is regarded as unsatisfactory by the people of the country that perhaps in a way one ought to congratulate the Minister on the courage he has displayed in the very unpopular taxes which he has imposed through the medium of this measure. I think if conditions were such in this country that the financial position could be regarded purely from the economic and social angle and the political considerations and the contributions which political parties make, and apparently have to make, could be put aside, possibly we would have a very different type of Finance Bill before us from the one we have here. The Bills which preceded this one would have been different from what they were. We have this Bill because of the ones that were passed in previous years. I think there was no speech made in the House with which I was more disappointed than the speech made by Senator Johnson. I remember in other days, in another House, how very different the Deputy Johnson of those days was from the Senator Johnson of to-day.

For years my view with regard to the policy of Senator Blythe when he was Minister for Finance was that he was putting on a charge upon the people of the country, particularly the farming community, which was beyond their capacity to bear. Looking at the whole position as I see it to-day, frankly I feel that Senator Blythe, with greater resources at his command, imposed lighter burdens and was much more careful in the way of spending money than is the Minister for Finance to-day. Perhaps I might say to this extent I have changed my own view from the view I held then, that taxation in itself and Government expenditure is not essentially harmful or injurious provided the capacity of the people to bear the burden of taxation is sufficiently strong that the paying of the taxes imposes no very great hardship. I think that cannot be said of the Finance Bill before the House.

I believe that the payment of many of these taxes will impose burdens on the very poorest of the community. I agree that the Minister can answer that the poorest in the community are getting services which they did not get in the past. But what I feel about it, as somebody else said earlier, is that if you balance the services which the State is giving to those poor people with the burdens they will be called on to bear under this Budget, I think they will be at a very considerable disadvantage in the new taxes they have to pay. The Minister told us that we have an increase this year in bounties of £600,000 over last year's figures. Of course it is true that these bounties are being paid practically altogether because of the economic war, except in the case of butter. This may be said about butter—Senator Dowdall has made reference to it—the world price of butter is much lower than it has been for years, but if the penal duties had not to be paid by the butter producers in this country the contribution from the State, through the consumer of butter here, to the producer might be very much less than it is and the farmers would still get a much better price for their milk than they are getting. The truth is that in the Six Counties the farmer is getting 5d. a gallon for milk and his butter is sold at 10d. a lb., while I cannot get more than 4d. a gallon for milk and butter here is sold at from 1/4 to 1/6 a lb. Now the penal duties and the economic war have made demands for bounties much greater, demands which in normal conditions would not have to be made. But because local government is going to get an increase of £230,000 this year, there is to be a decrease of £100,000 in the agricultural grant. I wonder how many hundreds of thousands of pounds are the local councils going to lose because of the default in the Guarantee Fund. Then I wonder how far local government services will benefit beyond what they received last year. Will they even receive as much? On the Land Commission you are going to spend £132,000 more than was spent last year. What strikes me about that is, when one knows the difficulties that people on land are experiencing to-day in paying the charges that are put upon them, is there any justification for increased expenditure to the extent of £132,000 in providing more land for other people? I agree that it is a policy that has to be carried out, but the liabilities are much greater even to the State than the figure of £132,000, and the return for the expenditure of that money is not such as to make one have one's heart in the spending of it.

Senator Dowdall said that the effect of the Government policy has been to put industrialists in the position of being able to go into the market and get capital which they would not have been able to get ten years ago. That is true, and if that was the sole effect one would not find fault with it. But I put it to the Minister and to Senator Dowdall that if that be true of the industrialists it is not true of the agriculturists, and that is the tragedy of the present political and economic situation in the country. If we were presented with a Budget that could be viewed from the point of view of its economic and social values and which had no entanglements with the political policy in which the country is involved, the whole position would be much clearer for many of us in this discussion.

A certain aspect of this Budget strikes me as it ought to strike the Minister for Finance himself. The deplorable state of affairs in this country was never brought more forcibly before us than it is to-day, and if ever there was an urgent call in respect of which the resources of the people would be taxed to the utmost that situation faces the leaders of the people here to-day. There is clear evidence that there is a greater necessity now than ever there was for sacrifice by the people here to terminate the Border position which is creating such an appalling situation for some of our people. The Minister for Finance is an Ulsterman, as I am, and as others of us are. When we read our papers to-day and when we saw, as I saw, and as Senator Toal saw, some of the paintings on the roads in the Free State as we came along here, the Border situation was brought even more forcibly before us. You begin to think of a way out and you look at this document here and find the unhappy position that the taxpayers here are in. Whatever may be said for the peace, calm and toleration we have got, the position here is that the taxpayers are being taxed through bread, butter, tea and sugar to an extent that the people across the Border have not to pay. That is not an argument for bringing the Border to an end. It is a serious consideration and it ought to be a serious consideration for our people so to organise their economic and even their political life as that it will be made possible for us, while reducing our taxation, so to raise our standard of life that we will have a very strong argument available for bringing about the unification of the country again.

I think from that angle this Budget is not what it ought to be. I sympathise with the Minister for Finance, whose home is in the Northern capital, for having to produce a Budget so unattractive to Ulstermen as this Budget is. From that and other points of view, I think it is a very unpopular Budget. I would have liked to make reference to some statements of Senator MacEllin. Perhaps I will leave it to another day. But I would make this comment, that when he referred to the wheat growers in Europe growing wheat and not growing grass, if he were telling the whole story it would have been that they did not grow grass, because if they grew grass to feed the cattle, there was no market for their cattle such as the Irish farmer had. He said the Government were maintaining social services and were not doing what their predecessors did. Their predecessors did many things with which I do not agree, but I would remind Senator MacEllin that even the Minister for Finance has found it necessary to follow the footsteps of his predecessor, if not in the same extreme way, at least on the same road, for they, too, are proposing to cut the old age pensions.

Mr. Fitzgerald

I think the point that was made by several of the speakers in the Opposition with respect to the Fianna Fáil challenge, a few years ago, that taxation then could be reduced by £2,000,000, could be summed up in this short manner, that considering what was collected from the people in the way of taxation, the services fell short of their real value by £2,000,000. I make the definite assertion here that no person can make a proper comparison between conditions that existed three or four years ago and conditions as they exist now, more especially when there is a complete change of policy and conditions not alone in this country, but in the entire world. I look upon this Budget as a very human and a very national Budget. It is the result of, in my opinion, three different definite sets of circumstances. The first one, which, I think, I can dismiss in a few words, is the extraordinary increase in social services. That has been dealt with by several speakers, and I shall not touch upon it beyond saying that I believe the policy of this State with respect to the provision of social services and with respect to the introduction of legislation, such as the Conditions of Employment Bill and other Bills, in time will bear fruit and create a wonderful impression across the Border.

The second important feature with respect to the present circumstances is that there is economic difficulty with another country. Not alone is that economic, but it is in a measure, and a very serious measure, political as well. We cannot disguise that fact. The only thing I want to say with respect to that economic position is that the thing that has been thrown up most of all is this question of the annuities. I come from Cork where no one can deny there is a certain definite atmosphere with respect to the non-payment of annuities. People who can pay will not pay. They believe, as Senator Milroy has pleaded, that England is collecting the full amount and, therefore, they ask why are we to pay again, even half of it. You can have the thing in either of two ways. One is to release them from the payment of 50 per cent. of their annuities and not to reimburse them in the way of bounties and subsidies. Which is the better way? I put it to Senator Milroy that he should be very slow to recommend the non-payment of annuities or even to consider a temporary moratorium in respect of the 50 per cent. of the land annuities. You may never get them back again. It is a very dangerous principle. If another section of the community — people in the towns — find themselves in economic difficulties—you know how the town tenants' position grew in volume — they may say "We will pay no rents; we will not pay for the shops that we run."

Mr. Milroy

Where is the analogy?

Mr. Fitzgerald

The analogy of not paying. I think the whole question of the farmer's title to his land should be left unimpaired, and the advisers of those who refuse to pay their annuities in Cork are going about now in the most dangerous possible manner to impair the title of the farmers to their land. You must remember that what is done in one decade can be repeated by another section of the people in a different decade, and you have got to take care that you are not laying down very dangerous principles. If you want to give advice to those who believe that they have a complete set-off with respect tot he economic position which they find themselves in and that they cannot orientate sufficiently quickly, it should be that, as a practical people, they should try to reconcile their difficulties outside of politics altogether and approach business from a business angle.

The third important consideration that we must bear in mind with respect to this Budget is that it is bound up with the huge national policy of a new fiscal system for this country. What does that envisage? It envisages for us what it does for every other country in the world. You have to consider tariffs, bounties, subsidies, prohibition orders and so forth. You have to give that system a trial. It is not so much a question of a difference with England, because if the difference with England were not there I would still stand for the building up of this fiscal policy. There is the question of security. I do not know that England is perfectly secure with regard to her food supplies or supplies of raw material in times of stress. I do not know that any country such as England or our own that is surrounded with water is quite safe in a situation of that kind. Therefore, on the question of national security, we must ensure that we will have food supplies and supplies of raw material in times of stress irrespective of whether that places a burden on this generation. With respect to the development of the policy of providing wheat for our people and placing an undue hardship on them in the meantime, I say that as nationally-minded people we should above all render our position as secure as possible for the future.

There is another reason. As regards the development of our own potentialities, we are placing ourselves on the safe side. The question of the loss of the nation's revenue can be dealt with in this way: supposing that the price of wheat hardened and went back to what it was in 1928 and 1929, this country would lose if it had not a wheat policy of its own. Three years ago there was the imposition of a duty of 2d. per gallon on petrol coming into the country. That cost our people £400,000 on a consumption of 48,000,000 gallons. It might be said that it would be a difficult thing to set up an industry of that kind here. First of all, you would have to import the raw material and when you had got down to the question of reimbursing the industry from the outset to put it on its feet, as you did in the case of the small refinery that you started in Haulbowline, you would be criticised as you were in that case for the loss to the Exchequer of £26,000. But that may have proved to be a very good investment. As a matter of fact, I claim that the recent increase of 1d. per gallon in petrol across the water which was not passed on to this country, but only 50 per cent. of it, resulted in a saving to the Irish consumer and the whole nation of £78,000. Have we there, I wonder, a set-off for the £26,000? You cannot consider the question of the temporary hardships that may be inflicted on any section of the community when you decide upon a bold policy and go out for it, knowing that in the ultimate you are making for national security, for the protection of your own interests, and that you can control your own markets.

With respect to the increase in population, Senator Milroy made the point that the restrictions on emigration were responsible for keeping people here. Surely not. We all know that not alone will young Irish men and women not emigrate to those countries that they used to go to, but that they are actually coming back because they know that this is a better country. That has happened in the case of people who have been ten, 12, 20 and 30 years out of this country. We all know the conditions in the United States of America for a number of years past. It is a country with a favourable trade balance. The figures show that it has a declining trade balance, but yet it is a fact that last year it had a favourable trade balance of £45,000,000. That may be effected by the exportation of its surplus commodities such as wheat, cotton and other goods at uneconomic prices. You cannot judge everything by an adverse trade balance. You have to consider the way in which the people of a country live their lives, and the degrees of happiness and social contentment that exist in a country. For those three reasons, I am going to stand by this human and national Budget. It has been argued that the incidence of taxation may fall unduly upon the poor, but does not the major part of our taxation fall directly upon the individuals in the community? That is so in the case of duties levied as either customs or excise. Most of our taxation falls directly on all the people.

You can increase this Budget in the way that Senator Blythe wants it done so that we can assess the exact figure that we are paying out of the Central Fund on wheat, butter and other subsidies. I resist that contention by saying that I do not think you can collect more to pay out more. As a matter of fact, if you let all those things find their real level you will get a better figure for your cost of living. You will get a better index figure by letting all these things find their natural level, and then labour can base its claims for consideration upon a true index level. These, briefly, are the reasons which impel me to support the Budget. I do not think I have entered into any political considerations whatever in my treatment of it. This is a Budget that is in accordance with the policy that has been supported by the people at the polls on two different occasions. That policy should be given an opportunity of proving its worth, and I believe that time will show that the policy of the Government is a wise one.

Leas-Chathaoirleach

The Minister to conclude.

Minister for Finance (Mr. MacEntee)

Before I go into my general reply, I think that I ought to devote my attention to one or two specific questions which were raised on the details of the Bill, notably by Senator Douglas and by Senator Honan. With regard to the effect of Section 8 which Senator Douglas referred to, and the possible reactions of it, on a person who went abroad — the Senator took the example of a student — I would not be in a position to say anything unless I had precise details of the case. I do not see the Senator in the House at the moment, but I will take the opportunity of getting in touch with him. When I get the details I will see whether the case in which he is interested is covered by the section.

The Senator also raised another question with regard to sub-section (5) of Section 3. He asked me whether an ordinary inspector of taxes would be competent to deal with cases which might be thought to come within the terms of this section, or whether we would appoint an officer specially for the purpose. The intention is that these cases should be dealt with by an ordinary inspector of taxes.

On the other question as to what is meant by the term "annual rent" which will be found in line 27, page 4 of the Bill, that is taken as being the rent which a willing tenant would pay for the premises he occupies if he were paying the rates and taxes and bearing the cost of repairs. The Senator also adverted to the position of those who had bought houses either, I presume, through a building society or under some other form of a deferred purchase scheme and who would probably suffer under this section. I presume that we shall have an opportunity of going into that in greater detail on the Committee Stage of the Bill. But the Senator specifically mentioned those who are owner-occupiers — again, I presume, under a deferred payment system — of houses with a £20 valuation. I would like to direct the attention of the Seanad to the fact that in the case of a person who is the owner and occupier of a house with a £20 valuation, that even if he had bought out the property completely: that there was no other charge on it, and that even if his family circumstances were such that he should have to pay income tax at all, the minimum increase that could be imposed under this section on such a person would be 11/3 per annum. I do not think that is going to derange any family's finances.

The Senator then referred to Section 7 of the Bill which deals with the amendment of Section 7 of the Finance Act of 1932, and I have pointed out that this is merely in accordance with what is already the decided policy of the Government and of the Oireachtas. It is simply bringing this into line with recent measures controlling manufacturers which are now the law. Therefore, I do not think that I would be justified in going into any elaborate defence of the principle involved, but the Senator seemed to regard it as a very serious matter indeed. He said that this policy was bad, and was becoming peculiarly bad, by reason of the fact that issues of shares which have been guaranteed by a British company enjoy an exemption. The Senator made that statement but he did not attempt to justify it by any argument. Possibly, before I go on to deal with what he said subsequently, I should point out that it is the intention that if those companies have been floated here they have, in general, been floated to establish new industries here or to transfer to such Irish ownership as will comply with the terms of the Control of Manufactures Act existing factories here. As well as that, it is clear I think, from the terms of the Bill that the exemption applies only to new capital invested in industry for the purpose of making extensions and so on. If foreign manufacturers are transferring to Irish companies owned and controlled here and entirely governed by our laws, if it does mean that it means that they are transferring ownership of existing factories here in order possibly to safeguard their position or to induce our people to invest in these factories. Our people can only invest in them presumably by realising some of the capital which they have invested abroad and bringing it home under Irish control. That is quite in line with the general policy of the Government.

Once again, in the building of new factories, the same process is being gone through — Irish capital invested abroad is being realised and is being brought home, and the general policy which the exemption was introduced to serve is being given effect to. Remember in that connection that the inducement is not given to the foreign manufacturer. The exemption can only be enjoyed by a resident in Saorstát Eireann. No matter how much foreign money is invested, if the shares are not held mainly by Irish citizens, controlled by Irish citizens and in the beneficial ownership of Irish citizens, no benefit is given. It is a concession reserved solely for our own people, and it is to encourage the Irish investor who in general, it is admitted and deplored, is but an apathetic and timorous figure in regard to Irish enterprise. It is to induce him to risk his capital in these concerns that the concession is provided.

The Senator then went on to deal with this very much vexed question of the fact that while this concession is enjoyed by a person who invested in a public company, it was not enjoyed by a person who, or as the Senator put it rather naively I think, there was no concession granted in respect of profits paid out to improve the business. That is how he put it. Of course, what he meant to say was that it was not enjoyed on profits re-invested in order to earn additional profits and in order that more income might be derived. The first question that would arise there in regard to the concession which the Senator was advocating was this: if you allow a person a certain exemption you will have a demand, as often happens, for complete exemption in regard to all profits invested even though they are part of his income. They happen only to be surplus income which he does not need to meet his ordinary requirements and which he invested in his own business. If you allow him exemption for income invested in his own business how are you going to deny him complete exemption also when he invests some part of his profits in another person's business? The purpose of the investment is to extend the business in order that additional income may be derived from it. I do not take the Senator's point of view. The Senator's point of view, I take it, is this: if he invests capital in a concern which he does not control and therefore takes an element of risk, he is to get no concession and receive no inducement whatsoever. On the other hand, if he is to invest money in a business which he completely controls solely and singly, he is to get a concession amounting to complete exemption from income tax. That is what I take to be at the back of the Senator's principle.

I think the House will understand why we could not grant the Senator's demand and they will understand those special circumstances which in our view justify the very special concession which we make in regard to public companies. There is the timidity of the Irish investor, and it is a serious timidity, about trusting his capital to the management of another Irishman. He is not at all as nervous when it comes to entrusting it to a foreigner, an Englishman or a Swede or to another Hatry or a Kreuger — for they seem to be able to get all the money they require from this country, but when it comes to a factory here, the Irish investor will fight shy and we have to offer special inducements. They are entitled to some consideration, however, as against the person who wants to keep everything in his own hands. The section which is most vocal in regard to its demands is that of those manufacturers who are enjoying satisfactory profits or protection for their products at the cost generally of the consumer — we can put it that way. Instead of doing as a man does who forms a public company — allowing the general public to come in and take shares — they are all concerned with keeping the matter in their own hands.

We have a number of problems and one of the things we are trying to encourage is the establishment of these public companies with a view to getting an active money and security market here. The people who are not concerned to help us want to keep everything in their own hands. I do not think that we ought to give them the concessions which we give to those who allow the public to come in and take shares.

The Senator referred also to one of the items contained in the Schedule. I would be prepared to debate that question more fully when we get to the Schedule on a later stage of the Bill. A Senator referred to the question of duty on starch. He said it would be particularly detrimental in regard to the linen trade and the other trades which export some part of their production. So far as starch is concerned, a drawback is payable on linen and textile exports in respect of imported starch used in the manufacture of the goods exported and it may be that while there would be some practical difficulties to be overcome, the fact is that it is the law, and if these people who use starch claim the drawback, they are entitled to it.

Senator MacEllin and another Senator raised the question of the duty on linoleum and said, or at least implied, that they thought this duty was unjust and inequitable. As in the case of all such duties, the specific rate is heavier on the cheaper product, but in this case the range of quality in linoleum is so great that it would be virtually impossible to administer satisfactorily an ad valorem duty. We would have all the temptations to present false invoices which accompany the administration of ad valorem duty and while it is true that we have imposed it on linoleum, we have also imposed it on oilcloth which may be taken to be an adequate substitute for the cheaper grades of linoleum, and in so far as the cheaper grades are concerned, they will not be affected at all.

In the moment I have left, I should like to say a word in regard to the point raised by Senator Honan in regard to Ennis. I am not in a position just now to say what my intentions would be in the matter but if the facts are as he has told the House, that Ennis was revalued some years ago—I wonder if Senator Honan could tell me the year——

Mr. Honan

About 1928.

Mr. MacEntee

——and that in consequence the valuation was increased by 70 per cent., I would be prepared to accept a recommendation from the House. It would be necessary that I should have immediately from the Senator or from the local authority full particulars showing the previous valuations and the present valuations and when the valuations took place, because frankly, I will not consider any revaluation prior to 1923. If it has taken place afterwards, and if other towns are in a similar position, I will consider them provided it can be shown in general that the proposed increase of 25 per cent. in the poor law assessment would be inequitable. I move the adjournment of the debate.

Debate adjourned.

Mr. Dowdall

On a point of explanation. When I attempted to move the closure, I did not know that Senator Blythe was about to speak. I would not be guilty of shutting him out.

Leas-Chathaoirleach

I take it that we resume to-morrow?

Mr. MacEntee

Yes.

The Seanad adjourned at 10.30 p.m. until 3 p.m. on Thursday, July 18.

Seanad Éireann debate - Wednesday, 17 Jul 1935