Finance Bill, 1955—Second Stage.

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

The Finance Bill each year affords the Seanad its principal opportunity to discuss financial administration. The Bill before the House has, in that connection, perhaps, this year a greater significance than usual, inasmuch as, together with the Budget, it marks the first stage in the implementation of the financial policy of the present Government.

I assume the House would not wish that I would go over again here the ground which I covered in the other House when I was introducing the Budget. I do, however, want to emphasise that the Budget of 1955, when compared with the 1954 Budget, provides benefits amounting to £4,250,000 without any change in the rates of taxation while at the same time it carries a net £1,000,000 more for the service of debt for capital development.

The benefits to which I have referred include £2,000,000 for butter subsidy, almost £750,000 for additional health services, £900,000 for increased old age, blind, widows' and orphans' pensions, £100,000 for relief to income-tax payers with dependent children and £600,000 for the additional cost this year of the tax concessions made last year. This, if I may say so, is a gratifying achievement for a Government but one year in office and is an earnest of the sincerity of our intentions.

Now to come to the technical aspects of the Finance Bill. Its chief purpose is, of course, to give permanent legislative effect to the Budget Resolutions passed by Dáil Éireann. These Resolutions dealt with the rates of income-tax and surtax for 1955-56, the agreement with Canada for avoidance of double taxation on death duties, the aggregation of assurance policies when computing the rate of estate duty to be applied in certain cases, and the stamp duty on credit-sale agreements. The covering legislative provisions are contained in Sections 1, 10, 12 and 17 of the Bill. Other matters to which I referred in my Budget statement are also provided for, income-tax being dealt with in Sections 2 to 5, the excise duty rebate for small brewers in Section 6, the agreement with Canada for avoidance of double taxation on income in Sections 14 and 15, and the termination of the stamp duty on yearly certificates of notaries public in Section 16. Section 2 incorporates, in addition, a provision which was not amongst my original budgetary proposals, namely, the increase from £40 to £60 in the amount of income a child may have in his own right without prejudicing the grant of the normal child allowance for income-tax purposes. I propose now to give a brief explanation of the purpose of the remaining sections of the Bill.

Section 7 reduces from 35 per cent. to 25 per cent. the minimum proportion of a cine-variety programme in a patent theatre which must consist of personal performances so that the entertainment may qualify for the 30 per cent. repayment of entertainments duty allowable under the Finance Act, 1948 (paragraph (c) of sub-section (4) of Section 10). This casement of the qualifying conditions is intended mainly to help the management of Dublin's Theatre Royal to maintain the stage show as part of the theatre's entertainment and so preclude as far as possible the danger of unemployment amongst musicians, stage hands, etc.

Section 8 revokes the customs duty on galvanised corrugated iron or steel, which has been suspended since 1942 and which, in the absence of this provision, would automatically come back into force with the lapse next year of the Supplies and Services (Temporary Provisions) Act, 1946.

Section 9 provides, in the first instance, that the £8 excise duty— applicable to agricultural tractors used on public roads for haulage of goods without reward—shall apply also as from 1st July, 1955, to agricultural tractors using a "carry-all" or other detachable container for the conveyance of goods without reward. This extension of the concession is warranted on grounds of equity.

Section 9 provides also that, as announced in the Budget, agricultural tractors used for hauling for reward milk, separated milk and containers to or from creameries and separating stations shall, as from 1st July, 1955, be subject to duty only at the £8 rate.

Section 11 provides that where property is being taken out of settlement the trustees may obtain from the Revenue Commissioners a certificate of the prospective amount of estate duty for which they, as trustees, may become accountable. Should the amount of the duty payable eventually be found to exceed the amount specified in the certificate, the trustees will not be liable for the excess but any such excess will be payable by the beneficiaries. The merit of this provision is that it will enable trusts to be wound up in certain cases.

As regards Section 13 the position under existing law is that a deceased person's own estate, if it exceeds £2,000, is aggregated for estate duty purposes with any settled estate in which he had an interest and, accordingly, becomes liable to the higher rate of duty appropriate in the circumstances. Section 13 sets aside the rule of aggregation where the net value of the property of the deceased does not exceed £10,000. There is provision also for marginal relief in cases where the property is not substantially in excess of £10,000.

Section 18 makes the usual amortisation arrangements in respect of borrowings for voted "capital services" in 1954-55 and 1955-56. The repeals provided for in Section 19 and indicated in the Third Schedule are, in so far as they relate to the Stamp Act, 1891, consequential on the repeal by Section 16 of the stamp duty on the certificates of notaries public. The repeal of Section 5 of the Finance (Miscellaneous Provisions) Act, 1935, and of Section 23 of the Finance Act, 1938, abolishes the bounties on tobacco made from home-grown leaf and on sugar made from home-grown beet which were introduced in 1935 to compensate exporters for the higher duty-free cost of such commodities as compared with the imported products. The tobacco bounty was suspended under the Emergency Powers Act. No bounty has been paid in either case since 1943. Tobacco has virtually ceased to be grown here and sugar ceased to be liable to duty in 1946. With the lapse of the Supplies and Services (Temporary Provisions) Act, 1946, the original legislative provisions would be revived and in the circumstances their repeal is now proposed.

The remaining sections, that is, Sections 20 and 21, are standard and require no explanation. I accordingly recommend the Bill to this House.

The Finance Bill affords this House the first opportunity it has had of considering the Budget proposals and I would suggest that, before we move to the proposals themselves, we should examine the statements made by the Minister in the introduction of his Budget. While the people as a whole are anxious to see what the Budget contains, they are equally anxious to hear what the Minister has to say in the introduction of his Budget because they expect that therein lies some guidance as to what the future policy of the Government will be and what steps it proposes to take to deal with the many problems confronting the Government and the country at the moment. The Minister in his financial statement introducing the Budget, column 678, Volume 50, of the Official Debates of 4th May, 1955, commenced by saying:—

"Despite some setbacks, such as the disappointing harvest and the widespread winter flooding, the economic picture for 1954 is, on the whole, satisfactory. In all the main branches of the economy progress was made. The external trade returns showed a further improvement, consequent on a turn for the better in the final quarter of the year. Exports were higher and our import bill, thanks to increased home production, was smaller."

That in itself is a very important statement and one, I feel sure, that the country welcomes very much. However, having regard to the statements that were made in relation to the Budget, under which this prosperity or improvement in our economy in general was achieved, it is hard to understand the manner in which that Budget was received and the suggestions at the time of the dire consequences the implementation of that Budget would have on the country. We all must be very pleased that, at the end of the financial year, the Minister for Finance was able to present a statement so satisfactory as I have read for the House.

The next important matter—I do not wish to go through the Minister's whole statement—to which the Minister referred in his Budget statement was in relation to exports. Dealing with the question of exports he said:—

"The increase in the exports of cattle and beef, has, in fact, more than compensated for the decline of over £10,000,000 in exports of chocolate, chocolate crumb and confectionery. Exports in cattle increased in value by £8.8 million and by no less than 163,000 in number."

But the Minister then sounds a note of warning when he said:—

"Some apprehension has been expressed that the increase in cattle and beef exports may be at the expense of stocks. It would seem, however, that the decline in stocks has been insignificant both absolutely and in relation to the volume of exports."

That statement was made on the 4th May last and I wonder if the Minister has, since making that statement, any further information in relation to the consequences arising out of this great boom in our cattle exports and whether he is not of the same opinion that they can continue at the same rate and if they can continue to bring into the country the same revenue as that about which he talks.

The next important item to which the Minister drew attention in his Budget statement was to the fall in imports in 1954. He said:—

"The fall in imports in 1954 is explained mainly by increased home production which lessened our dependence on certain foreign products. There were decreases in wheat, maize and sugar. Wheat imports fell both because stocks were drawn down and because home supplies were greater."

In that statement the Minister points out the importance to the House and to the country of increased production and particularly to the importance of increasing our wheat production. Since the Minister made that statement, the encouragement given to farmers to grow more wheat has been withdrawn and we have had a provision introduced which will have the effect of reducing the output of wheat. That in turn will have the effect of making us more dependent on imported wheat; we will have to import more wheat in order to maintain our bread supplies, and, so that we shall have the dollars to pay for this extra wheat, it will be necessary for us to increase our production in other directions. Turning to the question of production the Minister said:—

"There was an increase in 1954 in industrial and as well as in agricultural production.... The biggest advances were in the assembly and construction of vehicles and engineering. There was some falling off in local authority housing, but this was largely counterbalanced by a rise in private building."

I should like particularly to recall to the Minister his statement in relation to local authority housing. It is only natural that our local authorities, with the encouragement they have got down through the years through financial provision for the erection of houses, should now have met the needs of most of their houseless people. There are, however, in rural Ireland still a great many areas to which one might refer as slums. There is a great need still for generous provision so that small farmers and agricultural labourers throughout the country can build their houses. We should be at least as generous to that section of the community as we have been to those living in the urban areas.

I should like now to draw the attention of the House to one of the problems that have been uppermost in the minds of most of the people in this country for a considerable time. That is the question of unemployment and emigration. When one reads the Minister's Budget statement in regard to this problem, one immediately becomes anxious for more details and for information as to what is to be done about this important question. In his statement the Minister said:—

"Over the eight years from 1945 to 1953, there has been an aggregate fall in the number of males engaged in agriculture of 100,000, representing an average annual decline of 12,500. The outstanding and gratifying feature of the employment returns for 1954 is that no further decline took place."

The Minister in making that statement seems to have sat back in contentment because he says: "No further decline took place."

I feel sure that no member from any side of the House can be satisfied or gratified while, no matter how we juggle with figures, we have a considerable number of our young people, up to 50,000 or 60,000, lining up daily at our labour exchanges drawing unemployment assistance of one kind or another. There is not in the Minister's Budget statement or in the Finance Bill a single new provision which would relieve that position and ease the distress caused by unemployment.

A number of years ago a commission was appointed. It gave us valuable information as regards youth employment and we learn from it that it is essential that we should create no fewer than 25,000 additional jobs each year. But, if we want to get rid of the lines that form outside our labour exchanges daily, we must provide many more jobs than that. And that is the problem which the Minister passes over by saying: "The gratifying feature of the employment returns for 1954 is that no further decline took place." It is because of emigration that the unemployment figures have dropped to what they are to-day. Surely the Minister and those supporting him will admit that the solving of the problem of unemployment and emigration was a point which took a very prominent place in their speeches off the platforms? Those unemployed persons were led to believe that all that was necessary in order to have full employment created for them was to bring about a change of Government.

And now in his first Budget the Minister sits back and passes over this very important and difficult problem of unemployment by stating: "The outstanding and gratifying feature of the employment returns for 1954 is that no further decline took place." Having said that, I suppose he feels that everything in the garden must be very rosy. Off the election platforms of the Minister and his supporters many adjectives were used to describe this great tragedy of unemployment and emigration and it is notable that many people who were very vocal on that point have now changed their tune. They have begun now to describe emigration, which arises in the main from unemployment, as a blessing in disguise, as something of which we should be proud. In fact one of them described it as a safety valve.

It was one of your own leaders who made that statement.

That was a very great change from the statements we heard from them over a number of years.

That we bring them back from America?

That seems to be the new approach. It seems to be the new look, I would say, not alone of members of the Government but also of persons outside of Parliament altogether. We believe it is an evil thing and that it is one of the things to which the Minister and the Government should direct particular attention. We expected that some provision would be made by the Government to overcome this question of unemployment; we expected that the creation of more employment would stem the tide of emigration. But we find it has taken second place and it is hard to decide which was first, second or third in this particular race, whether it was Tulyar or some other horse in the election field.

The next thing to which the Minister referred was to the question of prices. He goes on to say:

"The cost of living may be affected by the rise in prices of imported materials."

It is good that we have a change of Government from time to time in order that the people may face up to the difficulties surrounding these matters of prices.

The Minister went on:

"Prospects for price trends in the coming months are less settled. The cost of living may be affected by the rise in prices of imported materials. We can meet this effectively only by exporting more, which means in the first place, producing more and doing so more efficiently. This is the way to keep up and even improve our living standards in face of a rise in import costs. No real or lasting protection is given, in these circumstances, by increases in money incomes alone; indeed, if we sought refuge in this, we would risk being costed out of the export markets on which we rely so much for our prosperity. I would, therefore, enter a plea, in the national interest, for a careful and reasonable attitude on the part of employees and employers alike, lest both internal and external stability be jeopardised...."

That is a statement made by the Minister for Finance of the Coalition Government introducing his first Budget. Had that statement been made by his predecessor, he would have been accused of not being in favour of giving the workers any increase in wages or any improvement in their conditions in relation to 1939; but the Minister's appeal has fallen on deaf ears, though not because the workers and trade union organisations have not been very sympathetic. Great credit is due to them that, during the difficult years we passed through, they exercised caution and acted in the national interests in not making any further serious or exorbitant demands. We have at present, however, a great wave of trade union unrest which has arisen, in the main, by reason of statements and promises made by these Parties at the last general election when the people were told that all that was necessary to bring down the cost of living, to bring down the cost of government and to introduce a more effective form of price control, was to have a change.

These were the three appeals made to the workers and they now see that, though the people who made them are now charged with the responsibility of government, no action of the Government has resulted in a reduction in the price of any one item referred to during the general election, in a reduction in the cost of government or of any item of essential foodstuffs, but that, on the other hand——

Is butter not an essential foodstuff?

I do not want to detain the House in going through all the commodities which have risen in price, because the list would be so long and so dreary, particularly for Senators like Senator L'Estrange, that he could scarcely hold himself in, if he heard the number of items that have gone up.

Tell us the items.

Tell us about point 15 in the 17-point programme.

It would be better to permit the Senator to make his speech in his own way.

If the Senator is anxious to have a debate on the promises made during the past 25 or 30 years from this side, I have ample time and am quite prepared to have a debate on them, but while it might be of some little benefit to the Senator if he listened intelligently, it would not be fair to the other members.

I do not want the Senator to go back 25 years. Tell us about the promises made last year.

He is entitled to make comparisons.

The Senator must be permitted to make his speech in his own way.

When speaking on the Vote on Account, I drew attention to this very question. I mentioned a number of items in respect of which we were promised reductions and I made reference to a certain pamphlet issued at the time in which were depicted the loaf, the pound of butter, of tea and of sugar, the wireless licence and the car licence. There was hardly room on the pamphlet for all the pictures of these things. The first person in the House who came to my aid was my friend, the Senator, who held up the very pamphlet I was referring to.

All it did was to compare prices in 1948 and 1951 and to set out your promises.

These prices were compared. I am in no hurry, and, if he wishes, the Senator can have the extracts from all the local papers over the signatures of the various election agents calling for support for the Fine Gael candidates, each and every one of which was practically the same—"Vote Fine Gael and reduce the cost of living"; "Vote Fine Gael and reduce the cost of government"; and "Vote Fine Gael for prosperity, increased social services," and so on. If the Senator or the Minister denies that such pamphlets were issued and that such advertisements were issued, they must admit that they must have come from some place, and, if that is the case, if they were not issued with the authority of the Fine Gael Party or with their approval, and were not paid for out of Fine Gael funds, they must have been issued by some underground organisation which set out to do serious damage to this great national organisation of Fine Gael.

We have electoral Acts, Corrupt Practices Acts and many others in relation to the running of these elections and I suggest to the Attorney-General, through the Minister, that we should have one more inquiry. There was a time when the Attorney-General was very anxious for inquiries, no matter whether it was well or badly he came out of them, and it would be no harm to have another to find out exactly who issued these documents and who paid for them. It is a very serious matter if statements of this kind can be put into print and paid for by somebody, if the Minister or the Senator denies that they were officially issued by the Party of which they are members.

I do not blame the Senator because he is only taking a headline from the former Minister for Finance who went down to Radio Éireann and handed in the script of his speech there, a speech which was accepted, as it should be accepted, by all the people of the country as coming from a man who had held the important position of Minister for Industry and Commerce in the Cumann na nGaedheal Government and who was looked on as the person who would be in charge of the country's purse if and when a new Government was elected. He did exactly the same thing as my friend. He made a statement over Radio Éireann in which he made promises to the people. Then, later, when he was challenged about that statement he said: That is not true; I did read the document but I had not my Party's approval of it and, signs on it, they did not allow me to make any further broadcasts over Radio Éireann.

I do not wish to detain the House by quoting statements which were made. It is not much use reminding the House of some statements and some promises which were made by people in public life in this country— and some of the promises were even broadcast over the national radio and published—when the persons who made them can then come along and suggest: "We never made them. If we did make a promise you misunderstood us. We meant that, over a period of years, we might accomplish these things."

The next matter to which the Minister referred in his Budget statement concerned actions taken by the Government to stabilise the price of tea. We are much nearer now to the appointed day of September when some steps must be taken to meet the cost of having the price of tea stabilised. It is true that small reductions have taken place. However, I should like the Minister to give the House an indication of what the cost has been to the Exchequer in the matter of the payment of interest on the money which Tea Importers were allowed to raise in the banks to help them over the period until such time as the price of tea may be reduced to a level at which it may be sold with a profit. Another important aspect of this question concerns the quality of the tea. While the Government may claim that they have done a good job for the community by maintaining the price of tea at its present level, another aspect of the question is that so long as the price of imported tea is in or about its present level, or even after there has been considerable reduction, we shall be forced to be content with an inferior quality tea over a long period in order to reach the stage when this whole question may rectify itself. These are some of the remarks that the Minister made in introducing his Budget.

If the Senator would allow me to say so, his interpretation of my remarks.

I tried to be so just in my remarks that I actually read verbatim the words of the Minister. If it is not a correct verbatim report of what the Minister said, then I am sure the Minister cannot blame me for it.

The Senator grossly misrepresented what I said on employment, although I did not like to interrupt him.

Lest the Minister or the House should have any doubt about it, I will reread what the Minister said.

The paragraph, please.

Under the heading "Employment and Unemployment" the Minister said: "The outstanding and gratifying feature of the employment returns for 1954 is that no further decline took place."

And that refers to what? It refers to agricultural employment. It is quite clear that it refers to agricultural employment although the Senator made it appear to refer to industrial employment.

I made it quite clear that I was referring to agricultural employment when I said that what the Minister was referring to was what is commonly known as "the flight from the land".

If the Senator will read his speech when it is typed he will see that he was referring to industrial employment rather than to agricultural employment. However, I am perfectly happy now that I find that he says he was referring to agricultural employment.

I desire to have from the Minister some indication of the Government's policy in relation to employment and I want to know what provision they intend to make about it. No provision is being made in the Finance Bill now before us that will create employment for any single person on the land or in the industrial sphere other than what was there previously.

During the year, we received a very valuable document in the shape of the Report of the Commission on Employment and Emigration. Surely the Government have considered this very valuable report. They should now be in a position to give us their views on this question and to give an indication of what they propose to do in relation to implementing some of the many very valuable recommendations by that commission. In particular, the Minister should give us some outlines of the Government's policy towards the Gaeltacht areas. Emigration is continuing there. The number of unemployed registering at the labour exchanges may be lessening but it is lessening because not alone are the young people emigrating but whole families are departing from many areas in the West and the same is true of Donegal and Kerry.

These matters were brought to the attention of the public during the elections. There was a suggestion, anyhow—just as the little blue pamphlet was a suggestion—that if there should be a change of Government something dramatic would be done and the whole countryside and the whole outlook of our people would be changed. It was suggested that there would be a Minister who would be in charge of Gaeltacht matters. We have heard nothing further about that—not that I am in complete agreement with such a step. I do not think that the mere appointment of a Minister, and additional services of that kind, will solve that particular problem. The fact of the matter, however, is that we have no indication of what the Government propose to do in this connection. This Coalition Government have now been in office for 12 months and they have had ample time to become familiar with the various offices and with the financial and economic position of the country to be able to tell us exactly what they propose to do.

I want to refer now to the tremendous increase which we have had in recent years in hire-purchase sales. The Minister must surely have given some consideration to their effect on our whole economy and way of life. I do not hold that hire-purchase cannot serve a very useful purpose but, like all other things, it can be abused—and there are abuses at the present time. The Government should inquire very closely into the operation of the hire-purchase system and its effects on the economy of the country, the business community as a whole and family life.

During the war years many people felt that land was a great security and came over here and purchased tracts of it. At the time, there was a great outcry because lands were being bought up by outsiders. The Government of the day took steps which they considered might be effective to counteract the taking over of large tracts of our land by people from outside. Now, combines or multiple shops in other countries are coming over here and taking control of many of our business concerns in this city and throughout the country. We should have some indication from the Minister on the Government's policy in relation to this matter. This is as important a question if not more so, than that of those people who are buying up the land, because after all those numbers were very small.

The Budget provides for the abolition of the subsidy on flour to those engaged in the manufacture of confectionery and biscuits. That may not be important to some Senators—probably Senator L'Estrange and Senator Burke are not interested in industries of that kind or the effect of the increased cost of biscuits or confectionery on our people. It is important, however, when the price of a pound of biscuits has been raised by 5d. and when the cost of confectionery of all kinds is being increased. I put it to Senator Burke and Senator L'Estrange and to Labour members generally, that the small farmer, the widow and orphan and the pensioners are entitled to these luxuries—if one may refer to them as luxuries—just as much as any other section of the community. While the other sections can provide against these increases by the home manufacturer, these other people cannot do so. Therefore, it is another increase on the workers and small people.

There is another difficulty I see arising out of it. Many of our small confectionery manufacturers down the country up to the present were in a position to purchase their flour from the local mill. Now, a small amount of flour converted for the making of confectionery or biscuits would not be sufficient to allow these small millers to manufacture that flour. Therefore, the small confectioner down the country will be compelled now to change his custom, and probably will find difficulty in doing so, to the larger manufacturers who will be manufacturing this flour in a rather big way to make it a paying proposition.

I am sure representation has been made to the Minister already about this, and I would suggest that this question of the removal of the entire subsidy should be reconsidered. Seeing that we have heard so much about the removal of subsidies up to this, it is a strange thing that this subsidy should go off so lightly.

The Bill also proposes to give certain rebates of income-tax—which we all welcome. I would suggest to the Minister that he should go a step further. He should make provision for some compensation for those who are compelled to employ domestic help. We have reached the stage when our young people, particularly young girls, are encouraged to emigrate. Unless we encourage our people to give employment to them at good wages at home, this emigration will continue. We already give a rebate of rates to the farmers for the number of persons they employ in agricultural employment. It would be a worthwhile inducement to our people, particularly those with families, compelled to employ domestic help, to give some concession to them. It would be an encouragement to our people to employ domestic help and to those who do employ them to give them a reasonable wage and, therefore, counteract in some way the inducements to emigration.

The Bill is more or less a Committee Bill and it is one that on Committee we can deal with further next week. I would like to have from the Minister some indication of what action it is proposed to take in the many matters to which I have drawn his attention.

There is a good deal more to commend itself to this House in connection with the Finance Bill than has been admitted by Senator Hawkins. The Minister deserves our congratulations on having made at least some concessions to widows and orphans and on giving some relief in children's allowances in income-tax. There is, too, some glimmer of hope that he has more imagination than many of his predecessors in financial policy. That is evident in his insistence that the Irish bank rate should not slavishly follow the English bank rate. There is there some glimmer of hope that, having taken the first faltering step, nevertheless a step in the right direction, he will go further and perhaps insist on using the finances of this country in very large scale schemes of capital development.

I would like to express disappointment about one point. I am sorry there has been no proper attempt to revise the income-tax code. I believe that if the income-tax code is properly devised and employed it is an equitable, and probably the most equitable, system of collection of revenue from the citizens; but I would hold very strongly that, as at present employed in the Republic, it is inequitable because it places an undue burden on one section of the community, the salaried or middle income group. These people at present, and for some time past, appear to me to be the Atlas of the world of income-tax, and the burden has been so crushing for them as to force the Atlas some distance into the ground. You read in ancient mythology of Cuchulain's feet being forced into the solid rock, up as far as his ankles, because of the pressure of the weight of numbers of his foes, but I do not think even Cuchulain could contemplate with equanimity the twice-yearly spectre of the income-tax inspector.

The burden is not lightened by the fact that other sections of the community are not bearing their share of the load. The very large farmer selling 100 head of cattle is not subject to any check, the manipulator of companies is able to salt away considerable profits by dummy companies and the person who is skilled in manipulation as a stock exchange investor is able by a quick deal in shares to collect a large profit arising out of that quick capital appreciation, which is not subject to checks later on like the ordinary individual income-tax payer, the salaried worker or the worker for wages, the teacher, the civil servant, the clerk and the State or semi-State officials and ordinary citizens. In this case of the inequitable burden of income-tax they have a legitimate grievance. I would, therefore, urge the present Minister, as I have done on other occasions, that before another year comes round some attempt should be made to meet their case.

I do not think this question will be settled merely by a reduction of 6d. or 1/- in the £. Something more drastic has to be done. The whole basic nature of the system of income-tax, which encourages evasion amongst the prosperous or the unscrupulous, forcing the middle-class income-tax payer into the dust, has to be revised. There is a particular responsibility on the Seanad, whose members receive tax-free allowances, to remove this injustice from a considerable section of the community.

There are other sections of the Bill with which I should like to deal, but I think it is enough to raise this matter at the moment. The amount spent on education is completely inadequate, but that is a point which, like others, may well be discussed on the Committee Stage.

Tá an oiread sin ráite ag na daoine a tháinig romham nach mian liom mórán a chur leis an méid atá ráite acu. Nuair a bhí an tAire Airgeadais ag cur an ráitis seo os comhair an tSeanaid, dúirt sé go dtabharfadh sé caoi duinn cur síos a dhéanamh ar chúrsaí airgeadais na tíre. Aontaím le sin, ach, i dteannta caoi a thabhairt dúinn cur síos ar chúrsaí airgeadais na tíre, tugann sé caoi dúinn strac-fhéachaint a thabhairt ar staid eacnamaíochta na tíre chomh maith, cúrsaí geilleagair agus eile. Mar sin féin, nílimse chun aon chaint fhada a dhéanamh orthu sin.

Na Teachtaí Dála a bhí ag caint ar na cúrsaí seo, do dhineadar an cás d'iniúchadh chomh mion sin agus chomh cúramach sin agus nach gá dúinn dul siar ar na rudaí a dúradar. Gan amhras, is iad an dá rud is mó a bhí i gceist an costas maireachtála agus na cánacha atá leagtha anuas ar mhuintir na tíre seo. Is iad na ceisteanna is mó—agus dá bhféadfadh an tAire agus an Rialtas rud éigin a dhéanamh mar gheall air sin, bheadh lá maith oibre déanta acu. Ach, chomh fada is chímse an scéal, níl aon iarracht á dhéanamh acu chun sin a dhéanamh, agus is leis sin atá muintir na tíre ag fanacht.

B'shin é an rud a cuireadh ina luí orthu, nuair a bhí na cainteoirí seo ag dul timpeall na tíre, na cainteoirí a bhí ag caint ar son an Rialtais atá istigh anois—do chuireadar ina luí ar mhuintir na tíre gur ceart na rudaí sin a dhéanamh agus do chuireadar ina luí orthu go gcaitfidh athrú Rialtais a dhéanamh chuige sin.

Nach raibh an ceart acu?

Tá an Rialtas nua anois ann, ach ní fheicim cad é an rud atá déanta chun na nithe sin a dhéanamh. Bhí ard-fhuadar faoi na cainteoirí sin mar gheall ar na nithe sin atá i gceist agam, tamall ó shoin; ach tá siad balbh anois. Is é an leithscéal atá acu anois ná fuilid fada go leor istigh, ná fuil rialú na tíre fúthu fada go leor chun na rudaí seo a dhéanamh; ach, fé mar adúirt mé ar ócáid eile annseo, bheimís leathshásta dá bhfeicimís aon iarracht fónta á dhéanamh i gcóir na haimsire atá ag teacht, nó aon chuspóir nó aon scéim á ullmhú acu, chun na rudaí seo a dhéanamh. Admhaím nach in aon lá amháin a déantar na rudaí sin, ach mar sin féin d'fhéadfá breith a thabhairt ar an scéal do réir na himeachta atá faoi na daoine atá i mbun na gcúrsaí sin agus do réir na himeachta atá faoin Rialtas seo. Ní fheicim cad é an dul chun cinn atá á dhéanamh chun an costas maireachtála a laghdú agus chun na cánacha—adúradar a bhí ro-throm ar na daoine—a laghdú.

Is é tubaiste an scéil, maidir le Rialtas den tsórt seo, Rialtas go bhfuil níos mó ná aon Pháirtí amháin páirteach ann, gur féidir le cuid acu rudaí áirithe a rá nuair a théann siad timcheall na tíre agus gur féidir le cuid eile acu na rudaí sin do shéanadh. Is ait an scéal é, ach sin mar atá sé. Is féidir le lucht Fine Gael dul timcheall i measc na ndaoine agus a bheith ag caint faoi chomh trom is tá na cánacha agus gur ceart rud éigin a dhéanamh chun iad a laghdú Is féidir leis an Lucht Oibre ansan dul timpeall agus locht a fháil ar an gcóras sóisialta atá anso againn agus a rá gur cheart na liúntais a tugtar faoin gcóras sin do mhéadú, gur cheart an pinsean seanaoise, na pinsin eile agus na buntáistí eile atá ar fáil faoi na hAchtanna úd a bhaineas leis an Roinn Leasa Shóisialaigh do mhéadú; ach, ansan, ní chloisimid focal uathu i dtaobh cá bhfaighfar an t-airgead chuige. Sin ceann de na lochtanna, mar adúras, atá le fáil ar Rialtas idir-dhreamach fé mar atá istigh anois.

I dtaobh na Cáinfaisnéise a chuir an tAire fé bhráid na Dála ar a bhuil an Bille Airgeadais bunaithe, is beag má tá aon deifríocht idir é agus Cáinfaisnéis 1952 nuair a tháinig na dreamanna poilitíochta atá sa Rialtas anois anuas sa mullach ar an Aire Airgeadais a bhí ann an uair sin á rá go gcreachfadh sé muintir na tíre, go raibh ar aigne ag an Aire na daoine a scrios agus mar sin de. Má ba scriosúnach an tAire a bhí ann an uair sin agus má ba scriosúnaigh baill an Rialtais a bhí ann an uair sin, nach mar a chéile baill an Rialtais atá anois ann? Ach tá so mar dhifríocht idir an cás a bhí ann an uair sin go raibh easnamh mór airgid ann tar éis don chéad Rialtas idir-dhreamach dul as oifig agus b'éigin don Rialtas a tháinig isteach an t-easnamh mór san do líonadh. Muna mbeadh san níor ghá dóibh na cánacha breise do leagadh anuas ar na daoine. Ní mar sin a bhí an scéal ag an Rialtas seo nuair a tháinigeadar isteach. Bhí an cuntas glan.

The Minister in his opening statement said that this Finance Bill gives us an opportunity of examining the fiscal policy of the Government. That is quite true. It also gives us an opportunity of taking a bird's eye view of the economic situation in the country as a whole, and it is very difficult to segregate the economic position from the financial since one is largely related to the other. The Minister, when he presented his Budget statement to the Dáil, expressed himself as being satisfied with the economic position of the country during the year 1954. No doubt every Senator here will also be glad that the economic position is a healthy one. I do not know whether the Minister for Finance or his Government was claiming credit for that, but everybody knows that the economic position of a country does not develop overnight; it depends on what has gone before and I suggest that the present satisfactory economic position of the country to which the Minister referred in his Budget statement is due to the policy that was pursued prior to his Government taking office.

It is always a sound policy, irrespective of what Government is in power, to balance the annual Budget because if payment is deferred or there is a refusal to meet current commitments out of current revenue, then, as in the case of the ordinary individual, the last state is worse than the first. The wise policy of balancing the Budget was pursued by the Minister's predecessor ; it was always the policy of Fianna Fáil to balance the Budget and to meet current commitments out of current revenue. When I say that it is a wise policy to meet current commitments out of current revenue I do not mean that it is not right to borrow to a reasonable extent, but I am one of those who is totally against a policy of excessive borrowing, or borrowing for wholly unproductive purposes.

The Minister referred to capital development. Knowing that this country has great potentialities for development in many directions, I believe that a certain amount of money should be utilised for capital purposes. It is one thing, however, to talk in an abstract manner about capital development and it is another thing to state exactly what this capital development will be. We have, as everybody knows, a few major industries which can be described as national industries; I refer to such projects as Bord na Móna, the beet industry and so on. We all know these projects have been very successful. We would like to know now to what additional extent capital development will be carried on in the future. What new industries has the Government in contemplation? It may be difficult for the Minister to answer that question precisely at this stage but, in connection with capital development here, I would emphasise the importance of decentralisation and of establishing industries as far as possible along the western seaboard and in the more remote parts of the country. I know that that is easier said than done because industrialists are not naturally inclined to establish industries far away from the big centres of population.

Some time ago we passed a measure here called the Undeveloped Areas Act. That Act was designed for the purpose of encouraging industrialists to establish industries in the remote parts of the country. The intention underlying that Act was sound, but I do not know whether advantage has been taken of the provisions of that measure to the extent that some of us hoped and I am inclined to think that the time has now arrived when we should reexamine the position to find out if, through the medium of new legislation or otherwise, we could encourage the growth of industry in the more remote rural areas. That examination should be undertaken if we are sincere in our statements about the flight from the land and so forth. Everybody knows that emigration is taking place to an alarming extent from these areas and nothing is being done to stem the tide. The position requires very careful consideration. If the tide of emigration is to be stemmed there must be some definite plan; there must be some more careful planning on the part of the Government.

The Minister in his opening statement mentioned certain benefits that have been brought about under the present Budget, or this Finance Bill which is the product of the annual Budget, and he said that in providing these additional social benefits, however small, it was not necessary to impose any fresh taxation. I do not agree with the Minister in that. I join issue with him on that. There certainly has been an imposition of additional taxation; because there has been a removal of the subsidy from the flour that is being used in the manufacture of cakes and biscuits. Is not that, in effect, an increase in taxation?

That is a new definition of taxation.

It is quite correct because the people of this country who will be purchasing cakes and biscuits from this on will have to pay a lot more for these commodities and that, in effect, is an increase in taxation. Who can deny that? Remember, the sum involved is—as far as my memory serves me; I have not the figure by me now—£400,000, nearly £500,000 in increased taxation, and taking the increases in the social benefits, the half-crown increase in the old age pensions and blind pensions and the increase in the widows' pensions, the whole lot amounts to only £900,000. The Minister will get £400,000 of that out of the pockets of the people when they will have to pay more for their cakes and biscuits. The purchase of biscuits and cakes is not confined to the rich people of this country; the poor people also use them and they are entitled to use them. I think there was no justification whatever for reducing the subsidy on flour to be used for the manufacture of cakes and biscuits. It is, as I have said, additional taxation to the tune of £400,000.

The Minister is fortunate also in having at his disposal the sum of £4,000,000 in estimated increased revenue. Does the Minister deny that?

I do not understand any of the figures that the Senator has mentioned in the last ten minutes. I am waiting to hear if the Senator will explain them so as to make them comprehensible.

The Minister in effect is starting with a surplus of £4,000,000 out of the same taxes because of estimated increased yields.

I think the Senator would be better advised to read again my Budget speech.

Does the Minister deny that?

The Minister would advise the Senator to read what I said on the Budget and he will find it easier then to follow the figures correctly.

There is another thing to which I would like to refer and that is the question of the balance of payments. This is a very important question, to my mind. When the first Coalition Government left office we remember that the adverse balance of payments had reached an alarming figure. Then, fortunately, the position improved year by year. In 1951 the figure was £61.6 million for the adverse balance of payments after three years of Coalition Government. The following year the figure was £8.9 million; the following year again, in 1953, the figure was £7,000,000, and in 1954 the estimated figure was £5.5 million.

Senators may not attach very much importance to these figures and in fact there might be some people who might try to point out that that is a healthy sign, that we are repatriating our external assets, so to speak, but I, for one, do not look upon a big adverse balance of payments as a healthy sign and I am inclined to think that for this year the trend is again upwards in the adverse balance of payments. I would like the Minister to give us some explanation for that. It would be well if he told us what the present position is and whether the present trend—the present adverse trend I will call it—is likely to continue.

I would like to refer to another point. It was no doubt referred to in the Dáil by many speakers and I do not propose to delay the House or to take up too much of the time of the House with these things that have been already debated in the Dáil. Many things were debated including the price of beer and spirits and tobacco, together, of course, with the expectation that the cost of living, the cost of essential commodities, and taxation generally would be brought down. It was expected, of course, that the taxation on beer and spirits would be brought down, having regard to certain statements that were made by people supporting the present Government. Unfortunately, it was not. But one thing requires explanation. In 1952 the price of malting barley, as far as I can remember, was 84/- a barrel. That was the guaranteed price. The guaranteed price of malting barley was 84/- a barrel, and the guaranteed price to-day is 57/6 a barrel. There is a great disparity between these prices and one would imagine that some part of the disparity at least would be reflected in reduced taxation on beer and spirits. Will the Minister tell us why that is not the case?

I am afraid that if all the Senator's reasoning is as cogent, I will not be able to follow him.

Will the Minister deny that the price of malting barley was 84/- in 1952?

The Senator says it was and I am sure it was. I cannot remember whether it was 1952 or 1951. It was one of those years but I forget. I think it was 1951 but if the Senator says 1952 I will take that.

What difference does it make whether it was 1951 or 1952? Why is not the reduced price that the farmers are getting for their malting barley reflected to some extent anyway in the price of beer and spirits?

That was not what the Senator said a second ago.

It was not.

There is another point to which I will refer before I sit down. I think I referred to it before in this House. The tillage farmers of this country had to suffer a reduction of 12/6 a barrel in the price of wheat delivered to the mills. I was wondering, when the Government decided on the policy of reducing substantially the price of wheat to the tillage farmers, whether that reduction would be reflected in the price of flour and bread. The Minister at that time was non-committal. Of course, the reason I asked the question was that it was only natural to expect that if the price of any raw material were reduced the price of the finished article would also come down. The finished article in this case was bread, but to our disappointment there has been no reduction in the price of flour or bread and the money that has been saved to the Exchequer by reason of that reduction of 12/6 a barrel has been used, as I said before, for extraneous purposes.

I do not want to detain the House any longer. I do not want to refer to-day to the promises that were made and not fulfilled by the people now constituting the present Government and by their supporters up and down the country. They have, of course, the alibi that they have not been long enough in office to carry out their promises and I suppose we will have to wait and see what the trend is going to be.

Surely that is not an alibi? It is a fact.

We will call it an excuse. Will that suit the Senator?

You cannot make 12 months five years.

I would be satisfied if the people now supporting the present Government would give me some evidence of what plans they have to bring about the things they said they would do. For instance, what plans have they to effect a reduction in the cost of living? Have they any plans for that? Have they given us any evidence of a plan? What plan have they for reducing taxation? Are they giving us any evidence of their goodwill to do so at any time in the future?

We reduced the price of wheat this year.

Furthermore, have they any carefully thought-out plan to grapple with the social evil of emigration—a topic on which many of them were very vocal in former days?

As the fiscal systems here and in England are very similar, I thought that some worthwhile information might be obtained by comparing the Budgets of both countries.

On the basis that our population is 3,000,000 and that of England 50,000,000, the total of our Budget per head of population amounts in round figures to £38. In England the figure at £94 is two and a half times greater. I do not wish to weary the House with a lengthy comparison of the Budgets of both countries, but I must say that it was a surprise to me to find that the yield from direct taxation on income here produced only £9 6s. 8d. per head of population and 25 per cent. of the total revenue, whereas in England the yield per head of population at £44.7 is five times as great, and this source produces 47 per cent., or nearly twice as much as here of its budgetary income.

There are, of course, various explanations, but, to my mind, none of them accounts in full for the discrepancy. Income-tax at 8/6 in the £ in England is 1/- higher than here; on the other hand, taxation allowances to industry in respect of depreciation are considerably higher than here. Surtax rates are also higher but only commence on incomes over £2,000 compared to £1,500 here. Corporation profits tax and profits tax are difficult to compare since in England profits tax is levied at only 2½ per cent. on undistributed profits, increasing to 22½ per cent. if profits are distributed. By and large, the burden of profits tax is probably a little greater than corporation profits tax.

Another factor is the greater wealth of England. From page 4 of the Preliminary Estimates of National Income and Expenditure 1948/54 published by the Stationery Office in London and from page 49 of the Irish Statistical Survey 1953 it would appear that our national income per head of population is approximately half of England's.

The somewhat higher rates of taxation and the difference in the two countries' wealth have, of course, a very material effect, but I find it hard to believe that they account in full for the large difference in the yield of direct taxation in both countries. There is, I think, a partial explanation of the discrepancy which I will mention later, but before doing so I would like to refer to another matter. Allowing for the net savings of £2.2 million shown in the table explanatory of the current Budget, 1955, of the estimated expenditure of £123,230,000, £110,503,000 is found from current revenue, the balance, £12,727,000 being raised by borrowing. I am sure that the purposes to which the money borrowed will be devoted are highly desirable and that, in due course, they will prove of economic benefit to the country. On the other hand, I do think it is exceedingly doubtful that in the immediate future they will yield revenue sufficient to meet the interest and sinking fund on the capital moneys which have to be borrowed. In other words, the national debt is being increased. The total burden of national debt according to table VII of the tables explanatory of the Financial Statement was £125,000,000 in 1954 and it now apparently has increased by another 10 per cent. Had the revenue of the Exchequer been higher it would obviously have been highly desirable to meet some of this capital expenditure out of current revenue but here we are faced with the difficulty that 75 per cent. of the national revenue comes from direct taxation and from revenue from customs and excise.

In the case of customs and excise duties, in table III on page 29 and table V on page 41 of the 31st annual report of the Revenue Commissioners for the year ended 31st March, 1954, tobacco, wines, spirits and beer produced in that year 72 per cent. of the total income from customs and excise. The rates of duty at present in force I would say are as high as can be borne and on any increase it is not improbable that the law of diminishing returns would apply.

Turning to direct taxation on income, let us deal with it from the industrial point of view. I think it will be admitted that the burden on industry is already rather too high. The fact is that industry in this country, having paid reasonable dividends, is unable to create the reserves necessary to provide for replacement of plant and the purchase of raw material at present high costs. In the long run this can only result in a loss of efficiency and higher costs of production. Though they may be available, I have not been able to find any statistics showing the amount of profit retained by industry operating here. On the other hand, from table 21 of the Economic Survey, 1955, published by the Stationery Office, I see that in 1954 the United Kingdom, after payment of dividends, set aside two-thirds of the actual profit there. From my experience of industry here I would say the amount set aside in this country is materially less.

There is one remarkable feature in respect of the method of assessment to income-tax in this country. In every case except one, the basis of assessment is on the income actually received, whether it be by wages, salaries, profit or unearned income. On the other hand, agriculture is assessed to tax on the value of the land and farm buildings. This being an agricultural country, our economy depends entirely on agriculture, and those employed in farming are, to my mind, performing a more useful service than anyone else. For this reason it is very satisfactory that the Minister in his Budget statement, at column 681, Volume 150, of the Official Debates of 4th May, 1955, stated that in 1954 there had been no decline in employment in agriculture, the number being 421,000, whereas the industrial employment exceeded 150,000.

Farm profits are assessed under Schedules A and B on the valuation of the land farmed and the farm buildings occupied. The valuation of land was carried out, I believe, 100 years ago, and, since then, has remained unchanged. From table 76 of the 31st annual report of the Revenue Commissioners for the year ended 31st March, 1954, I see that the actual income assessable to income-tax under Schedule B was £1,451,000, and one may assume that the figure for Schedule A was virtually similar, which gives a total income on which tax is payable of £2,902,000.

In the first place, it seems to me ridiculous to base any assessment on valuations 100 years old. In the second place, I see from table A (1) of the Irish Statistical Survey for 1953 that in 1953 profits from agriculture, forestry and fishing amounted to £116,000,000; I imagine that at least, say, £100,000,000 of this profit can be attributed to agriculture. Now is it reasonable that income-tax should be paid on only 3 per cent. of the actual profits earned?

As I have said, I have the greatest regard for the farming community. I agree that they are the most valuable element in this country, but, to my mind, there is no reason why they should not pay direct taxation on the actual profits earned as does every other section of the community. They enjoy the benefits provided by the social services in the same way as anyone else, and indeed they are in a privileged position in that part of the budgetary expenditure is spent for their benefit. I would remind the Minister that in the course of the debate on the Finance Bill reported at column 1473 of Volume 151, No. 10 of the Official Debates of the 16th June, 1955, he said:—

"If people can legally avoid paying duty naturally they will try to do so, and equally when the State feels the avoidance is disturbing the equity between one taxpayer and another, the State will close that method."

I do not suggest for one moment that the farming community has avoided paying the tax which is due under the present law, but I do suggest that the equity between one taxpayer and another has been disturbed. I would ask the Minister to consider revising existing law so that tax will be paid on farming profits. Were this done the burden of direct taxation on the rest of the community might be lightened to the long-term economic benefit of the country.

The Minister reminded us that the Finance Bill gives us one of the few opportunities of looking at the whole financial and economic position of the country. I would like, as briefly as possible, to refer to one aspect of our economic position, that is, unemployment and the resulting evil of migration which arises from the fact that we are unable as yet to provide employment at home for our own people.

The magnitude of the problem can be realised when we find that in the quarter of a century between 1926 and 1951 we had increased the number in employment in this country by only 12,000—in other words 1 per cent. What we had succeeded in doing was absorbing in industrial employment the 145,000 who had been displaced from employment in agriculture—and another 12,000 as well. The natural increase in the population in that quarter of a century—that is the excess of births over deaths—was nearly 500,000, so it is quite obvious to us all that, in that quarter of a century, 500,000 had to emigrate because of the fact that there was no employment provided for them in their own country.

It might be said with fairness that that quarter of a century is hardly a fair measurement because industrialisation had scarcely got into its stride until after the emergency years, but to take the most favourable period, that is from 1946 to 1951, when industry was expanding at what was an unprecedented rate for this country, all we had managed to do was to provide 800 new jobs per annum in this country. Through those figures I think the Senators will realise we have a problem of the first magnitude and a problem which affects all of us and which is of particular concern to the Government.

I was interested in what Senator Kissane said in regard to planning and looking at our resources. I would agree with him that there is an urgent need to look afresh at the natural resources of our country and see if we can plan so to develop our economy that we can provide employment for our own people at home. Assuming that you have a normal unemployment rate of 2 per cent. you would need right way about 50,000 new jobs, and with the natural increase in the population you would require to provide 15,000 new jobs per annum after that to provide full employment in this country. Now, can we do it? The first thing is to examine carefully our natural resources and see if we can, through modern developments, provide employment at home for our own people. Coupled with that examination of our resources I consider that we should plan as to what industries can be set up, how we can provide investment for those industries and, as well, consider the relative importance of the way we can use the capital available.

Reference is often made to the fact that this is primarily an agricultural country and that the best use that could be made of capital is investment of agriculture. In regard to that particular point I was interested to read, in a recent O.E.E.C. report, a recommendation in regard to underdeveloped countries. It underlined the desirability in those underdeveloped countries— agricultural countries primarily—of not diverting scarce capital into agriculture where the primary need was to provide employment for the unemployed which is a natural feature of agriculture. I would just like to make that comment on the argument that we should use whatever capital is available for agricultural development. I am not in the least criticising investment of capital in agriculture but I do say it has to be looked at carefully and we must realise that our principal object should be to provide employment for our own people at home.

It is quite true that investment in agriculture should improve agricultural production—agricultural productivity— but it does tend to make workers redundant, to a certain extent; our main hope of giving employment would be in industry, and, in the planning and developing of industry, the financial policy of the Government and its capital programme has a large part to play. It is important we should have capital development by the Government but here again we have to look at the matter very carefully. I have referred to the O.E.E.C. report on underdeveloped countries and I was interested to see that they remarked Ireland could hardly be termed "Underdeveloped". The more correct definition would be "insufficiently developed". I liked that because I do think this term "underdeveloped country" is a polite way of expressing "backward". We are not quite backward but not sufficiently forward.

In planning an expansion of our economy, so as to provide employment at home, we must look at the capital programme so that we can so create conditions that there will be sufficient development in industry to provide employment. We differ from the other underdeveloped countries in that we have a considerable asset in the form of external investments—external assets. Whenever that is mentioned, you have the warning against liquidating those assets over a relatively short period as a result of Government investment on too large a scale in non-productive works. I think Senator Kissane is against any form of liquidating those assets at all but the general warning is against liquidating them by Government investment at too quick a pace.

I am afraid the Senator has misquoted me.

I did not attempt to quote the Senator.

I was not against liquidating our external assets but what I wanted was that we should be careful in the way in which they would be liquidated and to make sure these assets would be invested in productive projects.

I thank the Senator for his correction. He has probably said in a better way what I am attempting to say. Usually I do not want to score debating points. I think this matter is so serious that we should all be in agreement on seeing what can be done to improve the position. I think it is wrong that we should look and keep a careful eye on the balance of payments as if it were, as has been expressed, a household budget, and that, if we can have a position in which the balance of payments is in our favour, then it is said that we are doing very well. That, of course, is the old policy, what we have been doing, of exporting our money and sending our people after it.

In regard to this warning about liquidating our external assets, I am inclined to agree with that portion of it which stresses Government investment in non-productive works. When we talk about developing our economy, we have to keep a careful eye on the investment of these assets and judge them according to the employment they will give and how they will improve the economy of the country. There must be a careful examination of the non-productive State investment in other than socially necessary projects, such as schools, hospitals and so on. As an example, I would quote the very heavy annual capital investment in road building and repair, which, having regard to the competition between road and rail for an inadequate volume of traffic, is a clear example, to my mind, of a State investment on a large scale which is not directly productive, and the point here is that a substantial portion of that capital might be invested in more productive works.

Here, perhaps, I should remark that a lot of this investment in road building is not done simply on the basis of judging whether it is good capital investment, but, because of our agricultural set-up and our underemployment in agriculture, there is a need to buoy up the economy and to circulate money by providing this employment for casual workers in the country by heavy repairs and indeed relaying roads altogether. It is good that employment should be provided there. I am just questioning whether the capital could not be invested in a more productive way.

Another example might be investment in forestry, where we sink all our money which cannot be used again for capital development for a long time. I am not against forestry development —I am just saying that investments in road building or forestry must be critically examined with a view to seeing whether the money could be used in more productive ways which would provide continuous and more gainful employment for our people. For example, it has been advocated that we should see about setting up a heavy engineering industry here. Again, it has been advocated that we should set up a chemical industry—all these things which require a lot of capital and which would, if successful, improve the economy of the country and provide continuous and good employment for the workers engaged in them.

With regard to this question of developing our economy and the fact that we are in a better position than other undeveloped countries in having external assets, I would say that, while there does not seem to be any urgent need for or urgent shortage of capital, it might be that, with an improved rate of investment in industry, we would find a need to control our financial resources and to control these external investments. Objections are usually raised and caution is advised when one suggests that we should control these external investments, and one of the arguments which are used is that these external assets are our sheet-anchor in times of depression and provide us with necessary imports. I think there would not be any disagreement on any side of the House that a far better sheet-anchor for the country would be our productive capacity, and that, if we could develop that, it would be of far more value as a sheet-anchor than external assets.

The second objection which is made when anybody suggests a diminution of these external assets is that we should be put in the position of borrowing with political strings attached. There is no immediate need at all to borrow in view of these external assets, but let us look at that particular argument in the supposition that we could develop so quickly that we would need to borrow from outside. Should I remind the Senators that surely such a heavy investment as we have in Great Britain can lead to as much political persuasion by way of threats to the value of these assets than can be exercised by any external lender, short of actual military action?

The third objection which is made is that these assets are, for the most part, private property, and, in so far as they are not private property, they are investments by the banks and other institutions necessary for the maintenance of the liquidity of their funds and the protection of the value of our currency in relation to sterling. In so far as these assets are private property, I would suggest that they are disposed of in a manner which is not permitted to private persons in any other European country. Senators will know that British exporters cannot use their earnings of dollars or French or Belgian francs to make profitable investments in those outside countries, so that the Government here, if it ever became necessary, and if it desired, would be acting within its recognised authority and within an authority which is exercised by other European countries in this twentieth century.

With regard to the argument that these external investments are necessary for the safeguarding of our currency, surely it is self-contradictory that this heavy external investment should provide us with a situation, as I have already expressed it, in which we are exporting our money and our people after it? Do these external assets maintain our link with sterling and do they provide us with a proper financial situation here? I do not think that that is a good argument. Suppose, for a minute, we had such a calamity as to have all our cattle die of some disease. Surely the best protection, in such an event, would be to increase our exports from industry, if we had industry, rather than these external assets which could only provide a bolt-hole for the people who own them and which are not of any great national value.

I shall summarise now, briefly. There is an immediate need for an examination of our natural resources to see how we can develop them. Secondly, and coupled with that, there should be a planning of our public and private investment programme so that we can develop our industry and provide employment.

The question of unemployment is of major importance. There can be no doubt but that it is the direct result of the emigration which has now been stressed so seriously but which, to my mind, is something which has been continuing since we set up a separate State here. So far, I think we have failed in tackling this problem. It is no credit to us that, after 30 years of self-government, we have a situation wherein we cannot provide work in their homeland for the Irish people. Unless we can succeed in developing our economy to provide that employment, we have failed, and the blood that was shed and the suffering that was endured in securing our freedom is largely wasted. We are not worthy of the freedom if we cannot develop our economy and provide employment at home. Surely, to be quite cynical about it, all this was wasted if the position now, after 30 years, is that our people simply have to emigrate to Britain to find employment. They might as well have been born in an Ireland which formed part of the United Kingdom. They are really no better off. To my mind, they are worse off to a certain extent.

You know that one-third of any group at school now will have to emigrate if the present tendency continues. What we do is that we educate them for some sort of Gaelic State, which exists in our imagination only, and they are quite unprepared to face the problems which beset them when they emigrate to Britain. They are educated not to take over the best employment in Britain, unfortunately. On the contrary, we have not prepared them properly to emigrate. We have to face up to the problem that, even if we do develop our economy quickly enough, we must for a certain number of years have emigration. It is unfortunate and regrettable that our young people must emigrate so ill-prepared for the dangers which beset them in Britain. I am sure most Senators have seen our young Irish people in Britain. They are not sufficiently educated to take over the work they face in Britain. They may know Irish, which is good in itself, but a lot of them, especially from the western areas, are not properly prepared for the work and we send them across to be the hewers of wood and the drawers of water. It is a national scandal. I hope that, even though a lot of Senators will not agree with the critical remarks I have made, we will all join in an examination of this problem to discover how to develop our economy so that we can provide employment for our people in their native country.

The annual appearance of the Finance Bill in this House provides the only opportunity the House has of reviewing all matters appertaining to the different aspects of our economy and, making due allowance for inevitably a certain amount of political sniping from one side of the House to the other, these debates are usually of great interest and from time to time fruitful of ideas. I have listened so far to-day with a great deal of interest not only to the Minister's speech but to the speeches of some of my colleagues. The problem of the ever-mounting cost of Government administration year after year causes not only the gravest concern to everybody throughout the country but causes the gravest concern to members of both Houses of Parliament and to Ministers of all Governments.

I want to deal now with the problem of the burden of taxation. Taxation has always shown a tendency to increase with the demand for extra governmental and public services. It was inevitable that a large portion of the debate this afternoon should be devoted to the subject of direct taxation in the form of income-tax. It was equally certain that, sooner or later, as has already been done by two previous speakers, grave doubts should be expressed as to whether the burden of income-tax is equitably spread, or otherwise, in this country. These speakers did not raise this doubt out of any sense of malice, I think. That doubt is fairly generally felt by income-tax payers in this country. They are doubtful as to whether the burden is evenly spread. It was inevitable, when such a point was raised on this aspect of income-tax payment, that the problem should be posed to the House and to the Minister of whether or not certain classes were bearing their full share of this particular form of taxation and it was inevitable that, sooner or later, we would get round to the question of farmers and the income-tax code.

It seems to me that this raises a very intricate study of the whole taxation situation. It is not quite as simple as it looks. It is over-simplifying the problem, perhaps, simply to say that the farmer does not pay any income-tax on his profits, that he merely pays it on the valuation of his land. That is, of course, perfectly true. It is not disputed. But there are other aspects of the question and one has to make a comparison, perhaps, between the economic conditions under which the farmer carries on his work, his profession or, perhaps, a better word would be his industry—because modern farming is in effect an industry—and the economic conditions under which other industries work.

I think you will find that in Ireland the agricultural industry, manufacturing industries and distributive industries, will claim that they suffer certain economic disadvantages and are operating with certain economic grievances. If we take our manufacturing industries, since the inception of this independent State of ours, a succession of Governments have devoted their attention to the building up of our industrial potential during the years. From the very word "go" a tariff policy was adopted. It was felt that it was necessary. It was advised by people who had been for years before we were an independent State trying to foster Irish industries. The tariff policy has been continued throughout the years. It started perhaps a little slowly. The tempo of it increased as time went on and we began to feel our feet and, as one would naturally expect, in the first decade of our existence as a separate State the results of this tariff policy were not perhaps as spectacular as some people would have wished and the economic benefits and the wealth that these new protected industries created for the country were again perhaps disappointing but that was understandable.

It would be fair to say that in perhaps the first decade and perhaps even in the first two decades of our industrial development, the principal thing that we gained was added employment for our people and the principal advantage that these new industries provided was not so much wealth as an employment potential. Of recent years that picture is beginning to change and we are now just commencing to reap the benefit of that tariff policy in industry because our industries in the last few years, for the first time, are beginning to find an overseas market and thereby are creating a potential wealth reserve for this country in addition to the already existing employment potential which the industries have provided since the commencement.

Of course, that is one side of the picture as regards industry versus agriculture but while tariffs provide their protection and their advantages, there is another side to the picture. They do not necessarily help to decrease the cost of living. They do not necessarily help to decrease the cost-of consumer goods and the community as a whole, from time to time, have had to carry the burden of struggling tariffed industries. It is a burden which I think the community has carried very willingly and very cheerfully. But amongst other members of the community that have had to bear their share of this burden of industrial development have been the farming community. The farmer has had to bear his share of the industrial development policy by having to pay a bit more than perhaps he need have paid if he had an open free market for such things as are necessary for the carrying on of his profession—agricultural implements, fertilisers and so on and so forth. I think it is a burden which he has carried quite cheerfully like every other section of the community.

It may be that our industries suffer from lack of capital. It may be. It is from time to time alleged by industrialists that they do. On the other hand, that suffering cannot be quite as severe as is claimed from time to time because we all know that, on occasion, industries are floated here in the form of public companies and private individuals invest their money in Irish industries. The farmer, on the other hand, finds it very difficult to get capital and everyone admits that Irish agriculture is under-capitalised. The farmer has not got the same borrowing facilities as the industrial community has. It is perfectly true that he has at his disposal a Government organisation known as the Agricultural Credit Corporation but that organisation is prepared to lend him money on good security only and at the same rate as ordinary commercial banks charge. The commercial banks are suspicious and slow to lend money to farmers and it is very doubtful anyway whether farming as an industry is designed to borrow money at the same rate of interest as other industries pay whose turnover is quicker and bigger. In other countries which are primarily agricultural countries, such as Denmark, there are special banking facilities, Government-sponsored, made available to farmers.

I think I mentioned that it is generally agreed that the farming industry is under-capitalised. There is growing up in this country nowadays a generation of young, energetic, intelligent and scientifically extremely well-informed young farmers who are very enthusiastic in taking the most energetic steps in developing the farming industry.

They claim that it is quite possible, within from ten to 15 years, to treble the agricultural output of this country, but to do so, they claim, will necessitate the spending of roughly £100,000,000 on the industry during that period. Of course the industry itself would have to provide the bulk of that capital. These are aspects of the problem of taxation and the farmer that we should keep in our minds before we try to over-simplify the problems of the farmer and income-tax and so pick on the over-simplification that the farmer does not pay income-tax on his earnings but merely on his rateable valuation.

On the question of economy in Government and public expenditure, so far there do not appear to have been any very concrete suggestions. One is always hesitant about making suggestions to the Minister for Finance because Ministers for Finance, while kindly and receptive men, are charged with such a burden of responsibility for the safe keeping of the national purse that they are not apt to treat suggestions too kindly, but in all seriousness, I would suggest that the Department of Industry and Commerce, which is a very important Department, and which has done some very fine work for the development of this country, has grown too big. I would suggest that it would be in the interests of Irish industry and its future development if the obligations for transport of all kinds, land, sea and air, were removed from the ambit of the Minister for Industry and Commerce and if the Department were free to devote its time to industrial and commercial activities. Transport could be transferred to the Department of Posts and Telegraphs and that Department could be called the Department of Communications. In the transfer it might be possible to make staffing economies.

I would also suggest that one Government Department should be abolished completely by this time next year, that is the Land Commission and the Department of Lands. I would suggest that that Department should become the Department of Forestry and Land Development.

An Leas-Chathaoirleach

The Senator is widening the debate unduly. These are matters which should be raised on another occasion.

I shall conclude by saying that the Minister, under difficult financial circumstances, has shown a very substantial token of his determination to relieve the burden of taxation on the people. He is to be congratulated for the courage and imagination that he has shown in picking the most necessitous classes of the community for reliefs as a commencement.

I would just like to add one word, again of congratulation. British financial practice is probably very good; it may be the best financial practice in the world for Britain but it was always a puzzle to me to know why, since we became an independent country, we slavishly followed British financial practice particularly in regard to the bank rate. I could never understand why it was that when the Bank of England increased its bank rate the Irish Government should permit the Irish banks to raise their bank rate in turn. I could never understand why an Irish farmer or an Irish industrialist was any worse speculation for a bank than an English farmer or an English industrialist. On the contrary, I think probably the situation was the other way, and the present Minister for Finance is to be congratulated on being the first Minister for Finance since we became an independent country, to refuse to allow the Irish banks to follow the Bank of England a few months ago. He has struck the first real blow for financial independence.

I do not want to speak at any length and I think I can conclude before 6 o'clock. I should just like to say one or two things. I cannot personally claim— I do not know how many Senators can —to be exactly an enthusiastic taxpayer. Nevertheless, I think we should recognise that we should not have sympathy with those who claim sometimes that any Government—or all Governments—ought to reduce taxes but increase services. I have little patience myself with the recent outcropping of so-called ratepayers' Parties who are concerned simply to cut down expenditure without adverting in the slightest to the sort of services they would like to see abolished. For that reason, I think one must recognise that it is the duty of the Government to raise the money which it requires and I think the Government deserves support for the general method by which that is done.

Some Senators, however, have adverted to the fact—I think Senators McHugh and Crosbie—that there is a feeling that the incidence of taxation does not fall quite evenly on each member of the community according to his capacity to pay. I feel that myself. I think most of us have felt it about those who are lucky enough to have an "expense account" in commercial life; those who can spend money apparently for the good of their commerce but not subject to tax; some in the professions also, and the larger farmers—I do not think one can say it about the small farmer, because if he were to calculate his income in real terms I think he would find it was in fact very close to zero. I think it is true, as Senator Crosbie said, that there are extreme difficulties for farmers in relation to borrowing. We know that the farmer in order to borrow money must prove conclusively that he does not require it. Only in those circumstances will he be given it. Perhaps some case can be made consequently for granting a certain degree of leniency to farmers.

There are other matters, however, on which I should like to hear the Minister's view, such as, for instance, the taxation of stock exchange profits, and the taking of quick profits by the quick sale of stocks and shares. I should like to hear, and I want to ask the Minister, if he has any ideas as to the evening-out of taxation in future years, the introduction, possibly, of a purchase tax on luxuries, of a pay-as-you-earn scheme, and also I should like to hear from the Minister what hopes he has of study and investigation, and, perhaps, future change along those lines.

Business suspended at 6 p.m. and resumed at 7 p.m.

I was rather amazed at some of the previous speakers— Senator McHugh and Senator Guinness—and the observations they made about taxation on agriculture and on farmers. They seemed to hold that the agricultural community was not paying its due share of taxation and I think I am not misrepresenting them when I say that they suggested —at least Senator Guinness did very clearly—that farmers should be subject to their share of income-tax. Speaking as one living in a rural constituency in Roscommon I think when I give some of the facts those people may change their minds. In the dispensary district of Ballaghaderreen, out of a total of something between 700 and 800 holdings, 93 per cent. are under £10 valuation. In the adjoining dispensary district of Loughglynn the position is somewhat similar. That is in West Roscommon, but North Roscommon is somewhat similar and so is a large part of East Roscommon. To suggest that people with such valuations are not paying their fair share of taxation is to my mind ridiculous. On the contrary, I assert that they are paying more than their share.

Senator Guinness also suggested that they were sharing the same social amenities as the rest of the community. I want to point out that these people are paying rates on a county-at-large basis and paying for electric light in the towns, paying for the very up-to-date streets and all the amenities that go to the city and urban dweller. They also subsidise cottages occupied by the agricultural labourers and while I—or they, I suppose—have never grumbled at that, I think I would be quite safe in saying that the vast majority of them have not the same standard of housing themselves. Certainly the approaches to their dwellings in the way of roads—many of them living in culs-de-sac—cannot in any way compare with the amenities enjoyed by people in towns and cities.

If there is a wave of prosperity for the farmers, let it be but for a season, we have everybody talking of the riches and the great wealth of the agricultural community. The real fact is that the wealth of the agricultural community and the farmers themselves must be based, not on one year or two years, but taking a term of years. Whilst his earnings for one or two years may be very large you will find, if you average it out, that the farmer working on his farm and rearing his family bases his income on a period of ten years. I myself believe that in many cases his standard is not as high as the rural worker or the white collar worker. I have never heard people complaining about the standard of living of these people. If there is a little wave of prosperity for one year that should not be interpreted as meaning that the farmers are wallowing in wealth and riches. That is not so. My idea in pointing out these things to the Minister is to ensure that he will have both sides of the story. Senator Guinness, being a city man, may have very little contact with the country but I would invite him to come down to the West of Ireland where, having seen the position for himself, he would very soon realise that what I say is perfectly true.

There is another matter I should like to bring to the notice of the Minister. It concerns old age pensioners. I have recently come across three cases in particular, involving people aged 89, 85 and 80. Their pension books were taken up from them, evidently for the reason that they had some money in bank. On that account, it was held that they were over-paid. I daresay that, under the present system and the present law, nothing can be done but I should like to ask the Minister whether it would be possible to devise some means by which these cases could be remedied. If that could be done, I think it would be a good day's work. I do not believe that any member of the Oireachtas or any taxpayer would oppose it. After all, when people attain that age and have been drawing the pension for a long number of years, they feel it very keenly when the pension books are snapped up from them.

Those people, perhaps, by denying themselves some of the good things of life and by being thrifty, accumulated something for the rainy day. In the particular cases I mentioned that may be very little. The amount may have been augumented by the earnings of the sons or daughters either in England or America. I think they were only acting as custodians for their sons and daughters. During the war period, it was the usual practice in the West of Ireland for boys and girls in England to wire their earnings home to their parents and the parents put these savings in the bank. That is really what happened in those cases and I expect there are other cases which would come under the same category. I do not know whether it was the neighbours gave information or because certain officers were over-zealous but, whatever the reason, I cannot understand it. Those are three particular cases known to myself personally within the past month. Those cases should be treated with sympathetic consideration. If the Minister did so he would have the wholehearted support of both Houses and of the general taxpayers of the country. Whatever the old age pensioner gets is not grudged to him by anybody in the country.

I should like, very briefly, to support Senator McHugh in what he said about the burden of income-tax on the salaried wage earner. It has been taken up as a special point that the contrast is with farmers and that the salaried classes, the salaried wage earners, were not having a fair deal in comparison with the farmers. But it is not just in contrast with farmers. These salaried wage earners are also being treated, in my opinion, unjustly in comparison with industrialists, businessmen, and many professional men.

I think it is quite clear to anyone who studies the difference between the Schedule D and Schedule E regulations that those who are under Schedule D have very great advantages, while people, like Senator McHugh, myself and other wage earners who are under Schedule E, are distinctly at a disadvantage.

Let me take one specific example. Suppose Senator McHugh, or I, or anyone under Schedule E, entertains a colleague from some other university or some other establishment to lunch or dinner, we cannot get any rebate in our income-tax, although it may be in the ordinary way of our business. The colleague from the university might be lecturing in our college or doing something professionally. A businessman being under Schedule D, through a slight difference in the wording of the code, can include lunch expenses and things of that kind under legitimate income-tax expenses.

Perhaps I could make the matter clear by citing an experience I had a year or two ago in a train travelling in Wales. I was seated at the same table with a man who obviously earned a good deal less than I. Whereas I chose my lunch with the greatest care from the menu provided by British Railways, he was choosing in most cases the dearest fare. He was obviously choosing the dearest things possible. He had sherry, wine, liqueur and coffee with his lunch, and I must say my feelings were moved a little by this. I inquired: "How could this be?" He said: "It is very simple. This comes within my expenses. These expenses are charged by the firm against income-tax and they do not mind." However, this puts very simply the injustice under which Schedule E people suffer in comparison with people under Schedule D.

I do not want to labour the point. But I did feel I must mention it, and I hope the Minister will bear this and other anomalies in mind. I hope he will have the courage to tackle the income-tax code, which none of his predecessors has had the courage to tackle. I think if he had that courage he would go down in history in this country as the only Minister for Finance who really tackled the problem at the roots. If he has the slightest inclination in that direction—I am sure he dreads the idea of the trouble that would be involved, yet his sense of justice may prevail over that—I hope he will look up the debate which we had in the Seanad about two years ago on the whole income-tax code. In my opinion it was a good debate. Senator George O'Brien introduced the motion and gave us a most valuable contribution and a critique of the whole system. It would be possible for me to recapitulate it now but it certainly would not be timely. I simply want to emphasise that there are injustices. It is no use simply reducing the income-tax. There is a need to revise the whole code. I draw the Minister's attention particularly to the anomalies between Schedule E and Schedule D.

There is one specific question I would like to address to the Minister on Section 3 of the Bill. This came up in the Dáil when a Deputy asked what was the purpose of this concession to charities involved in trade, and so on. I would like clarification in this regard. Under Section 3 in the Bill, would a school which is financed largely by endowments from the past for providing education for boys and girls, and which pays a headmaster and various other masters as well from those grants, be entitled to be considered a charity under this section and be entitled to this remission? I would welcome clarification on that point because I know of many schools in the country which come into that category and would be very glad indeed to know that they would benefit under this section.

I was rather interested this afternoon when Senator Hawkins first spoke. It was a pity that the line taken was rather one of an attack on the Minister for Finance than of presenting suggestions that might better the Finance Bill now before the House or future Finance Bills that might be brought before this House. Then he treated us, as also did Senator Kissane, to a discussion on sweet cakes and biscuits. It struck me, as was said about a much-maligned lady, Marie Antoinette, that they had forgotten nothing and they had learned nothing, and that they were more interested in the cakes and biscuits that people were going to eat rather than in getting down to the real facts of everyday life. I believe they ought to give us a more constructive and more considered opposition in this House.

Senator Hawkins spoke, among other things, of emigration. He did not conclude his parallel but one would take it, from the points he made, that Fianna Fáil had been on the high road to solving emigration. I think nothing is further from the facts. If they were prepared to work in with the number of political Parties of very varying views to try to solve the economic problems of this little country of ours, they would be making a greater contribution to economic and political progress.

There has been much talk about taxation and my view about taxation is that you will not solve the problem by pushing the burden from the shoulders of one group over to those of another. I agree with Senator McHugh that we do require a better and more equitable system. One of the great disadvantages of our present system is that its ills and its wrongs were not so apparent when taxation was low; the fact of certain people having privileges stands out much more when taxation is high. The farmer is in a peculiar position, I believe, in regard to taxation. By and large he carries an enormous burden of rates and some of his agricultural valuations are very high.

I happened recently to be on a farm of some 80 acres in South Tipperary and the outgoings, leaving out the two schedules of income-tax, were somewhere in the neighbourhood of £200 on those 80 acres. It happened to be a Sunday afternoon and the farmer and his wife had no help. They never do have help on Sunday now in our part of Ireland. They were out milking cows twice on that day, Sunday morning and Sunday evening. Sundays and holidays are days when the farmer has to work particularly hard. Another factor is that the cows have to be milked before the staff come in to work on ordinary days of the week. I think we would want to know all about the agricultural problem before we proceed to advocate additional taxation on farmers. Those who would impose any further burden by way of taxation, and the officials who would be charged with the responsibility of proposing it, ought to go down and live in various parts of rural Ireland for many years before they start to tackle anything of this nature. We speak about a flight from the land but I believe we would have a greater flight from the land than ever, if the farmers were supposed to be brought in to pay what some people call their equitable burden of taxation.

What is really wrong is that the burden of taxation on all of us is far too high and it is inclined to make any vocational groups in this community cynical about any real progress. When people work, they ought to be allowed as large an amount as possible of the fruits of their labour, industry and thrift. I would like to see a system of taxation devised that would encourage what one would consider socially and economically desirable groups. We all know what would be best for the national and economic life. I think it would be the Christian thing if the smaller capitalists, rather than the larger capitalists, were encouraged.

I shall very briefly to-night put what I believe is the case of the small capitalist—call him the proprietor of a family business or the smaller industrialist in Ireland. I think he has been ignored principally because his problems were not understood by the people levying taxes. I have made out a simple example of a small industry in which two or three members of a family are engaged. This is a small country of 3,000,000 inhabitants and our industries tend to be small rather than large scale. We have only one-fifteenth or one-sixteenth of the population of Great Britain and we have not got an export potential. Therefore, our industries would be around one-twenty-fifth the size of the industries in Britain.

I am taking the case of a small industry that earned £10,000 in a year. That industry would have to pay corporation profits tax as a private limited company. A business of that size probably would have to pay corporation profits tax at the rate of 10 per cent. on £7,500, and income-tax at 7/6 in the £ on the £10,000, less the £750 that would be taken off for corporation profits tax. In round figures the company would pay £4,200 in taxes and they would have almost £5,800 left over after payment of these taxes. If they decided then to pay out £2,000 in dividends and in directors' fees, they would have left £3,800. With the continuing inflation that has been going on they would require, with £10,000 for credit and £10,000 for stock, probably 10 per cent. to cover the additional amount of money needed for giving credit, and an additional 10 per cent. for extra stock. That would mean that another £2,000 would be required to keep the business structure going without any improvement whatsoever.

All that would leave a balance of something like £1,800 for the provision of new plant, new equipment, building and everything else. I believe that on that basis these industries are not sound. There is another problem which also exists in that type of industry. If one of the members of that firm dies, there would be a large demand for estate duty and for death duty on his portion of the assets. It might mean that the remaining partners would have to take out a considerable amount of money to pay off the duty to the Revenue Commissioners.

In fact the problem got so bad in England many years ago that an organisation was formed known as "Edith" for the purpose of stopping small businesses being merged by big corporations. It seems very bad that when you go into Birmingham you will see a company formed by the amalgamation of 15 or 20 small industries. I think that a Minister for Finance who changes the system and protects the small industries and the shopkeepers from the present burden of taxation will be doing a very good thing for the country.

I should like to express agreement with the point made by Senator Hawkins on the question of hire purchase. It is affecting the businessman in the country towns very adversely. I think that in the widespread way it is practised at present in this country it will become a social evil. I understand that suits and costumes, etc., are being bought and paid for at 1/- or 2/- a week. It has been said to me by people who buy them: "He was very decent; he let me buy it at 2/- a week," but that man is paying for the first suit while he is wearing the second one. That is a very bad principle. I understand that the large hire purchase firms receive a considerable amount of finance from an insurance company that has State sponsorship and, if that is so, it means that State money is being issued either directly or indirectly to advance projects which are not socially desirable.

The largest drapery shop in our town is up for sale at the present moment. I believe part of the position which results in that kind of thing is due to the hire purchase system. This is a situation where the Government could intervene very helpfully. The profits that are received on hire purchase I believe are enormous. I think that before any other price investigations into trades like the grocery are proceeded with, an investigation should be made into the whole system of profits on hire purchase. I am interested in an industry and the previous chairman of that industry and some of the directors and myself said that we would not engage in hire purchase. After 18 months we were forced to the conclusion that, if we did not engage in it in the way that everybody else did, we would not get the output and we would have to close down. Although we believed it was a bad social principle we were forced into it. Representations have been made to me, and Deputies and Senators have spoken to me, about the evil of the hire purchase system and how rampant it has become. I would ask the Minister to look into it.

I do not believe, though, that such an investigation should take as long as it has taken the Commission on Industrial Taxation to issue its report. The facts of the problem of industrial taxation must be well known. It is a problem that has been gone into thoroughly in Britain; it has been discussed here in both Houses. A very comprehensive report was issued on the matter by Dr. F. G. Hall, the economic consultant of the Federated Union of Employers and of the Associated Chambers of Commerce, and evidently has been received by this body. Those engaged in industry are anxiously awaiting the report of the Industrial Taxation Commission. I would ask the Minister to request that body to conclude its deliberations and make its report.

A very interesting contribution on our economic problems was made early this year in an issue of Studies. I do not propose to quote from the review which has been exhaustive but I should like to say that it is something which all of us engaged in public life could read with profit. I have said that I believe some of the acrimony that has been too manifest in Irish political life might be laid aside and that we might spend more of our time in trying to deal with the economic problems rather than have an Opposition which is trying to score points of no real benefit to the country. We usually compare our economy more with Britain and, to some extent, with Denmark than with any other country and I would like to suggest to the Minister for Finance that he would have the German, the Dutch and the Belgian economies studied as well.

The Dutch were invaded in 1940 and then they had in effect another invasion when the Germans were being driven out of the country. The destruction which took place in Holland was unbelievable. We talk here about the building of bridges such as the Youghal Bridge and of the difficulty of getting the money for the building of a bridge over the Blackwater. There must have been 1,000 bridges destroyed every time there was an invasion in Holland. Many of these bridges must have been much larger than the proposed one over the Blackwater and yet Holland is one of the most prosperous economic entities in Europe. So is Germany, and one of the things that Germany has been doing is bringing about a reduction in taxation. I think that unless we do get a considerable reduction in taxation in this country we will be inclined to make our people cynical.

Senator Guinness gave us a very interesting series of figures in his comparison between the effects of taxation in this country and in Britain, and I hope to have an opportunity of studying it when it appears in the debates. I must say that I agree whole-heartedly with nearly all my colleagues, Senators Murphy and Crosbie, said. Senator Crosbie mentioned a land settlement policy, and I think a considerable amount of progress could be made with an enlightened policy of land settlement.

The second sons of the farmers of this country who know how to work our agricultural land—most of them— have to find work in industrial employment in places like Birmingham and London and that untapped asset is being allowed to go from our country. I know that there were two or three farms taken six or seven years ago within a few miles of where I live and there are 150 or 160 acres in these two or three holdings. I recently wrote to the Land Commission to find out what they were going to do about them and they said they had not acquired enough land there yet to do what they wanted. Within a stone's throw of these farms, there are a number of uneconomic holders, people who have only ten or 15 acres, and for the life of me I cannot see what is happening the Land Commission.

One of the things which they are very often inclined to do is to disturb industrious people. They generally propose to acquire or resume, if a demand has been made by local people for the acquisition or the resumption of a certain farm, but, when that demand is made, they do not go down to the district to see if a land settlement policy is necessary and say: "We will take the land in this area which causes the least hardship to the people of the area." They will only take the land that is recommended, and I think it is a very bad state of affairs, and I am glad that Senator Crosbie raised the question.

Not very far from me there was a large estate, the owner of which was retiring. He had no family, but had one near relation. There were well over 1,000 acres in the estate and he said to his staff when he was retiring that he presumed that the Land Commission would take the estate. Sometime after, when representations were made to me that other land was about to be taken, I suggested to the Land Commission that they should take this estate, that there was no one there for it and that an economic price would be paid and full justice done to the man. It was not taken because nobody wrote from that area looking for pieces of that land, but a farmer's land was taken. We are voting money for the purposes of that sort of distribution which I regard as very bad policy.

Senator Murphy mentioned the amount of money being spent on road building and I agree whole-heartedly with his views. We have only a limited amount of assets——

We can talk about that on the Appropriation Bill when we are talking about spending money.

This is collecting money.

I would make one suggestion about collecting money. I believe we ought to have lower rates of tax here and we ought to introduce a system of purchase tax. We hear a lot of talk about spivs, about people having too much money to spend and spending it on luxuries. We could collect a considerable amount of money from these people and we would do no harm. We all know of families who have good incomes, but who have heavy responsibilities—responsibilities due to illness or other causes—and who find it very hard to make ends meet. Their neighbours maybe have money to spend on all sorts of ridiculous luxuries and it would be much better if there were a very much lower rate of income-tax and a scientifically designed system of purchase tax. Even the very well-off farmer, the farmer who is very successful, would probably come in under the lash of that scientifically designed purchase tax which would lean on luxuries. If he wanted to buy two cars in the year, he would be bound to be affected by such a form of taxation and I think it has a lot to commend it.

Since I became a member of the House in 1948, I heard the late lamented Senator Douglas speak at length on the need for a revised system of taxation and I should like to hope that the Minister would do something about it. When speaking about the commission which is examining the question of industrial taxation, I forgot to mention that an American body —the I.B.E.C. Corporation—came over here some years ago at the request of the first inter-Party Government to report on our economic conditions, and, in a most unequivocal manner, summed up the situation by saying that Ireland was overburdened with taxation. I know the Minister has many problems to deal with, but he will have a good long term to deal with them, and I believe that if he can create a climate which will give the people more confidence and a lesser burden of taxation, there will be such an expansion in our economy that he will get, at lower rates of taxation, the amount of money he requires to do the things the various Departments for whom he has to supply money wish to do.

I should like to join with Senator Burke in the desire he expressed that acrimony and bitterness should as far as possible be removed from political discussion here. In the Seanad, we are to a great extent immune from such influences and we are in a better position to approach questions of national or financial policy in an objective way than perhaps are the members of the other House. Approaching this Finance Bill, which is the implementation of the 1955 Budget, we are perhaps encouraged to approach it objectively because, on the whole, it was a non-controversial Budget.

The Minister in his opening statement said that this year's Budget marked the first stage of the financial policy of this Government. I think it would be more correct to say that this Budget, and the financial policy embodied in it, marks the continuation of the financial policy of Fianna Fáil. There is no apparent difference whatever between the Budget of 1955 and those of 1954, 1953 and 1952. They are all exactly similar and, to a great extent, that very fact tends to put those who want to have a contentious discussion on financial policy in a rather embarrassing position because it is impossible to praise this Budget without, at the same time, praising the Budget of 1952. It is equally impossible for supporters of the Government to condemn the 1952 Budget without ruthlessly condemning this Budget. Both are absolutely similar in every respect.

In 1952, some people described the then Budget as a hairshirt Budget. Every hair in that Budget is reproduced in this Budget of 1955 and every hair in this 1955 Budget is as long and as sharp as were the hairs in the hairshirt Budget of 1952. There is no reduction whatever in this Budget in the taxes on alcoholic liquor, tobacco, cigarettes, petrol or any of those other commodities upon which taxes were imposed in 1952. The food subsidies have not been restored and, therefore, we still have to meet a very high and substantially increasing cost of living. No argument could be advanced to condemn the 1952 Budget which could not be advanced even more effectively to condemn this 1955 Budget.

The Minister's financial statement in the Dáil and his speech here to-day are the best and most effective endorsements of the 1952 Budget that have been publicly expressed. In every line of his Budget statement, the Minister made it clear that, for the past couple of years, this State has been making substantial progress. Again and again, he repeated that all the trends were in the right direction. Employment, which was increasing in 1953, continued to increase in 1954 and is, I think, still increasing. Unemployment, which was declining sharply in 1953, has continued to decline and we hope that that trend will continue. In the same way, the national income has been steadily expanding since 1952.

I think the most interesting comparison of the financial and economic position of this State would be for some member of this House to sit down and read the Budget statement of the present Minister for Finance and compare it with the Budget statement of Deputy McGilligan in 1951, when he was Minister for Finance. In that Budget statement of 1951, the then Minister for Finance expressed alarm at the general economic position of the country. The cost of living was rising sharply at that time and the balance of payments position was deteriorating. He pointed out that there was too great a volume of consumption within this country and that, unless corrective measures were adopted, the position would deteriorate still further. That was the position in 1951, and that is the position which has been corrected in the intervening years with the result that the present Minister for Finance can report a satisfactory condition—a condition in which, during the past 12 months, the improvement in the whole economic position, which was manifested in 1953, has been continued. Our best hope is that that improving trend will continue.

I do not wish to introduce into this House any feeling of acrimony by quoting what was said against the Budget of 1952: I think it is better to let these things be forgotten. However, in the light of the Minister's statement, I think I should quote what I thought of the Budget of 1952 in 1952.

May I ask if this is relevant to the Finance Bill of 1955?

I think the Senator will appreciate himself that we are dealing with the Finance Bill of 1955.

In order to decide whether it is good or bad we must draw comparisons. You can only decide whether a thing it good or bad by comparing it with something else.

There are many ways of deciding whether a thing is good or bad without comparison.

One way of deciding whether a thing is good or bad is by comparing it with something which has been proved to be good.

We will permit Senator Cogan to give us a brief quotation but it is not going to be followed by every other member of the House quoting what he said.

That is an appalling prospect. We shudder at that.

If some Senators are ashamed of what they have said in the past, they are entitled to be ashamed. However, I do not happen to be ashamed.

Some people are never ashamed.

Senator L'Estrange is probably speaking for himself. As will be seen at column 34, Volume 131, of the Official Report of Dáil Eireann, I said on the 27th April, 1952:—

"... I want to say that it is the beginning of an honest, straightforward stand for clean administration, for honest administration and for an honest balancing of this country's economic and financial accounts. ... From now on, it is hoped that every Government in power in this country will seek to meet its current expenditure out of revenue ..."

Now come to 1955.

I think these remarks are appropriate in regard to the present Budget. In fairness to the present Minister for Finance, I think it will be said that he has endeavoured to meet current expenditure out of current revenue. As far as he accepts that fundamental of financial policy, I think we should appreciate his stand in the matter. No doubt, pressure might be put upon him to take an entirely different course, but he has taken what I believe is the right course, he has followed firmly and fearlessly in the footsteps of his predecessor, Deputy MacEntee.

In his introductory statement, the Minister said he was providing reliefs to the extent of £4,250,000 without imposing additional taxation. That, again, is a tribute to his predecessor's Budget. We were told that the increased taxes provided in previous Budgets would not bring in increased revenue, that they would be destructive of economic expansion and progress, and that instead of increased revenue they would bring in less revenue. In actual fact, in each year since 1952 the taxes then imposed have brought in an expanding revenue, because apparently the country has continued to thrive economically and financially. The result is that in the present Budget, because of the buoyancy of revenue, the Minister has had a substantial amount of additional moneys to utilise.

Let it not be said or accepted for one moment that whatever reliefs are given in this Budget have been secured without increased taxation. During the past year, taxes to the extent of £2,000,000 were imposed upon the farmers, through the reduction in the price of wheat. You can describe this as a cut in expenditure if you like, but we remember that when the food subsidies were reduced that reduction was described as a tax on bread and butter. In the same way, we can very properly describe the cut in the price of wheat as a tax of £5 per statute acre on every acre of land under wheat.

A prominent member of the Labour Party recently advocated a tax of £2 an acre on every acre of land in this State. That suggestion was not accepted by the Government, but it may be still under consideration.

Under consideration by whom?

A suggestion was made by a prominent member of one of the Government Parties. It has not been accepted yet by the Government, but I assume that since it was made by a prominent member of one of the Government Parties it may still be under consideration.

The last time I was in this House I made it quite clear that it would never be accepted by this Government.

It was repudiated in the Dáil.

By the Leader of the Labour Party.

I am sorry if there are disruptions in any of the Parties supporting the Government. I do not want to see that: I want to see them getting a substantial period in which to fulfil, or fail to fulfil, their promises. Whether that suggestion is accepted or rejected, it is not quite as vicious as the policy brought in during the last two years, of taxing the wheat grower to the extent of £5 a statute acre. A tax upon grass land or other land of that kind would not press as severely as the tax on tillage land, but instead of taxing all land, as Deputy Mrs. O'Carroll suggested, we have a tax imposed on the people who utilise their land in the best possible way, people who are endeavouring to get the most out of it. I would say that is a vicious type of tax, but it has produced for the Minister approximately £2,000,000, or will produce it during the coming year.

That tax can be taken in conjunction with the increases that were sanctioned by the Minister and by the Government in the prices charged by millers for their offals, which policy brought in additional savings to the Government and had a disastrous effect upon the pig raising industry in the past year. That £2,000,000 has been helpful to the Minister in preparing his Budget for the present year. It was extracted from a section of the community from which it should not have been extracted and it was an entirely unjust policy. It was made more infamous by the propaganda which accompanied it. We were told at the time that this levy on the wheat growers was necessary because certain farmers were sub-letting large acreages of their land to speculators and people of that kind. That statement has been proved false—or, at any rate, it has never been substantiated—and I think it was a grave slander.

I suggest that this is not relevant. There is no tax being levied on wheat.

I would ask Senator Burke who accused the Fianna Fáil Government of imposing a tax on bread, butter and other commodities of that kind. I think that accusation was made by people at the opposite side of the House. We are as much entitled to describe the levy imposed on the wheat growers as a tax on the wheat growers' land. That is sufficient to show that that levy or tax— or whatever Senator Burke would like to call it—has resulted in an additional £2,000,000——

A reduction in the price of wheat.

——or in a saving of £2,000,000 for the Minister and to that extent it has helped him to balance his Budget.

There were other economies which could have been effected which would have been much more beneficial to the country. We all realise—and even the Minister himself realises in his Budget statement this year—that the reduction in our importation of wheat, in particular, over the past year helped us to reduce the deficit in our balance of payments, particularly of dollar payments, and put this country in a very happy position with regard to trade with the United States.

The Minister was less than fair in his Budget statement in the fact that he made only a brief reference to the generosity of the people of the United States, who provided £1,000,000 by way of contribution to our expenditure here. That £1,000,000 bears a remarkable similarity to the £900,000——

Or to the £1,000,000 that was not there from C.I.E.

It certainly bears a remarkable similarity to the £900,000 that was provided for old age pensioners. If our old age pensioners and blind pensioners and others feel grateful for this increase, they should express gratitude in the first place to the taxpayers of the United States who provided this money because it is quite clear that under existing circumstances, even with the levy on the wheat grower, or, if Senator Burke prefers, the saving of £2,000,000 which was effected by reducing the price of wheat, it would have been impossible to provide an increase for old age pensioners without increasing taxation if it were not for the generosity of the taxpayers of the United States who provided this £1,000,000 to our Exchequer. Therefore, the Minister should have made some reference to those particular aspects of the financial position.

The Budget is non-contentious. It is, if you like, a continuation, confirmation and complete vindication of the Fianna Fáil Budgets of 1952, 1953 and 1954. This is the Minister's first Budget and no Senator would like to be too severe in condemning it even if there were serious faults in it.

For 12 months we were told that the country was labouring under a Fianna Fáil Budget but that when the 12 months would elapse the Coalition Minister would introduce the first Coalition Budget and then wonders would be worked, miracles would be wrought, everything that was evil in the Fianna Fáil Budgets of the past would be swept away. If this is an instalment of the fulfilment of Coalition promises, the Minister will need to live and remain in office until he is a very, very old man before the entire goods are delivered.

The Minister has presented his first Budget. It is a healthy infant, weighing approximately 110,000,000 pounds. While I have not been severe in condemning the Budget, I think the chief fault that most people will find with it is its enormous size. I do not say that in any contentious spirit. Everybody feels that the burden of taxation has passed beyond the limit which is satisfactory for our people and from the point of view of the development of our economy. An effort must be made to reduce expenditure without causing grave hardship. It is not an easy task and nobody suggests that it is. We are all prepared to agree that it is something which must be done in a regular and steady way without causing disruption of our economy. It must be done. We must seek—and this is where I feel that the Minister has not given any indication of a progressive approach to economic problems—we must seek to ensure that, while the volume of employment in non-productive work must be reduced, that reduction will be balanced by a very substantial increase in the volume of employment in productive work.

Senators have referred to the remarkable progress that has been made by nations devastated by war— Holland, Britain, Germany and other nations. It will be remembered, however, that those nations are in the main industrial nations with an industrial tradition and under the stress of urgent needs they adjusted their economy to intensive production. Our difficulty is that we have not an industrial tradition but we would be defeatists if we did not seek to create it. The effort must be made and it can be made to a certain extent by taxation reliefs and other ways that would encourage productive enterprise.

The man who is prepared to manufacture goods, whether it is in a small way with his own family labour, giving a small amount of employment, or in a very large way, must be encouraged, particularly the man who is prepared to invest his skill and money and to risk his fortune in producing goods for export. It is of vital importance that such a man, who is prepared to enter the field of world competition, should be given every possible inducement to do so. It is only in that way that we can raise the standard of living of our people, that is, as far as industry is concerned.

As far as agriculture is concerned we must give the utmost inducement to every farmer who is prepared to put raw material in the way of fertilisers and machinery into the development of his land. Such a man takes very grave risks compared with the man who is prepared to depend on permanent pasture. In taking those risks he should be assured of the goodwill and support of whatever Government is in power.

I hope we will never again see a position arise in which a Minister for Agriculture will damn as speculators people who cultivate their land, or other people's land if they can procure it, and produce a valuable foodstuff for our nation, thus avoiding imports. Such people take very grave risks, as only those of us who were engaged in agriculture last year realise.

It is time that a new approach was adopted towards farmers generally. The farmer ought not to be regarded as a criminal who is trying either to exploit the rest of the community or to undermine the fertility of his land. No farmer wants to do that and no farmer will do it. The slanderous accusations that were made against the wheat growers last year ought to be withdrawn. An apology ought to be made to them in this House, if not by the Minister responsible, then by some other member of the Government.

I think the Senator is inclined to develop that subject too far. It is a different policy.

I grew wheat and I do not think anybody slandered me. I do not think I am a villain. I would hate to let the Senator think anyone thought I was a villain merely because I grew wheat.

Acting-Chairman

I do not think it is relevant to discuss agricultural policy on this Bill.

The slander was of a much more villainous nature inasmuch as it was not directed against any individual, such as Senator Burke, but against the farming community.

That is a preposterous statement.

A Senator

Racketeers!

Now we have it again. It seems to me that, no matter how much I try to educate Senators in this matter——

Acting-Chairman

I think, if the interruption ceased, we would get on more rapidly.

Would it not be better still if we got to relevance?

As far as the farmers are concerned they have been completely vindicated because none of these charges has been proved. There was a suggestion by Senator Burke that the Fianna Fáil members of this House and Fianna Fáil organisations throughout the country should be prepared to co-operate with other Parties in improving the economic position of the country. I think that suggestion is unnecessary because most people must agree that, as far as farmers are concerned, Fianna Fáil have never withheld co-operation from any Party or Parties trying to do anything constructive for the nation.

Many members of the Government have expressed the view that over the past 12 months there has been less bitterness and less ill-will in public life than there was at any time and especially in the previous three years. Usually bitterness is injected into political life by those who are in opposition. The fact that there is not any bitterness, acrimony or dissensions in public life at the moment is a tribute to the present Opposition and it is a condemnation of the Opposition that Fianna Fáil had to face. However, I will let that pass. We are only too anxious to contribute in any way possible towards improving the nation's economic position.

It is rather significant that in his Budget statement, and in his statement to-day, the Minister made practically no reference whatsoever to the grave problem of emigration. In the main, his speech was one of complacency: he said conditions are improving; he said the economy of the country is both improving and expanding. That is true but, at the same time, we have made no attempt—and this applies to all Governments and all Parties—to solve the problem of emigration. Our whole economy is maintained at the moment through the export of 20,000 or 25,000 adults every year. If that export ceased to-morrow we would find ourselves confronted with very grave economic and social problems. Everyone realises that.

Emigration is something we all deplore but so far there does not appear to be any realisation on the part of the present Government at any rate, of their responsibility in this matter. I would appeal for more serious consideration to be given to the report recently published by the commission set up to inquire into emigration. Rather heroic measures will have to be adopted in order so to expand our economy as to absorb into employment those who now must seek a livelihood in other countries.

Such expansion can only be brought about along the lines of intensive industrial development, and along the lines we have already followed to some extent of establishing State companies to undertake certain industrial projects. In addition to that, incentives of a substantial nature will have to be given to ensure that every productive enterprise that can be got under way, whether it be in the manufacturing line or in relation to our primary industries such as fishing, afforestation and turf production, is got under way. I can assure the Minister that every Party will give him enthusiastic and active support in any measures which help to solve that problem by increasing employment here and increasing production. Providing employment is one of our biggest problems at the moment and it is on that we must concentrate. Later we may find ourselves confronted with other difficulties.

Reference was made to land settlement. I think there is need for a more dynamic approach on the part of the Land Commission to the whole question of land settlement. Young men who have qualified through the utilisation of our agricultural advisory services should be given an incentive to implement those qualifications through the medium of land distribution. I think it would be a wise policy to establish a land development authority to take over and develop certain lands which are at the moment unproductive.

Acting-Chairman

I think all that would be more relevant on the Appropriation Bill when it comes before the House.

It is not easy to make constructive suggestions on a measure such as this unless one adopts the foolish course of advocating increased taxation or new taxation, as some Senators have suggested. I would like to take this opportunity of complimenting the Minister on having followed so faithfully in the footsteps of his predecessor, Deputy MacEntee, in copying the Budgets of 1952, 1953 and 1954 respectively.

I can assure the Minister that I shall take only about five minutes. If everybody was as brief as I intend to be, we would have been out of here at 6 o'clock. I want, at the outset, to congratulate the Minister on the Budget in the circumstances. We have to appreciate the fact—and I am quite satisfied that not alone do we appreciate it here in this House, but that the ordinary people outside appreciate it—that the Government since it came into office is making an honest effort in all the circumstances. I believe in putting first things first, and they did reduce the price of butter, they did hold the price of tea—I would say it is being sold at the lowest rate in Europe. They did increase the old age pensions and widows' pensions. In other words, they looked after the people who are least able to help themselves. I hope, and I would be very pleased if it should be the case, that the next reduction will be in the price of the loaf of bread because I feel that these are things that directly affect the poorest sections of the community. So far as I am concerned, I make no apology to anybody in saying that I am satisfied with the Government and if they continue the present line they will be doing well.

My friend over there said nothing had been done about unemployment, but the Government is not yet a year in office. I honestly believe if they had been 16 years in office and had gone on the same lines as they are going, something would have been done about unemployment. There is no Irishman who does not dread unemployment and having people unemployed but I think I am correct in stating that the number unemployed in this country is the lowest now for 20 years. That is some achievement.

The principal item I intended to deal with was a suggestion made that farmers should be taxed. I would adivse everybody concerned to keep away from the farmers. The farmers have their own worries and some of the people, I fear, who are suggesting the taxation, if they had to live on a farm would never make a living at all. We cannot forget that the farmers are the people who produce food for all our people and if things happened to be a little better for the farmers for the past few years, we should be very proud of that. The farmers have sufficient worries of their own, worries about climate, losses of stock and so on, and I would advise everybody concerned to keep away from the farmers. The farmer has sufficient taxes and worries, and as a matter of fact, it is encouragement they should get so that they would be in a position to give more employment and at better wages. Every farm in this country is a little industry in its own way. It may be small or big, but it is an industry, even if only the household gets a living out of it. The farmers should get all the encouragement possible and I believe members of this House should raise their hats to the farmers because they are the men who produce the food and the milk and the butter. Suppose there was no food coming in from outside, say, in time of war, every other section of the nation could go on strike but if the farmers and the farm labourers went on strike for six months we would all be dead inside 12 months. I would advise the Minister to leave the farmers alone except to give them any help that he possibly can.

Regarding investment of money in agriculture, I would like to say: "Help them, yes, but do not help them in this way." Some people have mad ideas about bringing in machinery, but suppose there was a war and the machinery could not be got or something to drive the machinery could not be got? I think it would be far better if we did not go away altogether from the plough.

There is one item I am very keen to mention. In fact I would not have spoken at all were it not for it. I refer to the enormous amount of money that will be collected under this Bill and which will be spent on housing.

Acting-Chairman

The spending of money does not arise on this Bill; the collection of it does.

It is all spent anyhow. I shall not delay the Minister except to say that I would make a very special appeal to him to take up the question of the most distressed section of people within the nation now and that is those people who are trying to provide their own homes. I want to assure the Minister and everybody concerned that a nation will never be built on local authority housing. We should encourage and help the thrifty and industrious people who have saved up their deposits and paid them on houses in which to rear their families decently and without expense to the ratepayers. I would appeal to the Minister to give these people at least a remission of rates for 21 years until such time as one or two of the children at least are earning. Is it not sad to see around County Dublin to-day hundreds of houses built six or seven years ago now up for sale because the people cannot pay for them? I think these people should get special encouragement.

Somebody, naturally, will ask where would the money come from, and I suppose that would be in order. The Minister would get a goodly portion of it from the dance halls. I would suggest a severe purchase tax on luxuries, and I would have income-tax collected at the source, on a pay-as-you-earn system. I am satisfied that on these three items alone the Minister would find more money than would be required to give the reliefs I am seeking for these people who will be forced to abandon their homes and who, out of shame, will leave the country because they had good homes and will not go back into rooms. I say the Minister should consider these people who are the mainstay of the nation. It was the pride of the Irish people that kept them together in the past and it will be God help Ireland on the day that that pride goes. The people who maintain that pride should be given all the encouragement possible. It is cruel that we should be so hard in that direction. The Minister has another and much easier way to deal with the matter if he would be generous enough to take it and reduce loan charges.

That is the principal point to which I wish to draw the Minister's attention. There were other items which I wished to raise but in view of the fact that the Minister is anxious to get in I shall not hold him up. In conclusion I should like to say—and I am very much in earnest in saying it—that the present Government is making an honest effort to do an honest day's work. I say: God bless them in their task, and God guide them in the future.

May I be allowed just for a moment to turn to the specific details of the Bill in regard to income-tax? Many of us, I think, would be very glad to know the Minister's views on this question of personal allowance and its significance. The figures I have before me give for a 1939 for a single man, £125; for a married man, £225. Now, the 1955 figures, I take it, are, for a single man £140 and £280 for a married man. Those personal allowances were originally designed to represent the minimum cost of living for individual existence on the working class standard. To-day nobody imagines for a moment they do that. I wonder is it intended even to relate the personal allowance to what it signifies—the minimum basic requirements of the individual? In the past, the argument was that if you taxed a man below his personal allowance you were subjecting him to conditions that would not permit him to survive and he either had to earn more or die out. Does the Minister see any prospect of relating the personal allowance to the cost of living figures? The Minister has come to us with many things but he is not coming to us with much income-tax relief. I trust if he does not bring us relief now he will bring us hope for the near future. It seems to be regarded as necessary for every speaker to suggest new sources for raising the revenue by taxation but nobody has suggested taxing long orations. I shall set an example. I wish the Minister prosperity in his term of office and I wish the taxpayer prosperity in association.

I think the Minister for Finance is to be congratulated on the introduction of this, his first Budget, in this House. No matter what the Opposition side of the House say about the Budget, we all have to agree that the people of the country benefited by it and they proved that in the recent county council elections. They did that no matter what was stated at the crossroads. They are the jury by whom we are prepared to be judged. We on this side of the House are thankful for the verdict the people have given. I think the people of this country should be grateful to the Minister.

As he pointed out, he has given over £4,000,000 in benefits to the people of this country without increasing taxation by one penny. We have no apology to make to anybody for the fact that the old age pensioners, the widows and orphans and the people who are unable to look after themselves have been catered for in this Budget. All that has come about despite the fact that last year pamphlets were issued and there was a whispering campaign by certain people. The widows and orphans were told that if they returned the inter-Party Government to office their pensions would be cut and their allowances would be reduced. They now know that such is not the case.

If the people on the opposite side of the House say that they would do better—they have so stated and are still so stating—why was it that in 1952, when they slashed subsidies and put up the cost of living by 15 points, they gave an increase of only 1/6 per week to the old age pensioners and the widows and orphans? That was the time they should have done something for those people. We know that Fianna Fáil say one thing when not in office and do quite a different thing when they are in office.

Deputy Cogan referred to the Budget of 1952 and the Budget of 1955. He stated there was no difference between the two Budgets. I claim there is because in this Budget taxation has not been increased. As a matter of fact, it has been reduced slightly. Remember that this is only the first year since 1932 that taxation has been reduced in this country. Butter has been reduced by 5d. per lb. since the Budget of 1952. That may not mean anything, perhaps, to people in the Seanad but it means a good deal to the unemployed person or to the man on a small wage with a household of five or six. It means a lot to any of those people. Perhaps Senator Cogan may maintain that we should not have taken the 5d. off the butter but that we should have left it at 4/2 per lb. We were told in 1952 by some politicians that the people of this country were eating too much.

Senator Cogan must agree that the Minister is providing money to keep the price of tea at its present level. I would like to know what would Fianna Fáil do if they were in power. If they were in power the people would have to pay between 10/- and 11/- per lb. during part of this year or they would have to drink milk or light beer as they were told to do at one time.

How long would the Senator say the price of tea will remain as it is? Would he hazard a guess?

Wait and see.

A very good answer.

We know what the price would be if Fianna Fáil were in power. It would be between 10/- and 11/- per lb. Senator Hawkins, when speaking to-day, accused us of making promises last year to the Irish people that we had no intention of fulfilling. He stated that the Minister promised that if they were returned they would bring down the cost of Government, etc. I want to say that there is this difference between Fine Gael and Fianna Fáil. We have never made promises to the Irish people that we had no intention of keeping.

The people in Fianna Fáil are the last people who should speak about broken promises. They went into power every time since 1932 by making promises to the Irish people that they had no intention of fulfilling. In 1952 they made a specific promise that if they were returned to power they would maintain the subsidies and reduce the cost of living. The people on the Opposition side of the House are the last people who should speak about broken promises or about reducing the cost of living because, nine short months after making that specific promise, they went into the Dáil and introduced the Budget of 1952. We all know the increases that took place at that time. I have no intention of going through them as we all know them. The people of Ireland are paying dearly since that day.

It is amusing to hear Senators Hawkins and Cogan speaking about emigration. I happen to have certain figures about emigration. I also have an answer to a question given in the Dáil on the 11th November, 1936, by Dr. Ward who was then a Parliamentary Secretary. I hold that in the years from 1925 to 1932 the quota for emigration was not filled in any one year. In 1931-32—the last year the Cumann na nGaedheal Party were in office—3,089 more people came into this country than actually left it. It was only in 1933 that emigration started. In an answer given at column 164, Volume 64 of the Official Debates, Dr. Ward gave the following information in regard to emigration. In 1933-34, 9,517 people emigrated; in 1934-35, 17,284 emigrated and in 1935-36, 23,711 emigrated. All those people went to England and as many of us know thousands of them were killed afterwards fighting for Britain. Emigration started at that time because we had a Government in power that were not bringing in schemes to increase production and give employment to our own people in order to help to end emigration.

I want to come back to the question of unemployment. Many speakers harped on that subject to-day. Senator Hawkins stated that there was no provision in the Budget to open up new avenues of employment in this country. I claim that that is totally wrong as far as the present Government are concerned. Even from 1948 to 1951 they brought in schemes to relieve unemployment and to increase production and those schemes are still continuing.

We have the lime scheme, the land rehabilitation scheme, the bovine T.B. eradication scheme and the Local Authorities (Works) Act. All those are schemes that give employment and, at the same time, help to increase production, which is essential if we are to maintain our present standard of living. When we compare those with some of the schemes that Fianna Fáil had in view, such as the reconstruction of the Bray road, of Dublin Castle and the building of a new Dáil to cost £11,000,000, we realise that their schemes would not help to increase production or lead to the ending of unemployment or emigration. When the Fianna Fáil Party speak about emigration or unemployment, we must remember that, when the inter-Party Government left office in 1951, there were only 63,000 people unemployed and two years afterwards, in 1953, there were over 89,000 people unemployed. When the people were marching through the streets of Dublin demanding work—and we know that in a country like this which is relatively well off there should be full and plenty for everybody if the country were properly managed—they were batoned off the streets of Dublin for demanding their rights.

Senator Hawkins claimed, as did Senator Cogan, that by reducing the price of wheat we reduced production. I speak as a farmer and as regards the price of wheat I want to state, and we all have to admit, that our agricultural economy had become lopsided. It was altogether wrong to have a surplus of wheat and at the same time have a situation where the Minister for Agriculture had to give permits to import oats from Iran and barley from such places as Turkey and pay the highest prices for them. We know there are people in this country growing up to 1,000 acres of wheat and those people could not manure that land properly. We should be jealous of, and guard the fertility of, the soil of this country because, as Senator Tunney has said, it is from the land that everything we have comes. On the land depends the standard of living of every man, woman and child in Ireland. We have no underground wealth; we have no coal, steel or anything like that to export. Our standard of living depends on what the farmer can produce.

Last year we had something like 491,000 acres under wheat. Had the Almighty God given us a good year, we would have produced at least 500,000 tons of wheat. The Fianna Fáil Party had an agreement under which we had to take 270,000 tons; that was leaving us with roughly 770,000 tons. Our annual requirements are 450,000 tons, and that would leave us an exportable surplus of 320,000 tons of wheat. I would like to ask Senator Cogan where we were going to export or sell that wheat? Were we going to send it over to the British market to be sold at 50/- a barrel, because that was the world price? When he said that we have robbed the farmers of £2,000,000 I would like to tell him that only one-tenth of the farmers of this country produce wheat. Would it be right that the other nine-tenths, plus the people in the towns and cities, should continue subsidising wheat to the tune of £11,000,000 per annum? I think the Minister was right in the decision he took in that connection and that, when burdens have to be borne, they should be shared equally by all sections of the community. I think that is what the Minister did in this case and as far as I am concerned he did the right thing.

The Minister in his speech in the Dáil, I think, referred to the fact that we exported something like £8,000,000 extra worth of cattle last year. I want to state that many of the cattle which we exported out of the country this year and which are being sold at £60 and £70 are the progeny of calves that would have been slaughtered since 1948 had Fianna Fáil not been put out of office in 1948. There is nobody here or anywhere else can deny that. In the Dáil in April, 1954, Deputy O'Sullivan from Cork asked Deputy Donnchadh Ó Briain, the Parliamentary Secretary to the Taoiseach, as to the number of calves slaughtered during 1945, 1946 and 1947. He had to admit that there were 116,061 calves slaughtered during those years.

On a point of order. Are the emigration figures for 1925 and the number of calves slaughtered in 1946 relevant to the Finance Bill?

Acting-Chairman

It would be all right for the Senator to make a passing reference to those matters, but I am afraid he is developing the point.

I guarantee that the Minister for Finance would not be able to collect £110,000,000 this year if this large number of cattle and their progeny had not been exported out of this country, because everybody will admit that what the Minister collects depends largely on the produce of the agricultural community. In conclusion, let me say that this Government have good schemes that will be put into operation during the next four years, schemes that will help to reduce unemployment and to end emigration and in a few years time, when these schemes bear fruit, the Minister will be able to reduce taxation.

I think the Minister must be congratulated on his Budget. It is, as some Senators have said, an earnest effort to help our people in a difficult situation, not of the present Government's making. I listened very carefully to Senator Cogan. Anyone could feel the great difficulty he was finding in producing words to prop up a case in which he did not believe. We all know that a great deal was done for the ordinary people of the country, that the reduction of the price of butter and the maintenance of the tea prices at their present level was a great thing. It was also a very great shock to the Opposition, for anyone present in the Dáil at the time of the announcement could see that they were greatly taken aback because the lovely speeches which they had prepared to flog the Opposition had gone by the board.

The fact that the Minister has made provision for the more helpless sections of the community—old age pensioners, and widows and orphans—is very greatly to his credit. I am a person who knows very little about high finance but it has very often struck me that a likely source of income is the twopenny stamp on the receipt for the payment of a bill of over £2. The Minister would perhaps let me know if it is a sensible suggestion that that little point might be watched more carefully. There are very few householders throughout the State who pay a grocery bill of less than £2 per week and there are terribly few grocers' accounts which bear twopenny stamps. We are in the midst of sales now and you can scarcely buy any article, such as a remnant of cloth or other such household goods, for which you do not pay over £2. Yet you scarcely ever get a twopenny stamp on your receipt. In some of what you might call the old fashioned firms you will get a stamped receipt but in the vast majority of houses you will not. I think it is a point into which the Minister might look because I think there is a considerable amount of twopences lost to the State throughout the country each week.

I am grateful to those Senators who considered the basis of this Finance Bill in an objective and constructive manner. Naturally, I will not be expected to agree with the views put forward by some Senators. I do not, for example, agree with the statements made by Senators Hawkins and Kissane as to the implications of the Bill but I can understand them, with their long association with their Party, putting their Party's point of view. I found it, I must confess, difficult to retain the same quiescent mood I feel when I come to visit this House while listening to Senator Cogan. It is rather nauseating to listen to somebody trying to prove something in the way that Senator Cogan tried to prove that he has a long association with the Fianna Fáil Party. That really is more than I can bear.

Senator Hawkins, when he started to deal with the Finance Bill and the philosophy behind it, took the line that it was more or less an extension of previous Fianna Fáil Budgets and he posed the query as to whether this Government could take any credit for any of the improvements in the financial and economic position in 1954. I think I might say, quite categorically, that everyone would agree that the first essential before there can be any improvement in business or any increase in business activity, and therefore in national economic activity, is that there should be confidence in the Government. I do not think it can be gainsaid that wherever one goes in the country to-day, and compares the position with what it was 18 months ago, one will find now that there is confidence in this Government, confidence because there is a feeling abroad in the country that the Government knows where it is going and that it has a stable majority in the Dáil.

That was not the position 18 months ago; there was at that time an air of anxiety amongst the people. The ending of that air of anxiety with the formation of the new Government last June is one of the reasons why there was an improvement in the last quarter of 1954 and, as Senators who read the Budget speech will appreciate, it was in the last quarter of 1954 that the real improvement started to emerge. Senators on the other side of the House referred to employment. I must confess that I admire their temerity tremendously. I admire, for example, the temerity of Senator Hawkins who could attempt to criticise this Government in respect of the employment or the unemployment position.

What are the facts? The facts are perfectly clear—that in 1951 the Fianna Fáil Party took over a trend of increasing employment and diminishing unemployment; that after three years of office for them the position was exactly reversed; that three years after the results their policy had in regard to unemployment, comparing mid-June, 1954, with mid-June, 1951—two comparable periods, the same time of the year, the same position as regards employment Orders and so forth—was that there were 19,000 more people registered as unemployed in mid-June, 1954, compared with mid-June, 1951.

Might I ask the Minister a question which I am sure he will be prepared to answer? In what categories of employment were these people unemployed?

All down the line.

Yes. All down the line, ranging from building construction, for example, to the case of the agricultural labourer, right down the line.

Would the Minister give us the particular figures in relation to each category?

We would never conclude then.

The Senator is as well able as I am to read the Statistical Abstract and the quarterly Trade Journal.

So I am, but the public are not.

If the Senator takes the trouble to read these, he will find, among other things, that building was one of the categories and that the general average up and down increased in that way, regardless of the individual items. What we want for our people is not more for one section and less for another section; we want to raise the general average all over. It is not just a question of taking the register of unemployed; it is a question also of taking the employed on the other side. The number of people in insurable occupation, not in manufacturing industry alone but in all industries was 226,000 in 1951. There was a drop of 221,000 in 1952.

What was the figure for 1953?

It was 224,000, still not back to the 1951 figure. We had to wait until 1954 for the figure to get back to the 1951 figure.

Would the Minister say June, 1954?

No; the average 1954 figure largely as the result of the improvement in the last quarter of 1954. It came back to 228,000 employed. The Senators who are making the case that this Government had done nothing in regard to employment seem to forget the record that was there from their own period of office and they also seem to forget what the position is since this time last year— that again now the trend is coming in the right direction and that there is an improvement as regards the numbers registered as unemployed this year compared with last year.

I am not going to suggest for one instant that I regard the present employment and unemployment condition with complacency. I do not, but I do suggest, and I have the right to suggest, that the record of this Government in that regard and the record of the previous inter-Party Government are infinitely better than the record of the Fianna Fáil Government from 1951 to 1954, who followed a policy which resulted, as I say, in the end in the total number of registered unemployed being up by some 19,000, comparing mid-June, 1951, with mid-June, 1954. In the first quarter of this year, the percentage unemployed of insurable persons has dropped by some 1.2 per cent., showing that the improvement in trend operative last year is continuing this year.

We do not propose in this Government to regard that with any complacency. We propose to deal with it but not by methods which merely produce ballyhoo with no tangible results. We are working on the basis and in the belief that it is better to deal with the problems in a coherent and cogent way, quietly producing results, rather than going out with a policy of blare and trumpet and finding in the end, as the previous Government found, that we have immediately to reverse engines and change our entire outlook. Senator Hawkins, I am sure, will remember the speech of his leader in Ballinasloe in 1953 which was a complete reversal of the policy which they had adopted up to that time and, if it were not for the fact that they did reverse, the unemployment position would have been infinitely worse. The Senator, I am sure, was in Galway, as I was, on that occasion when that speech was made and he knows why it was made—because the policy adopted had proved so disastrous.

The Senator, I think, misrepresented by innuendo what I said on the Budget as regards employment. I was referring to the fact that last year, for the first time—and I do not take any credit for it for this Government, because the figure was taken on 1st June, the day before we came into office—the number employed in agriculture did not decline. In the previous year, the figure declined by 20,000 and by 12,000 the year before—32,000 in two years. Last year, it rose by some 500 persons. I think it was a matter that deserved notice and one on which we could congratulate ourselves, that the trend had stopped for the first time. I do not personally suggest, and no member of the Government suggests, that that was due to anything we did. It is a fact, a fact which is there, but it is a fact which still leaves the position that there is a good deal of leeway to be made up, bearing in mind the numbers who had gone out of agricultural employment during the previous years.

Senator Hawkins went on to deal with many individual points and spoke of the position in this year in cattle in relation to our balance of trade. I believe, quite frankly, that our land could easily carry a very substantially higher number of cattle than it is carrying at present. I believe that, with proper utilisation of modern invention and the application of modern science, we could very substantially increase our carrying power.

I do not propose to delve into the realms into which Senator L'Estrange went with regard to the record of Senator Hawkins' Party in this respect, but of course he was telling the truth. It is a fact and the record of this Government is there for everybody to see. We never suggested that that market was gone and gone for ever; we, on the contrary, believed that it would be a market valuable for our people, and, in fact, last year, of our total exports of £115,000,000, £45,000,000 came from live stock and the dead meat trade, a very substantial proportion indeed which, if it were not there, would have put us in very grave difficulties.

We must increase that export market; we must ensure that we can carry more cattle in future; and we must ensure that our land can bear greater production by the proper utilisation of modern methods. The developments there have been, particularly in the region of veterinary services, will assist that to a very great degree. It is because the previous inter-Party Government felt so strongly about the necessity for expanding our agricultural production that the land project was introduced and it is because we feel the same way now that we are moving on towards extensions of it and moving on to ensure the capital moneys, in so far as they are spent by this Government are spent primarily to develop our agricultural potentiality. The extension of arterial drainage and of anything that will bring more land into profitable production is something which will show a real result in the long run for our national economy.

I quite agree with Senator Guinness in his remark about deadweight debt, in the sense that it does not produce a direct dividend to service the money that has to be borrowed to finance that development, but it does undoubtedly ensure that our economy as a whole can be expanded and developed, and that is well worth while. I suggest, with all respect to the Senator, that it is not so much the amount of expenditure that matters, but what the expenditure is on.

If our expenditure is on productive schemes, be they schemes of direct production, bringing in a direct dividend to the national Exchequer, or schemes raising productivity and production through the nation as a whole, they are well worth while, and we should do everything we possibly can to expand them. If, on the other hand, they are schemes which are not going to produce any results of lasting importance, like a couple I heard mentioned in the debate, personally, I think the country is not in a state to afford such luxuries.

Housing is one of the services which requires money to finance and the money for which can, according to some people, be described as pure deadweight debt. Regardless of that, I do not know anybody in the House who would suggest that that is a type of deadweight debt on which we should economise and, so far as this Government are concerned, the provision of proper housing facilities for our people is extremely high on our priority list. I agree entirely with Senator Tunney that the time has come when we must do our utmost to ensure that we assist people who are building houses for themselves rather than those who are depending on local authorities doing the work for them, if they are able to make the provision themselves. There will, of course, always be a large number of people in the country who will not be able to make provision for themselves and who will have to depend on local authorities. Apart from that, there has been a tendency in the past for some people who could quite well make their own arrangements to provide houses for themselves to fall back and take the easy way out and allow the local authority to do it for them. I agree with Senator Tunney that we should try and stimulate those people into providing houses for themselves rather than that they should sit back and rely on local authorities.

I was looking at the figures of the amount provided in State grants for housing. I find that in 1955-56 we are providing a sum of £4,044,000. That is higher than the amount provided last year and, in fact, higher than the amount provided in any year since the last war, with the exception of the year 1950-51. Of course, the amounts that were provided before the war would have to be converted to present prices but we can flatter ourselves that, in this year, we are providing more moneys by way of State grants for housing than in any year of our time except the year 1950-51.

Senator Hawkins and Senator Burke referred to hire purchase. For some considerable time I have been watching the hire-purchase figures and the returns given showing the volume and extent of hire purchase. Let me say quite categorically that should there be any indication that, in any large way, there would be an import from the other side of the inflation which they had to stop there through hire purchase, this Government would not hesitate to deal with it. So far, we have not seen any evidence of that to any appreciable degree.

Senator Burke mentioned an insurance company which, he said, was State subsidised or State financed. That can only refer to one insurance company. I want to say quite categorically that if Senator Burke is referring to an article that appeared in a periodical—I think it is a monthly paper—about three or four weeks ago, the article in that paper was without any foundation at all. Deputy Lemass asked a question about it the other day in the Dáil. As I indicated to Deputy Lemass then, the article in that paper is completely devoid of foundation in so far as the only insurance company which has any direct connection with the State is concerned. I do not know whether or not that article was the source of Senator Burke's information but if it was that article —I am only able to verify what I have seen—the Senator can rest assured that there is no foundation for it.

Senator Kissane suggested that there was an excessive amount of borrowing. I think that perhaps that was not exactly what he meant but he did state that. Again, by comparison, let me just put this fact on the record. The net State borrowing in 1954-55 was £31.1 million. In 1953-54, the previous year, it was £36.4 million or £5.3 million more. There is an old story about people who live in glasshouses. I think Senator Kissane might fairly enough remember it before upbraiding me on that score.

I do not know whether or not I should follow some of the Senators who were discussing matters which I might have another opportunity, on the Appropriation Bill, of discussing. However, there was a fair number of comments that, if you would allow me, I should like to make a short observation upon. Whether you call a reduction in price a tax or whether you call it is a reduction is, of course, a matter of nomenclature. The plain fact of the matter in regard to the price of wheat was that the previous Government had got our agriculture into an unbalanced condition. They had too much wheat and too little barley. In consequence, we were in the position—on their own figures—of having more wheat than we could properly use for our own requirements and too little barley.

Is there a surplus of wheat?

Every member of this Government is quite clear that what we want to get is a balanced agriculture and the maximum production for agriculture. The position in regard to wheat is quite simple. The last Government—and we, too, accept it—were of the opinion that a proper ratio for our requirements is some 300,000 tons of dried native wheat in 450,000 tons of total used. The position last year, because of the harvesting difficulties, was that we had to lower substantially the moisture content allowed to qualify for the various prices; otherwise, the effect of the regulations that were made by our predecessors would have impinged unfairly on the farmers. That reduction was made and the effect that that had on the amount required to be mixed in as regards native and foreign wheat is pretty obvious. The previous Government decided they would have a basis of 300,000 tons to 450,000 tons. I think they were right in that decision but that they were entirely wrong in adopting two policies at the same time—a policy of advocating a stepping-up of the amount of native wheat that should be grown and, at the same time, a policy of signing the International Wheat Agreement under which they might be liable to be called upon to accept 270,000 tons of wheat under that agreement.

Provided they required it.

Not provided the Irish Government required it but provided the vendor required us to take it—which was a very, very different story.

And to take it at a very low minimum price.

Senator Hawkins need not shake his head.

We never reached the 300,000 tons.

I am quite prepared to listen to interjections from Senator Hawkins because I know he has convictions. The position so far as the International Wheat Agreement is concerned is that we had not got the option: the option lay with the vendor. The basis of following two diametrically opposed policies at the same time had nothing to commend it. Quite apart from that, there was no use in providing wheat here unless we had the capacity to store it. If the previous Government intended—which I do not think they did—to get up to the native wheat return which would have been reached if God had given us decent harvesting weather last year, they would not have been able to store that wheat. Surely to goodness we are not going to get into the situation in which we will hope for a bad harvest in order to get over our storage difficulties? Is it not better to aim at a realistic figure, at which we can provide a balanced economy, balancing in the native wheat with the dried wheat and having done that, ensure at the same time that we will get a sufficient supply of barley for our needs, both malting and feeding barley? That was not the position which this Government was left with when it took over a year ago. I think the Senator would have been wiser to have made up his mind on which side of the fence he stands in respect of these two diametrically opposed policies.

Senator Denis Burke referred to industrial taxation and quoted the booklet prepared by Dr. Hall. I do not want in any way to prejudge the views of the Industrial Taxation Committee, but as the booklet has been quoted here let me say that I do not accept the figures given by Dr. Hall in his booklet, nor the conclusion which he has reached. It would be better for me to defer any detailed contradiction of his figures and of his conclusions until the Industrial Taxation Committee has had an opportunity itself of making its study. However, I would like to put before the House just this fact, in respect of companies that were operating here up to 1950. My figures were compiled as of that time, as there is, of necessity, a substantial time lag in the compilation of these figures. I find that the total capital of all those companies issued at the time of incorporation was £43.6 million. New capital was introduced for those companies to a total of £11.7 million, that is to say, new capital subscribed for. That makes a total subscribed capital of £55.3 million.

When we look at the other side of the picture in regard to those companies, we find that they issued bonus shares to the extent of £10.9 million, that they had reserves, other than depreciation reserves, of £43.4 million and that they had reserves, being balances of their profit and loss accounts, of £24.79 million, or a total of £79.1 million. I do not want to suggest in any way that those reserves were not justified. I think they were probably justified. One could not tell whether they were individually justified or not without looking at the individual cases, but I think it must be accepted that these reserves are there and that it is a good thing that these reserves are there in those companies.

The existence of those figures is not compatible with the suggestion that has been made from time to time that Irish industry is unable to put any sum whatever to reserve. There may be a case for increasing the allowances that are given for modernisation and so on, as an inducement to hasten modernisation, but let us not ruin any case there may be in that respect—and which I shall examine when I get the report of the committee—by an all-out cry that there is no possibility of Irish industry accumulating any reserve, when the facts are there and speak for themselves.

Before the question is put, I would like to draw the Minister's attention to a very particular aspect——

Is the Senator asking a question?

Has the Minister directed his attention to the position of the multiple shops coming over here and purchasing private enterprise? If the Minister wishes, we will leave it over to the Committee Stage

The question of purchase is obviously not one for me but for the Minister for Industry and Commerce. On the question of hire purchase, which I thought the Senator was dealing with, he will recollect that I referred to it.

Question put and agreed to.
Committee Stage ordered for Wednesday, 6th July, 1955.