The purpose of this Bill is plain and simple. It is to restate, in the clearest possible terms, that the Guarantee Fund is, and since April, 1932, has been liable for any deficiency arising in the Purchase Annuities Fund through the non-payment of land annuities. As I shall show presently, the Dáil intended that this should be the position. We are asking it now to reaffirm its intention in terms that will put it beyond challenge.
The House is aware that the Guarantee Fund procedure has been an integral part of land legislation since the Purchase of Land (Ireland) Act, 1891. When the Land Act of 1933 was introduced in the Dáil by the Minister for Defence, then acting Minister for Lands, on the 28th June, 1933, the Minister, speaking on behalf of the Government, made it clear that one of the provisions of the Bill was designed to ensure that the Guarantee Fund would remain liable in respect of the non-payment of the reduced annuities. I refer the House to volume 48, column 2387, of the Dáil Reports. They will find on reference there to that, that the Minister's exact words were:—
"As regards the financial provisions consequent on the funding and revision of annuities, it is proposed that the deficiency in the Purchase Annuities Fund or in the Land Bond Fund, arising from the revision of annuities, shall not be a charge upon the Guarantee Fund, while not relieving the Guarantee Fund from liability to make good any other deficiency in either fund. That is to say, the Guarantee Fund will remain liable for the arrears of the reduced annuities payable in future."
The Dáil accordingly passed the Land Act of 1933 in the belief that its provisions would enable this, among other purposes of the measure, to be fulfilled.
In the Seanad an amendment to the Bill was moved on the Committee Stage by Senator Wilson—to insert a new sub-section as follows:—
(2) The charge on the Guarantee Fund in respect of the deficiencies in the Purchase Annuities Fund arising from the provision of this part of this Act in relation to the payment of the arrears of payments of annuities by means of the funding of annuities, shall cease on the passing of this Act.
In moving that amendment, Senator Wilson said: "My object is to do away with the Guarantee Fund altogether."
Nothwithstanding the fact that the acting Minister for Lands stated, on behalf of the Government, that he would not accept a proposal of the kind, the Seanad adopted Senator Wilson's amendment. Apparently, however, there was some doubt in the minds of certain Senators as to whether Senator Wilson's amendment, which, as I have said, they had adopted despite the opposition of the acting Minister for Lands, would effect their purpose, and, accordingly, on the 29th August, 1933, the Seanad adopted a further amendment, moved by Senator Sir John Keane, which was designed to carry out Senator Wilson's intention more certainly. Again, the acting Minister for Lands made it clear that, as the amendment would relieve the Guarantee Fund of its liability to make good any deficiency in the land annuities collection, the Government was not prepared to accept it.
In due course, the Seanad's amendments seeking to abolish the Guarantee Fund procedure came before the Dáil. The acting Minister for Lands moved that the Dáil disagree with them and, in doing so, pointed out—again I am quoting his exact words, and the reference is to the Dáil Reports, volume 49, column 1970—that:—
"These amendments would mean the abolition of the Guarantee Fund and the substitution of the Central Fund as the fund out of which deficiences should be made up if the land annuities are not paid."
The Dáil agreed with the Minister and rejected the Seanad amendments; thus, for the second time, clearly indicating, by the formal process of legislating, its purpose and intention that the Guarantee Fund should remain liable for any arrears of the reduced annuities. Finally, when the Bill came up in the Seanad again, the Minister for Lands urged the Seanad not to insist on the amendments relating to the Guarantee Fund, which had been moved by Senator Wilson and Senator Sir John Keane, respectively. The Seanad accepted this motion, and the amendments were dropped. So much for the clear intention of the Oireachtas as manifested in the course of the debates on the Land Act of 1933.
The question of the position of the Guarantee Fund arose again on the Land (Purchase Annuities Fund) Bill, of the same year. In the course of the discussion on the Committee Stage of that measure, Deputy Roddy — again I am quoting, and the reference is to the Dáil Debates, volume 46, column 1005—put a question in the following terms:—
"Are we to assume from the Minister's statement here to-day that the Guarantee Fund will still operate as in the past — that the grants to local authorities will still be paid out of that fund, and that in the last analysis the rates will still be liable for any arrears of unpaid land annuities, even when the new funding arrangement is in operation?"
To that question I replied:—
"This leaves the Guarantee Fund position undisturbed."
The Leader of the Opposition, Deputy Cosgrave, then asked:—
"If there is any shortage in respect of the collection of that £1,000,000, will that shortage be made good by the Guarantee Fund on 31st January next?"
My answer was: "Yes, certainly"; whereupon, Deputy Cosgrave made the comment: "The House understands that."
In due course, the Land (Purchase Annuities Fund) Bill went to the Seanad, and there the question of the Guarantee Fund was raised once more by Senator Sir John Keane, who asked what was the position of the Guarantee Fund in future. My reply will be found in volume 16, column 857 of the Seanad Debates, and was as follows:—
"The Guarantee Fund, so far as the present intentions of the Government go, will be retained as a feature of the land purchase finance. Naturally, the contingent liability on that fund will be greatly reduced by the fact that the total amount of the annuities to be collected will be reduced; but it will be retained, as I have said, as a permanent feature of land purchase finance, and the local authorities, to some extent at least, in the future as in the past, will be made responsible for any arrears in the land annuities which may arise."
There is one other statement to which I desire to draw the attention of the House. It will be found in the Dáil Debates, volume 49, column 774. Deputy Roddy, having inquired whether sub-section (3) would not create a new drain on the Guarantee Fund for the future in connection with the Land Acts from 1881 to 1889, the acting Minister for Lands made the following reply:—
"The Deputy has explained the intention of the sub-section. The annuities under the Acts of 1881 and 1885 were not covered by the Guarantee Fund, so it is simply to secure uniformity. They are all covered now by the Guarantee Fund."
This reply is important because it indicates that, not merely was it the intention of the Government to preserve the liability of the Guarantee Fund in relation to the Acts of 1891 and subsequently, but that it asked the Oireachtas to enlarge the scope of the guarantee provided by the fund, so as to make it cover the annuities payable under the Acts of 1881 and 1885; and this the Oireachtas, in due course, did.
In face of the history of the matter, as I have related it, and of the statements made by the Ministers responsible for piloting the Land Act of 1933, and the Land (Purchase Annuities Fund) Act of the same year through the Oireachtas, can it seriously be contended that the Dáil ever intended to do otherwise than to confirm as a charge on the Guarantee Fund any deficiency which might arise in the collection of the land purchase annuities?
Such was the position and such was the policy of the Government and Oireachtas in 1933. There has been no change either on the part of the Government or of the Oireachtas in that regard since. In fact, from time to time responsible Ministers, speaking with the authority of the majority of the Oireachtas behind them, have made it clear that the Guarantee Fund liability would remain unchanged. Let me recall to the House some of the definite declarations which have been made in this connection.
Speaking in the Seanad on the 22nd March last on the occasion of the Central Fund Bill—the reference is Seanad Debates, volume 19, column 1473—I said:
"So far as we are concerned, the Guarantee Fund is going to operate. We want to make it quite clear that the man who wilfully withholds his annuities is not penalising the central Government but is penalising his honest neighbours who are willing to meet the obligations they undertook when they applied for and were granted a parcel of land by the Land Commission."
And, again, in my Budget statement on the 15th May last (Dáil Debates, volume 56, column 859), I said:
"I do not think that those who have been responsible for withholding those annuity payments—that is, funded annuities—in respect of which the Guarantee Fund has had to borrow, wish to bring matters to that pass, but in any event the Government is determined, for the sake of the general credit of the State, to enforce payment of those moneys."
And in the Seanad on the 18th July, on the Second Stage of the Finance Bill for this year (Seanad Debates, volume 20, column 598), I again said:
"I do not know whether the Seanad will permit me to enlarge on the Guarantee Fund. The Guarantee Fund in the form in which we operate it now was in existence since the State came into being and has been a normal characteristic of our land purchase legislation. It may have disadvantages, but, on the other hand, it has this advantage—it does bring home to public opinion the injustices which a man may inflict on the community if he does not meet his just obligations to the State. So long as land purchase exists on its present basis, so long as the State has to find some solid security for the moneys which it advanced in order that farmers who were formerly tenants—most of them tenants at will—might eventually become the freehold owners of their land, so long as the State finds it necessary to have a real security, I do not think there is going to be any departure from the present system of Guarantee Fund."
Furthermore, on the 21st May last (Dáil Debates, volume 56, column 1425), the President made it clear that in his opinion the further subvention of local rates from the Exchequer would be incompatible with the continuance of local government, and that the maintenance of the Guarantee Fund is the only known way in which the payment of land purchase annuities can be guaranteed.
Here, then, is the position with which the Government is called upon to deal. The Oireachtas, in order to protect the public credit and to enable land purchase to be carried through at a reasonable cost, has devised the machinery of the Guarantee Fund to secure the public purse against loss in a certain contingency. The desirability of maintaining that Guarantee Fund has been several times challenged in the Oireachtas, and each time the Oireachtas has decided that the Guarantee Fund must be maintained. Minister after Minister, speaking for the Oireachtas, as they and they only, so long as they command a majority in the Oireachtas, are competent to speak for it, have emphasised and reiterated that intention.
Litigation is initiated in the Courts, in my view vexatious and factious litigation, started not so much with the desire of benefiting the local authorities as of embarrassing the Government and the Exchequer.