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Dáil Éireann - Volume 29 - 25 April, 1929

In Committee on Finance. - Financial Resolution No. 5—General.

Minister for Finance (Mr. Blythe): I move:

That it is expedient to amend the law relating to customs and inland revenue (including excise) and to make further provision in connection with finance.

Mr. MacEntee: I presume, in the consideration of this motion, we may discuss the financial policy and the financial position which the Minister for Finance put before the House yesterday. On that supposition, may I say to the Minister that there is one thing which the study of his financial statement makes quite clear, and that is, that he cannot be charged with the crime of which another Minister in another place has been charged—he has not produced what may be called an election [915] Budget. The Budget which the Minister for Finance has introduced is entirely unrelated to the economic conditions and circumstances of the State. The speech in which he sponsored it shows that the Minister is wholly unaware, or if aware, is misreading the signs of the economic distress which have manifested themselves in the Exchequer returns for the year which has just ended.

In the course of his speech, the Minister for Finance, reviewing the results of that year, said: “The figures for the year, as a whole, may be viewed with satisfaction. They indicate that there is no great reason to fear a shrinkage, of the yield of taxation in future.” The Minister is assuredly an optimist, a very Mark Tapley, amongst Ministers for Finance, if, after studying the facts, he can come to that conclusion. For what are the facts? Last year, the Minister by shortening the brewers' credit, by increasing the sugar duty, by the extension of the duty on motor vehicles and tyres and by an alteration in the date of the income tax payments under Schedule A. proposed by further taxation to secure £856,000. He made one or two minor alterations in the existing duties, but, with these unimportant exceptions, the existing duties remained as they were before.

In the year 1927-28, these duties produced £20,396,000. With the new impost, therefore, the tax revenue if there were no shrinkage should have attained to the old figure, plus at least £856,000. The actual tax revenue has fallen far short of that sum. It is only £20,880,000, where it ought to have been £21,252,000. The new taxes of the Minister, therefore, have scarcely yielded half of their anticipated return. And why? Because despite the statement of the Minister there has been a shrinkage in the yield either of the old or of the new taxation—a shrinkage which will continue because of the diminishing capacity of the people to pay.

When the Minister introduced his surprising proposals to the House [916] last year to increase the burden upon the taxpayers and upon industry generally by no less than £1,150,000, we warned the Minister that he was foredoomed to failure. We pointed out that the country was already groaning under a load too heavy for its capacity, that some of the taxes like excise, which in a prosperous community would annually show an increased yield were, on the contrary, giving a diminished return, and that it was not within his power, or the power of any other Minister, to collect an extra million from our impoverished people. Our warnings have been justified. The Minister has failed to collect that £1,150,000. He has not collected half that sum. He has collected little over one-third, and instead of having £1,150,000 more revenue than in 1927, his total tax revenue only increased last year by £484,000. The pitcher will go to the well too often, not because the pitcher in this case is in any danger of being broken, but because the well is run dry.

This Budget is the seventh for which the Minister has made himself responsible in this House. Six years is a long time to remain in charge of the finances of the State—long enough even for a Minister for Finance who put his signature to that document which has been termed the Ultimate Financial Settlement to learn a little about the financial position of this country, and to adapt his financial policy to the poverty of our people. But our Minister is above such lowly learning. As he himself admitted, I think this time last year, he has never even made an attempt to estimate what was the taxable capacity of our people. An over-riding economic factor like that comes not within his purview. Economists may discuss it, statisticians may calculate it, but let them not obtrude the result of their unseemly labours upon the attention of the Minister. With his head in the air and his hands in the pockets of the people, the Minister, year after year, has lived in a tax-gatherer's paradise, where cess is piled upon cess without cessation and not even the income-tax collector is vile.

[917] The Minister, as I said in the beginning, is an optimist. I have heard a pessimist defined as a man who has to live with an optimist. Year after year, the Minister for Finance has come to the Dáil chanting his litany of dreary optimism. Year after year he has come to us and told this Dáil and our people that we have turned the corner. This year he says, “Last year certainly we did not do as well as we had expected because of that disappointing Mr. Churchill, who insists that 20/- are not worth a pound,” though Deputy J.X. Murphy has already told us, through the Press, that a pound is worth 20/-. The next year, please God, things will be a little better. “In the meantime, let me take this little extra from you; it is a mere trifle, a tax this year upon transport which will increase the cost of living upon the farming community, but after all in this State, under my administration, what is there left to live for?” As I said to this Dáil, he said in effect so often before, “In every day and in every way we are getting better and better.” I would paraphrase this, and say, “In every way and every day, under the present Minister for Finance, this country is getting poorer and poorer.” After six years of the Minister's optimistic Coueism our people, this once joyous Irish nation, have been turned into a nation of pessimists without hope. That is what the Minister for Finance has made of us. How can there be hope when life's burdens become intolerable, and the burden of taxation upon the people has become intolerable, as a consideration of some factors which I am now going to place before you will show?

Last year the Minister collected £20,880,000 or £7 1s. 5d. per head of population in this State; this is to be compared with the corresponding figures of £6 1s. 9d. for the per capita taxation in the Six Counties and £15 2s. 4d. for the same quantities in Great Britain. Now, no proper statistical investigation has been made, not even by the Minister for Finance, who ought to have it made, as to what the total net [918] income of the community of the Twenty-six Counties may be. Some people have put it no higher than £110,000,000. I saw an authority, admittedly an authority on questions of Irish taxation, at any rate, the other day in the Press put the figure at not higher than £76,000,000 and produce very sound reasons to support that estimate. Now, I put it at the middle figure between those. I will say that the national income of our community is not more than £90,000,000, just over £30 per head of the population. I want you now to make a comparison between ourselves and our neighbours in the Six Counties. In the Six Counties, though the population there is not one-half of the population of the Twenty-six, nevertheless, the total import and export trade of that community is greater than our total trade. Furthermore a greater proportion of their population is engaged in commerce and industry. I say, if we take £30 per head as the average net income of a citizen of the Free State, then the average net income of an inhabitant of the Six Counties should not be put at less than £45 per annum. We see, therefore, that in the Twenty-six Counties, though our people only enjoy an income of something like £30 per head per annum out of which the Minister takes £7 1s. 5d. in taxation, in the Six Counties, where they enjoy an income of £45 per head per annum, only £6 1s. 9d. is taken in taxation. We will go further, however, and compare the respective per capita taxations and incomes in those districts with the figures for the same quantities in Great Britain. A very eminent statistician, on a most conservative basis, has estimated that the net national income of Great Britain is £3,900,000,000, or over £86 per head of the population. Therefore, we have this position, that in the Twenty-six Counties, out of a per capita income of £30, £7 1s. 5d. is taken each year in taxation. In the Six Counties, out of a per capita income of £45, £6 1s. 9d. is taken each year in taxation, while in Great Britain, out of a [919] per capita income of £86, £15 2s. 4d. is taken each year in taxation.

So much for the individual position; let us apply those figures to the family life in each community, the family life which is the basis of those communities. Upon that basis, and assuming that our families in the Twenty-six Counties are larger than the families in Northern Ireland and that those families in Northern Ireland are a little larger again than the families in Great Britain, assuming that the average size of a family here is five persons, and in Northern Ireland 4.5 and in Great Britain 4, we get this extraordinary position: in the Twenty-six Counties out of an average family income of £150 per annum, £35 7s. 1d. is taken in taxation. In the Six Counties, on the other hand, out of an average family income of £202 per annum £27 7s. 10½d. is taken in taxation, and in Great Britain out of an average family income of £344, £60 9s. 4d. is taken in taxation. But the true criterion of taxation, the true standard of value on which it must be judged is not what is taken, but what is left, because that residue is the fund out of which has to be provided, after the Governmental services have been provided for, the whole of the physical, intellectual and spiritual needs of the people. The smaller that residue the more inadequate the provision, and that fact invests with a peculiar poignancy the following figures, which give the respective residues left for family needs in the three administrative territories after the tax gatherers have visited those families. In Great Britain there is left £283 10s. 8d. to support four persons. In the Six Counties there is left £175 2s. 1½d. to support a family of 4.5 persons, and in the Twenty-six Counties there is left £114 12s. 11d. to support a family of five persons. Now, it is a commonplace fact accepted by practical British economists that Great Britain is at present taxed to the limit of her capacity to pay, but if Great Britain, that busy and opulent community with the resources of half the world at her disposal, [920] is overtaxed under a Budget which leaves to each average British family the sum of £283 per year to maintain four persons, how much more must our community here be overtaxed, the community in the Twenty-six Counties with its territory mutilated, dependent practically solely upon one industry and upon the remittances which filial affection compels our emigrants to return, when there is left to us only £114 to maintain a family of five persons?

On the basis of the figures that I have given, is it not clear and do we not begin to understand why every Government official is regarded in this country practically as an agent of famine or pestilence? For after his colleague the tax-collector has visited a family there is left £22 18s. 7d. to provide each person in it with food, clothes, shelter, coffins and graves. I would like at this moment to point out that I have been considering average conditions, and that the figures which I have given by no means represent the worst conditions which prevail. They represent the mean of a considerable number of quantities, and in calculating them the incomes of the few who are very rich, the incomes of the greater number who are in comfortable circumstances have gone to swell the account and to raise the average far above the level which generally prevails among the poorer classes of our community. No one will contend, therefore, that a family of five persons can maintain itself, in even the most meagre comfort, on an income of £114 per annum. What, there fore, are we to say to the hundreds of thousands of our people whose incomes are below that line, and whom the Minister for Finance taxes with the rest? In what condition are these, the poorer classes of our community, to live? What hope have they for themselves? What hope can this State repose in them that their children will grow up valuable citizens of this State? Yet it is from these that the Minister for Finance has drawn an increasing proportion of his tax-revenue each year. These people; [921] except in the most roundabout and obscure way, do not pay income or property tax. They do not pay stamp duty or estate duty or motor vehicle duty, but they do pay customs and excise, and while the proportion of the total revenue secured by taxes on income, profits and property fell from 26.9 in 1926-7 to 22.7 in 1927-28 and to 22.4 in the year which has just closed, and while in 1928-29 the percentage contribution from the stamp duty was only 1.95 as against 2.21 in 1926-27, the revenue collected by customs and excise was 64.2 per cent. of the total tax revenue in 1926-27; it rose to 65.3 per cent. in 1927-28, and last year it was 66.8 per cent.

With those figures before us, figures which clearly demonstrate that the cost of living has every year become greater for the very poorest sections of our community, is it any wonder that the large mass of our people are living in indescribable, unimaginable misery? Is it any wonder that, year by year, our population is declining and that our youth are fleeing our poverty stricken shores, that there are districts in the country where within the last ten years—and I speak with a certain personal knowledge of that —there has not been even one marriage? I have said that the revenue derived from customs and excise duties has represented a larger and larger proportion each year of the total revenue and I know it will be said that such increase has been largely occasioned by the import duties which have been imposed from time to time. I am prepared to admit that. But I do not hold, and I am not advocating, that such import duties as afford protection to native industries should be reduced. On the contrary, I wish them to be maintained and strengthened where need be to make them really effective. At the same time, I say that since the State is deriving a growing proportion of its revenue from such duties, so also the State by making an increasing provision each year for social services, or by lightening in some way, if such be possible, the burden of taxation upon the poorer [922] classes should compensate for the increased burdens cast upon them.

I will return now to the Minister's statement that the figures for the year as a whole “indicate that there is no great reason to fear a shrinkage of the yield of taxation in future.” I would like to ask the Minister if when making that statement he had before him and had studied the figures giving the yields of the stamp duties since 1925-26. If he had them before him, what significance does he attach to the position there indicated? I select the stamp duties because they belong to that class of taxes which are most generally accepted as economic indicators, and the return derived from them in any one year may be said to represent the value and the volume of the business done by the community in general during that year.

What is the economic position, what are the general conditions of business and industry, what is the trend of those conditions as indicated by those duties? In 1925-26 the stamp duties yielded £506,888; in 1926-27 the yield fell to £464,398; in 1927-28 it rose a little to £480,901, but was still below that of 1925-26; and in 1928-29, the year just ended, it fell again to £474,000. A heavy fall in 1926-27, a momentary revival, a flash in the pan, a flicker in 1927-28, a further fall in 1928-29. That is the history of the stamp duties since 1925-26. What does that indicate but a febrile, an uncertain, an unhealthy condition in business and industry generally? And yet with these facts within his knowledge—I presume they are within his knowledge: they ought to be within his knowledge and patent to his understanding—the Minister dares to come to this House and say: “The figures for the year as a whole may be viewed with satisfaction. They indicate that there is no great reason to fear a shrinkage in the yield of taxation in the future.” Nor are the stamp duties the only taxes which deride the optimism of the Minister. The yield from income tax is down by £13,000; from the corporation profits tax by £34,000; [923] and from the estate duties by £241,000.

The decrease in the yield from the estate duties is worth considering for a moment. In so far as they are a tax upon the property which passes upon the death of an individual, and in so far as such property may be said to have been accumulated by that individual during his lifetime or by his progenitors during theirs, they are a tax on savings. Any decrease in the yield of such taxes, therefore, unless accounted for by a decrease in the rate, or unless the preceding year's or years' has been abnormally inflated by a high and beneficent mortality among millionaires, is of ominous significance. Let us, in the light of the figures given in the published reports of the Revenue Commissioners, examine the position as disclosed by those estates which came under review of the Revenue Commissioners in connection with these duties. I have referred to abnormal yields which are sometimes obtained from these taxes. Such yields are occasioned by the deaths of the very wealthy, and while they may make one year compare unduly favourably with another, they do not make a fair presentation of the picture as a whole.

Let us, therefore, leave out of consideration for the moment the larger fortunes altogether, and confine ourselves to a consideration of the smaller estates. They are by far the more numerous, and, therefore, they give a truer representation of the economic condition of the community as a whole. The figures to which I propose to direct attention are the numbers as analysed by the Revenue Commissioners of the smaller estates which fell liable to estate duty in the years 1924-25, 1925-26, and 1926-27, respectively. These are as follows:—Of estates the net value of which exceeded £100, but did not exceed £1,000, there fell liable to duty in the year 1924-25, 1,541; in the year 1925-26, 1,523; in the year 1926-27, 1,412. Of estates the net value of which exceeded [924] £1,000, but did not exceed £5,000, there fell liable to duty in-the year 1924-25, 1,088; in the year-1925-26, 1,185; in the year 1926-27, 1,063. Of the smaller estates whose total value did not exceed £300 gross, there fell liable to duty in 1924-25, 2,234; in 1925-26, 2,277; and in 1926-27, 2,104. Of those estates whose gross value exceeded £300, but not £500, there fell liable to duty in the year 1924-25, 1,066; in 1925-26, 962, and in 1926-27, 894. I hope the House has noted the continuous decline in the number of estates which fell liable to estate duty between the years 1924-25 and 1926-27. In order to emphasise the import of these figures, I would like to quote for the House a statement made by the Revenue Commissioners in the course of their report regarding estate duties. “Generally speaking,” they say, “the statistics for any year furnish a fairly reliable-indication of the aggregate wealth in private hands above the limit of £100.”

As I have said, it will be noted that in the year 1926-27 the number of estates which were of such value as to come at all under the notice of the Revenue Commissioners was less than in 1924-25. What are we to conclude? First, that there has been a marked tendency for the distribution of wealth to narrow and constrict itself. Second, a marked absence of any significant countervailing increase of wealth in the possession of the less wealthy, the if I may call them so, lower middle classes. What are we to conclude from that? The conclusion I put before the House is that the demands of the Minister during those years and the succeeding years have been so exorbitant that the general mass of the people have not been able to meet them out of income, so that their savings have been encroached upon. In short, these figures prove that though a camel may live on its hump, it is going to take much more than the auto-suggestion of the Minister for Finance to make it grow fat on that diet.

To those figures which I have given I will add the following, again [925] by way of emphasis, and I will leave the figures to convey their own melancholy significance. They are the figures of the gross capital value of insolvent estates reviewed by the Revenue Commissioners in the three years which I have already referred to. In the year 1924-25 the gross capital value of insolvent estates which thus came under review was £165,593; in 1925-26 the gross capital value of such insolvent estates— and I assume that as the value increased the number increased—rose to £196,680; in 1926-27 the value was further increased to £238,285. The gross capital value of the insolvent estates tends to increase and the number of smaller estates falling liable to estate duty tends to decrease. Yet the Minister for Finance comes to the House and dares to say: “The figures for the year as a whole may be viewed with satisfaction. They indicate that there is no great reason to fear a shrinkage of the yield of taxation in future.” Such blue-sky optimism may be all very well in the mind of an investor who proposes to place his trust in the prospectus of a company about to manufacture patent mattresses, or in a gentleman who deals with the proprietor of a bucket shop; but it is sadly misplaced on the Government Bench when a community is in such straits as ours.

To sum up, what is the real economic position of the people under the present Ministry? The Minister's financial statement endeavoured to conceal it, but the tax returns are vocal, too loudly vocal even for the clamour of the Government's Press to drown their voices. What do they tell us? I have shown that by comparison with Great Britain and Northern Ireland we are over-taxed, and that as Great Britain is admittedly taxed to the limit of her capacity, we are over-taxed far beyond the limit of our capacity to pay. The truth of that contention is corroborated and upheld by the declining yields from the Stamp Duties; which show that business and industry are declining; by the falls in income tax and Corporation Profits Duty, which show that we are earning less; and [926] by the position as disclosed by the figures in connection with the Estate Duties which I have just submitted to you, and which show that we are saving less. Dwindling trade, smaller earnings, whether wages, salaries or profits, diminished savings and an over-burdened, over-taxed community. In such a situation as that what is the policy which the Minister has set before the Dáil? Not to lighten the burden, not to give the country a chance to recuperate and recover, but to continue to oppress it by maintaining taxation at a level which every factor of economic significance unites in proclaiming that the community is unable to bear. It is because of that this present Budget is entirely unrelated to the economic conditions of the State. We ask the Dáil to take that view of it, and we ask them, irrespective of Party, to press that view here and elsewhere, so that there may be a complete reconsideration of the whole position.

Expenditure must be cut down. That is quite clear from the figures that I have put before you. Economies must be secured. I want to guard myself against misrepresentation, and I mean by that, not economies secured by the curtailment of the social services, but economies secured by more efficient administration. There should be economy in every service which does not yield a due and proper return for the mass of the people who have to pay for it. There should be economies in the Army and in the Civic Guard. As regards the latter, possibly there should not be economies in their scales of pay but rather in their numbers. There could be economies in the trimmings and trappings of the State and the Executive. These must be further and ruthlessly sought. Let there not be a mere skimming of the surface, taking only the scum of waste, a mere saving of £172,000 where at least a million is required, but to change the metaphor, a paring of waste and extravagance remorselessly to the very bones. That is the financial and administrative policy the community requires in its present extremity, and until it has [927] been definitely embarked upon by this or some other Government there is no room, no ground and no reason for optimism. I know it is almost an unheard of thing, but I submit that on the case I have put forward, having shown the real position of the community that we represent here, the Dáil would be quite justified, as a matter of duty and right, in rejecting the Budget set before the House by the Minister, and the Dáil should certainly refuse to accept this Resolution.

Mr. Anthony: I want to direct attention to the position of the smaller income tax payer who pays on wages or salaries. I want in particular to refer to the case of the unmarried man with dependents, for whom little or no provision was made in this Budget, or indeed, in any preceding Budget in the Saorstát. Personally, I accept and acquiesce in the view that every citizen in this State who shares in the privileges, amenities and social services given by the State should shoulder his burdens and bear some responsibility. I do not believe in suggesting for one moment that any single man or other person enjoying a decent wage or a decent salary should be altogether exempt from income tax, so long as we recognise income tax as a source of revenue for the State. I take it that the demand for income tax is a recognised institution here and will continue to be so recognised for a very considerable time. The case as I see it, and as it has been represented to me in connection with a very large number of people in Cork at any rate who pay income tax, is that these have undoubtedly a very big grievance. Assume for a moment that there are 500 persons —and I take it that that is a very fair assumption—of the class that I speak about in the city of Cork. Let us examine for a moment the return given to the Department in relation to the expenditure in making that collection from those 500 persons. I have made out a similar calculation which anybody, even a second standard boy, can easily follow. A [928] man, married or single, with less than £150 is exempt. Now a single man may have £151 per annum. His liability is reduced by one-tenth of £151 which equals £15. He has his personal allowance of £135 and he is taxable only on £1. Therefore, he pays a tax of 1/6. His brother, who enjoys the same salary, but is married, is exempt. I could go on and quote you some other figures which would show very curious anomalies as far as the incidence of this taxation is concerned. I want to point out that in any of those cases which I have quoted the wage earner may be the sole support of the household. This is one of the cases which I consider to be of extreme hardship. No allowance can be made to him in so far as any members of his family may be unemployed, nor even for the father or mother dependent on him, unless, of course, they are incapacitated by old age or sickness, when possibly they may be drawing National Insurance benefit or something of that kind.

But let us come to the question of the expense of the collection and see what proportion or relation the cost of the collection bears to the amount which goes into the Exchequer. Again, assume that 500 single men or women are in receipt of £162 per annum. Now, the total amount received from those 500 income taxpayers would be £412. Many of those people who are taxed, of the class to whom I refer particularly, resent this tax. These taxpayers fight this matter tooth and nail, believing that they should be exempt. A fairly considerable number of these taxpayers live in lodgings and it is very difficult for the officers of the department to trace them. Then a rather laborious process is gone through, and I am sure the civil servants having to do with the matter will agree with me when I say it is a laborious and tedious process. The first steps in the recovery of the income tax from the small taxpayers to whom I refer are: (1) The collector gets a return of the wages of those receiving over £150 from the employer; (2) he gets the address of the employee; (3) he writes them up [929] in a book each year; (4) he issues a return form to each mail each year; (5) if the return is not sent back a second application form must be sent; (6) the making of the assessment; (7) he sends notice of assessment each year by registered letter, and this, of course, in turn involves a good deal of loss of time and labour in the Post Office handling these registered letters; (8) he has to furnish the particulars of the man's liability, and (9) the collector sends a demand, and, if necessary, a second one. All this must be repeated for the second instalment. Of course, there are a couple of other processes to be gone through. The headquarters, I understand in Dublin, then get busy with the demand on this man or woman, whoever the person concerned may be. At any rate I do know that the process has been somewhat slightly altered in the last nine or ten months. Formerly, the employers were threatened that if they did not deduct an instalment of the income tax from the man, according to the amount due, certain steps would be taken to make them pay up. They were required to deduct the amount due by the employee in three instalments. I know that in some places portion of the machinery and plant belonging to the employer was threatened to be seized if the employee did not pay up the instalments due. I understand now that that procedure is somewhat changed, and that the amount is recoverable by a civil bill process. At any rate, I think the Minister himself will agree that this is a rather tedious and laborious process—to go to such trouble in the department concerned in the case of very small assessments. Not alone is this very harassing to the taxpayer, but it must also be very annoying to the clerks in the department. What I would suggest as a remedy is, that where the total income from every source is less than £208 per annum that one-sixth should be allowed off the total as a remission instead of one-tenth, as is the case at present.

Deputy MacEntee has referred to recent legislation in Great Britain, [930] and I understand that one-sixth is allowed there on all earned income, subject to a maximum allowance of £200 to any individual. This, I suggest, would have the effect of completely exempting the unfortunate type of man to whom I refer. I do not suggest for one moment that one-sixth should be given off all incomes, but simply on earned income and on wage-earners whose total income does not exceed £208. As pointed out, the amount accruing to the Department as a result of the harassing tactics pursued against those small wage-earners is not really worth the candle. I agree that this State obviously cannot afford to concede the increased allowance given in Great Britain in respect of children. I agree that it will cost too much, but the allowance that I have indicated in the statement which I made a moment ago would go, in some measure, to meet the grievances of those people. As I am on the question of allowances for children, I may say that in my opinion there is a rather peculiar anomaly in the whole system. Whilst the Minister proposes that an increase in salary during the year would mean an increased tax, I think that he should also make some provision for the married man, say, who has a child born during the year. It is extraordinary that he is not allowed for that. I understand that that is also a grievance with many people who possibly may be assessed for income tax three or four weeks before another lad pops up to make a claim for exemption. I think that something should be done in that case.

I want to suggest that there should be no tax collected from any single or married person whose wage is not £208 a year. I also wish to impress on the Minister that it does not justify the expense and trouble involved in recovering that amount. I am glad, however, to see that the Minister proposes to adopt a principle of assessing the tax on the basis of the preceding year instead of the system which at present obtains. At the same time I want to [931] express regret that he has not made that applicable to the present financial year. It certainly has been rather annoying to find many wage-earners assessed for a year in which many of them; were anticipating, if I might say so, the sack. It is very annoying for a man to receive in a certain month a demand note for money which he had not earned at all. The demand simply forecasted what he might possibly earn. I feel in accord with the Minister in many other things in regard to income tax, while we may disagree on the principle of income tax altogether. One of the audacious things which Cork proposed was that we should have no income tax. Possibly it might be a good thing if we had no income tax. Now, as the Minister has taken one step, or perhaps two steps, to make the whole incidence of income tax a little more acceptable to taxpayers, I hope that he will go a little further in his next Budget and give relief to those on whose behalf I have spoken.

Mr. Shaw: I was intensely disappointed that the Minister for Finance held out no hope that the betting tax on race courses would be removed. My disappointment is shared by every person interested in breeding and racing in the Free State. The Betting Committee, knowing the urgency of the matter, sent in an interim report, because from all the evidence that was produced before them they recognised that the position of Race Company Executives all over the country was very serious, and that it was a matter that would have to be dealt with very soon. That was our reason for sending in the interim report. During the past year stakes in the country have been very much reduced, and that reduction has been caused by reduced attendances which, in turn, have been caused by the Betting Tax on turnover. I have always held that that is unfair and unjust, and I am corroborated in that by a statement made by Mr. Churchill last Monday in the British House of Commons, in which he said, [932] “I have always felt that it was very difficult to defend the continuance of the tax on turnover.” I may say that that statement was made in connection with a tax which is 50 per cent. less than the tax in the Free State. I would like to know from the Minister whether he is in agreement or disagreement with Mr. Churchill on that statement. All the various race companies in the country are in a parlous financial condition. The race companies at Mullingar, Naas, Clonmel, Navan, Baldoyle, Leopardstown, Mallow, and Longford—I intend afterwards to deal with the larger meetings—are practically unable to carry on.

The Minister said on previous occasions in this House that he did not want to interfere with racing, and that he would, if he was satisfied that these companies were in a difficult position, refund some of the money collected. £198,000 was collected last year, but not one penny has been refunded. I referred to the Phoenix Park Company last year, and now I only just wish to mention that since they started in 1902 they have paid an average dividend of 2½ per cent., but for the two years during which the betting tax has been in operation, namely, 1927 and 1928, they have lost £5,000. They are coming to the end of their resources, and if something is not done, I have no doubt that they will shut down. The Curragh is, of course, the principal meeting held in this country, and there was a loss there in 1927 of £3,800, and in 1928 of £3,000. There is a meeting going on there at the moment—I wish I were there —but from the reports I have got I understand that the attendance is very small. There is one very important matter that must be recognised now, and that is that the abolition of the betting tax in England will completely change the position here. I intend to read an extract from the Epsom racing representative of the “Irish Times,” in which he says to-day:— “The rest of the racing was not too interesting. I met several people who would, in the ordinary way, have been at the Curragh meeting, but who preferred [933] to come here where they could have a wager free from taxation. Mr. Leahy, who would have preferred to be betting in Ireland, was here for the same reason.” There is no necessity for me to dwell on that statement, as it is perfectly apparent that people who have horses to race, and who can race them where they like, will take them to England, and that other people, who believe that the tax is unjust and unfair, will go there as well. I take it that the sum of £30,000 represents the amount derived from betting on Irish racecourses.

I endeavoured by question on several occasions to get from the Minister the amount of money obtained by the betting tax from the various racecourses and coursing meetings, and I have always heard that the 2½ per cent. tax yields about £44,000. In view of the fact that dog racing is carried on for five nights of the week during the greater portion of the year, it must yield a considerable amount of that tax, and I have allowed £14,000 for it. In other words, a yield of £30,000 is being obtained from racecourse betting at the various meetings. For the sake of £30,000 a year, I say, the Government is paralysing racing in the Free State. In my opinion, racing brings a greater circulation of money to this country than any other thing that we have here. Racing and horse breeding give rise to a vast circulation of money. Everyone knows that this country is recognised all over the world as being outstanding from the point of view of the breeding of thoroughbred horses. We all know that the Aga Khan, who has gigantic interests all over the world, had a very large stud farm in France and disposed of it and has now a stud farm in Ireland. We have also the national stud here, while the Duke of Westminster, Lord Furness, and very many men who breed thoroughbred stock on a big scale, have selected Ireland to establish stud farms. There are over £3,000 brood mares in the Free State. The lesson to be derived from that fact is that everything should be done by the Government [934] to help that industry, and that anything that militates against it. such as the betting tax, should receive very careful consideration.

There are 1,000 flat race horses in this country which compete for some £50,000 per annum in stakes. Half of that amount the owners put up themselves in the way of entry fees. According to the Blue Book of the Government, the cost of keeping one of these horses is over £5 a week. In other words, there is a circulation of £5,000 per week in connection with the maintenance of flat race horses. The sum of £50,000 put up in stakes would only average £25 for each horse, so that it is perfectly evident that the people who are supporting racing here are doing so at a very heavy loss.

I sympathise with the Minister as regards the importance of revenue. I know he is in a very difficult position, and I know that no person could justify a tax on foodstuffs or anything else while taking away the tax on betting. At the same time, I have no doubt that this £30,000 could be found easily in a different manner to that of the present tax which is irritating the public and preventing them from attending races, and in regard to which we all know there is a very considerable amount of evasion. I believe if bookmakers were taxed by licences on the course it would provide as much revenue as the Minister is getting at present from the tax on betting. So far, from anything we know or have heard, I have very little hope that the betting tax on racecourses will be removed. I have repeatedly stood up in this House to refer to this matter. I have received very little sympathy from either the Government or members of the House, but I know I am right in this matter, and I shall continue to stand up if I have to stand alone. I know that eventually my number will be in the frame because the tax will have to be taken off or racing will go under. I do not intend to deal at any great length with the innumerable benefits that racing and the horse-breeding industry confer on this country, because I have repeatedly enumerated [935] them. The evidence of the senior steward of the Turf Club before the Betting Committee is all the one way.

I do not want to suggest that the betting tax is the whole cause of the trouble. I know there are other causes. I know that admission charges are too high. I believe that a charge of £1 to get into the enclosure at Punchestown is too much. I believe that poor racing is the cause of a great deal of apathy, but if something is not done, and done soon, race-course executives will not be able to carry on any further. Their resources are exhausted. I simply stand up, as I have for the last three years in succession, to appeal to the Minister, even at the eleventh hour, to do something that will prevent this great national industry, which we are all so proud of, from being destroyed. We know that Irish horses go all over the world, and their success has been so extraordinary that people in other countries cannot understand it. In face of that, for the comparatively small sum of £30,000, which I say could be found in other ways, we are going to destroy that great industry. If you continue that policy you will have very little racing in the future. You may have a few small meetings round Dublin, but the small meetings in the country will become a thing of the past.

Mr. Lemass: One of the daily papers this morning, in its leading article, I think, described the Budget statement delivered yesterday by the Minister for Finance as uneventful, but sound. The description was, I think, particularly apt, because most Deputies will agree that it was mainly sound. The uneventful nature of the Budget was due to the fact that every one of the big issues which are confronting the country and the Government was disposed of by ignoring it.

The Minister asserted that he had reached a fairly favourable financial position and was able to put before the House a Budget showing a nominal surplus of £14,000. [936] The fact, however, that he was able to assert that he had succeeded in balancing his Budget was due to the very simple device which he had operated to that end. There was, in fact, as an examination of the figures will show, a deficit of some one and a half millions, but by the simple process of deducting the amount of the deficit from the estimates of expenditure he succeeded in getting a theoretical balance which he considers was satisfactory. That deduction was achieved by taking the sum of £1,080,000 to represent what the Minister described as abnormal expenditure, and by deducting the remainder from the estimates for supply services and saying that it represents probable over-estimation. Whatever the financial position of the country may be, I do not think it is likely to be improved by the adoption of methods of that kind to conceal its true significance. There are, of course, included in the estimates for supply services every year a number of items that are of a non-recurrent nature, but it is inevitable that every year such items will occur, and it is likely that, in the main, the total of such items will represent normal expenditure. I do not think there is at present in operation in any other country a system such as prevails here of deducting these non-recurrent items and regarding them as abnormal expenditure which can be legitimately met by borrowing. It is certainly not the practice in Great Britain, neither do I think is it the practice elsewhere, to balance a Budget by deducting any given sum from the estimates for supply services and saying that it represents probably over-estimation. It may be true that each year there is a surplus remaining after the expenditure on the various Votes has been completed, that the estimates do in fact exceed the expenditure, but such surplus should be reckoned upon not at the beginning, but at the end of the year, and availed of to help the following Budget. It is an unhealthy and unsound practice to calculate on such a surplus at the beginning of the year.

As I said, however, the main [937] feature of the Budget was the fact that it proposed no great change in any direction. It is symptomatic of the whole policy of the Executive Council. Deputy MacEntee expressed the opinion that this Budget could not in any sense be described as an election Budget. I am not so sure that he was correct in that. Certainly, if I were a Minister in the Cumann na nGaedheal Executive, I would feel that the only election Budget that would be of any use to that Party would be one such as we had yesterday, because having no policy, no constructive ideas upon which to work, no real plans for dealing with the situation before the country, the only thing they can successfully do is to throw a blanket of words over their bankruptcy and try to pretend to the people that they have something up their sleeve which they cannot reveal because by revealing it they might destroy its utility. The various matters which have arisen in the Dáil during the year, the various demands which have been formulated in the country to deal with the situation which affects the people, have all been ignored. If we arc to take the Budget statement as indicating what the policy of the Executive is going to be for the next twelve months, then we are going to face one of the bleakest and blankest years in our history. We have a very serious housing situation which was discussed at length here on two or three occasions recently. We have, as I pointed out on that occasion, and I want to remind Deputies of it now, one quarter of the population of Dublin living in houses which are unfit for human habitation, and so described officially. In face of that situation we have the Minister producing theoretical points against making facilities available through the Local Loans Fund for the provision of money for the erection of houses. We have a very serious situation there, and the Government are making no effort to deal with it in the manner which its magnitude requires.

The same thing applies as regards unemployment. A number of Deputies [938] referred to the apparently callous indifference which the Government are displaying in this direction. At election times, of course, they take every opportunity to misrepresent the position, and try to make the people believe it is not as serious as it is. I saw a leaflet issued by Cumann na nGaedheal during the North Dublin by-election stating that there are only six thousand unemployed in Dublin. Does any member of Cumann na nGaedheal believe that? I should like to ask the Cumann na nGaedheal members for Dublin City if they believe that. If they do not believe it, why do they permit the Party managers to misrepresent the true facts to the people? A prominent member of the St. Vincent de Paul Society, in a statement to the Press, gave his estimate of the number at 70,000, and I think that is more likely to be accurate. If we are to do anything to deal with this problem, we should have at our disposal all the available information concerning it. Last week I put down a question to the Minister for Industry and Commerce asking why the statistics relating to unemployment which were ascertained in the census of 1926 had not yet been published. His reply was that they had been working upon them and that they would possibly be available in six or eight months. Surely it is obvious that figures relating to the unemployment that existed in 1926 have become almost useless by 1929. If the selection of the order in which the census statistics were to be published was left in my hands I think that the statistics relating to unemployment should have been made available at the very beginning. It is more important that we should know the number of men without work in any particular town or townland than that we should know the number of people belonging to different religions there. Yet the Department of Industry and Commerce thought we were more keenly interested in the distribution of religions in the country than in the distribution of unemployed workers. We have no accurate information relating to the volume of [939] unemployment. We do know from circumstances with which every one of us comes in touch in the course of our normal work as Deputies that unemployment is very serious and that the Government have taken no steps whatever to deal with that situation. Their attitude towards it is one of complete indifference. They are apparently merely hoping that something will happen that will ease the situation without calling for any effort from them.

It will be said, of course, that any steps that could be taken to provide adequate housing accommodation for our people, or to deal properly with the problem of unemployment, would involve increased expenditure. I agree. And there is a demand for increased expenditure, but increased expenditure does not necessarily involve increased taxes. If expenditure is properly applied and of a capital nature, it could legitimately be provided by borrowing, and I think the policy of the Government in not endeavouring to secure money to finance schemes for the relief of unemployment is deserving of criticism.

There is plenty of work to be done in the Twenty-six Counties in the reclamation of land, in afforestation, in the construction of roads and the construction of public utility schemes in various towns. There is a large number of towns in the Twenty-six Counties without any proper sewerage accommodation and a number of them without any kind of water supply, except from a stream or a river that happens to be flowing adjacent, and if we were to take advantage of the present situation with the large volume of labour unemployed to embark upon schemes of that nature we would be not merely alleviating the distress that now exists, but we should be doing a very useful work in the national interest.

The Minister will claim, of course, that the financial policy he has followed has greatly enhanced the credit of the State. It may be that the credit of the State has been [940] placed in a favourable position by the financial policy which the Minister for Finance has been following for the last few years. I would like to ask him, however, to consider whether that position has been won at too great cost. I would like to put on the other side of the account the number of people forced through economic circumstances to emigrate in the last few years, the number of people now idle, the number of people living under conditions unfit for human beings, and the general level of prosperity in the country. These things must be taken into account when we find the Minister for Finance clapping himself on the back because of the results of the financial policy he has followed.

The Minister has informed us that he is now going to issue another five million pounds National Loan this year. That announcement made by the Minister yesterday raises very serious issues which will have to be faced in this Dáil. It may be that we can secure loans on terms as favourable as any other country or more favourable than most countries if the financial policy of the Minister is the only thing to be taken into account. But while the Minister has been, at considerable cost to the State, building up that credit position his colleagues upon the Executive Council have been engaged in a mad ramp to destroy it. Does the Minister think that his Government will be able to secure money at a favourable rate when the President and the Minister for Justice are conspiring to represent the state of affairs in this country to be other than what it is, when we had the occasion of a by-election availed of for the purpose of making statements about the country which most of us here know to be deliberately and totally untrue? We have had statements of that kind made for the purpose of improving the prospects of a party candidate, regardless of their consequences to the economic interests of our people. It is true that since the by-election we have seen the President and the Executive frantically telegraphing to America [941] to say that the speech he made at the Rotunda at the opening of the campaign was untrue and that the situation existing in this country is nothing like what he represented it to be. In his statement he denounced people misrepresenting the position in this country, but the only people who did misrepresent it were his colleagues of the Executive Council. We have also to take into account that despite the nature of the campaign that the Government already adopted in that by-election, despite the issues they put before the people, they only got their candidate home by a very small majority in a constituency which they regarded as a pocket borough. And in view of that fact does the Minister still think this Government will be able to get a loan this year on as good terms as another Government, in whom the people would have great confidence, would be likely to secure it.

I assert deliberately that the Government Party do not represent even a considerable fraction of the people they represented in September, 1927, and that they in no way reflect public opinion in this country. They are not entitled to pledge the credit of the people to carry out their policy, because the people are not supporting that policy. The declaration of the result of the Dublin by-election was itself an indication of that fact, because not merely was that constituency one in which the Government Party was strongest, but from the very nature of the campaign they conducted there it meant that if they were likely to win any seat by a very comfortable majority they would win that one. They did not win by a comfortable majority. A constituency in which they got five members in 1927, against two for Fianna Fáil, they now barely hold by a mere 200 in a total of 56,000 votes, of which 600 were postal voters who are members of the National Army.

There will be other by-elections during the year. There is one likely to take place in the near future in the West. I do not know if it is the intention of the Government to fight this election upon the same issue that [942] they placed before the people of North Dublin, but if they do, and get the same result there, or if they are defeated on that issue, will they still think that they are the people entitled to go and borrow £5,000,000 for national work? I think that the decision arrived at by the Executive Council to issue that National Loan is a very serious one in view of their relationship to the people, and one that members of the Dáil should take very seriously into account before they make up their minds to vote for the Resolution now before them.

The Minister for Finance also took credit to himself for the manner in which expenditure was reduced during the last year. The fact that the amount required for the supply services this year is less than last year is one upon which we can all congratulate ourselves. It is at least a step in the right direction, but I do not think that anyone who goes into the details of the various Votes carefully will be satisfied that further reductions are not possible. It is true that some of the reductions represent, as the Minister for Finance said, projected services that would be very valuable if they had the money to spare to spend upon them. Such projected services which would be very valuable were abandoned in order to produce the reduced figure placed before us. But when we examine some of the remaining Votes we begin to see that valuable services had to be abandoned and were abandoned in order to meet the exigencies of the financial situation.

Take the Vote for the Department of Fisheries. I am taking that because I think it is a most glaring case. Time after time it was pointed out in the Dáil that the amount paid in salaries to officials of that Department was very high in relation to the total expenditure and particularly in relation to the expenditure upon actual fishery this year? We find that while the Minister for Fisheries has increased by £3,320 the salaries paid to his Department officials, he is reducing by a larger sum the amount he is proposing to spend on fishery development. [943] Is that the type of economy we want, to cut down expenditure when it is conferring some benefit on the people, and to increase expenditure on overhead charges which are of no direct benefit whatever? In quite a number of Departments the same situation is reflected. It is reflected in the Department of the Minister for Finance himself. In his office the salaries this year will be increased by £2,374, and when we go to the Estimates and compare them, not with the Estimates for last year or the previous years, but with the nation's resources, we get even more glaring results. We are spending a sum of 11/9 per head of the population upon the Army. At one time the Minister for Finance was of the opinion that the normal expenditure in the Army should be £2,000,000. When expenditure reached that figure and the old process of balancing the Budget had to be reverted to, he decided that the normal expenditure should be only one and a half millions. Now normal expenditure is down to a million and a half. Is the Minister satisfied that he cannot go lower? Does the Minister still think that the people of this country can afford to spend 11/9 per head—men, women and children—for the maintenance of that force? The amount we are spending on it represents 5.5 per cent. of the total expenditure on Governmental services. I would like to assert that, irrespective of what the Minister for Finance may say, we should make up our minds that, at the most, a million pounds should be spent on that service, and that at all costs expenditure should be brought down to that figure. I assert we are spending more than we can afford to spend when spending a million and a half, even though the Minister for Finance is prepared to represent that as normal expenditure to be met out of normal revenue. It is, at any rate, satisfactory that we are not mortgaging the income of the future to meet the expenditure on the Army this year, [944] even though it is the first year that we are not doing so.

We are spending 13/1 per head to meet the requirements of law and justice. That 13/1 per head represents 6.45 per cent. of our total expenditure, and these figures fall to be compared with the position in Great Britain, where the expenditure upon law and justice is 5/8 per head, or 1.79 per cent. of the total expenditure. In other words, we are, in relation to our national revenue, our resources and our population, proposing to spend this year nearly four times the amount which will be spent upon the same services in the neighbouring country of Great Britain. Does the Minister for Finance not think that there will be room for economy there? If he can reconcile his mind to that possibility and go seriously into the examination of the various items of expenditure in these Votes I think he will be able to effect a much more substantial reduction in the total expenditure next year than he has been able to effect this year. We are spending 14/- per head of the population upon pensions, or 6.9 per cent of our total national revenue on pensions which we are in a large part under no legal obligation to pay. I am referring to pensions paid to ex-members of the R.I.C. We will perhaps, on that particular Vote, place our viewpoint in that connection before the Dáil. It will be sufficient to say now that there is nothing in the Treaty or in any Act of this House which compels the Minister for Finance to accept responsibility for the payment of those pensions.

A thorough examination of the financial position of this State will, I think, convince any Deputy who makes it that the fact that it is anticipated that normal revenue will meet normal expenditure, less the abnormal items and the amount deducted for over-estimating, is not one on which we can congratulate ourselves. We are still spending more than we need spend, and we can reduce the total figure without in any way impairing the effectiveness or efficiency of the Government machine. In fact I believe if what [945] Deputy MacEntee called the trimmings and the trappings were cut away the efficiency of the machine would be greatly improved. We are, on the other hand, failing to make adequate provision to meet the various social evils which are confronting our people, and because of this fact, because of the failure to deal properly with the problem of administrative economy, on the one hand, and on the other hand to provide the. finances required for schemes of housing and employment, I think Deputies should record their disapproval of the Budget by voting against this Resolution.

I do not know if we are to take the proposal with reference to the 150 per cent. increase on the tax upon buses as representing merely a device to enlarge the revenue of the Road Fund or, as the Government claim, the solution of what has been called the transport problem. If it is merely a device to increase the revenue of the Road Fund, then we can deal with that matter when the Resolution comes before us on its Report Stage, but if this Resolution is intended to represent a serious contribution to the solution of the transport problem I would like to deal with it now.

Mr. Blythe: I do not propose it as a solution of the transport problem.

Mr. Lemass: It is not a solution, but is it intended to be?

Mr. Blythe: No.

Mr. Lemass: I think that matter can be let stand over for the present.

Mr. Davin: It is very dangerous.

Mr. Lemass: We shall deal with the transport problem at the right time and in the right place.

Mr. Davin: And in the right way.

Mr. Lemass: And in the right way. I hope. The Minister for Finance made some reference yesterday to what the State could do for the development here of industrial production and gave it as his opinion, from the operation of the Trade Loans Guarantee Act, that there were very few sound schemes of industrial [946] production available. Unfortunately we have not got the information concerning the operation of those Acts which he has, and I would be glad if he would give us some information concerning them when he speaks. We know there were 732 applications made under the Act for State guarantees. Of these 732 applications, 124 were referred to the Advisory Committee. Do the applicants that were not referred to the Advisory Committee represent applications for working capital or merely frivolous applications which could not be seriously entertained? Of the 124 referred to the Committee, 42 were recommended to receive the State guarantee. Of these people only 18 received the State guarantee, and of the remainder four at least were not proceeded with because of the fact that the persons concerned were unable to secure the working capital required. It seems to me we have got to make up our minds that the machinery of the Trade Loans Guarantee Act as a method of stimulating industrial production in this country is utterly inadequate. Some good has been done. A number of industries have been put upon their feet and are now giving a useful amount of employment, but if we are going seriously to tackle the question of developing the industrial arm of the country and providing some other outlet for the surplus population of the land than the emigrant ship, then we have got to overhaul very drastically the machinery at our disposal.

It seems to me that the position in which the terms of that Act left the Government was such that they could not in any case have done more than they have done to put it into operation. They are, of course, naturally suspicious of any person proposing to start an industry in this country. That suspicion can be traced throughout their whole economic policy, and consequently they devised an Act the purpose of which was to put as many barriers as possible in the way of Irish industrialists seeking capital for the purchase of [947] fixed assets and desiring to get it State guaranteed. As we have seen, there are quite a number of jumps, and the various applicants failed, some at one jump and some at another. The bulk of them failed at the first jump. Of the 732 starters, 124 cleared the first jump, 42 cleared the second jump, and 18 succeeded in finishing the race—18 out of a total of 732. The position of the Government in relation to the whole thing was purely passive. They said to the applicant that he would have to succeed first of all in convincing the officials of the Department of Industry and Commerce that their case should or might possibly come within the Act. The applicant, having succeeded in convincing the Department of Industry and Commerce, had then to go to the advisory committee. If he succeeded in convincing the advisory committee, he went to the Minister for Finance. I think in quite a large number of cases applicants failed to convince the Minister, for Finance. An applicant had to make his case three times in succession before he succeeded in getting a State guarantee and was able to go to the bank or the Industrial Trust Company and get the money. If we are going to develop the industrial arm of this country, I think the attitude of the State in relation to the matter must be active and not passive. It must look for opportunities of industrial development, and it must act with the resources at its disposal in relation to these opportunities. I think it is not sufficient for them merely to sit in offices in Merrion Street and wait until somebody with a good idea and with a certain amount of working capital comes to them with an application.

They must go seeking opportunities, seeking the available resources for the purpose of getting them operated. If that is not done, we cannot hope for any greater progress than has been achieved up to this. If greater progress is not made, then the conditions which confront our people will continue and we will [948] find ourselves, as we are at present, spending huge sums of money training up young men for the purpose of exporting them, and not merely exporting them, but giving them a certain sum of money in their pockets, paying their passage, delivering them there, cost, insurance and freight, on the quayside in New York. We are spending a considerable sum of money every year in order to send 35,000 emigrants to America. If the money that is being spent upon the education, training, clothing and feeding of these people prior to paying their passage to America were available for industrial development in this country, there would be no need for them to emigrate. I believe if the Government want to tackle the problem they will have to put behind them as having been played out the experiment of the Trade Loans (Guarantee) Act and devise other machinery which will give them a free hand to operate whenever they see a chance of operating. That matter, I know, has been discussed before. Certain proposals were mentioned in the debate upon the Estimate for the Department of Industry and Commerce last year. I do not want to go into this now, but I am merely putting that suggestion before the House.

When the Minister for Finance quoted the Trade Loans (Guarantee) Act and told us the experience of the Government in relation to its operation, I think he gave us the impression that it was making the Government despair of industrial development in this country. Then he must also tell us if the Trade Loans Guarantee Act represents the maximum effort which the Government is going to make and if, in view of its comparative failure, the matter is going to be left to rest there.

Mr. Law: I hope Deputy Lemass will excuse me if I did not quite follow him in these matters of high politics and finance. My purpose was merely to deal with one single aspect of the present Budget, almost [949] entirely with one single sentence of the Minister's statement. I heard with very great pleasure, as many other people did, the statement yesterday that it was his intention to try and simplify and clarify certain points in the administration of the income tax. I hope that he will stand by that intention. I hope also that he will extend his inquiry a little further than indicated. I think the Minister will not dissent from this proposition: that the taxpayer has a real right to know quite definitely and certainly how much he is called upon to pay to the State, and what are the exact reliefs, abatements and adjustments to which he is himself individually entitled. None of us likes to pay income tax, no matter what it is, but I am quite certain that nine-tenths of the irritation with which people view income tax is due, not to the fact of having to pay a certain sum but to the fact that the sum is uncertain, the fact that people in a general way do not know in the least how much they really ought to pay. It seems a very strange statement, I dare say, but it is really true.

I am quite certain that the officials in particular have no conception of the amount of irritation that is caused by the present complexity of the law. I say the law advisedly, because though people frequently complain of the complexity of income tax forms the complexity of the income tax forms really comes from the complexity of the law itself. I do not really believe that you could simplify the forms very much unless you were prepared to simplify your law and your general administration. A very great part of the complexity comes from the reliefs and abatements which are all for the benefit of the taxpayers. It is only fair to acknowledge that that is so.

I do not believe the officials dealing with this matter have any conception of how hard this thing presses upon the ordinary taxpayer. I can speak with a little authority on the matter. I was myself, for a short time, a temporary Civil Servant. Civil Servants have certain adjustments. Arrangements are [950] made with the Paymaster-General. The Civil Servant knows exactly how much of his salary is going to be deducted if he has no income from other sources. There is no particular difficulty, because his allowances and abatements are made straight off and the balance is paid to him monthly or quarterly, whatever it may be. But for the person who is not so circumstanced it is different. The person having a small income and who derives that income from a number of different sources is liable under Schedule A in respect of houses, under Schedule B in respect possibly of some small farm, under C for I know not what, under Schedule D for investments, some of them possibly in this country and others in Great Britain and Northern Ireland and some from other countries. The amount of all these things being calculated upon a different basis, the obligation involved for the ordinary man is something perfectly dreadful. A large proportion of the income tax is deducted at the source. I do not, for a moment, suppose that the revenue would ever abandon this very profitable and convenient method. The result of the present arrangements is, I am quite certain, wittingly or unwittingly, that the Revenue Commissioners do, in fact, obtain a great deal of money to which in strict law they are not entitled. It happens again and again, I know of my own personal knowledge that there are people, especially old ladies with small incomes, incomes even below the level at which income tax becomes payable at all, who, having had the tax deducted at source, are too bewildered over the whole thing to know how to get it back. In fact, they never do get it back.

I would be rather sorry to suggest that the income tax authorities ever deliberately or designedly have prevented people from understanding how to get tax back, or have kept back knowledge which the taxpayer should have. I am, however, bound to say that I have come across cases where it was very difficult to acquit somebody, at any rate, of some culpable [951] reticence. I propose to give one example. Take the case of a man who, along with other income, is the owner of a small farm. He is liable to assessment under Schedule B and Schedule A. He is assumed to make a profit equal to the amount of the Poor Law valuation. Suppose it happens that instead of making a profit he makes a loss equal, say, to the Poor Law valuation, he is entitled—and I do not think it is disputed—under Section 34 of the Finance Act of 1918 to have that loss set off as far as it can be set off against any other income that he may have. I know that in many cases such a loss is not allowed. I think the Minister will not dispute this. I do not think there is any doubt that if it was effectively challenged the man would be entitled to have that loss set off. But the fact is that he does not get it.

Only this morning I had a letter prominently brought to my notice which was received from an inspector of taxes to whom an aggrieved person wrote asking why, in the settlement of a farm of land, there seemed to be no allowance made for certain losses beyond the wiping out of Schedule B. The reply is a very curious one and I will quote portion of it:—“In reply to yours of the 19th inst. I have to inform you that the loss as disclosed on farm account is not set off against Schedule A liability unless a special request has been made by the taxpayer.” How is it possible to deal with such an attitude? The law quite clearly and definitely declares that any loss which occurs under Schedule B is to be satisfied in respect of income arising under other schedules. Yet this is apparently the system upon which the whole thing is worked. I should not have brought this particular matter forward if I had not satisfied myself that this is not an isolated case. I have inquired from the person who showed me that letter and who has had occasion to deal with these matters and he assures me that he has frequently come across similar cases where, when a loss is proved on a farm account, it is the habit or [952] practice of the authorities in many cases, through the inspector, to notify the claimant that his Schedule B assessment is cancelled and very frequently he is not told how much loss there is or to what extent the loss claimed on his farm is allowed. Nothing is done, at any rate, to recover losses from the other schedules. The fact is that if he has the loss he is entitled to consideration under some of the other schedules. I do not know whether the information is designedly kept from claimants.

I suggest that this is a rather serious matter, and I must say that it is typical of a great deal of income tax administration. I do not wish to make any attack on the individuals concerned in administration. I have come into direct contact with them, and I must say I received nothing but courtesy and consideration. But the whole system is such that instead of making it easy for the taxpayer to know what his liability is, it would look as if the officials were designedly making it difficult and almost impossible for the taxpayer to do so. That is all I wish to say on that particular aspect. The Minister said he would examine this question. When he does so I would ask him to extend his inquiry a little and see whether more could not be done to meet what is the naturally proper demand of the income tax payer— that he should know where he stands and, when he has made payment, how far he has overpaid or underpaid, It is about the simplest thing in the world, and yet it would seem that no one can arrive at an easy solution.

There is one other matter to which I would like to refer, and in connection with which I have had communications with the Minister. It concerns a very small number of people. I refer to the treatment of visitors to our shores. I do not know whether it is the policy of the Government, but I think in the peculiar circumstances that there should be some welcome given to our visitors. Particularly should it be our policy to welcome the kind of visitors who desire to remain for a considerable time and to spend money, improve places in the country, and give employment. [953] This raises at once an extremely difficult question. I have had correspondence with the Minister about it, and I had a letter from him in which he pointed out that it is not possible to give an assurance in any particular instance beforehand that a certain person coming here and taking a house for portion of a year over two or three years will not be held liable for Saorstát Eireann income tax.

Again, it is not the amount of the money that these people have to pay that worries them. It is the extraordinary thing of not knowing what it is they may be called upon to pay. That, I think, is a very valuable point. Take the Land Commission at the present moment. The Land Commission in its administration of the Land Purchase Acts is constantly getting into its hands large houses with sporting rights, fishing, and so on. Very unfortunately, for various causes, we have not got a very great number of citizens of the Saorstát who are themselves able to afford to take such houses in such places. I conceive that the Land Commission in particular would welcome the coming of more people from outside, from the United States, Great Britain or elsewhere, who would relieve them by taking off their hands what would be in some cases rather a white elephant. I know myself people who have considered the propositon of taking residences in this country, but they have turned down that idea, not for the sake of the £50, the £100, the £200 or the £300, but because they simply do not know and could not possibly ascertain the amount for which they might be liable under our present system of income tax.

I am quite aware that something has been done to meet their cases. I am very much obliged to the Minister for the steps he has taken with regard to the American visitors. But as regards the people coming from Great Britain, the position is by no means very simple. It is quite true that there has been established a joint office in London which, so far as it goes, helps the people to [954] make out what their liability is in respect of double income tax. But it is a little like telling a man who was going on a long, wearisome, expensive journey, without any certainty of the hour at which he will arrive or what he will have to pay, that he could find all the information that is available at Messrs. Cooks. It does not really solve this thing. I know this is a very complicated and difficult matter. I would not raise the matter here at all except that I take it it is a question of Government policy to encourage people to come here and live in the country. I do suggest that an inquiry certainly should be made so as to ascertain how far that object could be promoted.

I make one particular suggestion to the Minister, a suggestion which he might adopt for this particular purpose. It is to adopt the procedure which is followed in France, where the liability of a foreigner is based upon the rent of the house that he takes. I believe this liability is fixed at seven times the rent. If a man takes a villa for 10,000 francs, he is assessed on assumed income at 70,000 francs. He is thereby saved all bother and worry from the point of view of the income tax people and the income tax people themselves are saved all further inquiry. The amount he has to pay for income tax is based on the amount of his rent. He then knows at the beginning whether he can afford to pay that rent or not, and he knows where he is. In our case the visitor here has not the foggiest idea of whether he is liable to income tax or not.

There is another suggestion that I wish to make. It is only a very rough-and-ready one and it has only just occurred to me. There used to be an old practice and an old understanding—I do not know whether it had statutory authority or not—that if a man did not remain in the country for more than six months he was not liable for income tax in that country. That practice has been, I understand, completely upset by a recent decision in the House [955] of Lords and it no longer stands. The result is that in the case of people normally resident here, or people from England or the United States who may come here, there is no fixed rule or plan, no simple rule by which the question of residence can be determined. Again, I think that is a point that might be explored. It probably will need statutory authority to enforce the suggestions I have made. I am not at all certain that something cannot or may not be done. Say two months or three months instead of six months. I think some limit of that kind might be fixed, something which the ordinary plain man would understand and which would not require great calculations to ascertain the liability or which would not necessitate elaborate returns.

Something could be devised which would be very suitable and would have a very considerable effect upon the promotion of what I consider is rather a desirable object and is in accord with public policy—the conveniencing of visitors to the country. I will not say any more about that matter. I am more concerned with what I spoke of at the beginning. I do think that that is of vital importance. It is only the plainest, merest justice that we should be informed what it is we have to pay, and how and in exactly what way each individual is to get the reliefs to which he is entitled in law; the amount he is liable for, and he should know exactly how he stands. That is a matter that the Minister might consider with the Commissioners and see whether the whole procedure in relation to assessments and demands should be not only simplified, but that the taxpayer should know the exemptions to which he is entitled.

Mr. M. O'Reilly: I think it was the Minister for Finance, speaking on this particular subject some time ago, who told us that he had inherited the system and that perhaps it would take some time to work away from it. I hope he has not wedded that system and, if he has, that he will get divorced from it as [956] soon as possible. No doubt this system suits the country of origin. Most systems do. But certainly, as far as I am concerned, and as a good many people of the farming community for whom I speak, we are not satisfied that it suits us. The control which the system of taxation possesses over production seems to be altogether too powerful and too easy of manipulation. The Minister for Finance can control production by either increasing or decreasing the cost of production. As he draws his resources from production it would seem to be only just and reasonable that he would give production as much encouragement as possible. What has happened in this country for the last one hundred years? Have not all our industries been driven out of existence, and have not the farming community been practically driven out of business? That system of the destruction of industry was largely assisted by the introduction of this particular class of taxation—that is to say, income tax. For my purpose I divide this subject and the discussion on it into three parts: one is direct taxation; the other is indirect, and then you are faced with what you call local taxation. As we are a country practically altogether engaged in agricultural pursuits this affects us very materially. It is stated that 80 per cent. of the produce of this country is agricultural.

It naturally stands to reason that the agricultural community in this country pays 80 per cent. of those taxes, but the principal reason that I disagree especially with the method of indirect taxation, is that I am convinced that it is protection for the foreign producer to sell here and that it could, if properly manipulated, be a protection to the home producer to produce here. I believe that the manipulation of the machine in that direction is just as easy as its manipulation in the direction in which it has been and continues to be directed. One point strikes me as being rather peculiar— perhaps the Minister for Finance may be able to explain it—and it is this, that our indirect taxation is [957] altogether in excess of that in other countries. I believe that the normal rate is something like fifty-fifty, but I am quite sure that our indirect taxation is a good deal over 80 per cent. I take it, because it is so high, that that is a clear indication that dire poverty exists. Direct taxation is got out of earned income, and it is a system which a man with a little above average intelligence might be able to understand. I do not say that a man of average intelligence can always understand the imposition of even direct taxation because, as the last Deputy who spoke said, it is rather difficult and complicated. Be that as it may, I take it that a country in which direct taxation increases is on the road to prosperity.

In indirect taxation we have a system here—and it is perhaps one of the heaviest items—of collecting taxes on a commodity which we can produce here and, when we produce it here, the same thing happens. That would seem to be, without any doubt, an effort to destroy that industry, and as this Government, or any other Government in the future, is going to live out of production, I believe that an effort should be made to direct this system of indirect taxation so that it will eventually be an aid to production. The Minister for Agriculture told us some time ago that the real policy was to get another cow, another sow and something else. Of course, he did not tell us how to get them. If he told us not to pay taxation to the Minister for Finance we might possibly, in a year or two, have the price of the other cow and the other sow but, unfortunately for the farmer, he is never left as much as would buy a pot of paint. It is always with him a question of mere existence. The system of taxation is so severe on him in this country that he has no profit.

There is only one class of farmer in this country who can do a little more than merely exist and that is the man who has a farm of about forty acres and who lives by the sweat of the brow of his sons and daughters. He pays them no wages. What is the result? They are left [958] discontented and unhappy, and they are always wishing for an opportunity to leave the country. That is the farming community in Ireland. If they do get a wage it can only be a slave wage. The cause of all that is the system of indirect taxation which not alone gives the foreigner a chance of producing what he should produce, but has also the effect of greatly increasing local rates. Through the operations of this system men are thrown out of employment, children are ill-nourished, and all that is eventually going to cost the producer in that locality something extra. I believe that the farmer and the agricultural community should get a good deal more consideration than they do under this particular system. If a farmer transfers nine or ten acres of land to his son I believe that the duties for that transaction amount to something more than one pound an acre. What is the reason, when that transaction takes place, that that individual is pounced upon and either himself or his son is fleeced? It comes to the same thing if he sells the farm. That is another instance of indirect taxation hampering a man. This country can only get its existence out of production. It can only pay its taxes and support the Government of the country out of production, and if the Government of the day cannot devise some means of keeping their hands off production, emigration will not cease in the future but will increase, and local charges will increase correspondingly with it.

Mr. Mathews: I think that this Budget has, on the whole, been favourably received.

Mr. Cooney: By whom has it been favourably received?

Mr. Mathews: I do not think that any Minister for Finance could put before the House a proposal for extracting money from the people's pockets that would give pleasure or prove popular. There are some people who are disappointed that the tax on race-course betting has not been discontinued. A tax on betting [959] may seem to be an unimportant matter to bring before the House, but it has to be viewed in conjunction with horse-breeding, which is a very important asset to the country.

I need hardly elaborate the importance of the amount of money it brings into the country. One has only to look at the sales of bloodstock, at the Horse Show sales in Dublin, and at the sales in Newmarket and Doncaster, or to look up the statistics as to the value of the export of horses. One can further confirm it by looking over the racing results in England. Many of the most important races are won by Irish-bred horses. As a matter of fact every winner of an English race that was bred in this country gives a fillip to the trade in our thoroughbred horses.

I have seen in a Report of the InterDepartmental Committee which sat some time ago, that twenty years ago there were only 600 thoroughbred mares in this country. To-day it is estimated that there are over 3,000. I need hardly say more about the importance of the horse-breeding industry. I think it is pretty evident. I think it does not require much investigation to realise that racing itself is a necessary adjunct to horse breeding. Without racing we cannot bring out the merits of our bloodstock. In regard to the incidence of the tax on racing and the way in which it affects racing interests, I might point out that it is not the owners and trainers who help the executives of race meetings to continue racing. It is really the public, the man who pays 10/-, 12/6 or 15/- to see racing who contributes the money. I may be told that 2½ per cent. on race-course betting should not affect the attendance of the public to a great extent and that it is a rather small charge; but unfortunately this 2½ per cent. is charged on the turnover. If you are fortunate enough, A Leas-Chinn Comhairle, to have £10 on a winner at even money, you would have to pay 2½ per cent. on £20—£10 of your own money and on the £10 that you won. If you turn over that money [960] pretty frequently your whole £10 would soon be gone in taxation. You might be fortunate enough to have a little credit balance on your betting transactions, but you would be out of pocket owing to the tax.

Mr. Clery: It is not fair to resurrect unpleasant memories for most of us.

Mr. Mathews: I do not know, A Leas-Chinn Comhairle, that it is necessary to enlighten you as regards the incidence of the tax or how it affects betting.

An Leas-Cheann Comhairle: It is not.

Mr. Mathews: Many members of this House are perfectly ignorant of the incidence of taxation on race-courses. I am sure the Minister for Finance is too, and it is really for his enlightenment that I want to prove that the 2½ per cent. is calculated on your own money and the amount you win, and that when you turn over that money ten or fifteen times your whole capital disappears. That is what really happens any money you may have to spend on racing. Deputy Shaw stated that of the £198,000 that was derived from the tax only £30,000 came from race-course betting. He said that that was a very small sum. I have not seen that figure verified, but even if it were £50,000 I am of opinion—I am not connected with racing myself; I disclaim that—and people who do race are of the opinion that if the £198,000 were taken solely by an extra licence fee on the bookmakers, and perhaps by a slight increase in the tax on office betting, it would be more advantageous. There is a bigger turnover on office betting than on betting on race-courses. To enlighten you further, A Leas-Chinn Comhairle, office betting is of no benefit to the horse-breeding industry. You might as well have a roulette table in one of these offices and have people backing colours. They know nothing about horses or racing, and they do not pay anything. They simply read a paper, select a horse, and back a winner if they can. People connected with [961] racing do not want to curtail the amount the Minister of Finance gets in taxation, but in order to assist the horse-breeding industry they are anxious that he should get it in another way by a higher licence on bookmakers and, perhaps, a little increase in the tax on office betting.

Mr. Derrig: The statement has frequently been made in the course of the debate that however uneventful or uninteresting the Budget statement might have been, it was at any rate very sound. If we could know on what basis it is to be regarded as a sound statement, then we would be able to know whether we could agree with that viewpoint or not. If we regard the Budget statement as a very admirable setting out of our national finances, in a much clearer and more lucid way than we had them last year, I am willing to admit that the officials of the Department of Finance and the Minister deserve congratulations. The accounts are presented in a much more satisfactory manner and there is a touch of humour for which we are all thankful. If we regard it from another point of view and read through it and see what lines of policy are indicated or what forecast is made of conditions in the country, and how they are likely to go during the next few years, we will be disappointed. The Budget statement, since it is the pivot on which the whole administration and the whole of the work of this Dáil rests during the year, should not alone give us a clear statement of our national position, but should set out the broad lines of national policy and tell us very clearly what work the Government proposes to do during the coming twelve months. If we had these things incorporated in the Budget statement, then it would be easy enough to have a debate that would be interesting and which would give some satisfaction to newspaper reporters. So long, however, as the Minister for Finance arbitrarily sets the standard of trying to confine us to masses of figures and discussions as to what is normal or abnormal expenditure, whether certain things [962] should be allowed as Exchequer assets or not, then we are going to have a rather uninteresting discussion. It may make us very clear as to the procedure of the Department of Finance and as to the immediate financial policy that is guiding the officials of that Department, but as exhibiting the whole Government policy, or the spirit of the Executive Council in their administration, it is very disappointing.

When, for example, we have the statement of the Minister for Finance that luxury or semi-luxury commodities arc increasing in consumption in the Free State, we ought to have some background by which we could judge that. We could ask ourselves: Is the consumption of luxury or semi-luxury commodities increasing because it is fashionable in the Free State to be more luxurious than you can afford, or is it that there is that upward wave, that round-the-corner curve, that we hear so much about, that really does enable large numbers of citizens to join golf clubs and buy motor cars, and so on? We should like to know how exactly the Government, and the Minister in particular, view that. Is it a criterion of prosperous conditions, or is it simply a phase which the country is going through, which does not necessarily indicate any great approach to thriftiness, or that desirable state that the “Irish Times” wishes the citizens of the Free State to come back to—a realisation of the fact that they no longer enjoy the happy benefits of English rule here and that they must cut their cloth to suit their measure?

Last year we were in the position that we were somewhat new to financial procedure in this House and we realised that the Minister had a difficult situation before him. He indicated to us that he had to a large extent cleared away the debris of the preceding five years and was preparing to erect a sound structure in its stead of which we would be all proud. He made the claim that he has proceeded to build that structure, that it is satisfactory, [963] that the credit of the State is sound and high, and that we ought to be proud of that. But we must regard that structure from the general circumstances, from the aspect of the population and the wealth of the country, whether our industries are progressing or not, how unemployment stands, and various other matters like that. We cannot view the structure of our national credit apart from these circumstances. We must take these circumstances into consideration, and have them clearly in mind. As Deputy Lemass said, it is precisely because the Budget statement has conveniently ignored all these factors and has simply confined itself to the much narrower aspect of simply dealing with the financial accounts from the financial point of view, that the discussion up to the present has been so unfruitful.

We had hoped, having looked on the Minister's statement last year with a good deal of sympathy, that when this year arrived the debris that he spoke of would have been cleared away. It has been cleared away. Abnormal receipts, I understand from his statement, have practically disappeared, and abnormal expenditure, if it has not disappeared has been regularised and is in the position that we hope in a very short time it will be made to represent real capital expenditure. The position, therefore, this year, in my opinion, gave the Minister, if he had sustained the promises he had held out to us last year, and if he had maintained his position, an admirable opportunity of advancing and of giving us an exposition of how exactly the Government stood in regard to all these matters of national policy. We must only conclude, therefore, that on such an important occasion as this the Minister has so little to say about these matters that the word “unemployment” does not come into his statement from beginning to end, that he has nothing to say about it, and that the Government have no policy for dealing with the matter. If, for example, the Minister proposes to raise a loan of [964] five millions, and if in the same statement in which he had adumbrated that, he talks about housing, then certainly the opportunity was there for the Government, and it would seem to be a thing that they should have thought out and have been ready to declare their policy upon. It certainly was the time and the opportunity to say what they were going to do in regard to housing; whether they were going to deal with the question in an imaginative manner and in a way that their critics from all parts of the House would have to say: “At least there is an attempt being made to deal with the question; let us all unite in trying to make that attempt as successful as possible.” However, we have no such statement from the Minister, not alone in regard to the question of housing, but in regard to other matters.

There is the great question of agriculture. In that matter I submit that the Government is very lacking indeed, considering that during the past few years they have concentrated all the hopes of the agricultural community upon the possibilities of the Agricultural Credit Corporation, and that that Corporation, however good the intentions of its directors and officials may be, has not financed agriculture to the extent that is necessary in face of the general depression and the foreign competition that our farmers have to meet. It is unsatisfactory that the Government have not been able to hold out any hopes of further measures for the development of our chief industry. The Minister dealt in a rather detailed manner with proposals for de-rating which had been placed before him. He said, in the first place, that de-rating should not, perhaps, have struck the imagination of the people in this country, because after all it was an English commodity. There is no proof, unfortunately, that because a thing originates in England it is not popular here. Most of us have a grouse about that now and again. At any rate, it is a definite policy and a statesmanlike one to remedy a desperate situation. It is also a policy [965] that will affect this country very directly in regard to the competition that our farmers must have from English farmers whose markets lie at their doors. The English farmer has now a complete abolition of his agricultural rates, and, as well as that, he has the statement of the British Prime Minister, urged by an agitation amongst English farmers, and by the opinion of the highest experts in the British Empire, that steps must be taken to assist the English farming industry very directly.

We had the English Prime Minister the other day telling the House of Commons that the policy of the Government was that the fighting services, as far as possible, were to be supplied with the produce of English farms. In addition to that, we have the question of de-rating. We must add to these two considerations—the consideration that the English farmer is to have the advantage of de-rating, and, also, to have a very definite Imperial Government policy in his favour—the fact that our farmers here are placed in a disadvantageous position that they have no appreciable reduction in the taxation granted to them. They have to hear a taxation that compares very unfavourably with the taxation of their competitors across the water. In addition to that, out of their own business they have, if we take the cattle trade, about which Deputy Heffernan talked so much, to bear the expense of loss in transit, freight and middle-man's profits. All these things have to be deducted from whatever the Irish farmer would, in the first instance, be entitled to for the sale of his beasts. When you take away from that, in addition, the rates and the indirect taxation that Deputy O'Reilly has spoken of, I submit you have no case whatever to show that if you were drawing a typical Irish farmer's budget instead of a national budget, there would be even a small balance on the right side. I believe the balance would be on the wrong side.

I noticed that while the Minister for Finance, apparently with the approval of the Irish Press, tells us that profits are increasing and that an [966] examination of the accounts of typical business firms shows that things are on the upward grade, we have had no statement whatever, even in regard to the particular development which the Government has undertaken in the creamery industry, to show us that things are really improving in the Irish agricultural industry. If the Government can show us that, well and good.

There is the other side of the picture, however. There is the fact of the enormous amount of money paid out in home assistance, the fact that tillage is decreasing at an enormous rate, and the fact that you have a large number of farms derelict throughout the country for want of capital to work them. You have these considerations, and you have against them only the simple statement of the Minister which, I believe, is not based upon any examination of the agricultural position. You have simply this statement that things generally are on the upward curve. The Minister made a number of statements in regard to de-rating. He disapproves of it. He said it would be a much heavier burden upon us here than it would be upon the people of Great Britain. That is quite natural, but he omitted entirely to point out the other side of the picture, and that is the unfavourable circumstances in which the Irish farmer is now placed.

Even if you adopted the policy of the present Minister for Agriculture and concentrated on turning out bullocks and perpetuated the two hundred acre farms, and believed that the grazier is getting good profits, I believe that by your failure in the present Budget to make any compensating allowance to the Irish farmer you have allowed an additional burden to be placed upon him. It is one that you must meet next year or the year after. So long as there is an industry of that magnitude in the country—we believe there is no ground to show us to the contrary—under-capitalised and in a serious position, it means that if you do not take steps to improve that now you will have to do it later on, when it will be much more costly.

[967] The Minister made a number of arguments against agricultural de-rating. But all this argument was equally applicable against his grant of £1,200,000, which is given at present in relief of agricultural rates. That money has to be taken out of taxes which are imposed upon the very same people in some other guise. But it is there, and the fact that the Government has made an increase, unsatisfactory as it is, of £600,000, shows that they appreciate that agriculture is in a very serious position. If they would go further and recognise that the Irish farmer is now under additionally unfortunate circumstances, and is unduly burdened in the race for successful competition in the English markets, they would be doing a good thing. It is most unfortunate that the Minister for Finance has simply said: “We are not dismissing the scheme completely; we are simply keeping it on the programme so that we may revive it whenever the occasion suits, or if we think that we can get away with it and do nothing we can conveniently drop it.” It would be much better if the Minister, taking a more favourable interpretation than his speech would lead us to believe, having in view the idea that something will have to be done if the idea of de-rating could not be pursued and was too expensive, had indicated some other way.

It is most unfortunate the Minister did not take the course of adding some amount to the agricultural grant. You must remember that the agricultural grant which he talked so much about is nothing in comparison with the relief from rates that the British and Northern Ireland farmers are enjoying since 1923. They have enjoyed 75 per cent. of exemption and when we talk of an additional £600,000 grant we ought to have taken that into consideration. I submit the Minister might take some steps without committing himself to the whole question of recasting local government and having to employ a large scheme which would entail a large staff towards increasing [968] the grant. The Land Commission, as several speakers have pointed out in the course of the debate on the Estimate for that service, has had the amount that was allowed for the improvement of estates cut by one-half, and the Minister, last year, I think, for the first time, laid down the principle that any amount over £100,000 should be regarded as abnormal expenditure in that connection.

I asked the Minister, in a Parliamentary question, how he came to that conclusion, because it seems to me that if the Minister can arbitrarily take £100,000 out of the Land Commission and call everything above that abnormal expenditure, there is nothing to stop him from going into any social service or any services which involve what we are all anxious to keep going as much as possible, such as the giving of employment, and saying that service is largely or wholly abnormal. If you begin to regard a thing as abnormal, I take it it only means that after a certain time you are going to get rid of it altogether. As I said on the Land Commission Estimate, if the Ministry had given us any indication that other schemes were in the offing, or that anything was being done to keep alive the industries with which the Gaeltacht is primarily associated, we would admit, perhaps, that this ought to be cut, but the fact is that nothing is being done, and the amount that this year is set aside for this purpose, I think, compares very unfavourably with what the old British Congested Districts Board used to do.

I have accused the Minister for Finance before, and I accuse him now again, of not playing up to his public statements with regard to the Irish language in the way with which he dealt with the Gaeltacht. As far as we, on this side of the House, are concerned, we are anxious and prepared to support the Irish language policy of the Government, but we are not going to allow a state of affairs to continue that side by side with that is [969] going to go on the absolute neglect of the Gaeltacht areas. I can only surmise that the Minister for Finance is completely ignorant of the conditions in those areas and that he is not aware that the people are as badly off as they are. If the Minister has any doubt about it he ought to go to his colleague, the Minister for Fisheries, who is responsible for that area, and ask him to do something instead of cutting down the Ministry of Fisheries Estimate in the way he has done.

Mr. Byrne: I think that the Minister for Finance deserves the hearty congratulation of this House for the Budget which he has introduced. I listened with care to the speeches of the Opposition and their criticisms upon that Budget. Deputy MacEntee, like a conjurer, produced figures from his hat, but unfortunately those figures, like what the conjurer produces, are most unreliable and have very little value. He went i