Dáil Éireann díospóireacht -
Friday, 13 May 1932

Vol. 41 No. 13

Financial Resolutions. - Financial Resolution No. 26—General. (Resumed).

Debate resumed on the following resolution:

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.—(Minister for Finance.)

Mr. Finlay

The Minister for Finance, in introducing this Budget, at the outset of his speech, saw fit to describe the capital position of this country, and suggested that something like £115,000,000 was the amount of the National Debt. One would be at a loss to understand the reason for introducing this figure at the outset of the speech were it not that when one considered the remainder of his speech he was forced to the conclusion that the figure was simply introduced as a blind to persuade the people of the necessity for the grossly exorbitant imposition which he has placed on them in the Budget. To arrive at this figure, £115,000,000, the Minister has seen fit to describe as the contingent liability of this country £74,000,000 in respect of land annuities or land guarantee payable under Land Acts prior to the Act of 1923, and some £24,000,000 which is attributable to land bonds payable under the Land Act of 1923. Later he blandly told us that the only assets which this country has to answer this contingent liability of £100,000,000 is a national revenue of some £25,000,000. I must congratulate the Minister for Finance on his methods of accountancy and book-keeping. Probably few of us on these benches aspire to the position of Minister for Finance, but if it is a necessary qualification to make ourselves proficient in this new method of accountancy and book-keeping, then I fear we would all grossly fail, because it would appear to be somewhat elementary that an asset which this country has and which counterbalances any contingent liability in respect of this land guarantee under the Acts prior to 1923, or the land bonds which were payable under the Act of 1923, is the land itself, which the annuities are charged upon and which would appear to be security for it. It may be that the Minister thinks the land of this country of no value and accordingly dismissed it by saying that the only assets we have are £25,000,000 of taxable revenue. If that is his view, then it is certainly rather peculiar on his part when regarding the land of this country as of no value to impose an abnormal liability by this Budget, which, to a large extent at any rate must be ultimately borne by the land and those interested in working the land.

I must congratulate the Minister in the first instance for the jovial manner he adopted here when introducing this Budget. I represent the same constituents as the Minister, and I am sure they will feel greatly relieved when, considering all the blisters imposed upon them in the way of increased income tax and other impositions, they know that the Minister was in light heart when he announced them to the Dáil. I thought at first that probably his light heart was simply to make easy for the taxpayers the increased impositions which he placed upon them, but perhaps it is due to another motive, or another thought on his part because, if rumour be correct, he is not to participate with the ordinary taxpayer in paying increased income tax which in ordinary events would be payable by him for the remuneration he has received, and will receive, in thinking out the imposition which is placed on the taxpayer. Consider this Budget in any light you wish. I understand that the policy of the Government as announced prior to the elections was that the chief requirement of this country was the cutting down of expenditure—in other words, setting a headline as to what was the taxable capacity of this country. In the Budget which they have introduced, apparently they have entirely departed from any consideration as to what is the taxable capacity of the country. It is undoubtedly sound economics to consider and fix for oneself a particular point beyond which in imposing taxation on the people that taxation will be nonproductive, will lead to unemployment and in general will be to the detriment of the people.

The Minister for Finance and the Minister for Industry and Commerce held out to us great hopes of industrial revival. What steps have been taken in this Budget to promote industrial revival? In the first instance, we have a cutting down of the amount of profits in respect of which Corporation Tax will be imposed, and increased the Income Tax from 3/6 to 5/- in the £. I suggest to the Minister that these impositions in themselves, so far from encouraging industry and the promotion of companies in this country, will have the very opposite effect, and that the net result will be to stifle industry and to make it more necessary to have increased capital, while holding out no encouragement whatsoever to the people who invest that capital. In itself, that will hit the big body of people in this country. It will hit the poor to whom special reference has been made in this House. There are a number of other impositions which will, perhaps, hit the poor a great deal more.

We have been told that the articles in the Schedule of Financial Resolution No. 7 will produce about £910,000 this year. A big proportion of that will be borne by the working people and by the poor. The tax of 4d. on tea will be borne, to a large extent, by the working people, by farmers, and by the poor. It is all very well for the Minister for Finance to say, "Oh, that is well counterbalanced by the remission of the ½d. a lb. on sugar." I think most Deputies are aware that throughout the country tea is in no sense a luxury. It is a necessity for most people. What probably is not realised is that the connoisseurs and judges of tea are not people residing in good circumstances in the city of Dublin, but the people to whom it is, in a large measure, a food. They are the people in the country districts. It is these people who pay by far the bigger prices for their tea. The most expensive teas are purchased by them, and it is on these people especially that the increased imposition of 4d. per lb. will be a heavy burden.

[An Leas-Cheann Comhairle took the Chair.]

In this Budget the Minister has started out absolutely regardless of the taxable capacity of the country. He told the people, and members of the Government told the people before the election and used it as one of their strongest arguments for getting office, that they would straight away reduce expenditure here by two million pounds, without whittling down in any way the general services for the benefit of the people. What has been the result? The fact is that instead of any reduction by two million pounds there is to be an increase of something like five million pounds, nearly four millions of which is to be raised this year by the direct or indirect taxation of the people. We were told that at the end of eight months we would find much better conditions, much less unemployment. That is mere talk. The facts will prove that, at the end of that period, so far from there being any general improvement in the way of employment—I do not refer to the temporary measure of relief—things will be a great deal worse, because industry is being stifled and the general body of the people are going to pay much more in cost of living. They are being indirectly taxed to an extent which they cannot bear in present circumstances.

There is a matter in the Budget with which I would like to deal. The Minister told us that he proposed to effect a saving of a quarter of a million pounds by a reduction of the salaries of civil servants and of local officials. He has been careful not to tell the House the method by which he proposes to obtain the reduction. I gathered from his speech that, though there might be mere talk with civil servants or with local officials, the Government have determined to effect that reduction.

Apparently, if the civil servants and local officials do not agree, there is going to be some class of compulsory power taken. Before this House is asked to vote upon the Budget, the proposed method of securing the cut, and the amount of the cut, should be made clear, because we are all interested in seeing that the Civil Service which, I think, it will be admitted on all sides of the House, is a loyal and efficient body, is not treated in any way to its detriment. I quite appreciate the reluctance of the Minister for Finance to state clearly to the House the method by which he proposes to deal with the Civil Service. It is proposed to secure the seven Labour votes in support of this Budget. If that Labour Party which, on the eve of the election, distributed handbills outside the various Government offices stating that they were the one Party in the State which had the interests of the civil servants at heart, and which was prepared to stand by them, is not going to act up to the statements in that handbill and the promises on which they solicited the votes of the civil servants, they should ask for a very clear and explicit explanation from the Minister for Finance as to the method in which he proposes to deal with the Civil Service. I find on the handbill which was distributed: "The Civil Service needs the protection of the Labour Party. The Labour Party needs the votes of the Civil Service." If the Civil Service is depending to-day on the support and protection of the Labour Party, that support is sadly lacking. Not alone that, but the Government Party sought the votes, not only of civil servants but of their friends, on the undertaking that they would not interfere in any way with the Civil Service without arbitration. It was stated, on their behalf, that no step would be taken with regard to the Civil Service without consultation and without arbitration. Is there going to be arbitration on this cut in the Civil Service? We are entitled to information on that and we ask for it. I took it from the speech of the Minister for Finance that, after a talk with the civil servants, he hopes to secure their concurrence and consent and that, if he does not, the cut is going to come nevertheless.

What is the justification for interference with the basic salaries of the Civil Service? It may not be generally known that as between the year 1921 and to-day the civil servant has suffered a reduction of about 28 per cent. of his salary. The civil servant who in the year 1921 was paid £748 a year is to-day paid £537 a year—a reduction of 28 per cent. The civil servant, just the same as any other member of the community, has to bear the increased taxation imposed by this Budget. What case can be made out, or what case exists, for imposing a double burden on the civil servants? They are only one of the professional classes of the country. What is the case for compelling them to make a double contribution to the Exchequer? Take a specific case to illustrate the position of the civil servant after this Budget shall have passed. Compare the position of a married civil servant with four children drawing a salary of £425, with that of a married man outside with the same number of children and drawing £425 from National Loan as unearned increment. Both the £425 paid the civil servant and the £425 dividend from the National Loan come from the State. With income tax at 5/- in the £, if the children's allowance were left as last year, the civil servant would pay £5 income tax and the private individual, doing no work, would pay an income tax of £10 7s. 6d. With the new allowances for children, the civil servant will pay no income tax and the private individual will pay no income tax. So far as income tax is concerned, they are on an equal basis. But if there is to be a cut in the salary of the civil servant, what will be their comparative positions?

We have no information as to the basis of the cut in the salaries but we will take it at £15 on a salary of £425 a year. What is going to be the position? The civil servant will suffer a cut of £15 on his £425 salary. He will gain £5 in income tax as compared with last year and his net loss will be £10. There will be no deduction from the private individual and his net gain will be £10 7s. 6d. In other words, as between the two individuals the civil servant, because he is doing work for the State, is going to suffer a loss of £10 while the man drawing unearned income from National Loan will gain £10 7s. 6d. What case can be made for that? I ask the Minister to make a case for it. I suggest no case can be made and the net effect of attempting to interfere with civil servants by cutting down their salaries—and you have undoubtedly, a loyal and efficient Civil Service—will be to impair the general efficiency of the service.

It will affect the yield of revenue within the country; it will affect the country generally by depriving the civil servant of his power of purchasing. The civil servant has a basic salary plus the cost of living bonus. Apparently you are going to interfere with his basic salary. That civil servant may have entered into an agreement to purchase a house. He probably has to pay a sum of money by way of insurance and he has to pay for the education and the maintenance of his children. All these commitments are made upon the basis of the basic salary plus the cost of living bonus. You are going to deprive him to a large extent in relation to those commitments. You will certainly interfere seriously with them.

This question of eating-in on the salaries of civil servants goes a great deal further. There are large numbers of civil servants who are transferred officers from the Government of Great Britain. Under Article 10 of the Treaty and Article 8 of the Supplemental Agreement which was made the basis of the Civil Service (Transferred Officers) Act of 1929, these civil servants have complete security of tenure and have been given this right, that if there be any interference whatsoever with their position, including any interference with or cutting down of the salaries payable to them in respect of their offices, they can voluntarily retire and claim their terms under Article 10 of the Treaty.

The position in regard to the body of civil servants serving here at the moment is that they came over voluntarily to the Government of the Irish Free State; they came over to give their services here in the ordinary way until, under Civil Service regulations, they would be compelled to retire at 65 or 60 years as the case may be. If there be any interference with their basic salary, that is a breach of the contract with them, a contract which they have with the Government here by virtue of their Treaty rights. What would be the effect of that on the general efficiency of the Civil Service? You would have practically every senior man in the different branches of the service taking his Article 10 rights and going out. If the Minister says "Well, I am not going to give them Article 10 rights," we know where we are. That may be the reason for attempting to repeal certain provisions of the Treaty so far as they have legislative effect in this country. The fact remains that if the Minister attempts to impose any compulsory cut on the civil service the effect will be that he will lose to a large extent the general body of the service, most of the senior men, and he will seriously decrease the efficiency of the service.

I would like to ask a question with regard to local officials. It is proposed apparently to cut in a similar way the salaries payable to the officials of local bodies. How is that going to be done? Is it to be done by leaving it to the local authorities to agree with the officials as to what would be a proper salary in the future, or is the Minister for Local Government going to act on the powers he has under Section 15 of the Local Government (Temporary Provisions) Act of 1923, and fix arbitrarily by sealed order the salary payable in future to any county secretary, county surveyor or other officers of local authorities? If he is, the same arguments which apply to the Civil Service apply to this other reduction. The Minister is going to impair the efficiency of local bodies.

Local bodies to a large extent depend upon the good work done by the officials. The members come together once a week or once a fortnight, but the main work is carried on by the executive officers of that local authority. If it is proposed to make local officers disgruntled, the effect will be serious. Most of the county secretaries appointed by local bodies during the last four of five years were appointed at inclusive salaries—at very much reduced salaries compared with what was formerly paid to county council secretaries and grand jury officials. The salaries paid to freshly appointed local officers have been on the basis of the capacity of the local authority and the country to pay. These inclusive salaries have been accepted as a definite and final figure by these various officers. Much more will be the air of resentment at any attempt to cut down these salaries and the general efficiency of local government in this country will be seriously affected if this intended cut is carried out.

In March last in England the position with regard to the Civil Service was investigated by the Sir George May Committee on national expenditure. What was the report of that Committee with regard to the Civil Service? "Civil servants' remuneration should reflect what may be described as the long term trend both in wage levels and in the economic condition of the country. We regard it as undesirable that the conditions of civil servants when under review should be related too closely to factors of a temporary or passing character. The State which does not raise its general scales of pay in prosperous times should, having regard to immediate conditions, take a long view when times are not so good."

Does the Minister for Finance say that the paying capacity of this country is down once and for all? He does not. He tells us we have a dreary year in front of us, but at the end of that year, and with his foresight and the foresight of the Minister for Industry and Commerce, we are to have happy hamlets and villages and smiling children. The state of depression is a temporary thing, apparently. If it is temporary—and the Minister indicates it is—then there is no justification for any cut in the basic salary of a civil servant or a local officer. If the Minister attempts in any way to cut the basic salary of civil servants or local officers he will rue the day because, in my opinion, it will bring about disastrous results in the general efficiency of the existing system of local government in the country, and it will seriously affect the revenue yield which the Minister expects during the coming year.

Mr. Anthony

I can only compare this Budget to the curate's egg, good in parts. A fairly good case has been made out for the imposition of the various tariffs enunciated in the Financial Resolutions. No doubt an impetus will be given in the case of certain industries resulting in some increase of employment, but it will also result in the disemployment of very many other persons in this State. I feel that the Minister should have given some little further consideration, at any rate, to the interests to which I now refer—has he, for instance, considered the amount of injury that will be done to persons in the distributive trades, commercial travellers and others, and last but not least to a very deserving and hard working class of the community, on whose behalf I have not heard even one word uttered. I have not heard a word on their behalf from the members of the Party who are supposed to represent the working people in this country. I refer to the dockers, the men who go down to the docks day after day seeking that elusive kind of employment known as dock labour.

I do hope the Minister when he is replying will be able to give the House some information on that point. I hope he will be able to give some information that will satisfy me, at any rate, as representative of a city which has a very large number of unemployed persons of both sexes, and as representing a city which expects to reap some benefit as a result of the new tariffs. I am very doubtful indeed that the city I represent will receive any benefit from these tariffs. A few moments ago Deputy Brasier referred to the large amount of employment given in Cork City as a result of the imposition of the previous tariffs. He mentioned especially the case of the boot industry. Let me assure this House that I know more about, and am more intimately concerned with, the people who run the industry as employers and those who work in the industry as operatives than Deputy Brasier. Let me say that the boot industry is one of the most precarious employments we have in the State. It is indeed one of the most precarious of all employments in the State. It cannot be said that the wages given to the employees there are very much in excess, if in excess at all, of the wages paid to the boot and shoe operatives in similar industries across the water. The operatives mostly work on piece work and, therefore, they are only paid for the amount of work they produce. Possibly that may appeal to some of the amateur economists in this House who profess to be more deeply concerned with production than with the conditions which surround that production.

I have waited patiently during the past week to hear one word uttered with regard to the conditions that should operate in a Christian country, the conditions governing employment in the industries which we are now about to tariff and to protect. We have on the Order Paper a motion in the name of Deputy Norton which asks that every proposal for a protective tariff should include provision to secure that fair wages and conditions should obtain in these industries. I raised that point myself a week ago on the introduction, I think it was, of the Dairy Produce Bill, which seeks to impose a further burden on the poor and the working class people of this country.

Even the supporters of this measure proclaim, in any case they do not deny, that the Budget will result in increasing the cost of living. They suggest that the increase in the cost of living will be met by further and greater employment. Most of the things tariffed enter every other day into consumption in this country. There is no doubt we are dependent to a large extent on our neighbours across the water. Whilst I have every confidence in our own people to produce all they require, I must have regard to the fact that these tariffs are going to press unduly on the very poor.

I repeat that we are not altogether independent of our neighbours across the water. The political economy preached by List and his disciples, and subsequently preached in this country by the late Arthur Griffith, might have been good political economy at that period, but in the present age that political economy is not sound. I have always felt in relation to protective tariffs that we might assist particularly in a key industry. There are cases where we must protect such a key industry as flour milling. I always felt that we should extend a measure of protection to a young or infant industry in the same way as we would extend a helping hand to a little child attempting to walk, but that the moment that child's limbs were sufficiently developed to move about, then that protection should no longer be afforded.

The Minister for Finance, the Minister for Industry and Commerce, the Minister for Agriculture, or any of the other Ministers whom I have heard speaking on these tariffs did not suggest that at the end of a term protection by way of a tariff will be withdrawn, the end of the term being when the industry is placed on its feet. Some Deputy here to-day said, and I think rightly said, that once you apply a tariff you will find it very difficult to remove it; vested interests will have been created. I can see a more sinister thing developing in this country, far more sinister indeed than any economic disturbance. I can foresee that these tariffs may perhaps be the forerunners of other tariffs, and certain things will be dominated by outside forces. I can foresee the time when there will be financial support for political parties from the interests behind those tariffs. I said here before that we might some time or another Americanise our institutions. In using that expression I do not mean to insult the great United States of America, but I do feel that some of these days it will come down to the matter of graft, pure and simple.

Mr. Gorey

It has come down to it already.

Mr. Anthony

Once you establish vested interests, whether in spades or shovels or any other commodity, you will have the representatives of those vested interests, by means of huge subscriptions to the funds of political parties, influencing legislation along the lines which will be most acceptable to them.

Mr. Wolfe

Hear, hear.

Mr. Anthony

These people will be the donors of political bribes or graft, as I have termed it. Some Deputies appear to think that without some kind of price-fixing Board —by the way, I am not too much enamoured of that—or without some means of correction, some means of control, the prices which will be exacted by toll from the poor people of this country will be exorbitant. I am afraid, and I would like to remind the Minister of the fact, that we are not all saints and scholars in this island. Many years have passed since that appellation could be applied deservedly to this country, and because of the fact that we are not all saints and scholars, particularly saints— there are so many professors and schoolmasters in this House that I have to withdraw the statement about scholars—I cannot share the optimism that is apparently shared—and I use the word "apparently" advisedly— by many members of the present Government Party. I do not share their optimism that shopkeepers and the shopkeeping class in this country are such saints that they will not exact the last farthing they possibly can out of the consuming public of the country, including the very poor.

We heard to-day from the Minister for Industry and Commerce that, if it were brought to his notice that there were cases of the character which I have just endeavoured to outline, he would consider jail too good for them. I say "Hear, hear!" to that, but I say we must have regard to the fact of business being business all the time, and that we are living under a capitalist system which has not been changed, and which this Government does not propose to change. I will refer to that aspect of the case in a few moments. We heard of the shopkeeper who sold grape-fruit. He had to exact something from the consuming public which the tariff imposed upon him compelled him to do. He said, in other words, "If I am going to lose on the hobby-horses I am going to make it up on the swings." According to the present economic morality in this country he is entitled to do so. Some time ago, speaking in this House, President de Valera suggested—I am not going to quote his words—towards the end of his speech in enunciating his economic policy that it might be considered a hair-shirt policy, but that he did hope that, if we had to wear the hair-shirt for a time, the time would come when we would all wear silk shirts. I am not exactly quoting his words, but that is the burden of his message on that occasion. To that I say, "Very good." If we are all prepared to share in the losses we should also share in the gains. Subsequent to the President's speech the Minister for Finance, commenting on some speeches delivered on the occasion of the debate on unemployment, said, "Feed the hungry." Taking that as his text, he said—I am quoting the Report of the Dáil Debates of the 3rd and 4th May, Volume 41, No. 5, column 1440:

"Feed the hungry"—that was the admonition addressed to the individual, but very much more addressed to the community, and, in particular, addressed to Governments; and because we accept that principle of feeding the hungry, not feeding them in idleness, but providing them with a chance to earn their bread, in accordance with the Divine decree, by the sweat of their brow—that, according to Deputy O'Sullivan, is preaching a class war. I am glad, at any rate, to be one of those who will preach that war, and, so far as I and those associated with this Party are concerned, we will preach it until unemployment, hunger, and want are banished from the territory over which we have control.

There I interjected:

The President said that too, and I accepted it.

Again I repeat I accept that if it is the policy of the present Government. I am rather intrigued and most anxious to know from the present Government do they stand for the sentiment expressed there in all its implications, because if they do I stand with them in all its implications. But knowing what I do about human nature I feel that we have to travel a very long road indeed before we can reach the fulfilment of that very pious hope. I subscribe to the doctrine of "Feed the Hungry." I subscribe to the doctrine of the Sermon on the Mount but being only human and because this is merely a human institution, I cannot see how we can achieve that great objective. We may preach it. We may come very near it but we cannot evolve it out of the present system. We cannot evolve it out of the present economic system. That cannot be gainsaid.

I should like to put another question to which I hope the attention of President de Valera will be directed. He went further than the Minister for Finance when he said that if within the present system—remember, I hope I am not quoting him wrongly—he found it impossible to solve the present unemployment problem he was prepared to scrap that system and try the alternative, the only alternative being, as any of us who has the merest acquaintance with political economy knows, that you must scrap the present system of capitalism in this country. Remember there is such a whole lot in the policy of the present Government that it needs not alone one day's discussion or two days' discussion but needs discussion in the country and I feel with the time which we have at our disposal to discuss the very serious proposals which are included in the Budget, we should also have time to consult our constituents on the various matters arising out of the imposition of these tariffs.

I said that the Budget was good in parts like the curate's egg. I am in the position that I will be able to support the Government on one or two items, perhaps more, but I have not gone into the matter fully yet. I would find myself in agreement on certain matters. I would find myself in agreement with what they propose to do for the civil servants for whom they expressed great solicitude when in Opposition. At the same time, when in Opposition they always proclaimed that they were out to reduce the salaries of persons having over a certain sum per annum. I forget the amount at the moment. I feel that the matters raised in this Budget are of such a serious character that it would demand more attention than has been given to any Budget statement in this House since its inception.

Something has been said here about decentralisation in reference to tariffs. I feel here also agreement with Deputy McGilligan because I do feel that it is time that centralisation of industries in this country was stopped. There are several parts of this country where natural facilities, capital, and offices can be provided and yet we find that the tendency is to centralise. I do suggest that no Minister for Finance or no Minister for Industry and Commerce can be prevented from enforcing this policy or applying this policy of decentralisation. I agree with Deputy McGilligan when he suggested that if this went to its logical end it would mean that we might come down to provincial tariffs. We might come down, as somebody suggested to me, to parochial tariffs. Well, I think that is rather an absurd kind of argument, because I do feel that we could easily do with certain factories in certain areas. I have on more than one occasion said to this House that I felt that there were a number of social activities growing up around the small mill in the little town, around the small industry in the little town which kept people from migrating into the larger cities. There is a problem facing us in this State at the moment which transcends in importance any others, and that is the constant influx of people to the Metropolis and also to the city of Cork and to the cities of Waterford and Limerick. There is a regular trek from the land. And here, in this Budget, there is no proposal to put the people back on the land. I felt that the Fianna Fáil Party, and that the present Government which is a Fianna Fáil Government, would have done something that would induce people to go back to the land. But no, except for one or two things that are done here by way of butter production and so on that may possibly induce a very small fraction of our population to remain in these agricultural areas. But I do know that there are thousands upon thousands of acres of good arable land in this country remaining untilled. This is however a question, I think, for another discussion; and for that reason I will confine my remarks to other matters contained in the Budget.

The members of the present Government seem to take a pride in the fact that we have a growing population, growing at the rate of 30,000 persons per annum, the fact being that that growth in population has been brought about by the fact that emigration has been stopped. The Fianna Fáil Party say to us and say to the people outside: "It is because of our activities that young people can be kept at home." Not at all. Let us be quite frank about it. All these thousands of people would have gone to America if they got the chance, and if the ports were open to-morrow and if the United States of America opened its portals to Irish emigrants it is not 30,000 that you would have going but 60,000. There is no use in throwing this veil of patriotism over persons or Governments. We all know that we are a prolific race and that we shall continue to multiply; and so long as that multiplication of the human species goes on in this country you will have a surplus population. There is no question about that. I want to know from those people who envisage a population of eight millions of people in the Twenty-six Counties— I want to know from them in the name of common sense, how are we to keep eight millions of people? Is it by bringing them back to '47 and '42 when they were content to live on potatoes and sour milk? I should like to get rid of some of these nonsensical statements made here from time to time about increased population. We can support a very much larger population than we are keeping now, but we cannot support eight millions of people in this State. We have figures a hundred years old and sixty years old quoted, but we always neglect very important factors. We seem to lose sight of the fact that the age of machinery and tools has reached this country as well as other countries. I do hope that we shall have all that kind of thrash dropped out of debate in this House.

The Fianna Fáil Party are imposing in this Budget a tax of 6d. per lb. on tea. The Minister for Industry and Commerce endeavoured to prove or demonstrate that this impost is not affecting the very poor, and that an impost on sugar was a far greater evil than this impost on tea. I, too, like some other Deputies have met people in the trade and they have informed me that the cheaper teas, the Java teas, I understand, can now be bought or should be bought at 8d. or 10d. per lb. Now the 8d. tea will go up to 1s. 2d. and the 10d. tea will go up to 1s. 4d. If that is not an imposition on the poor people of this country I do not know what is. Tea is not the luxury that some people think. Tea is an absolute necessity for thousands of people in this country, not alone workless people, people who are unemployed, but thousands of poor people who are in precarious and seasonal employment. It cannot be said that this is a poor man's Budget. My own feeling on the matter is, as I said a moment ago, that it is going to give an impetus to some industries while on the other hand it is going to create an amount of disaffection, and to disemploy a number of other persons in the industries I have enumerated. Deputy Dillon made my blood run cold, I got cold shivers down my spine when the Deputy spoke of the effect that this tax might have on clogs and when he envisaged the time ten years hence when they could not afford anything else. Yet he praised this Budget. The other member of his Party —they have a party of their own like the Siamese twins—Deputy MacDermot damned the Government with faint praise. I do not anticipate that in the area represented by Deputy Dillon you will have the people running about barefooted after ten years. I think we have left all that behind us. But I am rather concerned to know how these tariffs are going to be imposed. I quite understand that the Minister may say that they will be imposed in the usual way.

I want to know will that usual way mean an increase in the number of officials, because I feel that if the expenses of administration are to be increased further it will not be a very happy augury for the Fianna Fáil Party, who for years have been proclaiming at the cross-roads and on every opportunity that presented itself that the late Government was squandering the money of the people: that it was indulging in an orgy of regular squandermania in every Budget that it introduced.

I can see in this Budget a very big effort to impoverish a number of people in the country. Of course, I will be told, with all the blandishments that the Minister for Industry and Commerce can command, that a number of people will be put into employment, that we will all be very happy and smiling after eight months, as I think he suggested. I am afraid that if the Minister is prepared to gamble on the impositions in the Budget producing the effects he hopes for in a period of eight months, he is unfair and unjust to himself, because, in my opinion, it will not be possible for him to ascertain in that period of time what the reactions and repercussions of these tariffs will be. I feel that this Budget has been very ingeniously conceived. A tariff here will satisfy one person, a tariff there will satisfy another; but I would much prefer to see a Budget which would go the whole hog and tariff everything in the country. Nearly everything has been tariffed already. Of course, this Budget reflects the economic policy of the Government. I believe it is the policy on which they pride themselves most. It is the one upon which they sailed into office, but in my opinion it is a policy which will bring nothing but ruin in its train. I know it can be pointed out that the putting into work of a hundred people is no indication of ruin, but the disemployment of another hundred or 120 people would be an indication of ruin, and I feel that is what is going to happen.

I am not of a suspicious nature, but I am concerned in more ways than one as to what will follow as the result of the imposition of these tariffs. We have confectionery and chocolate industries in this country. I am anxious to know from the Minister if he has received any representations at all from people who are selling here for outside firms chocolate, cocoa and their by-products. I had an interview with the representative of one of the firms engaged in that trade. He assured me that he and the representative of another firm were prepared to establish a chocolate factory in Cork that would give employment to between 800 and 1,000 persons. If such a thing came about it would certainly be very useful. I am anxious to know from the Government if any considerations, other than economic, induced them to apply the tariffs outlined in the Budget. Now I would like the House to understand that I am not saying that in any mean or captious spirit. I am putting the question honestly and frankly, because it is one that is giving me serious thought. In dealing with this I do not want to make the nasty innuendos or suggestions that were made here the other night by a member of the House, because I do not like that kind of thing.

As the Minister for Agriculture is the only member of the Government on the front bench at the moment, I would ask him to take a note of my question: whether any considerations other than economic entered into the granting of these tariffs, and of certain rights and privileges, if you like, to certain manufacturers to operate in this country? I ask that question because I feel that if considerations other than economic did enter into the granting of these tariffs it would be very serious. I say that as one who likes a square deal with his fellow man, no matter what business that man may be in, whether on this side of the Channel or on the other, and also because I feel it is better to act straight in these matters. I say that, too, because we do not know but that the cry of retaliation and that sort of thing—intimidatory expressions of that sort—may be used on the other side. At all events, we must have regard to what is going on around us, and to the fact also that if we impose tariffs then somebody else is going to use the tariff weapon against us.

The history of protective tariffs is very briefly told. Subsequent to the Great War many countries, because of certain reactions following the war and of the economic chaos that resulted from it, thought it prudent and wise to put up a tariff barrier not because they believed that it was going to provide an ultimate solution of their economic difficulties, but rather because they believed, as a medical man believes, that a stimulant of some kind was necessary if they were to keep the body politic alive. Now, one State having done that, another State retaliated and so on and so on.

Most countries now have tariff barriers and what is the result? Has the adoption of that policy brought any prosperity, even relative prosperity, to those countries? It has, of course, gingered up their industries for a time just as a stimulant may ginger up a human, but the tariff barrier has not had the effect of providing a lasting cure for the economic ills from which those countries suffer. I suggest to the Executive Council that that aspect of the matter should again be carefully considered by them.

The woollen industry has been referred to and reference has been made to the wonderful results that have accrued to that industry following the imposition of tariffs. I have a letter here from an operative engaged in the industry. I am not going to read it to the House, but I will hand it to the Minister if he desires to see it. I do not want by any act of mine to injure any industry in this country that is giving employment. But to revert for a moment to what I said earlier in my speech, I want to put this to the Executive Council: will they see to it that in those industries which they now propose to protect, and out of which they derive revenue, the Factory Acts are observed and rigidly observed? Will they see to it that the Truck Acts are observed, because I have definite knowledge that they are broken, and that fines are being inflicted on operatives in tariffed industries. That may be a revelation to the Minister, but so long as I am not satisfied that these industries will not alone give employment, but that they will give employment with decent humane conditions, I will be no party to passing, or supporting in any way whatever, the imposition of these tariffs. I am prepared to give the Minister private information rather than to give any kind of adverse publicity to the matter.

I would ask the Minister for Industry and Commerce if he thinks that a further impost on tobacco is necessary. It may be, of course, to produce more revenue for the State, but is it fair to the ordinary agricultural labourer to charge him more for his tobacco. At the present moment many of these men are working for eight or nine shillings a week and their keep. They have very little to spare out of that wage, and it is within the knowledge of farmer Deputies here that that small wage is pretty general all over the country. Farmer Deputies will bear me out when I say that. Is it right to impose that tax on the farm labourer, who smokes, on an average, between three and four ounces of tobacco every week, and to whom it is a necessity. I know some of these agricultural labourers who would do without their breakfast before they would do without a smoke. That seems to people like us a rather extravagant statement to make, but it is true, and those of us who represent the cities know that it is true in many cases, and here we are inflicting further imposts on the humblest class of the community, the class least able to bear them.

I have suggested that sufficient consideration has not been given to the imposition of some of these tariffs. I know of commercial travellers and others with thirty years' experience good sound Irishmen, and many of them strong supporters of the present Government—who have been thrown out of employment as a result of the imposition of certain tariffs. What I am mainly concerned about is why the Executive Council, when proposing to inflict these tariffs, did not see to it that those persons who would be put out of employment would be absorbed in the newer factories, which will cater for Irish manufactured goods. I am sure it will be very easy for the Minister for Industry and Commerce to suggest to some of these people who are looking for a tariff—the clothing industry, the woollen industry, the hosiery industry and the confectionery industry—that there are men in this country who are being put out of their jobs because of the operation of these tariffs, and that they should be absorbed by the people who are getting the tariffs. It would be a sound business proposition because these men have established business connections all over the country, and from that aspect alone it would be a sound business proposition.

The question of alien capital might be raised at another time, but I do feel that where a certain want exists, and where the want has to be satisfied, that want will continue unsatisfied, until such time as the consumer gets the particular brand of tobacco or sweet or chocolate he or she requires. Pending the setting up of factories here to meet that want, some accommodation should be reached. Where, as I have said, you have two firms prepared to establish a factory to cope with their Irish business, it is a matter that should be seriously considered by the present administration.

I want to close on one note, and that is, that I am more concerned with the conditions that will operate in these factories than I am with any other aspect of the case. If this Government decides to impose these tariffs, there must be sufficient inspection of the factories. The Factory Act system will have to be tightened up, and inspection will have to become, I will not say more rigid, but, at least, as rigid as it is in other countries, and there will then be no fear that operative will be sweated as they are being sweated in some of the tariffed industries, and on that I have private information which I can give the Minister. The conditions should be humane conditions, hygienic conditions, and so on. I want to close on that note, in the hope that when these tariffs are imposed, the workers in the industries will get decent, humane and fair conditions.

Mr. Cosgrave

An examination of this Budget would fall normally under four heads. There is, first of all, the balance, that is as to whether or not the necessity would arise for making provision for any deficit arising out of last year's Budget. There is next, the requirement of the current year, which would, of course, include any adverse balance remaining over from the previous year, and that would involve a decision being taken as to the amount of money that would require to be raised, which is, of course, the essence of the problem of practically every Minister for Finance in any country. There is then the question of impositions and reliefs, if any, and the last question which arises, and which is of, perhaps, major importance in connection with this Budget, the reactions, favourable and unfavourable, in respect of the whole Budgetary proposals taken together.

On the first point, of balance, the Minister devoted a good deal of his time in the earlier part of his speech to dealing with it, and he proceeded, so far as I could judge, to satisfy himself that according to his own estimate of last year's Budget it was not well balanced. His leader here a short time ago—I think within the last fortnight or three weeks—mentioned that the legacy which Deputy Blythe had left amounted to £1,400,000. Of course there is not a word of truth in that. Some Deputy on the far side said, when the President of the Executive Council made that statement, "That was their contribution to employment." We have had a retraction or an elaboration of that statement from the Minister for Finance, but we have had no retraction so far from the President, and he ought to be afforded the opportunity of putting himself right with the people, because a statement is either true or false, and this statement, coming as it did from the head of the Government, requires to have behind it at least something which would prove it, and there is, apparently, nothing to prove it.

Now if we leave that for a moment and go on to another point that the Minister made—that there was a very big task facing the Minister for Finance this year, whoever he would be, and that the late administration went to the country rather than face it, I want to stamp that statement as absolutely untrue in substance and in fact. Last October—and if I might, just while I am on the point of October, correct a mis-statement of the Minister in his speech, when he said that we put a tax on sugar last October. That is not true. It was imposed in the Minister's Budget last year and not in October—but, in October last, seeing what the situation was and realising the importance of balancing our Budget and of meeting all the expenses which should be met, the Minister for Finance at that time, Deputy Blythe, introduced a supplementary Budget here in which he imposed 6d. in the £ on Income Tax and 4d. on petrol. What was the attitude of the Opposition on that occasion? What was their contribution towards balancing last year's Budget? They stated that the supplementary Budget was not necessary—that the necessary money could be got by economy.

Let us just mark the difference between statements and actions, because no person of sense pays any attention to any statements of any individual, from the President of the Executive Council down to the Deputy who is least known. Let us look at the acts of the Government. What did they do when the second Budget was introduced in October? They walked into the Division Lobby and voted against it. It was not a rich man's Budget. The Minister for Finance last October took the House and the country into his confidence by putting before them what the situation was and what it required. Those who were in opposition last year, and who objected to 6d. in the £ being put on income tax and 4d. per gallon on petrol, come along now and ask us not alone to increase the income tax, but to put income tax in respect of certain businesses and professions in this country on exactly the same level as in England. They come forward and ask from the country at this moment a sum of approximately £5,000,000 in excess of what the yield would be if the taxes were the same as were imposed last year.

It is a strange commentary upon the statement made by the Minister for Finance, who cannot afford to waste any time by attending the House, that in the earlier portion of his statement he deals with the contraction of the business of the country, contrasts the present volume of business with what it was last year, and goes further and compares it with what it was in 1927-28. He said on page 6 of his statement:

So that in 1931-32 the total value of our import and export trade was only 68 per cent. of what it was in 1930-31, and only 63 per cent. of what it was in 1927-28.

Does he suppose that there is going to be an improvement this year in the trade of this country? In the year 1927-28 the late Administration was denounced from one end of the country to the other for taxing people beyond their capacity, for crippling industry and placing obstacles in the development of trade by reason of the enormous taxation that they were imposing at that time. This year we are being asked, when our trade is only 63 per cent. of what it was then, when industry, commerce, agriculture, and the professions are in a far worse position than they were when we were listening to these denunciations Sunday after Sunday, to shoulder a burden far beyond the capacity of this country to bear at present.

As I said, the first point to consider in connection with the Budget is balances. The Government describe themselves as honest men, who are approaching the consideration of this Budget purely and simply with the spectacles of honest men who are going to deal with everything in the Budget as honest men should deal with it. But when we put the question, "Are you providing for the deficit of last year?" we find that these honest men are not. We must draw only one conclusion from that, that there was no deficit last year. The ex-Minister for Finance has at least this to show, that after his eight or nine years of office, introducing Budget after Budget, in difficult times and good times, the whole thing remains for examination, and what are the weaknesses in it? None. So that the Minister for Finance, in introducing his Budget, found himself with ordered conditions in the State, with the credit of the State good, with its industry in a much better condition than we found it, with a successful tariff policy which has improved employment, subject to the proviso that we have not entirely escaped the terrible economic conditions which are affecting every State in the world, but that we did escape much better than any other country in the world.

As I said, we are now asked, with the example of other countries in Europe before our minds, in which bad financial policy brought about baneful results, in which unsound national economics injured the industry of various States, ten years after the event to take up the wrong policy that was followed by these other countries and to jeopardise the sound financial position of this country, and for what? Included in this Budget this year there is, beyond what was provided in last year's Budget, a sum of £650,000 for employment. The Minister for Finance, who criticises his predecessor by saying that he has left him nothing but mortgages, enters into possession of a Road Fund which produces something like £900,000 annually, with a liability of £640,000 against it, with a further liability of a quarter of a million, and as assets fairly good roads, as good roads as there are in any other country in Europe, and as good roads, I believe, as this country can afford. He proceeds to mortgage that Road Fund to the extent of one million pounds.

That operation simply means that whatever employment is going to be given this year is at the expense of the employment which should be given within the next five or ten years, or whatever the length of the loan is to be. It is not mortgaging your capital at all. It is mortgaging the unfortunate roadworkers of the country for the future. In a time of depression, if it could be conceived that there was a likelihood of improvement in conditions, if, as the Americans say, we were sure we had touched bottom and it was a question of rising up, there would be an excuse for that. There would be a further excuse if the condition of the roads necessitated such an expenditure of money as would enable them to be put in a condition to be used. But that is not the case. As I conceive it, what will happen is something like this: the Minister will assemble various officials belonging to various Departments, and will say: "I have one, two or three millions of money to spend in one, two or three years, or I have one, two or three millions to spend yearly for the next three years. How can we spend it quickly?" What are we going to be in possession of when we have spent this one million pounds? Is there an asset? Is there something that will lessen the cost of production and that will ease the burden upon anybody? It does not appear to me to be an attractive position even from the point of view of those most interested in giving the maximum of employment. There I shall leave that for the moment. As far as that one million is concerned, it is mortgaging the future. What is left? A sum of £600,000, of which £350,000 is to be devoted to public health work; a sum of £150,000 is to be devoted to immediate relief—there has been no development of the policy that is to be pursued in that connection— and £100,000 is to be devoted to housing. £600,000 is being given to provide labour in this Budget. At what cost? So far as the industry of this country is concerned, it is the difference between £23,310,000 which is the estimate of the receipts of last year's taxation, and £27,200,000 which the Minister proposes to spend this year. In essence what it amounts to is this. £600,000 is to be spent to give employment, and the people of the country are to be taxed to the extent of £4,000,000 in order to do that. There is sound finance! There is something for the various Deputies belonging to the Fianna Fáil Party to go around the country and to explain to the people as a sound economic proposition; to show what great financial mind is behind a proposition of that sort, how the country is to progress by spending £4,000,000 in order to give employment to the number who would be employed by an expenditure of £600,000. The first mistake made by the Minister, the first indication that he was not on a sound platform, was when he stood for getting from this country in these days, when he himself estimated that our imports and exports were only 68 per cent. of what they were twelve months ago, £27,000,000. It is impossible.

I would like to congratulate the Minister upon his first Budget and to say to him that it most closely resembles, and most faithfully follows the Budgets of our neighbours across the water. I will not have time to-day to explain that in full detail, but I hope next week to be able to deal with it. Imitation is the sincerest form of flattery. I would like to say this: that it is unwise ever, I think, for one Parliament to criticise another. But if I were asked, either as a Minister of State or an ex-Minister of State, or as a business man, what my view about the situation across the water is, I would say it is simply this: that they are levying much more upon the people of the country than the country can afford at the present moment. Much the same may be said of every country in Europe and outside Europe. It is to a large extent, and to a very large extent, one of the causes producing the terrible economic conditions prevalent at the moment all over the world. We are invited to follow in the wake of that policy, and we are doing it as closely as it would be possible to do it without forming an exact parallel.

There is a difference, it is true, of 2/- in the pound taking income tax and super-tax together as compared with the British, but it is more apparent than real. As a matter of fact, if one were in the happy position of being liable for the full income tax and full super-tax, he would pay more in income tax and super-tax in this country, with the other charges that are placed upon him, than if he were an Englishman. Nobody knows better than the Minister for Finance, and nobody knows better than the Ministry here, that one of the real weaknesses in this country is the low percentage of rich persons in the country. The reason taxation falls so heavily upon the people of this country is that a proportion of taxation is borne by a much higher percentage of rich people across the water than is available in this country, and that, in consequence, the incidence of taxation here falls much more heavily upon the remainder of the people.

The Dáil went out of Committee.

Progress reported.

The Dáil adjourned at 2 p.m. until 3 p.m. on Wednesday, 18th May.