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Seanad Éireann debate -
Wednesday, 6 Jul 1955

Vol. 45 No. 2

Finance Bill, 1955—Committee Stage and Final Stages.

Question proposed: "That Section 1 stand part of the Bill."

I want to make a few short general remarks on this section which concerns the rates of income-tax and surtax for the year 1955-56. The Minister, in his Budget speech, quite rightly called for savings and thrift for the purpose of building up capital in the country, both for private enterprise and for national enterprise, in order to employ our people, prevent emigration and create a happy social life here. I am sorry that it has not been possible this year to do something to alleviate the income-tax situation for industry. I do not blame the Minister for that as he has only come into office. Relief has of course been given to certain individuals.

I should like to point out that all our social services and everything given by the State depend ultimately on our ability to pay for them. I feel that in Ireland at present and, indeed, since the establishment of the State, we have never got down to the problem of creating national wealth and creating the capital from which our national wealth would be derived. Our income-tax laws, as they are at present devised, would seem, in fact, to be a positive deterrent to thrift and savings. It is obvious that if people are going to be induced to save it must be made financially and, if I might use the word, psychologically profitable for them to do so.

I am sorry to say that at present it is not financially possible to make any appreciable savings because of our income-tax which penalises people who save. Indeed, when people have paid the very high income-tax rates and succeed in saving and investing the savings they are actually regarded as having unearned incomes. In fact, anything earned from capital which is savings is regarded as unearned income and the people who enjoy such income are regarded as socially inferior and are to be looked down upon.

Nothing can be done about income-tax this year. I do not think the Minister could have done anything. In fact, I am certain he could not. In view of the statement of the Fine Gael Party—I have the honour to be a member of that Party—in connection with their philosophy with regard to the creation of capital in this country, I feel that, perhaps at a later date, the Minister will find it possible to examine the whole question of income-tax to see if any real incentives can be given to people who save; that, when they have saved their money, they will know their money will be allowed to fructify, that they will be permitted to build up individual capital and that they will be enabled to put their money remuneratively into private enterprise or national loans for development of all kinds. That is the only way we will ever get a partial solution of our unemployment problem and the consequential one of emigration.

The section we are asked to pass provides that:—

"Income-tax shall be charged for the year beginning on the 6th day of April, 1955, at the rate of 7/6 in the pound."

The rate of income-tax provided for in the Finance Bill of 1955 is the same as that in the Finance Bill of 1952. It is very strange that in the first section of this Bill we should be asked to implement something that was referred to as being cruel and callous and that would have very serious consequences on our trade, employment and emigration. The present Taoiseach, who was then in opposition, took this matter so seriously that he stated he would resign, were he in Government, sooner than implement any section of the budgetary provisions then under consideration.

Senator McGuire makes certain recommendations to the Minister in regard to savings with which I entirely agree. He referred to the policy of the Fine Gael Party and said he regretted that nothing could be done at the moment, whatever might be done at some future date. That is very far away from the promises made in relation to this very matter a short 12 months ago. In the recommendation he made to the Minister, he suggested that if we were to encourage our people to save, we must make it profitable for them to do so. With that I thoroughly agree.

Let me refer to another matter that has been under very serious criticism during that period of 12 months—the return that people should receive from the moneys and the savings they may invest, either in Government securities or in industries in this country. It is good to see that there has been a change in the viewpoint put forward by the leading speaker of the leading Party in the Government to-day.

Income-tax falls very heavily on a very large section of our people. Some short few years ago, it would not be very essential to draw the attention of the House to its impact but now its impact is spread over such a large section of our people and is weighing so heavily on them that we must take cognisance of it. Though promises may be made, we have not seen any serious attempt to remedy the position. A speaker on behalf of the Minister's Party might say that it is only 12 months since they took office and that the Minister could do very little about the matter in that time. I submit, however, that 12 months have passed during which the Minister had ample opportunity to bring about a reduction in the cost of Government, thereby relieving taxation considerably. I think it has now been admitted quite clearly and candidly by the first speaker on behalf of the Government Party that that is not possible.

In this section we are asked to approve of terms in this Finance Bill which are exactly similar to the terms contained in the Finance Bill of 1952. I suggest that that proves a realisation on the part of the present Government that Fianna Fáil acted wisely in their Budget of 1952 but, at the same time, I think it is the duty of the present Government to admit that the promises which they made to the people cannot be fulfilled by them. Whether or not these promises were made without having due regard to the position, I cannot say, but the Government should make it quite clear that they have no intention of fulfilling their promises in view of the fact that we are now asked to continue in operation for a further 12 months income-tax at its present level.

I think some thought should be given to the problem as to whether or not it is just that, in this country, surtax should begin at £1,500. In Britain, it begins at £2,000. In my view, the question should be considered whether or not it is just that, on purely earned income, surtax should be levied at the same rates as on unearned income.

I appreciate that nothing can be done about the matter now but I think that the surtax question should be looked into. I feel, especially in regard to earned income, that the whole question requires investigation.

There are two points which I should like to make. It is frequently stated that a great many people escape the payment of tax altogether or escape the payment of tax which they legally owe. Coupled with that, which at any rate is to some extent true, there is the fact, which everybody with experience of administration finds out after a time, that no staff is harder worked than the staff of the Revenue Commissioners. It is curious that the people who produce the money should be starved of staff to produce it. I have always heard, and I have seen some proof—not very recent, I must confess—that the staff is not sufficient to cope with the work, particularly now that so many people are liable for tax. It is alleged, with great appearance of truth, that more staff will produce more tax. The person who pays tax, the person who has no possibility of escape is generally the person working on a fixed income —the white-collar class. They pay to the last farthing everything due from them. If the staff of the Inspector of Taxes were increased so that tax-evaders were caught, there would be more possibility of relief for the persons who belong to the fixed income class. It has always seemed to me a short-sighted policy not to make every possible effort to get tax from the people who owe it and who can pay it much better than the unfortunates who are endeavouring to live on a fixed salary.

My second point is the point that Senator Cox has made, that is, that surtax begins on earned income at £1,500. Surely it is contrary to common sense, and entirely out of any correspondence with reality, to think that in 1955 a person who has £1,500 a year is in the wealthy classes and ought to be taxed in a specially heavy manner. I want to give just one example. In 1922 the figure for surtax was £1,500. However, at that time—as far as my recollection serves me—only one, or perhaps two, civil servants had a basic salary of £1,500. I think the head of the Department of Finance had £1,500 basic salary and bonus: the bonus brought it up to £1,700. The salary of the head of the Department of Finance, which was then £1,700, is now just £3,000. On that £3,000 he pays surtax from £1,500. I am taking that merely as an example. The salary which he now receives is not supposed to be any better than the salary of 1922. I think one could make a very substantial argument to say that it is not as good as the salary which the head of the Department of Finance or anybody else with £1,700 enjoyed in 1922. However, surtax is paid upon it from £1,500. That seems to me to be contrary to justice and to realities.

I know that if I were Minister for Finance myself, found this position there and found the money coming in, I would be reluctant to make an alteration no matter what argument was put to me. But the £1,500 surtax limit, particularly in earned incomes, does not correspond to reality. It also has the effect that professional people, skilled persons who, through the use of their professional skill, do earn more than £1,500 are specially taxed and indeed are encouraged not to earn any more at all. The Minister might certainly inquire into these things. There is surely a possibility of getting more tax from the people now evading it and thus making it possible to reduce the burden on people who are much more heavily burdened now by that tax than they were say 20 or 30 years ago or even, indeed, before the war, in 1938.

It is not often that a Minister is asked in either House of the Oireachtas to increase the number of civil servants, but I must say straightway that I join with Senator Hayes in the tribute he has paid to the Revenue Commissioners. They are a very hard-worked body of civil servants—a body that has considerably more to do than previously —and many of them are overworked. It is, however, a very specialised job and it is one that cannot be dealt with in the way of recruitment just by saying that you require additional staff and getting them the next day. It is highly skilled technical work.

I should like to avail of this opportunity, however, to underline another thing which was said by Senator Hayes. It is an undoubted fact that, no matter how hard the Revenue Commissioners may endeavour to ensure that every citizen pays his just dues, there are people in the country who do evade their legal liability. I am not talking at all of whether one class should or should not be taxed or whether we should amend the law so as to relieve one section of the community and perhaps put additional burdens on another section. I am talking of the law as it is and there is unfortunately abroad amongst our people—not amongst all of them by any means, and perhaps not amongst the majority of them, but amongst a section of our people—the feeling that, if they have avoided paying their legal liability to income-tax, they have done something clever. I think that the first step that must be taken is not so much that for the Revenue Commissioners—they are, if one may use the analogy, the policemen—but to try to encourage amongst our own people a sufficient sense of moral responsibility that they should pay the burdens which their own public representatives, as the properly authorised Government of the country, decide should be paid. If that were done and if people did not avoid their just responsibilities, it would be possible to make substantial concessions to those who are at present discharging their obligations. If a substantial number of our people do not discharge their obligations, it merely means that a heavier burden is being placed on those who do, and it should be the aim of everybody in any public position to ensure that the national morality of payment of the taxes due to the State be advocated.

So far as the question of the amendment of the law itself is concerned, I made it clear in the other House and I do not want to weary the Seanad with a repetition of what I said. Unlike Senator Hawkins, if I may say so, I do not want to play the record again and again. The record which Senator Hawkins played has been repeated in the other House on many occasions and at the crossroads, and the Senator's Party during the recent local elections, at which they lost seats substantially all over the country, got their reply from the people. There are certain facts, however, that it would be well to consider.

Senator McGuire referred to the incidence of income-tax in regard to industrial enterprise. There is at present, as everybody knows, a commission sitting to consider that problem. I will, I believe, receive the report of that commission in the near future, and, when I do receive it, I shall naturally give it the most careful considerations, but we have to consider all these problems not merely as a separate section in regard to income-tax, but as part of the general overall national position. I must confess, however—perhaps my understanding is at fault— that I did not understand Senator McGuire's reference when he said he wanted to create a condition in which people could put their savings into loans and into private enterprise.

I can see no reason whatever, no matter what Government may be in power, either a Government from this side or that side, why any of our people should have the slightest anxiety about putting their savings into loans or into the development of private enterprise. We are a private enterprise economy, and we are likely to remain such, and, as a private enterprise economy, anyone can feel absolutely assured that, no matter what Government may be in power, the savings invested in private enterprise will have as full and as ample an opportunity of developing here in Ireland as they would get anywhere else. I will go further and say that not merely will they have that full and ample development here at home, but in that development they will not merely be helping themselves but helping the country as a whole. I should like to take the advantage of the opportunity which Senator McGuire's remark has given me to stress that, and to stress that it will be with that aim, that object and that principle in front of my mind that I shall in due course, later this year, examine the report of the Commission on Industrial Taxation.

Senator Hayes and Senator Cox mentioned the question of surtax. There has been for many years consideration given at various times to whether it was desirable to have a separate surtax charge or a graduated income-tax. The problem has never been ultimately determined, but I do not think that it was that was so much in their minds as the rates they would have to pay. The figure of £1,500 is a very low figure at which surtax should commence, but there is, of course, the knowledge to all of us that everyone, no matter what section or class in the community he may belong to, has to make now a greater contribution to the services provided by the State than might have been possible some 30 years ago when far fewer services were provided.

It is because of the necessity to make that additional provision that we have taxation and it is perhaps because of that necessity over the years that the personal allowances for income-tax, to which Senator Fearon referred on the Second Stage and which I had not sufficient time to mention, were not increased as the value of money diminished. These are all problems which must be considered in the light of a review of our general taxation, and of income-tax in particular, and of industrial taxation also so as to ensure that the best incentive is given to our people to produce results and to produce them as cheaply and as efficiently as possible.

Some years ago, the Government commissioned this Ibec Report on the Industrial Potential of Ireland. The Minister referred to the commission now sitting and I am glad to know, and I have full confidence, that he will fully study the recommendations of that body. In the past, we have had many reports, but we seem to have put them into pigeonholes and to have forgotten about them, so that a re-reading of this Ibec report should be good for everybody.

What I meant to imply when I spoke of the difficulty of getting people to invest capital in Irish enterprise, in private and national enterprise, was not that there was any difficulty in putting the money into these things, but that there was the difficulty of saving the money to put into them, and that, when you did get it together and put it into these enterprises in the form of capital, the return was not enough when income-tax was taken off. It is only when one gets into any kind of big money—and we must think in terms of big money if we are to have good private enterprise here—that the income-tax laws are so heavy and stringent that they do not make it worth while investing your big money in business.

I have here a note that, according to the latest report of the Revenue Commissioners that we have, only 2,041 persons in this country have incomes over £3,000. I suggest that the wealth of a private enterprise economy can be judged from the incomes derived from it and the fact that in a country like this which wants to employ millions of pounds, we have only 2,041 people with over £3,000 a year, some of whom are in State employment, points out the very thing I want to stress, that there is not enough money being earned out of business enterprise, because it is out of business that income-tax is paid.

This Ibec report says at page 84, in the section on conclusions and recommendations:—

"The business tax structure, while lower than that of the United Kingdom or the United States, and about the same as that in Holland and Sweden, has probably been too high for Ireland's stage of industrial development, amounting to about 40 per cent. on the profits of moderate sized manufacturing corporations.

The ostensible weight of this tax burden has been increased by what appears to be an inadequate allowance for depreciation and depletion, when consideration is given to the great need for strong incentives to encourage plant and equipment modernisation."

That is the report of a commission that was appointed by the Government. I believe that our Minister for Finance will get down to examining our whole basic philosophy on our capital development programme, both private enterprise and Government. What really happened was this. We took over the income-tax structure after the Treaty in 1922. We then had a civil war and we were so engaged in the civil war, fighting one another, that this thing came into existence and nobody has ever changed it since except to put on 6d. in the £ one year and take it off the next year. We really have been only fiddling from the outside with the working of this system, and have not go down to the machine itself.

In my opinion we shall never solve our national, social and industrial problems until we get down to the question of creating wealth and of making it a good thing to be wealthy. At present, it would seem as if there was something wrong in being wealthy. I suggest that we should try to be wealthy, and try to be as strong as we can, because if we are wealthy and if our industries are in a healthy condition, then we can give our workers full employment at good wages and so enable them to maintain a high standard of living. You are not going to get the amount of employment the country needs, or the standard of employment that we should all like to see our people enjoying, from semi-bankrupt companies, or companies that are just struggling along, all the time trying to handle their business with huge overdrafts from the banks and being continually harassed to reduce them.

I was very much interested to hear the Minister say that ours is a private enterprise economy. In view of the remarks which have been made by Senator McGuire, I should like to hear the Minister clarify his statement on that a little more fully, and to get a much clearer definition of what type of economy we have here. I think that we have to make up our minds as to whether we are to have a private enterprise economy or whether we are going to have a very different economic system altogether. I am afraid I must disagree entirely with what the Minister has said, that is when I look at this question from the economic point of view. I am afraid that the trouble about this country is that we are falling between two stools. We have committed ourselves heavily, as far as State enterprises are concerned, so much so that we have to ask ourselves if we have left sufficient room for private enterprise to make the contribution that is necessary to enable us to carry on these State services.

At the moment I am not taking one side or the other, but I am just talking about the position that we are in. I agree with a good deal of what Senator McGuire has said. I think that we have reached the stage now when we cannot expect private enterprise to make an enormous contribution towards the welfare of the State in regard to taxation and employment because the opportunities to make big money are simply not available in this country. Quite a small section of our community, who are in business, are making reasonably good incomes and reasonably good profits, but taxation is extremely heavy on that section which numerically, is a small section.

I think that this is a problem which all the political Parties will have to face in the future. We shall have to make up our minds as to where the interests of everybody lie, that is if we are to make an attempt to provide employment on the large scale that is necessary to tackle employment, underemployment, emigration, and so on. I do not think that that very big problem is ever going to be solved by having one foot in private enterprise and another foot fairly well planted in a pretty wide extension of State services. In this latter category we already have the railways, fuel, electricity and others. I think it will be necessary for us soon to make an attempt to solve this problem which I have put to the House and it is for that reason that I am asking the Minister to clarify the statement which he made a few moments ago.

I do not want to cramp discussion on this section, but the section deals specifically with income-tax and surtax. It seems to me that the questions which have been raised on this section might have been more appropriately discussed on the Second Stage of the Bill. I propose to permit the Minister to make a comment.

I want to make just one short comment. It seems to me quite clear that Senator McGuire was speaking of industrial activity, but the instances which Senator ffrench O'Carroll gave were clearly in relation to public utilities, and there is a vast difference between ordinary industrial enterprises and public utilities. Gas, for example, is not a State enterprise here although it is in certain countries. Electricity, obviously, is a public utility, and in small countries such as ours, it obviously must be developed by the State. Our native fuel resources fall into the same category and the same is true of transport. What I was afraid of was that Senator McGuire's remark, though I do not think he meant it that way, might be misinterpreted in the sense that someone might think there was a danger in putting money into ordinary industrial enterprises. I do not think Senator McGuire meant that, but it could be so interpreted. It was because of that that I wanted to make the situation clear.

So far as the Ibec report, and our industrial taxation as a whole are concerned, I do not want to go into that question now, but I did come across an article quite recently in an American periodical which I should like to refer to. As regards the figures that are given in that article I have had no means of verifying them. These figures relate to American taxation. As to whether or not they are completely accurate, I do not know. I do not think that the instances of taxes which were suggested in that article could be taken as the whole story. We all expect that American industry in its productivity and in its drive has made vast strides. If there is any Senator who would like to read this article I would be happy to lend it to him.

It is stated, categorically, in this article that the taxation that is paid by an American company earning a profit of 1,000,000 dollars is substantially higher in America than it is in Great Britain. The equivalent Irish figure is not given, but I have got it worked out. If the article is correct in its assessment of what is payable in the United States, then out of a profit of 1,000,000 dollars a sum of 514,000 dollars would be paid in taxation in America. The figure here would be 437,000 dollars, so I do not think that when you consider the effect on American industry, and the effect on our own industry, you can, on these figures, take the view that it is entirely a tax question. The figures in that article would suggest that in America they are more heavily taxed in industry than we are. I think we will have to admit that there must be other factors that affect us and affect them in industry, and one of these factors would be the extent and size of their market, and the small size of our market.

I said the other night, when someone mentioned the question of reserves in the case of companies, that it was a mistake to spoil a case by exaggeration. Let us not exaggerate in this instance either. Let us agree that there is a problem there that should be examined and let us examine it as objectively as we can and not bedevil the examination by travelling too far on one road or the other until the examination has been completed.

Question put and agreed to.
Section 2 agreed to.
SECTION 3.
Question proposed: "That Section 3 stand part of the Bill."

I want to ask the Minister a question which I asked him on the Second Reading. He had not time to give a reply then as the House was rather pressed for time on that occasion. I simply want to ask whether the Minister would give us a definition of the word "charity" under this section.

I am afraid that the question of defining the word "charity" in a few words is a difficult one. I could answer the Senator by saying— but this would not help him very much at all—that a charity in the context of this section is any body of persons or trusts established for charitable purposes only. I do not think that was quite exactly what the Senator wanted. I think I can solve his problem when I say that the charitable purposes, visualised under this section, would be such purposes as the advancement of religion, education, the relief of poverty or the healing of the sick in a hospital for example.

The other night the Senator—he was kind enough to say just now that I was cut short for time—asked me specifically about schools. If a school is established with its primary purpose, that of education, and if the profits of the school—if it makes profits—go back into the school and are not paid out individually, then this section will give relief but the carrying on of the school must be the primary purpose of the charity and the profits must be ploughed back into it. In those circumstances the section will give relief because the profits are applied solely to the purposes of charity. Similarly in respect of other trades.

I was going to mention one particular case but I do not like to do so because it might, perhaps, be invidious to mention a specific instance here. There are, however, places in which people run general hospitals and also run private nursing homes attached to the hospitals as part of their general charity. Up to this, nursing homes have been separately assessed. After this, if the profits of the nursing home go to offset the general charitable intentions of the hospital and are not taken out for private gain or are devoted solely to the purposes of the charity, they will be relieved. It is better to give individual instances rather than to attempt a definition of the word "charity".

I thank the Minister. A great many schools and other charitable institutions in the country will be very grateful for this enlightenment. It seems to be very much a step in the right direction.

Reference was made by the Minister to hospitals which carry on private nursing homes. That is a problem with which I have been dealing. I am afraid that in reading the section I did not appreciate that it applied to such a case. The section, as worded, sets out that the work must be done by the beneficiaries of the charity.

I think the Senator will find that there are two choices. It says:—

"and either—

(i) the trade is exercised in the course of the actual carrying out of a primary purpose of the charity, or

(ii) the work in connection with the trade is mainly carried on by beneficiaries of the charity."

It is "either" or "or". Either would bring it within the ambit.

Question put and agreed to.
SECTION 4.
Question proposed: "That Section 4 stand part of the Bill."

I think we should have some clarification from the Minister on this matter. As I read the section, it will be operative this year. The Minister has already set up a council or committee to inquire into the advisability of inaugurating a health insurance scheme for those persons who would not benefit under the Health Act. It has already been passed and I would like an explanation from the Minister as to the reason which prompted him to introduce this section in the Bill.

This council or committee are giving consideration to the matter for which they were set up. I take it that the only purpose the resolution in the Bill would serve would be to influence their findings in a certain direction. Whether or not that is a proper approach to a matter of that kind is one, of course, that only the Minister is in a position to decide because he is the person charged with the responsibility of getting this Bill through the House.

I should like to recommend to the Minister in relation to this section that provision should be made in our income-tax code to relieve those persons. Payment for hospitalisation, medical treatment, health purposes and for any other purposes should be taken into consideration for rebate in income-tax for all sections of our people. Of course, it would not apply to those people entitled to receive free medical service but if we do not adopt a general recommendation of that kind and give effect to it, we shall give facilities to a section of our people who may enter into this insurance scheme which we are not prepared to give to those who will not be in a position to enter into it whenever it is established. The people who are in a position to make an annual contribution to an insurance fund will, if it is going to cover hospitalisation, nursing homes and specialists' services, be called upon to pay a considerable annual sum and the section of our people who will not be in a position to make that annual contribution should get more favourable consideration than those who would be in a position to do so.

I am afraid the Senator misunderstood the section. The section does come into effect this year but in calculating the relief that the section gives in any year it is not the insurance premium that is paid that year that is taken but the insurance premium that is paid in the previous year. That is done for the sake of administrative convenience so as to ensure that the taxpayers concerned will not have to submit a second time in the year a return of the premium after they have paid it. It will come into effect at once.

All I said about the body sitting at present was that if that body decided to bring in recommendations which were implemented they would probably qualify under this section. It is included this year because it is decided to give immediate relief of the kind in question. I do not think it would be right or proper for me to give figures in regard to the premium that is payable for the benefits which are covenanted for, and which give relief under this section. I think if Senator Hawkins makes inquiries he will find the amounts are not so large as he anticipates.

Quite apart from what one might term "commercial insurance" of that sort, there is insurance of another sort that gets relief under this section. Some trade unions run schemes to provide, by insurance, against the very expenses of sickness for which we are granting the relief here. Bank officials have such a scheme which will qualify under this if it qualifies under the Insurance Act of 1936 as a trade union insurance scheme—and I think it does qualify under this. Teachers have an insurance scheme which is, I understand, in respect of a large portion of its ambit, a qualified scheme under the 1936 Insurance Act. In so far as it is qualified as an insurance scheme, teachers too will receive the benefit under this. The teachers' insurance scheme includes a provision by virtue of which the additional third, I think it is, of the cost of a substitute—I think the Department pay two-thirds and the teacher pays one-third—will be met out of the fund. The cost of providing a substitute is not a proper charge under this section but the cost of bearing the expenses of sickness are a proper cost and, therefore, the premium that the teachers pay into their own trade union insurance fund will be apportioned in the same way and the portion referable to the expenses of sickness will be allowed as a tax deduction here.

Other trade unions run similar funds. Where those other trade unions run similar funds, and qualify under the 1936 Insurance Act to be treated as an insurance under that Act, they will automatically fall in for this relief and fall in for it at once but, having qualified for the relief forthwith, the extent of the benefit they get depends on the amount of the premium they paid last year, when computing this year's liability, and next year on this year's, and so forth.

Question put and agreed to.
Sections 5 to 11, inclusive, put and agreed to.
SECTION 12.

I move recommendation No. 1:—

Before Section 12 to insert a new section as follows:—

12.—Notwithstanding anything contained in Section 4 of the Finance Act, 1894, and subject to Section 13 hereof, where the property which passes on a death but in which the deceased never had an interest, includes any policies of assurance on his life, or moneys received under such a policy, or interests in such a policy or moneys, then the rate of estate duty to be paid on any such policy, money or interest so included (hereinafter referred to as "a life insurance") shall be determined as follows:—

(a) In respect of the value of any life insurance or interest in a life insurance to which immediately after the death any one person is absolutely and indefeasibly entitled for his own benefit otherwise than by virtue of a purchase for consideration in money or money's worth (whether of that life insurance or interest or of the policy or otherwise) the rate shall be that appropriate to the value or aggregate value of that life insurance or interest and of any other life insurance or interest in a life insurance to which he is so entitled;

(b) subject to the foregoing paragraph, the rate shall be that appropriate to the aggregate value of all the life insurances or if there is only one, to the value of that life insurance;

Provided that for the purposes of this sub-section:—

(i) there shall be left out of account any life insurance in respect of which estate duty neither is payable on the death nor would be if the duty were payable on estates of however small a principal value; and

(ii) where any life insurance or interest in a life insurance is immediately after the death subject to a mortgage or charge the mortgage or charge shall be disregarded and the life insurance or interest shall be valued accordingly; and

(iii) in relation to life insurances and interests therein which then form part of the unadministered estate of a deceased person, this sub-section shall have effect as if that person had been then living and entitled to those life insurances and interests.

For the purposes of paragraph (a) of the last foregoing sub-section, the value of any interest in a policy of assurance or moneys received under such a policy shall be arrived at by apportioning the total value of the policy or moneys according to the respective values of the interest in question and of the interest a person would have if, except for the interest in question he were absolutely and indefeasibly entitled to the policy or moneys.

This section shall have effect in relation to any death occurring after the commencement of this Act.

Section 12 as it stands is an extremely complicated section and is extremely difficult to understand. The reason I have had the audacity to suggest an amendment is that, in its present form, I have found it almost impossible to follow exactly what its consequences would be. Having found myself in that position, I discussed the question with a number of people more learned in the law than I am, that is, counsel——

Allegedly.

——and we could not follow it. In the course of these researches, we discovered that it is, in fact, an adaptation of a section in the English Finance Act, 1954. Compared with this section, it did appear that the English section was one which would be much easier of interpretation and also its effect did appear to be more just.

As I understand it, the English section was introduced and the present Irish section has been introduced, following that, in order to deal in the main with policies of insurance taken out with the advantage of the Married Women's Property Act, in order to provide possibly for a wife or children. The section, when introduced in the English House of Commons, was discussed at very great length. It was opposed by a number of members on the ground that, although it only applies to deaths that take place after the passing of the Act, it had its effect on policies which were raised perhaps 20 or 30 or 40 years ago and on which people have been paying premiums ever since. To that extent, it rather looked like retrospective legislation. Of course, in fact, it is not. Therefore, I have ventured to suggest that, in lieu of the modification of the section which is suggested in the present Bill, the section as ultimately passed in the United Kingdom Bill should be adopted as being clearer and, I think, fairer. As far as I can see— and in this I may be wrong, but it is the best I could make out of it after discussion with learned persons——

——under the section in the Irish Bill as it stands it would appear that the aggregation of all policies would have a very much more severe effect on the beneficiaries than in the form in which it appears in the English Act. The form put forward in the present Bill is itself an imitation or an adaptation of the United Kingdom form but it is very difficult to understand—at least I have found it very difficult—the justification for the modifications which have been made. In the United Kingdom form, there was a very clear position that this would not apply to a policy which had been purchased. I think also that the basis of aggregation as set forth in the amendment I am putting forward is a fairer method of aggregation than that which apparently would result from the section.

I have raised the matter so that it might be considered, but it does seem to me that, under the section as it stands, a rather unfair burden is placed on persons who have endeavoured to provide over a great many years out of income for the benefit of their children. I do appreciate and fully understand that there have been cases in which what might be described by some as an unfair advantage has been taken of the Married Women's Property Act, by the taking out of a large number of these policies, but I think that such cases are very rare and that what is aimed at in the section will hit a great many people who, in prudence, over a great many years, have taken out policies for the protection of their children. I merely raise the point so that the Minister might perhaps consider it further. I know that all these points were discussed in the Dáil and that it was there decided to adopt the present form, but I think that a variation of that form is desirable.

I agree at once with Senator Cox that it is a very difficult section. Where Senator Cox and I part company, I am afraid, is that he thinks his amendment the easier one, while I think it is a more difficult one still to interpret. The Married Women's Property Act only comes into this quite incidentally. Under the Married Women's Property Act, if a person gives something to a wife or children, there is a presumption that it was intended as a gift. The same effect can, of course, be achieved in the case of a person other than a wife or child by express deed and therefore, in considering the effect of this section, we can ignore altogether the Married Women's Property Act, because the section does not alter it in the very slightest, and, in fact, all that that Act did was to avoid the necessity for a deed of gift in certain instances for a wife and child.

I might perhaps summarise the difference between the section and the Bill which I ask the House to accept and the recommendation put forward by Senator Cox by saying that under the Bill, if a person takes out three policies in favour of A.B. and C, each of these policies being for £2,000, the policy moneys will, on his death, be liable to pay duty at the rate applicable to £6,000, that is to say, three sums of £2,000 each. I should stress that that is only so if the person who has died has been paying the premiums on these policies during his lifetime. Under Senator Cox's recommendation, these three policies and the sum of £6,000 would be entirely free of duty because no estate under £2,000 pays any duty. What Senator Cox asks is that I should regard each policy as being a separate estate in itself and, because the limit is £2,000, no duty would be payable. Frankly, I do not think that is logical.

I do not see that there should be any difference between the person who takes out a normal, straightforward policy on his own life and by his will, having paid the premiums on that policy during his lifetime, bequeaths the policy to his wife. It seems to me that that case is on all fours with the case of the person who takes out a policy in his lifetime, pays the premiums on it and in his lifetime nominates that the policy will be paid to his wife. I do not think there should be any difference. The two should be taxed on the same basis and, in fact it will mean that there will be a slight benefit in respect of the nominated policy under the section, because it is going to be treated as a separate estate and will not be aggregated with the free estate. That is inevitable because of the existing law, but I certainly think it would be a mistake to increase the differential between the two cases.

I can see also grave possibility of abuse under Senator Cox's suggestion. I can see the possibility of a person taking out policies on his children, and, instead of paying an annual premium, to deal with it by way of a single lump sum payment, and in that way to have a policy which he has taken out a matter of a few months before his death and ensure that a very substantial estate would be entirely free from liability to pay death duties at the rate appropriate to an estate of that size. Senators are aware, I am sure, that the rate of estate duty payable on any person's death varies according to the amount of assets that a person leaves. The effect of the recommendation would be that that would not be the position, or rather that that need not be the position, that there could be the method of evasion I have indicated, which means that the person would dispose of his assets for lump sum policies and in that way completely avoid payment of death duties at the rates considered appropriate for the time being here. I do not think that Senator Cox was visualising that type of case at all, but it is unfortunately my duty to visualise the type of evasion that might arise.

There is a third objection, and, even if I were able to get over the others, I would feel that the third objection was quite conclusive. I think it is infinitely harder under his suggestion to see where the ring fence should be made around each beneficiary. One will have the simple cases, yes, but there will be other cases in which the beneficiary is indeterminate, and in such cases it will be virtually impossible to see with what other policy another particular policy should be aggregated. In fact, I think it is a great drawback in the English section that there will always be the gravest difficulty in determining who will be the ultimate beneficiary in any policy placed in trust and I think, with respect to the Senator, that, far from his recommendation making it more simple to administer, it would make the law far more difficult to administer. On that account, on account of the fact that there would be the gravest possibility of evasion and on account of the position that those who have nominated policies, in any event, are getting a benefit and that the extent of the benefit should not be increased when considered with a person's ordinary free estate, I ask the House to reject the recommendation.

Is the Senator pressing the recommendation?

No. I put down the recommendation with the object of getting the Minister to consider this question. The Minister has considered it, and I would ask the leave of the House to withdraw it.

Recommendation, by leave, withdrawn.
Section 12 agreed to.
SECTION 13.

I move recommendation No. 2:—

Before sub-section (4) to insert a new sub-section as follows:—

(4) The first £2,000 of all estates shall be exempt from estate duty and shall not be taken into account in determining the rate of duty on the balance of the net estate.

This recommendation was put down by Senator Burke who has written to me asking me to move it. He asks to be excused from attending the Seanad to-day, stating that he was elected Mayor of Clonmel yesterday and has some duties in connection with that office to perform to-day. The object of the recommendation, as I understand it, is that the first £2,000 of any estate would be exempt from death duty. As the law stands at present, as I understand, if an estate does not exceed £2,000, there is no death duty, but if it does exceed £2,000 then death duty is payable on the whole, including the first £2,000. The purpose of the recommendation is to secure that, just as in the case of income-tax where a certain amount of income is allowed free of tax, where a death occurs there would be a certain amount of the property in the estate free of duty.

I think that was the intention of Senator Burke. I am not quite clear whether the recommendation if inserted in this section, would be one that would be applicable only to insurance policies. That is one interpretation of it. In any event, I am afraid I could not accept the recommendation. It is another method, an ingenious method shall I say, of reducing the rate of estate duty. The rates are there and unfortunately they are needed at the moment. Let me not be taken as saying that I am in favour of those rates per se. I am not, but one must consider the necessity there is of raising revenue and of the manner in which it has to be raised. The position at the moment is that the methods adopted under our death duty legislation are a suitable way of obtaining that proportion of the national revenue which we require. This recommendation would have the effect of altering those rates. That is really all that it is, an alteration of the rate. It is not an easement. I am afraid that for the reasons I have given I could not accept the recommendation.

Recommendation, by leave, withdrawn.
Sections 13 to 21, inclusive, agreed to.
First, Second and Third Schedules agreed to.
Title agreed to.
Bill reported without recommendation.
Agreed, to take the remaining stages of the Bill now.
Question—"That the Bill be received for final consideration"—put and agreed to.
Question proposed: "That the Bill be returned to the Dáil."

On that question, I move that we do not pass this further stage of the Bill. I do so because the Bill makes provision for continuing for another 12 months the present rates of taxation as regards income-tax, surtax, customs and excise. I consider that the present rate of income-tax at 7/6 in the £ is a greater burden on our people at the present time than it was when it was raised to that figure three years ago. We remember the statements which were made at that time about the effect which that rate of income-tax was having on the country in general. If the statements made at that time were true, they are certainly much more true to-day because more money is being extracted from our people in the form of increased prices for the various classes of commodities which they require. In addition to these increases, there has been the failure of this Government to reduce the cost of living. They had promised to do that. There is also the high cost of Government. I think that the Seanad should consider this matter carefully before giving its consent to the further implementation of the present rates of taxation for another year.

There is another reason, I think, why the Seanad should not pass this stage of the Bill. It is that we have had no clear or definite statement from the Minister for Finance, either in this House or the other House, as to what steps the Government propose to take to deal with the many problems that are before us at the present time, particularly the urgent problem of unemployment out of which arises the more serious one of emigration, especially in those areas such as the Gaeltacht to which we should be directing all our energies in the hope of maintaining the people there. We have had no statement from the Minister that gives any ray of hope to the people living in those areas, and there is no provision in this Bill indicating that anything sufficiently big is being done to deal with the problem that confronts the people who live in those areas or that anything has been decided on by the Government in that direction.

The Minister made a statement earlier to-day that ours is a private enterprise economy, and that we are placing all our hopes and expectations on the encouragement that may be given to the development of that particular type of economy. How are we going to deal with this problem? It will be necessary to seek new methods, whether it is left to private enterprise or whether it is one in which some Government action should be taken.

The questions put by Senator McGuire, as to the advisability of encouraging our people to save and to invest their money in Irish enterprise, seem to suggest that over the years there was, if not neglect, slackness in this regard. I would like Senator McGuire or the Minister to give us information as to what industry or enterprise failed for the want of sufficient capital being made available, either privately or through any of the Government organisations such as the Agricultural Credit Corporation, which are there to fill wants of that kind. I would like to remind the Senator and the Minister that the only brake on progress in this field occurred in the years in which the first inter-Party Government were in office, when we had the almost complete abandonment and discouragement of the development of our peat resources; we had the holding up of the extension and development of our cement industries and we had the complete selling and abandonment of our transatlantic service which would have created a wide field of employment.

The Senator is aware that the question is: "That the Bill be returned to the Dáil."

I was attempting, as briefly as I could, to put my reasons to the House why we should not give our consent to the passage of this Bill with the sections it contains. In the financial statement, much reference has been made to the action of the Government in maintaining the then prevailing bank rate and I was wondering whether the Minister would be prepared to go a step further—having been so successful, as he claims, in the first step—and make sure that these banks will make available to our people the finance necessary to develop our resources and help us to eliminate the many problems that are before us, or whether that is the approach the Minister would be likely to take.

We have had some few amendments to this Finance Bill, both in the Dáil and here. When I spoken on the first section, the Minister in reply suggested that the record of reference to the promises to reduce the cost of Government and the cost of living was overplayed.

"Worn out" would have been a better phrase.

The speakers on the other side, who were so vocal in their promises to reduce the cost of living, not only wore out the records but also wore out Radio Eireann. The promises which they have failed to fulfil——

Promises are not in the Bill which we are being asked to return to the Dáil.

The Minister referred also in that flippant way to the local elections. I would like the Minister to re-examine the figures and to assure him that his visit to Galway was as fruitless as many other visits in the future, for not alone did our Party maintain its position but increased its vote there by 3,000—so we are very glad and thankful to the Minister for having been such an ardent advocate on our behalf.

In conclusion, I wish to say that the Minister and his Party have refused to reduce the cost of living and they have also refused to accept Senator Cox's recommendation to reduce the cost of dying.

I wish to say a few words on the subject in regard to which I was talking previously, that I thought that income-tax weighed too heavily on people who were thrifty and saving. Before doing so, I understand that Senator Hawkins' opposition to the passage of the Bill is on the grounds that the Government has not carried out in one short year all its promises. I think we do not take that criticism very seriously. He did not make it in a very serious way; he made it in a very friendly way. I do not think it is any harm to say that we are rather amused always by this charge that has been bandied about recently. Nothing happened for about six months and then they woke up to this idea that the promises were not being carried out. I remember back to the year 1932, if I may go back that far, when we had lower salaries and lower taxation, when £30,000,000 a year was too much for a little country like this. I think that when Fianna Fáil left office taxation was in the region of £105,000,000. We are expected to do everything in one year, whereas after over 20 years their promises not only are not fulfilled but simply are thrown overboard.

I think the Minister has shown here, as he said in the very early stages of the debate, that he was only giving an earnest of what this Government intended to do. I think they have given a very good account of themselves and they started very quickly to do so. They were barely two months in office when they carried their promises into effect in regard to butter and other factors affecting the cost of living. I think the criticism is not serious, but it is necessary in a House like this to have someone to take the opposite side and who must say something, even if he has nothing to say.

When I was talking earlier, I spoke about the necessity to make it at least desirable for people to save. I said that they should not feel they are penalised for doing so. I want to refer to one other thing—the final thing, the death duty, the final imposition in every sense of the word. It cuts right across the idea of creating capital and saving. I am sorry to say we do not take an original line here. We were a poor country, starting an industrial programme, starting our whole national life, and we were in need of money, yet when people in this country succeed in building up capital, after their death the most savage and oppressive and penal death duties are imposed on their estates, with results that we can see all round us. We have these expedients to try to dodge the death duties; and a man, instead of spending his time making more money and creating more wealth, spends a big portion of his time in trying to find out how little taxable money he will leave, how he can break it into small bits and divide it here and there. We saw an example here to-day, even in connection with insurance for a man's family.

We are getting after one of the ways which existed of evading the duty and preventing the State from taking its pound of flesh. I think it is a pity because these are not cases where people have large sums of money kept together. When a man dies, having accumulated a large sum of money in the form of capital, that is very seldom in liquid form; in fact, it never is in liquid form because if he has any at all he has it out in goods, property or businesses of one kind or another. It is deplorable and I have seen it in many instances of men I knew, successful businessmen—they put a fine business together and when they die the whole thing is robbed right, left and centre by death duties. I think it is a pity. The philosophy of this country is the philosophy of the individual, the Christian philosophy of the individual and the family. This breaks up the idea of family estates; I do not mean large tracts of land but I mean businesses, private businesses.

I have heard a lot of complaints lately such as: "Is it not deplorable the number of foreigners coming in and taking big shops, multiple stores and so on?" That is inevitable. You cannot hold a family business, because if one or two of the owners die in quick succession, the next of kin simply have to sell out to people like that. There is no provision for the carrying on of family business in that way except by breaking up the shareholding into extremely small parts and even that is very dangerous because there may be as members of the family only one or two who are workers. It is then inevitable that the family business is crushed out by reason of death duties. Something should be done about that.

There is another side, coming back again to the Ibec report. It points out that this country is deplorably short of capital. There is plenty of capital floating round the world that could come in if it were made reasonable and desirable for it to do so and if it were profitable for it to come in. In that way we could turn ourselves into a veritable Switzerland. Anyone who knows Switzerland knows it is a country with very little natural wealth. It is mountainous—I do not know the percentage, but I think it is three-quarters mountain and very little arable land. It is one of the richest countries in the world because of its enlightened taxation laws and because of the laws under which it invites people from all over the world to bring wealth there. No one can say that the Swiss are dominated by foreigners because foreigners are brought in by the attractiveness of the taxation laws and the safety of capital. The Swiss benefit in that way because of their enlightened laws regarding foreigners and their capital. I think we could do the same here.

I happen to know a very wealthy man living here in Ireland at present who is a great benefactor to this country. He suggested over and over again, because of his interest in Ireland, that he does not mind here even the high taxation rates on ordinary income: what he does object to are the death duties here. They are completely penal and they prevent such men as himself from coming here and giving us the benefit and use of their large fortunes. I would like to make a plea to the Minister to consider this question of death duties. I think there is not a big sum involved. From memory, I think there is not more than £1,500,000 or £2,000,000 involved in it per year, over a period. Is that right?

It is very nice and airy to talk of £1,500,000 or £2,000,000 as simply as that. When one tries to find that amount, it is not so easy as that.

That is the very point I am trying to get over. I think all our policy is from year to year. We are a young country starting off and without a long term policy. If we had the idea of dropping £1,000,000 or £1,500,000 in one year, we could get something which could produce £10,000,000 or £20,000,000 in other years and give the people the employment, the capital and the wealth we need. I think that is the kind of thing we must do and that is the case I am making here to-day. We have been making progress only from years to year, putting 6d. on income-tax one year and taking 6d. off in another year, putting 2/6 on to old age pensions, and so on. That is not high finance. I think the principles of high finance ought to be applied to a nation far more than they should be applied to individuals, because the nation can do just as well out of high finance as the high financiers can do in other countries.

Senator McGuire expressed a very useful piece of philosophy when he said that Senators on the other side of the House, even if they have nothing to say, must say something. Senator McGuire, realising that it is high treason to speak of the high cost of living, decided to concentrate all his remarks on the high cost of dying. In this Finance Bill, the Minister has brought a very large measure of disappointment to his supporters. It is for that reason I assume that suggestions of the nature put forward by Senator McGuire are being mooted here.

While I am not in the least bit enthusiastic about the promotion of intemperance, I feel that the Minister should have done something to relieve the licensed trade. I do not suggest anything very drastic or substantial, but something should have been done at least to offset rising costs. It would have been desirable if, even at this stage, the Minister could give a definite assurance that over the next 12 months or even the next few months, there will not be any increase whatever in the price of liquor. The licensed trade are finding things difficult at the moment. I am not speaking on their behalf, but I believe that, in the interest of trade generally, it is desirable that some relief should be given in this case.

The Minister would have been wise if he had met the suggestion put forward by Senator Hawkins and others, that some relief in income-tax should be given for expenses incurred in doctors' bills and specialists' bills. Those bills could be presented as a means of claiming the allowance or abatement. That would have been a very desirable thing.

I am inclined to compliment the Minister on his decision to have nothing whatever to do with the reimposition of the dance tax. I was under the impression that that was one of the fundamental planks of the Coalition platform. However, that platform—whether you call it a dancing platform or a political platform— apparently has been thrown overboard.

I welcome the provision for relief in taxation on tractors used in the conveyance of milk to creameries. That is a desirable innovation. I would say it should extend to other forms of agricultural projects, such as grain being conveyed to the mill and sugar beet to the factories. If a farmer can carry grain or other produce for his neighbours, he should be entitled to use his tractors at the ordinary rate, at least for certain specified produce. I am not suggesting a general excemption of the higher tax covering every form of produce, but certainly it is desirable for grain that every form of transport be made available, particularly in a difficult year such as we sometimes experience. All forms of transport should be mobilised then and the concession should be made in order to do that. I know that a farmer can carry his own produce at the lower tax, but I think he should be entitled to carry for his neighbours also. This Finance Bill is simply a repetition of the Finance Acts of 1952, 1953 and 1954.

That is repetition, anyway. We heard that a number of times.

It is one of those forms of repetition which ought to be well driven home into the minds of people such as Senator L'Estrange. We were frequently told that the previous Budget was a savage and brutal Budget and it is pleasant to find that the people who denounced it so strongly are now endorsing it. The Minister in the course of his intervention on the Committee Stage to-day made one brief, but, I think, unfortunate, reference to the recent county council elections in which he suggested——

Unfortunate for whom?

For the Minister as I will show Senator L'Estrange. As far as figures compiled up to the present are concerned the election——

Surely this is not relevant on the Fifth Stage of the Finance Bill?

Neither was the reference made by the Minister.

Reference to the local elections is not relevant on the Fifth Stage of the Finance Bill.

I am sorry if Senator L'Estrange does not want to hear the figures. We gained 301 seats as against 299.

On a point of order. We are now on the last stage of the Finance Bill. Surely the Senator is confined to what is in the Bill? There is nothing in the Bill about the county council elections and even if somebody interrupts in regard to the county council elections that is not relevant either.

May I point out that Senator McGuire went far back into the political history of this country on the Fifth Stage?

The Fifth Stage of the Bill is a debate on what is in the Bill. There is nothing in this Bill about the county council elections. Not that I mind. I could certainly stay here for another couple of hours talking about the county council elections and having great fun.

I am sorry if Senator Hayes is not anxious that any Senator should disclose the fact that Fianna Fáil gained 301 seats as against 299.

An Leas-Chathaoirleach

The Senator may not discuss the matter.

How many seats did Fianna Fáil lose since 1950? How many votes did they lose? Surely that is much more relevant?

Is not that a good example of how right I am?

Fianna Fáil gained 34,000 votes whereas Fine Gael gained 21,000. Therefore——

21,000 seats?

An Leas-Chathaoirleach

That ends the reference to the local elections.

Am I not allowed to make a reference to it?

An Leas-Chathaoirleach

That ends the reference to the local elections.

The Minister is now satisfied——

An Leas-Chathaoirleach

We will have no further discussion on the local elections.

——that he was not right.

To-morrow will prove it when you will see the number of chairmen elected.

I was very wise. My figures were right—quite right. The Senator's Party has lost control of the county councils on which they had control before. No less than five is certain.

In view of the very definite statement made by the Minister it is right that I should give the information.

Surely there must be some order in this House? The Senator cannot discuss local elections on this Bill. I am only anxious that the House should adopt some kind of rational procedure and not have irrational nonsense.

An Leas-Chathaoirleach

The Senator has replied to a remark of the Minister and the matter must now be dropped.

I am quite in sympathy with Senator Hayes's zeal and his desire for order, but I did not notice that he intervened when the Minister was trying to put across his side of this particular question.

The Minister has not spoken on the Fifth Stage.

He spoke very emphatically in the course of the last five minutes.

The Minister has not made a speech on the Fifth Stage of the Bill.

An Leas-Chathaoirleach

There should be no further reference to the local elections.

I am sorry that the Minister introduced this question, but since he did so it is better that the facts should be put on the record. We gained 34,000 votes.

I want to call the attention of the Cathaoirleach to this——

An Leas-Chathaoirleach

The Senator is now flouting the ruling of the Chair.

——continued insolence on the part of Senator Cogan. There is no example in this House of anybody so persistently refusing to obey the ruling of the Chair. I think the Chair should take some action about it.

I think there is no objection to this Finance Bill in this House. We would all like to see certain improvements. The Bill follows fundamentally its predecessors but that does not mean that it is incapable of being improved as we go forward. Suggestions for improvement will always arise and will be welcomed.

I would be particularly anxious to support Senator McGuire's appeal for certain reliefs but I would, perhaps, be even more emphatic in advocating that, in future, consideration should be given to definite relief in regard to income-tax for those engaged in production and manufacturing industry here which adds to our national wealth and provides additional employment.

Some definite form of incentive must be given to our people to embark upon that type of enterprise. It is no use in the Minister saying that taxation in the United States is relatively higher than it is here. Conditions in the United States are entirely different from those prevailing here. Here we are trying to nurse infant industries into life and for that reason we ought to be over-zealous, if you like, in ensuring that any worthwhile industry that is producing goods for export will be given substantial relief in regard to income-tax over and above anything that has already been provided.

I trust that the Minister will give this particular point very serious consideration during the next 12 months. We all recognise that the income-tax code presses very heavily upon certain people, particularly upon those whose incomes are clearly known and defined. It may not press so heavily upon people who are engaged in widespread trade activities which are difficult, perhaps, to follow and where income cannot always be accurately ascertained. At the same time, I think that in the case of established new industries which are seeking to add to the country's wealth a definite step should be taken to give them additional relief.

There is one point I want to bring to the notice of the Minister. Has he received any complaints—I hear they are fairly widespread—about the relationship between business firms and the tax inspectors? A lot of people tell me that, in most countries, business people know where they stand in regard to such matters as capital, running expenses, wear and tear and depreciation. In this country it would appear that you have to run a business for several years before you have a final tax assessment at all and, no matter how competent your accountants are, they do not seem to be able to give you any guidance whatever as to what percentages or what figures will finally be allowed by tax inspectors in regard to the items I have mentioned and the amount which will be taxable. This constitutes a very great problem and many small business concerns, when they are starting off, because it is a year or two before the assessment is made, have no idea in the course of these two years as to what will be their eventual taxable liabilities.

Another problem which arises out of this methods of dealing with tax liabilities of various kinds is the question of arrears. Apparently the revenue authorities are very much in arrears in the collection of taxes. I suppose this would be blamed on the taxpayers but I do not think it is entirely due to the taxpayers. In many cases, there is very considerable delay before the revenue authorities make a final assessment and frequently the owner of a business has no idea of what liabilities he may have to meet.

Recently I spoke to a businessman who has a very large business here. Coming up to the Budget time, which is a time when all the tax inspectors start to rub their hands—no doubt the Minister is rubbing his hands, too—as they are very anxious to get in as much money as possible, somebody called to this man's firm and, across the counter, demanded the immediate payment of a very considerable sum within quite a short time. When this man went to the income-tax authorities he pointed out that the position was that, at that particular time, he was actually due a considerable rebate. People all over the country are having experiences like that. The income-tax position is not decided in a certain period of time and then they are suddenly asked at a critical time, such as Budget time, when the Government are looking for money, to make these lump sum payments.

I do not think the tax inspectors are giving businessmen a fair deal in many cases. They are extremely authoritarian in their method of handling business people. If the Minister endeavoured to standardise the methods of arriving at what allowances would be given, it would be a very great help to business people. It seems to me that, at the moment, a great deal of freedom is left to the individual tax inspectors in different areas to decide, themselves, what allowances should be given and to what extent these allowances should be granted. I think that varies from one area to another. I am assured that it is one of the great disadvantages in this country that all these matters are not clarified and undoubtedly it is a hardship for many business people with small concerns who are starting and who have no idea of what their eventual tax liabilities will be in a year or two when the position is clarified.

I find myself in some difficulty in understanding Senator Hawkins's opposition to the passing of this measure. I listened carefully and I was unable to ascertain whether his opposition was based on an argument that the level of taxation was too high or that it was too low. If it is the argument of Senators on the opposite side that the level of taxation is too high, I am wondering if they are in favour of removing the subsidy on butter or, indeed, whether they are against the provision for increases for old age pensioners and non-contributory widows. That is on the supposition that the burden of the argument is that taxation, as provided for in this measure, is at too high a level. On the other hand, if they are arguing that the taxation is too low, they certainly have not indicated to what extent and at what point it should be increased. Do they say that the rate of income-tax should be at a higher level or do they say there should be increased taxation on tobacco, cigarettes and beer? I think the Seanad is entitled to some answers to these questions because if the Opposition do not want this measure to pass they would want to base their arguments on either of the two legs that taxation is too high or too low. I want them to tell us in what way they would wish the matter to be mended.

In regard to other points raised here this afternoon, I should like to make some comment on the argument that the level of taxation is interfering with the expansion of industry on the private enterprise side. I may say that I am an upholder of any enterprise that develops our economy and provides decent employment for our people whether it be private or public enterprise. I think it is wrong to suggest or to imply, as has been implied, that there is any necessary conflict between private and public enterprise. To me—and I think it is the general position in this country— both are complementary. Both exist side by side. Both have an important part to play in developing our economy and providing employment. With regard to the suggestion that the level of taxation is interfering with expansion in private enterprise, I am puzzled to know whether or not that is correct. I cannot recall right away any recent incidents of an issue of shares in private enterprise being under-subscribed.

I do not think the argument can seriously be advanced that there is lack of capital for floating private enterprise industries in this country. I am inclined to suspect, however, that the argument is based on a sort of selfish and, I suppose, understandable attitude of people who want to expand their industries but who want to expand them out of their own profits and who do not wish to acquire capital by floating an issue of shares and so allow other people into the industry. I think these people say that they can expand but they want to expand out of their own profits and keep the enterprise strictly in their own hands. That is understandable but I do not think it could be advanced, because of that, that the level of taxation does interfere with expansion in industry here.

Mention was also made of the level of taxation in respect of death duties. I am wondering whether the Minister and the Government have given consideration to another form of duties. I understand it is the position in Britain and Northern Ireland that banks have to furnish to the appropriate authorities details of interest credited to any account where the interest exceeds £15 per annum. In that way, an eye is kept on these profits. I understand that here in the Republic, however, no such return is called for from the banks. The result is that any person can salt away quite a few thousand pounds under his own name in a different branch of the bank or, indeed, under bogus names.

I am told that people, wishing to evade income-tax in Britain or who try to hide, shall we say, undeclared gains, have come here and deposited substantial sums in our banks and these are not disclosed to the Revenue Commissioners and the interest arising from these deposits is not disclosed either. In my view, something is wrong there. I do not think it should be condoned that these interests and, quite obviously, the gains which have not been disclosed to the Revenue Commissioners should be hidden away like that. Perhaps the Minister, in the course of his reply, could spare half a minute to say whether consideration has been given to having the banks declare such interest, as they have to do in Northern Ireland and in Britain?

I would just like to say a few final words on this stage of the measure. I really do not think that I would have got on my feet at all were it not for certain remarks made by the speaker who has just sat down. He wanted to know what was the attitude on this side of the House to this measure. I think he interpreted Senator Hawkins's contribution rather incorrectly because he intimated that Senator Hawkins had advocated a reduction in taxation and an improvement in the State services at the same time. I do not think that was the line of argument that Senator Hawkins followed. What Senator Hawkins tried to bring before the House was the attitude of the people opposite when they, in their time, advocated that very same thing. They seemed to convey the impression that taxation could be reduced on the one hand and that social services could be improved on the other. One thing I would like to say in that connection is that the Minister has already got the money with which to increase these services if he would only do so. I do not know, of course, if it would be right for me to refer to these things on the Fifth Stage of the Bill, but the Minister himself has stated that the same rate of taxation will give higher yields this year, and is not that the same as saying that he would have additional money at his disposal? If that is the case, there is no need at all for an increase in taxation for the purpose of increasing the social benefits that we think people are entitled to and indeed there is no valid reason why the Minister could not reduce taxation if he wanted to.

Senator Hawkins mentioned another point to which I would also like to refer—the tax on beer and spirits. No doubt there has been great disappointment in the country that the Coalition Minister for Finance did not find it possible—I will put it that way—to give some remission in taxation to people engaged in the licensed trade. When I say that, I am not to be taken as advocating the cause of the people engaged in the licensed trade entirely by themselves. I am more concerned with the consumer, and the consumers up and down the country were given the impression that there would be a reduction of taxation on beer and spirits. They now find that the question is not so much will there be a remission of taxation on beer and spirits but is there going to be a higher price to be paid for these commodities.

In that connection, I would refer to the difficulty in which the people engaged in the licensed trade here in Dublin seem to find themselves and to a lesser extent, of course, the people engaged in the trade in rural parts of Ireland. I would ask the Minister if he will give a guarantee here this evening that the price of beer and spirits will not be higher in the near future. I do not know, of course, whether he will be able to commit himself to any statement of that sort, but there is a certain amount of disquite in the minds of people up and down the country in connection with this matter.

There is another point to which I would like to refer which was mentioned early on, and that is the question of tax evasion. The Minister himself referred to it, and Senator Hayes did likewise. I would like to know from the Minister to what extent there is evasion of the payment of income-tax in this country and to give any figures for that, because, if there is evasion of payment of income-tax, there is also the other side of the picture, that people are sometimes compelled to pay income-tax who are not liable at all.

Who are not liable at all?

People who are not liable, and find themselves sometimes unable to fight their case as against the Revenue Commissioners' assessment. The assessment becomes final before they know where they are, so that this argument about evasion of income-tax cuts both ways. After all, the income-tax people—the Revenue Commissioners and those officers engaged in the assessment and collection of income-tax—are experienced civil servants, and, because of that, the scale is weighted against the poor income-tax payer sometimes. I would like to find out from the Minister if he can give us any figures to substantiate——

I do not want to misinterpret the Senator. Do I understand him to allege that officers of the Revenue Commissioners deliberately make people pay tax which they are not bound to pay?

No. I made no such allegation.

I would like to know then what the Senator does mean, quite seriously.

My argument is that an inspector of taxes has the ambition to show as much activity as he possibly can in the fulfilment of his duty as an income-tax inspector. For that nobody can blame him. It is his job. He is paid for it. Sometimes, in his eagerness to assess as many people as he possibly can, he goes to people with very slender incomes and sometimes they find themselves assessed before they know where they are.

Of course, it can be said that they on their side can employ experts to fight their case, but sometimes these people are not in a position to do that.

In conclusion I will say that I am disappointed with this Finance Bill, disappointed that the Minister did not do what he and his colleagues gave the impression over a number of years and especially during the last general election that they could do in a short time if they were given an opportunity, namely, to reduce substantially the burden of taxation in this country. All I can say is that I hope they will do better in the future.

The discussion on this Bill has been as far removed from reality as anything I have ever listened to. I am wondering how many Senators on the other side have made any study of the report of the Banking Commission, with particular reference to the minority reports. I have heard Senators here pleading for people who are fairly well off already and I should like to point out to anybody who talks about relief of taxation, about death duties, estate duties and so on, that 15 per cent. of the people of this country own 64 per cent. of the wealth of the country. I should like to draw Senators' attention to the 85 per cent. who are without any means of livelihood at all.

We had the Banking Commission report together with four or five minority reports. I would put this question to the Minister: most of these gentlemen are still alive and why is it that that commission has disappeared, as it were, from the minds of the people? How many Senators ever read one of these minority reports? Facing the financial problems we are facing, I suggest it would be very desirable if we called in the gentlemen responsible for these minority reports to give us some assistance in improving the present financial position. Finance, we know, enters into every sphere of our lives, but not a word have we heard from the Opposition side about what should be done to relieve the burden of taxation. According to the Central Bank report, we are going to pay £16,000,000 for what they call the service of the national debt. I do not know what objection there is to telling the people what that phrase means. It is for interest on the national debt— a sum of £16,000,000.

Interest and sinking fund.

Interest and sinking fund—that is so. I am suggesting to the Minister and to Senators that that money should never be paid. When this State came into existence in 1922, and for some couple of years after, there was not a pound of what is called national debt. Does it not mean then that we are not in power at all in this country? I read the speeches made here last week on this Bill, as I was coming up on the train, and I saw that some gentlemen talked about sterling and about our currency. I suggest to the Minister it is about time the Irish people were told that we have no currency of our own. It is sunk in sterling and has no separate existence as a currency, and the sooner the people are told the truth about it the better. Nobody can deny it.

An Leas-Chathaoirleach

The Senator is now going very far away from the Finance Bill.

I will abide by your ruling, Sir, but I must say that I was terribly disappointed to see from the speeches this evening and those I read in the Dáil, especially by ex-Ministers, that we were not getting anywhere nearer a solution of our financial problems. We are now faced with finding money to do the things we want to do. We read in the Central Bank report that we are to be cautious and not expand this, that or the other. We are told about the debt of the local authorities and the national debt. Will the Minister tell me whether that means that the things that are necessary and desirable must remain undone because we cannot find the money?

The Minister may tell me that there is no scarcity of money, but, if there is money, we are going to pay a price for it. I want to say this also, that the flotation of the last two loans was very unfair to the people because we made a present of £1,500,000 to the moneylenders, and, to make it worse, while that sum was not given to the Government to do the work of the country, we are compelled to pay £67,700 interest on that money which we never got from the moneylenders. I make this definite statement, that that is an immoral system—a system which taxes the people to the extent of £67,700 in respect of money they did not get, for the next 22 years, the interest being payable every year.

Senator Hawkins spoke about the Minister's action with regard to the banks quite recently and said he hoped he would go further. May I remind the Senator of what the previous Minister for Finance said on a Finance Bill? I even asked Senator Hawkins or his friends to repudiate the statement he made.

An Leas-Chathaoirleach

The Senator is not going into any detail on a past Finance Bill?

No. I am referring to a speech made in which Senator Hawkins asked the Minister to do better than he did with regard to the bank rate.

An Leas-Chathaoirleach

Even so, the Senator may not go into detail on a previous Finance Bill.

I hope I will get an opportunity some other time. The Minister is a new Minister for Finance and there is need for a new approach to the whole question of finance. I suggest that the recommendations in the minority reports of the Banking Commission are still very desirable and I suggest that he should get in touch with these people and use them, with a view to relieving us from the burden of taxation we are carrying.

Senator McGuire and other Senators were worried about private enterprise not getting a show and about insufficient money being available for it. Why have we so many unemployed in this country to-day? Why are we without houses? I heard Deputy de Valera saying in the Dáil that the country could support 17,000,000 people on a higher standard of living, but this is 1955 and we have not yet reached the 3,000,000 mark. Will any Senator ask himself why we are in that sorry position to-day? Why are we not able to keep our people employed and why must we send them across to England for employment? I suggest that until such time as the Minister for Finance and his colleagues in whatever Government are elected by the people, take charge of the money and the credit of this country, we can talk here until the moon comes down and no progress will be made.

I want to compliment the Minister on his Budget, and I think that, in the circumstances, he has done a very good job. There has been no increase in taxation and there has been an increase in social services and a bringing down of the cost of living generally. I did not intend to speak on this at all, but the scope of the debate has been so wide that I felt I could perhaps mention one or two points. We have heard a lot about the effects of emigration and unemployment on our economy.

It cannot be denied that the present Government are endeavouring, in every way possible, to create more employment and to stop emigration. I feel that, if better methods were employed, we could create still more employment in our main industry, the cattle industry. The Ibec report, in dealing with our industrial possibilities, refers to cattle as the king in the Irish economy. I am not advocating that we should do anything to hinder the export of live cattle, but I do suggest that our carcase meat trade could be greatly expanded. Unfortunately, it has not been expanded in the way that other Irish industries have been. Quite a number of the factories engaged in this trade have not been operating for some time, due to the competition which they have to meet from the live-stock industry. The labour content of the carcase meat trade compared to the shipping of cattle on the hoof, is enormous.

If, for example, a meat factory kills and processes 400 cattle a week, its weekly wage bill will be at least £400. If the same number of cattle are exported on the hoof the most that will be earned will be £10 by cattle drovers. In the case of a carcase meat factory, one has to consider the valuable by-products, such as hides, which are made available. The Ibec report dealing with this matter says:—

"Even upon the basis of an 18 per cent. margin between the cost of animals and realised sales of products, the initial processing alone in Ireland of live cattle worth £20,000,000 would add £3.6 million of processing activity to the Irish economy. This figure would be raised to about £6,000,000 if the United States ratio was applied. There would be available on the Irish market an additional £3.5 million of hides (468,000 times 60 pounds times 30 pence per pound) for local processing which, since the fellmongery and leather category adds some 41 per cent. in net product to the cost of materials, might contribute another £1.4 million of processing activity. This could make a substantial contribution also to Ireland's exchange position since Ireland's leather imports in 1949 (net of leather export) amounted to about £1.3 million. If the additional supply of leather from a domestic source was not of a suitable type to displace imported shoe leathers, it might be used substantially to increase leather manufactures of other types in Ireland. Estimating upon the analogy of Ireland's boot and shoe industry, in which the net product amounts to about 70 per cent. of materials costs, this could increase manufactures based on leather by £2.52 million (£3.5 for hides and £1.4 for leather processing minus £1.3 imports times .7). Offal value should amount to at least £3 per beast, and that would provide another £1.4 million of raw materials for processing. The initial survey relating to ECA's Technical Assistance Project TA 44-74, indicates that over £2.6 million of protein feeds and related by-products could be produced from presently wasted bones of domestically slaughtered animals (of all types), mortality carcases and fish offal. This could be enormously increased as a potential through processing more cattle at home."

An Leas-Chathaoirleach

I am afraid that the Senator is taking the debate outside the scope of the Bill.

This report, in dealing with the Irish economy, says that cattle "is the king." I am sorry if I have gone outside the scope of the debate. There has been so much reference to unemployment and emigration that I thought I should give this quotation from the Ibec report to indicate to the House what are the potentialities of the Irish carcase meat trade. I thought that in doing that I was keeping within the scope of the debate. However, I bow to the ruling of the Chair. Senator Guinness, when speaking last week on the Second Stage of this Bill, referred to the taxation of farmers.

An Leas-Chathaoirleach

There is no reference to the taxation of farmers in this Bill, and hence the Senator should confine himself to the matters contained in the Bill.

Schedule B affects the taxation of farmers.

Senator Guinness advocated that there should be a tax on the farmer's land. I would ask the Minister not to consider that because, in my opinion, the farmers are overtaxed. I know, of course, that there are some people in this country who say that the farmers do not pay income-tax, but they seem to forget the rates, rents and other forms of taxation which the farmer has to meet. The farmer has to pay income-tax and all the other taxes which the other members of the community have to pay. I think that Senator Guinness, in speaking in the way that he did about the farmers, was quite wrong.

I should like to conclude by complimenting the Minister on the Budget he introduced this year which is incorporated in this Bill. I think he did a very good job, and I feel certain that, as year follows year, he and the Government will carry out to the letter the promises that were made by the Fine Gael Party.

I have only one or two brief comments to make on this stage of the Bill. I do not consider myself sufficiently conversant with finance matters to discuss the Bill at any great length. I should like to begin by saying that I do not think anybody in this country expected miracles from the Minister for Finance this year. It is true, of course, that the Budget that was introduced this year was not a very spectacular Budget. I would suggest that it was not intended to be very spectacular. Taking the circumstances of the times as we find them, I think that the Minister for Finance must at least get credit for having done a reasonably good job, faced as he was with a particularly difficult problem.

On behalf of one particular section of the community for whom I feel competent to speak, I welcome the concession which the Minister for Finance has made in this year's Finance Bill in respect of the premiums payable on foot of what may be described as sickness insurance. That suggestion has been pressed on successive Ministers in past years. It introduces this year a definite indication of the line which the Government would like to see the people taking, in providing from their own resources for the inevitable contingencies of life. We hope to see that idea developed as time goes on.

On the question of taxation generally, I do not think anyone would dispute the fact that in this little country of ours it is too high. If we are to be honest with ourselves, we must admit that our taxation is too high because too few of our people, who should pay and who could pay, do not pay, as they are either not obliged or not compelled to pay the taxation for which they are liable. The Minister has said that a commission is sitting at the moment to review the system generally as applied to industry. As far as I am aware, the terms of reference of that commission charge it only with investigating the incidence of taxation on industry only. There is a very strong, if not unanswerable, case for the complete overhaul of the income-tax code generally in so far as it applies to industry and to the large body of taxpayers. I would appeal to the Minister to consider the practicability of appointing some commission to go into that problem and let us have some concrete proposals in the near future that would give us hope for a more equitable system of taxation for the people as a whole.

Senator Crowley referred to the overhaul of the income-tax code and suggested he would wish to see a more equitable code. Many people have made that suggestion before and I hope the Senator will not think I am being personal when I say that when people talk about a more equitable system they usually mean a system which does not hurt them so much themselves. I do not mean that personally to the Senator but to the class he had in mind. Perhaps it is natural that that is so. When people talk about inequalities, the desire for reform and for a more rational system, they are really thinking of a system under which the burden would be placed on the other fellow and not on their own backs. When I say that, I do not mean that I think the present system perfect. It is not perfect by any means.

Whether it is possible to evolve a less imperfect system is a thing we shall have to consider, but it is not one in which there is any hope whatever of doing what Senator Crowley suggested, of seeing quick results. The evolving of a new system would take a very long time indeed. Even on the other side of the water, they found that when they wished to bring in changes there, by the time the various commissions had reported and had produced what they considered would be a new, a more modern and a more equitable system of taxation, the scheme was already out of date. We might not be in the same difficulty here, but certainly it is not a problem for which we could expect any speedy or quick solution.

Senator Crowley also referred to the fact that the Budget was not a spectacular one and said that perhaps I did not wish to make it so. The Senator is the only person in this or the other House who remembered the conclusion I reached at the end of the economic survey, that I did not think this year was a year for anything spectacular in that respect. It was quite deliberate in that sense. The other day I was rather interested to notice that, in one of the coming countries of the world, Canada—a country that many of us are inclined to look at as one with the greatest opportunities and with rising standards—the Canadian Minister for Finance when introducing his Budget said that his aim was to produce a neutral Budget, as he thought that was the best way of providing that they would have a controlled advance to prosperity.

Senator Hickey suggested that I should call in the authors of the various minority reports. He excluded the writers of the majority reports.

I had good reason.

Of course, that is a new principle—that you should set up a commission and when you are going to consider the matter you select only those who are in the minority. If we carried that principle along the line, we would arrive at a situation in the end in which a commission of one would probably have to examine matters, as everyone else would differ down the way. The Senator objected to the provision for the service of debt included in the Central Fund account for which this Finance Bill provides the moneys. It is true, as the Senator says, that a part of that service of debt is for interest. In the modern world in which we live, interest is an attribute of our economic systems everywhere and one which the Senator might feel should be done away with. The only place that I know of where its complete abolition is advocated is in the Koran in the Moslem world. I would not like to pick that example out of our Moslem friends' advice only—I think that would be somewhat unfair.

I do not think we can accept the Senator's suggestion that we should repudiate our liability to pay interest on the various national loans that have been floated from time to time and that will be floated in the future. Certainly, so far as I am concerned and so far as the present Government and Governments formed from that side of the House are concerned, the people can rest assured that there will be no such repudiation by any Government that is likely to come here in the foreseeable future.

I am not repudiating what has been done, but I want to change what is being carried on.

That is a different point. The Senator objected to the £16,000,000 that is there. That is in respect of what has been done and to change that would be repudiation, and a very undesirable repudiation.

I am sorry that I am not allowed to go into certain statistics for the benefit of Senator Cogan. Perhaps it is as well for the Standing Orders that I should not be able to discuss them. No doubt, my version would be of interest as compared to the Senator's.

When I was speaking last week on the Second Stage of the Finance Bill, Senator Hawkins challenged certain statements of mine dealing with the effect of the policy of the previous Government in regard to employment. The House will remember that Senator Hawkins had made, on the Second Stage, a somewhat similar reference to unemployment as he made to-day on the Fifth Stage. He said that he had not got any evidence of the policy of this Government as regards employment. The facts I gave then, and that I repeat now, speak for themselves. The facts are that in the three years of the previous Government, from 1951 to 1954, the number of persons registered on the unemployed live register increased by 19,000, as a result of the policy of the previous Government. I was challenged by the other side on that when I added that that increase arose under every single heading.

In fact, in the industrial analysis of the live register that is published officially every month, those on the unemployment register are divided into 25 sub-heads, and if we compare mid-June, 1954, with mid-June, 1955, we find that in 23 out of those 25 sub-heads, as a result of the policy of the previous Government, there was an increase in the numbers registered on the live register. Senator Hawkins challenged me the other day when I said that that was so and I want therefore just to give the exact figures now. Out of 25 headings, 23 showed an increase and in only two—employed in tobacco, where there was a decrease of some 69 persons, and under the unspecified item, where there was a decrease of 14 persons—were there any decreases. On the other hand, there was an increase to a total of 19,000 persons under all the other headings. It seems, therefore, somewhat extraordinary that Senators representing the Party on the other side of the House should now ask this Government for a formal declaration of our policy when it is clear that their formal policy created unemployment and it is clear from the figures, as to what has occurred in the last 12 months, that we have succeeded in putting more people into employment. We have succeeded in bringing down the number who have unfortunately to register as unemployed. As I indicated on other occasions, we do not regard with complacency the position in regard to employment, but we do say, and are entitled to say, that our record in this regard, both from 1948 to 1951 and from 1954 to 1955, is a record infinitely preferable to that of the other side of the House.

The Senator also referred to his regret that there was no reduction in the duties in spirits and beer, and Senator Kissane innocently made the suggestion, or thought that I was innocent enough to fall for the suggestion, that I would give a solemn declaration as to what prices would be in that respect in the future. It is an extraordinary thing that whenever the Fianna Fáil Party are on the Government side of the House either in the Dáil or here—if I may be allowed to say that there are Parties in this House—they always seem to be bent on imposing and increasing the duties on beer and spirits, and as soon as they move to the other side of the House then they always seem most anxious that those duties should be reduced. I think, therefore, that I would not be unfair when I say that the best chance, having regard to the record over previous years, of there being any reduction in those duties is for the people to ensure, as they did ensure recently in a rather reflected way, that the Party would be kept on that side of the House.

It was only a chance.

I frankly did not understand the reference that Senator Cogan made to the tax relief or the expenses of illnesses. As I intend the section to be interpreted, it was exactly as was stated by Senator Crowley. We have all got to face the situation that at some stage in our lives or the lives of our families we are unfortunately almost certain to have illness or sickness befall either ourselves or our families. The proper prudent way to deal with that situation is for a person to provide against it in times when he is earning and able to provide so that when the adversity comes he will not be faced with a sudden call which he is unable to meet. One of the ways of doing that is by insurance, whether by a trade union scheme or by an ordinary commercial insurance scheme. This Bill provides assistance towards that end, and provides that assistance, because we in the Government believe that it is desirable for people who are able to help themselves to get over such adversity to take any step that is open to them to do so. It seems to me that it is a principle which is in accordance with everything that is fundamental to our people.

Provided that reasonable facilities are given for all others.

Senator Dr. ffrench O'Carroll, when he was referring to it, seemed to think that it was in some way going to affect the provision of facilities for those who were not able to provide for themselves. If the Senator had considered the matter for a moment, he would have realised that this is a relief from income-tax and the person who is paying income-tax is the person——

On a point of order, the Minister is confusing me with somebody else. I did not speak on that section at all.

The Senator's interjection just now referred to it.

My interjection did not deal with that point at all. I merely said it was an excellent scheme provided that reasonable facilities are provided for all other sections of the community.

Whether they are or not makes no difference to this section, because this is a section dealing with people who are in a position to provide and it is right and proper that people who are in that position should make that provision. I know perfectly well what is at the back of the Senator's mind. He should not allow his guilty conscience in that respect to come out so openly.

What guilty conscience?

The part he played in ensuring, from 1951 to 1954, that certain people would not be as well able to meet their ordinary needs as they would have been if the Government had not been changed in 1951.

I cannot see the Minister's point at all.

Senator Dr. ffrench O'Carroll also made a suggestion when he was speaking that I want emphatically to repudiate—as emphaticaly as I can. With all respect to the Senator, before I became a Minister I had very much more personal experience of income-tax inspectors than the Senator could possibly have had. It was part of my business to deal with them. I never found any such case in which tax inspectors utilised their position to impose on the taxpayer. I had frequent dealings with them then and I want to put emphatically on record that I always found that, when I had a good case to advance, I got the hearing which I felt I was entitled to get for that case, and that I got for my client the concessions to which he was legally entitled. I do not think that there is any suggestion throughout the business community such as Senator Dr. ffrench O'Carroll mentioned. I am quite positive that, if there was that feeling in Dublin, certainly I would have heard about it and somebody would have brought it to my attention either officially or unofficially, but no such suggestion has ever been made before.

I think it is quite true, however, on the other hand, to say that there has been occasionally some delay, that there are arrears in the collection of taxes, and that there are arrears of work in adjusting tax assessments. Those, I think, arise largely from the matters raised earlier by Senator Hayes. Sometimes the delay arises in respect of difficulties in assessing or in adjusting, to be more accurate, what is capital and what is income, but it would be very unfair, indeed, to suggest that these delays arise from what one might describe as deliberate perverseness.

I did not suggest that.

Far from that being the fact, my experience is that the inspectors of taxes go a very long way to help out people. That has been my experience as a Deputy as well. People have often come to me as a Deputy and told me that they were with an inspector of taxes who pointed out to them that they were entitled to such and such a concession—a concession of which they were not aware even though they may have felt they were entitled to further concessions.

I do not understand the case to which the Senator referred, when tax was demanded but rebate was due. If the Senator likes to send me particulars of that case or if anybody else considers there is any question of a taxpayer not being fairly treated, I shall have it at once examined by the Revenue Commissioners. It certainly would be an exception. If such a case did exist it would be an exception which we would wish to remedy with the utmost promptitude.

I am afraid I must differ from Senator Murphy who suggested at times that he had not seen any evidence of an insufficiency of capital for private enterprise. One of our difficulties in regard to private enterprise is that it has depended in recent years, owing to the necessity for expansion, on loan capital and not enough on share capital. I hope that in the future there will be more capital available for private enterprise so that private enterprise can modernise and develop out of new capital introduced rather than solely out of accumulated profits.

The Senator suggested that some people were salting away money and avoiding payment of income-tax on the money so salted away. I did not discuss that matter with the Revenue Commissioners but, from my own experience as a solicitor, I know that people may sometimes salt money away and that they get caught sooner or later. It is in that respect as in others that the old saying of honesty being the best policy is just as operative.

Senator Kissane referred to the matter of tax evasion. It is rather like another matter that I was asked for details of in the other House— smuggling. The income-tax code evader or the smuggler does not post us a notice telling us how much he evaded or how much he smuggled. On that account, the Senator will understand that it would be difficult for us to produce the type of statistics he asked for. We hope that the proportion will continue to go down and down and, as the proportion of evasion goes down and down, so will the burden on those who are paying their appropriate liability also fall.

Question put and agreed to.
The Seanad adjourned at 5.55 p.m. until 3 p.m. on Tuesday, 19th July, 1955.
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