I move:
That in view of the widespread public opposition to the turnover tax, the Dáil is of opinion that the Government have lost the confidence of the people, and, therefore, considers that they should resign forthwith.
The Labour Party have tabled this motion because they believe it is in the public interest that such a motion should be tabled. The Labour Party further believes that it is the desire of the public that the turnover tax should be tested by the vote of the people. I want to make it clear from the start that as far as the members of the Labour Party are concerned, the opposition to the Government in their policy in relation to the turnover tax which they express in this motion is not merely opposition for opposition's sake.
It is hardly necessary for me to say that the Labour Party while in opposition have never engaged in the policy of opposing merely for the sake of opposing. We have on many occasions, even within the lifetime of this Dáil, voted with the Government on measures which we believed coincided with the policy and views of the Labour Party. On the other hand, we had no hesitation in opposing the Government on measures with which we violently disagreed and which were in contradiction of the Labour Party's policy. Our opposition in this matter of the turnover tax is not motivated by hatred or spleen arising from past events, nor do we intend, nor is our motion motivated by any intention to cause disruption or mischief. It is not so intended because we considered this deeply and at length before we did decide to call for the Government's resignation to try to ensure that the matter of the turnover tax would be put before the people for their decision.
Our motion is directly related to the turnover tax and I want to say straight away that we challenge the right of the Government, a minority Government, to impose this tax in face of the over-whelming opposition of the people. They are a minority Government who are always supported by some independents.When this turnover tax was introduced in the Budget last April, we were astounded that such an unjust and inequitable tax should be imposed on the general public. During the discussions on the various Budget Resolutions, and on the various stages of the Finance Bill, we in this Party endeavoured to have this tax withdrawn or amended drastically, but, as is known, our efforts were of no avail. The Government spokesman said they had no intention of withdrawing this tax and what is more peculiar still, they failed to give any indication whatsoever that they would agree to amend it, even in the most trivial way. It seems that in a dictatorial manner the Fianna Fáil Party were determined to put this tax through, even though they were a minority Government, dependent on the votes of two Independent members of this House. Worse still, they were determined to put through this tax despite the obvious strong feeling of a majority of the people.
In all this matter, it seems that the views of the people have been ignored by the Fianna Fáil Party, nor were the Party impressed in any way by the spontaneous opposition of the people. One remarkable feature about the feeling of the public in this matter of the turnover tax is that none of the demonstrations, none of the statements by the various organisations, was prompted in any way by any of the political Parties on this side of the House.
A description of the turnover tax has been attributed to the Taoiseach, the description of a bitter but wholesome pill. Needless to remark, a bitter pill is not necessarily a wholesome pill and if this is a pill to improve the nation's economic health, I would suggest that the Taoiseach and his advisers have made the wrong diagnosis completely and, having made the wrong diagnosis, proceeded to prescribe the wrong cure. This bitter pill which is wholesome — the phrase used — as a description of the turnover tax, could well, in my opinion and the opinion of the Labour Party, kill the patient.
We are not impressed, nor are the people impressed by the fraudulent attempts to justify this tax. The Minister for Finance made a speech on Saturday night in Dublin city and in his attempt to justify the turnover tax said that the abandonment of this tax would mean the abandoning of economic progress. He said that the adverse balance of payments would provide a bigger difficulty than now, that there would be higher unemployment, higher emigration, et cetera. Our memories are not so short that we can forget this day week when the Minister of Finance got the approval of this House for raising a loan of £25 million to be devoted to industrial and agricultural development. In his own words, this £25 million would be used to develop agriculture, industry, housing, sanitary services, schools, forestry, fuel resources, transport and the like. Surely we had a Capital Budget this year which in itself provides for industrial and agricultural development and general capital development?
We refuse to believe, and it has been impossible for the Taoiseach and the Ministers of his Government to convince the people and us, that our economic development is dependent on the taxation of tea, bread, butter, sugar and flour and all these foodstuffs. We refuse to believe it is necessary to tax all these essentials of life so that we can have economic growth in this country. It is ludicrous for the Government spokesmen to present the turnover tax in that guise. In any case, we were assured by the Taoiseach on many occasions that all the money that was needed for capital development was there. He said that if there was a worthwhile project, whether in agriculture or in industry, nobody need worry about the money and in saying that on many occasions, the Taoiseach never once referred to the fact that it would be necessary to get that money by way of taxing essential foodstuffs and other things. Now we are told that our economic progress is dependent on the pill of the turnover tax and it is necessary to tax such things as matches, lollipops, sweets, medicines and such articles.
The Minister for Finance was also reported in his speech of Saturday night, in his attempt to justify the turnover tax, as telling his audience, and incidentally the public generally, that the burden of taxation as between tax on profits and expenditure is equally divided. That is misleading. What he said in respect of this year is true, that the turnover tax this year up to 31st March will realise something like £3½ millions to £4 millions. It is true to say that the tax on profits and a few other things will amount to somewhat the same, £4 millions. The burden of taxation may be equally divided this year. It is equally divided because the tax on profits is a tax on the whole year. The turnover tax operates from 1st November to 31st March, but the burden will not be placed equally on profits and expenditure next year when the proportion will be £12 millions as their income from the turnover tax and £4 millions from a tax on profits and a tax on the income from rents.
Therefore, this is deceit on the part of Government spokesmen in an effort to pretend that all sections have their equal share of the burden of taxation. Such is not the case. In any case, as I acknowledged before, the Government have been pretty explicit with regard to their broad policy on taxation. They have said on innumerable occasions in the past 12 months that their policy is to shift the burden from direct to indirect taxation. I have said that as far as the Labour Party are concerned we oppose especially that basic principle.My interpretation of that is that the Government's intention is to lessen the tax on wealth and high incomes and to increase the tax on the public in relation to practically everything they buy. That policy is demonstrated in their surtax demand.
This Government, in their effort to shift the burden from direct to indirect taxation, have decreased the rate of surtax in recent years and increased the level at which surtax is paid. I was amazed yesterday to hear, I think, the Minister for Finance in reply to a Parliamentary Question, say that the numbers of those paying surtax had fallen from 10,000 about five years ago to 4,000 now. Is it seriously suggested, therefore, that that is an example of an equitable distribution of taxation? The Government have, in effect, thrown away money — granted, not a lot of money but it is something that would add to the finances of the country.
The stock justification for the introduction of the turnover tax is social welfare. I would say that that, also, is designed to deceive. It has been represented by members and supporters of the Government, that if the turnover tax is not introduced, then those who vote against the turnover tax are depriving old age pensioners, sick people, unemployed people, widows and all those in receipt of social welfare benefits of the increases proposed in the Budget.
Will any member of the Government tell us if all this money will go to social welfare, as has been represented by some of their spokesmen? The Government want to give the impression that their policy in the past two or three years has been to increase social welfare benefits. I acknowledge the increases that have been given. I gladly acknowledge that in the past four, five or six Budgets some increases have been given to the Social Welfare Vote. But, then, Fianna Fáil speakers always told the House when increases were sought that, as more money came in, more would be spent on social welfare.
Fianna Fáil speakers, whilst in Government, agreed that the social welfare benefits were low and should be improved. But they said — their Ministers for Finance and Social Welfare and the Taoiseach said — in effect: "If we get more money by way of tax revenue, we shall devote more money to social welfare." They have not done that; they have not done that particularly this year.
I want to refer the Taoiseach to Table 3 in the pre-Budget Tables issued to members of this House. In 1961-62, total Government revenue amounted to £151.7 million: £25.7 million was devoted to social welfare, representing 16.9 per cent. In 1962-63, total Government revenue amounted to £163.5 million; £27.9 million was devoted to social welfare, representing 17.1 per cent. That was an increase of .2 per cent. However, in 1963-64, it is estimated, according to Government sources, that the total tax revenue will be £181.6 million and that, of that, £13.6 million will be devoted to social welfare — representing 16.9 per cent of total Government revenue. These figures — the Government's figures — demonstrate to me that, at a time when they are asking taxpayers to pay so much, the recipients of social welfare benefits are getting a smaller share of the cake.
As I have said before, we had been led to believe by the Government that if they got more money, they could afford to devote more money to those in receipt of social welfare benefits. I acknowledge what has been done this year in respect of the increases. However, I remember times when Governments introduced new taxation in order to get, say, £1 million, £2 million, £3 million or £5 million and in most of those situations, certain increases were given to those, say, in receipt of old age pensions.
I remember when extra taxation was raised and when, after the Budget was balanced, there was a surplus of £1 million or £2 million. We now have a situation where the Government propose to raise £16 million, £17 million or £18 million and still there is the same old 2/6 to the old age pensioners. Therefore, if this turnover tax is intended, as it has been represented, to do much more for recipients of social welfare benefits, I hold that more than the 2/6 should have been given to those in receipt of old age pensions.
It has been suggested, as well, that the withdrawal of the turnover tax would retard economic growth. We are supposed to be frightened by these announcements by the Taoiseach and various Ministers of the Government. I suggest that the introduction and operation of the turnover tax could do serious damage to the economy and that the Government will be held responsible.
It must be recognised that there must be wage and salary increases as a result of the introduction of this tax. We were told of the concern of many of the Ministers of the Government about the eighth round of wage increases.We heard allegations by them as to how it damaged the economy. We were warned that if the trade union movement looked for a ninth round, or were unreasonable in looking for wage or salary increases, great harm could be done to the economy. Here we have a situation in which, by deliberate act of the Government, prices will be increased to such an extent that there will have to be a ninth round as far as wages and salary increases are concerned — and this will not be the responsibility of the trade union movement or of the National Industrial Economic Council.
Everybody recognises that in view of the introduction of this tax, with the consequent increases in prices all round, wage and salary earners will have to compensate themselves for the increase in the cost of living that will undoubtedly come, because they are not prepared, nor should they be expected, to accept a lower standard of living with the introduction of this tax. It is very difficult to assess the effect on the cost of living index figure of the introduction of this tax. It was naïvely suggested at first that it could not be any more than 2½ per cent. The Taoiseach said in this House on one occasion, either in June or in April, that the traders would absorb, if not all, part of the 2½ per cent. In view of recent announcements, in view of recent positive increases by traders, there is certainly no evidence that traders or others will absorb any part of the 2½ per cent turnover tax.
We asked the Minister for Industry and Commerce and we asked various spokesmen of the Government during the debate on the Budget if there would be price control. As far as I can gather, the policy of the Government is, and always has been, that they should not interfere at all in prices: that, by dint of competition, prices would find their own level and that, by dint of competition, not alone would the 2½ per cent turnover tax be absorbed but there would be a greater incentive to traders to compete, to such an extent that maybe existing prices would be lowered.
I gather that the Government are totally opposed to price control. They went through the motions of pretending to have convictions arising out of price control when they introduced the Prices Act, 1958. As far as I can gather, that Act was put into some pigeonhole and has not been taken out for the past five years. There has never been an investigation of prices, under this Act, within the past five years. Must we accept, therefore, that the Government's view has been that all price increases in the past five years have been justified? Was there ever a single instance where the Government or some of their agents decided that an increase had to be investigated? The Prices Control Act, 1938, was not anything like what the Labour Party wanted at the time, and they told that to the Minister for Industry and Commerce in no uncertain terms when the Bill was going through this House. In any case, we accepted it for what it was because it was the decision of this House. The Irish Congress of Trade Unions assured the Minister for Industry and Commerce and the Government of their co-operation in respect of the limited price control machinery and accepted the invitation of the Government to nominate some of their members to act on these investigation committees.Not once was any member of Congress on these committees invited to act in respect of any price increase. So much so that in the past two years, Congress, representing hundreds of thousands of workers, have refused to nominate anybody, thus showing their utter contempt of Government policy — or should I say, lack of policy — in respect of price control.
Even with the introduction of the turnover tax, with the evidence the Minister must have in his Department, with the evidence he sees daily in the newspapers and in the shops, of price increases, there still seems to be a reluctance to exercise any sort of price control. The Minister was questioned in the Budget debate and he said he did not see any necessity for price control at that time. He said weakly that, if he thought there were circumstances in which he should intervene, he would intervene. Last week, he had questions from various members of the Labour Party and other Opposition Deputies asking him if he was prepared to investigate the increases that had taken place in the prices of certain articles over the past few weeks. Again, he seemed very reluctant to do anything. He made a weak threat to people that, if they carried on like this, he would be forced to do something. He did not seem to me to be very positive about it or to be very strong in his desire to see there would not be undue increases in prices.
Then we had this milk-and-water statement from the Minister through the Government Information Bureau last week. It was a pathetic plea to manufacturers and industrialists to explain their increases. I never saw a weaker statement in all my life. He wanted the industrialists to tell the people how the increases were made up. Of course, they could tell them, but the Minister did not say whether or not he would accept the explanation given by these people or, if dissatisfied with them, that he would have the price increases investigated.
The Minister for Industry and Commerce does not yet seem to believe that there have been price increases in recent weeks, increases agreed among certain groups, increases that will not be the subject of any competition but will be permanent because groups of traders in this or that business have met and agreed that the price of articles will be increased in all cases by much more than 2½ per cent. Yet the Government refuse to act in a case like that and expect the workers to restrain themselves as far as wage increases are concerned. Many of the increases in the prices of foodstuffs in recent weeks have been described as increases in anticipation of demands for increased wages. As a result, some of these increases have ranged from five per cent to 7½ per cent and ten per cent. It is inevitable that workers and salary earners will look for increases to compensate for these increased prices, and we all know the traders will then put on a further increase to compensate for the wage increases negotiated.All this will be the responsibility of the Government and will happen despite the best intentions of the members of the National Industrial Economic Council. If, as the Government say, they want an orderly pattern of wage and salary increases, they have certainly gone the wrong way about it with the introduction of the turnover tax.
The main general plea of the Government seems to be that the money is needed. I can see that it is needed for certain things, but the Government's policy as far as taxation is concerned seems to be to get the money by hook or by crook, on the principle that the end justifies the means. A Government's job is not that simple. The end-product is desirable, but the means must also be given equal consideration. I should like to ask the Taoiseach — I am sure he has the information available to him and I have not — how many countries in the world tax food. How many countries in the world tax bread? Bread, which is regarded as the bare essential of life, is taxed by us in this country. Yet we go abroad and tell certain well-heeled businessmen how prosperous the country is and how prosperous it is going to be, but never tell them we have to tax the bread, butter, tea, sugar and flour of the ordinary people.
The Taoiseach must remember it is only a few years since the Fianna Fáil Government found it desirable to subsidise tea, bread, butter, sugar and flour to the extent of £12 million or £13 million. Has the standard of living and have earnings so improved that we now should find it necessary to tax these same commodities — that from subsidising them to the extent of £12 million or £13 million, we should now tax them to probably the same extent, apart from taxing clothing, footwear, household utensils, hire-purchase transactions at 2½ per cent, or more when it is reflected in the price?
The Government say it is a sound policy to tax expenditure. What sort of expenditure do they mean? They say it is sound policy to tax expenditure in order that the people may save. Are the people expected to save by reason of a tax on bread? Are the people expected to deny themselves bread and meat in order that they may save? Surely that would be false economy, so false that even the Minister for Health, as Minister for Health, would recognise it would be very bad policy to tax the people in respect of commodities so essential to life. Is it sound policy to tax food and medicines at the rate of 2½ per cent and, at the same time, to tax at the rate of 2½ per cent motor cars, jewellery, furs, expensive clothes and luxury electrical appliances? Surely that sort of tax could not be equitable or just—to make the loaf of bread subject to a turnover tax of 2½ per cent and a Jaguar car subject also to the same percentage of tax?
Medicines are taxed. Is the Government's general policy to tax medicines, medical appliances and drugs on the principle that if there is a tax on expenditure, people will save more? Does the Taoiseach know that while medicines are taxed, veterinary medicines are not? If a member of the family, boy or girl, wife or husband, is sick and gets a prescription from the family doctor and presents it to the chemist, he or she is expected to pay 2½ per cent or more, and this in order to ensure that a child will be cured of a heavy cold, pneumonia or other disease or illness in order that we may develop our agriculture and industry. If, however, somebody buys veterinary medicine in bulk to cure a pig, a cow or a horse, there is no turnover tax and this is an equitable and just tax! If one wants to buy medicine for greyhounds to ensure that they will go either faster or slower, there is no 2½ per cent tax but if you want to cure pneumonia or rid a child of disease, you are subject to 2½ per cent or, as will happen, much more than that.
How can the public be expected to consider that these bitter pills are wholesome? The Government do not want to talk about these things. They prefer to be doctrinaire and speak broadly about industrial and agricultural development, the adverse balance of payments and investment abroad and at home. The people are concerned about the things I mention, and which Fianna Fáil will not talk about: the price of butter which we are told through the newspapers is to be increased by twopence a lb.; the price of sugar which it is announced will be increased by ½d. a lb.; the price of tea which is to go up 4d. a lb.; the price of soap which is to go up 2d. a lb.; and coal which, it is reported, is to be increased by £2 per ton and that £2 per ton will apply to tens of thousands of tons of coal imported about six months ago and are now to make a profit for those who brought them over and above the normal.
Petrol is to go up by 1½d. per gallon. The people are concerned about these things and it is just a bit too thick for us to accept, as the Minister for Industry and Commerce tries to tell us, that all this coincides with the increase — say, in respect of soap — in the cost of raw materials. Cigarettes are to go up by 2d. per packet; the pint and the bottle of stout by 1d. to 2d.; whiskey, by 2d. per glass.
Yet the Minister for Finance in his Budget speech said very definitely that, in his opinion and that of the Revenue Commissioners, all these things have reached saturation point, meaning that if taxation were increased any further, consumption would go down. Now the Minister for Finance, the Minister for Industry and Commerce and the Taoiseach do not seem to be concerned with the fact that these articles are being increased in price. The 2d. on the packet of cigarettes would give, I think, over £2 million, perhaps £2.5 million, but the Government do not want that money. The ld., as far as I am aware, yields about £1 million on cigarettes and tobacco but the Government would get only 2½ per cent. Where would the remainder go? Are the Government prepared to throw that away to traders and manufacturers? I think it was daft for the Minister for Finance to talk of these things reaching saturation point. Those who want to smoke will continue to do so and pay the extra 2d. and, in my opinion, it would be far better that they should pay it to the Minister for Finance to do certain things with which the economy of the country is concerned rather than put extra profits into the pockets of those who deal in cigarettes.
We are reminded, as if it were something new, by the Minister for Finance that as far as the people are concerned, all taxes are unpopular. We know that: nobody wants to pay more no matter what section of the community he belongs to, but surely a tax on all things is a bit too thick and is something which I am sure the backbench members of Fianna Fáil do not support. A significant thing about the turnover tax is that while the Taoiseach has energetically defended this tax and behaved energetically in other directions and while some Ministers have attempted to defend the tax in a broad way, I have not heard any defence at all by those in the back benches. Whether that is loyalty, mistaken loyalty, or sheepishness, I do not know, but if this were a good thing, if it were all the things it is claimed to be by the Taoiseach, the Minister for Finance and the Minister for Industry and Commerce, the backbenchers would be on their feet week after week in its defence.They do not defend it because they do not believe it is just and equitable.
The Taoiseach in accordance with his own peculiar strategy, proposes an amendment to the motion put down by the Labour Party and there we have expressed in the first line or two the Taoiseach's usual indignation, the usual Simon Pure attitude — everything that is good is on that side, everything that is pure. The interest of the nation is on the Fianna Fáil side; they are the custodians of all things progressive, all things national, and anybody who attempts to put down a motion such as we have down, is irresponsible and mischievous.
There is also contained in this amendment an allegation or insinuation that we in the Labour Party with other members of the Opposition opposed every proposal in the Finance Act, 1963. The Taoiseach knows that is "cod": we did not. The Taoiseach knows, and the Minister for Finance knows particularly, that we approved, as did members of other Parties, the continuation of the taxes already there. We supported vocally the corporation profits tax and we were prepared to walk into the division lobbies with Fianna Fáil, if there was a division on that matter, and we said that. We supported the increase in the tax on profits from rents vocally and expressed our willingness to vote with Fianna Fáil if a division were called for. We also strongly supported vocally the proposals by the Minister for Finance and the regulations to prevent tax evasion and this to the tune of £4 million which incidentally would exactly pay for all the social welfare increases proposed to be given in any 12 months.
The Taoiseach has his own strategy and he is long enough a member of the House and the Government to be able to employ the best strategy, but I would describe this amendment as the last throw of a desperate gambler. I do not know if he means to be deliberately deceitful but this amendment in which he alleges irresponsibility and so on on the part of the Labour Party is something that the public certainly will not accept from him. I suppose the Labour Party do not come into that. It is silly, I think, for the Taoiseach to suggest also in his amendment that agricultural and industrial development is dependent on the turnover tax. If that is so, will he say in his reply how much of the turnover tax is to be devoted to capital development?
The Taoiseach says he is determined not to go to the country. Who does he expect to applaud him for saying that? There is no particular merit or virtue in the Taoiseach being determined to hang on to office, in view of his slim majority, or what may turn out to be tonight no majority at all. Of course he is determined not to go to the country. Again, as if there were some merit or virtue in it, he says he will not walk out on the job? Who does he think he would be displeasing if he walks out on the job? As far as I know, the consensus of opinion in the country is that people want the Government to be tested; they want to have an opportunity of passing judgment on the Taoiseach and his colleagues and on Government policy.
The Taoiseach seems to think, as some of his predecessors seemed to think, that he and his Party have a divine right to rule. As I said earlier, they seem to imagine that nobody else has any interest in this country, that nobody else is nationally-minded, that all these virtues are enshrined in the hearts and minds of the Fianna Fáil Party. I think it is shameful that the Taoiseach has stayed on so long in view of the many adverse decisions given against him in the past six or nine months. The Labour Party did not win the Dublin North-East by-election. Neither did the Fianna Fáil Party. The Fine Gael candidate won the election; but whether it was the Labour Party or the Fine Gael Party won it, the decisive factor in that election was the rejection of the turnover tax.
