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Seanad Éireann debate -
Wednesday, 9 Jul 1969

Vol. 66 No. 15

Collection of Taxes (Confirmation) Bill, 1969 (Certified Money Bill): Second and Subsequent Stages.

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

This is the fifth occasion on which a Collection of Taxes (Confirmation) Bill has been brought before the Oireachtas. In 1938, 1944, 1951 and 1954, Dáil Éireann dissolved, as it did this year, soon after Budget day and before the Finance Bill giving permanent statutory effect to the Budget proposals could have been enacted.

On Budget day, 7th May last, 12 financial resolutions were passed unanimously by the Dáil in Committee on Finance. Eight of these resolutions, namely those relating to income tax and sur-tax, hydrocarbon oils, tobacco, beer, spirits, wine and the sales taxes were given temporary statutory effect under the Provisional Collection of Taxes Act, 1927, pending the passing of the Finance Bill, but they automatically lapsed on the dissolution of the Dáil. The remaining four—relating mainly to stamp duties — were not due to come into force until 1st August.

The effect of the measure now proposed is to restore the statutory effect of the eight resolutions mentioned pending the enactment of this year's Finance Bill and to deem them to have had continuous statutory effect since Budget day.

The Bill passed all Stages in the Dáil yesterday and I should be glad if the Seanad would take all Stages today.

The Minister may be assured there will not be either determined opposition or too long a debate in regard to this measure Indeed, I think the Seanad in approaching this measure must consider what is concerned here is essentially unfinished Dáil Business and that but for the dissolution of the Dáil the matter of the Financial Resolutions would never properly be a matter for debate here in the Seanad. In the normal course of events the Seanad would have been obliged to wait for the Finance Bill in order to discuss the general position in regard to taxation. Accordingly, there seems little point in a prolonged debate on this measure on matters which might well arise again on the Finance Bill.

Indeed the Seanad would, I think take the view it would do everything it possibly could to expedite the financial business of the Oireachtas considering that financial business is in as bad a mess as it could be without further adding to it. In matters of this sort the Seanad definitely feels a sense of grievance. We had from the Taoiseach, when he was Minister for Finance, on his moving here a Central Fund (Permanent Provisions) Bill, an assurance that from now on financial business would move smoothly, that the various measures would come forward at an appropriate time, that delays in dealing with Estimates in the Dáil would all be done away with. Indeed, we have seen very little improvement in this respect. The Seanad has under this new dispensation still found itself being asked to deal with Financial measures at the end of a term, asked to deal with very important financial measures at a time when the Dáil already adjourned. Accordingly, I find the Seanad feels somewhat aggrieved at this particular position and certainly would not wish to impede in any way this enabling legislation in case this might add further to the chaos.

The Senator has forgotten that on 28th June there was a General Election.

I am not quite sure of the full purpose of this Bill. I understood from what the Minister for Finance said yesterday in the Dáil that he contended that strictly speaking this Bill was not really necessary and that he really had the authority to collect these taxes since the dissolution of the Dáil despite the fact that the 1927 Act provision ceases with that dissolution. He coupled this contention with the view that this Bill, as he has told us today, is very urgently needed, and we are presented with a Bill that is not necessary but very urgent.

I feel there is a certain contradiction in this and I cannot help wondering what would be the position if some purchaser of petrol, spirits or tobacco since the dissolution of the Dáil were to take an action either against the retailer for increasing the price arising out of fresh taxation or against the Minister for Finance for collecting taxes which legally he was not entitled to collect. I understand that this Bill is to put the Minister right, as it were, to give him power retrospectively to do things he has been doing illegally in the name of all of us since the date of the dissolution.

I should like the Minister, if he would, to clear up the point as to whether he had or had not the legal right to collect those taxes since the dissolution. I contend he had not and therefore this Bill is not only urgent but necessary. I understood the Minister to tell the Dáil that the Bill, in his view, was not really necessary but then he went on to say it was very urgent. I am not quite sure why an unnecessary Bill, giving him power he claims he has already, should be so very urgent. He quoted several precedents and Senator Dooge has accepted those at their face value and said no doubt matters of this kind will arise again.

I understand the Minister to tell the Dáil he will take steps to see to it in future this situation will not arise, which leads me to think he could have taken steps before the dissolution to see to it that this situation would not arise. With these matters in mind, I suggest to the Seanad that this Bill is unnecessary and does not have to be passed. I think it would make quite an interesting constitutional point if the Seanad were to reject this because the Minister, I understand, claims he has the necessary powers without the passing of this Bill. Therefore we are entitled to ask him: "Why do you want it?"

In spite of Senator Sheehy Skeffington's exhortation, we in the Labour Party will not oppose this Bill. This is, as I understand it, an unusual measure and except for the dissolution of the Dáil we would be dealing with the Finance Bill and we would have an opportunity on it of debating taxation policy in general and certain other side issues. I understand we will have the Finance Bill later on before the Seanad when we will have the usual debate on that Bill and this is simply a temporary measure to confirm the taxation imposed in the Dáil in the Financial Resolutions. We in the Labour Party did not oppose the Budget because of the way the extra money in the Budget was being distributed to the deserving people and therefore we are not opposing this Bill here today.

The measure before us is merely ensuring the taxes as brought in in the Financial Resolutions are fully confirmed. We all desire the ends to which this money has been applied. We welcome increased social welfare benefits and increased education facilities. Consequently we have to be realistic and co-operate in the raising of this money. While there may be differences between us on the way taxes should be levied, by and large we have got to realise that taxes must be paid because that is the only way we can ensure our future development.

Like many other Senators, I feel quite frustrated at the handling of financial business by the Government. With regard to the changes that were made some four years ago in the procedures of the Seanad, I appeal to the Minister that if he cannot do better it would be preferable to revert to the older practice by which we got the Central Fund Bill at the end of March and we then had a very constructive and timely debate on Government policy as revealed from the Estimates then published.

In other words, we were discussing Government financial policy within a few weeks of its being unveiled in the Estimates. Now, several months have passed before we have had a chance of discussing it. The opportunity which we used to have of discussing the Budget and its implications, both administrative and so on, has again been taken from us and it now comes at a very unrealistic time, just before Christmas, when one wonders which Budget exactly one is supposed to be discussing.

The Finance Bill must be passed by 5th August, 1969.

But on the Finance Bill we can only discuss policy. It is on the Appropriation Bill that we are allowed to discuss the administrative details.

We agreed in the Dáil to have a full debate on the Second Stage of the Finance Bill and, I am sure, it is open to the Seanad to do the same.

I should welcome that opportunity here and above all we should try to use the Seanad to its fullest advantage. Therefore, the Minister might consider reverting to the earlier procedure which brought everything in within a reasonable amount of time of the Government's decision being announced.

One final word on the Finance Bill which we hope to have within a couple of weeks. It will contain many details in respect of taxation, and I should like to make a plea to the Minister to try to continue what we have been pressing for in the Seanad, relief for widows and orphans.

The Senator may not raise issues of that kind at this stage.

I know the Minister has greatly improved their lot and I hope the Minister in his first Finance Bill in the new Government will continue to do that.

This Bill affords the House an opportunity, which I intend to avail of as the last opportunity afforded to me as a Member of the Seanad, and consequently I am not open to the jibes of the Leader of the House that I have any electoral motive in making the remarks I intend to make. I hope, therefore, that they will be accepted as sincere and constructive.

We are dealing with the Budgetary situation which was accepted by the House in the spirit in which it was presented to the House for the Government at that time by the man who was Minister for Finance at that time and who has been reappointed to that office. It was indicated that the taxes necessary were designed to be allocated for particular purposes which were quite laudable, but some years ago when Mr. Lemass was at the head of that Party he indicated that he had exhausted the original sources of revenue relevant to taxation and at that time he introduced the turnover tax.

I have a very tight schedule to adhere to, and I had hoped that the Seanad might agree to do what the Dáil did, in other words to leave over the substance of the Budget to the Second Stage of the Finance Bill and to treat this as merely a technical measure rendered necessary by the dissolution.

Very well, I will confine my remarks, but I am compelled by the exigencies of the moment to refer to a specific matter which I should like the Minister to clarify. On two successive days this week local authorities were confronted with an extremely serious financial situation. The Minister for Local Government informed us, relative to housing and sanitary allocations for the year, that we would be required to have recourse to borrowing outside the Local Loans Fund and that we were to apply ourselves to sources of revenue other than from the Local Loans Fund.

Then we had a directive from the Central Bank that two-thirds of the credit available within the country is to be absorbed by State borrowing; and the question which our county manager could not answer, but which I hope the Minister will answer today, is whether the loans of local authorities for housing and sanitation are to be included in the category of the two-thirds or will they have to compete in the commercial banks with the private sector of the economy about which the Minister and his Leader of his Party have made such a song and dance in regard to their respect and admiration of the private sector of the economy. Are the local authorities obliged now to compete with the private investor in recourse to the local banks?

On the day succeeding this impasse, I attended another meeting—I must refrain from identifying that meeting because of negotiations which are still in progress—in an effort to secure sufficient money to carry on this particular education service. But the directors of the bank, which had traditionally come to the rescue when the Department had failed, met twice and rejected the application for a loan of £25,000. All insurance companies which have been approached have refused to accommodate this local authority, and negotiations are in progress at the moment in the vague hope that building societies may come to the rescue.

Let me say that our deliberations were interrupted to make a phone call to the Assistant Secretary of the Department to confirm over the phone whether the Department also were to be written off as an underwriting source for the loan. The present negotiations are a last ditch effort to retrieve the situation. I cannot be more specific about them, but I should like the Minister to inform us whether this direction from his colleague, the Minister for Local Government, to local authorities to have recourse to the private banks will come within the restrictions imposed by the Central Bank in reserving two-thirds of the credit available for Government borrowing or whether local authorities will have to compete in the private sector about which we have heard so much recently.

The Dáil was dissolved within hours of the Minister's reply on the General Financial Resolution affecting the measure now before this House and this had the effect of denying the Minister for Finance a real opportunity of confirming the undertaking given on television by the then Minister for Education, Deputy Lenihan, that there would be no autumn Budget.

This is an opportunity now for the Minister for Finance to confirm that statement and to confirm that this undertaking will be maintained and that what is presented to us in the Budget for this year is calculated to balance the necessary finances. The Minister should also confirm that in presenting the Budget he anticipated any expenditure that had not come to light but which is, perhaps, in the offing and that consequently the undertaking that was given on television by the then Minister for Education will be honoured in a firm statement by the Minister for Finance to the effect that the taxpayers of this country have had their impositions for this financial year and that there will not be another Budget in the autumn.

What I said about this Bill in the Dáil, in fact, was that it was arguable whether this Bill was necessary. I was asked a question by a Deputy as to what would happen if a taxpayer took an action in the courts and my reply was that the case would be argued in the courts and that it was arguable that this Bill was not, in fact, necessary. I said that I was bringing it in in order to remove any doubt and I think that that is a perfectly sensible and logical thing to do.

For that reason it is urgent because, if there are any doubts in the situation that require to be removed, they should be removed as quickly as possible. There is no necessity for the Senator to argue himself into an intellectually impossible position. I also indicated in the Dáil that I propose in the forthcoming Finance Bill to deal with the type of situation that occurred in 1938, 1944, 1951, 1954 and again in 1969 and to provide for a more sensible method of dealing with the situation which arises on the dissolution of the Dáil.

I must decline the last speaker's invitation to enter into a general type of discussion to deal with the matters which he has raised. The Senator will have an opportunity of going into all these matters on the Second Stage of the Finance Bill which will be coming before the House shortly. In the meantime, I hope that the Seanad will facilitate me in a fairly difficult situation by passing this purely technical measure now and postponing a general debate and discussion until we have the Finance Bill before us.

May I ask the Minister when we can expect to have the Finance Bill in the Seanad?

Within the next few weeks.

Question put and agreed to.
Agreed to take remaining Stages today.
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