Wednesday, 15 November 1939
Dáil Éireann Debate
Mr. Dillon: Apparently under Section 17 (5) of the Finance Act, 1929, it is provided that an income-tax assessment under Schedule E is based on your total remuneration for the year preceding that of assessment. It is suggested that, as a result of the sharp reduction in the income of certain persons who are in the occupation of jobs of one kind or another, owing to the international crisis the levying of income-tax on the basis of last year's earnings, which is to be paid out of this year's earnings, is creating a situation of great difficulty for certain individuals. I understand that the British Government have taken some steps to meet that situation, to waive that basis of assessment, and to offer the person the alternative of paying income-tax in this year on the basis of the salary he receives this year. This is a matter of some complexity, which I do not expect the Minister to deal with now. As a matter of fact, I had drafted a Parliamentary Question relating to it, but it is a matter I would be glad the Minister would look into and see whether any similar concession can be made in this country.
Mr. O Ceallaigh: With regard to the point raised by Deputy Dillon. I had not heard any suggestion of the kind. Deputy Dillon is the first from whom I have heard that it has arisen. Nothing has come before me so far with reference to it. I did read about something of the kind happening elsewhere, and that some effort was made to meet the problem. I do not know enough about income-tax law to say whether it would require legislation to deal with a matter of that kind or not.
Mr. Cosgrave: There is also the case of certain firms in business who may have suffered loss of income in the same way. Certain industries have been started, such as motor assembly  or garages, and their profits next year will not be anything like what they were last year. I suggest if the Minister is looking into the question of salaries, he might also undertake to look into these cases.
Mr. Norton: I want to draw the Minister's attention to the tax imposed on sugar under the Resolution. Apparently the State proposes, nominally at all events, to increase the tax on sugar from 1¾d. to 2½d. per lb., and to stand hopelessly by while the consumer is being compelled to pay a much higher tax than that actually proposed in the Budget. We know that the Government has given a promise to the Sugar Company to get 50 per cent. of the increase in price by raising it from 3d. to 4½d., but it is not possible in country districts, in fact within 20 miles of Dublin, to buy sugar at 4½d. per lb. In the entire County Kildare sugar cannot be bought under 5d. per lb., and in some cases 5½d. From letters that I have received, people are compelled in many cases to pay 5½d. If the Minister is going to levy a tax of an additional ¾d. on sugar and permit the Sugar Company to get away with another 3d., one would expect that that would be the limit of the burden on the consumer. Apparently, the consumer is going to pay anything from 2d. to 2½d. or 3d. per lb. more for sugar. Perhaps some excuse for the increased price will be given as the new taxation imposed on sugar, but the Minister ought to take this opportunity to say definitely that the Government does not intend the consumer to be compelled to pay more than 4½d. per lb. In my view the 4½d. that people are being compelled to pay is an outrageous charge for a lb. of sugar, outrageous in view of the fact that they cannot get compensation for the increase in price in their earnings. When they are asked to pay 5d. or 5½d. per lb. there should be some definite declaration in that respect from the Government.
Mr. Dillon: Is the Minister in a position to tell the House what price the Government is now buying foreign sugar for, because it is becoming increasingly  difficult to ascertain, with certainty, what is the measure of taxation being imposed on sugar consumed by the people? Nominally this Resolution imposes a tax of ¾d. per lb. In fact, we know that, taken with the action of the Minister in another sphere, a tax of 1½d. per lb. has been imposed on sugar on the occasion of the introduction of this Budget, but if they examine the situation more closely this House will discover that the true measure of taxation being levied on sugar at the present time is approximately 4d. The true measure of taxation paid by the average person who purchases one lb. of sugar is 4d. That is hard to believe. If my information is correct, the Minister is purchasing foreign sugar at the present time at 17/-, but he could have purchased all the sugar this country could consume in the next three years at 8/- per cwt. if he had bought it last August, had taken delivery and stored it.
The present price for sugar is about 42/-, and that includes excise tax, customs duties, and any other taxation that may be imposed by way of concealed subsidy to Comhlucht Siúicre Eireann, and the people who grow sugar beet, all taken from the consumer; some of it going into the general revenue, some going to the sugar factories, some going to the producer of beet, but all taxation. If you measure it up you will find that the labourer's wife who goes in to buy a quarter stone of sugar, that is, 3½lbs., pays between 1/- and ½ taxation on what costs her 1/6. That is hard to believe but, nevertheless, it is true. If we say that there is 1/- tax on a quarter stone, and take it that the average agricultural labourer earns 27/- a week, and that he buys a quarter stone weekly for his family, on sugar alone that man pays annually in taxation the equal of a week's wages. On one item of food he has to pay 1/- a week taxation, or 52/- a year, on sugar alone. This House ought to make up its mind if it is true that the country is confronted with so grave a crisis that we have to get a Supplementary Budget. Can we continue the luxury of maintaining and subsidising a form of production which, together with the  revenue tax on the commodity, produced results in an annual tax of £2 12s. on every farm labourer?
I say definitely, if the crisis is so acute as to demand taxation on that scale, then the Government, or any other Government, must consider the desirability of suspending such a subsidised scheme of production for the duration of the crisis, until revenue is forthcoming to support them without taking food out of the mouths of the poor. I think it is time the Minister got up and told us if he thinks it right to allow taxation on sugar at the rate of 1/- per quarter stone. Will he defend that bearing in mind his dual capacity, (1) as Minister for Finance, and (2) as representative of one of the poorest constituencies in this country, the children living in which are being deprived of essential nourishment by the taxation which he has imposed on sugar, and the formal effect of which taxation is to leave sufficient sugar to the rich and strictly to ration the poor. I put it to the House, if the stringency is so great as we are told, that the subsidised scheme should be suspended.
Mr. Dillon: Any schemes such as sugar beet which is helping to pile on the burden of 1/- a week on the poor. If the abandonment of that scheme results in a reduction in the supply of sugar, then let the supply to the rich man and the poor man be rationed on the same basis, as the poor man has as big a stomach as the rich man. Let them both get the same ration of sugar, as was the case in the last war, and, if any special levy is made available for children, let the poor man's children get the same ration of sugar as the rich man's.
That is an equitable scheme. Of course, it is a plan which will impose hardship on us all, but at least it will be borne in equal measure by us all. It is not just or right, however, to raise taxation to a point in which you actually reduce the essential minimum of the poor man's foodstuffs while leaving those who are in a better position  to get all the necessaries of life that they may need. I think the Minister should face that dilemma and tell us honestly whether or not he is going to defend the taxation that this Resolution proposes to impose, bearing in mind the one group of facts that I have laid before him now, and having also in the back of his mind the innumerable other uneconomic schemes, such as the industrial alcohol scheme, the peat scheme, and the plunder that has taken place with regard to the flour milling industry; and whether he thinks it right to impose that tax in order to continue financing the beet sugar scheme, the peat scheme, the industrial alcohol scheme, and that annual plunder by the millers, which is about £3,000,000 a year, supplemented by the last scheme when they raised the price of bran and pollard by 3/- a cwt.
Mr. Corry: I should like to say a few words in connection with this matter, because I am surprised that Deputy Dillon, above all others, should take the attitude he is taking, since he was one of the leaders of the ramp that was carried on in this country last year and which has left this country short of supplies of sugar and made this country pay £700,000 for it as a result. Deputy Dillon was one of the Deputies who was anxious, and who was shouting, morning, noon and night, for the closing down of the beet factories.
Mr. Corry: The Deputy says “Hear, hear.” The price paid for sugar in the last war was £152 per ton, and it was sold at 1/2d. per lb. I should like to see Deputy Dillon's agricultural labourer, with his 27/- a week, buying sugar for his children at that price; and, mind you, if the beet factories had not been there this year, and if the Irish farmers had not produced 60 per cent. of our requirements this year —if we are to take it on that basis and interpret the prices given by the Minister for Supplies and the reasons he gave for this ¾d. on sugar—the Irish public would be paying this year, for Deputy Dillon's craze, £1,750,000 extra for sugar.
Mr. Corry: I am only giving the facts, and if Deputy McGilligan were here at the time, he would know them, or, if not, if he takes up the Official Report, he can find out the facts. We can only deal with the facts, and the facts are that, because Deputy Dillon and others in this country raised a ramp last year about the price of beet, the subsidy in connection with beet sugar, and all the rest of it, the result was that this country was left short by about 40 per cent. of its requirements. Owing to that, the public now has to pay ¾d. a lb. on sugar.
Mr. Corry: One-eighth of a penny on sugar last year would have meant from 10,000 to 20,000 extra acres of beet, but because of that mistake you have now to pay £700,000 extra, that would have gone to the farmers.
Mr. Corry: Because Deputy Dillon and other Deputies over there were telling the people that we should import  everything into this country and employ nobody. That is the policy Deputy Dillon and other Deputies want—to import sugar, import clothing, import boots, and everything else, and let our people walk around the streets idle.
Mr. Corry: It might be no harm to export the Deputy. However, that is the position, and I hope that the Sugar Company and the people in general will keep it in mind this year, because if the people of this country are going to get their supplies for the next 12 months they have got to pay it.
Mr. McGilligan: Perhaps the Minister may have some information or intelligence superior to that of some of his supporters. What was the price at which sugar could be sold in this country if it were all imported between January and September of this year?
Mr. McGilligan: Perhaps the Minister will look into those figures and tell us at what price it would be profitable to sell sugar per lb. at the average prices of imported sugar between the 1st January and 1st September of this year. I suggest that it would be something in the neighbourhood of a penny.
Mr. Norton: Why should people be compelled to pay 5d. and 5½d. a lb. now? I am putting the question to the Minister because he is the only Minister present who can answer that while these Financial Resolutions are being discussed.
Mr. O Ceallaigh: Of course, under the Resolutions before the House now, the only thing we are entitled to discuss is the tax, and not extraneous matters. However, with regard to Deputy Norton's point, I heard it stated here in the House to-day that 5d. and 5½d. was being asked for sugar in the West. Well, as long as I can recollect, I always heard that there was little or no profit in sugar for the grocer and that the grocer had to stock sugar because it was an essential commodity that every one of his customers would want, but that so far as profit was concerned there was none. That is not to-day or yesterday; it has existed as long as my memory goes, and certainly long before the last war. I do not know if it is true, as Deputies have charged here, that grocers now want to change that position and see that they get not alone a greater profit than they had already, but a profit where they did not have any profit before.
The statement made here to-day was that the grocer would not be able to buy his sugar, for sale at 4½d., at less than 4d. per lb. The halfpenny per lb. difference was, according to the statement of Deputy McGovern, all the trader had to provide the wages of his staff, pay his rents and rates, weigh out his sugar into lbs. and smaller quantities and provide paper bags. That was the statement made. What the margin is between the wholesaler's price to the retailer and the retailer's price to his customer, I do not know. I know little or nothing about the grocery business, but I think Deputy Dillon agrees with me that there never was any profit in sugar for the provision merchant.
Mr. Byrne: On Resolution 3, I notice that the duty imposed by the Resolution is not to be charged or levied on “(d) condensed full cream milk”. These small tins of milk include a certain amount of sweetening stuff, and they are largely used in the homes of the workers of the city. While it is stated that duty is not to be chargeable on this item, I was informed last night that a tin of condensed milk which is used in the working-class homes, and particularly by lowly-paid people, is costing a halfpenny per tin more than it did 48 hours ago. Can the Minister give any reason or show any justification for the increase in the cost of this foodstuff from 4½d. to 5d. per tin? It is additional to the tax on sugar, and I ask the Minister to inquire if there is any justification for the increase.
Mr. McGilligan: This question hardly arises on Resolution 4, but on the White Paper circulated to the House on the day of the Budget the Resolutions, as we have them, were marked Nos. 1 2, 3 up to this one. This one was marked 5. The others then went in strict numerical order. What did the missing Resolution deal with?
Mr. Hurley: On Resolution No. 5, on page 10 of the White Paper, it is stated  that the amount of the duty to be imposed on beer is 12/- per 36 gallons, “the equivalent of ½d. per pint at the standard specific gravity”. I notice in the papers that the Vintners' Association, which is, I think, the name they call themselves, increased the price by 1d. per pint. I want to know if that increase is justified or if the statement on page 19 is correct. The Minister, evidently, intended that the increase would amount to ½d. per pint, and only that. Is the price specified by the Vintners' Association a just one? I am merely looking for information. Somebody has just reminded me that the Minister said he would set his face against any section of the community getting increased profits or wages at the expense of the community. Is this a case in which the Minister will set his face against the increase in the price of beer or am I to take it that the figures quoted in the Press were justified by this increase in the tax of ½d. per pint? I want to get the reason, if any, for the increase over and above the ½d. specified in the White Paper.
Colonel Ryan: I want to call the attention of the Minister to the fact that the price of beer has been increased by 1d. per pint without regard to its specific gravity. Is it the intention of the Government to rectify the prices according to specific gravity? The retailer has put one increase on the different types without any regard to the specific gravity. I think that is a matter the Minister should look into, as there is ½d. on the bottle of stout which there should not be. As the Deputy has said, it is 1d. on the bottle of stout. It should not be. The Minister made it very plain that it was only ½d. on the pint, and until somebody else besides the brewer or the seller was getting that money, I think it should not be charged. It will be time enough when somebody else is going to benefit, but he should see at least that where a penny is charged on the different beers of different specific gravity, where it is charged on one, it should be charged on the other.
Mr. O Ceallaigh: Deputy Hurley is right in calling attention to what I said  on the Budget statement on Wednesday as to the result of this tax. So far as my information is concerned regarding the beer duty, here is what it is:—
“Beer is assessed by reference to a standard strength related to the specific gravity of the worts before fermentation, and this strength is higher than the beer on sale in the course of ordinary business.”
The tax put on was 12/- per 36 gallons, which is the equivalent of ½d. per pint at the standard specific gravity. But a greater part of the beer sold is not of the standard specific gravity, Therefore, there would be a margin left even on the ½d. a pint to the brewer and the seller. There would be a margin, but whether the seller would regard it as a sufficient margin or not, I do not know. Deputy Hurley asked whether that increase in price of the pint applied to bottles would be justified or not. I think we will have to leave that question to those who drink the beer and let them decide whether it is justified or not. I could not answer that question.
Mr. McGilligan: The Minister imposes a tax here and gives the House an assurance when it is being imposed —and has even stressed it now—that the increase of ½d. on the pint will meet the tax and give the sellers and brewers something over. He now tells us that it is notorious for the trade to determine an advance of a penny. The Minister is empowered by the Emergency Powers Act to take action in this matter, but he says that he will leave it to the people to determine that for themselves. If that is not abandoning government, I do not know what it is.
Mr. Dillon: I think it is right to recall the House to the true position. While deprecating any attempt to exploit past events, if the House will tell me how the harmless publican will find it possible to collect 6¼d. for a bottle of stout, I would be very much  obliged. Is it imagined that he will try to do so and that the counters are going to ring with farthings for the next 12 months? If it is, one would go out of one's mind, because they are not going to be got. What is the publican going to do? Is he going to charge 6d. and lose money, or charge 6½d. and keep his doors open? I make no attempt to disguise the answer. I think that he ought to charge 6½d. and keep the doors open and do something if he can—as he certainly will have to do— to help his assistant to maintain something approximating to the standard of living which has been maintained heretofore. The Labour Party are getting extremely zealous about cutting down prices. Let them remember that the brewery driver, the shop assistant, the cleaner and the watchman are all paid out of the halfpenny a bottle on stout. One can neither draw blood out of a turnip, nor water out of a stone. If you want to squeeze the unfortunate publican and drive him into the bankruptcy court, you are not only squeezing the publican but the shop assistant and all the others.
Mr. Dillon: If you are indicting the Minister for the terms of his Budget speech, which was a silly speech, he  deserves all he is getting. But he is a kindly man, and I do not think that it is fair to be too hard on him. But while we are mowing the Minister down let us not mow down every publican in this country. Let us not hold them up before the world as profiteers, robbers and plunderers. They are not. I do not know many publicans in rural Ireland at the present time who show any signs whatever of graduating into the millionaire class. As far as I can see, it puts them to the pin of their collar to keep a clean suit for Sunday. Most of them are decent, respectable men striving to make a decent living. I want to see them going on making a decent living and giving those who work for them a chance to get a decent living too.
If you are going to grind them down at a time when the cost of everything is rising—as it is at present in Ireland— they will not be able to live. I can tell you—and I say it quite plainly—if the publican has to choose between poverty and making a reduction in his staff by one, it is safe to say that, if he is a human being, he will reduce that staff by one. I do not pretend to be a philanthropist at all, but if a man has to choose between being poor himself and throwing off his coat and doing the work of his assistant, he will take the second course. I would sooner keep the assistant and sooner see others do the work and be paid wages for doing it, but it cannot be done without a margin of profit and, if the publican does not get 6½d. per bottle, he cannot carry on.
We all wish to draw the attention of the public to the folly of that which the Minister has done, in the hope that it will teach the Minister some little bit of sense and that it may correct the evils that threaten from his imprudence; but, in our urgent desire to mow the Minister down, let us not mow down half the population, who are bad enough as it is without our jumping on them. They have the whole Fianna Fáil Party jumping on them for some time past with both feet, but if we all get on to them as well, they will be wiped out altogether.
Mr. Hurley: The point I am making is that the Minister has decided the amount of the increase. We had one instance in the sugar case; here is another in the case of beer. Can people come along and fix their own prices over and above that? That is the point I am making. I am not following the arguments of Deputy Dillon in his particular way, but I want to know can they do that? Will the Minister allow them to do it?
Mr. O Ceallaigh: The remedy is the one of which the Deputy knows. I suppose it is somewhat too early to have evidence, but if the Deputy has evidence, I suppose the Prices Commission would be glad to receive it.
Regarding Financial Resolution No. 7, I would like to ask the Minister what he thinks of this so-called legitimate  increase in the price of a glass of whiskey? After a great deal of consultation and after having been advised in the technical points, he said that the cost of a glass of whiskey would be increased by 1½d. He was challenged by Deputy Dillon who read him the same lecture as he read before, with the difference of a change from beer to spirits. It was generally left by the Minister in the position that the extra charge would be 2d. a glass. I gather from the licensed trade memorandum of the other night that they are going to charge 3d. Is that right?
Childers, Erskine H.
Corry, Martin J.
De Valera, Eamon.
Flinn, Hugo V.
Fogarty, Patrick J.
Gorry, Patrick J.
Kelly, James P.
Kennedy, Michael J.
|Lemass, Seán F.
Little, Patrick J.
McDevitt, Henry A.
O Briain, Donnchadh.
O Ceallaigh, Seán T.
O'Loghlen, Peter J.
Rice, Brigid M.
Ruttledge, Patrick J.
|Bennett, George C.
Benson, Ernest E.
Broderick, William J.
Byrne, Alfred (Junior).
Cosgrave, William T.
Costello, John A.
Dillon, James M.
Dockrell, Henry M.
Doyle, Peadar S.
Gorey, Denis J.
McFadden, Michael Og.
Mongan, Joseph W.
Murphy, Timothy J.
O'Donovan, Timothy J.
O'Higgins, Thomas F.
Pattison, James P.
Rogers, Patrick J.
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