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Seanad Éireann debate -
Thursday, 18 Jul 1935

Vol. 20 No. 8

Finance Bill, 1935 (Certified Money Bill)—Second Stage—Resumed.

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

When we adjourned last night I was dealing with a few specific points relating to the various sections of the Bill which had been raised by Senator Douglas and Senator Honan. I think I disposed of most of them and I will come now to consideration of the general criticisms of the Government's budgetary policy. In general, these criticisms may be reduced to two heads, (1) that the amount of taxation is excessive; and (2) that the tax scheme has a number of features which are inequitable as between one section of the population and another. Senator MacLoughlin opened the attack by referring specifically, I think, to the Entertainments Duty which he said we had increased by 50 per cent. I do not suggest that that was the whole burden of his speech, but the greater part of it as you, Sir, will remember, was devoted to a commentary upon the verses of Omar Khayyám. I confess the demands on my time have not afforded me the same opportunity that Senator MacLoughlin seems to have enjoyed, of refreshing myself with Fitzgerald's quatrains. But I do seem to remember — and I am sure the Senator will forgive me if my deficiency leads me to misquote — a couple of lines as the Senator prosed along through a desert of inconsequences and occupied the time of the Seanad in going back on matters that were buried in the remote and distant circumstances of the past. I recollect one or two lines which I think might be aptly applied to that part of the Senator's speech. If my memory misleads me, and if I misquote, I must crave the indulgence of the House. I think the Senator is a mighty sniper at the Government and therefore he will recognise how apposite the lines are in connection with some of the criticisms. Omar speaks of the mighty hunter:—

"And Bahrám, that great Hunter — the wild Ass

Stamps o'er his head, and he lies fast asleep."

I must say that a certain feeling of drowsiness affected me as I listened to the Senator's dissertation upon this garden by the brink of the brook, with which he occupied the attention of the Seanad. But, leaving his budgetary quotations aside, and coming down to one or two specific points he made, there was a reference to the Entertainments Duty which he said we have increased by 50 per cent., particularly on the poorer seats. I can only conclude that the Senator has been placed under some misapprehension by the ill-founded criticisms of this particular tax which appeared elsewhere, because, in fact, there has been no increase in the rate of tax on the cheaper seats. So far as these seats are concerned the inclusive charge for which is less than 1/- the rate of increase has been a good deal less than 50 per cent. It is only in the much more highly-priced seats that the full increase has been imposed, and even if we had increased the Entertainments Duty on cinematographic exhibitions by 50 per cent., I think that is quite a justifiable imposition in the circumstances in which we find ourselves. It is an amusement and a luxury, and I think when it is remembered that live shows as they are called are completely free of tax, and that those who frequent the cinemas, if they merely want amusement, can get it elsewhere, outdoor or indoor, or at ceilidhes, there can be very real substance in the criticism that Senator MacLoughlin founded upon that fact.

With regard to the tax on sugar, one would think up to this year sugar had been a commodity which had gone untaxed. The position is that in the year 1931-32 the then Administration derived no less than £1,426,000 from the tax on sugar and sugar preparations alone. The amount which we hope to get this year, even after we have imposed this additional ¼d., will be only £800,000. In order to encourage the sugar beet industry, and to afford some assistance to our farmers, we have deliberately forgone no less than £625,000 for the revenue which was formerly derived from sugar. Even with the additional impost which we have put on in this Budget, it has to be remembered that in February, 1932, the average retail price of sugar in the Saorstát was 3.37d. We can take it that generally the price of sugar was 3½d. per lb. In 1935, before the present Budget was introduced, and in the same month, the price of sugar was 3.46d. on the average. Again we may assume that it was sold generally at 3½d. per lb. Even with the additional tax which we are putting on, and after having relinquished £625,000 of the sugar duty, sugar will be only a ¼d. a lb. dearer in 1935 than it was in February, 1932, the month before we came into office. When we consider the magnitude of the industry which we have developed and extended, and the additional employment which has been given, not merely to farmers, agricultural labourers and people on the land, but to people in factories as well as in all the other industries, on the railways, in the quarries preparing the lime, in the sack factories, and 101 subsidiary trades that are benefiting because of the foundation of this industry, it will be admitted, even if people do have to pay a ¼d. per lb. more for sugar, and if we had to make good with this tax some part of the revenue which we have lost by reason of the encouragement which we have given to this industry, when these facts are taken into consideration it must be admitted that the extension of the industry has justified itself in every detail.

It is going to be of enormous benefit to the people, particularly to farmers and farmers' sons, who are finding employment in the growing of beet and afterwards in the factories turning the beet into sugar. I do not think any person who has any regard for the psychological effect which the establishment of these large factories has had in the areas in which they were established will say that the price we are paying is too high. That deals also with the criticism Senator Jameson had to make of our policy in regard to the growing of beet sugar. It has been said that I referred on one occasion in a certain way to the sugar beet factory. Senator Miss Browne reminded me of that. I scarcely needed to be reminded of it at this stage. It is old music in my ears, that I referred to a certain undertaking as a white elephant. It was a white elephant in the circumstances which existed at that time. That was early in the year 1932 when we were subsidising that factory very heavily. I think, speaking from memory, that since the establishment of that factory we paid in subsidies alone to the proprietors almost £3,000,000 — nearly 50 per cent. more than it has cost us to buy back that factory and to establish three additional factories. Substantial profits were being earned by that factory — both profits directly disclosed and indirect profits which those who owned the concern derived from that ownership. Every penny of these profits was going out of this country, and the people of this country were feeding the "white elephant" with these profits. I am not going to say that the experiment did not, to some extent, justify itself. It did show that sugar beet could be grown here on possibly as economic a basis as it could be grown anywhere in Europe. I do not want to be unfair to the people who had the courage to start the factory and to show what could be done in regard to the industry, even if I must say that their courage failed them at a certain point and that they did not think the extension of the experiment would be justifiable. At the time at which I was speaking, that factory, from the point of view of the people, was not an economic proposition. We have changed that. All the profits now derived from the factory are being retained in this country. The whole share capital of this undertaking is owned by our own citizens. With the exception of the wages received by the technical staff, the wages paid are paid mainly to citizens of this country. A large part of the building work has been undertaken here, and I have not the slightest doubt that, henceforth, the fact that there are openings in these factories for young people with engineering and scientific training will be a great incentive to our universities and other institutions to provide facilities for techincal study which did not exist before these factories were established. The position has changed. Instead of having a white elephant as an object of pleasure or of worship, we have now a useful beast of burden. It is now earning its keep, at any rate, and it was not doing that previously.

And there will be more to come.

As soon as the demand for sugar increases, we shall proceed to meet it in the same way. No matter how closely this proposition is examined, one thing is clear—that whatever we had to pay before to foreigners for producing our sugar, we are now keeping at home. I admit that if all our land was being fully occupied, if all our young people were fully employed on that land in some other more profitable way, then the question as to whether the sugar beet industry here would be an economic one would be a matter for very careful investigation. But so long as we find large parts of our land untilled, so long as we find that a large part of the time of the agricultural population is not absorbed in agricultural pursuits, so long as our agriculturists are idle during periods when they ought to be working, then if we can use those idle lands to make sugar and save us what we should have to pay to foreigners, I think the industry is an economic industry and that we are justified in extending it.

Senator Jameson referred to the position in regard to corporation profits tax. I am prepared to concede at once that the fact that a large number of concerns are financed with capital which has preferential claims upon the profits and that these claims must be met before the equity shareholder gets any dividend, tends to place the whole incidence of the corporation profits tax upon the people who own the equities in the corporation. It is to some extent an inequitable tax as between one class of shareholder in an undertaking and another class of shareholder. It is not a tax in which I have my heart and soul. At the same time, when I have to choose between a profits tax of this sort and taxing a necessary of life, I am afraid that the person who is sufficiently prosperous to have surplus capital to invest must be the first victim. The Senator is in error in thinking that the corporation profits tax was a war tax. The corporation profits tax was imposed in the Finance Act of 1920—almost two years after the war. It was repealed, I think — I am speaking from memory — in 1925 in Great Britain, but it was not a war tax.

Even in 1920, the cost of the war had to be paid. There was taxation because of debts incurred during the war.

That is still true.

We are not paying all our war debts even to our first cousins. The feeling at the time, I think, was that there would be a tendency for small concerns to be amalgamated in larger undertakings and for the control to be concentrated in fewer hands. One of the social purposes they hoped to secure by the imposition of this tax was the prevention of that aggregation of industry. They kept that tax on until 1925, and we have kept it on since simply because there did not seem to be any less evil alternative. It has been a standing feature of our tax system since the State was established and it could only be dropped if, as I have said, some alternative source of revenue could be found. I do not see any great prospect in the immediate future of being able to dispense with it. At the same time, I am not entirely blind to its disadvantages. There may be a tendency, as mentioned last night, for men to keep their business in their own hands and not to allow others to participate in the profits. Provided they do not turn themselves into public companies, these people can escape the tax.

The Minister suggests that we are in the position of the Chinaman and that we must pay somebody to come in and get his head chopped off.

I am sure that there are other means of evasion upon which I do not want to dilate. There appears to be some misapprehension as to the exact effect of the tax. Senator Jameson mentioned that some people could not afford to advertise because they had to pay this tax. This is a tax on profits and advertising, I take it, would be regarded by the Revenue Commissioners as a legitimate business expense. Therefore, the cost of advertising would be deducted before the net profits of the firm were struck. I do not think that the tax would prevent any persons from spending more money upon the advertising of their products or from spending more money in opening up markets for these products. That would be a legitimate trading expense, which would be allowed for before the net profit upon which the tax is levied would be assessed. While the tax is inequitable as between one class of shareholder and another, I do not think it is so detrimental to business progress and development as Senator Jameson seems to suggest. One of the lesser justifications for Section 7 of the Bill — the section which grants the concession in regard to income tax — was as partial compensation for the burden of corporation profits tax. We had regard to the fact that people who invested abroad had not their investments subjected to corporation profits tax, and we felt that if we wanted them to bring back their capital and invest it at home, we had to put them, more or less, on the same basis as they would be if they had continued their investment abroad. That is one of the minor reasons why the concession in regard to income tax on new investments was introduced.

I do not know whether the Seanad will permit me to enlarge on the question of the Guarantee Fund. The Guarantee Fund, in the form in which we operate it now, was in existence since the State came into being and has been a normal characteristic of our land purchase legislation. It may have disadvantages but, on the other hand, it has this advantage — it does bring home to public opinion the injustice which a man may inflict on the community if he does not meet his just obligations to the State. So long as land purchase exists on its present basis, so long as the State has to find some solid security for the moneys which it advanced in order that farmers who were formerly tenants — most of them tenants at will — might eventually become the freehold owners of their land, so long as the State finds it necessary to have a real security, I do not think there is going to be any departure from the present system of Guarantee Fund. It has got to be brought home to people everywhere that it is just as bad to fail in paying your land annuities as it is to fail to pay your rates. People will have to become alive to the fact that if they refuse to pay the rates they themselves are going to be the first sufferers when the local services break down. It will be exactly the same in regard to the central services if people fail to meet their obligations in regard to land purchase because the grants which are given to local authorities cannot be met and it is the areas — and quite equitably — in which there is a mass refusal to meet their obligations in regard to the land annuities which, in equity, ought to suffer if the State has not the necessary finances to provide the grants in relief of local taxation.

I do not know whether Senator Jameson would like me to embark on the question of State investments, but I think that on the whole, so far as the Industrial Credit Company and the Sugar Beet Company are concerned, the results of the current year's working will show that we are justified in taking these investments at cost: that they have not depreciated in any way, and that, in fact, both concerns have justified their establishment even, possibly, much beyond our original expectations.

Might I say a word with your permission, Sir, on that subject? I would like the Minister to know that in what I said I was not quarrelling in the least with what the Government were doing, but was merely pointing to the great difficulties which must necessarily follow because of the non-payment of annuities. I was not suggesting in the least that they should not be paid. I was merely pointing out that if they were not paid by those who owed them, they would have to be paid by the ratepayers of the district and that a very difficult monetary situation is thereby created. I was merely drawing the Minister's attention to that point, and that is the real point for the whole country to consider.

I quite understand, Senator. I hope I did not lead the Seanad to believe that I understood that Senator Jameson was in any way encouraging the non-payment of annuities. Certainly, I did not gather that at all from anything he said. I think that Senator Jameson was rather stressing the ineffectiveness of the Guarantee Fund procedure. As I say, I cannot see anything that is likely to replace that fund, and I cannot see any of our successors in office replacing it by any other machinery, because if we are not able to deal with this problem, it is going to be a problem for those who succeed us, and it is not going to be any easier because we have found it difficult. Senator Jameson and Senator Dowdall both referred to Section 3 of the Bill. That is the section which proposes to increase, for the purpose of income tax assessment under Schedule A, the valuation of property by 25 per cent. They referred to the fact that a great deal of property had been built since 1922 and, therefore, had been valued since that date; and they assumed, I think, that because it had been valued since 1922, its present valuation was a fair reflection of its actual value. Now, it has got to be remembered what the valuation is supposed to represent. It is supposed to represent the fair income which a person might expect to enjoy from the property; that is, income which, in normal circumstances, he might expect to enjoy if he let to a willing and not favoured tenant — a tenant who was willing to pay the full commercial rental for the property and who, in addition, had to bear all the rates and to be liable for all the repairs. Therefore, it is the net income which the person would derive. What is the position? Most dwelling-houses here in Dublin, which are valued at between £24 and £26 a year, will let for £100, clear, the landlord bearing rates and taxes and being liable for repairs. If we allow the landlord £25 to cover rates, taxes and repairs, we find that the actual net income which the owner of the property derives from that letting is £75 per annum. The principle of income tax is that it is assessed on the real income, no matter how it may be derived. There are certain preferential schedules, such as that derived from profits accruing from the occupation of lands, and things like that, but, in general, income tax is supposed to be levied on the net income enjoyed by any person — either his profits in his business, or the earnings of his profession, or the salary of an employee —and there is no justification in equity for placing the person who derives income from the ownership of property — possibly the best secured of all incomes — in a more favourable position than any other person.

What about the values?

The valuers are bound by this, and that is the point: that the old valuation statutes, I think, have been interpreted rather against the State and the local authority by the courts. They have been interpreted in this way: that the courts have insisted on the principle of relativity being applied all round, and when new property has come along and been valued a person looks around to see what a more or less similar house, not so new and not erected prewar, is going to let at. He will find that the difference between the letting value of the old house and the new house is not very great, and he then looks at the valuation of the old house, which, again, is very much below what its true valuation is if the valuation is based on the income derived from it, and he fixes the valuation of the new house with reference to the valuation of the old house deriving a more or less similar income. That is the principle which——

I should like to point out, Sir, that in the case of old houses that come under the Rent Restrictions Act, where they have not been empty for a considerable period, there is no price approaching what the Minister quotes on a £24 valuation. The house would have had to be empty and then would have to be relet.

That may be the case in connection with houses under the Rent Restrictions Act, but on that the saver is that in no case can the notional assessment, to put it that way, for income tax be greater than the assessment based on the actual income to be derived. I cited in the Dáil a considerable number of instances of houses, as I have said, in all parts of the City of Dublin, whose valuations are of the order of £24, £26 and £28, which are let at rentals of between £90 and £110, and that is the class of houses which we feel, in equity, ought to come under this. I am sorry, Sir, if I digress, and possibly I might debate this with greater length on the section, because all these points will arise, but I am merely dealing with the general question.

Senator Johnson dealt with some of the criticisms of the present proposals which based themselves upon an assumed increase in the cost of living, and I think he dealt with it very effectively, with, possibly, certain qualifications which I may refer to later on. He pointed out that, as between 1931 and 1935, the trend of the cost of living in the Free State had followed very closely the trend of the cost of living in Great Britain, and that, if there was any spread between the two figures, it had been infinitesimal. In fact, notwithstanding all the charges that have been levelled against us to the effect that these protective duties have increased prices considerably, I think that, when every factor here has been taken into consideration, it will be found that there has been a slight reduction in the cost of living as between 1931 and 1935; that is, if we measure in terms of sterling. Accordingly, I think that those who use that argument against us do not found their arguments on very sound ground, unless they go further and say that, if we consider the cost of living here in terms of world prices generally, possibly the position might not appear to be so favourable as compared with other countries. Then, however, they find themselves in this dilemna: that the very people who argue on these lines are the people who say that we must keep ourselves linked to sterling. They cannot have it both ways. They cannot have world prices and sterling prices at the same time. They must have one or the other, and, as we are on a sterling basis, there has not been any increase, but on the contrary, a slight decline in the cost of living in this country as between 1931 and 1935.

Senator Johnson referred to what, I agree with him, is one of the major features of the Budget, and that is that we have not felt it advisable to increase the rates of income tax here. I can assure Senator Johnson that that decision was not come to except after the fullest possible investigation of the position and of what the possible reactions might be. I feel that, in the present circumstances, the psychological reactions of an increase in the rates of tax would be such among certain elements in the community that we should probably lose a very great deal more than we would gain and suffer a loss which, I think, we could not recoup ourselves for, for a very long time.

Therefore, it is one of the obligations of a Finance Minister to raise taxation in a way which will be least injurious to the community as a whole. I do not feel that I had any option in the matter except to conform to the policy which our predecessors found to be right in that regard, and to decline to increase the income tax rates over British rates in the present circumstances. I do not know whether the circumstances would not change materially if we were to consider the question of maintaining income tax at present levels rather than of reducing them. The psychological factors there might be slightly different, but in any event, I agree, as we see the position at the moment, that our rates and the British rates must, roughly, correspond in present circumstances at any rate.

The Senator also asked me to indicate that our long-term policy would be: whether we proposed to widen the basis of taxation. Well, I think that it is not possible for the Government, and, particularly, for the Minister for Finance to indicate what his long-term policy is going to be in circumstances which, I think, we all hope and anticipate are going to be temporary and passing and are not going to be a permanent feature of the country. We certainly have changed, to some extent, our agricultural economy and that in itself created certain transitional difficulties, but, over and above that, these difficulties have been intensified by the dislocation which has taken place in the accustomed channels of trade. I am not one of those who believe that this country and Great Britain are never going to be friendly neighbours. I look forward with eagerness to the day upon which they will be, and, as was indicated elsewhere, if we do overcome our political differences and do find a solution for them—an impasse even the most drastic that any of us could contemplate — nevertheless, we need not despair that normal trade relations between this country and Great Britain will be resumed. I think that we could only formulate a long-term policy as soon as we see what the long-term conditions are going to be. I do not think that we are in the position of people who have to adapt themselves at the present moment to changed circumstances, and I think I could not make any forecast in that regard. When the position is being clarified, then I think it will be much more profitable to indicate the lines upon which, I think, we would move.

But, there is one thing that I think I would be nearly bound to say, and that is that so far as I am concerned I cannot see any hope of betterment, any departure from what have come to be regarded as the canons of finance and of currency orthodoxy. My view is that for the past 20 years almost, the world has been going through an agony of currency experimentation. We have all sorts of panaceas, of various descriptions, tried in every country of the world and none of them has produced a solution for the domestic difficulties of any one of those States. I think that the old canon seems to be coming more and more established in repute amongst all thinking people: that unless a man sows he cannot reap, and you cannot produce the attributes of wealth out of a printing press any more than a conjuror can create anything out of a hat. That is my own personal view, and I think it is a view that appears to have been shared by my predecessor. Therefore, so far as I am concerned, I cannot promise that there will be any departure from what I think is the only profitable basis for trade or industry in a country: that a man will get the equivalent, in a tangible return, of his labour and that the State need not expect to be able to discharge its obligations towards its people or towards its creditors except by taking some of the concrete produce off the people to meet its obligations, whether it be to the poorer sections of the community or whether it be to the more fortunate who have capital and the wherewithal to furnish it.

I do not know whether it would be strictly in order, but I think I ought to say at this stage that there is some misapprehension as to the position in which our currency is at the present moment. We are not on the gold basis: that is to say that our unit of value does not depend upon the value of a single commodity, in this case gold. We have been, since 1931, enjoying a managed currency which is at present on a notional composite commodity basis. There are certain schools of economic thought that think that this is a desirable thing. There have been long agitations for a stabilisation in the value of money. We have been, as the figures for the cost of living in the two countries — Great Britain and in this State — indicate, enjoying whatever benefits we might derive from a managed currency and a stabilised value, but it has not, any more in this country than in Great Britain, cured any of our social and economic problems. We still have the question of unemployed people to be provided for as they have in Great Britain. We still have the unpleasant duty of having to come and impose duties upon this commodity and on that commodity in order to meet our national obligations, but there is this fact that, as compared with 1931, we have had a managed currency based upon a composite commodity basis. They are talking about bringing that into the United States, but we have had it here since 1931. Before that, we had a managed currency on a gold standard basis, and the position was not any better. My own personal feeling is that currency does not go to the root of this matter at all: that really what is more important is the organisation of endeavour in order to utilise to the utmost whatever natural advantages we possess. Until we have that efficient organisation with a maximum utilisation of our natural resources, we can no more increase the standard of living than a man can lift himself up by his boots.

Senator Blythe suggested among a number of things that this Budget was weak in structure, and as his justification for that he instanced the fact that we are borrowing large sums for export bounties and subsidies, that our allowance for over-estimation is too large when we take into consideration the fact that we were also claiming reductions in expenditure in respect of old age pensions, volunteer halls and unemployment assistance. He said that we were not justified in borrowing for the export bounties and subsidies unless we knew that the economic dispute was coming to an end this year. I do not see that he is justified in saying that borrowing for some part of the export bounties and subsidies would not be allowable unless the economic war was coming to an end this year.

Will the Minister guarantee that it will end next year?

I see that the Senator is hoping that it will come to an end sometime. In the meantime, we are doing this: we are progressively increasing the amount which we provide out of revenue for export bounties and subsidies. I agree with the Senator to this extent: that we would not be justified in borrowing for an indefinite period. I hope that every year is going to bring better things, but in any event, we have to face the fact, and I think it will be admitted that we have faced up to the fact, that the economic war did not end last year, and that whereas last year we only felt called upon to provide £750,000 for export bounties and subsidies out of revenue, this year we have almost doubled the amount which we are providing out of revenue by increasing it to £1,350,000. We have faced the fact that the war had gone on for another year, and, possibly next year, if the same undesirable obligation has to be faced, we will be compelled, I believe, to find a larger proportion of the export bounties and subsidies out of revenue. To that extent, therefore, I think that the Senator and I are in accord. I think any person — even those who might be inclined to take a very strict view — may say we have not failed to recognise what are the requirements of fair finance in this matter. It all comes down to this: what are we justified in bearing this year and what are we justified in trying to pass on to posterity? I think we are shouldering a fair share of the burden, bearing in mind what posterity will enjoy as a result of the sacrifices which we are making. It has been said that the allowance for over-estimation is too large because we have already taken credit in the Budget for economies in old age pensions, volunteer halls, and unemployment assistance. I think the Senator is possibly under some misapprehensionn, because he said these were not real economies. Take the case of the volunteer halls. There is a real economy there because we have definitely deferred the erection of 50 per cent. of the halls which we hope to erect this year. It is money which will not be spent this year. It is, therefore, to that extent, a very definite economy. So far as unemployment assistance is concerned, we are satisfied, after a further investigation of the position, and bearing in mind the operation of the employment orders, and particularly the heavy increase in tillage in rural areas, that we would be justified in reducing the original position in regard to unemployment assistance by £300,000. There are a number of factors which exist now and which did not exist then. There is, first of all, the increase in tillage. There is, secondly, the incentive we are giving people now to look for short-term employment under the Unemployment Assistance Bill. Under the original regulations a man placed himself at an actual disadvantage if he took employment for a short period. Consequently, there was, I believe, a great deal of evasion in regard to that. Thirdly, the new employment investigation officers have been at work since February of this year, and I have not any doubt that they are going to detect a considerable number of people who have secured certificates and are in receipt of unemployment assistance which they will not receive when the employment orders come into operation. Consideration of every one of these factors makes me feel quite satisfied in expecting to secure that reduction of £300,000.

The Senator also stated that there was going to be a general drying up of revenue, because even though we were placing people at work every person who had been put into a job displaced another man because of the changed economic conditions, that we were merely providing industrial employment at the expense of agricultural employment.

I said we were providing relatively little additional employment.

I want to elucidate the arguments pro and con and I do not want to mis-state anything. Let us assume that it may be a little, and challenge the argument which the Minister for Industry and Commerce has based upon the number of unemployment insurance books now current and upon data of that kind. I took the trouble some time ago to examine a number of industries. The examination of the figures as disclosed in the census of production for 1931 and the census of production for 1933 in a certain number of industries. These are figures which, I think, merit the attention of the Seanad, because I think they do show that even in 1933 there was a very favourable trend in employment conditions. I have not any doubt that that trend has been intensified and accentuated since. Take boots and shoes, clothing and apparel, sugar and confectionery, and jam making. In the case of boots and shoes, clothing and apparel, sugar and confectionery and jam making, the value of the output in 1931 was £2,950,000. In 1933 the value of the output had jumped to £4,045,000 and the number of people employed in the industries had increased from 9,638 in 1931 to 14,547 in 1933. The revenue derived from taxation of commodities of these descriptions diminished from £1,012,000 in 1931-32 to £650,000 for the current year.

The other side of the story is this: that the wages paid in these industries in 1931 amounted to £607,405, and in 1933 the amount paid in wages had risen to £841,542, an increase of £234,000 in wages. If we add to those figures the wages paid in the bottle making and brick making industries, we have in 1931 wages amounting to £72,652, and in 1933 wages amounting to £125,996, making a total increase in wages in all the industries I have mentioned of £287,400, against which we have a loss in revenue, I suppose, of approximately £380,000. We have 5,500 additional workers employed, when we take into account the workers who have been employed in the bottle-making and the brick-making industries. Here are really significant deductions which can be made from these figures. We have 5,500 additional workers employed at an average wage of £52 per annum. The approximate cost to the Exchequer in revenue per person employed was £66 per annum. It has been calculated — I think the Report of the Inter-Departmental Committee on Public Works will substantiate what I am going to say — on the very minimum in a public works scheme that the average cost of providing employment per £1 wages per man per week for a year is £150 — more than twice the State had forgone in revenue in order to provide employment in industrial undertakings for those 5,500 additional workers. It would seem from that that so far as the unemployment problem is concerned and particularly unemployment in agricultural districts, that there is going to be more hope from the policy which the Government is pursuing in establishing and fostering native industries, in solving or trenching upon that problem to a significant extent, than there is in any great scheme of public works.

What did the Minister say was the total value of the output in these industries?

It had risen, in the case of boots and shoes, clothing and apparel, sugar and confectionery and jam making from £2,950,000 in 1931 to £4,045,000 in 1933. Mark you, that was for 1933, before the policy of industrial development had got under way. I am perfectly certain, in due course, when the figures for 1935 are published, it will be found that this trend has been, as I said, intensified.

Before the Minister departs from that, will he say that the report to which he referred will be published shortly?

The interim report will not be published until the final report is published. The interim report is merely an indication of certain difficulties and of the steps which the Committee had taken to ascertain the extent of unemployment and things of that description. I do not want to commit myself, but I presume the full report will be published when available.

Because the deductions which the Minister is drawing are very interesting, and I think they will be very controversial.

Leas-Chathaoirleach

Certainly very interesting.

I wonder are they strictly ad rem, Sir? I do not know whether the House would have patience with me if I dealt with all Senator Milroy's speech. He also stirred my memory a little. I remembered, during some parts of it, at any rate, another couple of lines from Omar Khayyám. They are:—

"And lo! the phantom caravan has reached the nothing it set out from. Oh, make haste."

That is what I was thinking about some time about 8.30 o'clock last night, when he was anxious, he said, to get to this point of it. The Senator had alleged that the Government by deliberately destroying access to one of the markets which we had previously enjoyed, and which gave us capital to build up our industrial life, were crippling industrial development in this country. We have not destroyed access to any markets. We have, as the provision which we are making for export bounties and subsidies shows, been at considerable expense and considerable pains to maintain such access as we have to these markets. But there are other factors in the situation, and there are, I think, other authorities who have endeavoured to restrict access of external producers to those markets in the interests of their own producers. I do not know whether or not the Senator reads the Irish Times. I presume he does. He often expresses the point of view which finds favour in its columns. But there was a very interesting and instructive leading article—instructive to Senators who harboured the delusion under which Senator Milroy seems to have been labouring yesterday—in yesterday's Irish Times. Here is just one quotation from the Irish Times referring to the new agricultural policy which has been developed in Great Britain:—

"What will happen now?"

These Dominions have no dispute about land annuities with Great Britain. They have undertaken to reduce their exports to the British market.

"If the two Dominions keep their promise, the price of home-bred meat aided by the Government's subsidy, ought to rise; the farmers will be encouraged to breed more cattle, and less meat will be wanted from external sources."

On that point, is it not a fact, since the Ottawa Conference, that all the Dominions have increased their exports to the British market except this country—whether we are associated as a Dominion or otherwise?

That may have been so. We are not dealing with times past. Once again, "the roving finger writes, and having writ" we are looking now not at the past. We are looking to see what the future holds in store for those who believe that all their economic life is bound up with this problem of access to the British market. Here we are told that two Dominions have promised to reduce exports to that market, and that it is the intention of the British Government to encourage their farmers to breed more cattle, so that less will be required from external sources. Let us go on and see what, even in the best circumstances, is the view of the Irish Times. Painting that future in its rosiest terms, on the assumption that we are loyal and wholehearted components of the Commonwealth, the leader writer goes on to say:

"The Free State has one enormous advantage over the more remote Dominions—to wit, that she can supply fresh meat, while they can only supply frozen or chilled meat; and, when prices have been so adjusted that there is no great difference between the two varieties,"—

No great difference between the prices which we will ask the British to pay for our prime fresh meat and which they will be prepared to give for chilled or frozen meat, when these two commodities, very different in quality, have been brought almost to the same level.

—"the British public almost certainly will recover its former taste for fresh meat. If England and Northern Ireland cannot supply the demand, the Free State will be required to help them out."

When England and Northern Ireland refuse to supply the demand for fresh meat, at prices which are not greatly different from the prices demanded for chilled or frozen meat, we are going to be called in to help them to meet the demand. But look at the future that that envisages for our farmers.

Surely the Minister is not going to base the agricultural policy of this country on that of the leader writer of the Irish Times?

No. The trouble is that the Opposition here, and in the Dáil, want us to base our agricultural policy on the assumption of the leader writer in the Irish Times and of people in Great Britain who are shaping the policy which he has described here. I am not going to abandon this. This is the market which we are being told is going to be the sheet anchor and the salvation of this nation in the future, a market in which our farmers are going to be compelled to meet the demand for fresh meat at chilled meat prices.

Nonsense.

And give a monopoly for coal in return.

At any rate, I think it is an unbiased attempt to put the realities of the situation before the readers of the Irish Times.

I cannot understand the Minister's argument.

Leas-Chathaoirleach

The Minister is speaking to the Seanad and it is not fair to interrupt. What is the Senator's point?

If chilled meat and fresh meat are going to be the same price who in England is going to buy chilled meat? Where is the point or what is the argument there?

Leas-Chathaoirleach

Apparently that is what the leader writer said.

I do not know what the Minister is driving at.

I am not driving at anything. I think that Senator Miss Browne should write a letter to the Irish Times. I am not responsible for the opinions expressed there.

I should point out that we are taking very much less at present for our Irish fresh meat than is being paid for the frozen and the chilled stuff.

So we are getting very much less than 2d. a stone for our fresh meat. Very good frozen meat is being sold for 2d. a stone. These are factors in the situation to which Senators are wilfully closing their eyes. They have got to face facts. I pointed out often before that with the development of transport and the improvement in refrigeration we are going to be at a great disadvantage in the English market against prairie fed cattle. We cannot get over that. Senators will not take that view and will do nothing to safeguard themselves in that situation.

A situation that existed for years and years.

The situation has not existed for years and years, in the intensified form in which it exists to-day. Two years ago, it took the fastest steamer nearly six days to cross the Atlantic. It does the journey now in under four days. There is the same development in regard to transport between here and the Argentine and Australia.

Meat is not the only thing we are exporting.

Leas-Chathaoirleach

These interruptions are irregular.

I do not wish to pursue the Senator through all the ramifications of her argument. I heard about a tropical plant yesterday.

No, you did not. That is not true.

Leas-Chathaoirleach

That was in another discussion.

I know that I should not get the last word. On this question, let me try to drive home this point, that if I described the British market in the terms in which it is described by the Irish Times I would be accused of painting a biased and prejudiced picture. I take the observer, who is concerned to describe that market in the most attractive terms. If Senators have any quarrel with that description let them take it up with the person who made it. I am indicating that this is another view of the British market. I may not possibly go as far as the leader writer in the Irish Times goes, but I say that we will never again enjoy the monopoly and the privileged position in the British market which we did prior to the war, and up to quite recently.

Does the Minister agree that that is a damned good job?

Leas-Chathaoirleach

Is that a point of order, a point of explanation or merely an irregular interruption?

Perhaps it is.

There are a number of factors which we cannot leave out of consideration. There is a change in the whole military position, due to the development of aircraft. There is a change in the technique of refrigeration, and to improved methods of transport. There is the decision on the part of the British Government to develop its own agriculture. Everyone of these things is operating against us, and the factors we have to take into account will compel us to change our present agricultural economy. The difference between ourselves and those who criticise us is that we have foreseen these things, and have taken steps to deal with the new situation. I think I have taken up the time of the Seanad too long, and I will reserve for another occasion something which I was going to say in reply to Senator Baxter.

Leas-Chathaoirleach

I am sure Senator Baxter would like to hear you now.

There is another Bill to come along, and possibly we will resume the debate then.

Question put and agreed to.
Committee Stage ordered for Wednesday, July 24th.
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