The primary purpose of this annual Bill is to give effect to the financial resolutions already passed by the Dáil following the Budget. The opportunity is taken at the same time to introduce any miscellaneous financial matters which require legislative authority.
Section 1 is the usual section corresponding to Financial Resolution No. 1 and its purpose is to provide for the charge of income-tax and surtax for the current tax year and for the continuance of previous legislation dealing with these taxes.
Sections 2, 3 and 4 are relieving sections. The first of these brings up to date the existing exemption from income-tax in respect of wound and disability pensions and gratuities granted under the Army Pensions Acts. The second extends the existing exemption from income-tax of certain allowances payable to the widows of persons killed in the 1916 Rising, so as to cover increases in those allowances granted under the Army Pensions (Increase) Act, 1949. The purpose of the third of these relieving sections is to exempt from income-tax allowances payable to relatives of signatories to the Proclamation of Easter Week, 1916, and also the annuity payable under the Griffith Settlement Act, 1923. Originally, allowances payable to the relatives of the Proclamation signatories were exempt from income-tax but later these payments were not exempted, as the Griffith Settlement Act did not provide for exemption. It has been agreed that all such allowances should be exempt from tax and provision is being made in this section accordingly.
Section 5 provides that the preferential rate of customs duty applicable under Section 15 of the Finance Act, 1949, to unmanufactured tobacco grown in, and consigned from, a part of the British Commonwealth of Nations shall, with certain exceptions, cease to apply as from 31st July, 1950.
Section 6 has been inserted following representations which I received during the year from a great many quarters. These representations were to the effect that it was not often possible to keep the expenses incurred in connection with educational and charitable dances or other similar entertainments to as low as 30 per cent. of the takings. In such circumstances, where the expenses could not be kept as low as 30 per cent., the relief from taxation granted in 1943 was not provided to the extent desired. Section 6 now provides that the expenses limit of 30 per cent. be increased to 50 per cent. as from 1st August, 1950.
As regards Section 7, my attention had been drawn to the fact that, although most of the games of an amateur type conducted under amateur auspices have been exempt from time to time from entertainment duty, amateur westling games have been left out. There is no reason why wrestling should not be exempted and I have made provision for such exemption in this section.
Sub-section (1) of Section 8 provides that, on and after the 6th July, a person authorised to conduct auctions by virtue of an auctioneer's licence or an auction permit, granted under the provisions of the Auctioneers and House Agents Act, 1947, may act as an appraiser without being licensed under the Appraisers Licences Act, 1806. It was really intended that that should be the case, but licences under the Auctioneers and House Agents Act are often taken out for a company and it is then not possible for the exemption in fact to operate in favour of people who are called appraisers or people who get auction permits. There is a consequential sub-section which repeals as from the 6th July, 1950, Section 7 of the Appraisers Licences Act, 1806, which provides that all persons duly licensed to act as auctioneers may act as appraisers without being licensed as such under the Act. That sub-section is consequential on the passing of the auctioneers' and house agents' legislation and on the provision I am now making.
Section 9 is designed to give full effect to the provisions of the Chicago Convention on International Civil Aviation in so far as they relate to customs matters.
Sections 10, 12, 13, 14 and 15 relate to the very technical conventions concluded between the Irish Government and the Government of the United States in relation to double taxation. They were explained by me in considerable detail when I was speaking on the Second Stage in Dáil Eireann and I am assuming, for the time being, that that explanation has been read. These conventions are set out in the Schedules to the Bill.
Section 11 extends for a further period of three years the exemption from corporation profits tax allowed to certain public utility concerns, etc. This exemption expired on 31st December, 1949.
Section 16 secures with retrospective effect that last year's legislation increasing the stamp duty in respect of fines or premiums on leases shall not apply in the case of leases by a local authority under the Housing of the Working Classes Acts or the Labourers Acts or in the case of a lease by a society registered under the Industrial and Provident Societies Acts and made in accordance with a scheme for the provision of houses for its members.
Section 17 is designed to rectify a legal flaw which enabled the 5 per cent. tax to be avoided in the transfer of house property in certain cases.
Section 18 explains itself.
Section 19 embodies machinery to allow assurance companies to compound for stamp duty on industrial assurance policies.
Section 20 again was explained at some length in Dáil Eireann because it was not referred to in the Budget discussions.
The provisions of Section 20 are of a purely administrative character and do not raise issues of policy. The main purpose of sub-section (2) is to give the Minister power to invest foreign exchange held to the credit of the foreign exchange account, but he is restricted to two types of investment, either interest-bearing deposits with a bank or Government securities of the country in which such exchange is held. The rest of the section is consequential and no special point arises on it.
Section 21 provides for a further extension of the life of the Transition Development Fund to the 31st March, 1951, when it will be definitely wound up. While the moneys of the Fund could have been applied to various capital purposes in practice nearly all issues from it have been in respect of local authority housing including sanitary services which might just as well be provided for in the Vote for Local Government along with allied expenditure. After this year, as the Dáil has already been informed, all State assistance in respect of local authority housing will be provided through that Vote, and the opportunity will be taken to simplify the basis of subsidisation which at present is unduly complicated.
Issues from the Fund this year are estimated at £3,630,000 of which £3,461,000 is for housing and £169,000 for sanitary services. As the balance in the Fund at the beginning of the year was down to £1,630,000 it will be necessary to take a special Vote for about £2,000,000 as provided for in sub-section (2) to enable the Fund to meet the total estimated expenditure for the year.
Section 22 relates to the Capital Services Redemption Account. It will be noticed that after certain definitions have been set out, there is to be established an account called the Capital Services Redemption Account. Sub-section (3) of Section 22 provides a sum of £655,432 to redeem borrowing and interest thereon in respect of capital services. This is to be charged annually in the Central Fund, commencing with the financial year ending on 31st March, 1951. The annuity will be paid into a redemption account in half-yearly equal instalments.
Section 23 is the section which provides for the transfer of £300,000 from the Road Fund to the Exchequer for the purpose of meeting general charges falling on the Central Fund. When the Finance (No. 2) Act, 1947, was being enacted it was indicated that the proceeds of the increases in taxation on private motor vehicles provided for in it would not be available for roads expenditure but would be devoted towards meeting the cost of food subsidies. The additional revenue at the time was estimated at £300,000 for a full year. Since then there has been a considerable increase in the number of private vehicles taxed, so that the receipts from the increases in taxation would now be considerably more than £300,000 a year. This means that the Road Fund gains to the extent of some £100,000 to £150,000 not taken by the Exchequer.
Section 24 is the customary provision placing under the "care and management" of the Revenue Commissioners all taxes imposed by this year's Finance Act.
Section 25 is the usual provision in the Finance Act covering the "short title,""construction" and commencement of the Act.
Section 22 is the section upon which most of the discussion in Dáil Eireann turned. Section 22 has apparently been misunderstood. There is no reason really for a section of this type but it arises out of the borrowing programme in respect of the capital development of the Government announced or forecasted by the Taoiseach to the bankers and at a meeting in Clonmel and mentioned here and there is Dáil statements. In the Budget statement this year I said:
"The Central Fund Estimate shows an increase of £1,166,000 over actual issues in 1949-50, mainly for the service of public debt, which this year includes an annuity of £655,000 to redeem in full over a 30-year period the £12,113,680 of voted capital services which are being met by borrowing."
£12,000,000 odd is the sum which is shown on the face of the Book of Estimates this year as being for capital services. This provision then is to set up a special account known as the Capital Services Redemption Account for the payment of the interest on the sum of £12,000,000 odd and the amortisation of it over 30 years. When the Government came to a decision to admit in the Finance Bill the obligation of lodging this money to the Special Account they were fully aware of certain things: first, that the amount borrowed on foot of capital services might not meet the £12,000,000 odd which appears on the face of the Estimates; second, that it might be incurred only gradually over the year, and third, which has added force if what I said in respect to No. 1 is true, that the interest and sinking fund might be very much less than the sum provided for the year which is a full year's debt. The fact was lost sight of in the discussion in Dáil Eireann that without special provision of this kind interest on borrowings for capital purposes would have to be charged on the Central Fund as would the sinking fund on long-term borrowing on a national loan. £655,000 odd is provided for as evidence of the acceptance of the obligation of discharging capital service borrowings out of revenue over a period of 30 years and the determination to secure that result. The 3½ per cent. interest and sinking fund required to redeem the £12,000,000 odd is £655,432.
That section led in the Dáil to a discussion regarding the matter of capital services and borrowings in respect of them. That matter has been under discussion in this House once and in Dáil Eireann on several occasions. Again, I ask here as I asked before that in this debate Senators will let me know of any part of the £12,000,000 itemised in the Book of Estimates for which they consider this not to be a proper system of securing payment. They might let me know so that the items would be treated here in detail because I find it impossible to get those who are opposed to the scheme to come down to bedrock and list the items which they deem inappropriate to be dealt with in this way.
I will begin by quoting—as I will certainly will have to quote it before the end of the debate—the speech of one of the chief members of the Opposition regarding finance of this type. On the 6th March, 1948, Deputy Lemass addressed one of the Fianna Fáil Cumainn and said:—
"Austerity had not helped in increasing prosperity elsewhere."
He had in mind that the Government were setting out on a policy of austerity. His tune has changed but the speech remains. He went on:
"There was no justification for forcing their people to do without goods or services which they needed and which could be purchased for sterling. There was no need to cut down worthwhile projects for development merely to maintain external assets at their present level.
Plans for housing, arterial drainage, turf production, aviation, national defence, electricity development, harbour improvements, the expansion of the merchant marine service, transport reorganisation, and the like, would all require substantial capital expenditure. Fianna Fáil had been fully prepared to undertake all those projects, having been fully satisfied that the national resources were adequate, and that they would contribute in the future to the national prosperity or security. It was not a matter of choosing between those developments, plans and needed improvements in the social services, as the "ex-Labour" Minister for Local Government had suggested. There was no reason why the country could not have had both.
The present was a time for courage and enterprise, drive and enthusiasm. Instead they were being offered a mess of negatives, the timorous conservatism of little men who were afraid of the tasks with which they had been entrusted, who lacked confidence and imagination, and who were going to miss the greatest chance the Irish people ever had of placing the whole national economy permanently on a higher plane of productivity and safety."
We are taking that chance now.