Léim ar aghaidh chuig an bpríomhábhar

Dáil Éireann díospóireacht -
Wednesday, 4 Dec 1946

Vol. 103 No. 13

Imposition of Duties (Confirmation of Order) (No. 2) Bill, 1946—Second Stage.

This Bill is in standard form and its purpose is to confirm an Order made by the Government under the Imposition of Duties Act, 1932— Order 129—which imposed duties of customs on wireless telegraphy apparatus and component parts thereof. The House is probably familiar in a general way with the history of the duty on wireless apparatus and component parts. In 1926 that duty was imposed for the first time. The duty then imposed was a flat rate duty of 33? per cent. ad valorem on wireless apparatus and component parts of wireless apparatus and was intended for the sole purpose of raising revenue, which was regarded as required at that time to finance the establishment and the operation of the broadcasting station. In fact, a couple of years later the revenue from the duty was diverted to the general fund of the Exchequer and since then there has been no segregation of the proceeds of the duty or no specific allocation of it to wireless broadcasting purposes. The duty had no protective effect. Subsequently, the duty was altered so as to encourage the assembling of wireless sets here. In effect, the full rate of duty upon assembled sets and upon certain assembled components of sets was increased to 50 per cent., while the duty upon the parts of sets was reduced to 25 per cent. That alteration in the duties was intended, as I have said, to encourage the assembling of wireless sets here, while at the same time yielding a revenue for the Exchequer.

When did that take place?

That took place in 1932 and various changes in the duty were effected by different Finance Acts up to 1937. The purpose of the change effected by this Order is to consolidate the protective effects of the duties and to eliminate the revenue-raising aspect of them entirely. The duty upon components of sets, such as wireless valves, which are not made here and are not likely to be made here in the near future, has been removed and the duty upon assembled sets has been reinforced by a specific duty irrespective of the value of the set or component imported and supplementary to the ad valorem duty. The reason why it is necessary to have a specific duty in addition to the ad valorem duty is that the practice of the trade before the war was to give very substantial discounts to traders so that the declared value of the set for customs purposes was very much below the price at which the set was sold to the purchaser. That position permitted importers to pay the duty upon the low declared value and still make a substantial profit on the sale of the set at the price fixed by the manufacturer.

In fact, the protective duty in operation before the war did not succeed in securing the assembly or partial manufacture of sets here to the extent that was hoped. In the immediate pre-war period, only 25 per cent. of the total number of sets purchased in a year were of Irish assembly and manufacture, the balance being imported. Experience during the war, however, showed that it was possible to contemplate the manufacture here of components of sets which were previously imported and used in the assembly of sets here and the new range of duties is intended to give maximum encouragement to that development.

The duty came into operation some time ago and since then there has been substantial development in the industry. One firm has established a new factory of substantial size and two other firms have come into production. Employment in these firms has increased during the past year from roughly 100 to about 350 at present. There are some 20 different makes of sets being produced. I understand that three other firms are about to come into the industry. The process of assembly has been considerably extended and a number of parts, including loud-speakers, are now being manufactured here. It is hoped that the expansion of the industry which is going on at present will continue. Roughly, the pre-war demand was about 40,000 sets per annum. It is assumed that when supplies become available the post-war demand will be somewhat larger, particularly with the development of the rural electrification scheme. The present production of the factories operating here is at the rate of 25,000 per annum. That rate of production can be considerably improved upon when supplies of materials become available in greater volume.

Is the 25,000 the Minister speaks of potential production?

They are producing at that rate now.

They are actually producing?

At that rate. The firm which was first to resume manufacture after the emergency and which is now in the business to the largest extent is selling sets here at the same price as they are sold in Great Britain, exclusive of purchase tax. I am referring now to sets of the same design produced by an associate firm in Great Britain. The other two firms, which are only getting into their stride, are at present selling slightly above the British price but expect to sell at the British price when the full production stage has been reached. Because of the incidence of the purchase tax in Great Britain, the selling price here is actually lower than in that country.

The industry is obviously a desirable one to encourage. It is one that has considerable potentialities and requires an amount of skill on the part of the operatives and it has been demonstrated that it can be successfully operated here on an entirely economic basis. I think, therefore, that the Dáil will generally approve of the principle of giving reasonable protection to this industry and will certainly approve of the change in the duties which were effected by this Order, the primary purpose of which, as I have said, is to eliminate the revenue-raising aspect of these duties so as to make it possible to produce wireless sets here more economically than previously.

How many people are employed in the manufacturing end of this industry?

Roughly 350 at the moment. A year ago the number was 100 but it has gone up to 350 and it is still increasing.

We would be all anxious to see the radio manufacturing industry established here but I am entirely opposed to this Order as a means of doing it. If we are going to establish the radio industry here in a secure way I do not think we should discuss it with bated breath. I think we should know what firms are really established here, what firms are considering engaging in the industry, what the general effect will be on the type of services available here in the line of radio receivers and the type of employment that will be given. This Order is rather a different thing. The Minister has indicated that the purpose of the Order is to protect a developing industry here and to eliminate revenue-raising. I think the Minister will find it very hard to convince us that he is going to eliminate revenue-raising, apart altogether from the industry, by the way in which he handled the Order after it was issued on the 17th May. There are at present, I suppose, 100,000 or 110,000 licence holders in this country. The great majority of the sets are seven or eight years old and as a result of this Order any repairs that will have to be carried out to them, will be carried out at an enormously increased cost because every bit of material required for the maintenance or repair of these sets is going to be subject to the duties the Minister speaks about here.

In the first place, the Minister has inflicted a very serious injustice on a number of people who, after correspondence with his Department and the Department of Finance, very early this year, or perhaps in the end of last year, made arrangements to import certain items required for the assembly or maintenance of these sets and of wireless telegraphy apparatus generally. With the difficulty of getting supplies and getting them shipped, even though dealing with the Minister's Department, the Department of Finance and Irish Shipping, we had the astounding case of the Minister's refusal to waive this customs duty on a substantial import of condensers that was arranged by a Cork firm and which arrived 24 hours after the Order had been issued. That was one notorious case that was discussed here but there were other cases throughout the country of the same type of injustice. That was an injustice to the firms themselves but the firms themselves will get their own back in time by raising the charges to the general public.

The general public, in the circumstances of this Order, find themselves in the position that any repairs that have to be carried out to their present apparatus will have to be done at an enormous cost. Taking some of the provisions of this Order No. 226, we find that in the case of a transformer with a core wholly or partly of metal, the average cost will be about ¼, but there will be a duty of 7/6 on it. Again, a wire wound resistance, the average cost of which would be 8d. or 9d., will have to carry a duty of 3/-, and a small resistance, classified as a coil, which costs about 2½d., will have a duty of 3/-. There you have duties ranging from something over 500 per cent. to over 1,400 per cent. The Minister has indicated that he allowed certain people to import these parts, but I understand only for the purpose of making up new sets.

I had a number of questions drafted to be put down after the Second Reading, but I understand the Minister will be looking for the Committee Stage of the Bill to-morrow and there will not be an opportunity of putting the questions. By the time we discuss these matters to-morrow in Committee the Minister might have information in regard to some of these things. I wanted to ask the Minister for Finance who, under Section 6 of this Order, can, after consultation with the Minister for Industry and Commerce, authorise the Revenue Commissioners to issue a licence to particular persons for the import of these parts without the payment of duty, if he will state the names and addresses of the particular persons to whom a licence was issued by the Revenue Commissioners to import free of duty the articles referred to in Section 4 of the Emergency Imposition Order No. 226, from the 18th May, 1946, up to the last date for which information was available, if he will state in respect of the articles referred to under paragraphs (a), (b), (c), (d), (e) and (f) of the section, the number and value of the articles for which a licence was issued to each particular person. I wanted to ask the Minister for Industry and Commerce himself if he will state in respect to the articles referred to in each of the paragraphs (a), (b), (c), (d) and (f) the number and value imported from the 18th May up to the last date for which information was available and for which the duty set out in the Order was paid, the amount of such duty and the number of such articles imported without duty under Section 6 of the Order.

I think it is a most undesirable practice dealing with the setting up of an industry here which it is considered worth while to establish, that we are not given information as to what company is setting up this industry and what company is getting the facilities that are provided for under the Order. I think it is an undesirable and a shady way of doing things. I think when a Bill like this is put before the House, nearly six months after the issue of the Order, we should be given full information as to where, how and through what particular bodies this industry, if it is worth establishing at all and worth giving these facilities to, is being established. I think that there should be no withholding of information as to who they are. There should be no withholding of information as to who are getting facilities for the import of these articles, facilities which are being denied to other people. It is imperative that we should develop and extend our manufacturing arm in this country but it is also imperative that it should be done in such a way that we should all know the circumstances surrounding it. It is equally imperative that, in arranging to develop an industry of this particular kind, we should not do it in such a way as to penalise over a long period people who have already got machinery of one kind or another. Owing to the way this Order has been framed and is being worked, the people who already have wireless sets which are not of the standardised type which will be made here—and there are large numbers of such people—will be penalised year after year in the cost of their repairs. Table No. 1 of the Order refers to "a cabinet or other light container for wireless telegraphy purposes". The duty is 21/-. Many people have wireless sets with cabinets of bakelite or other composition. If any of those cabinets happen to get damaged the owner will have to pay 21/- straight away for an article which ought to cost only quarter of that sum. The Minister is saddling a section of the people with very high and unnecessary charges for the maintenance of apparatus of which they are already possessed. The Minister speaks of the 25,000 sets that are being manufactured yearly at present. No doubt, certain standard types of limited range will be made here and will be good enough for the general use of our people, but they will be very restricted in relation to the types at present in use, which will have to be maintained for many years.

There is then the matter of which I previously complained—the shocking injustice that took place, on the imposition of those duties, in respect of people who were carrying on their business in a progressive, enterprising way and had stuff on order which was "caught" by this Order. If the Order was issued for the purpose of aiding and setting up of an industry here, surely stuff that was on the seas at the time should have been dealt with under some scale which would have meant that they would not have to pay a greater duty than they would if it had been landed 24 hours before the issue of the Order rather than 24 hours after its issue. For these reasons, I am against this Order.

I have no objection whatever to giving the Deputy information as to the firms which are receiving the advantage of duty-free importation of component parts. I should, in fact, have given that information in introducing the Bill, but that it came on somewhat earlier than I anticipated and I entered the Dáil without the notes I had prepared for the debate.

I asked the Minister on the 28th November for that information and I did not get it.

The position is that the licensing provision was inserted so as to provide for the admission of specified component parts free of duty to firms engaged in the manufacture or assembling of wireless sets in this country to the degree approved from time to time. As in the case of motor cars, an approved degree of assembly has been notified to the firms interested in the trade and those who manufacture or assemble in that degree are entitled to the privilege of receiving the components, which are for the time being imported, free of duty—and only such firms.

And only for manufacturing purposes, not for repairs.

I shall deal subsequently with the question of repairs. The firms at present entitled to import components free of duty are Pye (Ireland) Limited, which has a factory in Dundrum area, Electrical and Musical Instruments, Limited, which has a factory in Waterford, and Brownlee Brothers, who are in the Dublin area. These are the three firms which are producing wireless sets at the moment. I mentioned that other firms were contemplating coming into the industry but I do not think that their names should be mentioned until they secure some advantage under the law—either the advantage of protection or the advantage of duty-free importation of component parts.

I think that the Deputy misunderstands the position concerning parts for the repair and servicing trade. I mentioned, in introducing the Bill, that the original duty on wireless sets and component parts was imposed solely for revenue purposes. When the broadcasting station was established, it was decided to finance its activities partially by a duty on wireless sets and parts of wireless sets. For some years after the duty was imposed, the revenue from the duty was earmarked for the wireless broadcasting service. That practice ceased in 1929 and, from that year onwards, the revenue from the duty on wireless sets went into the Exchequer account and was used for general Exchequer purposes. When, subsequently, it was decided to encourage the assembling of sets here, we modified the duty so as to give an advantage to firms which assembled sets here, but the Minister for Finance was unwilling to sacrifice the revenue which he had been enjoying from that revenue-raising duty imposed in 1926. Consequently, the new duty was a two-tier arrangement. A full-scale duty of 50 per cent. ad valorem was imposed on completely assembled parts and the duty of 25 per cent. ad valorem was retained on unassembled parts of sets, so that, at all times since 1926, the repair and service trades have been obliged to pay duty upon the imported components required by them. The position is, to some extent, being eased for those trades by this duty, because, in respect of certain components of sets, which, we are satisfied, it is not practicable to make here, that revenue duty is being removed. The most important of the parts affected by the change are wireless valves. Since 1926, wireless valves have had to pay an import duty. They will now be free of duty.

The position of the repair and service trades in the future will be that they will be expected to draw from the factories operating here, which are now manufacturing parts of wireless sets, the supplies of components required by them to the extent that those firms can meet their requirements. Admittedly, there will be some people who will still desire to obtain wireless sets of a design or make not produced here. They will have to pay duty on those sets and duty on the replacement parts of them but there will be a wide range of sets at different prices and of different performance available for purchase. The three firms I mentioned are at present producing 20 different varieties of sets. With the advent of new firms into the business, the number of varieties will be further increased.

The most notable change which has taken place in this industry is that the attempts of the firms engaged in it during the war to carry on by devising methods of production in circumstances in which a supply of component parts from outside was stopped have shown that the complete manufacture of various components is practicable, and is, in fact, now being undertaken here. That is an important development, first, because it increases considerably the number of people who will find employment in the industry, and, secondly, because it raises the status of the labour employed in the industry. A greater degree of skill will be required for these manufacturing operations than was needed for the assembling operations carried on previously. I do not know what the prospects would be of obtaining supplies of radio sets from abroad at present, but I do not think they would be very strong. At any rate, the supply would be limited and probably erratic.

If we can, as is being demonstrated now, produce wireless sets here under this system as cheaply as they are being produced abroad and sell them at the same price or lower prices as compared with the prices at which they are sold abroad, we must regard the industry as deserving of encouragement. That is the position. The increase in employment in the industry since operations were commenced following the revision of the duty has been quite remarkable. I have mentioned that when operations were resumed after the war 100 people were employed. That number has now increased to approximately 350, and is still increasing, because only one of these firms I mention has as yet got into full-scale production. The others are only now stepping up their production to the point at which they will manufacture on a completely economic basis.

That may be all right now in relation to the industries which are developing, but, in the meantime, these duties are hitting a lot of other people and putting people out of work.

No; they are certainly not doing that, because people who have wireless sets for which parts have to be imported are being required to pay duties on these parts on which they have always had to pay duty. They were never free of duty since 1926, and, whatever their chances are of getting components at present, I think they are just as likely to get a full supply at an early date from these factories operating here as from factories elsewhere.

But to-day the duties are substantially increased.

That is so. The Deputy raised the case of a firm in Cork which was caught with some component parts in transit when the duty went on. I explained the principles which applied in that case to the Deputy at the time. In a matter of this kind, the axe must fall some time. If duties have to be paid by people importing certain classes of goods, obviously, as from some date which is known to the public, the duties must be paid by everybody. If you start to make exceptions to meet the firm which had goods on order or goods in transit on that date, you are giving them an advantage over other firms which, in the normal course of business, would be importing these goods and might have them on sale here in competition with the goods imported by these other firms. If, in one case, the duty is paid and, in the other, not paid, the firm which got exemption would have an advantage, an advantage which I think would redound to their own revenues rather than to the benefit of their customers.

Would it not be better to announce a date on which the duties would be imposed?

It might be possible to do that in present circumstances, with international trade in the sluggish condition in which it is, but everybody knows that in the past if we were to announce in advance the date on which a duty would come into operation, everybody would be rushing to get in goods prior to that date, and some would succeed and some would not. For that reason, the Government has been given and always had power to impose duties by resolution of the Dáil or by Order, and to make them effective as from the date of the resolution or Order, subject only to subsequent confirmation by legislation, as we are doing in this case. No doubt, there is more likelihood of abnormal conditions prevailing in the trade at present, because not merely are supplies scarce but there are some firms selling some makes of sets who cannot get supplies at all and other firms supplying other kinds of sets who can get supplies fairly freely. That, however, is the outcome of chance and nothing very much can be done about it.

I will put the proposition to the Dáil in this way: if we are to have protective duties on wireless sets at all, if we are to encourage the development of this industry, the changes made by the Order we are now asking the Dáil to confirm are desirable. The system of protection which that Order provides for is a better system than the system we had previously. The previous system involved, of necessity, that the cost of sets produced here would be higher than the cost of similar sets produced elsewhere, because on every part which had to be imported, a duty was paid, a duty which was collected by the Exchequer for revenue purposes. The revenue aspects of the duties have now been eliminated, and if we succeed in the effort to ensure that all the wireless sets used here are manufactured and assembled here to the extent we consider practicable, no revenue will accrue to the Exchequer, and if that manufacture is on an economic basis, the sets will be much cheaper than they would have been under the old system, and certainly as cheap as they are available in other countries.

I am quite satisfied that there is no reason whatever why any of these firms manufacturing sets which are of a type which is sold elsewhere as well should not, once they get to the stage of full production, be able to sell these sets here at the same price as that at which they are being sold elsewhere. I have stated that in one case, where full production has already been realised, that has been achieved. In the other cases where full production has not yet been realised, the firms are confident of their ability to do it when full production has been achieved. In any event, with these three firms in the industry producing 20 different varieties and new firms coming in to make other varieties of sets, there should be ample competition, which is by far the most effective way of ensuring economic production and reasonable prices.

The firms in the business are not yet in a position to supply the full requirements of the repair and servicing trade. It will be some time yet before they will be able to do it, but it is part of their programme to step up their production of these component parts so as to meet not merely the needs of their own production but also the full demands of the repair and servicing trade.

Has the Minister given any consideration to the difficulties under which persons who are experimenters or research people in radio transmission labour? They are in very great difficulty under the present Order because their costs have increased enormously.

The Revenue Commissioners have power to exempt from duty in these cases. They also exempt from duty wireless apparatus for use by blind persons or for instructional purposes in wireless telegraphy schools or for instructional purposes in colleges, so that the Revenue Commissioners are given a general discretion to exempt from duty sets or parts of sets required for special purposes of that kind.

Required by colleges or for blind people, but not for use by persons who are carrying on transmission work themselves. These self-instructors are completely excluded from the scope of the concession. A large number of people in the country are interested, and have always been interested, in wireless transmission. These are the people who are definitely and permanently taxed under the Minister's proposals.

So far as there are parts here subject to duty, it is the intention that those parts will be manufactured or assembled here and available for sale through the manufacturing and assembling firms.

But the transmitting people are not catered for there.

The duty applies only to the apparatus set out in the schedules to the Order. There may be other apparatus used for wireless transmission and not listed and, therefore, not subject to duty at all.

In the event of television being adopted in the near future, is the Minister satisfied that these Irish firms would be able to manufacture suitable sets?

Television is not practicable here until there is a television station. We in this country would not receive television broadcasts from other countries. As I understand it, the pictures televised travel in a straight line and the receiving set can operate only within a limited range of the transmitting station. Therefore, there cannot be television here until a television station has been erected; and long before that occurs we can consider what is necessary in that connection.

Is the Second Stage agreed to?

No, I want to vote against it.

Question put and declared carried.

When is it proposed to take the Committee Stage?

It is a one-stage Bill.

I suggest that it be taken to-morrow as the first business.

Very good, if the Dáil must meet to-morrow to discuss the Ministers and Secretaries Bill.

If the Minister wishes, the remaining stages may be taken now.

Bill passed through Committee without amendment, received for final consideration and passed.

This Bill has been certified by the Ceann Comhairle to be a Money Bill, under Article 22 of the Constitution.