Dáil Éireann díospóireacht -
Wednesday, 27 Feb 1980

Vol. 318 No. 4

Financial Resolution No. 6. - Excise—Tobacco Products.

The Taoiseach

I move:

(1) That in this Resolution "cigarettes", "cigars", "cavendish or negrohead", "hard pressed tobacco", "other pipe tobacco", "smoking tobacco", "chewing tobacco" and "tobacco products" have the same meanings as they have in the Finance (Excise Duty on Tobacco Products) Act, 1977 (No. 32 of 1977), as amended by the Imposition of Duties (No. 243) (Excise Duty on Tobacco Products) Order, 1979 (S.I. No. 296 of 1979).

(2) That the duty of excise on tobacco products imposed by section 2 of the Finance (Excise Duty on Tobacco Products) Act, 1977, shall be charged, levied and paid, as on and from the 28th day of February, 1980, at the several rates specified in the Schedule to this Resolution in lieu of the several rates specified in the Fourth Schedule to the Finance Act, 1979 (No. 11 of 1979), and the Imposition of Duties (No. 243) (Excise Duty on Tobacco Products) Order, 1979.

(3) 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).

SCHEDULE.

Rates of Excise Duty on Tobacco Products.

Description of Product	Rate of Duty
Cigarettes	£12.10 per thousand together with an amount equal to 21.8 per cent of the price at which the cigarettes are sold by retail.
Cigars	£23.273 per kilogram
Cavendish or negrohead	£23.518 per kilogram
Hard pressed tobacco	£15.041 per kilogram
Other pipe tobacco	£18.906 per kilogram
Other smoking or chew- ing tobacco	£19.639 per kilogram

Mr. M.P. Murphy

Could I get the figures on tobacco? We have 10p on a 20 packet of cigarettes but what will the actual increase be on a plug of tobacco or an ounce of tobacco, pressed and loose?

The Taoiseach

It will be between 10p and 16p an ounce.

Mr. M.P. Murphy

It will be up to 16p an ounce on loose tobacco, I presume?

The Taoiseach

Between 10p and 16p, yes.

Mr. M.P. Murphy

According to those figures, the price of a plug of tobacco would be up by more than 20p— it could be up to 32p. We are getting used to price increases in the past months during the lifetime of this Dáil, on ESB, coal, bread, butter, sugar and now cigarettes and tobacco. To my mind, it is an unfair imposition—unfair is a mild term—to ask the smoking public to pay from 20p to 32p extra on two ounces of tobacco—in the present measurement it would be something less than two ounces—and 10p on cigarettes. As I mentioned earlier, speaking on the increase on beers and spirits, the Minister referred to them in his budgetary statement as the old reliables. I can make the same assertion on the imposition of duty on tobacco as I did on beer and spirits, that those who smoke are paying an undue share of taxation to the Exchequer.

I ask the Taoiseach, as he is at present in the ministerial seat, what will 20 cigarettes yield now to the State per packet? What was the tax on 20 cigarettes before the imposition and how much will it be now, when the 10p is added on?

The Taoiseach

Give me all the questions and I shall answer them.

Mr. M.P. Murphy

It would be a sizeable figure and undoubtedly the Minister, if he genuinely wants people to stop cigarette smoking, will succeed better by this budget than his colleague, Deputy Woods, the Minister for Health, has achieved in sending his packets of "Conquests" all over the country. It is disappointing that the Government, who were elected on a prices programme, come to the Dáil midway through the term and impose this extra tax on what many people consider essentials. Smoking is essential for many of our people; it is a source of relaxation. The manifesto on which the Government party were elected in 1977 told the people that there was no need for any of the existing taxes. We know what happened with rates.

An Ceann Comhairle

We are speaking now on a Financial Resolution.

Mr. M.P. Murphy

I know that. We know what happened to car tax and so on. We shall be speaking about that on a subsequent resolution. The whole question boils down to the fact that Fianna Fáil bought votes at too costly a price in the 1977 election. They paid too much.

An Ceann Comhairle

The Deputy will have an opportunity on the general debate. Financial Resolutions are being discussed.

Mr. M.P. Murphy

Fianna Fáil paid too much for votes. At the auction we had on 18 June 1977 they overbid.

An Ceann Comhairle

We are discussing Financial Resolution No. 6 now.

Mr. M.P. Murphy

As a result, we have these Financial Resolutions which will deprive many of our people of the relaxation of smoking and, as I said earlier, the relaxation of having a drink in their local. I entirely disagree with the impositions on tobacco, as I did with those on beer. The smoking and drinking public are already paying their fair share towards the national Exchequer and it is completely unfair to hit again—using the words of the Minister—at "the old reliables", drink and tobacco. The Minister is a non-smoker and it is all right for him to say that you do not have to buy cigarettes or tobacco. The term "discretionary" was used.

I ask the Taoiseach what would happen if people were to take his advice? One can only anticipate that they shall. The Minister told us that the imposition on drink, cigarettes and tobacco will rake in for the Government £75 million odd in a twelve-month period. I am opposed to this imposition as the smoking public are already making their fair contribution towards the central fund.

The Taoiseach

Is the question that the Deputy asked about after the budget? The price of 65p for a packet of 20 can be divided as follows: duty 38.4p; for the trade 20.7p; for VAT 5.9p.

Mr. T.J. Fitzpatrick

(Cavan-Monaghan): What will the total price be on average?

The Taoiseach

65p, made up in that way—VAT 5.9p, the trade 20.7p and duty 38.4p.

Mr. M.P. Murphy

That will be 44.3p on 20 cigarettes sold—38.4 and 5.9 are 44.3. I think the Taoiseach will succeed with "Conquest".

Mr. Kelly

He has.

Mr. T.J. Fitzpatrick

(Cavan-Monaghan): I have noticed in recent times that the quality of paper on which the £ is being printed has deteriorated a lot. I am not surprised, because after this budget the £ will disappear. The £ certainly will not buy cigarettes and drink. It certainly will not buy two drinks or two packets of cigarettes.

An Ceann Comhairle

Would the Deputy please keep away from the general terms?

Mr. T.J. Fitzpatrick

(Cavan-Monaghan): I am back to cigarettes now. I do not smoke; I never have smoked. I believe this method of taxing cigarettes is simply a revenue device to get money. Discouraging people from smoking, if they should be discouraged, is a matter for the Minister for Health. I am convinced that the direct result of this increase will be to leave less money in the take-home pay of the wage earner. If the husband and wife smoke there will be less money for other things. If there is less money for necessary commodities the result will be a demand for higher wages. I think that demand is inevitable after this budget. That will lead to a substantial increase in the cost of production and our exports will be less competitive on the world markets and our balance of payments, instead of improving, will become much worse. That is the argument I see against this sort of tax. One can introduce tax on cigarettes and tobacco with the loftiest of motives, saying that people should not smoke and therefore smoking should be taxed. That would be all right if we were a well-disciplined race. But experience has taught us that people do not give up cigarettes when they become dear and that it is other things that go to the wall, probably necessities of life, when people have to pay more for cigarettes and drink. This results in a demand for higher wages.

Generally speaking and in many respects this is a crazy budget. We shall have an opportunity of demonstrating that when we come to speak on the General Resolution later. There are many things in it which are mad economics and which are socially crazy. The bad appearance has been taken off it by increasing social welfare payments but that is only a measure of the length by which social welfare recipients have fallen behind. They have been talking loudly in recent times about how hard it is to live and it is a measure of the further inroads that will be made on the social welfare classes by the provisions in this budget. The budget proposal here does not affect me personally but I think the result will be a demand for wages and on that ground I shall vote against it.

Question put.

The Dáil divided: Tá, 76; Níl, 53.

Tá

• Ahern, Bertie.
• Ahern, Kit.
• Allen, Lorcan.
• Andrews, David.
• Andrews, Niall.
• Aylward, Liam.
• Barrett, Sylvester.
• Brady, Gerard.
• Brady, Vincent.
• Browne, Seán.
• Burke, Raphael P.
• Callanan, John.
• Calleary, Seán.
• Cogan, Barry.
• Colley, George.
• Collins, Gerard.
• Conaghan, Hugh.
• Connolly, Gerard.
• Cowen, Bernard.
• Crinion, Brendan.
• Cronin, Jerry.
• Daly, Brendan.
• de Valera, Síle.
• Doherty, Seán.
• Fahey, Jackie.
• Farrell, Joe.
• Faulkner, Pádraig.
• Filgate, Eddie.
• Fitzgerald, Gene.
• Fitzpatrick, Tom (Dublin South-
• Central).
• Fitzsimons, James N.
• Flynn, Pádraig.
• Fox, Christopher J.
• French, Seán.
• Gallagher, Dennis.
• Gallagher, James.
• Geoghegan-Quinn, Máire.
• Gibbons, Jim.
• Haughey, Charles J.
• Herbert, Michael.
• Hussey, Thomas.
• Keegan, Seán.
• Kenneally, William.
• Killeen, Tim.
• Killilea, Mark.
• Lalor, Patrick J.
• Lawlor, Liam.
• Lemass, Eileen.
• Lenihan, Brian.
• Leonard, Jimmy.
• Leyden, Terry.
• Loughnane, William.
• Lynch, Jack.
• McCreevy, Charlie.
• McEllistrim, Thomas.
• MacSharry, Ray.
• Meaney, Tom.
• Moore, Seán.
• Morley, P.J.
• Murphy, Ciarán P.
• Nolan, Tom.
• Noonan, Michael.
• O'Connor, Timothy C.
• O'Donoghue, Martin.
• O'Hanlon, Rory.
• O'Leary, John.
• O'Malley, Desmond.
• Power, Paddy.
• Reynolds, Albert.
• Smith, Michael.
• Tunney, Jim.
• Walsh, Joe.
• Walsh, Seán.
• Wilson, John P.
• Woods, Michael J.
• Wyse, Pearse.

Níl

• Barry, Myra.
• Barry, Richard.
• Begley, Michael.
• Belton, Luke.
• Bermingham, Joseph.
• Boland, John.
• Bruton, John.
• Burke, Joan.
• Burke, Liam.
• Byrne, Hugh.
• Cluskey, Frank.
• Collins, Edward.
• Conlan, John F.
• Corish, Brendan.
• Cosgrave, Liam.
• Cosgrave, Michael J.
• Creed, Donal.
• Crotty, Kieran.
• D'Arcy, Michael J.
• Desmond, Barry.
• Donnellan, John F.
• Enright, Thomas W.
• FitzGerald, Garret.
• Pattison, Séamus.
• Ryan, John J.
• Spring, Dan.
• Taylor, Frank.
• Fitzpatrick, Tom (Cavan-Monaghan).
• Flanagan, Oliver J.
• Gilhawley, Eugene.
• Griffin, Brendan.
• Harte, Patrick D.
• Hegarty, Paddy.
• Horgan, John.
• Kavanagh, Liam.
• Keating, Michael.
• Kelly, John.
• Kenny, Enda.
• L'Estrange, Gerry.
• Lipper, Mick.
• McMahon, Larry.
• Mannion, John M.
• Mitchell, Jim.
• Murphy, Michael P.
• O'Brien, Fergus.
• O'Brien, William.
• O'Donnell, Tom.
• O'Keeffe, Jim.
• O'Leary, Michael.
• O'Toole, Paddy.
• Timmins, Godfrey.
• Tully, James.
• White, James.

Tellers: Tá, Deputies Moore and B. Ahern; Níl, Deputies L'Estrange and B. Desmond.

Question declared carried.