It will be interesting to see what arguments they used to convince the Minister to make the change and put the tax on the less fortunate fellows who have to deal with the down-town offices. I should like to know their method of persuasion. As regards the cider tax, I think everyone will welcome the fact that it has been cast aside. Half a million is now going to be remitted, and it will be interesting to hear what the Minister will say in that connection. On the last occasion that this tax was discussed, it was represented from this side as a tax on industry. The Minister referred to it as a tax on profiteers. He is now throwing £500,000 to the profiteers.
When he last spoke he said that he was going to get this money from the profiteers. He said that when he got the accounts he realised that there were people who made extortionate profits as a result of the war. He is now yielding, to the extent of £500,000, to the people whom he described as profiteers. His last remarks on this are reported in column 963 of the Parliamentary Debates on 21st May. He said he would like to underline the hypocrisy and humbug of many speeches made over here by Deputies who charged the Government with pampering the profiteers and allowing them to loot the pockets of the poor. He added that now, when the Government were making an attempt to get some of the profits, the ill-gotten gains, there was a howl from this side that it would be hurting industry. We shall be anxious to see what new tune the Minister sings to-day in regard to this matter.
He put the whole of the industrialists —whom he was going to tax through his proposed taxation—into the same category as banks and the bacon curers, and that was a very foul and odious spot to put them. No matter what explanation may be given for those changes, I welcome them. I am particularly glad of the remission of £500,000 on what I describe as industry. There may be an odd profiteer who will get away with a little extra, but this remission will be for the general benefit of industry, and will prevent greater unemployment. This £500,000 remitted, in the sense that it will not be taken from industry, will be a welcome relief to the great majority, and may help to keep a certain number of people employed who, but for the remission, would have to walk the streets. Even so, it will be difficult to keep them from walking the streets sooner or later.
I hope the Minister for Industry and Commerce will keep a new list—a list of those people who should be put down as conscripted, in the sense that they are thrown on the streets through no voluntary demand of their own. They are like a part of the Ministry of Supplies—they could be called the "Minister for Supplies' Volunteers" when they appear in the list of unemployed. On the whole, faced with the present situation, we have, to a certain extent, avoided our responsibility simply because we are not able to shoulder them this year. To that extent we may list them in that way, in this rather foolish type of situation into which we have allowed ourselves to drift.
The whole thing shows a pretty serious lapse of forethought and lack of initiative which has characterised all Government Departments and Ministers since the outbreak of war. One would have thought then—and this may be repeated in the hope that the lesson will be learned while any chance remains—that it was immediately visible to any ordinary mind or far-seeing eye that there was necessity to get in certain supplies while it was yet possible. It was necessary to get supplies for defence materials, if they could have been obtained; it was necessary to get supplies of foodstuffs while the going was good, and the going was good even for a long time in regard to this; it was necessary to get supplies of raw materials for industry, and the going was good there for a still longer time. All that was necessary in the hope of keeping people in employment. Even if it were only for that purpose, it would have been worth while spending a limited amount of money. I do not think it would have needed an expenditure of actual cash if the Minister had been sufficiently alert, had taken time by the forelock and had asked banks to grant credit to certain people in industry. If that had been done, we would not have been in such a completely beleagured position as we are now.
There were promises at the outbreak of war—promises to which the House gave full approval—that there would be a checking of prices and a closing down on profits. By advanced warning given with regard to profits and by advanced notification of increased taxation, we could have avoided injustice and found the real profiteer, without harming anybody except, perhaps, the people employed by such profiteers. We could have reduced the spending power of the richer people and that reduction in purchasing power would not have mattered a whole lot. In addition to that, there was surely a warning from the last war. Even from the preparations already made in 1939 by some of the nations which were facing war then, it could have been realised that every effort should be made to stabilise prices and keep down the cost of living. We found in February, 1941, an index figure of 218; in August, 1939, that was 173. There was an increase of 45 or 25 per cent. on the figure for August, 1939.
We are told in the journal of the Department of Industry and Commerce for March, 1941, that the cost-of-living index number is designed to show the percentage change since July, 1941, in the cost of maintaining unaltered the standard of living of the wage-earning classes as in the month of June, 1922, no allowance being made for any changes in the standard which may have taken place since that date. That means there is no allowance for any change of standard since 1922 nor for the fact that the world has moved on so as to bring people with low rates of wages to some higher degree of comfort, or even something approaching luxury in their lives. It is merely to maintain unaltered the standard of living. The cost of doing so has gone up from 173, as an index figure, to 218. That is for all items. The food item only in February, 1941, stood at 196, compared with a figure of 158 before the war. There is again an increase of over 40 points, or over 25 per cent. on the figure for August, 1939. I have said often that, instead of the Ministry saying they would not allow wages to be raised because wages would start this spiral and we would have wages and prices chasing each other, it would have been far better if the Ministry had said that they would make every effort to stabilise the cost of living, that they would allow increases in the standard of living but would see that the cost of living would be kept the same. That might have meant subsidising to some extent a variety of things, but it would have been a better policy. They allow the cost-of-living figure to swing upwards and say that it is designed to maintain unaltered the standard existing before the war and that now they will not allow any increases in wages to meet that. They hide a particular lack of plan by this vague talk of inflationary spirals. That figure has risen, notwithstanding that more people probably will be thrown out of employment as a result of the particular measure before us and more will be thrown out of employment through the changes which have been announced. It has been foreshadowed that costs will rise still further, but the people will be pegged down to a particular wage level. Whatever may happen them at the lower end, they will not get the chances which those at the upper end will get when extra assistance is being given to meet the extra cost.
With regard to the impact upon industry of the present Budget, I still hold that the taxes proposed in the original Budget statement would have borne very heavily upon industry proper and would not have hit properly and with sufficient severity the person who ought to be hounded out of this country as a profiteer. Warnings were given to Ministers, at the start of the war, that there was one inevitable outcome of the war and Ministers were asked to see that excess profits would not be allowed. The speeches made from every part of the House at that time showed an anticipation—and a condemnation, nevertheless—that people would make profits in this way. We could not have but the worst forebodings of what would happen, when we looked at what had happened in the previous four or five years, when certain people were allowed to make profits at a time when the country was being crushed by the economic war.
I find it hard to understand the Government policy in this matter. The Minister for Supplies told us for months, in the sort of hoarse exultation that he always adopts when these matters are under discussion, that no profits would be made and that he was in control, that there were supplies in plenty and that he was looking after them. He was changed from that particular Ministry and another member of the Government took it over. Quite recently the Minister for Industry and Commerce replacing him was calling together employees and employers and saying that it was a question now of putting all hands to the pumps as the poor industrial ship was very heavily waterlogged and if we wanted to keep going sacrifices must be made by everybody. He did not say that there were supplies in plenty and did not indicate that there was any question of undue hardship upon those firms by checking the rate of profit or prices.
The Minister for Finance came along and in his Budget statement told us that these people were too well off. Previous accounts had not let him into the secrets of the trade but quite recently he did realise that they had made extravagant profits as a result of the war and he wanted the greater part of those profits to accrue to this State. He proposed to take 75 per cent. of those profits, leaving 25 per cent. to meet the bad repercussions of the difficult economic situation and the still worse times which would come. Yesterday the Minister for Supplies went off to a Fianna Fáil club and told there in detail what he cannot be made say here where he is subject to criticism. He has gone back on the crowing note that supplies were good and that everything is happily as good as it could be expected to be. Against all this, the Minister for Finance comes in and tells us that, apparently, now he has discovered that these profits were not so much in excess as he thought previously. He is concerned now, apparently, about the effect on unemployment that the exaction of these taxes involves and proposes to reduce them and to throw away £500,000.
Could we get something in the nature of a policy instead of a welter of inconsistent statements about the four or five things I have described? I believe there is profiteering going on. I believe it could be got after, and I believe that that should be done. I do not believe there will be any peace amongst the lower element of the community who are kept to a particular standard while other people before their eyes are openly profiteering.
I have often spoken of Rank's and of bacon firms. They are no small people in the way of profiteering. They had devices of their own. The Ministry had these devices exposed by two commissions which they set up; having got these reports they sat quiet. These people, whose sins were blazoned before the public, simply went on sinning. We know that the Ranks' situation was dealt with in the report. They came here and spent a certain amount of money acquiring milling interests. They added to these milling interests since the Government came into office and they unloaded on an unsuspecting Irish public shares in "Ranks (Ireland) Ltd." They recouped themselves the greater part of their capital expenditure by what they got from the Irish public, and having pocketed pretty nearly all they expended, they still retain a controlling interest in the company. They were able to put that over on the Irish public either with the connivance of the Ministry or owing to the inability of the Ministry to take any steps to have the situation rectified. They allowed these people to continue with profits of a high standard, though they may seem low when considered in relation to the very high fabric which they erected.
The bacon curers had a different device. They did not get away with so much. They had not so good a period to work in, and had not the same claim on the Government to strengthen them as Ranks Ltd. They were put into a position of trust, and were given control of the industry. They were told that if they came through a particular bad period they should build up a fund so that they could keep people in production by raising prices artificially when prices were going down and taking a little extra when prices were good. They proceeded to build up the fund, and at that point they raided the till, according to the commission's report. What was the measure of the estimate they made? The measure was the amount in the till—every shilling of it. That was exposed in the commission's report, and the Government was asked to take steps to deal with them. They have not dealt with them. The Minister for Supplies told us that these people were not profiteers at all.
I do not think that is the view of the present Minister for Industry and Commerce. The Minister for Supplies said he had a way of getting after them and that he was going to get after them. We have not seen it yet. We have not seen what knife was being sharpened for these people. Until we see it definitely in operation on them and something excised from them, there will be very little in the way of peace or quiet in industry or those employed in industry.
I put these people and certain other people who have abused the tariff policy in a class by themselves, and I segregate them from the ordinary body of Irish industry. Whether there are more in the profiteering class than in the other, I do not know, but the blatant examples of profiteering are certainly no advertisement for the tariff policy, and certainly do not inspire confidence in the people in a Ministry which, when its eyes were opened, did nothing to get rid of the abuses which have crept into a system which they themselves established. I think something should be done even at this late stage about Ranks (Ireland) and the bacon curers. I called attention here recently to the fact that a director of one of these bacon companies, having, I suppose, steadied himself a bit on his business footing on whatever his share of the loot was when they emptied the till or fund which they had been allowed to build together as public trustees, announced that, despite all the hazards of the last year, they made an extra £12,000 profit last year. The Minister was going to take 75 per cent. and leave them 25 per cent. to carry on, and possibly he is now going to take less. Of course, that was a case that called for special inquiry and for some action on foot of the special inquiry. With people like Ranks, the bacon curers and a particular bacon company, possibly we would get in all the money that is being thrown away, or that is not being taken as a result of the remissions announced to-day.
I have never in this House drifted into the mistake of equating Ranks and the bacon curers with those who run Irish industry, and I would dislike to see anything done to Irish industry simply under the cloak of getting in a half-hearted way at people like Ranks or the bacon curers. They should be segregated into a special class, to a special place in whatever industrial hell the Minister is going to have reserved for them. They should have their own special punishment, and, if we can get some benefit, whatever the thumbscrews the Minister uses on them, all the better. I object to people pretending that Ranks and company were not making money. All I say is that it is a pity they were allowed to get away with so much for so long.
Two or three things have emerged from the reconstructed statement of the Minister for Finance. The figures are confusing, but, as they are to a certain extent pointers as to how the State is able to bear the weight of taxation, perhaps the Minister would give us some enlightenment. In his statement explanatory of the Budget, he said he expects additional revenue from income-tax and surtax of £320,000 as a result of an increase of 1/-. The old calculation was that an increase of 6d. brought in £500,000, so that an increase of 1/- should bring in £1,000,000. One must recognise that the greater number of shillings put on, the greater the likelihood of the £500,000 or the £1,000,000 becoming correspondingly less. Nevertheless, it is surprising to see that a rate of 1/- in the £ on income-tax is calculated to bring in only £320,000. I should like to find out how the Minister will balance the figures when making an adjustment between corporation profits and excess profits. Previously, we were told that the corporation profits tax figure was £1,720,000. If we assume that the £500,000 now being set aside comes entirely from this source, it looks as if the Minister will get in £1,220,000.
In the table that was circulated with the estimates of receipts and expenditure for the year ending the 31st March, 1940, these two headings— excess profits tax and corporation profits tax—were estimated to bring in £673,000. These calculations are definitely mixed, and I do not pretend that I have extricated them from their context. But, if the figures are suitable at all for the purpose of making a comparison, one may say that it was estimated that the old rate for excess profits and corporation profits tax would have brought in £673,000 and that now they are expected to bring in about £1,200,000. I do not say that figure is right, but, at any rate, it must be somewhere around £1,000,000 and is, therefore, a heavy tax on industry. The Minister proposes to remit the £500,000 that he had expected to get from those described by him as profiteers. I am anxious to hear what convinced him to adopt that course. Was he swayed by the arguments advanced with regard to retrospective taxation? Was he led to take this step by reason of the fact that business is facing a lean time, and that further heavy demands on business and industry might lead to an increase in unemployment? He proposed to get £673,000 from certain avenues of taxation, but we find now that the figure will be in the region of over £1,000,000.
I come back to the question of borrowing to which many Deputies have referred. The figure under the head of what the Minister calls sound borrowing is £1,178,000. He also proposes to borrow, in a way which he cannot so describe, £4,500,000, so that his entire borrowings will amount to £5,750,000 in a year in which he said he had attempted to make economies in the Book of Estimates. I find that the way that book itself sums up his effort is this, that the net increase over last year is something short of £700,000. As the Army Vote represents £1,400,000, we may take it that if it were not for the increase in that Vote there would be, as between the two years, a decrease of about £700,000. On a further examination we find that £400,000 of that was due to the dropping of certain employment schemes, so that when one looks at the Book of Estimates the so-called economies are found to be a vain sort of thing.
In this year the Minister recognises that he cannot tax the people any further. There is a definite recognition that unemployment is going to increase, and a definite acceptance of the view that the cost of living is on the increase. It is recognised, and cannot be denied, that our people are flying out of the country and are prepared to go to bombed England rather than stay here and wait for the impact of hunger. In that situation, the economies claimed by the Minister in the Book of Estimates are surely fantastic.
The Army, with its allied services, is going to cost £9? millions this year— nearly £750,000 a month. As regards that expenditure, this House does not know what proportion is going to be spent on materials and Army equipment, and what proportion on the people who handle that equipment. The Minister presents the House with an Estimate for £9? millions per annum. That is the sum this definitely poverty-stricken State is expected to bear. We do not know how much of that is going to be useful expenditure from the point of view of defence. We have not been given the proportions as between equipment and man power. The Minister simply tells us that the Army is going to cost £9? millions this year. He does not tell us anything with regard to the proportions I have spoken of. We know, at any rate, that this will be expenditure mainly on another form of occupation, on men who, in the main, have no other occupation.
The Minister's attempted drive towards economy in this particular field of expenditure does not create any great confidence. First of all, as Deputy Cosgrave has said, the Minister misled people by saying that, when he referred this Estimate to a certain body, they agreed that no economies could be made in it. It was, however, discovered later that it was to the Army Council, a statutory body, that the Minister had referred the Estimate.
It would be ludicrous to expect that any body of that type, in view of its associations, would give any sort of ready ear to any suggestion of economy. One realises that it is easy to get money for the Army, particularly in the circumstances in which the Estimate cannot be subjected to a proper analysis. The whole thing has to be done sub rosa. There is also the feeling that if anyone objects to the expenditure of money for the Army he will, immediately, be held up to public scorn as a person who wants to weaken the defence of the country. A further repercussion may be that it may be said that such a person may even be weakening the morale of those people who have been good enough to give their services in the defence of the country. Even good Army men will recognise that there is something to be said for having proper defence equipment and a proper defensive corps. The good Army man would not like to have to face the public afterwards and say that on account of the lack of equipment his efforts could be of very little use in repelling an attack, and at the same time be paraded as the person responsible for all this taxation.
One must realise, however, that a good part of this £9? millions that the House is being asked to vote will be useless expenditure. We are tied by the Minister's statement that this sum is required. The Minister cannot promise the results that will accrue from the expenditure of this money. We know the harm that it is going to do. The Minister has been driven from his attempt to tax industry because of his fears of increased unemployment. The only excuse he can give for all the borrowing that is foreshadowed is that the defence of the country simply demands it. We shall have to wait until later, I suppose, to get an explanation of how much of this expenditure was ever likely to be of any use, and how much of it was simply another way of hiding still further the vast amount of unemployment that the Government have already created by their twin policies of industrial tariffs and excess taxation.