Tuesday, 13 June 1950
Dáil Éireann Debate
Mr. Derrig: The Taoiseach stated that the country was overtaxed when the present Government came into office. If it was overtaxed when the Government came into office, I wonder just how does it stand now? I think the Minister for Finance ought to be given an opportunity of showing us that it is no longer in that position. We need not go into the figures of expenditure, which have increased by leaps and bounds.
Mr. Derrig: Are we not entitled to question the raising of money unnecessarily for purposes which could have been avoided by the proper discharge of the Minister's duties? With regard to income-tax, it is a very substantial portion of the tax revenue of the country, leaving out of consideration for the moment surtax and supertax lest it might be suggested that we are only interested in those bloated capitalists, who, we were told a few years ago, were lining their pockets while exploiting the unfortunate poor people here and elsewhere. The receipts from income-tax in 1947-48 came to about £12,000,000 out of a total sum of £56.6 million; that is a little over one-fifth of the total sum. In 1948-49 the £12,000,000 had increased to £14.6 million and formed a still higher proportion of tax revenue. In that year also the Minister for Finance was able to announce that receipts from income-tax and surtax had actually brought him in £1,500,000 more than he had estimated. It seems incredible that the estimates from this important source of revenue, a great deal of which must come from taxation paid by persons in receipt of fixed incomes, should not have been calculated more accurately. I think the point in that is that, when the Minister tells us that he expects a certain amount, for example, during the present year some £16.7 million from this source of taxation, it is quite likely that it will be at a much higher figure. Of course, some catastrophe may occur, but if the trend continues—and there is no evidence in the conditions governing the circulation of money that it will not so continue since the Minister has emphasised to us that conditions are rather favourable—I think some of the pointers that he has given are not perhaps quite as favourable as he anticipates; for example, agricultural exports which might be very favourable if we were to adopt the very optimistic policy based on them. However, assuming that conditions are relatively prosperous in so far as the circulation  of money is concerned and that these conditions will continue—and I think it is quite likely that as in 1948-49, when the Minister for Finance got in £1,500,000 more than he had estimated from income-tax and surtax, and last year when he got in over a million pounds more than he had estimated, I think it is quite likely to continue and that sufficient consideration has not, perhaps, been given, in view of the fact that the buoyancy of revenue is being maintained, to the possibilities of reducing the burden particularly upon those in the lower income groups. I think that if the Minister's financial rectitude is so very exacting that in relation to his borrowing policy he did not find it possible to give a reduction on the flat rate of income-tax, there were other methods open to him by which he could justify the policy of giving incentives, for example, to those in industry, whether as employers or employees. He could have increased the allowance; he could have made adjustments that would encourage both employees and employers.
A significant feature of this income-tax question is the big increase in the number of working-class people who are now paying income-tax. The Minister attributes part of the surplus over and above his Estimate, which has accrued to the Exchequer, as in measure due to this fact. I daresay we shall be told, as indeed we have been told even from the Labour Benches, that the working-class people having received, according to those who claim to be their spokesmen here, compensation for the increased cost of living are not suffering to the extent they might otherwise have to suffer. It might be argued that they are not suffering from taxes since they are paying at a lower rate of tax. They have more money available to them. But I think the Minister for Industry and Commerce made it quite clear last week that the cost of living is going up largely because of factors over which he claimed he has no control. To that extent he disagrees with the Minister for Finance, who claims that there is no increase in the cost of living. If there is an increase and if the income-tax figure does not represent the realities of the situation and if people have more calls  made upon them—if in other words, although goods are more plentiful they have not sufficient cash at their disposal to purchase their necessities because of high prices, that means that, if taxation is kept at an unduly high level, more appropriate to acute conditions of emergency or very severe inflation, they have less money at their disposal to spend in whatever way they think best.
The Government, of course, believes that it can spend the money better and the policy that was described long ago as leaving the money in the pockets of the people so that it might fructify there and accrue to the general national benefit in a free economy is now being increasingly trespassed upon by the belief of the State that it can take an increasing share of the earnings of the people, whether through income-tax or contributions.
Mr. Derrig: If a working man has £5 per week and if he has to pay income-tax on that, in addition to the other taxes he pays on the commodities that he consumes, and if whether through conditions over which the Government has or has not control, he finds a big increase in his weekly housekeeping budget, I think it is germane to argue that, in order to enable him to fill his requirements of food and clothing and household necessities, the Government should have made a greater effort to reduce income-tax. Or if they could not reduce the flat rate in existing circumstances, they should have been more generous with regard to the allowances.
The Minister spoke in the Budget statement of private investment which occupied a very subordinate place, indeed, with reference to the capital investment lay-out which he has put before the country. I think it is the general belief that if the policy of State capital investment is carried to an undue degree, it must necessarily interfere with private investment. If the Minister, however, feels that the policy  of capital investment is now going to be justified——
Mr. Derrig: Perhaps it is not the right place to raise it. I was leading up to the point that, as far as the investing public are concerned, their capacity to invest, just the same as the capacity of the workman to purchase his requirements, must be affected by the direct or indirect taxation they have to pay. The capacity and the will of the investor to put his money into Irish industries or Irish industrial development, and particularly to realise the securities he holds in investments or funds elsewhere, will be affected—I think it is a legitimate argument—by the level of taxation here.
The Minister for Industry and Commerce stated that one of the functions of the Industrial Development Authority is to get in touch with persons in Great Britain and elsewhere who might come into this country to start industries here. Whether they are persons who have been invited here to start industries, or whether they arc our own citizens who are being encouraged to realise their savings and invest them at home, the level of taxation must certainly influence them in the decisions they are going to come to. In the case of a person who has invested his savings or his capital in his own industry, I suggest the argument is more germane still. It has been suggested that capital in business requires replacement to the extent of at least 10 per cent. every year. That, I think, is not considered excessive in general accounting practice for depreciation of a great proportion of the plant and machinery and for re-equipment. I think it is a fairly representative figure, particularly at a time when conditions are changing so rapidly and when industrialists or others conducting businesses are in danger of finding themselves driven out of the market almost over-night, through the adoption of better methods by their competitors. If it is the attitude of the  Ministry, as seems to be indicated by the Minister for Industry and Commerce, that since those in charge of protected industries are having a very good time and the Government is doing so much for them, it seems a rather troublesome way of collecting revenue to allow the consumer to be mulcted by increased prices which the Minister says almost invariably accompany protected industries, and then try to get back these profits into the revenue through a high level of taxation. Supposing an industrialist is carrying on his business honestly and fairly and making every effort to sell his produce at a price that is fair to the consumer, he has certain risks such as the one I have spoken of.
If he proposes to go into the export market—and the Government have set up a special committee to deal with exports—he is going to undertake greater risks and it is doubtful, if without very considerable incentives and encouragement, even our most successful industrialists would feel themselves called upon to take risks that they may feel are unnecessary in order to develop our export trade. The Minister is in a position to give the most direct and most beneficial incentive, I suggest, to entrepreneurs, exporters or industrialists by showing them that he appreciates the value of their contribution to the national economy and is anxious to encourage them further by reducing taxation. I regret very much that the Government has not seen its way to increase the allowances.
Turning again to the ordinary income-tax payers with a regular income in the lower grades, we find that there has been no change, so far as I know, in the earned income allowance for a considerable period. With regard to the allowance for children, although we are supposed to have more normal conditions now and to have put the war emergency situation completely behind us—in fact we were looking with such confidence to the future that we were embarking on these very large schemes —these allowances are the same as they have been for some years. The Minister in giving the allowance for children from the date of birth was surely not being over-generous from  the social point of view. If the children of the country are to be educated and are to have a background that will enable them to take a prominent part in the development of the State and the building up of the country later on, it is surely of the greatest importance, remembering the great cost of everything connected with a family at the present time—the cost of education, travel and of securing professional qualifications being so extremely high —that the Minister should go much further than he has to increase these allowances.
Mr. Little: I should like to support Deputy Derrig in his appeal to the Minister with regard to allowances. Not since 1947 has anything been done with reference to that matter and the value of money has changed very considerably.
Mr. Little: Certain costs have risen considerably. There has been an increase in the cost of living although I am sure the Minister does not like to admit it. The allowance is £260 for a married income-tax payer and £140 for a single person. Will the Minister agree that I am right about the 1947 Act having raised the married allowance and the personal allowance? The personal allowance is £140 and the married allowance is £260. Up to that there was an exemption. My point is that it is very hard on certain classes of people to whom a living wage would only be about £5 or £6 a week—people of the clerical classes and those who are very heavily hit because they have to pay income-tax on their wages. I suggest that the Minister should reconsider that matter. It probably would not mean a great deal if he were to introduce on the Report Stage an increase so as to raise the figures from £260 and from £140 to some other figures more suitable to the present economic position of those classes.
Mr. MacEntee: I suppose one would not be allowed to hark back to the jeremiads which used to be the habitual song from these benches about the hapless position of the income-tax payer because, if one were, it would be rather pleasant to see with what patience the Minister would listen to some extracts from his own speeches and the speeches of some of his present colleagues. However, it is not necessary for us to torment the Minister by awakening the recollections of some of the statements which he made from these benches. The only difference between then and now is that what the Minister said then was not well-founded but that what we are saying now is well-founded.
The income-tax is the tax of all taxes that bears most heavily upon the man who is in receipt of a fixed income of moderate dimensions. Nobody will waste many tears upon the person who pays surtax, particularly in the higher ranges. There is, indeed, even there, of course, something to be said as to the wisdom and expediency of taxing a man who is able to earn a substantial income so heavily that he will refrain from bringing his talents for direction and administration into full play because he may regard the remuneration or reward which he is permitted to retain for his own use as not being commensurate with the trouble and worry which these greater activities would involve him in. Therefore, as I have said, while I am not asking the House to commiserate unduly with the position of the person who is fortunate enough to be a surtax payer within the higher ranges of surtax, I do not want the House to take it either that I believe that it is, from the point of view of public policy and  interest, a good thing to overtax any element in the community no matter how great the taxable capacity of that element may be. I propose, instead, to ask the House to consider the position of those people who earn moderate incomes and who find themselves in the position that, in addition to paying all the other taxes which the more vocal and better organised elements in the community have to pay, they have to accept and to meet as best they can the present heavy impost of income-tax. The position of these persons who are in the enjoyment of moderate incomes and particularly those who are in the lower ranges was one that some years ago moved the members of the Labour Party—who are conspicuously absent from this debate—to plead on their behalf that something should be done to mitigate their position.
Deputy Little has referred to the fact that in the Budget for 1947 and the Finance Act of 1947 the personal allowances were increased to their present figures of £260 in respect of a married income-tax payer and £140 in respect of the personal allowance of an unmarried income-tax payer. The fact that in that particular year, when things were much more difficult than they are now, when we had just emerged from the six or seven anxious years of the war, the personal allowance was increased—in those particular circumstances—was evidence that the Government of the day was seriously concerned about the position of that respectable element in the community which is known as “the middle classes”. But, despite the fact that the increase was granted in those circumstances, it was not sufficient to meet the situation so far as the Labour Party of the day regarded it.
When he spoke on the finance statement of that year, the present Leader of the Labour Party, Deputy Martin O'Sullivan, expressed his bitter disappointment that the increases in the personal allowances had not been substantially greater and he went on to make a very eloquent plea for the smaller income-tax payer. He was supported in that view by many members of the Fine Gael Party who were then in Opposition. It is very regrettable  that, now that they are in a position to give effect to their opinions in regard to this matter, in this year, when so much more is being taken from the taxpayer in indirect taxes than was taken in the year 1947-48, neither the main element in the Coalition, the Fine Gael Party, nor that other key element in the Coalition, the Labour Party, have felt it incumbent upon them to give practical effect to the opinions which they expressed in 1947-48. I say it is highly regrettable, regrettable from many points of view, regrettable from the point of view of the taxpayers who are going to be affected by this but regrettable also from the point of view, if one may so put it, of political morale. How can anybody believe that the statements which were made on that occasion were made sincerely?
It cannot be alleged against us that we had not regard, when we were in office, to the position of people who enjoyed the more moderate incomes which were subject to income-tax because, as I have said, even in the year 1947-48 we gave a practical expression to the concern which we had for their position.
But, what is the position to-day in relation to these people? At the standard rate of income-tax of 6/6 in the £, it is approximately true to say that there are very many people in this State—far too many people in this State—who have to give at least one day out of three in forced labour, if you like, to the Government because that, if you look at it in one way, is what the standard rate of 6/6 in the £ means. For every over and above his personal allowance and earned income allowance which a man earns he has to give away 6/6 of that to the Government. It is a rough figure. If it were 6/8 it would be exact. If you try to appraise that or express it in terms of time, it really comes to this, that, in addition to paying his due share of all the customs and excise duties, the man who earns more than his personal allowance and his earned income allowance works one day in three for the Government and a lot of people who are capable of rendering productive service to the community  as a whole are beginning to wonder whether, from their point of view, from the point of view of their health, from the point of view of their ease and personal comfort, it is worth continuing to do that any longer. That is one aspect of this question to which enough attention is not being devoted.
There is another, of course, and that is the hardship which income-tax represents so far as the family of moderate means is concerned. It is a tax which is imposed arbitrarily, collected in many cases at its source. The individual who has to pay it has to pay, as I have said, his share of all the other taxes as well. This tax takes priority. It is now in the same position as any ordinary indirect tax so far as the majority of the income-tax payers go. Therefore, before a man can provide for his family, he has to pay this tax. Rents are going up. The cost of living is going up. The Labour Party have been very vocal about the cost of living outside this House. Demands are pouring in from all the organised elements in the community for greater remuneration but the small income-tax payer who does not belong to the Workers' Union of Ireland or the Transport Workers' Union or any of the other consolidated vested interests in the State, has no redress. There is nobody who can put in a demand for him that he will secure increased remuneration to compensate him for the increase in the price of boots, the increase in the price of clothes and the increase in the price of food, which is now admittedly the common experience of every one of us. He has to pay for his children's education. He has to meet all his obligations in respect of insurance policies, mortgages and one thing and another, and, on top of that, he has to give one day's labour in three to the service of the Government.
I do not think that, from the point of view of the public policy and from the point of view of social justice, that position should obtain any longer and I particularly do not think that it should obtain when we consider what is now the yield from income-tax, as it is estimated to be, by comparison with what it was in the year 1947-48. The figures, when they are quoted, will  be admitted, by all who look at them impartially, to be startling.
We remember the outcry there was in 1947-48 about the burden of taxation. We remember all the speeches that were made about reducing taxation in order to bring down the cost of living. Let us see how that condition has been fulfilled so far as this particular tax which we are now discussing is concerned.
The net receipt for the year ended 31st March, 1948, from income-tax, after repayments and allowances, amounted to £11,705,633. For the year 1948-49, the net receipt had increased from £11,705,633 to £14,500,000, that is to say, in one year, under the Government which was to reduce taxation, the net receipt from income-tax had gone up by £2,800,000. What is going to be the position this year? In this year, according to the Minister's statement, the estimated yield from income-tax is going to amount to £16,715,000. Let me give the figures again. The net receipt for the year ended 31st March, 1948— that was the year in which the Fianna Fáil Government went out and the Coalition Government came in—was £11,705,000. The estimated yield for the current year from income-tax only —I am neglecting supertax and surtax because, as I said at the beginning, I am not so particularly concerned with that class of taxpayer—is £16,715,000. We can all do a simple sum in subtraction, and, if we take £11,705,000 from £16,715,000, we get an increase in the amount of income-tax to be collected as compared with what was collected in 1947-48 of no less than £5,010,000. To put it another way, the income-tax payer is now paying £3 for every £2 he paid in 1947-48.
Some weeks ago, I put down a question to the Minister for Finance asking what the net loss would be to the Exchequer if the standard rate of tax were reduced by 1/- in the £. I cannot give the exact figure he gave me, but, speaking from recollection, I think it was £1,484,000. To what extent could he reduce the standard rate if he were to be content with collecting from the income-tax payer in 1950-51 the same amount as was collected by the Fianna Fáil administration in 1947-48? It will  not, of course, represent the dividend you would receive if you divided £5,000,000 by £1,484,000—I admit that —but nevertheless, you can see that if the Minister were content to collect only the same amount in income-tax in this year as Fianna Fáil were content to collect in their last year of office, a very substantial reduction could be made in the standard rate of tax, or, if that method of relieving the income-tax payer did not appeal to the Minister and to sections of the House, the problem could be approached in another way, and a very substantial increase given in the earned income allowances, the personal allowances or the allowances in respect of children under 16 or still being educated.
Therefore, it seems to me that, bearing in mind that the Government and members of the House who now support it generally regarded taxation as being excessive in 1947-48, there is in this one tax an ample margin for giving practical effect to the opinions expressed when in opposition and before they became the Government. I think, therefore, the House requires to consider very seriously the proposal the Minister has put before it and the House ought to receive from the Minister a reasoned defence of this proposal. Having regard to the Minister's own record in the matter, it seems to be a completely indefensible proposal, because, as I have pointed out, the yield from income-tax in this year is estimated to be £5,010,000 more than was collected by the Fianna Fáil Government in 1947-48, or, for every £2 the income-tax paying classes were paying in 1947-48, they are now paying £3.
Surely when we remember how very vocal certain satellite organisations of Fine Gael were in regard to the position of the professional classes during 1947-48, it is up to Fine Gael, which used to profess to represent the salaried classes in the community, to justify the manner in which it has completely ignored the interests of these classes. Shopkeepers' profits may be going up; manufacturers' profits are not going up. The salaries of public officers undoubtedly have increased, but the increases which public officers have received by way  of salaries could not possibly account for the enormous increase in the amount of money now being collected in the way of income-tax, and the only conclusion one can come to is that in this year, when things, to the common knowledge of everybody, are very much more difficult than they were in 1947-48, the Minister is going to collect £5,000,000 more than was collected during that year.
We know that the fact is that the tax is levied upon the income of preceding years and it means that, perhaps, in any given year, more will be collected than the personal circumstances of the taxpayer would warrant in justice and equity. It is not always possible for a person to meet the exigencies and vicissitudes of a year and make due provision for payment next year of the tax upon the income he earned this year. The probabilities are that there are very many people going to be called upon to pay tax in this year whose capacity to pay that tax is very much less than it was during the year in respect of which the tax was levied. That, again, is an argument for reducing the standard rate of tax when the circumstances of the times are becoming more difficult. That is admittedly the position now, as I have said.
When devaluation took place, we were told there would be no increase in prices within any foreseeable period. The foreseeable period has proven to be a very short one, and, before the end of this year, there will, I think, be a spectacular rise in prices, which is going to intensify the hardships which the people called upon to pay income-tax will experience. Accordingly, having regard to that fact, having regard to the fact that the tax is levied upon an income which in many cases is already spent, having regard to the fact that, with the rising cost of living which is now tending to get out of control, the margin which will be left to the taxpayer, after the needs of subsistence have been met, to meet the demands of the Government will be so much less, it seems to me that there is a very strong argument in favour of reducing the standard rate of tax.
 This proposal has been put before the House by the Minister in almost a contemptuous way. He did not, when moving it, give any reasons why the standard rate should be maintained. He refused to reply or apparently was not in a position to reply—I am not going to charge the Minister with that sort of discourtesy to the House—to the criticisms of Deputy Derrig and Deputy Little and, accordingly, the matter would have gone by default. I do not think it can be let go by default. The Minister will have to make a case for maintaining in the year 1950-51 the standard rate of income-tax at such a level that he proposes to take from the income-tax payers £5,000,000 more than was taken in 1947-48.
Mr. McGilligan: Deputies on the other side are very angry that we have discovered that prosperity pays a dividend. So it does. All the ranting from the opposite side to-night, in lieu of a reasoned type of speech, simply goes to show that on a reduced rate of income-tax more money was collected than estimated, by a considerable amount, and Deputy Derrig has this evening announced that, even with the same reduced rate continuing this year, he expects that more money will accrue to the revenue.
Mr. McGilligan: He said he felt very little doubt that this year it will be  discovered we have got more money than forecasted, and he read out a forecast which had been given. Can anyone tell me how what Deputy MacEntee said is occurring could be done? I would like to hear the explanation. He says that things are worse and that the main revenue officials will be levying this year on incomes already spent and yet on that we are to get this vast sum of money. I do not know how that could be done at all. I know another side of the story, that if there is a more abounding prosperity in the country, then the reduced rate of tax will bring greater revenue. I suppose the same complaint would come from the other side of the House if I had found it possible this year to reduce the standard rate to 3/- and had got an extra million.
Mr. McGilligan: I do not say it would happen, but if it did happen there would be the same wailing and caoining, since the same case could be made: “You are taking so much more money from the people.” What has to be remembered is the proportion of the money earned by the people that is being taken. I have taken less. I must say that a gallant effort was made by Deputy MacEntee to get back on his own past. In 1931 we left him with income-tax at 3/- in the £ and that was raised in the autumn of 1931 to 3/6 and the next year to 5/-. His first lick at the income-tax was to put on 1/6. In the period of his Government, it went on steadily increasing at intervals, year by year, until it reached 7/6.
Mr. McGilligan: I do not know if this is a point of order. If it is not, I am not yielding. The income-tax was 3/6 in 1931-32. The Deputy in his first Budget raised it to 5/-. Two years before his Government left, it was at 7/6. In addition to that, the personal allowance about which the Deputy is so concerned was £135 for a single person in 1930-31: and his first effort was to reduce it by £10 and some years later  by another £5. The person so concerned (a) about the level of income-tax and (b) about the allowances——
Mr. McGilligan: I know that in 1931 the income-tax rate was at 3/6 and the personal allowance £135 and in 1932 the Deputy as Minister for Finance raised income-tax to 5/- and reduced the personal allowance to £125.
Mr. McGilligan: If the Deputy thinks there is any point in them, let him tell me what they were. He raised the rate by 1/6 in his first year and reduced the personal allowance by £10 and in 1939 he reduced it to £120. That is the person now crying about the allowances. The tax stood at 7/6 in 1945-46. I am getting this money. I have not made any change in the income-tax rate this year. I cut it 6d. last year and got in more money.
As I said, there is apparently a view in the House to-night that, even by keeping the reduced rate, there will be still more revenue accruing to the Exchequer. That will be a welcome result, as it argues that there is more national income and argues that I am getting a certain amount of money more easily than used to be the case. Deputy Derrig thinks that workmen here are paying more in income-tax than before. They are not. The rate is down. Then he added—forgetting his own immediate past—that as well they are paying more in customs and excise. Surely the Deputy's memory is not so short as not to remember the £6,000,000 on beer and tobacco, which broke the backs of Fianna Fáil in the end? That was given back to the working man. He is  paying a reduced rate of tax and paying less on beer and tobacco than he did when Fianna Fáil left. The Deputy also holds that the policy announced, of leaving more money in the pockets of the people, is not apparently working out, as he argued that people are not able to buy as much as they could. The facts are against the Deputies who argue that way. May I give the figures again? Agricultural production in volume is at the pre-war level. Industrial production is running 43 per cent. in volume above the pre-war level. Exports are less by 10 per cent. than they were pre-war and imports are running in volume at about 27 per cent. over pre-war. All that means that there are more goods in the country to be purchased by the people —and they are being purchased. That certainly does not argue that people are not able to buy. In addition to that, the savings of the community are going up. The Post Office Savings Bank and Savings Certificates between them have shown a remarkable advance in the last two years over what they were when the Deputies opposite were last members of the Government. Therefore, we have the reduced rate of tax bringing in more revenue and more goods being purchased, we have less exported and even more imported than pre-war, and these goods are being bought. People find it possible, with the incomes they get at home, to buy an extra store of goods and also find it possible to save money. That argues prosperity and we have discovered that that type of prosperity pays a dividend, even though it may not be the one of paying the dividend in the rate of return of tax to the State.
Deputy Derrig is very concerned about the level of investment in this country. The investment rate will not be disturbed by any borrowing the State will do. I showed that last year. We have given an indicator as to the room for private investment and also for State investment. As to whether people are frightened of investing in this country and the English example the Deputy gave, I gave certain figures on the Financial Resolution and wish to give them again. Anyone investing in  business here at the moment is paying income-tax of 6/6 on each £1 under £2,500. On each £1 over that, as compared with income-tax in Great Britain, he will be paying 7/10.2. In England on each £1 under £2,000 the investor will find himself mulcted at 9/-. On each £1 over £2,000, if no profits are distributed, 10/1, and if 50 per cent. of the profits is distributed 11/2; and if all is distributed, 12/4. We have got a rather attractive situation for the investor from the far side.
(1) The duty of customs imposed by Section 21 of the Finance Act, 1935 (No. 28 of 1935) shall in respect of hydrocarbon oil chargeable with that duty be charged, levied and paid as on and from the 1st day of June, 1950, at the rate of 9d. the gallon in lieu of the rate now chargeable by virtue of sub-section (1) of Section 4 of the Finance Act, 1948 (No. 12 of 1948).
(2) The rebate allowable under sub-section (2) of the said Section 21 of the Finance Act, 1935, shall in respect of hydrocarbon oil on which such rebate is allowable be allowed as on and from the 1st day of June, 1950, at the rate of 9d. the gallon in lieu of the rate now allowable by virtue of sub-section (2) of Section 4 of the Finance Act, 1948.
(3) The duty of excise imposed by the said Section 21 of the Finance Act, 1935, shall in respect of hydrocarbon oil chargeable with that duty which is sent out on or for sale or otherwise from the premises of the manufacturer thereof on or after the 1st day of June, 1950, or is used by such manufacturer on or after that date for any purpose other than the manufacture or production of hydrocarbon oil be charged, levied and paid at the rate of 7d. the gallon in lieu of the rate now chargeable by  virtue of sub-section (3) of Section 4 of the Finance Act, 1948.
(4) The rebate allowable under sub-section (4) of the said Section 1 of the Finance Act, 1935, shall in respect of hydrocarbon oil on which such rebate is allowable and on which the excise duty mentioned in the next preceding sub-section of this section was paid at the rate of 7d. the gallon be allowed at the rate of 7d. the gallon in lieu of the rate now allowable by virtue of sub-section (4) of the said Section 4 of the Finance Act, 1948.
The amendment seeks to put the taxation on petrol and hydrocarbon oil at the level which obtained before it was increased by 5d. a gallon in 1948. According to the answer to a parliamentary question to-day there seems to be a very substantial increase in the amount of petrol consumed in the country. Perhaps that may arise from the tourists to whom so much objection was taken in the past when they were “coming in here and eating our food.” There has also been a big increase in the registration of cars and we know that the private car is now almost a necessity. It looks as if outside our cities and towns the car would take the place of the trap or governess car to which we were accustomed in the days of the first world war. That is only natural in a country where half the population is on the land following agricultural pursuits and living in villages or far from communities. Because of the distance to market or to the place where they must transact their business these people find it more convenient to have a car and there is undoubtedly a big increase in the number of cars in the country.
If there is truth in the Minister's prognostication that it is a sign of prosperity that the increased consumption of commodities which are taxed enables a reduction in the rate to bring in a larger revenue, perhaps even a substantially larger revenue, maybe the Minister would consider reviewing the position regarding petrol. When the claim is made that taxation was reduced by the present Government we can point to the present instance—there being no yea or nay about it—where it was  definitely increased by the Minister's action. The only excuse or pretext that seemed to be offered was that there was some offset in the case of a subvention for tea. I do not know what the extent of this subvention may be but it is scarcely so considerable as to offset to any great degree the increase in the tax on petrol.
In the last year in which we were in office petrol brought in something over £1,500,000. Last year it brought in £3,213,000. Some other oils are included but if that is the actual figure 98 per cent. of it represents the tax on petrol. This year it is expected that the revenue will be £3,250,000. It is an increase of 150 per cent. since 1947-48. There was an increase in price towards the end of last year. According to a parliamentary answer to-day the landing price per gallon of petrol from sterling areas is 10½d. and from the dollar areas from 1/1½ to 1/2. When Deputies realise that the vastly greater part of the retail price which they are paying of 2/11¾, I think, is going to the Exchequer they will realise that the motorists are certainly paying a very considerable contribution. In our circumstances in this country if we have all these factors of prosperity about which the Minister speaks it should not be necessary to tax the users of cars. Very often they are professional men who pay income tax and carry on with fixed salaries which cannot be described as excessive. In the case of agricultural producers there is no doubt but their cars are an amenity. They can use them to transport their goods to a certain extent and to do their business together with whatever limited pleasure they may take such as going for a holiday and so on.
We have put down the amendment to get the opinion of the House on this question and we challenge the Minister's contention that he has not increased taxation by pointing to this specific case where he definitely has increased it. If the hypothesis that reducing the rate brings in more money why would the Minister not try it in this case? It is quite evident that we are not trespassing on the dollar pool to an undue extent. I am glad to see that the proportion of petrol taken from sterling sources is increasing and  if that trend is likely to continue then the Minister, I think, could adopt a more generous policy towards private motorists.
Mr. Little: Now that the Government's attitude is showing signs of change on the question of tourist traffic they might give an indication to the country generally of that change by helping to reduce the price of petrol, which has risen only recently. It is a very high price and there is no doubt but that the number of cars coming into the country is increasing very considerably. I have not got the figures but I know that in some towns in Waterford the number of cars registered is continually increasing. The private car traffic in Ireland is also well distributed all over the country and is not by any means a city activity. As compared with other countries, a great many more cars here are registered by farmers and by people in the country. For that reason it helps a great deal the decentralisation of our population. Again, there is the question of the cost of transport of agricultural produce, which is a very serious matter, and the question of putting goods which deteriorate rapidly on the market quickly where they can be sold quickly. On the whole I think it would be a very helpful thing if the Minister were to consider this amendment and make the reduction which it proposes.
I do not pretend to know anything about hydrocarbon oil or what it includes, but I imagine that it must also include paraffin oil, which is such a valuable asset to the poorer people. It is sometimes substituted for heating and cooking purposes by the poor, and for that reason a reduction there, too, would be of great advantage to those people.
Mr. Davin: There is a good deal of truth in what has been said by Deputy Derrig and Deputy Little in regard to the big increase in the number of registered cars, but does it strike them when they proceed to talk along those lines the extent to which these cars are tearing up the main highways and giving far less opportunity to the ordinary  ratepayers in the rural areas to use those roads? As Deputy Little and Deputy Derrig should know, the increased cost of maintaining the main highways, the county roads, falls on the ratepayers. Is it suggested that the tourists and the owners of motor cars should not pay a fair share of the increased cost of maintaining the roads?
Mr. Davin: If transport is to be transferred from the iron rail to the roadways I can see the Government being faced with demands for millions to widen as well as to maintain the roads. Is it suggested that the ratepayers, who are kept off the main roads, the trunk roads, should bear all the cost? These roads are a menace to the ordinary ratepayer in a rural area as a result of the increased use of them by motorists, including tourists and those who run motor lorries and private cars. No doubt, the tourists will be welcomed here and should be given facilities equal to what are given tourists in other countries, but I am not prepared to give any tourist an advantage over our ordinary citizens in regard to rights on the roads and the circumstances under which they are permitted to use the roads. If a tourist takes a car into this country he should pay a reasonable amount for the use of our highways while he is enjoying himself on them.
There is a clamour for the stabilisation of rates and for a reduction of rates and nobody has taken a greater part in that clamour than the Fianna Fáil members of local authorities. Of course, they do it to embarrass the Government. There are some Deputies here on the Fianna Fáil Benches who are members of county councils. They talk a lot about the increasing rates, but what additional means can they suggest to get the money to maintain the highways, which are becoming an increasing burden on the community? Are the ratepayers to pay further increases in rates to maintain these highways for tourists and private car owners to the disadvantage of the ordinary country people? Deputy  Corry, no doubt, will tell us more about this aspect, because he takes a leading part in the discussions of the Cork County Council.
Mr. Briscoe: The Minister is now going to relate it solely to the reduction of income-tax. I listened very carefully to the Minister's argument against speakers on this side and what he said was that he had proved by a reduction in the rate of income-tax that it brought in a bigger revenue. He related it to general prosperity and he gave us certain figures. He mentioned that industrial production was up some 40 per cent., that agricultural production was up 27 per cent., that exports were down 10 per cent. and imports had gone up about 20 per cent., proving that the national consumption of goods must have gone up, if one gets these figures together, some 30 to 35 per cent.
I do not know whether the Minister will be able to prove that it is actual consumption that has gone up as distinct from an increase in the price of commodities, but if we are to accept what the Minister said and relate it to this amendment, obviously he must be convinced, firstly, that if you are going to reduce the rate of tax on petrol then you are going to have increased use of it and the net return to the Exchequer will be higher, and, secondly, if the national consumption of goods has gone up by 30 per cent., one is safe in assuming that the consumption of petrol has gone up equally, if not more. The Minister, in view of his own argument, should accept this amendment and be satisfied that there will be the same result here, too.
Deputy Davin mentioned something which is not quite correct—perhaps he does not know. Is he not aware that one of the grievances the representatives  on local authorities have since the change of Government is that the contribution for the upkeep of roads from the Road Fund has been reduced? Deputy Davin spoke as if it had been increased.
Mr. Briscoe: It is down some £300,000 this year compared to what it was before the change of Government. We have got—and I think it is admitted— increased numbers of motor cars on the road from the owners of which a registration tax is taken. The arrangement that existed over many years was that out of this registration fee very substantial contributions were made to local authorities for the upkeep of the roads. If that is withheld or reduced then Deputy Davin ought not to have a grievance against motorists—private car owners or those who use motor vehicles for business purposes—and particularly against tourists who, he says, come here and tear up our roads, and put the burden of making them good on the backs of the ratepayers.
We must relate all this matter to common sense. All of us in this House now recognise the value of the tourist trade. In connection with that trade there will be a certain number of people who will bring in their motor cars. Surely, if we want to attract good-type tourists who will spend sufficient money while here to make the tourist trade worth while, one of the things we must have is good roads?
Mr. Briscoe: Deputy Davin referred to tourists coming here and tearing up our roads and the implication was that it might be better for the tourist not to come in if he was bringing a motor car. I suggest to the Minister that if we are to accept his formula that a reduction of taxation will bring a substantial increase of revenue, here is an opportunity to try it out. We are making it possible to do so by this amendment. We can reduce the rate of taxation on petrol. Incidentally, I  agree with Deputy Little that it will also affect—not to the same extent, perhaps—the users of paraffin, particularly in areas where the people are not going to get rural electrification in the near future. If we can get increased consumption of petrol, and if that increase can be related to the figures given by the Minister, then we will have not only additional revenue but a sufficiently large increase in the revenue to enable the Government to restore the full grants to the local authorities. If that is done, the local authorities will be in a position to maintain the roads in their present condition. In fact, they will be able to improve them, and so make them attractive for the people who are using motor cars. The more attractive the roads are, the more often they will be used and the more petrol will be consumed.
Deputy Davin wants us to come to a standstill whereby we would make the roads less attractive for people to use their motor vehicles on them. I suppose less use of the roads will mean less damage to them. Consequently, there will be less need to raise money to repair them, and so we might gradually get back to the position of having little byways and highways. Is that how we are to try and abolish the use of the motor car?
Mr. Briscoe: I think Deputy Davin was allowed to attack the users of the roads. I did not introduce the Road Fund. I am suggesting to the Minister that he should be consistent in the case of this amendment and accept it because it will be a definite proof of the formula which he himself has suggested with regard to the raising of revenue. It will, at the same time, be beneficial to all those who are users of petrol and who have to pay a high price for it. In view of the Minister's previous remarks, I would ask him to accept the amendment on those grounds alone, if for no other reason.
Captain Cowan: There are many  problems that confront the people at the moment. The principal one that is worrying them is the high cost of living. I think the people desire that we in this House should give very serious attention to this question of a reduction in the cost of living. While I have heard very many complaints on that score I have heard no complaints in regard to the cost of petrol. In fact, motorists generally were relieved when they learned that in the recent Budget there was to be no increase in the cost of petrol.
I think that this amendment, asking for a reduction in the price of petrol, is, in these circumstances, not genuine, that it is not sincere, and that it has been put down here for debate for political purposes only. I agree with what Deputy Davin says, that, whether the roads of the country have to be maintained from local taxation or from the Road Fund or from general taxation, the position seems to be perfectly clear. If our highways are to be maintained in the way they ought to be for the increasing motor traffic, then it seems obvious that the Central Fund and the revenue from taxation will have to be utilised to a considerable extent for the maintenance, improvement and development of those highways. For that reason I think motorists, as a whole, are satisfied with the position as it is. If the Minister is able to get £3,500,000 or £3,250,000 out of motor taxation this year, then that £3,250,000 is necessary for the purpose of balancing the Budget and of running the State. If that money cannot be obtained in that way it will have to be obtained from some other source. Having heard the Minister's Budget statement and the debates on the Financial Resolutions, the Deputies who want a reduction in this particular tax should, I think, suggest to the Minister where he is going to get the revenue to replace the loss that would fall on the State if this reduction was to be granted. Clearly, there is no foundation whatever for the suggestion made by the last Deputy who has spoken that if there is a reduction in the taxation there will be an increase in revenue.
Captain Cowan: He said that, by a reduction in income-tax, he was able to get an increase in revenue which is, of course, a completely different thing. That increase comes from the fact that salaries and wages have increased, and that profits from business and other ventures have increased. If I have any quarrel with the Minister it is that he is not digging deeper into the profits of those business people in regard to income-tax.
Petrol is a thing that we have to import under considerable difficulties. The more extensive use of petrol here is endangering another industry. It is endangering the horse. The existence of the horse is threatened, and the position of all the people who find employment, directly or indirectly, through the use of the horse is being threatened by the more general use of petrol.
We cannot fly in the face of progress, but we have to face the situation that, while supplies of petrol at the moment are adequate and may be adequate for some time, it is quite possible that in the near future those supplies may not be available. The more extensive use that we make of petrol now may react to our disadvantage in the near future. However, I think that the arguments which were advanced in support of the amendment were not honest arguments, and the appeals which were made to the Minister to reduce this particular tax were not honest appeals. The State must be run. We must pay our way. Revenue is vital. If revenue cannot be maintained, then these people who want this revenue to be reduced ought to be able to suggest an alternative method of finding the revenue that must be found instead. As I have already said, we could more profitably employ our time here by devoting our consideration to the question of a reduction in the cost of living rather than to the question of a reduction in the cost of petrol.
Mr. MacEntee: Whenever the Government is in a difficulty, we shall always find Deputy Cowan of the vanguard in the van in their defence. I suppose he spoke for them here to-day as he spoke for them in Fermanagh last Sunday. But, nation of horse lovers and all as we are, does anybody think that the Minister for Finance is justified in imposing a tax of 9d. per gallon upon what has now become an essential element in all industry and in all social life in order to gratify Deputy Cowan's passion for the horse? It would be a great relief to know that when Cowan's Mounted Foot crosses the Border, it will not be motorised cavalry that he will use.
Mr. MacEntee: It is rather a pity that the Deputy who decries the internal combustion engine as a method of propulsion when applied to vehicular traffic should at the moment be calling for volunteers for a mechanised division. Apparently, the Deputy's anxiety is that the cost of petrol to the ordinary consumer should not be so reduced as to deplete unduly the stocks of petrol before his army calls upon them. However, let us examine the jejeune argument that has been advanced here by Deputy Cowan and, I understand, by Deputy Davin.
Is there anybody so misguided, is there anybody so ill-informed about the ordinary everyday life around him that he any longer believes the price of petrol is mainly the concern of the private motorist, of the individual who uses a motor car for his private pleasure? Does not everybody know that the vast bulk of the country's commodities is now being transported on the roads in vehicles which use in one form or another oil fuel? Does not everybody know that the workers of Dublin have to find their way from their homes to their places of employment and from their places of employment back to their homes again in the evening on vehicles that rely either on hydrocarbon heavy oil or hydrocarbon light oil for their propulsion? Are not the people who are most  closely interested in this question of the price of petrol and the most seriously concerned about it that very section of the population on whose behalf Deputy Cowan and Deputy Davin were elected to speak here? Are not they the people whose interests are allowed to go by default on every critical division? In consequence of the increase in the cost of petrol, is it not a fact that bus fares, which had been kept constant throughout the whole of the war period, were increased until now one cannot travel 100 yards in the City of Dublin without having to pay 2d. for it?
Mr. MacEntee: It is all very well for Deputies in easy and affluent circumstances to gibe at the unfortunate individual in whose household budget the cost of transport for himself and his family looms as a very large factor, looms as a larger factor to-day than it did in the year 1947-48. This is one of the commodities in respect of which the Government's undertaking to reduce taxation has not been fulfilled. This is one of the commodities in fact where the Government, by its own deliberate act, has considerably increased the price.
The characteristic about an increase in a tax of this sort is that it is an increase in the cost of a fundamentally essential commodity and the ultimate incidence with which that tax falls upon the ultimate consumer is very much greater than the original increase in the mere rate of tax; that is to say, when the Government increased the tax on petrol by 5d. per gallon, by the time that the user of the bus or the purchaser of the goods that had been transported, first as raw material on the roads by lorry and ultimately as the finished product again by lorry, by the time that the user of the passenger transport service or the purchaser of the finished commodity comes to pay, that represents very much more to him than a mere increase of 5d. per gallon in the cost of petrol because every incidence of charge has been added in the meantime. That is why it is such a  very serious tax from the point of view of the general public.
It has become, in fact, a tax upon a necessary of life. People who live out in Drimnagh and who have to work on the other side of the city, must take a bus to and from their work as a rule. There are a number of reasons why they are compelled to do so. Similarly, if goods have to be moved from the factory to the market, from the market to the retailer and from the retailer ultimately to the purchaser's house, petrol has to be used. It is as essential an element in our everyday life as food or clothes and a tax upon hydrocarbon light oils, whereas it might have been regarded 20 or 30 years ago as a luxury tax, has now become a tax upon an essential element in the life and productivity of the community as a whole. Therefore, it is no use Deputy Cowan saying that we are asking—and this is something that he should have been asking—that this tax should be reduced and that we are doing that for a political purpose. Even if we were doing it for a political purpose, we would be justified in doing it. If we were doing it from the high political motive of making Captain Cowan and his friends live up to their promises, we would be justified in asking for a reduction in this tax. As Deputy Derrig has already explained, for the year 1947-48 the amount collected in this tax amounted to £1,514,000. This year the Minister expects to collect £3,250,000. The difference between the two figures is £1,700,000, £1,700,000 which should be left in the people's pockets to enable them to pay their way.
Deputy Cowan has asked us where are we going to get the revenue to make up the deficit. The deficit, I suggest, should be made up by the Government's making the economies which it undertook to make when it brought in its first Budget, in the year 1948. That is the way to make up the deficiency. In this year what is the position? If I am permitted to speak on this aspect, since Deputy Cowan has put it to us, in this year due to the wasteful expenditure of the Government upon works which are embarked upon for a political motive, there is provision in the Finance Bill to saddle the taxpayers  of the State for the next 25 years with an annual payment of £600,000. Wipe that out and you have one-third of the deficiency which would have to be made good if we reduced the tax upon hydrocarbon light oils to the level at which it stood in the year 1947-48.
There are a number of other things which we might examine where economies could be procured to make good the deficit, but we are no longer responsible for the administration. There are varying examples of waste and extravagance, of instances where money could be saved if the Government was really sincere and earnest in the pledges which it gave to the people that it would reduce expenditure and thus enable taxation to be reduced. I do not want to detain the House unduly on this matter but it is a remarkable fact that the very sections in this House which, a few years ago, were clamouring when it was necessary during the war years to raise revenue to defend this country, and who were crying out then about the level of taxation and about the ill-effects which the taxation upon petrol and hydrocarbon light oils would have on the general life of the community, are the people who now get up and defend a tax which in this year is going to take £1,700,000 more out of the people's pockets than it took in the year 1947-48.
Captain Cowan: Deputy MacEntee, of course, is irrepressible and he leaves nothing out of his particular form of attack, whether the matter under discussion is one concerning national affairs or otherwise, if he can make what he considers some political point out of it. One would have imagined, after his long experience as a Deputy and as a Minister, that he would feel that there are certain things that might be left out of the cut and thrust of debate in this House. Deputy MacEntee referred to the cost of bus fares. Undoubtedly, and the matter has been raised and debated here in the House, bus fares are high in this city. They are unnecessarily high, but if they are high in this city, it is because our Dublin City transport was taken away from us by Deputy MacEntee and his colleagues and was made carry the burden of the whole transport of this  country. That is why fares are high from Drimnagh and from Donnycarney into the centre of the city. It is one of the problems that it is almost impossible now to solve, but the responsibility for that state of affairs must rest with Deputy MacEntee and his colleagues of the former Government. If Dublin City transport had not to subsidise and bear the burden of transport elsewhere——
An Leas-Cheann Comhairle: We cannot go into that. The effect of the tax on hydrocarbon light oils on transport is relevant but the question of the merging of Dublin transport with the general transport system of the country is out of it.
Captain Cowan: There is a certain amount of petrol and oils used in the bus services but Deputy MacEntee and the movers of this amendment want not only to reduce the price of petrol for Córas Iompair Éireann but to reduce the price of petrol to the private motorists all over the country. As I have already said, whatever other claims or demands have been made, there has been no demand or claim made by private motorists for a reduction in the tax on petrol. The suggestion has been made by Deputy MacEntee that because the revenue from petrol has gone up in the past three years from £1,500,000 to £3,250,000, another £1,500,000 is being taken out of the pockets of the ordinary people. That is an absurd argument because it is only within the last year that we have been able to get in petrol in quantity. We were on a very restricted ration three years ago. Since then petrol has come in in larger quantities. It is obvious to any intelligent person that if more petrol came in, there would be more revenue from that particular tax. I asked the question, if this tax is reduced and if the revenue is necessary to run the State, by what alternative  method can revenue be found? Deputy MacEntee says that there is £600,000 you could save right away. How are we to save it right away? By not engaging in the great schemes of capital expenditure that have been announced by the Government. In other words, do not engage in any large scheme of capital expenditure. Do not involve yourself in expenditure that will give employment to the people and that will enrich the country. Do not do those things and you will save £600,000 a year for the next 30 years. That is the idea of Deputy MacEntee's economics. The ordinary people who are interested in the development of this country know that these schemes of large capital expenditure are vitally necessary. They know that it is necessary under present circumstances that that money should be borrowed and that it should be repaid over a period and, for that repayment of £600,000 a year, the country is going to be enriched: unemployment is going to be eased very substantially and the country is to benefit generally. Deputy MacEntee says: “Wipe out that £600,000 and then you can reduce the tax on petrol.” Even from the point of view of a debating point it is a very poor and a very bad debating point.
I have already said that this amendment is dishonest politically and that it is an amendment that cannot be supported in the particular circumstances in which the country is at the moment. If Deputy MacEntee can support a reduction in bus fares in the City of Dublin, that can be brought about in a very easy way without any interference with this general tax. I am a city Deputy, just as Deputy MacEntee is, and I am naturally concerned about the cost of bus fares. However, it is vital and essential that we should have a city bus transport and it is quite possible that if, during the past ten years, there had been a different organisation of Córas Iompair Éireann we would not have this very high cost of bus fares and bus transport at the moment.
Captain Cowan: If Deputy MacEntee or Deputy Little or Deputy Derrig will suggest what reduction in bus fares the reduction in taxation that they recommend here would effect, it would be some help. But they cannot do that: they do not do that and they will not do that. However, they make a general appeal to everybody—to persons who use the buses, to persons who have to use cars in their private business and to persons who use cars for pleasure—that the petrol tax ought to be reduced. In debating matters of that kind in this House we should have regard all the time to the practicability of the proposition put forward. If this amendment were carried the revenue that would be lost as a result of its adoption would have to be found elsewhere. My question to the Deputies who support the amendment is this: where do they suggest this revenue can be obtained if the House were to agree to the amendment?
Major de Valera: With regard to Deputy Cowan's suggestion that there is nothing substantial in this—that is, if I took him up aright—I think that if the amount of money that would be saved by this amendment to the taxpayer, that is, the amount of money that is collected, were to lie there, so to speak, as a subsidy or to be given back as a subsidy to keep down bus fares it would represent a very considerable figure. That is the first answer. The second answer is that Deputy Cowan is, like many other Coalition Deputies, acutely conscious of the fact that Dublin bus fares have gone up during the period of office of the present Government. They are also actuely conscious of the fact that such an increase is a real increase in effect in the cost of living, because a very large number of lower-scale salary workers and workers generally in this city have to travel to their place of employment and back twice a day at least by public transport and they have to pay for that day in and day out and that is part of their cost of living.
 The Government, by allowing that cost to increase have, as Deputy MacEntee pointed out, not only failed in their promise but they have allowed the cost of living in that particular direction to increase. In view of these incontrovertible facts, Deputy Cowan has taken the line: “No, this increase was due to the amalgamation of the transport in the country and the petrol has nothing to do with it.” I do not want to digress on that line but perhaps the Chair will permit me to give the net answer to that. In the amalgamation there was nothing inherent in this system that necessitated Dublin's carrying the load. If the Government succumbed to the temptation of allowing Dublin to carry the load at any particular period, that is another question which, the Chair says, has very little to do with the debate.
Major de Valera: Deputy Cowan cannot sidetrack the issue because Dublin bus fares have increased. He has asked how that could be compensated for. The straight answer is that if the money being collected in this higher taxation under the present Government were not collected and were available as a subsidy, so to speak, in regard to Dublin bus fares then the increase in Dublin bus fares could be obviated and the cost of living in that direction need not have increased. The same, I understand, could have applied to Cork buses, as I am reminded by a Deputy who is sitting behind me. The net point of the amendment is that here the Government is choosing by taxation which has increased since they came into office to collect more in this particular regard than in other directions. The amendment is a suggestion that that particular increase would be nullified. I might be permitted to comment also at this stage that here is a very good example of what the Minister for Finance has done in trying to make a political appeal. Deputy Cowan talked about dishonest motives and so forth but I do not intend to follow him on that line. The Minister for Finance has, it is true, made reductions in certain  directions and he claims that he has reduced taxation. However, here is one of the specific instances where he has to balance his reduction in one direction by an increase in another direction. Here, that fact, taken in conjunction with the fact that over-all from the ordinary citizen, the taxpayer, he is collecting more tax—it does not matter how it is collected—than was ever collected before, justifies the argument of people who say that all the Minister for Finance has done is to readjust his accounting and that the over-all burden which the community has to bear and the sum it has to find to service the State and supply the needs of the Minister for Finance is of greater magnitude than it was ever before.
This amendment advocates that in this particular direction there should be a reduction. It is a case which I think can strongly be made if the Government is sincere on the question of reducing the cost of living. It is a direct tax which benefits nobody directly except the Exchequer. It is not one of those things like a subsidy or traffic which will not only help in one direction but will help particular groups, and so forth. In this case, it has not any other beneficial effect than helping the Exchequer. It is what might be called a pure tax.
The cost of living has been the subject of complaint, as Deputy Davin and his Party know, in Dublin particularly. We must reckon in the cost of living the cost of transport for Dublin workers. For all these reasons a very strong case indeed is to be made for this amendment.
Mr. M.J. O'Higgins: Deputy Vivion de Valera is quite right when the says that Deputies on this side of the House are acutely conscious that Dublin bus fares have been gone up. May I remind Deputy de Valera that Deputy Cowan and myself and Deputy Alderman Byrne at least had the courage to raise that matter in the Dáil at the time when the bus fares were increased? We were acutely conscious of it and we made our voices heard and our views known in this House at the time when Deputy MacEntee and Deputy Lemass were accusing this Government  of bankrupting Córas Iompair Éireann because they had not increased the bus fares earlier than they did. Is not that a fact? Will Deputy Vivion de Valera deny it or will Deputy MacEntee deny it? We all remember the type of speech that was made at that time. I do not want to go into it any more fully than to point out those facts in the hope that even Deputy Vivion de Valera will possibly admit that the Deputies sitting beside him are not all white and that the Deputies here are not all black.
Mr. M.J. O'Higgins: I could make some personal remarks also but, in the interests of the standard of debate in this House, it might be better if I were to restrain myself when facing Deputy MacEntee. Deputy MacEntee in his contribution to this debate has made some suggestions which could only be made by Deputy MacEntee and I was glad to witness the very effective manner in which Deputy Cowan disposed of them and disposed of the Deputy. I can only recommend that Deputy MacEntee should consider very carefully the words of advice which he has received from Deputy Cowan. Deputy MacEntee, despite the fact that he occupied the post of Minister for Finance for a number of years, has shown by his utterances on financial questions that either the period during which he was Minister was a very simple period to deal with or that someone else did the work.
Mr. M.J. O'Higgins: I take it that the split between the fiscal genious of Deputy Briscoe and the financial folly of Deputy MacEntee has possibly been healed by this. My recollection is that during the debate on the Budget there was a rather wide cleavage between the views.
Mr. M.J. O'Higgins: My only purpose in standing up was to point out, for the benefit of Deputy Vivion de Valera, that some of his own leaders were criticising this Government and accusing them of deliberately bankrupting the national transport concern because bus fares were not increased. That being so, if the words “political dishonesty” can be used, they certainly can be used to describe the activity of the Deputies from the same benches who are now taunting Deputies sitting on these benches with the fact that bus fares have been increased. As far as that is concerned, I do not propose saying any more. I hope that Deputy Vivion de Valera, if he is not prepared to accept my remarks, will have them confirmed by his two leaders sitting on his left.
Mr. Davin: Our extinguished Minister for Finance, now better known as Deputy MacEntee, knows better than any other Deputy in the House at the moment that the main source of revenue for the Road Fund comes from the taxation imposed on petrol, oil and so on.
Mr. Davin: And that, if you are going to reduce the taxation now coming into the Road Fund from that source, you will automatically reduce the grants made to local authorities and cause further unemployment in rural areas.
Mr. Davin: Fianna Fáil Deputies who are sitting in the House now or who might be sitting here and who are members of local authorities come into Dáil Éireann and say: “Reduce the taxation on petrol. Reduce the taxation imposed upon the people who are wealthy enough to buy high-powered motor cars” and go down to the local authority and say: “Keep down the rates. Bring down the rates” and the rates must be brought down and they look to the Government and the Central Fund and the Road Fund in particular for all the increasing charges that must be met from year to year for the maintenance of our main and trunk roads. They speak with two voices. They use one voice here and another at the local authority meetings. They must make up their mind, if they challenge a division on this amendment, where they stand and explain that to the local authorities when they attend the next meeting of those bodies.
Deputies have referred on several occasions here—Deputy Corry in particular—to the robbery of the Road Fund, to the reduction in grants made to local authorities and the unemployment that was caused as a result of the reduction in these grants, a couple of years ago, if you like. What are the facts? Deputy Corry has been given these figures before. During the two years that this Government——
Mr. Corry: On a point of order. I was prevented, when dealing with road grants and the Road Fund, from dealing with the petrol tax. I was told it had nothing to do with it. I was very specifically warned by the Chair.
Mr. Davin: The Deputy is cute enough to know that we are now discussing an amendment which will bring down the tax on petrol, reduce the revenue of the Road Fund and automatically force the central Government to reduce the grants to local authorities.
Mr. Davin: The main issue involved in this challenge—the word was used by Deputy Derrig when moving the amendment, in, I must admit, very cautious language—is where the increasing cost of maintenance of main and trunk roads is to come from.
Mr. MacEntee: It is rather a pity that you have ruled in that manner, Sir, because I should have liked to endeavour to explain to Deputy Davin the difference between the tax on hydrocarbon light oils, with which this amendment deals, and another tax upon vehicles known as the motor vehicles duty. The motor vehicles duties go into the Road Fund; the tax on hydrocarbon light oils goes into the Central Fund, and is kept there for the benefit of the Exchequer.
Mr. MacEntee: The Deputy is very much alarmed about the effect our amendment would have on the position of the Road Fund. I would recommend him to study very carefully Section 23 of the Bill which reads:—
When the Deputy ponders on the information I have given him, I think he will ask the youngest Deputy in the House who is sitting beside him to take him out and talk to him like a father. It is seldom a Deputy with the experience Deputy Davin has commits such a “bloomer,” if it was a “bloomer,” unless he was trying to mislead the less experienced and less well-informed people listening to him.
Mr. MacEntee: It would be interesting if we did endeavour to analyse the position created by the increase in the tax on hydrocarbon light oils which was provided for in the Budget of 1948 and which we are now endeavouring to have removed. According to figures given by the Minister in reply to a question some few weeks ago, the average cost of the petrol imported into this country is less than 1/- per gallon. Its total value amounted to something like £1,200,000. On this commodity, the net value of which when imported into this country is £1,200,000, the Government propose to collect not less than £3,250,000 and that sum of £3,250,000, let me repeat, is nothing less than a tax upon the people's means of subsistence. We can rule out as being comparatively insignificant the amount of petrol consumed for purposes of private pleasure. The main consumers in the country are the public transport services—transport services for passengers and goods—and therefore it is no insignificant matter that petrol is now almost as heavily taxed as beer.
It is a queer commentary that the Government which reduced the tax upon beer by 1d. a pint should immediately increase the tax on petrol by 1/2d. a point in order that it might compensate itself for the loss the Exchequer substained by the reduced tax, but I know that there are people, and particularly people who claim to be representatives of the workers, who think that it is more important that a man  should have cheap beer than that his children should have cheap food and cheap transport.
Mr. MacEntee: I am merely pointing out why it has become necessary to maintain this tax at its present level. I have pointed out that a commodity, the net landed value of which is less than 1/- per gallon and the total value of the import of which, landed into the petrol tank, is about £1,200,000, is to carry a tax of no less than £3,250,000. I think the position in that regard is absurd and unjust. I think we are failing to recognise that petrol is now an important element in our whole productive economy. If the price of petrol goes up, the price of transport to the farmer, the manufacturer, the shopkeeper and the individual goes up.
Mr. MacEntee: And we also did something which played no small part in keeping the public transport services going here during the emergency. Even Deputy Collins thought it was worth something to feel a certain assurance that, if the country were attacked, we should at least be able to move him and his comrades to the positions where they could best defend it.
Mr. MacEntee: Whether I did or not, there are a number of things I did not miss. Deputy Collins missed them all. I did not miss penal servitude and I have a Black and Tan and a 1916 medal, and Deputy Collins has not.
Mr. MacEntee: Now that Deputy Collins begins to realise that the Irish nation did not begin with the Collins clan, or with Deputy Collins, perhaps we can get on—and that it did not end with Tim Healy, either. We can now move on from that.
Mr. MacEntee: I was addressing myself to a serious question. I know that, when a Deputy endeavours to do that, he does it at some risk to his personal feelings, at some risk to the code of good manners which ought ordinarily to prevail in this and other assemblies. If I have infringed that code, I am sorry for it. I do not regard the fact that I was provoked into it as any justification. I should, in fact, now be in the position in which I would ignore these provocations, coming from the source from which they did come. If I could get back to this, I should like to emphasise the figures which I have given, that the cost of petrol landed in this country is less than 1/- a gallon, that in the City of Dublin we have to pay 2/9 and down the country it is 2/10 or 2/10½. The people who buy it down the country are mainly people who use petrol for business purposes, whether they be engaged in the livestock industry or as farmers, merchants or shopkeepers. All the difference between the 1/- and the 2/10½ goes in one of two ways, either to remunerate those who are handling the petrol or  to pay the Government tax, and it is the Government which takes the heavier portion. Accordingly, I think those Deputies who came into this House pledged to reduce taxation ought to avail of the opportunity of helping us to ensure that the taxation will be reduced.
A point was made as to what the effect would be upon bus fares. I do not know what the effect would be on bus fares, but quite understandably if we were to bring back the amount collected from petrol to the level at which it stood in 1947-48 we would, as Deputy de Valera has pointed out, have £1,700,000. At least, the public transport undertaking, the private hauliers, the merchants and shopkeepers and the manufacturers would have £1,700,000, which would go in the reduction of transport charges generally. No matter how we may try to blind ourselves to the facts that must have an appreciable effect upon the cost of living. If £1,700,000 were left in the pockets of the people, it means something substantial in the end. I am suggesting that those concerned about the cost of living, those who wish to avoid any further increases and the consequences that flow from those increases in the cost of production ought to vote with us in support of this amendment.
Captain Cowan: I feel that there is some insincerity in the arguments advanced in support of this amendment. Deputy MacEntee and Deputy Major de Valera have suggested that if this amendment were passed there would be or could be a reduction in bus fares in the City of Dublin or all over the country. Deputy Lemass smiles, and quite rightly, as he knows that there is no validity or substance in such a suggestion. If this amendment were passed, there would be a reduction in the running expenses of buses of less than 1/2d. per mile—and how 1/2d. per mile is to be spread over 60 passengers I certainly cannot understand. That is the suggestion made seriously in this Dáil and made seriously to people outside—that if you can reduce the running cost of a bus by 1/2d. per mile and divide it amongst 60 people you could reduce bus fares. Clearly, that is nonsensical  and absurd. That is why I have said that the arguments in favour of this amendment are not honest or fair arguments and can convince no sensible person.
Even charging the bus fares we have to charge, only a few short months ago we had to subsidies Córas Iompair Éireann to the extent of £4,000,000, which is something more than the complete revenue that would be received in this year from the tax on petrol and hydrocarbon oils referred to in the amendment. I would ask Deputies opposite to be fair to the general public in the arguments they advance. There are some persons in this country who will read Deputy MacEntee in tomorrow's Irish Press and who will feel that he has been making a case for a reduction in the cost of transport in Dublin City. It is unfair to those city people to have an argument such as that advanced in this House.
It is not only unfair but I think it is dishonest, as the Deputies advancing the argument know very well how invalid it is and nevertheless are endeavouring, through the publicity this debate will get, to induce certain simple-minded people to think that they are concerned about the bus fares that citizens of Dublin have to pay. Their own amendment, if it were carried by the House, would mean that each passenger would be entitled to a reduction in his fare of the 1/60th part of a 1/2d. I do not think we have a form of money operating in this country at the present time that would enable such a reduction to be made effective. That is why I say it is unfair, it is improper and it is dishonest, and I would ask the Deputies opposite to give up trying to cod the people by that type of argument.
Major de Valera: The simple answer to much of the talk that has gone on here is this, that owning to the increase that has taken place under the present Minister a substantial sum of money, estimated by some in the region of £1,000,000 to £1,750,000, is an increase in taxation. In the net, that is taxation, that is getting money from somewhere. The suggestion here is that here is a place where taxation can be reduced and it does quite clearly affect  transport, both public transport and also commercial travellers' transport and people who use cars for business purposes and so on. This amendment is a suggestion that that taxation could be alleviated and reduced. That is the net point in it.
Mr. McGilligan: We had better get a little history on this. In 1939, the Fianna Fáil Government put a tax on petrol of 1/3 and despite all their wails about the evils that would result from an increase in the cost of petrol they kept it there for five years. Now they think one night's debate is going to wipe out the stain of that. Deputy Cowan is quite right in asking them to stop deluding themselves in the belief that they are deluding anyone. For five solid years it was kept at 1/3 and all the people who are now wailing about the effect on transport, the effect on production and the effect on the cost of living were all dumb apparently in those days.
Deputy Cowan again was right in saying that there was not a sould in the country who operates a private car, a commercial vehicle or a public service vehicle but expected the tax to rise by 4d., 5d. or 6d. in this Budget and they got the thrill of their lives when I left it at the old point. Its effect on the users of vehicles was that in 1947 private vehicles registered in this country reached the very high figure of 8,294; in 1948 it was 12,910; and in 1949 15,118 cars were registered. It does not look as if the increase in the cost of petrol impeded people from going on the roads.
I want to make clear one point of confusion and that is really all I want to say about petrol. Deputy Briscoe appears or rather pretends to be labouring under another misconception. I said that people here must be better off than they were pre-war and I gave four indicators: the volume of agricultrual produce is pretty well at the level it was at pre-war; the volume of industrial produce, transportable goods, is up by 43 per cent.; our exports are running at 10 per cent. below what they were pre-war; our imports are 27  per cent. above. More goods are produced in this country than were produced pre-war. Not as many of these goods are being exported and more goods are coming in here. The people have the money with which to buy these goods and in addition while they are buying these goods which are there in greater plenty than ever they are saving more money than ever they did in the whole of the Fianna Fáil régime year by year. All that argues a higher standard of living. Deputy Briscoe seemed to form his case on amount and price and so on, but I am talking about volume, the amount of goods, the quantity of goods and the number of goods which are produced along the rates I gave. They are not being wasted, somebody is buying them; the community is buying them.
There is a third point about which there is a lot of misunderstanding. Deputy Cowan made this point for me but I should like to emphasise it. I said with regard to income-tax that it was found that if you increased the prosperity of the country a lower rate of tax on incomes could bring in a higher revenue and that we were getting under the auspices of the present Government in this country a dividend on prosperity. I want to stick to that. That is clear from the facts but it is not correct to say on that basis that that was a formula. Of course it is not. With an increase in incomes the tax clearly rises, but give away the whole of the petrol tax and you do not get any return. You cannot argue that it should be reduced by 3d. a gallon because income-tax gives a better return with 6d. relief. Reduce the tax on petrol and you will get nothing out of petrol. The things are totally distinct and there is nobody on the other side of the House but can make that distinction for himself. In any case the point was only made for the sake of argument.
The community has been suffering that tax for a number of years. They bore it and the number of vehicles which are registered shows that it has been no impediment to increased motoring in the country. The people here were reconciled to an increase on the tax on petrol and I am getting all the benefit as if I had reduced the tax  because I did not raise it and that of course is what is annoying the Oppositions.
Major de Valera: The Minister referred to the years from 1940 to 1946, but these happened to be war years and the Minister very conveniently forgets that. The Minister did increase the tax since he came into office and the price of petrol has gone up. The cost of a number of other things related to transport has also gone up. It is suggested here that he has his chance if the Minister is serious about retrenchment.
Mr. Little: The Minister tried to counter my point by taking an extreme case. I believe that if that tax were reduced you would probably sell a great deal more petrol. The Minister at the moment may not himself realise the effect of the high price of petrol but it is very severe on the ordinary person because of the rise in price as well as the tax.
Major de Valera: The Minister has mentioned £1,250,000 and he wants to know where he would get it. Appearently the Minister and the Government are in a position to abolish rationing so free supplies of petrol should be available. Users of cars who at present are confining the use of their cars strictly to business purposes because of the high cost of petrol would use more if the price were not as acute as it is. Probably, at least it is arguable—I would like to see the figures before I would commit myself in detail—that under these circumstances if the Minister went back to the rate at which he took over he would make up a large amount of the money which he would forego by reducing the tax as is requested by this amendment.
Major de Valera: It is, but if there was no control on the quantity of petrol the amount consumed would be ruled by the price at which it was sold. Many people who must now keep their cars for business purposes because of the high price and who must even restrict their use of them for business would use more petrol if cheaper supplies were available and consequently if he applied the old rate of tax the Minister would make more.
Childers, Erskine H.
Collins, James J.
Corry, Martin J.
Crowley, Honor Mary.
Davern, Michael J.
De Valera, Eamon.
De Valera, Vivion.
Gorry, Patrick J.
|Kennedy, Michael J.
Kitt, Michael F.
Lemass, Seán F.
Little, Patrick J.
Lydon, Michael F.
Ó Briain, Donnchadh.
Rice, Bridget M.
Ruttledge, Patrick J.
Ryan, Mary B.
Brennan, Joseph P.
Byrne, Alfred Patrick.
Connolly, Roderick J.
Costello, John A.
Crotty, Patrick J.
Dillon, James M.
Dockrell, Maurice E.
Doyle, Peadar S.
Halliden, Patrick J. Rooney, Eamonn.
Sheldon, William A. W.
McFadden, Michael Óg.
Madden, David J.
Mongan, Joseph W.
Murphy, William J.
O'Gorman, Patrick J.
O'Higgins, Michael J.
O'Higgins, Thomas F.
O'Higgins, Thomas F. (Jun.).
Palmer, Patrick W.
Pattison, James P.
Redmond, Bridget M.
Roddy, Joseph. Sweetman, Gerard.
Timoney, John J.
Question declared lost.
An Ceann Comhairle: I suppose the result may be taken as covering amendment No. 2?
Mr. Derrig: As it is complementary —amendment No. 2 to amendment No. 1—we accept the decision as governing amendment No. 2.
Amendment No. 2 not moved.
Section 5 agreed to.
Mr. Derrig: I move amendment No. 3:—
Before Section 6 to insert a new section as follows:—
(1) Notwithstanding anything contained in any previous enactment the excise duty referred to as entertainments duty in and chargeable under Section 1 of the Finance (New Duties) Act, 1916, as amended by subsequent enactments shall not be charged or levied on payments for admission to any ball or dance on and after the 1st day of August, 1950.
(2) Sub-section (2) of Section 10 of the Finance Act of 1948 shall not be construed as including any ball or dance.
The purpose of this amendment, which appears on the Order Paper in the name of Deputy Aiken, is to restore the position which existed before the Finance Act of 1948 was passed. Under sub-section (2) of Section 10 of that Act, halls and dances were made subject to tax. The Minister made a concession in respect of certain areas. The tax is still there, and is felt to be a very oppressive one in the case of ballrooms throughout the country and in provincial centres.
I think that a tax on the entertainment of young people is bad. It is frequently stated that one of the reasons for the flight of young people from our provincial centres is that they have not sufficient social amenities. Dancing provides social intercourse for our young people, a means for their coming together which, I think, is necessary in any civilisation. Anything that encourages legitimate and proper recreation is, I think, all to the good, and anything that discourages it is not helpful. If we bear in mind that young people at the present day demand these amusements then, to the extent that they are deprived of what they consider legitimate recreation, there is the danger, I think, that they may seek recreation in less desirable ways.
It was noticeable that this tax was imposed at a time when the Minister, having boasted of his reduction on beer, went further and reduced the tax on wines. Why it should be considered to have some special virtue that taxation on intoxicating beverages should, in some way be particularly sinful, and that reductions should be made in the view of the Government, while at the same time legitimate entertainment for young people properly run and controlled should be subjected to this burden, is a thing I have never understood.
When the Minister announced the tax in a previous Finance Act, it was pointed out that one of the reasons which Deputy Aiken, as Minister for Finance, had in abolishing this entertainment duty was owing to the difficulty of collecting the tax. It was pointed out that evasion went on. This is a tax which affects the social life of young people. If it is the case that, in respect of it, there can be considerable evasion and that the law can be defied and tax obligations evaded, then it seems to me that may be a very good reason for abolishing it. It may not be a reason which appeals particularly to a Minister for Finance if he is very keen on securing revenue.
I think the Minister stated, when he  introduced this proposal, that he expected to get £75,000 in the way of revenue from it. According to the figures given in reply to a Parliamentary Question to-day, the tax on dances and balls came to £108,000 last year. It is expected to yield £130,000 this year. The owners of these places in which this entertainment and recreation is provided have heavy overhead expenses. They have to maintain staffs. They have their off-seasons. It is a business, like other entertainment, catering, that is subject to very serious fluctuations. In times when money is in circulation, dancing and entertainment generally, and the catering industry, are likely to be fairly prosperous, but they are the first to feel the pinch when there is any change in conditions.
These places of entertainment gave a considerable amount of employment in areas such as the metropolis. They have a certain connection with the musical life of the country. They provide an opening for young musicians and bands, and to the extent that we are trying to get employment for both in our own country, we ought not to take any action that would discourage it. There can be no doubt but that this tax has a very serious effect on the income of these ballrooms. The position is that halls in country areas have not to pay the tax. They have substantially the same accommodation and they can take in almost the same income as the ballrooms in provincial centres, and yet they are free of tax. It seems to me that that is contrary to the fundamental principle of taxation which is that there should be equality. The distinction is entirely arbitrary in this case as between the city and town ballroom and the rural one. If there is a case for relieving the rural areas proper, there is the same case for relieving the ballroom in the provincial town to which the rural people come. The members of a young farmers' club or of other local associations are more likely to have their functions in the bigger centres if the conditions are as attractive, but there is a heavy excess cost at the present time on the ballroom in the city or town. If a country hall can secure the attendance of 400 people, it can  save, I am informed, up to £20 as compared with the hall in a neighbouring town. That, of course, is a serious consideration. Those halls would normally have a band which might cost anything up to £40.
If the Minister persists in maintaining this tax on entertainment, entertainment which is universal in the country and which there is no particular reason to discourage, I think it should be imposed on a fairer basis. Some consideration should be given to the principle of equality and equality should consist in having either a flat rate of tax applicable to all halls or in relation to the capacity and the income of the halls or ballrooms so that when they are assessed for taxation purposes the burden would be more or less the same having regard to the income. In the case of this amendment as in the case of the last amendment, which I proposed in the absence of Deputy Aiken, this is a further tax imposed by the Minister as a set-off to certain taxes he abolished. It is of a special character. Its imposition has aroused great resentment. It has created a certain amount of unemployment in a service that is peculiarly susceptible to sudden fluctuations and that depends a great deal upon the circumstances of the time. I hope the Minister will change his mind in this respect. In view of the amount of tax collected, I do not think it is worth the trouble, the expense or the hardship that it has imposed upon those who have invested their money in providing modern facilities for dancing in our cities and towns.
Mr. Little: We made a plea last year for exemption from this tax for our halls. It is true that a good many beagle clubs and rural sporting clubs prefer to hold their dances in the big centres of population. In that way, they come under this tax. The Minister considered one proposal put forward by the Opposition. I think he should go further now and reconsider this. Deputy Fitzpatrick put up a strong case for those employed in these dance halls and for the members of the band. These people have suffered very severely because of this tax. I am  convinced that the cost of collecting the tax must be very high indeed.
Mr. McGilligan: Two per cent.
Mr. Little: I wonder if that is quite accurate. I think it is very optimistic.
Mr. McGilligan: It was 2 per cent. when the rural areas were in. It is now less than 2 per cent.
Mr. Little: That seems to be very optimistic.
Mr. McGilligan: It is not optimism. It is fact.
Mr. Little: What about the evasion of the tax?
Mr. McGilligan: The evasion was in the rural areas in the main, and we have cut that out.
Mr. Little: The principal issue is that it would be better in the general interests of the country to give these people an opportunity of having decent dancing under proper conditions.
Mr. McGilligan: So they can.
Mr. Little: In conclusion, I would ask the Minister whether he might not consider modern dancing should come under the exemption that he proposes to give to wrestling?
Mr. McGilligan: I have not seen the Deputy dance.
Mr. Little: I do not dance modern dances.
Mr. McGilligan: That is the type that would come into the wrestling category.
Mr. P.J. Burke: I would ask the Minister to abolish this tax. Some of the small villages in my constituency really come into the category of rural areas; yet, they have to pay taxes on any dances they hold. I have here a number of balance sheets from clubs that have been trying to run dances for charitable purposes. In one balance sheet a club had to pay £10 in tax. Their expenses came to £50 and they took in £52. The local clubs are up against it.
Mr. S. Collins: Who certified the accounts? Was it the widow?
Mr. P.J. Burke: Deputy Collins will have his opportunity in a moment. These are certified accounts and I shall supply him with copies for his own examination. He has plenty of time to interrupt me so he ought to have time to look at these. I consider the Minister a bit of a spoil sport. Deputy Derrig has pointed out that there is very little entertainment in rural Ireland.
Mr. McGilligan: What has this to do with rural Ireland?
Mr. P.J. Burke: I am dealing with the tax.
Mr. McGilligan: With the small towns.
Mr. P.J. Burke: These come into the rural areas.
Mr. McGilligan: The amendment seeks to put the cities on a better level of competition than they are at the moment.
Mr. MacEntee: No.
Mr. McGilligan: This is to remove the tax from everybody.
Mr. P.J. Burke: The Minister went a bit of the way when dealing with charitable organisations by substituting 50 per cent. instead of 30 per cent. as heretofore. I think the Minister should abolish it altogether. The dance halls in places like Malahide, Rush, Skerries, Lusk and so on are really making nothing on their dances because of this tax. The Minister says he is collecting almost 2 per cent.
Mr. McGilligan: I never said that. I said that the question was raised here of the cost of the collection of this tax being enormous. It used to be 2 per cent. It is now less than 2 per cent.
Mr. P.J. Burke: For the amount of money that is collected it is hardly worth while persecuting these clubs. Inspectors are running in on top of them.
Mr. McGilligan: What did you do up to 1946?
Mr. P.J. Burke: As a result of our practical experience we abolished it.
Mr. McGilligan: But you kept it up to 1946.
Mr. P.J. Burke: That is no argument why you should put it on. Our practical experience showed us that it should be abolished and we abolished it. You come along then——
An Ceann Comhairle: The Minister.
Mr. P.J. Burke: The Minister reimposed it notwithstanding the fact that he and his supporters criticised us for sending inspectors round the country. Now, the Minister wants to send more inspectors round the dance halls.
Mr. McGilligan: You have not got this amendment right. I have withdrawn the inspectors from the rural dances.
Mr. P.J. Burke: Surely you do not call——
An Ceann Comhairle: The Minister.
Mr. P.J. Burke: Surely you do not call Rush, Skerries and Malahide——
An Ceann Comhairle: The Deputy is supposed to address the Chair.
Mr. P.J. Burke: I am addressing the Chair.
An Ceann Comhairle: The Deputy is addressing the Minister.
Mr. McGilligan: I do not know if the Deputy could call them rural areas.
Mr. P.J. Burke: The rural areas that the Minister has in mind are some small little areas in the centre of the country, where there is not even a village and where there is practically no dance hall at all, but every area in my constituency, that you could classify as rural, which has a hall has to pay a tax. Again, as my colleague, Deputy Derrig pointed out, the hall proprietors in those areas are finding it very hard to carry on, but my chief concern is to give local clubs an opportunity of carrying on in the areas which I speak of as rural. One could not call these areas towns or cities. They are the rural portions of County Dublin. There are at least nine or ten areas that could be classified as rural.
The small areas throughout the  country to which the Minister referred are very few and far between. Again, with reference to charitable organisations, I do not see why the Minister should have reimposed this tax because charitable organisations have been doing a good deal of work which would have to be paid for by the State if it were not for the self-sacrificing efforts of members of these organisations in trying to raise money to finance work that should be the responsibility of the State. Unless these people collect so much at the door, they will not be allowed a refund no matter how deserving the cause is. That is a point of view that is apparently supported by the members of the inter-Party Government who are giving these charitable organisations no opportunity at all of carrying on their good work. When these self-sacrificing people organise these functions to raise funds to help their less fortunate brethren, who find themselves temporarily in difficulties, the State steps in and says: “Unless you make a return of 30 per cent. or 50 per cent. as the case may be, we are not going to give you any money back.” I had the experience of being associated with a welfare dance in Skerries and it took us 12 months to get the money back. Meanwhile, all sorts of examinations and inquiries were carried out. This money was devoted to a certain benevolent fund but we were persecuted by inspectors coming along asking us to certify this, that and the other thing. That is the outlook which is supported by those supporting the inter-Party Government, people who are supposed to be charitable.
Mr. MacEntee: The Minister quite correctly pointed out to Deputy Burke that the purpose of this amendment was to put the cities and towns upon an equal basis with the rest of the country in regard to the amusement of the people. I should like if the Minister would be good enough, when he is replying, if he ventures to reply, to tell us why they should not be put on an equal basis, to tell us why, in the matter of popular amusements of this sort conducted under proper auspices, the people of the constituency of Dublin North-Central, for instance, should be discriminated  against as compared with the people in some rural areas. Why are we making fish of one section of the population and flesh of the other? Is there any justification for that?
The amount which this tax yields is, as the Minister admitted, comparatively small—somebody said £108,000 last year and maybe £130,000 this year. What is that to a Government which proposes to spend in one year £107,000,000? Does the Minister discriminate against the people of Dublin North Central as a punishment because they returned Deputy de Valera before they returned him? People who regard dancing as an agreeable pastime have to pay much more when they go to dances in one of the places of popular resort than they would have to pay if they had to go down to rural areas where dance halls have been erected. That is the discrimination which the Minister has to defend.
When we talk of balls and dances, we are inclined to think of the more expensive ballrooms in the city such as the Gresham, Clery's and the Metropole, but I can say that not 5 per cent. of the people of the City of Dublin, who dance for pleasure and for company as a social amusement, go to these places. The places which are most heavily affected and hit by this dance tax are the dance halls and the ballrooms which cater for the workers of Dublin. This tax falls, not upon the wealthier people and not upon those who go to dances because they want to figure prominently in the social rôle, but on the domestic servants, the working boys and the shop assistants and others who go to these places because they prefer to go there and meet congenial company rather than go to the public-house or the cinema. If it is no longer regarded as being socially disreputable to go to a public-house, why should it be regarded apparently as something reprehensible to go to a public ballroom or dance hall? Why should it be regarded as socially reprehensible to do this in a city or town and why should you be taxed in order that you may be deterred from going there? So far as the importance of this tax as a source of revenue is concerned,  it has become completely insignificant so the whole thing has now been put on a moral basis, so to speak. We cannot, surely, justify the tax as a source of revenue, having regard to the fact, as I have said, that the Government proposes to spend £107,000,000 this year.
To a Government that is so affluent and so open-handed, what does a matter of £108,000, taken mainly out of the earnings of the workers, signify? They cannot regard it as a serious contribution to the revenue. The only justification I think that can be afforded for it is that the Government look upon this matter in a puritanical way so far as the workers in the towns and cities are concerned. If you happen to live in the country it is not morally reprehensible to go to a dance. If you happen to live in the City of Dublin, in the City of Cork, in the City of Kilkenny or in any of the urban centres then, apparently, there is an element of moral turpitude in going to these places and the paternal puritanical Government steps in and imposes a tax in order to discourage people from going to them. I think that this is a piece of discrimination as between one section of the population and another which cannot be justified on any grounds. It certainly cannot be justified on the grounds that the tax collected is necessary in order to enable the State to maintain itself. The Minister, I am sure, will not make that sort of a remark. It certainly is not, I think, the sort of tax that can be justified on the ground that the dance halls and public ballrooms are places of ill-resort or ill-fame out of which our young people should be kept. They are, as everybody knows, well conducted, very well conducted, in the City of Dublin. They give a considerable amount of employment not merely to attendants but to musicians—to those people who try to live by the practice of an art. Surely, if we can afford it— and I suggest we can in this case—we ought at least to make it no more difficult for these people to make a livelihood now than they did before this tax was reimposed. That, I think, is the case that can be made for this  amendment and I hope that those who make it will not be confined to this section of the House.
Mr. McCann: Last year I appealed to the Minister to abolish this tax. I did so because at that time I was assured by representatives of the Ballroom Owners' Association and the Federation of Irish Musicians that unemployment would accrue.
Prior to the debate on the Finance Bill the Minister was asked by the Federation of Irish Musicians to meet them and to discuss the matter. The Minister did not do that last year. I do not know whether he has done it this year, but certainly he must have got the same memoranda as I and others got this year from the Federation of Irish Musicians. Last year he doubted my statement that unemployment would accrue. Does he still doubt my statement?
Mr. McGilligan: I do.
Mr. McCann: The Minister has had in his hands, I am sure, the same detailed statement which I have had from the Federation of Irish Musicians.
Mr. McGilligan: But nothing that proved unemployment.
Mr. McCann: If men come to me and assure me that they are not now getting the employment—that they are now getting only three nights employment whereas previous to the imposition of the tax they got six nights' employment—and if I know these men and if I take their word, as I do, surely that should be sufficient evidence for the Minister. But if that is not sufficient evidence, surely the word of one of the Minister's colleagues in the benches opposite, that of Deputy Fitzpatrick, should be taken. His association have assured me that that is a fact—that unemployment has accrued; that musicians have been laid off; that all sorts of personnel employed in the Dublin ballrooms have been laid off. I am not going to make any exaggerated statement as to the number involved. I do not know accurately the number because the information which I had before me dealt with man hours. However, if there is  an appreciable number—and there is an appreciable number of people unemployed through the imposition of this tax—and if the revenue which is being derived is in the neighbourhood of £100,000, then I think it is a miserable tax. Again, I say that unemployment has come about. Deputy Fitzpatrick will bear me out in that. Last year, the Minister thought fit to describe my statement as a falsehood. He said here that I was uttering falsehoods.
Mr. McGilligan: In connection with a statement which the Deputy made about the Ritz cinema.
Mr. McCann: The Minister has not had the manliness nor the courage to withdraw his charge.
Mr. McGilligan: Because I think the Deputy's statement was false.
Mr. McCann: It is no falsehood to repeat the statement which I made last year that men and women have been unemployed through the imposition of the tax.
Mr. McGilligan: It was the Deputy's statement in connection with the Ritz cinema that was false.
Mr. Fitzpatrick: I regret very much that the Minister has found it fit to continue this tax. Last year I made what I thought was a reasonable suggestion—that, instead of worrying and annoying people who go to dance halls and ballrooms to enjoy themselves and making them feel they have to pay an entertainment tax for the purpose of entertaining themselves, if he felt as he did and seemingly as he was advised that the owners of ballrooms in the cities, especially in the larger cities, were making money, he should impose the tax on the ballroom proprietors. Had he accepted that suggestion and given it careful consideration during the year and put it into operation this year, I believe a lot of the opposition would be and should be withdrawn for the simple reason that there would then be no difference between ballroom proprietors and the conduct of ballrooms and dance halls all over the country.
Listening to the debate here to-night and to the Minister's replies, it would  seem that confusion still exists in the minds of Deputies on the Opposition Benches and that of the Minister responsible for this tax as to the people who are actually paying and where it is imposed. Certainly no one has any doubt but that those who attend ballrooms in the larger cities—Kilkenny, Cork and Dublin were mentioned—have to pay tax. But there seems to be confusion as to how far that extends into rural areas.
The possibly very good intention of the Minister when he reimposed this tax was to exempt rural areas where small halls were catering principally for the local people but it did not work out that way. I have had complaints made to me, as chairman of the ballroom proprietors, from villages throughout the country with a population of 150 to 200 but which are situated near other villages with a population of 550 to 580. I took the precaution of inspecting the books of a ballroom in one of these villages where a dance is held for parochial purposes once a month. The takings at the door averaged £7 to £10, never any more. In view of the fact that this village is near another village with a population of 580, entertainment tax must be paid. These people are perfectly satisfied with their average profit of £1 to 30/- but that £1 to 30/- and perhaps a few shillings more is now collected by the revenue as entertainment tax.
The scheme introduced by the Minister may have been good from his point of view but I stated last year, and I repeat, that it was not a question of benevolence as far as the Minister and his advisers were concerned but was inspired by the difficulties experienced in collecting this entertainment tax. There was great expense involved in trying to collect it from small villages where there was not a resident revenue officer and where the revenue officer had to hire a taxi and go from one district to another for the purpose of inspecting the ballroom and checking the tickets. They found that the position was impossible. I believe that one of the arguments that had the greatest  influence with the previous Minister was the impossibility of collecting the tax in rural areas. The Minister felt, on the information supplied to him, that it would be quite a simple matter in the larger cities and towns, that the collection of the entertainment tax would not entail any great expense and that the proprietors of ballrooms and promoters of dances in those areas should pay the tax.
I explained that there should be a proper approach to this matter. I felt that the proper approach was to put a duty on the licence fee for ballrooms annually on the same principle as is applied in the case of public-houses. That could be done in the towns and could be very easily worked out for country areas. When a licence is issued, it is on the basis of the size of the ballroom, whether it can accommodate 300, 400, or 500. There is a fee of £10, £20 or £30. In that way the Minister could have collected the revenue just as easily as by the method of collecting entertainment tax as an admission charge. I know from experience, and I am sure the Revenue Commissioners also know, that people who attend dances resent that charge.
I am afraid the Minister has made up his mind and that there is no possible hope of getting him to accept the amendment proposed by the Opposition and to drop this tax altogether this year but I would once again appeal to him to have the whole matter reconsidered in the light of the facts I am placing before him. I hope that, next year, if he still feels that this form of amusement should pay entertainment tax, it will be levied in some other way which will ensure easier collection and more universal application.
The Minister is not satisfied with the statements made by the Opposition that the reimposition of this tax has caused unemployment. The Minister is badly informed there. I can tell him that quite a number of ballrooms in the larger cities found that they could not pass on this tax to the patrons in the case of house dances in view of the fact that the whole system and organisation of ballroom entertainment has changed during the past ten years. When many of the Deputies here were  young, balls were not organised for financial purposes. They were generally run for entertainment. The gentlemen paid and the ladies were admitted free. That is many years ago. A change has taken place. Ballrooms have been commercialised. It is correct to say that, in the last years of the war, proprietors of ballrooms and promoters of dances made considerable profit.
At the end of the war, the number of visitors seeking ballroom entertainment diminished. The greatest factor in reducing the number of people attending dances in the larger halls at present is the facilities that the public have to get out of the cities. Two or three years ago the best season from the point of view of proprietors of dance halls and promoters of dances was the summer period. That is difficult to credit. People who do not know anything about the business believe that the season starts in the winter. For the past seven years the profitable season ended in the winter and the best season was the summer period. Transport was restricted and it was impossible for people to get away from the cities and they resorted to the ballroom for recreation.
I want to point out to the Minister, for future reference that, since the reimposition of the tax, some ballroom proprietors reduced the hours of dancing. Where, formerly, dances were of four hours' duration, they reduced it to three. The personnel of the band numbered very often eight to 12. The band is paid, according to agreement between the proprietors and the Federation of Irish Dance Musicians, at the rate of 7/6 per hour per man. By reducing the number of the hours by one, a saving of 7/6 per hour per man was effected. Consequently, the members of the band lost 7/6 per night for seven nights in the week. While gaining in one way, the Minister lost in another. He derived certain revenue in income-tax payable by professional musicians. He lost on income-tax by the reduction in the income of the musicians. While, in a number of ballrooms, as I have said, the hours of dancing were reduced by one hour, in others they closed one or two nights a week. I notice that one of the principal  ballrooms in this city is closed for three nights in the week. There are ten musicians employed. Therefore, ten men are idle for three nights a week. That is one of the results of the reimposition of the tax.
According to the information that was disclosed here to-day, the Minister not only got what he budgeted for but twice as much.
Mr. McGilligan: Oh no. I do not think so.
Mr. Fitzpatrick: I thought you budgeted last year for £55,000 or £65,000 and got £100,000?
Mr. McGilligan: I hope there is no misunderstanding. If I spoke this time last year, probably I was talking as to what I would get in a nine months' period. I am estimating now for a 12 months' period.
Mr. Fitzpatrick: I thought the Minister was satisfied to get—was it £55,000 or £65,000?
Mr. McGilligan: Something over £100,000 and I got about £103,000. I would rather take the Deputy's point —that it meant the tax yielded more despite all the wailing.
Mr. Fitzpatrick: You are satisfied now that you got more? For every £1 you expected, you get £2.
Mr. McGilligan: No, I do not admit that at all.
Mr. Fitzpatrick: I say that that state of affairs encouraged you to continue the tax. Ballroom proprietors in Dublin, Cork and other cities generally run dances one or two nights in the week and they let the premises for the other nights to clubs which hold dances for the purpose of raising funds. In Dublin, some of these clubs had booked 12 months in advance. Quite a number of them continued their bookings in the hope that the tax would be dropped. When a number of the clubs which hold weekly or monthly dances found, after two or three engagements, that they were not making money, they dropped them and the ballroom proprietors were forced to close down or to run the dances themselves. Everytime  a ballroom is closed the band personnel and staffs are disemployed.
The people who supply the restaurant and buffets attached to the ballrooms lose a certain amount of revenue and it is only natural to expect that those catering for the ballrooms and buffets, especially confectioners have to dispense with some of their employees. The mineral water manufacturers, the ice cream manufacturers and even the taximen who derive a certain amount of their custom and patronage from people going home from dances—all these suffered as a result of the imposition of this tax and the position created by it.
Last year, when this tax was being reimposed, we complained that it was unfair, inasmuch as some people would have to pay and others would not. Some very glaring examples of that were brought to the Minister's notice particularly in the case of holiday camps. In one case, entertainment tax has to be paid, while in the other it has not. I will not say that the Minister gave us a guarantee but he said that if at any time it was brought to his notice that these holiday camps, by virtue of the fact that they were established in areas which had not got 500 population, were escaping the tax, he would take serious notice of it. I saw last week one of these very large holiday camps advertising public dances three nights a week and I think that is very unfair. In the case of the holiday camp run by Irish Holiday Camps, Limited, in Skerries, they have to pay entertainment tax, but ten miles further away, Butlin's Holiday Village can organise dances and run excursions from the City of Dublin, taking away the people who in the ordinary course might attend the ballrooms here, without having to pay entertainment tax. There are quite a number of aspects of this matter which I am afraid the Minister has not considered and I appeal to him, if he cannot see his way to drop it this year, to have this matter investigated next year and try to devise some more reasonable form of tax in respect of which everyone will be treated on the same footing.
I should like to draw the attention  of the House to a statement the Minister made in connection with the expense of collecting this tax. I do not know exactly what is taken into consideration. Does he take into consideration the tax he loses from the ballroom proprietors and their loss of profit? Does he take into consideration the tax which the personnel employed in ballrooms, bands and staff, would have paid, if things were normal? Or does he take into consideration only the actual printing of the tickets? Is a quota allowed for the staff that sell the tickets and the rental of the offices from which the tickets are sold? Does he take into consideration the expenses incurred by inspectors having to go to different areas? If all these matters are taken into consideration, I am at a loss to know how the Minister can be satisfied that he can collect this tax on the very moderate basis of 2 per cent. Previously, when inspectors had to go out to rural areas where it was generally admitted it was wellnigh impossible to collect or to enforce this tax, the percentage was a whole lot less than 1 per cent. The general impression amongst the people concerned in this business is that 2 per cent. would not pay for the staples in the tickets printed by the Department. I am afraid that the Minister will continue with this tax, due to the success it had last year, and, from the knowledge I have, I believe that a number of people who have booked ballrooms will continue their bookings or try to hold on to them, in the hope that the tax will be abolished, but, unless the Government in power in, say, three years' time want to abolish dancing in this country, the tax will be discontinued for ever.
Progress reported; Committee to sit again.
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