Léim ar aghaidh chuig an bpríomhábhar

Seanad Éireann díospóireacht -
Wednesday, 28 Jun 1950

Vol. 38 No. 7

Finance Bill, 1950 ( Certified Money Bill ) —Committee Stage.

Section 1 agreed to.

To expedite the discussion, I think that we might discuss together recommendations Nos. 1, 2 and 3, as the three have a bearing on increased allowances under the income-tax code.

I think that is an excellent idea.


The following are the recommendations referred to:—

1. Before Section 2, in page 3, to insert a new section as follows:—

Sub-section (4) of Section 3 of the Finance Act, 1932 (No. 20 of 1932) shall be construed and have effect as if the words "one hundred and fifty pounds" were substituted therein for the words "one hundred pounds".

2. Before Section 2, in page 3, to insert a new section as follows:—

Section 4 of the Finance Act, 1936 (No. 31 of 1936) shall be construed and have effect as if the words "ninety pounds" were substituted therein for the words "sixty pounds".

3. Before Section 2, in page 3, to insert a new section as follows:—

Sub-section (1) of Section 18 of the Finance Act, 1920, as amended by Section 2 of the Finance Act, 1947 (No. 15 of 1947) shall be construed and have effect as if the words "three hundred pounds" were substituted therein for the words "two hundred and sixty pounds" and the words "one hundred and sixty pounds" substituted therein for the words "one hundred and forty pounds".

I move recommendation No. 1. There was a time not very many years ago when one would be inclined to relate a debate on income-tax to a very small section of our people, but that time has long passed. The number of people who pay income-tax and who come under the scrutiny of the Revenue Commissioners is ever increasing. During the last 12 months an additional 21,000 people have been brought under their careful scrutiny and must pay income-tax. When, in 1947, provision was made to give an increase in the allowances, many members of this House considered that the provisions were not as generous as they should be and the then Senator Duffy, acting on behalf of the Labour Party, put down an amendment much on the lines of the amendments I have put before the House to increase the allowance for married persons from £260 to £300. Senator Hayes on that occasion was not satisfied that Senator Duffy gave the whole case, but he also approved of the amendment and gave it his support. That was back in 1947.

Since then many changes have come about and the arguments put forward on that occasion certainly hold good to-day and greater support can be given to them. We know that there has been an increase in the cost of living and that expenses in general have risen; rates have risen; for the family man educational charges have increased and increases in many ways have been brought about owing to Government action. On the other hand we have the estimate made by the Minister in 1947. The amount of money collected in 1947-48 was about £12,000,000; in 1948-49 it had risen to £14,000,000; the Minister estimates that the sum he will collect under the heading of income-tax this year will be no less than £16,000,000. That being so and as there was an overestimation last year of over £1,000,000, I agree with the Minister's statement here on the last day that the best policy that can be pursued by any Government is to leave as much money as possible in the people's pockets to be utilised in their own way. This is one way the Minister can give effect to the policy he put before us. In the collecting of moneys from one section of the people for re-distribution to another section a considerable loss is entailed and if the Minister holds strongly to the view which he expressed he has an opportunity of giving effect to that policy by accepting these amendments.

I agree with Senator Hawkins when he says that the position is much the same as it was in 1947 and I feel a certain amount of satisfaction— though not very great — in knowing that the arguments which I and others made then converted him although he did not show it at that time.

The position simply is that I do not believe there is a member of this or the other House who would not like to see each of these changes made and that a very strong case can be made for them I have not the slightest doubt, but the practical difficulty is that, even in the Dáil, it is not practical politics to upset the balance of the Budget. In a revising chamber it is completely impossible, because obviously these changes cannot be made without adjusting changes which would increase taxation and which would be out of order in our House. Therefore, we can only make recommendations which would reduce the total. These are very proper matters which should be brought forward. It is proper that these recommendations should be ventilated from time to time.

I have been continually and with very little effect urging the present Minister and his predecessors to set up a committee which would be able to go into the effect of certain changes which are necessary in the income-tax. Obviously, if that were done, it would be done as distinct and apart from the Budget of the year and if adopted, when the Minister came to formulate his Budget, he would have to base taxation giving whatever yield would be required after whatever changes had been made.

With regard to the first recommendation, I think that, under present conditions, it would be a very nice thing if we could increase the £100; but I think it would be very much better if you had graduated income-tax up to a certain figure, and if the amount paid by persons who just come over the limit was less than 3/3. I should have liked to have seen something like 1/- for the first £50 or £75, increasing to 3/-, then to 4/6, up to 6/6, because I believe it would be fairer, having regard to the need for some easement for the lower income classes. Part of the problem arises from the fact that wages have been substantially inceased in money, but not necessarily, and in some cases not at all, in earning power. The result is that the first £100 over £140, which, when it was fixed, was an adequate and fairly reasonable provision, now comes very hard on certain persons. It is much more so in the case of married people, but I think it is quite obvious, as I imagine Senator Hawkins recognises, that, whereas we can debate this and make suggestions, it would be quite futile for us to attempt to pass an amendment of this kind, because the result of doing so would be that the total amount of the Budget would not be realised, and for that reason it could not be accepted. Nevertheless, the Senator is quite right in bringing the matter forward. Sooner or later, some Government will have to consider seriously the effect on the lower-income classes.

Is mian liom cuidiú leis an moladh seo atá curtha síos ag an Seanadóir Ó hEacháin. Ní dóigh liom gur gá cur leis an méid atá ráite aige ar a son. Bhí mé ag súil nuair a bhí an Bille seo sa Dáil go labhródh duine éigin de na Teachtaí atá ansin thar ceann lucht oibre ar son an lucht oibre agus ar son na niarratas atá curtha isteach acu ar an fhaoiseamh atá i gceist againn. Ar an dóigh chéanna, bhí díomá orm an tseachtain seo caite nuair a bhí an Bille seo ós ár gcóir toisc nach raibh aon duine atá anseo thar ceann lucht oibre adéarfadh focal ar son na gceardchumann agus cumainn eile a chuir iarratas isteach go tráthúil chuig an Aire ag iarraidh laghdú.

Ní dóigh liom gur iarratas míréasúnta é seo ar an Aire. Sílim go bhfuair sé fógra réasúnta go mbeadh daoine ag éileamh laghduithe mar atá i gceist againn. An tseachtain seo caite, rinne mé tagairt do thuarascáil a bhí ar cheann de na páipéirí nuachta agus ba léir ón tuarascáil sin go raibh na ceard-chumainn go láidir ag éileamh faoiseamh mar atá i gceist againn. Ar an slí chéanna tá fhios againn, an tseachtain seo caite ag comhdháil cheard-chumainn amháin, go raibh rúin ós cóir na comhdhála sin ag iarraidh faoiseamh nó liúntas mar atá i gceist againn anseo.

I support very strongly these recommendations. I was rather surprised when the Finance Bill was before the Dáil that those Deputies who are supposed to represent directly labour interests had nothing very much to say on the matters covered by these recommendations. I was equally surprised last week when this Bill came before the House that none of the Senators who are supposed directly to represent labour interests had anything to say on these important matters. It is idle on the part of Senator Douglas to say that at this hour it is unreasonable to ask for allowances such as those suggested in the recommendations. Last week, I referred to a report which appeared in a certain newspaper just before the Budget that two trade union congresses, the Trade Union Congress and the Congress of Irish Unions, had submitted memoranda to the Minister asking for certain reliefs in the matter of the amount chargeable at half the standard rate or at a lower rate. I may also mention, if this report is correct, that the association which represents the various professional bodies in Dublin had submitted a memorandum asking for reliefs on the same lines.

I know that, according to one of the Galway papers, this matter was of some concern to the labour congress held there last week, the annual conference of the Irish Transport and General Workers' Union. Two motions were tabled there, one by the Galway branch, asking for a revision of the income-tax allowances in accordance with the decreased purchasing power of money and the other from the Drogheda branch which sought to have the personal allowance raised to £240 for single persons and to £350 for married persons. What I want to stress is the fact that this matter was drawn in good time to the attention of the Minister, before the Budget was introduced. I want to stress also that this Budget has caused, and is causing, a good deal of anxiety to people in the country, notwithstanding what was said on the other side last week in praise of it. I hope the Minister will see his way to consider these recommendations and to make available this year some measure of relief for people, who, as Senator Hawkins pointed out, are suffering severely because of the changes in the value of money, the rise in the cost of living and the rise in the cost of many items not included in the cost of living, but which are essential if people are to live at all. I support these recommendations and hope that the Minister will meet us to some extent, at any rate.

Nobody likes to be taxed, and it is only natural that any proposal of this kind which proposes to reduce the burden on individuals should receive a certain amount of sympathy. I think everybody in the House, not excluding the Minister himself, would have a certain amount of sympathy with them. I might remind Senator Ó Buachalla that, long before he entered politics, I, in another capacity, was in the habit of moving motions somewhat on these lines in the other House. As I have said, these recommendations are such as to appeal to anyone who is affected by them, but we might also look at it from this point of view, that income-tax, properly administered and with everybody paying his fair share, is about as fair a tax as can be put on the people. We have to consider also, as Senator Douglas has said, that the Minister has put a Book of Estimates before us — the bill is undoubtedly huge — and unless and until it can be shown how the total of those Estimates can be reduced, the Minister must find the money. If he does not find it in this way, he will have to find it in some other way which may not be as satisfactory to all concerned as the method of collecting it through income-tax.

I think it was Senator Ó Buachalla who said on the last occasion that, because we on this side were not voting against the Finance Bill, we must, therefore, be satisfied with it. We are by no means satisfied with it. We would like it if the Minister could see his way to adopt these and other recommendations made to him, but we recognise the difficulties of his position. We must be realists and understand that the money has to be found in this way or in some other less satisfactory way. I support the point made by Senator Douglas — it is a point which I made last year and on other occasions — that the time has come when the whole income-tax code should be reformed and simplified. If the Revenue Commissioners could find some means of collecting all the income-tax legally due, many of us would get off much more lightly than we do. The man with the fixed wage or salary cannot escape on any pretext, but there are others who undoubtedly do not pay the full tax for which they are legally liable. There are ways and means of finding loopholes in the regulations through which people who can afford it much better than those with fixed salaries or wages can find their way and thus escape their legal liability. We would all like to see these recommendations adopted and I would join with other Senators in pressing the Minister to consider them when formulating his next Budget and to have regard to the arguments put up not merely on this occasion but on many other occasions by people on both sides here and in the other House as to the necessity for introducing reliefs of this kind.

In the North of Ireland and in England, they have a pay-as-you-earn system which seems to give a good deal of satisfaction to wage-earners especially, and perhaps the Minister would explain why it has not been adopted here, and if he proposes to adopt it, and also if he would tell us what are the advantages and the disadvantages of the system.

We would like to have from the Minister an indication of what he proposes to do in relation to the amendment before the House.

Does the Senator know what they would cost?

That is for the Minister.

May I tell him? £2,250,000.

The question of the cost is a matter primarily for the Government, but I think all members of the House will agree with the principle in the amendments. The case the Minister might make is that quite a number of people have got increases in their wages since 1947. That is true, but the very fact that certain increases have been given has brought a number of people, who would not otherwise be brought in, within the income-tax code, such as tradesmen, and they form the greater part of that 21,000 persons who have been brought within the income-tax code in the last year or two.

Senator Michael Hayes, in 1947, speaking to Senator Duffy's amendment, said that he was prepared to go much further at that time and he proposed that the allowances should bear some relation to national health insurance. The figure would then be, instead of the £300 that I now propose, £500. I do not wish to detain the House in putting the case. We all know, as Senator Ó Buachalla has pointed out, that various trade union congresses and organisations throughout the country have issued a warning to the Government that they propose to seek an increase in wages. Deputy Larkin, the spokesman of the Labour Party in the other House, has put the position very clearly and definitely before the Minister, that demands are being made and that the demands must be met. He suggested that the Government should take steps to meet the demands now or otherwise bring about a very drastic reduction in the cost of living. One of the means by which that demand can be met to a small degree is by giving the benefits that I ask for in these amendments.

We would like that the Minister would avail of the occasion presented to him to give us the Government's view. What action do they propose to take? Do they propose to take immediate steps to bring about that reduction in the cost of living that the Labour organisations and leaders demand? Do they propose to take steps to meet the demand for increased wages? I suggest one or other must be done. I think Senator Mrs. Concannon drew the attention of the House to the position at present existing in Galway. Will that position extend throughout the country? Will workers be forced into a position to fight, to organise general strikes or local strikes in order to get what they consider their just demands in view of the rise in the cost of living? If the Government will face up to their responsibilities, they will either have to sanction the demands made by Labour leaders and congresses or take immediate steps to bring about that reduction in the cost of living.

Is that the only alternative? What about the Senator's own alternative, to peg wages?

I do not think this discussion should widen itself out into a question about the cost of living because I think that is something that should be discussed separately and which would carry us very far. The Minister suggests, for example, that Senator Hawkins, when he was supporting a Government, had a scheme for keeping down the cost of living, which was to peg wages. Another scheme for keeping down the cost of living is reducing the price of milk and the price of butter and the price of beef to the farmers. I do not know whether Senator Hawkins would suggest that for his own constituents. Anyhow, it is not open to us to discuss all these particular alternatives now, except to indicate that that is the kind of discussion you would have to have if you were going to talk about the cost of living.

As far as these amendments are concerned, it has been suggested that I supported similar amendments, or even more drastic amendments, in 1947. That is so, and I was quite right, and I do not suggest that Senator Hawkins is doing anything wrong now in putting these amendments down. I know that the arguments for doing this thing, if it can be done, are perfectly sound. I know that arguments can be made, as Senator Hawkins has made them, and indeed, other arguments can be made, and it is reasonable that they should be talked about. But, all the arguments that can be made now were just as valid in 1947, 1946 and 1933. They were all just as valid all the time, but Senator Hawkins and his colleagues took the view, and they were quite entitled to take it then, that they were supporting a Government, and would support a budget as a whole. They did that and there was nothing else they could have done.

As a matter of fact, those who support a Government in office have to look at a budget as a whole and, as well as looking at it as a whole, also have to look to the general performance of the Minister for Finance and the Government of which he is a member. Here we have recommendations which would make a gap, a breach, so to speak, in the Minister's Budget. The breach, he has indicated, would amount to £2,250,000. Incidentally, that figure proves that we get our income-tax, not from the rich at all, but from the comparatively poor — a very important point to remember. There is no rich person left, apparently, to milk for the purpose of distributing the largesse you get from him to other people. But, while we have power, if we were foolish enough to use it, to make recommendations like these, which would make a gap in the Minister's Budget, we have no power, as Senator Douglas has pointed out, to take any steps to fill the gap. We are not bound to suggest steps to fill the gap — that is, if steps can fill a gap; I do not think they can — but we have no power to suggest any method by which the breach could be filled. We are obliged, therefore, to take the Budget as a whole.

We may influence the Minister by pointing out to him that this would be a good thing to do. There are many other things that would be good things to do but we are also convinced of this, that we have a much better chance of getting these steps taken, in order to get reliefs for income-tax payers, by keeping this Minister in office than by defeating him on the Finance Bill. For that reason, I think we should support him and I think there can be no doubt at all about it that that is the correct thing for us to do, in the interest of the income-tax payers and in the interest of relief for the people, of which the Minister has already given a considerable amount.

I agree with Senator O'Connell with regard to people who escape income-tax. The people on fixed incomes, as I have been all my life, never escape at all. I think since 1922 there have been fewer people escaping than prior to that. As far as I know, the cost of living, about which there has been all this talk, has not gone up since 1948. In any event, these proposals are desirable, but they are desirable in their own time. The Minister cannot be expected to do everything at the same time. We must take this Budget as a whole. Therefore, it is my intention to vote against these recommendations.

I do not think anybody would find fault with Senator Hayes for voting against these recommendations, but I do find fault with him for trying to justify an attitude which is diametrically opposed to the attitude he took when a similar question was under debate in this House some time ago. I must say that I was quite pleased — agreeably surprised would describe my feelings — that Senator Hawkins's three amendments were received in a manner which could be described as not ungenerous by speakers on the other side of the House.

Senator Hawkins was very conservative in his statements in support of his amendments. When a similar amendment was under discussion before, Deputy Aiken was then Minister for Finance. While Opposition speakers might accuse Deputy Aiken of many things, I do not think anybody would accuse him of being a man of very many words or of using ten words where one would do, but when an amendment was proposed by Senator Duffy and supported by Senator Hayes, the then Minister for Finance, Deputy Aiken, went to very considerable rounds to explain to the House why he could not accept the amendment. Here we have a Minister who comes to the House, sits down casually, listens to the speeches made by Senator Hawkins, Senator Ó Buachalla and Senators who generally support the Government, and he allows the thing to go by default and does not think it worth his while to say a few words in explanation as to why he could not accept the amendments. If for no other reason — and there are several other reasons — I will vote for the amendments. I will insist on a division, if for no other reason than the lack of courtesy on the part of the Minister.

I support the suggestion made by Senator O'Connell as to the system of pay-as-you-earn. I think the Minister might consider the advisability, in present circumstances, of introducing that system next year, when, we hope, he will occupy the same position.

We have at times demands for all kinds of extra public services and amenities. All these services must be paid for. The Minister has to get his money somewhere. If the Budget is of a character which means that wage earners in particular would be able to meet their commitments, no more can be said about it, but there are cases of hardship and in this connection I would mention one case of hardship that the Minister might consider. I refer to the case of widowers who have children over 16 or 17 years of age and who are not allowed any relief for a housekeeper. That is a very grave injustice to many of these people who, because of the position they occupy, in banks, warehouses, etc., must keep up appearances and who, because their children are over 16, do not get income-tax relief because they cannot say that they have a housekeeper in charge of their children. I would ask the Minister to give that matter sympathetic consideration.

Since this is about to be put to a division, we had better all explain our positions. I would support these recommendations if they were put forward as recommendations. They are not put forward as recommendations on which the Minister may act in future. They are put forward as amendments to the Finance Bill. If I thought that the purpose of them was to benefit the workers, and that that was the sole purpose, I would be more in sympathy with the people who moved them than I am when I suspect, and almost believe, that the only purpose of them is to reduce the revenue in the way they suggest doing it. I would have no objection to reducing the revenue if I knew what the reduced revenue would be spent on. What services will the Government reduce if the Government get £2,250,000 less to spend next year? Where will they practise the economies? The proposers of these amendments have not stated it. Will they cut food subsidies? What will they cut? Social services?

They could hardly hit the rich by cutting any more of their expenditure. They must hit the poor. I can speak on income-tax impartially, as probably the only Senator who has no taxable income. I do not pay a penny income-tax. Some of the tears being shed for the poor seem to be crocodile tears. Let the sympathy be for those below the income-tax limit. Will this proposal benefit them? It will benefit the comparatively well-to-do section of the wage earners, who have not got enough, but it leaves out those below the income-tax level. While aiming at benefiting some wage earners, the benefit you give to them will also go to the rich above that, who will get the same concessions on their earned income as the poor man on the weekly wage.

This could have been some recommendation to the Minister for consideration next year. The Minister should then consider a revision of the whole income-tax system. We cannot force him to reduce the revenue now by £2,250,000. It could be reduced in other ways than by this amendment. We all believe the allowances should be more generous and give more relief to those on lower wages and salaries. We have not the power to increase taxation, and the only recommendation we can make is to reduce taxation by this means. If we do that, the Government's expenditure must be cut, and that will hurt the poor rather than the rich. If the proposer could give an alternative proposal for raising revenue, probably we could support it. The only alternative I can think of would be an increase in supertax and corporation profits tax. I wonder if the proposer would go that far and say that what is to aid the poor you should take from the rich.

The Minister's trouble is that these suggestions will cost £2,250,000. It is well to have the issue cleared to that extent. Senator O'Farrell wonders whether these recommendations are in order. If they were not, we would have been told, so we can make our minds up that it is in order for us to put down recommendations to the Finance Bill.

I never doubted that.

Very well. The Senator doubts our sincerity and doubts whether these recommendations were designed to aid the poor. He would be well advised to make that statement to the various trades congresses, trades and professional associations that have sought relief on these lines already. If he does not think they know what they are talking about, let him tell them that as a member of the Labour Party. He has referred to the conditions that obtained in 1947. There is a vast difference between conditions to-day and conditions then.


Hear, hear!

Among the differences are these — and I hope the people who said "hear, hear!" will pay attention to them — that those who now form the Government were declaring in 1947 that if they had power they would reduce the cost of Government. One Minister could reduce it by £10,000,000, another could reduce it by 30 per cent. There is no point in declaring that he is not the Government, as his supporters and those who oppose him have now come to the conclusion that there is only one Party in the Government, call it by what name you may. We were assured by one Minister that it was possible to reduce the number of Ministers.

The Senator is travelling outside the bounds of the recommendation.

If Senator Hayes suggests that conditions in 1947 are comparable with present conditions, am I not entitled to reply?

The Senator is not entitled to travel on the ground he was travelling.

On the question of the £2,250,000 that might be lost to the Minister by the adoption of these recommendations, might I suggest that he himself has more than once hinted at how moneys might be saved for such a very worthy purpose as this? Senator O'Farrell asked whether we were in favour of the imposition of the excess profits tax. He might have asked that of his colleagues.

I want to go on record as objecting to this tax as imposing an enormous burden.

It is not on this recommendation.

Without reading the Order Paper, I found it hard to know what the recommendation was, as the debate has been rather wide.

The Senator may have his opinion, but should not express it in those terms.

I withdraw. When the movers of this recommendation found that it required £2,250,000 reduction in the amount raised, they should have made some recommendations or suggestions as to what social services or other State services would be reduced or how the additional money would be raised.

I suppose this is the most popular motion that has come before the Seanad. Unlike Senator O'Farrell, if I were consulting my own interests I would be behind him. I would remind the Labour Party of a similar resolution which they put down. That has been stressed by Senator Hawkins and Senator Ó Buachalla. I was not a member of the House at the time and have no record as to what attitude they adopted. I would like Fianna Fáil to tell us whether they wholeheartedly supported the Labour resolution then and if not, why not? They have taunted us with supporting a resolution in 1947, but it is as well to ask them what attitude they took up on our motion in 1947. The position is very different from what it was then. We were faced then with standstill Orders of every description. Wages were pegged. In my county the workers' wages have been increased since 1947, or since the present Government came in, by almost 100 per cent. Widows' and orphans' and old age pensions have been increased. It is very nice to put down a motion of this kind, and when the Minister says it would cost £2,250,000 it is something we do not like to hear and are not in a position to face. It is a very popular resolution and one which we could readily support, but if the Opposition is putting forward the case against the Labour Party they should say what attitude they took when we put down that motion.

These resolutions we are discussing would cost £2,240,000 in a full year. The first would cost £415,000 this year or £690,000 in a full year; the second, £220,000 this year or £370,000 in a full year; the third £705,000 and £1,180,000; making a total of £1,340,000 this year or £2,240,000 in a full year. It is very hard to understand what one of the resolutions means on technical calculations regarding children's allowances. The stamp duty resolution would cost £480,000, so the whole four would cost something short of £2,750,000.

Senator Ó Buachalla says it is idle for Senator Douglas to say anything. I wonder how idle it is for Fianna Fáil Senators to feel that by an act of repentance like this they can wipe out the whole recent past. The converted sinner is a very pious man, but the sinner who shows a certain amount of repentance is always a pious humbug. Let us take the background. In 1930-31 income-tax was running 3/- in the £. The reduced rate of 1/6 was chargeable on the first £225 of income. In the last three months of 1931, the 3/- was raised to 3/6. Fianna Fáil took charge in 1932 and then increased the 3/6 rate to 5/-. and lowered the income on which the reduced rate was chargeable to £100. So 1/6 was put on in their first year and the income on which the reduced rate was chargeable was brought down from £225 to £100 and at £100 it has stood ever since. Income-tax went up to the 5/-, came down a bit and then went up again until it reached 7/6 between 1941 and 1946. It was reduced to 6/6 in 1946-47; in the Finance (No. 2) Act of 1947 arrangements were made to have it put back to 7/- for 1948-49 and then I took 6d. off last year.

As far as personal allowances are concerned, in 1920, they stood at £225 for married persons and £135 for others. The first Fianna Fáil Budget reduced the single allowance from £135 to £125 in their first year and in 1939 they reduced the married allowance from £225 to £220; and the allowance for others from £135 to £125 to £120. Thus they remained until 1947 when they became £260 for married persons and £140 for others and now it is proposed to increase them.

As far as children's allowances are concerned, the history was that they ran at £36 for the first child and £27 for the second, third and subsequent children. In 1932 they became £50, and in 1936 they were raised to £60. In 1944 a change was made to fit in with the family allowances scheme, and they became £60 for the first child, £60 for the second child, and £43 for third and subsequent children.

It is now proposed to make these tremendous changes, and on this point Senator O'Connell said that he does not wholeheartedly accept the present Budget, but that it is better than what might have been given. People who complain about it should think what they would have if Fianna Fáil were still in control: 7/- income-tax rate, no change in the allowances and wages pegged, because that was the intention. Of course, that is one way of forcing down the cost of living. A statement was made quite openly by the then Taoiseach on the 20th October, 1947, at a meeting in Tipperary, and recently we have discovered legislation which was prepared to peg wages, only for the uncomfortable feeling produced by the three by-elections which led to the general election, which produced a still more uncomfortable feeling. We would have had income-tax at 7/-, the allowances as they were, and wages pegged. Workers would not have the complaint that some people have suggested that because their wages have increased they have actually come to the point of being assessed for a few pounds income-tax. If people think that that other result would have been desirable they know the way to get that result — support Fianna Fáil.

Senator O'Farrell said that it was only proper that the people who suggested these vast remissions at this late stage in the financial year, when preparations have been made, should themselves suggest an alternative. He went on himself to suggest that surtax or supertax might do it, but even if surtax rates were doubled, I do not think that the sum would be sufficient for the first, second and third recommendations. One thing, however, was mentioned by Senator Ó Buachalla— by misadventure I should say because I think it is a thing that Fianna Fáil would like to keep away from — the excess corporation profits tax. It would bring in £3,000,000 in a full year, but Fianna Fáil threw that away. One wonders when the thing was drawing money in in that way that they failed to keep it up and give these allowances.

Why do you not introduce it?

I think I have the Senator's backing for it. Senator Summerfield, who will walk into the lobby to vote, would like to hear that I have the Senator's backing. Personally, I would be delighted to do it.

You have had ample opportunity.

I have explained the difficulties. Once it has been remitted, it takes two years to go up to its full height. There seems to be a certain amount of support in this House for it, because recently, when we were talking about wear and tear allowances which would, incidentally, cost £800,000, I was asked to give that £800,000 for industry, and no doubt Senator Ó Buachalla would like to support that. Now I am asked to reimpose the excess corporation profits tax. Why did Fianna Fáil not think of that when the tax was running smoothly?

I think that the people require some relaxation in having their personal allowances increased and in the other matters which were dealt with here. I am told that Senator Ó Buachalla brought that to my notice in good time before the Budget. That is a simple sort of argument. To bring a thing to a person's notice does not automatically mean that it will be accepted. If that were so, we would have seen a vast change in Fianna Fáil days when people made up their minds that it was not worth while to put suggestions to Fianna Fáil, because it only meant that the tax weapon would be sharpened against those people.

I did not say that there would be acceptance of the proposals.

It would be more consistent with the Senator's line of conduct if it had not been accepted. When the people who brought that to my notice did bring it to my notice, I explained the situation in 1948 when we came in with a certain programme which we had definitely accepted and spoken of on platforms. The lives of many people had been painfully distorted by the operations of the Government which was in power for 16 years. We saw that work, that bad pattern being fixed which caused very severe suffering to certain groups in the community and we had a plan to put those things in order. The people on the lowest level, old age pensioners, widows and orphans, and people like that, merited our attention first, and they got it first. After them came people to whom there were contractual obligations, people with whom contracts had been broken in a most scandalous manner by the last Government, State servants of various kinds, civil servants, Guards, Army people and eventually teachers. We thought that we had to take those in our stride next. At the same time we thought it possible to give a general relief to the community by removing certain taxes. One tax that had given rise to the most serious comment during the General Election of 1948 was the tax on beer and tobacco. That general relief was given to the community but it caused a loss to the Exchequer of a considerable amount of money— £6,000,000. After that, we found it possible to give a reduction of 6d. in the income-tax. I did suggest to my colleagues in the Government that we should give no general remission but give some increase in allowances and do some of the things which have been spoken of here but we found that those things would be too costly. The amount of money at our disposal would only allow of the general relief which was also the lesser relief of giving 6d. to the whole community.

That included the middle class, the professional workers, what are called the white-collar brigade. They are recognised as having suffered next in intensity to the old age pensioners and low-living group of the community who are forced to live at a low standard of life. I have made a promise to the association of professional workers, the people living on a fixed income, that at the earliest possible opportunity I will mark them out for very early priority for relief in taxation, and I hope to get that done at the earliest possible date. These things, however, have to be taken step by step and I suggest that Senator O'Connell does not put the thing too enthusiastically when he says that he does not accept this Budget wholeheartedly but that at least it is better than others that could have been brought in. The Senator can hope that there will be even better ones ahead.

I deny entirely the basis of the argument of Fianna Fáil with regard to this. The value of money has not changed since February, 1948. There has been no rise in the cost of living or in what are called essentials outside the cost of living. At least nowadays there is no deliberate interference with those who calculate the cost-of-living figure as there was in the autumn of 1947 when the trade journal carried a statement that the Government had ordered that the figures should be made up omitting certain things which, if they were put in, would clearly raise the cost-of-living figure.

I think there is only one other thing I have to answer. Senator O'Connell has asked me to deal with what is known as pay-as-you-earn. I am glad, Sir, that you have said that this can only be referred to in a passing way. It has been mentioned in this House and in the Dáil before, but I cannot say that I have given it a complete examination because I have never been pressed to the point which would require a complete examination to be made. It is not a scheme which is accepted too enthusiastically where it is in operation elsewhere. It does mean a fair amount of administrative costs and whereas that cost might easily be borne in a country like England, with a much greater number of industrial and factory workers, here it would be relatively more severe.

Finally, I am going to mention something which may be used against me hereafter. Workers in England who get a reduction in their wages weekly or monthly, are apt to regard the net sum as their wage. Luckily people in this country still regard the gross sum as their wage and that is good psychology from my point of view.

I am very well pleased with the response my amendment has got in the House and I am certainly very pleased to see that Senator O'Connell has now joined the crusade with his colleague, Deputy Burke, who has put before the House, and I suppose before the country, the new form of joy through taxpaying. It is, I am sure, one that the Minister for Finance might very well take up.

Questions have been asked about putting motions or amendments of this kind before the House without at the same time counting the cost or, having counted the cost, without presenting a scheme for meeting that cost. We were asked whether we stand for placing all the burden on one section of the people having relieved another. If we saw a shipwreck, we might not be able to save all the occupants but I think it would be very bad form if it were within our power to save or relieve even a small section and we did not immediately set about doing it.

Mr. O'Farrell

Widows and orphans first.

I can tell Senator O'Farrell one or two very important truths. I, for a long number of years, have been a member of a trade union organisation. As I said on another occasion, the very occupation I followed demanded, whether I liked it or not, that I should be. I have been in this House since 1938 on the Labour panel and I think I have as much right to give expression to the views of the Labour Party as one who has failed on every occasion and who only got in as a nominee of the Taoiseach.

Mr. O'Farrell

If personalities are to be exchanged, may I say that I stood for election for the Seanad once and once only, although the Senator talks about failing on every occasion?

Is that a point of order?

Mr. O'Farrell

Whatever it is a point of, it is a point of fact.

When it is suggested that I had an ulterior motive in putting down these recommendations, the people who make such accusations should be prepared to take what is coming to them. With regard to whether we stand for the withdrawal of assistance to widows and orphans, I should like to tell Senator O'Farrell and other Senators, and particularly the Minister, whose Government on one occasion in 1931 went out of office rather than increase the pensions payable to the people for whom they have so much sympathy now, that it was the Fianna Fáil Government which introduced widows' and orphans' pensions, family allowances and all the other social services about which we hear so much, and to which there was so much opposition in this and in the other House. The recommendations which I have put before the House propose to give relief to the type of person whom the Minister and members of the House would, I am sure, like to see being relieved. The first recommends that the first £100 of taxable income on which half the standard rate is now payable should be raised to £150; the second deals with an increase in the allowances in respect of children, and the third is very clear and explains itself.

The Minister, in repetition of many of the speeches he has made here, tells us that he gave relief in taxation, and he brings us back to the emergency Budget of 1947. We all know the particular circumstances in which that Budget was introduced and the purposes for which it was introduced. We know that the moneys collected under the taxes imposed in that Budget were collected and utilised for the purpose of reducing the cost of living by giving increased subsidies on bread, butter and other commodities. We know also that one of the first actions of the Minister was to remove those subsidies.

Not at all.

Not entirely, but to a great extent. If the Minister looks back on his Budget statement of last year he will find that he saved something in the region of £3,000,000 by a manipulation of the sums made available for food subsidies. If that is not so, why is it that we have two-price commodities to-day? Circumstances then changed and we reached a position in which it was no longer necessary to continue the subsidies on fuel and other essentials which had to be subsidised during the emergency. The Minister and the House will concede that, apart from the rationed commodities, part of which are subsidised, the persons whom I propose to relieve are the very people who are compelled to purchase the various items of food which are now unsubsidised, such as flour, bread, tea, sugar and other commodities, and for them the cost of living has increased. The Minister talks about interference in the compiling of the cost-of-living figure. All that any member of the House need do is to ask any housewife or any person whose responsibility it is to cater for a household whether for the money at her command every week she can get more essentials to-day than she could in 1947. When she can say that she can, I will agree that the cost of living has been reduced.

I hope I have not misled the House. When talking about the recommendations and their cost, I referred to the first four. I was talking about recommendations Nos. 1, 2, 3 and 6 and not recommendations Nos. 1, 2, 3 and 4.

The total is £2,240,000?

For Nos. 1, 2 and 3, yes.

Recommendation put.
The Committee divided: Tá, 15; Níl, 29.

  • Clarkin, Andrew S.
  • Concannon, Helena.
  • Fitzsimons, Patrick.
  • Fogarty, Andrew.
  • Goulding, Seán.
  • Hawkins, Frederick.
  • Hearne, Michael.
  • Loughman, Frank.
  • Lynch, Peter T.
  • Ó Buachalla, Liam.
  • O'Dwyer, Martin.
  • Nic Phiarais, Maighréad M.
  • Quinn, Martin.
  • Quirke, William.
  • Summerfield, Frederick M.


  • Anthony, Richard S.
  • Baxter, Patrick F.
  • Bennett, George C.
  • Bigger, Joseph W.
  • Burke, Denis.
  • Burke, Robert M.
  • Butler, Eleanor G.
  • Butler, John.
  • Crosbie, James.
  • Davidson, Mary F.
  • Dockrell, Henry M.
  • Douglas, James G.
  • Fearon, William R.
  • Finan, John.
  • Hayes, Michael.
  • Ireland, Denis L.
  • McCartan, Patrick.
  • McCrea, James J.
  • McGee, James T.
  • Meighan, John J.
  • O'Brien, George.
  • O'Connell, Thomas J.
  • O'Farrell, Séamus.
  • Orpen, Edward R.R.
  • Ruane, Seán T.
  • Ryan, Jeremiah.
  • Smyth, Michael.
  • Stanford, William B.
  • Tunney, James.
Tellers:— Tá: Senators Loughman and Clarkin; Níl: Senators McCrea and Crosbie.
Recommendation, by leave, withdrawn.
Recommendation declared negatived.

Recommendations Nos. 2 and 3 are covered by No. 1 and fall.

I move recommendation No. 4:—

Before Section 2, in page 3, to insert a new section as follows:—

In the case of a dwellinghouse, the owner or tenant, as the case may be, who has incurred the cost of maintenance, repairs and insurance of the house shall be entitled, on making a claim for the purpose, to repayment of the amount of the tax assessed on the amount of the cost of such maintenance, repairs and insurance.

There is little need to dwell at length on this recommendation. The State has made, and is making, very generous contributions in order to assist persons anxious to become owners of their homes. Provision is made to empower local authorities to erect houses for the working classes, and very large free grants are made available to those persons who undertake the erection of houses for themselves, when they are in a position to do. Provision is also made available by the way of loan facilities, but when it comes to the point of purchasing a house the procedure is the very reverse. While we make provision to assist persons to keep their homes in repair, and in a proper state of maintenance, I suggest that the Minister should give very careful consideration to this recommendation, especially from the point of view of encouraging occupiers to keep their homes in good repair, by making some concession in this respect and also encouraging employment in certain trades.

The point of view was put forward here some time ago that, because of high costs and no provision for assistance in that direction, numbers of people were not now carrying out repairs annually, especially on larger houses. If the Minister could see his way to make some concession by way of encouragement for such persons, I think it would be a worthy gesture.

The idea that a person occupying a house should get relief for repairs by way of income-tax is a sound one. For a long time it was recognised by law, and when I first paid income-tax on a house I owned, I remember being allowed one-sixth of the valuation for repairs. On a house with a valuation of £24 it meant with the income-tax allowance, £20 annually, as there was an allowance of one-sixth or £4 for repairs. I think it was the Fianna Fáil Government removed that concession, and subsequently they did what was worse, by compelling the owner to pay income-tax on five-fourths of the valuation, so that a man whose valuation was £24 previously and who paid income-tax on £20, found himself eventually under Fianna Fáil dispensation paying tax on £30. I think that was a very bad arrangement.

I know that, to some extent, it was mixed up with the whole question of valuation. Senator Hawkins is right when he stated that all Parties in the State regard it as desirable that people should, if possible, own their houses. At present people are taxed on something that they have not got. They should be taxed on the value of a house, and if taxed on a figure deducted from a gross figure, as well as repairs, they are certainly inequitably taxed. It is true that people get the minimum repairs done now, and getting the minimum repairs done means that the actual capital of the country is decreasing in value. The cost of repairs is extraordinarily high now, because tradesmen's wages are high, but if repairs are to be done properly it is better to employ craftsmen. More employment would be given if some allowance was made for the cost of repairs. Whether the recommendation as it stands is feasible, practicable, or capable of being properly administered, I am not sure. The arrangement that existed before Fianna Fáil removed it, of allowing a certain amount on the valuation for repairs by way of relief of income-tax, had some merit. While I realise that the Minister would not accept the recommendation, particularly in its present form, there can be no doubt that the matter is worthy of consideration when preparing the Budget, if possible to allow something off for repairs that have been carried out. While I realise that the Minister will not accept this amendment, particularly in its present form, I think there can be no doubt at all that one of the matters worthy of consideration in framing a Budget, if it were possible to do it, would be to allow something off for repairs which have been done. That is particularly the case now, on account of the cost, and it is particularly the case also because it is to the interest of the Minister for Finance and to the interest of the local authority and the State that the property in the State should be maintained in the best possible kind of preservation. So, there is an argument for taking some kind of action of the nature suggested in the amendment, whatever may be said about the amendment itself as it is on the paper.

Aontaím leis an méid atá ráite ar son an mholta seo. Támuid ar fad ar aon intinn go luíonn an bhróg go han-dian ar únaerí tithe le blianta gairide anuas go háirithe, mar gheall ar chomh mór agus atá costas deisithe tithe imithe i méid. Mar gheall ar chomh hárd agus atá na costais, tá go leor daoine ag déanamh faillí ina ndualgaisí maidir leis na tithe in a gcónaíonn siad. Tá na tithe ag dul ó mhaith. Mar adúirt an Seanadóir O hAodha, ní maith an rud é ó thaobh an Stáit, ní maith an rud é ó thaobh na ndaoine. Tá fhios ag an Seanad gur luacháladh tithe ins go leor áiteanna ar fud na tíre le dhá bhliain anuas. Tá aithne agam ar fhear amháin as Corcaigh a bhí ag caint liom ar an gceist seo le gairid. Dúirt sé liom nach ndearna sé tada ar a theach maidir le deisiú, péinteáil, ná eile. Luacháladh na tithe in aice leis ach níor hardaíodh an luacháil ar a theach oiread agus pingin amháin. Níl aon mhíniú aige air sin beag ná mór ach gur mar gheall air nach ndearna sé tada leis an teach a choinneáil i gceart. Shílfeá gur aisteach an nós é agus shílfeá gur éagórach an rud é ar na daoine ar hardaíodh an luacháil orthu.

Do leigtí, blianta ó shoin, mar a míníodh, liúntas an tséú cuid den luacháil bhliantúil le haghaidh deisithe tithe. Ba thruagh gur cuireadh é sin ar ceal. Tá fhios ag an Seanad anois go n-íoctar cáin ar 5/4 den luacháil faoi Dhlí na mBocht. Iocann tú cáin ar an luach agus an ceathrú cuid de thar mar do bhí roimhe. Ní ceart dearmad a dhéanamh air seo. In éindigh le cáin a íoc ar an mbreis luachála sin, caithfimíd cáin ioncaim a íoc ar an luacháil nua atá déanta le gairid agus is dóigh liom, ar an abhar sin amháin, go mba cheart go bhfaigheadh tithe, a luacháladh le gairid, liúntas thar aon tithe eile. Ní bheinn ag iarraidh liúntas le haghaidh dreama ar leith. An t-iarratas atá i gceist san moladh, tá sé réasúnta mar iarrtar é le haghaidh an dreama fré chéile.

There is very little more to be said on this matter except to refer to a point made by Senator Hayes that there was a time not long ago when we did get an allowance of one-fourth of the poor law valuation. It is true that in due course the valuation for tax purposes was increased to five-fourths. Now the position is, for instance in Galway, that we have had a revaluation. Many people in Galway do not know why their houses have been revalued. I understand that the tax on five-fourths of that revaluation is demanded. That seems to be very unfair. I do not want to make an appeal for any particular section. I think an allowance ought to be made to house owners in general, but, apart from that, there is a good claim to be made on behalf of people whose houses have been recently revalued, that they should not have to pay income-tax on five-fourths of the new valuation.

It is difficult for the Minister to find money for this, that and the other. I attempted on the last recommendations to point out how he himself suggested he might get money, but here, at any rate, is a case where he ought to go out of his way, even on the ground of human improvements, to provide relief for the people mentioned in the recommendation.

I referred in Irish to the case of a friend of mine who mentioned recently to me the revaluation that took place in Cork. He pointed out to me that his premises were not revalued and the only reason he could give was that he had neglected the general maintenance of his house. The other houses in the district had their valuations raised. His contention was that he got clear because he had failed to carry out necessary repairs and maintenance whereas the other people were industrious, looked after their premises and spent their money on them. They were rewarded by an increase in valuation and, I expect, for many of them, an increase in income-tax.

The Minister suggested last week, when he was replying to some of the points raised in the debate, that he had not raised taxation. I can say that I am one person at any rate who has to pay more income-tax, because my house has been revalued. If the Minister does not think that that is an increase in taxation, he is welcome to explain it in any way he likes, but I still maintain that my taxation has been increased.

The Minister did not do it.

We recognise generally that business people are entitled to allowances for wear and tear, and so on, and I think we might apply the principle in some measure to the type of property mentioned here, namely, dwelling houses. I hope that the Minister will see his way to make some arrangement to give relief as asked for in the recommendation.

Did I hear the Senator say that his tax has been increased in recent years?

Is the Senator speaking of direct, indirect or both?

I am speaking of the fact that the valuation has been increased.

Because Galway asked for it. I do not mean that in a slang sense. They definitely asked for revaluation.

They may have but the fact remains that people like me have had their tax increased because of this revaluation. That is the point I made. I think I made it quite definitely.

When he got an increase in salary he got his tax raised also.

The Senator is looking well on it.

Many others may not look so well.

This is a somewhat difficult matter. The suggestion that has been made is one, of course, that could not be accepted at this late stage of finance proceedings, because it is not possible to measure what this would cost. To start off with, the terms of the amendment are that "the owner or tenant who has incurred the cost of maintenance, repairs and insurance shall be entitled...." I do not know why "tenant" is put in there. It is only the owner of property who is liable to income-tax. The income-tax for which the owner, in the end, is responsible sometimes is collected through the tenant, but he has a right to recovery. In fact, effectively, he does not pay. Effectively, he does not pay. That is a defect in the recommendation, which could be amended by leaving out the word "tenant".

As far as the recommendation generally is concerned, I am advised that the income-tax on a dwellinghouse is charged by reference to five-fourths of the valuation. That was a device introduced in 1935. The valuation is based on an estimate of the rent for which, taking one year with another, the property in its actual state might reasonably be let from year to year, but that is after allowance has been made for the probable annual cost of repairs, insurance and other expenses to maintain the property. It may be said that due allowance has been made for the cost of repairs before the valuation is put on the house. I am not dealing with the exceptional case of an area where revaluation has taken place. It may be said there that, vis-á-vis other people in the community, there had been special impositions put on those people. That is outside my control, and the only way it can be amended is by having differential rates applying to different areas. I do not suppose I would be invited to adopt that course.

Does some special regulation apply to Waterford?

The poor law valuation is taken. The five-fourths does not apply.

The valuation of Waterford is a comprehensive thing and done on a special plea. Galway is not the same.

Waterford was exempted at the time the tax was put on.

Because of the special conditions under which the valuation took place. In general, valuations on which assessments to income-tax under Schedule A are based are considerably below the net rents yielded by house property under present day conditions, so that a property owner who is assessed on five-fourths of the valuation is being charged on a basis which is almost invariably very much lower than the actual rent for which the house might be let, as diminished by the cost of repairs, etc. If you take a house of £28 valuation, the Schedule A assessment at five-fourths is £35 and income-tax is payable on £35. The rent of such a house is taken to be £150 which I think is not an unfair letting rent. If the average outlay on repairs, insurance and maintenance were £20 and one takes rates into consideration, say £36, that is £56. Subtracting it from £150, which would be the reasonable gross rent, the net rent would be £94. Therefore, even in respect of such a house and after allowing for rates and an average amount for repairs, the comparison is between £94 which would be the real net rent of the house and £35 on which the person is asked to pay. The person gets a net income of £94 and is actually charged on £35.

Is the allowance in respect of rates based on 20/- in the £ in the example?

It is more than that.

In Galway we are paying 34/6.

On that basis, even five-fourths does not appear to be unfair. I cannot accept this, as it would require a good deal of examination to find out how it would run and what the loss to the Exchequer would be. It might be considerable and it cannot be brought into the arrangements for the present year.

Again, to refer back to the time when the five-fourths was put on, the then Minister for Finance, talking about this tax being a small charge, said it was like the grain of mustard seed he hoped would grow into luxurious trees under which, he said, "a happier Minister than I might sit some day to catch the glittering prizes as they fall." That was Deputy MacEntee.

I was wondering whether the Minister had a case in mind, until he came to the figures. In one particular house I have in mind, the poor law valuation is exactly the same, £28. For the purpose of Schedule A it is valued at £35 and the tax is payable on £35. The Minister, after allowing an abritrary sum for rates and a sum of £20 for annual repairs, said that the real income from that house, on the basis of its being rented at £150, would be £94. In the example I have, the landlord is not liable for rates; the tenant pays rates. Neither is the landlord liable for any repairs, so the figure of £94 is comparable with what the landlord of the particular house I have in mind would be getting. In the case of this particular house, poor law valuation £28, on which he pays income-tax Schedule A £35, the rent per annum he receives is £30. As there seems to be some doubt, I can only repeat what I said earlier, that I am speaking of this from my own knowledge.

There is power to adjust down to the actual rent received.

There is so much trouble in dealing with these adjustments and it takes so much time, that it is hardly worth while. May I say that those whom I have met who have had dealings directly with income-tax authorities in respect of matters like this have always told me that their experience has been that the income-tax inspectors have been extremely helpful to any citizen in such difficulties?

There is no doubt as to the truth of what Senator Hearne has said. That is the general experience. There is validity in the Minister's argument, only in the case of people who own houses for the purpose of letting them and where that is the main source of income. If the actual net income that a man receives from a house is £90, he is very fortunate if he pays income-tax only on £35 or £40. If he were earning it as salary, he would pay it on the whole £90, less allowances.

The Minister did not deal separately with owners who reside in their houses which is the main cause of dissatisfaction. Certainly, the dissatisfaction about it has reached me from time to time. This is not a new matter. Take the case of a man who saves enough money to buy a house or sells an investment to buy a house, to live in. I know a house which has a valuation, not of £28 but of £35, bought by a man who sold £2,000 of 3 per cent. safe investment and put it into that house, to live in it himself. He is not a bit interested in the fact that he could get a rent of £150. He was gaining an income of £60 and sold that investment. He might get £200 in rent. There were times in Dublin when he could have got £300, certainly if he put a few bits of furniture into it. It seems to me that the present tendency in taxation of houses is severe in the case of people, particularly young married people, who have to pay a high price to buy their own houses. I have always felt that if in theory you could have got £150 rent and do not get it, and if you are taxed as if you had got it, in practice that is unfair. I think there is a very great distinction between the person who buys a house for himself and his family and the person who makes a livelihood as a landlord by letting his houses. I never saw why there should be a fundamental difference between that and any other method of earning a livelihood, provided, of course, that repairs are fully allowed for.

I do not think that anybody, even Senator Hawkins, would want the recommendation carried as it stands because as it stands it would relieve anyone of paying income-tax if he spent the valuation on repairs. If the valuation were £28, all he would have to do is to spend £28 on repairs and he would pay no income-tax and I think that would be completely unworkable. I have always opposed the removal of the one-sixth valuation since it was introduced. It was first introduced at an earlier date but there was strong opposition in this House and the Dáil gave way to that opposition. Later a different Minister introduced it and it was carried in, I think, 1934. It was strongly opposed here on most sides of the House but the result was nil. I think there is something to be said for some provision but this is another matter with which you cannot deal simply. It wants careful examination and if it is examined, a distinction should be made between a person who is a landlord living out of his property and the person who has to pay a high price for a house in order to live in it.

There is another difficulty with regard to repairs and I cannot quite make out how it operates. I admit that this would not apply to some of the building that is done at the moment, but a man who builds a decent house for a few thousand pounds should have a small repair bill for the first few years while the person who very often finds it harder to live and who must buy an old house for perhaps a little less, has to pay highly for repairs. While I know that in theory provision is made in the valuation for repairs, it has never come to my notice that additional provision has been made in the case of an old house as compared with a new one.

Everybody knows that, as the law stands, it is not practical politics to appeal against new valuations. The practice generally is that the figure is decided by the valuation office, no doubt after careful examination, but they, no more than anybody else, are not infallible. The figure is based on the rent less outgoings and that is divided by a third because otherwise it would be grossly unfair if you were to put the full rent. That is the practice but if you go into the courts you will find that the law provides for full letting value. No satisfaction will be got unless an error so gross is found as that no attention was paid to the one-third. In practice there are no appeals and some of the grievances which have been mentioned by Senator Ó Buachalla are due to the fact that the number of appeals is practically negligible because of the state of the law at the moment.

I entirely agree with Senator Ó Buachalla that people who had a revaluation of the whole value of the house in recent years were unfairly treated in so far as they have to pay five-fourths. In, I think, 1934, members of the House drew attention to that, but while the Minister admitted that it was the case—if it was not he someone did—he did not see how it was possible to separate the income-tax so that one house would be treated differently from another. An exception was made in Waterford, and I think that there may be a case for the town of Galway. You could not possibly pick out the odd houses which are being revalued because a person who makes repairs or proposes to do so on his house has his house revalued. That could not be dealt with under an amendment of this kind but it is a problem which some Government some day will have to tackle.

In view of the Minister's approach to the recommendation, I do not intend to press it, but I would again draw his attention to the matter raised by Senator Ó Buachalla, valuations in Galway. The position there is that the corporation made applications to the Revenue Commissioners to have certain old houses which were valued prior to the 1914 valuation raised to a present-day valuation. In the course of carrying through the valuation the valuation officers recommended that it would be more equitable to have a full valuation, with the result that the whole City of Galway has been revalued. Therefore, it has been brought on a par with Waterford and I would ask the Minister to keep in mind—it may be too late now—giving on the next occasion some concession to Galway as has been given to Waterford.

Sections 2 to 4, inclusive, agreed to.
Question proposed: "That Section 5 stand part of the Bill."

Captain Orpen

On Section 5 I should like to ask the Minister a question. In his Budget speech, he indicated, I think, why he was removing the preferential duty on tobacco, and said that he expected to get £350,000.

Captain Orpen

Has the Minister made any estimate of the probable additional dollars required? Is it not likely that there would be a switch over from sterling tobacco to additional dollar tobacco owing to the removal of this preferential rate?

I cannot give the figure exactly, but it is something very small. The introduction of this last year arose from the fact that in O.E.E.C. pressure to some extent was being used to have this country buy tobacco of American Virginian type. When searches were made to see where tobacco could be got, it was discovered that the only country really offering was Rhodesia, because, although some was to be had from Turkey and Greece, neither was suitable and a costly process of drying and other things would be involved. When an approach was made regarding the purchase of Rhodesian tobacco, it was found that the British Government through bulk purchasing arrangements had for a number of years to come contracted to buy, and the sellers in Rhodesia had contracted to sell, a very high percentage, somewhere in the 90's. The remainder the Rhodesians desired to distribute among customers who could be described as old-time customers. The result was that the amount of tobacco we found it possible, even remotely possible, to get was very small indeed. I had to make the arrangements, and on account of Rhodesian tobacco being a bit dearer we had to allow for a preferential rate so as to put importers and manufacturers here into a position equal to that which we would have had if Virginian tobacco had been introduced.

That situation stood until this year, when a treaty was made with the United States, and they raised—they always do raise—the question of Commonwealth preference. It did not seem to be a preference that was likely to last. They had not got very much result from it during the year and it was certainly not worth while making it any cause of friction between ourselves and the American Government on the general tariff, and for that reason it was decided to remit it.

The situation with regard to tobacco is relatively quite easy. There are very big supplies of tobacco in stock and it certainly will not be necessary to buy even the smallest unit of tobacco by reason of this remission this year. We are in quite an easy position so far as stocks are concerned. The gain this year is estimated at £35,000, and there will be no switch to dollars by reason of this provision.

Is the position, in effect, this, that the United States are really the only source of raw tobacco open to this country?

No; tobacco is being bought from Rhodesia.

The quantities available are very small.

Yes, but there is some still coming in. I should like to have the date noticed. This provision is to have effect on and from 31st July next, because, as we had made arrangements with the people importing and who are about to manufacture, we felt it was only right to give them reasonable notice. The tobacco affected is tobacco either in a bonded warehouse on that date or tobacco purchased before that date. There is some coming in, but, as I say, the quantity is very small.

Generally speaking, the position is that the United States are the only source of raw tobacco open to us?

I would not say "the only source". We can get Turkish tobacco and we can get some tobacco from Greece, but they are dear and their cost is being increased.

And the supplies are very limited.

Limited, yes, and apparently the taste of smokers in this country does not run to them.

Is that not the main reason, that the taste for Virginia tobacco confines it very largely to America?

They do not even like blends, even though the percentage of other tobacco is small.

Question put and agreed to.
Section 6 agreed to.

Tairgim Moladh a 5:—

Before Section 7, in page 4, to insert a new section as follows:—

(i) Where entertainments duty has been paid on payments for admission, on or after the 1st day of August, 1950, to an entertainment which consisted either solely of a cinematographic exhibition or partly of a cinematographic exhibition and partly of a personal performance, and

(ii) such duty is charged on the basis of certified returns of such payments furnished to the Revenue Commissioners by the person or persons responsible for portraying and for producing such entertainment, and

(iii) the Revenue Commissioners are satisfied that at least 20 minutes of the duration of the sound track of said cinematographic exhibition is in the Irish language and that its primary object is the extension of the use of the Irish language,

the Revenue Commissioners shall repay to such person or persons an amount equal to 25 per cent of the duty so charged and paid.

Ní gá mórán a rá i dtaobh an mholta seo. Is é an fá is mó gur cuireadh síos é ionus go dtabharfaimís deis don Aire inseacht dúinn an féidir dó aon chabhair faoi leith a chur ar fáil a chuideodh le tionscal na scannán a bhunú san tír. Do cuireadh iarratas isteach go minic, sílim, go dtí an Rialtas ag iarraidh ar an Rialtas féin rud éigin a dhéanamh leis an tionscal seo a chur ar bun. Ní dóigh liom féin gur obair í gur cheart don Rialtas dul ina bun. Níor mhiste liom dá socraíodh an Rialtas ar deontas a thabhairt do dhreamannaí taobh amuigh a bheadh sásta teacht isteach anseo agus scannáin de shaghsanna éagsúla a chur ar fáil agus go mbeadh an chaint a théann leo i nGaeilge. Tá fhios agam faoi láthair nach bhfuil scannáin le fáil ach fíor chorr-cheann go mbeadh an chaint leo i nGaeilge agus níl fhios agam cad a chosnódh sé le go gcuirfí a leithéid de scannán ar fáil ach sílim dá gcuireadh an tAire in iúl do na daoine a bhfuil spéis acu san scéal go mbeadh sé sásta cabhrú leo tré laghdú ar na rátaí cánach a gearrtar ar shiamsaí go spreagfadh sé a leithéid sin de dhaoine an gléasra d'fháil, na haisteoirí d'fháil, an t-abhar a sholáthar agus dul ar aghaidh agus scannán i nGaeilge a chur ar fáil.

Mar adeirim, dá nglacfadh an tAire leis an moladh anois díreach, ní chosnódh sé scilling air i mbliana. Níl fhios agam an gcosnódh sé mórán air an bhliain seo chugainn, ach sé an rud ba mhaith liom go gcuirfeadh sé in iúl gur mian leis go rachadh a leithéid sin oibre chun cinn agus chomh fada agus a bhaineann leis an Rialtas go dtabharfadh siadsan cúnamh agus go dtabharfadh siad an cúnamh san ar a laghad ar an mbealach atá curtha síos san moladh atá curtha síos an seo san Bhille. Ní dóigh liom gur gá a thuille a rá faoi ach tá súil agam go mbeidh an deá-scéal le cloisteáil ón Aire ar an gceist.

Like income-tax, there was a time when a discussion of the film industry or cinematograph shows in general would not have been so popular, but we have reached a point where we must have regard to the fact that the cinema and the film play a very important part in the life of the country. We have had various suggestions that the time had come when steps should be taken to set up here an Irish film industry, and if it were possible to develop such an industry, it would be a great asset to the nation.

We have here many of the things which go to help to build such an industry. The one thing we lack at present is Government interest and Government assistance. Some attempts in this direction have been made in the past and I understand there are at present one of two companies endeavouring to build up what they hope will be at some time in the near future a real Irish film industry. If that is to be brought about, there will, first, have to be more sympathetic help from the Government and there will, secondly, have to be more sympathetic assistance from cinema owners in general. The question is how that can be brought about and the purpose of the recommendation is to draw the attention of the Minister to the need for making some concession in this regard.

I understand the tax on the films coming into this country at present is on a footage basis. We are one of the very few countries where no very active steps have been taken, so far as giving essential support is concerned, to establish the industry. What is required in this respect is, first, the fixing of a quota for Irish-made films, that is, films completely made, processed and recorded, in this country. We have then to have encouragement for the newsreel. In every cinema throughout the country, there is shown a film review or newsreel. These are imported from abroad. There is a company in this country at present which is capable of producing, and has produced, an Irish pictorial review, but, with the present control of the cinemas, they are finding it very hard to make the progress which they would wish to make.

The second step would be to have a tariff imposed on all imported news-reels, so as to encourage the production of Irish news-reels. I understand that the tax at present is on the footage of the film. I suggest it is time some change should be made in this direction and, instead of having the tax on the value of the film per foot, to have it on the amount of money earned by it in this country.

I understand that the position could be that a film with an earning capacity of £5,000 or £6,000 would pay the same tax as a film capable of earning £20,000 or £30,000. One way to develop the industry here would be to put a tax on the earning power of imported films and to put the money collected into a pool to assist Irish companies. A company is at present erecting a studio and I understand that that studio is to be utilised by outside companies. As many people in this country are very interested in this matter, I put down the recommendation in order to draw the attention of the Minister and of the House to it, with a view to seeing what could be done to encourage those who have put up money for the formation of a company to develop the Irish film industry.

Have not the arguments used in favour of this recommendation been much wider than what appears on the Order Paper? As I understand it, the recommendation refers only to relief in cases where 20 minutes are devoted to the Irish language. There is no question involved here of establishing a film industry, from my reading of the recommendation. It is rather more limited than the remarks that have been made would lead one to believe. The suggestion is a good one if it were practicable. I remember that, when a relief of this kind was given some years ago, provided there was a certain amount of stage entertainment, ways and means were found of avoiding the tax altogether. I wonder whether something of the same kind could now be introduced by all cinema proprietors by just having some item in the Irish language?

A feature or a record.

I have sympathy with the idea if it could be carried out, but I have doubts. In view of what happened on a former occasion, it might be taken advantage of rather than generally helping the language. That course would cost very little.

This would cost roughly £250,000. It is hard to estimate the amount.

When I read this recommendation I wondered how it would work. In the first place, the arguments put up about news-reels had nothing to do with the purpose of the recommendation. I am not a picture-goer, but a great many people who go to pictures say that the cinemas do not give Irish news. The recommendation aims at helping the Irish language. Already in regulations issued by the Revenue Commissioners dealing with entertainment duty, provision is made by law for remission of tax when the subject is educational.

"(4) An entertainment which is promoted by the Gaelic League, or by some other society or organisation in respect of which it is shown to the satisfaction of the Revenue Commissioners that its primary object is the extension of the use of the Irish language and the whole of the net proceeds of which are devoted and will be applied to the extension of the use of the Irish language."

The principle of exemption of certain types of entertainment from the tax, in order to help Irish, has already been adopted in legislation. I do not know how this recommendation will work. As I understand it, all that is required is that there would be 20 minutes' performance in Irish, out of the total performance during the day, and if that is so 25 per cent. of the tax would be returned to proprietors of cinemas and not to those who went to see the films. These people would pay the tax as they went in and the proprietors would get 25 per cent. of the tax back. I do not know how the Minister calculates that the cost of this recommendation would be £250,000.

If everybody qualified.

Mr. Hayes

I suppose it would be worth everybody's while to qualify, assuming that each day there would be 20 minutes of Irish, to get back a quarter of the tax. I do not know if anybody would think that to be a good scheme. Would it do to have a gramophone record? I think gramophone records of 20 minutes' duration are now available.

Then it would not be a sound track. The term "sound track" has a very definite technical meaning.

Mr. Hayes

That may be so. People who know Irish would like to know what kind of Irish would be used. To set down simply that Irish was to be used and that the tax was to be got back by proprietors, does not mean help in the promotion of the Irish language. Who would judge what kind of Irish was used or what it was about? Who would judge whether the performance had for its primary object the extension of the Irish language? The Revenue Commissioners are a very able body of men, and they have to deal with a very complicated set of rules. Are they now to be asked to distinguish between a 20 minutes' sound track, the object of which was the extension of the Irish language, or a 20 minutes' sound track with no such object? I can imagine people going into a cinema and listening to a 20 minutes' sound track in Irish which might do harm to the Irish language, but the cinema proprietors would get the tax back all the same.

The motive in putting such an item in the programme need not be that proprietors cared for Irish. The motive would be to get money back on any kind of splash-dash entertainment. Going back to the newsreel question, it seems to me that it would be more effective if we were to get out a newsreel in Irish and to subsidise it. People would then know what they were doing, and would have control of the newsreel as well as the amount of money spent on it. An amount of money might be spent on a newsreel that would be doing some good. The proposal in this recommendation would cost a considerable sum of money, but the amount of good that it would do to the Irish language might not be effective. The other procedure—although I know it is not relevant to this particular discussion—of subsidising newsreels in Irish, would be far more practicable, would cost the Minister considerably less, and would do far more good to the Irish language.

Senator O'Connell misunderstood me when he said that I implied that this would cost the Minister only about 1/- in the year. I wanted to convey that at the present time films are not available to fill up the 20 minutes and that, therefore, in this year it would hardly cost anything at all. Next year I do not know whether it would cost anything. It would take considerable time before the necessary plant would be assembled, the necessary scripts obtained, and the trained artistes made available. How many years that would take, I do not know. I was mainly concerned to get the mind of the Minister on the matter and that he would express his sympathy with this or with some idea that would encourage people to go into the production of films in Irish.

Senator Hayes and the Minister think that this amendment would cover, say, the playing of a gramophone record in a cinema. I do not think that that is so. I think it is very clear from the amendment that the sound would have to accompany a film. The idea of sound track means that it is part and parcel of a film. The sound track is incorporated in the film itself, so that I do not think an ordinary gramophone record would suit.

Senator Hayes thinks that this would be merely a money-making proposition for the proprietors of cinema houses. There may be something in that, that they would get something extra out of it, but I visualise that if films in Irish, covering, say, sporting events, documentaries of a historical kind, general newsreels, and so on, were made at all, much of the work, for some time, will have to be done outside Ireland. I understand the plant is very expensive and that, when a film has been made, the whole thing must be transferred, say, to London, for further processing. I imagine there would be some extra cost in this, which would mean higher rentals for the owners of the cinemas.

With regard to the object the cinema owner would have in taking in such films, it is difficult to visualise, in the present state, a cinema proprietor taking in a film in Irish except for the purpose of aiding the Irish language movement. Many of the patrons of cinemas have not got Irish as we know it, say, in the West, so that, if they go to a performance where part of the programme is in the Irish language, they will understand that they will go there with a certain duty on them to pay attention to this sound track and, in consequence, improve their knowledge of Irish. The very fact of a cinema proprietor taking in a film with a sound track in Irish would mean that he meant to aid the Irish language revival movement. I do not think there is any point in Senator Hayes's objection.

Would not he get back 25 per cent. of the duty?

That 25 per cent. would not go back to him. He would be involved in higher rentals. He would not get it all.

He would not get it all.

I am thinking of something to encourage him to introduce it. I do not think he would get it all. It is quite possible, as Senator O'Connell said, that ways would be found of driving a coach and four through regulations made by the Revenue Commissioners. That is true of everything in the way of legislation that is proposed. By experience we would discover the tricks adopted by these people and so devise means of checking them.

I quite understand that there are difficulties in this. What I am really anxious for is that the Minister would indicate to us his sympathy with the object mentioned in the amendment and that he would indicate to people interested in the language and to people interested in the film industry that there is reasonable opportunity of their getting back their costs, at least, if they go ahead with the production of films of the type mentioned. Incidentally, it would be an encouragement to those in the language movement to go ahead and aid that industry.

I put down the amendment with Senator Hawkins in the hope that the Minister, since he got the amendment, would have given some consideration to it and would indicate to us his views on the matter.

In respect of the amendment, as it is drafted, I cannot say I have any sympathy whatever. The difficulties in carrying out this are very great indeed. The amendment reads:—

"Where entertainments duty has been paid on payments for admission ... to an entertainment which consisted either solely of a cinematographic exhibition or partly of a cinematographic exhibition and partly of a personal performance,"

— I am leaving out the second paragraph—

"the Revenue Commissioners are satisfied that at least 20 minutes of the duration of the sound track of said cinematographic exhibition is in the Irish language, and that its primary object is the extension of the Irish language...."

Take a cinema in Dublin which ordinarily would open its doors at, say, 2 o'clock and close them at about 11 at night. I take it that, if they opened their doors at 20 minutes to two and ran off a sound track in Irish, they would have qualified for a remission of one-fourth of the tax. I think they would, under the Senator's phrasing.

If they had three performances in the afternoon?

It all depends on what is the definition of "performance."

If a cinema opens at 20 to two and continues until 11 o'clock it is understood that it repeats the programme several times.

Very good. It has done its 20 minutes. Even if it had to do 20 minutes three times during the evening, as the amendment is phrased, it would mean that if a cinema proprietor has some sort of stock film—I am not putting it at too high a point of parody—if he has a film and shows it in the cinema, of a public person making a speech in Irish, gesticulating and walking about and taking a glass of water, I think it would qualify. I am sure that is not what is meant.

We have to remember the evasions that were practised already with regard to what was called the live variety performances as opposed to mechanical performances, where the method of evasion was, where a cinema or entertainment hall ordinarily opened at 8.0, they opened at 6.30, not expecting anybody would come in, and would run from 6.30 to 8.0 with somebody strumming a piano, and so on. Maybe an odd courting couple and a few stragglers went in but the performance really started at 8.0. They qualified. It was that evasion which brought about the change in taxation.

This amendment, I think, would lend itself to the same. If a stock film in Irish would enable a proprietor to secure the duty reduction, apart from the loophole of evasion, it would not tend to put the Irish language on its feet but would tend to throw ridicule on it if there were any attempt of this kind.

Into this argument there has been introduced the matter of Irish films and the production of films in Ireland and in Irish. That certainly is in its infancy yet. Maybe some attention would have to be given to it when it shows some better signs of life. It is not possible to give a real estimate of the cost. One does not know how many would qualify. I do not know what real films there are with real sound tracks attached to them in Irish that would qualify. I imagine the number would be very small. Therefore, everybody would be led to the evasion. If every one did qualify, it would not be long until a method would be found of breaking through, so that every film would be qualified. Then we would lose a quarter of the entire tax, a quarter of £1,109,000, which is, say, £270,000. If I had £270,000 to give to the promotion of the Irish language, this is not the way I would use it. If this were tied on to the promotion of a film industry, there might be something in it, but we will wait and see how that develops. At the moment, I am against this.

Recommendation, by leave, withdrawn.
Section 7 agreed to.
Sections 8 to 11, inclusive, agreed to.
Question proposed: "That Section 12 stand part of the Bill."

I should like to make one comment and ask one question on this section. In an afternoon when there has been a good deal of hard hitting at the Minister, it is only fair that one bouquet should be thrown to him. I would draw the attention of the House to page 22, to a section which may have missed Senators' attention, in the treaty between this country and the United States. It is very gratifying to teachers that the framers of this Bill should have shown consideration to a hard-worked and often under-paid profession. Articles 18 and 19 on pages 22-23 make certain provisions for teachers when they go to the United States of America or when they come here. I should like, as a member of that profession, to congratulate the Minister and those who framed the Bill on putting in this section. It might easily have been overlooked and it is very much to their credit.

The question I should like to ask is this: Is there a similar arrangement between Northern Ireland and the United States? In other words, will teachers and professors in Northern Ireland have the same privileges when they go to the United States? If there is no similar provision, this treaty is something that would go towards making members of the profession in Northern Ireland desire a little more to become citizens of our Republic.

The answer is not one that would draw many people to us. They do not get it under this provision but under a similar arrangement between Britain and the United States.

I take it we corroborate by using the term "Ireland" throughout.

Question put and agreed to.
Sections 13 to 16, inclusive, agreed to.

I move recommendation No. 6:—

Before Section 17, in page 9, to insert a new section as follows:—

(1) Sub-section (1) of Section 13 of the Finance (No. 2) Act, 1947 (No. 33 of 1947) is hereby deleted and in lieu thereof the following sub-section is substituted and shall have like force and effect:

"(1) The stamp duties chargeable on conveyances or transfers of lands, tenements and hereditaments under the heading ‘conveyance or transfer on sale of any property' in the First Schedule to the Stamp Act, 1891, as amended by subsequent enactments, shall, on and after the first day of December, 1950, be at the rate of 10/- for every £50 or fractional part of £50 of the amount or value of the consideration in lieu of the rates immediately theretofore chargeable."

(2) References to sub-section (1) of Section 13 of the Finance (No. 2) Act, 1947, contained in the other subsections of the said Section 13 shall be construed as references to the new sub-section (1) inserted by sub-section (1) of this section and the provisions of the said Section 13 shall be construed accordingly.

This needs very little explanation. Section 16 makes provision for the removal of this 5 per cent. stamp duty on certain types of purchases or transfers of property, that is, between local authorities and utility societies. The State makes very generous contributions to local authorities to erect houses and makes provisions whereby loans may be made available to people. Here is a section of people not in a position to acquire a site for a house, or who for one reason or another cannot undertake it and are not in a position to benefit by any of the Government grants. Rather is a tax being imposed on them in this Section 17, to the amount of 5 per cent. on purchases or transfers over £500.

The purpose of the amendment is to bring the position back to what it was prior to the introduction of the Supplementary Budget in 1947. The then Minister for Finance explained to this and the other House that this tax was to stop an inflationery tendency at that time, a tendency to purchase houses not only in those who required them for their own use but in people who had money to invest. There was a traffic being carried on in the purchase and resale of houses at that time. These conditions have passed. Last year when we suggested that this tax should be removed he seemed to look very sympathetically on the suggestion. However, it is being continued this year. Where a person proposes to purchase a house for £1,000 we by the imposition of this stamp duty put a tax of £50 on him.

The Parliamentary Secretary to the Minister for Local Government announced a few days ago that an amending Housing Bill was about to be introduced and that one of the provisions would be to make the payment of grants available to a person who was the first purchaser of a new house. At the present time a grant will not be payable except to the person who erects a house for his own use or to a utility society or local authority. That is an argument for the removal of the stamp duty. If we pass a measure tonight imposing a tax of £50 per £1,000 and to-morrow or the next day are prepared to pass a Bill making a generous grant of £280, say, available to that person, we are not being consistent.

This question has been argued in the Dáil and it was argued here last year, so Senators and the Minister are familiar with the argument. No good case can be made for its retention except the case made by the Minister, the question of finding the money. The £600,000 which the Minister proposes to collect as a result of this is £600,000 of an imposition on young people in many cases starting off in life purchasing a house for their own occupation and being compelled already to meet the legal expenses of transfer, the auction-cering expenses and so forth. There is no use in the Minister or anyone else suggesting that the money is not going to come out of the pocket of the purchaser. There is nowhere else from which it can come and the argument that has been advanced in the past does not exist now, that the contractors can afford to pay the tax because of the profits they made during the war.

If it did ever exist it does not exist at the present time and the tax must be borne in the long run by the purchaser just as he has to pay the auctioneer's fees and all the other expenses in connection with the transfer of property. No good case can be made for the continuance of the tax at the present time.

The case which was made for it was founded on a statement exactly opposed to the statement which Senator Hawkins has made. The tax was carried in 1947 and the then Minister for Finance when questioned about the tax and its objective and where the money was going to come from said on the 29th October, 1947, column 1070 of the Dáil Debates:—

"I think 5 per cent. is enough at the moment."

I interrupted:

"To cheapen houses?"

And he said:

"Not to cheapen houses—to get money from the vendors of houses. It will not cheapen houses."

He was not satisfied with that very explicit statement but on the 13th of November, column 1916 of the Dáil Debates, he said:—

"It is the vendor whose price is going to be reduced by the 5 per cent. The 5 per cent. instead of going into the vendor's pocket is going to go into the pocket of the Treasury."

That was the way in which the tax was carried—on the basis that the vendor would pay it. I said in Dáil Eireann that that was tantamount to an admission that it was a revenue tax and I do not see how it could be explained in any other way. Remember that in 1947 the situation was, as I have explained in the Dáil, that the vendors of houses were in control. The then Minister for Finance said that certain houses known to him had changed hands two or three times during that year at increased prices each time. It was the vendor—successive vendors— who were able to extract an extra bit of money from the people who were looking for houses.

These were the days when the vendors of houses were supreme because houses of a particular type were scarce. A scarcity value had accrued to these properties and there were a number of people who just had to get houses. I did not believe that the tax was going to be paid by the vendors and I opposed the tax for that reason.

There is the reasoning by which a vote was got for the imposition of the tax. The situation has changed. When I saw the Incorporated Law Society a year ago and they complained of the tax, they agreed that houses which were running at £5,000 in 1947 were not even getting a buyer that year at £2,500. So the difference between 5 per cent. on £2,500 and 1 per cent on £5,000 would be of some benefit to whoever had to pay it. I think it was admitted at that conference, and it is certainly the view I hold and have expressed more than once, that now that houses of that type are more plentiful and buyers are not anxious to pay the enhanced prices which vendors are anxious to exact it is pretty certain that the tax will be levied on the vendors. The people who built houses and trafficked in houses did make so much money in the years during which they had the community at their mercy that it would not make anybody very keen on easing their particular difficulties at the moment.

With regard to the type of houses that would benefit, the increased stamp duty did not apply where local authorities built houses and sold them or where public utility societies built a house and sold it to one of its own members. There would be no relief for them because the stamp duty did not apply to them. The type of house with which Senator Hawkins dealt can be dealt with when the new Housing Bill comes before the Oireachtas. The grant house was another type which could be built freely during 1947-48 and the great majority of houses were built under contract and the tax did not apply once the house was built under contract.

The people concerned were able to a substantial extent to escape the incidence of the stamp duty by leasing a plot and getting a house built upon it, because that did not rank as a sale and the stamp duty was not charged. If under the new Bill a house is given to the first purchaser attention in that Bill will have to be given to putting that type of house on the same footing as the contract type under the old legislation. But that is a special case and has nothing to do with the general remission here. The people who would benefit are the people who were selling houses to the better-off sections of the community. I feel that in the main the tax is being paid by the vendor at the moment to such an extent that I do not think there is sufficient reason for remitting them £480,000 and seeking to get that sum from someone else.

Progress reported; Committee to sit again to-day.
Business suspended at 6 p.m. and resumed at 7 p.m.