Seanad Éireann debate -
Wednesday, 8 Mar 1967

Vol. 62 No. 15

Income Tax (Amendment) Bill, 1967 (Certified Money Bill): Second and Subsequent Stages.

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

Minister for Finance (Mr. Haughey)

I am asking the Seanad to give this Bill a Second Reading. Senators, I think, are fairly well aware of the circumstances in which I have felt compelled to bring this Bill before the Oireachtas. The object of it is to prevent certain provisions of the Income Tax Bill of 1966 coming into effect, when the Bill, as a whole, comes into effect. As the House is aware, the Income Tax Bill of 1966 is a consolidation measure and, as such, it must restrict itself to reproducing the existing statute law. Most Senators are familiar with our consolidation processes and the machinery by which we attempt to consolidate our statute law from time to time.

Under our Standing Orders, it is not possible to include in a consolidation measure any substantitive amendment of existing law, whether by addition or substraction. The Joint Committee of both Houses which considered the Bill was obliged to work within those terms of reference. I want to make this point perfectly clear and to refute any suggestion that the Government, the Oireachtas or the Committee were in any way at fault in the handling of the consolidation measure. The Committee, which included Members of this House as well as Members of the Dáil, did a very excellent job in considering a complex piece of legislation. Indeed, it is a measure of the thoroughness with which the Members performed the task allotted to them by the Oireachtas that they, in fact, did specifically advert to the doubtful constitutional validity of some of the provisions of the Bill. However, they were unable to make any specific amendments of the existing law. They did specifically refer to section 483 which dealt with the power of the Revenue Commissioners to lodge a person in gaol for the non-payment of income tax. When that issue was raised with the Committee, I informed the Committee that I would undertake to look at the section concerned. I also gave them an assurance that I would either repeal the section entirely or else modify it in some way which would make it acceptable to the Oireachtas, in the first instance, and make it conform— in so far as our judgment to measure this matter was competent—to the constitutional requirements. I am very glad to be able to say that the Committee unhesitatingly accepted my assurance and the Bill was duly returned to both Houses of the Oireachtas on that basis.

However, when the Bill went to the President for signature he had—as indeed had some members of the Committee—some doubts apparently as to certain provisions in the Bill and he decided, in accordance with the Constitution, to consult the Council of State with a view to referring the matter to the Supreme Court to test it. In these circumstances, it seemed to me and to the Government that the sensible thing to do at this stage was to bring in a Bill to the Oireachtas seeking to delete from the consolidation Bill, when it will become law, the provisions which have given rise to doubts, so that we will be able to have the benefit of this consolidation measure as and from the 6th April next. I think this is something which everybody desires. It is something which is eagerly awaited by a large section of the business and professional community and it would be a pity if we did not succeed now at this late stage in having this enacted into law.

It is for that simple reason I am asking the Seanad to give me the Second Reading now and I hope they will be kind enough to give me all Stages today so that the Bill may go to the President for signature this evening. As I explained in the Dáil, we have got into a difficult parliamentary situation by virtue, if you like, of two more or less conflicting matters or requirements. On the one hand, we have our own procedure for consolidating our law. It is very specific and it compels both Houses of the Oireachtas and Committees of both Houses to operate within very strict and clearly defined lines. We cannot change the law.

That is one of the sets of circumstances which are operating on us in this situation. The other, of course, is the necessity for legislation to conform with the requirements of the Constitution. It is in an endeavour to find a path between these conflicting requirements that this measure is before us and I hope the Seanad will see it as I do, namely, as a sensible parliamentary device to enable us to get ahead with this worthwhile piece of consolidation legislation which is eagerly awaited by so many people.

Mr. Garret FitzGerald

The Bill in general is acceptable though there is one query on it which I should like to raise, and I think I shall raise it on the Second Stage so that we may hear the Minister's view before we proceed to the Committee Stage. There has been ill-informed comment on the situation which gave rise to this Bill. Particularly, the Radio-Telefís Éireann correspondent did not seem to understand what was involved in Consolidation Bills. This is certainly unfortunate, but the Minister endeavoured to put it right later on the radio.

It is arguable all right whether the Committee dealing with this Bill should not have waited, having had the Minister's assurance and, presumably, not having any doubt that he would not carry it out, but it would have been better to have brought in a Bill of this sort before the Consolidation Bill itself. The suggestion that the Committee did not advert to this problem is entirely incorrect.

The problem I have about this Bill relates to its Title. The Bill is described as an amendment Bill, and, if it is to become law, it must go to the President for signature. So must the Consolidation Bill, if I understood the Minister correctly. This Bill cannot properly be described as an Income Tax (Amendment) Bill when the Act it is proposed to amend will not be law. It might be called the Income Tax (Prospective Amendment) Bill. The meaning of the word "amendment" as I understand it—the Minister will no doubt put me right if I am wrong—is to amend an Act in existence at the time it is introduced. We should, therefore, reconsider the Title and also section 2 of the Bill for that reason. The Minister may be able to suggest reasons for the present Title, and I should like to hear him on it before we discuss the matter further on Committee Stage.

In general, on this side of the House, we welcome the alertness of the President to the possibilities of the Bill being unconstitutional. I had occasion to raise in this House last week the position in relation to criticisms of the Constitution by a Minister. The Constitution is, indeed, a great safe-guard of our liberties and the whole system under which Acts of the Oireachtas can be found to be unconstitutional is one which we regard as of great importance. The fact that the President on this occasion took initiative shows that the constitutional mechanism is working well. One may wonder why he took this action in this instance because there have been cases of other Bills in respect of which the constitutional character of them might have been raised. Some people have suggested that the fact that this action was taken may indicate that it may be a good thing that an Attorney General should appear against the Government before becoming Attorney General so that he might learn something of the other side of the case which he might bear in mind later on.

Mr. Murphy

We, too, are not opposing this Bill. We do not oppose the proposal to take the other Stages this afternoon nor are we opposing the motion for early signing of the Bill by the President. I think, however, that the Government stand condemned by the necessity to have this measure. What happened in relation to the Consolidation Bill is as described by the Minister. A Consolidation Bill could only consolidate existing legislation, not alter it in any way. It became apparent that there was doubt about certain provisions of the Consolidation Bill which were taken over from British legislation—that they might not stand up to our Constitution. Surely the proper course then was for the Minister to promote legislation to repeal that portion of the existing law and then to consolidate the position in a Consolidation Bill. I do not think it is good enough for the Minister to give an assurance that he would do it at the earliest possible opportunity, in the meantime giving us an undertaking that he will not, in effect, allow the law as it stood to be applied—in other words, an undertaking that the Revenue Commissioners in the meantime would not exercise the right to put people in jail for non-payment of income tax.

The Minister may remember that when we were dealing with the Appropriation Bill recently I was critical of the attitude of Ministers of this Government in relation to legislation passed by the Oireachtas. I do not know how we as a democracy stand in this matter. I have mentioned a few cases where Ministers either failed to apply the law or did things which they called administrative actions which were not provided for in existing legislation. I am not clear in my mind as to how Ministers stand on the application of the law. There is a certain amount of discretion. We can, for instance, pass road traffic legislation but it does not necessarily mean that the Minister must see that the civic guards rigidly apply the law and prosecute in all instances where the law is broken.

That may appear extreme but still we must regard the Legislature as such that when they provide for certain things in legislation they should be acted on so that the Minister has no discretion to go outside what is provided for within the legislation. This is another instance where the Minister will say: "I am not going to apply the law in the meantime. Let us get this Consolidation Bill out of the way. I will give you an assurance I am not going to apply the law in this respect. So far as I know the Revenue Commissioners have never put people in jail for the non-payment of income tax."

We now have this ridiculous situation. It is bad for the whole picture of our democracy that the President has, in effect, said: "I am not signing this Bill which has been passed by the Oireachtas because I have doubts about the constitutionality of certain provisions in it." We are now trying to overcome that difficulty by passing this Bill which says that when the President signs the first Bill which came to him certain provisions in that Bill will be immediately repealed. We are, in effect, asking the President to sign the Consolidation Bill, recognising now ourselves that certain aspects of it which are not in conformity with the Constitution should be repealed immediately the Bill is signed. In other words, we are asking the President, it appears to me, to put his signature to a measure, parts of which are unconstitutional and in doing so we are compelling him to sign another Bill which is already on the table before him which will repeal parts of the Bill which he has just signed. Perhaps it is the other way around.

As I have already said we are not opposing this measure. We are prepared to co-operate in seeing it go through this afternoon. The Government and the Minister stand condemned for leaving the Oireachtas and the President in this situation by not doing what was right and proper, that is amending the legislation, as is being done here now, before this whole income tax legislation was put into a consolidation measure.

Mr. Rooney

I should also like to support this measure. We are all agreed that consolidation of income tax law is urgently desirable. That is the point that has been made in connection with this Bill. It is quite possible if the question of amending this were to be dealt with during the time of consolidation a great deal of procedure might have to be changed. It is a good thing anyway that the Committee and the Minister noticed this defect while the question of consolidation was being considered. However, I should like to make a comment about this obnoxious and uncivilised piece of legislation which apparently has been on our Statute Book since 1918 and has been in operation since that time.

Mr. Haughey

It was there before that.

Mr. Rooney

It is there since 1918.

Mr. Haughey

It was there 50 years before that.

Mr. Rooney

That means it is the best part of 100 years on our Statute Book.

Mr. McQuillan

It is certainly very urgent.

Mr. Rooney

It is a disgrace to modern civilisation to see such an undemocratic and inhuman piece of legislation on our Statute Book for so long.

Mr. Haughey

The world went on.

Mr. Rooney

It is amazing that this matter was not discovered 30 years ago when the Constitution was being considered and adopted. It was unconstitutional at that time just as much as it is at present. Despite that, this thing persisted for another 30 years until this Consolidation Bill was going through. The injustice of this was then discovered. I have a case in mind where an unfortunate person who did not have the money was thrown into jail under this legislation. After lying in jail for an indefinite period he was eventually carried out of Mountjoy into Grangegorman. He lived for many years more and eventually died in Grangegorman.

Mr. Murphy

Did the Revenue Commissioners get the tax?

Mr. Rooney

They did. The point about it is this. This Act has now been in operation for such a long time that I am amazed when the Constitution was being considered and implemented 30 years ago this very undemocratic piece of legislation was allowed to stand. I know that at present the Constitution is under the microscope to see if it needs any amendment to conform to modern needs, modern legislation and modern standards of living. If there is any other legislation on our Statute Book which is as undemocratic as this has been and was seen to be by the Committee and the Minister, I hope that when they were examining this consolidation measure efforts will be made to remove it. I am glad the Minister is doing something about this now. I listened to him on the television last night and I heard his case. I agree that this is the only way he could deal with this matter in the circumstances. I agree with Senator G. FitzGerald that it may be necessary to alter the title to really give a better description to what we are actually doing now.

Professor Quinlan

Like the other Senators, I accept the way out taken by the Government but I am just as unhappy as Senator Murphy about this because it seems from the newspaper and radio presentation to reflect on both Houses of the Oireachtas. It seemed as though we have not been doing our duty and now we have been found out by the President. The undue haste with which we are assembled for this seems to give support to that view. I know the view is erroneous and that the Minister's explanation is right and proper about the strict limitations within which a consolidation measure must be framed. However, I think further opportunity should have been taken to acquaint the public of this matter.

Unfortunately, I did not hear the Minister last night. Perhaps that may have gone a good way towards reaching the public. Despite this, I think the Government Information Bureau should issue a statement to the public more or less along the lines of the Minister's statement here today which would absolve both Houses of the Oireachtas from any blame in this regard.

I feel the more acceptable procedure would have been, in the first instance, to have amended the legislation and then brought in the consolidation measure. I hope, as a result of our experience in this matter, that in relation to all future consolidation measures freedom will be given to see whether any amending legislation is necessary before proceeding to consolidate. That may delay consolidation a little bit but it would undoubtedly produce a much cleaner job. I take it that the measure was scrutinised as part of the law reform programme in trying to bring our law into line with that of the EEC countries. I feel pretty certain that none of them have legislation in which the debtors prison features. At last we are getting away from this, but the undue haste has given the public quite an erroneous view on this. I regret that when we were brought back to the House we should not have an opportunity of tackling the real problem that is so urgent today—that is the chaos into which our country is drifting.

Mr. McQuillan

I just want to make a few comments on the background of this particular measure. There has been an attempt in the last few days to inject a sense of drama and urgency into this particular matter and into the doubts with regard to the legality of the proposals in the Finance Bill. The Minister here in the House has, in a very casual blasé manner, pointed out that this legislation, in effect, is on the Statute Book for practically a century, and here we have, after years of study of our laws and of our Constitution by legal experts, a decision taken by the President, within his rights, of course, to go against the advice of the Minister for Finance and of the Government.

At this stage I should like to make it quite clear that the Minister has evidently been able to convince the Special Committee that he would introduce certain legislation after the particular Bill was passed which would nullify the particularly odious sections in it. That assurance was sufficient for the Special Committee and it is generally accepted, in my experience in both Houses over the past 20 years, that a Minister's assurance is always accepted when given in Dáil Éireann, but the extraordinary situation has arisen now that the assurance has not been good enough for the President, and, in fact, the President's decision is a vote of no confidence in the Minister and in his own children, the present Government.

A Senator

Good man.

Mr. McQuillan

It is, unquestionably.

Tomás Ó Maoláin

You will get headlines for that one.

Mr. McQuillan

The President and the Government were seeking the headlines to take the heat off the present serious situation. That is what I am trying to bring out. This legislation lay on the Statute Book for more than 100 years, as the Minister said. Was there ever a better opportunity to divert public attention from the very serious situation that obtains here at the present time with another section of our community? The Minister stated here that there is an urgency about this because the business community were worried and he would like to see the House oblige them and calm their fears. So the Seanad is specially summoned and will sit this evening for approximately two and a half hours at the most to suit the business community, and yet the Minister, or his colleagues, could not give five minutes to talk about the welfare and the livelihood of another big section of the community, namely the farming community.

Tomás Ó Maoláin

It is quite obvious what Senator McQuillan is trying to do.

Mr. Murphy

I think he is speaking very sensibly.

Tomás Ó Maoláin

He is doing what he always does, looking for page 1.

An Cathaoirleach

Senator McQuillan on the Income Tax (Amendment) Bill.

Mr. McQuillan

The Minister stated here today that he gave an assurance to the Special Committee that nobody would be seized by the Revenue Commissioners and put into jail. I am not going to talk about what is happening to other sections——

Tomás Ó Maoláin

You are too damn clever. We are getting sick of it.

Mr. McQuillan

——but the Minister gave a guarantee that the Revenue Commissioners would not utilise the powers they have under sections 480 and 483 to imprison an individual for non-payment of his income tax or surtax. That assurance was given by the Minister to the Special Committee and it was given here too. I should like to ask the Minister a simple question. Under what Act has he authority to direct the Revenue Commissioners to desist from implementing a statute? Under what Act was the Minister in a position to give a guarantee to Senator FitzGerald or to this House that the Revenue Commissioners would not utilise that legislation? Let us be clear. Every Minister has been most careful to divest himself of even the slightest trace of authority over the activities of the Revenue Commissioners within the powers given to him. How, therefore, could the Minister give an assurance to the Dáil or the Seanad that the Revenue Commissioners would not utilise the legislation at their disposal?

Mr. Haughey

Quite simple. They gave me an assurance.

Mr. McQuillan

Are we to understand that the Minister requested, I presume, the Revenue Commissioners to give him a guarantee that they would not use it?

Mr. Haughey

They gave me an assurance that they would not exercise the power and I gave that assurance to the Committee.

Mr. McQuillan

Would the Minister not have considered in all fairness at that stage when it was realised that it had no binding power over the Revenue Commissioners that it would have been better, perhaps, to bring in amending legislation which would eliminate that section and, as several Senators have pointed out, to let the amending legislation be included in the Consolidation Bill?

I am not opposing the measure. I think it is desirable to have the matter dealt with properly but what I am against is the order of priorities established by the Government and the attempt to suggest that they have a belief in the freedom of the individual in this country and that as far as they are concerned any infringement of the Constitution is something they would contemplate with horror. To me, when I see the Offences Against the State Act and other odious legislation it only brings back quite clearly to me how the Government are utilising this as an opportunity of taking the heat off in connection with another matter of urgent public importance.

Mr. Rooney

No market today.

Mr. Haughey

First of all, to deal with the question of title, I want to begin by saying that the short title is of no particular significance in any piece of legislation. It is simply, if you like, a handy reference. It is just a name attached to the legislation for reference purposes. It has no legislative effect, so that from that point of view I do not think that Senator FitzGerald need be unduly concerned about the title. He need not be concerned about it from the point of view of legislative effect, but he might be concerned because of his sense of the fitness of things and the seemliness of it. In that connection, I want simply to say that this title seemed to be the most appropriate way to refer to this particular piece of legislation. I want to point out that this particular Bill does not purport to amend the Income Tax Act, 1967, if enacted. In fact, it could not amend a piece of legislation which has not yet become law. The sole purpose of the Bill before us is to prevent certain provisions in the Income Tax Bill, 1966, if enacted, from coming into effect.

If this Bill purported to amend an existing piece of legislation, such as the Income Tax Act 1967, it would have to have as its short title "The Income Tax Act 1967 (Amendment) Bill, 1967". It is simply a general type of short title which seemed to the Parliamentary Draftsman and myself to be the most descriptive way of describing this particular piece of legislation. In any event, I want to say again that it is of no particular importance in effect in regard to the piece of legislation itself.

Senators have, quite naturally, brought into the discussion this question of consolidation. I want to assure the Seanad that this is a subject in which I am very directly personally interested. I have a belief that we should as quickly as our resources permit bring about a situation in which all our Irish law will be comprised in modern statutes of the Oireachtas. I might perhaps make one small qualification to that. I personally—this is not by any means Government policy or anything like it—would be in favour of keeping on our Statute Book for purposes of historical continuity some of the old laws of Grattan's Parliament but my approach and wish would be that everything between the Act of Union and 1921 should in due course be abolished and all our law should be comprised in statutes of the Oireachtas. I hope we will eventually get around to doing that.

When I was in the Department of Justice I inaugurated a fairly intensive programme to that effect and we made good progress. I am very glad that my successor has the same interest in this subject and is continuing that programme as rapidly as resources of personnel available to him permit.

When you come to this question of consolidation you are immediately faced with a difficulty and I want to mention that this very point was adverted to by the Committee, proving again, I think, the excellence of the calibre of the Committee and the way in which they did their job. It is always a difficult decision to take whether or not you should amend first and then consolidate or whether, in certain circumstances, it is better to consolidate and then, when you have everything gathered together, to proceed to amend.

Mr. Murphy

No.

Mr. Haughey

Well, it is arguable. I was not the Minister responsible when this Bill was first conceived. It has been a long time now since work on it was initiated and it has seen three different Ministers for Finance in its time, maybe more for all I know but at least three. If I were coming to the problem all over again, I would still go about it as it has been gone about, mainly, first of all consolidate, get everything into one Act; have a look at it as a whole and then proceed with amendment as you see fit. I know there is another school of thought. I think perhaps the official view of the Consolidation Office would probably differ from mine. The Consolidation Office would probably go for the theory that you should amend first and then consolidate. I want to suggest that it is arguable in this case. Where there is such a vast complex of provisions as there is here it was quite defensible procedure to begin by consolidating and then, when the law is gathered together neatly in one volume, you look at it and see where you want to amend and what you want to change.

I want to explain again the reality of the situation. It was never, I feel, visualised that a consolidation measure should be the subject of reference to the Supreme Court. That was probably not in anybody's mind though, of course, as it now transpires, it is something that should have been adverted to. Generally speaking, I think the Constitution envisages the idea of reference to the Supreme Court as being applicable, in the main, to new law. This power of the President of reference to the Supreme Court is basically a check on the Executive and on Parliament and is primarily intended to deal with a situation in which the Oireachtas and the Government would be attempting to do something as new law which would be repugnant to the Constitution.

The procedure of consolidation gets us into a difficulty. Because of its strict limitations we cannot amend or change the law and, therefore, because a lot of the law is old and was enacted before we had a Constitution it is inevitable that at some stage some provisions will come in conflict with the Constitution. That is the difficulty that has arisen and this is the situation with which we are attempting sensibly, I feel, to deal in this measure.

I am grateful for the fact that Senators who spoke have all indicated, with qualifications, that they are prepared to let the Bill go through and I think that is the practical thing to do at this stage.

Question put and agreed to.

Agreed to take remaining Stages today.

Bill considered in Committee.

SECTION I

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

Mr. Garret FitzGerald

Might it not be more clear if it read, towards the end of the sentence: "and 483 of that Act shall immediately stand repealed". It is clear that the only possible Act that was reformed in 83 sections is, in fact, the Consolidation Act, and, therefore, it is not essential but it would be a little easier to read if it were: "that Act" rather than: "the Act".

Mr. Haughey

I think the point there is that it is not an Act yet. It is still only a Bill. Therefore, the demonstrative is not appropriate.

Mr. Garret FitzGerald

I do not quite follow that. In that case the word "Act" should be changed to "Bill", I would have thought. It says it becomes law as the Income Tax Act, 1967, sections 480.... It should be either "the Bill" or "that Act" but I do not think "the Act" is entirely clear. I do not press the point but I think it would be clearer.

Question put and agreed to.

SECTION 2.

Question proposed: "That section 2 stand part of the Bill".

Mr. Garret FitzGerald

The Minister says that the word "amendment" although it is, in fact, incorrect implied that it does not matter very much in the short title. I can see that it does not matter very much but at the same time it is misleading. It gives the impression to anybody who hears of this Act in the future that it is amending an Act in existence at the time this Act came into existence. I wonder whether it would be better if it became Income Tax (No. 1) Act, 1967. That would avoid the difficulty.

Mr. Malone

One would think we are going to have a series of them.

Mr. Haughey

These are technical drafting matters and I am afraid I have to be largely guided by the Parliamentary Draftsman in this matter. It is his opinion that this is the correct nomenclature to use. It is a sort of generic type of title which is used in this sort of situation. The title of a Bill is simply something to enable it to be readily indexed. It has no legislative consequence whatsoever.

Mr. Garret FitzGerald

But the title purports to suggest that this Act is not an Act at the time it is introduced. The Minister, however, has said that this is the normal procedure in cases of this kind. I am not aware of many cases of this kind. If the Minister has precedents for Acts being called amendments to Acts, purporting to amend the Act——

Mr. Haughey

It is not purporting to amend the Act. There is a fundamental difference. What I said in my remarks was that if it purported to amend the Act, which it cannot do, it would have to be called the Income Tax Act, 1967 (Amendment), Bill, 1967.

Mr. Garret FitzGerald

If the word "amendment" does not mean that it amends the Act what does it mean to amend?

Mr. Haughey

It means the income tax code generally.

Professor Stanford

The Bill must pass today. That is the implication of this two-sided argument. I would make the point that here we have another example of the disadvantage of hasty legislation. There is something here that ought to be put right. The Minister is not agreeable to accept this. In the circumstances, and because this Bill is needed immediately, we cannot improve the Bill as we should like.

Mr. Haughey

I do not accept there is anything to change.

Professor Stanford

I hold there is.

Mr. Garret FitzGerald

I have not heard the Minister say he is not in a position to accept an amendment. If that is so, it should be made clear.

Mr. Haughey

That would mean my going back to the Dáil and that would not be possible in the time available to me.

Mr. Garret FitzGerald

I have not understood the nature of the urgency, as to why the Bill should be passed today.

Question put and agreed to.

Preamble agreed to.

Title agreed to.

Bill reported without recommendation, received for final consideration and ordered to be returned to the Dáil.