This Bill has been certified by the Ceann Comhairle of the Dáil as a Money Bill.
FINANCE BILL, 1927—FINAL STAGES.
CATHAOIRLEACH
Question proposed—"That the Bill be considered on Report."
In connection with this Bill I have the following proposal to make: That it be a recommendation from this House "That the income-tax for the County Borough of Waterford for the year 1927-28 be levied on the old valuation, in accordance with the undertaking given by the Minister in his letter dated 20th October, 1924, to the ratepayers of the said County Borough."
CATHAOIRLEACH
There is a difficulty about this matter. You brought this up on the Second Reading of the Bill.
This is a different recommendation.
CATHAOIRLEACH
You see the position is that the Minister is not here, and has received no notice of this.
The recommendation that I proposed yesterday was as follows:—
"Section 1, sub-section (2). Before sub-section (2) to insert a new sub-section as follows:—
"(2) The revaluation made in the year 1924 by the Commissioners of Valuation of the tenements and hereditaments in the County Borough of Waterford shall not become operative for income tax purposes until the expiry of the present quinquennial Valuation Roll for the said County Borough."
The quinquennial period will expire in the income tax year commencing on the 6th of April, 1928. The present Finance Bill deals with the year from 6th April, 1927, to 6th April, 1928. The recommendation that I am now proposing is as I have read it.
CATHAOIRLEACH
I quite realise the interest that you have taken in this matter, and how important it is for your constituents and that, therefore, you should get every latitude, but I could not accept this recommendation for this reason: So long as you are not seeking to make a recommendation amending the Finance Bill I could not accept an amendment which would affect the incidence of taxation, assuming that this Bill is passed into law. If this Bill be passed into law it definitely fixes the incidence of income tax and the liability for the coming year. No pious expression of opinion will have any effect upon that, and unless you are seeking by your recommendation to introduce some amendment into the Finance Bill to accomplish your purpose you would not be in order. Have I made myself clear?
You have, but I submit that Senators are entitled to make recommendations as regards the Bill before it is passed in its present form.
CATHAOIRLEACH
That is so, but they must be recommendations appropriate to the Bill. They cannot be recommendations of an administrative character because the Minister has no power to administer anything except the law. Once this Bill is passed he can give no alleviation such as the Senator desires unless that is provided for in the Act itself.
There are certain exemptions for which provision is made in the Bill.
CATHAOIRLEACH
If you want to add to those, that is another matter, but that would require a substantive recommendation.
If I cannot proceed by way of moving this recommendation, then the only thing open to me is to proceed by way of making a personal explanation.
CATHAOIRLEACH
You are quite at liberty to do that.
In doing that there are two points which will need to be made clear in order that the Seanad may be able to appreciate the position in Waterford. The first point is: that there was a definite undertaking as to exemption for the quinquennial period entered into by the Minister with the citizens of Waterford. The second point is that the people of Waterford are being penalised as a result of a departure from that undertaking which was given by the Minister. As to the first point, I am sorry that the Minister for Finance is not here, but I will read for the Seanad the actual letter from the Minister giving this undertaking.
CATHAOIRLEACH
I think you have made that perfectly clear already. I am only expressing my own opinion, but it occurs to me that you made that quite clear when you spoke on this matter yesterday. You see the difficulty about this is, that this is really a personal issue between yourself and your constituents and the Minister. It does not affect the Bill. If the Minister finds that he is not in a position to carry out that undertaking or any promise that he gave, that, of course, is not binding upon the Executive Council in any way. It may be that in the result they may find themselves unable to give effect to it, so that really in the end it would only remain as a personal issue, if I may so describe it, between you and your constituents and the Minister. The Minister and yourself both had your say on that. I think that your position is quite plain, and I do not think the action you took requires any further indication on your part, which, if I may venture to say so, was, I think, quite proper.
The Minister on the first occasion the matter was raised showed that it was possible to introduce a remedy into the Finance Bill.
CATHAOIRLEACH
I agree that it is quite possible, but you see he did not do it.
The Minister for Finance, when speaking on the matter, said "He admitted that the change under the Finance Act, 1925, was made without any advertence to the position of Waterford... Had they remembered they might not have made the change, but it was made to apply to the whole country." That shows that on the introduction of the Finance Bill of 1925 the change could have been made.
CATHAOIRLEACH
I think the Minister admitted that.
The deduction to be drawn from that statement is that it can be remedied in a similar instrument, namely, the Finance Bill of 1927.
CATHAOIRLEACH
But the Minister refused to do it.
You have ruled against me?
CATHAOIRLEACH
No. If I ruled against you I would not have allowed you to re-move the recommendation that you moved yesterday. All that I am saying now is that if you wish to renew the recommendation it would be very difficult for me to allow it in view of the fact that it has been debated twice already. As I understood from you, you indicated that you proposed to speak for a different purpose now, namely, to make a personal explanation of your own position. If you would accept a suggestion from me it is that, I think, the House fully appreciates your position and I think no explanation is required.
I can quite see the Minister's point that for the year 1926-27 the income tax has been mostly collected under the rules and regulations of the Finance Act of 1925, and that the dislocation that would ensue from trying to readjust the position would be such that it would be almost impossible to do it because I believe that some of the money collected has already gone to the British Treasury. My present suggestion is to let all that stand as it is and to take it that the ratepayers will be mulcted in income tax for that period at the increased valuation. They must be satisfied with that. It is irretrievable and cannot be remedied, but I suggest that for the current financial year, from the 6th April of this year to the 6th April of next year, they should get this concession. Let this proposition begin to operate then. That will bring them up to the end of the quinquennial period. The quinquennial period ends on the 6th April of next year.
CATHAOIRLEACH
Then it should take the form of a recommendation that for the financial year 1927-28, they should be only liable for income tax at the old valuation?
That is my recommendation, and I ask the Seanad to approve of it.
CATHAOIRLEACH
Have you put it in writing?
Yes.
CATHAOIRLEACH
Then I will take it.
Would the Senator include another important city in his recommendation?
I have quite a mouthful to chew already.
CATHAOIRLEACH
I presume you refer to Dublin, Senator Haughton.
I take it that it is accepted I am quite in order in proceeding with this recommendation. As to the first point, I think it is already proved. In fact it was admitted by the Minister himself, here in the House, that "the change under the Finance Act of 1925 was made without any advertence to the position of Waterford. The city moved for a revaluation and when they found that it meant a considerable increase in the valuation of the city, they tried to stop the process."
CATHAOIRLEACH
That is another common factor in the case. It is not disputed. They had asked to have the revaluation and then they did not like it.
They meant only to have a readjustment in the incidence of the tax, but when the valuation was increased by 50 per cent., of course it alarmed the whole city. Continuing his statement the Minister said: "It was not possible to do so and they were told that they would have a respite because the assessment would not come into force until the end of the quinquennial period." I have the Minister's own words, that "that respite was lost under the Finance Act of 1925 because the position of Waterford was not adverted to. Had they remembered they might not have made the change, but it was made to apply to the whole country and they could not make a special exemption for Waterford." That is a conclusive answer in regard to point No. 1, that an undertaking was entered into between the Minister and the citizens of Waterford—the Corporation, the Chamber of Commerce and the licensed vintners—that they were to be exempt for the quinquennial period from the operation of the increased valuation.
As to point No. 2, the Minister said that it was really a matter that only meant £1,000 to the citizens, and that that was a very small amount. To show how irresponsible the Minister is in this matter, and how glibly he talks without any sufficient information, I wired last night to the Secretary of the Chamber of Commerce, Mr. Grubb, as to that matter. He wired me back this morning, stating that the additional licence duty for last year alone amounted to £1,114 7s. 10d. The Minister said that it was only a matter of £1,000, and afterwards he said it would only mean about £750. If I continued drawing attention to it it would, I suppose, ultimately be whittled down to a shilling or half-a-crown. In one item alone, the increased licence duties, there is an increase of over £1,000. The income tax under Schedule A for the year 1926-27 was £5,000, and at the present rate of 3s. in the pound for the current year, commencing April 6th last, it will amount to £3,750, plus the increase on the licence duty. It represents for the suspended portion of the quinquennial period, in the aggregate, a sum of about £12,000 for the City of Waterford. That is an imposition which the city cannot afford to bear. At the moment it is a dead city. There are 2,000 unemployed, factories are closing, and traders along the quay front from day to day are simply trying to prevent their shutters from being put up altogether. The traders and citizens cried out when they found that the revaluation had increased their income tax by about 50 per cent. They knew they would be unable to bear this addition to the tax. It meant bankruptcy for some of them. As to the second point, a certain number of the merchants of the city are determined to resist this, and to allow themselves to be brought into court. The equities of the case are on their side, and they are quite prepared to go to court. That will be an exposure in court—the Government charged with a deliberate breach of faith in connection with Waterford Corporation and Chamber of Commerce, because an honourable undertaking was entered into which was ruthlessly and lightly cast aside by the Minister for Finance. I will read for you a resolution passed at a special meeting of the Directors of the Chamber of Commerce on March 18:—
That in view of the imminence of the Finance Act, 1927, we, the Directors of the Waterford Chamber of Commerce, desire to draw the urgent attention of the Minister for Finance to the imposition of the new valuation to the Income Tax and Licensing Act Schedule for the current year in the Borough of Waterford, more especially in face of the definite and clear undertaking given in 1924 that this should not take effect until 1928-29, and we call on the Minister for Finance to redress this grievance and to fulfil the promise of the Government by inserting a retrospective enabling clause in the forthcoming Finance Act, unless this can be effected by other means.
I am not asking for that now in my recommendation as I realise that it would cause a considerable amount of dislocation. They have been mulcted to the extent of £6,000. I say that for the present financial year, that is, from the 6th April last to the 6th April next, the concession ought to be made. It would be a small matter to the Treasury but a big thing for Waterford. It is an honourable way out. I think the Seanad ought to take a stand in a matter of this sort, particularly when an undertaking is given. It would have a very bad effect if the matter came to Court and if it was broadcasted that it was possible that any Minister of any Government could treat the income tax payers of an important city like Waterford in this cavalier and dishonourable way. This is a way out for the Minister to enable him, as they say abroad, to save his face. Promises of this sort are rigidly kept in other countries. A Chinaman, for instance, will never sign a contract, but when its terms are explained to him he simply assents, and he is prepared to go into the Bankruptcy Court and beggar himself and his family rather than commit any breach of contract. I think that we have something to learn in the matter of commercial probity even from the heathen Chinee. I suggest that the Minister should make every effort to retrieve the Government position in Waterford where electioneering prospects are not very rosy. The matter with which we are now dealing will render our position there well-nigh impossible if I have to go back and say that my representations have been turned down by the Minister. Such a result would ruin the chances of the successful return of the Cumann na nGaedheal candidates among the business community. I ask the Minister whether it is honest or politic to refuse to right this wrong, particularly when it can be so easily remedied by adopting the recommendation which I have proposed.
CATHAOIRLEACH
I should explain to Mr. Blythe that, with some misgiving, I permitted Senator Kenny this morning to move his recommendation in a somewhat altered form. The recommendation which he now wishes the Seanad to adopt is one exempting for the present financial year the citizens of Waterford from income tax, except on the basis of the quinquennial period of taxation. The Senator wishes to let the tax for the past years remain as it was. The recommendation does not claim any adjustment or readjustment of the tax for these years but seeks for a redress during the current financial year, and bases that on the plea of a promise or pledge given by you that that relief would be given.
I do not desire, as one connected with the County and City of Waterford, to interfere in this matter, nor do I voice the plea or threat put forward in Senator Kenny's speech, nor do I rise to voice any grievance which the taxpayers of that city may have. I rise to point out that the good faith of the Government is involved in this matter. There is a clear Ministerial pledge. The letter has been read, and one realises that these things are only binding by honour and Parliamentary practice in all reputable countries. I make a plea to the Minister to meet the case put forward by Senator Kenny.
In view of what Senator Sir John Keane has said, and in view of what was said last night, my view is that, apart altogether from the denial of the pledge by the Minister, if a pledge was made to give a preference of this kind to one city as apart from any other part of the country, it is not the sort of pledge which this House should support or endorse.
I would like the Minister to understand the altered position. I quite appreciate his difficulty in acceding to the proposal of yesterday, as it would mean, as he said, a grave dislocation and an almost impossible readjustment of taxation, because the income tax for the most part has been collected for the year 1926-27, and some of it has been forwarded to people in England. I have been in communication with Waterford, and I am in a position to make this offer as a reasonable compromise. The city paid for the year 1926-27, wrongly as they contend, the income tax on an increased assessment. They are satisfied now to suffer that wrong in view of the impossibility of re-adjustment, as outlined by the Minister, but now ask that income tax for the current financial year shall only be levied on the old valuation. The end of the current financial year will synchronise with the termination of the quinquennial period, and, therefore, to some extent, by agreeing to that, the Minister would redeem his promise. It is a way out, and it will save a great deal of bickering in the city, and probably the Minister will not hear anything more about it. Failing the granting of that concession, I understand that the Chamber of Commerce are determined to resist the additional payment by bringing the matter to court.
I have only to say that there was no promise in the matter. What happened was that an explanation of the then existing position was given to the deputation. Since then, without advertence to that explanation and discussion, the existing position was changed, but there was no such thing as a pledge given to the deputation. I deny that any pledge was given. I have said what happened was that the position was explained to them, and perhaps in view of that discussion, if we had adverted to it, we would not change the position, but we did change it and no wrong was done by the change. It simply meant that the people paid their income tax on a very reasonable valuation, founded on the 1914 and not on the inflated basis. It would be impossible to go back in the case of Waterford without going back in other cases. As I pointed out last night, although there was not a general revaluation of Howth there was a series of revisions of property which had not been altered. It meant that the township of Howth was almost revalued in the same way as if there had been a general re-valuation. I do not think we could fairly go back in the case of Waterford without going back in the case of other places, such as Howth.
There was no promise made to these other places.
There was no promise made in the case of Waterford, and if you rely on that, I simply sit down.
Would the Minister read his own letter?
You can read it. You have read it already two or three times.
Pardon me, I have not. I must justify myself.
CATHAOIRLEACH
Read it, please, once and for all.
On October 20th, 1924, Mr. J.J. McElligott wrote the following letter from the Ministry of Finance:—
"To the Town Clerk, Waterford. F.91/2/'24.
"With reference to your letter of the 30th ultimo, transmitting copy of a resolution passed by the Waterford Corporation at a special meeting held on the 29th ultimo, in reference to the revaluation of the County Borough of Waterford, I am directed by the Minister for Finance to state that he understands that the revaluation was undertaken at the request of the Waterford Corporation on the grounds that the existing valuations were irrelative, and consequently the burden of rating was unfairly distributed; that in accordance with that request the necessary warrant directing the Commissioner of Valuation to undertake the revaluation was issued on the 24th November, 1922; and that the lists of the revaluation were issued to you on the 1st ultimo, and the statutory notices of their receipt and of the right of any person concerned to lodge objections within the period of twenty-eight days was duly issued by you. The general results of the valuation may be summarised as follows:—
(a) The total valuation of the Borough was increased from £51,199 to £76,819. This represents an increase of slightly over 50 per cent.
(b) 65 per cent. of the tenements in the Borough have been increased by less than 50 per cent., and, therefore, that proportion of the ratepayers will benefit by the reduction of the rates consequent on the increase of the total of the valuation. Of this 65 per cent. some 10 per cent. of the tenements remain unaltered or have been reduced. Some 27 per cent. have been increased by small amounts, and the balance of the 65 per cent. has been increased by less than 50 per cent. In all these cases the ratepayers have been bearing an undue proportion of the rates of the Borough.
(c) 35 per cent. of the tenements have been increased by over 50 per cent., and the ratepayers concerned have not hitherto been bearing their full share of the burden of rates.
Consequent upon the agitation which had resulted from the publication of the revaluation lists, a representative of the Valuation Office visited Waterford during the currency of the period within which objection could be lodged. The Minister is informed that he had interviews with the Directors of the Chambers of Commerce, the Committee of the Licensed Vintners' Association, the Corporation and individual ratepayers, and he found that objection to the revaluation was mainly based on its effects in relation to:—
(a) Income tax under Schedule A.
(b) Increase in Licence Duties.
(c) The large increase in the value of licensed premises.
It was pointed out that most of the increases in the valuations occurred in the main thoroughfares and affected the large business concerns, and as in these cases income tax is assessed under Schedule D, the additional impost of the tenant under Schedule A, would, in these cases, be credited in the assessment under Schedule D, so that little additional burden would, therefore, fall on the taxpayers in this connection. It was also pointed out that the present quinquennial valuation roll for Waterford would be in force for about four years more, and, except in the case of new and improved premises, the revaluation would not become operative for income tax purposes until the expiry of that period. It was further pointed out that the valuation of the licensed premises for the first time included the valuation of licence, as had been the case in the revaluation of Belfast and Dublin, but that in all probability the addition of 20 per cent. to the existing valuations for the purposes of determining licence duties would, following the precedent of Belfast and Dublin, be discontinued in whole or in part on application being made to the Revenue Commissioners. These facts considerably modified the attitude of many of the ratepayers, and while every encouragement was given to lodge objections if it was felt that the slightest injustice had been done, it is significant that although 35 per cent. of the ratepayers must inevitably pay a larger proportion of the rates, only less than 19 per cent. of them lodged objections to their valuations. It was also stated that as the revaluation would not come into force for rating purposes until all the appeals had been dealt with, it was quite probable that this would occupy a period of some months, and probably the revaluation lists could not be issued in time for an earlier rating than that of the financial year 1926-7.
In the circumstances, therefore, the Minister is unable to accede to the request conveyed in the Corporation's resolution for the suspension of the operation of the revaluation of the County Borough of Waterford. The suspension would be a decided disadvantage to 65 per cent. of the ratepayers of the borough, and it is probable that any attempt to give effect to the suggestion for suspension would be resisted by most of these ratepayers. The Minister has been informed that, in fact, a protest against the proposal has been lodged with the Corporation, and, in the circumstances, he feels sure that the Corporation will now agree with him that it is highly undesirable that the operation of the revaluation should be suspended."
As to the rates, we have no grievance. That is a local matter. As to income tax, the undertaking lies there and that is our grievance.
There was no promise.
CATHAOIRLEACH
I do not understand why Senator Kenny read that long letter because, so far as he read it, it tends to negative the suggestion of any pledge or promise such as he described. I am speaking only from hearing the letter read, and if that is the letter he relies on as containing the Minister's pledge or promise I confess that I failed to hear in it anything in the nature of the pledge or promise of the kind suggested.
I think that, possibly, you must not have heard the one paragraph which deals with that matter. That letter was written by instruction of the Minister for Finance. It says:
"It was also pointed out that the present quinquennial valuation roll for Waterford would be in force for about four years more and, except in the case of new and improved premises, the revaluation would not become operative for income tax purposes until the expiry of that period."
That is not a promise.
CATHAOIRLEACH
It amounts to this: that they were led to believe, perhaps rightly, that as the law then stood this valuation would not come into force until the expiration of the quinquennial period. That might have been the law as it then stood.
There is no doubt it was.
That was really a compromise in view of the agitation set up. This official went down and that was a compromise arranged.
CATHAOIRLEACH
The House is in possession of your case and I must now put the recommendation.
Recommendation put, and, on a show of hands, declared lost.
Question—"That the Bill be considered on Report"—put, and agreed to.
Question—"That the Bill be received for final consideration and do now pass"—put, and agreed to.