There are some questions I should like to ask the Minister on this section which deals with the disclosure of interest. I would ask if it is the intention under this section to look for a return of all deposits which are bearing interest. in other words, is there to be a global inquiry concerning all the deposits in the country which are liable to this particular tax or this particular return?
Finance Bill, 1963 (Certified Money Bill) — Committee Stage.
Sections 1 to 5, inclusive, agreed to.
SECTION 6.
Recommendation No. 1 not moved.
Section 6 agreed to.
Sections 7 to 16, inclusive, agreed to.
SECTION 17.
Question proposed: "That Section 17 stand part of the Bill."
We want particulars of all those who have received interest of more than £15 per year.
Is it the intention to receive this return from all banks and institutions?
Yes.
There is another point I should like to make. This arose from the recommendation of the Income Taxation Commission and my memory is that it should not apply to non-residents. Does the section apply to non-residents?
It does not apply to non-residents.
I think it is clear that it does apply to the Post Office Savings Bank as well as the ordinary commercial banks?
Yes, it does.
Question put and agreed to.
Sections 18 to 20, inclusive, agreed to.
SECTION 21.
I move recommendation No. 2:
To delete subsection (2).
This is a simple recommendation; there is nothing controversial about it. As I understand it, for the first time, there will be a single assessment which will cover all Schedules and, therefore, a taxpayer, instead of getting an assessment under Schedule D and one under Schedule A will now get one assessment which will cover all Schedules under which he may be taxed. Subsection (2) of Section 21 provides that:
A notice of appeal in a case in which subsection (1) of this section applies must, to be valid, indicate each assessment appealed against.
I suggest to the Minister that in the case of a layman filing a notice of appeal, that appeal may lead to difficulties. Heretofore, when a person got his assessment, he knew that all he had to do was to write "appeal" across it or to write to the inspector of taxes intimating that he was appealing within 21 days and that was all right. As it now stands, he will have to set out in his letter under which Schedule he is appealing. That might be all right if he is being represented by a professional man. Supposing a person has not put in a return at all or has put in a return himself and gets a notice of assessment dealing with two or three Schedules, he may not be able to sort out which Schedule he wants to appeal against. If he puts in his notice of appeal, merely says he is appealing, says nothing further about it and the inspector of taxes does not notice his appeal, the notice of appeal will not be effective. An ordinary notice of appeal against an assessment in general should be sufficient. If the inspector of taxes serves a notice on a taxpayer within so many days, asking him to specify which Schedule he is appealing against, his attention would be drawn to it, and if he were not able to deal with it himself, he could get professional advice and put the matter in order.
My objection to the subsection as it stands is that there might be a hardship on a layman who is not familiar with the various Schedules. He might be deprived of his right to appeal by trying to deal with it himself. I should like to hear the Minister's comments.
I certainly would agree with the Senator that nothing should be done which would deprive a person, on technical grounds, of his right to appeal. I do not think there is any great danger of that because the subsection says:
A notice of appeal in a case in which subsection (1) of this section applies must, to be valid, indicate each assessment appealed against.
The example I have in mind is a person who has a farm and who is also a company director and gets profits from the company. As far as his farm is concerned, there would be no difficulty, because he would give the valuation, and that would be that. The only item on which he might want to appeal is his business profits. If he appealed on his business profits and it transpired before the Special Commissioners that he should have included his director's fees, the practice is that the Special Commissioners would say: "We will deal with that even though you have not given notice."
I have no experience of this, but I am told there is no danger of a person being wronged because he did not state specifically against which Schedule he wished to appeal. Usually a person who has two or three assessments of that kind has a fuller knowledge of the situation than the ordinary person. He knows something about the dangers of income tax and is not likely to make a mistake.
If his notice of appeal is defective, or to use the word in the section, if his notice of appeal is not "valid", he will not come before the Special Commissioners. His appeal will not be listed. He will be notified by the inspector of taxes that his notice of appeal is defective. The Minister has dealt with the case of a man who gets director's fees and who also has a farm. Supposing that man did not put in a return in April—he might be ill or for one reason or another, might not attend to his business—and it dragged over and the inspector of taxes made an assessment, the profits of his farm would also be assessed under Schedule D and, as I understand it, not on valuation as heretofore. He could be in a very critical position. If he writes in to appeal against the assessment in its entirety under each Schedule, he is all right, but if he merely writes "I appeal" across the notice and leaves it at that, his notice of appeal is clearly defective. I do not think the inspector of taxes or the Minister would be prejudiced if the subsection provided that a note should be attached to the notice of appeal saying "...within so many days specifying under which Schedule he wishes to appeal."
One matter the Senator mentioned is not altogether right, I think. He referred to farm profits and said the man might be assessed under Schedule D.A long procedure is necessary before that can be done, and under Section 6, the inspector cannot do it on his own. He may ask a person for his return from the farm, but he cannot assess him under Schedule D unless the Revenue Commissioners say it is all right and that he can go ahead. The intention is to make sure that even though a person has a business, if he is carrying on genuine farming, he is not assessed on it. This is intended to apply to a man who exaggerates the profits from his farm to get out of paying on something else. I think it is fairly safe; there is no danger of what the Senator has in mind happening. The inspector cannot assess him.
He can.
If Senators are apprehensive about a person making a mistake through ignorance of the law, the Revenue Commissioners will take that into consideration.
Would that meet the case of the taxpayer who is foolish enough to leave it to the last day?
That will be covered.
Recommendation, by leave, withdrawn.
Section 21 agreed to.
Section 22 agreed to.
SECTION 23.
Question proposed: "That Section 23 stand part of the Bill."
I want to ask the Minister what is the reason underlying the appointment of this officer to be known as the Collector-General. I could understand it if it were an outside appointment, or if he were appointed exclusively to deal with the new turnover tax. Subsection (1) provides that he shall be drawn from the existing officers of the staff of the Revenue Commissioners. Subsection (2) provides that he shall be responsible for the collection and levying of the tax "from time to time charged in all assessments to income tax and surtax of which particulars have been transmitted to him under the preceding section". I want to know how the existing machinery of the Revenue Commissioners is inadequate, and why there is any necessity for the appointment of this new officer.
This is really only a tidying up of administration. In most Departments, it is paid to the Accountant in Telephones. This is the first attempt to get everything paid through the one person, the Collector-General.
Question put and agreed to.
Sections 24 to 31, inclusive, agreed to.
SECTION 32.
Question proposed: "That Section 32 stand part of the Bill."
Do I gather the purpose of this is to provide for a reduction of the penalty for illegal bookmaking from £500 to £100? Is it suggested that the £500 be multiplied by several offences? That is fantastic.
It is the result of a constitutional decision.
I shall have something to say to it on a following section.
Question put and agreed to.
Section 33 agreed to.
SECTION 34.
Question proposed: "That Section 34 stand part of the Bill."
As the Minister stated earlier, this proposal follows a Supreme Court decision that if treble the value of the duty involved exceeds £100, then the offence must be tried on indictment before judge and jury. With great respect, I say some other method should be got, even if it entails reducing the penalty to £100, because we have had experience under the Road Traffic Act where the offence of dangerous driving, causing serious bodily harm to another person, became an indictable offence.
As a result, the circuit court lists all over the country are now cluttered with these indictable offences under the Road Traffic Act. Juries are being brought from all over the country to spend several days trying these cases, in a very small percentage of which there are convictions. In one county —I think it is Donegal—the circuit court lists have become so crowded as a result of these alleged indictable offences under the Road Traffic Act that it is becoming impossible to get the civil work done at all with the possible result that it will become necessary to employ additional judges.
If it is not possible, or if it is difficult, to get a conviction in a charge under the Road Traffic Act from a jury, without in any way being offensive to the juries I think it will be absolutely impossible to get convictions under the smuggling prosecutions. A more practical way — I appreciate the Constitution could not be changed without a referendum— would be to reduce these penalties to £100 and let them remain summary offences, because it is much better to have a man tried by the district justice and fined £100 than to have him returned for trial before a judge and jury, at enormous expense to the State and inconvenience to the public, and have a verdict of "not guilty" returned.
That is what we are doing.
This is what paragraph (c) of Section 34 (4) says:
If the estimated value is not challenged—
(i) in case treble the estimated value exceeds one hundred pounds, the offence shall be tried on indictment,
Generally speaking, we are trying to get them tried by the district justices.
There would still be a lot of cases which must go before judges and juries.
If they exceed £100, but a lot of smuggling cases will be less than £100.
What about the big business? Even smuggling a few cattle would involve a lot more than £100.
The general intention of the section is that they will be tried summarily.
The intention is very sound, but is it not very likely that smuggling on any worthwhile scale will involve penalties of less than £100?
What can you do? You cannot avoid it in that case.
Question put and agreed to.
Sections 35 and 36 agreed to.
SECTION 37.
I move recommendation No. 3:
To delete the words and figures "1st day of January, 1962" where-ever they occur and to substitute therefor "sixth day of April, 1963".
This deals with the retrospective element of the corporation profits tax or with what can be more properly called company surtax. I have no desire to delay the Minister or the House on this topic, nor have I any hope the Minister will change his mind on this matter. Nevertheless, I feel it necessary that our views on this should be summarised and that our opinion of the retrospective element of this tax should be placed on the records of the House.
We have now in the case of this company surtax—a surtax which, incidentally, has now no lower limit— a tax charged at the reduced rate but still charged on the first £1, which is now liable to tax. I do not think there is any need to go into any long argument about whether or not the last increase in corporation profits tax in 1932 was in the same form as it is nowadays. Neither is there any necessity to argue whether or not the Minister is correct in saying all that is involved in this case are matters of accountancy checking.
The fact is that this tax is resisted on two grounds. First, retrospective taxation, like all retrospective legislation, is bad, and secondly, this is against the whole policy which the Government allege they share with the rest of us concerning incentives in regard to the economic development of this country. It is no good getting up and saying that what is involved are accountancy fictions if the people who have to make business decisions really feel that what is involved is retrospection in effect and retrospection that disturbs them and disturbs them psychologically. It is not arguments of accountancy or arguments of economics that are the fundamental basis of business decisions. Business decisions depend on these factors too, but also largely on other factors. Indeed, one of the greatest factors in regard to business decisions are psychological factors.
I think it is in this area that the Minister is doing great damage. There is no great need to argue whether it was done in 1932 or not. If it were done in 1932, it was wrong. If it were done in 1963, we still think it wrong. We think it particularly wrong in the economic climate of this particular period when we all seek, and the Government particularly claim to seek, economic advancement. There is at this stage no denial that this is retrospective.
The Minister agrees with Senator Nash. He said this is retrospective and should be retrospective. Indeed, one of the Minister's most vociferous supporters in Dáil Éireann lauded the retrospective nature of this tax and made the statement in Dáil Éireann that the only thing he regretted was that the tax was not retrospective to 1939. The position is that we object to retrospective taxation as having a harmful effect on business decisions during the coming year.
I made my case against this particular section on Second Reading. I do not propose to repeat the arguments I made but merely to support Senator Dooge and refer to what I said on the Second Reading.
I should like to support everything Senator Dooge said. I spoke on this on Second Stage yesterday, but I should like to clarify something Senator Fitzpatrick said this morning. He stated I had said, in effect, that I would support the Bill and then I had taken away so much of what I would support that there was nothing left. I want to make it quite clear that I do not oppose the increase in corporation profits tax as such, but I am entirely opposed to—I completely support Senator Dooge—the retrospective element which has been introduced into this section.
As a matter of absolute principle, I also support Senator's Dooge's recommendation. It seems to me that retrospective legislation is almost invariably wrong. I should like to know from the Minister what, in fact, the State will gain by this regrettable position. What is the amount of money for which we are selling a good principle? In any case, I personally am not prepared to sell it at any price.
In reply to Senator Stanford, I think there will be revenue up to about £2,900,000. I have also given my views on this already. I honestly do not see this argument about retrospection. It is taken out of this year's assets of the companies, whether it is income tax or corporation profits tax, or whatever it may be. The fact that we have to apply a retrospective yardstick to calculate the tax does not make it retrospective as far as I see.
I am afraid I cannot accept that. The law is proposed on a certain date in April and when a law that is proposed on a certain date in April reaches back to the beginning of January, I think most of us will agree it is retrospective legislation.
Let us look at the retrospective effect of the corporation profits tax proposals. It adds up to a clear levy on capital, not income. It is well known that last year's undistributed profits are part of this year's capital used to run a business. In many cases the people concerned may have already ploughed back some of those profits into their business. Certain incentives were given in the past and, as Senator Fitzpatrick said, this retrospective proposal in this year's Budget may frighten away many of those people who might otherwise come here and invest money in our industries. I believe the principle is entirely wrong and that the Minister should accept this recommendation.
I should like to support this. I quote subsection (5), of Section 37.
(5) Any additional corporation profits tax payable by virtue of the alterations in the law made by this section in respect of any accounting period ending on or after the 1st day of January, 1962, may be assessed and recovered notwithstanding that corporation profits tax has already been assessed in respect of that period.
If that is not retrospection, I do not know what it is. If corporation profits tax has been assessed in respect of an earlier period, the company is willing to pay thereon, and now, months or almost years afterwards the company finds itself subject to additional corporation profits tax which it could not possibly foresee as it did not form any part of the financial legislation of the year in question. Although I have the greatest possible respect for Senator Nash's legal knowledge in this argument, I am still not convinced that it is not retrospective. Assuming for a moment that it is retrospective, it seems to me that retrospective taxation of this kind is extremely bad and if people do not know each year what their taxation is going to be they cannot possibly plan ahead. I would ask the Minister very seriously to consider if he could not change the wording of the section.
I also made the case on the Second Stage. Unfortunately, I could not be here when the Minister was replying and I do not know what he said. I also quoted subsection (5) of Section 37 which has just been read by Senator O'Brien. Is it correct to state that a company which has already been assessed and on which notice of assessment has been served can now be assessed again under this legislation, and have an additional 5 per cent added on to it? If that is not the case, what is the meaning of subsection (5), Section 37? Take the case of a company, whose accounting period has closed, whose books are ruled off and who has been advised that, because the profits do not exceed £2,500 for that accounting period, there is no liability on it for corporation profits tax. Will that company now find that it is liable because of this legislation which we are dealing with today and which will become law next week? If the Minister would answer these two questions it might clear the matter.
The chamber of commerce commented on this matter in an editorial of the June number of the Chamber of Commerce Journal as follows:
At this point we can nail the speciousness of the argument that this proposed legislation is not retrospective. A suggestion is made that since accounts for the 1963-64 fiscal year can end at any time after the 5th April, 1962, the tax effect affecting must always be retrospective. Even the Budget framers who went back to January 1st, 1962, must have missed this point. But it is perfectly clear that Corporation Profits Tax is, and has always been, a tax on a company's accounting year, not on the fiscal year, and the correct legal interpretation will be found to be that it is retrospective if it applies to any period of time prior to the 6th April of the fiscal year. The Minister and his advisers can be openly challenged to produce good legal advice giving a contrary opinion.
What I would like to say is that I cannot understand the Government saying: "We are just making this legislation retrospective" and just sticking to the point. It is not even fair to business people to argue this point of whether it is retrospective or not, when it is patently retrospective. It would be much more honest to say: "It is retrospective and we are making it so." In their quieter moments, members of the Government must feel that this is really not correct, especially in view of the Government's record in the past. To give them their due they have been backing up business and industry in every possible way. This seems to knock the chair from under all the good things they have been doing.
I am afraid I am unable to understand the point of all this discussion. It seems to me that the important consideration is the actual effect on business. I am unable to see any difference between this imposition of an extra five per cent corporation profits tax as set out in the Finance Bill, and, say, a shilling extra in income tax on company profits. I should like somebody from the other side of the House to tell me if I am incorrect, but it seems to me that there is no difference whatever in practice from the point of view of the company between having to pay extra corporation profits tax and an increase in income tax as a result of the Budget. In the one case you may say technically that it is retrospective and in the other, it is not, but the practical result seems to be exactly the same in each case.
Senator Dooge rather gave the game away when he pointed out quite rightly that corporation profits tax is essentially a form of surtax on a company. Surtax is always paid retrospectively, as I understand it. It might be better in future not to bother about corporation profits tax—to eliminate it altogether and put an extra 3/- on to the income tax on companies.
That would be the honest way.
It would be just as retrospective but apparently there would not be the same grievance about it though the result would be exactly the same. I do not know quite what the suggestion is that should be done. Is it seriously suggested that the Minister should come in, introduce a Budget and increase taxation, in this case corporation profits tax, on the basis that not a penny would accrue to the State until half way through the following financial year? He would be in effect balancing next year's Budget.
You are doing that exactly with the turnover tax.
It would be futile. You would not get a single penny in the current financial year, and not until six months after the following year had begun would you get anything at all. If that were done, Senators would very rightly be in a position to point out that it was a very peculiar proceeding indeed. It is for that reason that the only change so far as one knows ever made in the rate of the corporation tax was done in the same way as this, for the reason that any other proceeding would be utterly futile. I should be very glad if anyone on the other side of the House could say what practical difference there is between this proposal and the ordinary proposal from time to time for an increase in income tax. As Senator Nash pointed out yesterday, in some respects an increase in income tax would be worse for companies in some ways compared with this.
I should like to clarify one thing. The Minister has told us that there is £2.5 million practical difference between the two things. Lest there should be any misunderstanding, this recommendation does not seek to reduce the proposed increase of 5 per cent in corporation profits tax, but it does seek to abolish the retrospective provision of the increase in principle. If this goes through, there is no reason why, as was suggested in the Dáil, in next year's Budget, there should not be an increase in income tax or corporation profits tax back-dated to 1958. The principle will be there. I understand that this Oireachtas has always avoided taxation in retrospection. It is obviously fundamentally unsound.
I quite realise that the recommendation does not abolish the proposal to put on the tax, but it would only be useful as far as I am concerned in the 1964/65 Budget. There would be nothing from it this year and we would therefore have to find £2,900,000 from some other source for this financial year. I think that this is a very academic argument. Senators on the other side admit that if we put on a shilling in income tax, we would have to get this money this year but because we call it corporation profits tax, we would not get it this year. Their argument is a legal formality.
I asked two very simple practical questions. Can a company taxed and assessed in respect of an accounting period be again assessed with an additional assessment under this Bill? Can people who were not liable in respect of an accounting period which is over and done with because their profits did not exceed £2,000 now be taxed for corporation profits tax?
Yes. This tax will be in addition to any tax paid or that would be paid this year, and it will be assessed on the profit earned from 1st January, 1962 to 31st December, 1962.
That is outrageous.
Question put.
The Committee divided: Tá, 12; Níl 29.
Tá
- Carton, Victor.
- Dooge, James C. I.
- Fitzpatrick, Thomas J.
- L'Estrange, Gerald.
- Lindsay, Patrick J.
- McDonald, Charles.
- McGuire, Edward A.
- O'Brien, George.
- Quigley, Joseph.
- Quinlan, Patrick M.
- Ross, J. N.
- Stanford, William B.
Níl
- Ahern, Liam.
- Boland, Gerald.
- Brady, Seán.
- Brennan, John J.
- Browne, Seán.
- Cole, John C.
- Connolly O'Brien, Nora.
- Farrell, Joseph.
- Fitzsimons, Patrick.
- Flanagan, Thomas P.
- Hayes, Seán.
- Healy Augustine A.
- Hogan, Daniel.
- Killilea, Mark.
- McGlinchey, Bernard.
- Mooney, Joseph M.
- Nash, John Joseph.
- Nolan, Thomas.
- Ó Ciosáin, Éamon.
- Ó Donnabháin, Seán.
- Ó Maoláin, Tomás.
- O'Reilly, Patrick.
- Ó Siochfhradha, Pádraig.
- O'Sullivan, Ted.
- Ryan, Eoin.
- Ryan, Patrick W.
- Ryan, William.
- Sheldon, William A. W.
- Yeats, Michael.
Tellers: Tá, Senators L'Estrange and Fitzpatrick; Níl, Senators Farrell and Seán Ó Donnabháin.
Question declared lost.
I move recommendation No. 4:
In page 26 to add the following subsection:—
"() This section shall not affect any company which shall have been wound up on or before 1st August, 1963."
This recommendation arises out of a point I raised on Second Stage. While there are all sorts of objections to making this tax retrospective so far as existing companies are concerned, I think very serious difficulties arise in the case of a company which has been trading from the period commencing 1st January, 1962, has continued to trade for the following year, has gone into liquidation some time during this year, and the liquidation has been completed. It seems to me that there are great practical difficulties. I cannot see how the Minister and the Revenue Commissioners will be able to collect this tax on the profits of a company which has been liquidated and the assets of which have been distributed. The assets have been distributed not merely in Ireland but in other countries and the Minister would not be able to collect that revenue debt. This recommendation sets out to rectify a practical fault in the Bill as drafted.
A company may close down and go into liquidation for the purpose of forming a new company. That might be done in order to get more profits and do better business. Two companies may amalgamate; one may go into liquidation and transfer to the second. In such a case, there is no reason why they should not pay the same tax as a continuing company. There is also the case of a company which closes down, say, if the proprietor or the principal has died, and there is no one to carry on. There may be considerable assets to be distributed. That is the only type of company with which the Senator would be concerned. I have stated my views about this more than once. I look on this tax as being paid out of this year's trading and whether it is paid out of reserves from past profits or from trading this year, it will be an ordinary liability of the company in respect of this year's trading.
In the case I have referred to, where the company is no longer carrying on, all I can say is that we would make it right in the coming Finance Bill. The only thing on which I would express some reserve is the date. I would have to consider whether it should be 1st August or Budget day. Subject to an equitable date being decided upon, I would be prepared to agree that a company that had gone out of business by that date should be relieved from this tax, unless, as I say, it is part of the continuation of a business, in which case it should be paid.
What about companies that will have closed down because of the retrospective tax?
I would not have sympathy for them.
If the Minister says he is prepared to exempt companies which have gone into liquidation on or before a certain date I shall be satisfied.
Is the Minister prepared to bring in an amendment on Report Stage to cover it?
I know from experience that legislation on income tax and corporation profits tax requires very careful drafting. I am prepared to undertake that we will make things right next year.
We have no objection to retrospective justice.
Recommendation, by leave, withdrawn.
Section 37 agreed to.
Sections 38 to 46, inclusive, agreed to.
SECTION 47.
Question proposed: "That Section 47 stand part of the Bill."
I do not think there is any need for an extended discussion on this matter but nevertheless I think that those of us in this House who object to the turnover tax in the form in which it is introduced should place on record our objection to it. In opposing it, there are a few comments I should like to make. It is just as well that in subsection (1) of Section 47 the Minister is statutorily defining the name of the tax as the turnover tax, because were it not statutorily defined, we might be in some difficulty about how to describe this tax.
Looking around for indirect taxation, the Minister has passed over many possibilities. When indications came from Government speakers that indirect taxation would probably be imposed, people thought of something in the form of a purchase tax. Indeed, some spokesmen for the Government Party took the same line and were not disillusioned until Budget day. A purchase tax is essentially a tax on a narrow range of goods. It is practically always a tax on luxuries. Apparently the Minister is not interested in a tax on luxuries. He wants a tax on everything.
There has been some talk in regard to this tax that there should be a movement towards expenditure taxation. That is something that has been talked about. The Taoiseach said it was something that economists had been talking about as desirable in present conditions. In 90 per cent of cases, these economists were referring to taxation on expenditure such as that proposed by Nicholas Calders of Cambridge University. It is different from our tax —it is the form of new taxation introduced in India. It is a tax on expenditure over and above a certain limit. In other words, just as in income tax, there is a certain limit allowed, under this expenditure tax, tax is taken only on expenditure above a certain amount. It is a tax in fact not on all expenditure but on conspicuous expenditure, the type of expenditure involved in foreign travel, for instance.
This tax of ours has been referred to by some advocates as a retail sales tax. Indeed it can hardly be described as anything but a mixum-gatherum wholesale-retail tax. Due to the way in which the Finance Bill now stands, the position is that retailers will be dealing with a mass of registered customers for whom tax will be added at the retail stage, and wholesalers will be dealing with non-registered customers at the wholesale stage. It is just as well that a name has been statutorily given to it so that the infant is well baptised and its name clear to everybody.
It has been argued this tax is a tax that has worked well in other countries. In particular, it has been said—it was said by Senator Nash yesterday—it is a form of tax which has spread throughout most of the States in the United States of America and that we should therefore adopt it. But it is not used in the same way in the US as it is used here. The very words Senator Nash used, to the effect that it has spread throughout most of the States, is, of course, the clearest indication of its true nature. It is not in the US largely a federal tax; it is largely a State tax for State revenue, and if we look at what happens in the US, we find that the conditions there, both the conditions in regard to the purposes for which the money is required and the way in which it is collected, are quite different.
Indeed anyone who has lived in the US for even a short while remembers the way in which this tax is added. You buy your weekly supplies in a supermarket; you trundle along your trolley and then certain foods are separated which are not subject to tax and the remainder are totted up and a special key depressed in the cash register which is a key for tax at 2½ per cent. I have a vivid memory of the operation, during the time I stayed in the US, when the system broke down. Instead of being able to punch the special cash register key, every supermarket had to tot up the items, the cash register keys were no longer any good and the resultant confusion is a good indication of what might happen here. What apparently happened was that the cash registers went out of use because it was necessary to change them from 2½ per cent to three per cent.
If we look at the situation in the US, we find that these charges for which turnover tax and retail sales tax are levied are largely for capital item by capital item, all of which have been voted on by the electorate—capital item by capital item, bond issue by bond issue—and that is the difference between there and here. If we had the prospect here that every item in respect of which this turnover tax is to be levied was to be submitted, item by item, to the electorate as they are in America for bond issues and otherwise, then there would have been some justification in following the US lead, but we have many large items of capital expenditure put through on a minimum of information given to the Dáil and Seanad. We have Bills in respect of heavy capital expenditure which give the minimum of information. Sometimes we might as well be dealing with Secret Service Votes. Unless more information is given, or unless the Government intend appointing Select Committees, I do not think they can claim they are doing here what is being done in the US. For those reasons, they cannot point to the conditions of the relatively successful operation of the tax in the United States.
Many of the Government speakers, and indeed we heard it in the Seanad in the past two days, have put forward the proposition that this tax is an unpopular tax and that because it is unpopular it must be right. In other words, they try to tell us that nasty medicine must do us good. I do not believe unpopularity has any great merit in this context. I think the proposals of the Minister should stand without it. There are many ramifications of this tax but I do not think there is any point in going into them in detail at this stage. Nevertheless, some of us in the House wish to record our opposition to this proposal.
I wish to record my opposition to this section and in doing so, I speak on behalf of Labour and the trade union movement. If I am relatively brief on the matter, it does not in any way indicate that I feel light-heartedly about it. The opposition is deep-seated, and I want to suggest to the House that it is well-based. The new tax to be implemented in Section 47 is frankly not a surprise to us because we have seen over the years, and in particular, in the past few months, the efforts of this Government to condition the public to this change in the tax system.
As long ago as 1957, the Minister for Finance said in the course of his Budget Statement that he believed it was a good principle to place whatever taxation might be necessary on expenditure rather than income. Earlier this year, we were treated in the newspapers to reports and rumours about the possible development of a big Budget gap, and it may have seemed strange to some of us to see in the Irish Press emphasis being placed on a Budget gap. Of course, it was all part of this planned campaign to condition the minds of the public, to try to convince them of the inevitability of some such tax.
In the speeches in the Dáil, and to some extent here, the introduction of this revolutionary and notorious tax is being related to a Budget gap. I should like for a moment to turn to this question of a gap. Even after providing for the higher milk subsidy and increase in the old age pensions, et cetera, the budgetary gap is 7½ million. From that we have to take the estimated increased revenue by way of corporation profits tax and the change in income tax, the additional tax on rents and the anti-inflation measures being introduced in this Bill, which it is calculated will bring in in the next 12 months a revenue of £4 million. That closes the gap to approximately £3 million. That gap should be seen in its proper perspective. It is a gap of £3 million in a total expenditure of £182 million, approximately 1½ per cent.
Is it being seriously suggested by the Government and their supporters that in a total bill of £182 million there is no room for economies, that there is no room for eliminating expenditure as an alternative to imposing further indirect taxation on the community, irrespective of their capacity to pay? It may well be that there are no large items to which we can point which can be eliminated but surely a variety of economies could be made, which, when aggregated together, would total a sizeable amount.
If the gap cannot be closed along those lines, let us look then at the question of finding alternative taxation. The Minister asked the Opposition in the Dáil to suggest how extra money could be brought in; what was the alternative to this turnover tax?
Let me make a few suggestions; I promised the Minister this morning I would do so. Let me remind the Minister and the House that twice in the past four years this Government had reduced taxation substantially on high incomes. Changes in surtax introduced by this Government have cost, according to the figures given by the Minister, £600,000 per annum— nearly two-thirds of a million. Those affected by the changes are relatively few, and the relatively rich, compared with the average citizen who is now to be asked to pay a turnover tax. Surtax has been amended to the extent that a single person can now earn £2,734 per annum, or £53 per week, before being subject to surtax. This Government's heart has bled for that poor single individual trying to keep himself going on £53 per week. It was thought he should be helped and the burden has been eased for that individual and people like him.
That is moving to the left.
I shall come to that in a moment. That is the type of policy implemented by this Government, who are now implementing a turnover tax.
Again, this turnover tax will presumably lead to an increase in the price of petrol of 1½d. a gallon approximately—1½d. a gallon from 1st November, when the turnover tax will come into operation. If that increase in the price of petrol had been applied, as it has been applied in previous Budgets, from Budget day, for the whole financial year, it would bring in a revenue of £¾ million this year. We have been talking about a gap of about £3 million, and the same argument exactly can be applied to cigarettes, beer, whiskey and tobacco. All these things will be increased in price on 1st November by reason of the turnover tax. If it were necessary to tax these—and if it were found desirable—if they were taxed from the date of the Budget, I suggest that the revenue brought in over the whole financial year would have been sufficient, and more than sufficient, possibly, to close the supposed gap. In fact, it is a gap that never was. That was simply part of the play-up by this Government to condition the mind of the public to the change in policy, which was admitted by the Taoiseach in speaking on the Fifth Stage of the Bill in the Dáil.
They have now gone away from the excuse that this was necessary in order to close a supposed gap, and are now admitting, and the Taoiseach says it quite openly, that it is not so much a tax to close a gap as a major part of the Government's policy for the future. If this is part of the move to the left referred to by the Taoiseach, it reminds me of a lady driver sticking out a left-hand indicator and promptly turning right. We expect these things from the ladies. If it were a turn to the left, we would have had a capital accounts tax, as exists in the United States and as exists in Great Britain since last year, having been introduced by a Government who do not talk about turning to the left but admittedly and openly a Government very much to the right.
A similar capital accounts tax operates in France, Sweden, the Netherlands, Finland and Denmark. In those countries, capital accounts are subject to income tax. Surely there is no equity in a situation where the Minister is supposed to be so hard up that he has to tax the ordinary necessaries of life and does not introduce a capital accounts tax.
Again, it is in accordance with the turn to the left that the Minister rejects an annual tax on wealth such as recommended by the Fiscal and Financial Committee of the EEC in 1963. Such a tax already exists in Sweden, Norway, West Germany, Austria, Switzerland and the Netherlands. This Committee recommended that all member countries of the EEC should introduce a moderate form of tax on wealth as part of their income tax code. The Minister, I am sure, has seen that article. We have been told about the desirability of moving in line with the EEC countries, but he did not expect that sort of recommendation.
I want to suggest that this is part of the deliberate policy of this Government: while stating they are moving to the left they are, in financial matters, moving very much to the right. I drew attention previously to the weight of taxation here, to the proportion of revenue colleced by indirect taxation as opposed to direct taxation and compared that with the position in other countries. Might I remind the House that 70 per cent of the revenue is collected by indirect taxation in this country. The percentages in other countries are—United States, 34; Sweden, 37; West Germany, 43; Great Britain, 48; and France, 50. Here we have already 70 per cent of revenue collected by indirect taxation irrespective of the capacity of the people being required to pay, not related to their income, family needs or anything else, and here we have a further move to the right and something that according to the Taoiseach, if we are to judge properly what he says, is to be a permanent measure. More and more weight will be attached to indirect taxation and correspondingly more and more reduction in the proportion of revenue collected by direct taxation.
We in the Labour movement are vehemently opposed to this section. This is not a built-up opposition. We have declared previously our opposition to this development. We have warned the Government of the dangers of doing this and tried to argue that it was unjustifiable and should not be done, but the Government have done it. We are opposed to it because a turnover tax does not differentiate between spending by ordinary families on essentials and luxury expenditure. It is a tax which cannot be related to the taxable capacity or family circumstances. It is an unnecessary tax, unjustifiable, and will be injurious.
I want to intervene briefly on this section to express opposition to it. Somebody has already described the feeling of resentment on the one hand and argumentative approval on the other that arose throughout the country in respect of the provisions of this Bill, particularly those enshrined in this section, this turnover tax. It is true, of course, that there has been considerable feeling aroused, that there have been protest meetings and marches. Nobody will question the right to organise protests, whether they be wholly constructive or not. It may be fallacious in its argument, but every man or group of men has the right to make an argument, even though it be fallacious. It is their right to make it that is important. Rebuttal is quite easy once fallacy is involved.
It has been an era in the past few months of stirring times and stirring phrases. It will probably be known as an era of turnover tax, of bribes, of cripples and of bloody noses.
What is the reference to bribes and cripples there? Perhaps the Senator would enlighten us.
Later.
It would be better if he did not. On the whole many of us would prefer if he would not enlighten us on this point.
Exactly.
Or even mention it.
I do not think there is any need for anybody to be enlightened on any of the matters mentioned by me. I think also that there is not any need for anybody to feel any kind of growing resentment at the mention of these things, particularly when I mention them in a vein of light sarcasm which, I think, is the vein in which they should be mentioned.
This tax, we are told, is necessary. The Minister, of course, has at his disposal all the information and all the means of getting at it to argue for such a necessity. We do not accept that it is necessary on any argument or on any approach.
Particularly I would not accept the geographical correlation of the turnover tax which we listened to yesterday afternoon from Senator Nash in what was the best speech made either in Dáil or Seanad in support of the Government, but it was a speech the classification for which the Greeks had a word—sophistry. I listened to it with admiration, and again I use the word "admiration" in its real classical sense of "wondering at". At that I will leave the content except to say that when Senator Nash urged the traders of this country to accept as a national obligation the position of tax-gatherer with the same patriotic indulgence as the solicitors' profession collect estate duty and other such moneys, I think it must have been plain to everyone that the Greeks had a word and that the Greeks were right.
My fear, and I think it is the fear of probably everybody with whom this tax will come into real contact, is a psychological one. It is concerned with the future. It is not so much related to two and a half per cent. My friend Senator L'Estrange reminds me that when the Health Act came in first we were told that it would not cost any more than 2/- in the £. That was probably an honest assessment at that time and in the circumstances of those times, but we now know in the different counties how far away from 2/- it has gone. What I would be afraid of is that next year the Minister will come back —if he is there—with another gap. Gaps have a tendency to widen unless they are attended to very promptly. I would not see any real difficulty in his way, once he establishes the principle this year, of saying: "We will make it five per cent this year." After all you do not need to be very persuasive to say that the man who has a £ has another sixpence, and it does not require that extra amount of persuasion to say that a man with a £ has another shilling. It can go on in a sort of gently-persuasive spiral and we are caught up. When income tax started in the beginning it was a very small figure—a matter of pence, I think. I should like to know whether this tax being adopted by the Government now is a matter of policy, recommended by the Taxation Commission but only recommended in view of a reduction in income tax. I want to know whether it indicates a trend in Government policy to leave the direct taxation static and then proceed mending gaps with increases of turnover tax or some such tax akin to it.
Going away from the £ and the shilling, it is quite easy, particularly for people who have not got that amount, to say that a person who can pay £1,000 for a motor car will have no difficulty in getting another £100. That will be ten per cent. But ten per cent of a tax of this kind on a purchase of £1 only brings it up to £1 2s. They are little things, they are insidious little things but it is the little things that have to be watched. I think I might quote correctly St. Paul when he said that little things were little things but fidelity in little things is a big thing, and this requires great fidelity, it requires great integrity, it requires that honesty of approach that is so necessary that by little, virtually, unnoticeable things, one is not deluded into believing that something is otherwise than a spiral economic trap.
That is what I think the people are worried about; that is why I think we have had protest marches; that is why chambers of commerce and kindred organisations have come together and have spoken vigorously on this matter. There are people who say that all the row is being kicked up by people who have not been making the proper returns in the past, people who have not been keeping books, people who have not been paying their due share of taxes. I can well see that to be the case but not to be as bad as people would make it out to be. I think, psychologically, that is the cause of the trouble. I deplore the kind of bitterness which has crept into all of these discussions. I think one could not purchase for 2½ per cent such a vast amount of anger, bitterness and resentment as this 6d. in the £1 represents in emotional outbursts. Neither do I like the argument of people who come into this House, or any other House or into any other meeting seeking to destroy their opponents with specious arguments and at the same time looking for an abandonment of bias to return to the co-operative ear, speaking with the gentle voice of Ophelia when in fact they are merely practising a mentally tortuous Iago part. People miscast in the role of innocence are appalling on or off stage.
On the Vote on Account, I made a reference to the final paragraph in the Minister's Budget speech last year in which he said that provided we entered EEC, he would probably find it necessary to introduce a new type of tax. At that time, when I made that reference, I knew that our application for EEC had been rejected and that it was not likely that we would enter EEC in the near future and I made an appeal to the Minister not to consider purchase tax, turnover tax or some other type of tax which he described in the 1962 Budget. If the Minister had not introduced Section 47 into the Finance Bill this year, I am quite sure that we would all have been at home yesterday at 6 p.m.; there would have been no need for us to stay here and discuss this Bill if Section 47 had been cut out. In my opinion, there has been little consolation for anybody as a result of the debate which has concluded in the Dáil and I think there will be even less consolation when we finish here this evening.
In my opinion, the majority of the people of the country are bitterly opposed to this Bill. The Dublin North-East by-election was fought on the turnover tax and the Government should know what would happen to them if they decided to go to the country in the morning. There is no doubt in the world that they would suffer a crushing defeat because there has been a turnover in more ways than one. The people who oppose the tax today were always strong supporters of the Government and they were in the march in Dublin a couple of weeks ago. There are rather influential people in the Fianna Fáil Party and when you see people in that Party who, because of Section 47 of the Bill, are prepared to oppose Fianna Fáil, then there must be something in that section which is repugnant to the people.
I cannot see why the Minister found it necessary this year to introduce the turnover tax. The deficit of about £6 million was so small that it could have been got from savings, as Senator Murphy suggested. It could also have been got in the orthodox way by increasing the price of cigarettes, with no increase in the price of the necessaries of life. Even as it stands, we are to have an increase in the packet of cigarettes and in the price of petrol. These were the orthodox means of collecting taxes and we are now to have increases in them. If I buy four gallons of petrol, it will cost me £1 and I am quite sure the supplier will ask me to pay 6d. tax. He will also come along and pay that 2½ per cent on the 6d. as well as paying it on the £1.
Someone in the Dáil asked how the tax on the box of matches would be collected and the first person who got an idea said: "Take out two matches from the box." He happened to be one of those who did not smoke and he must have been under the impression that there were about 100 matches in the box. Our Minister for Health suggested that if we took one match out of the box, that was the tax paid. If we use that principle right down the line to the pound of sausages, we will take off one sausage; in the case of the packet of cigarettes, we take out one cigarette. In other words, people are even being encouraged by members of the Fianna Fáil Party, and even by a Minister, to give a little underweight so as to get the tax. That is something I could not understand because at one time in this country we had fixed prices and inspectors going all over the country trying to find out if anybody was overcharging. Now the Minister does not mind about overcharging because of Section 47 of this Bill. It is the first time he has said he is not concerned with the way the tax is to be collected.
The booklet we got, on page 7, says that registered persons can adjust their prices so as to recover the tax payable. They may do this in any way they please. Now, it is the first time that I have ever seen that recommendation made to shopkeepers, that they should do it in anyway they please. Of course, the Minister is going to start up a bit of cut-throat business between the various shopkeepers. One shopkeeper may put up one item and another may put up another and the shoppers will go from shop to shop trying to buy at the cheapest price.
There is one person who will come out very badly under this turnover tax, the person who sells the necessaries for life, the grocer. Take any grocer in a rural area. If he turns over £200 in the week, he imagines that he is doing reasonably well. Anyone who has experience of the profit in grocery knows that if a shopkeeper can buy all round on a ten per cent margin, he believes he is doing very well. I know a man who started reasonably after 25 years experience and who made a bargain with a firm in Dublin to supply his goods on a ten per cent margin. He believes he has done excellent business. So we shall take it that a ten per cent margin is as good as any grocer will get out of his goods.
The grocer will not find it so easy to increase prices. Some other people will have grocery and bar. They will find it much easier to get the increase required to meet the turnover tax from the bar, leaving the groceries as they stand. The person who depends on the grocery shop is in the position that he makes £20 a week and he pays £5 of that in respect of £200. In other words, the grocer is to be taxed as no person was ever taxed in this country before. He is to be taxed 25 per cent on his profits.
The Minister and each member of the Fianna Fáil Party, like Senator Nash, told us there would be no increase in the cost of living, that competition would be so keen that there would be no necessity for an increase in the cost of living. If there is to be no increase in the cost of living as a result of this tax, the person I refer to will have to pay 25 per cent of his profits away, and if anyone has to do that—it is something that has never occurred before—that person will be forced out of business forthwith.
On page 9 of this booklet on the turnover tax, we have a section devoted to controls, and it says this:
Where accounts are not furnished for income tax purposes, the turnover tax returns will be scrutinised from time to time by the Inspector of Taxes and, if they appear satisfactory, no inquiries will be raised. Accounts will not be examined in detail for turnover tax purposes unless there is reason to suspect them.
The records of sales by manufacturers and wholesalers will be subject to inspection by Revenue officers to ensure that goods supplied to unregistered persons are included in turnover returns and that registered numbers are not being misused. The Revenue Commissioners may, however, if the circumstances of the case seem to require it, carry out a full examination of books and records of a business.
We were told there would not be an increase in the number of inspectors. According to that booklet, I can see no other option but to appoint hundreds of additional inspectors to inspect the books of the people in order to arrive at the proper tax. It is for those reasons that I, in line with my Party, oppose this Bill bitterly—it is because it proposes to tax food and all the other necessaries of life.
Senators Murphy and McAuliffe are now advocating that we should have put a tax on beer, spirits and tobacco.
And you have done so.
I would remind the two Senators that the Labour Party voted against me on every single occasion I endeavoured to put a tax on these commodities. Of course they are voting against me again this time.
The shopkeeper will put on the tax for you.
According to the Senator, I said the shopkeeper would put on the tax and that the cost of living would not go up. I said one thing or the other, but not both. Do not try to make me out as silly as the Labour Party. Senator Murphy said we were moving to the right rather than to the left. Actually what we are doing is following the lead of socialist Governments in Sweden and Norway who have put the tax on everything, including food. The reason why there are socialist Governments in these countries is that these Governments have the courage, unlike the Labour Party here, to take responsibility for the future. It is because they have that courage that they have got a majority. No Labour Party will get a majority by shilly-shallying, by saying: "We will give you everything but take nothing from you."
Senator Dooge said this is a most unpopular tax. Perhaps it is, but you cannot judge that by the noise. You must remember there is an organisation behind the noise and you must also remember who the people are who are behind that organisation.
A leading member of the Minister's organisation is president of it.
They are creating a lot of noise for political reasons. I would ask Senator Dooge to consider this: we know it to be an unpopular tax, and why then are we going ahead with it? There is only one explanation— we think it is right and we are going ahead with it. Had we been playing to the gallery, we would have dropped it by now. We think it is good for the country; otherwise we would not have introduced it.
Despite what the Minister says about the reasons for the widespread opposition, we believe it to be true that the opposition to this tax is genuine and that it is general in the country. It is not a question of being against the Government. It would not have mattered which Government were in office. Since this was introduced, people who had been quite calm and unbiased are now opposed to it violently. We can understand that, where members of the Dáil and the Seanad are concerned, there would be a certain amount of feeling that "the member across the House is not right in what he says." Be that as it may, we all know that throughout the country there is a genuine feeling that this tax is not fair, that it is something new, something of which the people are afraid, never having had experience of anything like it.
This is a tax on the necessaries of life. Before it, we have had experience of various kinds of taxes, but never before has there been such serious opposition to them by people who recognised that whatever Government are in power, the country must be run and the finances for that purpose must be raised. We support completely any improvement that can be given in social welfare benefits; in fact we should like to see much more given to such categories as widows and orphans, old age pensioners and unemployed persons.
There is another aspect also. This is bound to bring about a situation where there will be a definite increase in the cost of living. It cannot be avoided. The prospect is there despite all the arguments that trading is so competitive that the tax will not be felt by the general public. That is not so. Every time a change is made the cost is passed on to the consumer. Hence the increase in the cost of living. That is disturbing because the view has been expressed by the Government that where wages are concerned there should be restraint. We should not advocate a further increase in wages. If you have to be consistent, therefore, a position should not be created whereby there would be a necessity to ask for an increase in wages and salaries. Prices should remain steady but under this measure that cannot take place. Then, of course, where the essentials of life are concerned everybody has to pay this tax. There is the widow with a young family. She may have been in receipt of a means test pension, which, of course, is the smallest she could get. She would not even have a contributory widow's pension, which would be a better one. She has to pay for her purchases the same as the person who has £2,000 a year. She will not be able to purchase as much but in regard to what she will purchase she has to pay 2½ per cent. She has no way out of that. That is likewise the situation in respect of everybody else. She will, of course, get some relief by way of the increases which the Minister has proposed in the Budget. However, that is taken away again; there is nothing real about that. It is taken away because of the turnover tax.
When taxation has to be imposed— and it has to be—it should be placed on the shoulders of those best able to bear it. That would be a natural way to do it. If we want to increase taxation, as we do in this case, then face it and place that burden on those who can best carry the burden. That is not done in this case and hence our opposition. There is no other reason for the opposition.
All good causes in this country have met with opposition. I personally believe that this particular Bill and the section in it in relation to the turnover tax is the crossroads as far as the economic development of this country is concerned. I listened to the contributions to the debate here yesterday and today and, with the exception, I might say, of Senator Nash and Senator O'Brien, nothing has been said that has not already been said in the other House. It has been suggested there is opposition throughout the country in regard to the tax. The people who are supposed to be most opposed to it are the consumers, but no protest has come from the consumers. As a matter of fact, the consumer could not care less, from my experience. He has not even expressed himself either by a protest march or by having meetings.
What about North-East Dublin?
North-East Dublin to my mind is no criterion of the feeling of the country. If the Government wanted to win North-East Dublin, they could have withdrawn the tax in the Budget proposal, but they were honest enough with the people to leave it in their Budget proposals and face the North-East Dublin by-election. I think they are entitled to that much credit. It is easy enough to get up and make capital out of it but no alternative proposal has been forthcoming from any of the Opposition Parties. I, as one person who was listening in on the night the decision was taken in the Dáil, was agog, like many other people in this country, with my ear to the radio to hear the four alternatives by the Leader of the Opposition. He said there were four alternatives; he did not specify them and the country is still waiting to hear what they are.
It is all right to say: "I am not going to tell the Government what I will do"; but surely, as a responsible Opposition, they must make their contribution to the development of the economy of this country. If they have ideas, it is their duty to put them forward in Parliament. That is what Parliament is for.
Senator McAuliffe suggested that the Minister is going to create cut-throat competition between shops. The Minister has not to do any such thing. The cut-throat competition is already there. There are group traders in this country at the moment offering Boland's cream cracker packets, price 1/2, for 11d, a saving of 3d; diamond pink salmon at 3/- for 2/7, a saving of 5d and new deadline disinfectant antiseptic priced 1/9 for 1/3d, a saving of 6d. There is another group, at the other end of the town, advertising other commodities at reduced prices, and there is also a firm—"The Golden Goose" which is advertising on Radio Éireann—
The goose that laid the golden egg.
—a reduced cost of living to the consumer.
They lay golden eggs now.
As a matter of fact, when the 2½ per cent. tax is taken off, even in 3ds, 4ds, 5ds, and 6ds, the consumer will still buy at a cheaper rate. They are all joining and they are all anxious to go into that particular group at the moment. If there is competition there, it has not been created by the Minister for Finance, but by the shopkeepers themselves.
One of the amusing aspects of the parade which took place was that some of the people who were actually providing the group trading were marching alongside the small shopkeepers about whom they are so worried. The small shopkeeper is worried about this particular Bill on account of the book-keeping it may entail, but the Minister, to my mind, has gone a good part of the way to meet the case put forward in regard to the small shopkeeper. He has a limit and I do not think that the small shopkeeper will have any terrible problem in this matter at all. It has been pointed out to me that the man who is in business in a big way will have to live up to his responsibilities, which he has not been doing over the years. When he was making his audited return over the years—he was probably going to the till once or twice a week and taking out a fiver —perhaps, at the end of the year he had £520 and at the end of two years, perhaps, £1,000. He made his audited return and his income tax return but there was no reference to the lodgment he had on the side in the bank.
That is the man who is worried and that is the man, I believe, who has created this whole problem and this opposition. The consumer is the man we have to worry about and the consumer has made no protest. If he felt the shoe was going to pinch him he would have asserted himself just as effectively as people in other spheres of activity have done. There have been no protest meetings by consumers. They have not come together in any area, to my knowledge, if they require meetings to be held or want to protest. Protests have been made in various bodies. We know how that comes about. I am a member of a local authority and I know that a resolution is sent from one county council to another. It appeared on the agenda of some meetings and was ruled out of order as political in others. In one particular case, in County Mayo, a prominent member of the Fine Gael Party got up and congratulated the Minister for Finance on introducing this tax. He said that he probably would be expelled from the Party for having got up to express what he believed was his conscientious view on the tax.
Kerry County Council passed a resolution condemning the tax.
The whole country is not opposed to the tax. We are led to believe that there is terrible opposition to it, but there is not the opposition which was put up particularly in the Dáil and some also in the Seanad. It is not many people who will have to pay. I believe that within 12 months of its coming into operation, there will not be a word about it. It would have been a seven days' wonder if it had been introduced soon after the introduction of the Budget, but unfortunately people got too much time to organise and create propaganda about it. Nobody likes taxes and no Government wish to impose demands for money on people who cannot meet them, but the Government have a responsibility.
Suggestions have been made of this being a minority Government because it had a majority of one on some issues in the Dáil. It also had a majority of three on a few occasions. When a snap division was taken at a very appropriate time for the Opposition, people have been wondering where were all the people who were so anxious for a general election. President Kennedy, it has been pointed out to me, is a minority President of the United States of America. We had the pleasure and privilege and honour of receiving him here a few weeks ago, but he did not get all the votes of all the States. He still became President, and will be President, we hope, after the next election.
Reference has been made to the poorer section of the community. In that respect provision has been made in the Budget. It has been pointed out by the Minister for Finance that they are being catered for. The Labour Party have agreed with the section giving the benefits but they are not prepared to make provision for the money. How do they expect the Government to find it? The Government have not a hole in the ground from which they can collect money. They must depend on the taxpayer. It is not a popular thing to do but the Government must do it if they are to rule honestly and sensibly. The Government could have withdrawn the particular section and become a popular Government.
Provision has been made for the poorer sections, and in this respect I should mention that I had a telephone call from a lady soon after the Budget was introduced asking what I thought about it. I said that I had not had time to think very much about it but I was rather surprised that there were any benefits in it in view of the many warnings we had received prior to its introduction about the state of the economy. She said that it cost her £30 a month to run her house and that the turnover tax was going to cost her fifteen shillings extra. I asked how many children she had and then made a calculation on the family allowances and pointed out that she was going to make a profit on the transaction and would have four shillings at the end of the month after receiving the family allowances.
I indicated to the leaders of the other Parties earlier that the Minister for Finance would be unable to remain later than 5.15 or 5.30. It is obvious to me that this debate is not going to conclude as we had hoped it would, so I move that we adjourn until next week.
Agreed. I move the adjournment.
An Leas-Chathaoirleach
Is that agreed?
No. May we have some accommodation in this? I think the Minister has replied to the section. It will be necessary to take a vote on the section but it is not necessary for the Minister to wait for the vote.
It is quite obvious that there is no intention whatever to bring this to a conclusion, and I have been doing my best to accommodate everybody for the last two days without any co-operation.
That is completely wrong.
Surely there was co-operation.
Certainly there was.
From this Party anyway.
I indicated the position early today.
You indicated at 12 o'clock that there would be no further speeches from that side, and three Senators have intervened.
There was no indication of any understanding.
Five o'clock was mentioned. I had been thinking of speaking on this section but I did not do so, and nobody on this side spoke after five o'clock. One of Senator Ó Maoláin's supporters spoke.
I myself refrained from speaking in the hope of bringing it to a conclusion.
Senator Mooney spoke.
He was the only one after a series of speeches from that side.
Question put.
The Committee divided: Tá, 32; Níl, 15.
Tá
- Ahern, Liam.
- Boland, Gerald.
- Brady, Seán.
- Brennan, John J.
- Browne, Seán.
- Cole, John C.
- Connolly O'Brien, Nora.
- Farrell, Joseph.
- Fitzsimons, Patrick.
- Flanagan, Thomas P.
- Hayes, Seán.
- Healy, Augustine A.
- Hogan, Daniel.
- Killilea, Mark.
- Lahiffe, Robert.
- McGlinchey, Bernard.
- Mooney, Joseph M.
- Nash, John Joseph.
- Nolan, Thomas.
- Ó Ciosáin, Éamon.
- Ó Conalláin, Dónall.
- Ó Maoláin, Tomás.
- O'Reilly, Patrick.
- Ó Siochfhradha, Pádraig.
- O'Sullivan, Ted.
- Ross, J. N.
- Ryan, Eoin.
- Ryan, Patrick W.
- Ryan, William.
- Sheldon, William A. W.
- Stanford, William B.
- Yeats, Michael.
Níl
- Crowley, Patrick.
- Davidson, Mary F.
- Desmond, Cornelius.
- Dooge, James C. I.
- Fitzgerald, John.
- Fitzpatrick, Thomas J.
- L'Estrange, Gerald.
- Lindsay, Patrick J.
- McAuliffe, Timothy.
- McDonald, Charles.
- McGuire, Edward A.
- Mannion, John.
- Murphy, Dominick F.
- Quigley, Joseph.
- Quinlan, Patrick M.
Tellers: Tá, Senators Farrell and Fitzsimons; Níl, Senators L'Estrange and Murphy.
Question declared carried.
The Seanad adjourned at 5.30 p.m. until 3 p.m. on Wednesday, 24th July 1963.