Dáil Éireann díospóireacht -
Thursday, 26 Apr 1928

Vol. 23 No. 5

IN COMMITTEE ON FINANCE. - FINANCIAL MOTION No. 17.—GENERAL.

MINISTER for FINANCE (Mr. Blythe)

I move:—

"That it is expedient to amend the law relating to customs and inland revenue (including excise) and to make further provision in connection with finance."

I do not intend to take up a great deal of time in moving this general resolution, the purpose of which is to have the Budget as a whole, and all the questions arising in connection with it and surrounding it, debated. I would like to refer again to a matter on which I interrupted Deputy Lemass, I think, yesterday. The Deputy was comparing the 20,600 civil servants in the Saorstát with 61,000 in Great Britain. The British figure that is comparable with the 20,600 is 296,825. The figure of 61,000 which was quoted by the Deputy as being the British figure did not contain any Post Office employees at all. It did not contain any revenue employees or any civil servants employed in connection with the War Office or the Admiralty, so that the conclusions people would be inclined to draw when these figures were used can hardly be justified. I do not want to comment on the proceedings or any promises made or policy announced in another Parliament. But, with reference to the plan for reduction of staff announced in the British Parliament, I would like to read an extract in reference to the matter from a British White Paper which has just been issued and come to hand. It sets out the reductions expected to be made within the next five years, and it says:

The whole programme of reduction will only prove possible in so far as departmental estimates are not varied by new legislation or important decisions of policy entailing considerable increases of staff, and provided that the Ministry of Labour in particular is entitled to assume that for the purpose of fixing the numbers of the employment department during the next five years trade will become good.

So that there are certain qualifications surrounding that programme of reduction. I would like to point out to Deputies who insist that it is always possible to continue services that they desire to have continued and to reduce the cost of them, that, as a matter of fact, all sorts of things have been done, and had to be done since the setting up of the Saorstát. They involved very substantial increases of staff. The mere setting up of a customs entity involved an additional staff. The new protective duties have also involved an additional staff. It was very much easier to collect the smaller number of taxes which were in existence before any protective duties were imposed and to administer them than to administer a great number of protective duties some of which bring in comparatively little revenue. For instance, the furniture tax brings in little revenue, and the confectionery tax is beginning to bring in but little revenue. Others show a decline in revenue in a greater or lesser degree, but even when a small amount of income is yielded by protective duty a large staff is required. We are continually asked to do more forestry. That, of course, is only a partially economic work. The view taken by those most competent to judge in regard to afforestation is that if we could borrow money at 3 per cent. forestry would be remunerative, but as we cannot, it means that we must have free grants which will not be recoverable for the purpose of carrying on forestry. Yet there are wide demands that more forestry and drainage works should be carried out. The number of drainage schemes that can be economically carried out, and that will benefit the land to anything like the cost of carrying them out, is comparatively small. We have a great many demands for expediting land division. The Land Commission is a costly and a big department which involves a great deal of expenditure. If we had not the 1923 Land Act the Land Commission would be a very small department, and the numbers of staff and expenditure required would not be a very serious matter.

We have done a good deal in the way of housing, and we have a demand for more houses, and more are required; but you cannot do more in the matter of housing without involving increased staffs all along the line. We have reinaugurated the system of loans for the improvement of agricultural holdings, for the erection of hay barns, the building of farm offices, and for the thorough drainage of land, fencing, and all that sort of thing, which involve charges of administration in the head office and inspection and a loss of interest, for the whole cost cannot be recovered. Then there have been agricultural services, some of which have been the result of Acts passed in this House. Others have been the extension of existing services. Take cow-testing, which is a most remunerative one to the community, the expenditure there is increasing year by year, and is still growing. You cannot have that, or any other service like it, without an increase in the cost. Other things that have swollen the expenditure are the necessary costs of the repaying of compensation and the litigation involved in the valuing and inspection, and the actual checking of accounts and so forth. All that has involved an increase of staff. Then, again, the restoration of the buildings burned in Dublin and of the police barracks throughout the country involved an increase of staff and expenditure. The expenditure in connection with roads out of the Roads Fund is included, but that is new. The Road Fund, I think, was just in existence in 1914. The amount involved was very small at that time, but it has grown to be a considerable sum. There is now an expenditure on roads far and away beyond what it was in 1914, and the roads are there for it. If you want to have roads they must be paid for. Then we have had new services just commencing, like the Patents Office, which involve an increase in our total expenditure. The Railways Tribunal and the Tariff Commission also involve an increase.

In connection with education, there has been a considerable increase in grants for secondary education. An incremental scale has been provided for secondary teachers, and we are committed to a scale of pensions for them. I think that is necessary if we are to get the right material to go in to secondary teaching and to remain in. It cannot be avoided. We are pressed for pensions for certain classes of teachers in national schools who ought to be entitled to pensions. For the class of junior assistant mistresses I think there is a strong case for pensions, and there is a much stronger case for teachers in convent schools who are not now entitled to pensions. We have passed a School Attendance Act which has involved increased costs generally in education, and has done away with certain possibilities of economy, or reductions of numbers in regard to the Civic Guards. The enforcement of that Act, which was necessary, has thrown a great deal of work on the police. I believe in most stations it takes very nearly the whole time of a Guard to look after the enforcement of the School Attendance Act. Possibly, if the enforcement is carried on for a period of time certain changes in public habits and outlook will enable the enforcement to be carried out more cheaply, but the immediate result is a great increase. We have founded in University College, Dublin, a faculty in general agriculture, and in University College, Cork, a faculty in dairying science, the cost of which is considerable. That work, with the expenditure involved, is necessary.

We have increased the annual endowments to the colleges for their general work, and that again was necessary, for they were in a state approaching bankruptcy before the changes were made. We have started preparatory colleges, which were necessary to give us in the future national teachers with a command of Irish and able to educate through Irish. That is desirable, and there again costs were involved. Probably something will have to be done in connection with technical education. However poor the country is there is this much certain, that while we may scrape and pare here and there, in connection with education any cutting down in education work will be ruinous to the country. The real difficulty is, as somebody has said, that what was wrong with this country during the British occupation was not half so much over-taxation as under-spending—not so much that too much money was taken but that things were not done for the people with the money taken from them, and consequently new services had to be initiated since we took over. The problem is one of what services we must have; and the other, of the services we can have and do without, and which of them are worth paying for and having. You cannot possibly have services without paying for them. It has been suggested we should spend money on productive work and lessen our expenditure on enforcement. I do not think we can do it so simply as that. If you have a law and there is some requirement on the public, the law ought to be enforced and the requirements insisted on, and you should not have the position where you have a multitude of requirements that some of the best people—the people with a conscience—will obey while others will have the advantage of evading by a sort of social blacklegging. I believe that if we do lay down any law or requirement we ought to see that it is carried out, and if we feel that we cannot afford to carry it out then we ought to repeal it and require something less that we will get without the enforcement. But I do not see that we can simply shut down enforcement and let the laws stand—let those who like obey them and those who like to slip out, slip out. So that we come back to policy at every stage in connection with this whole matter.

Even in the matter of enforcement we have been asked for more. Some of the recent Agricultural Acts, and the most beneficial of them, are simply ordinances which must be enforced. The Live Stock Breeding Act is for the rejection of certain bulls for stud purposes. The Eggs Act prescribed conditions with regard to the export, packing and dealing with eggs. The Dairy Produce Act is the same sort of thing. Then we come to other Acts—I do not know whether Deputies had them in mind in speaking about this—like the National Health Insurance Act. I know that Act is unpopular in a great part of the country, but I think it is a most useful and beneficial Act. But it should be either enforced or it should be abandoned or modified and made into a voluntary Act. I could go over a great number of items of that sort.

If there is a serious disposition to cut down expenditure, we might find some Acts that could be abandoned, and some other requirements that we can say we will no longer insist on, but I do not think that the number will be found to be so very large. In a great many cases it would be found that failure to enforce requirements that exist at present would result in certain confusion and loss. On the other hand, I turn for a moment to the question of the system that we have inherited. We have inherited certain things which are perhaps not as we would have made them, if they had been made in this country in the first instance, but to change them would be very difficult and probably a costly matter. For instance, I do not know that we would have adopted all this system, with its multiplicity of approved societies, for National Health Insurance. We might have insisted on a single society. I do not think we would have stood for direct administration by the State, because that creates a lot of difficulties and means a lot of waste of Parliamentary time and all that, but we might have insisted upon one society. We have a large number of existing societies. If we abolish them it will be found that pressure will be brought to bear on Deputies, with all that that will mean, and compensation will be claimed for the abolition of vested interests of various sorts. In the long run the cost of the change, unless we were to spread it over a great period of years, would be such as to rob us of most of the benefit of making the change. That applies to a great number of other things. If the British, for instance, had not extended the postal system in the way it was extended, it might be that we would not have given all the facilities that are now in existence. But when a service has been given, it is very difficult to withdraw, and it is doubtful if it is right to withdraw it, because the withdrawal of such things has a certain effect on the mind of the country. It prevents the idea of progress, advancement and improvement taking root and grip. It is extremely difficult to effect economies once a system has been brought into being.

Then there is the old theory advanced —that what is being done could be done by fewer people. In my opinion, that view is entirely without foundation. As I said last night, nobody can say when you have a huge organisation that there is nobody slacking anywhere. You cannot say that everything is absolutely perfect, and that there is no flaw and nothing wrong anywhere. That will happen where you have a big commercial undertaking or governmental machine. You cannot just tune up a huge machine and keep it right and supervised in the way that some very small concerns might be. But I do say that, on the whole, there is very hard and honest work done by the mass of the Civil Service. Of the civil ser- vants whose work Ministers see most of—those at the top—there are men who are almost killing themselves with work. It would not be possible to get harder, more zealous, or more disinterested work done by any body of men. Among the men who do that work themselves, and who are perhaps better able to see into the machine than Ministers, who are occupied with political matters and have pre-occupations of various sorts, there could be no such thing as conspiracy to allow slacking, inefficiency and waste of public money by the people under them.

I pointed out once in connection with the Civil Service, when there were attacks on the Government and statements that the Government were sheltering them, that we inherited these people—that they were nothing to us. As far as the big body of them are concerned, they were British civil servants who were handed over and were absolutely nothing to us. We have no reason for allowing them to "go easy" or for covering up their faults. When dealing with anybody who will look at the matter rationally, I think that is the answer to that. The real point is this: that while from time to time there may be little adjustments and changes effected, you cannot get the work that is at present being performed done any cheaper than it is. If we want to reduce the cost of public administration and to be in a position to reduce taxation, we have to make up our minds what we will scrap or what we will slow down. When we have considered each item that might possibly be scrapped, we have then to consider what will be the economic effect of scrapping it. I know certain matters will be raised which do not involve great sums, taken altogether, and which are really political questions. They are matters that might be dealt with separately, because they only prevent any debate on economy or retrenchment in expenditure from having the appearance of reality. I refer to questions such as the Seanad, the Governor- General's establishment, and one or two others. When they are brought in we cannot have any real debate, because they are all——

Mr. LEMASS

Unspeakable!

A DEPUTY

They are a myth.

Mr. BLYTHE

People talk as if when £500,000 is wanted it is to be found in that way, or when £2,000,000 is wanted for a big scheme it is to be found in that way. We do not get matters faced up to seriously and honestly. Deputies have suggested that old age pensions should be given at 65, and should be given irrespective of means, and other schemes of that sort. Suggestions like that can be carried out, but they involve a very great increase in expenditure. It is doubt ful whether the mere cost of collecting that money and administering it would not put a burden on the country that it could not bear.

I shall just say one final word with regard to taxation. The British Government can get something approaching half—perhaps less than half—but a very big proportion of its revenue, from income tax. We can only get a comparatively small proportion. We cannot have our scheme of taxation balanced in the way the British scheme is balanced, because there is not the wealth in the country and there is not the accumulation of wealth in individual hands in this country. I think I once informed a Deputy, in answer to a question, that the total number of persons in the Free State with incomes over £5,000 a year was one hundred, or some such figure. I do not want to quote English figures from memory, because I might mislead the Dáil, but there are really none, broadly speaking, of these big accumulations of wealth here that exist in Great Britain, and you cannot try to get more out of the few accumulations you have than has been got, because you could lose them.

There are persons here who have been in the past politically opposed to the great majority of the people and who are not at present, perhaps, as firmly attached to this country in their sentiments as one would like them to be, and as their children probably will be. You can drive people out of the country who are owners of great wealth that in time to come may be of the utmost service to the country. And while one, on the other hand, cannot keep people here who will not stay, and cannot keep people without any sentiment or affection for the country or any interest in it, still if that sentiment and interest in the country exists at all, even if it does not make a person a strong nationalist, it is bad policy from either point of view to try to pile up burdens that may result in people being driven out.

It is just the same in the case of expenditure. We have to look all round the problem. So, in the matter of taxation, we have to look all round the problem; we have to see that we are not going to rob the country of the ownership of a great deal of wealth and income which it cannot afford to lose. I should like to say this, that in all the public discussions that have taken place about expenditure and taxation there have been very few people who get right down to it. There has been a great deal of inclination to talk in the air and find something of which a catch-cry could be made and to talk about that as if it had overwhelming importance, whereas in reality it will be found to be something in the nature of a triviality.

Mr. DE VALERA

The more one studies the statement that was made here by the Minister for Finance yesterday the more disappointed, I think, one must feel. Even from the technical point of view of giving us a clear picture of the conditions of public finances generally it was hopeless. For instance, we were given the impression that the Budget is again about to be balanced. We have heard that a number of times in the past, and I, speaking for myself in any case, have never been able to find that current revenue met the non-recurrent and current expenditure. It we look back, without examining it from that particular point of view that I referred to, we shall find that over a number of years there has been a constant deficit. Not going back to 1923-24, when there was a deficit of close on £7,000,000, really £6,800,000, but coming to the later years, we find that in 1924-25 there was a deficit of £721,000 odd; in 1925-26 there was a deficit of £904,000 odd; in 1926-27 there was a deficit of £3,280,000 and in 1927-28 there was a deficit of £3,597,000. We are led to believe that this year the public debt amounts to £20,000,000. Unfortunately the public debt—the service for which, at any rate, the public will have to pay —is very much more than that. In the provisions for the coming year, for example, and in calculating that debt, we are not told at all of the sum for the services—I am not capitalising it, as there might be differences of opinion as to its capital value—which come to two and one-third millions of the five and a half millions, roughly, going over to England. Putting aside the special item for land annuities, you have something like two and one-third million pounds there. There is no provision made whatever for the repayment of the first and second loan raised for the Republic in America. We have been promised that these claims will be met. Yet we see no provision of any kind made to meet them.

Then, again, one would expect that in a statement of this kind the whole national situation would be broadly reviewed, and the present position of local taxation would be taken into account, so that we would have something like a picture of the burden which the average citizen of the country has to bear. That is not being done. As I say, from the purely technical point of view, it is an unsatisfactory statement. From the constructive point of view, from the point of view of any hopes for the future, it is an unsatisfactory statement. The only thing that comes out from it clearly and definitely is that there is no hope in the future practically of any reduction of taxation, and that, in fact, we will have to face increased taxation.

As I said yesterday, we are not afraid to face increased taxes if it can be fairly pointed out that they are for the general good of the community, but we are against increases of taxes where they simply mean wasteful services. We are not convinced, as the Minister for Finance seemed to be, that administration is economically carried out, and that the administrative services are economically worked at present. We are told that we are not to bother about the Governor-General and items of that kind. Very well, let us keep to the bigger items. We hold that with a proper national policy it would be possible, well within this year, to reduce the cost of the Army by £800,000. We believe that it would be possible to reduce the Civic Guard Vote by a sum that would amount to half a million pounds. We believe that in the Civil Service, by reorganisation, we could get the same services at a cost that would enable us to diminish the amount by something close on half a million pounds. It may be asked: can you give us examples of the services where things of that kind could be done.

We have not, of course, got the same opportunity of investigating the different Departments and of seeing whether there is redundancy or not as the Ministers have. We cannot go into the offices and thoroughly examine the whole scheme of organisation to be completely satisfied that this reduction to the full amount could be effected, but when we take a view and look around merely on the surface we can see where certain economies could certainly be effected. If we can get examples that satisfy us by a mere outside glance, we can be satisfied that the same thing is happening in a number of other Departments. During a recent debate here, when a demand was being made for an increase in one of the social services, I felt that our attitude was either misunderstood or misrepresented on that particular matter and I pointed out that I, for one, would not be found asking, for example, for a diminution of the Education Vote. I meant the service of education in the proper sense. But now, for example, if you look at the administration of this service and take the three main branches, the primary, the secondary, and the technical, which are housed in three different establishments, you will find that they appear to be run in almost watertight compartments. You have got each one of them organised with four sub-divisions, namely, the Executive Department, the Examination Department, the Registry Department, I think, and another which does not occur to me at the moment, but which I will get in a minute or two.

I claim that if these three services were properly co-ordinated and brought together and not run as three separate departments there would be considerable saving. I believe also, that the inspectorate staff there is unnecessarily large. Those of us, for example, who went through a national school know very well what an inspector's visit to the school meant. Our view is that, ultimately, education in the country will be of the character which will be given to it by the teachers and that there is altogether too much inspection and too much waste on a staff of that kind. Similarly, if we go to the Examination Department, I am convinced that there is triplication there which is not necessary. In another debate it was suggested that the collection which is being done at present by one branch of the Land Commission could be very well handed over to the Department of Finance and that the Registry could go in with the General Land Registry. Then, again, if we look at the Supply Services, we find that we have the Board of Works, the Stationery Office, the Stores Office of the General Post Office, and the Purchasing Section of the Local Government Department all working independently and separately. Does anybody doubt that if these were properly co-ordinated there would not be a considerable saving of staff?

As I said, we cannot be expected to give more than a surface indication where we believe there is waste and, whatever we may say about other matters, we can all be agreed that this country in its present position cannot afford waste.

Let us get back to other directions. Let us begin with the Governor-General. If £8,000, as we were told yesterday, can put the horse-breeding industry on its feet, £28,000 can do a lot. There is £28,000 wasted in that office which nobody in this country wants, and I do not believe that Ministers on the opposite side want it. Very well, can we not have courage to deal with that situation? Even in accordance with the Treaty, you are not bound to pay £10,000 a year salary, though you are according to the Constitution, but surely as you can change the Constitution you can change that. You do not want to pay £10,000 for an office which carries no honour, and which the vast majority of the people are not likely to respect or care for. To spend £28,000 of Irish money on that is simply a shame. I believe that Ministers on the other side do not want it either, and, if that be so, and if we have the freedom which we are told we have, we should be able to deal with that situation and to save the whole of that money. I see no reason even for those who want to continue it why they should continue both the salary and the establishment on these dimensions.

Let us come to the Senate. The Senate, in my opinion, is not a necessary body. It is a luxury. It is doubtful whether the country would not be much better served if the responsibility was altogether thrown on this House, and that the people began to concentrate on putting into it the best people they could find and rely and concentrate on them. The clearing away of the Senate would mean a sum, I think, of £34,000. I want to get the actual figure.

The PRESIDENT

£20,000 odd.

Mr. DE VALERA

Very well, £20,000 odd. Again I say if £8,000 can put the horse-breeding industry on its feet, a saving of £20,000 is not to be disregarded. Come now to this House. We have here 153 or so members. Is there anybody sitting here who does not believe that 100 members would do the work just as well?

The PRESIDENT

Hear, hear.

Mr. DE VALERA

Very well; there is not the slightest doubt about it. I do not give them too much work to do anyhow. The reporting staff, which is big enough to run a daily paper, would be saved a good deal of trouble and would not necessarily be so large, as there would be less talk.

Mr. DAVIN

Why not have a dictator?

Mr. DE VALERA

A hundred would be all right. With the reduction that would ensue there is scarcely a doubt that we would save one-third of the allowances for expenses in travelling, and so forth. That would give you another saving of about £20,000. Let us take the Ministry. If we take even the Department of the President, we can get a saving in that direction of at least £4,000 or £5,000, and so on. If you go through the other Departments, you will find that you could have savings which would be comparatively a large percentage of the whole, and if we are going to prevent waste, it will be precisely by going through all these Departments and the activities of the State generally and cutting them down to a reasonable figure, something that would be fair when you take into account the general condition of the people. Coming to the specific changes which we discussed yesterday, I do not know to what extent I would be in order in referring to them again.

AN CEANN COMHAIRLE

The Deputy can go over the whole question, particularly in this case.

Mr. DE VALERA

Coming to the definite proposals, I would like the Minister to make it a little clearer for all of us, and certainly for me, how a shortening of credit and the other measures proposed are going to bring in, in this particular year, the amount he expects, and what influence that is likely to have on next year's revenue. We have income tax maintained at the old figure. We are not against, speaking for the Party as a whole, in any case, direct taxation, but we believe in this matter that there should be preferential treatment for capital which is invested in productive Irish enterprise. We think it could be done. We think, further, as I said yesterday, that some attempt should be made to give further relief to those with small incomes, particularly married men with children. Then we have the sugar tax. To me that was the biggest surprise in the Budget. None of us was surprised that taxation was going to be increased, the moment we saw the book of Estimates and when we bore in mind that a general election was not anticipated during this year; but I did not think that the present Executive was going to bring in a tax on sugar. We had heard so much of the free breakfast table that I thought that sheer shame, if nothing else, would have kept them from bringing in this tax. As all of us who opposed it yesterday said, that tax bears upon a section of the community that under present conditions is least able to bear it. It bears particularly on the poor, because the tax will be transferred to the consumer and will not be transferred by the exact amount specified in the tax. There is scarcely a doubt about that. It means that the poor, who cannot afford any luxuries, will be shortened in one of the things which to them is practically a necessity. You will have the rations of the children, which is worse still, in that particular commodity shortened. I hope that by a change of policy generally and by curtailing unnecessary and wasteful expenditure that tax will be removed at the earliest possible moment.

We next come to the relief on the entertainment tax. As I have already said, it was a shame in the first instance to introduce this tax on sugar, but to put it side by side with the relief on entertainment tax is a double shame. I am not by any means against sport. Far from it; I prefer to see people going to racecourses and out into the open rather than sitting, for example, in cinemas. But I do not believe that this remission of tax is going to help to bring them to the open air or to the racecourses. I believe that it is simply a gesture of a certain kind that loses £8,000 for the Treasury. It is a bad principle and will make the poor people more discontented than they would be otherwise with the imposition of a tax like the sugar tax. I think that instead of taxing sugar the entertainment tax might be increased. I admit that the yield from that alone would not be sufficient, but again many small things make a big thing, and if in other directions of that kind we were to tax the community without putting a burden on the poor, in the long run we would be able to find sufficient to meet that deficit.

Nothing has been done with the betting tax. I wonder whether the Ministry have considered the possibility of taxing betting on foreign racing? If they did, they might afford greater relief to home racing which would be much more effective.

Mr. SHAW

There is a five per cent. tax on it.

Mr. BLYTHE

Foreign racing is taxed so far as bets are made here. So far as bets may be made outside the country, we cannot tax them, but if they are made with bookmakers here they are taxed.

Mr. SHAW

That tax brought in £150,000 last year.

Mr. BLYTHE

The tax on betting on racecourses here is two-and-a-half per cent. and the tax on betting in bookmakers' offices is five per cent.

The PRESIDENT

The Deputy is getting a great advertisement for virtue out of this speech.

Mr. DE VALERA

I do not want to get an advertisement here or outside, though perhaps I would require it to make up for all the blackening I received here for the last four or five years. Then in regard to the bottle tax, we have medicine bottles, and I think it would mean a good deal to the country if we put a tax not alone on these bottles, but on what comes in in the medicine bottles. They are patent medicines for the most part, and it might be a source of income.

We spoke of the motor tax yesterday, and we supported that tax, but we are sorry that the Ministry would not take the whole question of transport and the unification of transport into consideration. We know that there is at the present time wasteful competition of every kind. We know that our railways were never designed to meet the internal requirements of the country from the point of view of transport, and that motors will be necessary, but nobody will hold that motor transport for long distances is economic. We have railways, and they should be used for long haulages. In any case, the whole question of the unification of transport should be taken into account. We believe that a tax on petrol, which would bring in a considerable amount, would be, for example, a much fairer way, even though, on the whole, we do not regard a petrol tax as the best way of raising revenue. We believe a tax of that kind should be devoted to the Road Fund. However, if you have to do it, a tax of that kind would be more acceptable than the tax on sugar. Then we have the cost of telegrams raised. Certainly I think we will have to admit that that is a very backward step. We have not, of course, in this country the same volume of business that they have in the United States, but it seems to me that we would be much better off if we encouraged people to use the telegraph office more. It is a matter, of course, for detailed examination, and I am not ready, not having got sufficient figures to satisfy myself as to what will be the result, to say that a reduction would bring in an increase.

I do say that there certainly ought to be a great deal of justification, and the Minister ought to be able to make—he must make—a very good case before he is going to satisfy us that there should be an increase of 50 per cent. on the present cost of telegrams. I wonder whether the Minister realises that in giving cheap Press rates he is directly, by State money, subsidising the Press? The Press are no friends of ours, and we do not mind. Perhaps the Ministers over there are a bit more anxious to be on particularly good terms with the Press.

Mr. HOGAN

The new paper will get the same rates.

Mr. DE VALERA

Exactly, and even in view of the new paper we think it is unfair that commercial concerns should be directly subsidised with public money. The cheap rate of telegraphing for newspapers is, we hold, a direct subsidy, and it is a matter that ought to be examined.

When looking through the items of unnecessary expenditure I find I did not speak at all about the Department of Foreign Affairs. That Department has now been handed over to the Ministry of Industry and Commerce, I understand, and it would seem to indicate that they wanted representation abroad only or mainly for trade purposes. Our foreign trade has not increased to any great extent, and where we have representation abroad, to my mind it is not representation as far as the country as a whole is concerned. I know one country, in any case, where we are supposed to have a representative, and I certainly do not think that the representative there is worth the money that is being paid or that the office is worth maintaining. The Trade Office in New York is, perhaps, worth something, but if you go to anybody in Washington who knows the situation I do not think that that particular office is any great credit either to the Ministry or to the country as a whole. If that office is simply to be an attaché, a mere appendage, of the British Embassy, I think we would be very much better off without it.

Mr. McGILLIGAN

It does not happen to be.

Mr. DE VALERA

It does happen to be, as we know.

Mr. McGILLIGAN

That is only a surface view.

Mr. DE VALERA

Is that all? I think it is more than a surface view, and if you think the people of America are foolish enough to be misled by that surface view, as you call it, you are very simple indeed. The people of the United States know exactly what the cry, "We have independent representation and independent service," is worth. They know it is a falsehood, and in any place if you want the respect of any people you will not get it by repeating falsehoods.

Mr. McGILLIGAN

That is the reason why they sent a representative here, I suppose?

AN CEANN COMHAIRLE

We are now dealing with a specific matter and Deputies should not stray from that.

Mr. DE VALERA

We are quite prepared to debate that whole question. I, for one, would not oppose having a fair expenditure on the representation of this country abroad provided our representatives were really free there, but I think that we are doing very badly indeed in spending money trying to pretend what we are not and what we are not able to be. The whole attitude of the present Executive, as far as I can see, is that of people who find themselves caught in some piece of revolving machinery, and they do not seem to be able to get out of it. In fact, they do not seem to be able to make an effort to get out of it, but they surrender themselves limply to be whirled about, and the poor efforts they appear to make are rather more like the curious antics I was told about at one time that would enable a man, if he were put in the centre of a very large and absolutely smooth table, to get off it without any help, or without being able to get any friction in the matter. If we want to get any enthusiasm in the country, if we want the country to rise out of the present slough of despond in which it is if we want the farmers and others in the country, who are very different from those who are constantly crying out that there is prosperity, the whole national question will have to be tackled in a much more courageous way than anybody on the other side seems to be prepared to tackle it.

Mr. T.J. O'CONNELL

I listened to the Minister's statement yesterday with a certain amount of disappointment, because all through it seemed to run a note of pessimism. One would hardly expect to find such a note coming from a Minister of a Government which has been in charge of the affairs of the country for over five years. I believe that note of pessimism which seemed to animate the whole Budget statement is not entirely justified by the facts, as we know them, in the country. I believe that was the impression which the Minister's statement gave to most people in the House and to many people outside. It was something in the nature —his whole financial statement was something in the nature—of a stop-gap Budget. The Minister did not profess to look beyond this time next year. He just devised ways and means to carry on for twelve months, and he has no outlook beyond that, as far as one could gather from his statement. Certainly, there is no large constructive outlook, and no manoeuvre with a view to constructive effort in the future.

I was interested to see if any indication could be got as to the policy of the Government with regard to schemes of reconstruction and the big schemes we heard about in regard to housing. No one can gather anything from the Budget statement as to what the Government's intentions are in regard to that. We had here early in the Session a debate lasting over several days on what is undoubtedly one of our great national problems, the problem of unemployment. One would think in a statement such as we had yesterday that that problem would be adverted to to some considerable extent; but that has not been done, and we are still in the dark as to what plans the Government have for dealing with that big national problem. The unemployed people of the country are living from hand to mouth, working in temporary positions of one kind or another, and they may be out of employment tomorrow. They looked hopefully to the Minister's statement. The majority of the people who are engaged in the agricultural industry will ask, quite naturally: "What have we to get? What may we expect from the Minister's statement?" I, for one, cannot answer; I do not know what they have to expect. They will see that their competitors in England are having a big burden taken off their shoulders.

Mr. HOGAN

In October, 1929.

Mr. T.J. O'CONNELL

Even in October, 1929, if there was relief for our small farmers, it would be something to look forward to and to live for. Of course, this £600,000 will again be trotted out as a sum given to the relief of agricultural rates. But with regard to that particular matter, complaint has been repeatedly made that this £600,000 is not being spent to the best advantage of the agricultural industry. Whether a man allows his land to go practically waste, or largely so, or whether he uses his land to the fullest advantage and produces food to the fullest advantage of the country, he gets the same relief out of that £600,000. I believe that that is unfair altogether and there should be a different basis for the allocation of that £600,000 so far as it goes to encourage the agricultural industry.

With regard to the taxes that are imposed, the one that I have the greatest objection to is the tax on sugar. In fact, I would be right in saying that I have no objection to any tax but this tax on sugar. I think there is something in what the Minister said about telegrams. People, as a rule, do not make a practice of sending telegrams. The special class who do send them is a class for whom I have no very great consideration. These are the people whom the Minister mentioned yesterday as sending telegrams on a large scale. Certainly, I do object to this increased tax on sugar. I need not again enter into the arguments I mentioned yesterday, and they have been mentioned again to-day by Deputy de Valera.

I would like to say a word, on the lines on which I spoke yesterday, with regard to the incidence of taxation generally on the small man. I have been making some calculations on this matter of taxation. A man with an average family, say a man with three in family, with an income round about £3 a week, if he consumes a moderate amount of tobacco, a very moderate amount of beer, and if he goes to the cinema once or twice a week, pays a tax out of all proportion to what he spends on food, clothing and other matters, as set out in the cost-of-living statement issued. The average family budget in the case of such a man would amount to about 6/- or 6/3 a week in the matter of taxation. That would equal an effective tax of 2/- in the £ on his income. If you take a man with a salary of £500 a year, and if you allow that he spends treble the amount on clothing, food and household requisites and the same amount on beer and tobacco, and pays income-tax at the present rate in addition, his total tax would run to about £34 a year, or 1/4 in the £, as against 2/- in the £ contributed to the taxation of the country by the man with £3 a week. If you take a man with £700 a year, and calculate on the same basis, he will pay in taxation 1/7 in the £. The man with an income of £1,000 will pay at the rate of 1/10 in the £ on his income, and it is only when you come up to the £1,200 a year man that the rate of tax in the £ is the same as that paid by the man with £3 a week. The Minister, if he looks into this matter, will find that there is a good deal in the argument advanced from these Benches, year after year, that the incidence of taxation is heavier on the small man than on the man with a larger income. That is why we have pleaded year after year on this matter that in the case of small incomes greater reliefs ought be given than are given at present. If the Minister cannot allow more than one-tenth off earned income on all incomes, a bigger proportion ought be allowed off incomes up to £500 a year. One-tenth off the smaller incomes is not enough.

Then I come to the question of the reliefs for children. The system under which the man who is doing his duty by his country and has a wife and three or four children to support, is taxed in comparison with the man who is not undertaking these responsibilities is certainly unfair and unsound. Then you have the man who wishes, after his son reaches the age of sixteen years of age, to send him to a boarding school or college. That man is allowed a sum of £36 a year off his income. That means, in effect, a reduction of £2 14s. in the income tax he has to pay. That surely is no inducement whatever to a man to keep his child at a secondary school or to send him to a university. I think it is here especially that reliefs should be given. I know the argument the Minister has put up. There ought to be grading, and I believe there are a great many people in this country who are still evading their income tax responsibilities. If we are to take a statement that the Minister made to mean that there would be much greater care taken in the collection of taxes legally due by people who can better afford to pay them than the small man I have been talking of, then that is satisfactory.

Mention was made here by Deputy de Valera of savings that could be effected, not in the actual administration, but savings in any case, such as national savings, such as might be effected by the unification of our transport system. I think there is a good deal in that. I think, too, there are other ways in which the wealth of the nation might be conserved. I refer specially to the question of insurance. I believe there is a lot of money going out of this country for insurance, and I believe that that is a question that could bear very useful examination. I believe that we can institute a system of State Insurance in this country covering the various aspects of insurance which would be of great benefit to this country and would mean a very great national saving. Everyone knows that a very great deal of money leaves our country and goes to enrich private individuals and shareholders in various companies, many of them outside this country. There is no reason why the Minister should not look round for a new basis of taxation rather than follow the old rut and take the easy line. It is an easy thing, of course, to collect another farthing in the lb. on sugar, and therefore that is done. I think the Minister might have displayed a little more originality in the matter of seeking new things to tax. There are a great many people exploiting this country to their own advantage that might be well made pay a little for their exploitation. There are people who flood this country with advertisements of all kinds of goods manufactured outside the country. Foreign firms have plastered our hoardings, our railway stations and our tramcars with splash advertisements of all kinds. I do not see why they should not pay a little extra for the privilege of inviting us to buy goods manufactured outside our country.

Even when these foreign firms advertise, as they do to a large extent, in the newspapers there is no reason why they should not pay for the privilege and help to maintain this State. I think it was Deputy Gorey who mentioned lip-stick as a possible source of revenue. It was mentioned before in this House that we import a very considerable amount—I do not know the actual figures—of cosmetics, to the doubtful advantage, and etven to the doubtful beauty, of those who use it. Another thing on which money is largely expended are toys. I do not mean that toys of the cheaper sort should be taxed, but I think a tax might be put on the more expensive toys that are imported.

Mr. DAVIN

Bachelors!

Mr. T.J. O'CONNELL

I have already advocated a tax on them—an indirect one—but as regards toys, people who pay 3s., 4s., or 5s. could afford to pay an additional 6d. or 1s. for them. Then we have foreign wines. I believe that the foreign wines could bear even greater taxation than they bear at the present time. If people must drink, then I prefer that they should take a decent glass of Irish whiskey or a pint of Irish beer rather than drink the thing that goes under the name of wine in this country. That reminds me that there was a rather surprising note in the Minister's statement yesterday when he expressed disappointment that the people were becoming sober.

Mr. BLYTHE

So rapidly.

Mr. T.J. O'CONNELL

So rapidly? I think, no matter what the Minister may think—and I believe he thinks it himself, too—it is a matter for congratulation rather than disappointment. I know that he has to look at it from the point of view of a Minister who is out to gather the fruits of dissipation; but looking at it from any other point of view I am quite sure that he and every reasonable person regards it as a matter of congratulation that this country is becoming sober. I believe it will become more and more sober in the future. I wonder has the Minister, or any future Minister for Finance, looked forward to the time when revenue from drink will be very appreciably lessened. What plans has the present Minister or even a future Minister to meet that situation, when such a large proportion of our revenue will not be derived from the sale of intoxicating liquor? I was calculating that at present drink consumers pay the whole cost of old age pensions, the army, police, prisons, reformatories and industrial schools.

Mr. GOOD

And you want to do without them.

Mr. FLINN

They are the cause of a good deal of them.

Mr. T.J. O'CONNELL

We could do without some of the prisons in any case. I am putting the question seriously that we must look out for new methods of raising taxation rather than encourage, as is advocated in some quarters, increased consumption of taxable liquors. I want to say that I am not afraid of increased taxation. We have always taken the view that if the money collected is well and wisely spent, increased taxation, in fact, may be a very good thing for the country. Neither do I take the view that economy simply means saving money and nothing more. Money wisely spent is, I believe, the best form of economy. I must say that my chief disappointment with the Budget statement of the Minister is that there does not seem to be any broad constructive outlook for the future in it. It is simply carrying us on for twelve months, and then, I suppose, we will see where we are. There is nothing beyond that, and that is my chief criticism of it.

Mr. SHAW

When the Minister for Finance introduced his Budget in 1926, and announced that he had decided to tax betting, that statement was received in this House with applause. He had no difficulty in passing the various stages into law, notwithstanding the strenuous opposition of a limited number of Deputies. However, as one of those who strenuously opposed the tax, particularly on racecourse betting, on the ground that it would seriously affect racing, and thereby the great breeding industry, I am now in a position to say that, unfortunately, all the gloomly predictions have come to pass. In view of the fact that there are a number of Deputies here who were not in the Dáil at the time, I propose giving a short sketch of what occurred then and what has occurred since. The suggested tax was at first 5 per cent. all round. At that time, in opposing it. I said:

"With regard to the suggested tax on stakes I have no hesitation in saying that if the proposal is carried and if the tax is insisted on, racing will cease in the Free State within twelve months."

Now, in view of the fact that the tax was reduced to 2½ per cent., we can imagine what the position would be if the original tax of 5 per cent. was insisted on. No business could stand a tax on turnover. I gave a good example at the time, when I said that it would be all right to tax a new hat when it is bought, but if it was to be taxed every time it was put on and every time it was taken off it would be a different thing. That is exactly what has occurred in connection with the betting tax.

Mr. CORISH

Putting the tin hat on it, I suppose.

Mr. SHAW

Having failed to have racecourse betting exempted, I was then in the position of endeavouring to make the best compromise I could, and I proposed the following amendment—

"That the proposed tax of 5 per per cent. on all bets made with bookmakers be reduced to 2½ per cent., and half of the net revenue to be likewise refunded towards the increase of stakes."

In support of the amendment I said:

"With regard to the stipulation that half the money collected at racecourses must be given back for the improvement of stakes, is a matter on which I cannot yield." But the amendment was rejected. Now the Minister for Finance made an important statement at that time. He said:—

"I have already said that if we found that we were getting an unexpectedly large sum from this tax, or if we found that it was seriously affecting in an adverse way the attendance at race meetings, and consequently the funds available for keeping racing going, we would be prepared to consider the putting up of a substantial amount by way of increasing stakes."

The Minister has got £232,000 out of the betting tax and £10,700 out of the entertainments tax, and not one penny has been given back to increase the stakes. Mullingar, Naas and Navan have been closed down, and very many other race companies are contemplating doing so. What I want to endeavour to impress on some Deputies who are not interested in racing, and who, I believe, are prejudiced against racing is, that they ought to look at it with regard to its effect on the third biggest asset in the Free State. I intend to deal later with figures which run into 2½ million pounds yearly for the export of horses.

Professor THRIFT

took the Chair.

Mr. SHAW

The Minister for Finance said:—

"The bookmakers will not pay the tax; the tax will be passed on to the bettors by the adjustment of the odds, and a successful bookmaker carrying on business will still make the same rate of profit as in the past."

The remedy the public adopted was to cease attending race meetings, and that is what has racing in the serious position it is in to-day.

I do not want to suggest that the betting and entertainments taxes are entirely the cause of the small attendances at race meetings. The betting and entertainments taxes are, of course, primarily the cause. High prices of admission, reduced stakes, scarcity of money, and want of co-operation between stewards of the Turf Club and the owners of horses, who keep racing going, and who are neither represented nor consulted in matters which are of vital importance to their best interests, are other causes. Let there be no mistake about this, that the abolition of the entertainments tax will help but will not save racing. I believe that before next August very few meetings will be held in the Free State outside the Curragh and the metropolitan meetings. Deputy de Valera referred several times to this £8,000 that is going to save racing. The amount involved, when divided amongst the twenty-five different companies, holding several days' racing, will have very little effect and will not save racing. I do not intend to detain the House by going into various details as regards the position of the race companies, but I have taken one example — Phoenix Park — with regard to which I will give figures. The position of the Phoenix Park Company is exactly similar to the position of the various other race companies all over the country. I want if possible to show that the betting and entertainments taxes are causing a vast amount of unemployment and a curtailment in the circulation of money.

I have here the Phoenix Park balance sheet, and I am prepared to stand over any figures that I give. For the past eight years, since the Free State came into being, the Phoenix Park Race Company has paid the Government £22,882 17s. 7d. in entertainments tax; it has paid £9,989 13s. 1d. in income tax, it has paid £1,006 9s. 0d. in corporation profits tax, and it has paid £1,682 4s. in excess profits duty. In other words it has paid £35,561 3s. 8d. in taxation. The dividends received by the shareholders of the Phoenix Park Race Company during these years amounted to £13,000. In the first year of the betting tax—1927—the Phoenix Park Company lost £3,393 6s. 7d.; no dividend was paid, and at the present time they are £4,000 in debt. The average cost of the upkeep of the Phoenix Park racecourse is £8,519. This money was paid to carpenters, painters and caretakers, and £3,000 of it was paid to agricultural workers. A large number of these men have been discontinued, and all of them are more than likely to be discontinued in the near future. The figure which I have given excludes racing officials' fees, outside officials, advertisements, or anything of that kind; they are entirely paid to persons working on the course. When you estimate the losses of the railway companies, motor drivers, licensed houses, hotels, and the innumerable other means by which money is put into circulation by racing, the danger of closing down can be estimated, and I am sorry to say that it is a matter of very great doubt if any further racing will take place in the Phoenix Park.

It is quite apparent that the Minister is going to get a very large revenue from greyhound racing, that he could abolish the entertainments and betting taxes and still get £230,000, because the people who used to go to race meetings and the people who used to stay at home are now all going to the dogs five nights a week. They are getting good, cheap sport at popular prices. They know that they are getting a straight run for their money. There are no non-triers, the result being that a far larger number of persons are attending greyhound racing than horse races, and quite as much betting is taking place. This is an alternative proposal that the Minister ought to give back half the amount collected from the race courses for the increase of stakes, and he would get it back from the greyhound racing, which is taking place five nights a week, or possibly six, and at which quite as much betting is being done as is being done at the race meetings. I was at Harold's Cross meeting the other night, and I am quite satisfied that there were four times as many people there as there were either at the Phoenix Park or the Curragh meetings.

Mr. FLINN

Will the Deputy give way a moment? I want to ask him a question. I am very anxious to get information, which very few members of the House have, but which Deputy Shaw probably has, that will enable us to understand how the money which is spent by the ordinary person in betting is translated into the benefit of horse racing. I want that traced right through. I want to see how a few hundred pounds spent by the ordinary man in backing will eventually, and to what degree, benefit horse racing, and I suggest that some Deputy who understands that problem should give us the information.

Mr. SHAW

I would refer Deputy Flinn to the Official Report in which he will find that I went fully into the matter. He will get every word of it there. I explained that breeding and racing are combined with one another and that you cannot have one without the other. You have millions of pounds invested in this country in the great breeding industry, and you had £2,211,545 worth of horses exported in 1927. I would like shortly to explain what the position is. Those horses have got to be exploited before they can be sold. Men who have gigantic sums of money invested in the country in the breeding industry must enter and run these horses, must enter and run them in the classic races, must enter them two years before these races take place, and sometimes four or five years, and that industry, the third biggest asset of the country, will disappear. What I want to impress on Deputies is that they should not look at it from the prejudiced point of view of being opposed to racing, that they should look at it as the third biggest asset of the country, and that they should remember the gigantic amount of money that is circulated in the country by means of it.

If the Minister does not do something more than abolish the entertainments tax, then I believe racing will cease, and with it the horse-breeding industry. Deputies on the opposite benches speak a lot from time to time with regard to the importance of home industries. Here you have an established national industry. The Aga Khan, who had the whole world to choose from, selected Ireland for his stud farm. Then we have the National Stud here. As regards horse-breeding, this country occupies an outstanding position. Deputy Morrissey and some other Deputies represent the County of Tipperary in this House. In that county was bred not only Tipperary Tim, the winner of this year's Grand National, but also Dark Warrior, the winner of this year's Lincoln Handicap. I do not know whether Deputy Morrissey had the winner of the Grand National backed or not. I hope he had. We read in the newspapers every day of the success in all parts of the world of Irish-bred horses. Might I make this point that the British Government is subsidising Irish racing. My horses won three races last year. The prize money came to me, not from Ireland, but from Whitehall, London. The reason was that the British Government pay something like £3,000 a year here for the King's plates. Our own Government, up to the present, have given nothing. But they impose taxation. They have now abolished the entertainment tax at Irish race meetings, but it is, possibly, too late.

Mr. GOREY

I am sorry the Deputy did not explain that he wanted the dogs to subsidise the horses.

Mr. SHAW

I am sorry the Minister for Finance is not in the House, because there are a few questions I wish to put to him. One relates to the totalisator, to which he made no reference in his Budget statement. I would like to know if that matter has been dropped, or if it is the Minister's intention to go on with it. I also want to know if it is the intention to publish the report of the Inter-Departmental Committee that inquired into the condition of Irish racing. The Minister, in his statement. just mentioned that the Committee recommended the abolition of the entertainment tax. The Committee, I imagine, must have dealt with some other matters as well as the entertainment tax in their report. I would like to know if the public are going to have an opportunity of reading and digesting that report. The Committee was engaged for several months in making their inquiries, and if they only made this one recommendation, then I suggest, they were only wasting their own time and the time of the people who appeared before them to give evidence.

There is one other matter that I would like to have information on. It is perhaps of more importance than the other two questions I have asked. I want to know what is the position with regard to the betting tax which expires next November. Is it the intention of the Government to renew it or to drop it, or when will that matter be discussed? I ask Deputies who are not interested in racing to remember that, if they penalise this great national industry which we have established in the country, they are going to injure the third biggest asset that we have. If the Minister is only going to abolish the entertainments tax, I am satisfied that in the future you will have very little racing in Ireland. In making that statement I except Punchestown and Fairyhouse, because almost everyone attends those meetings. If the Minister, or his representative, goes to the Phoenix Park, Leopardstown, Baldoyle, or the Curragh race meetings he will witness empty stands, empty trains and empty pockets, and it will become quite apparent to him that racing will cease before very long.

Mr. CLERY

You can see plenty of empty pockets without going to race meetings.

Mr. FLINN

Coming home from them you find the empty pockets.

Mr. SHAW

As I am not able to get a reply now on this question of the totalisator I will leave it for the moment, but will return to it some time later. I know it is not fair to criticise a particular thing unless one is able to put up an alternative suggestion. I do not say that there ought to be an additional tax or anything of the kind. I believe myself that the Minister will get so much out of the greyhound race meetings that he will be able to get his £232,000 a year, and that he can give back half the amount to those companies which have lost very large sums of money, and which, unless something more is done for them than the abolition of the entertainment tax will be obliged to shut down. I appeal to Deputies in all parts of the House to look on this question impartially. Horse-breeding and racing is our great national industry, and if Deputies are going to assent to proposals that would injure it, for the sake of a paltry sum of money, that will surprise me very much.

PROINNSIAS O FATHAIGH

Ba mhaith liom a chur i gcuimhne do'n Aire go bhféadfadh sé tuairim is £10,000, 'sa bhliain d'fháil ach iachall a chur ar Chumainn Iasachta Arachais stampaí a chur, sa Saorstát, ar na polasaí árachais a gheibheann siad sa Saorstát. Do réir na tuarasgabhála is deúnaí atá ar fáil, sna figiúirí i góir na blíana 1925, bhí luach £5,176,338 d'árachas beatha amháin ag Cumainn Iasachta sa stát so. Is dócha go raibh agus go bhfuil a thrí oiread san acu i n-árachas i gcoinne dótáin, i gcoinne gnó coitianta agus eile. Nuair a bhi an t-Aire Airgid ar lorg airgid ar iasacht tháinig na Cumainn Urrúis Ghaolacha i gcabhair dó go fial, fairsing—rud nár dhein na Cumainn iasachta. Tá taobh eile leis an sceul san. Is uathbhásach an carn airgid a seoltar thar lear gach bliain i bhfuirm árachais, agus is mór an chailliúint don tír seo é sin. Dá mhéid a cuirtear thar lear is eadh is lugha a fágtar annso i gcóir cánach. Dála an scéil sin do cuireadh reacht i bfeidmh i gCanadá i mbliain a 1917 dá chur d'fhiachaibh ar gach cumann arachais atá ag obair sa tír sin—is cuma cá bhfuil an Ard-Oifig acu—a ndóthain airgid a choiméad i gCanadá chun lucht na bpolasaí i gCanadá a íoc i n-iomlán. B'fhiú d'Aire an Airgid aithris a dhéunamh ar an reacht san.

Major COOPER

I am afraid that I must allow Deputy Fahy's argument to go unrefuted. With regard to Deputy Shaw, I am not quite sure that I followed him completely. I understood from him that he was lodging an objection to the Minister for Finance for in-and-out running—in that while abolishing the entertainments tax he has not also abolished the betting tax. This is still a young tax, and I think it would be desirable to have a little more knowledge of its working before we abolish it. Speaking as an ordinary man who sometimes goes racing, but has no financial connection with racing, I would say that the evils Irish racing is suffering from are not entirely due to the entertainment duty or the betting tax. Deputy Shaw said that people always go to Punchestown and Fairy-house—I think he might have added Galway—and that the other racecourses are in a parlous condition. The main reason for that is because—as I have said, I think he might have added Galway—they give good entertainment. As regards the other racecourses that he mentioned, I have absolutely ceased to go to them because it was one long boredom. There was nothing attractive at them, and rather than attend them I would prefer to spend an afternoon with Deputy Corry attending an extra special sitting of the Dáil. Racing, like the cinema and the theatre, will profit as long as it provides entertainment, but if it fails to provide entertainment it will undoubtedly lose public support.

I now come to Deputy O'Connell. I must say the Deputy gave me a shock this afternoon. Whatever I may have thought of some of Deputy O'Connell's economic heresies, I always thought that he was the friend of children. When I learned that he was prepared to consider a proposal to tax children's toys I was astonished. It is true that he safeguards himself by saying that he would only tax toys of a certain value—of more than three or five shillings. I have known several poor people to spend as much as three shillings on a Christmas present for a child. I do not think Deputy O'Connell has taken into consideration that a tax on articles of above a certain value is very difficult to collect, because there is always the temptation for the consignor to make out the invoice for a lower sum than the selling price of the article. To do that work efficiently would involve a very substantial increase in the staff of the Commissioners of Customs and Excise. If you are going to give exemptions, except for certain toys, then it would be necessary to get a valuer to value and see whether the prices invoiced on the taxed toys were correct or not. I do not believe you would get very much revenue from that.

With reference to Deputy O'Connell's argument regarding the incidence of taxation on the small man, I do not want to be out of sympathy with the small man. I should be very glad if the Minister for Finance had found it possible to extend to the lower branches of the taxpayers the same relief given in Great Britain. It might possibly have been better if instead of reducing the tax to a shilling last year he had given a general decrease of sixpence and given more extensive reliefs. Deputy O'Connell contrasted the man of £3 a week with three in family, and powers to add to their number, compared with the man with £1,000 a year. We must not only examine the rate of taxation, but ask what those two men get in return for that taxation. The man with £3 a week has far more social services provided for him than the man with £1,000 a year. The man with £3 a week probably sends his children to the national school, and the man with £1,000 a year, rightly or wrongly, has his children educated privately and pays a substantial portion of his income towards that. The man with £3 a week will probably be entitled to the old age pension, and the man with £1,000 a year probably will not. At any rate, let us put it this way, that the man with £3 a week possibly has some elderly relative who might otherwise be depending on him for help bringing in the old age pension, while the man with £1,000 a year has not.

Mr. T.J. O'CONNELL

That is stretching it very far.

Major COOPER

The Deputy can refute me afterwards. The man with £3 a week gets a little more for his money than the man with £1,000 a year. The man who is liable for super-tax pays a larger percentage of his income than the person who is subject to income tax at the lower scale. Possibly there will come a time when the man who pays super-tax and the man with £3 a week will combine to massacre the man with £1,000 a year and take more off him. That will be made easier by the propaganda of the Fianna Fáil Party, who regard the man with £1,000 a year as a civil servant. I was glad to find myself in complete agreement with Deputy de Valera on one point—that is the rate for Press telegrams. These telegrams are transmitted at a much reduced rate for public purposes. Though the Minister for Finance said that the bulk of telegrams sent referred to sporting events, or were either messages of congratulation or condolence, we must bear in mind that the telegram sometimes is a matter of vital importance to the poor householder, and that it sometimes deals with sickness, and possibly the announcement of death. If the Minister for Finance thinks that the sender of the ordinary telegram should pay an increase of 50 per cent., I think the Press telegrams might reasonably be asked to pay 50 per cent. more too. I do not think it would inflict a very serious burden on any section of the Irish Press, including the new paper, because as far as I know a very considerable proportion of the news that reaches the Irish Press from outside their own town reaches them by telephone and not by telegram. I believe that is the case, except perhaps during the elections, and considering the amount of advertising revenue during the elections, I think they could fairly be asked to pay a little more. On that point I am in agreement with Deputy de Valera, and I hope before we reach the Finance Bill that the Minister, by increasing the rate for Press telegrams, might be able to make the increase to the ordinary sender threepence or four-pence instead of sixpence. I hope he will consider that.

I have been looking through past Budget debates to-day, and I find that two years ago I prophesied that whoever brought in the Budget in 1928 would be an unhappy man. Almost for the first time since I came into the Dáil the Minister has had nothing to give away and has imposed fresh taxation. In previous years we waited—I might say, with open mouths and shut eyes, but I might be charged with bringing an accusation against some Deputy—to see what the Minister was going to give us. This time we have to take a rather different attitude. It is nice to be a Minister for Finance with a large surplus The sun shines and the birds sing, and everything seems gay. When there is a deficit, or a prospective deficit, to be met the skies are grey and the winds are cold and everything bleak. I am afraid I am unconsciously quoting from Mr. Wilkins Micawber. That is the position, and we are bound to have that position in the discussion on the Budget. As a matter of fact, I do not think the Minister himself will say it could be described as a sensational Budget. I think if he wanted any title to praise it would be that the Budget disclosed singularly few vulnerable points of attack.

There is one point at which attack has been directed by Deputy de Valera and the Labour Party, and that is the increase in the sugar duty. I put down this note when Deputy de Valera was speaking, but I am not a shorthand writer, and it may not be accurate:—"This tax bears most hardly on the section of the community least able to afford it. I hope this tax will be removed at the first possible moment." Deputy O'Connell said: "The only increase I have objection to is the tax on the sugar." It follows from the speeches of those two leaders that the increased tax on sugar is bad—the wrong thing to do. If it is wrong to increase the taxation on sugar, then it is a good thing to decrease the taxation on sugar, and the person who decreases taxation on sugar is a benefactor. I think that is an obvious inference. Yet, three years ago the Minister for Finance decreased the taxation on sugar, not by one farthing, but by seven farthings, and I do not remember anyone calling him a benefactor.

Mr. MORRISSEY

Yes.

Major COOPER

I was looking through the speeches of the Labour Party, and I think there was a reference to it by Mr. Johnson. There was no reference to it by Deputy Davin, and I do not find a speech by Deputy O'Connell. I admit it was a hurried survey. There was a brief reference that it was a good thing to do, but it would be better if the whole duty had been taken off. Possibly my reading is imperfect. I do not remember seeing any resolution proposed by Deputy de Valera and seconded by Deputy Ruttledge congratulating the Government on their action in taking seven farthings off sugar. I do not remember, during the speeches at the last election, any member of the Fianna Fail Party or the Labour Party saying: "Well, the Government are abominable; they have committed every possible iniquity in the world, but they have one good deed that shines like a candle in this naughty world—they have taken seven farthings off the duty on sugar."

Mr. T.J. O'CONNELL

And put it on clothing.

Major COOPER

I am afraid that Galway is a long way away, and that Deputy O'Connell's speeches were curtailed in transmission. I do not claim to have read all the speeches either of Deputy O'Connell or Deputy Ruttledge. However, I do not remember it being made a prominent feature on the platform, but this one poor little farthing against seven will be made a feature in every platform speech. It would have been infinitely wiser if the Minister for Finance had not been anxious to do his best for the consumer and, instead of reducing the sugar duty by seven farthings to one penny, if he had reduced it just by five farthings to three halfpence. We would have had just the same references from the Labour Party. They would be glad of the reduction, but would wish it was made a penny instead of three halfpence. Then the Minister could have built up, in the three years that have passed, a sum of £1,200,000, which would enable him to refrain from the necessity of imposing this further taxation now. The utmost the Minister can be charged with is an excessive desire to benefit the consumer of sugar —he let his zeal outrun his discretion.

Before I sit down I want to refer to and congratulate the Minister on his modification in the duty on glass bottles. I am not going to indulge in the temptation of saying, "I told you so," but I did oppose the extension of that duty, and I did suggest that the estimate the Minister had got from the firms engaged in that industry was unduly optimistic. I am glad that the Minister has now admitted that he was a little too sanguine in his hopes for the extension of that industry, and that he has persuaded, not only himself, but also the industry, to consent to a modification which will benefit the users of what I may call unusual kind of bottles—medicine bottles. I do not know if ink bottles will be included in this, but I know that Irish ink manufacturers were suffering from this duty, and that various other industries were suffering. This modification is going to be a great help and encouragement to those industries—not, of course, to the brewing and distilling industries, because their bottles are still to be taxed; but to other small industries, which are worthy of support, this concession is a very considerable one, and I congratulate the Minister on having made it.

Mr. FLINN

There was one good deed which was done by the Government which most certainly did not fail to get all the commendation that at least it deserved during the last election, and that was the good deed of adding to its resources all that Deputy Cooper represents and imputes. It was one good deed in clearing the issue, the fundamental issue, which will be the issue on which these two Parties and the divisions in this country will eventually be judged. Nationalists to the right. Cromwellians and neo-Cromwellians, shoneen-Cromwellians and imitation Cromwellians to the left—the issue between something which is active, something which is real, something which means to be productive, and something which boasts of its impotence.

I listened with a great deal of interest, with very keen expectation, and frankly, having regard to what we all knew of the circumstances, with a considerable amount of sympathy, to the Minister for Finance in the task which he had before him yesterday. It would compliment him unduly, and improperly compliment him on his appreciation and willingness to face the facts to say that he came here in sackcloth and ashes. But it is reasonably within the truth to say that what was called a Budget statement was really a complete ad misericordiam in forma pauperis. I am one of those who, surveying the different political personalities and their possibilities in this country, have not formed the opinion that an inspiration from heaven put the present Minister for Finance in the position of Minister for Finance of a country like this, faced with the necessity, often ingenious, always courageous, and generally very difficult task, of the solving of economic problems. But I did always think that as secretary of a board of guardians, as honorary auditor of a literary society, or something of that kind, we could have relied upon him for unimpeachable purism in finance. I thought he would add up things properly. I thought he would not use figures carelessly. I did not think that he would attempt to apply to one purpose what was obviously intended to be applied to another. I did not think that he would deliberately change, as the necessity of the moment might arise, his definition of the meaning and significance of particular sums of money. It was for that reason, to me at any rate, a shock to find a Budget which was balanced by small expedients, by unsound finance, by financial tactics of which we are more accustomed to hear in the courts in the final disastrous ends of speculative enterprises, than in the government of a country. I did not expect to find a jejune improvisation and a reckless disregard of the conventions of financial morality which this particular Budget has shown.

I think it was Deputy O'Connell who suggested that it was a rather tired, hard-driven-to-the-end sort of statement. It reminded me of an eleven months' tenant, of the feeling of a man who did not care what happened to his successor; who was quite willing to leave his successor in a position of embarrassment; of the farmer who would eat his seed potatoes; of the holder of an entailed estate who would cut the growing timber. "After us the deluge." That is exactly the policy and the philosophy. "We will strip this thing bare as long as we are in possession and control of it and we will leave a bankrupt concern. We will leave the thing with no free money; we will leave nothing in the till; we will scrape the cupboard bare, before we hand it over, at the fiat of the electorate, to our successors."

That seems to be the whole atmosphere and mentality of this Budget statement. Personally I regret it because as time goes on one loses, perhaps, an illusion every year, and I had thought to keep even of this political opponent the illusion that if he were not a great Minister of Finance he might still be a decent accountant. He has chosen, for instance, to take token currency and include it in the Budget. Token currency he told us last year ought not to be included. Token currency is an example of the reckless folly of the finance which has distinguished the Government. Token currency is the realisation of a convertible asset and nothing else, and to regard a thing of that kind, which is really the sale of an asset, as income is shocking. The notes! What were the notes but a loan without interest to England. I know the difficulty, and I sympathise with the difficulty the Minister is in. He is very careful to gather up from every possible corner anything which by any possible stretch of the imagination he could pretend to himself or to this House is non-recurrent. But he has, apparently, no hesitation whatever in handing over, and putting against that, things which are not recurrent. Notes are simply one of the assets which I estimate roughly to be about 50 million of money which are hidden at present in the system, and which may, one by one, be converted to use of this State, but to convert capital of this kind into income and to pretend that you are entitled to balance your weekly, daily, or yearly budget with it in that way is very unsound finance. However, the Minister for Finance, trained in the conciliatory and comfortable atmosphere of a House which has always done as it was told up to the present, thinks that he can, in this particular case, get away with the responsibility of this bad finance by saying that the directors have compounded the felony. We were told that before we were going to use this money which was not income for the purpose of balancing our Budget, we were going to anticipate by forced measures, the ordinary application of the payment of income tax arrears; and we were going to get in a sum this year, which does not belong to this year, from drink duties, and we were going to put that against expenditure; and because he had consulted the directors —we are the directors—and because the directors had been prepared to compound that bad finance the managing director or chief accountant was to be held irresponsible. Very good. If that is the idea then we will not take the responsibility for his bad finance. We say that token currency ought not to be taken into account in this thing. There is not the slightest use in pretending that it is ordinary income. In the same way, by the anticipation of property duties, he is going to get £150,000 this year and £50,000 next year.

It happens very ordinarily that a man comes to a certain period of the year and his bank manager sends him word that his overdraft is not looking a bit healthy, and he says to himself: "What is it that I ought to pay that I will avoid paying until the directors have a look at it, and what is it which I might get in, but which ought not to come in until another time, that I can put in to make things look nice?" That is exactly the political and financial morality shown in balancing this Budget. This £150,000 is got by anticipation of the property tax. To the extent to which it is money levied on income tax on working class and other such houses, to whatever extent it comes from people engaged in providing housing accommodation for the working classes and to whatever extent the fact that this money can be collected, and is going to be urgently collected in that manner, it is going to be a hindrance to investment in housing accommodation. To that extent, not merely is it bad finance, but it is thoroughly bad national policy in so far as it is interfering with the housing problem of the country.

The Minister for Finance has left us with a three shilling income tax. Now, let us take that income tax for a moment in relation to the problem of providing so many tens of thousands of houses in this country which, under present conditions, at the price at which they can be inhabited by people who ought to inhabit them, never can. and never will, be built. That is, I think the problem. We had a committee on unemployment. That committee on unemployment did not dare to formulate the sum and did not dare to suggest in its report the size and nature of the problem you have to face in housing for fear that we would all be frightened by it.

We may well be frightened of it, if you take into account the amount of work that has to be done and the smallness of our resources to do it. Owing to the charge of income tax upon investments he has to pay a certain price for his National Loan. What I am suggesting—I think that this is a matter upon which we might possibly have concurrence on all sides—is that if a loan is floated for housing, in any financial provision which is made for housing, above all, for housing those people who are not able to build houses, for providing work for men which otherwise would not be provided, we ought not to put upon ourselves the burden of income tax on that amount. I want somebody to calculate what would be the effect—I mean taking a particular period of years and assuming the loan was free of income tax—upon the amount of the rent during the time the money would be required to be repaid. I think it would be considerable. If that was spread over all activities in regard to that industry, whether in the provision of raw materials or otherwise, I believe that you would find that there would be considerable advantage.

Mr. MORRISSEY

Might I ask the Deputy a question in regard to housing and its financing? I remember reading some time ago a speech which the Deputy made regarding finance, and in that speech he said, amongst other things, that capital must get its price, that if capital did not get its price in the Free State it would go elsewhere. The price which capital demands for housing, as for other things, is 5½ per cent. Would the Deputy advocate that that price should be reduced to 3 or 2½ per cent? If he was prepared to do that, I think it would have a much greater effect on housing and on the rents which poor people have to pay than income tax would have.

Mr. FLINN

I am glad that the Deputy raised that question, because I think there is misunderstanding between people of various outlooks in this country which is preventing them coming together on that matter. Capital is of three kinds—fixed capital, fluid capital, and capital which lies somewhere in between, that is, capital entangled with fixed capital. I might have big works, and might hold a lot of shares in railways, which might otherwise be fluid, but which might be deposited in banks as against an overdraft used in running the business. Fixed capital in machinery I could not shift. Fixed capital in land I could not shift. Fixed capital and the capital entangled with it are very much under the control of a wise or unwise Government. You come to the third kind of capital, which is fluid, and it is not a question of what we want to do with it, but what you can do. That capital is capable of going where it likes. Just as we demand for labour a living wage and fail to get it, owing to the lack of its fluidity, that is one of the reasons why fixed capital cannot be immediately transferred, as it is entangled with social and family matters. Fluid capital has none of these difficulties, and it can and will go automatically where it gets its return. It looks for its return where it can get its living wage, and nothing that you or I could do could prevent it.

Capital—the Minister for Finance alluded to it yesterday in answer to something I said—looks for that return, and asks it to be expressed in three different forms. It goes where it can get security for itself and where it will not lose itself. It goes where it can get a return and where it can get convertibility. These are the three things to be secured—security, return, and convertibility. The big and fundamental difficulty which we have in Ireland in inducing our own people to put money into Irish enterprises and to employ Irish capital is that we have very few avenues in which we can offer that capital security, return and convertibility. In his Budget statement the Minister decided to remove the entertainment tax from racing, and I have asked certain questions in relation to that. I do not want to be taken in any way as asking them for polemical or other purposes. I want the information. I am told that the entertainment tax and the betting tax are ruining an industry in this country, a productive industry employing people I have come up against those who have made that statement and have asked them to show me—I am open to be convinced, I want the facts, and I represent a good many people in that matter—what is the necessary connection and the percentage connection between betting and horse-breeding? Is it contended that horse-breeding is subsidised out of the money of the backer? Is that the contention? Is it contended that the money which a foolish backer loses to the bookie is money which is keeping that industry in existence? If, say, a sum of £100 is lost by a backer, how much of that goes to the horse-breeding industry? Would it be more creditable to subsidise that industry in some other way?

My experience where I ask to have some connection traced in that matter is that it has always been avoided. Personally I do not think that the maintenance of bookmakers is a great national industry. They are quite desirable and proper people, but I am not going to go up in the air, and I am not going to regard the mere maintenance of bookies as one of our national industries. But if it can be shown that 90 per cent. of the money which I lose on a horse helps somebody to rear a horse and, what is more, that that 90 per cent., while rearing a horse, is also going to keep a human being in this country—that is a test we are not applying to our industry—I would have a very different outlook on it. The truth is that there are a lot of visible evils connected with betting on horses. In some places in large cities scenes are going on which certainly ought to give uneasiness to the consciences of of men responsible in this House for the government of this country. Perfectly reputable and very sane people have said to me that that particular industry, the industry of betting in the poorer districts, is causing as much evil as drink. If that is so, and if that is the only thing that we have got—to keep that system in existence—in order to breed horses, we are in a very serious position. If we want to breed horses, let us find some other way than a way which will require the building up in this country of a condition of evil which is equal only to that of the drink traffic.

The corporation tax, as far as I can understand it, seems to have this objection. The effect of the corporation tax for the purpose of getting estate duty from Irish shareholders, tends to penalise foreign firms doing business in Ireland as against foreign firms not doing business in Ireland. It discourages the investment of Irish capital in foreign firms which do business in Ireland as distinct from foreign firms which do not do business in Ireland. I am not cracking up foreign firms which do business in Ireland as compared with other firms here, but if the effect of this tax is to penalise firms which, having a choice, have factories here, as against firms which, having a choice, do not have factories here, I think it is evil, though on balance it appears good. If there is one thing the Minister may take from the whole House, it is that in the general object he has of getting estate duty for the Free State from another State he has the support of the House. It may be a question as to whether this machinery is best or not. I am, personally, a little doubtful on the subject, but I merely throw out that suggestion for examination and not merely in opposition to that particular proposal.

In regard to the tax on cars, I would suggest that the Ministry should look upon the tax on motor cars under three separate and distinct headings. A tax, whether it is obtained in petrol or in some other way, should replace the actual damage done by that car as far as can be calculated. It should be calculated to give to this State a return for the capital invested in making or improving a road into such a condition that it could be used by that car. The third heading, which is quite separate, is for revenue. In regard to damage and the provision of facilities to use the roads, they are entitled to get the whole of that from a car or anything else that does damage or uses State facilities. After that the question arises as to the revenue that you get from luxury cars, cars used simply for fun and enjoyment. There is no reason why they should not get that revenue. It is very questionable national economics, however, to get revenue from industrial vehicles—I mean revenue as such, as distinct from replacement value. They are entitled to the whole of the damage, and they are entitled to a share of the capital charges, but the question whether you should take from industrial vehicles revenue, is simply like the question of taking a tariff from production, putting a tax on raw materials or other processes of production.

I come now to the point at which I would like to say that I agree with much of the speech made to-day by the Minister for Finance as distinct from the speech made yesterday. Saving is a matter of policy, and unless we are prepared to say that certain things must be done differently, or certain things that we have got we must do without, we are in a serious position. You cannot get out of a pint pot more than is in it. The difficulty is that we have inherited a governmental standard of living and we are apparently anxious to live up to it. There are all sorts of machinery here of enforcement and of statutory regulations which ought to be reviewed simply on the ground of whether they could be simplified. If you are living up to a certain standard of comfort it is very difficult to pick out a particular thing of which you are going to get rid. I heard a story recently which illustrates my point. One man said to another, "Why cannot you get a car? You can afford to run it." The other man said, "Yes, I can afford to run a car, but I cannot afford the surrounding changes in my condition of life which would be involved in running it." We are in that position in many ways. We have a standard of living and we are trying to live up to it. We are trying to live up to that standard for twenty-six counties.

We are trying to maintain that standard for three Governments—for the Government we have pensioned, for the Government we have here, and for the Government which is in the North. We have only the old resources with which to do that, and for that reason we will have very seriously to consider what we can afford to have. We have got to ask ourselves whether the things we have got to do without are not, some of them, more important than the things we have and which cause us to do without the things we want. I do not believe that any Deputy in this House, starting off afresh now, would suggest that in the actual circumstances of Irish economic life he would spend upon enforcement services—I am speaking now nonpolitically and I am putting simply and purely what is an economic proposition —that proportion of available revenue on the Army and Civic guard which the Government have spent. Take the Governor-General. I am speaking now deliberately and not in any way politically. That is a staring luxury compared to what we know of the actual facts of the lives of a lot of our people.

Apart from any question of the Treaty or Constitution, I personally feel that there would be no difficulty and I personally would have no objection if the point were put to another Government by our Government that, faced with the conditions of the Gaeltacht and faced with the actual conditions of the slums of Dublin, that position is wrong, and is a generating cause of discontent. It is a thing which should be changed. There is a glaring obviousness of extravagance at the top compared with the harshness of the position of those who have to find the money for that. I believe on that line also there might be easily accommodation between the two sides. I do appeal to this House to look forward a whole generation. I have no nearer point of view in relation to Ireland than the time when two young boys are growing up and functioning, and I want to see that everything done is done so that when they are functioning in our place there will be a different outlook for them. If every man in this House, in relation to every single action, amendment or speech which is made, would ask himself what he is building for another generation, I do believe there would be a breaking down of many artificial divisions and there would be a wiping away of a great many unfortunate misunderstandings, and there would be the foundation of a better day for this country.

ACTING CHAIRMAN

Shall I put the motion?

Mr. MacENTEE

Are we to take it that the members of the Executive Council who are sitting on the Government Benches now do not desire to reply to the speech that we have listened to?

ACTING CHAIRMAN

I take it that I am bound to put the motion unless someone rises to address the House.

Mr. MacENTEE

They are unable to reply.

Mr. McGILLIGAN

There is nothing to reply to.

Mr. MacENTEE

Just a moment.

Mr. McGILLIGAN

We may get something now.

Mr. MacENTEE

I feel, like the Deputy who has just sat down, a considerable amount of sympathy with the task which was set to the Minister for Finance in preparing this Budget. We have heard it said that it is easy to make a mountain out of a molehill, but it is much more difficult to make a molehill out of a mountain when that mountain is represented by a load of debt which is crushing the life and soul out of this nation. As Deputy Flinn has told us, the Minister yesterday pleaded in forma pauperis, and as he spoke we had considerable sympathy with him, because as he spoke we felt that he was detailing not only the plight of a Party or the plight of a Government, but the plight of the whole country. For that reason if his speech yesterday was less optimistic than those which preceded it on similar occasions, it may be very much more valuable. For the first time the people are told something of the truth. Some presentation has been made to them of the real financial and economic condition of the country. It is a pity, however, that the Minister, having gone so far, did not go a little further, and tell the House and tell the people the whole truth in this matter. They, then aroused to the gravity of the situation, might have taken steps to insure its redress. Yesterday we were told that the total dead weight debt of this State was £20,000,000. That, I submit, is not the whole story. What about the land purchase annuities? What about the annuities of £250,000 payable for sixty years under Article 5 of the Agreement of 3rd December, 1925?

Mr. HOGAN

It includes that.

Mr. MacENTEE

What about the annuity of £600,000 payable for twenty years under Sub-head 5 of the Ultimate Financial Settlement? What about the annual debt of £134,500 payable for thirty years under Sub-head 5 of the Ultimate Financial Settlement? What about the payment of £1,200,000 for, I suppose, a period of twenty years in respect of the pensions of the R.I.C.? What about the repayment to the British Treasury in respect of Civil Service pensions amounting to £128,750 for fifteen years? There are a number of other items that I am not going to detail, but any financial statement that fails to take account of these facts and to remind the people of them fails to give a true and correct rendering of our financial position. Totalling these annuities for the respective terms of their currency, we find that a dead weight of debt—and it is an appropriate, if ill-omened and infelitious expression—instead of being £22,000,000 it is something in the neighbourhood of £143,000,000. That is the real financial responsibility and burden which was undertaken not when the Treaty was signed but when the other Articles and other Agreements, not originally included in this Treaty, were signed by the Government, which is responsible for the administration of this country since 1922. I refer to the land annuities. I suppose one may refer to the total amount of debt due by this country on account of the commitments which the Government entered into, unnecessarily, on that head on account of a commitment and an undertaking to pay something that had been previously remitted by the British Government under a previous legislative Act—something which was remitted to this country and acknowledged to be the property of this country by the British Government before even the Treaty was signed——

Mr. HOGAN

On a point of order, I understood that we were to have the advantage of a full-dress debate on the question of the Land Purchase annuities. I want to know is it in order now?

Mr. MacENTEE

It is.

Mr. McGILLIGAN

The question was not addressed to you.

ACTING-CHAIRMAN

It is not in order to discuss the financial settlement or the Land Purchase Annuities or the transfers. The Deputy is in order in referring to the dead weight debt, but the Deputy is not in order in criticising the financial arrangements entered into after the Treaty.

Mr. MacENTEE

I take it that I am in order in referring to the fact that the obligation exists, and that the debt and obligation were contracted after the Treaty?

ACTING-CHAIRMAN

Yes, but not in criticising the arrangement entered into.

Mr. HOGAN

We can have it again at any time.

Mr. MacENTEE

It suits me to have it now.

ACTING-CHAIRMAN

It is obviously a much more desirable thing that criticism of that kind should come in by itself and not through a side wind.

Mr. MacENTEE

Are we not in order in criticising the financial administration and the financial policy of the Government in this particular matter? After all, this relates as much to the financial policy as to the Budget.

ACTING-CHAIRMAN

I explained that you were in order in referring to the fact, but that you were not in order in criticising what led up to that. You are in order in stating this fact, but not in criticising a certain event which led up to that.

Mr. ANTHONY

Now that the President has arrived we might have a little light.

Mr. MacENTEE

I will content myself with returning to the statement that the real dead weight debt upon this country instead of being £22,000,000 is £143,000,000. How does that indebtedness compare with that of other countries? In the Free State it amounts to something like £49 per head of the population. In Great Britain it is £164 per head of the population, in the United States £35, in Denmark £13, and in France £52. I have reduced the value to pounds sterling. It will be granted that a national indebtedness of £164 per head in Great Britain is, relatively speaking, a much lighter burden than £49 per head in the Free State when the respective wealth and resources of the two countries are considered. But there is another very important feature to be taken into consideration in considering this question of the national debt, and that is, by far the greater portion of the money we owe is owed to those who reside abroad. Of the £143,000,000 odd that is owed £122,000,000 is due to foreign creditors.

Mr. HOGAN

Where did you get that?

Mr. MacENTEE

As I have said, of this sum £119,000,000 is due to Great Britain alone. That is, of our total indebtedness over 85 per cent. is foreign debt and only something like 14.5 per cent. is domestic debt. Now, economists draw a very serious distinction between expenditures which are mere transfer expenditures and expenditures which are known as exhaustive expenditures. Transfer expenditures take place within the State between one section of the community and another and they rarely result in a loss of wealth to the State, or any diminution in the common stock of the community. Exhaustive expenditures on the other hand represent money paid for real wealth destroyed or for real wealth transferred outside the State. Possibly the leading example of an exhaustive expenditure is an expenditure made in the payment of interest to foreign bondholders upon loans which they have made to the State. That does represent a real diminution in the wealth of the State. It represents money withdrawn from productive processes inside the State which would make for the creation of further wealth. They are, therefore, in every sense of the term, a real loss as compared with expenditure which would be made upon old age pensions or social services, because expenditures of that type take place within the State and may possibly be the means of creating further wealth. These expenditures made in payment of interest and for which no corresponding transfer of wealth takes place to the State which pays, do represent a real loss to the community as a whole. Therefore, you can appreciate the seriousness of our economic position when you find that of the £143,000,000 odd we owe, 85 per cent. of that money is due to foreign creditors.

Mr. HOGAN

How does the Deputy know what amount of the land stock is held outside the country?

Mr. GOREY

The Deputy does not want to know.

Mr. MacENTEE

It is not necessary for me to know.

Mr. HOGAN

How does the Deputy know, then?

Mr. MacENTEE

I know this, that if it had not been for the agreement which was signed after the Treaty was signed, the agreement which was signed at the Conference held in January, 1922, instead of you having to pay £90,000,000 to Great Britain to equalise the payment——

ACTING-CHAIRMAN

The Deputy is trying to get around the ruling I made. The Deputy must not make any criticism.

Mr. MacENTEE

I am not. I am only going to point out this, that instead of this State having to pay £90,000,000 to equalise the payment made by Great Britain to those who hold land stock, possibly we should be receiving, or citizens of this State should be receiving, the same portion of the payment on account of the land stock from Great Britain without having to make any reciprocal payment.

Mr. McGILLIGAN

You have not justified the 85 per cent.

Mr. HOGAN

Where did the Deputy get his figures?

Mr. MacENTEE

There you are. The land stock unredeemed is £90,000,000. It may be more, and I am only giving a rough estimate. The present value of the annuity of £250,000 payable for sixty years under Article 5 of the Agreement of the 3rd December, 1925, would be, say, £4,000,000. The present value of the annuity of £600,000, payable for twenty years under the Ultimate Financial Settlement, would be, say, £6,694,872. The present value of the annuity of £134,500, payable for thirty years under head 3 of the Ultimate Financial Settlement, would be, say, £2,067,594. The present value of the payment of £1,200,000 to the British Government for a period of twenty years in respect of the pensions of the Royal Irish Constabulary would be £14,954,652. There are a few more figures here.

Mr. McGILLIGAN

What about the 85 per cent.?

Mr. MacENTEE

Adding all up, you get something like £143,392,000 as the total indebtedness of the State either to people abroad or to citizens within the State. Of that total indebtedness, £119,000,000 is due to Great Britain; £3,000,000 is due to the citizens in the United States of America, and £21,000,000 is due to people inside this State.

Mr. HOGAN

Now answer my question.

Mr. MacENTEE

I was going on to refer to exhaustive expenditures. I pointed out that £119,000,000 was due to the British Government under our present financial situation.

Mr. HOGAN

You are walking into it again.

Mr. MacENTEE

My friend on the other side has walked into one libel action.

Mr. HOGAN

You are getting away from the 85 per cent.

Mr. MacENTEE

To consider the remittances made abroad on account of this foreign indebtedness we have first of all to consider the land annuities of £250,000 for sixty years; the £600,000 payable for twenty years under head 5 of the Ultimate Financial Settlement; the repayment of £134,500 for thirty years under head 3 of the Ultimate Financial Settlement; the repayment under the Treaty of £1,200,000 in respect of R.I.C. pensions, and the repayment under the Treaty to the British Government in respect of Civil Service pensions of £128,700 for 15 years. There are various other items amounting to £5,475,922 which are paid every year by the people of this State to a foreign creditor. That amount is paid for the most part for services not rendered and which represent on the whole one-twenty-fifth of the National income.

The Minister for Lands and Agriculture or the Minister for Industry and Commerce can contradict me if he likes, but I say that situation does not prevail in any State in Europe at this present moment. One-twenty-fifth of the National income is being paid away each year as an annuity or interest in some one form or another upon a debt to a foreign creditor. The fact that the money is abstracted, as I said before, from the requirements of production here is one of the principal reasons why trade is stagnant, and every tax, practically almost without exception, that the Minister for Finance has imposed during the past year produced a falling yield because trade is dwindling and is dying as long as this money, which is necessary to revivify and keep it alive and expand it, is withdrawn.

Before proceeding to consider the total burden of taxation which the Minister for Finance imposed, some consideration should be given to the question of normal and abnormal expenditure. I feel what I have to say in this regard could not be better prefaced than by quoting the Minister's Budget speech of the 21st April, 1926. The Minister for Finance said:

It would be possible on a close scrutiny of the Estimates in any year to find a considerable number of subheads which were temporarily swollen by some unusual set of circumstances. By adding together the abnormal amount shown in all such subheads, a substantial sum might be obtained, which, if deducted from the total estimated expenditure of the year, would enable us to calculate the amount required to be raised by taxation at any appreciably reduced figure. But such a procedure would put us wrong by giving a false result, and would, in a comparatively short time, prejudice very seriously the interests of the State and the people. Abnormal expenditure under particular heads in one year is likely to be followed by abnormal expenditure of somewhat similar amounts under different heads in the next year. Moreover, even in the same year unusual costs in one direction are frequently balanced to some extent by exceptional savings in another. These considerations do not, of course, apply to expenditure.... But if they are not borne in mind in regard to other abnormal spending, the country may find that, without intending to do so, it has begun to pile up debt to meet the ordinary cost of Government.

Could there be a more perfect, a more lucid, a more exact description of what has happened under the oegis of the Minister for Finance during the past four years? By a purely dishonest financial manoeuvre the Minister, in the years preceding the election, was able to bring in Budgets that granted certain reductions in taxation.

ACTING-CHAIRMAN

I think that the Deputy ought to withdraw the word "dishonest." I do not think that is a word that should be used.

Mr. MacENTEE

I withdraw the word.

Mr. HOGAN

Say "politically dishonest."

ACTING-CHAIRMAN

I think he might choose a different word.

Mr. MacENTEE

I withdraw the word "dishonest." I suppose I dare not say "shady"? I will say "ingenious." I think, as I said before, that the Minister's own words exactly explain what happened during the past three years, and the Budget which was introduced yesterday is the inevitable consequence of such a procedure. We find that the Minister, who, in other years, was able to reduce taxation with a fairly lavish hand, has been compelled this year to put on the screw again. Of course the reductions have served him. There has been an election; he comes back again to power, and now the people who entrusted him with the mandate have got to pay the tune. It would be difficult to find a more glaring example of the practice which the Minister for Finance himself condemned than is found in the classification which was made in previous years of the sums expended under Vote II, for the maintenance of drainage works and for the carrying out of the new works. Altogether under these Estimates I think the Minister for Finance succeeded in imposing an unjustifiable debt of £250,000 on the people. I do not know what has been responsible for his conversion, but this year he felt that he could not come to this House and justify classifying again the drainage works carried out under the Department of Public Works as abnormal expenditure. It is impossible to justify such works as abnormal expenditure, because works of that nature must be continually undertaken. The old works have got to be maintained, and new works have got to be undertaken each year. In any developing State that is the position, and the expenditure under this head will be always a recurring and constant one. Therefore, as the Minister himself found, he was unable to justify it.

I think there is even a more serious example of this wrongful refusal to meet out of revenue expenditure which is normally due. We have, under Vote 10, provision for repayment, with interest, of the Dáil Eireann Internal Loan, amounting to £219,000. Now the Free State Government, in its earlier years, had the use of a considerable portion of that loan. They had the interest on it, and now we find this year that they promise to repay it— they promised that last year; I think that a very definite promise was made some time early in June that the Dáil Loan would be repaid in the almost immediate future—but, at any rate, it is due, I presume, if their promises are going to be fulfilled this time, for repayment some time in the coming year. I happened to turn up the Finance Accounts for 1926-27 and I found there, returned as one of the miscellaneous items which formed part of Account 13, the amount received on foot of the sale of the National Land Bank, Limited, £190,005. Surely if expenditure which is required to repay the Dáil Loan is abnormal expenditure the revenue derived from the sale of an asset is a very abnormal revenue indeed, and we could very well afford to set off one amount against the other.

If that set-off took place there is no justification whatever for classifying the repayment of the Dáil Loan as abnormal expenditure.

Mr. GOREY

Will the Deputy indicate how much it cost the State to pay the bad debts of the Land Bank?

Mr. MacENTEE

I am not criticising the Government at the moment for selling the Land Bank; I am criticising the Government for what they did with the proceeds of the sale of the Land Bank.

Mr. LITTLE

I do not think that that remark about the Land Bank should be allowed to pass, because it is pretty well known, to some people at least, that the Land Bank is a valuable asset, much more valuable than the Bank of Ireland ever thought it was, and it would be wrong if a statement injurious to the Land Bank went out.

Mr. GOREY

The value of it to the State was that it paid about £100 an acre for land and that the State has to bear it now and make it good. They are paying almost more as an annual sum than they received as the capital sum altogether.

Mr. MacENTEE

I suggest that my friends can discuss the matter outside. In Vote 8, we have an item of £142,000 in respect of new capital for the Local Loans Fund. In the Finance accounts, 1926-27—and in this matter I may be subject to correction, but it seems to me worth referring to—I see the repayment by borrowers of certain loans advanced from the Local Loans Fund of £765,286, and I think that of that £765,000 odd £600,000 was transferred to the British under the Ultimate Financial Settlement. Now, if I am correct in what I say—and I have not been able to look it up and to verify it —that leaves a balance of £165,000 due and accruing to the Local Loans Fund and not transferred in any way. Is that £165,000 going to the ordinary revenue account and is it treated as revenue? If so, what is the justification for treating the £142,000 in Vote 8 as abnormal expenditure?

We then come to the question of the Army. In 1926 the Minister for Finance stated that the Executive Council, having carefully considered the matter, had come to the conclusion that an efficient and effective army could be maintained in the Saorstát for the sum of £2,000,000. They held very tenaciously to that figure, notwithstanding the criticisms that were passed in the House regarding it, notwithstanding the criticisms that were directed against them on that head in the country. Then, for some reason or another, possibly in order to bring about this reduction which would make the way easy for them in the country during the election, the Government decided that after all they had made a mistake, that after all these people, who are so careful, so penurious, I might almost put it, in the expenditure of public money, have made a mistake of something like 25 per cent. in the cost for which an effective army could be maintained, and that instead of having to tax the people to the tune of £2,000,000 each year, they found that they could do with £1,500,000. What was the consequence of that mistake?

The consequence of that mistake was this, that the Minister for Defence, charged with the administration of this particular Department, went into that Department and prepared his Estimates with the fixed idea that an Army could not be maintained for less than £2,000,000, and therefore, we may be certain, was rather more lavish in his expenditure than he would have been if the Government had come to a right and proper decision in the first instance and had decided that that Department and that service should not cost more than one and a half million pounds. But the Government is not infallible. If that mistake of theirs cost us something over £500,000 each year for the past four years, are we going to be told now that the cost of that mistake is abnormal expenditure? As I said, the Government makes mistakes every day; it takes decisions upon some matters which may be right and upon some matters which may be wrong. Where there is an error of judgment and where that error of judgment leads to a consequent unnecessary expenditure, are we to go through the accounts each year and segregate the items? Are we to say: "Here are the matters upon which the Government decided rightly and upon which the expenditure is not a penny piece more than it ought to have been, and here are the items upon which the Government decided wrongly and upon which the expenditure is at least £500,000 more than it ought to have been," and are we to say that, because the Government made an error of judgment and decided wrongly in this matter, we are entitled to classify that as abnormal expenditure and, instead of meeting it out of revenue, to meet it by borrowing? That is exactly what the Minister for Finance proposes to do in relation to this matter.

I think that if the question of abnormal expenditure is examined closely it will be found that really the only items which can be classified as abnormal expenditure are the items for Property Losses Compensation, and possibly—I make it with reservations—the amount which is voted for the purchase of shares in the Agricultural Credit Corporation. But with the exception of these two, every other item, including the provision which is made in Vote 11 for new works and buildings, should not be treated and should not be regarded as abnormal expenditure, because a large part of the costs of the new works and buildings under Vote 11 is recouped out of Property Losses Compensation. That happened in 1926-7, when, out of a total expenditure of something like £500,000 upon new works and buildings, something like £300,000 was recovered from the Property Losses Compensation Vote. But what would be the consequence of treating these items of so-called abnormal expenditure in the proper way? The Minister would be faced with the task of having to find almost a couple of millions more. Where would he get them from? The total burden of taxation of this country, local and national, amounts to something over 20 per cent. of the total national income, that is, assuming the total national income at a figure of £125,000,000. The Minister, in reply to a question by Deputy Cassidy to-day, admitted that he had not even made an estimate of what the total national income was. I have not made that estimate, but Mr. Johnson published a figure in last week's issue of "The Irishman" which I think is a correct figure.

A figure of between £120,000,000 and £130,000,000 fairly represents the national income of this country, and taking the average of these two figures we find that the total burden of taxation in the Free State at the present moment is over 20 per cent. of the total national income. With one exception, so far as I can see, that figure is not exceeded by any country in the world to-day. In Australia the burden of taxation is something like 18.4 per cent. of the national income; in France it is from 17 to 20 per cent.; in Austria, 17.3 per cent.; in Canada, 19.2 per cent.; in Italy, 19.2 per cent.; in Switzerland, 6.4 per cent., and in the United States it is 10.5 per cent., and the only case in which that figure is exceeded—and I am very doubtful whether it is exceeded even there—is in Great Britain, where the figure is taken at 22 per cent. I am very doubtful about that figure. I have not been able to procure estimates of the total national income in Great Britain for any year later than 1924, but upon the basis of the year 1924 the figure for Great Britain is 22 per cent., which is 1 per cent. higher than our own.

These figures which I have recited show you that we are at present being over-taxed. We are not only being over-taxed directly by the Government but we have also to meet an additional burden in the sum of £2,900,000 which is paid each year by way of land annuities to Great Britain. Now, what is the natural consequence of what I have just said? This, that there must be a reduction in expenditure. There is no more money to be had from taxation. The Minister in the course of his speech referred jocosely to the people who thought that if the number of buttons on the tunic on a Civic Guard were reduced from five to four everything would be well for Ireland. I am sure that there are no people in Ireland so silly as that. But there are people who have enough commonsense to know that if the number of Civic Guards were reduced in the ration of from three to two, or by fifty per cent., there would be a considerable saving, amounting to something near £700,000 this year; and there are people who feel, as was said once before in this House, that if it only requires twelve policemen per 10,000 of the population in England and thirteen per 10,000 of the population in Scotland, we in Ireland could go on very well with a good deal less than twenty-three per 10,000, which, I think, is the present figure. There are also people who feel that since the annuity payable under the Ultimate Financial Settlement was not provided for in the Treaty we could do very well with that sum of £600,000 ourselves. There are also people who feel that if the sum of £2,997,000 payable by way of land annuities under the Ultimate Financial Settlement were retained here that the future prospects of this country would be much happier and better than they are. I do not want to make that statement in any too controversial way, but as I have said, and as Deputy Flinn has argued, the payments under that Ultimate Financial Settlement were not provided for in the Treaty.

ACTING-CHAIRMAN

That question cannot be discussed now.

Mr. MacENTEE

I am not referring to it by way of criticism. I am merely saying that these payments were not provided for in the Treaty. Obviously, they impose upon this country an annual burden heavier than it is able to bear. If the State has to fulfil the promises which the President and his colleagues put before the country, there must be some easement of this burden and some reduction of this debt which is pressing so heavily upon us. The only way in which possibly at the moment that might be done is, first, by a reduction in the cost of the supply service and, secondly, by some modification of the agreements entered into between the Government here and Great Britain. The Government here has a strong case now. This year they have been compelled to increase taxation on the necessaries of life. Let them approach the other party to this Agreement and ask them to relax somewhat to meet us and reduce the heavy payments which they are exacting from us and the country.

Mr. ANTHONY

After the long homily on the financial morality, or lack of morality, of the Minister for Finance delivered by Deputy Flinn and to some degree also by Deputy McGinty——

Mr. MacENTEE

I beg your pardon. I never heard any person call me McGinty except one English schoolmaster who could not pronounce MacEntee.

Mr. ANTHONY

Deputy MacEntee —I have been educated into that. It is with some diffidence that I rise to make a few commonplace remarks in connection with the Budget. To come down to tin tacks, I join with other Deputies in expressing some disappointment at the imposition of this tax on sugar. It may be small. The Minister, in his statement, said that there was no reason why anything more than the amount of the additional tax should be passed on to the consumer. In saying that, the Minister must be very sanguine, because the common experience is that if a tax of a farthing or a halfpenny is imposed on an article by legislation, the retailer usually doubles that when passing it on to the consumer. In the absence of some machinery that would control the imposition of this additional burden, I fail to see how the Minister can be so sanguine as to think that nothing more than the amount of the additional tax will be passed on to the consumer.

We heard a good deal to-day from Deputy de Valera with regard to some of the services to which the economy axe might be applied with advantage to the State. I say advisedly with advantage to the State. The question of reducing expenditure in connection with the Civil Service was discussed. My experience of the Civil Service is that, from the number of inquiries made from time to time at the offices and the multifarious duties cast upon civil servants to-day, unless some other machinery is devised by which you can get that work done in the offices I fail to see how any reduction can be made in those Departments. Deputy de Valera suggested that instead of having three Departments, each having a separate head, by a system of co-ordination the three might be placed under one head, and that money might be saved to the State in that way. I disagree with him there, because the experience that I have gained from visits to the Departments is that the tendency now is to specialise more and more. If it is good economy to have specialisation in the ordinary business of life, I submit it is also good economy to have that system obtain in the Civil Service.

AN CEANN COMHAIRLE

resumed the Chair.

Mr. ANTHONY

It was suggested that we ought to have economies in the police and military forces of the country, but I would like to point out that certain civic duties and responsibilities devolve upon each one of us. It is up to the citizens of the State to prove by their conduct that these police and military forces can, and should be, reduced. As a practical man, I would like Deputy de Valera and others to indicate the manner in which a reduction of the police force can be brought about without any disadvantage to the State. I think it was Deputy Flinn who suggested that, among other things, money could be saved on Civil Service administration as well as on the administration of the military and police forces. As I have already said, we could by our own conduct do more to show how that economy could be brought about than by any of the methods suggested in any of the speeches to which I have listened so far.

It is one thing to pay lip service to the country and another thing to serve it so as to remove the cause for having this Army and police force. So long as we have in the country an armed threat to the State so long will an army, apart altogether from a police force, be necessary. When there are indications, and when these indications come from quarters from which we should expect them to come, that a period of peace, so far at least as regards the absence of anything in the nature of armed resistance is concerned, is in front of us, then it would be time to talk about a reduction of the Army and police forces. I am disappointed that something has not been done in the Budget to relieve certain users of motor vehicles from the very high taxation they have to pay at present. There are thousands of owners of comparatively light-weight motor cars who have had to abandon the use of their vehicles because of this rather prohibitive tax. That involves the unemployment of about 1,000 workers in the Free State. These cars are at present taxed on the basis of their horse-power. It has been pointed out by, I think, Deputy Flinn that if the tax were passed on to petrol or if the cars were taxed according to weight it would be a more equitable tax.

I expected to hear included in the Budget statement some relief in the way of a remission of the amusements tax as regards organisations of a cultural or educational character. I am particularly interested in this connection with such institutions as Shakespearian and operatic societies. We have in the city of Cork two very fine institutions—a Shakespearian Society and the Cork Operatic Society, both amateur organisations doing very valuable cultural and educational work. They are drawn from a class of the community which, let me say, is not a monied class. They are mostly people of the working class and their performances have been very highly commented on by eminent critics. They have run their entertainments at a very big loss from year to year, while the members pay subscriptions and put in a long number of hours at practice. Unfortunately in this age there is not much appreciation for culture or art. The result is that though they get decent support from those who desire to see art and culture encouraged in our midst, at the same time they have been looking forward to the Minister for Finance doing something to relieve them from the amusements tax. I hope the Minister will in the near future see his way to give some relief by way of a remission of this tax to bodies such as I have mentioned and which are doing very good work indeed. We know that cultural development is as desirable as physical development. I hope the Minister will see his way to do something in the near future for these educational societies to which I have referred.

Mr. GOREY

Fault has been found with the Budget statement with regard to the imposition of new taxes and the additional charge on telegrams. During the discussion on Budgets and Estimates in the last four or five years there has been a hardy annual, and that is the charges for the delivery of telegrams outside a certain radius. I have previously suggested that it would be more equitable to charge the receivers of telegrams a flat rate for delivery, or to charge an increased rate to senders. I should say that in 95 per cent. of the cases telegrams are sent in the interests of the sender and not of the receiver. If the extra charge of 6d. means the abolition altogether of the charge for delivery I would welcome it. I regret it is necessary in order to put the telegraph service in anything like a paying position to impose this extra 6d., but I hope it is an indication that the citizens will all be put on the same level, and that the rural dweller will not be penalised, just because he happens to be living in a rural district away from the more populous centres where the people have amusements. In the bigger centres there are two or three deliveries in the day, but in the rural areas there is a delivery once or twice in the week, or every other day. The rural dweller who has to live in the hills far from the towns has to pay a charge amounting to 2/- or 2/6 for a telegram. It is not because I am personally in the same position—I have to pay 1/- for the delivery of every telegram I receive—I raise the question. Sometimes the amount I pay runs up to 10/-, 15/- or £1 in the week. I had three from one man the other day.

Mr. LEMASS

Did it win?

Mr. GOREY

It was not a question of winning. I never had a telegram in my life in connection with a winner or a loser. As I have said, I am glad if this extra charge is an indication of levelling the rate for all citizens. Whether it is economy or not I maintain that every citizen is entitled to the same service from the State. I am not pleased with the suggested method of dealing with motor traffic. I do not think the Minister has gone far enough. I think he should take a leaf out of the book of the Chancellor of the Exchequer on the other side and face the position as it is. Sooner or later we will have to face the position as regards what the motor traffic is costing the country. That is a question that should be dealt with from an economic standpoint. The question should be gone into as to the amount the motor traffic is paying, and the amount it costs the State to construct and maintain highways for their running. That is an argument we have advanced for four or five years and I advance it now again. I can see it is not going to be dealt with now, but it is a State problem that has to be tackled, whatever difficulties are in the way. I am not speaking on behalf of the railways. They have found a formula on the other side which should be followed. It is the duty of the State in the immediate future to tackle this problem. I have been consulting experts on this question recently and some of the best County Surveyors have told me that the present horse-power tax on lorries and buses would not pay a twentieth part of the damage they are doing to the roads. There is no relation between what they pay and what it costs the State to maintain roads for them.

Deputy de Valera began attacking the statement of the Minister by saying that they are against expenditure where it is unnecessary and wasteful. So is every Deputy against spending where it is unnecessary and wasteful. That has been the tone of every debate here since I came into the Dáil. But we want some indication of where it is unnecessary and wasteful. We want Deputies to be honest, to get away from general statements, come down to particulars, and point out where there is unnecessary and wasteful expenditure. It is all very well to make general statements without being asked to come down to details. It puts the other person in an awkward position. It is the duty of any person criticising expenditure to give details of where it can be curtailed. When Deputies can only point out possible savings amounting to three or four hundred thousand pounds—certainly not amounting to one million in the aggregate—and have fought two elections this year on the plea that they could reduce expenditure by twelve millions, surely it is up to them as honest or dishonest politicians—call them what you like, they are honest men, but I cannot say the same about them in politics—to justify their twelve millions. They attempted to commit a crime in trying to "cod" the country. (Deputies: "Oh.") That word has been used in this House before. It may be disorderly, and if it is I withdraw it, but it has been so often used that we have got into the habit of it. Examples should be given. The different items of expenditure should be gone into. Where there are suggested savings the figures should be given, and we should have the total. Deputy de Valera said that they cannot do it, that they have not access to the Government Departments. I understand they formed a shadow Cabinet about twelve months ago. What has that shadow Cabinet done?

Mr. DAVIN

It is getting ready.

Mr. GOREY

Are they only shadows? The only economies that I heard suggested were in the Army and the Civic Guard.

Mr. BLANEY

And the Governor-General.

Mr. GOREY

And the Governor-General. It is true that there could be some saving made in expenditure on the Army, and I am sure there is the possibility of saving on the Civic Guard, if we did not give them as many duties as we are giving them, and if there were indications that the country was coming to a reasonable frame of mind—that is, all our citizens. While we have young assassins and potential assassins, and if we are to take the indications from the reports we read, a school of assassins where these young people are taught to be assassins——

Mr. LITTLE

On each side?

Mr. GOREY

Is there any doubt on which side?

A DEPUTY

Not at all.

AN CEANN COMHAIRLE

We are not here to decide on which side—that is our position.

Mr. GOREY

If the atmosphere was right, we certainly could dispense with a good part of the Army. How much of the Civic Guard we could dispense with is another matter. Then there is the Governor-General. That is the sum total of the possible economies pointed out here. Something has been said in regard to a saving on education. It has been suggested that if we had co-ordination we would have considerable saving. I do not know. I am not in a position to judge, but others are. Then we have the Senate. It is said that £20,000 could be saved by abolishing the Senate, and that if this House was reduced from 153 to 100 members there would be a saving of £19,000 and that there would be indirectly other savings, as the sittings would be shorter and the official records would be smaller, and there would not be so many of them. In other words, that we would have less "gas" in the House. It has also been said that there could be a saving on the Executive Council—that the present Executive is paid too much, and that there are men ready to do it for less. When I was a young man I was connected with district councils and boards of guardians, and the system at these bodies was that the lowest tender was accepted. The suggestion from Deputy de Valera is to give it to the lowest tender—that is as far as I can make it out. The suggestion is not that he could do it better, or as well, or do it at all, but that he is prepared to do it cheaper. He and his Party are prepared to step in and do it cheaper. That is the only virtue in his suggestion.

We also had a speech from Deputy Hugo Victor Flinn. I believe they took away the "O" when they were sending him to England. Deputy Flinn ended like a cooing dove—I will not say that he began like a lion, because if you take away the gas and that sense of self-importance from Deputy Flinn he is a very ordinary individual indeed. Deputy Shaw made some suggestions. I do not know that I am in agreement with them. As far as I could make out the sum total of them was that horse-racing is in such a bad position at present, and dog-racing is in such a flourishing condition, that the Minister would be well advised to put a tax on the one and pass it on to the other.

Mr. SHAW

I suggested that the Minister would derive such an increased amount of revenue from the tax that he would collect on betting at race meetings that it would make up for whatever deficit there might be and that some of it should be passed back to race executives to increase their stakes.

Mr. GOREY

It amounts to this, that he wants a subsidy from the dogs to keep the horses running.

Mr. LEMASS

Can you not settle the matter at the Party meeting?

Mr. GOREY

Perhaps I do not like to see the poor people of Shelbourne Park asked to subsidise the swells at the Curragh. Deputy MacEntee made great efforts to deal with the question of land annuities. I think he was called to order at one time by the Chairman, but in another way he continued on that particular subject for about an hour. I ask one question. He says we owe a capital sum to some other country and we owe interest on that capital sum to the extent of 2¼ million. Is an item such as that put down as the national debt of any country? If there never was land purchase would the charges for the occupation of the land as between one man and another be considered a national debt? What justification is there for bringing in land charges between the man who lets the land and the man who occupies it as a national debt? What justification is there for that?

Mr. FAHY

Lord Halsbury.

Mr. GOREY

Are the land charges in England put down as national debt? I do not think such a contention is worthy of anyone who professes to have ordinary intelligence. It has nothing to do with national debt, and it does not arise at all on the Budget.

AN CEANN COMHAIRLE

That is right.

Mr. GOREY

I may be out of order in pursuing the subject. I never heard more feeble comments or suggestions put forward in any Budget debate than I heard in connection with this. I never heard a worse effort to come from the general to the particular, and to give a concrete instance of the saving of those millions we heard so much about. It is an absolute avoidance of the subject, and it does not reflect credit on the intelligence of those who put forward this case. It is all very well to go to the country and to put these things before people who know nothing about them. Here in this House is the place to put them forward where they can be answered and met. The sum total of the suggested reductions made by Deputies opposite does not amount to five or six hundred thousand pounds, even if we waited until the whole list of the Estimates are gone over. If these are the people Deputy Flinn expects are going to be handed over the Government of this country, then I say God help Ireland when that happens.

Dr. O'DOWD

I listened with interest to what Deputy Shaw had to say on the position of Irish racing, and speaking for the province of Connaught, at the present time there is I suppose only one race meeting that yet survives and that is Galway. Roscommon race meeting which has been held through all these years was not held last year owing to financial difficulties. Now the horse breeding industry in the country is a most important industry. The revenue every year from horse breeding amounts to two and a quarter million pounds. That is a very big figure, and it is perhaps one of the greatest sources of income that the country has. I thoroughly agree—and this is a personal view— with Deputy Shaw, when he says that if we are to sell our horses we must try our horses. The only way to induce millionaire owners from across the water to buy them is to try them on the race-course. If we cannot try our horses on the race-course we cannot sell them and we shall eventually lose the revenue this country always enjoyed from the horse breeding industry.

The position has come to this, that whatever may be the reason Irish racing is in a parlous condition. The country race meetings are all gone. The Mullingar Race Executive, which paid something like 20 or 25 per cent. in dividends and held seven race meetings each year, did not apply this year for a single licence. The Roscommon race meeting is being held this year as an experiment through a very special effort of the Race Committee to raise funds. They have raised funds by collecting in the various towns, because otherwise they could not hold the meeting as they were £350 in debt. I am glad the Minister has relieved the race executives of the entertainment tax; it may help to some extent. The abolition of the entertainment tax will certainly, to my mind, not result in the slightest loss of revenue to the Exchequer, provided the race executives do their part and pass on the reduced rate to the public. The abolition of the tax will in fact increase the revenue that will come to the Exchequer because you will have increased attendances and the race committees will once again get on their feet and they will be in a position to pay, as did the Phoenix Park Executive, Income Tax, Corporation Profit Tax, and Excess Profits Duty. I find for the past eight years the Phoenix Park Race-course paid more than one half the amount in Income Tax, Corporation Profit Tax, and Excess Profits Duty than they paid in entertainment tax. If the meetings were closed down there would be no entertainment tax to be got. With the re-opening of the meeting the Exchequer will get revenue from these sources again.

There is another point. My own personal view is that the betting tax is the cause of more demoralisation in this country than any other tax imposed in recent years. One has only to go round the streets of the city to see that. The poorer streets have four or five betting shops and the principal streets have their big betting shops. These shops were opened because the betting tax legalised their position. They are, I maintain, a deadly trap for the poor people. Personally I think demoralisation caused by these betting shops is worse than that caused by any other means at present. If we want to preserve the revenue that we got from horse-breeding and to promote decent, honest sport, something more will have to be done than the abolition of the entertainment tax. I hope that, at least, if the Minister keeps the betting tax in force some of the revenue got from it will be put towards the encouragement of horse-breeding and towards the breeding of thoroughbreds that will sell well and that will help to give employment to the working classes in the State. He can do that by giving subsidies or grants towards the stakes. If he devotes some of the money derived from the betting tax to that purpose I think the money will be well spent because it will mean increased income in the country and because we will produce better-class animals and more people will come across here and breed horses here, and the more horses we breed the more we shall sell.

Mr. DAVIN

Having listened to the speech of Deputy Gorey I have come to the conclusion that he himself was not listening very carefully to the speech of Deputy de Valera. He says that Deputy de Valera, in coming up against the question of reductions in the services, only suggested reductions amounting to a few hundred thousand pounds. I listened very carefully to Deputy de Valera when dealing with that matter. He suggested a reduction in the case of the Army of £800,000, which, if agreed to by the House and by the Minister, would reduce the cost of the Army to £1,000,000. He also suggested that there should be a reduction —I must presume that he could justify it—in the case of the Civic Guard Vote by £500,000, which would bring the cost of the Civic Guard to £1,070,000. He also suggested a reduction in the number of those employed in the Civil Service amounting to a sum of about £500,000. In other words, he suggested reductions to the tune of £1,800,000 in all. I have always encouraged in this House, so far as we could justify it, a reduction in the numbers of the Army, bearing in mind when providing for the protective forces of the country that we can only reduce them on the basis of the people of the country accepting the law as made in this House. There has been a gradual reduction in the Army from year to year as compared with the number, about 52,000, in the years 1922-23.

If Deputy de Valera's suggestion were agreed to by the Ministry and by this House, namely, that there should be a reduction in the cost of the Army of £800,000—I presume he would agree that there should be an army costing £1,000,000—it would mean a reduction in the numbers of the Army from 15,000 to about 7,000 or 8,000. In other words, he is prepared under present circumstances, when we are faced with an unemployment list of 60,000 or 70,000 people to add to it another 7,000 or 8,000. We are unable to provide for those who are on that list already, and we are to add, according to Deputy de Valera, another 7,000 or 8,000. In the case of the Civic Guard, Deputy de Valera's suggestion would mean a reduction of 3,000 or 4,000 men. In other words, we are asked to take the responsibility, and I am not prepared to take it, of adding 10,000 or 12,000 people to the list of those who are looking for work and cannot get it. If Deputy de Valera is prepared to tell the House that he will reduce the present number in the Army from 15,000 by 8,000 and is prepared to provide them with useful and productive work I am prepared to agree with and to vote for his suggestion.

When we are asked to justify the reduction of numbers in the case of the Civic Guard particularly, as suggested by Deputy de Valera, it should be remembered that all of us are charged with the responsibility of this country —not alone the Ministry but every Deputy in this House—and that any Deputy who has any sense of responsibility, or any realisation of his duties to the people who sent him here, must insist, whether he likes the legislation made by this House or not, and agree that the laws made by the majority of the people's representatives must be obeyed by the people. That brings us to the question as to how we must provide protective forces to enable that law to be carried out and respected by the people. I heard that during a recent Easter Week celebration in a town of my constituency there was a procession preceded by bands, and at the close there was speech-making, and one of the most responsible members of the official Opposition Party in this House addressed that particular meeting. The actual words used, I believe, by him to the young men surrounding the platform were that they were invited to get ready for the revolution that was coming in the near future. If a responsible politician or any Deputy did that——

Mr. G. BOLAND

Name.

Mr. DAVIN

If responsible politicians in this country are prepared to get up and advocate that course of action to the young men of the country they cannot consistently at the same time demand a reduction of the protective forces, and cannot say that they stand for economy in regard to the cost of those forces while they encourage the young men to engage in another revolution.

Mr. FAHY

Did a Deputy who stands for the reduction of those forces also advocate the course mentioned by Deputy Davin?

AN CEANN COMHAIRLE

Is the statement attributed to a Deputy?

Mr. DAVIN

No, to a responsible member of the official Opposition Party in my constituency.

AN CEANN COMHAIRLE

I thought that the Deputy meant someone in this House belonging to the Opposition Party. The words are not attributed to a Deputy?

Mr. DAVIN

No, he is an ex-Deputy. I only want merely to make the point that you cannot get it both ways. You cannot advocate a reduction in the protective forces and say that that is being done in the interests of the taxpayers while failing, at the same time, to give the taxpayers the protection they are entitled to. I join with Deputy Gorey in appealing to the Minister—I am not quite sure what he agreed to do—to agree that the increased charge now being made for sending telegrams should include charges for forwarding and delivering. I am not sure what are the intentions of the Minister. He did not make it quite clear in the speech he made yesterday, according to the notes which I read. There is a considerable amount of opposition in the rural parts of the country to the demands made on people who receive telegrams for a fee for the delivery of a telegram which exceeds the cost to the sender. I think that whatever arrangements are made by the Minister in future, or whatever the increased cost is to be, it should include the cost of delivery and sending and should be charged to the sender.

So far as one can gather from experience, it is clear that the sender of a telegram will benefit as a result of the message to be sent. Therefore it is unfair to the receiver to make him pay more than the sender. That is true in some cases which have come under my notice. I do not know whether the new tax to be imposed on buses is the Minister's considered decision in regard to the treatment to be meted out in future to the owners and those responsible for motor buses and lorries. In my opinion the matter has not been very carefully considered, and it will not be given the consideration it deserves until responsibility for coming to a considered decision is put upon the shoulders of one Minister. At present in the case of the transport system you have three Departments involved. The three are probably in conflict with each other on matters affecting transport.

You have the Minister for Justice responsible for the police side, the Minister for Local Government responsible for road maintenance, and the Minister for Industry and Commerce who has to pay some regard to what is being done from time to time in matters of this kind by the other two Ministers. The Minister for Finance has, of course, to keep his eye on how much he is going to get out of this source for revenue purposes. I hold the view that the petrol tax is the fairest tax in the case of those who run or control motor cars, motor buses, or motor lorries. In the long run you will have to come to the point of considering the advisability of doing away with the horse-power tax and adopting a petrol tax which is, after all, a tax on use and bears some relation to the abuse done to roads by heavy lorries or motor cars.

I have discussed these matters in a casual way with Government officials with responsibility in different Departments and I have found that there is a different view held by responsible officials of the Local Government Department from the view held by responsible officials in the Department of Industry and Commerce. Until you get these conflicting views reconciled, or in other words, until you get the responsibility for the transport services of the country, put under one Minister and one body of officials who will have to look at the matter from every angle, you will not have that unity and that judgment brought to bear upon the matter which is lacking at the present time. I do not know what position we are going to find ourselves in now, having a motor tax here and a petrol tax of 4½d. per gallon in Great Britain and Northern Ireland while no such tax exists in the Free State area. I can imagine that the number of British officials on the Border will have to be largely increased so that they can dip their fingers, or whatever instruments they use, into the petrol tanks of motors crossing the Border. At any rate I believe it will cause a good deal of confusion and I do not believe that the decision of the Minister to impose a tax on imported buses is going to bring him to a final decision in regard to the charges that must be made in this country on people who run motor buses for their own benefit and profit.

We were told recently, in reply to a question, that there are 681 motor buses running in this country. I know from observation, and from some information that I have been able to get, that some of these buses are run by a driver alone, and that no conductor is provided. The largest number they could employ would certainly not exceed 1,000. What is the position in regard to railways as a result of the unfair competition of these buses? You have had 3,000 men deprived of employment, partly, I will admit, as a result of amalgamation but mostly as a result of the unfair competition of the buses. You have the carriage works, which gave full-time employment, now employing a smaller number of men on four days a week instead of the six days which they obtained formerly. This is a question which has not been gone into as carefully as it should be by the present Minister. You will have to come up against the fact that the longer you delay giving it that careful consideration which it deserves the greater the problem will become for those who will have to face it in the long run.

Mr. FAHY

took the Chair.

Mr. DAVIN

Deputy de Valera suggests a reduction in the membership of this House to 100. In regard to all these suggestions I have been waiting, especially during the discussion on the Estimates, for some proposition from the Opposition side, some practical proposition, which would enable members of this House to take a final decision on the merits of the cases put forward. For instance, when we had a discussion here on the Land Commission Estimate for £500,000, we had various reasons given by members of the Opposition for not agreeing to the Vote. One of the reasons given by Deputies who spoke against the Vote was that the Land Commission was not going ahead as quickly as it should with regard to the acquisition and division of lands. If the Land Commission is to proceed more quickly than it has in the acquisition and division of land it will, in my opinion, mean a larger number of officials and the provision of a greater amount of money than was asked for in the Vote that was passed by this House. On the other hand, we have statements made about excessive salaries paid to Ministers and officials in the various Government departments. On the Land Commission Vote I expected that there would be a reduction of three, four, or ten or thirty thousand pounds moved for, and that the reduction would be justified by pointing out that certain officials were too highly paid. For instance, I heard it stated that the Commissioners are receiving excessive salaries, and that they should receive only £1,000 each per annum instead of £1,300. Why did not the Opposition Party bring forward a practical proposition and move for a reduction of certain salaries? They could have given as their reason that A, B or C was receiving so much and that he is too highly paid.

Mr. G. BOLAND

On a point of order, I understand that the Ceann Comhairle ruled any discussion on salaries out of order until we come to the Central Fund Bill.

ACTING-CHAIRMAN

I am not sure that that is so.

Mr. DAVIN

I am merely asking members of the Opposition Party, who are protesting against excessive salaries, to put members of other Parties in a position to vote on the merits of any case they have to make.

Mr. BOLAND

Will you vote for it?

Mr. DAVIN

I will vote on the merits of any proposal put before the House. You have been protesting in the House, and particularly outside it during election times, against excessive salaries for officials, but you have not taken the opportunity as members of the House to give other members of the House an opportunity of deciding on the merits of any case you could put forward.

Mr. BOLAND

We have not got that opportunity yet.

Mr. DAVIN

For instance, when the income tax resolution was being discussed yesterday there was a protest made by Deputy de Valera that certain concessions were not made in the case of dependents, but he put the House in the unfortunate position of having to vote for the imposition of a 3/- tax or no tax. If the proposition which he put forward were carried by a majority it would mean that the people who had hitherto been paying an income tax of 3/- in the £ would have to pay no income tax in future. I ask Deputies on the official Opposition Benches, in talking about excessive salaries and other matters, to follow the procedure which is at their disposal and to give the members of other parties an opportunity of deciding the question on its merits and to come to a considered conclusion. So far you have only been talking around the question of a reduction of salaries, but you have never come to the point of putting to the House a definite proposal on its merits.

We had another case recently where a nomination was made from these Benches for the election of a certain member of our Party as Leas-Cheann Comhairle. The reason given for the opposition to that proposal was that the salary which was to be paid to the individual who would be elected—and whoever will be elected will have to be paid —was excessive, but the obvious thing that should have been done was to move that the salary should only be £500 instead of £1,000 a year. I hope that when we hear charges of excessive salaries being made that the members of the official Opposition will take advantage of the discussions on the Estimates and bring forward proposals for a reduction to the amount that they think should be paid to the individuals concerned and give us an opportunity of deciding on the merits. Let there be no talking around the question without giving the House an opportunity of discussing the merits. I am not one of those who believe that the prosperity of the country is going to be brought nearer by reducing the purchasing power of the community. To that extent, I see no difference between the members of the Opposition and the members of the Government Party. The royal road to the prosperity of this country, according to both the Fianna Fáil Party and the Cumann na nGaedheal Party is by reducing the purchasing power of the community. That is the wrong road to bring about prosperity, and I think when the members of the Fianna Fáil Party has enough experience, or at all events a little more experience in this House than they have had up to the present, they will find that that is a fact.

Mr. LEMASS

I think the most remarkable thing in the course of this debate has been the silence of the front bench of the Government. That they could allow probably the most important discussion of the year to proceed, and make no attempt whatsoever to answer any of the criticisms of their policy, or the group of illusions which passes as their policy, seems to indicate that they believe that no defence is possible. It is left to Deputy Gorey, the only Independent Deputy in the House, and to members of the Labour Party to defend such a policy as has been enunciated on the part of the Government. The majority of the Deputies here will remember that not very long ago it was thought that we would see emblazoned on the banner of Cumann na nGaedheal as a symbol of their policy what was briefly described as the upward curve. At every general election and in every by-election, in every issue of the daily Press, we were reading about the wonderful upward curve that represented the growing prosperity of the nation. Leave it to the upward curve and everything was coming right of its own accord, we were told. When we were not going at a rapid rate on the upward curve we were turning the corner. We kept on turning the corner so fast that some of us even got light in the heads looking at it.

It is perhaps a useful thing to have an end put once for all to this talk about the upward curve and about the famous corner that we have been going round so often. The upward curve has been flattened out at last. The Minister for Finance has assured us that it is of so slight importance that it cannot be considered in any way in relation to the Budget and that it will make no difference whatever in relation to the revenue, in fact he has estimated that during 1928 there will be a decreased yield from income tax, a decreased yield from excess profits tax, and a decreased yield from corporation taxes. The business returns of twenty firms which, as he told us, are taken annually and averaged in order to get a figure that will give an indication of the nation's prosperity, have shown that we may expect in 1928 a lower degree of business activity than we had in 1924. It is perhaps even possible that the upward curve has not merely been flattened out but that it is beginning to droop at the end.

As most Deputies know, it is much easier to slide on the downward curve than it is to climb the upward one, and unless we can rectify the present position, if the nation does start sliding it will be very hard to stop it. I think it is generally admitted by all who have the least knowledge of the industrial conditions existing in the country that the main cause of our lack of progress in industrial matters has been the burden of taxation. As Deputy Flinn pointed out here, the people of this island have not merely to keep up the Government that operates from this Chamber, but it has also to keep up another Government in Belfast and to maintain a third Government in pensions. The burden of maintaining the three Governments is so heavy that it is impossible to expect any revival of prosperity or any considerable increase in business productivity in this country. We cannot acquit the Government of the Saorstát of a large share of responsibility in maintaining that unequal and unbalanced burden of taxation which has brought about this general stagnation in trade. They have declined and persistently declined to make any concessions in the matter of the collection of income tax on incomes derived from investments in Irish industries. It is generally recognised that one of the main difficulties of Irish industries is the difficulty of inducing the owners of capital to invest it in Irish concerns. The failure to undertake the long-overdue campaign of economy must also be placed against the Government as one of the contributory causes to the present situation. We have had many assurances from the Labour Party, I presume, on behalf of the Cumann na nGaedheal Party, that economy is not possible. We have had Deputy Davin telling us—apparently they worked it out that the efficiency of a Government Department increases in direct proportion to the number of civil servants, and if we want to double the efficiency of a certain Department you have to double the number of civil servants in that department.

Mr. DAVIN

I protest against the misrepresentation by the Deputy of what I have said.

Mr. MORRISSEY

Are you surprised at that?

Mr. LEMASS

Perhaps when Deputy Davin reads his speech he will see that I was not certainly deliberately misrepresenting him. Any fairminded man listening to what he said would come to the conclusion that that was what he meant. It is possible that he did not say what he meant. Yesterday I mentioned certain figures in comparing the number of civil servants in this country with the number in Great Britain. The Minister for Finance has produced another figure which he says is the correct figure concerning the number of civil servants in Great Britain. I stated that the number of civil servants in Great Britain was 61,000. That was a statement that appeared in the Press, and when it was questioned by the Minister for Finance at that time I pointed out that even if the number in Great Britain were double or even ten times as many that even then the argument I was making would have the same force, because I said the number of civil servants in the Free State was, say, one-third the number in Great Britain. If the figure given by the Minister for Finance is correct the number of civil servants in the Free State is one-tenth of the number in Great Britain.

Mr. BLYTHE

The Deputy can get the British official return of the number of British civil servants in the library in this House.

Mr. LEMASS

I will take the Minister's statement. I will take his word that the number in Great Britain is 196,000.

Mr. BLYTHE

296,000.

Mr. LEMASS

The population of the Free State in relation to the population of Great Britain is one-thirteenth or one-fourteenth. The revenue of the Free State is one-thirtieth of Great Britain and the taxable capacity of the Free State is one-seventy-fifth. But even if the number of civil servants in the Free State was in relation to our population, and our revenue and our taxable capacity were equal to those in Great Britain, it should be borne in mind that the civil servants in Great Britain have not merely to deal with the machinery of Government for Britain, but with the affairs of a vast empire, which is not directly controlled at any rate from here. The British Government has decided that the number of civil servants there is too great, and it has embarked on a campaign of economy for the purpose of reducing the number of civil servants in a short period of time by a very considerable number. I suggest that a similar reduction should be, and is, possible in the Civil Service of the Free State area. Perhaps we may get a report during the lifetime of the present Dáil from the Economy Committee, of which Deputy Heffernan is Chairman: perhaps not. I am convinced, at any rate, from what little experience I have been able to get of the working of some Departments, that there are numbers of civil servants who are unnecessary. I am prepared to agree with the Minister for Finance that there are large numbers of civil servants who work very hard. There are numbers of them who are, perhaps, entitled to claim that they are over-worked. But those few efficient men who are worked hard have got to work hard because there are large numbers of inefficient men who are doing nothing. I think that any Minister who takes the trouble to investigate the conditions in his own Department will find that that situation exists; that the work is being done by a few with the many standing looking on.

It is to another matter that I would like to direct whatever criticisms I want to make of the Government and that is their failure to afford to Irish industry the measure of protection which is required. Yesterday the Minister for Finance told us that the Tariff Commission had produced interesting and valuable reports. Of those interesting and valuable reports to which the Minister was referring I would like to remind him that only two have been placed before the House and these two concerned articles of relatively small economic value.

Mr. BLYTHE

We will have a third in a couple of days.

Mr. LEMASS

We have been promised the third in a couple of days. I presume that must be the report in regard to flour which the Minister promised during the last session. He promised to produce it during the last session and he has not done so.

Mr. McGILLIGAN

When was that promise made?

Mr. LEMASS

On the 22nd of February, 1928, I asked the Minister for Finance whether the Tariff Commission "has yet reported on the applications made for tariffs on woollen cloth and flour, and, if so, when it is proposed to place these reports before the Dáil." The Minister replied that the Tariff Commission had not yet reported on these applications and he stated that the report on the application relating to flour was being prepared. I then asked: "Does the Minister anticipate that the reports will be laid before the Dáil during the present session?" The Minister replied: "The Report in regard to the application for a tariff on flour certainly will."

Mr. McGILLIGAN

The preamble to all that is anticipation. If the Tariff Commission did not send in the reports they could not be laid on the Table of the Dáil.

Mr. LEMASS

"The Report in regard to the application for a tariff on flour certainly will."

Mr. McGILLIGAN

Do not take that away from the context.

Mr. LEMASS

The fact that the report has been in the hands of the Government and that it is about to be put on the Table and that no mention of flour was made in the Budget forces us to the conclusion that either the Tariff Commission has recommended against any protection for the flour-milling industry or else that the Government has turned down the recommendation. If that is so it is, I think, a matter that will cause very grave disappointment to a large number of people in this country who were hoping that the Government did realise the position of Irish industry, did realise the situation in the country and the need there is for some active policy to produce employment and productive work here. If it has been decided to let the flour-milling industry go as others have gone, a very serious blow will have been struck at the economic life of the country. I hope that my anticipation is not correct and that we will find that the protection which the flour-milling industry requires will be afforded.

We have had in the Budget one additional tariff introduced, the extension of the McKenna duties to commercial vehicles. I saw it stated in this morning's newspapers that certain individuals in Dublin interested in the omnibus traffic have asserted that the extension of these duties to commercial vehicles will hit the Irish coach-building industry. I read the reasons which they give for the assertion and I was not convinced by them. It is possible, I think, for other reasons that the coach building industry will be hit by the extension of these tariffs. An English omnibus manufacturer will be able to deliver a completed omnibus in Dublin cheaper than he could supply the chassis and the body separately and it is obvious that the excess duty which an importer will have to pay over what he would have to pay on the chassis only may not be sufficiently high to induce him to undergo the delay of importing a chassis and having the body built here. I think we can be safe in concluding that the interests of the Irish coach-building trade were not taken into consideration when the Budget was being framed. If they were we would have had an increase in the duty on omnibus bodies.

Personally, I do not believe that even an increase would be adequate to meet the situation. I think that this country should make up its mind that whatever omnibuses or commercial vehicles are permitted to travel on its roads, the bodies of these vehicles should be constructed by Irish labour in Ireland. It is not denied by anyone with any knowledge of the industry that we can produce in Ireland bodies for these vehicles as cheap and as good in any other country in the world. The importation of bodies for motor omnibuses should be prohibited. The importation of bodies for commercial vehicles should be stopped. We can produce all our requirements at home. The importation of bodies for luxury motor cars should be at least impeded by the application of a tariff. If it was intended to encourage Irish industries, if it was intended to give employment to a number of those who are at present unemployed in this country, we believe that the taxes imposed in this Budget would have been arranged very differently. If for example it was thought that the construction of motor cars in this country could be economically undertaken there would have been a differentiation between the rate of duty collected or taken up on the completed cars and the rate of duty taken on individual parts.

If the rate on the completed car was increased, or the rate on the separate parts decreased, the importation of parts as distinct from the construction of the motor car would be encouraged in this country. Another matter upon which I would like information is the Imperial Preference rate in relation to the imported motor cars. About two-thirds of our imports, probably more, come from Great Britain under the Imperial Preference rate and are therefore not subject to the full tariff of 33? per cent. at all. If the Minister was seeking revenue he could have secured it by the abolition of the Imperial Preference rate in relation to motor cars, and let English cars imported into this country pay the same duty as cars from any other country. I should like to know what corresponding advantage we get in return for the loss of revenue involved in giving that Imperial Preference.

I commented yesterday on the facility the Government gave in the case of an application from the Irish Glass Bottle Company for a reduction, or for the abolition of a tariff, compared with the difficulties which they put in the way of an application for an increased or additional tariff. As I said in one case, that of an application for a tariff, every conceivable difficulty is put in the applicant's way. He is made to prove his case up to the hilt before the Tariff Commission, and even if he convinces the Tariff Commission the applicant has then to convince the Executive Council, before the measure of protection he asks for is given him. But when it is required to take a tariff off, when it is required to breach a hole, even in the very low protective wall that now exists, all these formalities can be dispensed with, and by a simple arrangement between the Ministry and the persons concerned the hole can be breached and the tariff reduced.

I would like to be satisfied that in restricting the operation of the glass bottle tariff the Government were acting in the best interests of that industry. It is common knowledge, I think, that there are a very large number of glass bottle makers idle in the Ringsend district of Dublin. I think it is also common knowledge that the market for the particular bottles which it is now proposed to import free of duty is so small that it is essential that they be made by hand, if they are to be made economically. I think I am correct in saying that even in England, where the market is much larger, these particular bottles—ink bottles, vinegar bottles and the like—are made by hand and not by machinery. The glass-bottle-workers in Ringsend who are idle have put forward several proposals to enable them to restart and make by hand or by hand-fed machines the bottles which the Irish Glass Bottle Company could not turn out. They offered to purchase the Irishtown factory and start their industry there. But the Irish Glass Bottle Company which had purchased that factory with a motor car and several important articles of equipment for £5,000 demanded a sum of £12,500 for it from the unfortunate workers, who wanted to earn a living for themselves, and that particular project fell through. The Irish Glass Bottle Company were induced to instal a Foster machine as an experiment, to see if they could give employment to those unemployed bottle-workers and manufacture in smaller quantities the bottles which could not be manufactured by the larger machine. That hand-fed machine was installed, and three Scottish operatives were brought over, it was alleged, to train the Irish workers in the operation of it. The Scottish workers came but they made no attempt whatever to train the Irish workers. They went away again leaving the Irish workers with the same information concerning the machine that they had before. When the three Scottish operatives got back to Scotland they came together and made this declaration:—

"To all whom it may concern.— This is to certify that we the undersigned hereby declare that the first day the three local workers came into the Ringsend factory to start work at the Foster machine, we had just finished our shift at 4 o'clock p.m. and were remaining in the factory to show the local men anything we could to help them to get a good start, when Mr. Schofield, Works Manager, approached us and told us to go away home and not show these men anything. He also followed that up by saying: ‘Don't wait behind, but go home and show them nothing. Even if any person sends for you to-night do not come out at any cost till you come on in the morning for your own shift.' He then watched us till we got outside the gate. (Signed) John Fulham, Gas. Bohme, John Hughes."

When we hear of things of this kind, and when we try to follow the ramifications of the various negotiations that took place between the operatives and the receiver of the company, we are forced to the conclusion that there is something that requires explanation, and that something should be explained before the Government takes hasty action in remitting a tariff without reference to the Tariff Commission. We believe that if the tariff on bottles were extended to cover bottles which come in full, it would be a measure of protection to the industry sufficiently great to enable all these bottles, which it is now proposed to exempt from duty, to be made here economically, and supply the requirements of the whole country. The difficulty which existed was that, while English ink manufacturers, for example, import bottles full of ink and pay nothing on the bottles, the Irish manufacturers of ink who import bottles had to pay duty on them, which the English manufacturer escaped paying. It has been suggested already that not merely could these bottles be taxed, but that the contents of them could be taxed. There must be a very large sum exported every year for patent medicines, and if the Minister for Public Health cannot persuade the Government that it would serve the public health to impede the influx of what in many cases are probably dangerous concoctions, at least we could convince the Government that there is a legitimate source of revenue there, and that it would be simplifying the operation of the bottle tax as well. Of course, the Minister for Finance might think that by restricting the importation of patent medicines he might lose some of the death duties that he gains at present.

Mr. BLYTHE

The patent medicines do not help to supply the deficit.

Mr. LEMASS

The people who use them go on for ever. The Minister informed us yesterday that the yield from the duties on furniture, wearing apparel, boots, soap, etc., has remained practically stationary. In the case of wearing apparel and boots, it is quite obvious that the duty, as a protective duty, is inadequate. When the tariff on imported boots was introduced in this House it was stated to be an experimental tariff. It has now been in operation for over three years, sufficiently long to enable us to judge the result of the experiment, and the result of the experiment is that the tariff that was imposed is too low. The volume of imports has not declined. It was, in 1924, 1,900,000 pairs; in 1925, 1,800,000 pairs; in 1926, 1,792,000 pairs, and in 1927, 1,734,000 pairs, a very slight decline. The same applies to wearing apparel. I think that when he was preparing his Budget, the Minister was probably fully aware of the fact that as protective duties these duties were inadequate, but he had to bear in mind, I suppose, that because they were inadequate they were bringing in a very substantial revenue to the Exchequer. It amounts, I think, to £600,000 in the case of wearing apparel, and to £264,000 in the case of boots and shoes. The industries which are represented by goods imported under these categories are industries which it is obvious to anyone can be fostered in this country, and we believe that there should be no necessity whatsoever to import a single article under either of these headings.

If the Government is in earnest, or was in earnest when they stated that they imposed these duties as an experiment, and if they are prepared to take the lessons of the experiment and apply them to the situation, the obvious thing for them to have done was to increase these tariffs this year so as to make them adequate and give the necessary fillip to the home trade. I have no doubt whatever that, no matter what we on these benches may say, the Government will get the vote of confidence which is asked for by this motion. They will get this vote, not because the country approves of the Budget—I do not think it does—not because it approves of the Government's inactivity in relation to industries, but because a number of Deputies got themselves elected under the false pretence that they were independent, and I do not suppose that there were two of them in the House all day. They do not listen to the arguments. As I said, Deputy Gorey is the only independent Deputy here. These so-called independent Deputies stand out in the lobbies and come in to vote whatever way the Government Whips indicate to them whenever a Division is challenged. The Government will get this vote of confidence. It will continue to carry on; it will continue to act as a brake upon any effort to stimulate industrial activity in this country because of the fact that these Deputies are here and are prepared to vote for them.

If, however, Irish enterprise is to be given a chance, if there is to be any lessening of the volume of unemployment, if there is to be any cessation of the emigration which is denuding us of the best blood of our race, we must change policy, and we can change policy, I believe, in a manner which will produce immediate results in relation to these things. It only requires the will to do it. I believe that what is holding the Government from taking vigorous action in relation to these matters is not so much that they do not see the need for action, but that after five years in office they are now suffering from a form of inertia which keeps them inactive and induces them to take the easy course whenever any question arises that calls for a serious decision.

I think that the Minister for Finance indicated that a re-organisation of the Civil Service was possible. Despite what Deputy Davin or Deputy Anthony said, we believe that it is possible. If the Minister for Finance believes that, it is up to him to accept some suggestion, such as that made some time ago by Deputy Flinn, to appoint a genuine economy committee that would go into every department of the Government, as a firm of auditors would go into every department of a private business concern, cut out every unnecessary official and speed up, rectify and improve the machinery in every respect. If that was done, and if a vigorous and progressive policy in relation to industries was adopted, we believe that a very different situation could be produced in a short time. However, the Government have decided not to do that because they prefer to let matters drift. We on this side of the House will oppose this motion as a vote of confidence in the Government.

Mr. McGILLIGAN

It has been urged in criticism against Deputies on this side of the House that so far there has been silence, that there has been no attempt to defend the Budget, no attempt to answer criticism. I do not want to keep silent any longer than is necessary, but I find it very hard to speak on this matter. One cannot argue with people whose main argument against a particular proposition is that they believe something, and who believe that, by saying they believe it with a certain amount of vehemence, they create the impression that they have made a point. Deputy Lemass is convinced that there are a number of civil servants who are unnecessary. Nevertheless he thinks that a committee should be appointed, like a firm of auditors, who would go into the affairs of the State and see where the unnecessary civil servants are. In other words, a committee whose terms of reference would be that whereas Deputy Lemass is convinced that there is a certain number of inefficient and unnecessary civil servants, a committee should be set up to decide who comes under that category. But Deputy Lemass has no idea of the Civil Service. He has as little idea as Deputy de Valera, and Deputy de Valera stated that, having no access to the offices, not being able to investigate files, not being able to look at the work that is being done, it must be remembered that people on that side had only a surface knowledge of what was happening. But with this surface knowledge, and with Deputy Lemass's conviction, a great body of honest, hard-working people are slandered.

Mr. MORRISSEY

A great many of them underpaid.

Mr. McGILLIGAN

I said before that the only limit to that particular type of campaign is just whatever activity a person's decency of mind would lead him to put upon the activities of a slanderous tongue. But we get it repeated again and again that there is a big number of unnecessary civil servants in the State, and that there are people who are inefficient. Deputy Lemass, at least, should have had some evidence of that. He should have been able to say: "There is a Department that I have some knowledge of, that even as a Deputy visiting I have been able to see for myself that there are certain people who are not engaged in work when I go to see them." He would then be able, at any rate, to make a prima facie case instead of merely saying “I am convinced.” That type of conviction is no good; it carries no weight unless some evidence is given, and we have repeated here, not for the first time since Fianna Fáil came into the House, that there are members in the Civil Service being paid, that some are inefficient, presumably working to the best of their capacity, but not capable of very much good work, and that there are others who are unnecessary.

If I started to talk in that way with regard to Deputy Lemass and any business organisation that he has charge of, if I said outside, with regard to Deputy Lemass's business that it was badly run, that there were quite a number of people in it who were not capable of handling the business they were trying to do, I would find myself in the courts pretty soon. Why should a man come in here and attack a body of people who are not able to defend themselves, and who, even through Ministers as spokesmen, cannot be defended, because the charges against them are vague? And not a solitary item is given by anybody with regard to unnecessary or incapable civil servants. Why should there be one standard with regard to criticism of people in business in the outside world and why should the limitations that are put on people's tongues with regard to slander be done away with when one comes to speak of the civil servants, who are carrying out the wishes of the State, as evidenced by legislation, and as evidenced by the work of the Departments that they do?

We are blamed for silence. When a certain amount of objection of that type is urged in debate it should be of a serious character. No attempt made to defend? I am making the attempt to defend the Civil Service at any rate from the type of charge which Deputy Lemass, in the most casual and indifferent manner, has thought fit to make against a certain number of people. As I have said, he was not able from his personal observation in my Department to name individuals without doing so in such a manner as to have them identified afterwards, as being either incapable or unnecessary in any office that he knows. By repeating that sort of thing frequently and by putting a certain amount of emphasis on it, Deputy Lemass seeks to create the impression that he has made a case against civil servants.

We are having the Civil Service position examined by people with a knowledge of it and by people who know what a civil servant of a particular grade ought to be able to do. If there are any economies to be made we will have them made, and afterwards, when the Committee has reported, we can see what we think is best to be done in the way of reducing the Civil Service, if that is found to be necessary. It will then be for Deputy Lemass or any other Deputy to ask that further enquiry should be made, to give some proof that there is still an unnecessary number of civil servants if it is revealed at any time that the number of civil servants is unnecessary. On that, the Deputy can ask that a further investigation be made, founded on the results of the work of this Committee, which is the only possible Committee capable of making a thorough investigation of the Civil Service. There may be other people who will bring a different point of view to bear on the work of the Civil Service founded on the results of what the first Committee has reported. But it is certainly not a thing that should be tolerated in the first institution of this country that people occupying prominent positions and composing a large Party in this House should simply, in a casual way without a vestige of evidence, make the statement that they are convinced that there are incapable and unnecessary civil servants operating here.

We are told that the main cause of the decrease of business in this country is the burden of taxation. We are asked by Deputy Lemass if there is any other reason why Irish capital cannot be got to fructify in Irish enterprise than the fact of the present burden of taxation. I do not know of any case in which people who were anxious to put money into Irish enterprise did not proceed to do so by reason of the fact that they were afraid of taxation. They were generally afraid that there were going to be no profits on which they might be taxed, but in no case that has come to my knowledge have I found people who were anxious to start industries in this country who were prevented by reason of the fact that there was a burden of taxation to be borne here. Deputy Lemass has spoken in a different tone to-night with regard to the builders or importers of motors, lorries and buses from the way in which he previously spoke about them. I have heard the statement frequently from the opposite benches: "If you do not put on a tax immediately on imported motor bodies the country is going to be flooded with imported buses and imported lorries." Now the situation has turned, apparently. We are now told that, by putting the tax known as the McKenna duties on particular types of motors and motor tyres, we are going to deprive a tremendous number of workers in this country of employment. That is the case made to-night. The Deputy said that he had read a certain case made against the proposal to impose this particular tax, and he indicated that he did not agree with it entirely.

Mr. LEMASS

Is it not a fact that the new tax will not go on the bodies at all but only on the chassis?

Mr. McGILLIGAN

I have not said that it does go on the bodies. But the people who were previously importing buses into this country were held up to scorn here. It was said that these people were not inclined to get the bodies built in this country, that if we did not tax the bodies imported here but left the matter to the free will of the people going to run omnibus and railway services in the country, that all these motor bodies would be imported. Now the argument is switched the other way. We are told now that, by taxing not the body but the chassis, we are in fact preventing a big number of people who had intended bringing chassis in here and getting Irish bodies built on them from doing so. That is a new point of view adopted by the Fianna Fáil Party towards the people who, it was previously said, if left to their own devices, were not going to get the bodies made here. Now we find that orders have been placed for bodies here, so we are told in the newspapers, and that a very big number of Irish people are going to be employed in the making of those bodies, but that the chassis are not going to be brought in because there is only a certain limited amount of money to bring the vehicle in, that therefore there is going to be less of them bought, and consequently less bodies made in Ireland.

AN CEANN COMHAIRLE

resumed the Chair.

Mr. LEMASS

I hope it is clear to the Minister that I did not say that.

Mr. McGILLIGAN

The Deputy was careful to say he did not agree entirely with the arguments in the newspapers. We will find out later with what he does agree. He has made the suggestion that if a protective tax is on at all it should be put on the bodies rather than the chassis, but we have to see with what points in the case made in the newspapers he agrees. Coming to the remission of duty on certain types of bottles, we are told of the speed and alacrity with which the Government have given away in remitting portion of the protective duty, and are asked to contrast that with the delay and difficulties in the way of those who seek to get protective tariffs imposed for the benefit of producers in the country. If there is a contrast to be made, certainly it might be made over this matter. This remission is, in fact, a help to the protective duty—that part of it was truly protective and the rest of it was not protective. If there is anything in the argument Deputy Lemass used about workers being idle when there is a particular type of bottle in the employment of which machinery makes no great difference, one naturally asks why these hand workers were not employed in making that type of bottle for which there is sale in the country, and which can be made as cheaply here as outside the country.

Mr. LEMASS

That is the question.

Mr. McGILLIGAN

The answer is, it was not done, and there must be something more in it than that bottles were being dumped.

Mr. LEMASS

Is not that a case for investigation by a commission?

Mr. McGILLIGAN

That case if it is to be made can be investigated. The position is that one factory is kept alive by the imposition of a duty of a bottle tariff, and which is impeded in its business by having to attend to these demands for all types and conditions of bottles. There is no one coming into this country prepared to set going a factory for that type of bottle. In those conditions it is not merely useless but an impediment to the proper working of the bottle factory to keep that tariff on. Further, as to the speed with which I am taking that off, for quite a long time the glass bottle people have been demanding that the tariff on that particular type of bottle should be done away with. On the other side, as to the question of difficulties and delays, as Deputy Lemass has peculiarly described, on the part of people who want a tariff put on, and that they would have to convince first the Tariff Commission, that there would be put in their way every impediment, and having overcome these they would have to convince the Executive Council, Deputy Lemass has never yet got it into his head that of the taxable imports 50 per cent. were already taxed before the Tariff Commission was set up, and there was no question of difficulties being put in their way by the Tariff Commission to be surmounted. The Deputy said that afterwards difficulties are put in their way by the Executive Council. There was such an investigation, the Department went into the circumstances, a recomcommendation was made to the Executive Council with regard to these tariffs and was adopted. Now the situation has changed and any difficulties that have to be surmounted are to be surmounted before the Tariff Commission and not before the Executive Council. There have been only two tariffs so far. There was no occasion for the Executive Council to have a case argued before them. The Reports of the Tariff Commission were received and accepted. The Deputy might reserve his remarks about difficulties being put in the way of those seeking protective tariffs by the Executive Council until he gets a case where the Executive Council has decided to have a further investigation after the Tariff Commission has reported.

I move to report progress.

Progress ordered to be reported.

The Dáil went out of Committee.

Progress reported. The Committee to sit again to-morrow.

The Dáil adjourned at 8.30 p.m. until 10.30 Friday, 27th April.