Wednesday, 30 June 1965
Dáil Eireann Debate
Mr. Sweetman: I want to refer to subsection (4). This is the section which will have the effect of ending the procedure under section 6 of the Finance Act, 1928. I notice in the end of the proviso in subsection (4) “the person on whom the tax is charged is no longer the occupier thereof”. The wording of certificates issued under section 6 of the Finance Act, 1928, is in respect of the owner, occupier or lessor. Can the Minister explain why both “lessor” and “owner” have been omitted from the proviso?
Mr. J. Lynch: The intention is that where the lands have been sold for valuable consideration and are no longer in the occupation of the person on whom the tax was charged, it will not be possible to distrain upon the lands for the recovery of the tax.
I want to make it quite clear, in dealing with this amendment, that this is not something that has been my  personal experience. Rather, my personal experience has been to the contrary. I am told by accountants who are dealing with the question of appeals regularly that in recent years it has become a practice that, at the end of a week, a Thursday or a Friday, the accountants concerned are informed that the cases with which they are concerned have been listed for appeal at the beginning of the following week. I know the Minister will at once agree that that is a highly undesirable practice if it does occur. At the very least, there should be some understanding, if there is not statutory provision, that an appeal could not be listed, except by consent, without an adequate period of notice. Accordingly, I move that 21 days notice be a statutory period.
Mr. J. Lynch: I can appreciate the purpose of the amendment. I understand that the practice is that no appeal is heard unless at least ten days notice is given. I have consulted the Revenue Commissioners about the implied suggestion and, I think, the express suggestion made on Second Stage by the Deputy, that such short notice as he has now referred to has in fact been given from time to time. They said they were unaware of such cases and that the inspectors are specifically required to give the ten days notice.
With regard to the extension of the ten to 21 days statutory notice, I understand that in some cases it suits the appellant, the taxpayer, better. Take, for example, the person who has business outside the State. If his appeal would come in not lower than a 21-day period, it might be to his inconvenience. In some cases, I understand that appellant taxpayers require a shorter period, certainly a period shorter than 21 days, possibly a period shorter than ten days. I believe it is better to leave it flexible if only for that purpose but perhaps for other purposes as well and on the strict understanding that the ten days will be strictly adhered to. Furthermore, as I believe is the case, if the ten days notice is not sufficient, the inspectors are usually amenable to an extension  of the period. I suggest that, in all the circumstances, it would be better to leave it flexible and not to tie it down to a statutory 21 days. It might affect the convenience at least in some cases of the appellant.
Mr. Clinton: I move amendment No. 2:
Before section 7 to insert a new section as follows:—
“Section 10 of the Finance (Miscellaneous Provisions) Act, 1956 (No. 47 of 1956) is hereby amended as follows:—
`the definition of “goods” shall include day old chicks produced within the State'.”
I moved a similar amendment to the Finance Bill in 1964. There are additional reasons now why I think this amendment should be accepted. When speaking on this amendment last year, I explained that this was an industry that gave considerable employment in the west of Ireland and in other parts of the country, especially to small farmers who were producing eggs as hatchery supply farms and again at the hatchery itself where the chickens were hatched out for export and there  were packaging and carriage, and so on, to be dealt with.
In 1964, the export of day-old chicks was in the region of £300,000. This is a considerable export. I am sure the Minister is aware that, during the past year, this industry has gone through a great deal of difficulty and has lost heavily because of the closing of the Border, due to fowl pest. It is only with extreme difficulty that the industry is kept going at all. In fact, it is in serious danger of closing down altogether.
I warned, when I moved this amendment previously, that there was danger of the principal firm engaged in this export industry leaving the country, if they did not get certain facilities, and moving up to the north of Ireland. Already, that has happened with portion of their business. I greatly fear that if the Minister does not accept this amendment, he will lose this industry altogether. The poultry industry generally in this country has run down to such a degree that soon we shall have no poultry industry, if we do not take more of an interest in it than we are taking at the present time.
I said that last year the export value of this industry was approximately £300,000. One firm alone exported about 80 per cent of its day-old chicks. I fail to see, and the Minister's predecessor failed to give me any reason, why, for instance, mushrooms should enjoy this tax relief, while, at the same time, the day-old chicks industry is not allowed it. I appeal to the Minister to take a look at this. There are many people dependent on the acceptance of this amendment, many smallholders in the west of Ireland and others throughout the country who are benefiting at present but who will cease to benefit if we lose this industry.
Mr. J. Lynch: I am not as competent as Deputy Clinton to deal generally with the poultry industry, but, as he appreciates, no doubt as well as I do, there is a difficulty in any event by reason of the deficiency payments by the British Government to British farmers in poultry production as in many other agricultural  production activities. I think that is the root difficulty of our poultry industry here. The day-old chick industry is, perhaps, something different. The relief of taxes on profits earned by exports was introduced initially to assist industrial undertakings as such and it was a very worthwhile relief for which I give due credit to Deputy Sweetman. It did give considerable impetus to our export industry. The intention was to confine it to industrial production proper because it was felt that it was through industrial production that we could help our balance of payments problem and increase employment generally.
I have a certain amount of sympathy with the case made by Deputy Clinton in so far as he cited the two cases, the fish farm products and the products of concentrated mushroom growing, but when these were introduced initially no doubt whoever was Minister for Finance at the time— probably Dr. Ryan—must have been conscious of the pressure that would be on him and on future Ministers to extend the scope still further. To extend the scope now to day-old chicks would give grounds for an extension of the scope of export tax relief to other forms of agricultural production, even those forms in respect of which subsidies are paid by the taxpayer. I am afraid that in order to hold a line somewhere, I must reject the Deputy's amendment, at this stage at any rate.
Mr. Clinton: My information is— whether correct or not—that if the proposal for the poultry plant in Bandon had gone ahead, it would have done so on the undertaking that broilers would be exempt. If that is so, it is really difficult to understand why we give relief to the mushroom industry where there is no industrial process and give it to the products of fish farms where there is no industrial process, why we had decided to give it for broilers and decided to exclude day-old chicks. It does not make sense. The Minister should be really concerned about the fact that there is a distinct danger of losing this industry altogether, an industry that last year  earned something in the region of £300,000 and something which the  country, especially at present, cannot afford to ignore.
The Committee divided: Tá, 46; Níl, 57.
Burke, Joan T.
Clinton, Mark A.
Crotty, Patrick J.
Dillon, James M.
Dockrell, Henry P.
Dockrell Maurice E.
Donegan, Patrick S.
Esmonde, Sir Anthony C.
Fitzpatrick, Thomas J. (Cavan).
|Flanagan, Oliver J.
Harte, Patrick D.
Hogan, Patrick (South Tipperary).
Hogan O'Higgins, Brigid.
Jones, Denis F.
Kyne, Thomas A.
Lindsay, Patrick J.
Lyons, Michael D.
Murphy, Michael P.
O'Higgins, Thomas F.K.
Reynolds, Patrick J.
Blaney, Neil T.
Burke, Patrick J.
Calleary, Phelim A.
Collins, James J.
Crowley, Honor M.
Fitzpatrick, Thomas J.
(Dublin South Central).
Gibbons, James M.
Gogan, Richard P.
Healy, Augustine A.
Hillery, Patrick J.
Kennedy, James J.
Kitt, Michael F.
Lalor, Patrick J.
Millar, Anthony G.
Ó Briain, Donnchadh.
Ó Ceallaigh Seán.
Tellers: Tá, Deputies L'Estrange and T. Dunne; Níl, Deputies Carty and Donegan.
Amendment declared lost.
Mr. Cosgrave: I move amendment No. 3:
Before section 7 to insert a new section as follows:—
“The allowance against income tax in respect of a dependent relative or relatives shall be £100 in respect of each such relative.”
As the Minister is aware, the allowance  for a dependent relative remained at the same level for many years. In 1956, it was increased by £10. In the meantime, costs have risen considerably and expenses of all kinds, not merely those included in the Consumer Price Index, but the general expenses involved in maintaining individuals, have increased. Many years ago the allowance in respect of children and the allowance in respect of a housekeeper were raised. In the case of a dependent relative, the allowance was increased last year to £60, as compared with the £50 which had operated for approximately ten years. There is no doubt that the same case for increasing the dependent relative allowance can be made as was made in the case of either children or a housekeeper. Since the allowance was last fixed, there has been a very steep increase in costs of all sorts.
I do not believe there is much need really to stress the point because everybody is familiar with the well-known circumstances surrounding living costs and the cost of maintaining a relative. There seems to be no justification for a differential between a dependent relative and a housekeeper and, for that matter, though there is a slight difference, children. We believe that the allowance should be increased now to £100. That would be reasonable, taking into account present day price levels and the changes which have occurred in prices since the allowance was last increased.
Mr. J. Lynch: I am afraid I must oppose this amendment, mainly on the ground of what it would cost. I appreciate the arguments made by Deputy Cosgrave that costs have increased considerably in the years since 1956 when the allowance was raised from £50 to £60; but so have incomes generally and, while that is in ease of the Revenue, it is also in ease of the taxpayer. Because of the difficulty in raising taxation otherwise in order to provide for this relief, I must resist the amendment; it is difficult to see where else the money could come from just at this stage.
Mr. Cosgrave: Could the Minister  say how much it would cost to raise it?
Mr. Lynch: About £¾ million.
Mr. T.F. O'Higgins: I take it the £¾ million relates to the proposal in the amendment that the allowance be increased from £60 to £100. Would the Minister meet the case, which undoubtedly exists in justice, in some way? Would he consider the matter further?
Mr. J. Lynch: The only way it could be met would be by giving an allowance in some form.
Mr. T.F. O'Higgins: Would the Minister not agree to increase the allowance from £60?
Mr. Cosgrave: Not necessarily giving the £100.
Mr. J. Lynch: It would be difficult to isolate this allowance from all the other allowances given. I do not think it would be possible to isolate this particular one. If a case can be made for this particular allowance, a case can equally well be made for all the others. In the circumstances, I was able to avoid any increase in income tax this year—something I was very glad to achieve—and I think it is not unreasonable to leave matters stand now.
Mr. P. Byrne: On the Minister's last point, it seems to me he is echoing a view we heard more than once expressed by his predecessor, the view that it is more desirable to stabilise the standard rate of tax or, perhaps, reduce it, than it is to increase the allowances. The Minister has said that, if costs have increased, so also has income. The fact is that none of the personal allowances or reliefs has kept pace with inflation. It is not normally easy to compare one year's money with another, but it is particularly easy this year to compare the £ today with the 1938 £. Our £ today is worth less than 6/8 in 1938 values. Personal allowances and reliefs have not kept pace with that decline in money values and the effect of that is that there are  people in the tax net now, with dependent relatives, who were not in the tax net in 1938-39. It is surely very important to keep these allowances and reliefs in pace with inflation.
There is another point I want to make particularly in relation to dependent relative allowances. Other forms of dependency provisions, annuities and such like, which qualify for tax relief would very probably be abated if this amendment were accepted. Take the case of a feeble-minded son or daughter, aged 25 or 30 years, who does not qualify for the child allowance or the £120. All the unfortunate parent will get for such a dependant is the miserable, inadequate allowance of £60. That implies that such a dependant can be maintained for less than 3/6 a day. That is absurd. I suggest it is very important now to remove the sense of grievance and injustice which rankles in the hearts of so many taxpayers. An allowance of £60 for a dependent relative is almost useless.
Mr. J. Lynch: I do not accept the premise that, because the allowance is £60, the parent is expected to keep the child on that £60. The purpose of allowances is to make it easier for people to raise families. I agree that the higher the allowance the easier that is, but there is no justifiation for suggesting that, because the allowance is £60, the presumption is that the parent can keep the child for the year on that £60. I should like to increase the allowance. It would be in ease of many people, but it would be difficult to keep pace every year with the falling value of money. In no country has pace been kept with the falling value of money in this respect. I should be very pleased if I could do what is asked but the Budget has to provide for a certain amount of money and reliefs given have to be made up elsewhere. Just at this stage I do not see where I could find compensation for any further relief in this respect.
Mr. Sweetman: It seems to me the speech just made by the Minister  is one of the worst counsels of despair ever heard in this House. The Minister has acknowledged that the value of money will go on falling year by year and he is going to do nothing to soften that.
Mr. J. Lynch: I have not said that. I said one cannot be expected to keep pace in child allowances every year in this respect.
Mr. Sweetman: The Minister is not going to make any attempt to stop the decline.
Mr. T.F. O'Higgins: Surely that is an illogical approach. If, in 1956, it was thought desirable to make, and the economy could afford, an allowance of £60 in respect of a dependent relative, that was intended to make the allowance an allowance in terms of real money. If, in the past eight years or so, however it occured, the value of money has dropped, or been allowed to drop, surely that cannot be said to justify now a non possumus attitude on the part of the Minister for Finance? I could understand it if the Minister were defending a dependent relative allowance fixed last year, or the year before, or at some fairly recent point in time. The Minister might well say then that the fact that the cost of living has risen in the intervening period of 24 months, or whatever it may be, and the value of money has dropped is too difficult a factor to be considered right now in relation to the level of the allowance.
Here, however, we have a rate which was fixed in, I think, a Budget introduced by Deputy Sweetman in 1956 and it has not been touched since. We all know that in the past eight or nine years, there has been a dramatic fall in the value of money. That is one of our troubles, whatever the cause may be; we will discuss the cause in another context shortly. I would urge in these circumstances that the Minister should do something in respect of this small section of our community and this very definite social problem.
Mr. J. Lynch: There is just one point on that. While I cannot but  admit there have not been any increases in these allowances since 1956, nevertheless the basic rate of tax in 1956 was 7/6. That has now been reduced to 6/4.
Mr. T.F. O'Higgins: That is something.
Mr. P. Byrne: I would urge the Minister to have regard to the recommendations of the Income Tax Commission on this matter. We all know the previous Minister for Finance rejected most of the recommendations in the several reports of the Commission. He was notoriously conservative in his approach to income tax reform. The Commission is on record as recommending that this allowance should be parallel to the child allowance. I mentioned a case a few moments ago of the feeble-minded son or daughter of 25, 30 or more who does not qualify for a child allowance of £120. It surely costs a parent more to keep such a feeble-minded child than it does to keep a child under 16 years of age.
We must instil some measure of equity into our tax code. It is an old maxim that equity is a stranger to income tax. That state of affairs has been too readily accepted for far too long. There are now approximately 250,000 people paying tax in this country and grave injustices are being perpetrated under our tax code. I urge the Minister, if he cannot see his way to accept this amendment currently—I admit I am a little shocked to hear it would cost £750,000—to look at the matter more closely next year.
Mr. Sweetman: Before we decide whether we will have a vote on this amendment, may we have an assurance on this occasion that all the bells are working? On the last occasion the bells in the Library and on the front of the House did not work and Deputies were left out of the division.
An Ceann Comhairle: I cannot account for it. Both bell switches were turned on here.
Mr. Sweetman: While we do not want to vote on this amendment, will  the Chair make certain they are working for the next division?
Mr. T.F. O'Higgins: Perhaps the Clerk of the House might go out with a hand bell?
Mr. Sweetman: A better method would be if the Minister would agree to the amendments.
Amendment put and declared lost.
Mr. T.F. O'Higgins: I move amendment No. 4:
Before section 7 to insert a new section as follows:—
“Where an individual has been involved in expense in respect of illness the amount of such expense shall be deducted from or set-off against any income for the year of assessment of such person.”
This is an amendment which we tabled on previous occasions, and we table it now again in this Dáil. Its object is to allow a situation under the income tax code in which medical expenses arising from illness occasioned to the taxpayer in respect of that year's assessment will rank as an allowance for income tax purposes. It is perhaps not generally understood that, in relation to medical expenses or any payment in respect of illness, the first and only concession made in that regard was made by Deputy Sweetman as Minister for Finance. In order to assist and encourage people to make provision with regard to illness, he allowed as an income tax allowance premiums paid in respect of schemes of health insurance. That has been of benefit to many people.
We are concerned here with the type of case where perhaps there is not adequate cover in respect of illness or no cover at all. We are concerned with cases where there may be in the home a situation of chronic and persistent illness requiring treatment which is not covered by the present scheme of voluntary health insurance. There are many cases of people with, for example, the affliction of diabetes or  some chronic illness of that kind who are, day in and day out, week after week, month after month, involved in consistent expense for the provision of drugs and medicines, which never seem to drop but always to increase in price.
Expenses of that kind for high-priced drugs and medicines—apart altogether from expenses in relation to medical attention—do not rank for allowance under the income tax code. Deputy P. Byrne mentioned that equity and income tax do not usually go hand in hand. That may have been the situation in the past. But at least some people in this House are endeavouring to achieve a just society and move towards it. Certainly, in a more just society, an allowance would be made in respect of expenses of this kind caused to taxpayers without any fault of their own, either by reason of their own illness or that of some member of their family. Some move should be made to meet this situation.
As I said, we have tabled this amendment on other occasions. We have always been met by an expression of ministerial benevolence, which in fact achieves very little. The Minister always said: “I would like to be able to do that, but unfortunately it would cost me some money and the state of the finances would not permit it.” Therefore, each year it was staved off until next year. Here we are discussing the first Finance Bill in this 18th Dáil. I hope the Minister, when he stands up, will not say to me: “Well, I would love to be able to do this, but perhaps it will have to wait for another day, the next Budget, perhaps, or the Budget afterwards.” That has been what we have been told for many years back. We do feel there has been sufficient notice of a demand in this regard to have expected some signs of ministerial activity in relation to it by now. I would urge that the Minister should come some way to meet us on this amendment.
Mr. J. Lynch: It is very difficult to reply to an argument like that when the Deputy anticipates what I might otherwise have said—that I  would like to do this but, having regard to the cost, I find it difficult to do it. I will say it. I would like to be able to do it, but possibly not to the same extent as is sought in this amendment.
This is a very wide amendment. It refers to an individual involved in expense in respect of illness. It does not say what kind of illness. Under the amendment, any expense any person would be involved in in respect of any illness would have to rank for an allowance, and I am sure the cost would run into some millions. It is true this amendment was moved on a number of other occasions and the Minister resisted it, even though he said, as I have said, it would be desirable if it could be done. But it should be done on an equitable basis. The fact is that the person who pays only a very small amount of income tax or no income tax at all would not benefit from this amendment.
If such a person were not covered by the medical card scheme or were not a member of the Voluntary Health Scheme, the fact that he pays no income tax would not give him any benefit. The man who pays a lot of income tax would get considerable help from the State, even to the extent, I am informed, of 69 per cent of his medical bill. If I accepted the amendment, I would be giving relief to the well-off and no relief to the not so well-off. I regret that for those reasons I have to resist it.
Mr. M.J. O'Higgins: I would urge the Minister to look more closely at the amendment, and if he is not satisfied with the wording of it, assuming, as I do assume, his genuinenss in the remarks he has made, if the amendment requires tightening up, Deputies on this side of the House will go out of their way to meet him. The Minister thinks the wording of the amendment too wide. If there is any indication from him that his Department is prepared to give way at all along this line, it will not take five minutes to agree an amendment which will meet the Minister's point of view and the point of view of most Deputies.
 Would the Minister be prepared to agree in principle that if an amendment is moved limiting the concession to the person himself, or to a member of his family or a dependant, that would narrow the field? The Minister is probably aware, in his personal capacity, that this question of medical and hospital expenses is one that creates a real fear and dread in the minds of many heads of families throughout the country. We are not talking of the well-off, nor are we talking of the particularly badly off who are catered for under the social welfare schemes. We are talking of the middle man who has not enough money to save up for hospital expenses or to join the Voluntary Health Scheme. That is the type of person who would benefit from acceptance of this amendment and the Minister would be doing a very great service if he would indicate that he would accept the amendment, even in a limited form.
Mr. Cosgrave: I should like to support the plea made by Deputy O'Higgins. We are not committed to the phraseology used in the amendment, and if it were possible to agree on wording which would limit the amendment or which would cover more closely defined categories, we would accept it. While the Voluntary Health Scheme provides very valuable and useful assistance for people who are members of it, it has, as at present operated, certain limits. A person has to go to hospital and spend a certain period in hospital before he can benefit from it. The result is that even certain X-ray examinations, which would not in the ordinary course be done in hospital, are now done there in order that they can be paid for under the Voluntary Health Scheme.
As Deputy T.F. O'Higgins has stated, there are many types of illness of a chronic nature which require treatment by drugs and medicine but for which a stay in hospital is not necessary. There are cases where people have to use certain prescribed medicines over a protracted period and the expenses involved in the purchase of these medicines can become a very  considerable burden on them. As has been stated, that is one of the greatest dreads which face people who are not covered by our social welfare schemes or who are not entitled to free treatment. A person may well be a member of the Voluntary Health Scheme but, because of the nature of his illness, is not required to spend a period in hospital. As long as that illness lasts, and some of them may last for a long time, that person is obliged to make very heavy payments for drugs and medicines.
One of the worst features of such illness is that the person suffering may not know how long the illness may last. We are all aware of how expensive drugs and medicines are and very often, even if these drugs and medicines are effective, they place a burden on the person who has to use them that is very heavy indeed. We do not mind redrafting this amendment or asking the Minister to get his draftsmen to do it, so that it might be confined in a manner that would meet the Minister's requirements.
This is a matter which has been discussed over a number of years and every year that passes confirms the views expressed that a very heavy burden is thrown on people who have to use drugs and medicines for illnesses which do not require them to go to hospital.
Mr. Ryan: The Minister has adduced the weakest possible argument against the amendment when he says that he will not do a good which would be conferred on many because he cannot do an equal amount of good for everybody. There is no piece of legislation ever passed by this Oireachtas or by any other parliament in respect of which it could be said that it conferred the same amount of benefit on everybody. It is impossible for a human parliament to apportion the same quantity of benefit to everybody and it is wrong for the Minister to say that he will not do good for some because he cannot do the same amount of good for all.
The justification for income tax as distinct from other forms of taxation is that it is a tax imposed upon a  portion of a person's income which is surplus to the amount necessary to maintain a reasonable standard of living. It is a tax on that portion of a person's income in respect of which he has a certain discretion as to the manner in which it be expended or distributed and the manner in which he expends or distributes the income is something not related to the necessaries of life but to providing a better standard of living or a more comfortable standard of living for himself and his dependants. But it clearly cannot be said that a man has a discretion over what he is to expend on the relief of human misery. Truly it cannot be said that he has a discretion as to the amount of money he will expend on necessary medical attention.
I can see that the argument may arise even between doctors as to whether an intensive course of treatment would be necessary, or a mild one, or whether an operation would be necessary or whether a course of medicine would suffice. There are certain medical reliefs which are necessary for the relief of pain, certain medical reliefs necessary to prevent death, and any money expended on these categories are not, under our tax code, deductible when the Revenue Commissioners come to collect the tax on a man's income. That seems to be entirely inequitable and indeed to paraphrase Deputy P. Byrne, equity and income tax are strangers. That should not be so certainly in relation to a matter so vital as this.
The Minister has indicated his opposition because he says the greatest benefit would be conferred on a person paying the greatest amount of income tax. Such people would benefit, unless the amendment were tightened up to prevent that, but certainly it should be possible to insert into our code that relief be given to people in a certain bracket of income or taxation. Take the case of a man who may have necessary medical expenses in one year amounting to £60 or £100. Such a man may be called on in the same year to pay income tax of similar dimensions. Clearly, it would be of substantial assistance if his income tax  bill were to be remitted altogether or reduced by one-third or one-half, or some proper proportion.
The people who could benefit greatly by the amendment we suggest are the people who are deprived of any benefit under our existing health code. They are people who cannot afford the colossal burden of medical treatment or care which we have to bear in this day and age. There are very many cures available today which are simple but costly and many families who deprive themselves of drugs or medicines which could provide the necessary and quick relief simply because the amount of income left after taxation does not permit them to do so. In some cases people allow their health to deteriorate so much that ultimately they have to give up working and go into hospital. In many cases such people may become a charge on the public purse because the costs of their illnesses are such that they are not able to pay the bill. If people were encouraged by a significant relief in the payment of income tax to provide themselves with medical care at the proper time, it is reasonable to expect that the Exchequer might benefit in the long run by being relieved of the substantial burden imposed at present because we encourage people, under our present code, to neglect themselves until their state of health has so deteriorated that they become a burden on the public purse.
Mr. P. Byrne: It has not yet been adverted to that this amendment springs from Recommendation No. 12 in the Seventh Report of the Income Tax Commission and all of the difficulties involved in providing an allowance for special circumstances, such as envisaged by this amendment, were fully considered by the Commission. It is worthy of note that the Revenue Commissioners went on record before the Income Tax Commission as being opposed to this amendment. Theoretically, income tax is a non-discriminatory tax which does not take account of special circumstances. It is because of doctrines such as this that this appalling position exists, of the  great disparity between our tax code and simple equity.
The Government in the Second White Paper on Direct Taxation set out their attitude to the Commission's Recommendation in the following terms, and I quote from paragraph 39 of the White Paper:
The possibility will be examined of framing a scheme which would be administratively practicable and at the same time would effectively confine the relief to cases of the kind contemplated in the recommendation.
That Second White Paper was laid before the Oireachtas in April, 1963, over two years ago, and it is time for the Minister to tell us just what researches and investigations have been made by the Revenue Commissioners into the practicability or otherwise of this amendment. A few weeks ago the Voluntary Health Insurance Board issued a circular to all its subscribers, of whom I am one, pointing out that the charge for a bed in a public ward in a Dublin hospital has recently been increased to 17 guineas per week. Up to a few years ago you could get a private room in a hospital for less than 17 guineas per week. I mention that to emphasise to the Minister the appallingly high cost of illness today. You cannot go into the chemist with a prescription and have a bill of less than 12/6 or 15/- in these days.
The proposition is a simple one and a Christian one which has previously commended itself to all sides of the House. Indeed, when I proposed an amendment similar to this but in somewhat more restricted terms some years ago, it was criticised by a number of speakers from the Government side as being inadequate to the situation and as not being sufficiently broad. One of those speakers is now a Parliamentary Secretary. I would urge the Minister between now and Report Stage to have another look at this matter and to tell us in what respects we can modify the proposal in order to make it more acceptable to him and to the Revenue Commissioners.
Mr. P. Hogan: (South Tipperary): Originally the principle that some reliefs should be given for expenditure on medical bills received recognition when the Voluntary Health Scheme started. Some allowances, I understand, are made in that scheme as regards taxation. It would be highly desirable, now that expensive drugs have become much more expensive, that that principle should be continued.
Deputy P. Byrne mentioned the cost of beds in voluntary hospitals in Dublin. The actual cost of a bed to a hospital in Dublin is between £20 and £30 per week and local authorities are now paying £17 10s. per bed per week to the Dublin hospitals. Were it not for subvention from the Irish Hospitals Sweepstakes during the past three years, the cost of beds would be much higher.
Everybody realises the cost of drugs at the present time, particularly antibiotics, the cortisone preparations, drugs that have to be given over a prolonged period for diabetes. Some concessions should be given in regard to these preparations. A Deputy from this side of the House a week ago left Leinster House, went down to see a medical consultant and got a bottle of medicine the size of my thumb. It cost him £5. I mention all this to bring home to the Minister and to Deputies in general the extraordinary costs of these modern drugs. Every day the cost seems to be increasing.
The section is loosely worded and I should be obliged therefore if the Minister would tell us whether he would be prepared to give some concession in regard to institutional bills and domiciliary bills. If he is not prepared to allow for such bills in toto, he might be prepared to give some concession. There should not be any abuse in this respect as regards institutional bills. I would ask him to consider giving a concession in respect of one or the other.
The Minister's expressed objection to the amendment is that if he gave this concession, he would not be giving corresponding reliefs to people who do not pay tax. I would remind  him that the people who do not pay tax get their medicines free nowadays. Thirty per cent of the population, through the dispensary system, get free drugs. Therefore, no injustice would be done to them if a concession were given to the other 70 per cent who have to pay for their drugs. Of that 70 per cent, 55 per cent have to pay for drugs for domiciliary purposes. I ask the Minister to consider giving such concessions. He seems to have taken up a rather resistant attitude, but if he indicates that he will reconsider the matters I have mentioned, there would be no difficulty in redrafting the wording.
Mr. J. Lynch: On the question of the wording of the amendment, I have pointed out that it could be of very wide application. Even if it were more tightly worded, I should still adopt the attitude I am now adopting. When a similar discussion took place last year or the year before, a similar attempt was made by Deputies opposite, and even then it was resisted. On the point made by Deputy M. J. O'Higgins, it is not so much a matter of helping the very high income group and giving no corresponding help to the low income group. A person in the higher income group would be considerably assisted under a proposal such as that suggested in the amendment, whereas a person who does not pay income tax would not get any assistance whatever. If such a person did not qualify for other benefits, he would have to pay every penny of the cost. In the middle income group, people do not qualify for free or semi-free treatment. Take a man with £1,450 a week with six children.
Mr. P. Byrne: A year.
Mr. J. Lynch: A year. I thought the Deputy said “hear, hear”. I suppose it was too much for a Minister for Finance to expect. That man pays no income tax and a relief of that sort would not give him any help.
Mr. M.J. O'Higgins: Does that not apply to all income tax relief?
Mr. J. Lynch: The man with six children has no tax obligations.
Mr. M.J. O'Higgins: A person who does not pay income tax in any event does not get relief from income tax relief.
Mr. J. Lynch: Indirect tax from this man who does not pay income tax is used to pay part of the medical expenses of the other man—up to 69 per cent in some cases. It is not a difference between the small man and the big man. It can arise equally between men of rather moderate incomes.
I gave an instance of a man with £1,450 who has children, who does not pay income tax. The man with the same salary without children pays income tax and under this proposal he would get relief to the extent of £25 out of each £100 he would be obliged to pay in medical expenses. Deputy Ryan suggested a person has no discretion in illness. He has some discretion in so far as he can choose the location of his treatment—a public or a private hospital—and he could equally well vouch the fees he would have to pay in the very expensive hospital and the taxpayer would have to relieve him under this proposal. I do not wish to make play of the wide use of the word “discretion” but there is that degree of discretion in the case of illness.
In reference to a suggestion by Deputy P. Byrne, the recommendations of the Commision on Direct Taxation were to the effect that something should be done for people who met with exceptional difficulties in this respect. The Government's comment was that they would examine the possibility of framing a scheme which would be administratively practicable and would confine relief to the cases contemplated in the Commission's recommendations. There has been a lot of examination of these recommendations and the possibility of their implementation. I must admit I have not read—I have not had time—all the documentation on this matter. Neither have I had time to study them in connection with the amendments which  appeared a couple of days ago. I am advised that it is in very technical detail and that a considerable degree of work or, as Deputy P. Byrne said, research, was put into the possibility of implementing it. There are many reasons. There is the difficulty of defining “serious illness”; there is the important matter of the cost to the Exchequer; and there is the necessity to maintain the viability of the Voluntary Health Insurance Scheme. I think Deputy Sweetman himself adverted to that in some detail whether from these or the other benches, I do not know, when this matter was discussed before. It is important that we maintain the viability of the Voluntary Health Insurance Scheme and that we do not do anything that would discourage people from becoming members of it. I should like to say, in reference to what Deputy T.F. O'Higgins said earlier that Deputy Sweetman, when Minister, gave some relief and that that was the only relief given to the Voluntary Health Insurance Scheme, that the former Minister for Finance, Dr. Ryan, gave some relief by relieving the profits of the scheme.
Mr. T.F. O'Higgins: Eventually— as a result of five years hard work by us and a commitment entered into between Deputy Sweetman and myself.
Mr. J. Lynch: It was not the whole story to say that Deputy Sweetman did something for the Voluntary Health Insurance Scheme. However, that is only a diversion.
Mr. Sweetman: It is there on the records.
Mr. J. Lynch: In all the circumstances, I regret that I must still maintain what I have said.
Mr. J.A. Costello: To my mind, at all events, the Minister at the outset of his remarks gave some very peculiar reasons or arguments against this proposal. I understood him to say that if there were desire on this side of the House to limit or further to narrow the proposals here, it would not make any effect on his mind. He then went on to say that a proposal of this kind,  even a narrower proposal or proposals, had been considered by his predecessor for a number of years——
Mr. J. Lynch: I did not give it as a reason. I mentioned it as a historical fact.
Mr. J.A. Costello: If it is merely a historical fact, that is that, but, as an argument, I fail to understand it. The amendment appears to me to fall in line with certain proposals I have made in this House, with no degree of success, over a number of years but which I had reason to believe and some time ago had reason to believe did recommend themselves to certain highly important persons in the country. I made the case here for people like myself, merely as a type. I contrasted the position of people like me, self-employed professional people who have no asset except their body, brains, energy and health—they live on them and make their money on them—with the position of business and industry. I said it was proper, and indeed that justice demanded, that something be done and some arrangement be made for that particular purpose.
We find here, year after year, appeals being made for business and industry for depreciation of their machinery. To my personal knowledge, over the years, that was fought by the Revenue Commissioners and by the then Minister for Finance but ultimately concessions were given for depreciation of machinery. The people for whom I am speaking cannot renew our machinery but we had to get something for depreciation of our machinery which is our brains and our health. I have asked over the years that consideration be given to that.
Quite a number of people outside find themselves in that position. They are not rich people; they are not even well-to-do people. They are people who have to make provision for themselves out of their own resources, energy and savings. It is rather difficult. Most of them have to make arrangements to look after their health by joining some organisation such as the Voluntary Health Insurance Scheme which has been available to  them only in the past few years and would never have been available to them if the Minister's Party had had their way. They had to make provision for that. They had to make provision for very appalling expenses that might come upon their families and, above all, they had to make provision in the event of their death.
Speaking by and large, they could do that normally only by effecting policies of insurance. Policies of insurance have been effected on the life of a person in various conditions and whatever the conditions, they have to pay a very heavy premium every year. At the end of that period—when the person dies or when the policies become payable on maturity—they find, as we have found here, that the amount of money they get has been divided almost by three. You get a small amount of income tax allowance. At the end you find that by reason of depreciation in the currency, the money you paid in premium all your life is worth only about one-third of its face value. On top of that again, and this is a matter I intend to resume on another section of the Finance Bill, you find that that depreciated residue of the policy on your life is being further depleted by the large and increasing demands of the Revenue Commissioners.
The people for whom I appeal are entitled to some relief. This is an occasion that gives me, at all events, the opportunity of making another appeal on their behalf. As long as I have been here, I do not think I have ever let a year go by without making this particular case on behalf of self-employed people as contrasted with business and industry which have got increasing allowances for depreciation of their machinery and plant. A self-employed person cannot, in the ordinary way, get what an industrialist or a businessman can get. But he can get it by giving him some allowance for the fact that, as year follows year, even though he is in health, his machine is depreciating. It is one way in which that class for whom I strongly appeal could be met with some degree of justice. It is a matter  that this amendment gives me the opportunity of raising again.
I have been told that the appeal I have made is reasonable and ought to be met by the people in charge. I had hoped to do it before I left office but unfortunately we left too soon and we had got only a bit of the way. I have not been able to make any of the subsequent Ministers for Finance do it. Here is an opportunity to consider it. I am not sufficiently presumptuous to imagine that any Minister for Finance will be persuaded by the arguments, however praiseworthy, I may make on such an occasion but the Minister has, for instance, the backing of the Income Taxation Commission, as Deputy P. Byrne mentioned, and surely that is something that ought to carry weight?
It is not sufficient for the Minister to say that he has just come into office and has not had time to read up the matter. From the point of view of the Minister, that is reasonable but, then, this has been out for some time. Have the Department of Finance or the Revenue Commissioners been giving any consideration to this matter in the meantime? Even if this amendment appeared only in the past few days, why are the Department of Finance and Revenue Commissioners saying, in effect: “We do not agree with this”? It would take only a few minutes. The Minister is a barrister and I know how much he can absorb by ear without getting a file on the matter at all. Has anything like that taken place or have the Revenue Commissioners or the Department any view on this recommendation which has been in the Department for some time? Making all due allowance for the fact that the Minister is new to his Department, I know, by reason of his profession, his capacity for absorbing information. I know what it is like to stand outside the door of a court, to be given information and then to go into court after such a conversation. I think the Minister would be quite capable of appreciating the points which were made either for or against it by the Revenue Commissioners. I think, therefore, it is due to the House that when this case is made on this amendment  and when it is a reasonable one, at least he should have some reasons to bring up in reply to the recommendation by Deputy P. Byrne. I have little hope that my recommendation will be accepted. I have made a number of speeches in this House about it and perhaps eventually somebody will do it.
Mr. T.F. O'Higgins: I do not agree that the amendment asks too much. It is just and right that all the expenses attendant on an illness in a family should be allowed as an expense on income tax. I see no reason for saying we will allow 50 per cent or 75 per cent. Commonsense dictates that if it is just to allow it, you allow all of it. I am not impressed by anything the Minister may say about its benefiting a man who has been involved in considerable expense and who may have an income that enables him to meet it. It is only right that it should be allowed.
The Minister has referred to the necessity of having regard to the Voluntary Health Insurance Scheme and the need to maintain its viability. The Minister cannot sell the Voluntary Health Insurance Scheme to us. We started it and it would not be there but for us.
Mr. J. Lynch: I made no point about that.
Mr. T.F. O'Higgins: I know, but I am saying that the Minister may assume that the Party who table this amendment year after year are well aware of the position of the Voluntary Health Insurance Scheme and have fully considered this matter and the likely effect. We are satisfied and those who have examined this matter—if anybody—at the behest of the Government must be satisfied that this will in no way affect the operation and success of the Voluntary Health Insurance Scheme. It appals me somewhat that with the great resources available to him — the Revenue Commissioners, the Department of Finance and all the income tax authorities, all sources that are quick enough, God knows, to act if there is any little loophole in the income tax  code—those who advised the Minister when the Budget came to be prepared had not even alerted him in regard to this particular proposal, which is no new gimmick but something that has been advocated here year in year out by the main Opposition Party, which was considered by the Income Tax Commission and in respect of which there is a report or recommendation by that Commission. What does the Minister say here today? He says that he became alive to the research on this subject only when this amendment was tabled.
I know the Minister has a great deal to do and to think about, and I suppose at times a great deal to worry about, but that is why he is supposed to have a Department to assist him and a bureaucracy available to him. Why did somebody not advise the Minister in a matter of this kind? They were quick enough with Resolution 18 (c) which was slipped into this House but no attempt has been made to brief the Minister on this particular proposal. We should not even have heard anything about the matter, were it not for this amendment, apparently. That is not good enough for the Dáil or for the country.
Are we to have a situation in which we speak here in the nation's Parliament advocating something and when the debate is over, it is forgotten? The file has been opened and is closed and dusted and put on the shelf in final form and that is the end of it. Surely if there is any basis for yearly stocktaking in relation to finances and the taxing system, one good argument in its favour must be that there should be an examination from time to time as to the equity of the system and the nature and extent of the allowances available? It is hard to understand where there is a case, as we have now, in which a particular proposal has been advocated for years and considered, not by any political body or anything of that kind but by an independent body set up by the Government and where that body has recommended its adoption and the Government some three years ago said: “Yes, we shall do something”, that, nevertheless, a new Minister for Finance  comes in, brings in his Budget, prepares his Finance Bill and is not even briefed in regard to this proposal. He says he became alive to it only when this amendment appeared. If that is to continue, there is very little use in our advocating these proposals here.
We regard this as elementary justice, something that any society seeking to provide more equitable conditions for its people would have seen in operation a long time ago. But, apparently, the Minister is adopting an attitude of intransigence in this regard.
He said one thing which I cannot allow to go without comment. He said that Deputy Sweetman was not the only person who did something in relation to the cost of illness. He mentioned his predecessor, Dr. Ryan. Just for the record, I want to remind the House that when I was Minister for Health and Deputy Sweetman was Minister for Finance in the last inter-Party Government, I had included in the Voluntary Health Insurance Bill a specific section excluding the earnings of the Voluntary Health Insurance Board from liability to income tax and other associated taxation. It was not a provision that should have appeared in a Health Bill and that fact was brought to my notice and the section was then removed from the draft of the Voluntary Health Insurance Bill, on the undertaking that it would be incorporated in the following Finance Bill.
Mr. Sweetman: That is true.
Mr. T.F. O'Higgins: That was the situation. By the time the Finance Bill came to be introduced, Deputy Sweetman was not there to do it and the Bill was brought in by Dr. Ryan. Both Deputy Sweetman and I raised this matter on that Finance Bill in 1957 and we raised it again in 1958, 1959, 1960, 1961 and in 1962. Eventually, in 1963, the section was put into the Finance Bill of that year. And now the Minister comes into the House and says that Deputy Sweetman was not the only man who did anything about voluntary health insurance taxation,  that Dr. Ryan provided this relief for the Voluntary Health Insurance Scheme. I do not thank him for it.
Mr. J. Lynch: I did not put it in that way at all. I just mentioned for the record that Dr. Ryan had made this provision. I did not go into the history of it but in fact I would have thought that Deputy O'Higgins, being the person who conceived the Voluntary Health Insurance Scheme, would have thought of such a relief for it by way of taxation.
In reply to Deputy J.A. Costello, I naturally would have respect for his argument in this matter but I think he is referring to something slightly different in seeking certain reliefs.
Certain relief is allowed for the professional man, no matter what way he is employed; his depreciation allowance, of course, is nil so far as his own machinery in earning power is concerned and I think I can say that Dr. Ryan did something in giving certain relief to self-employed people who provide some form of superannuation scheme for themselves, relief on the premiums. I think more should be done, all right, because I can appreciate, having been self-employed, like Deputy Costello, as he said, that there is grave risk for a man who has no other place to turn to, a man like that who might lose his capacity, mental, physical, or otherwise, through no fault of his own. Nevertheless, this is not what we are dealing with here. But there is always one cogent argument for a Minister for Finance, no matter how reasonable the case made from the other side, no matter how compelling it is, no matter how much in sympathy with the case he may be, that is: where is the money going to come from?
Mr. J.A. Costello: It is always got when you want it.
Mr. J. Lynch: I want to say in reply to Deputy O'Higgins, I do not think he was quite fair when he interpreted my remark as meaning that I became alive to the problem when the amendments were put down. He was not being quite fair to the officials; nor was Deputy Costello being quite fair  to them either in suggesting that they did not brief me. They did, of course, brief me. They gave me a reasonable synopsis of the case made for it and a reasonable synopsis of the difficulty they would have found in applying this particular relief
The main difficulty is, of course, as I have said, the cost, but there are many other things involved. I think I mentioned earlier the assessment of what a serious disease is and then there is assessment of what allowable expenses are. There are many headings under which one would have to examine what allowable expenses are, for example, the cost of an attendant for a blind man, the cost of nursing for the aged, board and lodging in hospital or convalescent home. There are many things that would have to be taken into account and it is not easy to define in such a way as to ensure that the expense involved would be calculable in any particular year.
I am not making an excuse, and I do not intend to do so at any Stage of this Bill, that because I have been so short a time at the job, I do not know anything about it. If I were here for another five years, I would not know all there is in a Finance Bill. But I want to repeat that there has been a great deal of investigation into the suggestions by the Commission on Income Taxation and because of the great deal of investigation, there has arisen the tremendous amount of documentation to which I have referred and which I did not have time to read since the Finance Bill came before the House.
I would not like to write this proposition off for all time, but I will say quite candidly that on the other hand, I would not like to create the impression that I could do something between now and Report Stage. The farthest I could go—and the Deputies will appreciate that I have some sympathy with it—is that between now and next year, perhaps, I could have another look at it. A Finance Bill is unlike many other measures that come before the House. It must come every year. We have Hire Purchase Bills and other kinds of Bills and the  Minister can say that he will look at some proposition “the next time” and the next time may not arise for five years. The next time in a Finance Bill always arises the next year.
The farthest I can go at this stage is to say that between now and next year, I will have a good look at this thing to see to what extent it is feasible, not only from the point of view of definition of serious illness, definition of the types of expenses which could be allowable, but from the point of view of that very important matter from the point of view of the Minister for Finance: what the cost is likely to be.
Mr. Sweetman: Would the Minister like to indicate, even this afternoon, what are the differences he sees between our circumstances here and the circumstances in Australia, where this is operative?
Mr. Cosgrave: Will the Minister have a sympathetic look at it?
Mr. J. Lynch: Yes, I will. I have certain sympathy.
Mr. J.A. Costello: I was about to express my appreciation of the fact that the Minister, at least in my regard, in relation to the points I have put forward, expressed sympathy. I think it was not merely verbal sympathy. I am further compelled to express appreciation of his expression of his intention of giving at least sympathetic consideration to the present proposal.
I want to make one other remark on this Bill. The Minister gave the usual stock reply: “Where is the money to come from?” Every Minister for Finance does that but finally and eventually money is found for everything that is wanted. I want to point to one place where money could be found, or could have been found, for something like either my proposal or the proposal in this amendment or a modification of it.
If you look at Part VIII of the Third Schedule, you will find—and I am reading from the explanatory memorandum—that the effect of that is to save as respects certain instruments  the £25 per cent rate of stamp duty on acquisitions of land by non-nationals. That was put into the Finance Bill. This is the first occasion, reading the Finance Bill, that we find this proposal anywhere set forth. My recollection is—and the Minister will correct me if I am wrong—that there was no mention either in his Financial Statement or in any discussion of Resolutions of the proposal to abolish this £25 per cent duty on non-nationals. It comes here in the Finance Bill for the first time. I suggest it is bad practice for the Minister for Finance not to have mentioned this proposal, not to have drawn the attention of the House in his Financial Statement to the fact that he was going to abolish the £25 per cent rate of duty on non-nationals.
That was a proposal that gave rise to considerable controversy in the House and outside. There may have been people who wanted to abolish or reduce the stamp duty but the general view was, so far as it did give effect to very vocal opinions on this matter, that it was desirable in the public interest that these non-nationals should be further restricted. I understood that the whole idea of the £25 per cent was to restrict non-nationals. There may have been debate as to the advisability of doing that or not.
The point I want to make is that something is going to be given away in the Schedule to the Finance Bill which was not told to the House or the people by the Minister in his Financial Statement. That was a departure, in my submission to the House, from practice. The people ought to have been told through the Financial Statement that this was to be given up and that, therefore, some additional tax or some alternative tax would have to be secured in order to balance or to provide for the loss incurred by abolishing this £25 per cent duty.
As this is a matter I intended to raise later on in the House and will raise in its appropriate place, will the Minister tell me, or tell the House, if not now, at some stage, what will  be the effect of abolishing this £25 per cent tax upon non-nationals in reference to purchases of and dealings in land? What amount of money is involved? The House is entitled to that information. The House should have been given that information when the Minister's proposals for taxation were being considered. I do not see why the Minister should put in the provisions about taking additional revenue from estate duty on widows' pensions and at the same time abolish this tax on non-nationals.
An Leas-Cheann Comhairle: I am afraid we are going away from the amendment.
Mr. J. Lynch: May I reply briefly to the Deputy? The purpose of the £25 per cent rate of stamp duty on land purchased by aliens was to be a deterrent and it was found to some extent that it was not a sufficient deterrent. Certainly, there were speeches from the opposite side indicating that land was being acquired at a considerable rate by non-nationals. Therefore, the £25 per cent duty was not a deterrent. Subsequently, the Minister for Lands, in the 1965 Land Bill, now an Act, took adequate powers and, therefore, the power taken as a deterrent in the Finance Act was no longer necessary. I cannot say offhand what the cost is or what is the income that would have been obtained by this £25 per cent stamp duty but I do not think it would be considerable, certainly nothing in the context of the kind of relief that this amendment would seek to obtain.
Mr. J.A. Costello: Would the Minister endeavour to obtain that figure?
Mr. J. Lynch: I have just got a note that there is no loss of duty at all involved.
Mr. T.F. O'Higgins: Not one non-national paid £25 per cent?
Mr. J. Lynch: I will check that.
Mr. T.F. O'Higgins: I suggest that the Minister should send that note back
Mr. J. Lynch: I will check.
Mr. J.A. Costello: We will swallow a great deal but we will not swallow that.
Mr. J. Lynch: I will check. In any event, it is only fair to say that the purpose of the £25 per cent stamp duty was not revenue raising.
Mr. Sweetman: That is right.
Mr. J.A. Costello: The Revenue did not object to it, you may be sure.
Mr. P. Hogan: (South Tipperary): Would the Minister consider some concession at least in respect of chemists' bills? I put that to him because, when these reliefs were first advanced some years ago in relation to medical expenses, we did not have a turnover tax. That has since been applied to medical requisites. Curiously enough, if a drug is required for a human being, tax has to be paid on it, but, if it is required for an animal, no turnover tax is applied to it. People involved in medical expenses today have to pay a considerable tax on the drugs and medicaments prescribed for them, a tax which was not there four or five years back. The reason for some relief now is all the stronger because (a) pharmaceutical drugs have become so expensive and (b) the people on whose behalf we are seeking a concession have already paid tax. On these two grounds I appeal to the Minister, if he is not prepared to deal in toto with medical expenses, to consider in particular chemists' bills.
Mr. Corish: I am at some disadvantage in this because I had other business with the Minister for Agriculture when this amendment was moved. The proposition seems simple, but I think the amendment bears rereading.
Before section 7 to insert a new section as follows:—
“Where an individual has been involved in expense in respect of illness the amount of such expense shall be deducted from or set-off against any income for the year of assessment of such person.”
 I may be wrong, but I do not know whether or not it is the intention of Deputy Cosgrave and Deputy T.F. O'Higgins to allow every single penny paid in respect of ill-health. I assume that means that every time a doctor is called in and a fee of 15/- or a guinea is paid, that may be deducted for the purposes of income tax. Every Aspro purchased, every drug, every prescription will be a deductible expense.
We must, I think, ask ourselves a few questions if we are to vote on the amendment as it stands. I am concerned about the cost as well. I did not hear the Minister, but he is probably not in a position to say how much this will cost. This will affect a substantial number of people, well over 60 per cent. I am certainly in favour of coming to the assistance of people who can be regarded as having heavy medical expenses. I do not know whether or not that has been specified.
Mr. T.F. O'Higgins: That is the intention. It is in respect of chronic or serious illness.
Mr. Corish: As the proposition stands, and I do not think I am misinterpreting it, it does mean every expense.
Mr. T.F. O'Higgins: We can restrict it.
Mr. Corish: Am I to assume that the intention is to get the Minister to accept in principle the idea of an allowance for heavy, extraordinary medical expenses?
Mr. Cosgrave: Serious expenses?
Mr. Sweetman: I think the Income Tax Commission recommended an excess over a figure.
Mr. P. Byrne: I am very interested in the Minister's admission that he has not studied the documentation on this particular subject. I avail of this opportunity now to point that out to him. He has in his office seven reports from the Income Tax Commission, a Commission established by Deputy Sweetman, when he was Minister for  Finance, which reported several years afterwards to the Minister's predecessor, Dr. Ryan. He also has two White Papers that were circulated. I would urge the Minister to have another look at all the recommendations of the Income Tax Commission. I have no hesitation in saying that Dr. Ryan's approach to these recommendations was ultra-conservative. There were many good recommendations which should have been implemented. They should be implemented now. I appeal to the Minister to have another look at them.
Mr. Norton: I am not in favour of this amendment as it stands. It would be open to all sorts of abuse and all sorts of evasion of income tax generally. Who is to decide when a person is ill and when he is not? Think of all the difficulty in relation to small bills from chemists or doctors' fees. The way to provide for serious illness is through insurance. That is the only method. Insurance should cover everybody on a fair basis, irrespective of whether his income tax assessment is big or negligible. Insurance is the only way in which liability can be covered. I could not support this amendment as it stands. Insurance is the proper way.
Mr. Cosgrave: That is our view, too, but the point is that insurance has been in operation for only a certain number of years and the financial resources of the Voluntary Health Insurance Board are not sufficient to meet the position. Quite a number of people are obliged to meet their own heavy expenses. Only hospital expenses are met by the Voluntary Health Insurance Board. Those who suffer from chronic illness and who require drugs or medicines are obliged to meet the cost of these themselves. The amendment could be restricted to some reasonable allowance as a set-off against income tax.
Mr. James Tully: I am much more in favour of the amendment than my colleagues. The only thing is that I feel it is rather loosely worded. The  intention is very good but the wording is a little unfortunate because it does give the impression that the fellow who goes on the beer on Sunday and goes to the doctor with a sick head on Monday morning and gets a certificate will be able to claim for income tax purposes.
Mr. J. Lynch: Not the cost of his binge, though.
Mr. James Tully: If he got a reduction in income tax, it would help to pay for some of the binge.
Mr. Sweetman: Not after the Minister has finished taxing beer and spirits.
Mr. James Tully: I am thinking of that. He would probably do it on rum. The insured person under social welfare gets only 50 per cent of his contribution taken into consideration for income tax purposes. There seems to be a weakness somewhere in the Bill. There is also a weakness in the amendment. Perhaps, as Deputy Corish said, the Minister would agree to have a look at the section to see if something could be done to meet the wishes of the House. That might possibly provide an answer. As it stands at present, the suggestion appears to be a free-for-all. I would not be in favour of that but something should be done to cater for those who are not covered by voluntary health insurance. There are a number of people who, through no fault of their own, are afflicted with chronic illness who will not be accepted by the Voluntary Health Insurance Board. Again, because of the tremendous increase in hospital charges over the past 12 months, the Voluntary Health Insurance Scheme does not go near covering the entire amount, particularly if a long illness is involved. Taking those points into consideration, there is a good deal of merit in the amendment. Perhaps, for that reason, the Minister might have another look at it?
Mr. J. Lynch: Deputy Tully may not have been here when I said that some of the reasons he put forward  represented some of the difficulties that have appeared and are responsible for my attitude. This would be difficult to administer and it would be difficult to assess its cost. It might be extremely costly, running into millions.
I also said, while I could not give an undertaking that between today and Report Stage I could do something, I would have a look at the whole scene to see what might happen between now and next year. The reason for that is that we will have a Finance Bill every year anyway. Whether I will be there or not, somebody else will be there to have a look at it. That would give a reasonable opportunity to see what the snags are, and they are many. As Deputy Sweetman pointed out to Deputy Tully in regard to headaches and sore toes, the recommendations of the Commission were that the expenses should be not less than £50 per annum per person, up to a maximum of £300.
Mr. James Tully: The binges could cost that.
Mr. J. Lynch: If you had a series of them in a year, I suppose they could cost that much.
Mr. P. Belton: Surely the Minister could give it where a person is out of work ill for a certain period? I am not talking about Aspros and other cures for drink the next morning. But surely the Minister could give it to a person with a serious illness laid up for two or three weeks?
Mr. J. Lynch: Again, the question of serious illness crops up. What is a serious illness?
Mr. P. Belton: If he cannot go to work and cannot get the money, surely he can get this?
Mr. Cosgrave: In the light of the Minister's undertaking to examine this provision next year, we are prepared to withdraw the amendment.
Amendment, by leave, withdrawn.
Section 7 agreed to.
Section 8 and 9 agreed to.
 NEW SECTION.
Mr. J. Lynch: I move amendment No. 5:
Before section 10 (but in Part I) to insert a new section as follows:—
“Subsections (1) and (2) of section 3 of the Finance Act, 1956, are each hereby amended by the substitution of `fifty pounds' for `twenty-five pounds'.”
An Leas-Cheann Comhairle: As amendment No. 6 is related, amendments Nos. 5 and 6, by agreement, may be discussed together.
Mr. J. Lynch: The purpose of amendment No. 5 is to raise from £25 to £50 the income tax exemption in respect of interest on deposits with the Post Office Savings Bank, trustee savings banks and any of the commercial banks. It is proposed the amendment will take effect from 6th April, 1965. This is intended to be a contribution towards greater saving in the community.
In regard to amendment No. 6, the House will remember that under the 1963 Act banks were required to return the names of persons who had money on deposit earning interest of more than £15 a year. I propose to raise that limit from £15 to £50 with effect from 6th April, 1965.
Amendment agreed to.
Mr. J. Lynch: I move amendment No. 6:
Before section 10 (but in Part I) to insert a new section as follows:—
“Paragraph (a) of the proviso to subsection (1) of section 17 of the Finance Act, 1963, shall have effect, where the return is of interest paid or credited during a year beginning on or after the 6th day of April, 1965, as if the reference to £15 were a reference to £50.”
Amendment agreed to.
Mr. P. Byrne: I move amendment No. 7:
 Before section 10, but in Part I, to insert a new section as follows:—
“(1) An individual who is a widow and who has the charge and care of any child of hers and who, in the manner prescribed by the Income Tax Acts makes a claim in that behalf and makes a return in the prescribed form of her total income, shall for the purpose of ascertaining the amount of her assessable income for the purpose of income tax be allowed a deduction from the amount of her total income whether earned or unearned of a sum equal to one-fourth of the amount of that income subject to a maximum deduction of £500.
This is a very simple proposition indeed. It is designed to give some measure of relief to widows having the care of children. It is an established principle of our tax code that earned income up to a certain stage is taxed at a lesser rate than unearned income. Currently, the standard rate of tax is 6/4 in the £; and the earned income rate for salary and wage earners, business people and pensioners is 4/9 in the £ on total income up to £2,000.
Last year, in sections 2 and 3 of the Finance Act, the Minister very properly decided that the time had come to extend the reduced rate to old persons, to an extent, and to persons in receipt of small incomes up to £450, also to an extent. I would suggest to the Minister that, in these days of rapid inflation, he, the Revenue Commissioners and all of us have a very strong obligation indeed to widows and fatherless children.
I feel strongly about this matter because in the past two years no fewer than three close acquaintances of mine were cut off in their prime, leaving large families of young children. There was a time when the person of whom Deputy J.A. Costello spoke, the self-employed person or salary earner who provided insurance for his wife and children in the sum of £5,000, was doing pretty well by them. Nowadays, with the astronomical cost of living, that is not the case. It is only  too true that widows and fatherless children are left in very dire straits.
We are going to fight that particular case with the Minister in regard to death duties later on. At this stage I want to say to him that the person who leaves £10,000 insurance to his widow to provide her and a family of young children with an investment income is, in equity, due the same right of a reduced rate of tax as she would have if she were in receipt of a similar income from a superannuation scheme or pension scheme of which her husband had been a member. Pensions are taxed similarly to wages and salaries. They are treated as earned income. They are given this right. The widow with three children with an income of £1,000 a year, trying to provide them with secondary education and hoping to put them through university, is surely most deserving of our very active sympathy. At present she is taxed at the rate of 6/4 in the £ on all her taxable income. She pays the sum of £83 a year in income tax. She would not have to pay that tax if, instead of being in receipt of an investment income, she was the beneficiary of a pension scheme. It is as simple as that. I would plead with the Minister to accept this amendment in principle.
Mr. J. Lynch: This amendment would create a very specially favourable situation for a widow and a widow is not necessarily in an unfavourable situation vis-á-vis other taxpayers. At the moment a widow does get certain favourable treatment over and above what single people get and the amendment would put her in a very favourable position altogether. A widow has a personal allowance of £259 which is £25 more than a single person gets.
Mr. P. Byrne: A miserable £25.
Mr. J. Lynch: Give me a chance. She is also entitled to an allowance of £100 for a housekeeper and, if she reaches the age of 65, she will be given the age allowance which amounts to one-fourth of earned income up to a maximum of £150. The  Deputy's amendment would give her the equivalent of earned income relief on unearned income up to £2,000 which is putting a widow in a specially favourable position, in a much more favourable position than she is in at present. She enjoys a certain favourable position at the present time and for that reason I must resist this amendment.
Mr. P. Byrne: The Minister mentioned the housekeeper allowance. Take the case of a widow with an income of £1,000 a year. How could such a widow bring up a family and still be able to pay a housekeeper? As everybody knows, domestic staff in this country now cost from £4 to £5 a week so that the person of whom I speak could not employ domestic help. In this country, where we cherish the large family, it behoves us to take out of our legislation all the British laws that we have kept in it. The average family in Britain is 1.3 children and if a father there dies at the age of 45 years or thereabouts, he leaves 1.3 children. In this country a father of that age would leave five or six small children.
He would have hoped to give these children a secondary education and to send them on to the university. The widow whom he leaves would hope to do likewise but how can she do it on an income of £1,000 a year? This is a Christian proposal, a proposal for the relief of widows having the care of children. For goodness sake, let us get away from these British horrors that we have kept in our law so long.
Mr. T.F. O'Higgins: I support Deputy P. Byrne's amendment. The case he has made out is a just one and one which ought to receive consideration from the Minister. We have heard a lot of talk about how dear the widow is to the Government in other forms of legislation where we are supposed to be providing legal rights for the widow. Here is a proposal in which a very definite advantage can be given to the widow and I think it is just that it should be done.
Amendment put and declared lost.
 NEW SECTION.
Mr. Sweetman: I move amendment No. 8:
Before section 10, but in Part I, to insert a new section as follows:—
“Section 21 of the Finance Act, 1922 shall be amended by the addition of the following subsection:—
`(10) No direction shall be given under this section in respect of any accounting period after 1 year has expired from the date of the submission of the accounts of the company to the Inspector of Taxes'.”
The Minister is aware that section 21 of the Finance Act of 1922 was drafted to provide that where, in a private company, sufficient of the profits were not being distributed, the Revenue Commissioners could make a direction that the profits would be subject to tax, and particularly to surtax, in the same way as if they had actually been distributed. That section is being used at the present time, I regret to say, in a manner in which, if it were used in private life, there would be a very unpleasant word to connote what was happening. I am not sure that it is being used with the knowledge or consent of the Revenue Commissioners.
Letters are never written but in telephone conversations which take place in certain circumstances, the investigation branch of the Revenue Commissioners are telling people that it is proposed to go back for a period of from 12 to 20 years for the purpose of giving a surtax direction under Section 21 of the Finance Act of 1922. That conduct is absolutely outrageous and the person making that suggestion knows it is outrageous. It is made only for the purpose of setting up a background and the next sentence in the conversation generally is: “What would you think of setting for such and such a figure?” If that sentence were used outside, in ordinary language it would be described as blackmail.
I want to make sure that this going back over the years, so that people never know when there is to be any form of finality, will end now once and  for all. I accept that there must be a reasonable time in which the Revenue Commissioners must consider whether they will make a direction or not, but it is outrageous that in a family business which is being carried on bona fide in the belief that the Revenue Commissioners are satisfied with the accounts, they should suddenly have someone suggest that because of something that happened years back, it is now proposed to go back for a period of from 12 to 20 years.
Progress reported; Committee to sit again.
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