The President intervened in this debate last night. His speech was distinguished for unnecessary heat and the importation of a good deal of unnecessary vigour into a discussion from which, so far, those disturbing qualities have been absent. I rather think that the President was needlessly peevish in the manner in which he took exception to Deputy Davin's statement. I do not know what it was in Deputy Davin's statement that irritated the President, or whether his irritation was due to the fact that Deputy Good had blessed the Budget. Nothing that Deputy Davin said seems to me to supply the meaning for all that irritation and peevishness, and I must, therefore, come to the conclusion that Deputy Good's benediction in respect of this Budget is the sole thing which has disturbed the President. Of course he had good reason to be disturbed by Deputy Good's praise of this Budget. Deputy Good, in the course of his broadcast speech on the Budget, said that while business men might object strongly to some specific taxes which had been imposed, it could not be denied that the Minister had succeeded in distributing taxation over a wide field. Of course, Deputy Good was perfectly right when he said that. The Government has succeeded in distributing taxation over a wide field. It has succeeded in putting taxation on people who are incapable of bearing it, and it is for that reason that Deputy Good, representing the particular viewpoint which he does represent, finds it possible to make a broadcast speech in which approbation is pretty thickly distributed. Of course the whole philosophy of Deputy Good in respect of this Budget, and in respect of taxation, comes out in a later portion of the Deputy's broadcast speech. He said that most business men who are in favour of sound finance would have to compliment the Minister on having the courage to tell the people that if they wanted certain services they must pay for them. In other words if old age pensioners are to continue getting the old age pension they must have a tax on tea, on sugar, on flour, on bread and on coal. Deputy Good goes on to say that the Minister had the courage to impose all-round taxation to emphasise the fact that those services must be paid for. I do not know whether the Minister takes Deputy Good's references to his courage as bouquets. I do not know whether the Minister takes it as a bouquet that he has felt it necessary to impose taxation on tea, sugar, wheat and coal, in order to impress on old age pensioners and the recipients of unemployment assistance benefit that they must pay for the services which they get.
The President complained because Deputy Davin said that old age pensioners and recipients of unemployment assistance benefit had to bear a burden under the Budget. It is perfectly obvious to everybody that the recipients of unemployment assistance benefit, or those who were denied the receipt of unemployment assistance benefit because of the Budget provisions, and potential claimants for old age pensions will in future have to bear a burden. Not only will they have to bear a particularised burden in respect of unemployment assistance and old age pensions, but they will have to bear a burden in respect of various other imposts which are made in this Budget. The saving of £100,000 in respect of old age pensions looks to me to be a measure of economy rather than a measure of curing abuse. If there were evidence of any widespread abuse there might be a case for dealing with the abuse; but this proposal to save £100,000 is introduced at a time when we are told it is absolutely necessary to raise the money this way for budgetary purposes and not for the purpose of curing any abuse.
In respect to the Unemployment Assistance Act, there is a naked confession in the Minister's statement as to how the money is going to be saved. In his statement the Minister said:—
"As employment upon relief works financed out of public funds in whole or in part will be confined to persons entitled to receive unemployment assistance, and as, since the Estimate was prepared, two Employment Period Orders have been made, and as it has also been decided to introduce amending legislation affecting various changes in the Unemployment Assistance Act, the combined effect of which will reduce expenditure, I have decided, with the concurrence of the Minister for Industry and Commerce, that the figure for unemployment assistance may be reduced by £300,000, that is from £1,600,000 to £1,300,000."
Let us examine the significance of this statement. It is clear that the giving of preference to persons on relief schemes is not going to reduce expenditure to any great extent in respect of unemployment assistance benefit, because that preference was there last year and it will be there this year and these factors will be common to both years and no special reduction may be looked for in that respect. But there are going to be two Employment Period Orders in respect of two periods of the year during which persons formerly entitled to unemployment assistance benefit will not be able to get that benefit.
We had a statement from the Minister for Industry and Commerce here recently that these Employment Period Orders were imposed willy nilly, that there was no special investigation made to ascertain whether in fact employment would be available for the persons concerned, that the Minister had no evidence that such employment would, in fact, be available and that the Employment Period Orders were imposed in order to deprive those persons of benefit, the belief being that the employment might be available or that they might be able to get employment on the land. I think before the Minister imposed these Orders there ought to have been a much more thorough examination of the problem and the circumstances existing in the years to which these Orders would apply and there ought to have been a much more close and sympathetic examination of the needs of the persons affected. However, the Employment Period Orders are going to contribute a saving in respect to unemployment assistance and the amending legislation which is to be introduced, and which many people thought would be utilised to improve the rates of benefit, is put into the Minister's statement as one of the factors which will make a contribution to the saving of £300,000 on unemployment assistance benefit this year. Is it not patent to everybody that there will be £300,000 less for unemployment assistance benefit? Can the Ministry say they have made any examination of the unemployment assistance problem such as would justify them in stating that there will genuinely be a lesser demand to the extent of £300,000 for benefit this year than existed last year or than exists at the moment?
If Deputy Davin required any corroboration for his statement that old age pensioners and recipients of unemployment assistance benefit would have heavy burdens placed upon them, and if he wanted to make a general statement that the body of workers in the country would have new burdens placed upon them, surely the Press of the last few days has supplied convincing evidence in that respect? We have the sugar tax, which has resulted in the price being increased. Not only will sugar be increased, but all the commodities, including jam, of which sugar is an essential part, will also be subject to an increase. We will have a rise in tea prices, and the tax on wheat has already begun to show itself in the form of an increase in the price of the loaf. The coal tax of 5/- is going to remain. Some time ago it was admitted by the Minister for Industry and Commerce that the price of coal on board at the city port was 17/- per ton. That was before the coal-cattle pact. The present price of coal delivered in similar circumstances is 22/- a ton, and on that coal a duty of 5/- per ton is imposed, so that in respect of the consumption of British coal the consumer is paying 10/- per ton more than before the coal-cattle pact.
No reference to the tax on coal imports would be complete without a reference to the circumstances under which the tax was first imposed. In the first instance that tax was imposed to keep out British coal, and at that time an alternative supply of coal was made available to the people. The effect of making available to the people that alternative supply was to give them coal at a price not higher but in some instances less than they paid for British coal. Now the Ministry have changed their whole policy in that respect. They are now giving a 90 or 95 per cent. preference to Britain in respect of all our coal imports. The alternative source of coal supplies is cut off, and we are now only permitted to import coal which is subject to duty of 5/- a ton. What was put on in the first instance to keep British coal out of the market is now being utilised as a penal tax upon the only coal which the people can consume. It is very unfair that a tax imposed in certain circumstances should be utilised as a revenue raising tax now.
We have another novelty in the Budget by which houses are to be valued in future for income tax purposes at five-fourths of their present valuation. I would like to call the Minister's attention to the fact that many of these houses built in recent years, especially in Dublin City, are being purchased on the hire-purchase system by the tenants. All of these houses which have been erected in recent years have been valued in the light of modern circumstances and conditions. It is obviously unfair to ask the occupants of a house which was erected during the last ten years and which was valued under modern circumstances to consent to a revaluation based upon five-fourths of the existing valuation for income tax purposes. In any case the whole method of valuing houses in a Budget statement is, in my view, a questionable novelty and the Minister might not have prejudged the issue of imposing an additional valuation on the houses for income tax purposes in the manner adopted. If houses are not bearing a proper valuation at present let us have an inquiry into the valuation; but to anticipate the result of the valuation in this manner seems to me to be unfair in principle and to rule out the possibility that some of the houses may be reduced in valuation under any examination that may be instituted.
Let us take stock of these imposts— a tax on sugar, a tax on tea, a tax on coal, a tax on wheat, as well as the reduction in unemployment assisttance benefit, and more stringent regulations, based upon the needs of the Exchequer rather than on known cases of abuse, are to be applied in respect of old age pensions. If we examine the effect of these imposts on old age pensioners, on persons in receipt of unemployment assistance benefit, on persons in receipt of 24/- a week under minor relief schemes, or on the forestry workers referred to by Deputy Davin yesterday, we will find that these are the people who are going to bear the heaviest burdens in respect of these new imposts.
Speaking yesterday, a Deputy on the Government Benches laid down this philosophy in respect of the taxable capacity of the country. He said that he would define the taxable capacity of the country as the amount of the total income over the income which was required for the subsistence of its population. Let us assume, for the sake of argument, that 24/- a week is a subsistence level for any citizen in the community—although, of course, everybody knows that it is far from being a subsistence level—but let us assume, for argument's sake, that it is the subsistence level and that it has been regarded as a subsistence level: What will be the effect of these new imposts on a person who is compelled to tolerate that standard of subsistence? The obvious effect of imposing a tax on tea, sugar, tobacco, coal, flour and bread, will be to drive that person down below the subsistence level; and if, as was suggested yesterday, you have a subsistence level, and if you invade that subsistence level by imposing new taxes on the people who are compelled to exist at that level, then the result, inevitably, will be to force them down below that level. It will mean that every person in receipt of a small income, on which he is barely able to subsist at the moment, will have a still smaller income when these new burdens are imposed. Every person who has had, in existing circumstances, to subsist on that small income, will find it harder to do so. He will have to face more burdens and more hardships as a result of these new burdens and there will be less food for his family. That is the inevitable effect of imposing this new taxation on small incomes which are at present inadequate to provide decent subsistence for the persons concerned.
The Minister for Industry and Commerce made what I think was a heroic effort to explain the Budget the other evening. He talked about the Government's industrial policy and about all the additional people who were being put into employment as a result of that policy. While I concede that additional people have been put into employment and, while certain towns and cities may have derived certain benefits from an industrial policy which has resulted in new sources of employment being made available, we have got to remember that there are a great many places in the country where no benefit has been derived as a result of the Government's industrial policy.
As a matter of fact, in the rural areas, one finds it difficult to produce any instance where rural areas have benefited by any policy of creating new industries, whether by means of tariffs or by any other means. What, then, is the effect of this Budget on these small towns and the rural areas? They have not felt any benefit from the industrial revival but, apparently, they are still expected to make a contribution in the form of additional taxes in order that the Government may pursue an industrial policy which, at any rate so far, has conferred no benefits on them. Can anybody doubt that the imposition of these new duties on foodstuffs and coal will have the effect of still further depressing the standard of living of the workers in the small towns and the rural areas?
In my view, the difficulties referred to by the Minister for Finance, in the course of his Budget statement, and the difficulties referred to by other speakers from the Government Benches, in respect of the balancing of the Budget this year, arise mainly, if not solely, out of last year's spectacular gesture in cutting income tax. Last year we had a dramatic gesture from the Minister for Finance in cutting income tax. Obviously, the Minister must have thought that he would be justified in doing so without recourse to taxation of food this year. Instead, however, we find that the Minister who, last year, cut income tax, finds it necessary this year to impose fresh taxation on food. I want to ask the House, and the members of the Government Party in particular, to look at the remarkable swing to the right which is evidenced in this Budget. One would think that the Minister for Finance had had long conversations with the banks. In 1934 income tax was reduced and the tea duty was abolished. In other words, there was a levelling up and, perhaps, a wider distribution of benefits. The rich were to have income tax reduced and the needy section of the community were to have the tea duty abolished. Now, look at 1935! We find now that the duty on tea is to be restored, while the reduction in income tax is to be continued. In other words, this year the poor are going to pay more than those who are able to pay income tax.
In that very change this year, you have clear evidence that the Government, in taking the choice between increasing income tax and putting a tax on the foodstuffs consumed so generally by the poor, have definitely voted in favour of taxation on foodstuffs and leaving the income taxpayers in the position in which they placed them last year. In a choice between these two alternative forms of taxation, we might well ask ourselves who is the more capable of bearing the burden—the income taxpayers or the unfortunate people who will be compelled to bear these taxes on food and who are finding it difficult enough already to meet their obligations on their present sources of income? I should have imagined that, faced with a situation of that kind, the Government would have placed the burden on the back that was broadest and most capable of bearing it. We had good reason, in any case, to believe that that was the policy of the Government. Speaking in this House on the 29th April, 1932 (Col. 909, Vol. 41, Parliamentary Debates) the President spoke as follows:—
"Our purpose as a Government is to see that these burdens rest heaviest on the shoulders of people who are best able to bear them and rest lightest on the shoulders of those least able to bear them."
That was in 1932, shortly after the Government came into office. The whole philosophy of the Government at that time was to put the burden on the shoulders of the people best able to bear it and to put the lightest burden on the shoulders of the people least able to bear it. Let us try to reconcile that philosophy with the way things are being done now. Deputy Good has told us that the burden of taxation is being distributed over a wider field so as to emphasise that certain people must pay for the social services that are to be made available. In other words, while the President says that he would put the heaviest burdens on the shoulders of those best able to bear them and the lightest burdens on the shoulders of those least able to bear them, we find that by this Budget burdens are being put on the backs of old age pensioners, on the backs of lowly-paid workers, on workers receiving 24/- a week, on old age pensioners and even on forestry workers referred to previously by Deputy Davin. All these classes are going to have these burdens put upon them. Are these the best backs to pick out for the imposition of new taxation? Are these the backs best entitled to bear the burdens? I would like to ask the Minister for Finance to reconcile the philosophy of the President's speech with the burdens imposed by this Budget. I think the Minister will find it extraordinarily difficult to do so. Every member of his Party will likewise find it extremely difficult to do so.
The President's speech last night looked to me as if he wanted to imply that the Labour Party were restricting the development of social services. Lest anybody should hold that misconception I want to say now very definitely and positively that we are anxious that the existing social services should be continued. We make no apology to anybody for demanding an extension of the existing social services which at present can in no way be described as liberal or extravagant; nor will we make any apology for asking, as the President asked in 1932, that the cost of maintaining these social services, necessary as they are under our present system of society, should be placed on the backs of those most capable of bearing them. In his statement defending the Budget last night the President said that there was no way in which they could bring up taxation to their expenditure except by the methods suggested by the Minister for Finance, and that if those burdens were extended to all sections of the community it was not because the Government wanted to put them on, but because they must do so. While there are other Deputies to speak on this debate to-night—and I understand that the debate is to conclude to-night—there is one aspect of the President's statement on which I want to speak. On his statement I want to say that I do not believe it was necessary to impose burdens. I believe that the money could be found elsewhere. The introduction of his Budget is a confession of inability and a confession of failure on the part of the Government. They should have brought in a Budget that would make the wealthier classes pay their contribution towards the cost of government. The President said that it was necessary to tax the food of the poorer classes. That, in effect, is what the Budget states. I say I do not believe it was necessary to tax the food of the people by imposing new taxation. I do not believe it was necessary to raid the Unemployment Assistance Fund. While we as a Labour Party are anxious for progressive, national, social services and that a progressive social policy should be put into operation in this country, on the other hand —and I speak for my colleagues of the Labour Party in that respect—we are not going to vote to place burdens on the poor and needy sections of the community while there are other sections with broader backs more capable of bearing these burdens.