The resolution which I now submit to the Dáil asks for approval of a certain change of the regulations which have heretofore governed the issue of funds out of the Exchequer for defraying the cost of the public services. To explain this matter briefly I may say that the effective and formal transfer of financial functions from the British Government took place on the 1st April last. On that day the Exchequer of the Provisional Government was constituted. Into it were paid from that day forward all taxes collected in the area of jurisdiction of the Provisional Government, and out of it were issued the sums required for maintaining the public services.
In the normal course the issue of funds for public services must necessarily be authorised by more or less detailed enactments of the Legislature. It has not, of course, been possible as yet to deal with the financial business of this country on these settled lines, and until the Constitution of the Irish Free State can come into operation, procedure of an emergency character is inevitable.
At first, therefore, it was provided by regulations made by the Provisional Government that the authority for the ordinary issue of funds out of the Exchequer should in the case of a given Department, be a certificate signed by the Minister in charge of the Department, and where that Minister was not the Minister for Finance, the certificate was required to be approved by the Minister for Finance. This arrangement was made in the first instance for a period which was intended to end on the expiration of a month after the meeting of this Dáil, that is on the 8th of this month. In present circumstances, while the Constitution still awaits adoption, it is considered impracticable to terminate the arrangement on that date, and, therefore, the amended regulation now submitted for approval aims at extending the temporary scheme up to the date on which the Government of the Irish Free State is constituted, or the 6th December next, whichever is sooner. The 6th December, as the Dáil is aware, will be the anniversary of the Treaty and the date of expiration of the arrangement made by the Treaty for a Provisional Government.
In adopting the extension which I have explained, the Government have thought it proper at the same time to abandon the discretion which up to this has necessarily remained with them as to the amounts of the Exchequer issues, for which Ministers may certify. The resolution which I propose consequently contains a proviso to the effect that the aggregate amount which under the temporary procedure may be issued out of the Exchequer in respect of Supply Services for the period from the 1st April last to a date not later than the 6th December next, shall not exceed £18,953,475. If any issues for the services in question should seem to be required in excess of this amount during the period mentioned, it is proposed to submit the matter to the Dáil for previous consideration. That, I think, should be in accordance with the views of Deputies generally and of their constituents outside.
At this stage I do not propose to say anything further on the somewhat technical though important features of the resolution with which I have so far been dealing, as I wish to take the opportunity of laying before Deputies such information as I think may be of use, and as they will probably desire to have regarding the figure of nearly nineteen millions mentioned in the resolution and other figures which have a bearing upon it. The figure in the resolution represents the estimated cost of the ordinary public service in the twenty-six Counties during the period from the 1st April last to the 6th December next. It has had to be prepared somewhat hurriedly by the Ministry of Finance which is working at great pressure. Necessarily, owing to the disturbance arising from the change of Government and other difficult conditions of these times, estimates are not as easily framed as when a settled Government is working on established lines. But even allowing for such factors, it may be taken that the figure given is a reasonable approximation to expenditure that will probably be required.
In a paper which has been circulated, the details which make up the total of £18,953,475 are set out according to the several services to which they relate, and in addition, figures are given showing the estimated provision required for the same services for the full financial year from 1st April, 1922, to 31st March, 1923. The aggregate for the full year is £37,709,586. For comparison with these figures the Dáil will, no doubt, be interested to have a statement of the sums issued from the Exchequer for the like services for the half year ended Saturday last, the 30th September. The issues in question for the half-year amount to a total of £9,544,044, the chief items being as follows:—
|
Army |
£1,863,000 |
|
Public Education |
1,802,100 |
|
Old Age Pensions |
1,191,000 |
|
Post Office |
1,150,000 |
|
Ministry of Industry and Commerce |
441,700 |
|
Relief Grants |
270,044 |
|
Property Losses Compensations |
252,500 |
|
Other issues of less than £250,000 each |
2,573,700 |
Of course Deputies will understand that these figures of Exchequer issues for a given period are not an exact indication of expenditure for the period. Some of the money issued out of the Exchequer will be in the hands of Departments or Officials and will not yet have been actually disbursed to defray public charges. On the other hand—and this is especially likely to happen in the transition state through which we have been passing— liabilities incurred in a given period will be outstanding to a certain extent at the end of a period. To form a fair impression of the cost of the public services in the past half year some addition must probably be made on this account to the figure of nine and a half millions which I have given for Exchequer issues. It will be one of our special aims as conditions get more settled to reduce the interval between the maturing of a liability and the discharge of it.
I will ask Deputies specially to bear in mind the figure of thirty-seven and three-quarter millions which is given on the paper as the net total of the estimate for 1922-23. I regret to say that this does not represent the whole of our possible commitments for the year. It covers the ordinary public service for which Parliaments as a rule provide money by annual vote. But there are additional liabilities, actual, probable and possible, which must also be borne in mind. Of these one important class consists of the fixed charges which are mandatory under existing law, chiefly certain local taxation grants and the salaries and pensions of judges. This class requires a provision of about £1,350,000. Next are two items which are in the nature of capital charges, namely, £105,000 for Telephone development and over £600,000 to be advanced to meet an anticipated deficit in the Unemployment Fund. In referring to this item I should like to call special attention to the fact that an abnormal burden is being imposed on the State at present to provide Unemployment Insurance benefit by reason of the omission of many persons to comply with the requirements as to stamping Unemployment Insurance cards. It is essential that those concerned should realise their responsibilities in this connection and do their part towards the restoration of normal conditions and the support of stable government by discharging their obligations in this respect. The situation in this matter has become such as to demand the strict enforcement of the penalties prescribed for non-compliance.
There remains the third category of cases in which claims are being made against us by the British Government in respect of charges under the Land Purchase Acts and other heads. The amount involved here is perhaps a million a year. Even excluding this amount as being in dispute, it will be seen that the estimated total sum required by the Government in the current financial year is only a little short of £40,000,000. The payment of compensation claims in respect of damage before and after the Truce accounts for a quarter of this total. Of course this is not anything like the entire or even the main part of the compensation liability, but only the provision which is expected to be required to meet payments that will actually be issued before the 1st April next. Leaving compensation aside, we have to find perhaps £30,000,000 to defray the cost of ordinary government, including the Army for the current financial year. What resources have the Government and the country at their disposal to meet this heavy burden? It must certainly be confessed that if the burden were to be a continuing burden and if the public and the Government by loyal co-operation in the establishment of order and other necessary measures do not reduce the public charges, we have not sufficient resources and can only see before us the prospect of following the path of financial and other folly, which has brought several of the countries of Continental Europe to the condition of abject misery in which they now find themselves. But there is no need for alarm or for taking dismal views if the growing sense of civic responsibility and patriotism brings our people to the realisation of the great economic and social prospects that lie before them provided that they turn while there is still time from destruction to construction.
I will ask Deputies to bear with me while I attempt to summarise the position in which we find ourselves respecting the finding of the funds that are necessary for public purposes.
The revenue actually received into the Exchequer for the half year from the 1st April up to and including Saturday last the 30th September, has been as follows:—
|
Customs |
£1,097,000 |
|
Excise |
7,885,000 |
|
Motor Vehicle Duties |
Nil |
|
Estate Duties |
418,000 |
|
Stamps |
161,000 |
|
Property and Income Tax(including Super-tax and Mineral Rights Duty) |
1,119,000 |
|
Corporation Profits Tax |
179,000 |
|
Excess Profit Tax |
75,000 |
|
Post Office |
350,000 |
|
Miscellaneous |
180,107 |
|
Total |
£11,464,107 |
This total figure of £11,464,107 represents the revenue actually collected into our Exchequer in the period mentioned. For various reasons, however, it cannot be taken as accurately representing the true revenue of the Irish Free State in the period.
For example, as regards the customs which is shown as providing £1,097,000 there are several foreign commodities such as tea which frequently come to us via Great Britain. On landing at the British port they pay duty there, and although they come to Ireland for consumption the tax is credited in the first instance to Great Britain where it was in fact collected. For this reason the Customs duty collected in our area and paid into our Exchequer does not represent the full Customs duty on the foreign goods which we consume.
To meet this point it has been arranged that the proceeds of any taxes collected in Great Britain or Northern Ireland which are properly attributable to the Irish Free State shall be paid over in due course into our Exchequer. No adjustment of this kind has in fact yet taken place and the figures which I have given represent the actual collection.
The figure I have given for Excise is £7,885,000 or over two-thirds of the total revenue. The Excise which consists mainly of the duties on beer and spirits has long been a chief factor in Irish revenue. But the amount of this duty collected here is largely in excess of the amount attributable to home consumption. In 1920-21 there was collected under this head in the whole of Ireland about 23½ millions, but of this only 15 millions was treated as true Irish revenue. The reason for this is, of course, that much of the output of our breweries and distilleries having paid duty here, is removed to Great Britain for consumption.
It will, therefore, be seen that of the £7,885,000 which we have collected under the head of Excise a substantial portion cannot be said to belong to us at all, and just as we must expect from Great Britain a supplementary payment in respect of customs, so on the other hand are we obliged to surrender that portion of our Excise receipts which cannot be regarded as pertaining to our own area.
The next head of revenue is Motor Vehicle Duties, for which a nil return is shown. This does not mean that there has been no collection of tax under this head, but only that there is no tax collected which has yet reached the Exchequer. When the Provisional Government entered on their task they did not find in existence any operative machinery for the collection of this tax. That state of affairs has since been rectified and proper arrangements have been made with the County Councils for the registration and licensing of motor vehicles and the payment of duty. The receipts of this duty are at present lying to credit of outside accounts, and it is intended shortly to make a transfer to the Exchequer.
The heads of Estate Duties, Stamps and Corporation Profits Tax, which together have yielded £758,000 call for no special comment. The receipt of £75,000 in respect of Excess Profits Tax represents an arrear for a past period. It is well to have it made clear as regards arrears of tax generally that these are now payable to our Exchequer and become the property of this Government. There appears to be still a certain amount of misunderstanding about this, and a number of persons are understood to have hesitation in paying up arrears of Income Tax through a false impression that this country would not have the benefit of it. There is no longer any excuse for such an attitude.
The yield of Income Tax including Super Tax, has been £1,119,000. This figure is probably three millions short of what it ought to be, especially as there were considerable arrears due on 1st April which are payable to our Exchequer. Now, however, that taxpayers are beginning to realise that the revenue they contribute goes directly to the Irish Exchequer and will be applied exclusively for purposes approved by the Dail, it may be expected that the hesitation which many honest people in this country have heretofore felt about meeting Income Tax demands will give way to a serious sense of public duty, and that this will be reflected in improved receipts under this head in future.
The figure of £350,000 given for Post Office revenue is only a payment on account in respect of the gross revenue of the Post Office. There is no net revenue from this source.
The miscellaneous Revenue of £180,107 consists mainly of sums collected in respect of public loans previously advanced by the British Government. In so far as such sums have subsequently to be surrendered to the British Exchequer in liquidation of the advances there is no net gain under this head.
It is a matter of much guesswork to form an Estimate of the full amount of our real revenue for the current financial year. As a rough indication of the position it is perhaps not safe on present indications to count upon a total of more than £27,000,000, of which nearly £1,500,000 represents the gross Post Office Revenue.
Deputies can now draw their own conclusion from the figures I have laid before the Dáil. Without scrutinising smaller items which in other circumstances would be of much consequence they will, I am sure, appreciate the salient fact that the financial burden of enormous compensation charges and a great Army is one which has perhaps already strained the resources of the country to the danger point, and which has undoubtedly deprived the country of the means by which great public benefits and reform might otherwise have been accomplished.
In conclusion, I have a few words to say on the subject of compensation, which is our greatest financial problem. The arrangements for dealing with cases arising in the pre-Truce period, were, as is well known, settled by negotiations with the British Government. Damage to property in the pre-Truce period, except where covered by decrees which were defended and which are payable in full, is being dealt with by the Shaw Commission, an international body not controlled by either Government singly. The obligation of paying all the awards rests in the first instance with us but we are entitled to recover from the British Government the amounts awarded in cases where damage was done by their forces or in their interest.
Up to now the work of the Commission has necessarily been largely of a preliminary character, and in consequence no considerable volume of payments on foot of their awards has yet become due. The Commission has in fact reported seven awards, and they have recently intimated that they are about to report a further twenty-three. With improved procedure and more extended provision for investigation, it is expected that the number of awards is on the point of expanding rapidly so that the burden on the Exchequer in the months immediately ahead should grow largely. For this reason it has been found necessary to include in the paper which has been circulated a sum of £2,000,000 for payment of awards up to the 6th December next.
After that date and up to the 31st March next, as the paper indicates, a further large expansion of the provision for payment of awards is thought necessary. This will result not alone from the increasing volume of awards by the Shaw Commission but from the determination which should then have been made of a large number of awards in respect of post-Truce damage. On this question of post-Truce damage which is occasioning great anxiety to a wide circle of sufferers, I am in a position to say that a comprehensive scheme for dealing with claims is now in an advanced state of preparation and will, I hope, be announced at a very early date. The Government have accordingly thought it well to ask that the ordinary malicious injury claims due for hearing at Sessions now proceeding should be adjourned, it being anticipated that provision for dealing with these claims on the new basis will shortly be available.
In view of the serious liability arising in respect of compensation claims, generally, it will be necessary to take every practicable step to secure the maximum economy in the administration of the Public Services, and therefore, when the Dáil is now being asked to give its approval to a vote on account of some nineteen millions, it is the intention of the Ministry to endeavour in so far as they can to reduce the requirements of Public Departments below this amount wherever it is found feasible. It will be understood that on this account many proposals for public expenditure, which at another time might deserve favourable consideration, will now need to be rejected or deferred on grounds of financial stringency.
