Finance Bill, 1963—Report and Final Stages.

Bill received for final consideration.
Question proposed: "That the Bill be returned to the Dáil".

It appears to be inevitable that the Finance Bill of 1963 will shortly become law but it would be wrong to allow this occasion to pass without registering a final protest against it. I rise to do so because, in the words of the Taoiseach, this Bill effects a revolution in the tax structure of this country, a very undesirable revolution, I suggest. It imposes tax without regard to the capacity of the people being taxed to bear it. It imposes a tax on everybody, a tax on the poor as well as the rich. It imposes a tax which will equally affect the necessaries of the poor and the luxuries of the rich man.

Early on in the debate on this measure, there seemed to be some doubt as to whether or not it would affect the cost of living, but as the debate dragged on in the Dáil and as we discussed the measure in this House, it has become clear, and has been accepted by the Minister, that it will affect the cost of living; in other words, it is now agreed that the business people of this country are not philanthropists, that they are not enjoying huge margins of profit and that if they are to stay in business, they will have to pass this 2½ per cent tax on to the consumer. That is the first reason I object to this Bill, that it will hurt the people who are not in a position to protect themselves against it.

It may be said that organised labour will protect themselves by demanding an increase in wages. That may be so. It is, in fact, my opinion that that will happen, but there are very many people throughout the length and breadth of the country who have to buy food, clothes, boots and other necessaries of life, who will not be able to protect themselves against this iniquitous tax on the very existence of mankind in this country. It has been stated that up to now there has been no rebellion from anybody except the organised traders, but I venture to suggest that it will not be long after the 1st November until you have a universal outcry against the tax and a demand for increased wages all over the country.

In fact, it is not correct to say that there has been no protest on a general line against the tax. I must again refer to the by-election in the largest constituency in the country. The people there in no uncertain way by a vote of two to one registered a protest against the tax. In fact, the Government know perfectly well that this tax is not acceptable to the people of this country because on the Fifth and Final Stage of the Bill in the Dáil the Taoiseach used language which meant, in effect, that he believed that if the Government fell on this measure and went to the country they would be hopelessly beaten. I think that is a fair summary of the Taoiseach's speech in the Dáil. I can quote it if necessary. On the 17th of this month he said that if the Government fell on this measure the result would be that there would be unstable government for a long time. I do not accept that in its literal sense. I do not accept it as an admission from the Taoiseach that his Party would be defeated, that he would not have a majority on the issue of this tax, that other Parties would have the majority.

This tax is being imposed on the people against all advice. An independent commission on income tax, after hearing expert evidence, gave its report and advised that some sort of sales tax be introduced but it made two qualifications. The first was that exemption from tax should be given to goods essential for agricultural production, goods essential for industrial manufacture and goods for export, agricultural and industrial. Food, particularly essential food, fuel, newspapers, books, household non-durable goods, goods already subject to heavy customs or excise duty such as tobacco and works of art should also be excluded. That was their recommendation; that a tax excluding those items should be introduced.

It had a further proviso in its recommendation: the tax should be substituted for income tax or rather certain reliefs should be given. They recommended a minimum relief of 2/-in the £1 in income tax if even that limited sales tax were introduced. What have we here however? An all-embracing turnover tax that covers everything a person has to eat, to wear or to use and, at the same time, we have measures to ensure that more income tax will be collected as well as this sales tax.

The people who gave evidence before the Commission on Income Taxation consisted of professors of economics from three university colleges and each and every one of them advised against a sales tax. The Revenue Commissioners prepared a considered memorandum and submitted it to the Commission late in 1957 and for reasons, which I have given earlier, they advised against such a tax as this as costly to enforce, difficult to enforce and involving too many people. Therefore, you have the experts all against this and as far back as 1957 advising against the tax. The people of Dublin North-East a short time ago registered their protest against this tax and still it goes through by a majority of one vote in the Dáil. I do not think there is any necessity to labour further the turnover tax, which hits the poor person and hits the essentials of life and cannot be justified according to any standard.

I oppose this Bill on the ground that it creates another undesirable precedent in that it makes provision for the levying of tax retrospectively in the form of corporation profits tax. If the Government want to increase the rate of corporation profits tax and think it is necessary, they are entitled to do so, but the people of any country are entitled to know from year to year what tax they have to meet. When a business firm closes its books at the end of the financial year and has made provision for tax for the year which has ended it is entitled to say: "I have no further tax to meet here." The Minister, however, in reply to a query of mine on Committee Stage, admitted that under the provisions for increasing retrospectively the corporation profits tax, a company which has already paid tax in respect of an accounting period can now be called upon to pay a further five per cent tax in respect of that period. That is retrospection, and it is a bad precedent.

The Minister also admitted that under the provisions of this Bill very many limited liability companies whose profits for the year did not exceed £2,500 and who were free from corporation profits tax will now be told: "We have changed our minds; you must pay the tax."

There is a drive to induce foreign capital to come in here in the form of companies setting up industries and bringing with them their know-how and some foreign capital. We are expending a considerable amount of money on advertising in order to attract such companies here and to put before them the privileges and advantages to be gained, such as grants, cheaper labour,et cetera. I venture to suggest that this retrospective provision in this Bill will far outweigh any publicity we can engage in to attract foreign industrialists here. The amount involved in this retrospection appears to be £2½ million, and it is not worth it. The amount being taken in in the additional revenue in this Bill is £14 million, I understand.

There is another provision in the Bill which I violently oppose because it is quite unsettling to the people of this country, that is, the provision which coerces the commercial banks into disclosing the business of their depositors to the Revenue Commissioners. A lot of us here have knowledge in one way or another in dealing with the ordinary countryman, and we know from our experience that he wants to keep his business private. We know that he has a considerable amount of money on deposit in the banks because he thinks it is the only place he can put it where it will not be known to his neighbours and to the Revenue Commissioners. I say that the provision in this Bill which compels the banks to furnish a list of depositors of £1,500 and over to the Revenue Commissioners is a bad provision. Not alone will it put out of the banks large deposits but it will discourage the small depositor of even £500, £600 or £1,000 from depositing his money in the bank. He will refuse to do it because he will fear that his business will be known.

Up to now, it has been very difficult to get the farming community to invest in Government loans or even to put their money in the Post Office. The reason is that they fear their business would be known and that it would have some queer consequences for themselves. It is obvious from that that money which would otherwise be deposited in the banks will now be hoarded in small or large amounts in the homes of this country. The economy of the country in general will suffer as a result.

I do not wish to drag out this debate any longer than necessary, but I feel that this House should and must protest against this measure on the grounds I have given—the turnover tax, the retrospective provision in respect of corporation profits tax, and the interference with the confidential relationship of banker and customer. I sit down now after listening to this debate and reading all that has gone on in the Dáil and the Seanad, and having regard to the lack of intervention in this debate by members of the opposite side of the House, I find it indeed extremely difficult, in fact, impossible, to understand how they can support this Bill.

I agree entirely with what has been said by Senator Fitzpatrick, particularly his reference to the silence on the other side of the House. We all know some can be wiser in their thoughts than in their speech, and that, in all probability, is the reason why Fianna Fáil Senators have not intervened in this debate. This Bill is about to pass because Fianna Fáil have a large majority in the Seanad and there is therefore nothing we can do in the people's interests to prevent its implementation. Our Party in the Dáil and here have done their best to make the Government and the Minister see the light of day, but unfortunately without success.

Included in this Bill are two retrograde steps, two very dangerous precedents. First is the Minister's intention, despite the pleas in the Dáil and here, to proceed with the retrospective corporation profits tax. That is a very bad precedent because it will leave the way open for some even more unscrupulous Minister for Finance to indulge in further retrospective taxation. The second retrograde step is the Minister's decision for the first time to tax bread, butter, tea, sugar, flour, fuel, clothing and the other necessaries of life.

The Minister contradicted me earlier to say that Fianna Fáil removed a tax on imported sugar in 1932, put there to save the first of our sugar factories which had been described as white elephants. Many people, many Senators, are dismayed and annoyed by the Government's resolution to impose this retrospective taxation which adds up to a clear levy on capital, since last year's undistributed profits are part of this year's capital, used to run a business. Many people claim that this retrospective legislation is of doubtful legality under the Constitution and that, in all probability, it will be tested in the courts.

The Dáil and Seanad have fought successfully retrospective legislation of this type in the past. If we look back to 1958, we remember the Minister finding it necessary to take steps in the Finance Bill against dividend stripping, regarded at the time as a kind of legal raid on the tax fund. When the Minister brought in his proposals, the Dáil accepted them then, on condition that he withdrew their retrospective effect. There were lengthy discussions in the Dáil and the Minister had the good sense to appreciate the arguments against retrospective taxation, however right he may have been in attempting to stop that particular abuse at the time. He saw the light then and took it out of the Bill. At that time, Fianna Fáil Deputies spoke against the retrospective taxation.

We on this side of the House believe Fianna Fáil have no mandate to proceed with this legislation. In none of their published policies did they ever forecast their intention to put a tax on bread, butter, sugar, tea, flour, fuel, clothing, and if they had they would not be in Government now and they know that very well. As a matter of fact the provisions of this Bill are directly contrary to their published statements and policies of the past. The only opportunity the people got of protesting was in the Dublin North-East by-election where, for every vote cast for the Government, two were cast against them. That was the only opportunity the people got to show what they thought of this iniquitous tax. They rejected it, and if the country as a whole got the opportunity in the morning, the people would reject it.

What would Westmeath do?

What did they do to your referendum?

Would Senators kindly address the Chair?

The Senator asked me a question and I was replying to him.

I expect it is a waste of time at this stage to oppose the introduction of the turnover tax, around which discussion on the Bill has centred. In every other year, the main debate has been on the Appropriation Bill, the Finance Bill getting through in a few moments. The reverse has been the case in Dáil Éireann this year and I expect the same will apply here. When I see the commodities exempted from this tax, I begin to think. For example, we have earth, stone, gravel and cement exempted. Food for animals is exempted. Sales by farmers are also exempted because the Minister knows right well that there are no sales by farmers directly to the consumer. The farmer does not sell milk directly, the consumer having to buy it from the shops. The Minister knows this and knows that he will be assured of his 2½ per cent from milk. Potatoes are not sold directly.

The same thing applies to butter. There is no such thing as farmer's butter now: you must go to the shop for it and there you will pay the 2½ per cent tax. People would not have opposed this tax so strongly, had it been a device to provide concessions in income tax. Nowadays, Bord na Móna workers and forestry workers are among those who pay income tax. The latter class pay small amounts, if they earn over £7 a week. Bord na Móna workers pay a large amount of tax each week. If they had been given some relief in income tax, I do not think their opposition to the turnover tax would have been so great.

Senator Dooge recommended that butter be exempted. Is it not extraordinary that our people who emigrate to England can buy our butter there at 2/7d. per lb. while its prohibitive price here denies it to their brothers and sisters, to the farm labourer who earns £6 a week? That man has to pay 4/7d, plus 2½ per cent taxation. There can be no argument for putting a tax on food. One thing the Minister has in mind is that he will not face the country this year. He may face it next year.

I hold that he will.

The reason why I say he will next year——

This year or next year are not in the Bill. The Senator will speak on what is in the Bill.

I shall speak on what is in the Bill. Because of the turnover tax this year the Minister will be in a position to reduce income tax next year——


Hear, hear.

He will be in a position to increase social welfare benefits——


Hear, hear.

That is definitely politics, but it is not straight politics.

May I again ask Senators to address the Chair?

Next year as a result of this taxation—and the Minister will get nearer to £15 million instead of £10½ million—the Minister will have a few million pounds to play around with. He knows that the public have a very short memory. He will go to the country and say: "We have done a wonderful job. We have taken corporation profits tax retrospectively. We have taken 2½ per cent. Forget about that. We are giving you a Budget now and you will not have to pay any more tax." That is the way I see it. For quite a long time there has been agitation to have people in the middle income group relieved of the 10/- per day charge for hospital treatment. That would cost only £230,000.

The Senator is now going outside the scope of the Finance Bill.

I may be going a little astray but everyone went a bit off the mark on the Finance Bill. If the Minister had done one thing as a result of the turnover tax I might be voting with him. If he had done something about the farm labourers—

This Stage of the Bill is not concerned with what the Minister might have done. It is concerned with what he has done in the Bill.

I am not satisfied about how the money brought in by the turnover tax will be used. I suppose I can wait for the Appropriation Bill to raise that point. Our Party oppose a turnover tax on essentials. We have not opposed the corporation profits tax. We have not opposed any other items in the Bill, except the turnover tax. If the turnover tax were not in the Bill, we would probably be voting with the Minister. We in the Labour Party believe that taxation must be collected in order to run the country.

Why did the Senator not vote for the corporation profits tax the other night?

We are not in agreement with any retrospective legislation. We took no part, and we left it to the people who raised that matter. We have nothing to be ashamed of. We have been advocating corporation profits tax for years and the Government did not increase it.

We have done it now.

They did not do it for years. Those people were too good to the Party.

The Senator would not vote for it.

I oppose the final passing of this Bill which contains a number of highly undesirable features, the first of which is the widespread turnover tax. I think a majority in the country feel that a tax on essentials is wrong. It is scarcely necessary to debate that. It is a remarkable step from food subsidies to food taxation, and that is what we have come to in a space of ten or 12 years. Apart from taxation on essentials, a worse feature still is the uniformity of the tax. When we find we have to pay exactly the same tax—an increase of 1½d—on a glass of whiskey, on a dance ticket and on a lb. of butter, it is shocking. We all know there are some commodities that could carry a great deal more taxation, and certainly any tax which equates a tax on butter with a tax on whiskey is obviously wrong.

The tax on a mink coat is roughly the same as the tax on a suite of furniture, that is, a tax of 50/-. Perhaps you might not get a very good mink, but that would be the tax on an average mink. There is something wrong with that equation. Likewise if you buy a watch, or a necklace, or any article from a jeweller, if you are in the mood for a slight luxury, you pay a tax of something like 5/-, the same tax as you are now asked to pay on a ton of coal. Again, I submit there is something wrong with that equation.

Let us now take the question of travel. If you are so patriotic as to decide to take your holidays at home rather than go to the south of France or Spain, you will pay turnover tax on the food you eat, and probably also on the increased wages that will follow from the turnover tax. In short, the price of your holiday at home will go up. You can go abroad with impunity and there will be no tax on what you pay to the airlines. Neither is there a tax on the money you take out of the country. Again, I submit there is a lack of justice in that equation.

I do not want to drag out this debate but there are one or two other features with which I want to deal. The next objectionable feature of the tax is the arbitrary manner in which it is levied, and the absence of regulation in the manner in which it is levied. The shopkeeper is to collect 2½ per cent, and it does not matter how he collects it. The Bill makes no provision for that, and the Minister has not taken any power by order to regulate that. The worst feature of the Bill is that we are handing over to the chain stores a mighty weapon with which to completely destroy the family grocers.

Two and a half per cent is a small price to pay to put the local grocers out of business. That is what will happen on the passing of this tax. You will find the big chain stores advertising: "We pay your tax. Butter at the same price as before. Bread at the same price as before." The local shopkeeper will have to put up his shutters and then, when he has done that and left for England, the chain stores will charge not only two and a half per cent but will say that they have also to charge their own expenses and overheads and you will be paying four per cent or five per cent instead of two and a half per cent. That is the worst feature of the Bill. The Minister could have legislated down to the last detail to prevent the use of this measure as a discriminatory measure by the chain stores.

This tax is claimed to bring in about £8 million in a full year. A certain amount of that will have to be given back by way of social welfare benefits so that if all our future expansion depends upon £8 million in this way it is a very small item when one considers that we are raising a Budget of £169 million in the same year. If the return from this turnover tax were to be £32 million or £35 million, there might be some justification for the extravagant claims of what it is going to do. I say that we are now setting up this tax as a means of increasing taxation but we are also permitting it to be used in a very discriminatory and ill-advised manner.

However, we can now do no more than register our protest at the Bill and hope that the many bad things we believe are in it do not come to pass. We hope that if the results of the Bill do turn out to be serious the Minister and the Government will not hesitate to step in before the family grocer has packed his bag for England because he has been taxed out of existence.

Senator L'Estrange was complaining about the silence on this side of the House. That silence was due to the fact that, having read the reports of the debates in the Dáil during the three months since the Budget was introduced, people on this side of the House felt that since Fine Gael or Labour did not reveal to the Dáil any alternative proposals to the turnover tax or any alternative way of raising the money, they must be reserving that secret weapon for the debate in the Seanad. So we sat and listened to Senator L'Estrange reading out that long harangue which he could more usefully have put on tape and played in the ante-room where we could have listened to it from time to time. However, even Senator L'Estrange did not produce the alternative or any evidence to show that the turnover tax would hit anybody unfairly.

Is this in the Bill, a Chathaoirleach?

An Seanadóir Ó Maoláin.

If there are rules for this side of the House, there should be rules for the other side of the House.

Senator Quinlan brings up the usual bogey man and I suppose Senator Quinlan would find himself in agreement with the statement made by Senator Fitzpatrick about the Bill when he said:

The very existence of mankind is threatened in this country by the Bill.

How Fine Gael could expect anybody to take statements of that kind seriously is beyond my comprehension and how anybody could be expected to place any credence in their statements when, during the debate, they have failed to suggest an alternative and failed to show any other way in which the money could be raised which would be as fair as this turnover tax is also beyond my comprehension.

The turnover tax does not, as Senator Fitzpatrick said, hit the poor because the social welfare beneficiaries to whom he referred will get more than they contribute. As the Minister pointed out, 1,300,000 are covered by this and the remainder of the people can well afford to pay the two and a half per cent. I do not think they are going to complain about it either, despite the organised effort made by Fine Gael to get them to do so. Senator Fitzpatrick said that the tax was being imposed on the people against all advice. Against whose advice? Against the advice of a group of grocers who attempted to use political pressure to further their own interests. I remember the scarcity during the Emergency and I cannot see anybody weeping salt tears about the grocers. I do not think they are going to lose anything as a result of this and I do not think the prophecies of vast increases in prices are going to come true. Competition will regulate prices to such an extent that not even the most rabid members of RGDATA will have an excuse for not charging honest prices for what they have to sell. "The very existence of mankind is threatened"— Senator Fitzpatrick should remember that expression for all time. We heard quite a lot about majority rule.

Majority rule does not arise on this measure.

I submit that the one vote by which the Bill was passed in the Dáil is majority rule.

It does not arise on this Bill.

If Senators on the other side of the House were allowed to discuss the one vote, surely I should be allowed to discuss that one vote also.

Hardly on the Fifth Stage of the Bill.

The Bill was passed by the Dáil and Seanad.

It has not been passed by the Seanad yet.

It was passed in the Dáil by one vote which made a majority. It was passed in the Seanad by much more.

It ill becomes the people who opposed the proposition which we put to the country some years ago to replace proportional representation by the straight vote to criticise now the narrow majorities which are inevitable under proportional representation.

That matter does not arise.

According to the Opposition, we have not a mandate to proceed with this legislation. We have a mandate to govern and to ensure that the finances of this country are kept in order. We have a mandate, through the confidence which the electorate placed in us, to ensure that every citizen in this country gets a fair deal. That is precisely what this Finance Bill ensures. It enshrines the Government's policy of a fair deal for all citizens and the Government's intention of ensuring that the social welfare beneficiaries of grants and schemes of assistance will not lag behind whenever organised groups of labour are able to obtain advances in their own standard of living.

It is quite obvious, since we are on that point, that our social welfare system lags behind not only our neighbouring country but many of the more progressive countries in Europe and it is quite obvious that we must improve it. It is obvious it will require money to improve it and if this turnover tax, which will not bear heavily or unfairly on any section, will bring in more money to enable the Government to bring social welfare benefits up to the standards which prevail in progressive modern democracies, it will be well worthwhile and the people will appreciate what is being done.

If we do not keep pace with modern democracies in our social attitude and outlook, then we will slip back, instead of going forward. It is necessary that we should have more money to do this and this is one way of getting it. I am quite certain that nobody with commonsense will criticise the Government for having taken the steps they are taking under this Bill, to ensure sufficient money is raised as painlessly as possible. This Bill has been before the Dáil and Seanad for the past three months, since the Budget was introduced in the Dáil, and we have not heard one suggestion from Fine Gael about where the money would come from if the turnover tax were not introduced. Neither have we heard any alternative proposals. When asked about this, they have fallen back on the quibble that it is no part of the duty of the Opposition to suggest ways——

It was the Taoiseach who said that.

I recommend them to look at the record and the attitude of the British Labour Party who are hoping to be, and look like being the next Government in Britain. In the speeches of Mr. Harold Wilson and Mr. George Brown and other leaders of the Labour Party, their policy is put down in black and white. If they would take an example from a modern democratic State and Party, then perhaps we might take some notice of their opinions——

We shall be discussing the ex-Minister for War in England next.

When they fail to suggest any alternative and when their talk is froth and bubbles, nobody can take them seriously. This tax will be law and in due course it will achieve the results it is designed to achieve. We shall have a balanced Budget and the social progress which we have made under Fianna Fáil will be continued, in spite of Fine Gael and in spite of the obstacles created by the political, organised attack of a section of the grocery trade. It is indeed one of the most remarkable features of this opposition to the Budget and the tax that only those particular shops and people took part in this organised opposition. All the other traders, as far as I could see, were completely silent.

Dublin North-East.

When this Bill is passed, the country will be happier for it.

I should like to comment on one point raised by Senator Ó Maoláin. He said that the Opposition had been lax in not revealing their alternative proposals. He also asked us to look to Britain as an example. I want to say categorically that the British Labour Party have not revealed their future taxation policy. They have talked a good deal about policy but have not said what the taxation policy will be. It is still a matter for speculation as to whether a capital gains tax, a capital tax, or some other sort of tax will be brought in under the first Labour Budget in the British Parliament. The British Opposition do not reveal, and there is no onus on any Opposition to reveal their taxation policy.

I suggest that the Senator should read what Mr. Wilson and Mr. George Brown said within the past 14 days.

I do not think it makes for good legislation to have recriminatory remarks of an extremely savage political nature used in a debate of this kind. All our people are affected by fiscal legislation, whether Fianna Fáil, Fine Gael, Labour or of any other political affiliation. This Government, if they continue as a Government, will regret this legislation on three grounds. They will regret that they adopted this form of tax which in many cases operates as a tax on a tax—at least double—and which of course will give rise to the easy trend of increasing it if money is needed for some purpose or other. Secondly, there is the retrospective nature of the legislation which, while it might not go so far as to be not in accordance with practice, or unconstitutional, or come under any of the heads of legislation that are not in accord with tradition, nevertheless is an undesirable feature of legislation and gives rise to a precedent that might well be abused. Thirdly—and this is really the most important point—it will have an extremely bad psychological effect on our people. It will make them live in what I might call financial terror from year to year, not knowing what is going to happen, whether we are to have a 2½, 3½, five or ten per cent tax.

It is all very well to say that the shopkeepers and those resenting this tax are afraid it will have other repercussions, that they will have to make returns which will involve them in greater income tax or even surtax. As a people, our whole history has made us look unkindly upon taxation. We have inherited that and it is extremely bad when a native Government impose something by way of a fresh tax without any relief in the matter of taxation. This makes our people feel very badly. That is probably the most important aspect of this particular matter because all shades of opinion will admit that it is a very long time since popular feeling was so stirred, and the protest came from the people themselves.

There are accusations that one Party, the Party to which I belong, organised groups such as RGDATA, chambers of commerce and such people who have made an active study of the matter and have made their protests in an orderly way. I think I am stating what is the truth when I say our Party did nothing to organise that. As a matter of fact, I think that, if they did, it would not have been such a unanimous protest as it was. I understand traders of all shades of opinion took part in protest marches and even resolutions were passed by local authorities. From that point of view, the popular feeling stirred up is as indication of the great resentment that is felt.

Somebody has said there was no protest on behalf of the consumers. The consumers have only one way of making a protest, that is, through a ballot box. So far, they have not had any nationwide opportunity to do so. While I do not venture to prophesy, I shall go so far as to say it will have a repercussion.

There have been references to the result of the by-election in Dublin North-East. That is a city constituency and in so far as the city is concerned, it is an indication of how the people feel in relation to this tax. So far, we have had no indication of what the reaction will be in a rural constituency. Accordingly, from a national point of view, it is too early to make an assessment as to what reaction this turnover tax will provoke from our people, both urban and rural. However, the House can be quite certain that there will be a reaction. Whether it will be big, small or middling, is a matter which I am not prepared to prophesy.

I want to reiterate what Senator Dooge has just said. It is not the function of an Opposition to disclose their policy and particularly their taxation policy, either between elections or immediately before an election. I belong to the school of thought of which the Taoiseach is the leader when I make that statement because he is on record as having gone so far as to say that.

I dislike to use the label "political Parties" in this House because I subscribe to the vocational idea, however little it is manifest in this House. I think that if we made an effort to subdue our political feelings in discussing matters of this kind that affect all our people, we would probably get a good deal further. We had a very good example this afternoon in the course of the discussion of recommendations. Senator Ross and Senator Jessop and many others appealed on behalf of the Zoo. There were appeals also to exempt books from the turnover tax and there was the question of hire-purchase. I could not help feeling that these recommendations, having come dispassionately from a very independent part of the House—university representation—made the Minister sympathetic: in fact, he was. I should imagine that if he had a free hand, he certainly would have gone a long way to meet them.

It is in this House, particularly at this time, having regard to recent events, we must take a full hold on ourselves not alone in discussing the Finance Bill but in discussing everything else and make an earnest and true return to standards that are so urgently required in our public life.

Have a word with Senator L'Estrange.

And with the Leader of the Government Party.

There you are.

I want to refer to the word "retrospective". There are few people in this House with a more analytical mind than Senator Lindsay. I am sure that when he used the word, he used it in all good faith. I wholeheartedly agree with him that, in a matter such as this, which concerns all our people, we should endeavour to give the facts to the people as they really are.

An ill-educated democracy, a democracy which does not understand the principles of its taxation, is a democracy that ultimately will not survive. It depends on how you use the word "retrospective".

The very same principles apply to income tax, surtax and corporation profits tax. For all three, the yardstick upon which you pay your tax this year is the yardstick of the profits which you made during your accounting period last year. There is no difference whatsoever. That is a fact that is beyond controversy.

During the some 40 years this State has been in existence, the rates of income tax and surtax went up and went down on many occasions. This is only the second occasion on which the rate of corporation profits tax is being altered. The very same principle has been applied to corporation profits tax as has been applied to income tax and to surtax. That is absolutely beyond dispute. I am dealing with these accounts constantly. I know there is absolutely no doubt whatsoever about it. Why, then, apply the word "retrospective" to corporation profits tax and not apply it to the others?

There is a very grave danger of misinforming and misleading our public. It is retrospective in all three cases, if you will, but it is charged on the profits in the previous accounting year and the profits shown in your accounts are the profits you return.

With great respect to Senator Lindsay, if he will pardon me, I feel it is a disservice to the general public to misinform them in a matter of that nature that has been repeated over and over again because one comes to feel ultimately that people will not repeat matters of that nature unless they are accurate. It is absolutely beyond controversy that it is inaccurate. That is the only aspect of this Bill with which I propose to deal at this stage. It is only fair to the public and fair to the House that that matter should be put beyond doubt.

Senator Fitzpatrick started off by saying it is incredible that the Finance Bill may shortly become law.

I do not think so.

I might be excused for starting with that sentence after such a long struggle to get the Bill through both Houses. The Senator went on to say that the Minister for Finance had accepted the fact that it would affect the cost of living. It is not true, as Fine Gael speakers tried to make out in the Dáil—I do not say Senator Fitzpatrick said the same thing here but it might be taken as the same— that I had come to admit that, because I said it in my Budget speech. I said that as this tax—perhaps not in such plain words—would be borne by the consumers, it would therefore be necessary to compensate the social welfare classes. If I did not believe it, I would not have tried to provide £4 million for the social welfare classes this year and whatever it will be next year. There is no doubt that I always believed this tax would be passed on to the consumer. I believe every tax is passed on to the consumer.

You said in last year's Budget speech that, with the help of God, you would give another 2/6d. this year.

So we did.

It does not cover the turnover tax then.

It does.

It cannot do both.

That does not say what the cost of living will be in mid-November. We do not know what movements there may be in prices in the meantime. The cost of living may be up more than 2½ per cent or down more. That is a different matter.

Senator Nash dealt with the corporation profits tax better than I can and I am not going to go into it again, except to say to Senator McAuliffe, who gave his excuse for not supporting the tax the suggestion that it was retrospective, that he must have taken that interpretation from the Fine Gael Party.

From the chambers of commerce and every accountant and auditor in the country.

He certainly did not take it from us.

The chambers of commerce are not members of the Fine Gael Party.

I hope not. Senator Nash has made it very clear that it is ridiculous to call it a retrospective tax.

He said all taxes were retrospective, including income tax, but PAYE is not.

A second ago, the Minister said it was only Fine Gael who preached that. Now he is admitting it.

Senator L'Estrange is at pains to prove that the Labour Party are not taking anything from them, that they are listening to the chambers of commerce rather than Fine Gael for information. I wish they would do that at all stages.

They are using their own brains. The Labour Party have brains as well as Fianna Fáil.

An Leas-Chathaoirleach

The Minister, without any interruptions.

Senator Fitzpatrick went on to criticise the provision requiring the banks to disclose those who are getting more than a certain amount of interest in a year. It is hard to understand why any responsible Party should object to this. If income tax is to be imposed, we can only make the burden equitable and fair and as light as possible on everybody by making all those who should pay income tax pay it. If it is impossible to get the information necessary except by requiring the banks to give it, I think we are right in asking the banks to do so. I did not think any Party would try to defend people who are not paying tax by depositing their money in the banks.

I do not want to frighten people who are not liable.

Since I became Minister for Finance, I have always gone as far as possible to ensure that any tax I found it necessary to impose would be paid by everybody and that there would be no avoidance. That is only fair. Senator McAuliffe gave us the impression that if we had imposed other taxes, he might support them. That would be a change for the Labour Party as they have always opposed every tax we put on from the very beginning.

So did Fianna Fáil in 1956.

Would the Senator allow me to go on? If we did oppose it, we did not say we would support the taxation. The Labour Party gave the impression that they would support taxes but they have never agreed to any tax imposed. They have opposed taxes on tobacco, beer, spirits and income tax, every tax we put up——

We never opposed income tax.

You voted against income tax in 1952. Look up the debate in the Dáil. I am positive about that because I quoted it to the Labour Party in the Dáil very recently.

The record is there.

We voted against taking off the subsidies.


The Labour Party voted against it and they will always vote against any tax the Fianna Fáil Government put on.


An Leas-Chathaoirleach

Perhaps the Minister could be allowed to speak without interruption.

Is the Minister to be allowed to speak without interruption or not?

An Leas-Chathaoirleach

I am endeavouring to see to it that he will.

Senator McAuliffe also talked about the cheap butter there was in England compared with here. That is a very big question that has been examined not only by the Minister for Finance and the Minister for Agriculture in this Government but also by the inter-Party Government. They defended themselves on that issue. I presume Senator McAuliffe was a supporter of the inter-Party Government and I am sure he listened with great interest to the explanation given at that time. The same explanation holds now. It is the only way that can be thought of by any Government by which we can get a remunerative price for milk producers.

Would I be right in saying that butter was only 3/9d. per lb. at that time, so that the difference was not so great?

It does not matter about the difference——

The difference was only 5d.


Sir, can anything be done to suppress Senator L'Estrange and permit the Minister to continue without interruptions?

According to Senator L'Estrange, it is all right to do it when it costs only 5d. but when it goes to a shilling, we cannot do it. It may be that it cost only 5d. at that time. Last year, for instance, the price in England was the same as here, I think; in fact, I think, it went higher at one stage. Now it is almost the same again. I am talking about the principle of subsidising butter for export in order to keep the price up for the farmers' milk.

Senator McAuliffe went on to say that the Government were very anxious to hold out because they could hope to give very good concessions in the Budget next year—lower income tax and take some taxes off altogether— and then go to the country. It is evident that the coalition Parties—to group them in that way—are dreading that situation. They know that all this legislation we are putting through now can be made to appear awful to the people and if they could appeal to the people now, they might get a majority. I am not sure that they would.

The Taoiseach seems to think so.

They are very much afraid that when these things come into operation, the turnover tax will not be such a terrible thing as it is now made to appear and that it will make very little difference to the cost of living, that the Government will go on and do good work and the people will see that Fine Gael and Labour tried to deceive them but they will not allow themselves to be deceived again.

The little boy whistling in the dark.

They may be right in that. I admire their political sagacity at present but it is not much good because it will not work.

I agree with Senator Lindsay in deploring recrimination in these debates and that we should make an effort to subdue our political feelings. I shall have great pleasure in telling my colleagues what Senator Lindsay said.

Before I sit down, I want to congratulate the Seanad, as I did the Dáil on doing such very good work in passing this Bill. I do so for two reasons, first, because they have agreed to a tax which every country in Europe, and most countries in the world have found to be the best tax ever introduced. The experience in all these countries is that there is no Party in any one which would dare suggest that the retail or turnover tax could be substituted by some other form of tax. The Oireachtas is, therefore, to be congratulated on passing this measure. This will be one of our major taxes in future.

Major is the operative word.

Any tax yielding £10 million is naturally a major tax. This will be one of our best taxes. I also want to congratulate the House on its action in very plainly telling a pressure group that there is no use trying to intimidate the Parties in this House of the Oireachtas; it will not work, and they had better try some other method in future if they want to be listened to in matters such as this.

Question put and agreed to.