Dáil Éireann díospóireacht -
Wednesday, 28 Oct 1970

Vol. 249 No. 1

Financial Resolutions. - Financial Resolution No. 1: Wholesale Tax.

Minister for Finance (Mr. Colley)

I move:

(1) That, with effect on and from the 1st day of November, 1970, wholesale tax imposed by section 2 of the Finance (No. 2) Act, 1966 (No. 22 of 1966), shall, in the case of the goods specified in the Table to section 7 (1) of that Act, be charged, levied and paid at the rate of twenty per cent and that, accordingly, "twenty per cent." shall be substituted for "fifteen per cent." in the said section 7 (1) with effect on and from that date, and "twenty per cent." shall be substituted for "fifteen per cent." In section 11 (1) of that Act in respect of articles imported on or after that date.

(2) It is hereby declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1927 (No. 7 of 1927).

Mr. Cosgrave

Can the Minister state if this takes effect from 1st November with regard to purchases made after that date?

Mr. Colley

Yes, on transactions which occur on and from that day.

Mr. Cosgrave

What is the estimated yield?

Mr. Colley

£0.9 million in this year.

Mr. P. Belton

Surely it is £20 million for the year?

Mr. Tully

The Minister is apparently unaware that motor cycles and scooters are used by workers very frequently. There is a wholesale tax increase on these.

Mr. Colley

Yes, wholesale tax.

Mr. Tully

Is the Minister aware that these are not luxury articles? Throughout the country, if not around the city, where there is no public transport available lowly-paid workers use motor cycles and scooters for the purpose of getting to and from work. They get no income tax remission for them. I pointed out to the Minister previously that I felt he had never had the doubtful pleasure of having to travel to work on a motor cycle or scooter. If he had, he would have much more consideration for their users. It is a shame that these vehicles should be included in this. In addition to that, there is the question of the cheaper type of car. Does this include secondhand cars as well as new cars? Surely the Minister is aware that the practice for a group of people travelling long distances to work is——

Mr. Colley

This does not apply to secondhand cars. This wholesale tax does not refer to them.

Mr. Tully

Does the Minister know that people have been travelling long distances to work and two or three people travelling such distances club together to buy a car to keep them off the tremendous list of unemployed in this country? If we have not got wholesale tax on secondhand cars, we have such tax on car replacements. Old cars are seen on the roads every day. People have to buy odds and ends to keep them running. In most cases they buy new parts and pay tax on them. I know Deputy Donegan will disagree with me, but I have no particular objection to a tax on yachts or racing cars.

Mr. Donegan

I am all right. I do not need another.

Mr. Tully

I would ask the Minister to have another look at this. The Minister should also consider the question of radios. In the 1970's people can say that TV is a luxury but I do not think radios can be classified as luxuries. Many people in this country at the present time are using radios because they cannot afford to pay for a television set. That may be amusing to those with fat salaries but it is not amusing to those with an old age pension.

Dr. Byrne

What about caravans? Are they classed as luxury items? This may apply in the case of the moneyed class. Many homeless people in Dublin and all over the country who are unable to provide houses for themselves can provide themselves with a permanent caravan. Has the Minister made any provision whereby caravans bought out of the necessity to house people, whether by local authorities or by individuals, are exempted?

Mr. Donegan

In the last week the Louth County Council have provided a caravan as a temporary dwelling for an old person. Is this caravan subject now to this further tax?

Mr. Colley

I presume that Louth County Council has already bought the caravan and it would not be subject to this. I am aware that there are people using caravans or mobile homes as their homes. I am also aware, as are the Deputies opposite, that the vast majority of caravans are used as luxury items. Many of them are hired out.

Mr. Tully

People cannot afford to go to posh hotels for their holidays and they use caravans for holidays.

Mr. Colley

On any financial proposal it is amusing to hear the efforts made by Deputy Tully. No matter what the proposal is Deputy Tully will show that the proposal is designed to "do down" the lower-paid workers. The Deputy assumes nobody else in the House knows the conditions of the poorer section of our community.

Mr. M. O'Leary

The Minister, for instance.

Mr. Colley

That is exactly what I mean. This kind of arrogance which we get from the Labour Party time and time again——

(Interruptions.)

Mr. Colley

The Labour Party need not laugh just because they have not been told so often that they are arrogant. Think about it and see what I mean. The vast majority of caravans are used for luxury purposes. It is not possible to make a distinction. In regard to the case being made about motor cycles and scooters Deputy Tully worked valiantly, as always— and I give him credit for that — and produced the argument about secondhand cars. They are not liable to this tax. The Deputy then spoke about replacements. They are not liable to this tax either. Then the Deputy went back to new cars and new motor cycles. Young people who are not very well-off use these. It is also true to say that there are plenty of people using both cars and motor cycles purely on a luxury basis. These are young people whose parents provide them with such things. The majority of people who use cars and motor cycles use them on what would commonly be accepted as a luxury basis.

Mr. Tully

That is not true in rural Ireland.

Mr. Colley

It is true of the majority of cars and motor cycles in this country. As that is so, we cannot have a distinction between them. The tax we are talking about is in existence and we are talking about an increase of 5 per cent. In my opinion what we have to do is try to raise revenue at this late stage in the year and within the constraints of which I spoke earlier. This is not an item which could be regarded as bearing down on the poorer sections of our community.

Mr. P. Belton

The Minister mentioned in his package deal something about controlling housing costs. Surely there are many items in the building trade which would be liable to this wholesale tax? Things like baths would be affected.

Mr. Colley

Not in this.

Mr. P. Belton

There are some building items which are liable.

Mr. Colley

None whatever in this Resolution.

Mr. Donegan

I should like to take the Minister up on the question of whether people use motor cars for luxury purposes. Let us think of a farmer with 50 to 60 acres of land who is running a dairy farm. Such a man might need a veterinary surgeon. The veterinary surgeon would have to go to the farm. He simply cannot do without his motor car. It is one of the necessary expenses he has to incur, although it is something he would like to do without. We can think of teachers who have to travel distances to schools because, through planning restrictions, they are unable to build themselves houses beside the schools. Most of those people regard a car not as a luxury but as a necessity.

Mr. Pattison

On the question of caravans, I suggest that the Minister very easily could distinguish between the people who have caravans for pleasure and those who own caravans because they cannot get houses. He should be able to amend his proposals to enable local authorities and recognised voluntary social service groups to be exempted from this tax in respect of caravans provided as temporary homes for people awaiting rehousing. It should be a simple matter for the Minister to amend his proposals to include such recognised groups who provide this very essential service. It has become essential to provide caravans temporarily for people awaiting rehousing.

Mr. Colley

The number of caravans used for such purposes is very small in relation to the total number and consequently the amount of the wholesale tax involved would almost certainly be only equal to, or perhaps even less than, the administrative costs that would be involved.

Dr. Byrne

Surely the Minister will agree that the caravan population is increasing mainly because caravans can be described as a safety valve in the housing shortage?

Mr. Colley

This has to be calculated in relation to the total number of caravans.

Dr. Byrne

Because of the housing shortage the increase in the number of caravans in recent times has been disproportionate. The Minister should not decry any consideration we may seek to give to the provision of mobile houses. This provision means that the Minister is increasing the cost of housing to some people by as much as 6 per cent.

Mr. Cosgrave

Is there any differentiation between caravans fixed and stationary and those which are moved from place to place? Is there any consideration being given to caravans set and left in a permanent position?

Mr. Colley

They are treated in the same way.

Mr. Donegan

A mobile home on wheels is to be treated as a caravan.

Mr. T.J. Fitzpatrick

(Cavan): Section 7 of the 1966 Act does not include any building materials.

Mr. Colley

The effect of this proposal is to relate it to building materials.

Mr. T.J. Fitzpatrick

(Cavan): Is the Minister saying that clearly? This Resolution increases the wholesale tax by reference to Section 7 (1) of the Act of 1966.

Mr. Colley

The reference has to be taken as a reference to the current version of that section.

Mr. T.J. Fitzpatrick

(Cavan): I am perfectly satisfied if the Minister assures me it is not proposed by this Resolution to increase wholesale tax on any materials used in house building.

Mr. Colley

It is not.

Mr. P. Belton

What about machines used in building, such as hoists, tractors and so on?

Mr. Colley

It is not proposed to increase the tax on those items.

Mr. Kavanagh

What about central heating, radiators and the like?

Mr. Colley

It will not apply to those.

Question put.

The Committee divided: Tá, 75; Níl, 67.

Tá

• Aiken, Frank.
• Allen, Lorcan.
• Andrews, David.
• Barrett, Sylvester.
• Blaney, Neil.
• Boland, Kevin.
• Boylan, Terence.
• Brady, Philip A.
• Brennan, Joseph.
• Brennan, Paudge.
• Briscoe, Ben.
• Brosnan, Seán.
• Browne, Patrick.
• Browne, Seán.
• Burke, Patrick J.
• Carter, Frank.
• Carty, Michael.
• Childers, Erskine.
• Colley, George.
• Collins, Gerard.
• Connolly, Gerard C.
• Cowen, Bernard.
• Cronin, Jerry.
• Crowley, Flor.
• Cunningham, Liam.
• Davern, Noel.
• de Valera, Vivion.
• Dowling, Joe.
• Fahey, Jackie.
• Faulkner, Pádraig.
• Fitzpatrick, Tom (Dublin Central).
• Flanagan, Seán.
• Foley, Desmond.
• Forde, Paddy.
• French, Seán.
• Gallagher, James.
• Geoghegan, John.
• Gibbons, Hugh.
• Gibbons, James.
• Gogan, Richard P.
• Haughey, Charles.
• Healy, Augustine A.
• Herbert, Michael.
• Hillery, Patrick J.
• Hilliard, Michael.
• Hussey, Thomas.
• Kenneally, William.
• Kitt, Michael F.
• Lalor, Patrick J.
• Lemass, Noel T.
• Lenehan, Joseph.
• Lenihan, Brian.
• Loughnane, William A.
• Lynch, Celia.
• Lynch, John.
• McEllistrim, Thomas.
• MacSharry, Ray.
• Meaney, Thomas.
• Molloy, Robert.
• Moore, Seán.
• Moran, Michael.
• Nolan, Thomas.
• Noonan, Michael.
• O'Connor, Timothy.
• O'Kennedy, Michael.
• O'Leary, John.
• O'Malley, Des.
• Power, Patrick.
• Sheridan, Joseph.
• Sherwin, Seán.
• Smith, Michael.
• Smith, Patrick.
• Timmons, Eugene.
• Tunney, Jim.
• Wyse, Pearse.

Níl

• Barry, Peter.
• Barry, Richard.
• Begley, Michael.
• Belton, Luke.
• Belton, Paddy.
• Browne, Noël.
• Bruton, John.
• Burke, Joan.
• Burke, Liam.
• Burke, Richard.
• Burton, Philip.
• Byrne, Hugh.
• Clinton, Mark A.
• Cluskey, Frank.
• Collins, Edward.
• Conlan, John F.
• Coogan, Fintan.
• Cooney, Patrick M.
• Corish, Brendan.
• Cosgrave, Liam.
• Cott, Gerard.
• Coughlan, Stephen.
• Creed, Donal.
• Crotty, Kieran.
• Cruise-O'Brien, Conor.
• Desmond, Barry.
• Dockrell, Henry P.
• Dockrell, Maurice E.
• Donegan, Patrick S.
• Donnellan, John.
• Dunne, Thomas.
• Taylor, Francis.
• Thornley, David.
• Timmins, Godfrey.
• Enright, Thomas W.
• Esmonde, Sir Anthony C.
• Finn, Martin.
• FitzGerald, Garret.
• Fitzpatrick, Tom (Cavan).
• Flanagan, Oliver J.
• Fox, Billy.
• Governey, Desmond.
• Harte, Patrick D.
• Hogan, Patrick.
• Hogan O'Higgins, Brigid.
• Jones, Denis F.
• Kavanagh, Liam.
• Keating, Justin.
• Kenny, Henry.
• L'Estrange, Gerald.
• Lynch, Gerard.
• McLaughlin, Joseph.
• Malone, Patrick.
• Murphy, Michael P.
• O'Connell, John F.
• O'Donnell, Tom.
• O'Donovan, John.
• O'Hara, Thomas.
• O'Higgins, Thomas F.
• O'Leary, Michael.
• O'Reilly, Paddy.
• O'Sullivan, John L.
• Pattison, Séamus.
• Ryan, Richie.
• Spring, Dan.
• Treacy, Seán.
• Tully, James.

Tellers: Tá Deputies Andrews and Meaney; Níl: Deputies R. Burke and Cluskey.

Question declared carried.

Mr. O'Higgins

For the moment, they are all right.