The only thing, so far as I can see, upon which we can congratulate the Minister for Finance in regard to his Budget is the effort he has made to enable orchestras and artistes to continue to live in this country. I agree with a great deal of what Deputy Anthony has said in regard to talking films. The question of the general demoralisation and overspending going on in the City of Dublin and causing such discontent among the farming community is not a matter that we can go into very deeply here. But when the Minister for Finance goes out of his way to refer to certain tendencies that are being manifested in expenditure on entertainment and so on, when we have the daily Press reporting that a certain well-known racing function was more successful this year than it has been for many years, and also when the Minister for Finance says that, according to the examination carried out by his Department, there is no reason whatever for the remission of a particular duty, it is certainly extraordinary that he should come along, in spite of these factors, and remit that particular duty. We see letters in the Press from Dublin traders stating that a large number of people attending those functions and professing to give a lead in social affairs, are very slow in squaring up their accounts afterwards. I think that the Minister for Finance, if he went into that question at all, should have gone a little more thoroughly into it.
My own opinion, which I expressed before, is that the hire purchase system is bound to lead to trouble. It has committed a large number of people in receipt of regular incomes to charges and obligations which they now find themselves unable to maintain. If some steps had been made to curtail expenditure and to cut down these extravagant advantages that firms profess to give people by giving them materials for nothing, even without a cash deposit in the beginning, I think it would have been an effort at any rate to curtail this extravagance.
The Budget shows also that we have certain items appearing as Exchequer assets which in fact are not assets. Other speakers have referred to the question of the creameries. The State expended something like £700,000 on these creameries, and at the time that the money was being voted we questioned whether it was good national policy, or even good business, to pay such a large sum. The outlook at that time for the dairying industry may have been better than it is now, and the Minister for Agriculture may have been justified in taking the step he did to get control of this important industry, but if we are to continue to write off the assets which we are supposed to have in this industry at the rate at which we are writing them off this year, £168,000, then, in three or four years we will find that the £700,000 which he advanced may be completely written off.
If the dairying industry improves to such a condition that these assets will appreciate above their present value nobody will be more delighted than I, but anybody who is acquainted with the circumstances and who has given any study to the circumstances prevailing across the water must believe that the present depression in agriculture is going to continue. I think, therefore, that the Minister for Agriculture, so far as his Department is referred to in the Budget statement, has very little upon which to congratulate himself. He has staked the greater part of whatever little reputation he has left on his efforts in this matter of the dairying industry and the financial effects have been disastrous. I do not know that any business man would be tolerated for five minutes in any business concern who could not conduct a business transaction of such magnitude on a better basis than the Minister has conducted this.
There is also the question of the sugar beet subsidy. The Government contend that they have made a ten years' contract with the proprietors of the beet factory and that they cannot break that contract. What was the object of the sugar beet subsidy? Was it to enable a number of financiers, when the money was not forthcoming in this country, from Belgium and Czecho-Slovakia, having invested £380,000, to reap the advantage of a subsidy of ten millions, which will enable them to clear out at the end of the period, having got their factory as well as their sugar beet free for the entire period? It has been suggested that these gentlemen may be philanthropic enough to remain on after the end of ten years. I cannot see any hope that they will unless the subsidy is continued. If we look at the figures or the accounts of the undertaking, we must conclude that they are working on the basis of a ten years' period, and they want to be able to clear out after the ten years if they see no possibility of making substantial profits after the subsidy has terminated.
The Minister for Agriculture stated that the object of the subsidy was to increase tillage. Recently he stated in Athy that the Government were not to blame in this matter of grain growing and the future of the nine or ten counties that are very substantially interested in the matter. He stated that we have given them an alternative, the beet subsidy, but the point is that although they gave a definite contract and a definite promise to the factory for that ten year period, the grower had no security after the first three years. You are now in the position that you have a number of small farmers who, because their productive capacity was low, and because the factory did not consider that they were the best people to deal with, were excluded in the earlier years and the bigger growers who built up the success of the undertaking and made a name for themselves, because I believe they have been as successful as growers in any other country and even more successful, are now in danger that they are going to be entirely excluded. The factory may be able to drive a hard bargain with the small farmer who considers that he has a grievance because up to the present he has made very little out of the undertaking. He is in very penurious circumstances at present and he is willing to seize any straw whatever that will enable him to get hard cash. The price offered is 38/- this year and it may be 34/- next year if the present circumstances continue. The factory can take advantage of the condition of the small farmer and can force prices down in competition with the prices of barley and oats. It will simply mean that the sugar beet subsidy instead of being an encouragement to the agricultural community, particularly to the farmers who employ labour, is simply going to be used as a method of extorting slave labour and of extracting more from the small farmer than the State is entitled to allow. I think the Government had a good case for interference in this matter. They had public opinion behind them. Even now I contend they still have a remedy. As well as a ten years' subsidy we are granting an indirect subsidy in the form of remission of duty on sugar manufactured in this country.
Although it is proposed to increase the Customs duty this year, the preference to the Sugar Manufacturing Co. is still going to continue. Does the Government contend that in addition to the payment of a direct cash subsidy which the country is paying, in the new circumstances where the factory is stepping over the heads of the growers, breaking up their association and trying to drive the hardest terms they can with the small farmers in order to get an acreage—does the Government think in these circumstances—it is justified in giving a preference in the form of an indirect subsidy? If, on the other hand, the Government has a policy for developing the beet industry in this country after the ten-year period, and if it has any plans for maintaining it or extending it, I think the sooner the Government takes the country into its confidence the better. The position at present is that there is wholesale discontent and great resentment naturally between the growers who have been working up to the present and who refused to grow this year and the small growers who are coming in. I think the Government should have some policy to deal with this matter.
Another matter which is very disappointing in the Budget is the failure of the Minister for Finance to effect any economies. He has admitted, in the way that he seeks to collect the tax to provide for this temporary relief for farmers, that he is working on the principle that those who get relief shall in the long run pay for it. He is working on the principle that the Minister for Agriculture has so often criticised, that you are going to take money out of the farmer's pocket with one hand and put it into it with the other. This is exactly the same thing. It could be argued that even within the limits of taxation, the Minister for Finance had other opportunities for getting the yield than by direct taxation. In the case of petrol, for example, although it may be argued that there is a case, apart from de-rating altogether, for transferring the onus of maintaining the main and trunk roads to the petrol tax and motor traffic generally, the Minister for Finance, in an endeavour to make the case that the petrol tax will not in the long run come back to the farmer, states that he is relying on the fact that the retailer will not pass it on.
What is the position of the retailer? The position of the retailer is that the retail price is fixed by the combine, that price is to be charged, or else the retailer is forced out of business, and can be forced out of business tomorrow by the action of those foreign combines. Even the Government of this State is not able to prevent that, so far as I know. If you take the case of those people who have small garages and try to get into an independent business, or those shops who carry on side lines and whose total revenue is not great, is it to be contended that in such cases those people should not pass on this 4d. tax to the consumer? It seems to me that it must be passed on. You cannot go to the very end of the scale and ask the people who have a very small turnover and a small business to reduce their profits not already very much. You have such cases of persons in this industry, if it can be called an industry—at any rate a distribution service—where there is wholesale depression, and where there are too many people trying to operate where you have cutting of prices, and a number of failures. In such cases it must be passed on.
If the Minister for Finance said that taxation should be imposed upon motor merchants who sell big cars, or the man who sells tyres or other accessories, there would be an outcry from that part of the population. But here is a case where, under the pretext of maintaining the yield of tax, the Minister is putting on a tax that is going to be transferred, and it is a tax that is going to lean heavily, perhaps not so heavily as the sugar tax, but, nevertheless, is going to lean not alone on the poor people who are in the distributing business, but it also will lean on those who are driving or hiring cars. In the long run, it may be the taxi-driver who will have to pay far more in comparison with his earnings in the way of petrol tax than those people whom we see every day driving their cars into Grafton Street because they are too lazy to walk from their residential quarters, and they leave these cars here in the streets of Dublin.
The fundamental point as far as agriculture is concerned is that agricultural prices, as has often been reiterated in this House, have gone back practically to pre-war level and the cost of living is coming down. How is the agriculturalist to live in the intervening period? In a great many cases he is in debt already; certainly he is not making a profit and if he is borrowing money from the Agricultural Credit Corporation his last case may be worse than the first. How is he going to live in the intervening period? If the philosophy of the Government Party is right and if they stand by what was said in the De-rating Commission Report that there is danger that in the matter of protective tariffs we are feeding ourselves with our own tail and that subsidies or bounties or relief to agriculturalists in any form must tax the non-agricultural community, such a policy is therefore to be decried.
If that is their policy how can they explain why agriculture is being forced by the rest of the community to maintain a standard of living and to maintain services that it is not able to maintain? You have that in the congested districts areas which were referred to by Deputy Walsh last night where as far back as 1901 there was a Government Commission report stating that in those areas it was the case of the poor maintaining the destitute—a state of affairs that is still existing there and you have that state of affairs all along the West coast of Ireland. On the other hand you have counties where you have substantial farms but a large number of these farms are derelict. The farmers there are in debt and there is no future whatever for the farming industry, particularly in the tillage areas. This is not a new phenomenon. It is going on for a hundred years. The De-rating Commission coolly set aside the whole question of agricultural depression, and on the other hand they tell us that world conditions are very serious and must be looked into. The Minister for Finance said that world conditions are going to rule the whole question for him and asked what is he to do.
World conditions have been pressing on agriculture for a considerable time. World conditions are now against the Irish farmers, and world conditions, so far as we can reasonably see, are going to be against them in the future. The farmer has a very sound instinct which the Executive Council have counted upon in this relief, and that is the instinct that this feeding him with his own tail is no good and that it is not going to lead to anything. There is danger that the whole case of the farmer may be prejudiced if the country is going to be committed to the position that the only way in which you can discuss relief for the farmer is on the basis that there must be a tax on the rest of the community, and in the long run that tax is to be passed back to the farmer who bears two-thirds of the primary producing capacity of the State.
The farmers want a reduction in their overhead expenses; the farmers want a reduction not only in their central taxation but in their local taxation. I am greatly against the suggestion of the Minister for Finance of appointing managers to go down to the country. Where the farmers' representatives have bitterly fought against any increase in the local rates in the past, the managerial system itself is not going to effect any change in the matter of local taxation. No matter how efficient managers may be so long as the system remains as at present, so long as the town standards are set for country agriculturalists, so long as the rural communities are forced to maintain certain services that they cannot maintain, the managerial system is not going to get you out of the difficulty. If local rural communities were allowed their way in this matter they would, unfortunately, do away with a large number of these services. The taking over of these services by the State may mean, as the De-rating Commission points out, great extravagance and a large increase in these services. The only hope is to do what you are asking the local bodies to do, and what you are constantly criticising them for not doing. Why not turn round and do the same thing yourself? Yes, the Minister for Finance, the national manager, the national housekeeper, has not effected one single economy that he can point to or that he can show the agricultural community.
I have not forgotten that over and above all there is this problem of bringing him up to the general standard or reducing the general standard to the level that our agricultural industry can afford. If there had been strong action taken on this matter of public expenditure, I feel that something might be done to bring down prices and effect a readjustment. But the trouble at present is that the whole readjustment is being effected slowly and painfully at the cost of the agricultural section of the community. The agricultural section of the community have been driven out of business while that course is manifesting itself. We have been charged by the Minister for Agriculture that there is some change in our policy. There is no change in our policy. Our policy was well shown in the amendments that we proposed to the Land Bill which, we made it quite clear, were put forward in order that encouragement should be given to the small farmers.
That is not the Fianna Fáil policy. It is the policy of every Party in this House. It is the State policy. You have a huge Department of State, costing hundreds of thousands of pounds, and its chief business is the carrying out of that policy, making economic holdings and wiping out the enormous grass ranches, putting in their stead hundreds of families. That is the policy that the President of the Executive Council asked the country to compliment him upon when he spoke recently at the Cumann na nGaedheal Convention. At the same time as they pretend to carry out this policy, they are going to relieve these people. These people have already been relieved through the Land Act. They are going to receive extra compensation for disturbance. The land is going to be taken from them in pursuance of a policy that says it is better for the country to have ten families living on a certain area of land than to have only one man with his herd and his dog. When they are carrying out that policy they will now have to pay extra compensation to those people, and I contend that the compensation will be so much that they will not really be able to take the land; at any rate, if they do acquire the land it can be only taken on terms absolutely uneconomic from the point of view of the people whom it is intended to place upon it.
The President tells us that he has a policy for the Gaeltacht. It has been well said by members of his own Party that these people ought to be paid in order to live in the Gaeltacht. The Government are prepared to give an advantage which to my mind, seems to run directly counter to the State policy of splitting up the ranches. They are prepared to give extra compensation for the lands that will be acquired. Are we now to proceed further, and give these people heavy relief in the matter of local taxation, while at the same time we are not giving corresponding relief to the poorer people in the community? As I have indicated, there are in this country areas where the poor are maintaining the destitute. There are places where the valuations are £1 or £2, and yet people are expected to live there and bring up families. Are we not going to give these people adequate benefit? To my mind, you are giving these people not the same benefit, but far less benefit. You are going to take away from them far more than you are giving to them. On the other hand, you are giving every advantage to the other classes, whom you are obviously encouraging.
It is apparently the State policy to try to bring these people into the country who did not think it was safe or good to live here after the Treaty was signed. The general taxpayer is being mulcted to the extent of a remission in income tax of 1/6 in the £. That has been remitted in order to encourage those people to come in here. Is it suggested, if those people come back here, if they are worthy people and have connections with the country, and if they will be of advantage to the areas where they reside, that as well as remitting income tax and giving special privileges to them, together with all the other amenities the Government are giving them, they will be also given relief from rates? Are we going, in the case of the man with a valuation of £1,000, to give him this extraordinary relief in rates over the whole of his valuation?
Our policy, as it was set out in the Land Bill, is to give preference to the small man, and we do not think the man who has nothing else but a grass ranch and who gives no employment is worthy of consideration. There should be, in the case of the congested areas, a limit below which you must either abolish rates altogether or give better services. The Government could, for instance, give a much better medical service than at the present time. The people are being given only small relief in the matter of public health. Public health services could be improved in various areas. I realise that to abolish rates altogether in these areas will create difficulties which at the present time cannot easily be solved. On the other hand, you have areas where you have substantial farms, where the farmers have been endeavouring to carry on and to give employment, but they found it impossible to do so. We maintain that these farmers deserve relief in so far as they contribute to production and give employment. Many such farmers maintain four or five labouring families on their farms, and, in such cases, they are entitled to relief.
Our first duty is to the small man, who is at present living simply under slave conditions. The small man has been taken advantage of, and he will have to remain in his present position until we set our house in order and tackle this question by reducing expenditure at the top. If there was some indication that the Government were going to go into this whole question of agricultural rating and examine the question thoroughly, they might have met with more sympathy. It would appear that at the last moment they decided to throw £750,000 at the farmers as a sop to keep them quiet. The basis of allocation does not seem to indicate that the difficulties in the congested areas and in tillage counties like Wexford, where there is great depression, and where there are 9,000 agricultural labourers deserving of consideration, have been gone into. Those matters ought to have been considered from the very beginning.
The Government should, at least, institute a system of local taxation that would tend to assist the agriculturist. When we take the whole circumstances of the agricultural industry into consideration, I think we will agree that there is a strong case for a de-rating system. The whole tendency is to increase indirect taxation. The farmer has to pay his share of that. He is paying at least 43 per cent., according to the De-rating Commission's Report, of the Customs duties, the protective duties that have been imposed. He is paying more than 43 per cent. in the case of some items. When you are offering £750,000 you are not, as was semi-officially admitted in the Dublin Press, giving back to the farmers all you have taken from them under the protective system. We recognise the difficulty in regard to protection, and we are prepared to support a plan of de-rating on a basis which will give remission where remission is most required. On the other hand, we will safeguard the State against giving undue remissions in income tax and in the matter of an agricultural grant to people who really do not want them.