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Dáil Éireann díospóireacht -
Wednesday, 27 Jan 1982

Vol. 332 No. 2

Financial Resolutions, 1982: Financial Resolution No. 1: Excise— Beer.

I move:

(1) THAT in this Resolution—

"alcohol" means pure ethyl alcohol;

"the Order of 1975" means the Imposition of Duties (No. 221) (Excise Duties) Order, 1975 (S.I. No. 307 of 1975).

(2) THAT the duty of excise on beer imposed by paragraph 7 (1) of the Order of 1975 shall be charged, levied and paid, as on and from the 28th day of January, 1982, at the rate of £126.707 for, in the case of all beer brewed within the State, every 36 gallons of worts of a specific gravity of 1,055 degrees, and, in the case of all imported beer, every 36 gallons of beer of which the worts were before fermentation of a specific gravity of 1,055 degrees in lieu of the rate specified in section 2(1) of the Finance (No. 2) Act, 1981 (No. 28 of 1981).

(3) THAT, notwithstanding the provisions of paragraph (2) of this Resolution and subject to compliance with such conditions as the Revenue Commissioners may think fit to impose, the said duty of excise shall be charged, levied and paid, as on and from the 28th day of January, 1982, on all imported beer which contains not more than 0.5% of alcohol by volume, at the rate of £0.372 per gallon in lieu of the rate specified in paragraph (2) of this Resolution.

(4) THAT whenever the Revenue Commissioners are satisfied that any beer on which the duty of excise imposed by paragraph 7(1) of the Order of 1975 has been charged or paid at the rate specified in paragraph (2) of this Resolution was used to produce or manufacture beer containing not more than 0.5% of alcohol by volume, they shall, subject to compliance with such conditions as they may think fit to impose, remit or repay any such duty and, in lieu thereof, a duty of excise at the rate of £0.372 per gallon shall be charged, levied and paid, at such time as the Revenue Commissioners shall prescribe, on the beer so produced or manufactured.

(5) THAT the drawback on beer provided for in paragraph 7(3) of the Order of 1975 shall, as respects beer on which it is shown, to the satisfaction of the Revenue Commissioners, that duty at the rate specified in paragraph (2) of this Resolution has been paid, be calculated, according to the original specific gravity of the beer, at the rate of £126.707 on every 36 gallons of beer of which the original specific gravity was 1,055 degrees.

(6) THAT the drawback on beer provided for in paragraph 7(3) of the Order of 1975 shall, as respects beer on which it is shown, to the satisfaction of the Revenue Commissioners, that duty at the rate specified in paragraph (3) of this Resolution has been paid, be calculated at the rate of £0.372 per gallon.

(7) THAT there shall be allowed and paid on the exportation as merchandise or the shipment for use as stores of beer which is shown, to the satisfaction of the Revenue Commissioners, to be beer containing not more than 0.5% of alcohol by volume, to which paragraph (4) of this Resolution refers and on which the duty imposed by that paragraph has been paid, a drawback calculated at the rate of £0.372 per gallon.

(8) THAT the duty of excise imposed by paragraph (4) of this Resolution is hereby placed under the care and management of the Revenue Commissioners.

(9) 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).

Are we debating Resolutions Nos. 1-13 together?

No, each must be taken separately.

, Cavan-Monaghan): Unless by agreement.

We have the printed Resolutions but in addition we have been given a sheet of Resolutions which seems to indicate the intention of taking Nos. 1-13 together and the other Resolutions separately. That would be a much more expeditious way of dealing with it. We could debate Nos. 1-13 together and take separate decisions on them if we wished.

The Chair had not been advised of this position but, if there is agreement on both sides, that procedure can be followed. Could the Chair be given a list of the Resolutions that it is intended to take?

As usual, the Opposition to the rescue.

(Cavan-Monaghan): It is a good job the Opposition have some use.

The Minister will move the first Resolution and then we will debate the group of 13 together.

Let us move Nos. 1-13 together and get it over with.

(Cavan-Monaghan): On a point of order, I do not think it is possible to have more than one motion before the House at a time. Therefore the procedure is to move No. 1 and debate Nos. 1-13 together.

That is what the Chair has indicated. Ordinarily each Resolution must be moved separately but the Minister having moved Resolution No. 1, by agreement Resolutions Nos. 1-13 may be debated together.

I have already moved Resolution No. 1.

Could the Minister indicate the information available as to the impact of these Resolutions on the consumer price index?

I can give that information in relation to them singly but not cumulatively and I will go through them if the Deputy wishes. In relation to beer it is estimated that the immediate increase effective from today in the CPI will be .202 per cent. This method of debate has the disadvantage that the VAT items are being debated separately but if the Deputy wishes I can tell him in advance what the VAT impact will be. The VAT impact under the beer item is estimated at .226 per cent so that the cumulative impact of the budget under the head of beer would be .428 per cent. I can give this information in regard to all these items if the Deputy wishes.

That would be helpful.

I am giving the effect of the immediate increase plus the VAT increase. Therefore the cumulative overall effect of the budget in regard to these items in respect of the year 1982. The total effect on the CPI in respect of spirits will be .197 per cent in total. In respect of wine the total effect will be .058 per cent. The total impact of the budget under the cigarettes item is estimated——

Are cider and perry included in the wine and made wine figure? No. 3 is wine and made wine and No. 4 is cider and perry.

The information I have is that the CPI effect of the budget is insignificant. It is so small as not to be worth computing. The cigarettes item is calculated at .0557 per cent.

Is that the combined effect?

That is the overall effect of the budget.

Is the Minister absolutely sure in the case of cigarettes and spirits that that is the combined effect?

I am sure that is the best advice of the Department of Finance.

Can we have a breakdown of both of them?

Yes. The immediate effect in the case of spirits will be .096 per cent and the VAT increase on 1 March will be .101 per cent giving a total of .197 per cent. The immediate effect on wine will be .042 per cent and the VAT item on 1 March will be .016 per cent giving a total of .058 per cent. With regard to cigarettes the immediate effect will be .384 per cent.

Is that right?

The Deputy is quite right to question that. There is a typing error here. I thought it was strange but I felt I should not throw the point away until it had been challenged. The immediate effect is .384 per cent. I will accept responsibility for the typing error. VAT will account for .173 per cent giving a total of .557 per cent. The plug tobacco item is included in the cigarettes item so it does not figure separately. The effect on the price of petrol will result immediately in an increase of .211 per cent and the 1 March effect will be .161 per cent so that the total effect will be .372 per cent. The road diesel item does not figure in the CPI.

The first point I want to make in relation to this is that, with the greatest respect to the Minister, I have some doubts about some of the figures he read out. They certainly do not tally with the kind of increases and the CPI effect of them we have had in previous years. It is accepted by economists generally that the total effect on the CPI will be not less than 5 per cent and perhaps as high as 6 per cent. Drink has an abnormally high element in that. It is worth noting that this is the first budget I can recall where the Minister for Finance did not in his speech give the effect in CPI terms of the increases he was proposing. Likewise, it is the first budget speech I can recall where no forecast for inflation for the year under consideration was given. The obvious reason is that the Minister for Finance, in spite of an 83 page script, is afraid of his life to give the forecast because the forecast is an inflation rate for 1982 well over 20 per cent. I have not been able to estimate yet how much over the 20 per cent it will be. In the short-term we have seen the announcement for the last quarter of an inflation rate to mid-November of 23.3 per cent. If we add the 5 per cent to 6 per cent which this budget seems to create the inflation rate will be around 28 per cent or 29 per cent, which is a real healthy Coalition figure.

The tax increases on things like beer and spirits announced by the Minister were given in very handy easy stages and there was talk of excise duty amounting to 2p on a pint of beer. Many people conclude that the increase is 2p. That is not the case because the VAT increase will more than double that and the retailers' margin must be added to that. This is conveniently omitted in all cases from this budget speech. The actual increase the consumer will have to pay on a pint of beer is not the 2p which the Minister for Finance sought to give the impression today it would be, but is likely to be 6½p or 7p when the retail margin and the various other margins are taken into account. That is the true figure. Similarly, in regard to spirits, the actual figure that will be paid by the consumer by way of increase will be something in excess of 10p per glass and not the rather lower figure——

It is 8p.

The margins must be added to that.

(Cavan-Monaghan): The Minister spelt out the total amount.

He did not.

Deputy O'Malley should be allowed contribute without interruptions.

I listened to the speech and went through it very carefully but I could not find any reference in it to the retail prices that will be charged. I can be corrected by the Ministers opposite if I am wrong. The only reference is that the Minister for Trade, Commerce and Tourism will fix the prices in due course. He certainly will fix them. I remember all the problems I had in relation to the immediate aftermath of budgets in trying to fix those prices because there were allegations that there was profiteering due to the fact that the profit was fixed at a higher figure than that mentioned by the Minister for Finance.

The same situation arises today. The Minister for Finance, as well as his Department, must have been well aware of the confusion on former occasions and they should have made the actual retail prices clear but they did not do that. That is why I say the increases are much higher than the impression given. In regard to petrol the actual figure will be 16p per gallon when the dealers' margin is taken into account. The inflationary effects are much higher than the kind of figures the Minister for Trade, Commerce and Tourism has been talking about. These figures are not being made available to the House. The figure for cigarettes will be 13p for a packet of 20 and not the figure mentioned in the Minister's speech. The sooner the House and the public are aware of that the better. We should now invite the Minister for Trade, Commerce and Tourism, who appears to be dealing with this matter, to give us what the actual retail price to the consumer will be as a direct result of these excise and VAT increases on all the long list of items that we have and then give the CPI effect of the total increased price which the consumer at retail level will be paying. I think those figures will be very different to what we have been led to believe up to now.

While this party do not have a fundamental objection to some reasonable increases in excise on goods of this kind, at times like this we feel the public have been misled to some extent, that the increases are a great deal higher than has been implied by the Minister for Finance and that the inflationary effect is very considerable.

I would remind the House that drink constitutes between 10 per cent and 11 per cent of the CPI. It is the single most heavily weighted factor in the consumer price index. Therefore, these very substantial increases in the retail price of beer, spirits and so on, will have an untoward effect on the CPI, the figures the public will have to pay will be higher than has been mentioned by the Minister today and the effect on the CPI will also be very much higher than he said. It would be better if we were given these figures and their effect in full now rather than have them come out in dribs and drabs as undoubtedly the Government hope will be the case.

I want to give a very brief outline of our general approach to these Financial Resolutions which are coming before us. Everything I say is affected by the fact that, although the House will be sitting until 12 o'clock midnight, because of the unprecedented number of Resolutions before us there is not much time to deal with them as we would like. That is why we suggested Resolutions No. 1 to 13 be taken together.

They are a rag-bag of taxation provisions covering beer, spirits, wine, perry, cider, cigarettes, tobacco, televisions, video players, motor vehicles, gaming machines, special exemption orders, foreign holidays and development land. This is a very wide ranging series of taxation measures and we will not have an opportunity to go into them in detail.

Generally speaking, our approach to these Financial Resolutions is not to oppose them, because in some cases we have to recognise that were we in Government we would probably be looking around for similar sorts of revenue. I would not like the Government to think that because we will not be opposing them seriatim and consistently as we might do on another occasion, it does not mean we favour the impact these increases must make on the cost of living. Taking them together they are going to have a very real and serious impact on the cost of living and when you add the others, it is clear that this is a savage and anti-social budget.

There is no problem or crisis in the public finances nor is there any difficulty on the balance of payments front which could justify the savage imposition on ordinary families that this budget represents. I cannot understand how the Government would attempt to bring forward any alleged difficulty in regard to public finances as a justification for the very real hardship which this combination of taxation measures is going to cause and for the very real lowering in the standard of living right across the community they are going to bring.

Taking them together the trouble is that there is not one single optimistic aspect; they are purely taxation measures directed to lowering people's standards and to causing inconvenience and hardship to families and individuals. If there was some glimmer of hope or optimism offered anywhere in the budget, these increases would perhaps be less unacceptable than they present themselves to us this evening.

We will vote against Resolution No. 1 which proposes to increase the tax on beer. We would be perfectly justified at any time in voting against that proposal but on this occasion we are voting against it more as an indication of our opposition to the totality of the measures. As I said, we are not going to vote against the other resolutions because we accept that the Minister for Finance has to raise considerable amounts of revenue on this occasion. We will be responsible in our approach and will not vote against the individual Resolutions Nos. 2 to 13. We are voting against the tax on beer because we think it is very undesirable in itself, particularly when you take into account the cumulative effect, and as a sign of our objection to the cumulative effect of these measures and their impact on the cost of living index and all that means right across the board for pay negotiations and for many other areas.

I support what my Leader and Deputy O'Malley had to say on these resolutions, particularly Resolution No. 1. We are voting against Resolution No. 1 to show our abhorrence of the attitude adopted this afternoon by the Minister for Finance. He seemed to forget completely the impact these taxes would have on the cost of living and employment. No hope was given; no plans were laid; no hope was given to the many young people who are and will be seeking employment, and no hope was given to those who are already unemployed.

As a Deputy representing an area with an interest in employment in the drink trade, I want to add my voice to what has been said. I want to remind my Cork colleagues on the Government benches that we have to think very carefully about this matter and we must be given very strong assurances, because we are being asked to vote for an increased tax on beer. In this city Guinness's are a good employer and have been good employers for a long time. Their subsidiaries, whether in Dundalk or elsewhere are also good employers. Likewise in Cork there are two breweries one of which is going through a particularly difficult time. This increase in duty would be bad enough on its own without being added to by the savage increase in VAT, the second such increase in six months or so. In levying these increases the Government have disregarded the employment situation in the drink industry. I want an assurance from the Government side that we are not now in a diminishing return situation in so far as beer and spirits are concerned. That sort of situation was referred to many times by the Minister for Fisheries and Forestry while he was in opposition. Not only in terms of its impact on the drink trade but in terms of its overall strategy this budget is doing more than has ever been done to bring about a diminishing return situation. I should like an undertaking also that in the case of Irish Distillers in Midleton—our only distillery —employment will not be affected. We know there are difficulties there. As our Leader has said, we are voting on No. 1 and not on No. 2. I want an assurance that the impact of the budget on spirits will not affect the existing employment or future employment prospects at the Midleton plant.

We have had submissions from the drink trade. Apart from the impact of these increases on the CPI, there is the important aspect of employment. One must ask whether this industry has been hit too hard in successive budgets and whether today's increase is the last straw.

The overall impact of the budget will be to tone down activity, to deflate, so that there will be less money available for what some might call the luxuries of life. We are putting the drink trade in a precarious position. We may be pushing that industry too far and bringing about job losses.

We have had far too many promises from the Taoiseach in the past number of months. These have been glib off-the-cuff promises in respect of which there was no research. The situation is different now. He is in charge of the country and what we are getting are excuses from various Minister for the failure to keep those promises. In Cork city, for instance, there are 7,200 people unemployed while the total number of unemployed for the city and county is 20,000. We do not want any action from this Government that will lead to further job losses but I fear for Irish Distillers and the two Cork breweries in this respect.

Before calling on Deputy Lenihan the Chair would seek confirmation as to what has been agreed. The Leader of the Opposition has indicated that he will be voting on Financial Resolution No. 1 but I have been supplied now with a list of amendments which includes an amendment to Resolution No. 6. I take it that when at the end of the debate I will be putting the question in respect of each resolution, the amendment to Resolution No. 6 will be put in the ordinary way without debate.

I do not know where the confusion arose but perhaps I could clarify the position. So far as I know we are taking Resolutions Nos. 1 to 13 but with the exclusion of No. 6. That is the understanding we had.

That is not so. We have the document here.

The Taoiseach does not know anything about this because it happened in his absence. Therefore, he should not take responsibility for something of which he is not aware.

The Leader of our party passed to the Chair a document which carried in succession the following list of Resolutions: Nos. 1, 2, 3, 4, 5, 7, 8, 9, 10, 11, 12 and 13.

Without being contentious——

Cavan-Monaghan): On a point of order, I was in the House and I intervened at that stage. I think it was put clearly that Resolutions Nos. 1 to 13 would be taken together. It is fair to say that there was no mention at that time of any amendment nor had the amendment sheet been circulated. What was clear was that we would put Resolution No. 1 to the House and discuss with it Resolutions Nos. 2 to 13, inclusive.

We are all concerned here about dealing with the business of the House. We facilitated the Government and the Chair by producing this list. The Minister for Trade, Commerce and Tourism was present at the time and we had an easy exchange of views. If one looks at this list, of which I take it the Government now have a copy——

We had it all the time. We produced it.

——one finds that the Resolutions listed are Nos. 1 to 5 and 7 to 13. These are together in a list between the two lines. One finds then that No. 6 is in a separate category.

I do not know what list the Deputy is talking about.

I should like to say to Deputy Lenihan that there was never any question of accommodating the Chair. Indeed, the Chair is quite annoyed at not having been advised of the agreement until after proceedings had commenced. At that stage my understanding was that Resolutions Nos. 1 to 13 were being discussed.

I have no wish to upset Deputy Lenihan but can he tell us from where the piece of paper he is holding came and what is its provenance? Was it produced in his party's office or in the Chair's office? The list we have does not show that No. 6 is being excluded.

The Leas-Cheann Comhairle got a copy of it from the Leader of the Opposition and the comment of the Minister for Fisheries and Forestry at the time was that the Opposition can be of some use sometimes. In any case, the amendment can be discussed.

This is rich. The piece of paper which Deputy Lenihan has just shown us is obviously part of his party's instructions because at the top and opposite paragraph 1 are the words, "oppose, debate but not vote". It leaves out No. 6. It then reads, "amend 8p to 4p and oppose by vote". That instruction never came from this side of the House. This is really a collector's item.

Might I explain to Deputy Fitzgerald that in respect of the original document which was handed to the Chair there is reference to Resolutions Nos. 1 to 13, inclusive.

That is not so.

This is obviously a party instruction.

To avoid confusion, there was a document produced by the Department of finance giving the number of motions to be debated and voted on. I facilitated the Opposition Whip with a number of copies. When the Leader of the Opposition rose he had that list, he said they would take Resolutions Nos. 1 to 13 and there was agreement. A copy of that document was then given to the Chair and he is in possession of it. I will now give the Chair a copy of the document which the Opposition are talking about, which is a totally different one and not the document which was agreed to by the Chair.

Does it make the slightest difference? There was agreement on Resolutions Nos. 1 to 13 and it does not really matter if a Member of this party sought to facilitate the Chair by giving him a list.

What the Leader of the Opposition gave to the Chair was a copy of a document with which we had furnished him which showed the budget resolutions divided into categories. What Deputy Fitzgerald and Deputy Lenihan are now flourishing, and with unprecedented courtesy have handed to the Government, is their own Whip's instructions to themselves about what they are to do here tonight.

So what?

Would the Minister give way to the Chair, please? Can we get agreement that we are discussing Resolutions Nos. 1 to 13 inclusive, but that when the debate has concluded the question on the resolutions will be put individually and that there will be no debate at that stage? It will be taken that that amendment No. 1 has already been discussed in this general debate on Resolutions Nos. 1 to 13. That being accepted, we can proceed and there should not be any further difficulty.

I agree and I want to avoid any contention at this stage of the debate because we are discussing specific resolutions arising out of the budget statement made by the Minister for Finance. The budget traditionally has been the annual stocktaking of the nation's finances and is supposed to be used by the Government of the day as the instrument for economic policy. Yet, in the speech made by the Minister for Finance, we have a single page in an 83 page document devoted to the economic situation and there is no mention of employment.

Brewing and distilling are traditional industries where there is substantial employment and home produced inputs by way of raw materials available for these two industries. The budget is inflationary with regard to putting up the cost of living by anything from 5 to 6 per cent and we have deflationary aspects such as this one where employment and jobs in the brewing and distilling industries are in serious danger of being adversely affected. As Deputy Fitzgerald has already stated, we want a positive assurance from the Minister for Finance and the Government that jobs will not be affected in any way by the proposed impositions of VAT on spirits and beer. The budget is inflationary in regard to the effects on the CPI and deflationary in regard to the absence of any incentives towards enterprise and job creation. Because of the importance of employment in the brewing industry in this city and in other towns throughout the country, we propose to vote against the imposition of VAT on beer.

I support what Deputy Lenihan said with regard to employment. It is well known that farming is going through a very lean period at present. One of the strong standbys of farmers in certain areas is the contract for malting barley. I gather from the impositions that financial experts had come to the conclusion that the law of diminishing returns was beginning to take effect and this indicates we are very near a period when consumption will drop considerably. If this happens some contracts, or parts of them, will be in danger and this should be taken into account also.

This is one of the most extraordinary days I have ever seen in Leinster House. The National Coalition demoralisation-of-the-nation policy continues unabated. They know the breweries are in serious trouble. In Dublin, Guinness are laying off workers and the savage increase on beer and spirits is going to increase unemployment in the city and other areas where breweries are a source of employment. Some of the people who the Minister said might be contaminated are now going to support this budget. The Labour Party have well and truly been contaminated——

We are not sure of that. They might jump off the wagon.

There are rumours that this contamination may be shaken off later on when the vote is taken. I want to stress that the whole issue of putting on ever succeeding increases on beer and Guinness militates against people who most need it. It is the least harmful of alcoholic beverages and old people and those on lower incomes depend on having a few pints every weekend. It is their only outlet with the price of theatre tickets and other entertainment soaring. It is socially harmful to continue to increase the price of beer. It is a retrograde step and I regret it very much.

We must consider very carefully the question of introducing a tax on foreign holidays. Admittedly the initial imposition of £10 per holiday does not appear to be a geat deal. It is very important that Irish people should be encouraged to travel abroad to see what is happening in Europe, or America, or wherever they want to travel. It is part of the development of this nation that people should go abroad and learn from their experience. At the moment an imposition of £10 is not a great deal, but knowing the approach of the Coalition Government to these matters we realise this is only the tip of the iceberg. It is a very retrograde step.

One of the most extraordinary statements we heard today was made by the Minister when he suggested that taxing short-term social welfare recipients would encourage them to go back to work, when we all know there is no work to be had. We will come back to that again.

These extraordinary statements made by the Minister for Finance are frightening. This budget is a terrifying example of the incompetence of the Government. If I may refer to a statement made some time ago by the Minister, Deputy Kelly, I can only say that the piglets are panting.

To take up the point made by Deputy Andrews about foreign holidays——

Excuse me, Sir. I do not mean to be stingy about this debate. There is no reason to be. One speaks once on a resolution, and Deputy Haughey has already spoken. If he has a specific question there is no bother about that. This is a point of order.

If I feel like it, I propose to speak on every resolution from No. 1 to No. 13.

Deputy Haughey has spoken once.

We are trying to help the Minister.

The whole point of the wrangle in which we have been engaged for some time was to establish that Resolutions Nos. 1 to 13 would be debated together.

They are being debated together and the speakers spoke in the following order: Deputy O'Malley, Deputy Haughey—I have a note of what he said and I propose to reply to it in due course — Deputy Fitzgerald, Deputy Lenihan, Deputy Wilson and Deputy Andrews. They spoke on Resolutions Nos. 1 to 13 together. It appears now that Deputy Haughey wants to make a second speech. If that were in order, it would be equally in order for all the other Deputies who have already spoken to do so as well. It would be equally in order for me to reply seriatim to every single one of them. It is up to you, Sir to decide whether the agreement on which this House had a clear understanding an hour ago is or is not to be observed.

An Leas-Ceann Comhairle

The Minister will appreciate that this is not the first time he has spoken. There is agreement that Resolutions Nos. 1 to 13 will be taken together. Ordinarily by order of the House on each resolution the first speaker for the Opposition would be entitled to speak for an hour-and-a-half if he so desired. I took it that we were excluding the formality of asking the Minister to move each resolution separately and that the spirit of the agreement was that the debate would not be subject to the normal regulations. I am calling on Deputy Haughey to speak.

I am going to speak.

On a point of order, you are accepting, Sir, that Deputy Haughey is within his rights in making a second speech on a set of resolutions which are being debated together. Is that the situation?

I am accepting that we are discussing 13 resolutions. While I am excluding the formal requirement to call upon the Minister to move each one separately, I am accepting that Deputies may make a second contribution during this debate on the Financial Resolutions.

Is there any reason then why they should not make 13 contributions?

The Minister is taking up time. We have very little time.

Is there any reason why all six of them might not speak again? The hours are going on and one gets less coverage as it gets later. It would suit me much better to reply to each Member of the Opposition——

The Minister is interested in coverage only. That is a most revealing remark.

I would remind the Minister that, apart from the decision I have given already, agreement was reached that in respect of this type of debate the conditions normally and formally covering Committee Stage should be adhered to. I will give the Minister a copy of the agreement to read. Deputy Haughey to proceed and the Minister to give way. He is being disorderly.

I will be perfectly happy if we are adhering to Committee Stage rules.

The Minister should read what was agreed by a Committee of the House. Deputy Haughey without interruption.

The Minister is a bully.

I must deplore this carry-on by the Minister. As the Opposition we have facilitated the Government beyond measure in taking 13 resolutions together. Having regard to the generosity shown by us, that the Minister should find it necessary to carry on with silly carping interruptions and criticism is beyond belief. We are facilitating the Government in getting through 16 or 18 resolutions between 6.30 p.m. and 12 midnight, and he goes on with this nonsense in an endeavour to deny me the opportunity to say a few words.

I am not trying to deprive the Deputy of that.

I want to move amendment No. 1 in our name if I may move it on behalf of Deputy Burke.

The Deputy may discuss it now. It will be moved when the question is being put on Resolution No. 6.

I want to discuss it now. I want to explain to the House what we are endeavouring to achieve in amendment No. 1 to Financial Resolution No. 6. Financial Resolution No. 6 proposes to increase the excise duty on petrol by 8p. Of course, that is only the thin end of the wedge. I have not got the calculation with me but I believe eventually, between one thing and another, and when all the effects of today's budget are taken into account the price of petrol will increase by 14p.

We accept that, in the situation in which he finds himself, the Minister for Finance can look legitimately to petrol, diesel oil and LPG for some revenue. We believe an increase of 14p is far too much. We are taking the responsible course of suggesting to the Minister and the House that an increase of 10p in total would be sufficient on this occasion. Therefore we put down this amendment to Resolution No. 6 to reduce the 8p to 4p. Ultimately that would have the effect of reducing the overall figure of 14p to 10p.

With all the other impositions being piled on the unfortunate motorist in this budget, we believe that is enough, that is going far enough. Many motorists could claim validly that it is going too far, much too far. We want to take a reasonable and responsible attitude on this matter. We suggest that the House should accept the amendment reducing the tax increase from 8p to 4p and thereby reducing the overall increase in the price of petrol from 14p to 10p.

The Minister said he would like to point out that tax evasion has moral implications. I should like to put before the Government the thought that perhaps going before the electorate with a series of proposals also has a moral implication. Indeed that moral implication might come more to the fore when one comes into the House and turns one's back completely on the issues adjudged by the people.

Having said that I should like to move on to Financial Resolution No. 12 dealing with non-scheduled air flights. The International Year for the Handicapped has just come to an end. Do I take it that each invalid person who may leave this country on a charter flight heading to a place such as Lourdes will be liable for this tax or has the Minister in mind some provision whereby they would be exempted?

If the Minister would agree to reply shortly——

I am sorry, I have been trying to keep track of what Deputy Haughey asked——

If the Minister would agree to reply shortly we would be prepared to allow the debate finish at this stage.

I must apologise to Deputy Murphy. I did not catch his question because I was trying to track down the question asked by Deputy Haughey. Perhaps Deputy Murphy would repeat his question.

In the course of his budget speech the Minister said:

...I would like to point out that tax evasion has moral implications.

I accept that and pose the question to the Minister opposite: is there a moral implication in going before the electorate with a series of commitments or promises and then, having been elected to govern by that electorate, turning one's back completely on those commitments and promises, as they have done? This moral theory can be carried substantially further. However I shall deal with that later in my budget contribution.

I should like to deal with Financial Resolution No. 12 in relation to a charge or levy on people who travel outside the country. It seems to be aimed mainly at people going on holiday. Bearing in mind especially that the International Year for the Disabled has just concluded and the efforts made in respect of those people, has the Minister any proposal to exclude from this levy disabled people who may travel to Lourdes or some such place, or is it intended that this levy of £10 will be applicable to them? It would seem to me to be an entirely different case from that of those people who may go on a so-called sun holiday.

Are there no Labour Representatives in the House who know about our amendments?

Nobody represents the working people of this country except Fianna Fáil.

And we are talking about jobs here.

The Minister for Trade, Commerce and Tourism to conclude.

I apologise to Deputy Murphy for having given him the trouble of repeating his question. The question of what is morally implied in politics at election time and afterwards we can deal with at greater length and, believe me, I shall not be short of things to say when the general budget debate begins.

In regard to Deputy Murphy's second point, of course the Minister for Finance recognises the strength of the point Deputy Murphy has made and considered it. I think what was uppermost in his mind was not so much the question of the status of disabled people but the question of pilgrimages. The problem here is to discriminate between a pilgrimage which is purely a pilgrimage and something which may have a certain holiday content as well. I am sure the Minister, if he were here, would accept that there are absolutely clear cases on one or other side of the line. But probably there are so many cases in which it would be difficult to draw the line it might not be feasible to make the appropriate discrimination. However, for myself, I would accept the force of Deputy Murphy's point. Perhaps it can he thrashed out in more detail when the appropriate legislation is being enacted.

I shall deal as quickly as I can with the speeches made by Opposition Deputies on these 13 Resolutions. I shall not be all that brief but certainly I will not string it out. Deputy O'Malley, I think, alleged that the Minister had omitted or avoided giving cumulative totals of the impact of excise and VAT on drink items, and perhaps he said on cigarettes as well. That simply is not so — Deputy O'Malley has forgotten what the Minister said — and I would direct him to page 54 and following pages of the Minister's statement in which he clearly said, without the slightest sign of wishing to evade the issue, that the immediate increase — in order to give a picture of what the budget was going to do — would have to be topped up by the VAT increase on 1 March next, and the total would be as he said.

That is not what he said.

Deputy O'Malley said something else and I shall deal with that in a moment. Let me just quote part of what the Minister said in his speech:

There will be an immediate duty-based increase of 4p in the retail price of a glass of spirits. This is an extra 2p on the normal half-glass measure and will bring in extra revenue of £7.8 million this year and £8.9 million in a full year. Taking account of the VAT change on 1 March, this amounts to a total tax increase of 8p to 8½p on the glass of spirits, or about 4p on the normal half-glass measure.

I know it is possible in the course of a long statement to miss something — and I do not make a point about it — but Deputy O'Malley did miss that. Under all these heads the Minister very clearly gave the total effect of his budget both under excise and VAT.

What about the prophecies?

The Deputy should not mind about the papers; the Minister did not write the papers. The Deputy should complain to the papers about that, not to the Minister.

They only give coverage.

Deputy O'Malley wanted to know why the Minister had not said what would be the effect of an increase in margins. The National Prices Commission is the body which advises — advised him when he was Minister responsible for this — on price increases. In calculating margins they do not normally take tax increases into account on most products. Even if they did do so I do not consider there is any obligation on a budget Minister to go out of his way to try to anticipate a margin increase which quite likely will not arise in respect of this heading in the course of a budget speech. Deputy O'Malley is certainly going very far afield to try and find a criticism if that is the best he can think of, that not alone should the Minister produce bad news on the taxation side but that he should be scouring the horizon for further bad news which may arise under a quite different heading altogether.

Citizens are entitled to know.

Of course they are entitled to know but there is an order and a form in which this information is delivered by Ministers, and the budget Minister on budget day, in the course of a speech which lasted two hours and ten minutes, can be dispensed from scouring the horizon for further clouds.

Deputy Haughey complained — I must say with some justice, in the sense that I can see his point — about the shortage of time in which an Opposition is required to deal with a budget statement. I just happened to have in front of me the Official Report which includes the last two budget statements, Deputy Bruton's first one in July and Deputy Gene Fitzgerald's last in the preceding January. The Official Report at least does not disclose that there was any sos at all, let alone half an hour, between the completion of the main budget statement and response and the beginning of the debates on the budget resolutions. Although I have a very unreliable memory — and am in very good company being in that condition — I have been in the House over eight years and I do not remember such a thing either. I can remember occasional sosanna but I do not recall that there was ever a practice here that there was a break between the budget statement and response on the one hand and the Financial Resolutions on the other; perhaps there should be. I have often heard it said that it is unfair that the Opposition spokesman should be required to reply without having a chance to think about it, that it does not really give him a chance to show himself in his true colours. I must say that proposition was amply borne out by the speech which Deputy O'Donoghue gave here this afternoon which I would hate to think was supposed to do him justice.

An excellent speech.

It was an extremely feeble production. At any rate I accept that that is so. Why then do we have this rule? Why not change it? I would not mind giving the House my bet on why we have it. Probably it is because, in the days when these rules were drawn up, the English had them which, as I never tire of complaining, is a reason for far too many things in this country. If anyone on the Opposition side wishes to raise such a matter at the Committee on Procedure and Privileges certainly he will have me behind him, and I am sure many other Members, who would be anxious to see a reasonable way of doing things in this House and not just the English way.

Deputy Haughey also complained in a general way — which would be more appropriate to the general budget debate — that this budget offered what he called no glimmer of hope. In connection with what is the outlook, whether one sees it in terms of sunrise or sunset I want to draw the attention of the House to the fact that Deputy O'Donoghue spoke about this crisis we are in in terms that almost suggested that the lot of us, Government and Opposition, were innocent passengers who were shanghaied——

I would remind the Minister that Deputy O'Donoghue has not contributed to the debate on any of the resolutions which have been debated.

He did not but he did contribute on a former occasion. I am not aware of any rule of this House that prevents me from adverting to a speech made in the House on some other occasion.

I took it the Minister was concerned about propriety and formality. Accordingly I am reminding him that he is replying to speeches that were not made on any resolution and therefore is out of order.

I will make the Chair a present of that point. It does not matter. The same thing came through with Deputy Haughey. He said there was no glimmer of hope; in other words he recognised that this was a grim situation——

On a point of order, the time at our disposal for dealing with the resolutions is very limited. I do not think it fair that the Minister should take up that limited time with this filibustering. I wish to make the point that if this carries on and if we are not given full advantage of the limited time at our disposal the Government will not get the Financial Resolutions through by 12 o'clock.

(Cavan-Monaghan): On a point of order and in order to avoid any misunderstanding later on, when the Minister for the Environment moved that the House should sit later than 8.30 p.m. and not later than midnight, he also read into the record that it was agreed between the parties that Resolutions Nos. 1 to 16 would be concluded before midnight tonight. That was agreed by the opposite side and I want clarification on that point.

If we get a fair crack of the whip.

(Cavan-Monaghan): There are no if's or but's about it. It was agreed and it is an order of the House.

The Government are walking steadily towards a crisis.

(Cavan-Monaghan): I submit it was made an order of the House by agreement.

The order the Chair is concerned with is that the House is discussing Resolutions Nos. 1 to 13. Comments have been made on the resolutions and questions have been asked. I hope that the Minister in concluding will refer only to the points made in the debate and I am asking him to do that now.

There is an old Irish proverb which states: "Clocha ceangailte agus madraí scaoilte"—"stones tied down and dogs on the loose"; in other words, it is all right for Deputy Haughey to raise points about there being no glimmer of hope in the budget statement but it is not all right for me to reply to them——

If the Minister will bear with the Chair, I did not refer to Deputy Haughey. I referred to the Minister's two references to Deputy O'Donoghue who had not made any contribution whatever.

I am not going to filibuster. I accept that the convention here is that the Opposition get the major part of this time and I am not going to hog it. Deputy Haughey went out of his way to say that the budget contained no glimmer of hope and to say things that would be more appropriate to the general budget debate and I think I am entitled to a few minutes to reply. I will tell the Deputy in a few minutes what is the glimmer of hope in this budget. It is that for the first time in my memory at least we have a Minister for Finance who knows what is meant by taxation equity because taxation equity is the corner stone on which any kind of social understanding here must be built, on which fairness must be built, on which any kind of reason in trying to control wage explosions and people fighting each other on the industrial scene must also be built. He has produced things here today that no other Minister for Finance has had the courage to do and I am proud to be his colleague. He has produced proposals about tax avoidance and evasion, about business entertainment expenses —farewell to the era of the golden boys —and he has given allowances for rent on private tenancies for elderly people. He has produced proposals regarding taxation on the self-employed and about capital and bank taxation. These were not produced in a spirit of ideological conflict but with the intention of creating an atmosphere of equity. It is only when we get that atmosphere of equity, where people will feel that everyone is being asked to carry the burden according to their ability, that we will have industrial and social peace. That is the glimmer of hope. That is what the Minister for Finance has given the House and the country today. His budget speech, long though it was, did not contain any bogus promises about £200 million in the private sector of which Deputy Fitzgerald made himself a present this time last year. There was nothing about a rationalisation programme in the public sector that would save us £25 million——

This is grossly out of order.

Where is the £25 million? We were not able to find that when we were searching around.

The Minister knows he has been out of order in making these general comments. The Chair is not moved by the Minister's pained expression. I am asking him to reply to questions that have been put on the resolutions.

The remaining points made by other Deputies related to the specific question of taxing drink. When Deputy Haughey was Minister for Finance in 1968 or 1969 I remember he was questioned by a journalist about the forthcoming budget and he was asked if there would be increases in the price of beer, spirits and cigarettes. I recall him replying in the following way, and I did not fault him for it: "These are rightly called the old reliables because no matter how often they are hit they always come up smiling".

That was in my budget speech.

I remember the phrase the Deputy used. The Deputy will be surprised to hear me say that it is not the only thing in his record I remember with agreement and approval. The truth is that the old reliables do come up smiling and the record shows it. There have been very hefty increases, some of them heftier than the increases today, but consumption did not drop noticeably. The Chair was complaining a few minutes ago about my pained expression but now the Chair is looking at his watch with a pained expression. The point is that five speakers talked about the effect of the increases on the drink industry, and Deputy Fitzgerald mentioned in particular the manufacturing end of the drink industry. The best calculation that the Department of Finance have been able to make is that under the headings of beer and spirits the likely contraction in consumption, on foot of the impositions, will be about 1 per cent in each case. It is estimated that there is no reason to suppose that a contraction of that order will be reflected in employment. Deputy Fitzgerald mentioned the possibility of diminishing returns which obviously would have a corresponding impact on employment. Naturally every Minister for Finance dealing with excise duty has to bear in mind the danger that there may be a point of diminishing returns, that if he hits some item too hard he will end up with less tax. I presume that the advisers of this Minister have calculated that possibility just as carefully as they did when Deputy Haughey was Minister. That is the calculation given to the Minister and I take it it is entitled to the same faith as was given to similar statements made by former Ministers.

Deputy Lenihan mentioned employment in the drink industry and Deputy Wilson and Deputy Niall Andrews mentioned the possibility of diminishing returns. The last four Deputies, except for Deputy Haughey's second speech, harped on this single point. The Government's attitude is that the contraction in consumption under these two heads — wine is much more difficult to assess because obviously there is not the same employment content there — will be minimal and therefore there will not be any great employment implications.

I should like to say that when the Minister was giving details of the considerable assistance he is giving at a difficult time to export promotion, for which my Department are extremely glad, he said specifically that the £500,000 he is making available for export promotion will have a special edge, the details of which he has not yet devised, directed towards assisting the export promotion of Irish drink. Of course that is extremely important to us because it has important employment implications.

Therefore, even though we may get a one per cent contraction in consumption at home, I hope that the injection into export promotion on the other side will allow the drink manufacturing industry to feel they have come well out of the budget.

I do not think I need to reply specifically to Deputy Haughey's point in regard to the LPG content of oil. Naturally, it would be much easier for the consumer if the reduction the Deputy proposes were to be made, but the Minister adequately explained here today that he felt obliged to impose a severe measure of extra tax.

On a point of clarification, would the Minister reply to the point made by Deputy Murphy in regard to Resolution No. 12? Deputy Murphy referred to the tax of £10 per head on persons travelling out of the country in charter flights. He referred to invalids travelling to Lourdes, and the Minister said it could be discussed when the legislation will come before the House. He said he would favour it. Is the Minister aware that in his statement the Minister for Finance said he could not make any exemptions because it would make the thing unworkable? Why did the Minister now in the House offer such a hope to Deputy Murphy?

I am glad the Deputy has given me an opportunity to reply to this. Perhaps I went too far. I only wanted to do justice to Deputy Murphy. Off the top of my head, I personally would agree that disabled people are in a special category in so far as sympathy is concerned.

Off the top of his head, then, would the Minister pay the money?

(Cavan-Monaghan): He did not make any promise.

I did not. I merely tried to do justice to another Deputy by admitting that he had force in his point. I am not the Minister for Finance. The Minister for Finance has reasons, which I tried to explain to all and sundry, why he did not feel able to make this concession. It is not for me to predict whether he may be open to persuasion at a later stage.

Question put.
The Dáil divided: Tá, 81; Níl, 82.

  • Allen, Bernard.
  • Barrett, Seán.
  • Barry, Myra.
  • Barry, Peter.
  • Begley, Michael.
  • Bermingham, Joseph.
  • Birmingham, George.
  • Boland, John.
  • Browne, Noel.
  • Bruton, John.
  • Burke, Dick.
  • Burke, Liam.
  • Byrne, Hugh. (Dublin North-West).
  • Collins, Edward.
  • Conlon, John F.
  • Connaughton, Paul.
  • Connor, John.
  • Cooney, Patrick M.
  • Corish, Brendan.
  • Cosgrave, Liam T.
  • Cosgrave, Michael J.
  • Coveney, Hugh.
  • Creed, Donal.
  • Crotty, Kieran.
  • Crowley, Frank.
  • D'Arcy, Michael J.
  • Deasy, Martin A.
  • Desmond, Barry.
  • Desmond, Eileen.
  • Donnellan, John F.
  • Dukes, Alan M.
  • Durkan, Bernard J.
  • Enright, Thomas W.
  • Farrelly, John V.
  • Fennell, Nuala.
  • FitzGerald, Garret.
  • Fitzpatrick, Tom. (Cavan-Monaghan).
  • Flaherty, Mary.
  • Flanagan, Oliver J.
  • Fleming, Brian.
  • Glenn, Alice.
  • Governey, Desmond.
  • Griffin, Brendan.
  • Harte, Patrick D.
  • Hegarty, Paddy.
  • Higgins, Michael D.
  • Kavanagh, Liam.
  • Keating, Michael.
  • Kelly, John.
  • Kenny, Enda.
  • L'Estrange, Gerry.
  • McCartin, John J.
  • McMahon, Larry.
  • Markey, Bernard.
  • Mitchell, Gay.
  • Mitchell, Jim.
  • Molony, David.
  • Moynihan, Michael.
  • Nealon, Ted.
  • Noonan, Michael. (Limerick East).
  • O'Brien, Fergus.
  • O'Brien, William.
  • O'Donnell, Tom.
  • O'Keeffe, Jim.
  • O'Leary, Michael.
  • O'Sullivan, Toddy.
  • O'Toole, Paddy.
  • Owen, Nora.
  • Pattison, Séamus.
  • Ryan, John J.
  • Ryan Richie.
  • Shatter, Alan.
  • Sheehan, Patrick J.
  • Spring, Dick.
  • Taylor, Madeleine.
  • Taylor, Mervyn.
  • Timmins, Godfrey.
  • Treacy, Seán.
  • Tully, James.
  • White, James.
  • Yates, Ivan.

Níl

  • Acheson, Carrie.
  • Ahern, Bertie.
  • Alderman Dublin Bay-Rockall
  • Loftus, Sean D.
  • Allen, Lorcan.
  • Andrews, David.
  • Andrews, Niall.
  • Aylward, Liam.
  • Barrett, Michael.
  • Barrett, Sylvester.
  • Blaney, Neil T.
  • Brady, Gerard.
  • Brady, Vincent.
  • Brennan, Paudge.
  • Brennan, Seamus.
  • Briscoe, Ben.
  • Burke, Raphael P.
  • Byrne, Hugh. (Wexford).
  • Callanan, John.
  • Calleary, Seán.
  • Clohessy, Peadar.
  • Colley, George.
  • Collins, Gerard.
  • Conaghan, Hugh.
  • Connolly, Gerard.
  • Coughlan, Clement.
  • Cowen, Bernard.
  • Crinion, Brendan.
  • Crowley, Flor.
  • Daly, Brendan.
  • Doherty, Seán.
  • Ellis, John.
  • Fahey, Jackie.
  • Faulkner, Pádraig.
  • Filgate, Eddie.
  • Fitzgerald, Gene.
  • Fitzgerald, Liam.
  • Fitzpatrick, Tom. (Dublin South-Central).
  • Fitzsimons, Jim.
  • Flynn, Pádraig.
  • Foley, Denis.
  • French, Seán.
  • Gallagher, Denis.
  • Gallagher, Pat Cope.
  • Geoghegan-Quinn, Máire.
  • Harney, Mary.
  • Haughey, Charles J.
  • Hyland, Liam.
  • Joyce, Carey.
  • Keegan, Seán.
  • Kemmy, Jim.
  • Kenneally, William.
  • Killilea, Mark.
  • Kitt, Michael P.
  • Lemass, Eileen.
  • Lenihan, Brian.
  • Leyden, Terry.
  • Loughnane, William.
  • Lyons, Denis.
  • McCarthy, Seán.
  • McCreevy, Charlie.
  • McEllistrim, Thomas.
  • MacSharry, Ray.
  • Meaney, Tom.
  • Molloy, Robert.
  • Moore, Seán.
  • Morley, P.J.
  • Murphy, Ciarán P.
  • Nolan, Tom.
  • Noonan, Michael J. (Limerick West).
  • O'Donoghue, Martin.
  • O'Hanlon, Rory.
  • O'Leary, John.
  • O'Malley, Desmond.
  • Power, Paddy.
  • Reynolds, Albert.
  • Sherlock, Joe.
  • Smith, Michael.
  • Tunney, Jim.
  • Walsh, Seán.
  • Wilson, John P.
  • Woods, Michael J.
  • Wyse, Pearse.
Tellers: Tá, Deputies F. O'Brien and Mervyn Taylor; Níl, Deputies Raphael Burke and Fitzsimons.
Question declared lost.

In view of the result of the vote, I will proceed immediately to Aras an Uachtaráin to seek dissolution from the President.

The Dáil stands adjourned.

The Dáil adjourned at 8.15 p.m. until 10.30 a.m. on Thursday, 28 January 1982.

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