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Dáil Éireann díospóireacht -
Friday, 23 Apr 1926

Vol. 15 No. 4

FINANCIAL MOTIONS. - MOTION NO. 15—(AMENDMENT OF THE LAW)—DEBATE RESUMED.

I regret to find that the Minister for Finance has not made any attempt to deal with the question of reduction of taxation. I believe that if the Minister had faced up to the problems in a courageous and investigating spirit he could have found means whereby reductions in taxation would be possible. I do not at this stage intend to enter very deeply into the question of possible economies, but I want to say that, despite the assertions that have been made by Ministers and Deputies, I believe that if our request for the setting up of a Commission of Inquiry to go into the different Estimates, the different services, and the different departments of the State had been acceded to it would have been found possible to recommend reductions. In proposing the appointment of such a committee I had no intention of trying to convey to the House that I believed that reductions of such a kind as would mean considerable relief in taxation could have been effected in the salaries of State officials. I have never contended that such is the case, nor do I do so now. But in spite of that, apart from the question of actual economies resulting, apart from the question of what reduction in taxation might be brought about by such investigations, from the point of view of the example which the Government ought to give to the country it would be valuable. I believe that if it is possible to bring about a reduction in the salaries of higher officials the effect on the country would be useful and would help us, who are of opinion that we cannot get the economic conditions that we ought to have until there is a general levelling of the emoluments drawn by officials of the State and of the local boards.

We also feel, in view of the fact that economies have been carried out in other directions—economies have been carried out at the expense of the old age pensioners and at the expense of the workers on the Shannon, and economies have been recommended in different places by the Minister for Local Government—that it is the duty of the Government to make a really serious effort to bring about economies in Departments of State. I do not believe that these economies can be brought about with the present machinery. I do not believe that Ministers themselves have either the time available or the necessary experience for a close examination into the personnel and the organisation of their Departments. When we inherited these services from the British Government it is quite probable that a great many of them were run in an old-fashioned and unwieldly manner, and by careful examination into their organisation and into the methods of coordination amongst them there are possibilities that economies could be brought about, that the system of Government services could be so reorganised that a great amount of red tape and unnecessary work could be eliminated, and that the work could be carried on with a very much more limited staff than at present.

With regard to this question of economies, I am in agreement with the statement by the Minister for Lands and Agriculture. I believe that no really effective economies can be carried out without dealing with questions of policy. I have never maintained otherwise. I believe that the good effect of economies would be largely by way of example, but if we are to have economies which will be a relief that will be felt by the taxpayers we must deal with questions of policy. But I do not agree with the suggestions thrown out by Ministers that this matter of policy must be thrown on the shoulders of members of the Opposition. I maintain that that is not our work. I maintain that the Government itself is responsible for policy and that this suggestion that we should point out to the Government the services which are redundant and which could be eliminated is not the method by which Government should be carried on, or the method by which it is carried on in any State.

Ministers know as well as I do that in finding out matters in that connection, we in the Opposition work under a considerable handicap, for the reason that we are not in close touch with the workings of the different Government Departments. The ordinary Deputy has to deal in a cursory, and sometimes, haphazard manner with problems affecting the different Departments of State, whereas Ministers are in a position to concentrate on their own particular Departments. Therefore, they can know better than the ordinary Deputy whether services or even portions of services, are redundant, and I suggest it is up to Ministers to come forward and say: "We have examined our Departments and believe that, in view of the economic condition of the country, certain services are redundant, certain services which, perhaps, might be necessary in normal times, but which can be done without in the present abnormal condition of the country." Ministers have refused to face this problem and have endeavoured to throw the onus of making suggestions on us. We are going to take up the onus of doing so, and are not going to run away from it. Our suggestions may not all be wise, and they may not all meet with the approval of the House, but wise or unwise, good or bad, it is our intention, and my intention, when the Estimates come before us, to face up to the different problems and to make definite suggestions in regard to how economies can be carried out. The Minister for Finance, in making his Budget statement segregated the Estimates into two lots. One lot dealt with a sum of £19,500,000, and this included such matters as payments for the relief of local rates, old age pensions, police, education, university colleges, the Army, Post Office and revenue, and apparently the suggestion is that no possible economy can be effected in respect of this total sum of £19,000,000 odd. With that suggestion I do not agree, and I am going to point out possible economies which might be effected in regard to some of these items. I do not intend to go very deeply into these matters at this stage, but I will do so later when the Estimates come before us.

Is the Deputy suggesting that there should be a further cut in the old age pensions?

You mentioned old age pensions in the list you read out.

I read out the list of the items which the Minister for Finance gave when dealing with this total sum of £19,000,000 odd, and apparently the Minister's suggestion was that no economies can be effected in regard to this total sum. I have not suggested that the old age pensions should be further reduced, but I have suggested that certain economies could be effected in some of these items, and that they are not in any sense of the word sacrosanct. There is a sum of over £2,000,000 for the Army. I see no reason why an Army, sufficient for the necessities of this country, could not be maintained at a cost of at least £1,000,000. I think that drastic reductions could be carried out in regard to the size of a standing Army that it would be necessary for us to maintain in this country. There are other items that I do not intend to deal with at the moment, but I believe that if we could get the help, rather than the antagonism, of Ministers, there is the possibility of reductions in expenditure. I say we are not bound or authorised at this stage in the affairs of this country to vote one and a half million pounds for a police service, particularly in view of the fact when we are paying over £2,000,000 a year for an Army which, in effect, is only a police service at the present time.

The Minister for Finance when introducing the Budget, dealt with the question of tariffs. He said that in accordance with the pledge he gave last year, when introducing the Budget, he had not introduced any additional tariffs and that it was not his intention to introduce any further tariffs in advance of a General Election. I am inclined to think that the Minister evaded the promise he gave last year, because as far as I can see, the duty placed on wireless apparatus is evidently a protective tariff. There is nothing to prevent people, with the capital available, from establishing a business here for the manufacture of wireless apparatus, and they can start that business under the protection of the 33? per cent. tariff. I am inclined to think, too, that the remission of the road tax payable in respect of the Ford car is really, in effect, a tariff. There is another evasion, in my opinion, of the promise made by the Minister, and that is in connection with the appointment of the proposed Tariff Commission. I gathered from the statement of the Minister that during the existence of the present Parliament this Commission will have power to enquire into all industries asking for a tariff, and will have the right to make recommendations in regard to these industries. I am inclined to think that the Government will have the right to enforce tariffs for the protection of these industries within the life of the present Parliament. I regard that as nothing else than an evasion of the promise the Minister made last year not to deal further with this question of tariffs. As regards this proposed Tariff Commission, we know nothing at all as to what the composition of it will be. Its findings, I should say, will depend to a very large extent upon its personnel, and I am inclined to tell the Minister that he will find it extremely difficult to get a Commission to deal with matters of that kind which can be regarded as wholly unbiassed. He will find it almost impossible to get a Commission together which will not have members upon it who are not definitely in favour of one policy or another, Free Trade or Protection. I am not in favour of the suggestion at all that this is a matter that ought to be dealt with by a Commission. I believe that this question of Free Trade or Protection is a matter of major policy, and that it should not be dealt with at all until the people of the country have a chance of expressing their views upon it. This is a question that has never been put to the people. The Government, at no time, received a mandate from the people for the establishment of their protective tariffs. Further, the Government, by establishing protective tariffs, are prejudicing the ground for any future Government which may attempt to deal with the question of tariffs. Recently, the President thought fit to taunt the members on these Benches with the ambition to obtain office and to be in office. I want to assure the President—I am sorry he is not here—that we have no ambition of that kind at all, and that our object in having this economy matter discussed had nothing whatever to do with the question of office.

We see the difficulties of office and appreciate them, and I, personally, have no ambition to belong to a Government in office at the present time. However, it seems to me that any political party, that sees fit to go into this Dáil, must realise the fact that there are possibilities that it will be in office at some time, and any party which is not prepared to take its part in the government of the country is not fit to be a party. Such being the case, I maintain that those tariffs, which are to be imposed without the people being given a chance to examine them, are not justified. Any Government that may come into power cannot touch a great many of those tariffs within a number of years, as it would mean, in effect, the abolition of industries protected by tariffs. For that reason I hold the Government have prejudiced the issue, and prejudiced the course of action that a government which acts on the views of the people should take.

In dealing with this question of tariffs I shall have to stress the agricultural aspect. I know that talking about the position of farmers is unpopular. People are tired of hearing of the dire distress agriculture is in, but the fact of having to listen here to the difficulties of farmers does not change the condition of affairs that exists. The condition of affairs will force itself on the Ministers despite any disinclination they may have to listen to our statements. On this question of protective tariffs as against free trade, the first thing to be taken into account is, what are we really aiming at in this country? Are we going to build a wall around this country and live within that wall? Are we aiming to take part in the modern development of the world whereby distance and time have been almost eliminated, and whereby we can get the products of countries hundreds of miles away, produce in our country the products for which it is suited and exchange those for the products of other countries. Or are we to take the other alternative and live within the brass wall set up by the protectionists? I have no doubt we can cut off all connection with outside countries and live within that wall. We can manufacture every thing we want with the exception of certain raw materials. We could manufacture articles which the country is not suited to produce. We can live and maintain ourselves using those articles, cutting off possibly our agricultural production to the extent of what is required to support the people of the country. The ultimate effect would be the lowering of our standard of life almost down to the level of the savage if we were to live completely within ourselves. I think the House will agree with me when I say that agriculture is to be regarded as the basic industry of this country. If we are to maintain it in an economic position we must have agriculture right. If agriculture becomes unsound and sinks into a state of bankruptcy or semi-bankruptcy, any industries we have attempted to build up, apart from agriculture, will crumble to pieces. I want to show that agriculture is going to be a detrimental factor to anything in the nature of considerable tariffs. I acknowledge that perhaps single tariffs may not have any great effect on the cost of production, but the process is a growing process and, as the effect of protective duties increase, they increase the cost of production on the farmer. The Minister who has made himself such an exponent of the policy of protection knows that agriculture cannot be adequately protected, the price of our agricultural products being fixed in almost all cases by the value of the exported surplus. We have in agriculture to sell our goods in a non-protected market, and no protection which the Minister may give agriculture will have any effect on the industry. We have to face the competition of the agricultural exporting countries of the world and to produce our agricultural products in a market where the cost of living is being made daily dearer by the tariffs which it is proposed to impose. The farmers and their sons have to wear clothing, to use furniture, jams, etc., which it is intended to protect, and if the policy of the Minister for Posts and Telegraphs is carried out we will have the price of endless articles increased by the imposition of protective tariffs.

Has the price of jam in fact increased?

I shall deal with that. The Minister for Posts and Telegraphs says the price has not increased. The Minister for Industry and Commerce knows that the effect of tariffs on all articles is to increase the cost of living and knows the effect is to cause the articles protected to increase in price.

That is not so.

As in the case of the Minister for Agriculture and Deputy Wilson yesterday, I say you are wrong.

Would the Deputy quote figures showing that the list of articles given by the Minister for Posts and Telegraphs yesterday has increased in price in this country?

Has it decreased in proportion to that of other countries?

The Minister for Industry and Commerce is very clever; he is very well aware that I have been trying to get information through his department as to whether there has been an increase or not, but he was not able to give me any figures showing whether there was or not.

That is not so. The Deputy asked me to compare certain wholesale and retail prices here with those in England. I say it is almost impossible to get dependable figures as regards the various articles he mentioned. The fact that I was not able to give those figures is now being used by the Deputy for the purpose of making a definite statement that prices have increased.

That is not so. If the Minister's contention is right, that protection does not increase prices, it can be proved by the experience of other countries. The Minister for Finance, in introducing the Budget, stated that it was his belief that tariffs increase the cost of living. If they do not increase the cost of the article how can they increase the cost of living? The tax collected on imported goods is a tax which, if not collected in that way, must be collected in some other form, and I say if tariffs do not increase the cost of the article, the Minister's statement is not truthful. You arrive at that conclusion by a comparison with other countries. Several such comparisons were made here yesterday. Comparisons were made with Canada, New Zealand and other countries. If the Minister who has made that comparison will make inquiries in those countries, I believe he will find that the cost of living has increased owing to protection. I can speak on this matter from practical experience. I lived for some time in a country where high tariffs prevailed, and the farmers in Western Canada will tell you that at that time their corn binders used to cost them almost the exact cost of the American binder plus the tariff. The farmers in the United States paid the American price, while the Canadian farmers paid the American price plus the tariff.

Is not the United States also highly protected?

I am dealing with one article, namely, agricultural machinery. The United States did not protect agricultural machinery. Taking it for granted that the prices of the articles which are protected are going to be increased to, at least, a considerable portion of their protective values, we are going to have the cost of agricultural production increased considerably. Then we have the agriculturalists producing in a protected market, where the cost of living is higher, but they have still to compete in the open markets of the world. The Minister for Posts and Telegraphs apparently believes that agriculture can be protected. I believe that the majority of the people who are using that argument are using what the Minister for Finance called "eyewash," and that they are simply trying to exploit the industrialist at the cost of the agriculturalist. They know that agriculture cannot be adequately protected, especially in view of the resources of the State. In examining this problem you have to remember that when you protect an industry you usually protect the whole industry and not a section of it. When, for instance, you protect the boot, furniture or readymade clothing industries you protect the whole of them, and you must also regard agriculture as one great industry, and not as an aggregation of one million units. You must therefore impose protection which will give adequate protection to the agricultural industry as a whole.

Let us assume that you are going to give a 20 per cent. tariff, say, on woollens and that you are going to protect agriculture in a similar manner. You will have to give a 20 per cent. subsidy to agriculture because you cannot protect export articles unless you subsidise and pay on the actual amount produced. Take any figure you like for agricultural tariffs. It is practically impossible to get reliable figures, but take any figure, say five, ten, or more millions or any figure which will be sufficient to illustrate the point in question. Take it that the total agricultural products amount to £60,000,000 a year. If you want to protect agriculture in the same way as you would protect woollens, say, with 20 per cent., you have to subsidise agriculture to the extent of 20 per cent. of £60,000,000, namely, £12,000,000. If the Minister for Posts and Telegraphs is prepared to subsidise agriculture in the same way as it is suggested to protect woollens he would have to give us a subsidy of £12,000,000, instead of the Minister for Finance giving what he calls a present of £12,000—£12,000 as against £12,000,000. That is what we are getting. We are told that agriculture is being protected because oatmeal millers are getting £12,000. The Minister for Posts and Telegraphs is very anxious to protect the weak farmers. He dislikes ranches and sometimes goes to the trouble of ascertaining whether Deputies in Tipperary are interested in ranching. He seems to have some sort of secret service at work to find out whether they have 50 or 100 acres.

The Minister for Posts talks about protection of the weak men against the men of high finance, the foreign dumper and the rancher. I maintain that the Minister would be doing more for the small farmer if he protected him against the attempt to exploit him by the rich industrial manufacturers of this country. He would be doing more for the small farmer if he attempted to reduce the cost to him of his clothes, his boots and his furniture. I want to point out to the Minister for Posts that the effect of these tariffs will be to turn the real farmers into ranchers. The men who are tillage farmers or who are doing mixed farming will be turned into ranchers. The rancher is the man least interested in protection, because he has reduced his cost of production to the lowest point. He has not to employ labour and his expenses are cut down to the mere maintenance of the cattle on the land. He is not worrying about the cost of production or the cost of living. The question of tariffs does not affect the cattle grazing on the land. But tariffs do affect the real farmer, tilling 20 or 30 per cent. of his land and employing labour. That man will find his cost of production going up and his labour costing him more, because his labourers have to pay higher prices for their boots and clothes.

The manufacturers of artificial manures want a tariff, the Wexford engineering firms want a tariff. They want to be allowed to sell their ploughs and their mowing machines and other implements at higher cost. On whom will that additional cost fall? It will fall on the practical farmer. When the Minister for Posts goes out as an exponent of a tariff policy and poses as the great supporter of the small farmer against the rancher, it is well that the small farmer and the real farmer should know that the policy of the Minister, if carried to a conclusion, would turn him into a bankrupt or wipe him out of existence.

The Minister for Posts gave us information about the cost of boots. He said that the boots manufactured by Cork firms have not gone up in price. He gave us information about other articles which, he says, have not gone up in price. What is his source of information? If the Minister for Posts wants information of that kind, he ought to go to the Ministry of Industry and Commerce, whose duty it is to get that information. That is a Department maintained at considerable expense by the people and it ought to be able to provide the information. The Minister for Industry and Commerce ought to have been able to give me information regarding the comparative prices of articles here and in England. The Minister for Posts goes to Mr. Dwyer, of the Lee Boot Factory. He told the Minister that boots are not costing more. The Minister goes to the Secretary of the Industrial Development Association—a propagandist protectionist association—to obtain accurate information on these matters, and he asks the Dáil to accept information of that kind here. I state here, without fear of contradiction, that protected articles are costing the people more, wherever the increase comes in. I do not know whether it comes in in the wholesale or retail prices, but it comes in. Anybody who crosses to an English town and goes into a shop there to buy a pair of boots or a suit of ready-made clothes, will realise that there is a difference between the price here and those of about 15 per cent. in favour of the English house. If that is not due to the taxes——

Three years ago was that not a fact? It was stated here as a fact two or three years ago before the tariffs began to operate.

I do not know. We are told that we will get guarantees that protected articles will not cost us more. There is very often a catch in these statements. Do these boot manufacturers allow for the considerable reduction in the price of boots since the tariffs were imposed here? Do they allow for the reduction of the price of leather in England since the tariffs were imposed on boots? They do not allow for the reduction of the prices in England, and unless boots here are going down in price proportionately with those in England it shows that the tariffs are making a difference.

As regards the boot tax, may I say that I have made very complete inquiries and my information is that the price of boots has gone up in England in the last two years.

My information is that the price of boots has gone down.

I can prove that they have not gone up.

We have demands for tariffs on flour, and in connection with these demands we have quotations from some mysterious Tariff Commission or Committee which nobody knows anything about—a Commission that sat in camera and produced a report which was never published. There was another Fiscal Inquiry Committee, whose report is not referred to at all. It seems to be a crime to refer to a certain Fiscal Inquiry Committee set up by this Government, which consisted of economic experts who inquired into fiscal questions and into the statements of manufacturers. What do they say about the case put up by the flour manufacturers? I refer anybody interested to paragraph 90, page 44, of the Report of the Fiscal Inquiry Committee, which I now quote:

"A critical analysis of the facts put before the Committee by employers and workers in the flour milling industry will serve to show the difficulties which must attend any attempt to determine the relative weight of the considerations relevant to the question of protection. And it must be said that so fully alive were the members of the Flour Millers' Association to the complexity of the problem that they did not venture as a body dogmatically to assert the necessity of a protective tariff, still less to adopt officially any estimate of the amount of the tariff which was likely to afford them adequate assistance. It was asserted both by the Association as a whole and individually by the witnesses who appeared before the Committee that the industry was in a bad way financially,"

It is still asserted, by the way, that the industry is in a bad way, but still we find it going on,

"that few mills were making a profit even of moderate dimensions, and that the rest were either making no profit or being run at a less, some mills having been actually closed down for a period, if not permanently. These statements, unfortunately, were not supported by precise figures, as the flour millers' representatives did not respond to the invitation of the Committee to furnish it, in confidence, with copies of representative balance sheets. Only one balance sheet was submitted, and that was a balance sheet of a firm not engaged independently and for its own profit in the industry, but as a branch of a subsidiary mill to another and more important firm. The Committee was not, therefore, able to form any judgment as to the bearing of its balance sheets upon the question of the financial condition of the industry as a whole. Enough was, however, elicited to make it seem probable to the Committee that the large profits admittedly made by the industry during the financially prosperous years when flour milling was under Government control, must, if a period of years and not one or two years be taken into account, act in mitigation of any losses that may now be incurred."

That is the Report of the Fiscal Inquiry Committee. The fact is that the flour millers made untold wealth in the days of the War.

As a matter of fact, may I ask was not the flour-milling industry in England and in Ireland controlled during the War? and is it not a fact that they were not allowed to make anything more than a miserable profit? Let Deputy Heffernan give the facts to the House.

I am giving the facts as contained in the Fiscal Inquiry Committee's report.

And on the evidence submitted to them by the millers.

I call attention to the fact that the flour millers refused to submit their balance sheets.

They were controlled.

What conclusion can we come to when they refused to submit their balance sheets except that they had profits which they refuse to acknowledge.

Untold wealth.

The farmers made money, too, during the War. We are told that often enough, but we are not told that the farmers are only able to carry on out of their capital during the last few years.

Are the farmers willing to submit their balance sheets?

They have none. The woollen manufacturers were making khaki during the War, and what have they done with their savings? They put their money into Coates and Guinness's and Imperial Tobaccos and kept it there. Instead of using their capital in tiding over the difficulties this country is faced with, they now rush to the Government for aid, while, in the meantime, they are drawing their dividends from Coates and Guinness's and other places like that. And now we hear from both about their shutting down.

In connection with the flour milling, the advantage to be gained by growing wheat in this country is put forward. We are to get guarantees of prices, I suppose with Government control—at least that is what the Minister for Posts and Telegraphs would give us— and a certain quantity of the wheat grown in Ireland will be used in bread. I asked the Minister what guarantees, of that kind, are worth, and how they can be effectively carried out? Is he going to coerce the people of this country by law to eat bread made from the flour of Irish-grown wheat? If so, it may do some good for the Irish wheat-grower, but even if it should do good, I think it is a very doubtful proposition. I do not see, with all the difficulties that at present present themselves, that the growth of wheat, in bulk, is to be encouraged among Irish farmers.

Anyone who has seen trains, half a mile long, with intervals of only three hundred yards, running along the Western Canadian prairies can form some idea of the competition that wheat-growers in this country would be up against. These trains, half a mile long, are running all night loaded up with wheat grown by what I might call the wheat miners, who have not to manure the land or to fence it in, and who have nothing to pay practically for labour. That is the kind of competition we are faced with in growing wheat. I doubt very much that the suggestion that the farmers of Ireland should divert their attention to the growing of wheat is an economic proposition, or one to which the energies of the farmers of Ireland should be diverted. There might be a possibility of a certain development of the growing of wheat for home consumption, for the feeding, in limited quantities, to cattle possibly, and for use in the farmers' household, but I believe it is altogether contrary to modern economic development all over the world, to try to induce Irish farmers to grow wheat, in bulk, and to compete with the growers in Canada, in Russia, Argentine and India.

The Minister has seen fit to compare the conditions in this country with New Zealand, Canada, Australia, Denmark, and other countries of that kind. I maintain that the conditions in this country are not in any sense comparable with those. There are very good reasons in those countries for protective tariffs. There are very strong arguments in favour of protective tariffs in these countries that cannot be used here. They are undeveloped countries with great natural resources which we have not got here. They are countries whose populations are new and have not already placed upon them heavy charges for the continual maintenance of government and for a fixed system. These countries, because of the natural resources available and which they want to develop, have protection. The men who become farmers in these countries recognise the fact that protection is the policy of the Government of these countries and that they must face the issues which fall upon them because of protection. The farmers of this country are in a different position. They are living under a certain fiscal system and they find that new obligations are placed upon them because of protection. Many of these countries like Canada are enormous continents, almost self-contained. They have power to produce nearly everything they require. They have immense natural resources both in the way of minerals and other things. We are not in that position. We have only one great natural resource and that is agriculture. I maintain our first duty is to protect agriculture by the only means that we can protect it and that is by keeping down the cost of production.

Now the Minister used the argument that there is no emigration from these countries. Would it not be an extraordinary thing if there was emigration from New Zealand, Australia and Canada? That kind of talk is nonsense and is not answerable: it answers itself. He used Denmark as an example. As a matter of fact, protection in Denmark is of a very minor kind. To all intents and purposes it is only protection of luxury articles—articles containing silk and matters of that kind. There is no real general tariff of any kind in force in Denmark.

The Minister for Posts and Telegraphs talked about our adverse trade balance, which he says is altogether due to our wrong fiscal policy, and he maintained that we lose twelve millions of money exported out of the country and lost for all time to the people of this country.

I should like to know if in making a statement of that kind, the Minister is supported by the Minister for Finance. I should think not. I believe that within the last year or two there has been an actual exportation of capital, but nothing like twelve millions. The Minister must know something about the unseen or invisible imports and exports, and he must know that it is very doubtful that there is anything like a balance of that kind against us. He must know that in the final issue exports are paid for by imports; that exports and imports are not paid in money, but by exchange of goods, and that if we are to buy we must send out goods. If we send out agricultural products we have no way of being paid except by taking goods in return. In any case his figures are not correct in regard to the adverse trade balance. In Australia in 1923 there was an adverse trade balance amounting to fourteen millions. In 1924 there was an adverse trade balance of twenty millions. I was very glad to hear the Minister for Agriculture deprecate the association of the tariff reformer with patriotism. Apparently the argument used by a great many exponents of tariff reform is that nobody is a good or patriotic Irishman except a tariff reformer. If that is one of their strong arguments, it only shows the weakness of their case. This is an economic question to be argued from an economic point of view, and the question of patriotism does not enter into it. There are as good patriots on the free trade side as there are on the tariff reform side, and the taunt that the free traders are West-Britons and anti-Irish is not true. It is a taunt which would not bear examination. The fact that such a taunt is used simply blows the argument of the protectionists sky-high, because it shows the weakness of their policy.

Bread and butter patriots.

I am very glad the Minister for Posts and Telegraphs is in favour of a general policy of tariffs. We are going to have tariffs on everything. The Minister's proposed panacea for the economic ills of this country is protection. If they are not able to help agriculture by protection they will have to subsidise it, so that the future Minister for Finance in the Government, of which the Minister for Posts and Telegraphs will be the President, will, I suppose, be bringing in a Budget for £50,000,000 to subsidise agriculture as a result of the tariffs placed on all classes of goods. It is a good thing to be able to find a cure for all ills, and to know once and for all that if we embrace holus bolus the protective policy of the Minister for Posts and Telegraphs our economic condition will be at once righted.

I am very glad to know that the attitude which I have taken up with regard to this question of tariffs and my argument that effective protection could not be given to agriculture have been borne out by the facts and confirmed here by the statement of the Minister for Agriculture. From the beginning, I have felt that no adequate protection could be given to agriculture, and I believe that in view of the fact that agriculture is our staple industry the whole financial and economic position of the country must hang upon the soundness or otherwise of the condition of agriculture. As the position of agriculture must be worsened by the imposition of tariffs, I maintain that it is the duty of the Government to call a halt immediately on this question of tariffs and not to appoint this Commission, or if they appoint it, not to accede to any request of this Commission, for the imposition of further tariffs, until the people of the country have got, what they did not get before, a chance of expressing their opinion in the only way in which people nowadays have a chance to express their opinion, and that is in the polling booths at a general election.

In discussing the Budget, I desire to do so from, perhaps, a different angle to that from which it has been discussed by various Deputies so far. The Budget that has been introduced will certainly not set the Liffey on fire. It is largely a modest Budget. It deals, I think, modestly with the circumstances and conditions of the moment. But, regarding it from the point of view of what has sometimes been termed a journalistic creation, namely, the man in the street—the average man in this country who eats, drinks, smokes and bets and who has to wear clothes and find a means of livelihood for himself— there are three broad facts that emerge from the Minister's proposal. The first is new taxation different in character from that already in existence which will have to be borne by persons of the description I have mentioned. The second is that provision has not been made for any remission in existing taxation appreciable by the man in the street, with the exception of the proposal to reduce the road tax on Ford cars and to increase the allowance for Corporation Profits Tax. With these exceptions, there has been no remission of any existing duty. The third fact that emerges is that this Budget does not propose any great benefits for the ordinary taxpayer which shall accrue from the imposition of those new taxes. The great point is that when the average citizen of the Saorstát took up his newspaper the other evening he found that he would be called upon to pay fresh taxes. The natural question that he asked himself is: "What am I to pay those fresh taxes for and where is the money going to?" I was pleased to hear the Minister state that in compiling the amount that he would require for current expenditure he was going to separate what he calls capital and abnormal charges from those which must be met out of current income, and he detailed ten heads the total of which amounted to £4,429,000. I think he was right. These heads comprise details of non-recurrent expenditure, though, of course, they are also nonproductive. In view of the smallness of our National Debt I think the Minister, at the moment, was perfectly entitled to fund these charges.

Amongst the charges which the Minister has partly funded is a sum of £475,470 for the Army. He says he arrived at that figure as being the excess over £2,000,000 which would be required. What does that mean? It can mean nothing more or less than this: that the Minister is now budgeting for a recurrent expenditure of £2,000,000 on our Army. If the Minister is of opinion that £2,000,000 should be spent in future upon our Army I grant him that. I am not of his way of thinking but, even so, I would suggest that he could have taken, not £2,000,000 as a future basis for recurrent expenditure, but at most £1,500,000, or even £1,000,000, and so released half a million or one million for the relief of present taxation. What I mean is, that instead of funding the excess of two millions of the cost of the Army he might, with security and soundness, have funded or capitalised at least £1,000,000 of that sum. In doing so he would be in the position that he would not have required to have imposed these new taxes. The new taxes are estimated to bring in £305,000. If the Minister had seen fit to have funded another half million of the expenditure on the Army, I say there would have been no necessity for the imposition of this extra tax amounting to £305,000, and there would have been even the possibility of reducing or remitting existing taxation. It comes to this, that these new taxes—that is the only explanation I can find—seem to be necessary for the upkeep of the Army, the recurrent expenditure on which is going to cost us £2,000,000.

I think there is another method, and that the Minister might have seen his way not to introduce fresh taxation. It has been suggested that there should be a reduction in the Excise Duty on beer and spirits. The Minister's statement shows that for the last two years there has been a considerable drop in the returns on these two duties.

There was no drop in dividends.

I must confess that I was not at all convinced with the Minister's arguments as to the reasons for that drop. The Minister went on to say, in regard to beer, that the sum obtained in the present year would not be less than that collected last year. That is, that the prospect was that the beer duty next year will not be less than that collected last year. With regard to the spirit duty, he stated that the amount would be about the same as last year, which would mean a further decline in consumption representing £130,000. I think it would have been no great experiment on the part of the Minister, in view of the serious loss to the revenue in these duties in the last two years, to have reduced them considerably, and thereby succeeded in obtaining more money for the Exchequer. It may be stated that if the duty was reduced the Exchequer would lose. I combat that statement. I say that these duties have almost reached breaking point, and that unless they are reduced they will go from bad to worse and become a serious loss to the Exchequer.

There are reasons, moral reasons, why the State should not carry on duties obtainable through the consumption of liquor, but it is better that the State should receive certain legitimate sums on the consumption of proper alcohol than to place unbearable burdens upon the production of these spirits, and also to put a premium on the making of poteen. A reduction in the duty on English beer which took place, I think, in 1923, has certainly not meant a loss to the British Exchequer. Not only would the Minister, probably, have succeeded in obtaining a large increase for the Exchequer by a reduction of these Excise duties but he would have been doing both a moral and a material good for the country. The industries concerned are certainly in an exceedingly bad way. While the Minister would have been able, probably, to have increased his revenue, he certainly would have helped existing industries.

By these two methods I think it would have been possible to have avoided introducing fresh taxation, the introduction of which is always dangerous. Fresh taxation is seldom brought in in these countries unless existing taxation has in some way been remitted, or unless there are some great benefits to accrue from fresh taxation such as restoring the old age pensions to what they were previously. In that case, I say there might have been some semblance, or some legitimate grounds, for the introduction of these new taxes. These taxes are not of a very startling or overwhelming character. The tariff on oatmeal is not going to upset even, I think, the prospects of our friends the farmers. Personally, I think it is better to import oats than to import oatmeal. If, as it is said, the mills will in the future use Canadian oats for the manufacture of oatmeal, then I say it is better that oatmeal should be manufactured from Canadian oats than that we should import Canadian oatmeal. With regard to tariffs generally, the debate has taken the course of a Free Trade versus Protection debate. I was very glad to hear the Minister for Lands and Agriculture last night, and I agree with him that it is out of the question to expect anyone in this country to say that he is a whole-hog protectionist or a whole-hog free trader. That, on the face of it, will be absurd. Each tariff should be investigated on its own merits—each herring should hang by its own tail. If it can be shown that the imposition of a tariff on any article that can be manufactured in this country will bring a benefit, not to the manufacturer, for it is not with him I am concerned in this regard, but to the people at large, a benefit to the few and not to the many, and that the people will not have to pay more for living, then I for one will be in favour of imposing a tariff upon that article. Because I am not against imposing a tariff on imported flour that does not mean to say that I am in favour of imposing a tariff on woollen goods. It is not a question of principle, but it is entirely a question of economic expediency.

The betting tax certainly is an innovation, and the Minister deserves congratulations on the courage he has displayed in introducing this subject, for it is certainly a difficult one. From the examination, cursory as it is, that I have had the opportunity of giving it I think it is bristling with difficulties. I would like to know, in the first place, whether the Minister had any consultation with anyone interested in racing, apart from the general public, whether he consulted, say, the Irish Turf Club on this question, or whether he consulted even the bookmakers themselves. I think they should have been consulted in the matter. I want it to be understood that I am not opposed to this tax as such. I have seen the tax in operation in Australia and New Zealand, and I have had experience of the pari mutuel in Paris, but I am afraid the methods the Minister proposes to apply in the operation of this tax at the moment appear to be rather amateurish and impracticable. The tax divides itself into two parts. First, there is the licence. I am all in favour of that. If anything, I think the licence is too small, and it would be quite feasible to double the proposed licence. I know that would not bring in a very great revenue, but, at the same time, it would serve many salutary purposes. In the first place it would bring a certain revenue to the Exchequer, and it would be a revenue that would be exceedingly easy of collection. The second proposal is the percentage on what the Minister has described as the stake. I am not quite clear as to what is meant by this proposal. Is it meant that 5 per cent. should be taken off the original stake or bet, or that 5 per cent. should be taken off the total amount of the transaction—namely, the possible winnings, which would be a very different matter both for the Exchequer and the public? If, say, I put £10 on a horse with a bookmaker, is 10s. to be the total amount recoverable, or if I win, say, at 4 to 1 is the Exchequer to get 40s. off my winnings?

What do you recommend?

I would like to hear from the Minister which he means. I can assure the President that if the latter course were adopted the money already in circulation for racing purposes would very shortly be eaten up, and the Minister would have killed the goose that he proposed should lay the golden eggs. There are many other difficulties in the way. We really do not know so far how this is to be collected, but if it is to be on the turn-over, or even if it is to be on the stake only, it will take a considerable amount of money completely away from the racing world. Some people may say that it is a very good thing, but is it because racing purposes comprise more than betting? Betting is carried on on racecourses over horses which have had a great deal of attention paid to them in their breeding and upkeep. Horse breeding is a great industry in this country, and it would be a serious matter if it was to be interfered with by taking away a sum from the racing world, from breeders, owners, or even bookmakers, and certainly from the public. It would considerably interfere with, first of all, the provision of stakes for racing; and, secondly, the improvement and the upkeep of our horse-breeding industry. I would like to know was the totalisator considered, for that is a productive means of revenue in other countries, and it is easy of collection? What takes place in other Dominions, as Deputies may know, is that the Government actually run the totalisator on the racecourse, and they take a certain percentage of the stakes. I think, indeed, they take a certain percentage of the winnings, but I understand a certain amount of the money they collect is handed back, or is in some way utilised as for what I have described as racing purposes.

Now we come to a much more difficult question still, namely, credit betting. Most people, I will go so far as to say everybody, knows, for there is no use being hypocritical in the matter, that credit betting is a great portion of the betting carried on so far as the amount of money is concerned in these countries. How this percentage is to be worked out fairly and equitably in regard to credit betting I personally cannot see. A prominent bookmaker at the Curragh for three days would likely hold about £10,000 by way of credit betting. At the end of the week generally, or at the beginning of the next week, the following Monday, there is what is known as a settling-up day. Presumably on that date the Government will insist on this bookmaker sending them a cheque for £500. That is all very well, but according to the present proposals, this bookmaker who would have to send the cheque for £500, would have no means of recovering his £10,000, as the Gaming Act is to be preserved. I ask is that equitable or indeed logical? The proposal, as far as I understand, is that betting, in the words of the Minister, is to be legalised. What is meant by "legalised"? According to the Minister's statement it simply means that nobody is to be prosecuted because they are discovered in the process of making a bet. In fact he goes further; people are to be licensed for betting purposes. They will have to pay a licence; they will have to pay a tax, and then the proposal is that they shall not be allowed legally to recover the amount of the bet. I do not think that that proposition holds water.

Then we have again the suggestion that we shall not bet by telegram, telephone or letter with any outside bookmaker. The Minister for Posts and Telegraphs seems to have a pretty busy and difficult task at the moment, but if, according to the proposal of the Minister for Finance, he is going to institute a search through his telegrams, his telephones, and his letters for transactions by way of gaming, which shall hereafter be illegal, I think he had better give up his tariff proposals altogether and devote his whole time to that purpose. Apart from that, is it a right suggestion to make that the privacy of the post, leaving out telegrams altogether, should be so interfered with that the Minister for Posts and Telegraphs is to have the right to open letters, as was mentioned in the statement of the Minister for Finance—letters as well as telegrams?

Has he not that now?

He is to have the privilege in future of opening all letters.

I think he has that now.

He may have that privilege now—I do not deny it to him now—but he has very little occasion to use it, whereas in the future he will have no alternative to doing it.

He will have it imposed on him by the laws of the State.

As Deputy Baxter says, he will have the duty imposed on him to open letters to see whether they relate to betting transactions. I think that that suggestion is not only illogical but it is inequitable, impracticable and absurd. I would suggest that so far as the betting tax is concerned it should be proceeded with, and that in so far as the licence is concerned the licence should be increased if anything, but that all those finicky proposals about opening letters and scrutinising telegrams to prevent anybody getting into communication by way of betting transactions with people across Channel should be dropped. I think it will be impossible to carry them out. Further, the cost of collection of this tax must be considerable, in fact enormous. The officials at present engaged in the Post Office will have to go on with their present occupations, and you will have to put a new army of officials to open letters to discover who is betting with Mr. Isaac So-and-So in Manchester.

Another matter in regard to the Post Office is that not only will the Minister and his officials be engaged more busily than in the past, but the revenue from the Post Office derived from postage as well as from telegrams will of course considerably suffer. It has been suggested to me also that there will be a means of evading this proposal. Of course everybody knows that codes are in existence, that they are used every day and that it will be very hard, even for the Minister for Posts and Telegraphs, to decipher all the racing codes. I have said enough on that subject to show that though the tax itself is well worthy of consideration, and though the Minister deserves credit for having brought it before the notice of the Dáil, still he should pause before he goes on, certainly in regard to the percentage. I for one will support him in regard to the licence proposal. There has been provision made for different classes of taxes and some extra taxation on motor vehicles.

Ordered that progress be reported.
The Dáil went out of Committee. Progress reported.

Before the Deputy continues, I should say that private members' business should normally come on at 2 o'clock. An arrangement was made after questions that we would take the question of whether the Dáil will sit late or not to-day at 2 o'clock. Perhaps the Deputy would not object to be interrupted here for the purpose of having that matter determined, and he can resume his speech later.

Certainly, sir, I am always glad to be interrupted by you.

The suggestion that has been, perhaps, most favourably considered is that we might wind up the debate at 4 o'clock on the general understanding that a division would be taken at that time, if it were to be challenged, and that members who would not have an opportunity of speaking to-day would reserve what they have to say for the next stage on the 3rd or 4th May. If that were agreed to we could go ahead.

There are several speakers on our benches who are prepared to agree to that suggestion provided that all the orators do not get up on one side. I believe there are several speakers on our benches who wish to take part in the debate, but they can reserve what they have to say for the next stage.

When Deputy Redmond rose a number of Deputies rose on this side of the House, but as they had a considerable time yesterday evening to address the House I called on Deputy Redmond. I am informed that Deputy Shaw desires to speak on the betting tax, and I propose to allow him do so to-day. Two other Deputies on this side of the House desire to speak, one against tariffs and one in favour of them. I do not know whether Deputy Gorey would be satisfied to allow these Deputies to speak after Captain Redmond has concluded.

We wish to hear not so much the arguments for or against, as the reply of the Minister for Finance to the criticisms addressed against the Budget. It is very desirable that he should have sufficient time to make his argument.

That is the really important thing for us to consider. The statements that may be made for and against tariffs can wait. It will make the situation difficult if we let the discussion go too close to 4 o'clock. The Minister should be given time to complete his statement and then a division will have to be taken—I assume a division will be called for.

Will the Minister be allowed to reply at 3.30?

The Minister is liable to be asked question. Perhaps it would be better to allow the Minister to reply at 3 o'clock.

The Minister should be allowed to reply after Deputy Shaw has spoken.

I will take only a very short time.

Deputy Good asked me if it were likely that he would be allowed to speak; he would have to go away at 4 o'clock.

I do not think we can allow him to speak to-day. If we are to end this discussion we cannot provide for everybody. I am providing for Deputy Shaw. He will be brief, and he is speaking on a particular topic. If we agree to conclude at a certain hour, we cannot let many Deputies speak. When Resolution No. 6—touching on the oatmeal duty—is taken on Report, the whole question of tariffs can be reopened. On Resolution No. 10, dealing with the tax on motor vehicles, the whole question of road policy will be open for discussion. I take it there will be no difficulty in coming to an arrangement.

I do not propose to refer to tariffs at all, if you are good enough to allow me to speak.

The Dáil went into Committee on Finance.
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