Seanad Éireann díospóireacht -
Wednesday, 29 Mar 1933

Vol. 16 No. 15

Central Fund Bill, 1933 (Certified Money Bill)—Second Stage.

Question proposed: "That the Bill be now read a Second Time."

Minister for Finance (Mr. Seán MacEntee)

The purpose of this Bill, as no doubt all the members of the Seanad are aware, is to make it possible to issue out of the Central Fund, first of all, the amount required to meet the Supplementary Estimates not covered by the original Appropriation Act of 1932; and, secondly, to issue out of the Central Fund that sum which will be required to meet the cost of the normal Supply Services for the first four months of the year.

I do not know whether it is necessary to deal with the Bill at any great length, but with regard to Section 1 of the Bill, which is concerned with the provision to be made to meet the cost of the Supplementary Estimates, the House may be interested to know some of the major items covered by the sum of £2,694,112 mentioned in that section.

The first is the Supplementary Estimate of £250,000 on Vote 7 for the old age pensions. That represents the cost to the State of the additional benefits granted by the Old Age Pensions Act of 1932. The next item of importance is the sum of £350,000 which is provided under Vote 69 for relief schemes. The next item is £250,000 which is provided under Vote 74 for the relief of rates. That is the special and additional grant which was given for relief of rates on agricultural land last year. The next item is £1,616,000 which is to be provided under Vote 75 for the advance to the Guarantee Fund and which, in fact, represents the complementary step which must be taken to the passage of the Land (Purchase Annuities Fund) Bill in order to recoup the Central Fund, the Emergency Fund, and the local authorities the amounts withheld on account of the deficiency in the land annuities collection. The other items are of minor importance and represent what would be the normal Supplementary Estimates at this time.

With regard to the sum of £7,985,460 covered by Section 2 of the Bill, that represents the usual provision made at this time of the year in order to enable the public services to be carried on pending the passage of the Estimates by the Dáil, the presentation of the Budget, and the principal Central Fund and Appropriation Bills of the year. I do not think that it will be necessary to deal at length with these. It would take a long time to do so and possibly the agenda is heavy. It might suffice if I were to point to the main differences between this Vote and last year's Vote. The first thing that arises is that the Vote this year is slightly heavier than last year. This Vote is for £7,985,460 out of the total provision of £22,039,951, as compared with last year, when the amount asked was £7,840,460. However, there are two rather striking differences between this year's and last year's Estimates to which I would like to refer.

On Vote No. 7—Old Age Pensions—there is an increase of £479,000 for the complete year for the additional benefits conferred under the Old Age Pensions Act of 1932. On Vote No. 8—Local Loans—provision is asked for £900,000 out of the total of £2,150,000. There is an increase in the total Estimate over last year's provision of £1,000,000. When we consider the amount voted last year as a Grant-in-Aid to the Local Loans Fund there will be an additional provision this year of £1,600,000. Of the sum asked this year, £318,513 is provided as a Grant-in-Aid to cover loans sanctioned in 1932-33 in excess of the amount originally provided in that year. The increase in the amount required on account of the normal Grant-in-Aid for 1932-33 is chiefly due to the provision made for loans for housing purposes which will be £1,700,000 for the coming year, as compared with £350,000 last year. The amount which we are asking for in this Central Fund Bill on account of housing loans is approximately £500,000. A sum of £100,000 will cover loans to public authorities and cover the cost of other classes of public health works and constructional works generally. Similarly in Vote No. 41 there is a net increase in the Estimate of £229,980 over what was provided last year, and of this increase £220,000 mainly represents increased provision for housing grants.

As against these items, in which considerable increases are being granted, there are some items in which certain deductions have taken place and to which possibly the House would like me to refer. The first provision is in Vote No. 8—Local Loans. Last year that Vote included provision for the annuity payable to the British Local Loans Fund under the Ultimate Financial Settlement of £600,000. We do not propose to ask the Oireachtas at this stage to make that provision and accordingly nothing has been included in the Estimates to cover that £600,000. The whole of the £2,150,000 asked for in Vote 8 this year will be spent in this country in providing employment and in the execution of useful public works. Similarly in regard to Vote No. 16, provision was made last year for recoupment to the British Government of £105,000 in respect of the civil pensions and £1,126,500 in respect of the Royal Irish Constabulary pensions. The Vote this year does not include any provision for these payments, and accordingly the total amount of the Vote will be reduced by £1,234,640. On Vote No. 55—Land Commission—there will be a total decrease of £190,483 and that is accounted for very largely by the non-inclusion of provision for payment to the British Government of a contribution towards charge for excess stock of £134,500 and a further decrease of £73,455 to meet the deficiency of income from untenanted land. These are the principal items upon which there has been any very great departure from those of last year.

There have been minor reductions which are very largely accounted for by a decrease in the bonus payable to civil servants owing to the fall in the cost of living figure. I might say that it is a rather striking commentary on what we were told when the Government's protectionist policy was being considered in the Oireachtas, that one of the effects would be to increase considerably the cost of living. So far as the cost of living figure may be taken as a true representation of any changes which might take place in that very composite quality, which we refer to as the cost of living, there has been a very substantial decrease rather than an increase. I do not think that there is anything else that I might usefully say at this stage.

Miss Browne

With regard to the Minister's last remark, does he remember that there is an economic war in progress at present, and that the prices of farmers' produce have decreased enormously? Is he boasting about that? I would like to comment upon another item to which the Minister referred—old age pensions. When the Bill was here some Senators protested against the change that was made in the means test. That was one of the greatest public scandals that ever happened in this country. I am not referring to the administration of the Act but to the effects of removing the means test. I know cases where people who own motor cars and wireless sets, and who have electric light in their houses, are making their farms over to their relatives in order to live on the State and draw the full pension of 10/- a week. It is becoming a terrible scandal in the country and I would like to protest against it. I protested when the Bill was going through this House and I protest against it now. With regard to the prices of many articles which have to be imported it is not true that they have decreased. Prices have increased. Except for farmers' produce there is no decrease in the cost of living. I hope the House will not agree that it is a thing to be boasted about, that the cost of living has gone down, because of the impoverishment of farmers, who are not able to sell their produce.

Mr. Wilson

I would like to get some information from the Minister, particularly with regard to the rate of interest charged for the building of agricultural labourers' cottages. The House will remember that in the Local Loans Fund last year there were two items, one of £600,000 and one of £550,000, which in the ordinary course would be raised from the taxpayers and which under the previous Government was regarded as abnormal expenditure, but would be repaid, as the loans fell due, by those who received the money. When these items were going through I was of opinion that the reason why these items were placed on the taxpayers was that the Government had in mind the question of issuing the money at a very low rate of interest in order to have houses built for labourers. The money is raised from the taxpayers and therefore can be issued without the necessity of repaying the capital. Under the former Government the price at which the loans would be issued included repayment of the capital and sinking fund. That practice was departed from last year. Notwithstanding that, I find that these loans are being issued at 6 per cent. or 6¼ per cent. Seeing that the taxpayer has already paid the money, I do not think that is right. The main difference between this Bill and last year's Bill is a reduction in the amount of money paid to Great Britain, amounting to over £2,000,000. Although that money is not included in this year's Estimates they are higher than the amount asked last year. The reason given by the Minister is that there is an increase in the cost of old age pensions, which is, perhaps, well spent money, and £1,000,000 extra needed for Local Loans for housing. I notice that the Minister did not indicate that the £448,000 is to be given to the relief of local taxation this year, notwithstanding the fact that the money is not being paid to the British. The Estimates as a whole are greater than those of last year. While the payments to England are not included in them, the amount for the relief of local rates is diminished by about £440,000. That would give an idea of the increasing cost of government of this country under a Government that was to reduce expenditure and to give the same satisfaction on a reduced Estimate. I think that would take a lot of explaining. Perhaps the Budget will show that the necessary money will be found in another way. Probably the Minister will get it from sweepstakes.

Mr. MacEntee

Does the Senator object to getting it in that way?

Mr. Jameson

It is rather difficult to discuss this Bill seeing that we only got the Estimates yesterday. It is not easy to go through the Estimates, to analyse them, and then to come here and discuss them at such short notice. We have a proposal from Senator Robinson to have the different stages of the Bill completed this afternoon. Such a proposal reminds me very much of the pictures issued by the petrol companies, of a man who is looking out for a motor car to appear and when he looks again he finds it is gone. Our chances of debating these Estimates under such circumstances are infinitesimal. This is the expenditure side of the Budget. I take it that there will be ample time to discuss the items when we see the Budget and know where the money to meet the expenditure is to come from. The Minister has explained certain decreases in expenditure and referred to local loans for housing. I have no doubt that the plans for these schemes are sound, and that the superannuation and retired payments to which he referred, deal with the money that is in dispute with Great Britain. The money for the land annuities does not come under this Bill, but the Bill means that this is a continuation of the war with Great Britain, a war which the farming community are finding so burdensome. The Bill is a practical admission that the war is going on. In the Dáil the Minister stated that a Grant-in-Aid of agriculture of £1,750,000 will be provided. I have been trying to find where these figures appear. I could not find a supplementary agricultural grant of £448,000. I could not find anything, except £229,000, under the Vote for Local Government and Public Health. Where is £1,750,000 mentioned?

Mr. MacEntee

Might I point out that £599,000 of the Supplementary Agricultural Grant is charged on the Central Fund and does not appear in the Estimates. The next thing is that it will be necessary to introduce a new Bill during the coming financial year to distribute the agricultural grant on the new basis. Accordingly, as the new Bill has not yet been introduced, and has not passed the Oireachtas, we could not include that provision in the volume of Estimates now before the Oireachtas.

Mr. Jameson

Then the grant which the Minister mentioned in his speech is not in the Estimates?

Mr. MacEntee

Not the whole of it.

Mr. Jameson

That explains why I could not make the figures balance. There is no use, therefore, in my saying anything more about agriculture. The Minister has explained why there is a difference in the totals. As regards expenditure generally the figures are practically the same as they have been for some time. There may be a difference of £500 or of £200 or £300 here and there, but in the Estimates before us there is nothing to show that, as regards the ordinary cost of running the State, we are doing it any cheaper now than we were before. I take it the Minister's answer to that will be that it cannot be done for anything less. Probably he is right. At any rate there are no savings apparent.

Then I come upon a rather strange thing. I find a reference to relief schemes, but against a number of them there are no figures entered. Section 1 of the Central Fund Bill that we are discussing provides for the issue of £2,694,000 odd out of the Central Fund for the service of the year ending the 31st March, 1933. It is quite evident from the blanks in the Estimates that such a provision is not being made for the year ending 1934. Is it the belief of the Government that they can get through next year without any Emergency Fund grant-in-aid? The fact that the payments to the British Government—superannuations and annuities—are being withheld shows that the economic war is to go on full tilt. Last year there were various bounties and grants to agriculturists who shipped their produce to Great Britain. Are there to be no more of these? Are they all to cease? There is no provision being made for them so far as I can see. Are we to have, this year, what probably was excusable last year, emergency grants rushed through the Dáil, and then brought forward to this House in such a way that Senators will not have any chance of discussing them adequately? Are we to have them brought forward and rushed through at one sitting? If that is so, then we will be in the same position this time next year that we are in to-day: passing a sum of 2¼ millions extra under the title of an emergency grant put through the Dáil and brought forward here for five minutes discussion.

I see that the Olympic Council and the Tailteann Games are not going to get anything this year and that the leather subsidy is to be discontinued. The Minister stated definitely that the sum for the relief of rates on agricultural land is to be down by £250,000. He has stated that relief schemes are only to have £150,000, showing there a saving of £350,000. Is there anything in the present state of the country, known to any member of this House, which would indicate in the slightest degree that the cost of relief schemes is likely to be less this year than last year, or that the need for them is likely to be less? In my opinion quite as much will be needed for relief schemes this year as last year, and yet a saving is shown under this head of £350,000.

I now come to advances from the Guarantee Fund. I must ask the Minister to explain that clearly. In banking, advances mean a thing that you expect to get back. I presume the Minister hopes to get back the £1,600,000 from the people against whom it has been charged. He is going to get that money, I take it, out of the money held in suspense. That is the way that item is going to be cleared. Therefore, one must come to the conclusion that if we had not these nice little nest eggs, as a result of the great war with Britain, we would be in a shocking financial condition now. Of course, there is the other way of looking at it that if we had not the war we would not be in this financial condition, and would be able to pay our rates and hold our heads up. I want to point this out to the House: that if the economic war is to continue next year no provision, so far as I can see, is being made now to help those who will suffer as a result of it. There is nothing before us to show how the money needed to help them is going to be provided. The Minister will probably deal with that later on. Quite a number of columns in the Estimates before me are left blank, but if the economic war goes on they will have to be filled up and filled up by further taxation, and under the very worst system of doing that, namely, with emergency grants rushed through when the need for them arises.

I think the Government, at the present time, ought to have some fair idea of what all these bounties, bonuses, grants-in-aid, and everything else that will probably arise next year will amount to—the gross amount that would probably cover them. I think that information ought to be given in the Estimates, and that we ought to have a statement from the Minister. This idea of having Estimates for £22,000,000 is entirely wrong. I do not think it is a right thing for the Government, in our present situation, to evade the issue; they should give us an estimate of what they consider the things on which we spent two or three million pounds last year are going to cost this year. I think that when the Budget is introduced we should have estimates put before us honestly telling us what the Government believe is the amount of money they will require in the current year as well as the reasons for asking the House to assent to it. I do not think the Government should act as they are acting here, leaving a lot of blanks to be filled up by emergency legislation later, legislation put through in a hurry.

Mr. O'Rourke

I would like to know from the Minister for Finance how he justifies the deduction of one shilling in the pound in the agricultural grant. This matter is now before the different county councils. The Monaghan County Council, of which I am a member, met yesterday. We decided to strike a rate which is sixpence in the pound higher than last year. That increase of sixpence is due entirely to the cost of home assistance. If it had not been for that we would have been able to carry on with last year's estimate. The increase of sixpence in the pound for home assistance is due altogether to the present Government's economic policy. The cost of home assistance has increased because poor working men are unable to get work. There is no employment in the towns owing to the fact that the farmers have no money to spend. At our special meeting yesterday we had a demand from the Department of Local Government and from the Minister for Finance that we must increase our rate by a further shilling in the pound. We refused to do that. I would ask the Minister how he justifies his demand for a further shilling in the pound from the farmers of the country?

Everybody is threatening a strike against cuts this year. The railway men are on strike against the cut proposed in their wages. The teachers and the civil servants are out against cuts in their salaries. It is not a 10 per cent. but a 100 per cent. cut that the farmer is asked to bear because the Government's policy has absolutely taken away all his income. There is no doubt about that. Yet, in face of the fact that all his income is taken away the Government say to him that he must pay an additional 1/6 in the pound in his rates this year. A demand of that kind is bound to make trouble. If the people are not able to pay, then sooner or later there will be a strike and that will bring the administration of the local bodies and of the whole country into a state of chaos. I ask the Minister to reconsider that matter and to allow the county councils to carry on with the rates they have agreed to strike. He should try to find this shilling in the pound in some other way. For instance, he could cut salaries. The present Government have been promising us for a very long time to reduce salaries. I see that the Government now propose to repay the American loan of £1,000,000. They propose to do that and a war on. Surely the repayment of that loan could be postponed. It is a very extraordinary thing to propose the repayment of this American debt at a time when the farmers have been deprived of their total income, with an economic war on and when they are being asked to pay an additional 1/6 in the pound in their rates.

I know that the answer of the Government to all this is that they are reducing the land annuities by half, and that therefore the people can afford to pay higher rates. At the present time, halving the land annuities is no recompense to the farmers for the losses they are suffering. If all the annuities and all the rates that the farmer has to pay were remitted at the present time it would not put him in as good a position as he was in two years ago under the Cosgrave Government. Everything that he has to sell is reduced in price by about a third, sometimes more, while everything that he has to buy has increased in price. For instance, he has to pay from 5/- to 7/6 a ton more for his coal. The blacksmith has to increase his charge for shoeing the farmers' horses by a shilling. When my blacksmith charged me an extra shilling for the shoeing of my horses and when I asked him the reason for it his answer was that he has to pay more for coal and iron. All these increased charges come back on the farmer. He has to meet them all, and at the same time to sell his stock and his produce at reduced prices. The other day I saw a bill in connection with eight cattle that were shipped to Birmingham. The sum of £39 was paid in duty to the British Government. The farmer who had to pay it would not pay £39 in his land annuities in three years. It is my opinion that if the present Government continue in existence very much longer there will be no farmers left in this country.

Is the Minister not in a position to make a better offer to the boards of health throughout the country in connection with housing loans than that which was communicated to these bodies recently? The boards of health have been asked to build labourers' cottages very extensively. I agree that such work is very desirable and very necessary. But on the loans advanced the Government want the boards to pay 5½ per cent. interest on the money, and in addition 1¼ per cent. for sinking fund. If money were to be borrowed on those terms, then a wholly uneconomic rent would have to be charged to the labourers for the cottages. We propose in the County Monaghan to build 200 houses, but if we have to borrow the money at the rate fixed by the Government, 5½ per cent., with the additional charge for sinking fund, then we will have to charge the labourers a rent of half a crown a week. At present we have some hundreds of labourers' cottages let at 1/- and 1/3 a week. We find it difficult to collect the rent of 1/3 a week. In fact, quite a large number of the tenants are in arrear with their rents, some of them for four and six months. If tenants are not able to pay a rent of 1/3 a week, what is the position to be if we build houses for which we must charge half a crown? —I suggest to the Minister that he should float a housing loan. If he were able to get money at 3½ per cent. and were to lend it at a reasonable rate to the boards of health then they might be able to build cottages that could be let at about 1/6 per week. I see that the Northern Government were able to float a loan at 3½ per cent. and the English Government at 2½ per cent. There is no reason why, on the credit of this State, we should not be able to get a loan on as good terms. There is no use in the boards of health building cottages and charging rents for them that the labourers will not be able to pay. Of course, if the labourers are not able to pay, then the rates must bear the burden which, in turn, means that the farmers must pay. That is what happened under the old Labourers' Acts schemes. Any arrears that accumulated in connection with cottage rents had to be paid ultimately by the farmers.

There is another matter I want to deal with. It is in connection with the Old Age Pensions Act recently passed by the Government. The Government made a mistake in connection with that measure. They should not, I think, have agreed to give pensions to the inmates of public institutions. A great many of these people will be inmates in these institutions for the remainder of their lives. What happens at the present time is that they are entitled to a pension of 10/- a week. They sign an authorisation enabling somebody to go to the post office to draw the old age pension weekly for them. As far as I can learn, only about 2/- of the pension reaches the old age pensioner. The public institutions in which the pensioners are being maintained, so far as I know, get nothing out of the pensions. I think some provision should have been made that portion of the 10/- would have gone for their upkeep in these institutions. Because of the failure to make any provision of that kind some thousands of pounds are lost annually to the taxpayers. Only a small portion of the pension is of any benefit to the old age pensioner. The remainder apparently goes to some outside person or perhaps the official who gets authority to collect it at the post office. That person gets the 10/- and just gives a few shillings to the pensioner.

Mr. Dowdall

Senator Miss Browne and Senator O'Rourke have spoken as if the present Government were responsible for the fall in the prices of agricultural produce. In a manufacturing country like Britain it is quite obvious that cheap food is practically equivalent to cheap raw material. The price of food in England fell so low that the subordinate interest in England—agriculture—was so threatened by the great depression in prices that the Government there were compelled to call on countries that were importing food to Britain to restrict their imports. It is now calling on the Colonies to decrease their imports of butter and cheese. When this so-called economic war was threatened I went across to England as quickly as I could to get in, before the duties applied, something over a hundred tons of butter.

Mr. Counihan

Did the Senator succeed?

Mr. Dowdall

Thank God, I did not succeed with it all. One ship carrying 35 tons was late, and I brought it back. I lost money on every ounce of the 100 tons I sent into England, but I made money on what I brought back, so that when Senators talk about Deputy Cosgrave or anybody else increasing the price of Irish agricultural produce in England, by implication blaming the present Government, I say that to anybody who knows the facts such talk is pure rubbish. Choicest New Zealand butter is selling in London to-day, delivered less discount, at 70/- per cwt. It is being retailed at 10d., and in a good many cases at 9d. per 1b.

I am rather rejoiced that the Estimates contain no provision for emergency relief work, but I expect we shall have some emergency relief works. While they were probably immediately necessary and gave a good deal of employment—the labour-content was high—I think it was a choice of evils. The breaking up of some of the roads and the replacing of them by better roads was, in the circumstances, wasteful. I suggest to the Minister and to the Government that it would be very much better to carry on even to a larger extent than has been done the subsidising of some productive industry like agriculture or to arrange for the carrying on of continuous housing schemes where some value would be given for the money. It is only natural that if a man knows that at the end of a particular job, in a few weeks, he will be workless, he will not work hard to put himself out of work. If, as recommended by a committee instituted by Deputy Cosgrave's Government and presided over by Deputy Vincent Rice, a continuous housing scheme was entered upon, we would get better value for the money spent.

Mr. Douglas

I agree with Senator Jameson as regards the difficulty of criticising Estimates which only reached us a couple of days ago. Looking over the Estimates last night, I found a number of small points upon which I should like to put questions to the Minister but I do not think it is desirable to take up the time of the House on details. I notice that pretty drastic cuts have been made in the Grants-in-Aid of scientific investigation. I should like to know from the Minister whether any prior consultation took place with the bodies concerned and whether he is satisfied that these cuts can be effected without permanently injuring the bodies concerned—the Royal Zoological Society, the Royal Irish Academy, the Royal Hibernian Academy, the Royal Irish Academy of Music and the Irish Folklore Institute. I am not a member of the Royal Irish Academy of Music but I am informed that the reduction of £200 in their grant may create very serious difficulties for them. I am not inclined to criticise the Minister for endeavouring to make economies in these grants but, before reductions are made, an opportunity should be given to the bodies concerned to make representations and the Minister should be satisfied that they will not be seriously or permanently injured. I am told that in one case the body concerned knew nothing about the reduction until yesterday. Possibly my information in that respect is not correct.

There are two matters in connection with general financial policy that I should like to raise. Perhaps they would come up more appropriately on the occasion of the Budget but they are matters which come under the control of the Department of Finance and I should like if the Minister would give them some consideration before the Finance Bill is introduced. One of these matters is in connection with the method by which income-tax is charged on income from investments. I think I am correct in stating that it is the policy of the Government to do what they can to encourage persons to invest their money in this country rather than in undertakings outside the country. While admitting the difficulties, I imagine that everybody would be glad to see as much money as possible invested at home. If the Minister makes inquiries, he will, I think, find that the income-tax authorities—accidentally rather than intentionally, I am sure—place barriers and difficulties in the way of persons who at present hold investments outside the country and desire to transfer their money to investments within the country. A relative of mine consulted me about certain changes of investments and that is how the matter came to my notice. This particular person had a comparatively small income—£60 or £70—from investments outside Ireland and the proposal was to invest the money within the country. We found that under Schedule D.—I am not positive about the exact schedule, because it is difficult to keep these schedules in mind—investments outside the country and certain other investments, including bank deposits inside the country, are treated as one separate source of income. Assuming that this person had an income of £70 and succeeded in selling these investments or reducing his income to £20, he would be obliged next year to pay tax on the full £70, even though he had changed into Irish investments. The Irish investment comes under a different schedule and is regarded as a different source of income. Therefore, it would be treated as new income and the investor would have to pay twice. I consulted an authority on the matter and I was told that the way in which the two classes of investments were divided was accidental. I am not suggesting to the Minister that he should give me an answer to this question now. I am not suggesting, either, that I have stated the position correctly but I know that in one or two cases that is the way the matter worked out. Perhaps the Minister would look into the question and see whether it is possible to include income from investments here and in Great Britain in the same source of income. If that were done, the transfer from a British investment to an Irish investment would not entail any additional payment of income-tax and would leave the investor in the same position as before, which, I think the Minister will agree, is desirable.

Another matter on which I feel rather strongly and which I would ask the Minister to inquire into is that of the taxation of profits of companies operating here when those profits are put back into the industry for capital purposes. Any investigation of the majority of our smaller companies would, I think, show that the majority are suffering from lack of adequate capital. If they succeed in making a profit, it is highly desirable in the interest of the company itself, in the interest of employment and in the interest of the ultimate taxable capacity of the country that as large a portion of that profit as possible should go back into the industry by way of reserve, for the buying of new machinery, the extension of buildings or any other work which may be deemed desirable. Before that money goes back into the industry, the State takes 5/- in the £, or 25 per cent. of it. If the profits are divided amongst shareholders or partners, I have no objection whatever to their being obliged to pay the proper amount of income-tax, but where the profits are put back into the industry some concession should be made. When income-tax was 3/- in the £, it was bad enough but now that it is 5/- in the £, it means taking 25 per cent. of the money that ought to go back as capital. If the company were a new one and came under the Minister's scheme of last year, it would enjoy a 20 per cent. reduction of tax, but if it is not, the full 5/- must be paid. If the firm happens to make a profit of £5,000 or over, not only is there a tax of 5/- in the £ but there is also Corporation Profits Tax of 1/6 in the £ or, in all, 6/6 in the £, or one-third of the profits, even though the money is being put back into the business. That ought to be looked into and some concession should be made. While it might seem as if the total amount received by the State in tax would be less, in practice it would not be so, because in course of time the State would inevitably benefit by the money which went back into the business. It may be argued that if money is put into a reserve, it may afterwards be taken out and divided as profits, thus leading to a certain amount of tax evasion. My answer to that is that if the State agrees to free money placed in reserve from tax or to fix a low rate of tax for it, then any money taken out of reserve for the purpose of paying dividends should be subject to tax, so that the State would not lose. This is a case in which the Government, if they really want to help industries in this country, could give real assistance. I am not pleading in respect of the payment by the individual. I am pleading for a reduction of the tax charged on profits which go back to increase the capacity for employment and the productive capacity of the industry. At present, the State takes 25 per cent. or 33? of these moneys, as the case may be. I could argue this matter at considerably greater length but I think the Minister knows exactly what I am driving at and I hope the Government will consider the matter before the next Budget is introduced.

Mr. MacEntee

Senator Miss Browne passed some very severe strictures upon the additional provision which the Government are making this year for old age pensions. She said that the fact that we had, in certain circumstances, excluded from the calculation of means certain amenities which a person enjoyed not as of right but as of privilege had given rise to one of the greatest public scandals that had ever occurred in any country. She went on to refer to cases where people who had wireless sets, motor cars, and large houses had become entitled to pensions owing to the operation of the Act of 1932. It is not our desire that people who are not properly entitled to pensions should receive them. If Senator Miss Browne would be good enough to give me particulars of the cases she has in mind, I shall have them investigated.

With regard to the question raised by Senator Wilson as to the rate of interest on local loans, and the plea made by Senator O'Rourke that the rate of interest should be reduced in respect of housing schemes, I should like to point out that the very generous grants made under the Housing Act of last year were fixed having regard to the rate of interest which then prevailed. They were fixed on such a basis as would enable local authorities to build houses and to let them at rents which would be approximately half what such houses would have been let at under preceding Housing Acts. The point I wish to make is that the rate of interest on local loans cannot be considered apart from the very substantial increase made in respect of the grants for housing. If those two facts are taken in conjunction, it will be found that their co-operation is such as to enable this very substantial reduction in the rents to be made.

With regard to the criticism of Senator Jameson, I should like to say, firstly, that I understand that the volume of Estimates for the Public Services was in the possession of members of the Dáil on Tuesday or Wednesday last. I do not know whether there was any delay in supplying them to members of the Seanad——

Mr. Johnson

We received them yesterday.

Mr. MacEntee

If my Department has been in any way responsible for that, I should like to express my regret to the House for any inconvenience it may have occasioned them. At the same time, I should like to say that, as a general rule, the Estimates are not discussed at any great length on the Vote on Account. A further opportunity will arise when the Appropriation Bill comes before the Seanad for the consideration of the Estimates in greater detail.

With regard to the point as to the Guarantee Fund advance, the position is that there is statutory authority at the moment to fill the Guarantee Fund or the Purchase Annuities Fund. Accordingly, in order to keep the bookkeeping right, the Estimate for £1,616,000, to which Senator Jameson has referred, has had to be introduced. It is one of the Supplementary Estimates which the Dáil has passed, and it forms part of a sum of £2,694,000 referred to in this Bill. The position, as matters stand, is that we would have to keep the Guarantee Fund or the Purchase Annuities Fund up to the figure of £2,978,000 next year. But we are expecting that we shall have the new Land Bill before the Dáil and Seanad some time before it becomes necessary to clear the Guarantee Fund next year and that we will be able to make the necessary legislative provision to obviate the necessity for introducing a similar estimate next year.

With regard to the Emergency Grants-in-Aid, we could not make a definite provision in these estimates for bounties and claims of that nature. There has been much criticism of these bounties and we have heard the statement made often that the farmer gets no benefit from them, that they are altogether insufficient, while they are the maximum that the State could, in any event, afford. Their payment has been so interlinked with the question of the payment of the Land Annuities proper to the Exchequer that we are having the matter fully considered. It has been decided to continue the bounties in any event until the 30th April. Before that date arrives, the Government will be in a position to announce more definitely its intentions with regard to them.

With regard to Relief Schemes, I am not going to say that we are so optimistic as to feel that £150,000 will be sufficient to deal with the want and destitution which exist on account of unemployment. At the same time, it has to be remembered that in the Estimates we are making very substantial provision for public works. I have referred to the additional provision of £1,600,000 under the Local Loans Fund and the additional provision of over £200,000 on the Local Government Vote. Remember that, last year, schemes had to be improvised rather hurriedly. This year, the local authorities had a very clear indication of what the Government policy is in these matters. We have given them encouragement to go ahead with public works of a nature which will yield a permanent return to the State. Accordingly, we are of opinion that it will not be necessary to make anything like the provision for relief works next year that was made last year. What the actual provision will be will have to be determined when we have before us the definite estimates for revenue for the coming year. We shall have, in regard to that matter and in regard to all other matters, to cut our coats according to our cloth, and we shall have to take into consideration the limitation of our own resources and the fact that we are encouraging local authorities to undertake constructional works on a very wide scale. We do hope that the effect of these works will be to reduce the provision which otherwise might have to be made for the relief of destitution and want.

With regard to the points made by Senator O'Rourke as to the reduction in the local taxation grants, that, like the question of bounties, is linked with the question of the land annuities. We have given very substantial reductions in the land annuities which will cost the Exchequer in a full year not less than £2,200,000. If, as an offset against that, we reduce the local taxation grant by £450,000, I think the balance of advantage is on the side of the agricultural ratepayer. In passing, I should like to deal for a minute with the example which Senator O'Rourke gave as indicating the hard plight of the farmer at the present moment. I understood him to say that, when a certain farmer had sold eight cattle in Great Britain, he had to pay £39 in duty on them. I do not know whether my calculations are right but that would seem to indicate that that particular farmer—I may possibly be crediting him with more business acumen than he possessed— received something in the neighbourhood of £17 or £17 10s. per beast and, in addition to that, he would have received, possibly, £1 15s. by way of export bounty if he sent his cattle over the Six-County Border or £2 3s. 9d. if he exported them through the port of Dublin.

Mr. Counihan

Not at all. I have a bill here showing that a man made £20 on the other side but had only £13 returned to him. There was a duty of £6 6s. per head.

Mr. MacEntee

I am dealing with this particular matter. I may be wrong, but I assume that having sold his cattle at £17 10s., he would get 10 per cent or 12½ per cent. in respect of bounty on them. If my argument is right, it would look as if he had got something in the neighbourhood of £19 5s. or £19 13s. per beast. I am not in a position to say whether that is a generous price for that particular type of beast or not but, at any rate, it is far removed from the poverty line and it would indicate, at any rate, that cattle have some real value even under present adverse circumstances. As I say, I am not a farmer and I do not know whether that would be regarded as a generous price, but it does indicate that the cattle trade is not altogether in the very parlous state that has been represented to us.

With regard to the points made by Senator Douglas, I should like to have much more definite particulars than he has been able to give in the course of this debate before expressing an opinion as to whether anything could be done to relieve the position which he has described. I should like however, in that connection, to say that, at first thought, it appears to me that it would not be possible to include in one and the same category incomes derived from internal and external investments. Difficulty would arise because of the fact that we have a double income tax agreement with our neighbours on the other side of the water and, for the purpose of making claims for refunds under that agreement, it is necessary that we should be able to check those claims with the British revenue authorities and that they should be able to check the corresponding claims with us.

Mr. Douglas

My point was not that it should be returned in the one category but that, for the purpose of treating them as sources of income in relation to the payment of taxation, they might be treated as one. If you have one source of income from investments and another one from salary, they are all treated as different sources. If one ceases altogether, you do not have to pay in the year in which you have not received it, but, if it partially ceases, you have to pay on the whole amount. That is how it works out.

Mr. MacEntee

If I had fuller particulars of the case I should be glad to look into it.

Mr. Douglas

If the Minister wishes, I will ask the Inspector for the particular case and send it to the Minister.

Mr. MacEntee

I should be glad if the Senator would be good enough to do so. With regard to the other point as to whether it would be possible to exempt from income tax the profits derived from a business which are reinvested in the business, as the Senator euphemistically puts it, "for the benefit of the industry," if they are reinvested in the business, it is not for the benefit of the industry, but for the benefit of the proprietor of the business, who is in exactly the same position in regard to his own business and the investments he would make therein as he would be in regard to any investment he would make in some other person's business. He would put his profits, that is, his income, back into this business, and I am sure that, first of all, he would not dream of putting them back unless he was certain that it was going to yield him a certain profit. It would yield that profit and, if you once conceded the principle, it would seem to me that it would ultimately resolve itself in this way that we would have to exempt altogether from income tax any profits derived from a manufacturing business or, in fact, any other sort of business. Apart altogether from that, we should thus be in this position that, whereas we should tax the clerk earning an income in the business, or a manager, or possibly a foreman who is earning an income in the business, whereas everybody employed in the business might be liable for income tax, we should have to exempt the man who owned the business and who was drawing a profit on the whole thing. Apart altogether from the logical extension——

Mr. Douglas

Might I point out——

Cathaoirleach

I do not think we can have a debate across the floor of the House.

Mr. MacEntee

——of the principle of exemption in that way there is this, that, even if we accepted the principle, I am perfectly certain that it would lead to wholesale evasion and the effect of it on income tax collection would be disastrous. Every man who owned an individual concern could turn it into a private company or corporation and it would be quite impossible to administer a concession of that sort and, accordingly, I should like to say at this stage that I can hold out no hope that the Government, anxious and all as it is to develop Irish industry, will be able to grant an exemption of the sort indicated by Senator Douglas.

Mr. Douglas

Would you allow me to ask a question, sir?

Cathaoirleach

You will have opportunities of doing so on the further stages of the Bill, Senator.

Question put and agreed to.

Mr. S. Robinson

I move:

That, notwithstanding anything to the contrary contained in Standing Orders 79 (1) and 85, the Committee Stage and Report Stage of the Central Fund Bill, 1933, be taken to-day.

I hope that Senator Jameson and other Senators will understand that when a motion of this sort appears over my name, it does not emanate from my brain.

Cathaoirleach

Where does it come from, Senator?

Mr. Robinson

These motions do not originate there, anyway, and it is only when the Minister concerned or some harassed official asks me to do so, that it is done. I take it that the Central Fund Bill in its very nature is a late Bill. It is compiled in relation to figures that come in only towards the end of the financial year and it is in the nature of things that it should be late. Also, whatever other delay has taken place was caused in the Dáil where the Opposition had a good innings and it is not our fault that the Bill is rushed upon us. I did my best to give the greatest possible notice of this motion. I asked the Cathaoirleach last week, and he kindly consented to do so, to announce verbally that this motion was being tabled for this week. That gave Senators a full week to bring forward any recommendation they felt inclined to bring forward. I might also add that not for the last 12 years has the Seanad ever sent forward a recommendation to the Central Fund Bill, so that generally, apparently, these Bills are only Second Reading Bills in this House. There is, therefore, really no great hardship inflicted on the Seanad. The urgency of this Bill, I am sure, is quite clear to every Senator. The Bill must be through by the end of the month, otherwise matters will be difficult for the Government.

Mr. D. Robinson

I second.

Question put and agreed to.