Has the Minister given any consideration to the matter I raised on Committee Stage in relation to death duties where the person left is a widow with children, who are dependent within the meaning of the Income Tax Acts?
Finance Bill, 1961 (Certified Money Bill): Report and Final Stages.
Bill received for final consideration.
Question proposed: "That the Bill be returned to the Dáil."
I should like to take the opportunity of thanking the Minister for undertaking to investigate the quality of Irish petrol. I hope that his investigations will include performance tests as well as analyses of the octane ratio and so on. The fact is that a good deal gets past these chemical analyses and what matters to the common people of Ireland is that they should get as good mileage as the people of Britain and that their engines should do as well on Irish petrol as on British petrol.
I want to make the point that, in my opinion, this Finance Bill is, from the social point of view, one of the most reactionary Finance Bills ever introduced in this country. In essence, what is in the Bill? The Minister is to give a concession to income tax payers of a couple of million of pounds per year.
That is news anyway, that a reduction in income tax is reactionary.
I do not know whether the Senator has read the Bill or not.
I have, indeed.
Perhaps the Senator will let me finish my argument——
I am sorry.
——and he will then perhaps see what I mean by the reactionary nature of it. The other end of the Bill means, in essence, an increase in the duty on tobacco which will bring in, I think, £1.2 million per year. The purpose of that in theory—and of course it is a completely reactionary theory—is that some part of it will be given in the form of social welfare benefits. I would object to it even if the entire amount it yielded were given in the form of social welfare benefits because it is a wrong approach in state finances, completely wrong in its essence, but it is doubly objectionable when in fact all the Minister is giving to the social welfare beneficiaries is half the amount he will collect from the tax and is giving the other half somewhere else.
The pretence is that this concession on all sides to the income tax payers is to develop the economy and that it is offset, on the other hand, by these miserable concessions to the social welfare recipients, concessions which do not even compensate them for the increase in the cost of living over the past 12 months. That is what makes it an extremely reactionary Bill. If the Minister should find himself back in office after the next election, it would not surprise me in the least to find him coming back to the House in November in the same way as another Chancellor had to go back to Parliament yesterday across the water.
It is very well and fine to talk about this increase in social welfare benefits but the fact is that the persons who have to make social welfare contributions—I am talking about the workers —have had their contributions increased already this year from 2/9d. to 4/9d. And for what? In fact, to make payments to people, payments to which those old people had not contributed at all, the so-called contributory pensions.
That is not in this Bill.
With respect, it is. There is reference to social welfare contributions in this Finance Bill in Section 10—contributions and benefits under the Social Welfare Acts—and I am putting those matters together. Do not forget that those paying these increased social welfare contributions each week will not get anything back out of it for 30 or 40 years, the great bulk of them. If the Minister had given these miserable increases in social welfare benefits without putting this penny on tobacco and without putting part of the yield of it somewhere else, I would have said: "Well, this is some concession to the people who are paying large increases for which they will get nothing for many years to come, the great bulk of them, unless they happen to become ill or unemployed." In a normal community like this, many people go right through until they draw their old age pensions without becoming ill for any lengthy period and without being unemployed.
Take another example. Take the stamp duties in Part IV, Section 29— Termination of Stamp Duty on Receipts. We all know that there was evasion of an objectionable kind with this small stamp duty. We also all know it was a bit of a nuisance. The ordinary person in the community who has to pay an extra 1d. on his cheque will make a much bigger contribution to this than the great semi-State organisations.
Take, for example, the E.S.B. which will benefit enormously out of it. It will not have to stamp any receipts for payment of electricity bills from now on. It would issue infinitely more receipts than make payments. Therefore, it will gain very substantially. In other words, small though it may be, it is a reactionary transfer of taxation. It is regressive and an example of the Tory mind. Why did the Minister simply not abolish the blooming duty and leave it at that? I suppose he will say he could not afford to lose the £100,000, or something like that. Then we hear that there is not 1d. for anything or that there is too much money: you go from one extreme to another within a period of a few months.
There is a good deal of discussion about stamp duty on cheques and its abolition on receipts. For a very long time, there was no stamp duty at all on cheques in many countries. It was not until just before the recent war that a small stamp duty was imposed in the United States. A penny would be sufficient, if one thinks of it. As somebody has pointed out, this rate of stamp duty on cheques is the highest rate in the world. That being so, I take it that our cheques are by no means the largest in the world. In the western world today, the ordinary cheques passing in this country must be the lowest except in the United States where the habit grew up, when they were free of duty, of writing cheques for as low as a dollar in big numbers. This has a double effect. It is the highest rate in the world. With the exception of the United States, we use cheques for smaller sums than other countries. This adds up to an extremely reactionary Finance Bill.
On Committee Stage, I raised the question of certain amendments to the section dealing with death duties, that is, that a widow with children entitled to refunds under the Income Tax Acts, that is, children under 16 years of age or children undergoing a full-time course of instruction, should be regarded as different from other people, that it would be simple to make the widow not liable for the first £3,000 and each child not liable for £2,000 and £1,000. Has the Minister given any consideration to that?
In reply to Senator Stanford, I made some inquiries—I cannot say they were exhaustive. I was not able to verify what Senator Stanford said that the quality of petrol here is lower than that of petrol in Northern Ireland and elsewhere. We have not got the highest grade of petrol but the first grade here is the same grade as is sold across the Border and in England. My information is that it is much the same; I am told it is the very same. I do not mean to drop the inquiry at that stage; I intend to go a little further. The Senator also said it is dearer here but that does not hold any longer.
With regard to Senator O'Donovan, I think what I said about the tobacco tax was that half of it was devoted to relief for farmers and the other half to extra benefits for social welfare classes, which I still believe was well worthwhile. The purchaser of cigarettes or tobacco can regulate his purchases and buy a little less, if he thinks well of it. Both the farmers and the social welfare classes needed some help, I considered, at the time of the Budget. There was an estimated increase in the yield from income tax. Part of that was devoted to concessions on income tax but, even with the concessions, there will be an increase in the yield from income tax during the coming year, I expect.
I do not understand the Senator's attack on the increase in contributions for social welfare payers in order to give them a contributory old age pension. The Senator's point was that the person who is paying that contribution now may not benefit for 30 to 40 years to come. He may benefit much sooner. That is a feature of every superannuation scheme. We cannot very well bring in a superannuation scheme that will become payable, say, six or seven years before the benefit accrues. It always applies to the people in the particular occupation, whatever it may be, and it is lighter in that way. It is a feature of every superannuation scheme I know of.
Removing the stamp duty on receipts and putting an extra 1d on the cheque is leaving the transaction 1d less. A person signs a cheque. It costs him 1d more. He gets a receipt back which costs 2d. less to the person who gets the money. If the ordinary laws of commerce work, with the costs and so on of the businessman determining the price of the article, there should be a slight gain in the transaction as a result of this change. I agree with the Senator that there was a great deal of evasion of the law relating to stamped receipts. It is a good thing, if at all possible, to get rid of these means of evasion. It is a much better thing to have a system under which the law will be obeyed. I think it will be obeyed, now that the stamp duty comes on the cheque instead.
Senator Hayes raised a question, which indeed appeared to me to be a case that would excite anybody's interest, of a person leaving an estate, especially a young person with a wife and family, and felt that there should be some easement of death duties, whether it would be done according to age or whatever way it might be done. As the law stands, there is a considerable advantage in the case of an estate left to a wife and children. Let us take the ordinary estate duty first. In the case of ordinary estate duty, let us say, a man dies and leaves his place to his nephew. Death duty there is paid if the estate is worth more than £5,000. The nephew who inherits also pays five per cent. legacy duty.
In the case of a man leaving a wife and family behind and leaving all his estate to them, it is true that he pays the same amount of death duty—if it is more than £5,000, he has to pay death duty—but there is no legacy duty payable up to £15,000, if it is all left to the wife and children. Even if the estate is higher, then the legacy duty would not be charged to any particular individual in the family who receives less than £2,000. So, the payment therefore is considerably less in the case of an estate left to a wife and family. That is the position as it stands at present. However, I do intend to consider the matter raised by Senator Hayes. I may find that it would be very difficult to do anything about it. As far as I have studied estate law, it is a difficult matter and to make any exception might land us in endless difficulty. I am not sure it can be done but I should certainly like to investigate it further.
Question put and agreed to.