Wednesday, 22 July 1953
Seanad Éireann Debate
Minister for Finance (Mr. MacEntee): Neither the terms of reference nor the personnel of the Committee have been settled. The terms of reference will generally follow the statement which I made in Dáil Éireann. Owing to the extreme pressure of business falling on the Revenue Commissioners and on my own Department and myself at this period of the year, we have not been able to draft the precise terms of reference and we have not been able to consider the personnel for the committee. I hope that the personnel will be sufficiently representative of both sides and of all interests involved to give general satisfaction. I expect to be able to announce the personnel some time in September.
Mr. P.F. O'Reilly: Might I ask the Minister if he will consider, if not this year at some other time, making an allowance to persons in respect of travelling expenses incurred in getting to and from their places of employment? Up to ten or 15 years ago there was never any great expense incurred by people in doing that, but to-day  many people have to pay a great deal in fares for conveyances between their residences and places of business. In the cities, the residences are a good deal away from the business premises and a considerable sum of money is spent by taxpayers on that account— considerably more than was paid in past years. For that reason, I suggest that the Minister consider making an allowance to people in respect of that cost, so that such an allowance might be deductible in arriving at the net figure for assessment for tax purposes.
Mr. MacEntee: I regret, for the reasons which I explained at some length in December last, I could not consider making an allowance of this sort. If we had the money to spare, I think we could apply it with greater equity in giving reliefs in other directions.
Professor Hayes: Am I correct in thinking that under Section 6, as drafted, when a sound film is 50 per cent. in a language which is not either Irish or English it thereby gets a certain remission of tax?
Professor Hayes: It might lead to very curious results. I could understand if it were Irish, but as this particular section stands it appears to me that a film containing propaganda on something which none of us would like, in a language which was neither Irish nor English, would get a remission of tax.
Mr. MacEntee: That, of course, might happen, but we cannot legislate for particular cases like that. The  general idea here is that the cinematograph can play an important part in facilitating the study of languages. The existing remission, which is a remission of the full 100 per cent., is reserved to films which are of a wholly educational character. The general idea is to encourage people to exhibit films in Irish and continental languages which will be, perhaps, more entertaining than educational.
Professor Hayes: Lest there be any misunderstanding, I want to say that I am entirely in favour of the provision. It would be very important for people here to study, first and foremost, Irish and, secondly, continental languages. This seems to me a provision that would help in doing that.
Mr. Baxter: I welcome the decision of the Minister to clarify the position somewhat on what we discovered the law appeared to be after the passing of the recent measure which was handled by the Minister for Local Government. The matter came up for discussion at our county council in Cavan, when it was discovered that as the responsible authority, the county council was proposing to levy on a number of institutions in the county a tax on their tractors which was regarded as inequitable and not in accordance with what we thought was the intention of the legislation. There was considerable discussion about it at the county council meeting, and no doubt the matter was brought to the attention of the Minister for Local Government, who was responsible in the first instance for having the law as it was then.
I would like under this section to bring to the notice of the Minister a matter which we discussed in this House when the question of taxation on tractors was going through as part  of the recent legislation. The new tax of £31 10s. is the amount imposed on all tractors now in the possession of any of these institutions, the diocesan college in Cavan, the convent, a charity institution in Killeshandra, and so on. All these institutions found they had demands on them to pay tax to the utmost limit on an ordinary tractor previously taxed at £8 where used exclusively for farm purposes. These institutions were called upon to pay £31 10s. for making exactly the same use of tractors as the ordinary farmer across the hedge.
We had a great deal of discussion on this when the Bill was being enacted. I regret that the Minister for Finance cannot see his way to make the law such that tractors in the possession of farmers can be used for the haulage of agricultural products, unprocessed products, whether they are for himself or for his neighbour, at a tax which is now changed from £6 to £8. I want to bring this matter to the notice of the Minister, because he, in the last analysis, is the person primarily responsible.
In the larger farming areas, the farmer uses his tractor for the work of the farm. You will not see that farmer taking out his tractor and doing much hauling on the roads. He may haul his machines from one farm to another but, in a small county like mine, the tractor has been turned into an instrument of transport that is vital to farming and to our economic life. We have built up a scheme for the transport of milk to the creameries in our county. The alteration in the tax on the tractor has meant an extra 1d. or at least an extra ½d. in the gallon to our farmers for the transport of their milk.
Before the recent increase in taxation, whatever the law was, under ministerial authority tractors were being utilised to haul the milk of perhaps 20 farmers to the creameries. Possibly the tractor which hauls my milk to-day is also hauling the milk of 30 other farmers. Undoubtedly it would be in small quantities.
Although we had an increase of 1d. a gallon for milk some time last year we are paying a ½d. of that, and perhaps  a little more, for the haulage of the milk. I do not know how much the Minister hopes to collect from this particular tax, but it is important that he should realise that it presses very heavily on some farmers and on their economy. In small farming counties like Cavan, Leitrim, Monaghan and so forth this is a matter of considerable concern. Meetings between the owners of these tractors, which are used for the haulage of milk to creameries, are taking place to consider the plight in which they find themselves. Take, for instance, the small farmer who has only a few gallons of milk to send to the creamery and who has to go along a lane or a byway for perhaps a quarter of a mile in order to leave that milk on the side of the road where it will be collected by the tractor and taken to the creamery. An extra tax will possibly cause that man to determine not to send his milk to the creamery at all. This increased tax can alter the economic pattern of life in our small farming areas to an extent which, possibly, we do not realise. It is detrimental in its effect to agricultural production and we should study its consequences before we allow our tax policy to create an unhappy situation.
When the Minister for Local Government was piloting the matter of increased taxation on vehicles through this House he said that if I, with my tractor, take my neighbour's pigs or cattle to the fair, nobody will bother about it. In actual fact, that is not so. Men are being prosecuted for doing that very thing. It does not make sense. I am afraid that we shall not make a farmer of the Minister for Finance now, but I am anxious that he should have more understanding and sympathy for the difficulties which confront the farming community.
If I am going to the market or to the fair with six pigs in my tractor to sell there, it is fantastic and grotesque that I cannot take three of my neighbour's pigs or cattle home from the fair without being prosecuted. As I have said already, it does not make sense and yet that is the position under the law as it stands at the moment.
 I urge the Minister to have an examination carried out into the total receipts expected as a result of this extra tax on tractors which farmers use for what I would regard as purely agricultural purposes. If a tractor is used by a contractor to haul concrete blocks, sand, and so forth, I submit that it is a different thing entirely. That work is carried out for 12 or 14 hours every day. Agricultural tractors are not on the roads in that manner at all. It cannot be claimed that they are damaging the roads to the same extent and it cannot be claimed that this high tax on tractors which are used for the haulage of agricultural products for the owner or his neighbour is equitable.
I am glad that the position has been clarified by Section 8. There was considerable concern about this matter in institutions all over the country—institutions which are doing a considerable amount of very good and up-to-date farming. They have been feeling the pinch as a result of this recent legislation. I am glad that the Minister has eased the situation but I think he could profitably go further.
I urge an examination into the total receipts to the Exchequer from this tax on tractors which are engaged purely in the haulage of agricultural products. I am convinced that no case can be made that they are damaging the roads to an extent commensurate with the extra tax which their owners are asked to pay. In addition, I believe it has the effect of discouraging production. Considering the small number of tractors engaged for this purpose, I believe that it would mean nothing to the Exchequer to reduce the tax to what it stands at for ordinary purposes, namely £8.
Mr. Hawkins: We desire to encourage the farming community to utilise the most up-to-date methods and particularly with regard to machinery. I fear, however, that if Senator Baxter's suggestion were accepted by the Minister we should bring about a position about which we have heard a lot in the past, namely, a flight from the land. The tractor is a very important machine on the land, but if we turn the  farmer into a haulage contractor then we shall do the very thing which Senator Baxter, his colleagues and the majority of people cried out in the past that we should not do or encourage.
Senator Baxter complains because a farmer with a tractor cannot take his neighbour's produce or cattle home from the market. That is not so. If a farmer feels that way about it, he can take the whole fair home with him provided that he does not do it for hire. The question is whether you will turn the farmer into a haulage contractor. Our difficulty at the present time is that we have too many persons and organisations engaged in transport without turning the farmer into a haulage contractor.
Mr. Baxter: One must make some comment in reply to Senator Hawkins. I feel he has no appreciation of the problem as it affects rural Ireland. Many farmers have to go a considerable distance along lanes and byways before they can get to the main arteries, and none of our councils are spending much money in putting such byways and lanes into repair. Under the old system, 25 or 30 men brought their milk to the creameries in their carts and had to wait there half the day. Such a system could not continue under present circumstances in view of high labour costs and the difficulty of securing labour in rural districts. Had the tractor not come along to do this work, I do not know what the position would have been like at all.
Senator Hawkins thinks that the use of the tractor for the purpose which I have mentioned would not keep the people on the land. If that is what he really thinks, then all that I can say is that he does not understand what the country is like. Our only hope of keeping people on the land is to be as modern and up to date in our farming methods as possible. That is what our young people want. They do not want the spade, the shovel, the slow, broken-kneed pony and so forth.
It might be better if we were all like that, but we are not; the world is not like that, and you are not going to hold the people back. On the other  hand, I feel that our tax policy in relation to agriculture should be devised in such a manner and after such a fashion as to encourage the maximum production. I believe that the tax we have imposed here is a tax on production. It is unprofitable nationally and discourages the people who would really be progressive. In the last analysis, the amount which accrues to the Exchequer from the present system does not justify what has been done. It is pressing very hardly on a limited number of people in certain parts of the country, and anybody who knows what conditions are like in a small farming county like mine will realise the difference the tractor makes to us in getting our job done in time and the sort of independence it gives.
If my neighbour can take my cattle home from the fair, I should like to be free to go to him and say: “Will you take these cattle home for me?” not because either I or my man will do something in return for him, but because I am able to pay him. Instead of my cattle being made to tramp three or four miles home—one of them perhaps being a springing cow —I ought to be able to pay my neighbour to do it for me, and he ought not to be taxed at the rate of £31 10s. for his tractor. I do not think it makes sense, and it is a handicap all round, a handicap from which the Minister gets very little in the end.
Mr. MacEntee: Senator Baxter has now put this question on an entirely new plane. When he asked me to convey his views to the Minister for Local Government, he suggested that this tractor would be used merely to convey the milk of about 20 farms or so to the creamery. He went on then to suggest that the increase in the motor vehicle duties represented a charge of 1d. a gallon on milk.
Senator Baxter says, quite truly, that I am not an agriculturist, but I think I know a little simple arithmetic, and what I find, having worked out the sum, whether it is right or wrong, is that the total tax on this tractor which is used for general haulage purposes and not merely for the purpose  of hauling agricultural produce works out at 21d. a day, so that if the Senator's argument is based on fact, it would appear that, on the average, the 20 farms he had in mind produce about a gallon of milk a day. I am perfectly certain that it is scarcely worth their while to trek these four or five miles he has been telling us about—down the long lane—in order to send that gallon to the creamery.
The fact is that the moment one begins to examine the Senator's case it collapses. As Senator Hawkins has rightfully said, if the proposal of the Senator were to be adopted, we should convert the tractor owner into a general public haulage contractor and not merely would he carry cattle, but everything else, irrespective of whether it belonged to his neighbour or not, and he would charge whatever he thought the traffic would bear, no more and no less—perhaps a little less to make his terms competitive with those of other people who are already engaged in the road haulage business.
The Senator has spoken as if this were a special imposition imposed upon tractor owners, a sort of penal device, but the fact is that every penny of the money secured from the motor-vehicle duties goes into the Road Fund now and is expended in building and maintaining roads over which these tractors travel. I think it is fair and equitable that they should make a reasonable contribution to the making and maintenance of these roads. They do not carry the whole cost. There are many people who would never have a tractor on the road, many people who would not have even a bicycle on the road, who have to contribute as ratepayers to the maintenance of the road system of the country, and I feel that the people using the roads for profit ought not to jib if they are asked to contribute a fair share towards the construction and upkeep of the roads over which they travel.
Mr. Baxter: I can tell the Minister that I am sending milk to a creamery and he is not, and only that other people are doing the same thing as I am, he would be buying more New Zealand butter and his whole problem with regard to the balance of payments would be more difficult than it is. I am concerned about the serious problem that exists in certain parts of the country where we are carrying on dairying under considerable difficulties. When this tax came through last year, the man who was hauling milk in my district made a demand for an extra 1d. per gallon. He did not get it, and he ceased hauling the milk. After some difficulty, another person was found to haul it, and if that other person had not been there, the problems for the farmers in that area would be such to-day that their milk could not be handled and they would have to change their economy. I am speaking as one of them. That does not apply merely to my own district; it applies to most of my county, and, I should say, to all of it and the adjoining County of Monaghan. I do not know so much about Sligo, but it applies perhaps to parts of Donegal.
The Minister says that the people who use the roads should pay for them. I am not against that, but there are some people living far away from the main roads who are paying considerable rates and taxes and who are getting roads over which practically nothing can travel. Our problem in many parts of the country is to try to keep these there, to keep these areas productive, because there is a feeling and a spirit that if they are away from the main and trunk roads, no one bothers about them. That is the problem which I am confronted with as is every member of a county council— what are we doing for the man beyond the hill? We are all faced with that problem, and, when the Minister talks about these people paying for the roads they are using, I say that they are getting no roads in most cases, and the use they are making of them is so limited that they are taxed out  of all proportion when they are asked to pay.
When the Minister is asked to give an extra 1d. per gallon for milk, he knows how he jibs and what the Minister for Industry and Commerce says, but he has no hesitation in putting a tax, with one stroke of the pen, on the haulage system which will mean an extra charge of ½d. per gallon, anyhow, on the price of milk to the farmer. It is the producer who is paying it and I do not think it is wise.
It is really stupid and the total amount accruing from the tax does not justify the dissatisfaction and discouragement of these farmers. I urge the Minister to look seriously into it. You cannot apply a rigid principle with regard to the imposition of a tax like this on every type of transport vehicle in a rural community. Some study must be given to the interests being served, to the conditions in which the people whose interests are being served live. Unless you can look out on Ireland in that spirit and realise that unless these people so far away from creameries, from main and trunk roads and so on, get facilities, unless you make some concessions to them, their total productivity is going to fall or so radically change that our output, instead of rising, will go the other way, due to this tax policy which I do not think can be justified in reason or common sense.
Mr. Hawkins: One would imagine that the imposition of this duty on tractors at the start deprived the people in these remote areas to which Senator Baxter has referred of good roads and good accommodation and of all the transport facilities that should be available to them, and that it results in a reduction in the quantity of milk delivered to the creameries. That is not so. The removal of this duty will not solve the problem that Senator Baxter put before the House. That is another problem entirely and it is one that is being faced by the Government and by most county councils. I do not know what Senator Baxter's county council is doing in that connection. The Senator mentioned 1d. a gallon for milk. The point is that the amount of milk delivered to the creameries has increased over the last 12 months.
Mr. Hawkins: I have not got the figures. If Senator Baxter could prove that there was a big reduction, then he might be in a better position to make a case. There was a reduction over a period of three and a half years.
Mr. Hawkins: There was a reduction over a period of three and a half years because the then Minister for Agriculture asked the farmers to accept a lower price than they were in receipt of. As a result there was a reduction of 34,000 in the milch cow population and we had to import butter. Now we are in the position that during last year and during this year in particular we have an increase in the amount of milk delivered to the creameries. Senator Baxter has made a very bad case in regard to his suggestion.
Mr. Baxter: Senator Hawkins knows that the number of milch cows was never lower. We spent more on New Zealand butter last year than we ever spent before and the Senator cannot blame his predecessors for that.
Mr. Quirke: I am inclined to agree with Senator Hawkins that Senator Baxter ruined whatever case he had. Judging from his opening remarks, I thought he was not without having a fairly good argument when he told us that it cost 1d. a gallon to bring milk to the creamery.
Mr. Quirke: On reconsideration, Senator Baxter told us that the demand was made on him and his neighbours for 1d. a gallon. What would be far more interesting to know would be what exactly did Senator Baxter and his neighbours pay. I do not think it is right to suggest that it is a general practice in the country for tractors to be used for the haulage of milk to the creameries.
Mr. Quirke: Senator Baxter is not the only one who knows the conditions obtaining in what are called the small farming areas. I think I know as much as most people about this matter. I have seen milk drawn by lorries over reasonably long distances, but the general practice in most parts is for milk to be drawn by horses, mules and donkeys, particularly by donkeys. I do not want to stress a matter which I have often stressed before. The farmers of this country ought to be a little bit more cautions and reserve for themselves some kind of transport other than transport that depends on fuel supplies. I think that Senator Baxter ruined whatever case he had. I hope he will now give us the exact figure per gallon that he and his neighbours eventually agreed to pay.
Mr. O'Donnell: As an industrialist, I feel loath to interfere, but it seems to me that Senator Baxter's point is not so much an economic as a social one. The imposition of this increased tax has changed the whole pattern of life in the countryside. That has a social rather than an economic implication. If good neighbourliness amongst the farmers is disappearing, that is something which you cannot evaluate in money terms.
Mr. Burke: In rising to speak I propose to keep myself as close to rural Ireland as possible. I am not going to New Zealand or any place else. It would be very bad if we conveyed the impression that we are against the farmers helping each other or that when a tractor is coming back from a fair a neighbour cannot bring back a few cattle for someone because it would interfere with some rule or other. I should hate that Senator Quirke would be put down in Tipperary as being opposed to that neighbourliness. Senator Baxter wanted the farmers to be permitted to carry goods for each other.
Mr. Quirke: Senator Burke is not yet old enough to be as deaf as he pretends to be. Senator Baxter did not suggest that one farmer would oblige another by carrying two or three cattle from the fair——
Mr. Quirke: Senator Baxter suggested that the farmers should be permitted to charge for bringing home the cattle. This good neighbourly business is, therefore, a cock-and-bull story. Senator Baxter made a bad case and Senator Burke knows that as well as anybody.
Mr. Quirke: It is just the same as paying a taximan to take you up to Kingsbridge. Senator Baxter and his neighbours are apparently no fools. I could not even imagine Senator Baxter carrying cattle home unless there was an election in the offing.
Mr. Meighan: I should like to support Senator Baxter in so far as the haulage of milk solely for agricultural purposes is concerned. It is only in the past couple of weeks that this matter was brought to my notice in regard to creameries in our own area. Generally speaking, the custom in our area is for a number of farmers who live within a radius of three or four miles from the creamery to join together in parties from five to seven, taking their turn daily. That is the most satisfactory way for the creameries, the suppliers and everybody else. Some years ago you could get a man with a cart and horse to bring the milk to creameries from eight to ten miles distance. Nobody will do that now, largely due to the expense of keeping a man with a slow moving animal.
In addition, the roads are against this form of transport and furthermore a lot of heavy motor traffic is now met with on the roads to the discomfort of the man driving the horse-drawn vehicle. Therefore, to keep up an economic supply, creameries are forced  to look for alternative collection methods beyond the three or four mile limit. This collection by tractor or lorry means a charge of 2½d. or 3d. per gallon on suppliers and when that is deducted from their monthly cheques it reduces their net cash considerably. I strongly urge on the Minister to give very special consideration to such cases as I believe special consideration is justified.
I am putting up the case where it is not economically sound to send the horse and cart to collect the milk from those areas. The ideal arrangement would be for the farmers and suppliers to join together. If seven of them joined in it would mean that each would have to spend only a half day or a day in the week. Of course, that is not possible in the case I have mentioned. In two creamery areas both the suppliers and the management concerned have been in touch with me on these matters. It is for these reasons I am putting these views before the House. I do so sincerely and with no other purpose in view than to see that the thing is done as fairly as possible in the general welfare.
There is one thing that farmers cannot do. You can neither get into a herd of cows nor get out of one in a week. It takes some time. In order to avoid the danger of a shortage of butter later on or in the immediate future the matter should be tackled seriously. I recommend to the Minister and the Government that they give very sympathetic consideration to any case that can be reasonably and soundly put up. I believe there are such cases.
Mr. Baxter: Would the Minister undertake to look into this? If there is a considerable sum of money involved, that is a different matter, but I believe the total sum is so small that it is only a bagatelle. In certain areas it may have a very serious effect on production. I do not think Senator Quirke can be serious that he wants to have all our farmers standing around at the creameries. I know no more depressing sight than to see 30 or 40 farmers on a fine summer day with a long trail of carts waiting at the creamery to get their milk taken in when they should be on their farms.
Mr. Quirke: I repeat that Senator Baxter made a very bad case. I agree that it is probably a good thing from the political point of view to put up some kind of argument, but I am afraid he made a bad job of it. Senator Baxter surely knows that if there is one thing a tractor was not made for it is for haulage along the roads. If they were made for that purpose why are not more of them used? Senator Meighan raised a different matter in regard to a number of farmers employing a lorry——
Mr. Quirke: ——to collect milk along the road. That is all right provided they have a long journey to make, but it can be proved that, even to hire the men on a very good wage and buy everything that has to be bought for the provision of horse transport, horse transport on short haulage is cheaper than any kind of mechanical transport. The big haulage companies in this city and in the City of London have proved that.
From and after the passing of this Act the duty of excise imposed by sub-section (2) of Section 3 of the Finance Act, 1920, shall be charged, levied and paid at the rate set out in sub-section (2) of Section 6 of the Finance (No. 2) Act, 1947, in lieu of the rate set out in sub-section (2) of Section 8 of the Finance Act, 1952.
The purpose of this recommendation is to endeavour to provide that the excise duty which shall be payable on whiskey will be 137/- per proof gallon. That is the rate of duty that existed before  the 1952 Budget or Finance Bill came into force. Consequent on the passing of the 1952 Finance Bill the excise duty on a proof gallon was raised to 176/-. Translated to the smallest and more popular form, perhaps, that means that following the 1952 Finance Act the increased duty on a glass of whiskey was 6d. A glass of whiskey which prior to that had cost only 3/- cost 3/6 after the passing of the 1952 Act.
The endeavour to collect this additional revenue from the whiskey distillery business is a very serious matter. It affects many people in the country. It affects people who have their money in the distillery business; it affects the workers in the distillery business and to a very great extent it affects a number of farmers in the country who produce malting barley. Accordingly there is quite a large number of persons concerned. They are vitally concerned to-day because it would appear that the Minister, by the imposition in 1952 of this increased duty, made a very grievous mistake.
He told us last year in introducing the Budget that as a result of the increase in spirits duty he expected to get £1,020,000 over the yield in the previous years. He was warned here and elsewhere, at the time, that he was making a mistake; that he would not get the extra £1,000,000. He was told that, in the opinion of people who were competent to judge, he would get considerably less than he had obtained in previous years. The warning was quite justified. The people outside his own advisers who gave him advice were quite correct. The Minister did not get his extra £1,000,000. As a result of the additional tax, he received, to be exact, £591,713 less than he had received in the previous year. That in itself should make the Minister pause in his consideration of the reimposition this year of the duty.
What does all this mean? I suggest it means that the money is not to be obtained. This revenue that the Minister expects to obtain from whiskey will not be obtained any longer. The  distillers' business simply cannot stand the imposition of this duty.
If I am right in saying that the business cannot stand this duty, we must consider where we shall go if the duty is reimposed. I would say that we shall cause very serious injury to that industry. We shall cause further unemployment. The Minister will have lost the revenue—revenue in duty and revenue in tax, and the farmers who would have in the ordinary way a fairly settled market for a good cash crop will no longer have that market. All this will follow if this duty is continued.
The Minister will tell us, no doubt, that we cannot rely on the figures of last year as an indication that he will be wrong once more; in other words, that we cannot take the figures of last year as indicating that he will not this year or the year after get his additional duty. He will tell us that one of the reasons for the fall or the poor yield from the whiskey duty was because a number of people withdrew stocks of spirits in anticipation of the Budget. Now, Sir, there is a simple anwer to that claim or that excuse if put forward by the Minister, and the answer is “baloney—nonsense”.
In my view there was very little more whiskey taken out of bond in anticipation of last year's Budget than there was in previous years. Why anybody should seek or how anybody would have the money with which to take out substantial stocks of spirits, I do not know, and I suggest that the Minister will be merely talking nonsense in telling us that one of the reasons why the whiskey duty failed to produce the amount which he said it would was because the spirits were withdrawn by, I suppose the Minister might say, some adventurers. I suggest and I say that no such excuse exists, and the simple answer, the simple reason why the Minister failed to obtain this additional duty, was because the money was not there.
Now, he must consider this position and consider it fairly. Thinking over  this matter I thought that the Minister would have no hesitation in accepting this recommendation and that he would save us the trouble of making speeches but apparently I was wrong in so thinking. I thought that the Minister had only to look around him to see what the position was. Recently a very big distillery concern across the water told us that their profits were down from £21,000,000 to £13,000,000. That firm engaged principally—but I must be fair and make it clear, not solely—in the whiskey distillery business lost in last year £8,000,000. The meaning of that, of course, is that people cannot pay the prices that are demanded for whiskey principally by reason of increased duties.
No doubt the Minister will say that in regard to countries across the water the tax is considerably heavier than it is here. That is so, but relatively our tax, our duty, is as high here as it is anywhere else. Now not merely did that company lose this £8,000,000 but the Chancellor of the Exchequer lost his income-tax and his surtax and he lost duty. The Minister must take heed of what I say, and he cannot honestly say, I suggest, to us as he said elsewhere that he will in this year or next year get the additional duty. The additional duty, I say, is not there to be obtained out of the distillery business, and if he pursues this policy of forcing or endeavouring to force money by means of that duty there can be only one result, the closing down of those concerns with resultant unemployment, resulting loss of duties. I say, Sir, that there is an unanswerable case here for the withdrawal of the present duty and the reimposition of the duty as it was prior to the Finance Act, 1952.
Mr. Quirke: I did not intend to talk on this section, but it strikes me that a deliberate attempt is being made in this country, and not for the first time, to mix whiskey with politics. We have had one statement made by Senator O'Reilly and a statement made to the contrary by the Minister in the Dáil, and I would not be surprised if he repeated it here. I remember seeing in one of the daily papers a statement to  the effect that the whiskey business was nearly a thing of the past. I am interested only in one distillery in this country, that is Locke's Distillery, Kilbeggan, and to my amazement and dismay I saw in the paper that Locke's Distillery was in serious danger of closing down, that they were disemploying a lot of people, and so on and so forth. But in another part of the same paper on the same day I saw an announcement to the effect that an agent of Locke's Distillery had gone out to America and had reported that the prospects for the sale of that whiskey, Locke's of Kilbeggan, in America, were excellent, and that they looked forward to the development of a very good market in America.
If anything is to be done to help any distillery in this country over and above another distillery I would say that the Minister should take serious notice of the fact that there is only one distillery in this country which uses the Irish language on its labels, and that distillery is Locke's of Kilbeggan. I think it is a very creditable thing, particularly for an industry working hard to develop an export trade, that they should give even that small preference to the Irish language, and I suggest to the Minister that he should get in contact with the other distilleries and, as far as he could, encourage them to do the same thing and follow that good example.
Mr. Hawkins: Senator O'Reilly put forward a recommendation to this Finance Bill and when I first saw the recommendation on the Order Paper I expected to hear from Senator O'Reilly some concrete reasons put forward or a case being made for the reduction of the impositions made in the 1952 Budget. All that Senator O'Reilly has done is to put before the House the number of persons interested in this industry—the farmers who produce the barley, the distillers who produce the spirit and the licensed trade who are the distributors. Many of us on this side of the House cannot be accused of being bigoted in our outlook. Many of us know more about this business, as my friend Senator Honan put it on another occasion in this House, from  both sides of the counter, and I think that we probably can speak with a more open mind and with greater knowledge than Senator O'Reilly. I sometimes find it difficult to understand many things, but particularly I find it very difficult to understand those people who are advocates of one form of society and at the same time are industriously engaged in the extension of distribution of a commodity that they so much dislike. That is only beside the point, but it is well that we should have it clarified at the outset.
It cannot be held that the Fianna Fáil Party or Fianna Fáil Government were not anxious at all times that the people of this country, particularly the working people, would have the ways and means to obtain whatever enjoyment they can secure as reasonably as possible. When a respectable member of the Opposition comes to this House or the other House and suggests the removal of a particular duty, it should devolve on that person to put up an alternative. If the duty the Minister has proposed is removed, we must face the responsibility of extracting that amount from some other source. Has Senator O'Reilly suggested what source should be used, in what form this tax should be collected if it is removed from spirits, and how it can be imposed so that it will fall more easily and more lightly on the people? Again, can Senator O'Reilly suggest, as he should, what services should be abolished or curtailed to such an extent as to offset the revenue at present derived from this particular duty? I fail to understand the mentality of members of the Opposition when they come before this House and demand increased services but at the same time demand a reduction in taxation. That is still harder to understand when the increase in taxation is due in no small way to undertakings entered into by the Government of which they were supporters.
As I pointed out here last week, we found that the demand on the people in the way of taxation in 1947-48 was in the region of £52,000,000, and by the end of 3½ years that demand had  increased by no less a sum than £31,000,000. If the money the Minister has to find cannot be found in the way that he proposes to find it, some of the suggestions I put before the House must be seriously considered. To which of the proposals is Senator O'Reilly prepared to give his support?
Senator O'Reilly makes the case that the Minister did not get what he expected. He stated that the Minister expected £1,020,000 additional. We find that in the year 1948-49 £16.1 million was expended on Irish beer, porter and stout and £7.45 million on Irish spirits; and in 1951-52 the £16,000,000 had risen to £17.5 million and the £7.45 million had risen to £9.60 million. That does not take into consideration, as the Minister has already said, the forestalling that took place before the last Budget.
We have at least as many, if not more, ardent supporters in the licensed trade as any other Party and they are as national in outlook. The licensed trade as a body has been national in outlook and has helped every national movement down through the years. No one would suggest that it was because the Minister or someone else was very anxious to carry on some vendetta against the licensed trade these impositions were imposed. What I would like to find out, when I hear so many people plead on behalf of the members of the licensed trade, is who benefited from the forestalling? It must have been the licensed trade.
As regards the brewery industry, great complaints were made that during the war exports of whiskey were not possible, but we had then an accusation against the Government by members of the Opposition, and particularly by the former Minister for Agriculture, that the Fianna Fáil Government deliberately and of malice, at the expense of the Irish farmer, put into the pockets of the brewers millions of pounds because of the fixed price of barley over the war years, and that that was a deliberate act of the then Government in order to put this money into the pockets of the brewers. Now we suddenly hear another suggestion in a short space of 12 months. Of course one can accept  that just as you can accept the statement that the whole bread subsidy was being put into the millers' and bakers' pockets. Afterwards, an inquiry was held and did not prove the accusations then made, and made in particular by the same person.
We have then a suggestion that the recent tax has discouraged the export of Irish whiskey. Of course, it was not possible to have an export of Irish whiskey during the war, but there was considerable trade in the export of Irish whiskey to America in the years before the war and if that trade was lost I have no hesitation in saying that it was lost in no small way through the indifference of the Irish distilleries and those engaged in the industry at home here themselves. I remember seeing at one time, in the distillery to which Senator Quirke referred, Locke's distillery, a particular container. A vast number was made at the time for the export of Irish whiskey to America. Some objection was taken, by the people who controlled the importation of whiskey in America, to the particular container and that had a serious effect on the produce of that particular firm at the time. There were several other attempts made by that firm and other firms engaged in the distillation of Irish whiskey at the time. It cannot be held that it is resulting from this taxation that some serious steps were not taken. Every facility is there for those people if they are anxious to avail of it to help them to get into the American market. We know that the industry here in particular is being owned and run by people who probably are not very interested in the extension of either the home or foreign markets at the moment.
Mr. McGuire: I never cease to be astonished at how the different sides of the House are able completely to close their minds to what, if they met outside, would perhaps be a perfectly reasonable case. One side seems to be able to close its mind completely to the ordinary arguments that prevail in ordinary life. Like Senator Quirke, I did not intend to speak on the section, but I was astonished to hear members of the side which supports  the Government here saying that Senator O'Reilly had made no case for his proposals. There seems to be a sort of automatic opposition even to the most sensible case that is put up on these occasions.
To say that Senator O'Reilly has made no case is ridiculous. He made a perfectly good case and a definite proposal. The definite proposal was that the rate per proof gallon of taxation on whiskey should be altered to the old rate of 137/- as compared with the present-day rate of 176/-. I am only repeating what has been said before, but in view of the case which we heard in favour of the retention of this increased tax it seems necessary for me to do so.
The case Senator O'Reilly made was that the Minister estimated that he would get extra revenue from this higher duty. In actual fact, however, he got less revenue than he got the year before. It is obvious that this extra taxation has done harm to the sale of whiskey and also that it has not achieved its object in getting more money for the Minister. That case has been proved by facts. The estimate upon which the Minister's calculations were based was out by only £1,500,000 but, in our Budget, that is a considerable sum of money. As a businessman, it seems to me not so much that the Minister did not get the extra revenue which he wanted as that harm was done to the industry concerned. It is not how much taxation can be collected; it is how much taxation can be collected without doing any harm to the industries of the country which are the source of our wealth. In this case it happens to be the distilling industry.
Senator O'Reilly has shown two things quite clearly to me. I did not know very much about this matter until I came into the House. He has shown that the industry has been injured, that the price of whiskey is too high, that the sales are falling and that the revenue is not coming in. I do not think that the Minister would lose any face or that anybody would suffer any indignity of any kind by admitting that the experiment did not work and going back to the previous rate of taxation. That would help the  industry to function again and at the same time to yield the revenue which we used to get and which was more than we are getting now under the higher rate of taxation.
Mr. Burke: I do not know any distillers but I know a number of persons engaged in bonding, which is an old-established industry in the town in which I live. They inform me that the present tax is a great burden on them because not alone have they to give credit, in many instances, for the whiskey, but they have also to pay extra money whenever they clear a cask of whiskey out of bond. This higher tax is a very heavy impost on them and makes it difficult for them to finance their business. I think that the licensed trade in general is in a bad state. Most of the independent houses find that their business has contracted in relation to the amount of beer and spirits which they sell and that they are not earning as much money as they did.
It is rather unfair to attack the distilling trade of this country. Between the two wars there was a very large surplus of whiskey in Ireland which it was found difficult to sell. I understand from people in the bonding trade that whiskey was being bought at considerably below what could be regarded as a fair price for it. Irish whiskey is a potstill whiskey. Generally it matures in anything from seven to ten years, before which time it is not sold. You have to have a long period of good trading together with good prospects for future trade, before you can put away a commodity on a seventen years' basis.
The history of bad times between the wars is probably the reason why there is not a more competitive spirit among Irish whiskey distillers. I believe that some form of tax remission should be devised. It is hard to expect a private trader to put away whiskey for a period from seven to ten years. Then, later on, if he is able to sell it to America, and make a profit, another Government will say to him that he was a good boy for  the country and earned any amount of dollars. The experience after the first world war has been that there is no money in putting Irish pot-stilled whiskey on a speculative basis. I think that that is the reason why we have not been able to sell as much whiskey as the Scots. Most of the Scotch whiskey is patent whiskey, blended with a certain amount of pot still. They are able to sell it after probably a year or two years, as against an average of seven to ten years in respect of Irish whiskey.
Mr. O'Donnell: During the earlier part of the debate last week I referred to “reduced consumer purchasing power.” It is obvious that, in this instance, my contention was correct. Nobody blames the Minister because a gamble which he took did not come off. He expected that a certain amount of revenue would come from this extra taxation but it is obvious that he was incorrect.
It seems to me that my fellow Galwayman had an entire misunderstanding of Senator O'Reilly's argument. Senator O'Reilly's argument was that the Minister has priced whiskey out of the market. The lower income group cannot afford to buy whiskey. If the tax on whiskey were altered to what it was in 1947 I believe that more people would be able to buy it, and that, in addition, the Minister would get increased revenue. In that way, one thing would compensate the other. It seems to me that this is class legislation because, though not deliberate, it acts in that way. It has made it quite impossible for the average man in the street to buy a glass of whiskey to-day. If anybody goes to buy a bottle of whiskey for home use he must pay 30/- odd for it. Not many incomes in this country can afford to pay for it at that rate.
I urge that the tax on spirits should be reduced to its former level. We see the ruins of distilleries in different parts of the country. There is one in Bandon and there is another one outside Dublin City. I am quite certain that the Minister is no more anxious than anybody else that these distilleries  should be abandoned. It seems to me that he has made a mistake and that he should not try to defend himself but rather sell out and admit that the gamble has not come off and accept Senator O'Reilly's suggestion. I believe that that would have the effect of bringing increased revenue into the Exchequer and, at the same time, it would enable the working man to buy a glass of whiskey.
Mr. Loughman: I find these figures pretty convincing. In 1948-49 £7.45 millions was spent on Irish spirits. In 1949-50 it was £8.20 millions. In 1950-51, it was £9.05 millions. In 1951-52 it was £9.6 millions and in 1952-53 it was £9.05 millions.
I was somewhat amused while the debate was taking place by the fact that everybody was worrying about the distillers. I did not hear anybody talking about the person who drank the whiskey. Our purpose apparently should be to ensure that the people should have plenty of whiskey to drink and should drink as much as possible of it—we should make whiskey cheap in order that people might drink a lot more of it. I did not hear anybody say that, but if we want to reduce the price of it to the consumer and if the Minister is to get a greater revenue, they must drink a lot more of it. Personally, I think the people are drinking enough whiskey.
Mr. Loughman: At the same time, if people wish to drink more whiskey, I am not going to try to prevent them; but if the Minister is to raise money to meet the expenditure of the nation, it is much better that he should try to raise money on a commodity such as whiskey. If Senator P.F. O'Reilly had suggested some alternative which would provide the Minister with the  £1,500,000 extra which he wants to get, I should be pretty happy about it. At any rate, so far as I can see, the Minister is losing nothing by the increased charge he is making and there is every prospect that in the coming year he will realise his expectations and get the revenue he estimates to receive from the imposition of the tax.
Mr. P.F. O'Reilly: I thought I made it perfectly clear that the Minister had lost nearly £600,000 by reason of the imposition of that duty. I therefore suggested that, if he went back to the old rate of duty, he would be in £600,000, which would help him towards the securing of the extra £1,000,000. Senator Loughman said that nobody seemed to say anything about the public in this matter, but the public have already made clear their protest.
Mr. P.F. O'Reilly: There can be no doubt that the Minister has almost run this business to its end and that not merely will he lose in his effort to get revenue, but will destroy the business altogether.
Mr. MacEntee: I do not know that it is necessary, after the speeches made by Senator Hawkins and Senator Loughman, to say very much in reply to the speeches of Senator O'Reilly and the Senators who have  supported him. The main fact is that, even before the duty on home made spirits was increased, there had been a marked fall in consumption and that downward trend in consumption was not confined to this country. It was world wide; it was experienced in Great Britain, in America and in France, so that, whatever the reason may have been, there was undoubtedly a widespread change in the public taste. I have no doubt that the fact that the duties were increased last year has, if I may say so, intensified that change and therefore I am driven to this conclusion, that, if I were to accept Senator O'Reilly's recommendation, the Exchequer would suffer a very grievous loss. That is the opinion also of my advisers who say that the acceptance of this recommendation would cost the Exchequer in a full year £800,000.
I listened to two speeches from two members of the Seanad who are en-engaged in quite another business, but who supported Senator O'Reilly in a proposal which, as I have said, would cost the Exchequer £800,000. I should like to know from Senator McGuire and Senator O'Donnell how they would propose to recoup the Exchequer for that loss. What alternative tax would they suggest which would give me an equivalent revenue? Would they advocate a purchase tax, a means by which the Chancellor of the Exchequer in Great Britain has succeeded in raising quite a considerable sum of money through the medium of the drapery trades? I am wondering whether that is what these two Senators have in mind when they support Senator O'Reilly—that they are prepared to take on their shoulders a burden which they would like lifted from the shoulders of another industry.
It has been said that the Minister for Finance made a mistake last year in increasing these duties. The only mistake I made was that I underestimated the amount of whiskey which was, so to speak, under the counter, the amount of forestalling which had taken place in anticipation of the Budget of 1951, in anticipation of the  supplementary Budget the Opposition were calling for in the autumn of 1951 and in anticipation of the Budget which I introduced in 1952. On these three separate occasions, there was very heavy forestalling, increased clearances from bond, which were not placed on the market, and the proof of that is found in some figures which I will give the House showing what the clearances from bond were in the first quarters of 1950, 1951 and 1952. They are rather remarkable.
Mr. MacEntee: Unfortunately, we assumed that the withdrawals from bond in these years represented actual consumption. We did not appreciate the provision which the publican was making for the dark days when the excise duty would go up.
Mr. MacEntee: Here are some figures which are very remarkable. In 1949-50, the net clearances from bond of home-made spirits for home use in the first three months were 163,902 proof gallons and, in 1950-51, the net clearances amounted to 166,788 proof gallons. It will be noticed that there was an increase in 1950-51 as compared with 1949-50. I think the reason for that was that the Budget for 1949-50 showed a deficit of over £2,000,000 and everybody expected that my predecessor, as Minister for Finance, would at least try to balance the Budget by increasing taxation since he was bound not to reduce expenditure. But in 1951-52 the clearances from bond in the first three months of the year fell to 161,182 gallons. That was the quarter in which my predecessor introduced his preelection Budget.
 The Seanad will recall that the Budget was introduced on the 2nd May and that the Dáil was dissolved on the 7th May. The clearances in the first quarter of the year 1952-53 fell to 105,904 gallons. Undoubtedly, that was a very severe blow to the Exchequer and represented a very serious loss of revenue but in April, May and June of the present financial year, the quantity of home-made spirits cleared for home use jumped to 155,210 gallons. That is to say, an increase of 50 per cent. over the clearances for the same period last year and I am informed that the clearances for July are showing an increase over July of last year so that we may assume that, now that the publicans have cleared the cellar and have sold the stuff that was under the counter, the revenue from the excise duty on spirits will begin to flow in at a normal rate and that the expectation upon which I counted in this year's Budget, that there would be a substantial increase in the revenue from spirits duty this year as compared with last year, will be fulfilled. I see no reason, therefore, why the Seanad should accept this recommendation of Senator O'Reilly.
Mr. P.F. O'Reilly: The Minister has given us a lot of grand figures with regard to withdrawals. In anticipation of these figures he himself made very serious mistakes. He had the pre-1952-53 withdrawal figures when he was preparing his Budget for that year but apparently he either overlooked them or did not give them proper attention so that at best he made another very serious mistake.
For some reason the Minister seems to have his knife up to the hilt in the publicans. I do not know why that should be the case, particularly having heard Senator Hawkins who says that he and his Party, I take it, have many friends in the licensed trade. For some reason apparently the Minister is very  embittered towards the licensed trade but I think he went beyond the bounds in saying, as he did, that it was the licensed trade or the publicans who made all these withdrawals from bond, anticipated his Budget, put the withdrawals under the counter and in due course sold them with considerably resultant profit. I think that is most unfair and the Minister should certainly not make a statement of that kind.
Mr. MacEntee: I must protest. I did not use the words which the Senator is now ascribing to me. I did not say that the publicans put these things under the counter and sold them at considerably enhanced profits. These are words which the Senator himself has added.
Mr. P.F. O'Reilly: The Minister has cleared up something for us. He has told us that the publicans withdrew the spirits and put them under the counter. He led us to believe that they kept them under the counter until his Budget which increased taxation was passed and then like very strange people, if they had done the strange thing of making these withdrawals, in anticipation of the Budget, sold the spirits at the old price. That is not what the Minister means, Sir. What the Minister means to suggest is that the publicans of this country bought spirits at pre-duty prices, kept them under the counter and later sold them, benefiting to the extent of the increased duty. A suggestion of that kind in regard to a responsible trade, often described as a branch of the Minister's Department, as revenue collectors, should not have been made. That trade does not deserve to be insulted or spoken of in that manner. The fact that these withdrawals were made does not improve the Minister's case.
|Baxter, Patrick F.
Douglas, James G.
McCrea, James J.
McFadden, Michéal Óg.
McGee, James T.
Meighan, John J.
O'Donnell, Frank H.
O'Higgins, Michael J.
O'Reilly, Patrick F.
Ruane, Seán T.
Clarkin, Andrew S.
Farnan, Robert P.
Gorry, Patrick J.
Honan, Thomas V.
Lynch, Peter T.
|Ó Ciosáin, Éamon.
Ó Donnabháin, Seán.
Ó Grádaigh, Seán.
Ua Guilidhe, Seán.
Ó Siocfhradha, Pádraig.
Stanford, William B.
Summerfield, Frederick M.
Teehan, Patrick J.
Yeats, Michael B.
Tellers:—Tá: Senators O'Higgins and Seán T. Ruane; Níl: Senators Hawkins and Ó Ciosáin.
Question declared lost.
Mr. P.F. O'Reilly: I move recommendation No. 2:—
Before Section 9, to insert a new section as follows—
In lieu of the duty of excise imposed by Section 10 of the Finance Act, 1952, there shall be charged, levied and paid on all beer brewed within the State a duty of excise at the rate set out in sub-section (2) of Section 7 of the Finance Act, 1948.
The purpose of this recommendation is to endeavour to secure a reduction of the duty on beer from £9 13s. per standard barrel to £5 12s. per standard barrel. The former figure, £9 13s. is the amount of the duty at present payable. Beer is, of course, porter or stout. In this case I cannot say the Minister was very wrong in his figures last year. The Minister obtained a substantial increase last year in revenue from the additional duty. However, there was a fall in production of beer, not by any means a very great fall but nevertheless a substantial fall. There was a fall in the production of beer of nearly 106,000 gallons.
Undoubtedly the Minister obtained the revenue which he estimated he would have obtained but we must pay attention to the fall in production and we must consider what that fall means. The fall was due entirely to the increase in the rate of duty and if the same rate of duty is to be continued, the fall will not remain as it was in the last year. Production will fall considerably and we may find that unemployment will be the result. The farming community will be deprived of a source of revenue.
Following the increases in prices in the trade as a result of this duty there has been a great deal of unemployment in trade circles. In the licensed trade in this city we had, following the 1952 Budget, a position that was never known or heard of in the licensed trade before. Never until after this Budget had been introduced was there unemployment in the licensed trade. Every publican's assistant available for work had work available for him but since the imposition of this duty there has been a relatively large number of unemployed assistants. Business too in the trade has been exceedingly bad. The revenue that the Minister would have lost in tax from licensed traders would have been, I am sure, very considerable.
For these reasons, I think that a case can be made for the reduction of this duty from £9 13s. to £5 12s. per standard barrel. To be quite fair I must confess that I cannot assist the Minister by giving him some other form of commodity which he can tax. I think that he would get less revenue of course but not very much less revenue if the old rate of duty were restored in place of the rate which he now seeks to reimpose and it must not be forgotten that when we think of revenue yield we must bear in mind that this revenue from the duty on beer is only one part of the general revenue.  Whilst the Minister, as he has in this case, got substantially increased revenue as a result of his additional duty he has caused unemployment, he has caused loss in the licensed trade and loss generally from taxation other than say the beer duties. For these reasons I think that the Minister should reduce the duty to its former rate.
Mr. MacEntee: For reasons which Senator O'Reilly himself hinted at it would be quite impossible to accept this recommendation. It would mean a loss of some millions to the revenue and I do not think that even Senator Frank Hugh O'Donnell would be prepared to face up to that. Certainly it would mean a drastic reconstruction of this year's Budget and a reduction of expenditure upon many objects for which some of Senator O'Reilly's colleagues elsewhere have been clamouring.
Recommendation put and negatived.
Question proposed: “That Section 9 stand part of the Bill.”
Mr. O'Donnell: Might I ask a question on that? When the Minister was introducing the Bill he said that Section 9 was to extend for a further period of three years the temporary exemption from corporation profits tax which hitherto has been conferred on certain public utility concerns like docks, canals, or undertakings which operated railways, and to building societies and the Agricultural Credit Corporation, Limited. I would like if the Minister would give us the reasons for that exemption. An explanation was given in the Lower House but some of us who were not here at the time are not aware why exemption should be given to certain corporations and not to others.
Mr. MacEntee: I fear that I could not give a quite precise answer. Some of these undertakings operate under statutory restrictions as to the dividends which they may pay and as to the fares and prices which they may charge. In so far as building societies  are concerned of course the general idea was to encourage the operations of building societies and therefore they were relieved from the tax. That applies also to the Agricultural Credit Corporation. I have already dealt with the public utility companies, which as I say are the docks, harbours and undertakings which operate railways. They are subject to certain statutory limitations as to the charges which they may make and in certain cases as to the dividends which they may pay.
Mr. O'Donnell: May I take it that where such a utility society or building society does make a profit which would make it subject to corporation profits tax liability that has to be carried forward for the further development of the utility society or undertaking?
Mr. MacEntee: I think that the point the Senator is discussing is very largely an academic one, because there are only two railway undertakings which can possibly be affected, the G.N.R. and the C.I.E., and neither of them is making profits.
Mr. O'Donnell: In view of the explanation, I do not question it any further.
Question put and agreed to.
Sections 10 and 11 agreed to.
Mr. P.F. O'Reilly: I move recommendation No. 3:—
Before Section 12, to insert a new section as follows:—
Sub-section (2) (b) (ii) of Section 13 of the Finance (No. 2) Act, 1947 (No. 33 of 1947) is hereby amended as follows:—by the substitution, for the words “one thousand” in the said sub-section, of the words “two thousand” and the addition after the word “transactions” in the said sub-section of the words:—“In such cases the duty shall be at the rate of one pound for every hundred pounds of the amount or value of the consideration.”
If I may, I would take recommendations Nos. 3, 4 and 5 together. They  relate, I think, to the same matter, and Nos. 4 and 5 would be consequential on the acceptance of No. 3.
An Leas-Chathaoirleach: Any objection?
Mr. MacEntee: No objection.
Mr. P.F. O'Reilly: The purpose of this recommendation is to endeavour to provide that in the case of purchases generally of property where the purchase money is between £500 and £2,000 the stamp duty on the necessary deed of conveyance would be at the rate of 1 per cent. instead of as to-day. In a conveyance of such a kind to-day where the purchase money exceeds £500 and does not exceed £1,000 the duty is on a scale starting at £5 10s. on £500 and going up to £30 where the purchase money is £1,000; between £1,000 and £2,000 the duty is £1 10s. per £50, so that in the case of a deed where the purchase money would be £2,000 the stamp duty would be £60.
I would point out that in cases of new houses for which a State grant is given the duty in such a case is only 1 per cent. on the purchase money. The idea underlying the statutory provision regarding the duty in such cases, I understand, was that in the case of a house in which a State grant was available it was younger people about to get married who were purchasing a house and when they purchased a State grant house the way should be made somewhat easy for them, therefore the duty should be at the rate of only 1 per cent., in cases where the purchase money was over £500.
People about to get married and other people like them might not be getting a State grant house or a State subsidy house. Numbers of people about to set up homes buy an old house where the purchase money would exceed £500 and not exceed £2,000. It is for such a case as that that I wish to provide. I agree that in providing for that kind of house the stamp duty provision I have proposed would be including everybody, whether they were people about to set up a home or people buying a house, say, for resale,  but I think that I have made a case for the reduction of the duty in such cases from 3 per cent. to 1 per cent.
I am not aware as to what the loss to revenue there would be if my recommendation were to be accepted. In my ignorance, I would suggest that the loss would not be very great. A young person buying a house to-day for £2,000 very frequently obtains portion of the purchase money, say, from a building society. He has to pay the cost of obtaining that money, he has to pay his own cost of purchasing the house and to-day, if he must pay 3 per cent. stamp duty and if his purchase money is £2,000, he will have to pay £60 as well as his own costs and his borrowing costs. Very often people find it difficult to provide the money with which to pay the stamp duty and in these days, when we are encouraging people to save—and one way for people to save is for them to purchase their own houses—we should give them every inducement we possibly can. Such an inducement is this reduction in the rate of duty from 3 to 1 per cent. where the purchase money would not exceed £2,000. It would be a very great help in encouraging people to purchase their own houses and for these reasons I would ask the support of the House for this recommendation.
Mr. MacEntee: I could not agree to accept this recommendation for this year. There is a number of reasons for that. First of all, it is going to cost us some money, quite a significant amount, and the Budget has been very tightly drawn, as the Senator knows. In fact, we are relying on securing economies of the order of £3,500,000 over the 12 months to ensure that we shall have a balance.
I have a certain degree of sympathy with the recommendation which the Senator has proposed and I will have it examined in connection with next year's Budget; but it would be quite impracticable to accept it this year. There is a number of reasons for that. One of them is, of course, the inequity which would arise as between a person who paid £2,000 for a house and his neighbour who for one reason  or another might pay £2,050 or even £2,001. The person who bought for £2,000 would pay only £20, while the person who paid £2,001 would pay a little over £60. Apart from anything else, that is one of the reasons why we could not accept these recommendations in the form in which they have been presented. I will undertake, however, to consider these recommendations in connection with next year's Budget. I do not promise anything, but if the money is there it is one of the ways in which we might give some relief to the taxpayer.
Mr. Douglas: Might I point out that it is not usual in the case of recommendations to attempt to go into details in this House? It would not be possible in a case like this to work out the graduations which would be required—£2,000, £4,000, £6,000 and so on—and for the purpose of discussion it would be largely a waste of time.
I am glad the Minister has referred in a sympathetic way to this, but I would like to emphasise that it is very doubtful if it is a good State policy to have a high tax on the purchase of houses at all, particularly under present conditions, when it is extremely difficult to sell houses and when there has been a very considerable recession in building. I would urge on the Minister that it is not a question, as he himself has pointed out, of exempting only everything under £2,000. If there is to be a higher tax on a higher price it should be graduated.
I doubt if anybody really believes we are justified in putting a high tax on the purchase of houses. Indeed, if one could see behind the Minister's mind, one probably would realise he has done it only because of the difficulty of devising a tax which would bring in some amount of money. One of the advantages of raising a question of this kind here on the Finance Bill is that it brings the hope that the publicity given to it now will lead to something next year.
Mr. P.F. O'Reilly: I appreciate what the Minister says and, with the leave of the House, I will withdraw the recommendation.
 Recommendation, by leave, withdrawn.
Recommendations Nos. 4 and 5 not moved.
Mr. P.F. O'Reilly: I move recommendation No. 6:—
Before Section 12, to insert a new section as follows:—
(1) Section 13 of the Finance (No. 2) Act, 1947 (No. 33 of 1947), shall not apply to a conveyance or transfer on sale of lands, tenements and hereditaments where the person becoming entitled to the entire beneficial interest in the property (or, where more than one person becomes entitled to a beneficial interest therein, each of them) is related to the person or each of the persons immediately theretofore entitled to the entire beneficial interest in the property in one or other of the following ways, that is to say, as a step-child, as a lineal descendant of a brother or sister of the husband or wife, and the instrument contains a certificate to that effect by the party to whom the property is being conveyed or transferred.
In moving this recommendation, I would remind the House that last week I protested at the manner in which Finance Acts are amended from time to time, and that nobody has ever made an effort to codify them. On considering this matter over the week-end, I realised why the Finance Acts were amended in such a manner. I found, when I commenced to prepare one or two simple amendments, that it would take me a considerable time to wade through the various sections of the Acts, and I came to the conclusion that the Minister was a very clever man and an excellent tactician. He patched these Acts from year to year in such a way that nobody would be able to amend them to provide that there would be any reduction in revenue. I see now quite clearly why the Acts are amended, as I say, in a patchwork way. They were amended designedly  to prevent people from making it easy to secure cuts in revenue.
This recommendation seeks to provide that in certain cases of conveyances of property duty will be payable only at the rate of 1 per cent. instead of 3 per cent. In the case of transfers between certain relatives, it was provided by the Finance Act, 1952, that the stamp duty on the deeds of conveyances would be at only 1 per cent. instead of at the ordinary rate applicable to a conveyance, 3 per cent. In this recommendation I seek to provide that in the case of a transfer to a step-child the duty will be 1 per cent. I also seek to extend that further, but later on I will not press that, as it may be a bit too wide. The 1952 Act provides that in the case of a conveyance to a step-parent the duty will be only 1 per cent. but strangely enough it does not provide that in the case of a conveyance to a step-child the duty should be like that of a parent. Therefore, I am making the recommendation that the duty on a conveyance to a step-child should be only 1 per cent. instead of 3 per cent. I shall not press the remainder of the recommendation.
Mr. MacEntee: In that event the position is very simple. In fact, stepchildren are covered by the expression “lineal descendant of a husband or wife”.
Mr. P.F. O'Reilly: Of course, that is so.
Recommendation, by leave, withdrawn.
Sections 12 and 13 put and agreed to.
Mr. P.F. O'Reilly: I move recommendation No. 7:—
To delete the section.
I put down this recommendation to ascertain from the Minister the reasons for seeking to refund to persons duty which they will allege was overpaid.
This section provides that persons who at one time did not certify that they were Irish citizens, and accordingly paid 25 per cent. stamp duty on  conveyances, will now, if they give the Revenue Commissioners sufficient information to decide that they could have certified that they were Irish citizens, be refunded the amount of duty overpaid—say, between 5 per cent. or 3 per cent. and 25 per cent. Perhaps the Minister would tell us how many cases are involved and how the particular mistakes were made. The Minister may tell us that people like me make mistakes. That may be so, but I should like to know how much money is involved in this matter.
Mr. MacEntee: I do not think that the amount of money involved is of any great significance. I do not know the number of cases. During the past two years representations were made to me from many quarters that the manner in which the section was drawn left it possible for a person to make a mistake and then, on going to the Revenue Commissioners, the person could not secure any redress for the mistake which he himself had made.
The deed must bear on its face that the person acquiring the entire beneficial interest in the property is an Irish citizen. The determination of the question as to whether or not a person is an Irish citizen may sometimes be a matter of great difficulty. Sometimes, it involves a certain amount of research, and that takes up a certain amount of time. Meanwhile, however, the document has been presented and stamped while this question remained in abeyance. Then, when the doubt was settled in favour of the person acquiring the property, the Revenue Commissioners could not make him any refund. It was never intended that the 25 per cent. rate of duty should apply to any person who could prove that, under our naturalisation or citizenship laws, he was an Irish citizen. In some circumstances, that is not a very simple matter.
Professor Stanford: Would the Minister tell us whether this differential rate holds in other countries besides our own—whether other countries differentiate in this way between buyers from abroad and buyers from home?
Mr. MacEntee: I am afraid I could not answer that. I think that, in some cases, they do, but I only think that.
Professor Stanford: Was this legislation based on that of other countries?
Mr. MacEntee: I did not promote it and, therefore, I cannot say.
Mr. Douglas: The Minister's Party did.
Mr. P.F. O'Reilly: I am not altogether satisfied with what the Minister has told us. Apparently the present position is that some people—perhaps a very few—can claim that they overpaid duty, that they paid stamp duty at the rate of 25 per cent. when they should have paid only 5 per cent. at one time or 3 per cent. at another time. They would have been liable to the lower rate of duty if they had signed the certificate in the deed of conveyance that they were Irish citizens. I cannot understand why any person would have any difficulty in deciding whether or not he was an Irish citizen.
If he was told, as he was bound to have been told, when he was signing the deed: “Look, the stamp duty on this will be 25 per cent. if you are not an Irish citizen. If you are, and sign the certificate in the deed to that effect, the duty will be only 5 per cent. or 3 per cent,” surely, on being told that, the transferee or purchaser would say: “I will have to consider this very carefully” and I think he would be inclined to say, if he had any doubt as to his Irish citizenship, having regard to the difference between the duties: “Surely, I am an Irish citizen”. At least I think he would be inclined in that direction. According to the Minister, there have been cases where people did not sign that certificate.
Mr. MacEntee: Did not make the required declaration.
Mr. P.F. O'Reilly: If I may say so, what a person must do or should do in the deed is to sign the certificate  saying that he was becoming the sole beneficiary in the property conveyed by the deed and that he was an Irish citizen. Why he could not sign that certificate at the time, particularly having regard to what he would have to pay if he did not, I cannot understand.
Mr. MacEntee: In the first place, I am afraid that the Senator underrates the difficulty in some cases of ascertaining citizenship.
Mr. P.F. O'Reilly: I appreciate that there would be difficulty.
Mr. MacEntee: It might require an amount of research. One has to have proof of birth, and things of that sort, in a number of cases. The next thing is that the 1947 Act provided that if, at the expiration of 30 days after the execution thereof, a conveyance or transfer is not stamped, or is not stamped at the higher rate, a sum equal to twice the amount of duty— equal to 50 per cent. of the purchase price—would be payable. Then there were penalties for making a false declaration. Naturally, as the Act provided that, in order to secure the benefit of the lower tax, the instrument must contain a statement that the person acquiring the entire beneficial interest in the property is an Irish citizen, many solicitors would hesitate to incorporate that statement in the document unless they were certain of their facts. Because, shall we say, some solicitors have been more cautious than others in that regard, their clients have found themselves mulcted at the higher rate of duty and had no means of redress. Obviously, that is quite inequitable.
The sole purpose of this section is to enable the Revenue Commissioners to make refunds in cases where Irish citizenship has definitely been established while, at the same time, duty had been paid at the higher rate.
Recommendation, by leave, withdrawn.
Sections 14 and 15 put and agreed to.
 SECTION 16.
Question proposed: “That Section 16 stand part of the Bill.”
Mr. P.F. O'Reilly: On the section, might I ask the Minister why he would not consider, although he is under no obligation to do so, enabling the Revenue Commissioners to accept land bonds which he issued to original holders or allottees in discharge of claims for death duties? I know that in regard to 5 per cent. National Loan the Minister, in pursuance of his contract with purchasers of that loan, must bring in this legislation. In regard to land bonds these are securities which if I may say so were forced upon certain people. They were forced upon people from whom the State, the Department of Lands, had acquired their lands for resale.
Why would the Minister not, in all fairness, accept from original allottees of these bonds—his own bonds—in payment of his own claims for death duties? The Minister will say that there would be a loss to the State should he do so—should he accept bonds at their nominal value in discharge of claims for death duties, but what about the poor citizen who will sustain and has sustained very grievous loss because something went wrong with the Minister's bonds and they are not worth £100 per £100 of the purchase money of his bonds? I should like to hear why the Minister would refuse to give such equitable treatment to original allottees or holders of the bonds. I do not mean that he should give that relief to persons who hold bonds by way of purchase.
Mr. MacEntee: I am afraid there would be no possibility of any Minister for Finance accepting that proposition. This Section 16 is embodied in the Finance Act because it formed part of the covenant upon which the 5 per cent. National Loan was issued. We are giving effect to that. There was no agreement and no undertaking to accept land bonds in discharge of death duties and I do not think the State could undertake such an obligation now.
Mr. P.F. O'Reilly: Might I ask the  Minister why he will not put the required regulations into a Bill of this kind, instead of providing by the Bill that he will make the regulations later on? I do not know that there can be any great difficulty in putting such regulations into the statute and I think we should have them in the statute because we should see what is to be done by these regulations, and should not pass the Bill and enable the Minister later on to make regulations which may in some way—I will not say adversely affect—make it difficult for citizens to have their loan accepted. I refer now to the regulations regarding the acceptance of this national loan. I know that Bills from time to time are passed in this way—providing that regulations will be made by the Minister or as the Minister directs. I do not want the Minister to give me that answer and say that the regulations will be made as prescribed by this Act because we do it in other Acts.
The time has come when we should consider that, so far as possible, we should not allow regulations to be made outside this House and that if regulations must be made they should be embodied in the statute. In 1930, regulations were made in regard to death duties—Death Duties (Payment in Securities) Regulations, 1930. No. 78. They were made by the Minister for Finance and there was nothing very startling in them. They were quite in order, but one of the regulations, regulation No. 5, provided that the Revenue Commissioners should arrange with the applicant the procedure to be followed in each particular case for the transfer of the stock. The position then was that we had a Finance Act providing that regulations should be made and then we had regulations made providing that the Revenue Commissioners would arrange with the applicant about certain procedure to be followed. I never saw what provision the Revenue Commissioners made in pursuance of Regulation No. 5, but should we be surprised if they made a regulation or an arrangement that somebody would arrange that somebody else would do something else? Is that not reducing this legislation by regulation to the ridiculous?
 I should like the Minister to tell us why he cannot put into this Bill these very simple regulations and let us see where we are. Let us know what regulations exist. If he will put them in the Bill, we will know where we are and if he does not do so nobody will know what regulations exist.
Mr. MacEntee: I think the Senator has no experience of the administrative difficulties which would be created and the amount of the Legislature's time which would be taken up if we were to embody regulations of this sort—purely administrative regulations—in a Bill. The Senator has admitted that the regulations issued in connection with the 1930 loan were not in any way oppressive or vexatious. This is merely a matter of administrative convenience. The stock must be transferred to the Revenue Commissioners at a certain time, or possibly not before a certain time, until they are ready to take it, and that is all there is to it. They would arrange that, and the Minister for Finance would have to make the regulations empowering the Revenue Commissioners to fix these dates. The Revenue Commissioners, when they get the stock, will transfer it to the Minister for Finance who will have to make arrangements then, by regulation, once more, having disposed of the stock or held it, to pay the Revenue Commissioners cash for the stock they have surrendered. These are the sort of things that are going to be dealt with by regulation and surely the Legislature does not want to be put into what is the proper field of the Executive and have all these regulations set out in black and white. We would simply be cluttering up the Statute Book with unnecessary verbiage.
Question put and agreed to.
Sections 17, 18, 19 and Title agreed to.
Agreed to take the remaining stages now.
Bill reported without recommendation and received for final consideration.
 Question proposed: “That the Bill be returned to the Dail.”
Mr. P.F. O'Reilly: Section 13 deals with certain exemptions from stamp duty in the case of certain receipts for money. The practice has grown up recently whereby people when making payment by cheque have endorsed on the back of the cheque a form of receipt. In order that that cheque may be negotiated the payee must endorse it as a receipt by signing it over a 2d. stamp. The banker of the drawer of such a cheque will not negotiate the cheque unless it is properly stamped.
Frequently it is necessary to issue a receipt in respect of the payment for which that cheque was given, and it occurs to me that in such case two stamps would have been used in connection with the same matter. The cheque must be stamped because the bank will not negotiate a cheque unless it is properly stamped and endorsed, and if you do not stamp the receipt you subsequently issue for the amount of the cheque the Revenue Commissioners may call upon you for £10 as a penalty for not stamping a receipt. I should like to know if I am right in thinking that in a case where the cheque was stamped as a receipt, a subsequent receipt for the amount of the cheque must also bear a 2d. stamp.
Mr. MacEntee: No, no. The cheque is not stamped as a receipt. It is stamped as a cheque and it bears the ordinary stamp duty which cheques bear. If there was a form of receipt on the back that form of receipt has to be stamped also.
Mr. P.F. O'Reilly: Perhaps, I did not make myself clear I know that a cheque, as a cheque, must bear a 2d. duty stamp. A practice has grown up recently of issuing a cheque with a formal receipt endorsed on the back and bankers will not cash these cheques unless the endorsement is duly receipted over a 2d. stamp. I ask if I am right in thinking that, notwithstanding the fact that the endorsement on the cheque was stamped as a receipt, if another receipt is given for  the amount of the cheque that other receipt must bear a 2d. stamp?
Mr. Douglas: The question does arise in business. If a copy of the receipt is given it should not be necessary to put a stamp on it. In other words, the copy is a certificate that a receipt was issued. One is not entitled to a receipt if the original is lost and I do not think it is, in fact, legal that a stamp should be put on a copy.
Mr. MacEntee: The difficulty is that we are trying to discuss in the Seanad matters that might be the subject of procedure in the courts. I am asking the House to have regard to the limitations of the Minister for Finance who happens to be a layman.
Mr. Baxter: He has technical advisers.
Mr. MacEntee: No, no. My technical advisers cannot give specific opinions upon general cases. If Senator O'Reilly has experienced any difficulties in this matter, I suggest that he ought to enter into discussions with the bankers about it.
Mr. Douglas: It is not a question of the bank. It is a question where the drawer of the receipt has to give a second one and whether he is liable to stamp it. Provided it is made clear that it is a copy and not the original a person has no obligation to put a stamp on it. I am not asking the Minister to interpret the law. I think it is reasonable for me to say what is business practice. I should like to know whether Senator Summerfield agrees with me.
Mr. Summerfield: I do not think there is any difficulty.
Question put and agreed to.
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