Committee on Finance. - Finance Bill, 1953—Second Stage. – Dáil Éireann (14th Dáil) – Thursday, 28 May 1953

Committee on Finance. - Finance Bill, 1953—Second Stage.

Mr. MacEntee

I move that the Bill be now read a Second Time. The mainpurpose of the Bill is to give legislative effect to my budgetary proposals for the coming financial year of which the Dáil has already approved by adopting the Financial Resolutions which I submitted to the House. The Bill, in addition, covers a number of minor matters to which I will refer.

Section 1, of course, is the ordinary charging section relating to income-tax and surtax. Section 2 increases the rate of relief in respect of a premium on an insurance policy taken out after the 21st May, 1953, with any insurance company or friendly society registered, managed and controlled in the State. The rate of relief in this case will be up to two-thirds of the standard rate of income-tax instead of the former maximum of half the standard rate.

Section 3 will operate to authorise the granting of a measure of relief in respect of the foreign income of certain persons, who, while formerly resident outside Ireland, have settled down in this country. The proposed relief is confined to foreign income where in any case affected, the total tax, both here and abroad, on the foreign income is shown to be greater than the tax which would have been payable on it had the taxpayer being solely resident in the country of origin of the income.

Section 4 gives effect to the new scale of entertainments duty in lieu of the scale now in operation under subsection (3), Section 10, of the Finance Act, 1948. As I mentioned in my Budget speech, the existing scale is anomalous at several stages of its gradation. The new scale, while removing these anomalies, avoids increasing the duty on any current admission charges and, in fact, affords some relief at the lower levels. It may happen, however, that the existing duty under the section may be increased at some points beyond the level of the highest admission charges at present in force and to cover this purely theoretical possibility of an increased in the charge, I propose, in order to comply with the financial procedure of the House, to move an additional Financial Resolution before the Committee Stage of the Bill.

Section 5 provides for the exemptionfrom entertainments duty of amateur exhibitions of basket ball and cycle roller racing promoted by their respective controlling bodies or by clubs affiliated thereto. Section 6 provides for the repayment of one-half of the entertainments duty paid in respect of entertainments which are wholly cinematographic performances and which, while not qualifying for existing exemption in respect of entertainments which are wholly of an educational character, can be said to be educational in the sense that they encourage or facilitate the study of languages. It provides for relief where at least one-third of the entertainment consists of Irish language films or where one-half consists of films in, for example, a continental language.

Section 7 provides that where under the existing law exemption from entertainments duty in a rural area ceases to operate by reason of a change in population, such exemption shall not cease abruptly upon the publication of a new census but shall be continued for two years after such publication. The section also provides that as regards the 1951 Census the period of two years shall commence as from the 1st September, 1953.

Section 8 provides for a further period the continuance of certain exemptions from corporation profits tax hitherto afforded to certain public utility concerns (such as railways), to building societies and to the Agricultural Credit Corporation. Section 9 provides for the postponement of payment of income-tax on foreign income where the taxpayer is unable, because of currency restrictions in the country in which the income arises, to remit the income to this country.

Section 10 is merely a constructional section and is self-explanatory. Section 11 is a section which corresponds to Financial Resolution No. 2 and is designed to combat an evasion of stamp duty by means of the exchange of land of unequal value, the difference in value being paid over in cash. Under the existing law, as I explained in my Budget statement, a transaction of this kind is not a conveyance on sale and consequently the increasedrates of stamp duty imposed some years ago may be escaped.

Section 12 provides for a refund of stamp duty in certain cases where persons have paid stamp duty on conveyance or leases at the 25 per cent. rate and have subsequently ascertained that as they were Irish citizens at the time of executing the instrument they need have paid only at the lower rate in force for Irish citizens.

Section 13 is an annual section which provides for the adjustment for the remaining 29 years, by reference to actual expenditure, the provisional annuity for 30 years fixed last year on the basis of the estimate for voted capital services fixed under Section 22 of the Finance Act, 1950, and further fixes provisionally the new annuity, also for 30 years in respect of the estimated expenditure on such services in 1954. Section 14 implements the undertaking given in connection with the Fifth National Loan and which arranged that the stock of the loan would be accepted at its face value with due allowance for accrued interest in lieu of cash in the payment of death duties subject to certain conditions. Section 15 is one which should gratify Deputy Sweetman because it provides that the 30th September will be the latest date for the presentation to the Dáil of the finance accounts instead of the 30th June as heretofore. Section 16 is the customary section placing all taxes and duties under the care and management of the Revenue Commissioners. Section 17 deals with the Short Title.

Mr. McGilligan

This is a very technical, formal and even cold introductory statement by the Minister, something like the hopping of the clods on a coffin after the mourners have gone and public sorrow has been eliminated. We are now apparently expected to discuss such formal matters as certain slight duty concessions, certain concessions to the people who brought the last loan with a State rate of 5 per cent. guaranteed to them, and these other minor concessions contained in the legislation known as the Finance Bill. I suppose the Minister would like to feel that all the horrible things that theBudget carries have been passed over with the Financial Resolutions and that we can now enter on a formal debate of the provisions of this Bill and, having done so, divorce the Finance Bill from the Budget. I do not intend to allow such a consideration to take place. In the week-end before the Budget was introduced a Dublin newspaper produced an article under the heading "National Terror" and underneath they published the Minister's photograph. It was a wise forecast but, if the article were to be rewritten now, it would probably be headed "National Calamity". It was written only in anticipation then.

We now know that the particular type of economic suicide that had been carried on and forced on the community last year is to be continued and extended in all its severity for a further year. I suppose the Minister, like all his colleagues, feels that one should put aside all thoughts of emigration and one should refrain in the coming year from accepting the flow of people out of the country as an indication of the failure of the Government to provide at home for our young men and women those opportunities of earning a livelihood which they might reasonably expect under a proper economic system.

I have a cutting here from an article which appeared at a time when hopes were brighter and hearts were lighter with regard to the anxieties of the Government, particularly with regard to emigration, and when the present Taoiseach spoke in America of his anxiety on seeing the Irish people leaving their native country. He is reported as having said that the fact which should give those interested in the future of Ireland most concern was the undiminished flood of emigration from the country. He continued:—

"Within the memory of persons still living the population of Ireland has been cut down from 8,250,000 to 4,250,000. In the 18 years, 1911-1929, 650,000 emigrants left our shores—more than the entire population of one of our four provinces and of the City of Cork combined.

Out of every 100 persons born inIreland who were alive in 1926, 43 were living abroad.... Those who leave are almost exclusively young men and women in the prime of life and at the period of their maximum economic productivity. No nation could face the continuance of such a drain on its vitality and hope to prosper. Ireland's emigration has been caused by the economic policy forced upon us during the latter half of the 19th century. The rulers of Britain set out to make their country the greatest manufacturing and trading nation of the world. The part they designed for Ireland in their scheme was to be purveyor of cheap, fresh food for the British workers, who were being transported from the land to the mines, factory and the merchant ship. They took care that Irish manufactures should be discouraged and handicapped both because they coveted the Irish market for British manufacturers and because they wanted the Irish people to have no alternative industry to the rearing of herds that ministered to British needs.

The result is that to-day pastoral farming is Ireland's main industry, and pastoral farming requires and can maintain relatively few people."

That judgement having been passed, he went on brightly to the future:—

"To end emigration we must end its cause. The policy designed for the Irish people by England and in England's interests must be set aside. Ireland must no longer be left almost entirely dependent on the raising of herds for British markets. The various needs of the home market must be supplied, as far as practicable, by home industries.

The Irish Free State area alone imports each year about 170,000,000 dollars worth of goods that could be produced at home. When we have organised ourselves to produce those goods in our own country the dearth of work which is the cause of emigration will cease."

It was a simple plan.

An Ceann Comhairle

Would the Deputy give the reference?

Mr. McGilligan

I shall give the cutting to the official reporters afterwards.

Mr. MacEntee

It is customary to give the reference always.

Mr. McGilligan

I shall give the reference in my own time. The article goes on:—

"Ireland is to-day a land where mothers rear their children for export, but her economic backwardness has one advantage. It simplifies the problem of industrial reorganisation and gives our people an unique opportunity to become pioneers on the path of social progress. In no other country, perhaps, could the benefits of improved machinery and modern efficiency in production be so readily made available in the homes of the people.

It is not for its own sake merely that Irish Republicans are striving for political liberty. Political liberty is necessary to secure the freedom from outside interference on the stability on which economic reconstruction depends. The ultimate aim is to give the Irish citizen—the worker and his family—the opportunity for the fullest and best line of which he is capable and which the organised resources of the nation can afford."

I think "line" there should read "life". This appeared in a paper called The Sunand it is copyrighted by the United Press. It was apparently an article written by the present Taoiseach. The date is the 17th March, 1930 when, as I said, hopes were very bright. The simplicity of the plan to end emigration must have been appealing to those who were so simple as to accept it. That was 1930. We are now in 1953, and in the year 1953 a clergyman, addressing a meeting of the Waterford branch of the Irish Union of Distributive Workers and Clerks, said:—

"The declining Irish birth rate"

—and this is 23 years afterwards with the plan, of course, in full operation in the meantime—

"one of the principal causes of which was unemployment, was particularlyalarming and as a result the Irish were becoming a vanishing race."

The reverend gentleman went on to say that the Irish race had been declining for the last 100 years and, if the trend continued, in another century it would be reduced to be a handful of crocks, neurotics and so on. The simplicity of the plan apparently did not work out or is it the case still, as it was alleged to be the case in 1930, that the Government had a plan before them which no other country had and it was only obtuseness or else political malice on their part that prevented them taking this plan down, operating it and so remedying unemployment and emigration?

In the month of April in this year the census report made its appearance. It was published in the Trade Journaland the report shows that 78,000 farm workers have left their employment on the farms; that 78,000 is made up of labourers and the members of the farmers' families helping on the land. Seventy-eight thousand have left the land, some to England and some to look for occupation in the cities and the towns. The next day the figures released by the Central Statistics Office caused a headline in one of the papers that the chief disclosure of the census report was that there are fewer young people in the country. A local paper in the month of May in this year carried what it described as the alarming news that 600 people were signing on at Ballyshannon labour exchange and the figures were given to show the contrast with the previous signing on. In a Sunday paper on February 8th of this year a journalist wrote:

"I have seen the most depressing sight in my 24 years in journalism. It was a line of women and girls about 60 yards long, three or four deep, stretching across the roadway from the labour exchange in Victoria Street off the South Circular Road in Dublin. There were about 400 women and girls in the queue and dotted along it were a number of prams."

The article goes into further details, but that is the opening phrase.

Last year there was taken from the pockets of the taxpayers inthis country a sum of money that was represented as a saving on subsidies. The gross figure was almost £7,000,000. With the compensatory social benefits given back the saving from a budgetary point of view was about £4,000,000. It was prophesied with regard to that saving that, if the workers operated their industrial power, there would merely be transferred from the taxpayer to the purchaser of goods on the industrial side the full effect as far as the industrial worker was concerned of removing these aids to the cheapness of food and, as we know, that is what has happened over the year. It was also pointed out that local authorities would have to meet new claims from their employees and when these new claims were met, as it was expected they would have to be met, what was demanded from the ratepayer must necessarily increase. A district justice in the last six weeks, on defaulting ratepayers being brought before him, said it had become perfectly plain in the past six months that the people who were not paying their rates were not defaulting in the strict sense of the word. Summonses involving almost £2,000 were brought by the Dublin Corporation in respect of rates and he enumerated the classes of people which, he said, were amongst those coming before him; everybody was unable to pay and he indicated that, if he had the power—which of course he has not—to make it possible for them to pay their rates in instalments he would make such an order.

The Wicklow County Manager has said that social services there are increasing in scale and in cost and the rates in Wicklow are being pushed up by the cost of the social services which they compulsorily must provide. I think that is the experience all round; the increases in rates are not to any great extent due to local expenses voluntarily incurred but are in the main necessary to meet the increases as far as wages and salaries of personnel are concerned, increases forced upon the local authority on humanitarian grounds as a result of the removal of the subsidies last year or the diminution in the aids to them. The Dublin County Council has metand has had to increase its rate by something over 2/- in the £. In the city the increase is almost double that. In Cork the increase is 5/6. In all places an analysis will show that the greater part of this increase is caused by the alleged saving, from the taxpayers' point of view, of these many millions last year; I refer to what was described as the saving on the subsidies.

This year we are supposed to be happy because the Ministers are constantly taking to the Fianna Fáil clubs to lecture one another across the county border as if they had not time or opportunity to speak to each other in counsel or at their Party meetings in Dublin. They lecture each other on the fact that taxation has reached the extreme limit. The Minister for Lands goes to Kilkenny and he says that back here to Dublin. The Tánaiste goes to insurance dinners and says it back to the Minister for Finance. The Minister for Finance goes to some banquet and tells that for the edification of the Taoiseach, and the Taoiseach addresses all his Ministers and the whole country and the burden of the song is: "We cannot let taxation go to any higher point," as if anybody in the country was raising taxation except the people who are complaining that it has gone to the limit.

Mr. Carter

You wanted to put £900,000 more on it this evening.

Mr. McGilligan

For what?

Mr. Carter

For retrospective payment.

Mr. McGilligan

And I told the Deputy where he could get it without putting on a penny piece in taxation, and there is no denial that the money is there. I would like the Deputy to be coherent: there is no denying the money is there.

Mr. MacEntee

But there is every denial that it should be used in the way you suggest.

Mr. Dillon

You do not deny it is there. Go back and tell Deputy Carter that because the poor laddie does not know.

Mr. McGilligan

I am glad to have the Deputy's name because I can send the Deputy a note about it. Maybe the Deputy would like to say something more about it. No?

Mr. Dillon

A very coherent contribution to the discussion reminiscent of a punctured bicycle tyre.

Mr. McGilligan

The Government said we could not have taxation openly imposed and so we resorted to what was described by the Taoiseach on the 19th May of this year as "hidden taxation." The present Taoiseach, speaking on 19th May in his own constituency, said that the Coalition were adepts in the art of hidden taxation. He said that when they wanted money they got it by hook or by crook in a stealthy way but that Fianna Fáil came openly to the people and asked for it. As example for hidden taxation, the Taoiseach mentioned the petrol tax, higher bus fares, dearer postage stamps, higher contributions to unemployment and national health amongst other things.

"The Coalition, said Mr. de Valera, had increased the price of petrol. They thought that the ordinary man did not mind that, and that he only saw a person driving along in a motor-car, whom they thought deserved no sympathy. They conveniently forgot that a tax on petrol was a tax on everything transported by lorry. Under other forms of hidden taxation they had increased bus fares in Dublin and had increased the price of postage."

They conveniently forgot that the tax on petrol was a tax on everything transportable by lorry. Other forms of hidden taxation have increased bus fares in Dublin and also the price of postage. That is a remarkable forecast which, I suppose, some of his governmental associates, who look after the paper clippings, took out and kept until the emergencies of the last 18 months arose and then decided they would neglect the sermonising part and operate the practical part of it. We are to have no new but hidden taxation this year. First of all, the subsidies which were to bring in almost£4,000,000 last year only operated for eight months. This year they will operate for the whole 12 months. Presumably there is a nest egg of £2,000,000 which means that this year the people will have their food with the subsidy added for the whole 12 months instead of only for the eight months as was the case last year.

As an instalment of stability, the price of sugar has been raised. I took it from the example given by the Minister yesterday that ½d. on sugar brings in about £500,000. I know that the increase is not going to bring any money to the Exchequer. It is going to be a burden on the community the same as if it was an extra ½d. imposed on the price of sugar by the Government. There is in issue an extra ½d. The Minister may give the figures now or have them forced out of him by way of parliamentary question. The Minister knows what that extra ½d. means—it is in the region of £500,000.

A profit is also being made out of the sale of New Zealand butter. My calculation is that about £900,000 extra will come from the increased charges in the postal service. There are other hidden items, motor-car parts and other items. The only figure mentioned in the Budget is a bulk figure of £2,000,000 which is to be raised by duties of the customs type. If that were an extra £2,000,000 derived from taxes at the old rate it would not be too bad, but if it means that the flow of goods, deliberately stopped last year, is to be increased and that these extra goods will this year bear the duties they escaped last year then, of course, it does mean that an extra £2,000,000 of taxes is to be taken from the people of the community.

In any event, there are millions and millions lying in the shadow of the Budget that was to make no new impositions on the community.

In addition to that, we have this new ludicrous situation. The Minister for Agriculture, according to the papers of the 19th of this month, issued a warning that it was now an offence to sell Irish creamery butter in the Dublin City area, in Dún Laoghaire and the urban district of Bray. One is used to the appearance of Guards in the district court with medical attendantsto prove that people are driving motor-cars who are under the influence of drink around the City and County of Dublin. Are these men going to be taken off that which is a most important task and made run round seeing whether they can get any evidence that people are consuming Irish butter which they have bought?

An Leas-Cheann Comhairle

That seems to be administration.

Mr. Dillon

It is not.

Mr. McGilligan

It is policy because of the fact that the Minister for Finance has to get some little rake-off from the sale of New Zealand butter in this area. That is the point I am making. It does seem ridiculous that in this agricultural country with a fairly good numerical strength in milch cattle the situation has been reached where it is an offence—a definite offence, something having the stain of criminality about it—to sell Irish creamery butter in Dublin County and City and the urban district of Bray.

The Minister this year is apparently to pursue his tactics of borrowing at an extravagant rate introduced last year in the National Loan and followed then by the loans for C.I.E., Dublin Corporation and Cork Corporation. The Minister's colleagues used to ask me what would be the total of repayment in connection with the various loans issued in our time. Will the Minister make that calculation now? Will the Minister make the division into the interest sums that will be paid over the pendency of any of those loans and the amount that will have to be paid when the capital will have been recovered by the owners?

At the end of the period of office of the Government a stage has been reached where they are anxious to forget the old standards which used to be regarded as the proper ones for the stability of the community, unemployment, emigration, high prices and the high cost of living. The purchasing power of the £ becomes of importance in any of these calculations. There is one way in which that was standardisedup to 1947, that was in relation to an official cost of living index figure.

In the year 1947 some remarks were made in the Seanad. One of the members of the Government at that time said it was unfair to compare English prices with ours because our index figure was a real figure and a more realistic figure. It included things which the English figure left out. It was insinuated that the English figure had been built up deliberately, leaving out certain items because, otherwise, the cost of living figure by which the value of the £ was valued would give such a horrid spectacle. Ours was so much better as it included such things as drink and tobacco. By August of 1947 the happy thought hit the members of the Government of that time that tobacco and all forms of liquor could be taxed but lest the horrid fact might strike the Irish people through the decrease in the value of the £ and the consequent increase in the cost of living figure, they were removed from the index calculation. It was agreed that a new figure would be brought in dealing with "essential items" and by the end of the year we had brought our figure down to the debased level on which the British figure was calculated. Even taking it on the essential items figure, the calculation made here in the Dáil was that the 1939 £ was worth at the moment 8/-. Measured by the old index figure, it would be worth somewhere in the region of 6/-. The 1914 £ had by 1951 been reduced to about 5/-; if one were to apply the old index figure it had gone below the 5/- mark.

That is part of the victory that Fianna Fáil had set about—the complete stoppage of emigration, having such conditions that those who had emigrated would swarm back to the country, that unemployment would be such a rarity here and employment so good that there would be jobs to spare for all, including those brought back. Life was to be bounding, taxes were to have been reduced, farming was to have been encouraged by definite grants and in every way, including, of course, an increase in the purchasing value of the £, there was to be a highliving standard. All these were to have been obtained by the Government.

Fianna Fáil have been in Government in this country since 1932 with the exception of three years. In these three exceptional years, and in every month of them in between, the calculation is that 1,000 more people were put into insurable occupation. In these three years, a record number of houses were erected by the local authorities, and a record number of men were employed building these houses. In these three years, while all that was being done, and while taxes were being reduced, pensions for the aged were raised and the means test modified. Pensions for the blind and for widows and orphans were also improved. The expansion on the industrial side showed great activity. Rural electrification progressed at a rate which had not been thought of before but which has diminished since. The land reclamation scheme that we thought of was begun, and the bright prospects in that regard were added to enormously by the income derived from the land and from the productivity of the land. We provided capital for agricultural development, and capital for schemes that we said were both economically and socially desirable but which were derided as putting the nation in pawn, and which have since been accepted and continued with a certain amount of inefficiency in the handling of them.

Last year we warned that the Minister was trying to do artificially, and at great cost to the community, what we thought would naturally come about, and that was an improvement in our international trading situation. We said that it was easy to forecast that the terms of trade would improve. We knew that result was going to follow, and follow quickly, from the increased development of the land, and that exportable goods from the land would reach a point which would make any anxieties which might arise from a too serious consideration of the international situation of no importance.

In the first quarter's trading of this year all the forecasts we made havebeen borne out. The figures of imports and exports for the first three months of the year are on record. The Independent, in an editorial on May 27th, calls attention to the fact that “there are certain aspects of these returns which are of more than statistical interest”. It says that “the fall in the value of imports has owed a lot to a fall in their price”. It goes on to say: “This trend is, of course, in conformity with the general trend of world prices.”

That trend was observed by everybody except the Minister for Finance, long before it had developed to the point that the Independentcould write that it had been observed for some time past. TheIndependentstated that the tendency which was there was welcome and said that “it should contribute still more powerfully towards rescuing the balance of payments from the disequilibrium which was created by the outbreak of the Korean War and the world-wide rush to buy up stocks of goods”.

I have come across a phrase used by the present Minister for Finance. It is a very old quotation. It is dated 14th December, but the year is not given. It is clearly of the vintage period of about 1928, 1929 or 1930. One of the things promised by him was that Irish investments in Britain were going to be looked after, and that in particular the banks at home were going to get some attention from the Minister when Fianna Fáil got into power. The Minister was speaking at Tallaght and said that they would see:

"that the savings of the Irish people were used to develop Irish industry and that the bank rate, instead of being 6 per cent. was 2 or 2½ per cent., and even if the shareholders had to suffer a little the new Government would ensure that the Irish people benefited by having Irish savings invested in Irish industries".

Now, we have slipped from our 3½ per cent. to 5 per cent. When I called the Minister's attention to the fact that even Jamaica could get 20 times the money it wanted at £3.7 per cent., and that Northern Ireland could get almost 20 times what it wanted at less than that at which we borrowed here, andcould get a vast over-subscription, it did not draw any explanation from the Minister but rather a certain amount of sneering at Jamaica. While the Minister is open to criticism himself, Jamaica despite all the calumny that he poured upon it was able to get nearly 20 times the amount of money it was looking for at £3.7 per cent. That is all the more reason why he should be ashamed of having reduced the credit of this country to the point it now stands at.

This year great borrowings are to take place again. The Minister is so happy about the situation he developed last year that he will probably give a little bit more to the moneylenders, or take it out of the community by raising the interest rate for housebuilding and on other loans for any type of development. He is going to make the community suffer in the interests of the people who were promised a little suffering about the 1930 period. That suffering is going to be put upon them for the benefit of Irish people who invest their savings in Irish industry.

I have not heard any of these quotations. It is my turn at the moment. That one may cause a shudder of apprehension to the Minister, but I am not sure it is the worst quotation that I could bring against him. The aid to the Ballroom Proprietors' Association is being continued by the Minister. The I.R.A. are being helped. It is a sad commentary for anybody who looks at the provision that is being made this year in regard to the I.R.A. when he considers that if some of these men had been wiser in their time they would have been materially better off if they had joined the Irish Ballroom Proprietors' Association instead of joining the I.R.A. The members of the Irish Ballroom Proprietors' Association benefited much more than the Old I.R.A., according to the provision which is made for them this year in the Budget.

This year, the Minister confessed in his Budget speech that the tax on spirits failed last year. According to his own statement he looked last year to get an extra £1,020,000 on a new tax on spirits. The confession this year was that he was £1,500,000 short. That means that the Minister got £480,000 less than he did in the previous year, when the new tax was not imposed. It is quite clear from the returns that have been made that production on the distilling side is down. Employment is definitely down. Unemployment has been caused over the year. As an advantage, we have lost not merely the £1,020,000 which the new tax was to bring in, but £480,000 that used normally arrive. We are losing £480,000 to establish conditions in which production declines and unemployment grows. If that is regarded as one of the standards by which last year's and this year's Budget are to be judged, then it is a poor standard. We are keeping on that tax of last year which has been demonstrated to have failed.

A newspaper report recently calledattention to some of the results of last year's Budget. The date of this quotation is the 23rd of this month of this year. A commentary had been made about advice that was coming from doctors circulating in the poorer quarters in Dublin. What they said was questioned. The doctors themselves were questioned. The report of what they said is given in this way:—

"A number of Dublin doctors said yesterday that the majority of mothers and babies in the poorer areas of Dublin were not getting enough nourishment and many of them were suffering from chronic illnesses as a result."

The report says that the doctors then referred to statements made by one of the doctors at the annual meeting of the Coombe Hospital Linen Guild and they said that the ailments which that doctor found among patients of the hospital were pretty common in all the poorer areas of the city. The group of doctors said that infant mortality was a problem which could fall under any of the following three heads: medical, social education or mental ability.

An Leas-Cheann Comhairle

Would that not be more relevant on the Estimate for the Department concerned?

Mr. McGilligan

People have been forced to live at a certain standard— a standard which was imposed by last year's Budget and which is being continued by this year's Budget. The report from which I was quoting says that one doctor said that poverty was one of the greatest contributors to ill-health.

"If there was no poverty there would be very little medicine needed. It was true that about 50 per cent. of the mothers in the poorer class areas of Dublin were suffering from a deficiency of iron in the blood and this was due to what could be described as poverty— living largely on bread and tea.

There were three to five times as many premature babies among thepoor people than there were among the more well-to-do classes. If this could be remedied it would reduce the infant mortality rate considerably."

That newspaper article is headed "Causes of Infant Mortality." The reasons are judged to be poverty and ill-nourishment because people are forced to live largely on bread and tea. These are the people who, in last year's Budget statement, were referred to as being too well off.

Mr. Carter

He did not give the reference.

Mr. McGilligan

Their standard of living had increased too fast. The salaries and wages they got had increased more than the increase in the cost of living.

An Leas-Cheann Comhairle

Deputy Carter is asking for the reference.

He then said that that plan of securing for everyone an income both when working and out of work sufficient to provide the bare necessities of life for the worker and his dependents and of leaving it to him to secure by his own efforts income above the minimum had been frustrated as a result of the decrease in the value of the £. Our pound has decreased and decreased rapidly in the last year.

Mr. Carter

You halved it at one time.

Mr. McGilligan

I do not remember halving it.

Mr. Carter

You devalued it.

Mr. McGilligan

The Deputy had better get the Minister for Posts and Telegraphs, who is probably about six lessons ahead of him in economics, to go back one or two and talk about devaluation and what was devalued and how it affected things here.

Then we have the welfare society which we have decided to promote here. Most Reverend Dr. Gregg of Armagh, addressing the Protestant Synod at Armagh on 8th October last year, said:—

"The welfare State concerns itself with the welfare of the bodies of its citizens, it meets their bodily needs from the cradle to the grave and in doing so much to protect them it weakens their sense of self-reliance and initiative. The human beings who are the beneficiaries of this system of planned materialism become lost behind the workings of this almost inhuman machine. Forall its apparent benevolence, the engine which carries them tends at the same time to crush them. It is not concerned with the citizen as a man, as a child of God and a pilgrim of Eternity. It is concerned with maintaining his bodily health and with insuring him against the material results of accident or ill-health — undoubtely a wonderful piece of insurance against the unknown future, but a system which has to deal with individuals by the 10,000 makes them little better than ciphers.

Where everything is done for men, the system robs them of the spirit of enterprise and of forethought with which they were born. They belong to the crowd and life in the crowd saps their independence and their personal sense of moral responsibility."

Of course, notwithstanding what Most Reverend Dr. Gregg may say, the Irish Timeshas a different concept. It has told us that in most of these welfare services certain Christian principles must inevitably suffer and we are proceeding along that line. How far we will get I do not know, but I know how far certain people want us to get.

Whether the present Minister for Posts and Telegraphs was at the time speaking for a Government in which he was then only a Parliamentary Secretary, I do not know, but he said in Cork, as reported on the 3rd December, 1946:—

The Chair is not making a point and I must be afforded a chance to say why I am in order. I put it that the Local Elections Postponement Bill proceeds from fear; that that fear is the product of the North-West Dublin election; that that election was the result of the cut in subsidies; and that the subsidies cut is continued this year, except that it runs for 12 months instead of eight. Four or five people here had to be preserved from the electorate.

(Interruptions.)

An Leas-Cheann Comhairle

The Deputy should try to relate his remarks to the Finance Bill.

Mr. McGilligan

It is hard to relate anything, with the constant interruptions both from Deputies and from the Chair.

An Leas-Cheann Comhairle

It is the Chair's duty to keep order. The Deputy should relate his remarks to the Finance Bill. Local elections do not arise.

(Interruptions.)

Mr. Carter

The last by-election was held before last June.

Mr. McGilligan

The subsidies were not cut then, and the people were promised these things, that they would keep the subsidies and increase them. No doubt the Deputy will have to explain the cutting of them. It is quite clear that this shuddering over this House, that is evident in that group and its satellites, comes from fear. That fear is based on last year's Budget, which is continued by this year's Budget.

If any Deputies have read the stories by P.G. Wodehouse, they must know the efforts that his most futile character—even more futile than some of the Deputies here—made to get work. He was the great Bertie Wooster, and there was an occasion on which Bertie got work and it did not develop too well—like the way Fianna Fáil did not develop too well last year. He was sent for by his boss—like Fianna Fáil being sent for by the electorate. As he went into the room he realised, he said, that the sack was floating in the air; almost, he said, you could feel the beating of its wings. That is the sensation that is round this House for the last year and a half, the wings of defeat are flapping. It was that that drove the Minister for Local Government to-day to postpone the local elections, to save that community a little bit longer from the exposure that would have taken place all over the country if the local elections had been held and which would certainly have been shown in the two constituencies wherethey have not been able to postpone an electoral appeal.

This Budget continues last year's severity. Last year's severity was unnecessary, and we said that was so. The out-turn of the year shows that what we said was right. The international situation, which was not terrifying to anyone who could look it in the face and realise the causes of it, has righted itself. This country has benefited not by anything that the Fianna Fáil Government has done but by the ordinary turn of things in the world outside. As far as anything was done here at home, it was done from a wrong idea, and it was done inefficiently.

The handling of those circumstances and the results of them have been something that everybody here wants to forget about. The Minister has not dared, in all his orations about the Finance Bill, to talk about what used to be paraded before the House as one of the great standards, the test, the thing on which people banked, saying they will be a success if things go one way and they must confess failure if they go another. This test is whether we can keep our people at home and, having kept them at home, keep them not at the employment exchange but at work, and at work which would in the end make for greater productivity, for the production of goods that our community wants and for the production of goods which we could trade for the goods across the frontier that the community here desires to maintain the standard of living—which has two or three years ago and which has been on the decline since and is probably at its lowest ebb since this community became a State.

Mr. O'Higgins

Most of us who have watched the progress of the Government in recent months realise very well that the very thought of an election causes them as much panic as a gadfly does to a herd of cattle. That is because of the effects of the policy enshrined in the Bill we are now discussing. This is as disastrous a financial policy as has ever been initiated in any country. We can see now very, very clearly, some 18 months after it was first announced and wentinto operation, the effects in serious unemployment and very serious poverty and hardship amongst the people. Apparently no amount of evidence adduced here by Deputies can compel the Government to alter their views in the slightest. One would think that, in a democratic country like this, the appalling effects of the past 12 months would have induced the Government this year to alleviate in some measure the dreadful burden of taxation on the people and in some positive way to restore the confidence necessary for a return of prosperity. Unfortunately, that has not taken place and we are discussing a dreary document, pock-marked with unemployment, hardship and poverty, which is the Finance Bill of 1953. It will be Fianna Fáil's last Finance Bill. It will be their last contribution to the destruction and hardship they have caused in this country, because, as Deputy McGilligan has stated very clearly, the coming defeat is very near.

Without regard to his duty as an Irish Minister for Finance, the present Minister last year embarked on a policy designed to kill the Irish whiskey trade and I hope to be able to convince the House that in the past 12 months the Minister's policy has very nearly succeeded. We should not forget that this Irish industry gave the name "whiskey" to the English language and gave a world-famed drink to the people. I do not think it is a thing we should be in the slightest ashamed of and I do not think it comes well from any Government that any member of it should set out deliberately to destroy such an industry. Last year, the Fianna Fáil Government increased the duty on spirits from 137/- to 176/- per proof gallon, an increase of 39/- per proof gallon, or 6d. per glass. They did that at a time when the whiskey trade was just beginning to surmount the difficulties created by the war and emergency conditions here and at a time when legitimately the country could look forward to the development of a very important export trade in whiskey.

Captain Cowan

Is the export trade affected by the duty here?

Mr. O'Higgins

It is, and I hope to be able to show that. They did it, as I say, at a time when legitimately we could expect the development of an important export trade, including a very important dollar-earning trade. When that tax was imposed, Deputies on this side, and, I think, Deputy Cowan also, urged the Minister to reconsider what he was doing. We suggested to the Minister that the mere fact that up to that whiskey had bornethe tax of 137/- per proof gallon was no indication that a further increase would yield further revenue and would not harm the industry. The Minister would not listen to that and he based his Budget of last year on the expectation that this new spirits levy would bring in an increase in revenue of £1,020,000.

One can understand the Minister for Finance, last year, believing that an increase in taxation of 39/- per proof gallon would bring in a further £1,000,000. One can even excuse his obstinacy and his failure to listen to the arguments made on this side of the House. One can pull a veil over all that took place in the Budget of 1952. The year has passed. The taxes have been imposed and now, more than 12 months later, we look at the result of that taxation. What is the result? In the last financial year the whiskey tax, instead of yielding over £1,000,000 more, yielded almost £400,000 less than in the financial year prior to the Budget of 1952 and the Minister's estimation was out by £1,500,000. Surely that very sharp decrease in revenue should cause any responsible member of a Government to halt, consider and reflect whether the tax he had imposed was a just and a fair one or whether it should be changed or altered in some degree.

The Minister did neither of those things. Apparently, he regards the maintenance of the whiskey tax as in some way associated with the prestige of the Fianna Fáil Party. In this respect, apparently, he is so small that he cannot afford to admit that he was wrong in his Budget of 1952 and he comes into this House refusing to alleviate the tax on spirits in any respect. As a defence for that he says that he would have got the revenue he expected were it not for the fact—I am quoting the Minister—that the produce of the spirits duty last year was adversely affected by the fact that consumption had been met in part by using up stocks in hand rather than by withdrawing stocks from bond. That is the Minister's defence, his reason for not reducing the spirits tax this year: that those engaged in the distribution and the retail trade had such largestocks in hand that consumption in the last financial year was out of stock in hand rather than out of withdrawals from bond. That statement of the Minister must have seemed a very lame one to Deputies.

I want to remind the Minister and the House of what took place before this tax was imposed in the Budget of 1952. Prior to the Budget of 1952 every publican in this country was on a strict monthly ration of whiskey. He got his supplies as a ration per month and his ration was designed to meet the whiskey trade he was doing. It is correct to say that the trade had recovered from the shortages of the war and that consumption had increased, but there was maintained by the different distillers supplying publicans and those engaged in the trade a monthly quota or ration. The existence of that quota or ration made it extremely difficult for any publican to carry a large stock of whiskey on his premises and, in fact, very, very few publicans did carry a large stock.

Before the Budget was introduced last spring, the Commissioners of Customs and Excise, at the direction of the Minister for Finance, sealed the bond houses and prevented, for some considerable time before the Budget, any withdrawal from bond. Accordingly, when the Budget was announced and the tax fell on whiskey there could have been no stockpiling, if I may use the expression, and the trade had to meet the new tax with only the remnants of the previous monthly quota.

Under those circumstances it appears extraordinary for the Minister to say that in the last 12 months the trade has been using up stocks they could never have had and have, therefore, not been withdrawing whiskey from bond. Would not it be far better, and indeed perhaps a shrewder thing for him to do, for the Minister to come to this House and admit that the tax was perhaps a little too severe, that he over-stepped himself and that he did what a Minister for Finance should never do, that by his taxation he brought about a reduction in revenue?

In addition, it was, perhaps, unhappy for the Minister as Minister for Financethat the Budget of 1952 in relation to the tax I am discussing came into effect at a time of the year when most people, perhaps, refrain from the consumption of alcoholic liquor. It does not require much imagination to understand what took place last year. Most whiskey drinkers decided to drink whiskey no longer and to take instead beer or stout. Many of those who formerly took beer or stout put up the pin and drank lemonade. Accordingly, the revenue returns show for the last 12 months an increase in the beer revenue and a reduction in the spirit trade. If there had been a tax on minerals, I am quite certain the tax would have yielded a colossal sum. Would it not be far wiser for the Minister to face these facts and realise that that is what has taken place?

Major de Valera

To put a tax on minerals?

Mr. O'Higgins

Would it not be far wiser for the Minister——

Major de Valera

To put a tax on minerals.

Mr. O'Higgins

I do not think the Deputy is anxious to be serious. Even at this late stage, I want to try to emphasise to the Minister and to the House some of the effects we will experience in the coming months in relation to the continuance of the spirits tax. In my constituency, in Deputy MacEoin's constituency, in this city, and in the South of Ireland there are important distilleries. They have been there for a great number of years. Some of them are amongst the oldest in the world. As an industry they have had to face difficult times in the past and they surmounted them. The Irish whiskey trade has always been a very constant and substantial trade. Even during the war the home distilleries were able to keep going and, were it not for war difficulties, there would have been no reduction in the business done by the industry.

Then let us be clear on that. Deputy Cowan was one of the people the Minister had last year giving the warnings. The warnings given last year have been justified. There has been less whiskey consumed in the last year. The people engaged in the whiskey trade are engaged in a business the same as any farmer, any newspaper proprietor or any professional man. They are in business for as long as it pays them to be in it. It is nonsense to suggest that the very moment they say: "This is not paying us any longer; we are going to pull out of this business," they are to be regarded as national saboteurs. That is the all-time low in contributions in this House.

The whiskey trade has not paid the whiskey firms in the last 12 months.Two of those firms were operating very much on the margin; they were just able to keep going. One of them, not very far from the city, was barely able to keep going with old and antiquated plant. The balance has now been tipped and that particular industry is facing the decision being forced upon it to go out of business.

I point that out to the Minister so that if it takes place he cannot say: "No one told me about it." He has had considerable warning last year. Throughout the year his own departmental advisers, I am certain, must have warned him as to the story told by the revenue figures. I am telling him now on the information available to me that shortly, unless this tax is in some way alleviated, two old Irish industries will disappear. There will be less production of whiskey and more unemployment and to that extent the difficulties facing the country will have been enlarged.

In the large financial policy adopted by the Government and in the variety of taxes they have imposed, this spirit tax may not appear to be a very major item. From time to time in the past Ministers for Finance and other Ministers on both sides of the House have made very grievous mistakes. Having made the mistakes and having recognised their mistakes, they have taken some steps to redress the situation. I appeal to the Minister not to allow political considerations to prevent his recognising the mistake which was made in regard to the spirit tax in the Budget of 1952. If he reduces the tax he need not fear that there will be any jeers at him from this side of the House. On the contrary, I think many people will say that at least he was man enough to see his error and, like the repentant sinner, he will come back to the fold.

The situation is serious and it would be a great mistake if some effort was not made on the Second Reading of this Bill to point to the effects this taxation is having on this important industry and to the subsidiary effects it is having on the agricultural industry and on the production of turf. I hope the Minister will, on the Committee Stageof the Bill, consider reducing in some way the effect of the tax. A sum of 39/- per proof gallon was a very large chunk of taxation.

If the Minister thinks that what we have said last year and what we are saying now is too extreme or wrong, would he not at east adopt the middle course and reduce that 39/- per gallon tax by half and see the effect it will have in the next financial year? If he does that I am certain that he will derive a yield in revenue from the whiskey trade that will surprise him, and if the Government is there sufficiently long he will be able to come in and give tax reliefs to every section of the community. He will even be able to pay the civil servants an adequate sum. He can do that by adopting this middle course, and I do suggest that the circumstances of the industry, the events of the last 12 months and the possible repercussions in the near future all dictate a reduction in this tax.

Dáil Éireann díospóireacht - Thursday, 28 May 1953