Last night I was demonstrating the inadequacy of these allowances in present circumstances. These allowances were last fixed in 1960. Originally, I believe income tax was intended to ensure that those who had a surplus after providing adequately for their own needs and those of their families would contribute portion of that surplus towards the upkeep of Stage services. We seem to have gone a long way from that idea. The Minister and the Government must recognise that it is a bit unfair, to put it mildly, that the single man should be taxed on anything he earns over and above £6 per week. It would be valid for me to argue, I think, that rather than putting that person under an obligation to contribute to the running of State services, the State and the community should be under an obligation to give that man a better income and a better standard of living.
I do not think £312 free of tax is any longer real, particularly when one remembers that this amount was fixed in 1960. If we have regard to the increase in the cost of living since 1960, this exemption level should be raised to something like £400. These allowances have certainly not been adjusted side by side with the increase in the cost of living. The average growth rate in the economy since 1960 has been four per cent. This means an increase of 25 per cent over the period; in relation to that increase, the exemption level should be something in the region of £390. It must be abundantly clear that £312 as an exemption level for a single man is a ludicrous figure. The allowances for a married couple were fixed approximately six years ago.
I want to give an example now of a single worker who is required to pay income tax. Deputy Tully will correct me if I am wrong. The average wage of a farm worker is £7 10s per week. He gets £390 per year. When one takes the personal allowance, the earned income allowance, and makes a deduction of £20, say, for other allowances, such as working clothes and social welfare contributions, one finds that that worker is taxed on £38 per year. If you make that figure £39, it means he is paying approximately £13 per year income tax. Under PAYE, he pays every week out of his £7 10s five shillings income tax. It is generally accepted in the House, certainly it is protested from the ranks of the Labour Party, that this average wage is too small, not perhaps so much for a single man as for a married man with family responsibilities.
I do not think I need pursue the argument in respect of these allowances because all these arguments have been dealt with pretty fully in the report to which I referred last night. That report, published in 1962, made very positive recommendations with regard to these allowances. I do not know whether the Government have accepted these recommendations in principle or accepted them in the hope that they may be implemented at some future date. I think the time is past when these recommendations should be both accepted and implemented by the Minister for Finance and I hope that he will take steps to implement them in his forthcoming Budget. Recommendation 36, which says that the personal allowance for a married man should be at least twice that for the unmarried, does not need any argument. It seems ludicrous that a man and his wife should have less by way of allowance than two single people living together.
Our motion is in accord with the recommendations of the Commission. That Commission recognised that these allowances were unreal and unfair, particularly the allowances for the family man with children. They recommended that these allowances be adjusted.
I believe they should be adjusted in such manner that greater emphasis would be laid on those in the higher income groups and on the wealthier classes. It has often been protested here by the Taoiseach that we have no people of real wealth in this country. A former Minister for Finance in the Fianna Fáil Government brought in regulations to allow the Revenue Commissioners to introduce tighter controls to prevent evasion and, above all, the avoidance of tax. There are so many loopholes in the income tax code that there are some people who avoid rather than evade the payment of income tax, and do that within the law. There are many examples of this, the expense account and so forth. On the other hand, we have the agricultural worker with £7. 10s. per week who cannot avoid the demand made on him and the payment of tax at the rate of 5/-per week. We want to make sure now that the weight of taxation will not be as heavy on those with reduced incomes. That was the viewpoint of those who made the recommendations in this report and I trust that not alone will the Minister accept the principle enshrined in our motion but that he will have due regard to the recommendations to which I have referred.