Senators I think are aware that an Order made by the Government under the Imposition of Duties Act, 1932, must be confirmed by legislation within a period of eight months from the date of the Order. In this year the Government made an Order which this Bill proposes to confirm—Emergency (Imposition of Duties) (No. 226) Order—which relates to duties on wireless apparatus. It was considered desirable to review and recast the duties upon wireless apparatus. The House is probably familiar with the history of these duties. They were originally imposed in 1926 for the purpose of raising revenue to finance the broadcasting station that was then established. Duties were imposed upon wireless apparatus and on all component parts of wireless apparatus at the rate of 33? per cent. ad valorem. They were not intended to and did not have any protective effect. For some years after the duties were imposed the revenue derived from them was earmarked for broadcasting purposes. That situation ended in 1929, when these revenues were credited to the general account of the Exchequer and not appropriated in aid of or set against the cost of the broadcasting services. In 1932 it was decided to recast these duties so as to encourage the assembly and partial manufacture of wireless receiving apparatus here. The duty of 33? per cent. was increased to 50 per cent. upon assembled or substantially assembled apparatus and the duty on component parts was reduced to 25 per cent.
As I have stated, the duties had originally a solely revenue purpose and with the revision of duties in 1932 the Minister for Finance did not wish to lose the whole of that revenue so that the scale of duties devised in 1932 was designed not merely to encourage the assembly of wireless apparatus but also to continue to yield revenue to the Exchequer. The duties were protective to the extent that a lower duty operated upon component parts than upon assembled or substantially assembled apparatus. These duties were revised in a minor degree by various Finance Acts up to 1937. In consequence of the change, the production of wireless receiving apparatus here began, although in pre-war years the output of local factories was not sufficient to supply the whole of the requirements of this market. It is estimated that of the 40,000 wireless sets which were purchased every year on the average in pre-war years, not much more than 25 per cent. were home produced. There was a number of reasons for that position. The industry was a new one and it was developing gradually but the main reason in my view was that the manner in which the trade in wireless apparatus was carried on involved the giving of very substantial discount by manufacturers to wholesalers and importers. That situation had the result that the declared value of wireless apparatus for customs purposes was small in relation to the selling price fixed by manufacturers and the importers were able to pay the duty and still make a substantial profit on the sale of sets.
During the war years the production of wireless apparatus fell considerably owing to the difficulty of obtaining parts but, arising out of the efforts of the firms to keep going, it was demonstrated that many parts which were previously imported for incorporation into sets assembled here could be manufactured here and it was considered desirable to recast the duties, first of all to encourage that development, that is to say, the manufacture of parts which were previously imported complete for assembly in sets here and, secondly, to eliminate the revenue aspects of the original duty. The new scale of duty is designed to encourage manufacture and assembly to the degree now considered practicable and to remove from the scope of the duty altogether such parts as wireless valves which it is considered are not likely to be manufactured here but which were nevertheless subject to duty previously for the benefit of the Exchequer.
The system under which the duty will be operated will necessitate the granting of licences to firms which are engaged in the manufacture or assembly of sets to the approved degree, to import duty free certain components. There are, in fact, three such firms operating at the moment, manufacturing components and assembled sets for sale here. To these three firms, and to these three firms only, is the privilege of duty free importation of certain assembled parts allowed.
I have mentioned that the annual sale of wireless receiving sets in the pre-war years was about 40,000 sets. It is anticipated that the demand in the present and future years will be higher than that, both in consequence of the fact that there have been difficulties in obtaining sets during the war years and the fact that the extension of the rural electrification scheme will create a new market heretofore not catered for by the manufacturers. The three firms engaged in the industry are producing at present at a rate of about 25,000 sets per annum. Their output is increasing and will continue to increase as supplies of materials become more plentiful. When in May of this year the new duties were brought into force the number of employees was 100. It is now about 350 and it is still increasing. It is understood that at least three additional firms are proposing to engage in the production of wireless sets here. One of the existing firms, which established a new and larger factory and got into full-scale economic production before the others, is selling sets similar to sets sold under the same trade name in Great Britain at prices which are the same as those prevailing in Great Britain exclusive of purchase tax. The other firms, which are not yet in full-scale production, are selling sets at prices slightly higher than the British prices but it is anticipated that their prices will come down to the level of British prices when full-scale production has been reached.
There is at present a certain difficulty in supplying parts for the repairs and servicing trades, but it is the intention of the firms in the industry to produce for these trades, and already some supplies are becoming available to them. It is contemplated that the full requirements of the repairs and servicing trades will be met by the production of the local factories in respect of components manufactured by them. To the extent that persons may have sets of types not produced here and require replacement parts for those sets, they will, of course, have to pay duty on those parts. As I explained, however, these parts have been subject to duty since 1926. At present 20 different varieties of sets are being produced and sold here, so that there is a wide choice available to purchasers. All these sets have different characteristics and different performances. The industry is a very desirable one for establishment. It involves a considerable degree of skill on the part of some of the operatives, it is capable of giving substantial employment and its full-scale exploitation may lead to further industrial development of various kinds worth having. For that reason, the Government considered it advisable to make the changes in duties achieved by the Order referred to in this Bill and recommends the Oireachtas to pass confirming legislation.