As I said on the Second Stage, the Minister in his Budget speech got away with murder in this connection. He succeeded in giving the impression to everybody who read the Budget speech the next day and all who heard it then that he was making some very striking remissions in relation to import levies. In fact, he did nothing of the sort and by and large what has been done in relation to the levies since Deputy Dr. Ryan became Minister for Finance has been divisible in three ways. A small amount has been remitted altogether; a large amount has been converted from temporary taxation into permanent impositions; and a further amount is now continued as levies here. I want to get some clarification in relation to some of these levies that are now imposed by the Order. I have the various notices that have been issued by the Revenue Commissioners and while I am sure there was every anxiety when these notices were being prepared to make them as clear as possible, they may be understandable to some people, but to my limited intelligence they appear to have passed beyond the language of ordinary everyday trade and commerce.
I am not too clear, for example, what is the position in relation to imported newspapers. I shall spare the Minister the castigation he deserves in regard to the levy on newsprint. I say "the castigation he deserves in respect of the levy on newsprint" because I remember what he said about it in 1956 and in 1957 when he was in Opposition. I want to be quite clear what is the position in respect of the competition by imported newspapers with the home, nationally-produced article. First of all, let me come to Statutory Instrument No. 63 of 1959 which is the one we are here confirming and Section 11 of that Article together with the interpretation that is set out on page 3 of the neostyled notice that was issued by the Revenue Commissioners originally.
It seems to me that an Irish newspaper has to pay the 5 per cent. newsprint duty regardless of the size of the circulation. On the other hand, a newspaper or a priodical—as far as I can understand the situation, it applies to periodicals just the same as newspapers —that is produced outside the State, if its circulation in the State does not exceed 6,000 copies, does not have to pay it on them. It seems to me that there is a preference in favour of that imported newspaper or periodical. It is entirely illogical that that should be the case. The position would arise particularly also in respect of weekly newspapers which are printed just the other side of the Border in the Six Counties. Some of those are ones with which I have little in common. Some of them are good newspapers but whether they are ones of which I approve or of which the Minister approves, or whether they are ones of which the Minister or I disapprove, it is entirely wrong that they should be enabled to compete on terms that are unfavourable to, say, Donegal weekly newspapers. I should like to hear from the Minister what will be the future policy in that respect. The time has certainly come to remedy that anachronism.
There is also a position, I believe, in respect of which an Irish newspaper produced in the State pays its newsprint duty on returns. It has, in fact, paid newsprint duty before the paper was printed. A foreign newspaper, if I may use that phrase for the purpose of describing something that is not produced here, brings in its paper. If it does not sell it here, I understand that it can export the returns and obtain a drawback of the levy previously paid. If that is the position, and it is only in comparatively recent times that I have been informed it is—I certainly did not know it was the position in 1956 or in 1957—that should be changed. There should be the same provision relating to returns of each paper so as to provide, for example, if there was a difference in the levy between the one and the other, that the amount of the drawback would be limited to such a sum as exceeded what would be the 5 per cent. tax on that newsprint, as if it were for the newsprint duty instead of for the individual duty.
I should like also, apart from that, to have some indication from the Minister as to what some of these references mean in this because I found it very difficult, indeed, to understand them. Do I understand that the provision in the Order which makes golf caddie-cars and component parts liable to duty similarly exempts wheelbarrows and handcarts? I cannot see what the analogy is between the two.
It is also desirable that the Minister should make clear for the benefit of the House what is the ordinary licensing provision and the special manufacturing licensing provision. Those, I think, were two different types of licensing provisions that were introduced for the first time last year.
Can the Minister give us a list of the items, subject to levy, that are not produced in this country or, if it is easier for him to do it the other way round, the list of the articles that are produced in this country which are also subject to levy? It seems to me that the pattern there was in relation to special import levies has become entirely distorted now and that the special import levies are being utilised not merely by budgetary calculations for the purpose of providing revenue to balance the Budget but also that the articles upon which the levy is being imposed are being considered now from the revenue point of view rather than from the deterrent point of view.
When these levies were first imposed for the purpose of remedying the deficit in our balance of payments, they had a twofold effect. There was, first of all, the deterrent effect because it meant that the price of the article that was going to be consumed—I am using the word "consumption" in the technical sense—would be higher. Naturally, when the price of the article, as a result of the levy, was higher, less was going to be consumed.
There was also a second effect. The levies were designed to have and did have this effect. The transfer of the amount raised from levy to capital account was going to prevent any inflation that might arise because of the amount of the capital expenditure by the State. The Minister has changed from that, has abandoned the second completely and the anti-inflationary effect that was there has gone altogether. To that extent, therefore, in so far as the levies are retained under the name of levy or duty, I think they would be about £3,000,000. I think that £3,000,000 advantage in fighting against the balance of payments deficit has been thrown away completely. I think I am right in saying that the amount involved now is a little over £3,000,000. The amount that is left in relation to levy as such is nothing like so great but the Minister has transferred the many levies into the permanent customs duty code and in considering the advantages from a balance of payments point of view it is proper that those should be included.
I do not know why the Minister has terminated certain levies and transferred them to permanent customs duties. I am inclined to the view that a great deal of that determination is a breach of faith with the arrangements made at the time the levies were imposed. The Minister is aware, of course, that the levies were imposed because we were able to take advantage of the escape clause in our trading agreement. So long as we were imposing levies for balance of payment purposes—nobody can deny they were so imposed in 1956—we were enabled under our trading agreements to do that. Once we no longer deal with them on a balance of payments basis, once we are imposing levies purely for the purpose of obtaining revenue, once we have abandoned the second part of the reason for those levies to finance pro tanto the capital programme, then I think we are laying ourselves open to a charge of a breach of faith. That is not a thing that should be done. It is one that may militate considerably against us in relation to future discussions for a future trading agreement or in relation to future action it may be necessary to take, if and when another balance of payments difficulty should arise.
I do not propose to discuss under this section the general balance of payments situation. All I am going to say to that is that the Minister himself acknowledged in his Budget speech of May, 1957, that when he took over office, we were in balance on our external account but we are certainly not in balance now. We are certainly in the red. The extent to which we are in the red for abnormal causes is a matter upon which the Minister and I might disagree, but the Minister cannot disagree with me when I say he took over an external account on balance, because he admitted it himself in May, 1957, and that he has now got an external account that is out of balance.
That is a sad commentary on a period of little over two years during which the terms of trade have been moving in Ireland's favour. During the whole of the period, since February 1957, import prices have been gradually dropping and export prices gradually rising. It is in those circumstances, in which everything was in our favour, that we now have a trade deficit for the first five months of this year of some £11,000,000 more than last year. Even allowing for the fact that some of that deficit may be accounted for by abnormal imports it is one which is substantial and which shows a drift in the wrong direction. We can only hope that for the sake of the country the drift is not one that will continue.
