Finance Bill, 1954—Second and Subsequent Stages.

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

By the Collection of Taxes (Confirmation) Act, 1954, which became law on 29th June last, the Financial Resolutions passed on Budget day this year were deemed to have had statutory effect from the outset and were continued in effect for a limited period pending the passing of the Finance Bill. The Finance Bill now before the House embodies these Resolutions and provides as well for certain other items requiring legislation, most of which were mentioned in the financial statement on 21st April last.

It is scarcely necessary at this stage to give a detailed analysis of the Bill, which has already received some publicity. I will refer only to those sections which deal with matters not covered by the Budget Resolutions or explained in the financial statement.

The first sections to be mentioned, taking the Bill in this manner, are Sections 6 to 9 inclusive, in Part 1. These relate to the exemption from income-tax of certain statutory pensions, gratuities and allowances. Section 6 exempts pensions payable to the widow of Terence MacSwiney and the widows of the former Mayors of Limerick—Michael O'Callaghan and George Clancy. The other two sections bring up to date the tax exemption of pensions, gratuities and allowances under the Army Pensions Acts. Section 10 merely brings Section 11 of the Finance Act, 1924, into conformity with the extension under the Courts of Justice Act, 1953, of the jurisdiction of the Circuit and District Courts. Section 12, which I might also mention, extends to future issues of transport stock—a Government guaranteed security—and to stock of the E.S.B. the privilege of dividends being payable without deduction of tax.

I shall pass over the first four sections in Part II of the Bill which provide for the alterations in the duties on beer, matches and rural entertainments announced by my predecessor, and come to Sections 17 to 20, inclusive. These four sections deal with the termination of various customs duties no longer deemed necessary and at present suspended by Orders made under the Supplies and Services (Temporary Provisions) Acts. These Orders are due to lapse on the 31st March next and the suspended duties would automatically revive next day unless previously terminated. In addition, Section 18 provides for the termination of the excise duties on glucose and saccharin. The commodities covered by these sections are in Section 17, boots and shoes; Section 18, glucose and saccharin; Section 19, mats of straw, rush or grass; and Section 20, the items listed in the Second Schedule.

I might explain with regard to the single Section 21 forming Part III of the Bill that Section 12 of the Finance Act, 1943, was designed to stop possible evasion of corporation profits tax, including excess corporation profits tax, by preventing companies from claiming exemption on the ground that they were precluded by their constitution from distributing profits. It is now considered that the section may safely be repealed.

The undertaking given in the prospectus of the 4½ per cent. National Loan, 1973-78, that stock of the loan would be accepted at its face value, with due allowance for any unpaid interest thereon, as the equivalent in cash in satisfaction of death duties, is implemented by Section 22 in Part IV. The authority is phrased in general terms and may, where so desired, be extended to any similar loan issued in future.

In Part V, Section 23, as well as implementing a concession announced in the financial statement by abolishing the £5 stamp duty on special licences for marriages in Protestant places of worship, discontinues, for administrative convenience, the 1d. stamp duty on certificates of births, deaths and marriages. Section 27 is the only other section in this part of the Bill requiring comment. It exempts from stamp duty receipts given for payments under the Health Acts to persons suffering from an infectious disease and receipts for certain other payments to necessitous persons.

Section 28—the first of four sections in the last part of the Bill—relates to the amortisation arrangements in respect of borrowings for voted "capital services" in 1953-54 and 1954-55. The purpose of the other three sections is self-explanatory.

That deals briefly with the technical aspects of the Bill. So far as the general principle of the financial policy which this Bill enshrines is concerned, I think I made fairly clear in the other House—and I am sure that members of the Seanad have read it in the newspapers—the view that we have expressed that, because the date of the general election was put back, it was impossible for the incoming Government in the time available to it to bring in and put through the Oireachtas new financial proposals. It was impossible to bring these proposals in and to give them sufficient time to have operative effect in this financial year.

That fact that we were not able to do that was not of our choice. It was the deliberate choice—as they were entitled to take a deliberate choice— of the previous Government when they decided early in March to hold the general election after the inception of the financial year and on the date on which it was fixed. Having taken that decision and the general election having been held at that time, we had no option in the circumstances but to accept the position as we found it and start from there. The Bill, therefore, in its technical aspects to which I have referred is the Bill introduced following the financial statement made by my predecessor on 21st April last.

The Minister, in concluding his explanation of the Bill, said it was a brief summary of its technicalities. This Bill is a Bill to implement the Budget proposals and the Budget proposals of 1954 are similar to those introduced in 1951, with the exception of certain reliefs amounting to something in the region of £2,000,000 which are given in this Budget. If we cast our minds back, we can remember the manner in which the 1951 Budget proposals were received and the statements then made by responsible persons who now occupy ministerial posts. We were told that these proposals inflicted great hardships on our people, that they contributed to unemployment and to stagnation in industrial and agricultural production. I do not wish to quote many of the statements made at that time, but I want to remind members of the House and those who may read the Official Reports of the proceedings of the Seanad that the measure we are asked to pass to-day gives approval to the provisions of that Budget except for the reliefs given in the Budget of 21st May last.

The reliefs given are reliefs which the majority of the people appreciate. They are reliefs which extend to the great majority of our people and amount to something in the region of £2,000,000. The Budget this year removes from the category of payers of income-tax something like 40,000 people; it gives considerable reliefs to the widow and the widower; it makes provision for increased allowances up to £20 per child in respect of children; and it gives facilities, encouragement and reliefs to those who are prepared to set up house and to purchase their homes. It makes provision also for a reduction of a ½d. per 2-lb. loaf of bread which will amount to £1,000,000 in the financial year. The country in general welcomed the fact that, after it had been found necessary to put our finances on a sound basis, we had arrived in 1954 at the stage at which we could give these reliefs. It was an encouragement to our people who could look with confidence to the future for reliefs of larger amounts.

The people who now constitute the Government suggested that the taxes imposed to meet the current expenditure of the Government were not necessary, that the huge demand, as they referred to it, was not essential for the carrying on of the functions of a Government and they suggested many ways in which there could be given a reduction in general taxation and, at the same time, a reduction in the cost of living and in the costs of the commodities which the people in general consume. While it may be suggested that a relief of ½d. in the price of the 2-lb. loaf is a relief for which the people should not have very great appreciation, I suggest that it was a more beneficial relief than what the Minister now proposes—a reduction of 5d. per lb. of butter.

In that connection I should like the Minister to give us more details, to give the House figures for the amount of creamery butter at present being consumed and the estimated increase which will arise due to the reduction of 5d. per lb. He might also tell us whether this amount will be paid to the farming community who produce farmers' butter and, if not, whether the Government have taken into consideration the very serious effect which that will have. The Minister for Agriculture in the previous Coalition Government stated that the bulk of the butter produced by the farmers' wives was not fit for the table and would be more appropriately used for the greasing of carts. That had a very serious effect and I am sure Senators who are interested in the farming community fully realise that.

When the subsidy was removed from farmers' butter, those farmers who were engaged in that particular occupation had no alternative but to get out of milch cows. They did so and were put on to the purchase of creamery butter. If that is going to recur we will have the same state of affairs brought about and in a very short space of time we will have, as we had in the short period of three and a half years, a reduction of something like 20,000 in our milch cow population. Those who are interested in the dairying industry will agree that it is the backbone of our agricultural industry and that if we have any serious decline in our milch cow population we will naturally have a general decline in our cattle population. While the Minister and the inter-Party Government may welcome an increase in beef production, you must remember that you cannot have the beef production without the cow population and any suggestion that is made for political purposes or otherwise should take that aspect into serious consideration.

There is another aspect of this proposal. When the Central Fund Bill was going through the Seanad, I think Senator Baxter, who is the representative of the dairying industry and creamery industry in this House, asked the then Minister when was it proposed to give an increase to the milk producer and when was a report from the Milk Costings Commission expected. We have heard now from the person who is in the responsible position of Minister for Agriculture that he has no great faith in whatever report this commission might make. Whether Senator Baxter has changed his views in connection with the demands the farmers were making for an increase in the price of milk——

Will the Senator quote what I said in that regard because that is not what I said?

Senator Baxter queried the price of milk and what the farmers would be paid for milk in the coming year.

That is very different.

If Senator Baxter would like me to trouble the House and delay the proceedings by reading his whole speech on this occasion, I would be quite prepared to do so. However, the members of this House have heard Senator Baxter make the same speech over so many years that I will not worry them with a repetition now.

We have seen in our daily papers that the Minister for Agriculture has sent an instruction to the creameries throughout the country that they may now export butter. The Minister and Senator Baxter know as well as I do, if not better, that, at the price prevailing at the moment, butter cannot be exported from this country to any other country. Therefore, I suggest this proposal to provide a subsidy to reduce the price of butter is not of itself a proposal to give cheaper butter to our people but a proposal to enable the Minister to subsidise the export of butter and that whatever may be the immediate effect of whatever statement may be made now, that will be the ultimate effect of it.

In connection with the proposal before the House, the Minister in this and in the other House claimed our indulgence for not giving us more detailed information and for not bringing before us a Bill in conformity with and giving effect to the policy of the present Government, because of the short time at his disposal. I would like to put one or two questions to the Minister. Has he seriously considered what effect this Bill will have on the country as a whole and is he satisfied that the passing of this measure and the giving of effect to the demands it is going to make in regard to taxation are in the best interests of the country? If not, he should have withheld the introduction of the Bill and brought in that Bill that he and his Government would consider to be the proper measure.

There are many aspects of the situation on which one would like information. There is a general anxiety amongst our people to have a statement from the responsible Minister, who is the Minister for Finance. We have had up and down the country during the general election campaign statements made that the previous Government accepted the advice of the Credit Corporation, that credits were frozen, and that because of that there were serious repercussions upon the country in general. It was suggested that all that was necessary to bring about a liberal flow of credit facilities was to change the Government. When it was suggested from time to time that the credit facilities that were available were there for those who were credit-worthy, we heard the cry: "The creditworthy man does not want any of those facilities because he can get the credit anyhow, but the person who cannot get credit should be provided for and will be provided for when we bring about this desired change of Government."

I would like also to get some information as to what is going to be the attitude of the Government to the many State-sponsored organisations we have and in particular to Bord na Móna. Bord na Móna has become one of the greatest employers in this country. It has done tremendous work, and I think those who advocated the development of this great national resource of ours are very proud to see that this week we have representatives from 14 nations who are here to discuss problems with our people and to see for themselves the great progress that has been made here. Is this great organisation going to be allowed to continue and, in particular, is it going to be allowed to continue in its own way, especially in regard to the recruitment of its employees? We have had a very wild charge made by a responsible Minister of this Government that recruitment in this and in other spheres was conducted on political grounds. There is a veiled threat behind this suggestion and I would like an assurance from the Minister that there is not going to be any ministerial or Government interference with the day-to-day operation and work of such organisations as Bord na Móna, the E.S.B. or those other organisations that are doing their work in such an excellent way.

I wish to refer now to the National Development Fund. A good deal of criticism was offered during the general election campaign to many of the proposals that were put forward for the utilisation of this fund and particularly in connection with Dublin Castle. This proposal was put forward by the inter-departmental committee that was set up to put proposals before the then Government, it was accepted as an essential project in that the building at present occupied by the staffs is in such a condition that they could not continue to be employed there. The responsible Minister stated in the Dáil, I think, that this particular project would be abandoned. What does the abandonment of that project mean? It means that the Civil Service staffs occupying these buildings at the moment must be housed elsewhere.

Where will they be housed? Will they be housed by taking over private buildings throughout the city? I suggest that already too much of that has been done to the detriment of the housing of our people. That project was one which should be continued so that the staffs there would be housed properly. The present Government seem to have grave anxiety about the Civil Service as they made a promise that there would be no less a sum than £1,000,000 provided to give the full award of the arbitration tribunal.

We on this side of the House have the greatest regard and respect for those employed in the Civil Service. They are all boys and girls, the majority of whom have come from the country. They are all giving very good service and any of us who come in contact with them, particularly with the higher officers, have nothing but the highest regard and praise for them. If we did not give the full award, it was because we had to recognise the financial position at the time. It should not be suggested because of that that we do not hold in the highest esteem the claims and privileges of the Civil Service. I think that is one of the reasons why we should see that as far as possible they should get what the State can afford and that they should be housed in the best manner the State can afford to house them.

I should like the Minister to be more free with the House and give an outline now of what he proposes to do. Not alone is the House anxious to hear that but so also is the country. The absence of such a statement is having a serious effect on trade and it would relieve that anxiety if the Minister could give any indication as to the great reductions in prices the public have been promised and which they expected. There is a withholding of orders by the general trade throughout the country. That is bad for industry, commerce and for the country in general.

It is all very well to suggest, when you are in opposition, what you might do if you had control, but when you take over control and find the things you thought were possible cannot be accomplished, I think it is only fair that there should be a definite statement made as to when these reliefs might be given. If it is not possible to give them this year, let that be clearly stated. It will have a good effect and will be of great benefit to our people. Whether that statement is made or not one very good thing to my mind has arisen out of this position and that is that in future we must have more honesty and more truth in Irish politics. We must act more responsibly in political life and take more care when we make promises and statements of this kind to the general public. I should like to have from the Minister a more clear and definite statement of policy in regard to what is in store for the future.

One would have expected that in the dying hours of this House there would have been a little more realism brought into the Chamber than that which emanated from the speech made by Senator Hawkins. He says there is general anxiety on the part of the people for a statement from the Minister. I do not think there is any evidence whatever of that. I think that any of us who come from the country will admit that there was never more calm and peace in the political life of the country than there is to-day. The election and the results of the election have had the most amazing stabilising effect on opinion. It has no doubt damped down the spirit—sometimes the almost disorderly enthusiasm one might say—of some of our people but if we are to judge by the tone and temper of the men in all Parties in the country there is an acceptance of the present political situation in a manner that does credit to the country. I would say that on behalf of the people who are now in Opposition and who were defeated at the last general election just as I would say it of those of us who were the victors. There was no great jubilation and defeat was accepted in a good spirit.

There was no defeat.

They realise by now that a considerable majority wanted a change of Government. We have got that change of Government and the people will permit the Government to carry on with their job just as they try to get on with their jobs. That is a new and very welcome spirit. I think the Minister is quite justified in saying that it would be unreasonable for anyone to expect from him a complete change of policy from that which was being pursued by the Government who outstayed their welcome. There was nothing else for the Minister to do but to introduce and implement the proposals of his predecessors. I would have thought that the Opposition would have acclaimed that decision on the part of the Minister. I do not know whether they are acclaiming or denouncing the Minister for accepting their proposals, but whatever their temper and mood about it is, the fact is that he has done that. He was very wise. It was a much more sensible thing for him to do that than to come in and attempt to upset the whole house and change everything overnight. I think it was very wise and far from his being denounced by all sides of the House he should be applauded for his right decision.

I had hoped that both truth and realism would play a greater part in Irish political thought in the future than many of us have experienced over a very long period. People in political life are frequently denounced. We denounce each other. Sometimes we are denounced by people who are not very prominent in political life but who are prominent in other walks of life. Let us try in our own way to make a contribution in a reasonable, realistic manner and if we do that I think the government will be better.

Senator Hawkins made a number of statements. To me, they did not seem to hang together. He asked when were we to have the general reduction of prices that has been expected and promised. I do not know who made statements promising a general reduction of prices. I do not think the Minister or any other members of our Party in their speeches up and down the country did so.

If there were evidence of such declarations, Senator Hawkins would have introduced the document and read it to us. That is sufficient proof that those statements were not made. A reduction of prices all round would be very desirable, but I was amazed at Senator Hawkins's attitude to the ministerial decision on the reduction of the price of butter. It seemed to me he was not pleased about it, as he said it would have been better to reduce the price of bread by more than ½d. How is one to please a Senator like that? I am sure the reduction is as welcome to the Senator as it is to anyone else.

I had hoped he would have approached the problems of the country in the spirit in which a Fianna Fáil Deputy in the Dáil last week attempted to approach them, when he addressed himself to them on the Estimate for the Department of Agriculture. If Senator Hawkins does not like to hear or to read my speeches, I suggest to him that at least he should read the speeches of his colleague, Deputy Moher, in the Dáil last week. He would see a striking similarity between those speeches and mine. I would commend to Senators on the other side that they should begin to think on the lines along which Deputy Moher obviously is thinking to-day. If they would do so and give their views in that fashion, they would be making a considerable contribution to the betterment of the people on the land and in that way to the betterment of all the people.

Senator Hawkins referred to a ministerial decision taken in the last few days making it possible for us to export butter. I do not know whether he is for or against that; I do not really know whether he knows himself. I would have imagined that would be something which he would have liked. On several occasions we heard him and his colleagues talk about the serious plight of the country, due to the balance of payments position. The only way in which we can rectify our balance of payments, when it is going against us, is by trying to increase our exports of whatever commodities we have in which there is a surplus available. He is talking about our dairying joined to our beef. One would be inclined to think he is against the export of beef. One would have thought we had passed away from those dark, unhappy days.

Those reading the Press in the last day or two felt a slight elation that Irish beef on the British market was commanding a very high price. We all should hope that that high level of prices can be maintained, as the higher it is the higher living standards we can enjoy and the less we have to fear that the balance of trade may go against us. When the Senator spoke of the decision to export butter, he said he believed this proposal was to enable the Minister to subsidise the export of butter. Surely Senator Hawkins can recall the days when we not only subsidised the export of butter but of beef, lamb, pigs, and everything we were sending off the farms?

When was that?

Not so long ago. The Senator is old enough to remember.

You are referring to the economic war?

You wish us to discuss that on this?

I am pointing out that we subsidised the export of products in the past.

Was Senator Baxter in favour of it?

Senator Baxter had no responsibility for the sins of those opposite.

Is he favourable to subsidising exports?

He is not going to take responsibility for the hardships, troubles and worries that those opposite brought on the country and which we regarded as unnecessary.

We will discuss that later on.

I am addressing myself to the decision to export butter. If, in the judgment of the Minister for Agriculture, butter production has risen to such a level that we cannot consume it all—even at the reduced price at which this Government has made it possible for the people to purchase it—what are we to do with it? Are those opposite for or against the export of butter? Do we not all know that if you can raise production to a certain level, beyond the capacity of our own people to consume the product, you have to export it or destroy it? We have heard denouncements of other countries where wheat was burnt. What are we to do with butter when we cannot eat it, or with lamb, pork, pigs and beef that we produce here? Is the Minister who finds this surplus available to be denounced for the decision to export? It seems to me to be a very sensible decision and it was better to take it now than in September or October next.

We can trust the Government of to-day to act wisely, carefully and with discretion. I hope we will have larger quantities of butter to export in the future. I believe that the prices for our exports after a little while will be lower than they are to-day, because the general trend of agricultural prices is downwards. That is unfortunate for us as a food-exporting country, but we have to contemplate it and visualise it and be prepared to grapple with the problem. The people on the other side of the House will make a major contribution to political thought and economic development here when they are able to point to ways by which we here will become more efficient in our production, so that our export price may be lower but our income as great, if not greater than before. That is why I would commend to the Senators opposite the wisdom of reading the speech of Deputy Moher. They will find there a completely new approach, certainly from the Fianna Fáil angle, to the agricultural problems of this country.

On the whole, the Minister should be congratulated from the Fianna Fáil side of the House for doing what he has done. I am rather astonished that they want to disown their own child. I would have thought they would have applauded the man who took it to himself and tried to bring it up as a healthier baby than it was when it was passed on to him.

Senator Baxter in his last sentence expressed the wish that we applaud the Minister for adopting the Estimates and the Budget prepared by the Fianna Fáil Government. We can go this far—we can commend him for his wisdom in accepting the Estimates; but what Senator Hawkins wished from him was an assurance that he was going to work in the future in the spirit of those Estimates and of that Budget. When Senator Hawkins spoke about honesty in politics amongst the variour Parties, I noticed that my friend Senator Burke said, "hear, hear." During the last general election every politician knows, as do the ordinary people of the country, the campaign was the most dishonest ever carried out against a Government.

Give examples.

I will give plenty of them. I heard Senator Baxter say that no promises were made to the people. I listened to the candidate that Senator Burke spoke for, making this statement in the village of Cloneen: he announced there that if returned to power the prices of stout, bread, butter, tea, and various other commodities would be reduced immediately. I felt so keenly that day about those promises that I referred to them in a speech which I made at Mullinahone immediately afterwards. On that occasion, I challenged them to state definitely—because I was anxious about the matter—whether or not the promised reductions in prices would result in a reintroduction of the rationing measures which, I felt, were in line with any proposals for bringing about a big change in the way of a reduction of prices.

Senator Burke is as well aware as I am that in Clonmel a shop window was devoted to a display of the advertisement which the Fine Gael Party published both in the newspapers and in pamphlet form—the advertisement which showed the prices operating in 1951 and those operating in 1954. The ordinary people may, in their opinion, be very stupid but the ordinary people did not fall for that line of propaganda. They knew it was simply Fine Gael bluff.

Did they not vote for it?

They did not, and I will prove it. In the County Tipperary —the county for which Senator Burke speaks—we walloped your Party completely. When our two candidates were elected, we had some 6,000 votes to spare. We beat the Government and we beat them in rural Ireland on all those promises in relation to prices that were definitely made from Fine Gael platforms throughout the length and breadth of our country.

I heard all kinds of foolish statements from Fine Gael platforms during the last general election. I heard it stated from a platform from which the Minister for Agriculture spoke in Kilkenny that gloom and despair were stalking the land. I assert that the country was never more prosperous than it was when we handed it over after the last general election. I assert, further, that prices were reasonable and that the price of butter was reasonable.

Senator Baxter spoke about a reduction in butter prices. What, in fact, is this reduction? You are taking it out of my pocket in order to give it back to me, and there is a loss in the exchange. Every sensible person knows that a reduction by way of subsidy is no real reduction and that it is simply pulling the wool over the people's eyes. If we want to give a reduction in prices, why take the money from the people in the first instance in order to give it back to them? We realise that the Government were in a difficulty when they were faced with the redeeming of promises made on their behalf from election platforms.

At the close of the counting in Clonmel, when moving a vote of thanks to the returning officer, I said that we had been faced with a dishonest campaign. I pointed out that while the leaders stated from the platforms that they would make no promises except to do their best, their supporters and candidates made these promises deliberately to the people. The people were not, however, fooled by them except in Dublin City and some other places like that.

Recently, I was asked by a civil servant to intercede with the Minister in order that she might get the bonus bribe which was offered—the arbitration money. That offer was nothing but a bribe. The taxpayers' money was to be used in order to win votes for certain candidates. I have no doubt but that that particular bribe did get sufficient numbers throughout Ireland—small though they were —to bring about the change that gave the people on the other side the majority which they now hold.

I should like to tell the House that in the Province of Munster we had a majority in at least five three-member constituencies. Take, for instance, Clare, which on this occasion was a three-member constituency—Senator McHugh's constituency. Take also North Tipperary, East Cork, South Kerry and West Limerick. These are five three-member constituencies where the people definitely showed their disapproval of the present Government and definitely showed their disapproval of the Minister for Agriculture.

Is the Senator sure of that?

I am certain of it. We had a majority in these five constituencies. It is interesting, therefore, to hear Senator Baxter inform us of the way in which the people rejected the Government. We know they did, and, as he said, we accept their rejection. We are glad that the Minister has the common sense to implement this Budget. Nevertheless, Senator Hawkins is perfectly entitled to ask the Minister when he proposes to bring about the price reductions which were promised and which induced some people, at any rate, to give them the support they got at the last general election.

Senator Hawkins referred to a number of matters which I should like to develop somewhat. There is the question of the roads of Ireland. In South Tipperary, no topic was more prominent from the platforms of the present Government than the story of the Bray Road. I understand that in the Estimate for the coming year no provision is made for the expenditure of money on the Bray Road; that was the Estimate we prepared. However, from every Fine Gael and Labour platform we heard talk about the shocking expenditure of money on the Bray Road. I might mention that though Deputy Norton, the present Minister for Industry and Commerce, was announced as coming to Clonmel he did not turn up. Indeed, it would have been a very embarrassing situation for him. We heard speakers from the Labour platforms denounce the Government for all the money which, they said, they were spending on the Bray Road.

It is interesting to bear in mind the enormous sums of money which were spent over the years on a Kildare road —the Naas Road. We heard nothing at all about that. Deputy Sweetman, the present Minister for Finance, could not denounce the Government for employing people on the repair and maintenance of the Naas Road and neither could Deputy Norton but the Bray Road was wide open for attack and neither of these two Deputies was concerned with it. One would imagine that a Fine Gael man or a Labour man with any common sense would revel in the fact that our roads were being brought up to the required condition and that some of our people were being given employment on them. It was money well spent on bringing our roads up to the standards that are definitely required if road travel is to be safe.

We were nearly deafened by all the talk we heard about Dublin Castle and the squandering of money on it. We heard Senator Burke and other speakers dwell on that topic. There was plenty of talk about spending the taxpayers' money to build palaces for civil servants to work in, and so forth.

I do not remember mentioning Dublin Castle anywhere. I should be interested to see any quotation in the Nationalist in reference to any speech which I made and which contained remarks of that nature.

I heard it mentioned.

So did I, but that is not the same thing.

There was hardly a village or a townland in County Tipperary where mention was not made of Dublin Castle. Of course, talk about Dublin Castle sounds very grand down the country. Its history is so bad that any talk about spending money on it is listened attentively to by some simple people—but, of course, we have plenty of people of common sense, too.

The people who voted for Fianna Fáil!

Except in Tipperary.

I am a Tipperary man and I am talking of conditions with which I am familiar. After 30 years of self-government, I regret that we have not given greater attention to the erection of public buildings. I know of no way in which money could be better spent or that would establish this particular generation in this country so far as the future is concerned. In other countries we see the great buildings they have erected— very often out of public funds. In our Irish towns and cities the only buildings that are worth while are those which were built by private enterprise. As Senator Hawkins said, our civil servants in Dublin Castle are undoubtedly working under the worst possible conditions. The buildings of Dublin Castle are in ruins, and any sensible Senator who walks into them will realise that that is a fact, that they must be either torn down, evacuated or reconditioned. If we had a report from an inter-departmental committee making certain recommendations to the Government that certain reconditioning of these premises should take place, that does not commit a Government to anything, but of course it is a useful weapon for Opposition groups to use even though we did not make provision, as I have already said, in the Budget to do anything about it.

I think a great loss is that we did not pay more attention to the erection of buildings of that description. We ought to be rather proud that we have here in Kildare Street the Industry and Commerce building. It may be that if we were building it at the beginning of this general election we would hear an awful lot about all the squandering, as we did with the bus station. We have no apologies to make. I believe that we should devote more of the public funds to the erection of proper public buildings not only in our city here but throughout the country. This is one of the things that will stand, when this generation has passed, as a reminder that this generation was mindful of what it should do.

I would like to see them encouraging native craft in the dressing of stone buildings even though they are much more expensive than those concrete monstrosities we have in a number of places. Anything that will give work to the imagination of our architects and use our native products and our craftsmen is to be commended. It is regrettable that the representatives of big Parties in this country should condemn a Government that has even half-expressed approval of something which will add to the beauty of our country in the future.

Senator Baxter brought us back to the sins of those who held power here and caused the subsidising of things like butter and beef and so on many years ago. I happened to be in the Dáil when Deputy Costello, the Taoiseach, was announcing his new Ministry, and in the course of that announcement he expressed the great satisfaction it gave him that he had the wonderful legal knowledge of Deputy McGilligan and also, of course, his wonderful knowledge as a Minister when appointing him as Attorney-General. If I recollect properly, the same Taoiseach was the Attorney-General of the old Free State Government, and it was his advice during the later years of that Government on which the Government acted. During that time—this is just a little preamble to something in connection with the economic war——

The economic war, of course, may not be discussed. It may be referred to.

I am trying to relieve the mind of Senator Baxter of the belief he has that the sins of those days fell on our shoulders and not on his.

The sins fell on all the people, unfortunately—the evils, perhaps.

The suffering for the sins.

And the sorrow for the sins.

We will take Senator Baxter's "sufferings". I want to say very briefly that as Attorney-General the advice of the present Taoiseach was that certain clauses of the Treaty could not be removed positively—the ones dealing with the Oath of Allegiance, the Privy Council's right to alter a ruling made by our courts, and the Governor-General. These were clauses, he said, that could not be removed. His advice caused very grave hardship to half the people of Ireland over a number of years. His advice was also——

Where is that to be found?

——that the land annuities were legally and morally due to Britain.

Where might that advice be found?

He was Attorney-General. That was put to the public.

Will the Senator quote this advice?

I will tell you the whole story. You know that when the Taoiseach was telling us that Deputy McGilligan was to be Attorney-General he stated that he would have the unique legal knowledge of Deputy McGilligan to advise him.

He did not say any such thing.

I beg your pardon?

He said he would have his experience in finance.

He added his experience as Minister for Finance. I would ask the Senator to look that up and he will find that both statements were made.

As Minister for Finance?

No, as Attorney-General. His legal knowledge as a lawyer. Where was I?

Keep to the straight road.

I had just stated that Deputy Costello definitely advised the Government that the annuities were not only legally but morally due to Britain.

Where is this advice to be found? On a point of order, I want the Senator to read this to the House, to produce to us evidence of the truth of what he is asserting.

Is Senator Baxter denying it?

I ask the Senator does he dispute it?

I do not know.

You may take my word for it, if you do not know, he gave that advice. I remember that in an election address issued in 1933 this poser was put to the people: "Why should Britain yield on this question of annuities?"

On a point of order. Do we understand, Sir, your ruling to be that we were not to discuss the economic war? Am I in order in asking that if Senator Loughman says in this House what he says was the advice of the new Taoiseach on a certain legal position before the economic war he should give us the quotation?

Except in so far as references to the economic war relate to financial policy at the present time it would be out of order. I expect the Senator will act on that.

I will, but my point is that Senator Baxter put the sins of the economic war on our shoulders and I am merely trying to prove that his shoulders should bear much more of the blame—and the Party that he represents. I think I have sufficiently proved that point. If we had a united Parliament fighting that battle at that time it is very evident now after the years that have passed that that economic war would never have lasted and that these penal tariffs and so on that had to be imposed would never have been imposed. We proved by the results in 1937 and 1938 that Britain was quite willing to yield when we had any kind of a united front at all and the economic war was wiped out. So far as I am concerned and so far as many other people in Ireland are concerned we are satisfied——

Some of the results of the economic war only went out years afterwards—the differential in cattle.

Differential my eye!

That concludes the reference to that matter.

We will close the reference to the economic war on this remark, that I hope that Senator Baxter will not in the future put on the shoulders of Fianna Fáil the blame, or at least all of the blame, as he would wish to do, for the economic war.

I was referring merely to the question of subsidies.

There will be no further references to the economic war.

All I was referring to was to the sins. I would like, with Senator Hawkins, that the Minister, before he concludes, would give us some idea of when we might expect the reductions in prices will be given effect to. We are entitled to have some clearer statement than he made in his opening announcement on that point. I might advise him that the people in the country generally are making a joke now of those particular promises which we allege were made. They are making a joke of the 5d. reduction, in the price of butter because many of them are sensible enough to realise that that 5d. is coming out of subsidy and that the subsidy is coming out of taxes and therefore coming from the people themselves. We are entitled to that knowledge and I hope that the Minister will tell us something about it.

It is not coming out of new taxes.

Why not give the people this reduction in taxation that was promised? It is definitely coming out of taxes. We were told that we were to have a reduction in taxation as well as a reduction in prices.

Who told you?

The Senator is not such a fool as he suggests. He knows as well as I know that the people who looked into the shop window in Clonmel and saw this propaganda about butter at 2/8 a lb. in 1952 and 4/2 a lb. in 1953—and the same with regard to stout, sugar and so on— realised, on the principle that a nod is as good as a wink to a blind man, that it was simply a proposal to them that we put up the price of butter over and above what it was when the inter-Party Government were last in power and give them a chance and it would come down to what it was in 1952.

Who ever said that?

We are sick of that question: Who said that?

Because it is not true.

Ask any ordinary person through the country what he felt. I can tell you one person who said it. I listened to a Fine Gael candidate in South Tipperary announcing to the people in the village of Cloonee —there were no Press present—that when they were returned to power— and he was very positive about it— that the price of the pint—it is always the pint they refer to—would come down and that the prices of butter, tea and sugar would come down.

That is not what the Senator said a moment ago.

It is exactly what I said.

It is not.

At the next meeting at which I spoke, an hour and a half later, I made the speech of that candidate the subject of my speech and dealt with it as effectively as I could. However, I am glad the Minister has adopted the Estimates and the Budget introduced by his predecessor and I hope he will, during the coming 12 months, work in the spirit in which these Estimates and that Budget were introduced.

I want to begin the few words I have to say by welcoming the Minister to the Seanad on the occasion of the first Finance Bill he is introducing. He is an old member of the House—he was a member years before I was a member—and I am very glad to see him coming back. I hope he will introduce many more Finance Bills in future years. He will always be welcome in the House of which he was a member, but he will be more welcome the lighter the load of taxation he brings in the Finance Bill. A Minister coming with a Finance Bill is coming to perform an unwelcome task and there will be an inverse ratio between the warmth of the welcome for the Minister in his old House and the amount of taxation which he proposes in the Finance Bill every year.

One thing I think I can say is that he will not remain very welcome in future years if the load of taxation he proposes is as heavy as the load he is proposing this year. I fully accept that he is carrying on the proposals of the previous Administration, that he is not really responsible either for the Finance Bill or the Appropriation Bill which are to be introduced in the House to-day. We therefore all hope that in future years he will bring us better news than he has brought to-day in the way of a reduction of taxation which can only be based in the long run on a reduction in expenditure. We therefore look forward to hearing from the Minister next year good news of a reduction in expenditure which will make it possible for a reduction in taxation to take place.

Any criticisms I have to make of the Finance Bill—and they will not be many—are, therefore, of the Bill and not of the Minister, who is not responsible for its drafting and is responsible merely for its introduction. The reason I make these suggestions is not that I have any hope that they will be adopted in the course of the present debate, but in order to put what I may respectfully suggest are some good ideas into the Minister's head on which he may ponder between now and next year when drafting, and not merely introducing, the Finance Bill for 1955.

I hope the Seanad will not accuse me of being a person with a single idea, obsessed by the King Charles's head of income-tax, if I return to that subject of which I have spoken several times already. The reason I return to it is that I have reason to believe that there is a very considerable amount of public opinion aroused on the subject. This is the occasion on which to try to give expression to some of that public opinion, when we have the Minister with us. I should like to say that, for reasons which I will explain later, the Finance Bill now being debated makes the income-tax position worse rather than better than it was before. It is perfectly true that there are certain concessions in the Bill, but I think I will be able to give reasons to show that the injustice and inequity of income-tax have become greater and not less as a result of the changes in this Finance Bill.

Income-tax has been fully debated in this Chamber before. There was a motion before the House a couple of years ago, as a result of which the former Minister for Finance appointed a committee on income-tax with very limited terms of reference. The main point I wish to put before the Minister is that the utility of that commission would be very greatly increased if the terms of reference were widened. I have discussed the commission with various of its members and they have told me that they are to some extent handicapped by the narrowness of the terms of reference. The terms of reference practically confine the commission to discussion of business depreciation allowances, wear and tear and the effect of income-tax on industrial profits. It is quite impossible to segregate matters of this kind in this way, and the members of the commission have been forced to reject memoranda from witnesses on the ground that the matters in the memoranda are not within the four walls of the very narrow terms of reference, whereas they are very definitely relevant to the income-tax position as a whole.

I therefore ask the Minister, before putting his own mind down to this all-important question, to consider the possibility of amending the terms of reference of the commission. It should, in my opinion, not only embrace the whole question of income-tax but also a matter to which I will come back, the possibility of alternative sources of revenue. To discuss the injustice of income-tax in isolation is rather barren. Unless the commission is able to put forward suggestions, as I propose to do, for alternative sources of revenue, the commission is condemned to academic exercises in what I suggest is an unduly narrow field. I ask the Minister not merely to widen the terms of reference of the commission, which to some extent puts off the responsibility of facing this issue, but to apply his own mind independently to some of the very serious problems involved.

The Chancellor of the Exchequer in England has recently promised a radical revision of the income-tax code. I refer the Minister to the current issue of The Economist in which, at page 55, it is stated:—

"The Chancellor stated that he would prefer to consider a general overhaul of the income-tax system than a piecemeal reform of anomalies."

It goes on to say in the same extract:—

"...the Chancellor considers that now we have the commission's report and the opportunity really to tackle this complicated branch of the income-tax law in its entirety it would be unwise to tackle it unless we can do so on a comprehensive and logical basis."

There has been a Royal Commission on Income-tax sitting for many years. Several interim reports of great interest have been presented to the Chancellor of the Exchequer. In spite of that it apparently is the intention of the Chancellor to reinvestigate income-tax in a radical manner. I appeal to the Minister to make a similar investigation in this country. If the income-tax code in England is ripe for a radical reinvestigation, for reasons which I have given in the Seanad before, it is still more ripe here. The income-tax code was never really suitable for Irish conditions and in the last 100 years it has become more and more unsuitable, more and more unjust, more and more out-of-date and in need of revision.

I hope the Minister will remain in his present position for several years. I appeal to him to use his time not merely to tinker with the existing income-tax system but to take a larger view of the subject, to consider it in relation to the fiscal system of the country, to scrap a bad system, lock, stock and barrel, and to put something more suitable to Irish conditions in its place. As I said, when the matter was debated here a couple of years ago, the income-tax code in England is based on a number of political assumptions which are not universally agreed to-day. The high progressive taxation, which seems to be taken almost universally for granted as something self-evident, is not self-evident. A great many politicians and a great many economists to-day are questioning the whole basis of this form of taxation both on the ground of the political repercussions in regard to the taxpayer and on the still deeper ground of moral and ethical justice. The whole question of progression, which seems to be taken for granted by every politician in England and Ireland to-day, is open to very serious question. I appeal to the Minister for Finance to apply his mind to this matter, free of outmoded political assumptions which, as I say, are being discarded in many very reputable intellectual quarters at the present time.

Last year was notable, amongst other things, for celebrating the centenary of the application of income-tax to Ireland. It was not a particularly joyful event—there were no bonfires or flags—but it is an event which should not have been allowed to pass unnoticed. Income-tax, as everybody is aware, was imposed on Ireland for the first time in 1853 by Mr. Gladstone, avowedly as a temporary measure. When income-tax was imposed in 1853, Mr. Gladstone, who was then Chancellor of the Exchequer, stated quite categorically and definitely that it was a temporary measure to recover some of the loans made for famine relief which had become irrecoverable in other ways. Ever since then the income-tax remained on the Irish taxpayer right up to the Treaty. Since the Treaty Irish Ministers for Finance, I may say without disrespect, have shown a certain lack of imagination in dealing with the subject.

The Minister for Finance, in addition to being a financier, is also a lawyer. Reform of the common law has proceeded more rapidly in England than it has in Ireland. The Irish legal profession seems to be content with a legal system which has been regarded as outmoded and out-of-date in many respects in the country of its origin. As regards income-tax, as I said, a Royal Commission is sitting at the present moment in England and the Chancellor of the Exchequer has promised to approach the question in a very radical frame of mind. Nevertheless, we go on limping slowly after the English income-tax authorities. The one step which could always be more or less accurately foretold in regard to an Irish Minister for Finance is that if English income-tax rises, Irish income-tax will rise very soon, if not by the same amount, certainly in the same direction. In this respect it is very like the bank rate. Since 1922, when the rate of income-tax in England was raised, the Irish income-tax rose almost invariably.

I do appeal to the new Minister for Finance to approach this problem with a fresh mind and with a greater degree of originality and imagination than any of his predecessors since the Treaty. Even if the income-tax was ever suitable for the circumstances of this country, which I suggest it was not, in its present form it has become out-of-date and is in need of radical revision in many directions. No adequate allowance has been made in recent years for the great changes that have taken place in the value of money. The income-tax code still seems to assume that money values are the same as they were in the middle of the 19th century. I will give two or three examples of the way in which changes in the value of money have rendered necessary a revision of the income-tax code. The first matter to which I will refer—and I hope I will not get into great trouble with some of the rural representatives in the Seanad—is the position of farmers. The income-tax on agricultural land and property in this country, as everybody knows, is related to the rateable valuation of the land, and the rateable valuation of land has not been altered in the last 100 years in spite of the great change in the value of money and the unreality of the old values.

The rates have risen.

I am now talking about income-tax, not about rates. I intend in this speech to confine my remarks to the subjects in the Finance Bill and not to refer to other matters, as previous speakers have done. I would refer on this matter to a memorandum on income-tax prepared for the Committee on Income-tax by the Irish Trade Union Congress in which the question of income-tax on agricultural land is dealt with very briefly. What I intend to quote is only a very small part of an already condensed statement. It is stated:—

"The fact that this is largely an agricultural country makes it difficult for an income-tax code to operate wholly equitably since the income of farmers is difficult to assess in the absence of any widespread system of farm accounts. Farmers as a class pay very little income-tax. Farmers as such are paying much less than 1 per cent. of the total income-tax. It must be admitted, however——"

and this will give comfort and solace to the great majority of the farmers

"——that the great majority of farmers are in all probability not liable for income-tax because of the fact that their income is below the exemption limit after taking into account the various reliefs and allowances."

The Trade Union Congress memorandum goes on to say:—

"...we deduce that the great majority of farmers—about four-fifths—are not liable for income-tax, but that a relatively small number are. It would seem that a large number of farmers on holdings of 50 acres and over, numbering some 80,000, should be liable for income-tax on the basis of their farm income, yet only a minute minority are even assessed for tax. It is difficult to devise proposals which would ensure that these farmers paid their fair share of income-tax and which would at the same time be equitable and practicable. The problem is one, however, which requires serious study and investigation. The present system of relating the income-tax liability of farmers to the poor law valuation of their holdings or to the original land purchase annuity provides a possible basis. Even though the general valuation of this country was made nearly 100 years ago, it is generally accepted that valuation is still a fairly reliable index to the value of farm land. If this is so, the present method of assessment of farmers under Schedule B could be retained as a basis, but the assessable value taken as twice or three times the poor law valuation instead of the amount of the poor law valuation as at present. Farmers' income (not including wages of farm employees) has increased nearly fourfold since pre-war, yet there has been no change in Schedule B assessments under the income-tax code.

In any event, modern conditions require farmers to utilise proper record keeping in order to progress in their own industry. The income-tax code did much to push business in this direction to its own advantage and the same indirect benefit would accrue to the farmer if he were required to keep and produce accurate accounts.

It might be mentioned here that for the purposes of the Health Act, 1953, a farmer the valuation of whose holding is over £50 is put on a par with an employee with more than £600 per annum (or £11 11s. per week), which suggests that the view is held officially that a farm with a valuation exceeding £50 is equivalent at the least to an income of more than £600 a year. There are around 33,000 agricultural holdings with a poor law valuation of more than £50."

The whole question of the revaluation of agricultural land must sooner or later be faced. One of the benefits which would accrue from such revaluation would be that a number of people who are now exempt from income-tax might be prima facie liable if they were not able to prove that their actual income was less than the amount liable to taxation.

Another inequity caused by neglect to take account of changes in the value of money is that the personal and dependents' allowances, in spite of recent increases, are still inadequate. On this matter I should like to refer to a statement on the Budget which was published in the newspapers and prepared by the Irish Conference of Professional and Service Associations. Calculations are made in that statement of the change in the cost of living of salaried workers. It is pointed out that the rise in the cost of living has not been compensated for even in the new allowances in the 1954 Finance Bill which we are debating to-day. The following are the figures which are given in the memorandum. In 1935 the allowance for single persons was £125; married persons, £225; and children, £50. The equivalent allowances to-day should be £323, £582 and £129 instead of £150, £300 and £85 given in the Budget.

The fact that the Minister has increased even to a small extent these allowances is a recognition of the justice of the claim made by the conference. He boasted that the Bill excludes a further 40,000 people from the payment of income-tax. I will come back to that matter in a moment.

Another injustice caused by the failure to take into account changes in the value of money is that the wear and tear allowances in business and the depreciation allowances have become much too small. This matter is within the terms of reference of the income-tax committee and I have no doubt that the Minister will, sooner or later, receive recommendations recommending a change.

I should like to refer the Minister to a short document prepared by the Dublin Chamber of Commerce by Dr. F. G. Hall, entitled The Inadequacy of Irish Commercial Profits. This document deals in detail with the question of depreciation and wear and tear allowances. I do not propose to weary the Minister by quoting to him the document with which he is, I believe, entirely familiar already. I will, therefore, just recall to his mind pages nine and ten that he may, perhaps, peruse them again in the light of this debate. At a time when everybody is talking about the necessity for more investment in Irish industry, it is inconsistent for the Government to maintain the wear and tear and depreciation allowances at a level which is quite inappropriate to the present level of prices.

The final matter to which I refer in relation to the change in the value of money is that surtax begins at much too low a level. It may be, perhaps, that at the beginning of this State in 1922 there was some justification for starting surtax at a £500 lower level than the British surtax which was £2,000 but whatever justification there ever was has long since disappeared. The price level has risen greatly since 1922. I do not think that anybody would suggest that an income of £1,500 is now so great as to be singled out as a proper object of high exceptional taxation. These are some of the old grievances regarding income-tax which I for one have raised already in the Seanad. I should now like to come to the Finance Bill before the House and indicate to the Minister that some of the proposals of that Bill instead of making things better make them, in my opinion, rather worse.

The late Minister for Finance in the Dáil boasted that one result of this Bill would be that 40,000 less people would now pay tax. A statement was made in the Dáil on the 24th February, 1954, by the late Minister for Finance that the number of individual taxpayers paying income-tax in 1952-53 was 195,000. The occupied population comes roughly to about 1,200,000 people so that about two out of every 13 persons at work are liable to income-tax. If the Finance Bill takes 40,000 people out of paying income-tax it means that the total income-tax in the country in future will be paid by 150,000 people. That is to say, one in 20 of the population. Therefore 19 out of 20 of the population are not paying income-tax and, therefore, will be completely unaffected by the level of tax or pressure of the tax on the underprivileged and unfortunate very small minority who are singled out for this entirely unjust and inequitable imposition.

The reason why the number of people paying income-tax is so small is partly the basis of assessment of Schedule A and Schedule B which, in fact, operate to exempt a large number of people from taxation in a perfectly legal way. The method of making allowances to business people for business expenses also reduces the burden of taxation on a great many people. In addition to that—it is a matter of common knowledge—there must be a considerable amount of evasion so that the number of people who do not pay income-tax in this country is partly the result of favourable assessment and partly the result of illegal evasion. The fact of the matter is that this tax which now raises something like £10,000,000 of revenue per annum, presses on 5 per cent. of the population. I cannot help feeling that prima facie that looks rather like as if a small minority of the population are picked out for unfavourable treatment in the fiscal system.

The reason why I say the present Budget makes things worse is this, that as the area of impact of this tax becomes narrower the possibility of a reduction in the standard rate becomes less. The tax is now spread over fewer and fewer people and the logical conclusion to this progressive nibbling away year after year is that, sooner or later, the whole £10,000,000 will be collected from 2,000 people. When we get to that stage, the only possible way in which an increase in the yield of income-tax can be secured is by a very stiff rise in the rate. I suggest that every time the area of impact of income-tax is narrowed, the burden on the wretched people who are still inside the net must become greater and, instead of it being a matter of congratulation for the Minister for Finance that there is a narrowing of the net, so to speak, it should be a matter of apology, if not of shame.

There is one feature of the present Finance Bill which to me is suggestive —maybe because I have a suspicious or evil mind—that is, the way it is stated that no person with less than £250 a year will be liable to any income-tax in the future. When the late Minister for Finance was introducing this Bill in the Dáil he stated that this would mean that no agricultural labourer in the future would be liable to pay tax. My mind began to dwell on the association of ideas between these two statements and the conclusion I came to was that, owing to the favourable assessment of farmers, the position has arisen that agricultural labourers are being assessed for tax and that when they refuse to pay it, or fall into arrears, their employers —many of whom are rich farmers—are being called on by the Revenue Commissioners to deduct tax from wages. It has reached a perfectly absurd state of affairs that a comparatively rich farmer who, owing to the differential basis of assessment, is not paying tax, is deducting a shilling or two each week from agricultural labourers, owing to their arrears of tax.

If this suspicion of mine is correct, we are driven to this conclusion, that the minimum income ever liable to income-tax will in future be fixed by the Agricultural Wages Board. If agricultural wages rise to £6 a week, we then will be assured that no one with less than £300 a year will in any circumstances whatsoever be asked to pay income-tax; because, if they were, a rich farmer might be asked to take a shilling or two each week from some poor labourer working on his estate, for arrears of tax. That is what used to be called in my school days a reductio ad absurdum.

The exemption of all incomes up to £250 has the effect of pressing the income-tax more and more severely on the salaried or white-collar class. We have already gone into this fully in the Seanad, that Schedule E accounts for more than its fair share of tax. Now that all incomes up to £250 are exempted, a very large part of manual workers will escape tax altogether. Therefore, the impact becomes more and more narrowly driven in on the white collar or salaried class. This is brought out very clearly in the statement on the Budget from which I have already quoted, prepared by the Irish Conference of Professional and Service Associations, where it is stated:—

"In spite of the reliefs given in the Budget, the incidence of direct taxation still bears unjustly and unduly on a very limited number of citizens. It is estimated that some 151,000 taxpayers are assessed under Schedule E and that the tax collected from them amounts to approximately £9,500,000. This means that those citizens are paying on an average £1 4s. 6d. per week in direct taxation. The average income of the person so taxed is £550 and when it is remembered that they also pay a considerable share of that income in indirect taxation, rates and welfare contributions, it has to be admitted that they bear a very undue share of the cost of running the country."

The Irish Conference of Professional and Service Association have elaborated that point in a memorandum they have submitted to the Committee on Income-tax Reform, in which they give the following striking figures. They show the percentage of the total income-tax collected in the year 1951-52 under the different schedules, with the following result: Schedule A, 4.21 per cent.; B, 1.07; C, 1.2; D, 41.55; E, 52.2. They followed that up with what I can only describe as a very remarkable comparison between the amount of income enjoyed and the amount of income-tax paid by different sections of the community. The figures given in the memorandum—which as I say, is before the Committee on Taxation—are as follows. The income of the community is divided into four classes:—(1) agricultural; (2) company profits; (3) other profits, professional earnings, etc.; (4) salary and wage earners.

I need not give all the figures, as the Minister has a copy of this memorandum. In the first column is given the amount of the national income estimated to be enjoyed under each of these categories. In the next column is given the amount of tax paid by the people in each of these categories. In the last column, which I am going to quote, the income-tax paid is stated as a percentage of the income received in each of these categories. The following figures are, I think, impressive— Income-tax as a percentage of the national income enjoyed: (1) agriculture, 0.51; (2) company profits, 13.3; other profits, professional earnings, etc., 7.0; salary and wage earners, 5.6. The contrast between salary and wage earners and the agricultural community is, to say the least of it, rather striking.

I would ask the Minister if he has already been struck by a certain inconsistency in his predecessor's Budget. The late Minister for Finance boasted that no person with an income of less than £250 would pay income-tax in future. We may take it, therefore, that that is officially regarded as the irreducible amount of income which is necessary to a person to live. If that assumption is correct, the personal allowance should be £250, not £150. It seems to me that one of the two figures is wrong and that there is a clear inconsistency. If no person with a total income of less than £250 should ever be liable to income-tax, the first £250 of every taxpayer's income should be free of tax.

This is a new inconsistency introduced into this Budget for the first time. In previous years there was a direct relation or identity between the personal allowance and the minimum taxable income. Now, owing, as I suggest, to the difficulty regarding the rise in farm wages, we have an inconsistency. If £250 is the absolute minimum income that can stand any income-tax, every taxpayer whoever it may be—whether he be a company director or a salaried worker, civil servant or a teacher—should have £250 free of tax. I would ask the Minister to apply his mind to that inconsistency in his predecessor's Budget—an inconsistency of which I do not believe a man of his own logical mind would be guilty.

I wish the Minister would apply his attention to this whole question in an open and liberal manner. After all, the five schedules A, B, C, D and E were not handed down with the Tables of the Law. There is nothing sacred about them. They are the creature of William Pitt during the French War. Yet they have become so much a part of our lives and, for some of us, a part of our dreams and nightmares that it has now become almost elementary that they cannot be altered. The fact of the matter is that the figures I have already quoted show they are entirely unjust and unsuitable for the circumstances of this country. I would ask the Minister coming with a fresh mind to these very difficult problems to face them in a way that they have not been faced before. I would ask him to consider whether or not these five schedules are in the same category as the Tables of the Law handed down from Heaven. I suggest they are not of that degree of sacredness and that they are quite capable of being amended or, if it is not disrespectful to the Revenue Commissioners to say so, even improved.

I want to suggest that other forms of taxation exist in other countries. If the income-tax is as unjust and as unsuitable for this country as I have suggested, I think it would be rather unfair for me to finish without throwing out at least a suggestion to the Minister and one which may be brought before the commission, assuming the Minister widens their terms of reference in an appropriate manner. I do not for a moment claim to have thought fully about this matter. I have no doubt but that a great many objections will be made to it and a great many points will be raised which have not occurred to my mind. But I throw these suggestions out for discussion in the Seanad and for reflection by the Minister. In the peculiar circumstances of this country, I suggest the same amount of revenue now raised by income-tax could be raised more easily and more cheaply and more equitably by means of a purchase or a sales tax. Such taxes are collected in many other countries and they seem to work reasonably well. The first great advantage of a purchase tax or a sales tax is ease of collection. All that has to be done is to take the Schedule to the Finance Bill—which now includes beer, spirits, tobacco and a few other dutiable commodities—and simply to lengthen it to include boots, shoes, household goods, and so forth. The collection of these taxes is impersonal. There is no inquisition.

I think I have made some valid points in criticising the income-tax code in this country. They have been financial points and moral points connected with the equity of the policy. However, as a citizen and as a member of the Seanad, I think I may say that the greatest objection I have to income-tax is the amount of prying and inquisition into the private affairs of people which the tax necessarily imposes. I do not blame the Revenue Commissioners: everybody's hand is against them. The collection of income-tax in this country is almost like a hunt where you have large packs of well fed hounds hunting half famished foxes. That is the picture as I see it. When the animal is dug out he is subjected to something which could be likened only to third degree and to the sort of things we read about as taking place in less free countries than this.

I seriously suggest that income-tax involves an inquisition into private affairs. It involves a lack of privacy which would be completely absent in an impersonal sales tax or purchase tax of the kind I suggest. Another great advantage—and this is on the financial side and it should appeal to the Minister—is that every Minister, including the Minister who is present to-day, on practically every occasion on which he appears in public praises the virtue of thrift, the virtue of saving. We hear remarks to the effect that our industrial progress depends on investment and investment depends on saving, so let us all save more. May I point out to the Minister that the income-tax code as we know it to-day directly discourages saving whereas a purchase tax directly encourages saving?

Income-tax is discouraging to saving for the reason that a person pays income-tax on the whole of his income —on that part which he spends and on that part which he saves. On that part of his income which he spends, he pays income-tax only once, but on that part of his income which he saves and invests in income-yielding securities he continues to pay income-tax year after year. That is a well-known criticism of the present code. It is not an original criticism: you will read it in any elementary book on public finance. Compared with that, a purchase tax has the advantage that nobody pays any tax on that part of his income which he does not spend. That part of a man's income which he chooses to save is free of tax. If the Minister for Finance is sincere in his desire to encourage thrift and saving, I suggest that here is a weapon ready to his hand—a system of taxation which does not tax savings and which does tax spending.

It has been suggested that a tax of this kind is unfair to the poor. In other countries it has been graduated in such a way as to fall more heavily on the purchases of the rich people than on those of the poor. In Britain, during and since the war, many experiments in the graduation of purchase tax have been tried and many of them have been successful. There is no reason why the progressive principle should not be applied to purchase tax. It has also been suggested that it cannot be adjusted to the taxable capacity of the taxpayers in the way that income-tax is by children's and dependents' allowances. The answer to that is that increased children's allowances and increased social services and allowances to dependents, wives and children, educational allowances, and so forth, can give an equivalent amount of relief to the parents of families to that which they now derive under the income-tax code.

It may be said that no differentiation is made in purchase tax between taxation of earned and unearned income. One of the features of our income-tax code is that people pay at a higher rate on income derived from property than on income derived from their own labour. Most people will agree that that is a fair distinction. A purchase tax can continue to operate that distinction if it is accompanied by high graduated death duties. My suggestion for the substitution of a purchase tax for income-tax does not include the abolition of death duties. Death duties can still be retained as the main direct tax. In so far as people have increased their capital wealth by speculation or otherwise, that can be taxed at death, and in that way an effective distinction can be made between taxation on earned and unearned income.

On a couple of occasions when I have discussed this matter with students in my college, they have raised the objection that when they read the English financial papers they see a great desire to abolish the purchase tax—everybody complaining about the purchase tax there while I am advocating a purchase tax for Ireland. The answer to that is this—that in England the purchase tax is on top of 9/-income-tax and so felt as a very heavy fiscal burden, whereas my suggestion is that purchase tax should not be an addition to income-tax but instead of income-tax. The proposals I make would involve no additional burden on the taxpayers as a whole.

These suggestions are made to the Minister merely to show that alternatives do exist, that I am not merely complaining of a tax which many of us do not like. I wish to end as I began, by welcoming the new Minister for Finance to the Seanad, by hoping that he will have many years of office before him, that he will introduce many Finance Bills into the Seanad, and that between now and the next Finance Bill he will apply his mind to these problems in a fresh and original way. The present Minister for Finance is a young man. He has many years of life and office before him, and can if he wishes establish a great reputation in the history of this country. As I have said, since the Treaty we have followed the English tax code slavishly without any real originality or any thought of our own. Over the years great Chancellors of the Exchequer in England have made reputations by adjusting the tax system to a new situation. In the 40's Sir Robert Peel scrapped the whole old-fashioned out-of-date tax system and introduced new taxes. Gladstone did something of the same kind in the 50's; and in the years before the first World War Lloyd George overhauled the tax system. Whether one agrees or disagrees with some of the things these statesmen did, the point is that at least they had originality to apply new taxes in a new situation. Here are three Chancellors of the Exchequer who have gone down to history as people who had courage and originality to deal with a dynamic situation in a dynamic manner. I appeal to the present Minister for Finance to be the first of a long line of Ministers for Finance who will go down to history with a similar record.

I hardly know how to begin my remarks, but I think I will begin by welcoming the distinguished ex-Senator now Minister for Finance. I do not suppose that every member of the House wishes him a long reign over us, but all of us would express our goodwill to him and hope that during his term of office he will be able to produce those financial miracles that the circumstances of the country so much require.

As Minister for Finance it is his function to acquire the means of paying for the public services, but he must never forget that in the exercise of that function he is also an important agent of public economic policy. Every tax and every subsidy has some effect, good or bad, in developing or perhaps in perverting the general economy of the nation. That consideration applies especially to the decision to subsidise once more the price of butter, because there is an indirect economic repercussion from subsidising butter, which means, in effect, creamery butter. Between 1948 and 1951 when the butter subsidy operated there was, indeed, an increase of some 40,000,000 gallons of milk sent to the creameries, but that was balanced by a decrease of nearly 100,000 cwt. of butter produced by farmers on their own farms, the equivalent of some 25,000,000 gallons of milk turned into butter on the farms.

The production of farmers' butter is an important element in the total butter production and consumption in the country, and it is not desirable public policy to discourage the production of that butter. Recently there was a desirable increase in the production of farmers' butter. It was associated with an increased tendency to rear young beef cattle on the farms. An important by-product of that was the production of farmers' butter for sale locally. That, I think, was a thing that we should welcome. I imagine that as a result of this new subsidy that desirable tendency will probably be reversed.

The functions of a Minister for Finance rather resemble the functions of a gardener, in this matter of using the pruning knife of taxation. Sometimes it is the duty of a gardener to cut out an over-luxuriant growth if he wishes the tree as a whole to grow more in another direction and to produce a better balance in itself. In effect, it has been a common practice for former Ministers for Finance to use the principle of the levy on one over-exuberant branch of the economy in order to subsidise another branch of the economy which it was desired to see expanding and developing. It was common practice to levy something on the export price of turkeys in recent years with a view to maintaining a desirable level in the export price of eggs. That was considered to be normal and possibly a proper exercise of the function of a Minister for Finance.

That brings me by a natural transition to discuss a large-scale application of the same principle with which my name has been rather prominently and unpleasantly associated in recent debates in the Dáil and in recent hustings down the country during the election period. I refer to a reference I made to the possibility of an export tax on cattle when talking on the Finance Bill in 1952 here, on the 16th June of that year. Senators will find my remarks in Volume 40, No. 22, page 1571 and the following pages.

Was it the 19th or the 16th June?

Sorry, the 19th June, 1952. I do not propose to inflict them at greater length now. The references to me which I regard as rather unpleasant and rather a violation of parliamentary manners took place in the Dáil on Wednesday and Thursday of last week. You will find them on record in Volume 146, No. 7 of the Dáil Debates, page 835, and Volume 146, No. 8, Dáil Debates, page 1044. In one or other of those references you will find a quotation from my speech of two years ago which is completely wrenched out of its context and gives a most misleading impression of what I said or advocated in the speech as a whole. I want to take this opportunity of putting the whole matter in its proper perspective and giving the whole idea of an export tax on cattle the decent burial that I thought I had given to it in a publication, not referred to in the Dáil, which I sent to the Press two years ago.

The assumption behind the recent controversy seems to have been that what I recommend in the way of agricultural policy to-day becomes Government policy the day after and the law of the land on the third day. That has never been the case in my personal experience with reference to the previous Government and I am sure it has no application either to the probable practice of the present Government. It is true, and I am perhaps rather proud of the fact, that I served on a rather important committee, the Committee on post-Emergency Agricultural Policy, which sat from 1942 to 1945 and produced a certain report which I think has been adopted in many of its most essential aspects by both the major Parties when they were in power from time to time. I had more than a little to do, in association with another member of that committee, in writing and drafting that report though he contributed the major part of it.

After it appeared, a certain person who was then a Minister in a Fianna Fáil Government, asked me if it was true. I modestly admitted that it was and he said: "You deserve a medal for the part you played in that connection." Not long after that, I met another person who subsequently became Minister for Agriculture in the inter-Party Government, and who is now again the Minister for Agriculture. He asked me a similar question and I said, yes, and he said: "The report is worth its weight in gold." I was rather pleased with these pleasant remarks, but I have travelled a long way from 1945 to 1954, because, in the recent controversy with which my name has been associated with regard to agricultural policy, I have been demoted to the position of a stick to beat the Fianna Fáil dog, and I strongly object to being pilloried as a stick to beat a Fianna Fáil or Fine Gael dog, or any other dog that happens for the time being to be in power. So far as I can ensure that result, that stick will become a boomerang, so long as I am able to remain in public life and exercise the right of free speech.

Let me put on record the genesis of the whole controversy with regard to this matter of an export tax on cattle. I have been known to write articles for the Irish Press and I have also been known to write articles for the Irish Independent and also for the Irish Times. I am quite catholic, in the etymological sense of the term, with regard to the organs in which I choose to put my views before the public. It happened around about the spring of 1952 that I thought it would be a good idea to make certain suggestions to the readers of the Irish Press. The initiative was mine and the responsibility for what I said in those articles was mine. The whole idea was to put certain ideas before the public and bring about intelligent public discussion of these ideas.

In the course of the second article, dated 14th March, 1952, which I should like to put on the records of the House because it is necessary to a complete understanding of this matter, I said as follows:—

"Why has our agricultural (unlike our industrial) arm been so comparatively static in its output in recent years? In a recent lecture to the Institute of Bankers, Mr. Meenan has pointed out that between 1926 and 1946 the number of persons occupied in agriculture diminished by over 75,000, and 50,000 more males had left agriculture by 1950. On farms up to 30 acres in size, the diminution (mostly of family labour) was as much as 47,000 up to 1946. On the larger farms the number remained comparatively stable. By 1949, gross output was practically 100 per cent. of the 1938 level, but it was the output of perhaps 100,000 fewer persons. Output per person has increased substantially and encouragingly and there is good reason for thinking that it is capable of further substantial increase. If this can be accomplished without further decline of rural population, gross output will increase, and with it taxable capacity and export capacity.

Why have the surplus members of small farm families been fleeing from the land in such large numbers, especially since 1939? The small farmer is pre-eminently a processor of raw materials (much of which he must buy from sources other than his own farm), and cannot possibly make a tolerable living by the production and sale merely of cash crops. As I explained in my recent book Irish Agriculture in Transition the Second World War created conditions in which it was no longer possible for the small farmer to make a tolerable living. His traditional specialities, pig and poultry production, depended upon imported Indian meal as a necessary component of the ration, and during the war to obtain this was a physical impossibility.

After the war, for a year or two, Indian meal was obtainable at a price which bore a favourable ratio to the prices at which pigs and eggs could be sold, and the small farmer's production again began to expand. But the devaluation of 1949 raised the price of Indian meal considerably, while the price of eggs continued to be depressed by the rigid policy of the British Ministry of Food. A reviving export trade in bacon was annihilated and an expanding export trade in eggs was checked and reversed. Poultry production is now declining, and pig production is static.

The problem is to recreate conditions in which the small farmer (numerically our most important productive agent) can afford to expand his productive effort without inviting financial bankruptcy.

The traditional dependence on Indian meal as a raw material for live-stock production must be brought to an end. Fortunately, a new cereal —Ymer barley—has been increasingly grown in Ireland in recent years, and it is capable of becoming an almost perfect substitute for the Indian corn which is now no longer to be relied on. Here again there are problems of quantity and price. We would need to grow this year an additional 200,000 acres of Ymer barley without diminishing the acreage under other cereals if we are to make a serious impression on the problem. As we also require an additional 200,000 acres under wheat if we are to be reasonably self-sufficient with regard to this all-important cereal, it looks as if the total area under the plough would need to increase by nearly 500,000 acres in the current year. This additional programme is primarily a job for the owners of the middle-sized and larger farms, especially those of them who have access to tractor power and modern implements.

Live cattle are now commanding nearly 120/- a cwt. There is no reason to suppose that there would be any fewer cattle reared or matured if the price were only 100/-per cwt. They might perhaps be fed less generously in the wintertime, but silage will do quite well, along with hay and roots, and there is reason to think that feeding barley, produced on the larger farms, is now being fed to cattle, whereas it would be more in the national interest if it were sold to small farmers and fed by them to pigs and poultry.

If the price of cattle were only 100/- a cwt. instead of nearly 120/-, the price of beef in the shops would be cheaper and the cost of living would come down. During the war, the British Ministry of Food kept the price of beef cattle here down to around 60/-. They overdid it, of course, and there were reactions on the rearing of calves, but the relatively low price paid in those days for beef cattle was a material factor in keeping down the cost of living for us in Ireland.

According to a recent broadcast talk from Finland, the Finns have lately imposed an export tax on food products, and have thus successfully reduced their cost of living. I suggest that our Government impose an export tax of £5 a head on all cattle exported ‘on the hoof.' This would bring in, perhaps, £3,000,000 in a full year. The effect would be to cheapen all cattle and beef in the home market, and to give a rapidly expanding dead meat trade a valuable ‘boost'.

The yield of such a tax should not be treated as ordinary revenue, but should be earmarked to subsidise and encourage the productive efforts of small farmers, now handicapped, as explained above.

During the eighteenth century there was a bounty on the inland carriage of corn (mainly by canal to Dublin), which is said to have had a considerable effect in expanding tillage. The proceeds of the cattle tax should be used as a bounty or subsidy on the production and sale of Ymer barley as a raw material for live-stock product production. The larger farmers, of course, won't like the cattle tax (but they can ‘take it,' for they have been doing pretty well in recent years). As growers of a largely increased area of your barley, they can get back all or most of the tax in the form of a suitably guaranteed price. I see no reason why the guaranteed price for Ymer barley should differ at all from the guaranteed price for wheat. Offaly County is a typical area in which much wheat and barley are grown and relatively few pigs and poultry are kept. County Galway is the exact reverse. If the Offaly County farmer could count on selling Ymer barley at £32 a ton, and the County Galway peasant could count on buying it at £22 a ton (plus transport), would there not be a considerable expansion of barley growing in Offaly County and pig and poultry production in small farm areas, even at present prices of eggs and bacon and is not this precisely the result we now need to achieve? I am assuming a yield of 300,000 tons of Ymer barley, produced and sold, and a subsidy of £10 a ton in respect of it."

That seemed to fall that flat for the time being but, as I said, I made some further reference to it in my speech on the Finance Bill in this House two years ago, the speech from which an inadequate quotation was made in the proceedings of the Dáil the other day. I stressed the fact that the price of beef was at that time so high that farmers were turning into beef cattle young heifers that should in the ordinary way have been turned into cows, that we were killing off what should be heifer replacements of our future cattle stock and, therefore, doing something which made it impossible for us to increase the total cow population in the long run. Everyone knows that the first condition of any real, permanent increase in agricultural output in this country is that the number of good milch cows should substantially increase. I recommended the discouragement of the practice of turning potential cows into prematurely killed beef. Again I stressed the fact that if it was not considered desirable to use the tax for ordinary revenue purposes it should be and could be used to subsidise the price of Ymer barley, for use as a feeding stuff on farms specialising in pigs and poultry.

An Leas-Chathaoirleach

Would the Senator consider that he has sufficiently met the case now that was made in the Dáil and come to the present Bill?

I have not met it fully yet. I thought that for the time being it had fallen flat but people down the country would hardly speak to me because I had made the suggestion of an export tax on cattle. I also came to the conclusion that the Government, however much they may have been interested in the matter in a purely academic way, were not in the least likely to take it seriously and that, however desirable it might be in theory, it was not practical politics. I sent a letter to the Press on the 11th July, 1952, which I would like to put on the records because it has not been adequately noticed since then. It was certainly printed in the Irish Times of that date and also in other newspapers.

An Leas-Chathaoirleach

Dealing with this present matter?

It relates to the whole matter.

An Leas-Chathaoirleach

Would not the Senator consider that he has sufficiently explained the case? He has given us many quotations. Would he now come to the present Bill?

I merely want to put it on the records of the House because my name has been mentioned in a way which I do not approve of.

An Leas-Chathaoirleach

It was on the public Press but you want it on the records of the House.

Have I not a right to put it on the records of this House?

An Leas-Chathaoirleach

I wonder.

This matter has been referred to and is on the records of the other House. I want to put on record in this House what I really said.

An Leas-Chathaoirleach

The Senator may proceed.

I am quoting a letter I wrote to the Irish Times which was published on the 11th July, 1952:

"Some time ago I suggested that it might be a good idea to put an export tax on all cattle exported ‘on the hoof'. There is not the least likelihood of the suggestion being adopted."

I underlined that sentence.

"Desperate diseases may indeed require desperate remedies, but our present Government is not so desperate as to consider this remedy seriously, however persuasive the theoretical consideration I may have urged in its favour. The remedy, then, being out of the question, the problem (or the disease) remains, and I would be glad to hear of other solutions for the problem which are politically feasible.

The problem is to secure the maximum possible increase of agricultural production in the shortest possible space of time. There are at least two aspects of this problem. In our agricultural set-up we cannot in the long run increase the output either of beef cattle or live-stock products unless we increase the total number of well-fed, fertile cows. There were 1,189,000 milch cows in the Republic in 1951—just 1,000 more than there were in the same area in 1911. In the interval the number has rarely exceeded 1,300,000. Last autumn the price situation was such that, if you tried to sell a two-year-old heifer that seemed likely to make a good cow, the first question the dealer would ask was: ‘Is she in calf?' If the answer was affirmative, you could count on getting about £5 less than if she were suitable for the store and beef trade.

The relatively high price of beef and store cattle must have caused the destruction of tens of thousands of heifers which in a normal price situation would have been retained to replenish and increase our inadequate stock of milch cows.

From 1947 to 1950 the number of heifers in calf on June 1st was abnormally high, and total milch cows increased from 1,156,000 in 1947 to 1,209,000 in 1950. The long term trend was then satisfactory. In 1948 the number of in-calf heifers on June 1st was 128,000—the highest number in any year since 1931, and about 40,000 above the average. In 1951 the number was down to 80,000. If this present situation continues, what is the outlook for total milch cows, total cattle population, and total agricultural production in two or three years' time?

The other aspect of our major agricultural problem is how to make it worth while for our small farmers and their families to expand poultry and pig production. You can't make a living out of store or beef cattle on 30 acres of land. In 1936, 386,000 males were trying to do so on farms under 50 acres in size, and since then over 50,000 of them have disappeared from our agriculture, largely because under war conditions and under present conditions the expansion of poultry and pig production is financially precarious. With Indian meal nearly 40/- a cwt., the price of eggs and pigs would need to be fantastically higher than their present high level to justify an expansion of pig and poultry production based on Indian meal as the primary raw material.

The Minister for Agriculture has rightly pointed out that we must rely increasingly on home grown barley and fodder beet as feed crops. It is satisfactory to note that the acreage under barley is increasing though somewhat at the expense of other cereals.

Anyhow, these are our two main problems—to prevent the destruction of heifers that should be kept for breeding and put the small farmer and his family back in a situation where it will not be financially suicidal for them to increase production."

Those problems, like the poor, are still with us. I bequeath the solution of those problems to the present Government and the new Seanad. The success or failure of the Government in solving this problem will make or mar the prospects of that Government and the welfare of the country in the very near future.

I feel that we meet to-day in an air of unreality. Here we are, an almost dying Seanad, meeting to discuss something that has come to us from a new Dáil. Even so, there are certain fundamental matters which come under review when a Finance Bill is before us. When I came into the House to-day, I heard the tail-end of Senator O'Brien's speech in which he advocated a purchase tax as a means of providing revenue which we all know is necessary for the running of the Government of the country.

I will try to avoid any controversial note. As an individual, may I wish to an ex-member of this House, the new Minister for Finance, a triumphant success in the job he has now got as Minister for Finance? I wish the new Minister for Finance a big success in his job. The job he has got is a big one and if he does not succeed in it the country as a whole will suffer.

In general, I do not think it can be denied, whether it is the new Government which has come in, or the one that has gone out, that we are all appalled at the amount of money the nation is called upon to provide for the cost of government of this small community of ours and in so far as that amount can be broken down into sections, is it wrong for me to say that too much of that money is being provided by too few of the community? In so far as direct taxation is concerned the white-collar worker, the salaried worker and the company that has audited figures cannot escape the amounts they are called upon to contribute. Does anybody in this House know the degree to which tax responsibilities are being evaded in this country to-day? It is not fashionable to talk now of the moneys made out of agricultural production.

It is not fashionable to talk to-day of the moneys made by the professional sections of our community. I suggest to the new Minister—I do this in the friendliest possible way; he has got a very alert mind—that something should be done to get at people who to-day are making more money in relation to other sections of the community than ever before, and who in my opinion are paying less in tribute than they should to the State of which they are a part.

We all know—we talk about this matter in clubs, bars and all over the place—that the man who is not on a salary, the man who is not the owner of a business whose accounts are audited, enjoys to-day by reason of circumstances that have arisen in recent years a prosperity which he never before enjoyed. Thanks be to God for that. I do not envy him for it, but he is not paying anything like the amount in direct taxation to the State as those people whom I have enumerated, the white-collar worker, the salaried worker and the business man whose accounts are audited by responsible auditors.

I suppose it is a natural thing to try to pass the buck, but I do suggest that the new Minister, with all the virility of his youthful mind, should devise some system by means of which all of us, no matter in what activity we engage, will pay our requisite tribute to Caesar. That is what I ask for. If every man in proportion to the money he is making within the confines of our State, pays his share of direct taxation, then I think the burden of the Minister for Finance will be lessened and the general burden be equalised. I could discuss this matter at length, but I do not think this is the occasion for it.

As far as I am personally concerned the Government of the day is the Government of the day, and on all things that are not controversial they will get the support of the more responsible elements of the community. That goes in particular fashion for the Minister for Finance who is an ex-member of this House. He has not got an easy job, but I would suggest to him, with 50 years of industrial activity behind me, that we are spancelled with old associations with Great Britain. Even income-tax as we know it is a heritage from Great Britain. It was created, devised and developed under conditions that did not exist here.

I would suggest that, when the Minister gets time to get down to it, he might examine the economic situation with a view to getting the revenues we all admit are necessary for the running of the State, in a more equitable manner. On another occasion, I hope I will have an opportunity of discussing other matters in detail. I might have something to say about the cost of the administration of government. Are the myriad of Departments we have necessary for the controlling of the destinies of 3,000,000 people?

We know that the Minister for Finance has got a youthful and virile mind, and he might cut adrift from these spancels which we have inherited and accepted willingly from John Bull, and see whether, in fact, he could devise some economic and financial scheme which would be less of a burden on industry yet be more equitable and provide him with the revenues which he or his successor needs.

Even at the risk of offending slightly, I must join with the other Senators in welcoming our new Minister to the House. I hope this will not be a prelude to disappointments on some other occasion when we will be telling him what we think of his policy.

I am sorry Senator Summerfield was not in earlier. He has re-stated exactly what Senator O'Brien said in his speech particularly in connection with the methods of income-tax, where they came from and their effects, and his suggestions as to reapportionment. I rise mainly to support the appeal of Senator O'Brien to the Minister that a new and more imaginative approach be made to the whole question of taxation. The Minister is carrying on a system which if it succeeded in another country may not be the best so far as our financial position is concerned. I think Senator O'Brien's suggestion was a timely one. It may even have come too late in the day and even now it might be too late to some extent to have a new approach.

Psychologically, income-tax has a very bad effect upon people. As everybody knows, the Irish people are a peculiar race and they resent income-tax as such. Any other form of taxation that I know of is not nearly so objectionable to the people as a people as income-tax is. From the psychological point of view alone the securing of the national income through some other form of taxation might bring in more, might be more palatable and more appealing to the Irish people.

The creation of that income from either purchases or sales taxes involves another psychological problem which Senator O'Brien overlooked. It is to some extent an academic matter, but I wonder to what extent it might affect the purchasing desire of the people. We know that in England the purchase tax had a retarding effect on certain consumer goods. Whether the transfer of the collection of our national revenue from the present income-tax system to a new form of purchase tax would have a peculiar reaction upon producers is something one will have to think about, because eventually all income comes from production.

I agree entirely with what Senator O'Brien said—and which Senator Summerfield has restated—in the argument for the equitable distribution of liability in proportion to share of national income. I am not going to stress that matter, as it is something that has been discussed already. Neither do I want to refer, beyond in passing, to the wear and tear allowances and depreciation allowances to which Senator O'Brien referred and which are at present the subject of consideration by the commission appointed by the last Minister.

I cannot understand Senator O'Brien when he states that nobody would pay tax on that part of his income which he does not spend. I would like to follow that argument to its conclusion and I wonder what happens to that part of the income which he does not spend. Senator O'Brien said it is for free investment and that the return from that portion of his income is not spendable, at least by him. But surely that portion of earned income which results to somebody else from that investment is liable to tax in some form or another? However, that is only an academic matter.

I would appeal to the Commissioners of Revenue to get over "gobbledegook", if I may so describe it. I know that the income-tax code is an involved and intricate one, but outside of the Seven Mysteries there is no greater mystery insoluble to-day than the income-tax demand, in certain ways. As a result, there has grown up a parasitic class known as income-tax accountants, who do a very good job of work in assisting people like myself to secure that which we should have a right to get without having to employ them. The forms presently issued are nearly non-translatable by ordinary minds. I would appeal for a simplification of these documents. It would be of great advantage particularly to the business community, as it costs us quite a lot every year in the employment of men who might otherwise be employed in another way in something productive. They try to show to us means of extracting from the income-tax authorities what we should get, and their activities are in no way adding to our national income.

The other recommendation I would like to make is that they would write letters of a conciliatory character to those unfortunate people who are not able to pay their income-tax up to time. Again I come back to the psychological feature of the Irish people. If you write that sort of letter to an Irishman he is not going to keep on paying, whereas it would be better if they wrote to us—most of us are in one class, always overdue in income-tax—as we would write to a customer in ordinary business in regard to a debt, in an inoffensive way. The ordinary letter going out in the ordinary way from the income-tax collector is offensive, as it is a sort of a threat or a mandatory indictment to his future seclusion in the purlieus of Mountjoy Gaol.

To the average man income-tax is a method of collecting part of our national income and it would be all to the good if that income can be extracted with the least possible dislike on the part of the public. When talking in this fashion I am not talking in a personal sense of the personnel of the Revenue Commissioners or the personnel of the Department, with which I have the friendliest relations, but I am talking about the attitude of mind which has grown up in the collection of the tax, which does not suit the mentality of this country—just as I am wondering if the new form of tax suggested by Senator George O'Brien, a purchase tax in substitution for the present income-tax, is suitable for the psychological attributes of our people.

I think the Minister will agree that he has heard quite a different angle on our financial position, or that quite a different viewpoint has been expressed on it from this House, from what he heard elsewhere. In so far as it is new and novel and to some extent invigorating, we hope it will help him on his road to be one of the most successful Ministers for Finance we have had for a long time. Everything we can do to help him in any way we will do and that, added to his own natural gifts, means that it will be a great day for all of us when no one in this country will be contributing income-tax as such and in substitution there will be some other sort of taxation and then, I would say, there will be golden statues put up to him all over the countryside.

I want to answer a few of the points made by speakers opposite. Senator Hawkins was very worried about the export of butter and Senator Johnston seemed to be very worried that we would not have enough milk. I think it is well that the agricultural policy has been such that we have had the dual-purpose animal, that we are reaping to-day the benefits of the very high price of meat and meat products in the neighbouring island, that we have not, like the Danes and the New Zealanders, to be sending ambassadors to Moscow to try to sell milk and milk products there and that we are not like the Americans to-day with thousands of millions of lb. weight of butter and cheese and dried milk they do not know what to do with.

I believe the greatest asset we have at present is the export of our live stock or live-stock products—meat and those types of highly-valued goods which we have been able to export. The standard of living of all our people would be very much reduced if that was not so. There is great credit due to the Department of Agriculture and to the Ministers for Agriculture who have been handling the affairs of this country—that they were not led away by any catch-cries regarding the cattle or dead meat industries and the basis on which they are being preserved as our greatest asset. It pays probably for 80 per cent. of the imports of everything that comes into this, island.

Through neglect in the past, our land is not producing what it ought to produce. I believe that to-day we have a Minister for Agriculture who sees that problem. In 1948, when Mr. Holmes was over here from Australia, he said that some of the land that he examined was such that it was not possible for it to grow less under an Irish sky. That was a shocking indictment of the neglect of grass which, if properly looked after and appreciated as a crop, with our high rainfall, could be the most valuable asset we have. Many countries which are considered progressive would love to have it and to exploit it to the full. That is why I wanted to reply briefly to those matters referred to by Senator Hawkins.

Senator Loughman spoke a great deal about things that happened in Tipperary during the election, about comments that appeared in shop windows.

In a shop window.

I felt like saying, in order not to let the debate get too heavy: "How much was the dog in the window." In that window were shown the prices of certain commodities in 1948 and what those commodities cost in 1951. That is all, no more and no less, that appeared in that window.

In 1951 and in 1954.

That is right.

All that appeared in that window was the cost of these items in 1951 and their cost in 1954. Why the Senator should have got so hot——

Excuse me, except a request that the people would return the people opposite to office.

A request? I do not understand the Senator. Anyhow, what appeared in the window were the prices operating in 1951 and those operating in 1954. Apparently, to many of the supporters of the previous Government who saw those mere facts in that window, it was enough to drive them almost mad.

We laughed at them —and the people also laughed at them.

Laughed? I think Senator Loughman also mentioned the election in Tipperary. It ought to be said that in 1951 we won a seat from Fianna Fáil in Tipperary—and we won it by 152 votes. When we got the second seat in Tipperary this year, we had almost 2,400 surplus votes.

The 152 votes meant that we got three out of four.

In 1951, 152 votes gave us the second seat and in the recent general election we increased our surplus to almost 2,400 votes. I do not propose to develop that point any further as I want to answer what has been said as briefly as possible. If there was any indictment by the people of the last Government surely it was in respect of their incapacity to borrow money at a reasonable price for the development of the resources of this country. The Minister for Finance in the Fianna Fáil Government had to pay 4½ per cent. to 5 per cent. for the money which he borrowed during his term of office. When Deputy McGilligan was Minister for Finance in the inter-Party Government he was able to borrow all the money he required at 3 per cent. and 3½ per cent. During the past three years, the Fianna Fáil Government paid more for money than municipal corporations in Britain. They paid from ½ per cent. to 1 per cent. more than cities such as Bristol and Birmingham. Any State which is properly managed and in which the people have confidence should be able to borrow money at a very much lower rate than a municipal corporation.

I believe the financial interests and the men and women who made a little money and saved a little money had no confidence in the last Government and did not give their money to the last Government so that it was necessary for the then Minister to offer that high and attractive rate of interest. In its turn, the high rate of interest which the Minister offered had ill effects. It depressed the value of the savings which other people had previously given to the Government by way of loan and it caused those people a great deal of hardship. Further, it made housing and development in this country very much more expensive than it need have been, and for the next 20 years our people will have to pay the cost of that folly and the cost of that period of maladministration.

I should like to return to some of the matters which were mentioned here to-day by Senator O'Brien and other speakers. I believe a tax system should be such as to allow that which is good and best in the nation to survive and, as Senator Johnston said, to remove some of the overgrowth which may be crowding in on some of the things that are good. If the tax to-day is light on the farmer, the farmer is investing more money in his land and holding and in the capital equipment of that holding than ever before. The farmer never got a fair chance in this country. Anyone who reads a page of Irish history will see at once that it was always the land and the things that appertained to the land that were the cause of the fight. That is only natural because the land is our major asset.

However, by and large, the farmer did not get a chance. If he gets a period in which he will be encouraged to work hard and to invest the major portion of the fruits of his work in industry, in the development of the land and in increasing production on that land, we should be very slow to devise any scheme here in Dublin City that would stop him from so investing that money. I believe that to-day many farmers are investing 25 per cent. to 50 per cent. of the proceeds of their work and industry in their land and in capital goods.

Mention has been made of wear and tear allowances. I think that the Minister for Finance will have to consider the fact that those people who reinvest their money in the industry should have the proceeds of that reinvestment taxed in a different way from money which is often spent on objects which may be socially undesirable. There is another aspect relating to the Irish economy which I do not think has been properly stressed. We are a small economy. Businesses are small and many businesses are family businesses. When a member of the family dies, the incidence of death duties falls heavily on that family business and in a way which is not common in other countries where, generally, they are companies—sometimes very large companies of a kind that we do not know in this country. In that way, the continuity of a natural development of Irish life and Irish industry is destroyed, in my opinion, by the incidence of death duties.

In fact, this trend has been noticed in Great Britain where a company was established a couple of years ago—I think it had the very homely name of "Edith"—for the purpose of helping family and private companies to avoid being swamped by the incidence of death duties. Undoubtedly, the Minister has the advantage of having very able men in his Department to advise him in these matters. I believe, however, that he ought to give great attention to the report of this commission which is dealing with taxes at the present moment and that it ought to be the duty of the Department of Finance and the Revenue Commissioners to try to devise a system that will give us the best and the healthiest growth in our Irish life.

I notice that to-day practically every town in this country is almost overrun with multiple shops. These shops have no real interest in the life of the towns in which they are set up. They will praise neither Fianna Fáil nor Fine Gael policy and they take little or no interest in the social or cultural life of the communities among whom they are trading. I believe that, with a properly devised tax system, such types of growth would be arrested and the normal types of growth in our country towns would be encouraged and directed. We are a comparatively young State, and as Senator O'Brien has said, we have taken our taxation system from Great Britain. They have revised their system but we have just carried on with their old system. We have to-day a young Minister for Finance who is not affected too much by time-established precedents.

I would like to ask, in conclusion, that the Minister for Finance would, during his term of office, give us a system of taxation which would be more amenable to those who have to work it and to those who have to bear the tax burden which it imposes, and that would also create a climate that would be good for the proper development of our economy and our social life in this island of ours.

I move the adjournment of the debate.

The Land Bill is to be taken at 7 o'clock?

An Leas-Chathaoirleach

Yes.

It will not take long, I understand. That has been arranged.

An Leas-Chathaoirleach

I thought that the idea was that if the other business was finished, the Land Bill would be taken.

The Minister would prefer to finish it if it is in order. Perhaps it could be arranged.

Take the Land Bill at 7 o'clock.

An Leas-Chathaoirleach

Very well. We will have the Land Bill at 7 o'clock.

Business suspended at 6.5 p.m. and resumed at 7 p.m.