On the last occasion, when the discussion on the Fifth Stage of this Bill was adjourned, I was trying to point out that under this Bill a greater burden of taxation is imposed on the people of the Saorstát than they could bear. You are not alone imposing this taxation upon the wealthier classes of the community, but, as the Finance Minister tells us, you are basing your calculations for increased revenue on the fact that the business men of the Saorstát are doing well, that their profits are increasing, and in representative firms you have been able to point to increasing profits, so that on that score you also propose to increase the taxation on the farmer and labourer. You are also adding to the cost of telegrams and putting an additional farthing a pound on sugar. The total effect of that is that you have to gather, in one way or another, a sum of £24,000,000 a year. That is the standard of expenditure you have set up, and you have to raise money to enable you to meet that standard. I was trying to show the House that not alone is the nation unable to bear that standard of expenditure and the accompanying burden of taxation, but, as a matter of fact, so long as you impose undue burdens on industry and enterprise, and so long as you maintain taxation at the present high level, you are steadily eating into the capital reserves of the community.
That may not appear obvious to the Minister for Finance, who bases his calculation upon the account books of a certain number of business men. If he were to take the accounts or conditions of farmers and labourers who are a more important section of the community than even business men, he would find that not alone is he, as I have said, imposing further burdens on them and restricting employment and production, but he is actually eating into the capital resources which would otherwise provide employment which is so badly needed. A well-known economist. Sir Robert Giffen, who gave evidence before and rendered valuable service to the Royal Commission which was appointed in 1897 to inquire into the financial relations between Great Britain and Ireland, estimated that the income of a country could be found by taking approximately twice the gross assessment for income tax in any one year. If we take that as the basis, and take the gross assessment of income tax for the last year for which we have figures available, we will find that the amount from all sources would be £125,000,000. Out of that we have to make allowance for the subsistence of the people, the amount actually necessary for them to carry on to meet their daily requirements, and to secure the necessities of life. The basis that has been calculated on is a basis of £32 a year. That is not a very large sum. It covers the actual necessities of an individual citizen of the State, and, if you estimate the total amount which would be required in order to allow for the subsistence and maintenance of your population of three million citizens, you get, roughly, one hundred or one hundred and one million pounds.
You therefore subtract that amount which would be necessary to provide for the subsistence and maintenance of your citizens from the total gross income based on income tax, which is as good a criterion as any other, and you get a margin of £24,000,000, which is not much greater than the present amount of expenditure. It therefore follows that even if there is a margin it is very small if it is on the right side. But the margin must be on the wrong side, because, not alone have the people to find £24,000,000 for the expenses of central administration, but they have also to get £5,000,000 to pay for rates and local services. Consequently I think it is quite clear, and there are no figures to prove the contrary, that year by year you are steadily eating into your capital and steadily taking away from production in agriculture and industry resources that ought to be available, especially in a depressed period such as we have at present. You are also maintaining expenditure which is on a very high level if you compare it with the total export trade, which amounts to £45,000,000. You have to take a high proportion of that to pay for central government expenses. If you are going to make up the adverse balance of trade and put it on its right side, and wipe out the £16,000,000 which is standing against you, and which Sir Josiah Stamp is so anxious to wipe out by good marketing, I would like to know what schemes could the Minister for Agriculture produce or what wonderful changes he could effect in our agricultural economy, especially in the marketing of our produce, which would enable us, if we did not take other steps, to wipe out that adverse balance. The big way, the way that has been followed in England and other countries, is to endeavour to bring the scale of expenditure down to the scale which ordinary people can bear. We must remember that a farmer who in 1920 had his agricultural produce represented, say, by a figure of 300, has had that figure now reduced to about 120, almost one-third of what its value was previously. The farmer, out of that tremendous reduction, still has to pay and maintain in many respects a higher scale of expenditure than he was asked to do at that time.
It follows, therefore, that in endeavouring to provide for the farmer by means of agricultural schemes, by wiping out the middleman, by trying to bring him into direct touch with markets and with those who will supply him with his requirements, you are forgetting the greatest middleman, the man who extracts more from the farmer than he can produce by his toil, namely, the middleman of State interference. Your only answer to the farmer, who tells you that he cannot bear the extractions of that middleman, who tells you that you are crippling him, that he cannot increase his productivity, is that you are giving the farmer services for the money you are taking from him. You have heard a great deal from the Minister for Finance regarding these services. If you go through the Appropriation Accounts you will see that such services are not, in reality, very big. In arterial drainage, for instance, you have a state of affairs in which you have not been able to expend for the benefit of the farmers the amount of money available. I do not know who is to blame for that, but the money has not been spent. It is not only in that, but in other Departments in which money was available for productive work, that such money remains unexpended, money which you told the farmers was going to be expended for their benefit.
The Minister for Finance tells us that money that is raised or estimated for will be spent during the current year. We expected that something bigger and greater would have been done by the Minister for Finance to show that in spite of the economies he wants us to believe he is trying to make, that he cannot reduce taxation. We would at least expect him to take some steps to increase production, some such steps as have been taken in England, some steps to reduce freight charges, or some steps to increase the agricultural output— there are various ways in which it could be done—some steps, at any rate, which would give the farmer something in exchange for the taxation you are taking from him. The position is that you have given him nothing. You have not expended the money you have granted in a great many cases. As regards the town labourer, on whom you are imposing a fresh burden in the increased cost of sugar, you are not, I submit, holding out any hope to him either that this additional taxation represents, in the long run, something that that will come back again to him in the form of employment. You are not building houses. You have had a long period during which to produce your housing policy. You have raised two loans, and in spite of the fact that that money should have been spent upon reproductive work, what has actually happened is that the Minister for Finance, on finding himself running short, in the squaring up of the Budget Account, because of the abnormal items that still persist, has wilfully put these amounts against those abnormal items which are of no use to the country, which do not benefit the country, and that money which he has set aside for those non-productive services, such as the Army, pensions, and so on, has to be taken, naturally, from other services, such as housing, in which we expected that the Minister for Finance would do something big.
There is the question of the general position of taxation in this country. When we were discussing it here on the Report of the Committee on Public Accounts a great many members did not think it worth while to wait. Ministers themselves seemed to be rather irritated at some of the things that that Committee had said. The Committee at least represents the House. It is a Committee appointed by the House. It is not, as far as I can see, a Party Committee. It is simply a Committee, like the English Committee, to see that when money has to be spent and when the Dáil sanctions money to be spent, that money will be spent wisely, effectively and with economy. Therefore, we must pay attention to the Report of that Committee just the same as we must pay attention to the eye of the foreign investor. The Minister for Finance tells us that never before were we so keenly under examination by foreign investors. I submit to him that foreign investors are pretty well able to look after themselves when it comes to bargains, and that there are other people besides the foreign investor who deserve some attention. These are the people who are crying out against this burden of taxation. You are paying a higher rate of taxation than the people in any other country except, perhaps, England, and in that country, with £800,000,000 of taxation, a large percentage goes for the service of the public debt. You cannot even institute a comparison if you take into consideration the public debt of Great Britain and the tremendous extent of her international resources. You cannot institute a comparison and say that we are well off if we are not paying as high a bill in taxation as they are paying in Great Britain.
If you take the figures for Italy, Germany or France, or of any of the countries that have successfully survived the war and that have had to undertake gigantic schemes of reconstruction, much greater than the Free State has to undertake, you will find that all those countries which can give a good account of themselves and compare favourably with us in the matter of production, have managed to keep taxation at a very much lower figure. I think if the Minister tells us that the cause of the high taxation is the additional services which have to be provided, that if we look at it from another point of view we come simply to see that what he means is that he is feeding the dog with a piece of his own tail. That is a process which cannot last indefinitely. It means that you are dictating to the Irish taxpayer and that you are telling him that you, in effect, are better able to manage his income than he is himself. The best way to increase prosperity, to give confidence to the taxpayer, is to show him that you are out for economies; that you are doing your best to effect retrenchment; that it is not merely a question of using a few phrases in your annual Budget speech and that you have a definite policy which is not merely to please your foreign investors in whom you are interested, but which is going to secure the co-operation and the support of the producer at home.
I do not think I have anything further to add. I simply wish to say that so far as the Budget statement of the Minister was concerned we were disappointed with it. It did not lay down any definite lines of the policy which he proposed to pursue in the country in the future. He did not lay down any large scheme for the relief of agriculture, or of the unemployed of the towns. It did not make any definite suggestions of what was being done to effect economies in the Government services. We know that there is wastefulness, that there is bound to be wastefulness, and that it is not altogether on the shoulders of the Minister for Finance, that he has had to grapple with the situation which was handed over to him, and that he is trying to make the most of it. What we want him to do is to take the House into his confidence. I submit that in that way he will get co-operation, help and encouragement where otherwise he would only get criticism.
