Committee on Finance. - Resolution No. 14—General (Resumed). – Dáil Éireann (17th Dáil) – Tuesday, 7 May 1963

Committee on Finance. - Resolution No. 14—General (Resumed).

Debate resumed on the following motion:

That it is expedient to amend the law relating to customs and inland revenue (including excise) and to make further provision in connection with finance.—(Minister for Finance.)

Mr. S. Collins

Before I moved to report progress on Thursday last, the Minister for Finance had become slightly irritable and was most anxious that I should not return to battle to-day. I have never refused to join issue with the Minister but he will be gratified to know that I shall hardly keep him for two hours today, as I did on the last occasion.

One must deal with this Budget in the light of the stimulus, if any, or the benefit, if any, to general economic progress that can be found in it. It might be very wise for the Minister before the Finance Bill takes its final shape, to ask his supporters and his rural Deputies about the reaction to the Budget, the gathering storms that have arisen as a consequence of this inept, sterile Budget.

We are all conscious of the fact that one of the most serious problems we have faced in this country over the last decade has been the haemorrhage of emigration. What is there in this Budget that will give any hope that in the immediate future there will be a significant uptake of people into employment to enable them to stay at home and get their living at home?

This Budget, as I have said quite emphatically, is restrictive in its thinking and one might describe it as being retrogressive in its effect. With the broadening of the concept of modern democracy and the increase of State interference in the ordinary everyday life of the nation, it becomes more and more evident that any stimulant or forward line of action required should flow from the instrument of economic direction, which is the Budget. I fail to understand why in the atmosphere suggested by the Taoiseach, of the need for time to develop, to re-equip and to improve, there is not some direct incentive given to industrialists who may be lagging behind in the effort to get on with the job. We know perfectly well that between the farce of their instrument for bridging the gap and their melancholy pay pause philosophy the worker is extremely suspicious of the intentions of the Government. These two facets of Government administration make even the most unwilling recognise the fact that there is no hope that people who are thinking in that uncoordinated manner can provide the necessary impetus to our economy.

I was telling the Minister quite bluntly of how deeply the turnover tax would penetrate into the everyday ordinary normal life of every section of the community, how far the hungry claw of taxation would reach. It is a good thing for us to be realistic and to appreciate the fact that every retail article is affected by this taxation. The people are most anxious to know by what method the extraction will take place. The Minister may not realise it but every retailer, from the owner of the huckster shop to the proprietor of the biggest store, has a deep-seated resentment to being made a tax collector. These people are deeply concerned as to how they can recoup the taxation that the Government will take from them and at the same time cushion the impact for the consumer public. These questions remain unanswered and the Minister, for some reason of his own, is not prepared to come to grips with the problem. It is our duty and it will continue to be the duty of the Opposition to press throughout this debate for that information and to press the Minister to give to the country the answers to the questions created by this Budget.

There is no doubt that anybody considering the Budget now, in spite of the unreal atmosphere in which it was introduced, realises its full impact and realises also that this form of taxation represents the thin edge of the wedge and that nothing can be expected from this Government, for so long as they may last, but the same inept, unrealistic thinking as is shown in the Budget. The only thing that will become conspicuously evident is that the Government will continue on their merry way with this new technique of taxation which the Minister finds, as he puts it himself, so inexpensive to collect. Indeed, the exuberance of the Minister for Justice was very aptly cartooned by one of the Sunday papers. The computer was shown as an instrument with sharp teeth for gripping, with a bludgeoning glove, and with the space for the heart left vacant. That is the attitude of the Government towards the people of this country.

We must come to grips with this completely callous and unreal approach to problems at a time when progressive thinking, sustained effort and a courageous forward movement were never more necessary. I do not believe that, without a very substantial stimulus, we can get industry geared for any type of free trade competition. The industries that have been realistic in their approach have already made an impression upon open competition, and the industries that have lagged behind need all the coddling, support, and forward encouragement the Government can give, if they are to survive. Our principal industry, agriculture, still has to face unsteady and unsettled markets, without any effort being made in that broad field of endeavour to find suitable export outlets at remunerative prices.

This Budget is very hard to describe. It displays a sinister disregard for and callous treatment of the general public. As I said earlier, it is no deterrent to the constant flow of emigration about which we make pious observations but few constructive efforts to arrest. We are, apparently, in an era when the way is open to goodwill between the partitioned section of our country and ourselves. What stimulus to such goodwill is an instrument of Government economic policy such as this Budget? Are we to put our heads in the sand and not allow ourselves to face the realities of an Ireland that has become adult, that is capable of taking its hat off to the past and paying all the respect and honour due to those who, in their day, gave us the impetus and effort that brought us our freedom? The young people growing up today are not looking for bitterness or a rehashing of the past. They are looking for something of sound economic value which will show the way to progress, and not the artificial differences and continued spites that time should have healed.

My biggest and most serious complaint against the Government in relation to a Budget such as this is that the young people cannot see in it a constructive economic policy. We still face the awful problem that has always been ours of exporting young people qualified in commerce, accountancy and various trades and professions to the far-flung corners of the world, there to establish themselves as competent technical people, or as experts in their particular fields, while we at home lag behind, without an overall general economic plan to integrate policy year after year so that it may result in sustained progress and increased employment for our people at home and an assured future for generations yet unborn.

It is in that spirit that I urge the Minister to take a very serious look at this Budget to try to find a way to exclude from the impact of the turnover tax the necessaries of life of the poor, the social welfare groups, the labouring and the working groups, so that he will not start a further movement in this spiral of wages chasing prices and will not create more unrest. Above all, I urge him to give some indication to our cynical youth that the Government are capable of something better than a retrograde step or a mere sentimental attachment to the past, and there is some hope not only for an expansion and stabilisation of agriculture but also for the development of industry, now that more and more raw materials are becoming available at home.

In the overall pattern, there should be some hope that the children of Ireland will not have to go to the Irish centres in Birmingham, Manchester, London and Coventry, or America or Australia, that whatever about the return of the emigrants, we will be able at some future date to provide extra employment to stop the haemorrhage of the departure of our irreplaceable young manhood and womanhood to foreign parts so that Ireland will remain for them not merely a land of sentimental attachment, but a reality in which they can make a living for themselves and their children.

Mr. Faulkner

I have often wondered if the Fine Gael Party have ever endeavoured to find out why it is that, despite the deluge of destructive criticism which was poured by the Fine Gael Party on Fianna Fáil Budgets down through the years, despite the manner in which Fianna Fáil Budgets have been misrepresented by the Fine Gael Party, as they are misrepresenting this Budget, and despite the fact that the Fine Gael Party have been in Opposition for a very considerable time, and because of that in a position to be all things to all men by demanding this Budget, and despite the fact each heading, while at the same time complaining about the cost, the Fianna Fáil Party are the largest Party and have remained the largest Party in this House for many years—larger than the combined organised Parties.

If the Fine Gael Party were to try to find out the reason for this, they would find that the answer is a simple one; simply that our people are an intelligent people and it would be wise for any political party to treat them as intelligent people. Our people expect from an Opposition reasonably constructive criticism, not the type of destructive criticism to which we have been listening here for the past few weeks and to which we have, indeed, listened for a number of years on all the various Budgets introduced by the Fianna Fáil Party.

Having listened to the debate on this Budget, there is one thing of which we can be assured. Whatever the Fine Gael Party may lack—there is no doubt they lack much—their powers of imagination are unlimited. Their speakers have conjured up all types of ogres and demons in relation to this Budget. The Fine Gael Party have declared that the country is lost, despite all the signs to the contrary. One would expect the Party who led this country to the brink of ruin in 1957 to be better able to read the signs. As the Minister has said, however, we need not take statements on the Fine Gael benches too much to heart because these prophets of doom are very obviously indulging in wishful thinking. It becomes rather boring having to listen to Fine Gael speakers crying out about what they allege is Government extravagance, especially when one notes how careful they are not to itemise the directions in which they think expenditure could be reduced. There is, of course, a very good reason for that; if they were to suggest any way in which expenditure could be reduced, that would hit some section of the community. That would not be popular and Fine Gael have always endeavoured to found any programme they put forward on its short-term popularity basis.

I have listened for a considerable time to a litany of prices. To put the matter in perspective, I shall now give a few points, perhaps, also in the form of a litany. Since we came into office in 1957 we have consistently increased the amount allocated to agriculture until it is now two and a half times what it was in the last Book of Estimates issued by the Coalition Government. I know this annoys Fine Gael because that Party would like to be known as the friends of the farmers. There is no doubt that if the basis of this friendship were measured in words, they would have a very good claim. It must be difficult for them to convince the farmers how much more interested in them they are as compared with Fianna Fáil, remembering that we are giving them two and a half times more money than Fine Gael.

Fine Gael have stated that we are extravagant, that we are spending too much money. It is only fair that we should ask them, taking agriculture, first of all, where they would make savings. Do they suggest we should end the eradication of bovine tuberculosis scheme? We could save money in that way. Do they suggest we should reduce the price of milk? Do they suggest we should hold back the money we have allocated towards reducing rates on agricultural land? Is it suggested we should reduce the grants for fertilisers? Is it suggested that the farmers are getting too much in the way of grants for farm buildings? We would like to allocate more money, if we could. As I have said, if Fine Gael want the Estimates reduced, they must tell us where they want the reductions made. I have put a number of questions to them with regard to agriculture. I should like to hear those questions answered before this debate closes.

If they say they do not want any reduction in agriculture, then let us turn to industry. Do Fine Gael suggest we should reduce the grants we are making available to induce industrialists to come in here and establish industries, thereby providing more employment? Having listened to some of the speeches by the leaders of the Fine Gael Party in my constituency, I have a feeling that there is an idea of that kind moving around in the Fine Gael Party at the moment. If that is so they can be assured that, should they ever attempt to have this money reduced, they will meet my strongest opposition. Do they suggest we should reduce the grants we are now making available to our older industrialists to enable them to equip their industries so that they will be in a position to compete in the free trade market we are all agreed lies ahead? There, again, some Fine Gael speakers are endeavouring to convince our older industrialists that we are forgetting them, they themselves forgetting in the process that the Fianna Fáil Party was the architect of industry here and that we have recently passed a Bill providing still more money for industrialists who are anxious to improve their industries. That is proof that we are most anxious about these older industrialists and the provision of this money is mainly to ensure that these industries will continue to thrive and that those who are employed there will continue in employment.

Are we spending too much money on health? We would like to be able to spend more. If I am to judge by the motions and questions put down by the Fine Gael Party on the subject of health, they also want more money spent on health.

With regard to social welfare, is it suggested we should cut down on old age and widows' pensions, on unemployment benefit and unemployment assistance? So far as this Party are concerned, that is a suggestion which would be very strongly resisted. We have a very fine record with regard to social welfare benefits. If, however, the Fine Gael Party think there ought to be cuts, then let them say so.

Are we to reduce the grants for housing? I know the Fine Gael Party are annoyed because of the boom in building at the moment. Perhaps that is why they suggest reductions in spending on building. This is something in which we have taken a very considerable interest right since 1932 and we shall continue to do so; we shall provide as much money as we possibly can for housing.

What about education? Should we reduce the Estimate for Education? If I am to judge by some of the speeches made in my constituency, it is the view of Fine Gael that we are not doing enough for education, particularly for the poorer people to enable them to get a reasonable education. Again, the fact that we have increased considerably the number of scholarships in the past two years has been conveniently forgotten. We are giving very many more scholarships now than were given under the Coalition.

Are we to reduce the money allocated for telephones? I can imagine the uproar on the Opposition Benches if it were suggested we should. Are we to reduce the amount allocated to the Land Commission for the buying up of farms and the subsequent redistribution of those farms among deserving applicants? Are we to reduce the amount of money allocated to the Board of Works? If I remember rightly, a considerable number of questions was tabled by Deputy Oliver Flanagan in connection with bog roads. I should imagine he would be opposed to any reduction in the amount of money allocated to that end. I have been through most of the Department Estimates, but I doubt if any Fine Gael speaker will allude to any Department in which he would like to have a reduction made.

It must also be remembered that if the Opposition decide that certain Estimates should be reduced, they must also consider what effect this would have on employment and what effect it would have on the small shopkeeper about whom they have talked to a considerable extent in the past few weeks. I should imagine that, difficult as the position of the small shopkeeper may be in regard to this tax, he would prefer it very much to conditions as they were in 1956 when he could not get in his money at all.

When the Vote on Account was before the House, the major opposition Parties differed in their approach to it. The Labour Party stated that they were satisfied that the amount of money being sought by the Minister was reasonable. The Fine Gael Party adopted their usual conservative attitude, that we were spending too much, and that we were looking for too much money. This is merely in keeping with certain statements I have seen from Fine Gael on many occasions on which they said that their policy was to allow every man to spend his own money without any Government interference. That is a very satisfying policy for the rich but I am sure it will be agreed that it is rather harsh on the poor, on the old age pensioner, on the unemployed, on the person who is depending on taxation to supply him with the social welfare benefits to which he is entitled. This standstill attitude of Fine Gael is one to which I have always been opposed and I have stated this on many occasions in the House but at least I can say that, on the surface, anyway, Fine Gael are consistent in their conservatism because they opposed the Vote on Account and they now oppose the Budget.

On the other hand, it is very difficult to understand the Labour Party attitude to the Budget. I might add that I have been very disappointed by their attitude here. Here is a Party who were agreed that the estimated expenditure was reasonable but who now oppose the manner in which this money is being collected without suggesting any alternative likely to provide anything like the amount of money needed. I know Deputy Corish and other Deputies have stated that it is no part of the Opposition's duty to suggest an alternative policy in regard to taxation. In this case, there is a certain duty on the Labour Party because they agreed that the estimated expenditure was reasonable. If they agreed that the estimated expenditure was reasonable, they must also agree that a certain amount of taxation had to be levied. If they have a system whereby this taxation could be levied which they believe is a better system than the one we have put into operation, it is their duty to let us know it.

However, I am very much afraid the attitude of the Labour Party is based on the fact that it is popular to spend money on people—hence their support for the Vote on Account—but it is unpopular to collect it—hence their vote against the Budget. Those are the reasons for their opposition to the Budget rather than sound economic principle or concern for social justice.

I am suggesting this because many countries in Europe which have Labour Governments have in operation a tax system such as this one and I have in mind particularly one country which has had a Labour Government for a considerable number of years and where the standard of living is one of the highest in Europe. I am also suggesting it because of the fact that the expressed intention of the Labour Party in Britain to operate a tax system somewhat similar to this one has caused the present Conservative Chancellor of the Exchequer in Britain to instruct a number of people to examine the possible effects of a turnover tax on the British economy. I believe that this is only a prelude to the introduction of a turnover tax in Britain.

As has been said here on many occasions, no tax of any description is popular and it was only to be expected that the introduction of this tax by the Minister for Finance would not be popular either. The facts are that the Minister faced a very considerable deficit between estimated expenditure and estimated revenue and this deficit had to be met. While Opposition Deputies criticise Government spending and suggest we are spending too much we have not got one specific proposal from the Opposition to show where cuts in expenditure ought to be made.

Therefore, at least as far as the Labour Party are concerned, we are agreed that new taxation had to be imposed. When taxation is imposed, somebody has to pay it. What we on this side of the House were concerned with was that the imposition of taxation should be equitable and that the poorer sections of the community and those with the greatest responsibility should be protected. The Minister has assured this by increasing old age pensions and children's allowances; he has cushioned those sections of the community who would be likely to be hardest hit. Despite efforts by the Opposition to befog the issue, the people in these categories are well aware of what they will get and what they are entitled to, of how these social welfare benefits will counteract and more than counteract the effect of the turnover tax.

There is some doubt yet as to how this tax will operate. However, I believe that there will be consultations between the various groups who are concerned in this with the Department of Finance and that they will jointly work out an equitable and reasonable method of collecting it, before it comes into operation next November. When PAYE was decided on, we thought it would be very difficult to operate and we find now it is not so very difficult at all.

Revenue is also being increased by increasing corporation profits tax. As the Minister pointed out in his Budget statement, profits have risen considerably and they can bear this extra taxation. That there should be an outcry from the Fine Gael Party in regard to this type of taxation is something which we expected but we on this side of the House were concerned with social justice and this required that the taxation should not fall on those who are unable to bear it.

Since we came into office in 1957 we have increased aid to agriculture very considerably. The amount of money being allocated now is enormous in comparison with the amount which was allocated in 1956 when the Coalition were in power. Fianna Fáil did this because they recognise that agriculture is our basic industry and that practically every facet of our economy depends on agriculture. They did it also because they would like, if it were possible, to achieve a reasonable balance between farming income and the income of people in other types of employment. For these reasons Fianna Fáil increased the price of milk which cost the Exchequer £1,250,000 and this is, also, being provided for in the Budget.

We realise that, however much we may improve agriculture, we must look to manufacturing industry and to transportable goods industries to increase the number of people employed. Between 1958 and 1962, there was an increase of 25,000 in the number of people employed in these industries. All we have done for agriculture and for industry costs money. We could have saved this money by not adopting the expansionist policy we have adopted. I do not think any Party, apart perhaps from Fine Gael—I am going only on their statements—would be in agreement with saving the money at the expense of agriculture and industry.

In my constituency, nobody who has seen the strides made in the expansion and development of industry there would agree for a moment that we should adopt a conservative policy. For the sake of comparison, I shall very briefly go back to 1956. Take my constituency, which is highly industrialised. By the end of 1956, industry had got into a shocking state. Week after week, large numbers of people lost their employment in industry. Things became so bad that our people lost confidence and even those who did not lose their employment in industry decided they would get out. That began the shocking wave of emigration which started to slow up only a short time ago.

Today, industry in my constituency is booming. At the present moment, we have three new factories under construction in Drogheda. A fourth small one is awaiting delivery of some machines in order to begin production and there is another one in the offing. At the other end of the constituency, we have a proposed expansion of an industry which at present is employing 800 people. According to a recent statement, that industry will this year be able to employ 1,100 people and ultimately 2,000 people.

One of the factories I have mentioned in Drogheda hopes to start with 150 people and to reach a total employment of 500. Another will employ all male labour. I cannot vouch for one of these industries but certainly every one of the rest of them has been helped by State grant. These State grants are moneys which were taken in taxation. For that reason, the taxpayer must ask himself the question: "Do I want a reduction in taxation with a consequent reduction in employment prospects or do I prefer things as they are and an improvement in regard to employment prospects?" If he says he would prefer a reduction in taxation he must remember he is not only doing an injustice indirectly to his unemployed neighbour but is also endangering the prospects of his family and of other young people getting employment here at home.

When speaking on these matters, I speak of something concrete—not just airy-fairy talk about expansion of industry. I am talking of what I see in Drogheda at the present time. For that reason, I have no hesitation in supporting the policy of the Government. The policy I support is one which is providing more and more jobs. In the interim, I am quite prepared to accept whatever short term unpopularity will come from the unthinking with regard to taxation. So long as I believe that the policy being pursued by the Government will provide more jobs, and this, of course, I do believe, and I must believe it because I have the evidence of my own eyes at the present time in my constituency with regard to it, I will continue to give it my wholehearted support.

I sincerely hope we shall be allowed to continue this programme of expansion. We know from past experience what misrepresentation can do. A by-election in 1954, in which I was a candidate, was won by the Fine Gael Party on the basis of the now notorious blue prices pamphlet which led the people to believe that if the Coalition were returned to power prices would revert to the level which operated in 1951. The people were taken in for a very short time. They returned the Coalition to power with the disastrous results of which we are now only all too well aware.

It is worth while remembering that within the very short space of two and a half years the Fianna Fáil Party were returned to power with the largest ever majority in this House. The obvious reason was that the people might be hoodwinked for a very short time but you cannot hoodwink them or fool them all the time. We may expect in the future a somewhat similar campaign. I think the people who were fooled at that time realise the effect this type of misrepresentation had afterwards on their livelihood and on the whole economy of the country and will not be so easily fooled on this occasion.

Mr. Clinton

At this stage, when so much has been said and written about the Budget, there is little new that one can introduce. However, reading the Sunday newspapers over the weekend, I was surprised to find that there is still some doubt in the minds of the people with regard to the attitude of this Party in connection with the turnover tax. In some of the weekend papers, I saw the blunt question still being asked: "What would Fine Gael do, if they were in power, with regard to this turnover tax?"

It has been stated so many times in this House already that we are totally opposed to the turnover tax that I find it hard to see why that question continues to be asked. Speaking for myself, I can say that in no circumstances would I be associated with a Party who would be guilty of imposing a tax on the necessaries of life. We know only too well by now—it has been admitted even by the Minister—that two-thirds of the yield comes from food, clothing and fuel. Therefore, there is no doubt in anybody's mind that every man in this country, no matter how poor he may be, must pay the same tax on the essentials of life as the richest man in the country.

When the Minister made his Budget announcement, I do not think the people were unduly shocked or surprised. This was due in some measure to the delayed action element of the Budget. However, to my mind it was due far more to the fact that more and more of our people are beginning to take an interest in and to understand economic trends. It was abundantly clear to them that all the economic indicators were now pointing in the wrong direction. In other words, they knew the state of the country and they were prepared for the worst.

For many of our people, the year 1962 will be remembered as a year of hardship and in some cases indeed even a year of considerable losses It was a year when the unemployment figure was at a consistently high level, reaching at one point as high as 70,000. It was a year when, for the first time in the history of the country, the adverse balance of trade topped £100 million and the national debt exceeded £500 million. It was a time when rates were rocketing and many people, especially in the Dublin area, were in dire need of housing with very little indication that their needs would be met in any reasonable time in the future.

Since the Government came into office in 1957, there are 58,000 fewer people employed. In spite of all we hear about an expanding and prospering economy, that is the clear measurement of the Government's achievements. They have failed to put these people into employment. I have yet to hear any Deputy—Deputy Faulkner or anybody else—tell me what indications there are in this Budget that will have the effect of reversing this position

Is it any wonder that in these circumstances, with this dire picture before them, it was almost a relief to the people when the hatchet fell? The wound inflicted by that Budget increase is becoming sorer with every hour that passes. People are more and more beginning to realise the full implications of this turnover tax—this major innovation of a turnover tax, as the Taoiseach described it. It is now clear to the shopkeepers throughout the country that they are to be the new tax collectors. They are to be conscripted to work for the Government without fee or reward. As I see it, they are being fined for the pleasure of undertaking this task, because for many of the smaller shopkeepers it will mean putting in a set of books and setting about the difficult task of seeing how this tax is to be collected by them in the future.

Another aspect of this tax occurs to me. Whether or not an agricultural worker paid income tax heretofore, he now knows that from November forward he will have to pay in tax on essentials £8 to £12 per annum. That applies to every agricultural worker.

That leads me to the general position of farming. It is incredible that the Minister for Finance should introduce what amounts almost to a blanket tax and tell the House he is not clear as yet as to whether this tax is applicable to feeding stuffs, fertilisers, farm machinery—to what I would describe as the raw materials of agriculture. I would be extremely interested to hear the Minister clear up this point as soon as possible. Last year we had 19,000 people leaving agriculture. Some estimates make it 24,000, but let us leave it at 19,000. If this turnover tax applies to the raw materials of agriculture, in future years it is not 19,000 will be leaving rural Ireland, but 40,000.

Last year in feeding stuffs alone we imported 174,000 tons of maize and 117,000 tons of wheat offals. My estimate is that the turnover tax on the retail value of that much alone would be in the region of £100,000. That does not take into account the cost of expensive protein feeding stuffs, either imported or produced at home, nor, indeed, does it include the vast amount of home produced feeding stuffs that find their way into compounds and eventually would be liable for this retail tax. I should like the Minister, when replying, to clear this up. It is a matter of great anxiety to the farmers that this should be hanging over their heads after a year in which the volume of agricultural production dropped. I heard the Tánaiste say that the volume of agricultural production expanded last year. I am sure he was not aware of the fact that that was not so. Last year was a very difficult year for agriculture. In fact, agricultural production did not expand, but contracted.

Another matter which has not been given sufficient attention is the effect of the turnover tax on the finances of local authorities — its effect on the finances of health authorities, voluntary hospitals and institutions generally. This, in turn, will have an enormous effect on the amount of rates. If this tax is to apply and if health authorities and local authorities are not exempted, let us take the case of the Dublin Health Authority alone, where we have a Budget of £6 million. My rough estimate of the effect of the turnover tax on the materials they purchase is that we would require in the region of £100,000 extra to meet the needs of the Dublin Health Authority. Fifty per cent of that must come from the rates. It would mean, therefore, that we would have to put £50,000 more on the ratepayers. I would exhort the Minister to reconsider this situation and ensure that health authorities, and in fact, local authorities of all descriptions, voluntary hospitals and other such institutions, will be exempt from the effects of this tax.

One of the exempted services is education. As a service, it is true to say it will be exempt, but it is not quite clear how residential colleges will benefit, since they will have to pay the increases in the cost of food and all the other materials required to run such establishments. We go from there to the effect of this tax on county councils. Will their roadmaking materials come within the scope of this tax? If they do, it will involve enormous extra costs. It is stated in the Budget Statement that bulk sales of certain basic building materials will be exempt. I should like to get that position clarified also because I feel that even in respect of local authority house building, in respect of local authority house repairs, this turnover tax can be applied. If applied it will lead to very great increases in the rates.

I have read the comments of many sections of the community on this Budget and I must say I have not read one favourable comment. I was amazed to hear the Parliamentary Secretary to the Minister for Lands, when speaking on the Budget say that not one adverse comment had been made on the Budget. There is such a long list of unfavourable comments——

Mr. Lenihan

In the correspondence columns of newspapers.

Mr. Clinton

Absolutely, and where else are we to get it? We have reports of the Dublin Chamber of Commerce, the Cork Chamber of Commerce, the National Farmers Association, the grocers, the publicans, the hoteliers, and the latest development is that the RGDATA are preparing a programme of opposition to this tax. The Tánaiste referred at some length to the aids being provided for agriculture. I had been hoping to get in when he finished because the copy of the Farmers' Journal which I have here was current at the time. It is dated May 4th, 1963, and in it is a report of a meeting of the National Council headed: “Farmers Infuriated by the Budget”. The report states:

Not only must the Government be accused of insincerity and lack of leadership towards this, our major industry, but also of pursuing a policy the result of which will be the further depression of agriculture.

That is a report of a meeting of the National Council of the NFA in a discussion on the Budget. It goes on to say:

This is a Budget which must inevitably speed up the depopulation of the rural areas by adding several millions of pounds to the cost of small farmers who constitute 70 per cent of our rural community.

I think there is no doubt in anybody's mind as to what the farmers think about the Budget. Much play was made of the penny in the gallon increase in the price of milk provided for in the Budget. However, a few days later, we had the benefit of that small increase made still smaller by a levy of three-eighths of a penny per gallon which apparently is estimated to cost the milk producers of the country something in the region of £500,000.

This Budget has been criticised for the fact that it provides no incentives, that there is no indication in it that as a result of its provisions, there will be increased employment or increased economic activity. We have heard a lot about the development of industry generally. I have been critical on this matter already. We can see and are very glad to see that additional employment has been provided in industry but nothing like the expansion that the country requires is taking place.

I believe the machinery we have in this country for the encouragement of industry, the organisations that have been set up to bring about the establishment of industries—the Industrial Development Authority and Foras Tionscal—have proved completely inadequate to the needs of the country at the present time. I am not criticising the individuals who make up those bodies—they are probably very much overworked. My fear is that they are preparing for the readjustment of this country in a narrow Civil Service way. The sooner there is a very big change in that situation, the better.

My experience is that these people are there not really to go out looking for industries but to ensure that any proposition that comes in is gone through with a fine comb, that it is scrutinised so keenly that it is certain that no unworthy proposal passes through. In the course of doing that— and it is done very effectively—I am afraid many worthwhile proposals are turned down. There is ample evidence to indicate that because certain people do not want to go to the undeveloped areas of this country, they are rejected and given no facilities whatsoever. I believe, too, that industries desirous of starting in a small way and expanding as things work in their favour and as they develop, get very little consideration from the Industrial Development Authority. Unless they can come in and indicate big things straight away, unless they are able to ensure initial employment for a couple of hundred people, they are given a very poor chance. I am speaking from recollection when I say that out of approximately 42 proposals for the Dublin area, only nine were accepted in the past year. That indicates——

Mr. McQuillan

There was one plum accepted.

Mr. Clinton

There was one plum accepted, I agree. We are only interested in the plums and in the very big things.

Mr. McQuillan

Who gets the plums?

Mr. Clinton

I shall leave that aside. In my view, that is not nearly so important as that somebody should get the plums and that there should be opportunities for him in industry, if we are to have this enormous number of people leaving the land every year, and we are to have them leaving the land for more than one reason. It is well known that there was underemployment and over-employment on the land and that if we are to become more efficient, fewer people will be employed on the land. Nevertheless, in agriculture, there is great scope for improved production and expansion. This is such an important industry that there should be in the Department of Agriculture a permanent planning body which would look ahead to see in what way expansion and improvement could be effected and have nothing else to do except plan. No such body is in existence.

I listened to my colleague from County Dublin, Deputy Burke, wailing for a long time about all the sins committed by the inter-Party Government. He wailed so much and for so long that I got the impression that he was afraid that Fianna Fáil must be on the way out again and he was warning the people. In an effort to discredit this Party, he referred to all the calamitous things that occurred during the inter-Party regime, but he forgot to mention all the worthwhile things they did and which, in fact, are being continued by this Government. He forgot to mention the Local Authorities (Works) Act and the good work done and the employment provided under that Act. He forgot the Land Project, part of which has been continued by the Government at a slower pace and in a more restricted way. He forgot the lime scheme. He forgot that it was the leader of this Party who for the first time insisted that the farmers should be entitled to grow feeding barley.

Deputy Burke also forgot that the inter-Party Government, when the leader of this Party was Minister for Agriculture, set up the soil testing centre and the Agricultural Institute. He conveniently forgot the beneficial effects of the tax concessions on exports and also the amount of money collected through the prize bond scheme. Many of these schemes have been continued. He went on to say that this Party and the Labour Party, after criticising the Government for this Budget, walked into the lobby and voted against an increase for the old age pensioners and against an increase in children's allowances. That is simply untrue.

Obviously, Deputy Burke hopes that the people will be gullible enough to believe that. He knows that people outside this House are unaware that the Budget contains a number of Financial Resolutions and he forgot to tell the people that the only Financial Resolution against which this Party voted was the one containing provision for the turnover tax. As far as I know, the members of this Party are very pleased when there is some improvement in the old age pensions and in the various social services.

Deputy Corry, after speaking about anything but the Budget, then talked at some length about the deplorable situation in which so many people imported foreign goods and sold them here. That was when he had finished talking about dirty milk, the uncleanliness of farmers' daughters and farmers' wives and other matters. He conveniently forgot to mention the enormous imports of maize and wheat offals—unnecessary and expensive imports. He forgot that his Party and his Minister could be sorely criticised because of that, but that is typical of the dishonesty displayed by certain Deputies on the opposite benches.

Another matter which will have an effect on the rates, and which I forgot to mention, is this decrease of nearly £500,000 in the contribution to the Road Fund. It is all right to say that it is increasing yearly as traffic increases but so are the wear and tear of the roads.

Deputy Cummins referred to the rate at which houses were being provided. I could not understand that. I am a member of a local authority and a Deputy for a city area and every day I receive letters, phone calls and personal calls about housing. I know that there are thousands of people waiting to be housed in Dublin city and county and that the needs of the majority of them will not be met for a very considerable time. If this turnover tax were taking the place of the income tax code that exists at the moment, it might to some extent be forgiven but it is an additional tax and the people know that every commodity, all the essentials of life, will now be taxed and that even the poorest worker will have to pay a tax of £8 to £12 per year. It is for these reasons that I have condemned the Budget and spoken against it.

Mr. Blowick

Deputy Clinton seemed surprised that Fianna Fáil should give a penny a gallon increase in the price of milk today and arrange that almost half of it is taken back tomorrow but anybody who has studied Fianna Fáil policy over the years will realise that is part of the pattern. Since I first came into this House, they have always given meagre, beggarly increases. The first thing that comes to mind is the old age pension. They give the increase today and then they arrange for an increase in the price of commodities the old age pensioner must live on and buy tomorrow so as to take most of the increase back. Sometimes that order is reversed and they take back a shilling from them and then throw them eightpence or tenpence in compensation later on. Sometimes the increase is given first and the pockets are rifled or plundered later. It is all part of the pattern.

Listening to the debate, and to the Minister's speech last week, it occurred to me that there is a vast difference when things have to be given to the poorer classes and when they are given to the upper classes. The old age pensioner must wait for his halfcrown increase until 1st January and the same applies to social welfare beneficiaries, but when the judges were getting an increase of from £300 to £800 a year, it was made retrospective. They did not have to wait a full year to benefit.

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

Mr. Blowick

I was commenting on the fact that when benefits are given to the poorer sections, they generally have to wait for three or six months, or almost a year in this case, but when judges or the highest paid officials in the State get an increase, it is generally made retrospective so that along with the increase, they get a tidy lump sum to put in their pockets.

Nearly all the Fianna Fáil speakers tried to make out that the Opposition —including Labour, Fine Gael and ourselves and everybody who has spoken so far on this side—were objecting to the expenditure and they say: "What can be done? Where can the saving be made?" That is just trying to throw dust in the people's eyes to blind them to the principal issue. The principal feature of this Budget is not the benefits given or anything done in it but the mean and despicable way in which it is proposed to gather tax for the future. To put it in a nutshell, it means that every shopkeeper and trader, every person in business, big and small, all over the country has been converted into a tax gatherer willy-nilly. That provides the main form of opposition to this tax. Several shopkeepers to whom I have been speaking and who fear they may have to close their doors as a result of this turnover tax have put the plain question: "Drink, tobacco and petrol and several other things have been taxed at the source. If the Government want extra money, why not tax the goods flowing through our hands at the source also?" That is a good question. I believe that, first of all, it is unconstitutional, apart from the meanness of it, to compel a shopkeeper to levy a tax. I think it is completely wrong but that is what they have to do.

I cannot understand the completely false statements made by Fianna Fáil speakers inside and outside the House that the tax will not mean an increase in the cost of living. Who will pay the two and a half per cent? Does anybody think that the shopkeeper, at the end of the month or year, will pay out of his own pocket? He has to get 6d. in the £ on everything he sells; 3d. on the 10/- and 1½d. on the 5/-. Take a small shopkeeper trading in a poor area in the country or in the town where his principal customers are working class or poor people who have to buy very carefully in units of 1/- or 5/-. I want to bring to the Government's notice that tea, sugar, bread, butter—the principal necessaries of life—will all be taxed very heavily. The average purchase is a quarterpound or half-pound of tea in the case of many households. These people do not like going into debt. They want to pay their way and hence are forced to buy in small quantities. The shopkeeper must charge these people much more than two and a half per cent in order to save himself. The two ounces of hard-pressed tobacco the old-age pensioner buys at 5/6d. will bear 1½d. tax making it 5/7½d. and the shopkeeper has to add another 1/2d., which makes it 5/8d., or 2d. of an increase on the half-quarter of tobacco, as it is known. The shopkeeper, in order to save himself, must make a 2d. increase in the price of this one item.

In the case of the loaf of bread at 1/3d., how is he to determine the tax? One penny will not pay him and he has to put on 1½d. The lb. of butter which I think costs 4/3d.——

Mr. Tully

4/7d.

Mr. Lenihan

It can be bought for 4/3d.

Mr. Tully

From cartels.

Mr. Blowick

The Parliamentary Secretary probably will not feel the pinch of the 2½ per cent but I can assure him there is a huge number of small farmers and working people who will be very badly hit because at the end of the year, on account of the small purchases they must make, they will have paid more than five per cent or six per cent instead of 2½ per cent. I can understand a person to whom the shopkeeper will give credit and who pays at the end of the month, getting away with the very minimum of tax if the shopkeeper adopts that policy. He can add up the bill of £15 or £20 and then add 6d. in the £. That applies if the person gets all his goods in the one shop. He pays the two and a half per cent exactly.

In the case of a person whose purchases amount to £15 a month, the shopkeeper will charge him the present price and 7/6d. tax. That is all right and quite understandable but I am concerned about the ordinary poor person, such as an old age pensioner, who buys in 6d. worth and a shilling's worth. The shopkeeper must increase the price of the small quantities he buys. There must be a definite increase in the price charged by the shopkeeper to the casual customer who buys a packet of cigarettes or some other small item. In such cases, there will be a definite increase in price and it will be much more than a 2½ per cent increase.

There is a good deal of substance in the point made to me by many shopkeepers, namely, that if the Government needed all this money, they could have taxed goods at source, just as tobacco, beer, spirits, and petrol are taxed. That has been the practice for years. While there might have been a grumble if ld. were put on the bottle of stout or 1/2d. on the ounce of tobacco, the people would understand such taxation. Now the shopkeeper who sells or the customer who buys does not know where he is. There will be two different prices in every shop. Another effect is that the big shopkeeper will get all the business and many small shops will have to close. That is an appalling aspect of the Budget.

Deputy Clinton referred to the effect the Budget will have on rates. I have made a rough and ready calculation on the basis of the purchases by Mayo County Council of food and clothing for institutions and road materials, tools, machinery, and so on. The lowest estimate I could make is that this tax will mean 2/8d. in the £ in the rates in County Mayo next year. That may be reduced by 50 per cent by way of Government grant but I estimate that the total impact on the rates will amount to approximately 2/8d. in the £. I base that calculation on purchases by Mayo County Council for last year, including purchases in respect of the health services.

During the 1957 general election, we heard a great deal about the 100,000 new jobs that were in the offing. All that was required was for the electorate to return Fianna Fáil and 100,000 persons would walk into jobs. These people found the jobs all right but most of them were found in Birmingham, Coventry and other English cities, not in this country. This Budget will have the effect of driving still more people out of the country.

Under this Budget, there will be a tax of 2½ per cent on commodities that already bear a heavy excise duty —tobacco, petrol, beer and spirits. That means that that tax has been retaxed. I do not know the amount of the actual tax on, for instance, a packet of cigarettes. I understand that tobacco carries a tax of approximately 2/- or 2/1 an ounce. That tax is now being taxed at the rate of 2½ per cent. That is a shameful, cowardly form of taxation. This Budget was described in the papers as a cowardly Budget and that is the proper epithet for the manner in which the Minister for Finance and the Government have decided to levy taxation.

I should like a Fianna Fáil Minister to answer this question: why were not goods taxed at source? Fianna Fáil have made a complete turn from the standard we had in 1948 to 1951 and in the second period of inter-Party Government, when we reduced the cost of living by subsidy. Fianna Fáil abolished the subsidies and let the man in the street, if he wanted a loaf of bread, pay the economic price for it, irrespective of whether he was able to pay it or not. Now they have started on the other half of the circle. Now they are taxing the very food and clothing and everything else the ordinary man buys.

I want to know if the farmer's son who uses his father's tractor to earn a few pounds for himself or the family will have to pay the 2½ per cent tax. Will his operations be assessed as a business? He can be dubbed a tillage contractor by the Revenue Commissioners.

Mr. Lenihan

I would advise the Deputy to think twice about that tax and to think twice about supporting it because it is a mean device to get revenue. The Tánaiste went so far here the other day as to suggest that it would not mean an increase in a single item included in the calculation of the cost of living. If that is so, I wonder who will pay the £10 million it is supposed to bring in, in a year, or the £3 million it is supposed to bring in, in portion of a year. Will they call it down from the sky? Not only is this a despicable way to gather taxation, but I believe it is illegal to convert the shopkeepers, the business people and the traders into tax gatherers. For the first time since this country got its freedom about 40 years ago, the poor people are being made to bear the very same rate of taxation as the rich people.

Perhaps I was wrong, but I had a notion about how to run this country. I thought the rich people should bear their share of the burden of running the country, and that the poor, the working-class, the old and infirm should get off as lightly as possible. That policy is now blown sky-high by this method of taxation. The man in the street has to pay the very same increase as the big man in Dublin, the biggest farmer in the country or the biggest industrialist in his factory office. That will be the effect of the Budget. I greatly deplore the fact that the Government have stooped to such a mean tactic to collect taxation from a section of the people who are not finding it easy to live. They are being made the tax gatherers and the servants of the Revenue Commissioners.

Mr. Booth

I have been disappointed in this Budget debate ever since it started; yet I had hoped that as it progressed some members of the Opposition might be able to say somepoun thing intelligent, or helpful, or constructive, about it or even make a reasonable criticism of it. As time has gone on, my disappointment has increased because nothing has been said which was in any way helpful, and we are left exactly as we were.

That may be. I think the point at issue there is that the increase in net output was not nearly as much as the increase in gross output, due to facts stated in the earlier part of the booklet. If the situation were nearly as grim as Deputy Clinton, Deputy Sweetman, Deputy Dillon and many others have suggested, I think there would have been greater signs of it outside the House. It is extraordinary to me that all the prophets of gloom appear to be within these four walls. Outside, objective criticism of the economy is favourable.

I would refer in particular to a statement made by the Chairman of the Provincial Bank of Ireland at the annual general meeting this year. This statement is very much along the same lines as those of other chairmen of Irish banks for the same period.

Mr. McQuillan

There is no danger of that gentleman having to emigrate.

Mr. Booth

That is not the point at issue. The point I was trying to get at was that if there were a state of economic distress, and if the country were in grave economic danger, a chairman of a bank would be the first man to lose his nerve. Bankers are the most conservative of any group in the economy, not because a bank chairman is worried about his job, but banks are always the first to foresee recession, doom and disaster of one sort or another, if there is the slightest chance of these occurring.

In his report, the chairman commented on the loans raised by the Government during the year. He said:

The whole amount of stock on offer was not fully subscribed, but the margin by which subscriptions failed to achieve the total target was so small that the result may be regarded as completely satisfactory. Elsewhere, the demand for Irish Securities has been good and the growth in confidence continues.

Acting Chairman (Mr. Tully)

Would the Deputy give the reference?

Mr. Booth

It is from the statement of the Chairman of the Provincial Bank of Ireland, Ltd., at the annual general meeting, 1963. To back that up, we have only got to see the state of the stock markets at the moment, which show no great change from what they were at the beginning of the year, except that prices have been rising slowly but steadily throughout the first quarter of the year. That, again, is a sign that the investing public, which is a very sensitive section of the community, has confidence in the economy and is investing further amounts in Irish industrial enterprise, even though the price of investing is going up.

It is interesting to note that in the stock market reports there is steady buying of Irish industrial shares by cross-Channel buyers. No British investor will invest money in Irish industrial securities or Irish Government securities just out of love for this country. Even emigrants in the past have been very slow to invest their money in Ireland, but the fact remains that there is now steady cross-Channel buying of Irish Government securities and Irish industrial shares, and that is continuing. Incidentally, that is one reason why our external assets are continuing to rise. It is one way in which outside capital is, to our own great advantage, coming into the country.

It has been made clear, I think, that this Budget must be judged not only in relation to the increased taxation but to the increased benefits which will be given. The amount of the increase in social welfare payments is definitely in excess of any possible increase in the cost of living as a result of the turnover tax. No one can contend to the contrary. That means that, consistently with their policy over the years, Fianna Fáil have again made a move to level up the general standard of living of the community by taking particular care of those who are unable to provide for themselves.

Comment has been made on the increase in corporation profits tax. I will deal with that in greater detail later, but I should like at this stage to refer to the reaction of the stock market. If the increase in corporation profits tax were to be a crippling burden on Irish industry, the reaction on the stock exchange would have been very noticeable. In fact, there was virtually no change in prices immediately after the Budget. Prices remained static for a day or two and then resumed their upward trend.

Deputy Maurice Dockrell spoke very strongly against the increase in corporation profits tax and foresaw disaster for the business community, but it is noteworthy that those who wished to consider an investment in his own firm did so in such numbers that the price of Dockrell shares jumped by 5/-. That shows that those who invested in that particular company had the greatest confidence in its continued prosperity, even though the managing director appeared to think the company was heading for disaster. Candidly, I do not think Deputy Dockrell was altogether in earnest in his prophecy of gloom and disaster but, even if he were, I think he was prejudiced and I should prefer to take the unprejudiced view of an investor who feels an investment in Deputy Dockrell's company is becoming more and more attractive.

When the Government White Paper Closing the Gap was before the House, and for some time afterwards, it was criticised time and again because it stressed, it was alleged, that there should be wage restraint but there was to be no restraint on profits in industry or elsewhere. That, of course, was entirely contrary to the facts. At paragraph 15, it was stated:

Profits, industrial and other, form a much smaller proportion of national income than do wages and salaries. Higher profits distribution not associated with higher production or sales have, however, even if on a smaller scale, the same consequences as higher incomes not related to output. There is a special obligation on industrial management to set in this respect an example to the community.

At paragraph 18, it is stated:

An obligation rests on all sections of the community not to jeopardise economic progress by pressing for higher incomes whether in the form of profits or pay until national production is able to support it.

Finally, at paragraph 20, it is stated:

The Government are convinced that it is necessary to avoid the damage to the national economy which would occur if further wage and salary or other income increases took place.

And:

General restraint is essential and may reasonably be expected. Employees' income in general, sales, profits and other non-agricultural incomes have risen significantly over the last few years.

Those who read the White Paper thoroughly and noted that there had been references in it to the question of profits disregarded these, alleging that they were eyewash on the part of the Government and that the Government were not really interested in restricting profits.

In other countries, as well as here, it has been discovered that actual restraint of profits is something which it is almost impossible to secure. At the best, it is very difficult and really not worth the trouble. The easiest way of securing the same desirable result is to tax these profits. As a businessman, the taxation of profits on the business with which I am associated is something which does not arouse immediate enthusiasm in my breast. At the same time I do not see that this increase in corporation profits tax will be a crippling blow. It may well result in the maintenance, possibly a slight reduction in some cases, of the rate of distribution, but, in view of the fact that profits have been increasing, I do not think this will be unduly hard on any section of the community. I believe that most businesses, if not all of them, will still be able to plough back as much as they have done in the past few years. Even if there is a slight setback in the rate of distribution, in the end, I think that will be no harm.

I am not altogether satisfied that this increase should take effect as from 1st January of this year. There is an element of retrospection here which I must resist. I do not see that it is necessary. Granted that there is a certain amount of retrospection because this tax refers to profits in the year immediately ended, at the same time, it is normal to regard the rate of tax as being the rate of tax for the Government financial year ending 5th April. It would have been far better—I hope the Minister will consider this—if this tax increase were to date from 5th or 6th April rather than 1st January. For my own protection, I should say now that no company with which I am associated will gain one way or the other. It will be caught either way. I want to make it perfectly clear I am not arguing purely from self-interest.

The criticism of this Budget is largely ill-founded. It is suggested that the Government find themselves in financial difficulty due to extravagance. I do agree sometimes with Deputy Sweetman, and, in the opening part of his speech on the Budget, he referred to the buoyancy of the economy and of the revenue and said that it would have been quite easy for the Government to avoid any additional taxation simply by cutting down on additional expenditure. However, what I hope and believe is becoming more clear every day to the community is that the Government's policy is a policy not only of expansion but of investment for expansion. It is not just a matter of spending money without getting something for it. A tremendous proportion of the money which is raised by taxation is going straight back into the pockets of our own people but it is part of the redistribution of the assets of the community which we believe to be in the best interests of the community as a whole. If you like, this is part of the move to the left to which the Taoiseach referred in his speech during this debate.

We do believe in a planned economy and we do believe in one with much greater sincerity than that which is exhibited by Deputy McQuillan. It is also much more difficult for us to state that in public because we have to carry it out whereas Deputy McQuillan can simply sit there chuckling to himself knowing that he will never have any responsibility so far as Government is concerned. I hope that may give him some satisfaction.

When we are raising money for taxation, we are doing it in order to reinvest it in the economy and we do this with enthusiasm and in direct opposition to the Fine Gael policy, in particular, which has at last been clearly stated by Deputy O'Sullivan. It was hinted at by Deputy Sweetman who said that expenditure might be reduced but Deputy O'Sullivan came out quite in the open and said this was a time for retrenchment. That is something with which we on this side of the House could not possibly agree. I do not believe Deputy McQuillan would agree with it either. This is no time for retrenchment, for cutting back. This is a time for investing with courage and with foresight to ensure that the economy will continue to expand to the benefit of all members of the community.

It is typical of our policy that we should be giving every encouragement to State enterprises such as Aer Lingus and Aerlínte to go on with their development programmes. Just as it was typical of Fine Gael policy to sell the transatlantic Constellations which had been purchased for the opening of the transatlantic route, it is typical of our policy that we should have authorised the purchase of another Boeing jet for the long-distance routes. Again, it is typical of the way in which this policy pays off that, at a time when Aer Lingus is fighting a very rough battle on the cross-Channel and European routes and has lost money, this loss has been more than counterbalanced by the operating surplus of Aerlínte on the transatlantic routes. This shows where the investment of money is paying off.

There are many who criticise the Taoiseach as a gambler. Those who do are simply those who have not got the courage to take what the Taoiseach refers to as a calculated risk. No leader is worthy of the position of Taoiseach if he is not prepared and able to take such calculated risks. However, he must calculate what the risks are and to do that he must have something between the ears, a quality which seems markedly lacking in Fine Gael, in particular. I should like to comment on some of the passages in the speeches of other Deputies in this debate. Deputy Sweetman at column 130, Vol. 202, of the Official Report of the 23rd April, 1963, stated:

...a Budget whose impositions, perhaps, not yet realised, will be crippling in their effect on very many people throughout the community...

Where he got the idea that this Budget will cripple large sections of the community, I do not know. He went on to refer at column 131 to the hot money which is saving us from a substantial drop in our external assets but neither he nor anyone else who refers to this hot money can produce any evidence that it exists at all. It should be remembered that the only country which is a safe refuge for hot money is Switzerland where the Government allows bankers to accept money from anyone, on the strict understanding that the name of the depositor will never be known and, in fact, I understand that in certain circumstances the name of the depositor is not known even to the bank itself. Why anybody should imagine we are being saved so far as our external assets are concerned by deposits of hot money I do not know. It is a silly idea which has come up out of the imagination of Fine Gael and nowhere else.

Deputy Sweetman went on at column 132 to state with reference to the general standard of the economy and the number of people who had left the country:

It was estimated by one of the big firms the other day that the reason why their sales of flour were down was that there were 300,000 fewer mouths to eat their flour.

Deputy Sweetman knows perfectly well that that is not the answer to give to any flourmiller whose sales are falling. It is the same all over the world. In countries with rising standards of living, one of the first items to be reduced in consumption is flour. Bread becomes less and less the staple food of the community and that is the fact here, too. Granted there has been emigration; granted that until recently there has been a fall in population; but Deputy Sweetman was trying to convey that almost overnight there were 300,000 fewer people in the country and that as a result, flourmillers were having some trouble. I know that flour mills are having trouble but that is because more and more people are eating——

General MacEoin

Cake.

Mr. Booth

——meat and vegetables than was the case before. Deputy MacEoin knows we are aware of that joke about eating cake. Let us forget that silly joke and stick to the facts. The facts are that much more meat and vegetables are being consumed now than before.

Deputy Sweetman went on at column 134 to say:

People will realise that, if they get the opportunity, Fianna Fáil will not fail to put another blister on them next year.

I know——

General MacEoin

If you lived in the country, you would.

Mr. Booth

I know that Deputy Sweetman has been unwell and I am afraid he has not quite recovered yet. That is the sort of statement which is really below even his own standard. How anyone can suggest that Fianna Fáil, out of sheer evil-mindedness, love nothing better than to put blisters on the community passes my comprehension. No political Party like their Government to have to increase taxation. It is no fun for anyone. Let it be clearly understood it is done only when it is absolutely necessary in the interests of the community.

Fianna Fáil are not storing up evil thoughts of putting blisters on the community. The Government will collect a larger amount of revenue during this year than last year but they will also pay out a larger amount this year than last year. Nobody should be allowed to get away with the idea that the Government are simply accumulating money for their own advantage.

The Government are spending money on and investing money in agricultural grants and industrial grants. They propose to spend very much more money on education. All of these items are essential if we are to achieve a high standard of living and at least maintain our present rate of economic growth.

Deputy Sweetman referred also to the possible effects of the turnover tax on the small family business and, in particular, to the possible effects of the corporation profits tax on these small businesses which make a profit of only £2,500 on turnover, or less. Deputy Dillon, I think, also made comment along the same line. Both Deputy Sweetman and Deputy Dillon forgot that in the average small family business to which they were referring, the profits are distributed not by way of dividend but by way of salary.

In a small family business, as I see it and in my experience of businesses with which I deal myself, usually more than one member of the family is engaged. Any members of the family who are actively engaged in the business are drawing salaries out of it, and very properly so, but those salaries are not returned as profits, so far as the company is concerned. They are legitimate deductions from the trading profit before the taxable profit is calculated. Therefore, to say that a small family business with a profit of £2,500 will be unfairly taxed is just not true. The tax on the first £2,000 is a mere five per cent.

In actual fact, most small family businesses return very little profit at all. The only way in which the Revenue do, at the moment, get any share is by the ordinary assessment of income tax on the earnings of the members of the family engaged in the business. A lot of crocodile tears have been shed over small family businesses without any justification whatsoever.

Let us move from the first day of the Budget to the second. We come to Deputy Dillon who at column 265 of Volume 202 of the Official Report is reported as having this to say. He referred to this purchase tax, as he called it, and continued:

The purchase tax which it is proposed to impose in this Budget covers, it is true, furs, jewellery and expensive motor cars but it also covers perambulators, butter, boots, tobacco, spirits and everything else anyone has to buy.

Here again we come to a point on which we are in complete and utter opposition to Fine Gael in all their thinking. Time and again, comment has been made on the alleged inequity of a man's being able to buy a Jaguar car and still pay the same rate of tax as the poor man pays on his butter. I do not know why people always refer to Jaguars because there are other cars on the market but I must not expand on that. At the same time, it is no harm that we should think back on the measures taken by the Coalition Government when there was a time of real financial crisis, a crisis which occurred simply because the Government had run out of money. In that case, the motor trade was given almost a death blow because Deputy Sweetman, as Minister for Finance, slapped on his temporary import levies. Initially, some people did not see what was going to happen. They said: "It is right that people buying motor cars should pay an additional tax on them. Why tax the honest working man when you can squeeze the rich man when he is buying his car?" In actual fact, what happened was that the rich man did not buy his car and the honest working man who was working in assembly factories all over the country was put out of his job. Granted, the honest working man was not taxed: he was just fired. To my mind, that was not a suitable alternative.

Any honest working man would much prefer, if it were necessary, that he should pay a very slight tax rather than that he should be put out of a job altogether. The motor assembly trade virtually closed down. There was one time when the Ford Motor Company had six employees working on its production lines and round about 3,000 men were disemployed in that trade alone simply by reason of the Fine Gael idea that you do a good day's work for the country by taxing the more expensive items, quite forgetting that a tremendous amount of employment is tied up in that business.

Mr. McQuillan

How about removing the protection or what effect would that have?

Mr. Booth

That does not arise at this stage but I should be glad to discuss it with the House or the Deputy at the proper time.

Mr. McQuillan

The Common Market is in your mind still.

Mr. Booth

An article was written in the Irish Times. I do not know the gentleman who wrote it but he would appear either to be a member of the Fine Gael Party or a very suitable man for that Party to get after. They have already suffered one resignation and if they would like to fill the gap the writer of that letter appears to be just the man for that job. He suggested, rather, I think what Deputy McQuillan is getting at, that it would be a good idea to allow cars in, fully assembled, and, on the assumption that they would then be considerably cheaper—disregarding the question of duty altogether—than the cars which are actually built here, he suggested the price of the car should be made the same and the difference between the price of the Irish assembled car and that of the car imported in a fully assembled condition should be collected by the Government as tax. He just laughed off the criticism that this would result in the disemployment of a tremendous number of men. He said the firms engaged could obviously pay them compensation and just get rid of them.

I think we must get this clear. One of the greatest points in favour of the turnover tax, as opposed to a heavy purchase tax on luxuries, is that the turnover tax will not affect employment in the slightest, whereas a tax on expensive luxuries may very well put a tremendous number of working men and women out on the street.

Mr. McQuillan

So it is better to tax the necessaries of life rather than the luxuries?

Mr. Booth

I shall not argue with Deputy McQuillan. He is so stupid he could not understand me. I do not think anybody else would fall into a similar mistake.

Mr. Clinton

The corporation profits tax then?

Mr. Booth

I do not believe for a moment that that will be the result of the tax, but I shall comment on that at a later stage. Deputy Dillon also, at column 267, made a comparison between this Budget and the Budget of the British Chancellor of the Exchequer, Mr. Maudling. I cannot understand what Fine Gael are trying to get at. They are the Party who at one stage, under Deputy J. A. Costello, were going to strike Great Britain in her pride, prestige and pocket. The next minute they come dashing around saying we must depend entirely on the British market for our prosperity, and we get Deputy Dillon stating we should have followed the example of the British Chancellor of the Exchequer and brought in a similar Budget here.

If Deputy Dillon really believes that, I can only sympathise with him in his ignorance, but I cannot honestly believe he was really sincere. The British Chancellor of the Exchequer was dealing with an entirely different situation. He was dealing with the situation where demand had fallen, where turnover was going down and where there had to be some shot in the arm to the economy to bring up demand on the home market. Our situation is entirely different. If anything, what we are trying to do is to restrain demand on the consumer market here.

Deputy Dillon went on, at column 268, to state all the records which had been achieved during the past year— highest taxation, highest adverse trade balance and everything else. Here, again, Fine Gael always dodge the issue on this question of the adverse trade balance. Fine Gael have always been the advocates of building up our cattle trade and have always been the most active critics of our industrial expansion. Here is the situation where the only set back in our exports occurs in connection with our cattle exports and where our industrial exports have gone up. If it had not been for the fact that we had placed such great emphasis on industrial development, our situation might have been serious. Fine Gael have always been trying to put all their eggs into one basket, forgetting that the cattle trade is one which may expand exceedingly some years and may receive a set back in other years for reasons over which we have no control whatsoever. That is precisely what happened in 1961. Things were in our favour because cattle exports were higher than ever. But in 1962 there were heavy imports by Great Britain from other markets and our trade was hit. If we had followed Deputy Dillon's advice and concentrated more and more on producing cattle for export we would have been in real trouble.

On the question of this turnover tax, the main wail or moan from the Opposition has been that every conceivable commodity bought by anyone is going to attract this tax and in particular, that an exaggerated amount will be put on bread, butter, tea and sugar. Here, again, I wish people would try to get their facts right, that members of the Opposition would walk around the streets of the city here or of their own towns at home with their eyes open instead of with their eyes shut. I wish they would go out shopping with their wives to see what the policy of the small business is at the moment, especially in the grocery line. If they did, they would see that every conceivable item is being marked down in price. All the emphasis is on the cutting of prices and the reduction of profit margins.

One feature of that trade of which I thoroughly disapprove is what is known as stamp trading. It is a great waste of money. I wish traders would resist it and abolish it. It is interesting to note that those traders who carry on this stamp trade policy are buying stamps at the rate of 6d. in the £ of their turnover. That is a curious coincidence. It means that any stamp trader, any grocer who is holding himself out as a distributor of these free stamps, has, in fact, already reduced his profit margin by 2½ per cent voluntarily, admittedly in an effort to increase his turnover

Mr. McQuillan

Hear, hear.

Mr. Booth

The fact remains he has done it.

Mr. Byrne

He is blackmailed into it.

Mr. Booth

As well as that, you will see every shop window has painted on it in white the name of a certain article "Price, 3/11d.; our Price, 3/9d." That is in respect of everything —tinned fruit, detergents and so on— except tea, butter, sugar and bread. The prices of those are not being cut. My own view is that the price of all the essentials will remain precisely the same. I have discussed this matter with quite a number of shopkeepers when they have said to me: "What is going to happen? How am I to do this? I am going to be in the poorhouse. Nobody will come and buy from me. All the customers will not be able to afford to do it." I say to them, first of all: "Are you going to put your prices up the full 2½ per cent on everything you sell?" They say: "Well, we would like to". I ask them: "Are you going to be the first man to increase the price of bread, butter, tea and sugar?" They say: "No". I ask them: "Are you prepared to be the second man in the street to do it? " They say: "No". The fact is that certainly the prices of all those essential foodstuffs will remain exactly the same as they are at present. At most, there may be less cutting of prices and that would be no harm either. I am not saying the traders will bear the entire cost of this tax themselves because I anticipate that small shops— groceries, confectioners, tobacconists and so on—will increase the prices of the more expensive items by more than 2½ per cent.

If a trader is to increase the price of a 3/6d. box of chocolates to 3/8d. or 3/9d., is this to be regarded as a terrible blow to the honest working man? I have not heard boxes of chocolate mentioned yet but boxes of chocolate could well bear more than the 2½ per cent. There are many items, such as imported tinned fruit which is not an essential article of diet, which could well bear more than the 2½ per cent. I have no doubt the traders will be able to recoup themselves about half of the turnover tax without any undue imposition on the community and in fact without the community ever knowing anything about it at all. I believe they would be able to bear 1¼ per cent themselves without any trouble.

Deputy Dillon wanted to know why we had not put on a purchase tax. Being a businessman, Deputy Dillon ought to know that well and he should not try to confuse other people who do not know the facts. The trouble about a purchase tax is that when it goes on, it remains an additional burden all the way until it comes down to the final purchaser and each trader who handles that article before it goes out for retail sale is affected by it and is adding a certain write-up to cover his own finances.

We can regard import duty along the same lines. I know that in the business in which I am engaged, we have to pay a very heavy rate of import duty on the materials we import for the assembly of motor cars. We have to put down that money in hard cash to the Revenue Commissioners before we move our materials from the docks. They may come from Rosslare or sometimes only from Dublin docks, but they have to be brought to the factory, unloaded, checked and finally manufactured into a complete vehicle and sold. We are out of that money during all the time, and that is the difference between a sales tax, or purchase tax and a turnover tax. With a turnover tax, you pay the money to the Government only after you have at least had a chance of collecting it. In my business, we pay import duty long before we have a chance of getting it back.

For that reason, a sales tax is definitely out because it would put up the price far too high without proportionate benefit to the revenue. A purchase tax when the goods are being sold is also a difficult one to arrange, a difficult one to collect and it does not seem to have anything in it to attract those interested in tax reform. The turnover tax is payable monthly, that is, in comparatively small instalments, and it is up to the trade to collect that money during the month before it is paid out. I would state that, in my opinion, quite definitely the amount of money which the ordinary working man will have to pay additional to what he is paying at the moment by reason of the turnover tax will be either nil or negligible.

During the past few weeks, I have been very interested to see what the impact of the bus strike has been on the community, particularly on the working class man and woman, to many of whom I have given lifts in the car. They have spoken to me very freely. I find that a man earning, say, £8 a week, if married with a family, had been spending anything from 10/- a week upwards on transport alone, that is, transport for himself to and from his work, occasional transport for his wife when going shopping and for his children to and from school. He also has to pay rent, which does not attract the turnover tax—bus fares do not, either—and he pays his social insurance contributions. The very least these would amount to would be 30/- a week, leaving with him £6.10s. to spend, presumably on retail purchases.

There might have been a bit more sense in it if he had, but he did not, because he had not got the wit, because he is not an accountant like Deputy Byrne. He has not got his head screwed on but I must admit that Deputy Byrne has. He is awake. Deputy Corish is floundering in a wilderness of ignorance. An increase in the rate of income tax is going to hit a tremendous number of honest working people, whom Deputy Corish quite wrongly assumes he represents.

At column 285, he went on to say: Direct taxation has been reduced since 1957 by the Fianna Fáil Government to the tune of £6 million and that extra £6 million has been pushed over into concealed taxes, into hidden taxes or, as it has been termed, indirect taxation.

At column 286, he said:

It is to fill the gap, caused by the reduction in surtax and the like that it has been necessary to introduce what is described here as a turnover tax.

When referring to Deputy Byrne a moment ago, I was not just trying to smooth him down by trying to be polite because I have quite a regard for Deputy Byrne. I hope he will not mind if, in his absence now, I refer to a very good question which he asked the Minister for Finance on Thursday, 25th April, at column 486. He asked him if he would state, in respect of the last six years, the net receipts of income tax, surtax and corporation profits tax, and the number of taxpayers in each category and the total income assessed in each category. The House may remember that previously I was referring to Deputy Corish's speech where he said that Fianna Fáil, because they had reduced the incidence of direct taxation, had to make up the balance in other ways. In actual fact, if we take the taxes under the headings suggested by Deputy Byrne, that is, income tax, surtax and corporation profits tax, we find that the total receipts for those three taxes have gone up enormously during the past six years. For 1957-58, the total was £28 million; for 1958-59, there was a reduction to £27½ million; and for 1959-60, it was down slightly more to £27,300,000. Then the move for economic expansion got under way and for 1960-61, the total receipts were £30½ million. The following year they were practically £35 million and in the past year, they were £40 million.

That was at a time when the rate of income tax had been reduced, when the exemption for surtax had been raised and in spite of those reductions, the total had gone up, so that there was no question that because the Government had reduced income tax, they had to raise indirect taxation. It was quite the reverse. There is more and more money coming in from those sources already. That is a point which was raised by members of the Committee of Public Accounts some weeks ago and the accounting officer was asked whether that increase in income tax and surtax was due to PAYE or whether it was due in any way to the recovery of arrears. He stated that initially, the first increase was partly due to the recovery of arrears but that subsequently in recent years the increase was due solely to the increased number of people paying tax and the amount of tax actually being recovered.

I feel that the whole approach of the Opposition to this Budget has been entirely wrong. To sum up, I should like to put it this way. We are utterly against a policy of retrenchment, of cutting back, of a reduction in employment. On the contrary, we are in favour of a policy of expansion. In order to achieve that expansion, we insist that there must be greater investment, both private and public, and in order to have a greater rate of public investment, we must raise additional finance. In raising the additional finance, we must be sure that this is done in such a way that the expansion of industry and agriculture will not be impeded and therefore we must spread the lot as equally and as fairly as we can over the whole community. That is precisely what we have done in this Budget.

I do not want to apologise to anybody for this Budget because I am entirely in support of it. In fact, I was checking up on the Reports and I notice that on the 1959 Budget, the Minister stated that it appeared to be generally agreed between the Government and the Opposition that the emphasis of taxation should now be switched more and more from income to expenditure. That statement was not queried at that time, and I gave it my unqualified support. I was criticised elsewhere for it because I was told any increased taxation on expenditure was a very regressive move. I wish people who condemn taxation as regressive would at least find out what it means. In most people's mouths, it is merely a term of abuse. Deputy Corish referred to some economist in France who stated that France's trouble was largely due to a higher rate of indirect taxation on expenditure. I never heard that before but there are plenty of other much more possible explanations for France's difficulties than purely her imposition of sales or turnover taxes.

We are looking ahead with confidence. Quite frankly, we are prepared to take risks similar to the risks we have taken already and which have paid off handsomely. Anybody in business knows that you cannot play for safety. You can never say: "We have gone far enough." No business can stand steady; it is either going up or going down. I do not know what the explanation is but it is a fact and any business man knows it. It is exactly the same with the economy of a country. It has either to be expansionist or it has to be the opposite. We are against retrenchment and we are in favour of expansion and of spreading the lot equally over the community, getting as much money as we can in a fair way and distributing it again amongst all the members of the community.

I would ask the House and the public to keep constantly before their minds that this money is not being spent wastefully, that it is being spent on such things as agricultural and industrial grants and on education which are thoroughly good investments, good things to be in, and I have every confidence that they will pay off. As I say, I do not apologise to anybody for the Budget. I think it is a thoroughly good one and that it is going to work out to the benefit of everybody. I am absolutely confident that the poor people and even those in the lower income groups are not going to suffer any additional load by reason of the turnover tax. I am utterly confident about that.

Best of all, I believe that employment will not only be maintained but increased, and confidence likewise, and that in the current year the rate of economic, industrial and agricultural expansion will be increased to the benefit of us all. I do not want to be complacent; it will not happen without a tremendous amount of hard work, but I believe that will be forthcoming. I hope people will look back on this Budget debate with a certain amount of shame about this time next year when they have experience of this turnover tax and when they see what the reaction of the shopkeepers and the poor has been. I think everyone will find that the increased social payments more than counterbalance any extra costs and will be much more use to those who need them most.

I congratulate the Minister on the Budget and I wish him and the Government the best of good luck this year. I could not say they actually need it but I sincerely hope, for the sake of us all, that they get it.

Mr. McQuillan

Every time I have to listen to Deputy Booth in this House, my blood pressure goes up and I know it is not good to have to stay here, but unfortunately I had to stay because I was hoping to make my contribution—poor as it may be—to this Budget debate. I am sure I am slightly off form because I am really annoyed at some of the comments made by the Deputy. All I can say to him at this stage is that the conversion from an arch-Tory Conservative capitalist to a socialist inside 24 hours is a conversion nobody will believe.

Deputy Booth and his friend, the Taoiseach, are now prepared to do any type of political striptease they are asked to do if it means a possibility of staying in office a little longer. I have read all the speeches made on the Budget and I have listened to quite a number. It is quite a task to have to listen to them and to have to read these speeches. I am sure the same will be said of my speech.

The Government speakers on this Budget ranged from the Parliamentary Secretary to the Minister for Lands, Deputy Lenihan, who said that nothing was being taxed, to Deputy Colley and Deputy Booth who say that this turnover tax will be collected through a tax on peaches, tinned fruit and chocolates. The Taoiseach intervened to say that this was not a tax on any commodity. In other words, we have had a most confusing medley of voices from Fianna Fáil, a regular Tower of Babel. We know what happened in respect of the Tower of Babel. I think similar confusion has begun to overtake the ranks of Fianna Fáil.

There is no political philosophy running through the Budget speech made by the Minister for Finance and there is no real political thinking underlying the Taoiseach's speech during the debate. He is reported as saying that it was time for a shift to the left by the Fianna Fáil Party. That remark was thrown in casually during the debate by a man who, up to very recently, has spent his time smearing every individual inside and outside the House who had leanings towards the left.

The Taoiseach is now going left. Deputy Booth let the cat out of the bag on the thinking that has taken place in Fianna Fáil. It was quite apparent that as a result of the antics indulged in by the major Parties here in connection with the Common Market that there was really no difference between them on major or even minor issues. And it is becoming apparent that if Ireland's application for admission to the EEC were successful, both major Parties would be in the embarrassing position, as David Thornley pointed out so amusingly some time ago, that when they went to represent this country abroad, both Parties would have to take their seats together in the European Parliament. There would be no question of Fianna Fáil and Fine Gael sitting in opposite sides in the European Parliament. There would be competition between them as to who would first get into the Conservative benches.

That predicament dawned on Fianna Fáil, as Dr. Thornley pointed out, when he said that we would have the very amusing position of Fianna Fáil and Fine Gael getting on an Aer Lingus plane and sitting at opposite ends, Opposition and Government, and then arriving in the European Parliament and being bunched together in the same seats, because, as far as the Europeans are concerned, there is no difference and both these Irish Parties are conservative in the extreme.

Then, having transacted their business in the European Parliament, they would rush back here and resume the tremendous battle in Dáil Éireann on opposite sides of the House. That day would be brought to an end if the Irish application for membership of EEC were successful. The Taoiseach still hopes that Ireland will be admitted and so it was necessary at this stage to have a gimmick for public consumption and the latest gimmick was: "We will prove that Fianna Fáil are different from Fine Gael by saying that we are going left, but that is as far as we are going." That is typical of the Taoiseach's thinking and of his contempt for the public. It is typical of the slavish mentality of the Fianna Fáil backbenchers who are prepared to accept anything the Taoiseach produces out of the hat.

This move to the left by the Taoiseach reminds me of the saying: If you cannot beat them, join them. We now have them moving towards the people whom he has been condemning so ruthlessly and callously for years. It is not pleasant for me to have to say this but I notice that one of the biggest and one of the first groups in the country to latch on to the present Pope's wonderful Encyclical was the Fianna Fáil Party through their leader, the Taoiseach, and if ever there was a case of the devil quoting scripture, here we have it so far as the belief in social improvement is concerned or in the idea contained in that Encyclical of the rights of the workers to partake in the ownership of industry.

In relation to the Government's budgetary proposals, it is only fair to examine the position in this country after six years in Government by the Fianna Fáil Party. Six years ago, when they returned to office, the talk at Budget time was to the effect that they were not yet in a position to do anything about the major problems of unemployment and emigration, that they were not yet in a position to provide a livelihood here for all our people, that they were not yet in a position to carry out arterial drainage, rural development or afforestation or embark on a big programme of school building, that they were trying to clear the mess left by the previous Government. That was the tenor of the speeches made by members of the Fianna Fáil Party in 1958, 1959 and 1960. As reasonable men, those of us who opposed them, said, in 1960: "You have had three years to clear up the alleged mess."

Now, after six years—it is their second period of office without a break—I cannot accept the same type of argument as was put forward six years ago. It will not wash. If the type of taxation envisaged in the Budget had been brought in six years ago the Government would have been saying that they had to pay the debts incurred by their predecessor. Now the position is arrived at that the Government are responsible for all debts incurred in the last six years.

This is the Government whose Minister for Finance said there were too many civil servants. Deputy Corry described those civil servants as drones. We all remember the day that remark was made here. Even his own Party disapproved of his description on that occasion. That remark showed what was being thought in the Fianna Fáil Party because Deputy Corry is often allowed in here to air their views and when they think things are going bad, they will disown him or laugh at him. They let him in on that occasion to make criticism to the effect that there were too many civil servants. Since that statement was made by the then Minister some years ago, the number of civil servants has increased considerably. Government expenditure has also increased.

I want to make it quite clear that I do not object at all to increased expenditure on the part of the Government provided that that increased expenditure is for the purpose of productive employment and to keep the wheels of industry and agriculture moving, to "get cracking", to use Fianna Fáil's expression in relation to what they had hoped to do some years ago. We have not seen many results so far. There has been a period of six years of stumbling and staggering along, as far as this Government are concerned.

The Taoiseach came in here. As an example of how little dependence can be placed upon his viewpoint or his belief for more than 24 hours, he told the House about neutrality—a dirty word—he did not believe in it—never heard of the fact that the neutrality of Ireland during the war years was due to the interpretation of the articles of NATO, although he himself had quoted those articles while he was out of office. But, neutrality went. We had his Minister for External Affairs spouting all over the world against nuclear armament and deploring the nuclear clubs and when the Secretary General of the United Nations asked this country and a number of other countries to join a non-nuclear club and to say that we would not allow our land to be used for the purpose of bases for nuclear weapons under any circumstances refusing that request.

An Leas-Cheann Comhairle

It would not seem to arise in the debate.

Mr. McQuillan

I am merely referring to this briefly to show how little one can rely on statements by the Government. On this nuclear issue we had the Minister for External Affairs, acting on behalf of the Government, preaching, on the one hand, that the country deplored the use of nuclear weapons and, on the other hand, refusing the request of the Secretary General of the United Nations to give a guarantee that no bases of any description would ever be allowed in this country. There is a typical example of a two-faced approach. We have had that all through.

We have the Taoiseach turning left at this stage because he has been cornered in respect of his line of approach up to the present. For 20 years, he had been protecting a form of private enterprise that battened on protection, exploited the Irish public and made plenty of money. Having allowed that, the Taoiseach was prepared to move into Europe, into free trade and to suffer the workers in Ireland, who had worked here during all those years, to take to the boats in increasing numbers as a result of the fact that the protected industries in which they worked would be unable to compete with the more efficient ones in Europe. In the six years during which this Government have been in office, over 300,000 new emigrants have been added to the list. People in this House and outside it are sick and tired of hearing about emigration and I get very tired of talking about it but I must keep hammering home the facts. Even though the public never have an opportunity of hearing the facts because of the type of publicity that is given outside this House, at the same time, it is essential that I should go on the records of this House as pointing out what the true position is.

As I say, 300,000 people have emigrated during the two periods of office of the Fianna Fáil Government, in the last six years. Just prior to Fianna Fáil assuming office, in 1958, the Taoiseach, as has been mentioned on a number of occasions, quite bluntly stated that if Fianna Fáil were returned to office it was their intention to get cracking and to provide 100,000 new jobs. That statement was made by the Taoiseach when he was Leader of the Opposition. A number of his henchmen in this House have since said that he did not mean it in that way, that he did not know with certainty what the position would be when he would get back to office. They hedged in many ways but the simple fact is that after six years the number of new jobs created by the Taoiseach and his Government in industry is only 20,000. That is to say, an average of 3,000 new jobs per year have been created by this Government. In that same period over 34,000 persons who had been engaged in agricultural employment left that employment.

The true picture, then, is that when the 20,000 new jobs were created in industry, 34,000 left employment in agriculture. So there was a minus figure for the number of workers in the country. There were 14,500 fewer employed in 1962 than there were in 1958, in addition to the 300,000 who emigrated in the same period. That is the record of this Government on the issues of unemployment and emigration.

I know that Fianna Fáil have plenty of skilled propagandists in the Party who go down to club meetings all over the country and deliberately tell their supporters untruths—deliberately tell them what can only be described as untruths — and their supporters are asked, in turn, to disseminate those untruths throughout the countryside. If we cannot nail the falsehoods outside the House, it is necessary to place on record here how absolutely without foundation are the statements made by Government speakers. When I refer to "speakers", I refer to speakers who are quite senior in their appointments. I am not talking about mere backbenchers, but junior Ministers and Parliamentary Secretaries — and we have one beauty in my constituency.

Without leaving on one of his weekly excursions to a meeting of the Ku Klux Klan in his constituency, the Parliamentary Secretary to the Minister for Lands came into this House last week and on the question of agricultural employment, as reported at column 584 of the Official Report of 30th April, he said:

I think that the total effect of the figures I have given will be to show that agricultural employment has also rounded the corner and is on the rise.

That statement was made here in the Dáil last week by the Parliamentary Secretary, although sitting beside him he had top class advisers from the Department of Finance who had, I presume, a hand in the preparation of the various White Papers issued before the Budget. He could have consulted one of those officials, and if he did not want to do that, he could have read some of the White Papers issued by the Minister. In Economic Statistics issued prior to the Budget of 1963, it is stated in black and white that in 1960-61, 2,800 people left employment in agriculture, and that in 1961-62, no fewer than 19,200 people left agricultural employment. Yet, the Parliamentary Secretary came in here and told us that, so far as agricultural employment was concerned, we had rounded the corner. I think it was Deputy Browne who said that a man who produced figures like that had gone round the bend. I am glad that we have an opportunity here to nail an unfounded statement like that made by the Parliamentary Secretary, which no Government could possibly stand over, a statement which is completely inaccurate.

How can the people of the country have any confidence in a Government who allow a junior member to make such an irresponsible statement for public consumption? The simple fact is that last year the number who left the land was almost nine times the number who left the land in 1961. How can any man, unless he has lost his senses, come into the House and say that the situation is all right, that we are around the corner, that the number in agriculture is stabilised——

There seems to be no particular reason to doubt the recent figures returned for employees in the same enumeration. In fact the trend is confirmed by computations based on the average number of the relevant social welfare stamps sold in recent twelve-monthly periods.

I wonder will the Minister deny the statement made by whoever wrote this booklet that there seems to be no particular reason to doubt the recent figures?

Mr. Carter

That is a shaky enough basis.

Mr. McQuillan

I do not know what to make of you. When figures produced in black and white by departmental officials are embarrassing to you, you say they are doubtful and cannot be relied on, because they are embarrassing to you, but if the figure showed there was an increase in the number of people coming back from England because of enticements offered by Fianna Fáil, the printing works would not be able to keep going because you would be taking copies of the statistics like hot buns out of an oven, and rushing them to the Ku Klux cumainn all over the country to tell the people what the Government had done.

(Interruptions.)

An Leas-Cheann Comhairle

Order

Mr. McQuillan

I shall not discuss the matter with the Deputy. I should prefer, if he has a contribution to make, that he would make it himself.

Mr. O'Connor

I will be speaking later.

Mr. McQuillan

All I have to say is I will stand over every figure I have given; 300,000 people have left this country since Fianna Fáil took office; the total number of people in employment has dropped since Fianna Fáil returned to office in 1957 by at least 14,000, and that in spite of the fact that 20,000 new jobs have been created. I agree that is admirable but 20,000 new jobs is a far cry from the programme we were led to believe would be initiated by this Government when they came back in 1957.

There is no doubt at all they got the confidence of the public. As a person in politics, to me their propaganda was very enticing. What must it have been to the unfortunate individual outside who wanted to get a job? What must it have been to the housewife who read, as she passed along the street: "Wives, put your husbands to work." Was that not a very attractive slogan? I think it was. But how tragic for those who voted for this strong Government. That is how they like to describe themselves. How have they fulfilled the promise of that slogan? Where is the "Let's get cracking" now? This is the Government the former leader of which went down to Mayo and said that it was alleged they were going to tax this, that and the other, and do all manner of things. This was the Government who were not satisfied to remove food subsidies. They were not content with just that. They come along and tax food and, in taxing food, they tax essential foodstuffs.

I am dealing with the position as I see it. There are other rural Deputies here. I do not know what their story may be but I think the picture is pretty much the same all over, with the exception of a few localities which were lucky enough to attract industrial concerns. In the rural constituency I represent, we have a very serious situation as far as the small farmer is concerned. As far as the towns are concerned, the small business people are, to put it quite bluntly, just pulling the devil by the tail. The majority of them are people who can never afford to take a holiday, even as far as the seaside. There is no use in my talking about the workers from the point of view of industrial employment because there is none in my constituency. The small farmers are in a desperate plight to get their land drained.

What do this Government offer? We have been told that they will do tremendous work under the arterial drainage scheme. The alleged Minister for Transport and Power spent an hour here the other night telling us how much this Government have spent on arterial drainage. What is the position? Major drainage schemes, and they include the Shannon, are waiting attention for the past seven years. Promises had been made by the Government that survey teams would be out on these rivers in order that the vital work of reclaiming land for the small farmers could be undertaken. What is the position? There is not an engineer to be found to do drainage work. The Parliamentary Secretary to the Minister for Finance has spent the past 12 months advertising for engineers. He cannot get them.

An Leas-Cheann Comhairle

This would seem to be a matter for the Estimate rather than the Budget debate.

Mr. McQuillan

I do not propose to deal with it in any great detail, except to say that, if the alleged Minister for Transport and Power deals with arterial drainage, I am surely entitled to reply briefly. It is a lot of humbug for the alleged Minister for Transport and Power to say this Government are spending huge sums on arterial drainage when the position is they cannot get engineers. They cannot get engineers because they will not pay them. It is a great excuse, when one cannot get engineers, to say that one is quite ready to spend the money if only one had the staff. The Government will not get away with that in my constituency. When it was a matter of getting rid of bovine tuberculosis, the money was found to pay the vets. Tuberculosis eradication was important. The same case can be made in regard to the employment of engineers for major arterial drainage works.

Apart altogether from arterial drainage, immediate and temporary measures could be taken to do quite an amount of good, were the Government prepared to allow the Local Authorities (Works) Act to operate. They got rid of that. That is something for which this Government are responsible. What thanks should any rural community give to this Government? This Government assert they represent the small farmer and worker in rural Ireland. Any time they look at them now, they look at them through Dublin-tinted spectacles. Whatever about having a rural bias in the past, Fianna Fáil are now dominated, body and soul, by the Dublin mentality, the mentality of the slick city director and his friends, with their Mercedes, their Jags and their night clubs. These are the people who run Fianna Fáil to-day and Fianna Fáil tell the boys down the country: "You will do this" and "You will do that" and "We will allow you to go forward as a candidate for the Dáil". If there is any doubt in the mind of any honest Fianna Fáil rural Deputy that he is not being hoodwinked, I beg him to study the situation here in Dublin and observe the manipulations on the part of those who rule that Party at the moment.

We have this Dáil claiming to represent rural Ireland. What is the position? The finest of land is being purchased, in the past 12 months in particular, by unscrupulous speculators out to beat the new legislation which has been promised here for so long. No Land Bill has yet been introduced. If they are not purchasing it, it is being purchased by non-nationals and, when the Land Commission enter the market, the price is three times what it would be because the non-national has three times the amount of money available to him to purchase land. The price of land is inflated. Future Irish tenants of the Land Commission will be saddled with an intolerable burden because of freedom of the individual, free trade, free enterprise.

What is the position? A group of hypocrites try to don the left wing garment. How dare they suggest they are turning left, that they have socialist leanings? If that were the case, the first people they should look after are the poorer and weaker sections of the community. The Fianna Fáil Party are dedicated to the rights of private enterprise. They are dedicated to the jungle law of the stronger you are, the more you are entitled to. That has been their philosophy down through the years. What are they trying to do now? They are trying to attract the attention of the innocent and gullible youth in this country with this gimmick: "We are different from Fine Gael. Let us say we are going left."

There is no more drainage. There are no engineers to do the work. It reminds me of the story I have told in this House about forestry. The rural areas and the areas in the west where the population is fleeing all the time are the places for afforestation. I have no objection to their planting in other counties such as Wexford and Wicklow but any major afforestation programme should be carried out in the western region.

This Government's excuse some years ago for their lack of enterprise in forestry—and Deputies may not believe this—was that there was no wire netting to keep out the rabbits. That excuse was given in this House at one stage for the slowing down in the afforestation programme. Many new Deputies never read back the debates to see these excuses in writing but I had to listen to that type of excuse being made in this House. I must say the Party to which I belonged at that stage did one day's good work on afforestation. It enlightened the public and brought home to them the benefits of afforestation, with the result that this Government have wakened up to the fact that it is of benefit. The only trouble at the moment is that they are not going strongly enough at it and not doing enough in the right places. We can safely say that Wicklow and the other eastern counties have got a fair crack of the whip. The report of the inter-Departmental Committee on conditions in the West and the congested areas mentions afforestation as a key point. We should have from this Government something that would inspire hope in the people who are left deserted in these western areas, something that would indicate to them that finally they will be able to live in some comfort in their own country and let their children stay, but there is no message of hope over the years from this bunch.

When I am criticising them here, I am making it clear that at the moment it is enough to deal with the Government. They are responsible at the present time. They are no longer fit to be a Government. I know many sensible people outside this House who discuss this matter and say: "If they are put out, there is no alternative." That argument has been trotted out in this House, in the corridors and elsewhere. That is not the position at all. This is a democracy and the people should be given credit for sufficient intelligence to decide in the course of a general election whom they want in. They will decide whether they want a conglomeration or whether they will wipe out some particular group or not. Whatever they want, they are entitled to get and they are entitled to have the opportunity of deciding. There is no good in this paternalistic approach: having got rid of one daddy up to the Park, we have the next daddy who takes over looking into his heart and saying: "I know what is good for the Irish people."

An Leas-Cheann Comhairle

These references to the President should not be made. They are not in order.

Mr. McQuillan

There is nothing in this Budget about which the people in the rural areas can enthuse. When we examine the Budget carefully and when its true implications are known to those people, they will find quite an amount about which to complain. The hopeless spirit that is in the rural areas will remain as a result of the new taxation proposed in this Budget. It is extraordinary to have statements made that there is no taxation imposed in this Budget. Whom do these people who act as propagandists think they are codding this time? Do they hope that between now and 1st November, when this Budget will be implemented, some miracle will happen so that it will not be necessary to have this amount of money raised or is this Government of the opinion that it will be out of office before November?

There is an admission that in a full year—and this has been said in the House before so I will not labour it— that this turnover tax will bring in about £11. I hope the Minister for Finance will not contradict that statement which, I understand, is accurate. Fianna Fáil Deputies were already telling us that there would be no taxation imposed on petrol, beer and tobacco because these items were already overtaxed. That had been stated in this House by a number of Deputies. It was also stated in my constituency some weeks ago and I think it is on the records of this House. As reported in the local paper of 23rd March. the Parliamentary Secretary to the Minister for Lands stated in Boyle:

In the next few weeks and months the Budget would be the main topic of conversation and he wished them all to have the facts at their finger tips.

This is a meeting of the higher council of the Fianna Fáil Party held in Boyle.

There would be no increases on those items which were already, perhaps, overtaxed, items such as beer, cigarettes, petrol, spirits and so on.

That was a statement made in March by a responsible junior Minister to a group of intelligent men, I presume, in his own constituency at a meeting at which, the paper tells us in a heading, the Parliamentary Secretary gave the delegates an informative talk on the forthcoming Budget. Then he went on to say:

The increases would be on luxury goods and semi-luxury goods such as jewellery, furs and expensive motor cars.

This has been said so often that I am sure some Deputies are bored stiff but I feel I must repeat it because the more I read it, the more I am convinced the people who listened to that must be given the facts. The only way in which I can see them getting the facts is for other Deputies in the constituency, like myself, to try at this late stage to explain the true situation, to explain what we believe the facts to be, so that there will be no illusions amongst the supporters of the Fianna Fáil Party.

He went on to repeat, in case what I have just read out was not sinking into their heads, that the taxes were being imposed on luxury and semi-luxury goods. He then said that the Budget would be attacked and criticised and that the people from whom criticism would come were anti-national.

Mr. Rooney

He would be some judge, what?

Mr. McQuillan

I do not like at any time to have to attack any Deputy very seriously or in a very hurtful manner; I prefer to attack the policy. I find it hard to restrain myself when I find a Parliamentary Secretary of the Fianna Fáil Party taking time off from his Government duties of looking after fish to go down with a red herring like that to his constituency and to say that the people who will not agree with the Budget and who are likely to attack it are anti-national.

Things have reached a serious situation when the Party in Government indulge in that type of statement. I know that during election campaigns, the Fianna Fáil Party have dishonoured the national flag by having it on the bonnet of all their cars when they are sweeping into the polling booths. They have some kind of an idea that they own the flag but they are being disillusioned on that. I suppose, in one sense, the less we say about something as contemptible as that statement by the Parliamentary Secretary, the better. His actions and deeds prove he is not the man to cast the first stone when it comes to what is national or anti-national.

I am afraid, having said all that, there were a few people at that meeting who must have believed him because the chairman—I am glad I was reminded of that—had this to say, in effect, at the meeting: "It was a very fine address, indeed, one of the best addresses I have heard in a long time." That chairman, I see, was a national teacher. It reminds me of the lines:

And still they gazed and still the wonder grew, That one small head could carry—

—all that nonsense that Deputy Lenihan told in Boyle. That was the only impression I could get—that it was sheer unadulterated nonsense that he was talking to the people there.

As I have said, in a full year, the new turnover tax will bring in £11 million. According to the Fianna Fáil Party—Deputy Dillon said there would and others have said it, too—there will be no tax on beer, cigarettes, tobacco. Then we are assured by other Fianna Fáil Deputies such as Deputy Booth that butter, bread, tea and sugar will not be taxed. Where is the £11 million to come from? I do not know if these Deputies realise what is happening at all.

I addressed a number of questions to the Minister for Finance today. I asked him if he intended to make the necessary provisions by legislation or otherwise to ensure that there would be no increase in the price to the consumer of essential commodities such as bread, butter, tea, sugar and similar commodities. The Minister replied that it is not the intention in connection with the turnover tax to interfere in any way with the present freedom of traders to fix the prices of commodities they deal in. Consequently, he is unable to say with certainty whether or not the price of butter or, indeed, any other commodity will be increased. The backbenchers say there will be no increase in the price of bread, butter, tea or sugar. Whom are we to believe or can we believe any of them?

As I have said, there have been so many different versions of this Budget that it is like the Tower of Babel. The Minister goes on to say he feels that the force of competition will operate against undue increases. He is very careful. That was worded by intelligent civil servants to prevent the Minister's being caught out on this at the back of the neck in six months' time by some political opponents.

The only safeguard now to the poor man and to the middle income group is the force of competition amongst the traders. Is there any competition amongst traders on essential foodstuffs? Can there be? I do not know much about this personally but I have discussed the matter with traders and I have only to look at how they get on. I know they are not wealthy people. Unless they measure out very carefully the quantities of the various essential items of foodstuffs in which they deal they could easily lose instead of making a profit in their transactions. Unless the are absolutely accurate in their measurements of tea, sugar and butter, say, the profit is so small that they are liable to lose rather than to gain. Where will the force of competition work there?

The intelligent Fianna Fáil Deputies say the tax will be put on tinned peaches or pineapple or imported tinned fruit. What is the total consumption in the year of tinned fruit, tinned fish and tinned vegetables? At a rough guess, let us put it in the region of £1½ to £2 million or maybe to £3 million. Considering that, on foodstuffs alone, it is expected to take in, I understand, about £5 million, is it not obvious that essential items of food will be taxed?

I do not know what kind of mentality this Government have. They say they are going left, that they are going to be true socialists. At the same time, they are the first Irish Government to come in here and tax the essentials of life—foodstuffs, light, fuel and clothing. They have a terrible neck. I suppose they believe in the saying that if you must tell a whopper make it a good big one. It would appear that that is their attitude—to brazen it out. I do not know what the people in this constituency in Dublin are like——

Mr. Byrne

They will give them their answer; do not worry about that.

Mr. McQuillan

It is possible they will provide the answer. I do not know whether or not they will because the impact of this Budget will not be felt until November next. In the meantime, even the organs of opinion and publicity have given — perhaps through mistake — a wrong version of this Budget. It shows how even the most intelligent journalists can be caught out when they say that the first reaction to this Budget was something like this: "Well, there is nothing very dangerous in it—no increase in the price of the pint or cigarettes."

It is a poor defence of the Budget when members of the Government have to come into this House and quote leading newspapers, which are opposed to them, saying: "The newspapers do not think the Budget is as bad as some Deputies are saying it is."

This is a tax imposed on every member of the community from the cradle to the grave. It will make things harder for the lower income and family groups. As far as the poorer people and the not-so-well-off are concerned, this is a form of income tax. I can see the mind of some gentlemen working on the problem of how to get more money in. They feel they have squeezed the last penny out of whiskey and cigarettes and, perhaps, in the direct sense, out of petrol. They say: "If we keep on taxing these things, people will stop smoking and drinking and using their motor cars for pleasure purposes." Therefore, they strike at the very essentials of life, at the things people must buy, at the food of the poor and of the family groups. There is no evasion, no avoidance: they are all caught in this huge net.

This Government, who profess to have regard and sympathy for the weaker members of the community, offer 2/6d. to compensate for the increase in the cost of living. Deputy Corish made the point—but I do not think it was emphasised enough—that although 2/6d. was miserable enough ten years ago, 2/6d. today is worth not more than half what it was worth at that time. Yet the increase given the old age pensioners to offset the increase of the cost of living is 2/6d. If you work it out on the cold facts of their expenditure, you will find the old age pensioners are getting 11d.

Some Deputies say this Government will ride the storm. They hope the public will have a short memory and that next year there will be £6 million or £7 million to play with in the "kitty". I wonder would this be the calculated risk Deputy Booth referred to—the calculated risk that the Taoiseach, who is described as a gambler, is prepared to take in preparation for a general election so that there would be plenty of money to throw about? Would it be possible that such is the mentality in the Party at present?

In taking this calculated risk, are they taking into consideration the damage they are doing to the country at present, the further incentive to emigration, the further increase in the figures for unemployment? To-day, the Taoiseach sought to suggest that these figures of rising unemployment were a result of the CIE strike. That is not true. That trouble does not account for even 25 per cent or 30 per cent of the extra numbers out of work in comparison with this time last year. That excuse will last a while. The Taoiseach is not worried so long as he has an excuse to get him over the particular day in the Dáil.

Some Deputies referred to the impact this turnover tax will have on local authority expenditure. There is bound to be trouble in so far as increases in rates are concerned. There is bound to be trouble as a result of the cost of foodstuffs and drugs. A Government prepared to put a tax on medicines and drugs should have their heads examined. Only last week I read where some member of the Stormont Parliament asked the Minister for Health there to make arrangements with the Government of what he described as "Southern Ireland" so far as health services were concerned. I can see the Northern Minister rubbing his hands in glee at being able to point out without fear of contradiction that, much as he would like such a reciprocal arrangement, it was impossible to implement because there was no comprehensive health scheme in operation in this part of Ireland. This is the Government that has gone left, prepared to look after the weak and the sick. We have, possibly, one of the worst health services in the civilised world to-day.

It is no harm to recall that when the Taoiseach visited Bonn, General de Gaulle in Paris and other European cities, he was full of pep. He made it quite clear to all the people he met abroad that the old country was very healthy, that everything was booming. That was the word I heard bandied about here last December—the economy was booming. Anybody who said otherwise was anti-national. Last December and even January this Government stated time and again that we were fit to compete with the most highly developed European countries, fit to pull down our tariff walls and all sorts of protection and to withstand competition from Germany, France, Britain and other countries. There was no talk of recession, of being unable to balance our accounts.

How then did this situation arise in which the Government say that, were they not to take the action they are now taking, things would be as bad as they were alleged to be in 1957? They alleged that the pay pause they introduced a short time ago was to prevent a similar situation arising as arose in 1957. It is not unfair to suggest that that situation was well known to the Taoiseach and the Government for the past 12 months. They knew there were plenty of thorns and that it was not a bed of roses. They knew the economy was not as healthy as they were telling people abroad. In spite of all their protestations that we were a fully-developed and highly-efficient unit, they knew that we were described in the files of many European nations as undeveloped. They did not expect, however, that we would be described in the United Nations as an undeveloped country.

I am convinced that the Government were prepared, as Deputy Booth so mildly puts it, to take a calculated risk. It is a nice way of describing what I would call a reckless gamble on the part of the Taoiseach. In deference to Deputy Booth, he took this calculated risk and said: "We will be into the Common Market because I have promised that we will do everything we are asked to do; we shall make no restrictive provisions as far as defence and tariffs are concerned and later, when we are in, we can blame the Common Market for the state of the country and its finances."

The Common Market, however, did not come off. We did not get in and the Government are not able to run away from the realities facing this country now. After seven years of Fianna Fáil, we are in a greater mess now than we were in when they took office. All they do is put a new blister in the form of what they describe as a turnover tax on every section of the community, the impact of which will be hardest on the poorer, the lower income groups. It is beyond contradiction that 75 per cent of the expenditure of the lower and middle income groups will be affected by this tax.

Again, it is quite possible that the public, between now and October, will not realise what is happening. Most people have enough to do to look after their homes and families; they are occupied with their work and later on, those who can afford it will be occupied with having a short holiday; so it is after that, in November, that the facts of life will be brought home to them.

This is a revolutionary and a complete about-turn move of the Government. They got no mandate in the 1957 general election or in the 1961 general election to carry on in this fashion. They have no overall majority; they are dependent on the help of individuals who, rightly or wrongly, will support them for reasons best known to themselves. In these circumstances, it is not unfair to the Government to suggest that they allow the people to decide whether they want Fianna Fáil in office or a change of Government. The only way to do that is by going to the country as soon as possible.

Mr. Byrne

There have been many Ministerial interventions in this debate but, to my mind, the most significant contribution was that of the Taoiseach. The most telling part of his statement was not his bluff about going to the left but his statement, reported at column 320 of volume 202 of the Official Report for 24th April last:

I have said before that it will never be possible to have a great leap forward in respect of these social welfare services and we must aim at improving them step by step.

Halfcrown by halfcrown, we must improve the miserable lot of that section of our community who are dependent on social services to subsist. The plight of the 10,000 old age pensioners in the city of Dublin who are trying to eke out a miserable existence on 32/6d. a week is a grave one and any Government or any Party in this House who consider that the improvement of their position halfcrown by halfcrown, one year with another, is fair treatment, humanitarian treatment or Christian treatment, are betraying all the decent principles in which the majority of our people believe.

It is time we faced up to the fact that a diet of "bread and scrape" for our social welfare classes must be departed from. It is time we dropped this idea of increasing old age pensions and unemployment benefits by a halfcrown, a miserable halfcrown, on the one hand, the best part of which is taken away on the other hand. I admit that no matter how high the cost may be, we all must accept the grave necessity for improving the lot of those who are unable to provide for themselves, in most cases through no fault of their own. I do not wish to be political in a matter of this kind. I am not even saying there are not those on all sides of the House who will disagree with me. I am aware high taxation is necessary if we are to provide anything like a decent standard of living, anything like reasonable opportunities for the thousands of youngsters who have no chance of secondary or university education in our society. My complaint is that the forms of high taxation which the Minister has brought in in his Budget are most inequitable ones, that the outrageous sales tax he has introduced is one which will have a far greater impact, which will lean far more heavily, on the less well-off sections of the community, that there are other forms of taxation which could well have been substituted for that sales tax. All of the arguments, and we have heard them here ad nauseam, against the sales tax can be found concisely in the statement that it is a retrogressive tax which will lean more heavily on the less well-off sections of the community than on those who are comfortably off.

The last speaker referred to the Taoiseach's bluffing statement about moving to the left. I deplore doctrinaire attitudes and theorising in this House. No Party in this House has a monopoly of concern for the underprivileged. It is certainly true to say that the Taoiseach is flying in the face of truth when he says, on the one hand, that Fianna Fáil are moving to the left and, at the same time, imposes taxes on the necessaries of life. I will say frankly that I would welcome a move to the left by the Government Party, if it meant that the appalling social conditions, under which our 10,000 old age pensioners in this city are labouring, would be removed, or if it meant that our youngsters would be given the opportunity they deserve in education instead of the present class-ridden system which obtains. We all know that the Taoiseach is only play-acting in this matter.

The proof of that is very striking if one looks at the tax returns for the past five years. Surely it is implicit in any move to the left that the whole basis should be a redistribution of wealth? If you look at the Government's record in relation to that form of direct taxation which is meant to tax the wealthy, namely, surtax, you will see that since they took office in 1957, Fianna Fail have made no fewer than three reductions in surtax and have reduced the number of persons paying surtax from 10,000 in 1957-58 to 4,500 in 1961-62. The source of my information for that is the reply to a question tabled by me on 25th April last. In 1957-58, the yield of surtax was £2,193,000 and in 1961-62, it was £300,000 less, and that at a time when we all know there are more wealthy people in this country than ever before.

Mr. Corish

They do not need that sort of money from these people any more.

Mr. Byrne

In reply to a further Parliamentary Question in regard to the amount of surtax payable on an income of £5,000 a year, by a married man with two school children, in 1957-58 and in 1962-63, the Minister replied that in 1957-58, the surtax payable by such a person was £443 and in 1962-63, the amount payable is £233, £210 less in surtax on an income of £5,000 a year at a time when income tax has been reduced. This is the Government who impose a tax on the foodstuffs of the £7 a week labourer and claim to move to the left. That is nothing more than sickening hypocrisy.

We are making of this country a haven for rich people. In Great Britain, where the standard rate of income tax is higher than it is here, the equivalent surtax on £5,000 per year for a married man with two children is £512 10s. If our policy is to encourage rich people to come into this country and leave it to their private initiative to create employment opportunities and build up our economy, then, if that is the accepted principle upon which the Government are working, let us have that statement outright from the Minister for Finance or the Taoiseach, but if it is not, let us cease fooling ourselves. In 1957-58, the number of people paying income tax was 195,000. In 1961-62, thanks to PAYE, it had gone up by 55,000 to 250,000 and in the same period, the number of surtax payers went down from 10,000 to 4,500.

I accept that fairly high taxes are inevitable, if we are to provide our people with a decent standard of living, with a health service in place of the existing Victorian dispensary system which we still operate, and with an improved educational system. I accept that high taxation is necessary for these things but I object to inequitable and unfair taxation. Taxation should fall on those who can best bear it and the labourer with £8 a week or the £10 a week clerk is not the person who should be taxed at all. A tax of £7 million on foodstuffs is an outrageous and savage tax. The Taoiseach seems happy to accept the status quo in relation to these social services I have mentioned and the Minister for Social Welfare can smugly quote percentages and claim that their position has not disimproved, but unless we can face up to the necessity to give an old age pension somewhat analogous to that payable in the North of Ireland or Britain, we will be doing a grave injustice to the people who are trying to subsist on “bread and scrape”.

I do not believe the Minister for Finance, who is a very busy man and a very active man in the Government, appreciates the appalling poverty that still exists in this city. I accuse his backbenchers of failing to keep him in touch with the condition of the social welfare recipients in Dublin Corporation housing schemes, because they must be aware of them. Only yesterday, I had a case of a refusal to give unemployment benefit to a man who was pensioned at an early stage from the Dublin Port and Docks Board with a pension of £112. Up to a few weeks ago, he had a parttime job as a night watchman but he lost it and applied for benefit and of course was ineligible. He and his wife have to exist in a corporation house on an income of £2 7s. 6d. a week and pay 15/- rent.

Dr. Ryan

I will give them more if you give me the money.

Mr. Byrne

The Minister, of course, missed my opening remarks. I agreed that high taxation cannot be avoided if we are to provide our people with a decent standard of living, but I object to that high tax being inequitable and being imposed on the people least fit to bear it. I object to a regressive tax on foodstuffs.

Dr. Ryan

I never yet put on a tax that Fine Gael did not object to.

Mr. Byrne

I shall make my own speech and I should be obliged if the Minister would leave me alone. The Minister also missed my remarks on surtax. I wonder does he appreciate that there are only half as many people paying surtax to-day as when he took office in 1957? He probably does not, because we all know that his Party have come to be known as the rich man's Party. This sales tax is going to have a very serious effect on the Government because the people in my constituency will repudiate it completely. The people who were misled a fortnight ago now appreciate the full impact of this tax. They will appreciate that it means, on the Minister's admission, that threequarters of the yield is coming from food and clothing.

The Minister in his Budget Statement, to my mind, endeavoured to convey that the Income Tax Commission had made a case for a tax of this nature. Nothing could be further from the truth and it is very interesting to look at the Third Report of the Income Tax Commission to see what, in fact, they said about a tax of this nature. At paragraph 115, they said:

We accordingly recommend the introduction of a purchase tax at a rate or rates of between 7½ and 15 per cent on a base of £65/£75 millions wholesale value, but in any event excluding (a) goods essential for agricultural production (b) goods essential for industrial manufacture (c) exports, agricultural and industrial (d) food, particularly essential food (e) fuel (f) newspapers and books (g) household non-durable goods (h) goods already subject to heavy customs and excise duties, e.g. tobacco (i) works of art, and goods that are primarily of a cultural nature.

It went on to say that this tax could be partly substitued for income tax and that the revenue from it be used to reduce the rate of income tax. They say: The revenue we recommend to be raised by a purchase tax, i.e. £6 millions at least, should permit a reduction of about 2/- in the present rate of income tax, i.e. from 7/- to 5/-.

The Commission recommended a tax of 7½ per cent to 15 per cent on a basis of £65 million to £75 million. The Minister's tax is based on annual purchases of £400 million and includes all these items—foodstuffs, fuel and goods essential for manufacture—which the Commission recommended should be excluded from such a tax. It is completely idle for the Minister to claim any justification whatever from the Income Tax Commission for the introduction of this turnover tax.

What did the Government themselves say about that recommendation I have just quoted? If we look at the first White Paper on Direct Taxation published two years ago, we can see on page 15 what the Government then thought of a purchase or sales tax. At paragraph 43 of that report, under the heading "Views of the Government", we read:

Its economic effects might also be adverse: the prices of taxed goods would be increased and, through compensatory raising of money incomes, costs might be increased and the competitive capacity affected, with risk to exports and employment.

That is what the Government thought of sales tax two years ago.

The inter-Party Government subsidised foodstuffs to the tune of £8 million per year and by coincidence that appears to be about the amount by which the present Government are taxing foodstuffs and essential clothing. Therefore, you have a swing of £16 million in a few short years. The Minister and other Government spokemen expressed the hope and expectation that a rise in the volume of sales and business will help shopkeepers to carry the tax themselves without passing it on to the consumer. I cannot understand the fantastic naivety of astute businessmen like Deputy Booth who spoke here this afternoon expressing the opinion that essentials would not be taxed; that the shopkeepers, the grocers, would put the tax on tinned peaches and other non-essentials. If, indeed, the Minister expects the grocers to shoulder this 2½ per cent tax he is doing a very cruel injustice to many thousands of small traders. He knows what the force of competition is in the grocery trade at present. He knows that the retailers' margin of net profit is 5 per cent or less in many cases. If he is not properly aware of that he need only ask the Revenue Commissioners for a considered appraisal of grocers' accounts as submitted to them.

Economists and statisticians can tell us that we have too many shops; that the distribution machine is unduly expensive and unwieldy and the sooner the small shopkeepers are pushed out of business the better. That is the view of some economists and I believe people of that frame of mind have talked the Minister into this sales tax, arguing that the small shopkeeper is on his way out anyway and that in pushing him out the Minister is only speeding him on his way, completely overlooking the humanitarian and social aspect of it. Many a decent family depend on the small shop for a livelihood and many a good man has been reared and educated out of the income of the small family grocery. The suggestion that things like tinned peaches and chocolate can bear the tax is incredibly naive and unrealistic because the force of competition in the grocery trade is so intense that this situation could not be brought about.

The Minister should try to protect the small trader from unscrupulous price-cutting and unfair competition by powerful vested interests with plenty of funds to sustain losses for lengthy periods in the hope of driving the small man out of business. We shall see what the results will be. There is talk of foreign interests coming here with millions of pounds to enter the grocery trade. If that report can be substantiated, by reason of what the Minister is doing to the grocery trade in this Budget, it imposes on the Minister a very strong obligation to protect decent Irish trades people from unscrupulous competition.

There are no controls in regard to this tax. It is a slaphappy affair. The Minister is leaving it to the trader to impose it and he is claiming and hoping that as far as most essentials are concerned, the trader will not impose it at all. That leaves the situation that in the highly organised trades—and there are highly organised trades—the trader will probably make a profit out of the tax. He will probably include his mark-up with the turnover tax and recover five per cent or maybe ten per cent from his customers, because there are many businessmen astute enough to avail of a golden opportunity such as the Minister is now presenting them with to increase their profit margins. The grocers are in no position to do that.

What will be the effect of this sales tax in so far as it will be passed on to the consumer? For the answer to that question, we need go no further than the Irish Times, to an article by the Research Officer of the Irish Congress of Trade Unions, Mr. Donal Nevin. He says:

Whatever the actual extent of the increase, it is certain that the rise in the cost of living as a result of the turnover tax will be a factor in the making of claims for higher wages and salaries. The Irish Congress of Trade Unions has stated that such a tax would immediately give rise to quite justifiable demands for pay increases.

That is a statement by a very authoritative person, the Research Officer and spokesman of the Irish Congress of Trade Unions, who surely knew what he was talking about and has issued due warning to the Minister in this respect. The Minister will have to cease talking about a pay pause.

I have said all I want to say about the sales tax. I have not very much more to say on the Budget because there are many other speakers waiting to get in and I have undertaken not to take too long, but, having criticised so much, it is only fair that I should say that there is one feature of the Budget which I welcome, namely, the steps which the Minister is taking to counteract evasion of income tax, which he hopes will yield him £600,000 in the coming year. I should hope that those steps will impress upon all taxpayers the strong social obligation there is upon them to pay those income taxes which their fellow citizens pay.

It has been said that there may be a flight of deposits from the banking system by reason of the obligation imposed on the banks to disclose deposit interest. I do not think there will be because we all know that the majority of the deposit holders in Irish banks are a class of persons whose trading profits are not in fact taxed, namely, farmers. There is such an inordinately high ratio of deposits held in the Irish banks relative to the British banks that, in any case, our system will be well able to withstand the strain of a certain small, misguided flight of deposits, if it should take place.

The Minister, in the Budget, is implementing a recommendation of the Commission in regard to rents from residential properties which will be taxed on the actual profit accruing to the landlord, instead of the landlord being taxed on the notional Schedule A profit basis on which he was previously taxed. That is a suitable recommendation to implement and I believe that it may to a small extent restore some degree of sanity to the property market where fantastic prices have been paid for properties for letting in the past few years. But I want to impress this viewpoint on the Minister: He is now taxing residential landlords, with certain minor exemptions, on their net profit. In other words, he is permitting them to charge up against the rent all the expenses attributable to the upkeep, maintenance, repair and other outgoings on the property and those other outgoings will include the Schedule A property tax, which will be separately assessed under Schedule A, separately collected under Schedule A, claimed by the landlord as an expense against his Schedule D tax and allowed by the Revenue Commissioners as an expense against Schedule D tax and, having gone through that cumbersome process, the taxpayer will then pay tax on the net profit remaining to be assessed under Schedule D.

It emphasises more than ever before the absurdity of Schedule A property tax. If Schedule A property tax were not applied in these cases, there would be no loss of revenue. On the contrary, collection costs would be reduced. The obvious conclusion is that it is time the Minister emulated the example of the British Tory Chancellor of the Exchequer and abolished this absurd, inequitable and repressive form of taxation, Schedule A tax, which now, as a result of this change, will be a real burden only to the residential occupier of his own home, the type of person who, instead of being taxed on a notional basis, on an income that does not exist, should be encouraged on social grounds to own his own home.

This is an archaic tax devised in Britain 160 years ago for the benefit of landowners at that time who were the controlling power in Britain. It is completely obsolete by all the acceptable canons of sound taxation today. It is completely unsuited to our social and economic conditions. It does not yield anything like what the Minister claims that it yields. The cost of collecting it is probably as high as 50 per cent of its effective yield, and it is time it was done away with.

I want to draw the attention of the Minister to the fact that many people inside and outside the House expected him to make some reference in his Budget Statement to the rating system. There can be no denying that local rates, as levied today, are in effect, a form of direct taxation——

Acting Chairman (Mr. Cunningham)

The Deputy is not in order in discussing local rates on this Resolution.

Mr. Byrne

I am not discussing local rates in detail but I shall not labour the point. I am discussing economic policy in broad terms, and in broad terms, it cannot be denied that there are many people in the city of Dublin who are not liable for income tax by reason of their family circumstances—the number of children they have—and Dublin Corporation comes after them, and for purposes which should be national charges, like health services, collect £6 million a year.

Acting Chairman

The Deputy may not discuss that matter on this Resolution.

Mr. Byrne

Very well. I urge the Minister to have regard to the public reaction of shock and dismay to the new form of taxation, this tax on foodstuffs and the essentials of life which he has introduced in this Budget. I urge him to consult with his backbenchers and to have regard to the realities which have been advanced by trade associations, to consult with RGDATA and the various chambers of commerce, and to cease fooling himself with the misguided idea that the costs of the essentials of life will not be substantially increased as a result of the sales tax he has introduced.

Mr. Desmond

When members of the Opposition Parties refer to this tax as a purchase tax, the Minister and other members of his Party take umbrage. Whether we call it a purchase tax, a sales tax, or a Fianna Fáil tax, is immaterial because, in the ultimate analysis, it will affect practically everything the people have to buy, and particularly the people of the working classes and those who are called the white collar workers.

The Minister suggested that while there might be criticism of this Budget, he would like constructive suggestions, but before we try to do anything on that line—which, of course, we know would not be appreciated by the Minister—it might be well to draw particular attention to the differences of opinion which apparently exist between the Minister and many other Ministers of the Government.

The Taoiseach said that this new system, as he termed it, is a guide for the future. He spoke of a time when we may be much better off. The Minister mentioned that the turnover tax would yield a very high income for 1964-65. He said that, according to today's Cork Examiner, at a debate last night. Therefore, it is quite obvious that the Minister heartily agrees with the Taoiseach when he says that the new system is a guide for the future, and he is quite happy, even though it inflicts a burden on the working people. He is quite happy to know that, in 1964-65, there will be a very good rake-off because of his action in this Budget.

The Minister also said the night he introduced the Budget—perhaps in the heat of the moment—that he wants the money and someone must subscribe it. That was plain talk. The Parliamentary Secretary to the Minister for Lands went so far as to say that nothing is being taxed. It is strange, when the Minister asks members of the Opposition for constructive criticism, to hear that members of his Cabinet are completely in conflict with his point of view, in particular when he says that he will get such a rake-off in 1964-65.

One member of the Minister's Party said that the tax would be on goods sold for cash, and that bad debts were not being taken into account. I wonder how that will operate? We know that in the rural areas and in the cities, there are many shops in which the customers carry their weekly books or their monthly books. When is the shopkeeper to decide that money owed to him by a customer is a bad debt? The Minister, knowing rural Ireland as well as anyone here, knows very well that it is a common practice in rural Ireland for the farming community, for instance, not to pay many of their heavy bills until after the harvest. Long before the harvest comes in, but after the time that the various commodities have been bought by the farmer, is the shopkeeper in a position to say they will be paid for, or that some of them can be reckoned as bad debts?

Apparently the Minister for Justice, an economist himself, made it quite clear that bad debts will not come under the heading of this tax. The Minister made it perfectly clear that the bulk of the money that will come in under this tax will come in under the headings of food, clothing and fuel. He stated in his Budget speech that if food, fuel and clothing were to be exempted, a rate of 2/- in the £ would be necessary to produce the same yield. It is quite obvious, therefore, that the heaviest rake-off the Minister hopes to get will come from these important items—food, fuel and clothing. Will any member of the Minister's Party deny that these three items bear more heavily on the ordinary working people and the lower paid white collar worker than on other sections of the community?

I do not wish to repeat what I have already said, but, before the Minister came in, Deputy Byrne made it perfectly clear that by the actions of the Minister since 1957, the number of people paying surtax has been considerably reduced, reduced by over 50 per cent. Now the 6d in the £, the purchase tax, the sales tax, call it what you will, will not bear heavily on them since they have been exempted from surtax. There is no relief for those with whom we are concerned, the lower paid workers.

The Minister said that administrative costs would be less than one per cent. Supporting the Minister in that view, the Minister for Justice elaborated mightily here on the wonderful machine—the electric computer— which will be installed. Apparently that is the source of the reduction in administrative costs. Through this machine, the Minister will be able to rake in at the expense of all concerned, and he will save in doing so. The Minister for Justice, in elaborating on the wonderful advantages of this machine, did not attempt to make any comparison between (a) the cost and maintenance of such machines and (b) the possible displacement of humans by these machines. We may have different views as to whether or not Government Departments are overstaffed, but there is one aspect on which there can be no difference of opinion: Irish boys and girls entered the Civil Service by their own ability. Now, apparently, the Minister for Finance, supported by the Minister for Justice, is quite prepared to move them out and bring in an electric computer to replace them. With the aid of his electric computer, he will harvest as much as he possibly can from the taxpayers, from the fathers and mothers of those who may be adversely affected in their employment by the installation of this machine.

The Minister for Social Welfare drew particular attention, as he was entitled to do, to the various increased benefits being given as a result of this Budget. Increased benefits are always welcome. Now the Minister worked out percentages, percentages varying from nine to eleven, and even 13 per cent. Along comes the Minister for Finance, and, in answer to a question put by Deputy Norton, states, in relation to the man with two children whom the Minister for Social Welfare had already told us would benefit enormously: "I did not say I was giving him anything." That is reported at column 195 of volume 202 of the Official Report. Now which of them is right? Where is the nine per cent, the eleven per cent and the 13 per cent the Minister for Social Welfare is giving, when the Minister for Finance, the man who provides the money, comes along and says quite calmly: "I did not say I was giving him anything?" Which of them is right?

The main burden of the Tánaiste's contribution to this debate was that all our troubles have arisen as a result of this House passing the 1948 External Relations Act, an Act supported and voted for by the Tánaiste himself. I am sure the Minister is delighted with some of the suggestions made by his Party. They are so irresponsible. Of course, the Tánaiste went a little further and, in doing so, he either slipped badly or else, if he is correct, the Taoiseach was most careless and negligent in not seeking the advice of the renowned Tánaiste. The Tánaiste, speaking on our entry into the Common Market, stated that as far back as January, 1962, he made it quite clear in a public speech that there would be no easy way for either Britain or ourselves of getting into the Common Market. He stated he said then there would be no red carpets. What a pity it was the Taoiseach and the Minister for Finance did not seek his advice then instead of making fools of themselves and the country for the past six months. That shows how much they are at variance in relation to this savage tax now being inflicted on everyone.

In case some of the Minister's Party may be in doubt and in case the Parliamentary Secretary to the Minister for Lands may still wish to maintain that there will be no tax, the Taoiseach himself stated at columns 306 and 307 of volume 202 of the Official Report that higher tax rates on tobacco, beer and spirits would not be enough. He said that was the case for extending the range of expenditure tax. Was that not an admission? The Taoiseach knew he could not get enough out of a tax on beer or spirits. He could not get enough out of the smoker and, because of that, had to extend the tax. If the Minister for Finance were serious in his statement that he is anxious to hear alternative suggestions from the members of the Opposition, he should, first of all, ensure that the suggestions put forward by his own Party are sensible suggestions and ones on which he can act.

At column 307—this is worth drawing particular attention to—the Taoiseach said subsidisation always has the effect of killing initiative. How long has he thought that? God bless us all, since 1932 we have been hearing about the present Taoiseach, as Minister for Industry and Commerce, being the man who, through subsidisation, built up the industrial arm in this country. Subsidisation, where it was essential to build up industry, to provide work for our people at home, should have and did have the support of the Labour Party. There were many occasions when members of the Labour Party drew attention to the abuses of subsidisation but over all those years, the then Minister for Industry and Commerce could not see any abuses. Complete subsidisation was then apparently essential. Now he says it is the worst of all evils because it has the effect of killing initiative.

That is a complete turnabout on his part and it is a complete turnabout of the views I believe he held in the past in connection with industry. Perhaps, in making that statement, he visualised, as he seems to have been doing over the past 12 months, a wonderful future for us, not through subsidies but through "hobnobbing" with all in the Common Market. He went so far as to tell us we were as wealthy as the USA. If it comes to joking in connection with a serious discussion such as that on this Budget, I am afraid the trips abroad to different parts of Europe are affecting the minds of the Taoiseach and his Ministers to such an extent that they have lost complete track of what is happening in their own country as evidenced by the imposition of such difficulties on the people as will produce disastrous effects in many households.

The leader of the Labour Party drew particular attention to one part of the Budget speech in which the Minister for Finance stated:

It is a good thing in the circumstances of a developing country to place the emphasis of taxation on expenditure rather than income so that earning and saving would be encouraged rather than spending.

I wonder is that a wise policy. If taxes are imposed on foodstuffs and other essential commodities so that people reduce their buying of such commodities, how will it ultimately affect Irish production? If there is not a buying public, there is little use in having a selling manufacturer. The overall turnover of the wholesaler and the retailer must be severely affected by a tightening of spending on the part of the public. That was the advice given by the eminent economist attached to the Department of Finance when he said that a purchase tax would have an immediate reaction on sales of Irish products and probably in the end would have an inflationary effect on wages and the cost of living.

That is commonsense. Let us go back over the years to a tragic period in Irish history, to 1845-46. I am not suggesting for a moment that the Minister or any other member of the Government would wish for a repetition of what happened then but at that time shiploads of produce, of food, left the quays of Cork and other parts of Ireland. Apparently, the policy then was: export, export. The tragedy of it was that the export of food meant starvation for the people at home.

We are faced with the same position, perhaps, in a miniature way. Nevertheless, if the members of the community are not to spend, if they must keep within a minimum diet and at the same time we are to export, will it not ultimately mean a further reduction in employment for our people at home? Will it not ultimately mean a lowering in the standards of living of those who remain at home except those who can avoid heavy surtax?

I do not intend to refer to all the impositions on the various sections of the community which have been mentioned here over the last fortnight, but there are some to which I shall refer. First of all, there is the imposition on the family. The Minister made it quite clear that nothing is being given to the man with a wife and two children. If he gives them nothing and there is a tax of 2½ per cent and, perhaps, a lot more on the items they buy, who is at a loss there? Surely the family suffers by it? That is not what we would expect from a Minister for Finance in 1963.

Mr. N. Egan

Is the first child not getting 10/-?

Mr. Desmond

The Minister for Finance stated: "I did not say I was giving him"—that is, the married man with two or three children; that means the first one.

Mr. N. Egan

There must be a first one.

Mr. Desmond

If they were identical twins, it would be hard to say which was the first. Nevertheless, the Minister stated: "I did not say I was giving him anything"—meaning the father with the two or three children. That is at column 195 so I am not trying to twist the Minister's words or say something that is not based on fact. In regard to the turnover tax, even if it is only 6d. in the £ we all know that in rural areas and, I presume, in the cities, a very large percentage of families buy different items at different times. Sometimes they will buy 20/- or 30/- worth and another time it will be 2/6d. or 1/- worth. How then will this 2½ per cent tax be collected? I have here a small cutting from the paper—a Cork paper, of course, the Evening Echo of last Saturday night—the heading of which is “More Farthings in Circulation”. Then we read: “There were 5,857 farthings in circulation in the Republic on 31st March last. This is ten more than in the corresponding period last year.”

Now, we have 5,857 farthings in circulation. Divide them between all the shopkeepers. Give each shopkeeper his share of farthings so that he will not overcharge his customers. How does it work out? I am afraid I cannot do it. I shall have to leave it either to the Minister for Finance or to his computers.

There may be an alternative. I suppose these farthings were minted abroad. The Taoiseach believed in the subsidisation of industry but we have not reached the time when farthings can be made here. Therefore, perhaps we shall have something like this—a little bit of paper issued in the shops in Dublin which is credit for a farthing. When they charge 8½d. for something that should be 8¼d., you will be handed a little piece of paper like this. Just picture the housewives of rural Ireland going around with a bag of little papers which are marked "Credit for a farthing." Meantime, we must await an increase in the number of farthings in circulation, if the 2½ per cent tax is to work out in the manner envisaged by the Minister.

Again, the family is handicapped. We all know that every family whether in Dublin, Cork city or any part of rural Ireland, has to pay rates and we all know that the rates will have to go up. Machinery purchased for use by local authorities will carry the 2½ per cent tax. Materials for roadmaking, when sold to the county council by retailers—whether or not they term themselves contractors—must carry the 2½ per cent tax. All that means an increase in rates.

Likewise, there will be an increase in rates because of the effect this tax will have on health charges— hospitalisation, the cost of clothing, bedding, food, medicines, drugs, and so on in hospitals. Who will pay all that? The Minister may say that a certain percentage of the community will be able to gain through this turnover tax. The Labour Party supported the Health Act. Under that Act, certain people may get free treatment in hospital. However, let us not forget that the Minister for Health decided to increase the charge for X-rays. I do not want to enter into a discussion which would be outside the borderline of the debate; I just touch on the fact very briefly. In addition to such impositions by Fianna Fáil Ministers, there will be a 2½ per cent tax which will, in turn, mean an increased burden on the community through rates.

Take what is called the free footwear scheme. Take the 3/- or 4/- under that scheme The unfortunate people who must avail of it will now have to pay on that, too. They will go in with their coupon and they will have to pay the 2½ per cent tax.

I have in mind another section of the community who will be handicapped by reason of this tax. I know a man in Cork city who is a milk vendor—he is one of many. Up to some years ago, he was able to buy loose milk out in the country. Now, of course, that system is stopped and all milk must go through the pasteurisation plant in Cork. That man is allowed 1d. per pint or 8d. a gallon on the sale of milk. Out of that, he must pay all his overheads—the running of his van, tax, insurance, and so on. He must pay a young lad who is a helper and he must also keep his wife and six children. He is one of those who, the Minister says, will not be passing on the 2½ per cent; the retailer can carry the burden.

Can a man with an allowance of 1d. a pint for milk from a firm making colossal profits and which, because it is wholesale, will escape the 2½ per cent, carry on without trying to impose the 2½ per cent tax on his customers? Can we not be realists in all this? If we want to defend something, let us be honest. Let us not try to put such an imposition on such a man—and he is only one of many. At the end of the week, when he has to pay for his total supplies, he will have to pay the 2½ per cent to the Government, by virtue of this wonderful electrical computer, on total sales. He must do that although he has only 1d. on each pint to clear his whole way. Is that fair on these people?

The Minister mentioned building. He said bulk sales of certain items will be exempt. We do not know what those certain items are and we do not know what "bulk" means. A small builder can go into a timber yard in Cork and buy a certain amount of timber, slates, and so on. Will the "bulk" be based on cost or will it be based on certain items in the construction of the house? We do not know that. We do know, however, that by virtue of the imposition of a levy on any materials in connection with building, there will ultimately be an increase in cost on the family who are building a house privately, who are getting a builder to do it. It will involve a further imposition on the rates because of the higher cost of building local authority houses.

This is the first time the Taoiseach has ever showed any doubt about statistics. Hitherto, he had great faith in them. Some of us may have had doubts from time to time, but the Taoiseach never had. Now the Taoiseach has doubts because apparently, taking one set with another, they are not tallying too well for him in connection with unemployment or emigration. Without being sarcastic, I would refer him to the statistical expert of the Government Party—the Minister for Transport and Power— who undoubtedly is not over-busy, besides.

Two words frequently uttered in this House are "unemployment" and "emigration". In this connection, I do not accuse the Fianna Fáil Party any more than I did the inter-Party Government. All over the years, irrespective of what part of the House I spoke from, I tried to make my views quite clear in connection with Government policy on unemployment and emigration. We hear much talk about the setting up of commissions. If we tried to count the number of commissions set up, not alone by Fianna Fáil but by the inter-Party Government, we should get lost. I remember a question being asked here about the number of commissions and the figure given in reply was fantastic.

I suggest that another commission be appointed—a commission to inquire into the results of automation in this country. No later than last week, the newspapers carried reports of another industry being established here-more foreigners coming into us. We do not object to them if they give employment. What struck me forcibly, however, was their proud boast that everything would be done by automation. Could we have an idea of what way automation is affecting the workers? Some of us who are members of local authorities know to our grief what automation is doing. However, we do not know to what extent automation is helping or hindering industrial employment, especially in Dublin, Cork and Shannon.

An Leas-Cheann Comhairle

That would seem to be a matter for an Estimate rather than for a discussion on the Budget.

Mr. Desmond

The Minister said he would welcome any proposal to reduce unemployment. I am only asking him to help us by setting up such a commission. We have undoubtedly gone beyond the limit in regard to automation. It means fewer employed, fewer customers and more emigration, no matter what Government are in power.

There is also the innovation, especially in Dublin and Cork, of supermarkets. If I attack this system, it may be said I am opposed to people being able to buy the necessaries of life at lower cost. In case that is said, let me stress that I believe supermarkets are helping to cause unemployment. We know the supermarkets themselves are encouraging juvenile labour. We know that other members of the business community cannot compete with them. The fault lies with the Taoiseach and the Minister for Finance. Four or five years ago, we in the Labour Party appealed to the Taoiseach and the Minister for Finance not to do away with the Prices Advisory Body. So well may the Minister for Finance say, when questioned here last week, that the retailer may charge 40 per cent if he likes. The door was left wide open by the Government when they abolished the Prices Advisory Body. The Taoiseach and the Minister for Finance and others complained about the eighth round of wage increases. Did they not then realise, as they now admit, that the increased cost of living was brought about by what the Taoiseach used to call free trade—doing away with subsidisation? Now we have the supermarkets. We have more unemployment because prices have been allowed to become rampant through the inactivity of the Taoiseach—whether purposely or not, I do not know.

The Minister drew particular attention to tax evasion. There is one section of the community, however, who have not got away with a farthing, that is, the ordinary workers or white collar workers, on PAYE or otherwise. Statistical returns, which cannot be contradicted, clearly show they are the one section who have not got away with a halfpenny. There are other sections. The Minister knows them. There are many professional people who are being paid in cash with the result there are no bank returns. Is anything being done about that? As Deputy Byrne said, perhaps the Minister would consider it unfair to impose a surtax on them.

I always try to avoid bringing in personalities, but I wish to refer to what one Independent Deputy said. Deputy Sherwin is entitled to say what he wishes, but according to newspaper reports, he is horrified to find both the chambers of commerce and the Labour Party opposing this Budget. Because the Labour Party oppose it at the same time as the chambers of commerce, Deputy Sherwin thinks the Labour Party is all wrong. The simple question to put to him is this: if two men, one wealthy and one poor, are injured in a crash, does it mean the relations of the poor man should not sympathise because the wealthy man is injured? That is our position. If the wealthy are injured by this Budget, they will be well able to see after their own interests; but if the working people, the people barely able to make ends meet, are affected by this Budget, then it is our duty and responsibility to say that we will take their part.

One big item facing the country, irrespective of what Government are in power, is the national debt. When we speak of the national debt, we must include the enormous amount being paid in interest. No Government have yet had the initiative to decide that money be made available for productive purposes—water, sewerage and so on—at nominal rates of interest. If we have this heavy national debt on which we pay heavy interest, every one of us is contributing to it. None of us here is in the big banking class and the wealthy bankers gain while the country loses by this heavy national debt. As long as this heavy imposition is placed on the country by this small minority who have escaped surtax, so long will our national debt continue to be such a heavy burden that it will be an enormous problem for successive Governments. The banks escape this 2½ per cent tax; the insurance companies escape it. Therefore, the two wealthiest sections in the community escape while all the rest must bear it.

Reference has been made to foreign companies coming into the country. I do not wish to discuss the pros and cons of the policy followed by this Government or by the inter-Party Government before them on this question. We can, however, consider the Tánaiste's reprimand of Deputy Dillon on the question of foreign industries here. According to the Tánaiste all foreigners should be welcome here; they should be allowed to come in and make a good living. I read a few weeks ago of three American firms in the south-west getting grants for the establishment of industries. Every one of us is contributing to those grants but these companies have said that as far as they are concerned they are not in favour of their employees being members of trade unions, if they can avoid it. I want to say now that while we welcome all industries here and that while we will co-operate with them in so far as they provide employment in return for the grants they get, we will insist on Irish workers being treated fairly. I deplore the miserable wages paid to our workers by one or two of these firms.

Turning now to the question of our entry to the Common Market, the Tanaiste was probably right in January of 1962 when he said there would be no red carpet laid down for us to the Common Market. Why did the Taoiseach and the Minister for Finance not realise that then? What are they doing about it now? They are reducing tariffs while at the same time imposing taxes on purchases. Can they not take the Tánaiste's advice if they do not take ours? We were accused in this House of being saboteurs. Some people in the country who had retired from the Army found it suitable to say that those of us who opposed entry to the Common Market at the time, who mentioned anything in connection with such entry, who even asked for information on the implications of our entry, were either traitors to the country or ignorant of the facts. Who was wise then? We spoke of the difficulties that lay before us. I say again to the Minister for Finance that the problems in Europe will be difficult. The Tánaiste has said that the Prime Minister of a certain European country was wise in keeping us out for a while longer. I say to him now that the big problem confronting us is the welfare of our own people.

Do not forget the old saying that charity begins at home. Instead of continuing to fool ourselves with the belief that by sending officials and Ministers to various councils in Europe, we will change the face of Europe, either economically or politically. We are just a backwash as far as Europe is concerned. Our own people, however, are dependent on us—on Fianna Fáil, Fine Gael, Labour and Independents—to do what we can to see that our people at home will be first in our consideration, that we will provide for them a decent living at home in Ireland.

Mrs. Hogan O'Higgins

I rarely speak in this House and on this occasion I intend to be very brief. I feel I must say a few words on this Budget. It is a very subtle Budget. I imagine the Minister thought he could fool all of the people all of the time, but if he did, he greatly under-estimates the intelligence of the Irish people. During the past two weekends, I have spoken to a great number of people in my constituency and they all understand that the turnover tax will affect their pockets. Not only the small shopkeeper but the man in the street has that understanding of the Budget. Small shopkeepers have told me that this tax will wipe some of them out. Others feel that while they can weather the storm they greatly resent being turned into tax collectors.

Perhaps because I am a woman I look particularly at this Budget from the housewife's point of view. Because of this provision in the Budget, she will have to pay more for fuel, clothing, food and medicines. On clothing, she may be able to economise to some extent but on fuel and food and on medicines, she cannot. Is it not a shocking thing that a Government in this country would deliberately, by their actions, increase the costs of medicines? There are things we buy only when we have to but in many cases they are matters of life and death. Perhaps the Minister felt the increases in children's allowances, old age pensions and other social welfare benefits would pacify the people generally. They will do very little to alleviate the enormous extra cost involved in this turnover tax.

Mine is a rural constituency and I know that many people are terribly perturbed over income tax on agricultural incomes and on land rentings. I spoke to a young widow with three young children recently. She told me she cannot pay labour and, therefore, she sets or lets her land on the 11 months system. Now, for the first time, she is liable for income tax. Not only has she suffered the loss of her husband but now because of it she is taxed. Surely that is not fair or just? There are many people, several of them young widows, in big towns throughout the country who now for the first time find they have to pay tax on the rents which enabled them to eke out an existence.

What of the elderly retired people who have been living on very restricted incomes from dividends on stocks and shares? What will they do? The dividends have not increased yet the cost of living will increase because of this tax. Do the Minister or the Government care about them? It seems from his statement that the Minister for Finance does not care what becomes of these people. We are facing a by-election in Dublin North-East and I am quite sure the people there will give the Government an answer they do not expect. Since 1932, with the exception of a few years, people have put up with a lot from Fianna Fáil but with this Budget, they have sounded their own death knell.

Mr. O'Malley

Hear, hear.

Mr. Rooney

The implications of this Budget are so widespread that one cannot take one aspect of it and discuss it fully. One has to have regard to all the other aspects and try to take in the whole picture. First of all, the proposal in regard to corporation profits tax— about which there has been an outcry amongst those who have already declared their profits and paid their dividends—is to be retrospective. It is proposed to collect a further 50 per cent from those firms which have already paid ten per cent corporation profits tax. That seems to be unconstitutional. The year 1962 has been completed, whether you take it as ending on 31st December or 31st March, and profits have been declared and dividends paid. Now, however, it is proposed to go back to those firms and take half as much more from them. In addition, it is proposed to abolish the first £2,500 which previously was free of corporation profits tax and indeed has been free for the past 20 years. It is intended now to take this amount into consideration and to collect 15 per cent from the first £2,500 and indeed from the rest of the profits. If that amount was free 20 years ago, it means that at this stage firms should be entitled to profits free of tax up to £10,000 at least.

Most people who are familiar with the working of firms know that profits are used very carefully and judiciously. Apart from paying dividends to their shareholders and fees to their directors, they put aside a portion of their profits for capital development, for expansion, for equipment and for other purposes which enable them to expand and provide more employment. I consider that this proposal will immediately result in a falling off in the employment content of these firms. Certainly some of the firms which are only ticking over, if you like, from one year to another, will, when they get this bill for half as much more tax as they were liable for in 1962, be upset considerably and possibly they will have to postpone the purchase of modern equipment which they had intended to use for expansion and as an aid to providing further employment.

I have mentioned this matter first because I wanted to emphasise what appears to be blatant dishonesty on the part of the Government. They have been dishonest on many occasions, particularly with the public. We remember that before the 1952 Budget, the Taoiseach made a clear statement indicating that they had no intention of abolishing the food subsidies and that the public should not listen to the warnings of the then Government speakers that if Fianna Fáil got into office, they would abolish the subsidies. However, when they did get into office, they did abolish the subsidies. That was a case of blatant dishonesty. Here we have a retrospective raid on firms which in many cases have already paid corporation profits tax for 1962. I feel that the Government will find themselves in a court of law over this and that many people will challenge the right of any Government to legislate retrospectively in a manner like this. Those firms operated under the law of the land as it existed in 1962 and met their liabilities as they then existed. The year 1962, just as 1952 or 1922, is over and past and we are now in 1963. That is why I consider that the Government are being completely dishonest in their efforts to take this money from the firms. I do not believe that under the Constitution they will succeed.

This Budget has also indicated that bank managers will be compelled to give confidential details about interest paid on clients' accounts, which will enable the Government to calculate the amount of money actually on deposit. The bank managers are very careful about keeping their clients' affairs secret and there is no doubt that an inquisition will begin the moment the information is obtained from the bank managers and the Revenue Commissioners will be after the people who have this money on deposit to find out where it came from. Those people will be harried and hounded by the various tax collectors until they find out how these deposits were accumulated. When this process begins, we may have a considerable tightening up amongst the banks.

It is well-known that the banks participated in a great deal of the agricultural and industrial expansion in recent years because they were backed up by these deposits and felt safe in making the extra credit available. Compelling the banks to give out this confidential information may result in a tightening up of affairs and a drop in the industrial and agricultural expansion we have been hoping for. Under the proposal for increased corporation profits tax, the Government hope to get £3 million during the present year and in respect of 1962. It will be a colossal collection just by a stroke of the pen.

Deputy Byrne rightly mentioned that it is proposed now to collect tax from profit rents. Under this heading, it is proposed to collect £500,000. This is no small sum to collect from people who very often are widows and others depending for income on these rents.

The other highlight of the Budget is the turnover tax. I should like to quote the Minister's Budget Statement to show how comprehensive this tax is intended to be. It says:

The tax will in general include all retail sales and will apply not merely to expenditure on goods but also to expenditure on services with certain exceptions.

That shows what a blanket tax this is to be. It is intended to follow expenditure through every possible channel. In round figures the national income at present is between £400 million and £600 million. A very conservative estimate of the revenue expected from this turnover tax has been given but, in fact, it will affect almost the complete national income and it is calculated that something like £400 million will be subject to this 2½ per cent turnover tax.

The Minister indicated how he is going to balance his Budget for the present year. He began by saying he intended to raid the Road Fund and that he will save £400,000 out of Road Fund grants. That will have repercussions on every county council. He will follow that by saving £350,000 by avoiding the purchase of Army equipment and replacements. He is going to buy one helicopter this year. Apparently, he will let the Army carry on with obsolete equipment or none at all. He also intends to save £50,000 by postponing Garda recruitment although everybody knows, particularly in Dublin city where the population has been increasing rapidly, that there is need for extra Gardaí as there is also in Dublin county.

He intends to take credit for another £2 million out of the usual overestimation associated with the financial handling of Budgets from year to year. Thanks to PAYE he intends to save a further £2 million on reserve balances. In addition to those savings, the corporation profits tax and the rents tax will bring in £3.4 million. A further £3.5 million is to come from the turnover tax in the space of a few months. The Minister indicated that, over a year, the turnover tax would yield over £10 million. I do not know where the Minister and his advisers got that figure which is certainly very conservative and I think deliberately reduced.

All this is the culmination of 25 years of mismanagement by the Fianna Fáil Party. We have seen one crisis after another while they have been in office. The abolition of the food subsidies caused a great outcry but I think the outcry as a result of the proposals in this Budget will be no less. In the 25 years during which Fianna Fáil have been in office over one million have emigrated although they came into office saying they would have to get ships to bring back people to work in Ireland. More recently, we find over 300,000 people emigrated since Fianna Fáil took office early in 1957, only six years ago.

At the same time, we have an invasion of foreigners and the hot money is coming in very strongly as was shown when the figures were put together recently in this House. We have foreign financial manipulators moving in and buying our land and house property while Irish boys and girls are emigrating. In the past we had an invasion by force: now we have an invasion of money and a careful watch is necessary to ensure that the country will not be sold out to foreigners.

The turnover tax will absorb the eighth round of wages completely. In my Budget speech last year, I mentioned that PAYE would take approximately £5 million out of the eighth round but this sales tax will take the balance. A ninth round, and possibly a tenth round, of wage increases, can be expected when this sales tax begins to snowball.

I thought the Tánaiste made some very foolish remarks regarding the 1938 Trade Agreement. We all know the effects of that Agreement, particularly during the war. It was more of a surrender than an Agreement. During the war years, the farmers sold their cattle for "half nothing" under that Agreement and only when the 1948 Agreement came, were prices for Irish cattle brought up to a level comparable with the prices available to the British farmers who were buying most of our cattle. In addition to the terms of the Trade Agreement of that time, which put a straitjacket and shackles on the nation until the 1948 Agreement was negotiated, there was a sum of £10 million collected amongst the people. A loan was floated and £10 million was collected and paid up to John Bull at the same time as the 1938 Trade Agreement was signed.

"Grocers intend to do everything possible to prevent the implementation of this tax," they added. RGDATA call it a sales tax. It is a tax on expenditure, irrespective of what one calls it. It is significant that one of the few deputations received in connection with the proposed tax was a deputation from the Bookmakers' Association. Apparently the Minister had a little chat with them on this proposal. Actually, they seem to be contributing a fairly substantial tax as it is but, at any rate, the Minister received a deputation from them.

We have the comments, too, from the NFA. It is stated here: "The NFA body condemns the Budget as being negative, destructive extermination of the rural population. Farmers are annoyed by the attitude of the Government to agriculture as illustrated in this Budget." Only a few days after the one penny on the gallon was announced, and I remember when Deputy Dillon gave one penny on the gallon of milk; he was sneered at——

Mr. O'Malley

What year was that?

Mr. Cunningham

He took it off.

Mr. Rooney

He put it on.

Mr. O'Malley

The Deputy will lose another fiver. He never gave one penny a gallon.

Mr. Rooney

He did.

Dr. Ryan

He offered one shilling a gallon.

Acting Chairman (Mr. P. O'Donnell)

Order. Would the Deputy come back to the Budget now?

Mr. Rooney

After getting this one penny a gallon on milk, I see now that the milk producers have to contribute nearly £500,000 by way of levy to Bord Bainne. We know that most of the milk producers will be affected by this expenditure tax.

I was wondering whether the Minister has considered the effect of this proposal to seek information in relation to the deposits from bank managers. I wonder is that wise; I wonder is it justifiable. I do not think it is justifiable and the harm it will do our economy will far outweigh any advantage the Minister may have in mind.

In order to sweeten the Budget, the Minister proposes some increases for old age pensioners, for widows and orphans, and in childrens' allowances. Anybody who takes the trouble to calculate will see that these increases will be completely offset by the rise in the cost of living as a result of this tax on expenditure. When the inter-Party Government considered it necessary to take steps to correct the adverse trade balance of £62 million in 1956, they brought in the special levies. Those levies were much fairer than this proposed tax because they avoided essential foodstuffs such as bread, butter, tea, sugar, milk and flour. Those levies were brought in to correct the situation that was developing at that time.

Mr. O'Malley

That had developed. He should have brought them in in 1955.

Mr. Rooney

The adverse trade balance today is £102 million. In September, 1957, the Minister for Finance announced our economy was "now on balance again". That is proof of the excellent judgment of Deputy Sweetman in introducing the special levies on only 67 items. Care was taken to avoid any levy on items appearing in the list upon which the cost of living is calculated. There are nearly 200 items in that list. As a result of this proposed tax, thousands of items will be affected. So will services. I do not believe it would be possible for the Minister to put down in black and white a complete list of the items which will be the subject of this sales tax. At least when Deputy Sweetman was dealing with an adverse trade balance of £62 million in 1956, he was able to set down in black and white 67 items, which included umbrellas and lawn mowers, but this time, in addition to the umbrellas and lawn mowers which will be the subject of the sales tax, bread and butter will be taxed. That is the difference between the approach of this Government and the approach of Deputy Sweetman when he was trying to correct an adverse trade balance in 1956.

Under this scheme, corporation profits tax will be increased from approximately £4,500,000 to £7,750,000. That is a very steep rise just by the stroke of a pen and I believe that employment will be affected considerably. Firms must effect economies somewhere and certainly as far as the provision of modern equipment and replacements are concerned, some of these firms which are not so strong will find it very difficult.

There are other items I should like to mention in relation to the cost of living. Under this sales tax, there will be a tax of approximately 1/- on a pair of boots or shoes, apart from the tax that will apply to clothing, particularly children's clothing, which is a very large item in the family budget. It will be seen from the recent Book of Estimates that taxation has gone up by £55 million in the past six years under the Fianna Fáil Government and at the same time, emigration is continuing apace.

Mr. O'Malley

It was never lower.

Mr. Rooney

According to statistics, it was never lower but that is because there is nobody left to leave. Deputy Dillon mentioned that we would have to get ambulances and bathchairs to let the rest of those emigrate who have been emigrating particularly from the areas where employment and industry are not available.

It seems, too, under this Budget that any farmer who has a shop in addition to his farm will find himself in considerable difficulty. He will get very special attention from the Revenue Commissioners in regard to his farm. The farmer-shopkeeper appears to be a person who will be very badly affected here. Most of these people are in a small way. The shop seems to help to run the farm but now apparently the farm will have to stand on its own legs. It was a very great mistake on the part of the Government to devise this scheme. It will cause considerable hardship. It will not be any good for the nation.

Take, for instance, the suggestion that it will enable the Government to embark on a new Programme for Economic Expansion. The last Programme for Economic Expansion was designed by the former Taoiseach, Deputy Costello, and printed and published by Deputy Costello: that was in 1956. It was taken over in 1957 and operated by the Fianna Fáil Party. Now, they propose to start out on another five-year programme.

The last five-year programme was not a great success if we put against it the adverse side of the picture. Let us examine that programme and ask: "What did it achieve?". There are 60,000 fewer wage earners, for a start, under that programme. Some 300,000 people have emigrated during the past six years while that programme was being implemented. Taxation has increased by £55 million a year since that programme began. The population has declined since it began. The number of people in employment has fallen.

If we are to have another programme for the next five years that will be half as bad as that record, the Government should think again. They should revise whatever plans they may have and do the opposite to whatever they have been doing because results could not be worse. It was pointed out that that programme had increased the net volume of production four per cent one year, 3½ per cent another year and last year, of course, only 2½ per cent. When we put those small increases against the losses I have just mentioned, it is apparent that the programme which Fianna Fáil have operated since 1956 has not been a success. This Budget, and the hardships proposed in this Budget, should not be used as an argument in favour of giving a similar programme over the next five years a chance, considering that the programme operated during the past five years has had such very poor results.

Mr. N. Egan

The last speaker, in his opening remarks, dealt with the 1938 Trade Agreement. He seems to have an extraordinarily erroneous idea of the position before that Agreement and what it achieved. He said that, as a result, £10 million was wrung out of the Irish people and given to John Bull. He forgot to mention that we were paying £5 million a year before that by way of annuities.

Mr. Rooney

For a limited period.

Mr. N. Egan

This Budget will go down in the financial history of this country as marking a new departure in our taxation system. It must be clear to anybody who has made even an elementary study of last year's revenue returns and trends that the old reliables—beer, spirits, tobacco and petrol—can no longer be relied on to bear extra taxation or to yield increased revenue. The Government, faced with the position of having to close this gap of £6¼ million and realising that the traditional sources of revenue I have mentioned could not be expected to bear an extra burden, adopted this new system which is called a turnover tax. The 2½ per cent or 6d. in the £ on turnover, together with another five per cent on corporation profits is estimated to provide the £6¼ million extra required.

Progress reported; Committee to sit again.

The Dáil adjourned at 10.30 p.m. until 3 p.m. on Wednesday, 8th May, 1963.

Dáil Éireann díospóireacht - Tuesday, 7 May 1963

Committee on Finance. - Resolution No. 14—General (Resumed).

Acting Chairman

Dáil Éireann díospóireacht -
Tuesday, 7 May 1963