Public Business. - Finance (Customs and Stamp Duties) Bill, 1929—Third Stage. – Seanad Éireann (1928 Seanad) – Wednesday, 10 Apr 1929

Public Business. - Finance (Customs and Stamp Duties) Bill, 1929—Third Stage.

The Seanad went into Committee.

Cathaoirleach

This Bill has been certified by the Ceann Comhairle of the Dáil as a Money Bill.

SECTION 1 (4).

Whenever the Revenue Commissioners are satisfied that any partially manufactured woven tissue which but for this sub-section would be-chargeable with the duty imposed by this section is imported for further manufacture and subsequent exportation, they may, subject to compliance with such conditions as they may think fit to impose, permit such woven tissue to be imported without payment of the duty imposed by this section.

Mr. Douglas

I move Recommendation No. 1:—

Section 1, sub-section (4). Before the sub-section to insert a new sub-section as follows:—

"(4) Wherever the Revenue Commissioners are satisfied that any woven tissues, which but for this sub-section would be chargeable with the duty imposed by this section, were originally manufactured in Saorstát Eireann but have undergone a process of shrinkage abroad, they may, subject to compliance with such conditions as they may think fit to impose, permit such woven tissues to be imported on payment of duty only on the actual cost of the process of shrinking."

This Recommendation is moved by me at the request of the Woollen Manufacturers' Association. The object of a protected duty is, of course, to help those manufacturers, but it is quite clear that unless they are enabled to have goods which may be shrunk in London reimported here there is great danger that they may lose a serious portion of their export trade. I understand that very important representations have been made to the Minister in connection with this, and therefore I do not propose to argue the case further until I have heard what he has to say.

Minister for Finance (Mr. Blythe)

The points dealt with in the two proposed recommendations on the Order Paper in the name of Senator Douglas have been the subject of discussion between representatives of the woollen manufacturers, of the wholesale clothing trade, and the furniture industry and the Department of Industry and Commerce, and as a result the Tariff Commission have been requested to prepare a Supplementary Report dealing with these three points. As the members of the Tariff Commission are fully familiar with this whole matter, I think they will be able to hear such evidence as they require to hear, and to give early consideration to it. If they recommend that these concessions be given, either in the form suggested here or in some other form, it would be possible to embody them in the main Finance Bill. In fact, if there was urgency about the matter we could make them the subject of a resolution in the Dáil which would come into effect at once. I would suggest, therefore, to Senator Douglas that these matters should be left over until they have been reported on by the Tariff Commission, which, I can undertake, will happen very quickly.

Mr. Douglas

As far as the first recommendation is concerned, I am agreeable to that course being adopted. The second recommendation is as follows:—

New section. Before Section 2 to insert a new section as follows:

2.—(1) Where a person or company engaged in the manufacture in Saorstát Eireann of furniture or of bodies for motors or omnibuses shows to the satisfaction of the Revenue Commissioners that woven tissues made wholly or partly of wool or worsted are imported by them for the purposes of manufacture of furniture or of bodies for motors or omnibuses and that such tissues are not manufactured in Saorstát Eireann, the Revenue Commissioners may, subject to compliance with such conditions as they think fit to prescribe from time to time for the security of the revenue, allow the importation by such person or company without payment of the duty imposed by Section 1 of this Act.

(2)—Woven tissues imported under this section without payment of duty shall be used in Saorstát Eireann by the importer thereof in the manufacture or repair of furniture or bodies for motors or omnibuses and for no other purpose.

With regard to this, I would like briefly to point out that the matter is really both a serious and an urgent one for the furniture manufacturers. They at present employ a very considerable number of people. They are protected by a duty on household furniture, and as far as what is known as "stuff over," which is used for the making of arm-chairs and other upholstery work, is concerned, they are very seriously handicapped, because the woollen materials required are not made in Ireland. They are imported in small quantities, and there will be no benefit to anyone, except perhaps the Exchequer, by maintaining the woollen duty on this class of material. There would be very serious danger, in fact there would be very real hardship imposed on the furniture trade, if this matter is not dealt with, either as I propose to deal with it here by allowing the manufacturers to get the material in free in the same way that the manufacturers of motor tractors are dealt with later in this Bill, or by the provision of some technical definition definitely excluding furniture coverings. I understand that the matter is now to go before the Tariff Commissioners, and that if the Minister gets a recommendation from them that he will deal with it either by Resolution or in the main Finance Bill. In these circumstances, I am prepared to withdraw the recommendation. I suggest to the Minister that the matter should be dealt with by Resolution and not by an Act which would have to pass through both Houses of the Oireachtas. This latter procedure might cause too much delay and, in fact, injury.

Mr. Connolly

I would like to emphasise the fact that the materials used for furniture coverings, motor cars and coach-building upholstery are not manufactured in the Saorstát or indeed in any part of Ireland, nor is there any potential factory for their manufacture here. If relief is not given in regard to these coverings, then what will happen is this: that the present protective tariff of 33 one-third per cent. will be reduced to between 17 and 18 per cent. In view of the mass production methods across the water it would kill the advantage of the tariff altogether. I agree with Senator Douglas that it would mean that the "stuff over" trade—the upholstering trade—which is one of the most potential sources of employment in the furniture industry at present, would be almost wiped out as regards manufacturing here in competition with the mass-producing factories on the other side. The matter is one of great urgency. I feel satisfied, when the Minister realises that, that as speedy action as possible will be taken.

Recommendations, by leave, withdrawn.

Sections 1 and 2 agreed to.

SECTION 3.

(1) Where a person engaged in the manufacture in Saorstát Eireann of motor tractors shows to the satisfaction of the Revenue Commissioners that a substantial proportion of the motor tractors manufactured by him in Saorstát Eireann is exported, the Revenue Commissioners may, subject to the provisions of this section and to compliance with such conditions as they think fit to prescribe from time to time for the security of the revenue, allow the importation by such person without payment of the duty imposed by Section 11 of the Finance Act, 1928 (No. 11 of 1928), of motor tractor parts and assemblies of such parts.

Mr. Jameson

I move the following recommendation:—

Section 3, sub-section (1) After the word "person" in line 26 to insert the word "is" and to delete all from the word "shows" in line 27 to the word "exported" in line 30.

In Section 3 of the Bill there are points that really confine this concession to one firm in the Saorstát, and that seems to make it impossible for any other firm hereafter to come in and get the benefit of this section. If there has been some special arrangement made by the Government here to induce the firm of Messrs. Henry Ford and Son of Cork to come along here, in which case, of course, it will be necessary to put this guarding clause in for their trade, I suppose we ought not to say anything about it; but if there is no such arrangement I do not see why the section would not read better in the form suggested by my recommendation. I would direct the attention of Senators to the section, which reads: "Where a person engaged in the manufacture in Saorstát Eireann of motor tractors shows to the satisfaction of the Revenue Commissioners that a substantial proportion of the motor tractors manufactured by him in Saorstát Eireann is exported," and so on. The words that I have quoted from the section can only apply to someone who has at present a factory here. Supposing that General Motors Company, or someone else, proposed to come in here and to establish a factory, I believe the section as worded would bar them out. I think it would be much better that the section should be amended on the lines indicated in my recommendation, and that the whole thing should be left in the hands of the Revenue Commissioners. I think that even as regards Messrs. Ford that the words in the section at present are not necessary. Further, I do not think that it is seemly that such words as "a substantial proportion" should be put into any Act of the Oireachtas. What I suggest is that the matter should be left to the Revenue Commissioners.

If we are going to leave it to the Revenue Commissioners why not leave the whole matter to them? What do we mean by a "substantial proportion"? Is it one-half, one-third, or two-thirds? I think this sort of indefinite method of expression should not occur in any Act of Parliament. If the lines, as I suggest, were taken out that portion of the section would then read: "Where a person is engaged in the manufacture in Saorstát Eireann of motor tractors the Revenue Commissioners may, subject to the provisions of this Act," etc. Any person who wishes can then come along and the Commissioners can deal with the matter as they think fit according to the Act. Unless the Minister has some strong reasons for arrangements made which the words I propose would upset, then I think my proposal would be worthy of attention.

Mr. Comyn

It seems to me that the construction put upon this section by Senator Jameson is not quite accurate, and that the amendment which he proposes would give to the Revenue Commissioners a discretion which has never been given to Revenue Commissioners in any country. My submission is that the words "a substantial proportion of the motor tractors" are words which in the ultimate resort will be construed not by the Revenue Commissioners but by the courts of justice. I see nothing in the section which will prevent any motor manufacturers who may hereafter establish factories in this country availing themselves of the provisions of this section as it stands, because the section, whenever it comes for construction, will be construed as speaking from the date in which it comes before the court for construction. Therefore, I think on this question it would be inadvisable to alter the words of that section. They seem to me to have been very carefully drafted with a view to guarding the interests not merely of the manufacturers who are established at the present time, but any manufacturers who may hereafter consider it advisable to establish themselves in this country. I think it is right that people, a substantial portion of whose output is exported, should be encouraged.

We hear a great deal about the necessity for an export trade, particularly an export trade in manufactured goods. It seems to me that the section has been very carefully drafted, and I think that the words to which Senator Jameson takes exception could not be improved upon. Is he to substitute for them a certain definite percentage? If he is not it is, I think, advisable to leave to the proper authority the question of determination as to what is a substantial proportion, and that proper authority will not be the Revenue Commissioners but in the ultimate resort the courts of justice. That is my view of the construction of this section. I think the words in the section are just as good as the word "reasonable" which you frequently find in sections of Acts of Parliament, and the words "substantial proportion" are in the same nature as the word "reasonable" in analogous cases that appear in similar sections of Acts of Parliament. For that reason, I think the section as a question of drafting is very well done and that an alteration in the section would not be an improvement.

Mr. Douglas

It is almost surprising to find Senator Comyn arguing in favour of a monopoly. My objection to this section is that while it does make provision for Ford's, of which I strongly approve, I am of opinion it is not necessary to do it in such a way that another firm which started in the manufacture of tractors, and which could not prove that they were exporting a substantial proportion, could not get the advantage of this, and, therefore, would be at a disadvantage in comparison with the larger firm. I cannot see that we ought to provide that there should be a substantial proportion exported, because the firm will be allowed to use parts imported for home trade as well. That is clear in the section. It seems to me the simplest and the most straightforward way is to allow a firm manufacturing tractors to bring in parts free of duty.

Mr. Blythe

I think the words objected to express the intention of the section. I think we should leave it with the intention perfectly clear. The position is that motor tractors are subject to duty, and motor tractor parts on entry are subject to duty, but, on the other hand, with regard to parts which have been imported and used in the assembling of tractors, a draw-back can be paid in respect of them if exported. The position so far as Ford's is concerned is that the parts which they import and afterwards export in assembled tractors do not pay duty. Ford's are compelled to keep special books to give special returns, and to undergo expense, in order to avoid paying the Saorstát duty on parts which do not go into consumption in the Saorstát. In view of the fact that this firm are giving a substantial measure of employment here, and giving that employment by making something here which is exported, we propose to give them this concession which will save them trouble and expense. The reason for giving them the concession is that they are mainly an exporting firm. In order to give the concession we might have said "mainly" instead of "substantial" if we had liked.

The fact that we give Ford's this concession is no reason why any other firm which may start manufacturing here should not get it, because there will be no bona fide firm starting the manufacture of tractors here unless they are going to export the main part of them. If we were dealing with any other firm here we would be dealing with some non-bona fide firm which would manufacture some tractors in order to get advantage of the free importation of parts. I do not think we should put the Revenue Commissioners to the trouble and expense, and perhaps litigation, that would arise in connection with some such firm, and I do not think we should disguise that our intention in this matter is simply to give a special concession to a manufacturing firm which are giving a great deal of employment by the manufacture of goods which are mainly or almost entirely for export.

Sections 3, 4, 5 and 6 put and agreed to.

The Seanad went out of Committee.

Bill reported.

Seanad Éireann díospóireacht -
Wednesday, 10 Apr 1929