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Dáil Éireann díospóireacht -
Wednesday, 4 Jul 1962

Vol. 196 No. 9

Finance Bill, 1962—Committee Stage (Resumed).

Debate resumed on the following amendment:
Before section 15 but in Part III to insert a new section as follows:—
"In connection with any assessment for liability for income tax where a person proves that he has incurred expenditure by way of fares on public transport in travelling between his normal residence and the place where the income is earned he shall, subject to a maximum of £52 in any one year, be allowed such expenditure as an expense wholly, exclusively and necessarily incurred by him in earning such income."—(Deputy Byrne).

I should like to comment that there seems to be some misunderstanding about this amendment because it is a fact that people who use vehicles for the purpose of getting to and from their work cannot at present claim tax remission, while those who use vehicles in the course of their work do in fact claim remission and are granted it. It is very important that the Minister should consider not alone the question of those who travel by bus but also those who have to use motor cycles, auto cycles or even motor cars to get to and from their work—to have those people included for the purpose of tax remission. At present there are people travelling from Kells in County Meath, 40 miles, to their work because of the present building boom in Dublin and they can get no tax remission in that respect. I think the Minister could attempt to meet that situation. I would say that the people responsible for administering PAYE seem to be quite sympathetic but the regulations prevent them from granting any remission in such cases.

This amendment would be commendable if it were not so local in its outlook. If adopted, it would be applicable to Dublin city and the contiguous areas only. I am not in favour of confining such reliefs to such a small area or to travelling by public transport. It should also apply to those who have to provide their own transport, such as motor cycles and bicycles to get to and from their work. Particular hardship occurs where people's work is not in a fixed location. There are building workers and road workers who might work here today and ten miles away tomorrow.

I feel strongly there should be an allowance in respect of travelling expenses incurred in this way, whether in respect of public transport or otherwise. Unless Deputy N. Lemass made a mistake, his contribution suggested that regulations in this respect are being applied illegally at the moment. He mentioned the case of a man who bought a scooter and who was allowed tax remission in regard of its use in transporting him to and from work. In my interpretation of the Act, if such an allowance is being made, it is highly illegal. I understand the regulation is very definite that the Income Tax Commissioners have no power to give a remission in respect of any vehicle used to get to and from work, unless the vehicle is also used in the course of a person's employment. I would accordingly ask the Minister to insert a new section dealing with travelling expenses generally, leaving out all mention of the amendment we are now discussing in so far it relates to travelling by public transport only.

A reasonable allowance could be granted to people having to incur expense in travelling to their places of employment. It would be difficult to give a fixed amount as the circumstances and the cost would vary very much but if there were some system whereby the local tax inspector could deal with each case on its merits it would be a good thing. There should be a section inserted in the Bill providing travelling expenses for workers. I would not oppose the amendment but I think it is too local. You cannot give something to people in one part of the country and deny it in another part of the country. I would be in favour of an amendment giving an allowance for expenses.

The income tax law as it stands at present provides certain reliefs but on very broad principles, so much to a single man, so much to a married man and so much for children and other dependants, but apart from that there is very little relief of any kind. It would be very difficult to depart from that and it would be very difficult to operate any other scheme administratively and to be impartial and fair to everybody.

It is assumed that a person chooses his own residence and it is not therefore the business of the State to compensate a man for going to his work and coming from it whatever that distance may be. That assumption may be correct in some cases but there are other cases where relief from income tax is claimed and conditions are right but nothing can be done about it. This proposal would be very difficult to administer. There are almost a quarter of a million people paying income tax in this country and a great many of these would make a claim if a concession like this were given. It would mean an individual investigation in each case which would be a costly procedure and it might be difficult to be fair to all the applicants.

There is a certain misunderstanding by some Deputies with regard to allowances already given. It is not true that company directors or executives get better treatment than the ordinary workers. They are not allowed to charge income tax on the expenses of going to work or coming from work. In a Bill brought in here in 1958 it was provided that where a company gives a car to an executive officer or director there is a charge made for it. In other words, the Revenue Commissioners put a charge against that amenity and income tax is payable on the amount charged.

There is, on the other hand, an allowance for travelling between one business and another or where a man is travelling on business. If a man has to travel on business, whether he is a commercial traveller, or engineer or some other man who has to go from one place to another, then a travelling allowance is allowed. Take this example. There are workers with Dublin contractors who, if their employer is doing a job in the country, get country money. They are charged income tax on that allowance unless they are living away from home on the job. In that case an allowance is made and they are not charged income tax on the allowance.

These are the only points I want to make on this amendment but I should like to mention that the seventh report of the Income Tax Commission does deal with this question of allowances provided they are wholly, exclusively and necessarily incurred. The commission have some comments to make on that definition in their report. I have not considered it yet nor have I asked the Government to consider it and I should not like to give the Dáil the impression that it will be favourably considered. It will have to be considered but whether anything will arise from that I do not know. I would oppose the amendment as it is against the present concept of expenses as far as income tax is concerned.

Mr. Ryan

I would only say in conclusion that we are grateful to hear that this matter is to be examined. The only people in this country who are able to travel from their homes to their places of employment without having to incur expenditure are Ministers of State and Parliamentary Secretaries who have cars, petrol, oil and two chauffeurs given to them to use as they wish, either for pleasure, for family use or for going to their homes and offices. It must choke the Minister for Finance to deny this privilege which is enjoyed by himself and his colleagues to less privileged members of the community by refusing to give consideration to this amendment.

In considering this amendment, I am thinking particularly of the people who had this expenditure imposed on them, people who through slum clearance were pushed out to Ballyfermot and such places where there are no local opportunities for employment. They have to pay considerable sums annually in travelling to the city to work. Heretofore, they lived in the city but now some of them have to travel as far as the East Wall to their work. That involves considerable expenditure, expenditure that has been imposed on them and this is a matter that should receive serious consideration.

I should like to support what other Deputies have said on this amendment. There is a point in the case made by Deputy Clinton. Those of us who have had experience of applications from persons who reside in these housing estates know that the majority of them want to be transferred to housing accommodation nearer to their places of employment. Most of them were anxious to be rehoused but they regarded the transfers to the outside housing estates as a temporary alleviation of their problems. There is great force in the view expressed that these people through no fault of their own, contrary to their own wishes and desires, were transferred to housing estates much further from their places of employment and in many cases to areas where there was no immediate prospect of employment. Consequently they are forced to incur travelling expenses which persons employed in the same or similar undertakings are not obliged to bear. I believe there is a very strong case for sympathetic consideration of this matter. If the Minister is not prepared to accept this amendment, I hope the matter will be examined between now and the Finance Bill next year.

I understood the Minister to say he intended making some recommendations to the Government in regard to concessions in respect of travelling expenses. I would like him also to bear in mind the position of workers who have to incur board and lodging expenses by reason of their work being some distance from their homes.

The amendment deals only with travelling expenses and the question of board and lodging would not arise.

I fully agree with you, Sir. Between this and the next Stage the Minister may have an opportunity of discussing the matter with the Government. I cannot see any reason why the Minister cannot insert a new section on Report Stage. The case has been made from practically all sides of the House that this concession in respect of travelling expenses is wanted. Deputy Lemass mistakenly believed that travelling expenses were allowed and he was surprised to think they were not allowed. All public servants qualify for travelling expenses in the course of their duties and I cannot see why the ordinary worker who has to pay for private transport or to provide private transport should not be entitled to some remission. Many of these people have incomes of less than £10 a week. A concession should be given and the Minister might consider inserting a new section on Report Stage.

I wish to support Deputy Murphy in his submission in regard to travelling expenses. There is no denying the fact that people in SDA houses are mulcted in taxes and experience the greatest difficulty. They are the same set of people who, when they look for benefits under the Health Act, do not qualify because of their income. Yet they can see big business people having an easy passage in the matter of relief. It is quite common for people who own or direct businesses to entertain as much as they like and charge it down to the Minister for Finance because of the reliefs they get. The people to whom I refer have to struggle for an existence. I am quite satisfied that in the homes of many SDA tenants in Dublin, there is abject poverty because of the pressure of taxation. Surely it is not asking too much for these people that they be afforded relief in respect of travelling expenses?

While I agree with the principle of the amendment, I think it is true that few of the tenants in Ballyfermot, for instance, pay income tax. You do not pay income tax if you have a few children. You would want to have £20 a week yourself. The children might have to pay it, but the tenants who are shifted to Ballyfermot do not pay income tax. I do not pay income tax—I have five young children. It affects only a percentage. I admit it would be difficult for the Minister—not impossible, but very difficult. At the same time, I accept the principle of the amendment.

There are simple people living in Deputy Sherwin's area who are handicapped by reason of income tax.

A small percentage.

They all vote.

That has nothing to do with it.

Amendment put and declared lost.
NEW SECTION.

Mr. Ryan

I move amendment No. 7:

Before section 15 but in Part III to insert a new section as follows:—

"In connection with any assessment for liability for income tax, where a person proves that he has incurred expenditure on the provision of necessary medical services or treatment in respect of illness or infirmity of himself or any of his dependants and that he was unable to insure himself against the said expenses, there shall be deducted from the income to be assessed the expenses so incurred."

I would remind the House that last year we had an amendment in similar form. The Minister then expressed some sympathy for the amendment but indicated it was not acceptable because, apparently, it was contrary to the inhuman income tax code so much respected by the Minister. This year, I shall ask the House to approach it from what I might call a negative or artificial angle. I want to show how by not accepting this amendment, we are treating different sections of the community differently.

If a man has a weekly income of about £5 per week, it is almost certain he will be entitled to free hospitalisation and medical treatment at the expense of the local health authority. When such a person is sick, his medical expenses may amount to £10 per week in respect of hospitalisation and the drugs, medicine and treatment he may have to get. That puts him in the position of earning or having to his name £15 a week, £10 for hospitalisation and £5 which he otherwise has. If he is earning £15 a week from his own work and labour he will be disqualified from receiving free medical benefit from the local authority. If he goes into hospital or if he is at home and has to provide expensive drugs, he may well be denied the services because he will be regarded as a person able to provide for them out of his own means, or the State or local authority may come to his relief in part. Nevertheless, if he is ill in any particular year, he is assessed for income tax purposes on the basis of £15 per week, although the income over which he has control is exactly the same as the man who has £5 for himself and £10 paid by the State. It is quite clear that we are penalising the person who has an income of his own and who has to pay for his own medical expenses. It is high time that we gave the reasonable consideration to such a person which is asked for in our amendment.

We in the Fine Gael Party are especially proud of the success of the Voluntary Health Insurance Board. In passing, may I say that I think it is regrettable that the Minister has not yet seen his way to relieve the Voluntary Health Insurance Scheme of liability from income tax in relation to its own costs. A body of that kind which is saving the national Exchequer and the local authorities a considerable amount of money, and a scheme in which people contribute for their mutual benefit, should be relieved of any liability whatever. If that were done the Voluntary Health Insurance Board would be able to provide additional benefits which are not now available to policy holders or people who pay their premiums to the Board. However, that is only in passing.

I want to point out that there are many medical expenses which are not covered by the Voluntary Health Insurance Scheme. As men of the world we know that the cost of treating a person at home in this day and age is quite considerable. The expenses of modern drugs, antibiotics, and the regular attendance of a general practitioner of medicine in the home, can be exceedingly high. That is something which is not insured under the Voluntary Health Insurance Scheme or, I think, under any independent commercial scheme.

A situation can arise in any one year in which people may have considerable medical expenses for treatment of themselves or their families at home. Again, unfortunately, so long as we tolerate the continuation of the present scheme that will be regarded as money which they have to spend themselves. I understand—and I am sure most people in the House will accept—that the principle underlying income tax is that it is a tax upon that portion of our income over which we have control of the manner in which we spend it.

Illness is not something which people voluntarily take upon themselves, unless they are suitable patients for a mental hospital. Normal people will not bring illness upon themselves. If they become afflicted with illness they must provide the money and the means to cure themselves and, therefore, they are deprived of that portion of their normal income which goes for the purpose of paying for medicines and doctors' fees. Therefore, we should no longer regard necessary medical expenses as being expenditure over which people have control or choice. It is necessary and vital and it should be allowed for income tax purposes.

Such expenses could be easily proved. Our medical profession and pharmaceutical profession are reputable and honourable enough not to issue certificates in respect of medical treatment or drugs unless they are necessarily obtained for the cure of some illness or pain. The argument the Minister used earlier today and last year against such a scheme was that it would benefit only those who were sick and that there are many other people who need relief of one kind or another. That is a very thin argument. The illness which afflicts us mortals is something over which we have no control, and it must be cured. That being so, I believe our amendment is worthy of acceptance.

Another principle which has been accepted by those in favour of the present income tax system is that the cost of earnings should be deductible for income tax purposes, that if you have to expend a certain amount of money in order to earn an income you should be able to deduct that for tax purposes. If there is any necessary cost of earned income it is the cost of good health. A sick person or a dying person is unable to work and earn an income. If a person expends money for the purpose of restoring himself or his family to health, that is a productive thing. It is necessary for the purpose of earning an income and, therefore, on that rather academic income tax principle, our amendment is worthy of acceptance.

Under the income tax code provision is made for the cost of replacing or repairing equipment. Surely if it is necessary to improve or restore the human body and the human brain as a piece of productive equipment, the expense of that improvement or restoration should be allowed under the income tax code.

Deputies will notice that under our amendment people who can insure in respect of some illness or ailment, or some hospital or medical expenses, but who refuse to insure themselves, would not receive the benefit of any allowance for income tax. We have done that because we believe the Voluntary Health Insurance Board should be encouraged. If people were to receive that benefit without that qualification, the danger is that they would not insure in respect of hospitalisation and medical expenses, and that would be undesirable.

There are many classes of people who are unable to insure under the Voluntary Health Insurance Scheme, or any other scheme. People who have coronary trouble or chronic diseases of one kind or another are debarred from availing of the various health insurance schemes. People who are above a certain age limit are likewise excluded from any such scheme. By reason of their condition, their lack of health or their age, such people are in need of the relief we now seek to give in this very reasonable amendment, because it is the aged, and people who are suffering from a chronic disease or an ailment and in need of constant treatment, who deserve the small modicum of relief we suggest should be given by this amendment.

Last year the Minister said the right thing to do was to provide for them under some national health scheme rather than to provide for them under the income tax code. I do not want to become too partisan in this matter, but last year when we, on this side of the House, were straining to introduce such a comprehensive national scheme, we tabled a motion and the Fianna Fáil Party, including the Minister, went into the Division Lobby and voted against it and put the whole idea of improving the health scheme on the long finger by appointing a farcical committee which is sitting like a hen on a dud egg at the moment, a committee which the Minister for Health has said——

The Deputy may not discuss the Health Act or the Committee which was set up, on this amendment.

Mr. Ryan

I am anticipating the arguments which the Minister will produce against the amendment.

The Deputy must relate his remarks to his own amendment.

Mr. Ryan

If it debars the Minister from proceeding upon the same extremely foolish line, I shall deal with it by way of reply later on. These, in brief, are my arguments. Last year, the Minister indicated he was sympathetic. When we asked him to translate his sympathy into action, he accused us of being sarcastic. I am perfectly genuine in moving this amendment and I hope on this occasion the Minister will indicate a preparedness, if not on this Stage, then on Report Stage, to do something about it.

Last year, I supported this amendment and I want to do the same this year. It is perfectly feasible administratively and, in fact, it is in operation in Australia. I am not quite sure whether, on the wording of the amendment, it is clear that the allowance would have to be given for expenses in the preceding year. When we introduced the amendment of the income tax laws to allow an offset for the premium paid to the Voluntary Health Insurance Board in 1956, we did so on the basis of providing that it was the premium paid in the preceding year that was eligible for offset against income tax. Exactly the same procedure could apply here. I understand that it is on this basis that the allowance is made in Australia. Frankly, I do not know whether it is made in any other country, nor do I know whether, for example, the premiums paid in America to Blue Shield Insurance are eligible in the same way as our voluntary health insurance premiums, but the Australian and, I think, the New Zealand practice is that the allowance is made for the full medical expenses that have been incurred, subject to proof that they have been genuinely incurred. It is quite a simple matter for the Revenue Commissioners to exact such proof from any taxpayer.

The amendment was phrased quite deliberately last year, and again this year, to cover only the case of persons who are not able to get insurance benefits against these expenses, the idea being that we want so far as we possibly can to assist in building up the Voluntary Health Insurance to enable it to give greater cover and greater benefits. As every Deputy knows, through cases brought to their attention, there are many instances where voluntary health insurance is not able to offer cover because of bad medical history in one respect or another. Yet, when those people have necessity, because of the matter for which they have been excluded from voluntary health insurance, to go into hospital and be operated on, it costs them just as much as if they had a clear record before. Indeed, I do not think it is unfair to say that there is even greater need for protection for them because they are more likely to suffer expenses in regard to medical attention over a period than the normal, healthy person who is able to insure with the Voluntary Health Insurance Board.

Last year, the Minister said he did not think an allowance against income tax was the proper way to deal with this situation. I say this in no spirit of criticism of the officials administering the income tax code. They must administer the code as they find it but the whole tenor of the code up to 1956 has been, with, I think, the sole exception of the additional allowance for Irish insurance premiums, that it would not take cognisance of anything outside taxation matters. There was the breach in that of the additional allowance given to Irish insurance premiums and the additional breach— I am not disclosing any secret in saying this—was greatly resented by senior officials of the Revenue Commissioners at the time because they felt it was putting them on an entirely different line. Those officials are now no longer in the public service. Times have moved and have changed and we must now accept that no longer is it a question of the tax code being one purely for taxation but that tax can take cognisance of matters outside the pure equity of taxation between one individual and another.

After all, there is another section in this Bill which deals with the doubling of initial allowances. The whole point in that is to try to induce people to modernise their machinery. The purpose of the amendment in regard to allowances on Voluntary Health Insurance premiums was the same, to induce people to insure against that type of expense. Once you have done that in that respect, then there is an obligation also to ensure that there is equity between one taxpayer and another and it is not equitable for the A.1 medical history life to be able to get relief on his insurance premium and for his next-door neighbour, who is not quite so lucky in regard to health, not to be able to get any allowance for income tax purposes in that way.

The administrative machinery for this proposal should be quite feasible and it will not mean a very great dent in actual taxation because it is specifically provided here that it is applicable only where the person concerned can show the Revenue Commissioners that he is not able to insure against the illness in question. The obligation of proof remains on the taxpayer. I know many people think it is entirely wrong that any obligation of proof should remain on the taxpayer but that is not the issue on this amendment. The obligation here remains on the taxpayer and when he can discharge that burden of proof, he should get the allowance for which this amendment provides.

I submit a very large proportion of Dublin citizens is affected by this amendment. I have in mind, particularly, the claims of people I have already referred to, those coming under the Small Dwellings Acts. It is well known that such people, in order to qualify, go out of the class entitled to a corporation house and come within a particular condition in relation to what they are able to afford in order to pay off their commitments. It is generally found that such people are asked to substantiate that they are able to have, after meeting their commitments, a sum of £8 2s. 6d. or £8 5s. on which to live.

One can well imagine the difficulty such people experience not only in trying to live but in trying to combat something that happens to them rather suddenly in having to pay medical expenses. I am well aware that the Voluntary Health Insurance scheme exists and that it has done very commendable work but a vast number of people are not familiar with its operation. Indeed, there are a number of people who not only do not contribute but do not qualify for what is set out there. That being so, we should take into consideration the difficulties such people experience, the natural way of living of these people.

People are urged to have their own houses and the trend is for them to be on their own and be independent. In some cases, it is found they commit themselves to something that they cannot fulfil. These are the people who could very easily be described as trying to keep up with the "Joneses." They are people who enter into commitments day after day by way of hire-purchase and so on. They are people who can be found in very straitened circumstances living in their own homes. Surely these are the people who deserve relief and consideration?

These are the people who can be classed as being a little above the corporation house but still they are struggling with a young family and on occasions need the kind of relief set out in this amendment. As I have already said, all our people are not imbued with a realisation of the value of the voluntary health scheme. All our people are not thrifty. All our people are not as cute as the fellow who controls business, the fellow who is able to lay it off against taxes. Such people are entitled to relief and our Christian inclinations should urge us to assist them.

Deputy Ryan said that on the last occasion this matter was raised there was a great deal of sympathy extended from the opposite side in regard to the points of view expressed. We have now reached the stage where we do not want sympathy. What is very much required is action with a view to ensuring that these people who are undoubtedly trying to keep their heads above water will be afforded an opportunity of existing. They are the self-same people who are called upon to face the demands for increasing rates and similar charges and they face such situations bravely. Every man should be encouraged to have his own possessions and not discouraged.

This amendment is a commendable one and should be accepted by the Minister. If affords an opportunity of bringing relief to a section of our people who have always been asked to pay because they are between the fellow on the low rung of the ladder and the fellow who is higher up. We should never discourage any of our people from moving up. If something is not done in this connection even those people who have obtained assistance from the SDA people and who have been facing up to their commitments will be left in a forlorn position. Were it not for the people who pay taxes, direct and indirect, a most peculiar situation would exist in this country.

I wish to quote this amendment which intrigues me in one respect:

In connection with any assessment for liability for income tax, where a person proves that he has incurred expenditure on the provision of necessary medical services or treatment in respect of illness or infirmity of himself or any of his dependants and that he was unable to insure himself against the said expenses, there shall be deducted from the income to be assessed the expenses so incurred.

The operative word there is "unable" and I should like to have the matter considered on that basis. The people of whom we speak are absolutely unable to meet their many commitments and we are pushing them into destitution if we continue the way we are operating.

I wish to add my voice in urging the Minister to consider seriously accepting this amendment. This matter was referred to last year and I referred to it on the Second Stage of this Bill. I instanced the case of a man who was in a rather high income bracket but whose expenses to keep himself alive ran into several thousands of pounds. I think the Minister knows this man and certainly many members of the Government do. I was surprised to hear that this person has for many years been paying by instalments the fees of the doctors and specialists who attended him. Even though he is in a fairly high income bracket, he could not be expected to pay £6,000 or £7,000 which was the cost of the series of operations he had to undergo. Whatever arrangements he made to pay his commitments in this regard, I believe they are genuinely deductible expenses.

On the Second Stage, I did not ask the Minister to introduce an amendment at this stage. I suggested to him that he might give the matter further examination, with a view to including a provision next year. However, now that the amendment is before the House, unless the Minister has some serious objection, I would urge him to accept it.

I should like to support this amendment for the reasons that have been stated already and, in addition, because I believe that, in equity, there is a very good case for accepting it. We proposed a similar amendment last year and understood on that occasion that the Minister was having the matter examined. There are two very valid reasons for accepting it. At the moment those who are insured under the Voluntary Health Insurance Act are entitled to relief from income tax in respect of the premium paid and they benefit to that extent but, although a person is actually insured under the Voluntary Health Insurance Act and is entitled to the income tax relief granted in respect of the premium, where such a person incurs either in respect of himself or his dependants expenditure for hospital or medical treatment, the Voluntary Health Insurance Board allow only a certain maximum benefit to be paid for doctors' fees, hospital accommodation, drugs or medicine. Therefore, in most cases, even for a comparatively minor operation, the amount which is allowed by the Voluntary Health Insurance Board represents only about half the actual expenditure incurred. Over and above that sum, the insured person has to bear the full liability. There is, therefore, a great case for including in the allowances granted not merely an allowance in respect of the premium paid but an allowance in respect of the expenditure incurred over and above whatever sum is granted under the Voluntary Health Insurance Scheme.

Outside these categories, there are cases of elderly physically infirm persons who are not regarded by the insurance board as proper subjects for insurance under this scheme. At the moment a person has to prove that he, or she, suffers from no serious disability before he, or she, will be admitted into the scheme. Two categories are excluded: those who suffer from some serious disability and those who are above a certain age. Now it very often happens that the onset of years necessitates medical care or hospital treatment and these older people are obliged to undertake certain necessary expenses.

Apart from these cases, there is the case of the person who, although insured under the scheme, is put to considerably more expense for medical and hospital treatment than is met by the scheme. The Voluntary Health Insurance Board have in recent times increased the amounts being paid. I know of one case, however, where for a comparatively simple operation, the amount covered by insurance was less than half the actual expenses incurred. In all these cases, the difference between the actual sum paid by the Board and the expenses incurred by the insured person should qualify for relief.

Where a person, because of physical infirmity or disability, is refused admission to the scheme and where aged people are excluded from the scheme—I understand eventually the Voluntary Health Insurance Board hope to extend the cover—sympathetic consideration should be given to these cases. This amendment might well be the subject of sympathetic consideration by both the Minister and the Revenue Commissioners because of the very special circumstances applicable in cases where people necessarily incur either medical or hospital expenses.

I approve of this amendment. The Minister will be quite safe in accepting it because people will have to prove they were unable to insure against "the said expenses". These are the people in the categories mentioned by Deputy Cosgrave. No one would get away with anything. There is no element of risk. No one will be able to say: "Oh, I will not bother. If anything happens, I will be able to claim something back from the Revenue Commissioners". No one will be able to get away with that. The percentage affected by this amendment would be comparatively small. Those who would benefit are those who might, perhaps, be in dire need.

Deputy Lemass referred to people who are alleged to have high incomes and who therefore do not benefit at all from local authority assistance. Those in receipt of incomes up to £800 a year have half their hospital expenses paid. If the cost per day is £1, they need pay only 10/-. In fact, if they can make a good case, the cost may be only 6/- a day. I am aware of an unfortunate class which has the name of having over £800. Because of that, they receive no local authority assistance. They must pay £1 per day for maintenance, £3 3s. for extras, £4 4s. for X-rays, and so on. Some people have come to me in a panic with bills for £50 and £60. They are alleged to be in receipt of £900 or £800 a year. These people deserve some consideration. They are not exactly working-class people but they are not much better off than the working classes.

To illustrate my argument, I do not pay income tax. I have got only my allowance as a Deputy. I had a child in hospital. I was asked to pay £7 7s. per week for that child, just because I had the name of being a TD. Half of my allowance goes in paying election expenses. A certain percentage goes back in my day-to-day work as a TD. I calculate I have about £10 per week to live on, but I have the name of having £20 per week. I made representations to the hospital and the hospital authorities admitted to me that they had numerous cases like mine; these people could prove that they could not pay but, under the law, they were compelled to pay.

These are the cases which could be met by way of income tax relief for expenses incurred due to illness. The Minister would be quite safe. Those affected would have to prove they were unable to pay. I think he could accept this amendment. If he cannot see his way to accepting it now, perhaps he would consider it sympathetically between now and Report Stage. A good case has been made for it. Only a small percentage will benefit.

I do not want to go over the arguments, or to repeat what I said on the last amendment, or what I said last year, but I do want to point out, in relation to this question of being unable to insure, that the Fine Gael Party produced a scheme. Arising out of that scheme, a committee was appointed. The task of that committee is to find out whether an insurance scheme would be feasible. I know, and others know, that there were many defects in the scheme put up by Fine Gael. I am very much in favour of insurance if a feasible scheme can be put up. I hope the committee will arrive——

The Minister hopes they will meet, rather.

They must produce a report by November. Presumably, they will do so. I hope they will produce a feasible and workable scheme so that medical and hospital treatment will be within the reach of all who need it. I think we should wait and see what the Committee will produce.

The Income Tax Commission made certain recommendations, not in line, but not out of line either, perhaps, but not by any means the same recommendation as is made here. That will have to be considered. I do not know whether we will be compelled at some stage to do something with regard to relief of income tax in relation to medical expenses. There is such relief in some countries. These countries appear to have a better system of check. The only one I have seen in detail is the American system. The Revenue Commissioners there have power to check the expenses by asking the doctors to produce their accounts. I am afraid we would never get that here. Therefore, we would never have the same opportunity of checking expenses put in by a taxpayer.

Why would we not get it here?

If the Deputy were here at the time I was putting the Health Act through, he would agree with me.

If you change the Minister for Health, the IMA might be more co-operative.

Yes, if you put in a Minister for Health who would agree with them, they would be co-operative: I am quite sure of that. For these two reasons: (1) the fact that the Committee is sitting in regard to health and (2) the fact that the recommendations of the Income Tax Commission will be made public in the very near future—and it refers to this matter—it would be better for Deputies to see it and for the Government to consider it before we go any further.

Deputy Ryan seems incapable of avoiding personalities. He said Ministers are the only people with free transport to their work. So have Deputies, Senators and local authority representatives. Therefore, we are not alone in that. However, in this particular instance, there is no immunity. I think I would be safe in making a bet, at 10 to 1, that I am the person who most recently paid medical expenses. I had to pay them within the past week.

Was it not wonderful to be there to pay them? I am sure the Minister was glad.

I was glad to get out and pay them.

Mr. Ryan

The Minister should not be putting the baby in his arms. I did not put it there; he put it there himself.

What is the Deputy saying this time? I can wind up by saying that I am not prepared to agree to this amendment. I do not want to be misunderstood on this. I repeat that I hope this Committee will bring in a scheme, preferably a workable insurance scheme, that will at least relieve the difficulties of many people cited here who are paying heavy medical expenses at the moment.

That is entirely beside the point.

Amendment put.
The Committee divided: Tá, 52; Níl, 64.

  • Barry, Anthony.
  • Belton, Jack.
  • Browne, Michael.
  • Burke, James J.
  • Burton, Philip.
  • Clinton, Mark A.
  • Connor, Patrick.
  • Coogan, Fintan.
  • Corish, Brendan.
  • Cosgrave, Liam.
  • Costello, Declan D.
  • Costello, John A.
  • Coughlan, Stephen.
  • Crotty, Patrick J.
  • Desmond, Dan.
  • Dillon, James M.
  • Dockrell, Henry P.
  • Dockrell, Maurice E.
  • Donegan, Patrick S.
  • Dunne, Thomas.
  • Esmonde, Sir Anthony C.
  • Everett, James.
  • Farrelly, Denis.
  • Flanagan, Oliver J.
  • Gilhawley, Eugene.
  • Governey, Desmond.
  • Harte, Patrick D.
  • Hogan, Patrick (South Tipperary).
  • Hogan O'Higgins, Brigid.
  • Jones, Denis F.
  • Kenny, Henry.
  • Kyne, Thomas A.
  • Lynch, Thaddeus.
  • McAuliffe, Patrick.
  • McGilligan, Patrick.
  • McLaughlin, Joseph.
  • Mullen, Michael.
  • Murphy, Michael P.
  • Murphy, William.
  • Norton, William.
  • O'Donnell, Thomas G.
  • O'Higgins, Michael J.
  • O'Higgins, Thomas F.K.
  • O'Reilly, Patrick.
  • O'Sullivan, Denis J.
  • Pattison, Séamus.
  • Reynolds, Patrick J.
  • Ryan, Richie.
  • Spring, Dan.
  • Sweetman, Gerard.
  • Treacy, Seán.
  • Tully, James.

Níl

  • Aiken, Frank.
  • Allen, Lorcan.
  • Bartley, Gerald.
  • Blaney, Neil T.
  • Boland, Kevin.
  • Booth, Lionel.
  • Brady, Philip A.
  • Brady, Seán.
  • Brennan, Joseph.
  • Brennan, Paudge.
  • Breslin, Cormac.
  • Briscoe, Robert.
  • Burke, Patrick J.
  • Calleary, Phelim A.
  • Carter, Frank.
  • Carty, Michael.
  • Childers, Erskine.
  • Clohessy, Patrick.
  • Colley, George.
  • Collins, James J.
  • Cotter, Edward.
  • Crinion, Brendan.
  • Crowley, Honor M.
  • Cummins, Patrick J.
  • Cunningham, Liam.
  • Davern, Mick.
  • de Valera, Vivion.
  • Dolan, Séamus.
  • Dooley, Patrick.
  • Egan, Kieran P.
  • Egan, Nicholas.
  • Fanning, John.
  • Faulkner, Padraig.
  • Gallagher, James.
  • Galvin, John.
  • Geoghegan, John.
  • Gibbons, James M.
  • Gilbride, Eugene.
  • Gogan, Richard P.
  • Haughey, Charles.
  • Hillery, Patrick.
  • Hilliard, Michael.
  • Lalor, Patrick J.
  • Lemass, Noel T.
  • Lemass, Seán.
  • Leneghan, Joseph R.
  • Lenihan, Brian.
  • Lynch, Celia.
  • Lynch, Jack.
  • MacCarthy, Seán.
  • McEllistrim, Thomas.
  • MacEntee, Seán.
  • Meaney, Con.
  • Medlar, Martin.
  • Millar, Anthony G.
  • Moher, John W.
  • Mooney, Patrick.
  • Ó Briain, Donnchadh.
  • Ó Ceallaigh, Seán.
  • O'Connor, Timothy.
  • O'Malley, Donogh.
  • Ormonde, John.
  • Ryan, James.
  • Timmons, Eugene.
Tellers :— Tá: Deputies O'Sullivan and Crotty; Níl: Deputies J. Brennan and Geoghegan.
Amendment declared lost.
NEW SECTION.

I move amendment No. 8:

Before section 15, in a new PART IV entitled "STAMP DUTIES", to insert the following section:

"15. Subsection (4) of section 13 of the Finance (No. 2) Act, 1947, is hereby amended by the deletion of paragraph (a) and by the substitution of—

`(a) there is a recommendation (which shall be an excepted matter for the purposes of section 12 of the Land Act, 1950) of any two Lay Commissioners of the Land Commission to the Revenue Commissioners for their application in relation to the conveyance or transfer, or' ".

I have no objection, if the Minister has no objection, to amendments Nos. 8, 9 and 10 being discussed together.

They are all cognate. Under Section 33 of the Finance Act, 1961, it was provided that if a non-national bought land, he had to pay the 25 per cent. stamp duty, unless the two Lay Commissioners gave a certificate that the land was not required. Then the practice and the procedure was that that certificate was sent back to the Minister for Finance who then had another look at the matter. At that time, it seemed to me that the practice and procedure of last year was very unnecessarily complicated but I let it go as a practice because I felt that perhaps it was better that the right of dispensing from tax should be vested in the Minister for Finance rather than in the Land Commission. The Minister for Finance, however, has in his own two amendments, Nos. 9 and 10, provided that the right of dispensation from the 25 per cent. duty should be vested directly between the two Lay Commissioners and the Revenue Commissioners. When it can be done and is being done by the Minister for Finance himself in his two amendments, I think it proper that it should be done on all occasions.

It seems to me undesirable, once the system by which the Minister for Finance alone dealt with taxation has been breached, that there should be any second examination by the Minister for Finance himself. It seems to me that it adds unnecessarily to the administrative cost and indeed it is undesirable that there should be a position remaining that the Lay Commissioners who are in fact by our legislation in a quasi-judicial position should then subsequently be subject, if one likes, to veto by the Minister. The procedeure which the Minister himself visualises in amendments Nos. 9 and 10 is entirely satisfactory to us and it obviates a possible loophole which existed already in the legislation. Once it has been accepted and dealt with in that way correctly, it is highly desirable that the whole matter should be done like that and highly desirable, therefore, that the Minister for Finance would drop his right of veto which he is leaving in it as between the Lay Commissioners and the Revenue Commissioners.

First of all, with regard to the Deputy's amendment, I prefer to deal with amendments Nos. 9 and 10 and then go back to amendment No. 8. Amendments Nos. 9 and 10 are designed to deal with a certain form of avoidance that has arisen of buying an estate with a building and taking the building with less than five acres in one part and taking the remainder of the estate in another part, and, therefore, avoiding the 25 per cent. tax on the building on the smaller part. The Land Commissioners have knowledge of what is being done and I presume they will refuse in a case like that to recommend that the lower duty should be applicable.

With regard to amendment No. 8, when this scheme came in first, it was difficult to know if very much revenue would be lost by giving the exemption from 25 per cent. to 3 per cent. The case has come to me, as the Deputy pointed out, from the Lay Commissioners. They have it tabled. I should like, however, to keep a tab on it for a little while longer. I think I might be disposed to agree to this next year when we have a little more experience. If the Deputy would agree, I would undertake to give it full consideration in connection with next year's Finance Bill.

Amendment Nos. 9 and 10 become operative only on the passing of this Act.

That is so.

That is the correct procedure — not the procedure announced by the Minister for Lands. Of course, nobody pays much attention to the Minister for Lands when he speaks in this House or in Castlebar.

Amendment, by leave, withdrawn.
NEW SECTION.

I move amendment No. 9:

Before Section 15, in a new PART IV entitled "STAMP DUTIES", to insert the following section:

"Subsection (4) of section 13 of the Finance (No. 2) Act, 1947, is hereby amended—

(i) by the insertion at the end of paragraph (a) after `or' of `in the case of property which is being acquired for private residential purposes and which does not include land exceeding five acres in extent, there is a recommendation (which shall be an excepted matter for the purposes of Section 12 of the Land Act, 1950) of any two Lay Commissioners of the Land Commission to the Revenue Commissioners for their application in relation to the conveyance or transfer, or'; and

(ii) by the deletion of subparagraph (ii) of paragraph (b)."

Amendment agreed to.
NEW SECTION.

I move amendment No. 10:

Before Section 15, in a new PART IV entitled "STAMP DUTIES", to insert the following section:

"Subsection (4) of Section 24 of the Finance Act, 1949, is hereby amended—

(i) by the insertion at the end of paragraph (a) after `or' of `in a case in which the lessee's interest under the lease is being acquired for private residential purposes and does not include an interest in land exceeding five acres in extent, there is a recommendation (which shall be an excepted matter for the purposes of Section 12 of the Land Act, 1950) of any two Lay Commissioners of the Land Commission to the Revenue Commissioners for their application in relation to the lease, or'; and

(ii) by the deletion of subparagraph (ii) of paragraph (b)."

Amendment agreed to.
NEW SECTION.

I move amendment No. 11:

Before section 15, in a new PART IV entitled "STAMP DUTIES", to insert the following section:

"(1) Stamp duties shall not be charged on—

(a) admission of any person to the degree of barrister-at-law,

(b) admission of any person as a student of the Society of King's Inns in Dublin, or

(c) articles of clerkship whereby any person becomes bound to serve as a clerk in order to his admission as a solicitor.

(2) This section shall come into operation on such day as the Minister for Finance may by order appoint."

This amendment is a long-standing question in respect of which the Minister was requested to make this change but it was not possible to get the agreement of the parties concerned until now. First of all, it is proposed now not to charge duties on the admission of a person to the degree of barrister-at-law, admission of any person as a student of the Society of King's Inns in Dublin or articles of clerkship whereby any person becomes bound to serve as a clerk in order to his admission as a solicitor. Those are the three points.

Point No. 3 was partially dealt with on a former occasion but the £14 was maintained for the benefit of the King's Inns and they were not agreeable to forgo it. Now they have agreed to forgo it. By our foregoing the other two duties, the King's Inns will presumably—I am not saying they must—put up their fees and recoup themselves in that way.

How much is involved?

About £1,500.

Is there any chance of making it retrospective?

I noticed the words "articles of clerkship" in paragraph (c). Does that apply only where a solicitor's clerk becomes a barrister or where an apprentice is indentured to a solicitor? Does it apply to both?

Yes, it does.

I want to raise a point in relation to the drafting of this amendment. Is the wording of paragraph (c) correct? It does not make any sense to me. It says: "Articles of clerkship whereby any person becomes bound to serve as a clerk in order to his admission as a solicitor." Surely a word has been dropped out?

These are the words in the 1891 Act.

The 1891 Act is wrong, too. Some people always say that they did things well in the good old days but they made messes in the good old days, too. It means nothing to me.

We are going back to Old English.

There is a precedent for it.

If it is wrong, is it being repeated simply to make it comply with the original provision which imposed the stamp duty? I agree with Deputy Sweetman. As it stands, it does not mean anything. Is it essential that it should comply strictly with precedent? Here you are cancelling a stamp duty. If not, and I hope it is not, it would be better to insert the word "gain" before the words "his admission". As it stands, it just does not mean anything.

I think that if I stick to the old Act, I cannot go very far wrong.

Would it not be better to make the amendment by way of saying that: "Section so and so of the Act of 1891 shall be deleted"? Then you would be removing the nonsense instead of perpetuating it.

With regard to the point the Minister made about the King's Inns putting up the fees, I did not understand that the King's Inns got any of the stamp duty.

They did.

Every solicitor who is qualified has to pay tribute indirectly to the King's Inns.

Amendment agreed to.
NEW SECTION.

I move amendment No. 12:

Before Section 15, in a new PART IV entitled "STAMP DUTIES", to insert a new section as follows:

"Notwithstanding anything contained in any other enactment, as and from the passing of this Act, stamp duty shall not be payable by an Irish citizen in respect of a house acquired for use as a private residence with not more than five acres of land the market value of which at the date of purchase does not exceed £3,500."

This amendment is in the name of Deputy Ryan and I move it in order to hear the Minister's observations on it.

As far as I can get an estimate, this brings in a fair amount of money—perhaps about £250,000.

A quarter of a million.

I do not know what alternative tax would be any more equitable or just than this.

Amendment, by leave, withdrawn.
NEW SECTION.

I move amendment No. 13:

Before Section 15, in a new PART IV entitled "DEATH DUTIES", to insert a new section as follows:

"Where the property passing on the death, occurring on or after the day of the passing of this Act, of any person dying domiciled in the State includes (a) any Irish stocks, shares or securities or (b) land situated in the State, such stocks, shares, securities or land shall not be taken into account for the purpose of assessing death duties".

The purpose of this amendment is to ensure that money invested in Irish securities or property by a person who dies domiciled in the State shall not be included for the purpose of assessing death duties. Many years ago, somebody conceived the idea of imposing death duties as a means of getting handy revenue. I submit that at that time circumstances were very different from what they are today. In fact in those days, there was a much greater concentration of wealth in the hands of a few. In the course of time, during which the estate duties were paid, it became obvious they were affecting not the particular people at whom they were aimed but the community as a whole.

There are many instances that come to my mind of big business concerns, the business and employment potential of which were practically destroyed by reason of one or two deaths in the family. I know of two instances of businesses in the State which had to close down and sell out as a result of death duties. I know of one instance where two people put their life savings into a garage here, but because of several deaths in the family, had to close down and emigrate and their employees, of course, lost their work.

It is well known that big landed estates which had given regular employment throughout generations found themselves, by reason of the death of two or three people in the family, faced with the prospect of having to lay off workers and, in fact, practically cut out employing men altogether. In our fiscal policy, we spend a tremendous amount of money encouraging people to bring capital into the country. We give all sorts of facilities to people to bring money in here to start industries, but at the same time I suggest to the Minister, without drawing on the taxpayers' purse at all, we could get an influx of capital sufficient to meet all our requirments—and the one thing we need is unlimited capital—simply through acceptance of this amendment.

The amendment is so framed that anyone who is relieved of these estate duties will be living here and whatever the loss may be through the remission of the duty concerned should be repaid four or five times over by the influx of new capital. In every part of the world, this situation obtains and no other country has seen fit to introduce legislation of this sort. I should like the Minister to give the House some indication of what the revenue under this heading is. Of course it is impossible to give the actual revenue from estate duty itself, since it varies so much from year to year, but I believe it is in the neighbourhood of £3,000,000.

I venture to suggest that if the Minister could himself make this decision, overcome the inherent conservatism of his advisers and introduce legislation to bring this into effect, there would be a tremendous inflow of capital from abroad and the revenue from income tax alone would be sufficient to compensate the State for any loss suffered as a result of the remission of this duty. I would also suggest that if such legislation were introduced, we would not have to pay huge sums of money to encourage people to come in here to start industries. Anyone who rationally examines this will see there is a tremendous loss of employment, that there is tremendous instability in industry, as a result of this duty. In this age in this country, employers and employees are so dependent on each other that this is a step the Minister would be well advised to consider. I do not suppose that his advisers will be inclined to accept this, but I will have achieved something if I sow in their minds the idea that we would have a much more efficient fiscal policy if this most misplaced system of taxation were eliminated.

I should be interested if the Minister would give some indication of the amount that has been lost to the revenue by the operation of the Finance Act, 1956, which provided that in respect of certain Irish securities, one-third of the death duty should be remitted. When that was brought in at that time, it was introduced very deliberately for the purpose of trying to widen the stock market in Irish securities and for the purpose of widening interest in such securities. It is an unfortunate fact, however, that it has not been availed of as much as I personally would like to see it utilised.

The more that section was used for the purpose of the legal avoidance of a certain amount of death duties, the more the market and the interest were aroused in Irish securities, and that is the first fundamental in achieving a better basis for Irish public industrial issues. I do not know whether the Minister has the figures but I should be obliged if he would give them to us, if he has got them.

I notice that this amendment has been so phrased as to obviate at once the usual objection that is made to remissions of death duties—that all that will happen through its acceptance is that one would be subsidising a foreign State, that the only thing that would happen is that the people who came over here kept their foreign securities in such a place that they would not have to pay on them here. This amendment deals peculiarly with Irish securities and a very strong case can be made in respect of working capital here, particularly that of a business.

I include in the term "working capital" the capital of a farmer, a man who owns land. In such cases, the family of such a farmer find themselves, after his death, very seriously restricted, sometimes to such an extent that they are, in consequence, unable to continue properly to work that land. Private firms and private companies have felt this draught from time to time. I see considerable difficulty in administration in regard to a method of investment through a private investment company or through securities outside the State, but I suggest it is not beyond the wit of the Revenue draftsman to provide a means whereby that method of avoidance cannot be operated.

I admit that when I introduced the concession in 1956, I did so as the first step along a certain road. This amendment is another step along the same road—perhaps not the next step but a jump ahead by two or three steps. It is, however, one we ought to consider. We must remember that the State gains nothing on a long term basis if, by extracting duties on the death of the owners of businesses, they prevent those businesses carrying on effectively so that their product is lost to the national economy.

Notice taken that 20 Members were not present; House counted, and 20 Members being present,

I think I have said all I wish to say on the amendment.

I could only give a very rough estimate of what would be lost by this. It would be something under £200,000. I say that is a very rough estimate. If we were to accept Deputy Esmonde's amendment, it would make a very big hole in the death duty because property taken as well as Irish investments would certainly be one half of the lot. It would hardly be worth while continuing death duties at all, if the amendment were accepted. As far as I understand the Common Market requirements, they do not prefer division in taxation as between foreign and home investments so it would be a bad thing to do a thing like this.

It might be a good thing to get in in time.

It would look like a trick to get there in time. At the moment, we could hardly afford to forego the income that is derived and that would be done away with if we were to accept the amendment. My reply is that we cannot afford it.

Shall we go on as we are forever?

Not for ever. It is a tax that I should like to see abolished some time or other but we cannot afford to abolish it.

Amendment put and declared lost.
Section 15, as amended, agreed to.
Section 16 agreed to.
SECTION 17.
Question proposed: "That Section 17 stand part of the Bill."

Does this refer to friendly societies?

This continues the exemptions.

For friendly societies?

For certain corporations, including C.I.E.

Question put and agreed to.
SECTION 18.
Question proposed: "That Section 18 stand part of the Bill".

There is a new Part IV being put into this Bill in relation to stamp duties for the sale of property to aliens and it would be appropriate that Section 18 should go into that Part IV.

It does not change the wording of it; it only changes its place?

That is right.

Question put and agreed to.
SECTION 19.
Question proposed: "That Section 19 stand part of the Bill".

Is there any provision under the 1957 Act that returns made under that Act and this section will be tabled?

Is there an annulling power?

Question put and agreed to.
Sections 20 to 22, inclusive, and First Schedule agreed to.
SECOND SCHEDULE.

I move amendment No. 14:

To add to the Schedule the following Parts:

"PART III

CUSTOMS

£

s.

d.

Unmanufactured:—

if stripped or stemmed:—

containing 10 lbs. or more of moisture in every 100 lbs. weight thereof

the lb.

2

14

11

containing less than 10 lbs. of moisture in every 100 lbs. weight thereof

,,

3

1

0

if unstripped or unstemmed:—

containing 10 lbs. or more of moisture in every 100 lbs. weight thereof

,,

2

14

10½

containing less than 10 lbs. of moisture in every 100 lbs. weight thereof

,,

3

0

11½

Full

Preferential

£

s.

d.

£

s.

d.

Manufactured:—

cigars

the lb.

3

9

6

2

17

11

cigarettes

,,

3

7

6

2

16

3

Cavendish or Negrohead

,,

3

9

0

2

17

6

Cavendish or Negrohead manufactured in bond

,,

3

8

6

2

17

1

other manufactured tobacco

,,

3

7

0

2

15

10

snuff containing more than 13 lbs. of moisture in every 100 lbs. weight thereof

,,

3

6

6

2

15

5

snuff not containing more than 13 lbs. of moisture in every 100 lbs. weight thereof

,,

3

9

0

2

17

6

PART IV

EXCISE

£

s.

d.

Unmanufactured:—

containing 10 lbs. or more of moisture in every 100 lbs. weight thereof

the lb.

2

13

containing less than 10 lbs. of moisture in every 100 lbs. weight thereof

,,

2

19

9

Manufactured:—

Cavendish or Negrohead manufactured in bond

,,

2

15

Amendment agreed to.
Second Schedule, as amended, agreed to.
Third Schedule agreed to.
Title agreed to.
Bill reported with amendments.
Agreed to take remaining Stages today.
Barr
Roinn