Finance Bill, 1969 (Certified Money Bill) : Second Stage.

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

As well as renewing the income tax and sur-tax, the Bill now before you gives statutory effect to the tax increases required to finance the social welfare and other improvements announced in the Budget. The Bill also gives legislative form to some significant tax changes and improvements.

Among the principal features of the Bill are the new relief for artists, writers, composers and sculptors; the extensions of the periods of operation of the exports tax relief and of the "Shannon" relief; the provisions arising from the abolition of Schedules A and B; the increase in the income tax personal allowances with additional measures to help hardship cases; and the stamp duty relief for persons buying houses.

With regard to the new relief for artists, writers, sculptors and composers, the exemption will depend in the main on the general status which an individual attains in his own particular field rather than on any specific work which he has produced.

I expect therefore that painters, writers, sculptors and composers who have won general acclaim for work of artistic or cultural quality will be granted the tax exemption on earnings from their work in those roles without having to submit works for consideration by the Revenue Commissioners. A person who has yet to make his name will be able to claim exemption by submitting to the Commissioners any work which, in his opinion, possesses the required merit. Once the Revenue Commissioners make a determination in favour of a particular work, all the person's earnings from work in that category will be exempt from tax.

I have asked the Revenue Commissioners to approach their task of adjudication in a liberal way and, if anything, to err in favour of borderline cases. Of course, questions of cultural or artistic merit cannot escape subjective judgment; opinions on any particular work may diverge widely. But I feel confident that these obstacles can be surmounted and that the scheme can achieve the objective of improving and enriching our daily lives.

Most of the other provisions of Part I of the Bill are concerned with tax easements and the relief of taxpayers.

At present there is no special tax relief where a housekeeper must be employed to look after a totally incapacitated person. Section 3 provides a new allowance of £100 for this purpose.

A further improvement in tax relief is set out in section 7; the amount of medical expenses on which relief may be claimed is raised from £300 to £500; and the total health expenses of a taxpayer and his dependants may now be grouped together for relief purposes instead of dealing with the amount spent on each individual as was the case previously.

At a cost to the Exchequer of over £3.5 million, provision is made in section 9 for increases of £30 in the income tax allowance for married persons and £15 for single persons. This will have the effect of taking some 30,000 persons out of the income tax net.

Because of the prohibitive cost of really worthwhile increases in these allowances, I am examining the possibility of easing the burden of personal taxation by a comprehensive re-structuring of our tax system. This is, of course, a formidable task, but I would like, if possible, to introduce the necessary legislative measures this year.

Section 15 extends to 1990 the period within which the "Shannon" relief may be claimed. Section 16 extends the exports tax relief to the same date. There are many other noteworthy provisions in this Part of the Bill but, as they are described in the explanatory memorandum, I need not dwell on them further at this stage.

Part II contains the detailed provisions necessary to effect the repeal of Schedules A and B. A year ago I announced the abolition of tax under Schedule A because it was a burden falling mainly on owner-occupiers of private residences. As a measure of relief for farmers, Schedule B tax—on income from the occupation of land— was abolished also. The removal of these Schedules simplified the tax code; the 16 sections excising them are somewhat complicated as they are mainly of a technical nature.

The Customs and Excise duties changes announced in the Budget are confirmed in Part III of the Bill. In addition, this Part simplifies the tobacco manufacturers' licence duty; introduces a number of minor changes requested by Irish business interests; increases the penalty for breaches of the regulations relating to the excise duty on table waters and applies the Customs and Excise laws to hovercraft.

Two sections improving death duties reliefs are introduced in Part IV, in response to various representations to the effect that, in certain circumstances, the widow and family of a deceased person were not obtaining in full the benefits which it was intended to give them.

Section 49 in Part V relieves from stamp duty first purchases of grant-type houses, sales by public utility companies to their members and sales by local authorities to tenant purchasers. Section 50 imposes a stamp duty of 10 per cent on contracts for the construction of office blocks. This is intended to raise most of the revenue needed to pay for the stamp duty relief I have just mentioned and also to divert our scarce building resources away from office blocks.

The sections in Part VI of the Bill deal with corporation profits tax and follow from changes in relation to income tax made in Part I. The effects of the sections in the three remaining Parts of the Bill are fairly straightforward.

At the Committee Stage, I shall of course be glad to answer any questions Senators wish to raise on particular aspects of the Bill.

Before proceeding with the debate, the Chair would like to indicate for the guidance of Senators that this debate on the Second Stage of the Finance Bill should be along the lines of a Budget debate as it takes place in the Dáil. That is to say, it is confined to taxation, to general expenditure and to financial policy and to other matters in so far as they are connected with financial policy. Matters of administration, and details relating to matters of administration, may not be raised. Opportunities for debating these latter subjects will arise in due course on the Appropriation Bill.

The Finance Bill usually affords the opportunity for one of the major debates of the Seanad year. It is indeed, together with the Appropriation Bill, one of the two debates in which general and financial policy are discussed. We usually find these bills come to us at the end of a session, and, indeed, usually after the Dáil has adjourned, which makes realistic hopes of making recommendations in regard to these Bills somewhat empty. We must congratulate the Minister in managing to have the Finance Bill in the Seanad before the Dáil is adjourned, if only by a matter of hours. It is unfortunate, when for once this has been achieved, that this Bill happens to come to the Seanad at what is, for another reason, an untimely season. The Members of this House find it difficult to concentrate in this debate on the minutiae of taxation proposals when our minds are elsewhere on matters such as counties still to be covered and preferences still to be won. Indeed, it may well be that the Seanad members will not feel in the humour for a fully comprehensive debate. Perhaps Senators will be relieved to know that I certainly am of this disposition and I do not intend to make a major or prolonged speech on this occasion.

I would nearly give you my No. 1 for that.

On occasions such as this, we discuss the question of taxation policy in general and taxation in particular. I should like to refer first of all to the question of our general level of taxation. There is a tendency for Government spokesmen to be slightly complacent in regard to this. It is an easy thing to say that the level of taxation in this country is lighter than that in countries at a similar stage of development. This has been said but it does not happen to be true.

Some years ago I went into some detail on a Finance Bill to point out that at that time the position was that by a margin which was considerable, our level of taxation, taking the total taxation as a percentage of our GNP, was somewhat higher than in countries which could be classed as being at the same level of development. The circumstances have not changed greatly in the interim. I am sure if this exercise were done again we would find that we still hold somewhat the same position.

If we look at the Second and Third Programmes for Economic Development in regard to this question, we find that the hopes of the Second Programme in regard to the level of taxation were not realised. It is hoped that a certain stage of development could have been achieved by a moderate rise in the level of taxation. It was unfortunate that this particular level of taxation was the first target to be passed and outpaced during the operation of the Second Programme. We do not know what the precise figure is but we are now running at about 30 per cent of our GNP in total taxation.

This is not necessarily a bad thing. It is not necessarily something to be deplored in the sense that we are taking this much in taxation and redeploying the money within the economy. However, we are getting to such a level of taxation that certain dangers as regards the weight of this taxation and the general burden of this taxation now emerge. Consequently, we must be more careful than ever to ensure when we ask the people to bear a burden of this size that, in fact, the money is being well used. As the figure of total taxation gets higher and higher, the onus becomes greater on the Government, and on the Minister for Finance in particular, to ensure that the money taken from the taxpayer in this way is efficiently returned to public use. In particular, there is an onus to see that money is not unnecessarily raised in taxation only to be diverted back to pretty much the same area from which it originally came. The greatest amount of efficiency in both the collection of the money and its disbursement cannot avoid a loss if we are circulating money unnecessarily in that way.

When we approach this problem of general taxation there are some criteria which must be applied. There must be criteria on which any financial policy and any budget must be based and assessed. These criteria will be somewhat different when we are dealing with taxation on individuals and when we are dealing with taxation on corporations. The criteria would be in each case social and economic but there will be a differing emphasis in regard to the two. In regard to the taxation of individuals here the emphasis is on the social purpose. Here we are concerned with the re-distribution of wealth, with the promotion of social justice in our society, so that in regard to the framing of general taxation policy with regard to the taxation of individuals what we are concerned with is the achieving of a social purpose without doing undue economic damage in the process.

So we have various arguments about the level of the balance between direct and indirect taxation. Many people believe that if we allow the level of direct taxation to go too high there is a serious disincentive effect here, so that in fact in attempting to achieve social justice through the re-distribution of wealth we may well do economic damage. I take the view that this case is not a proven one and that in fact we know too little about what are the incentive and the disincentive effects of various types of taxation. This is something on which we need more information, something which would well commend itself to our Economic and Social Research Institute, who could assist the Minister, the Government and the Oireachtas by an investigation of what are the incentive and the disincentive effects of various types of taxation in Ireland, given its economy, given its habits of life and given the psychological disposition of our people. This is something well worthy of investigation.

As I say, I feel that in spite of what is very often glibly quoted, the case for the disincentive effect of direct taxation is not a proven one. There are needs for incentives throughout our whole taxation system, but we know little about their effects.

When we come to the question of the taxation of corporations here the situation is somewhat reversed. We are not concerned now about social justice. Here we are concerned with economic developments, and just as in the case of the taxation of individuals which involves trying to achieve a social aim without any bad effects from the economic viewpoint, here our aim should be a taxation system on corporations which will achieve certain economic objectives without interfering with our conception of social justice. I wonder does our present system of taxation of corporations do this.

I wonder in fact have we got the best system of taxation of corporations and of institutions which will give us the best allocation of resources. I am inclined to doubt it. I am inclined to say that here again there is need for study, there is need perhaps for cautious experimentation on the part of the Minister in regard to this particular topic, because if we raise much of our taxation from corporations on the basis of profitability we may well be going in the wrong direction. The alternative is not easy. It is perhaps easy to say in the abstract, to say in an academic way, that we need a taxation system in regard to corporations which will give rise to the best allocation of resources by penal taxation of the waste of resources. But to translate this from an acceptable principle into a real policy and into actual provisions in the Finance Bill is, as it must be freely admitted, very far from easy. Experiments in Britain in regard to the selective employment tax have not been entirely happy, but nevertheless I do commend this approach to the Minister as something which should be kept in mind as it may well be that it is in this direction that we will have to move if we are to modernise our system of taxation and modernise our budgets.

The Minister has come here with a well-shaped Budget of the traditional type. It is a post-Keynsianster Budget but I think that we have possibly been in this regard post-Keynsianster long enough and that we should from the point of view of using the Budget as an instrument of public policy be moving in new directions still. I think that this is, talking in a general way, something to which the Minister and his adivsers might well turn their minds. We have become used now to the idea of the budget as a controller, not merely balancing the books but also a controller of the economy, and indeed certain provisions that have been introduced in recent years have improved it as a controller. The introduction of PAYE brought in an automatic feedback in regard to the question of the taxation of increased incomes virtually as soon as they arise. I think that once again there is possibly a need to move further in this direction of control. The Minister for Finance can now manage through his Budget, though we have found in the past few years that it requires two budgets a year to do it, to exercise a sort of control to a certain level of grossness as it were; but there are other fluctuations in the economy of a shorter term nature and it is necessary that we should turn our minds towards the question of evening out these fluctuations, these higher frequency fluctuations, which do occur in the economy. This cannot be done by action and re-action. It cannot be done by waiting for things to arise and then acting. In the sort of economy that we must develop here within the next decade it will not be sufficient to have plans available for what must be done in regard to the regulation of the economy, or that we have a contingency plan if this or that should happen. What we need is to solve the problem of how to put a built-in stability into the economy.

How are we to devise a system which is best suited to the Irish economy? This should not be outside our ingenuity. We have seen in the technological field that this building in of automatic compensation and of stability into the engineering systems enabled men to land on the moon. It should not be beyond our powers to build in some more stability so that there will be need in the regulation of the Irish economy for an absolute minimum of direct intervention.

This is the problem we face in regard to the construction here of an appropriate taxation and financial policy, as we face many problems in the next decade, facing problems the like of which we have never faced before. This I think is the sort of way in which we must think out our problems and our taxation policy. Mere alterations in the Budget from year to year, merely trying to put a new version of the old-type Budget, will hardly be enough. It is of course in general terms that I am talking. I am talking now not about what should be in the Finance Bill, 1969, or perhaps not even what should be in the Finance Bill for 1970. I am talking of things which might well engage the attention of the Minister so that as we get well into the 1970s we will have a new type of Budget to meet a new type of age.

I have been dealing so far with general points. There are just a few things I would like to say about the particular provisions of the Bill. Most of them would probably be more appropriately dealt with on Committee Stage but I think it would not be right if I did not welcome some of the provisions of the present Budget. The Minister is to be commended in regard to the introduction of the provision regarding the earnings of artists. The position in the age we live in is different from what has been the position in centuries past. With very few exceptions, the State is now the patron to whom artists must look both in regard to the commissioning of works and in regard to seeing they have an adequate livelihood.

There are dangers in this. We have just one munificent patron. I suppose this is not much different from the position of patrons in the medieval cities of Italy centuries ago where there was one powerful family who by their wealth and their interest in art were the major patrons. The State could use their powers of patronage as well as they were used by the great Italian families of the Renaissance period and it would be doing something for the general good. I commend the Minister for what he is doing here. We all clearly realise that this is a start in a particular direction and one in which the Minister will feel able to go further in the years ahead. For the moment let us welcome what he is doing.

There are other provisions which are also welcome. They are provisions which are moving in the direction of recognition of the fact that family welfare is the great social problem of this country, that it is the large families, the families afflicted by sickness and incapacity, who bear the great social burden. Again we must commend the Minister for what is being done in this Budget. These are all things for which the people will be quite ready to provide the extra taxation. Here again what the Minister is doing, though worthy in its way, is only going part of the way to meet the general problem.

There are other matters in this Finance Bill which I could comment on but they are perhaps better left over for Committee Stage, where they can be dealt with in detail. I wish to say that the main burden of what I have to say on this Stage is that this Budget which we have is a good example of a Budget which we must now consider as being a classical type and perhaps adequate to the problems which we face as we enter the next decade. A great deal of serious thinking will be needed on the part of a large number of people and I ask the Minister to initiate that.

I think I will take the Minister up on his offer and make a bid for his number 4, 5 or 6 vote on the Labour Panel during the next ten minutes. Clearly we have got to realise even tonight that the Finance Bill is one of the rare times we get a chance in this House to take a square look at the very broad fabric of taxation. It is important, if we are to make any approach to the subject at all, to recognise first of all that we have got to look at this very big problem as a whole. We have got to ask ourselves some questions concerning it. Some of them have been posed so often that we are inclined to take them for granted. However, the question is quite relevant today, no matter how often it is repeated, about how relevant the present system of taxation is. It is unfortunate that there is in fact no up-to-date information available whatever on the incidence of total taxation in this country, on the pressures which exist on the different income groups. I suggest that there is a pressing and urgent need for such information, first of all, to be collated and made available and to be made available quickly.

Incidentally, in passing, I should like to suggest also that it is not quite sufficient for the Minister to point to the incidence for example of income tax and surtax because I believe if we are to solve the problem in the future we have got to have a long, square and honest look at the overall incidence, both of direct and indirect taxation. We have built up a structure of taxation in this country and in many other countries in which to a very large extent the bulk of the burden borne by the tax payers is in fact concealed and not made fully apparent to the unfortunate people who have to foot the bill. It is there and I suggest in any examination of the problem now and in the future, which examination is overdue, it will have to take a long, hard, searching look both at direct and indirect taxation.

That examination is urgently needed because I believe, without any fear of contradiction, there is an unanswerable case for a much wider and a much more equitable distribution of taxation as a whole, both direct and indirect. I should like now, having said that, to look at the picture in reality and to suggest that we have got to recognise, if we are to have State services of various types, if we are to have, for example, health services for the lower income groups, if we are to have a better provision for education, health services and so on, that that sort of planning, that sort of thinking and that sort of provision can obviously only be provided by taxation.

I say, on behalf of the Labour Party, that we readily accept this. Our quarrel is not about the taxation which has to be raised but with the manner in which the taxation is imposed. We believe the present system is grossly unfair, grossly inequitable and that it is long overdue for an overhaul. I want to say in passing also that the present Minister or, for that matter, any of his predecessors have satisfied us so far that the present system of taxation is either fair or as fair as it ought to be or if it could be made fair if we had the will to do it.

I would suggest, therefore, that the time is both ripe and opportune for a complete review of our taxation system. From 1957, I think it was, until 1961, the Commission on Income Taxation sat and after much deliberation produced many valuable conclusions and many valuable recommendations. Not all of these have been either accepted or recommended; some of them have and some of them are still there on the record, and I am afraid with the pace of modern life as we find it, some of these are quite likely to be overlooked, if not forgotten. I would suggest therefore that now is an opportune time for a similar type of commission to look at our entire tax structure, both direct, indirect as well as the special types of taxation such as rates and even social welfare. This is the broad type of picture which has got to be looked at squarely and honestly if we are ever to arrive at equity and justice in this particular field.

I strongly suggest to the Minister that that is the type of review that ought to be undertaken and which, in fact, could only be undertaken in the Minister's own Department, activated by the Department and carried through with the facilities and information available to the Department. I think the Minister would perform a most valuable national service if he were to initiate some such steps as these.

In all fairness, I think, we have got to give the Minister full credit at least for his effort to introduce some very badly needed reforms and improvements. On behalf of the Labour Party I want to welcome the reliefs, minor though they are. We fully recognise that even though these are minor they are very costly. But I would suggest to the Minister that they are costly because the overall burden of taxation is so unevenly and so inequitably distributed.

I, like the previous speaker, should like to welcome the Minister's approach to the exemption of writers and artists from income tax in certain brackets. This is an imaginative gesture, which a person would be bound to welcome. I think it is fortunate also that it will not result in any great loss of revenue but it will be a very considerable help and aid to the relatively small numbers of people involved. This is the type of thinking that we ought to be doing on this problem of taxation. I suggest that the Minister's imaginative approach to this particular aspect of taxation is one which he could well take example from and have a look at certain other factors to which I have alluded.

I am also glad to note that in the Dáil yesterday as a result of an amendment put down by the Labour Party the Minister undertook to consider giving further assistance to the live theatre. I believe this is both desirable and necessary because if financial assistance is not given to the live theatre in this country, and given very soon, the wealth of talent we have produced down the years—and, unfortunately, which we have to export —will go and in a short time the country will be denuded of much of that talent. If we do not make some realistic attempt to recognise the problems which confront the live theatre and those which confront our young actors and actresses, then our reputation as a country which has always tried to cherish, promote and nourish the live theatre and all those who work in it, will be lost. I personally regard the Minister's approach not only as imaginative but as a ray of hope in a very materialistic world and one for which he should be given full credit.

I have confined my remarks to general points because I do not think we could hope to discuss the Finance Bill in this House in the atmosphere in which we are meeting tonight, with any real attempt at breaking it down into any detail. I have tried to suggest, and I hope effectively, that two facts quite clearly emerge from the Finance Bill of 1969. One is that our taxation system obviously needs to be overhauled; and two that in order to do that we should select and appoint competent people to do that job in an objective way, but above all in an honest approach to the solution of the problem. We have got to recognise that our taxation system is the key to the shaping of our society in the future. The question therefore arises as to whether the tax code as we know it today is either sufficiently comprehensive or sufficiently elastic to do the job it is intended to, and if you ask that question you must answer it in the negative.

I suggest also that there is an unanswerable and social case for a capital gains tax in this country. It could be one of the solutions to the overburden of taxation from which sections of our people are suffering at the present time. I believe my suggestion to the Minister is one which is pertinent, useful, and highly desirable at the present time. I would urge the Minister as soon as the new Seanad has taken office to make use of the material that I am sure will be available in the House to assist him in his examination of this problem. Whether we are here or outside those of us who know anything about it, will, I am sure, be only too happy to help. These are my observations on the Second Reading of the Bill.

I wonder what the House would say if it could speak with one voice as to the essential and ideal qualities of a good budget. I suppose most of us would say it should be just and fair to all citizens equally; it should be intelligent and realistic; efficient and honest. But there is at least one other quality which makes a budget a distinguished budget. It has been referred to already by previous Senators. It is the quality of imagination—the quality which suddenly, out of the blue, after careful consideration, of course, produces an idea and a workable idea, which has not been introduced into a national budget for 20, 100 or a thousand years, perhaps. In fact, I am sure we are all very happy that the present Budget has such a feature. Financially, it is a small thing. But it has brought great credit to our nation in the press of the literate world. I mean the clause which has been referred to by the two previous speakers—the clause that gives exemption to writers, artists and musicians for their creative work. We have never had anything like this before. We have had competent budgets, but we have never had this flash of imagination. I wish we knew the history of this. Some people say that it was the Minister himself who thought of it, while others say the idea came from his advisers and there are still others who say that the idea was suggested by a certain Irish writer. But whoever made the suggestion was a man of imagination.

Nobody has ever denied that the Irish have the gift of imagination. But when people are paying us this compliment they usually add that we have this gift in a very impractical way. We are said to be imaginative in literature and art, but not imaginative in the hard realities of life. Here, however, we have a marriage of imagination and good financial sense.

This is particularly apt in our country, and it has brought this country great credit throughout the world. Perhaps, however, I should declare some interest in praising this section. As the author of some books I have a certain curiosity about the section's interpretation. But I do not speak just for myself in this matter. I speak for what I hope the House considers a respectable class, the scholars of Ireland. I remind the House that our most famous title refers to scholars as well as to saints, a title that goes right back to the time of Columbanus and to the time of Sedulius when the saints and scholars of this country were famous. Perhaps the scholars are not so saintly any longer. But at any rate there are a great many hard-working men in our universities and elsewhere who have produced works of scholarship—editions of the classics, histories, textbooks and so on—and they are particularly interested to know if their books will be regarded as coming within the meaning of the section as works of cultural merit. I understand that this is to be left to the Revenue Commissioners. I hope that in the light of our national history and in the light of the realities of the present day they will rule that works of scholarship are of cultural value.

I do not propose to debate this section at length. It has been debated and discussed with universal praise—this is something very unusual—in the public press and in the Dáil, with one lamentable suggestion. I congratulate the Minister and his advisers on their imaginative decision which is bound to encourage the creative arts and which has already won us considerable credit abroad.

I hope this will not be a flash in the pan and that it is the beginning of a series of imaginative clauses in our Finance Bills. I hope, for example, that very soon some imaginative way will be thought for preserving our national heritage; that some imaginative way will be thought of to preserve our Georgian buildings in St. Stephen's Green; that something will be thought of to make our National Library worthy of its name. When I go into the National Library, though I know how well they are doing within the resources at their disposal, I feel that it is a disgrace to this country that our National Library should be in that state. We want something both imaginative and practical in this regard.

The Senator is using his imagination to discuss matters of administration.

You allowed Senator Crowley, Sir, to refer to the theatre, so may I underline his plea for an imaginative and constructive decision on that matter?

I move now to a different point. We all agree that Budgets should be honest. This Budget of ours, is, in so far as I can judge, an honest Budget. But it accepts a kind of international dishonesty about which I should like to say a few words—a form of international dishonesty in which all the countries of Western Europe, North America and South America are conniving. I refer to the steady inflation, the steady decrease in the real value of the £. We are all accepting this without a demur saying that it is inevitable and doing nothing about it. But at least let us not be complacent about it, because it is dishonesty. Why is it dishonest? Because the Government are encouraging people to invest their money in the post office, but some day the farmer from Kerry or the shopkeeper from Galway will go to the post office to take out £100 that he invested 20 years ago and what he will get will be only worth half the value. So he is being cheated. It is a form of bankruptcy. The Government and other organisations of the kind are paying only a percentage of their debts.

It would be very difficult to cheat a Kerry farmer whatever about a Galway shopkeeper.

The Minister knows best about that. It is unfair to the people that we encourage them to save in the post office at the moment. What fools they would be.

There is a remedy for this. It was suggested in this House about 15 years ago by a previous Senator, Senator George O'Brien. I have consulted economists about this and they tell me it would be workable. The idea was that when a man puts £100 in the post office he would get it back at the time of withdrawal in terms of the real purchasing power of the £1. That would be honest, and would encourage savings in a way in which no interest rate would encourage them.

There is another reason why this is dishonest. There are pensioners in this country who served the State well for 20 or 30 years and who at the time of retirement got what looked like a reasonable pension in 1945 or 1955. Now it is barely a living pittance.

This kind of thing is international dishonesty. It has a demoralising effect throughout the world today. It is tempting us all to be debtors for as long as possible. It is subsidising the debts that Governments accumulate. The only way to stop it is to introduce some drastic measure. I hope that the Minister will turn his imaginative and decisive attention to this problem.

These, then, are the only points I wish to make, except to offer my congratulations to the Minister on bringing in a very successful Finance Bill. In conclusion, as these will probably be my last remarks in the Seanad, may I say that I shall always value my 21 years as a representative of Dublin University in this House as a high honour and as a salutary part of my education as an Irish citizen. I shall not develop that, but I mean it. It would be out of order for me to say more. I shall simply affirm my belief—against a good deal of opposition outside this House—that the Seanad has done, and will continue to do, much for the welfare of this country. I am proud to have shared in its debates for so long.

I intend to be very brief on this Finance Bill. There are just one or two points which I should like to make. Perhaps I might say at the outset, on behalf of myself and of other Senators, how much I regret the imminent departure from this House of Professor Stanford.

The part of the Finance Bill which I wish to discuss is not the most important part from the point of view of the amount of money involved or from the point of view of the effect it will have on the country's economy but it certainly represents the part of the Budget which will be remembered for generations long after the circumstances of the present day have been forgotten. I refer to the concession to writers, painters and sculptors which the Minister has brought in. Others have said that this is an imaginative and extraordinary step. It is unusual to get a concession from the Minister which has not been pressed for by various lobbies of the public. It is more unusual to get one as far-reaching as this one.

In view of the munificence of the Minister's gesture, it might seem unreasonable of me to press for a change in this which I think would be an improvement. The change could not be made this year but I would ask the Minister to consider it between now and the date of the Budget next year. This concession is given to living writers, painters and sculptors. I am anxious about the widow of a writer who finds herself bereft and the income of the family certainly goes down because there are no new works coming along. She will find herself faced, for the first time in many years, with a demand for income tax since the concession in the Finance Bill only refers to living artists, painters and sculptors.

I have an interest which is not personal in this. I say there could be no conceivable justification for a general exemption from tax of copyrights after the death of an author or performing rights in the case of others. In the case of a widow it might be considered whether in reference to copyrights or performing rights the exemption from taxation might be extended to her. In considering a widow there is also the question of orphans. It might be considered whether in the case of copyrights owned by children in full-time education they might come under the provisions of this exemption.

This is not a case for extending the class of people who benefit. It is merely extending the time in which a section of them might continue to benefit. I would be against the case made for bringing in whole new classes. To bring in an extension of this kind might make the whole thing collapse, which would be a tragedy. The Minister might consider the question of the wodows or orphans who suddenly find themselves, at a time when family finances were not as good as they had been, faced with demands for income tax.

There is one other matter which people have mentioned to me. The suggestion has been made that perhaps this tax concession in the case of writers would only be given to what are described as inoffensive, establishment writers, and that there might be a sinister financial censorship and that writers who offend might not be counted at writers of cultural value. I am in no doubt whatever that the Minister's view is that if the writer is a writer of ability and of great literary merit the nature of his writings, whether offensive or not—and whether people like them or not—should not come into it. People have made this suggestion. The Minister might care to deal with the matter.

That is all I wish to say on the Finance Bill. It seems to me that this question of exemption from taxation is so new and so fundamental in its nature and of such interest to writers, painters and sculptors all over the world that it is a step of the greatest importance and one which may well be copied by others. The Minister's munificence may not have an effect here alone but may affect artists and writers all over the world. I would like to congratulate the Minister on this Bill and on this provision in particular.

In approaching the general debate, I should like to begin by making a plea for reconsideration of the facilities for debate in this Chamber. A reversal to the old system of handling Government debates here would be a great improvement. The Finance Bill is the only one which has retained its place. The opportunity we had on the Vote on Account in March of each year of having a valuable opportunity of discussing Government policy following the publication of the Book of Estimates is gone. The Seanad always had an excellent debate on that. We cannot in this Bill tonight discuss the details of administration. This is what we are vitally interested in and where we have our main disagreements with the Government in the sharing out of the national cake and the amounts given to various bodies under various headings. We cannot discuss it now.

Previously we could discuss it within two weeks of this in the Appropriation Bill. We will not get an opportunity until perhaps next Christmas of discussing these matters. At that stage we will have no hope or opportunity of influencing Government policy in the following Budget. We are rather long suffering in the Seanad. When we speak on a measure we take it for granted that we will not influence the measure before the House very much, but we are hoping always that we can influence the following measure.

Therefore, in speaking on a Finance Bill we are trying really to throw out suggestions and ideas that might influence the following Finance Bill, and in the case of the Appropriations Bill that will affect the distribution of the finances between the various Departments and the various bodies. Now coming next Christmas there is no hope of that. This hope is rendered more nugatory by the recent Government decision, which I do not think has been very well publicised yet, that all Estimates for the following fiscal year have to be in on the 1st of June of the previous year, so that there is little use in speaking and hoping to influence the Budget for next March, speaking next December, when the Estimates have to be in on the 1st of June.

Therefore, I ask the Leader of the House and the Government to try to see can something be done about this. Can we get some opportunity of having a timely word on the distribution of the national cake as shown in the Book of Estimates? A compromise might be to agree to have a debate on a motion in July, seeing that the Appropriation Bill is not then available, that Seanad Éireann notes the Book of Estimates. If the debate were held at that time with two or three days allocated to it then the following Bill could be taken without debate in December. That might get over the situation, but the present situation is completely ludicrous. I am appealing for an end to that.

To return to the present Finance Bill, in dealing with a Finance Bill when you are not in the Government Party or in the Government you can of course advocate all sorts of concessions and reliefs and so on and you do not have to worry about providing the money. The unfortunate position that every Finance Minister finds himself in is that he can see the necessity for most of the reliefs but money has to be provided to meet those. We will try to be realistic on it, and we welcome what has been given, especially the slight increase in personal allowances. It is very little but yet is costs £3½ million—£15 to a married man.

£30 to a married man and £15 to a single man. That does not of course restore the position to what the personal allowance was ten years ago, making due allowance for the depreciation of money meantime, yet we welcome what has been given and we hope that the next Finance Bill may produce something more.

We look to the Finance Bill now more as an instrument of fiscal policy. It is there I think that we can profitably contribute to the Bill by suggesting ways and means that can succeed in shaping our economy. The first thing that we have to recognise is that the Government are very much influenced—and I think rightly so—by the National Industrial Economic Council. They give their reports periodically and they are always worth reading, challenging, usually pretty straightforward in their thinking and so on. Indeed we have often tried to get discussions going in this House on their reports but very often the motions stand on the Order Paper long after the report has lost its value.

I again have to return to this, that this Council have in some mysterious way been caught up in the conflict between the Department of Finance and the Department of Agriculture and the result is that agriculture, our main industry, producing more than 30 per cent of the national income, is not represented on the National Industrial Economic Council. I appeal to the Minister at the start of a new Government to right this as soon as possible, because its recommendations on agriculture are always wrong, because it has no faith or belief in agriculture, and it has not the type of faith or belief that every practising instructor in agriculture and every good agriculturist has. It does not put agriculture in its proper perspective as the one facet of our economy that is capable of great expansion if only we are courageous enough to face the task of that expansion. So I appeal to the Minister to right that.

Also I think that the Minister could broaden out that Council by seeing that provincial opinion is available there, because by and large another criticism I would make of their reports and findings is that they are very centralised, very Dublin-centred, and in general I do not think that they reflect in an adequate manner the contribution that the provinces can make. In that regard I think that the Minister might look at the personnel available in the provinces and see if these cannot be included to broaden that. I know that the Minister by a rather imaginative stroke of his went against all this outside Dublin to Galway to produce the head for the Science Council. Where he has been found there are other men who have a great contribution to make to a body like the NIEC.

Any discussion on taxation leading to a fair measure of redistribution of incomes brings out the necessity for a prices and incomes policy. It is now four years since we had a long and very worthwhile debate in Seanad Éireann on the necessity for a prices and incomes policy. We have had many reports and yet we got no action. I know that the subject is an exceedingly complex one. You have to steer between a completely regimented and as it were planned approach to this and our present chaotic approach which like the maintenance men's strike really depends on the pressure a group can exert. I appeal to the Minister again at the start of this new period that perhaps by the autumn we might see the beginning of a proper prices and incomes policy. The NIEC have written quite extensively on this, and the recent issues of the Banking Review have again come out quite strongly on this as the only firm basis on which we can base our economy in the future.

I am glad to note from the Minister's Dáil statement that the Government expect quite shortly to have a general review of the Free Trade Area Agreement which has run 3½ years. I think that its impact on our economy can be weighed at this stage and we should seek to modify it. At all times I have held that it was the best that we could get at the time and that those who negotiated it were to be complimented on it, set as it was in the expectation of free trade in the 70s and entry into the Common market in the 70s also.

Those two realisations are not quite as near as they appeared to be then. Also we have the fact that twice when it pleased Britain she broke the terms of this Agreement. It was not called breaking, still by any other name it means breaking the terms, and consequently we are in a strong position in going to negotiate and we should be able when the time comes probably to bring results. In that regard we have in the Free Trade Area Agreement and the reduction of tariffs the main door to the entry of British goods into our market. I do not want to develop that here too much, but it calls for some revitalising of the Buy Irish Campaign. I wonder whether the Minister can bend our fiscal policy to achieving that, because at present the Buy Irish Campaign is an absolute dead letter. Very careful steps are taken in most of the stores to camouflage the foreign origin of the goods displayed and 70 to 80 per cent of the housewives have no idea for the most part that they are buying foreign goods. I reckon that correcting that is a No. 1 priority in trying to right our position and our balance of trade.

What is done here from the point of view of the rights of widows and dependent children amounts really to just a little bit of tidying up. I do not think it amounts to anything more than that. It certainly does not go any distance to meet the strong case we made last year and the year before for the mitigation of the impact of death duties on a widow with a family. We have shown the iniquity of the capitalised value of the pension accruing to the widow. If a widow is left a pension of £2,000 a year and she is 70 years of age, according to the life expectancy tables she has only about four years to live and that means that she will probably draw on average only four pensions; the present value of those four pensions is something around four times £2,000—slightly less; £7,500 —but, if she is a young widow, aged 35, with young children, then she is held to have a life expectancy of about 33 years and the estate is increased by the full present value of the £2,000 received each year for the next 33 years. It would not be exactly 33 times £2,000; it would be about 12 to 14 times £2,000.

That increases the estate by about £24,000 and can easily move it into the higher income category. In response to appeals here and elsewhere, the Minister did try to mitigate this situation by giving allowances for dependent children off the death duties. These were increased very substantially last year. But the main problem still exists, this aggregation of pensions or insurance. If the State cannot see its way to remitting the tax on these sums they should at least arrange for the tax to be paid each year instead of imposing the full sum on the unforunate widow at the very worst possible moment, within six months of the death of her husband. The tax could be on a pay-as-you-live basis which would mean that it would be paid each year on the £2,000. I trust the Minister will come back to us next year with this next instalment.

With regard to the remission of tax in the case of artists, writers and so on, presumably one of the motivating factors in this is the uncertaibty of income. While these people may earn a good deal one year the following year may be a very lean one. This is a generous gesture on the part of the Government. There are others besides artists and writers in a similar position and I think the important thing to do from the point of view of our taxation code is to ensure that it does level out. I would also like to think that the income tax paid would form the basis for earning the right to a pension, a contributory pension, so that those with uncertain incomes would have the assurance that what they contributed in the heyday of their earning power would entitle them to consideration in the future and to a pension afterwards and the "afterwards" should really begin to operate when their incomes fall to pre-determined levels.

I support Senator Stanford in his plea for a broadening out in the case of writers. Writers in science or ain education should certainly qualify and this should really have been spelled out as artistic, cultural or educational. They are not mutually exclusive terms. We are short of textbooks and every inducement and encouragement should be given to those with the ability and the energy to spend the time necessary compiling these books. The available market is a small one and no writer could make any large fortune out of such textbooks. I agree there should be a broadening out here.

There is this imaginative approach, this variation of tax to achieve a specific end. We have it in relation to the Shannon Free Airport Development Company. The industries there get certain tax remissions which have now been extended up to 1990. There is the same idea in the export tax relief system. This is designed to encourage industry. However, we should not confine ourselves to the factory floor. On occasions here we have appealed for a more imaginative approach towards attracting back retired people to live here. We have much to offer such people. If the Government would make imaginative tax concessions to these people I think we would get a great number of them. They would, of course, need special amenities and personal social services. The late Father Coyne, who was President of the Irish Agricultural Organisation Society, had a pet scheme for attracting retired people to the Bantry-Glengarriff area. He felt it could do a great deal for that area which had its climate to offer. Provided the organisation of a personal service matched up then it could really provide a great deal. I see the Minister is smiling. I hope he was not at the Olympia.

I am sorry. If the Deputy is talking about attracting retired people we have already provided that pensions will be free of tax here if they are not liable to tax in the country of origin.

Yes, but you should go further. You could be selective: take a few areas and provide certain personal and social services, which could be on call in the area, and so on, and other services that would make life more pleasant. There are many people in England and America who would be induced to come if that was the case.

I want to repeat that we have provided that if an American who has a pension of either one or two kinds comes here, that pension is now free of income tax. It is a very important provision.

It does not apply to the British?

It does. The provision is that any pension which is free of tax in the country in which it is paid will be free of tax here.

Yes, but still the pensioner will be liable for income tax here, will he not?

No; if the pension does not attract tax in the country of origin and the pensioner comes here we will not charge him income tax.

That is really only a double taxation agreement.

No, it is not. It is a very important provision.

Most pensions are taxable in those countries, are they not?

If we exempted a pension which is taxable in the country of origin we would simply be making a present of that tax to the revenue in that country. The two important types of pension with which we are concerned are the Social Security Pensions and the Railway Retirement Pensions in America which are not liable to tax in the US. They are exempt here if the people who receive them come and live here. It is another one of my enlightened proposals.

It certainly needs to be organised on a community basis and needs to be pursued strongly really to attract those people here. Another matter to which I want to refer is the recent increase in borrowing abroad and about which I am a little uneasy. I am not talking merely about foreign subscribers to Government loans and so on, but the various semi-State bodies and other concerns doing some of their financing by external borrowing. In an earlier Bill we had Aerlínte being financed to the extent of £28 million, presumably by borrowing from abroad. We may say that is testimony to the soundness of our economy if we can get money from abroad, but I want to look at it from the point of view of cost to the country and in the situation where at present we have interest rates of 8½ per cent and 9 per cent prevailing. The interest is a very great burden on our national loans. At least if the interest is paid to an Irish person here it is part of the person's income and it is used to buy Irish products and meets the various tax laws, whether it is the tax on petrol or on drink or the wholesale tax. The result is that of the £9 that the person gets in interest on each £100 about 40 per cent, or £3 10s, ultimately finds its way into the Exchequer again. The Exchequer gives out £9 and gets back £3 10s so that it is at a net loss of £5 10s. On the other hand, if that payment was made to somebody outside the country, if the money was borrowed from abroad, there is no money coming back to the Exchequer from it. In point of fact we get say 14 per cent paid to an Irish person and when you subject that to the tax laws about 40 per cent would find its way back to the Exchequer, or almost £6, leaving 8 per cent to 8½ per cent, so that the cost to the Exchequer in paying 14 per cent to an Irish lender, is the same as paying 8½ per cent to 9 per cent to a foreign lender. That should bring home to us the cost of foreign borrowing. We should make every effort to get more of our needs at home through a greatly increased savings campaign.

I am not suggesting that we should start paying 12 per cent or 14 per cent at home because we cannot disturb the equilibrium of the economy. It is being disturbed enough at the moment because you have last year's Exchequer loan at 8 per cent being quoted at present at 96 or 96½. Perhaps it may be possible to combine both the national and social objectives by having attractive schemes aimed at the small investor. One does not mind giving the small investor additional rates or additional advantages in order to encourage him to save more. I should like the Minister to say what is the level of our foreign borrowing at the moment. My figure suggests that it is between £30 million and £40 million, but it is probably higher.

I would like to feel that we could reach out to the small people for more. We could look for savings from the overtime earnings of some workers in our factories. The only solution is to run those idle factories for longer hours. That is the only way in which the purchasing power of the vast bulk of our workers will be increased and yet not disturb the cost of production. Out of those increased earnings the State might hope, by giving tax reliefs on a certain amount of overtime within certain categories, to attract savings directly or through workers acquiring shares in the company. Either way the money would be put to work productively for the community rather than having it spent on consumer goods. That is something that could well challenge the ingenuity of the Minister, to come up with a scheme to meet those double objectives.

Finally, I would appeal also in relation to this matter of getting industrial efficiency. Agriculture is not represented and again it is not having the impact it should have. Many of our bodies sound well but judged by their performance they are not matching up to what is required. I will end by asking the Minister to reform the NIEC as a first prerequisite to getting a proper prices and incomes policy in this country.

We are now discussing the Bill which is intended to legalise the provisions of the Budget. A lot of debate went into the section of the Budget which was regarded as an innovation granting reliefs to artists, writers, composers and sculptors for creative work. I consider that it is a humanitarian section more than anything else. There are not many people engaged in this activity who earn the kind of money that would involve substantial tax on income. Many creative artists have very low earnings for very many years. An artist might go five years before he would succeed in producing something creative. He might go five years before he would hit the jackpot in one year and then his earnings for that year would be taxed but he would have had four or five lean years before that and would not have been taxable on his income.

I would be interested to know, for instance, and it may be possible for the Minister to make out a list now, the number of creative artists, writers, composers and sculptors who were taxed annually or even once in the last few years and then we could assess how much, in fact, it will cost the Exchequer to grant this new relief.

I do not believe that the relief in money terms, as far as the nation is concerned, will be substantial. There are a few creative artists and composers who earn substantial money but the vast majority of these creative artists only occasionally succeed in getting a substantial return for their work. For that reason I think it is a humanitarian clause taking into consideration the fact that these people in most cases have many lean years before they may have a success. Taking it over a number of years, on the average, the relief will not be substantial. Of course, it is encouraging to those people to be told that they are being recognised as creative artists by the fact that there is a special section in the Finance Bill to relieve them of the payment of taxes in relation to their earnings on creative work.

We are discussing now the election Budget of 1969. It was described as such and it was designed in good time for the election campaign and the Minister is to be congratulated on having designed a very popular Budget. But, in money terms, what is the meaning of this Budget?

Seventy-five seats.

Exactly. This is the point. This is exactly what I am going to tell the Minister.

You need not. He knows it.

He has used £8 million of the taxpayers' money for political party purposes. The canvassers went from door to door. A canvasser, going to the doorstep of a house where the housewife and six children were living, told them how much this Budget would mean to that family and then went to the next house where there were pensioners to tell them what this Budget would mean to them. Of course, in each case they were told that Fianna Fáil were giving them this money. It is the taxpayers' money, subscribed, in fact, by those very people whom they interviewed at their doorsteps, that is being given out. It is proposed to give out £8 million. We are discussing a Finance Bill now which is intended to collect £12 million. The distribution of the £8 million at the doorsteps was very successful but the canvassers forgot to mention that, in fact, the Budget intends to collect £12 million from the same people or their neighbours in the form of one tax or other.

Of course, these people who will benefit by the distribution of this £8 million of their own money will pay back a very substantial amount of it in other taxes—taxes on their drink, their cigarettes, their entertainment and all the other items that are taxed in his Bill. There are 65 sections in this Bill and there is a trap in every one of these sections to take money in one way or another from the classes of people affected by the sections. Let us see the Budget for what it is.

Now I am going to criticise the Government for the fact that, with the Budget increasing substantially from one year to another—it is nearly £400 million that our 2¾ million people, including infants and aged persons, are going to subscribe this year in the form of taxation towards the running of this little country—the Government have made no attempt so far in respect of the recommendations of the NIEC to design and implement a prices and incomes policy.

Are we going to drift on as we have been, watching the value of the £ fall annually? In the last 12 months the value of the £ fell by 1s, approximately. The purchasing power of the £ fell in 12 months by 5 per cent. It has fallen by 10s since 1948. Twenty shillings in 1948 is worth only 10s 4d now. The fall in the value of money continues but no effort is made by the Government to preserve the value of the £. This fall in money values affects most severely people who are on small fixed pensions. The Government have made no attempt to protect those people against the steep increases in prices.

Everybody knows that no attempt is being made by the Government to control price incrases. In the shops the price of an article goes up this week and the Government do nothing about it. The following week the price goes up again and still there is no action on the part of the Government. There is no regulation of prices and these prices must be met out of the earnings or income of the people who are purchasing the article.

When the Coalition were in office there ware no pounds there at all.

The £ was worth far more in those days than it is today.

Yes, but you had not any £s.

They were worth 20/-a time. The Senator would be glad to have them now.

But you did not have them.

We were able to build too many houses at that time.

You had nobody to go into them.

The record of houses built in 1956-57 has not yet been equalled and was never equalled before.

An Leas-Chathaoirleach

I am sorry to have to interrupt this disputation between the Senators. It is hardly relevant to this Bill.

Nor is it accurate.

Sorry. Every year we see an increase in Government expenditure. If we examine the statistics, we shall see that the number of people at work is less than the number who were working this time 12 months ago and apparently the number of people in employment continues to fall. Apparently, the Government take no interest at all in trying to ensure that the number of people in employment will be increased: they are satisfied to see a reduction in employment.

Emigration continues. There are anything up to 60,000 registered unemployed persons seeking work. The taxation at the moment, at between £300 million and £400 million, is approximately one-third of the total earnings of the community. It is a very substantial charge on the earnings of the people. Approximately 6s 8d out of every £1 earned by the people is taken back from them in the form of taxation one way or another.

The national debt has reached approximately £1,000 million. We are not satisfied merely to beg, borrow and steal in every possible way within our community here: we borrow the balance outside this country one way and another.

In the past and up to the present, we have had a system of financing the capital programme with the aid of national loans. In his Budget statement, the Minister indicated his capital programme but did not indicate how this capital programme would be paid for.

I thought I did.

If the Minister did so, I am sorry that I did not notice it. If the Minister did mention that he proposes to float a loan for the purpose of financing the capital programme, I am sorry if I missed that point.

Up to the present, people have been investing their money in national loans. As soon as they have invetsed it there, at very attractive terms, the value of their money is not protected because the purchasing power of the £ is not protected. It was allowed to drop one shilling in the past 12 months. There is nothing in the agreement with those people who subscribe to the national loan to assure them that the £ they subscribed in 1968 will be of the same value when it is redeemed. We have reached a stage now when that guarantee or undertaking will have to be given to people who are asked to subscribe to the financing of capital programmes. They cannot continue to subscribe to our national loans without these assurances.

This raises the point as to whether the Irish £ sterling should be tied to any particular currency—the dollar, the German Mark or any other of the currencies. At the present time, with a policy pursued by the Government of allowing things to drift, in the absence of a prices and incomes policy, no attempt is being made to protect the value of the £. The result, of course, is that the price of house property in this country is now equal to or higher than the price of similar property in England. Much of the money being invested in Irish property—whether it be houses, offices or land—is foreign money. It has certainly upset the situation for Irish citizens who would be interested in purchasing these houses and property.

The cost of land has gone up very considerably. Probably it has gone up in anticipation of entry into EEC. If that is the case, I think the interests of Irish citizens should be protected. I suggest their interests should be protected by a very substantial tax—possibly up to 50 per cent—on the purchase of land in this country by non-nationals. The first of this exercise began when talk of our entry into EEC was around. Central Europeans —I might describe them as Germans, Belgians, Dutch and possibly Danes— looking at the price per acre of land in their own country, decided they would come to this country and purchase Irish land in anticipation of our entry into EEC, because of course the cost of land in Europe was at least four times as high as the cost of Irish land at the time. Now this price in relation to the Common Market countries has moved up towards that level and before we find a situation where Irish land is snapped up by so may non-nationals we should do something about it. I would mention that non-nationals usually interested in large holdings. There are many small farmers, congests, uneconomic land holders in this country seeking an opportunity to become owners of Irish land with the aid of the Land Commission or other financial means provided by the State but there is no attempt made effectively to discourage the purchase of Irish land by non-nationals. These uneconomic holders, small farmers, congests and the like have no chance of having their hopes of getting land realised. I feel this should be stopped immediately by the imposition of a very heavy tax so far as the purchase if Irish land by non-nationals is concerned.

We are trying to get into the Common Market, for good or ill. I am sure that will depend on ourselves to a very great extent but we could find ourselves in great difficulty economically when we do go into the Common Market if we are not geared for it. We may find that we are not able to compete in the agricultural and industrial fields and of course the provisions of the Treaty of Rome will ensure that all countries are equal within that market when it comes to competition for agricultural or industrial prices, output and conditions. I feel that with this prospect in view our Government should ensure that the investment of foreign money in land and houses in anticipation of entry into the Common Market should be controlled in addition to being discouraged by the application of very heavy taxes, much more than the nominal taxes which apply at present.

At the moment 2¾ million Irish people are contributing between three and a half hundred million and four hundred million pounds towards the running of this little country and the people who subscribe from their week's wages are actually contributing nearly £70 million of that. Seventy million pounds of that is being taken out of their wage packets. The Minister in his budget gave a tax concession of £15 to a single man and £40 to a married man and stated that this would relieve 30,000 persons. Of course as soon as those people receive an increase in wages or if they work overtime or get any other kind of increase such as a bonus in their earnings the tax will go back almost immediately. Anyway, that relief amounted to only £3.5 million out of a total of £70 million being subscribed at the moment. We know that if wages go up by, say, 5 per cent which results perhaps in an increase of £10 million in wages and then 5s 3d PAYE tax is taken off that there is immediately a very substantial contribution under this PAYE system and it certainly obliterates the £3.5 million relief.

One bone of contention with people who pay PAYE is that no allowance is made for the person who must travel a long distance to his or her work. There are people travelling 70 miles a day to and from their work and there is no allowance made. For instance, there are builders' labourers travelling from Navan to Dublin and from the Midlands to Dublin every morning by car and back again in the evening and no allowance is made for that. Those people would not travel from Navan to Dublin if they could get employment around the corner. For that reason travelling expenses should be recognised and allowances made under the PAYE scheme for those people.

I have much more to say on this but I shall reserve it for the Committee Stage.

This is a very unsatisfactory position because the Minister has come in here and asked us to accept this Finance Bill and to pass it and very soon the Dáil will have adjourned.

It has adjourned.

There is only one Member of the Fine Gael Party here at the moment.

Think of what it would be like if we had a few more. It is bad enough as it is.

There is no possibility of having this Bill amended in any way because first of all the Government majority would be used. For instance, if there was some kind of obvious error in this Bill the Government majority would be used in order to prevent——

The Senator should know he cannot amend it, he can only make recommendations.

I understand that but if the Minister decides that the recommendations should be accepted he cannot go back to the Dáil now unless he sends out telegrams and brings them back in order to get the Bill amended. I regret to see that once more the iniquitous Finance Act of 1965 has been retained in our legislation. That is the Bill which was designed to raid the thrift of those who decided to protect their wives and families against the ravages of the estate duty system. Those people took out insurance policies to cover the cost of the estate duty after their deaths which would leave their families in much the same position as before those persons died. The situation now is that the insurance policy taken out to protect that estate is put in with the estate and counted for taxation purposes. It was obviously improper and I felt that at some stage since 1965 this provision would have been repealed but it is still there. It means that people are not given a chance by means of insurance to protect their wives and families against this very heavy tax. Frequently successive deaths in a family cause very great hardship.

An Leas-Chathaoirleach

Might I point out to the Senator that it is now past the normal time for adjourning.

I think the House will agree that we should hear the concluding address by the Minister on the Second Stage and then adjourn.

An Leas-Chathaoirleach

Are there any other Senators who wish to speak when Senator Rooney has concluded? Is the Senator nearing a conclusion?

There are two things I want to mention. We are meeting tomorrow—that is the first thing.

Then why not adjourn now?

Secondly, will we have the Minister for Finance here in the morning?

An Leas-Chathaoirleach

I take it that if we adjourn now the House will resume the debate on the Second Stage of the Finance Bill first thing in the morning.

Yes. Senator Rooney has had 40 minutes and I think that is a reasonable time for him to make his case. He is well aware of the reason why we want to finish this programme but he is not being in the slightest degree co-operative in continuing this discussion when we have the proposition that the Minister should conclude the Second Stage now. If there are any points he wants to raise he could do so tomorrow on the Committee Stage.

I object to the remarks of the Leader of the House because I have my rights here and I am entitled to speak for another three hours and the Leader of the House knows that.

Nobody denies the Senator that, but in the circumstances——

On a point of order, not after 10 o'clock without a special resolution of the House.

An Leas-Chathaoirleach

Adjourning at 10 o'clock is a custom rather than an order.

I am anxious and prepared to co-operate with the House. If the Minister intends to finish tonight I shall conclude and if he feels he could not finish tonight I shall move the adjournment.

I shall conclude in five minutes.

In that case I shall conclude now.

A great deal of the discussion has taken place on section 2 of the Bill which I think has become fairly popularly known now as the artistic provision. I should like to mention briefly that in so far as we are trying to improve what has now become fairly commonly known as the quality of living or quality of life, the Budget in fact contains three measures of some importance.

I think we all agree in the Oireachtas that as our economic programme continues, and as we seem to be able to achieve greater economic expansion and development, we must devote more and more time to ensuring that the way in which our people live is constantly improved and that they are enabled to lead fuller, better and more satisfying lives. That is what is behind the three provisions I mentioned. Section 2 is fairly obvious in its intent but there are two other measures which, perhaps, have been to some extent overlooked. One is the setting aside of an initial sum of £100,000 for the provision of better sporting and recreational facilities for the young and the provision contained in section 64, which is designed to encourage employers to provide such facilities for those who work for them.

I should like also to remind the House that these three measures simply carry on a tradition which we have established over a number of years of trying in each Budget and Finance Bill to do something to make a contribution towards the objective I have been discussing. The measures which we introduced to provide free transport and free electricity for the old people in their own way made a substantial contribution towards improving life for a very large and important section of our people. I mention these matters to assure the House that the Government are aware that it is necessary in this age to make better provision for leisure and to do what we can to help people towards a fuller and better way of life generally.

I am sorry that Senator Stanford has announced that he will no longer be a Member of this House because I feel that not alone intellectually but also visually he contributed to making the Seanad a more distinguished place. I might perhaps on this occasion of farewell also remind him of the happy occasion when with some assistance from me he put through a Private Member's Bill of some significance. I shall always remember the considerable Parliamentary skill and the dedication which he exhibited on that occasion.

I am interested in Senator Yeats' point in connection with section 2 in regard to widows and it is something I shall keep in mind and look at on another occasion.

Senator Dooge made a plea that we should continue on a course of reform on budgetary machinery and I assure him we shall do that. In fact, we hope to do a substantial amount of work during the remainder of the year in this area. We are also looking at the possibility of devising, to some extent, multi-annual budgets with a reasonable tolerance both on the expenditure and taxation sides. The Senat or spoke about the achievements of scientists and engineers in our day and, of course, he is quite right. I do not think, however, we could ever achieve any sort of inbuilt stability in the economy in the way it is done in those scientific type of programmes.

Perhaps, while we in this country could never hope to put a man on the noon, I might remind the House that we have here an asset of our own which is very distinctively ours, that is, a tradition of intellectual endeavour. I think this is true. I am more and more convinced of this fact. Our people have, for some reason I am unable to fathom, a great reserve of natural intelligence and a great propensity to achieve intellectual excellence. Perhaps we could, if we devoted more of our time and effort to it, make a contribution to the world in this sphere and, perhaps, modestly give a lead to other countries not only in what we produced in the intellectual sphere, but in the arrangements we made for the development of a sympathetic intellectual environment here for our people. This Government will keep this in mind continuously as an objective. I do not think there is anything to prevent us doing this. We may not have the material resources with which to achieve the spectacular things other countries can achieve but, perhaps, if we persist, we can quiently create here a sort of community which in its culture and intellectual excellence would be a very satisfactory place for Irish people to live in, in the future.

Senator Crowley made what he called an unanswerable case for a capital gains tax. I must very strenuously disagree with him. The Commission on Income Taxation, a very representative and impartial body, having examined this matter very fully, concluded that the disadvantages associated with such a tax were so enormous that they would have to recommend against it. It has not been very successful in Britain. In fact, it has produced very little revenue and that very fact would indicate that, as a potential for redistributing income in the community, it is of very limited use. I am satisfied that, in our circumstances, a capital gains tax has not very much to offer to us. Indeed, it could be positively disadvantageous in a number of ways.

Senator Stanford talked about inflation. Of course we are all very much aware that the world today is in a serious inflationary spiral. Unfortunately, because we have an openended economy, we cannot escape the over-flow of that world wide movement. The nations of the earth seem to be singularly unable to agree on sensible international monetary policies. It seems this is an area in which it is very difficult to get any improvements agreed between the different nations. We will continue to do what we can in the international monetary councils of the world to try to improve the situation. I am not at all optimistic. From what I have seen of the way things have been developing in recent years, there does not seem to be any great deal of international commonsense in this area, whatever about other areas.

The remedy Senator Stanford proposed, a simple remedy, I am afraid is not one I would regard as being very effective—that of tying loans and borrowings to the cost of living. That was tried in Finland and they had to give it up. Indeed, it seems that one could argue that this very device, in itself, generated inflationary pressures. That was their experience in Finland.

In reply to Senator Quinlan, we have a very dedicated and energetic voluntary Savings Committee which is all the time looking for new methods of encouraging savings. There is now a very wide range of media available to the public to encourage them to place their savings at the disposal of the community. Any additional incentives which appeared to me to be desirable would be adopted. If Senator Quinlan can suggest anything of a practical natural I will, by all means, consider it.

I think these were the main points raised. Perhaps I might mention that Senator Rooney seems to have put himself in the unfortunate and unenviable position of being practically the only representative who spoke in grudging terms about the provision in regard to artists and others. He more or less missed the point of the whole thing. This is very largely an effort to create a sympathetic environment and the amount of money involved one way or another is not at all important.

I described it as humanitarian.

That is not a word I would choose myself. I would be more inclined to describe it as generous, enlightened, broadminded, liberal.

How many pounds, shillings and pence? Not £5,000.

I do not think I am capable of enlightening Senat or Rooney.

The Minister got a lot of mileage out of £5,000.

Where did the Senator get a figure of £5,000?

It does not even amount to that. The Minister got a lot of mileage out of it.

It does not matter what it costs or does not cost. It is the spirit which motivated it that matters and that is what will bring us the greatest benefits.

To come back again to the opening speaker, Senator Dooge—and I think most of us would agree that he made a very good speech on this Finance Bill —he said he hoped we would be able to devise new and better methods of budgeting and better techniques, more in line with the age in which we live. He seemed to suggest we should throw the traditional methods overboard and develop something new and, I think he said, imaginative. I do not think that would be too easy. I do not think it will ever be possible to come up with policies in the financial field which will be universally acclaimed as suitable, desirable, attractive or anything like that.

The harsh reality of the situation is that the Government have to achieve certain social and other purposes, and, to achieve them, they have to interfere with the situation of a vast number of citizens. No matter what methods or techniques are devised, that basic unpleasantness will remain at the root of all financial and fiscal policies. We will always have to take money from some people in order to give it to others or to devote it to some desirable ends. When I say that, I want to make sure that no one thinks it is simply a matter of suddenly, overnight, devising beautiful and attractive and acceptable new policies. But I do not despair of being able continuously to improve matters. We are always looking at the whole taxation structure and we shall look at it much more keenly in the next few years and, I would hope, overhaul it. Whether people will subsequently call that a radical overhaul or not is something I cannot envisage at this stage, but certainly we intend to have a good try at bringing the whole system of taxation into line with the requirements and demands of a modern developing community such as ours is. That is the furthest I could go in replying to Senator Dooge's interesting speech on this measure and his appeal with regard to future Budgets.

Senator Quinlan is still here and I could not help thinking as he was speaking that the only thing he was short of suggesting was that we would give out a few Green Shield stamps with every £1 of income tax we collected.

Question put and agreed to.
Committee Stage ordered for Thursday, 24th July, 1969.
The Seanad adjourned at 10.25 p.m. until 10.30 a.m. on Thursday, 24th July, 1969.