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Seanad Éireann debate -
Wednesday, 18 Dec 1974

Vol. 79 No. 4

Health Contributions (Amendment) Bill, 1974: Committee and Final Stage.

Before we take up the Committee Stage, I should like to indicate that I have ruled amendment No. 5, standing in the name of Senator McGlinchey, out of order on the grounds that it is outside the scope of the Bill as read a Second Time and that moreover it involves a potential charge on State funds. I have also ruled out of order amendment No. 6, standing in the name of Senator McGlinchey, on the grounds that it is not relevant to the subject matter of the Bill as read a Second Time. The Senator has been notified accordingly.


As amendments Nos. 1 and 2 appear to be cognate it is proposed that the two be discussed together.

I move amendment No. 1:

In page 2, line 12, to delete "1974" and substitute "1977".

The reason we have tabled this amendment is because the economic climate is not ripe for another increase. In the last three weeks the National Coalition Government have surpassed themselves as far as extracting money from the hard-pressed taxpayers is concerned. The people who are being asked to pay this increase are the workers, the small businessmen and the small farmers. At this stage, when the Government are asking for restraint as far as income increases are concerned, we believe that, by accepting this amendment, the Minister would be demonstrating Government restraint as far as increases are concerned. I also feel, despite what the Minister said in his reply to the Second Reading, that the Government's achievements in the development of the health services are very poor and if the date for imposing this legislation is extended by three years possibly during that period the Government will expand the health services in the manner in which Fianna Fáil anticipated when introducing the Health Act of 1970.

The Minister has given us to understand that the expansion rate has been very good and points to the fact that the Vote for health services has increased from £86 million to £166 million. He quoted figures which I quoted in my Second Reading speech and the only difference between us was that the Minister seemed to think that these figures were satisfactory whereas I felt sufficient money was not being injected into our health services.

We should postpone the proposed increase until the Government decide that the health of the people should receive top priority. I do not accept that they are giving it the priority they should.

As I said earlier, of the £40.5 million extra being provided in the coming year, £20 million will be devoted to pay and price increases. An additional £9 million will go to pay for the relief of rates, leaving £11 million or £11½ million which will be spent on the various medical services and the provision and improvement of general and psychiatric hospitals. I do not believe that this money is sufficient and, had the Government not granted relief of rates, an additional £9 million would be spent in the coming year on the actual health services. In fact, they have reduced expenditure on health services by £9 million, in order to keep an election promise.

While some ratepayers admittedly will benefit, the people who should benefit from the health services have suffered. That is why I am asking the Minister to accept this amendment, to postpone the collection of his increase for three years, to enable the Government to carry on the good work commenced by Fianna Fáil following the passing of the 1970 Bill. If in the next three years this Government should demonstrate the same dynamic approach to the expansion of the health services as the Fianna Fáil Government did in their last few years in office, then, by 1978, nobody would seriously object to a request to increase this contribution.

I should like to join with Senator McGlinchey in his comments in regard to these amendments. They raise a point I made quite strongly on Second Stage. We are imposing an 18 per cent increase on those categories most disadvantaged by the present economic circumstances and by the effects of inflation. I am referring to what is called the middle income group. They used be described as such but now they are described as people entitled to limited eligibility within the terminology of the Health Acts. This category is outside the group entitled to general medical services: those still under £60 valuation in the case of farmers, people insured under the social welfare Acts and persons whose yearly incomes are less than £1,600.

These three categories cannot be regarded as being well off. They have to make a contribution towards the health services: apart from this contribution. They are not totally eligible for every medical service. They are entitled to hospital in-patient and out-patient services, to maternity and infant care services and the drug subsidy scheme. Outside of that they have to pay their way under the general medical services. In addition to the contribution, these people have to pay for a substantial proportion of the medical attention which they or their families may require. This is the category asked to pay an 80 per cent increase, the category hardest hit. People entitled to general medical services are, in the main, those who are looked after in one way or another, and rightly so. That is part of our social obligation as a society. These people in the middle are a hard-working segment of our population. In most cases, whether working in a factory, or on a farm, or in administration they are ravaged by inflation and ravaged by the agricultural decline we witnessed during the past year. These are precisely the people from whom the Minister decides to make a revenue grab, thereby adding to their tax burden.

The Minister himself has admitted that there are real difficulties by reason of the farming situation in getting the contribution at the present level from farmers with under £60 valuation. There is a real lack of thought on the part of the Government. It was certainly a strange decision for a Government to decide to introduce a tax on this category at this stage. I wish to emphasise again that this is not basically a health measure, this is a taxation measure. There is nothing in this Bill that will add to, improve or expand the medical services. This is simply a Bill to enable moneys to be transferred from Exchequer obligation to a headage payment in regard to social welfare earners, adult persons whose income is less than £1,600 per annum and farmers under £60 valuation.

This headage type of payment, a straightforward payment, is increased by 80 per cent in one case per week and in the other case per year—26p per week and £12 per year as far as the farmer is concerned—and is paid automatically by the contributors without any regard whatever to earning capacity. It is an automatic payment under certain figures and for certain categories. There is no point in the Minister, as he said in reply on Second Stage, arguing that this is not taxation, and that this is not regressive. It is highly regressive, to use the economists' term, which means that it is unjust. It is an unjust form of tax in that it is a headage tax irrespective of capacity to pay. It is highly regressive.

Why did the Senator introduce it?

I want to answer that. It was introduced by us in an era of expanding prosperity, where the capacity to pay was rising and where the revenue was rising by reason of the increased capacity to pay.

That is a flippant reply to a serious question.

It is now being increased by 80 per cent in a period when there is a diminishing capacity to pay on the part of the people concerned, where the people concerned are being crucified by inflation that, according to the Central Bank, has been contributed to by 50 per cent by Government action apart from international difficulties.

It has nothing to do with the principle of taxation.

When I quote the Central Bank I am not quoting somebody from the Fianna Fáil organisation, I am quoting Dr. Kenneth Whitaker, chairman of the Central Bank, who authorised the various Central Bank reports in the past year which were severely critical of Government policy. They went so far as to itemise the exact contribution as at 50 per cent. Budgetary policies pursued by the Coalition Government over the last two years have contributed 50 per cent to the present economic difficulties. That is from Dr. Kenneth Whitaker, chairman of the Central Bank, the major financial agency under the Government.

This measure was introduced by the Senator as a Cabinet Minister. The Senator supported it.

I remember when the Health Act was introduced in 1970. The Minister, in replying, paid glowing compliments and emphasised the fact that under that Act the Minister for Health could adopt any progressive measure he wished and I agree with him. Indeed, I would urge him to pursue that pragmatic approach to a greater degree rather than try to bring in doctrinaire measures we cannot afford. That Act is an embracing Act under which the existing health and medical services can be improved in a rational manner.

I wish to return to the point about the form of taxation proposed here. As everybody in this House knows any progressive community today tries to get away from what is called regressive taxation, in other words taxation where the same amount is taken from everybody irrespective of his capacity to pay. That form of taxation is wrong, unjust and out. Yet we have it embodied in this measure. It is not just a headage form of taxation for everybody—at least under that system you would be casting your net wider—it is a headage form of taxation for the limited categories I have mentioned who are the hardest hit categories in our community.

If it is wrong now how was it right when the Senator introduced it?

The point is that when we introduced this form of contribution in the 1970 Health Act we had an expanding economy and out of that expanding economy we could draw the cream in the form of taxation. Now we have an economy that is diminishing as far as economic progress is concerned, an economy where people cannot make decisions to develop the mines that would give employment. The Minister for Industry and Commerce is dithering in regard to making basic decisions that could create the wealth for this country from which we could draw increasing progressive taxation.

Answer the question.

Senator Lenihan to continue on the amendment. Senators will have an opportunity to make more than one contribution on it seeing that we are on Committee Stage.

Then the Cathaoirleach will facilitate Senator Halligan.

The basis of Senator McGlinchey's amendments quite accords with what I have said and does not cut across the fundamental decision that was made in 1970. Senator McGlinchey recognises in the first two amendments that we are now living in a period of serious economic difficulty and, therefore, we must minimise whatever further impost is made under the Health Contributions Act. He wants to substitute 1977 for 1974 in the first amendment and substitute 1978 for 1975 in the second amendment. The effect of those two amendments is to recognise the reality of the present economic situation. It does not in any way take from the principle which is written into the 1970 Health Act but it recognises that the time, 1st January, 1975, is not opportune to bring in an 80 per cent increase in headage taxation as far as the disadvantaged people who will be taxed by this increase are concerned.

That is, basically, what these two amendments are about. It is a recognition of the fact that the scheme of health contributions must continue under the 1970 Act but this is the wrong time, having regard to our present economic difficulties, to introduce a measure of this kind. It shows that we have a Government totally lacking in reality, totally out of touch. Apparently, they do not realise what they are doing in this case. They are taking a burden from the Exchequer— which draws generally from all the people right across the board—and imposing that burden to an 80 per cent increased extent on the category who are affected most by present economic and financial circumstances, those who should have their position improved generally and more particularly under the administration of the health services.

If the Government and, in particular, the Minister for Health, were being practical instead of announcing widespread, comprehensive health changes, providing a free health service for all the wealthy people, they would be concentrating on doing what they can do under the 1970 Act to improve the existing services. They could provide better dental services but above all else they could widen the range of the general medical services to include half of the people now being taxed in this measure, the people in the lower segment of the middle-income group who are just out of the general medical services area. These are the people who need help and who are fully entitled to medical cards, free health and medical services.

Instead of helping these people, people with chronic illnesses, people who require regular medical attention, people who require dental and other services that are not available to this category the Minister is concerned about conning the Labour Party Conference into adopting a resolution for a comprehensive health service that will benefit the wealthier people in our community. Those people are fully satisfied with the operation of the voluntary health scheme and by way of an extension of that scheme, and its development, they would secure all the benefits they would require adequate to their station in life. This is why I feel very strongly about the form of taxation we have increased by 80 per cent in this measure, and to which Senator McGlinchey has rightly put down these amendments, to mitigate the effect of any such increase for three years. That form of taxation in this day and age is profoundly unjust by reason of the economic circumstances in which these people find themselves.

One other point to which I should like to refer—the Minister took me up wrongly in his reply—relates to the removal of the rates element in regard to health. I feel very strongly that however regressive rates may be as a form of taxation this form of headage taxation is far more regressive. There is certainly nothing progressive or socially just in taking the rate charges in regard to health off office blocks, administration buildings, bank buildings, large factories, and off large properties, removing the liability and the obligation to pay rates from all of those people in the multi-millionaire category and giving them the very same facilities in regard to the removal of rates in relation to health as the people in the smaller ratepaying categories. If that can be defended then I do not know what can be defended.

The Minister for Health stopped referring to the issue I raised and went back to our de-rating and housing programmes. That has nothing to do with it. I am certain that the committee established by the Minister—or have they been established yet?—or that he proposes to establish to review taxation and to review financing in regard to the health services, will recommend one thing very strongly—I have a certain authority on this—that there be some adjustment in the system of removing health charges from the rating system as it is at present, which applies right across the board in regard to financing the health services and which the Government will dearly regret.

On the Minister's own figures it is evident that this is one of the main reasons he finds himself in the position where he is at the moment, that he has removed a very fruitful source of revenue for health purposes that was being paid by the wealthier element in our community who could well afford to pay it. This was all because of an ill-judged pre-election promise and all because he finds himself in a straitjacket into which he jumped so promptly after the election without looking into the serious consequences involved in following that ill-judged election promise the whole way home.

When you have a situation where a rates contribution which amounted to £36 million to Health alone in 1972-73 and would probably be around £60 million today is going to be removed in about two years' time. I feel that this is outrageous. I would say on an assessment of that figure that half the contribution comes from the categories I am talking about, the really wealthy ratepayers who discharge rates and who should be discharging rates with regard to health services for the less well-off sections of our community. This is the matter which I am certain will be recommended by whatever committee the Minister establishes because it is so obvious and so completely sensible that it cannot be denied that the way to have gone about the abolition of the rates in regard to health charges, if it was socially desirable to do it, was to put a ceiling on it, for instance, a ceiling of under £60 valuation, a ceiling such as you have in the present middle-income category and one which would exclude from paying rates in respect of health all the people in the middle and the lower income categories.

The Senator is now departing very far from the question of a three-year postponement in regard to the introduction of these changes.

The three-year postponement period is one that could be easily carried if the Government sought to ensure what I will call rates taxation from the wealthier sections in our community who are now free from the obligation to pay rates by reason of the Government decision which came about by reason of a promise before the last election.

I realise that the health and medical services must be financed and resources must be made available to finance them. Senator McGlinchey rightly suggests that we leave over taxing the middle-income group, the limited eligibility group, until January, 1978, that in lieu of taxing them it would be quite possible to get the £3.5 million, which is all that is involved, from the higher echelon of ratepayers. The £3.5 million which Senator McGlinchey suggests should be postponed by reason of his amendment is the sort of money which could be easily got if there were rates extracted from the very top echelon of rate-paying people that I have mentioned who have been relieved of their duty to the less well off section of the community.

I am afraid the Senator's repetition of his argument does not make it any more in order. The question is that there is a proposal here to substitute 1977 for 1974. It is not possible on the Committee Stage of a Bill to discuss every other possible alternative way of raising the money.

Having mentioned that alternative, I want to come back again to Senator McGlinchey's amendments and the principle behind them. The two amendments are designed to protect the people who are hardest hit by inflation and by the Government's taxation policy. They are the people who have only a limited eligibility in respect of health services. They are the people most of whom, if there was a progressive Government policy in regard to health, should be in the general medical services category. They are not in the general medical services category. They have only got limited eligibility for certain medical services and on top of that they are now being asked to pay an 80 per cent increase.

Senator McGlinchey's amendments are very progressive and socially just in the circumstances in which we find ourselves. They seek to have 1978 the year in which to start this policy and not 1975. I was suggesting in a constructive way to the Minister and the Government alternative methods by which this equivalent sum or greater sum could be obtained. I feel I was being highly constructive in not just negativing the Minister's proposals by supporting Senator McGlinchey's amendments but offering as well a very positive alternative to what the Government appear to have taken on themselves by the adoption of an ill-judged pre-election promise.

Everybody will agree that health services at the moment are very demanding. I was really surprised when the Senator on the other side of the House shed crocodile tears for the people who had to pay the contribution. In 1970 when this Act was introduced, at a time of thriving economy, not alone did the then Government make provisions to cover hospitalisation but they went further and took from the pockets of the people whom they cry about today £4.3 million of a nest egg.

There is no consistency. The category covered in 1970 is the category which is covered today. This amendment is amusing. It requests a reduction from £12 to £8 in the contribution. In other words, inflation is not as high as we are led to believe.

The Senator is now talking about amendment No. 4. Unfortunately, the House has not yet reached that amendment.

Then amendment No. 5, which was ruled out of order, requested that the ceiling be increased from £1,600 to £4,000.

The Senator cannot discuss an amendment which has been ruled out of order.

I am glad it was ruled out of order because it looked stupid. A Fianna Fáil Senator told us that there was no sense in taking the health charges off the rates. Not so long ago we had a midnight statement that all rates would be taken off. We do not know who speaks for whom. People must accept that there is a demand on our health services. We sought £4.3 million in 1970. If we are consistent, we will realise there is a great demand and the money will be utilised very quickly. I do not believe that if we receive what we demand in this Bill even if we get what is sought in this Bill, we will not have any surplus. We are demanding what we believe will cover the services. I am confident the Minister is not trying to build up any nest egg from these contributions.

Speaking in this House on 13th July, 1971 at column 1234, Volume 70 of the Seanad Official Report the last speaker said:

The £4 million surplus aimed at in this scheme is not something that I should like to support.

Three years have passed and, like most members of his Government, Senator O'Brien has changed his mind.

A different year.

When Senator Lenihan was speaking Senator Halligan asked several times why Fianna Fáil introduced the first Bill. They introduced that Bill because they cared for the workers. They wanted to demonstrate that care in a practical way. In the first Bill Fianna Fáil abolished the 50p per day hospital fee and provided free hospitalisation for the workers, farmers and small business people. In return they asked for 15 pence per week or £7 per year.

The difference between the legislation in 1971 and this legislation is that, while the workers are now being asked to pay an extra 11p, or an extra £5 per year, there are no proposals by the National Coalition Government to improve the service in any way. Fianna Fáil took 15 pence and in return gave free hospitalisation and abolished the 50p per day. This Government of the socialists and advocates of the just society clearly demonstrate that they do not give a brass button about the workers. They are more concerned about giving free hospitalisation to the richest people.

What category?

All categories.

I would ask Senators to allow Senator McGlinchey to continue without interruption.

Senator O'Brien asked what category. He may not know it but the Government have been at loggerheads with the consultants for almost 12 months about this proposal to provide free hospitalisation for everyone. The people with numbered bank accounts in Swiss banks will be given free hospitalisation. I am asking for an extension of three years because I feel that, before the Government place this latest imposition on the workers, they should in return do something worthwhile, as Fianna Fáil did in 1971. Senator Halligan, Secretary of the Labour Party, wanted to know why Fianna Fáil introduced this measure.

I still have not heard a coherent, consistent, intelligent or comprehensive answer.

Fianna Fáil introduced this measure to give free hospitalisation to the workers and to abolish the 50p per day imposition on people going into hospital. By doing so they demonstrated that Fianna Fáil were concerned about the workers.

Judging by the reaction on the other side of the House, it appears that the Labour/Fine Gael Coalition do not give a brass button about the workers. They have demonstrated that here today. It was demonstrated last week with petrol and the week before with butter. We could go on and on. My main reason for asking in this amendment that the date be 1st January, 1978, is that on that date the National Coalition Government will have long passed into history.

And you will be gone with them.

I certainly will not.

I do not propose to accept this amendment. With due respect to the Senators who have spoken, they have contributed much more on the amendment than they did on the Second Reading. If there is any significance in that fact or not I do not know. There is the same repetition. Postponing this measure until 1978 is tantamount to the rejection of the Bill altogether. Voting against the measure in the Committee and Final Stages is superfluous. I do not know why there should be this repetition of irrelevancies. In any case, there will still be a selective tax, as a Senator described it, in 1978. The Senator said the economic climate is not right. I do not know if it was right when the measure was introduced in 1971. We were told that year was a boom year. I have no recollection of it being like that.

On the question of workers, small farmers and business people, Senators on the other side of the House are inclined to think that every farmer, no matter what his acreage if he has a valuation under £60, will pay. The practice of the health boards is that, roughly speaking, anybody under a £20 valuation—I will not be held to that—would be regarded as being in the lower income group and can therefore avail themselves of medical cards and all medical services. I said that the business people to whom the Senators referred would have the allowance of £1,600 increased. I know the concern Fianna Fáil has for the workers. We have had many examples of their concern expressed today. It is a matter of contradiction when one comes to talk about a Department such as the Department of Health. Senator Killilea said that we called for restraint in incomes.

"Tighten your belt" were the words.

That is not a bad expression. I do not know if the Deputy can tighten his belt or not. It is proudly extended to its fullest. The Deputy says there should be restraint in Government spending. Immediately he goes on to criticise the health services. How can you improve the health services unless you have money?

On a point of order, that was not what I said. The point I made was that the Government were spending foolishly. That is a completely different matter.

The Senator made these accusations against the Western Health Board. Would he get some of his colleagues in Fianna Fáil—I know they are pretty strong in that part of the country—to ask the questions which he is not able to ask because he is not a member of the health board?

No, that is not the reason. Obviously, the Minister is not the boss.

The health boards have their allocations and if a public representative suggests that they are not spending their money wisely he should bring it to the notice of his colleagues who are members of the Western Health Board.

On a point of order, am I not bringing it to the notice of the Minister?

I should like to point out that that is not a point of order.

The Minister is accusing me of something which is wrong. I am bringing the matter to the highest authority, the Minister for Health. The Minister for Health does not want to accept that fact. The Minister is supposed to be the highest authority in health matters. It is the Minister's responsibility.

On this amendment, would the Senator please tell us what is wrong with the Western Health Board?

I did not say there was anything wrong.

There is no use making wild allegations when all the evidence I have is to the effect that the Western Health Board are one of the most efficiently run health boards in the country.

Not at all.

Even Deputy Coughlan said that.

Deputy Coughlan was talking about his own area.

I do not know what kind of sums Deputy McGlinchey was doing.

We remember what the Labour people said in Cork at the by-election.

We remember many by-elections—in Monaghan and a few other places. The Senator did not always have his own way. I do not think there is any use repeating the achievements of the last two years. Sufficient to say—and can anybody disprove it on the figures which I gave in the Dáil and which I quoted today? —that the improvements in real terms over the last two years were 8 per cent and 7 per cent respectively. I have no hesitation in admitting that these improvements were made as a result of the various Health Acts, in particular the 1970 Act.

Senator McGlinchey suggested that the £9 million relief in rates could have been spent on the health services. Perhaps he has no concern for the ratepayers at all. Ratepayers have been considerably worried about the amount of rates in recent years and they were very grateful that in our two budgets housing and health charges were reduced and, please God, in our third budget will be reduced further.

According to Senator McGlinchey, one would get the impression that he did not want that type of relief. I am not in favour of the general system of payment by way of rates because the burden usually falls on the householder, the father of a family. In many cases, if the sons and daughters are working they earn more than the father. I believe that sons and daughters should make their contribution to the rates and health charges. This is what they will do within the limits of the proposals contained in this Bill.

Senator Lenihan spoke of a nice round figure of 80 per cent increase in the proposed charges. I suppose he wanted to round off the figure, but it is 72 per cent. Perhaps he should have said 70 per cent.

Give or take 10 per cent.

Give or take whatever you like for the sake of argument, but relate that increase to the cost of the services or relate it to the cost of living or wages and salaries and, on these counts, these charges are justified.

I do not see much point in covering the same ground again. The Senators suggest that this should be postponed until 1978 but it will still be, as has been described, a selective tax. Therefore I do not propose to accept this amendment.

I think it was Senator Lenihan who told us of the circumstances in which the Act of 1971 was introduced. I should like to remind Senator Lenihan that at that time, when there was a charge of 10/- per day for those in the middle income group who had to have hospital care, the cost to the State then was £700,000. The measure brought in by my predecessor in 1971 raised that figure to £5 million. If anyone wishes to call it a tax in that context they may, but the tax is attributable to my late predecessor. An increased income of £4.3 million was brought to the health services. I do not take any exception to that. I believe, as I said before, that it is not the best form, but it is a reasonably good form of insurance for 55 per cent of the population who can have free hospital care, out-patient attendance, mother and child scheme and free drugs.

There were also references to the proposal to extend free hospitalisation to the other income groups. I want to make this quite clear. It was inferred that there was a difference of opinion on the scheme generally between the consultants and myself. There is a difference but it has nothing to do with the implementation of the scheme in so far as they are concerned. What is in dispute is the method of payment. Frankly I was not prepared to give what would be virtually a blank cheque when it was suggested that it should be on a fee per item basis. My suggestion was that they should be paid a salary and given compensation for what are described as anti-social hours. They would not accept this and for that reason I established a review body to inquire into the methods of payment to these consultants in such a scheme.

Therefore, let nobody assume that the dispute between the consultants and myself is about the implementation of the scheme. It is about the manner and method of payment. There was a question raised as to taxation generally and an allegation was made that the poor were paying for the rich. I do not know to what extent that will have an effect in view of the introduction of a wealth tax, a capital gains tax and a profits on mining tax by this Government. When we suggested this down through the years Fianna Fáil opposed it vigorously. This is the manner in which to get money from those who have got it— not the methods that were applied by Fianna Fáil when there was taxation across the board.

Capital gains taxes, wealth taxes and profits on mining taxes were taken from people who have money in order that we may not only give assistance to the health services but to other services in the country as well.

It is a strange situation when we have a Minister coming in and talking about profits on mining on an amendment to delete the year 1974 and substitute 1977 in section 1 of the Health Contributions Bill. I have no intention of following the Minister down the mine—I will try to stick to health. As a comment on the way in which this Government are conducting their business, the Minister feels it is necessary to deny with some vigour that he is raising taxation by 80 per cent—he says it is only 72 per cent. All right, we will agree on the 72 per cent but even by present Government standards that is a considerable rise.

Senator Halligan has asked on several occasions whether we propose to accept these terms. I forget his exact words—he was interrupted on a number of occasions—but I understand he wants us to say whether this request for taxation was also requested in 1971.

The Senator will forgive me—I am saying when does taxation cease to be requested?

Cease to be requested?

I presume the Senator is familiar with the principles of taxation?

This type of taxation——

Independent of the rate of income.

This type of taxation is requested and was requested for 1971. I accept that. We have to consider also the situation that in 1971 the public, and particularly the farming community, were in a much better position to pay this tax. The Minister for Finance in an unguarded moment last summer described the position as being like paradise compared with the conditions in which we are living now. It was an unwise statement but I think a true one. Things were like paradise at that time compared with the position now. The public were, therefore, in a position to pay this type of taxation, which I concede in theory is desirable, but I suppose that neither this Government nor any other Government can always achieve perfection in taxation measures.

Nonetheless the taxation was imposed at a time when people were in a position to pay it. With regard to the farming community as a whole there seems to be a difference of opinion about this but the lowest estimate of their fall in real income this year is 30 per cent. First of all we have the extraordinary decision taken to impose income tax on them and, secondly, we have the decision to increase these charges. Apart from the farming community who are certainly not in a position to pay these charges—the Minister says they have been refraining from paying, for whatever reason, as much as £500,000 in the last 12 months—the community as a whole is in a bad position to do so.

The Minister suggested that the Fianna Fáil Government paid little regard to the workers or to the interests of labour as a whole. In answer to that it is justifiable for us to point out that under Fianna Fáil the administration of the country was carried out in such a way that we did not have almost 90,000 people out of work. I know there have been foreign influences but, nonetheless, the fact remains——

It is most gracious of the Senator to say that.

——that the last time the Minister was in office the number of unemployed ended up at around 97,000. It is now 83,000 and I will make Senator Halligan this prophecy that after Christmas, at the beginning of January, it will certainly be 90,000. I can bet on that but it is a bet one would clearly prefer to lose. I am afraid that is the position. How far it will go beyond that one does not know. The Minister for Industry and Commerce has said he would not be surprised if it reached 100,000 next year.

Without a doubt things are going to be very difficult. In answer to the Minister's comment, I think it is justified for any member of Fianna Fáil to say that we did not reach this state of unemployment in our period in office in the last 16 years. People in this or any other country would prefer to be in decent, economic conditions with rising standards of living and in work rather than being thrown sops by the Government. It is on that front that this Government have failed.

The late Seán Lemass once said that the real test of a Government was the number of people they managed to keep in employment. On that test this Government are failing. The worst aspect of it is, and the reason why we are putting forward this amendment, is that the Government have chosen this particular time—when they are asking everybody else to exercise restraint in seeking income rises—in this rather sneaky kind of way to reduce people's incomes, especially the incomes of sections of the population who can least afford it.

It is for that reason that we suggest a delay of three years would give this, or perhaps more likely another Government, a chance to bring about some kind of improvement in the economic condition of the country. People would then be in a better position to pay this taxation, which clearly they are not in a position to pay now.

There are times when listening to debates in this House I believe that I am in Mickey Mouse land or watching a Walt Disney movie. If I ever wanted an argument to justify the cynicism that members of the public feel about politics I think I could do no more than quote the various speeches which we have heard during the course of this debate both on Second Stage and so far on Committee Stage.

The amendment is mischievous and perfidious. It is one of the grossest forms of political hypocrisy that one could come across. I addressed Senator Lenihan about the principle behind this Bill and I asked why, if something was right in principle in 1970, it should be wrong in principle in 1974 simply because one had crossed the floor of the House?

I do not like the principle behind the Bill. I believe it to be a form of taxation and to be regressive. It is now part of the method of financing the health services. As they need the extra revenue I shall support the measure. That does not mean that I will refrain from criticising the principle. I have no hesitation whatsoever in giving the like of Senator McGlinchey a hostage to fortune which he may quote back to me in two or three years' time. If I was in the House in 1970 he could have quoted back something along the lines I have just enunciated.

We have the spectacle of a man who was the second Cabinet Minister, second only to the man who introduced the Bill, denouncing, as leader of his party, the principle behind the measure which he was responsible for introducing in the first place. I categorise that in any political terms as nothing more than unctuous hypocrisy. The purpose the Bill is intended to achieve is far too serious for that type of dissent. It is petty party politics that traduces the name of politics and traduces the profession to which we all belong. If something was right when one was in Government it remains right when one is in Opposition. No party point of the moment justifies turning principles around on their heads.

Senator McGlinchey made the spurious point that in 1970 what Fianna Fáil took with one hand they gave back with the other. They relieved this section of the population of the ten shillings a day charge that eliminated, as the Minister has said, £700,000 but imposed a regressive tax of £4.3 million. Of course, it was not a tax then because it was a Fianna Fáil tax.

An Leas-Chathaoirleach

I am afraid I must inform the Senator that we are on Committee Stage, amendment No. 1.

I am very glad to be reminded of that fact. If that is so, and if it is suggested I am out of order, I think I am traversing ground that has been well trodden by previous speakers, also on Committee Stage.

An Leas-Chathaoirleach

It is quite in order for you to reply to what was brought up on Committee Stage, but you are developing into a Second Stage debate, which we had earlier today.

That is a tactic of the Senator.

I adopt a tactic, as the Senator will recognise, having been on this side of the House, of trying not to stimulate too much debate from the other side of the House. It is one of the greater penances of being here, if the Senator will forgive me, of having to listen to him too often.


The point was made by Senator Lenihan, in supporting the amendment, that what was correct in 1970-71 is wrong now because of changed economic circumstances. That is an interesting contribution to the theory of public finance. I am sure it will find its way into the textbooks for the benefit of students of economics and of public administration. It is not one to which I would subscribe, there are very few people who would, but it is at least novel and, therefore, worthy of future note.

During 1971-72, even under Fianna Fáil, the economy grew. It continued to grow in 1973 and it has grown even in the very serious circumstances obtaining in 1974. While I do not have the figures for real growth, the GNP, at hand, I am sure the capacity of the economy and the total GNP have risen in real terms, since this Bill was introduced, somewhere between 13 per cent and 15 per cent.

Since this Bill?

Since the Fianna Fáil Bill was introduced, since the original Act was introduced.

An Leas-Chathaoirleach

Will Senators kindly address the Chair?

At the beginning of a period it was correct to introduce a form of taxation which it is incorrect to adjust when the economy has, in the interval, grown by about 14 per cent to 15 per cent. The economy has grown in real terms in the interval. If the Senator will pardon me making an elementary point in economics, when the economy grows, incomes grow. If incomes grow the taxable base grows. That seems to have escaped the Opposition benches in arguing that an increase from 15p to 26p per week is beyond the taxable capacity of this section of the community and that the proposal in the Bill should be deferred for a time.

An Leas-Chathaoirleach

We are on amendments Nos. 1 and 2, Senator Halligan.

I want to come back to the point on which I started, that a principle remains immutable despite changes in external circumstances. If it was correct to introduce it in the original Act it remains valid now. If it was regressive in 1970-71 it is just as regressive now. The size of the taxable capacity does not affect the principle one way or the other. The truth of the matter is that the Opposition know that this amendment is no more than a peg upon which to hang a rather contentious opposition to the health policy generally. It is no more than that. They would do themselves well and the House better if they were to pretend that their amendment was nothing more than that and cease this sort of exercise in opposition.

I do not want to follow the Minister down the line, or I would not like to follow Senator Halligan's line of argument. He does not understand clearly the point that was made from this side of the House. I would not dare to defend Senator Lenihan in this instance, but I understand clearly what he was saying. It can be borne out by fact and by history. This is not the first time in the history of the State that we had a period of great economic strife. We had several of them in 16 years of Fianna Fáil Government. We did not introduce regressive legislation at a particular moment when the nation was suffering, as it is now, from great economic strain. This is the point we are trying to make.

Senator McGlinchey had to specify a year or a date to try to make the point that now is not the exact time. He had to specify, say, 1977. It could be 1976 or it could be 1975. We do not know. To get it clear in Senator Halligan's head, we are saying this is not the time, when we are suffering from great economic strain, to bring in legislation such as this, nor is it the time to bring in legislation such as was brought in last week where the Government collected £27½ million. In the following few days they collected £2½ million by the removal of the butter subsidy. In the last three weeks they have collected at the rate of £11 million a week in taxation.

Senator McGlinchey could do nothing else in this amendment but try to name a date in order to make the point that this is not the moment to bring this legislation in. When it was brought in by the previous Minister, the late Mr. Erskine Childers, it was at a time when people could afford to pay. The Minister admitted that today when he said the farmers had a hey-day in 1971 and 1972. Since this Government got into power the graph has gone the other way. The farmers are the people who are being asked to pay in this instance. I am sure many of them will not be able to pay, but that does not mean they will get a medical card as the Minister seems to think. The Minister mentioned a figure of £20 valuation which I think is not correct.

No wonder the Senator does not like the Western Health Board.

Why? It is not a matter of my not liking the Western Health Board. I would like to refer to what the Minister said in reply to these two amendments. The Minister brought me into this argument. This is my first time to talk on amendments.

I thought the Senator wanted to talk on them.

I made my statement earlier today. Obviously the Minister did not understand me. I said I felt the Western Health Board did not properly spend the money they received. I specified one instance which was the provision of extra bed accommodation. I mentioned the old county home, now St. Brigid's hospital, Loughrea, into which at one stage it was easy to get but which now has a waiting list.

An Leas-Chathaoirleach

Would Senator Killilea continue on the amendment?

Yes. In these two amendments Senator McGlinchey had no option but to name 1977. I admit it may be 1976 or 1978. I hope it will be 1975. When we are spending this extra £3½ million I want to ensure that it will be spent correctly. I am accusing the Western Health Board of not spending it correctly.

An Leas-Chathaoirleach

I must interrupt the Senator——

When we are spending money collected by the State which we say in the amendments should not be collected until 1977 or 1976 or 1975, we hope that it will be spent correctly. I do not want an imposition of extra taxation in order to create a better situation in the area in which I live. I am asking the Minister as the person responsible to ensure that this money is spent properly.

An Leas-Chathaoirleach

I must interrupt the Senator again. He is not keeping to the amendments.

On this amendment I am talking about the application and the distribution of the money collected by the national group. It is a fair amendment. I think Senator Halligan should understand that. We feel that now is not the time for this legislation. Perhaps 1975 or 1976 would be more appropriate, particularly with reference to the agricultural community.

We must plead for the workers. Santa Claus will not be coming to a lot of them. Not that I blame the Minister for that. Instead of Santa Claus coming the Minister is coming in the guise of Santa Claus and taking money from them. We have a reverse situation in this instance. We are asked for a 75 per cent increase on 1st January. The Minister for Agriculture and Fisheries yesterday failed to honour a commitment given to farmers a fortnight ago. The Minister for Health then adds an extra £5 on the people the commitment in respect of whom the Minister for Agriculture failed to honour. Of course we can expect that from the National Coalition. Nobody believes what they say any more. That was obvious from the results of the North East Cork bye-election.

I did not intend to intervene in this debate at all. In order to clear my own mind after Senator Killilea's entertaining performance I would like to say a few things.

I am glad somebody here is entertaining.

The Senator was entertaining in perfect English. There is nothing wrong with the Senator's English. The Senator managed to express the greatest lot of nonsense and hypocrisy in the best English I have ever heard.

The purpose of this Bill is to increase contributions or taxation, in order to raise an extra £3.5 million, which is something like 2 per cent of the total cost of the health services covered by this middle income group, with £166 million, as mentioned by the Minister. If the money is not raised this way it will be raised some other way.

An Leas-Chathaoirleach

I hope the Senator will confine his remarks to amendments Nos. 1 and 2.

Yes. In the last two or three years there has been substantial inflation; costs have increased substantially. The trend at the moment seems to indicate that inflation will continue. We will therefore have higher costs in every State service, every public service, and undoubtedly in every private service too. All Ministers for Health, including the late President and the present Minister, did their best to expand the health services. Unfortunately they have to be paid for. This amendment proposes to keep the charge at the present level for another three years in the light of the knowledge that inflation will continue for some years to come. This amendment is dishonest. I think Senator Killilea knows it is dishonest. With all due respect to the Chair, I think the Senator is talking hypocrisy or stupidity. This amendment is absolutely hypocritical. It has been put down for a purpose. It has been flogged to death.

If I were to say that as a Senator I would have appreciated it if the Minister had said in the House: "Look, we are up to our tonsils in debt. We have to find some money from somewhere and this is one of the ways by which we think we will find it," Senator Russell possibly would suggest that this was hypocrisy. If I were to say that—and I am anxious that Senator Russell should hear the question I am directing to him through the Chair— would Senator Russell call me a hypocrite? Would he suggest that that was hypocrisy as he has described this amendment?

I made the statement myself. It is not hypocrisy.

Exactly. Three years ago on a Health Bill, the Senator who now is condemning this amendment used the statement that I have just quoted from column 1248, Volume 70, of the Official Report for 13th July, 1971.

Considering what Senator Halligan said a few moments ago, if it was right in 1971 how can it be wrong today? We can use this argument against them. If Senator Russell considered it wrong in 1971 how can he consider it right today. However if we are keeping the Minister back with these little arguments perhaps we could finish at that.

Question: "That the figure proposed to be deleted stand part of the section", put and agreed to.
Amendment declared lost.
Amendment No. 2 not moved.

An Leas-Chathaoirleach

It is suggested that the debate on amendments Nos. 3 and 4 could be taken together.

I move amendment No. 3:

In page 2, line 25, to delete "26" and substitute "16".

Senator Halligan was not in this House in 1971 but on 13th July of that year at column 1241, Volume 70 of the Official Report the leader of the Labour Party, Senator Fitzgerald, had this to say:

It is a Bill that should have been introduced by the Minister for Finance because it attempts to collect an extra £4 million from the taxpayers.

Again, as Senator Halligan says, if it was wrong in 1971 for the Labour Party to oppose this Bill how can it be right today?

Because it is there. I made that point in my own speech.

In February, 1973, the Fine Gael and Labour Parties came together and they published the infamous 14-point plan which consisted of promises they would implement if elected to Government. They made a categorical claim that they would halt rising prices. We all know now how dishonest that promise was and how miserably they have failed to implement it. They blamed everyone but themselves and the poor Arabs have come in for more than a fair share of the blame. Tonight they are asking us to approve of another price increase but on this occasion no one can blame the Arabs. I have tabled these amendments because I believe that there have been too many financial impositions on the workers in the last 21 months and particularly in the last 21 days. I do not believe that every week should be a budget week in Leinster House. This measure could only be described as a miniature budget—a measure to collect from the workers the sum of £3½ million without giving any direct new benefit. If Fianna Fáil were re-elected in the last election £9 million would not have been taken from the Health Estimate to alleviate the ratepayers. The Minister asks did we not believe the hard pressed ratepayers should have been relieved in this way. They should have been relieved of rates as well. In order to provide that relief next year alone £9 million that should have been devoted to the expansion of the health services so that the Government can live up to their election promise.

The people who benefit from this rate relief may not realise that it has been provided by cutting the Health Estimate by this amount. We should not ask the people to carry this burden at this time. It is another imposition and, as each day goes by, the people have to face increase after increase. Admittedly some of them are outside the control of the Government, but this is one increase that is within their control. It is wrong to do this now and, because it is, I would ask the Minister to give favourable consideration to my amendment.

I should like to support this amendment on the grounds that by giving some increase to the Minister, even a small one, that would not place the same burden on the people as the Minister's proposals. I accept that £3½ million is not in itself the kind of burden that the people in a normal year would be unable to support. The problem here is twofold. First of all, this is not a normal year. We have the situation that economists on the whole agree that there has been an overall 4 per cent fall in the real income of the community, allowing for changes in trading conditions, and so on. This fall is worse in the sense that one particular section of the population, the farmers, have suffered very severely indeed in this year.

There is also the condition that one has to relate that at this precise moment in December, 1974, there has been an overall fall in the national income during the year. At the moment, because of a very rapid rise in unemployment and, in particular, because of the enormous 20 per cent inflation that we are suffering from, many households, even where the breadwinner is still in employment, are finding it very difficult to make ends meet. Therefore this is not the time to impose taxation of this kind, which is always regressive and is particularly so in present conditions. Secondly, while I suggest that the sum of £3½ million to be raised by the Minister in this Bill is much more serious that one might otherwise feel, it is part really of the whole pattern of mini-budget that this Government have been introducing through various Ministers during the past month or so.

As I mentioned on Second Reading, the Government, through various Ministers, who apparently have had instructions from the Minister for Finance to raise money in whatever way is possible in advance of the budget, have raised a total of £46 million in increased imposts on the people by way of very heavy increases in postal and telephone charges, very heavy increases in the tax on petrol, by the elimination of the subsidy on butter, thereby raising the price to the consumer and, finally, this Bill, with its additional imposition of £3½ million. Had this Bill come by itself, even in the present difficult circumstances one might have been able to accept it more easily. However, it comes as the last imposition in a long line of impositions by the Government, all apparently designed to ease the task of the Minister for Finance in his forthcoming budget on 15th January next. In these circumstances, this relatively small sum becomes far more serious. We all know the old saying: "It is the last straw that breaks the camel's back" and this could well be the last straw that breaks the backs of many innocent families and, because of that, we must support this amendment.

There is no point in going over all the arguments again. This amendment is tantamount to saying: "Withdraw the Bill." I have no intention of doing so. The amounts suggested would bring in about £3,000 or £4,000 and it would not be worth while bringing in a Bill for such an amount. A subvention of £3½ million is, however, something that could be well used in the Department of Health.

Somebody—I do not know who— described this as a sneaky method. It has all been open and above board, it was discussed for days in the Dáil. It was circulated many weeks ago. It is now before the Seanad and we have had a reasonably long debate; I make no apology for introducing it, knowing that it will contribute to the health services.

The Exchequer has also played its part since this Government came into office. In 1972-73, 74 per cent of the health charges were paid by the Exchequer. In 1975, the estimate is that we will be paying 90 per cent of the health charges from the Exchequer.

I should like to endorse what Senator Halligan said because I, too, am not too happy about this type of taxation or insurance and I promise the House that there will be a review. If there is a better system, one that would be equitable in the distribution of moneys, I certainly will introduce such a scheme. There is a possibility that the Exchequer may take on the entire cost. Since we changed horses, we seem to have different arguments.

On both sides.

Yes, on both sides. I suppose this is the way of politics, but I certainly take exception to the fact that Members of the Fianna Fáil Party call this a tax while, in 1971, when it was introduced, it was said to be in substitution for the 10/- per day paid by those who were hospitalised. I honestly think that, in present circumstances, this is reasonably good value, even for a poor farmer. A stay of 24 days in hospital at the old rate of 10/- per day would work out higher than this proposed contribution. Mention was made of the Voluntary Health Insurance scheme. It is a good scheme but this is a far better bargain for the people in this category. They have many more advantages than they would have in the Voluntary Health Insurance Scheme in which they would pay a good deal more.

I do not think we need go too deeply into this. All the arguments about petrol, butter, unemployment, and the state of the economy have all been made before. Without further ado I would say that I could not accept these two amendments because if I were to accept them I need not have come into the Seanad at all. I could have scrapped the Bill.

I will not keep the Minister any longer on these amendments but, as the person who suggested that this was a sneaky way of imposing taxation, I should explain what I meant by that. The reason I described it as a sneaky way of imposing taxation is that it would seem to suggest that in some way this money is required to make up the Department's budget for the health services. It is not that at all. The situation is that if this Bill had never been framed, or if it were rejected now, the result would be that the Minister for Finance in his forthcoming budget would have to find £3½ million somewhere which, of course,—and I make a present of this to the Minister straight away— would have to be done through taxation, though I hope a fairer means of taxation than is contained in this Bill.

The basic point is that this Bill is designed to relieve and has the effect of relieving the Minister for Finance of the task of finding £3½ million in his budget. Just as in the case of the increased postal charges, the increased petrol charges, the elimination of the subsidy on butter, the sole and intended effect is the same—that of relieving the Minister for Finance of the task of finding money in his forthcoming budget. Of course this is nice for the Minister for Finance but, nevertheless, these types of budget operations, irrespective of whether they are done by ministerial order or by legislation, can be described as sneaky particularly when, as in this case, it comes three weeks before the budget. It is part of the budget apparatus, one might say, and yet it is not included in the ministerial statement read out on budget day.

It seems to me that a more candid, open and straightforward way, from the point of view of the public, for dealing with these matters would be to have them all included in the budget. I know it is not always possible to wait for the budget. There are times when the budget may be six months or nine months away and you have to take some kind of action, but all these things have been brought in at the very end of the year within weeks, days almost, of the budget, clearly designed to relieve the Minister of problems in his budget statement. They could perfectly well wait to be included in the budget statement. That impels me to describe it as a sneaky method of imposing taxation.

We had better not get too sneaky about it. I said before today—I do not know whether Senator Yeats was here—we are, indeed, only four weeks away from the budget but this Bill was circulated two or three weeks ago. If this is a sneaky way to introduce taxation or the raising of money, the same accusation could have been made against my predecessor and the members of the Government at that time who in the beginning of June, 1971, introduced the original measure.

Long after the budget.

It was only a month or two after it. The late Minister for Health had everything prepared well beforehand and I am sure he knew in June, in view of the fact that the budget that year was in late April, that this was on the stocks. Therefore, if I am to be accused of a sleight of hand he, too, could have been accused of the same thing.

Question: "That the figure proposed to be deleted stand part of the section", put and agreed to.
Amendment declared lost.

I move amendment No. 4:

In page 2, line 27, to delete "£12" and substitute "£8".

Question: "That the figure proposed to be deleted stand part of the section", put and agreed to.
Amendment declared lost.
Section 1 agreed to.

An Leas-Cathaoirleach

Amendment No. 5 has been ruled out of order.

An Leas-Chathaoirleach

Amendment No. 6 has been ruled out of order.

Section 2 agreed to.
Title agreed to.
Bill reported without amendment and received for final consideration.
Question proposed: "That the Bill do now pass."
The Seanad divided: Tá, 23; Níl, 9.

  • Barrett, Jack.
  • Blennerhassett, John.
  • Boland, John.
  • Burton, Philip.
  • Deasy, Austin.
  • Halligan, Brendan.
  • Harte, John.
  • Kerrigan, Patrick.
  • Kilbride, Thomas.
  • Lyons, Michael Dalgan.
  • McAuliffe, Timothy.
  • McCartin, John Joseph.
  • Mannion, John M.
  • Markey, Bernard.
  • Moynihan, Michael.
  • O'Brien, William.
  • O'Higgins, Michael J.
  • O'Toole, Patrick.
  • Owens, Evelyn.
  • Russell, George Edward.
  • Sanfey, James W.
  • Walsh, Mary.
  • Whyte, Liam.


  • Cowen, Bernard.
  • Dolan, Séamus.
  • Killilea, Mark.
  • Lenihan, Brian.
  • McGlinchey, Bernard.
  • Eachthéirn, Cáit Uí.
  • Keegan, Seán.
  • Ryan, William.
  • Yeats, Michael B.
Tellers: Tá, Senators Sanfey and Halligan; Níl, Senators Killilea and W. Ryan.
Question declared carried.