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Dáil Éireann - Volume 34 - 01 May, 1930

Financial Resolution No. 6—General.

Mr. Blythe: I move:—

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

Mr. MacEntee: In discussing the Budget which was submitted to the House yesterday, may I say at once that it reminded me of nothing so much as of a ragman's bag, a collection of odds and ends, yielding to the taxpayers neither pleasure nor profit? It is a Budget of impotence and despair, and the only message it [1229] conveyed to the harassed people of the country was an admonition to abandon hope. We may not hope, said the Minister for Finance, for any remission of taxation in the near future nor for any improvement in the social services nor for any economy in public administration nor even, after this year, to balance the Budget without recourse to fresh taxation. After such a recital, people may well ask what have they to hope for from this Government. The price of butter may go down, farmers may be beggared and impoverished, but the giddy whirl of Governmental extravagance must go on and taxation, so long as the Minister remains in office, remain at its present high level. The Minister's speech was a confession, not only of material, but of mental and moral poverty. As previously, the Minister refused to face up to the facts and to set them plainly and truthfully before the people. As previously, we were told “that there is no longer any sign of shrinkage in the revenue,” when, in fact, the yield from taxes on incomes and profits, from customs and excise and from stamp duties, exhibits in each case a decline from last year's figures—and the yield from these taxes represents 90 per cent. of our normal tax revenue.

The only main heads of tax which returned an increased yield were the death duties and the motor vehicle duties, accounting last year for 5.73 per cent. and 4.12 per cent. of the tax revenue respectively. The Minister pins his faith and his hope of balancing the Budget on these two taxes. But the death duties are too uncertain and too fortuitous in their return to justify the hope that in future they will make good the deficiencies of the other taxes. Thus, while in 1923-4 they yielded £996,000, in 1924-5 they only yielded £787,000. In 1925-26 the yield rose to £1,022,000, but in 1926-27 it fell to £952,000 rising again in 1927-28 to £1,285,000, only to fall once more in 1928-29 to £1,044,000. Last year the yield rose to £1,180,000. It is reasonable to assume that next year, as in previous years, a decrease will follow [1230] an increase, and the yield in this particular tax manifest a decline. That, however, is not the view of the Minister. Just as his colleague, the Minister for Justice, takes his stand against the laws of the State and procures men to commit crime, so does the Minister for Finance defy the law of probability and budgets next year for a second successive increase in the death duties, a phenomenon which he has not experienced since he first became responsible for the finances of this State. Two years ago the Minister's Budget was saved from disaster by an epidemic of sickness and disease. Next year his hope of salvation is reposed in the Angel of Death. What a ghoulish Minister!

Again, the Minister refers to an increased yield from the motor vehicle duties and offers it as compensation for the decrease in income tax and in the customs and excise. But the proceeds from these duties are ear-marked for the Road Fund, and are not available to meet other expenditure. They must, therefore, be eliminated altogether when considering the prospects of future revenue. We are now in this position, that last year the yield from the principal taxes, the taxes which furnished, as I have said, over 90 per cent. of the normal tax revenue, manifested a decline. The sole remaining source of revenue available to meet general expenditure gave an increased return last year and is, therefore, most unlikely to produce a further increase next year. Even if this unlikely event were to happen, that particular tax would not account for more than 6 per cent. of the revenue. Notwithstanding that the Minister, with these facts before him and familiar to him, declares that there is no longer any sign of shrinkage in the revenue. A Minister, who makes that statement in face of the facts which I have recited, is fooling the people, is false to the people, unworthy of their trust and unworthy of his office. He is here as custodian of public finances. He is here to present them truly to the House and to the people. He is not here to mislead the people by false [1231] hopes, but to make them aware of the position in order that they may make such efforts as will be necessary to redress it.

Now, let us consider the Minister's account of the public debt. He fixes the total figure for this at about £20,250,000 after including a liability of £5,000,000 to the British Government and allowing for certain Exchequer assets. Is that a true statement of the position? Are the Exchequer assets taken at their real value? What is the present value, for instance, of the £5,496,000 expended on the development of the Shannon or the £957,000 supplied to the Electricity Supply Board? I am not criticising that expenditure. I am not criticising the proposal to develop the Shannon. I have no doubt it will be successful, but that success has not yet been attained, and however hopeful we may be, from the very nature of things, may never be attained. If these advances are to be credited as assets, they must be taken into account at their present value, at their value at this moment when the prospect of repayment is still more or less uncertain, and not at their value at that indefinite future date when their full recovery is assured. The same criticism may be offered in regard to the advance for the purchase of creameries.

I notice an item for £100,000 advanced to the National City Bank in connection with guaranteed loans. That advance is to be repaid, and it is typical of the Minister's financial methods that while in the early part of his statement it is treated as a capital asset, we find that later on he proposes to utilise it to defray current expenditure of the kind which he himself admits is not abnormal and therefore should not be met by borrowing nor by the realisation of assets. But apart from this, it is to be noted that the Minister in his statement makes no note of the contingent liabilities which the State has contracted in respect of these loans. I do not question the wisdom of the loans nor the amount nor any single circumstance [1232] in relation to them, but I do say that since the amount of the loans and the probable real liability in respect of every one of them is fairly well known, it is wrong not to include this item among the State liabilities.

There is one other item which the Minister, I presume, has credited as an Exchequer asset and that is the investment in the Industrial Trust Company of Ireland. What is the present value of the shares in that concern and is the Minister satisfied with the purposes to which the capital which he has subscribed has been devoted? I understand that the Minister is strongly represented on the board of the company, and I should like him when replying to give some information as to the present value of this investment. There are rumours in circulation in regard to it, and I think it would be well either to set the public mind at ease or let them know the worst in regard to this particular project.

The points to which I have referred are comparatively unimportant when we remember that the Minister's statement discloses only about one-sixth of the public liability, or rather I should say about one-seventh. What is the use of talking about a public debt of only twenty millions when the Minister has not taken into account his commitments in respect of land annuities, R.I.C. pensions, civil pensions, compensation allowances, pensions to ex-British Judges, pensions to resigned and dismissed R.I.C. men and local loans? Are these liabilities or are they not? Are they an obligation upon the people and upon this State? Are they to be met by the Exchequer of this State? Do they not recur year after year? Will not some of them continue to recur for over thirty years? Can the Minister get up and say that the land annuities, as he at present accepts liability for them, are not part of the public debt of the State, rightly or wrongfully, under his regime? In my opinion, our present liabilities in respect of these items should be capitalised at not less than £130,000,000, of which land annuities would represent about £116,000,000 [1233] and R.I.C. pensions about £9,000,000. It is those concealed items, those items upon which the Minister does not dwell, those items to which he does not call public attention, which make the truer presentation of our economic position, and it is the annual charge in respect of these items which is crippling our people.

We paid last year for the services of what the Minister describes as the public debt a sum of £1,708,000, but practically the whole of that amount was paid to the inhabitants of this country! It was distributed here and went to finance industry and to maintain our people. But, in respect of the land annuities, local loans, and damage to property annuities, R.I.C. pensions, and other items we paid last year to Great Britain no less a sum than £5,365,000. Of that sum only about £1,200,000 in respect of dividends on land stock and £960,000 by way of pensions to ex-R.I.C. men resident in this country found its way back here. The balance of £3,200,000 was permanently withdrawn. I wish to make it clear that I feel that these two items—the dividends on the land stock and the pensions to ex-R.I.C. men resident in this country—would probably have accrued to us in any case, and that, therefore, the direct burden upon our people represented by the payments to Great Britain to which I have referred is not less than the total sum of £5,365,000.

But apart from this aspect of it, the transaction is one which represents in the present circumstances a net withdrawal from this country of gold, or the equivalent of gold, to the value of over £3,200,000, and is, therefore, accompanied by an increase in the cost of money and a restriction in the volume of credit, and all the handicaps and burdens which those two factors impose upon industry and enterprise. So long as these payments continue there is no hope of an economic recovery in this country; no hope that we shall be able to maintain our social services even on their present standards. I think that that, from the point of view of the future of our country and of our people, is a significant [1234] and vital factor in this whole ultimate financial settlement. The fact is that if it continues, and if we are under it to have to find this £5,300,000 annually, we shall not be able to maintain here the same conditions of life that people enjoy in neighbouring and even in more distant countries. I think that that would be disastrous.

Our people are hardy and enterprising and courageous. They will not be content with poverty and misery in their own country while they may win comfort and affluence elsewhere. They assuredly will be called, as millions of our race have been called, to those other lands where their qualities will ensure them an adequate livelihood. The best of them will go, and we shall be left with a race not only decreasing in number but deteriorating in quality. Whatever may be the cost, we shall have to strive to make life in this country at least as attractive for our youth as it is in other countries. I think that that must be one of the guiding principles of those who have the direction of this State, of those who have the government of our people; that life here must be made as attractive for our young people as it is in other countries. That may be very difficult, but it is the burden which their obligation to our race imposes upon our elder generation. To shirk that burden would be to commit race-suicide. And if that burden cannot be shouldered and those obligations fulfilled so long as the Ultimate Financial Settlement stands, then the Ultimate Financial Settlement must go.

The Minister is as well aware of the realities of this position as we are. He knows how this agreement is crippling our people, how, so long as it stands, there is no hope of a revival, and yet, instead of coming out boldly and telling the truth to them, at whatever the cost to him or his associates in the Government. he prefers to mislead them and to lull them by presenting an entirely fallacious account of the public debt. As I said, the Minister's speech was a confession, not only of material, but of mental and moral poverty.

[1235] Yesterday, I described the Minister's speech as a defence of squandermania, because a large part of it was devoted to justifying an estimated expenditure of £26,002,000 upon various services. Of this amount no less than £16,180,000 was earmarked for services which the Minister described as unavoidable. Let us consider three of them only: superannuation, accounting for £2,065,000; the Army, accounting for over £1,500,000; and police and prisons accounting for over £1,800,000. Of that £2,065,000 spent on superannuation, no less than £1,170,000 is paid to Great Britain in respect of pensions to the ex-R.I.C. That expenditure admittedly is unavoidable, but only unavoidable so long as the present Government remains in office. But if there were another Government in power which would question those payments and show, as it can be shown, that they are not obligatory even under the Treaty, there would be an immediate reduction in this item of expenditure, which the Minister classified as unavoidable, of £1,170,000. Similarly in regard to the Army, which costs £1,574,000, the Minister yesterday pleaded that this expenditure cannot be reduced until the possibility of internal armed attack on the State has disappeared. Quite so. So long as the Minister's colleague, the Minister for Justice, spends public money fomenting disorder and goading men to violence, the Army must be there to suppress the results of that vile policy. But, suppose the Minister for Justice were to be swept away, back among the debris of the Law Courts from which he never should have emerged, and suppose the Minister for Finance and this Government gave place to another, which secured a revision of the Constitution, so that all sections of the people might avail of it to secure by peaceful means their political aims, then all possibility of internal armed attack, which I do not believe exists, but which the Minister makes his excuse, would have disappeared and a reduction in the cost of the Army by about half a million pounds would [1236] be made possible.

The same can be said of the police and prisons. If there were another Minister than the present Minister for Justice, and another Government in office, the cost of police and prisons could be reduced by at least £300,000. So that when the Minister states that expenditure upon these services is unavoidable and must be maintained at its present level, and continue to absorb over £5,500,000, what he really means is that so long as he is there the expenditure of that amount is unavoidable. But displace him and his Government, and at once it will be possible to reduce the expenditure under these heads by not less than £1,970,000, which would become at once available for the relief of taxation, or the extension of those social services of which the Minister despairs. Furthermore, I feel if the reorganisation of the present administrative services were seriously undertaken, it would be possible to save at least another £300,000 without diminishing the efficiency of those services or the benefits which people derive from them. If, therefore, there is to be no retrenchment in Government Departments next year, it is not because savings are not possible, but because the Minister refuses to make them. Similarly, if there is to be no relief to the taxpayer, it is because the Minister will not do those things which would enable him to grant those reliefs. In both cases, it is not lack of power nor of opportunity but of will which is at fault.

In the course of his speech yesterday the Minister, in dealing with the question of allowances to smaller income taxpayers, stated that to grant the relief asked for would increase the burden of taxation on the poor for the benefit of those who had the good fortune to be income taxpayers. Coming from the Minister, that remark makes it opportune to consider the taxation policy which the Minister has pursued since 1923-24. According to the last available report of the Revenue Commissioners 1,500 persons share between them seven and a half millions of the aggregate of individual incomes in this community, [1237] which I put at, say, £158,000,000. About another 63,500 persons take £58,822,000. And there is left £91,967,000 to be divided amongst 1,242,662 other persons gainfully occupied in this country. There is, therefore, to be devoted to the support of 7,500 persons, say, £7,500,000, or £1,000 each; to 317,500 persons the sum of £58,822, or £185 each, and to 2,647,000 persons the sum of £91,967,000, or £34.36 each.

If we take as a family unit a household consisting of two adults and three children, the families of the twenty-six counties may be ranged in three classes:—(a) families with average incomes of £5,000 per annum; (b) families with average incomes of £926 per annum, and (c) families with incomes of £172 per annum. It will be noted that over 89 per cent. of our people are included in the last category. It will not seriously affect the comparison if, for its purpose, we take families with average incomes of £5,000, £1,000 and £150, respectively, and see how the Minister for Finance has dealt with these since he came into office in 1923-24. We shall take the poorest family first. In 1923-24, the average amount of taxation paid by a family with an income ranging from £150 to £350 was £26 6s. 3d. per annum. In 1924-25, this amount had fallen to £24 14s. 3d., and in 1925-26 it had been still further reduced to £21 18s. 10d. In 1926-27, the tide turned, however, and the taxation imposed upon such families began to increase, reaching £23 Os. 7d. in that year; £23 12s. 9d. in 1927-28, and £23 14s. 7d. in 1928-29. So much for our poorest families.

Let us now consider an average middle class family with an income of £1,000. In 1923-24, that family paid £148 4s. 8d. in direct and indirect taxation. It was decreased to £146 12s. 8d. in 1924-25, and to £119 17s. 5d. in 1925-26. It rose slightly in 1926-27 to £120 19s. 2d., but in the next year (1927-28) it fell to £97 11s. 2d., rising a little to £97 13s. in 1928-29.

We now come to consider the spoiled darlings of the Minister's [1238] heart. In 1923-24, the fortunate person who enjoys an income of £5,000 paid in direct and indirect taxation, full allowance being made for estate, legacy and succession duties, £1,558. In 1924-25, the burden was slightly reduced to £1,556, and again in 1925-26 to £1,528. But in 1926-27, the Minister began to be really moved, and, full of compassion for this hapless individual, he reduced his burden to £1,217, and in 1927-28 he reduced it still further to £996, at which it remained in 1928-29.

Let us look at it in another way. In 1925-26 the amount of taxation paid by a family with an income of £150 was £21 18s. 10d., but in 1928-29 the taxation of that family had risen to £23 14s. 7d.—that is, it was increased by about 7.5 per cent. The £1,000 family in 1925 paid £119 17s. 5d. in taxation, and in 1928-29 this had fallen to £97 13s., or a decrease in the burden of about 18.5 per cent. In 1925-26, the five-thousand-pounder paid £1,528 in taxation, and got off in 1928-29 with £995, or a decrease in his burden of 34.8 per cent. A gentleman with £3,000 was even luckier, because while in 1923-24 he would have been paying at the rate of £726 per annum, in 1928-29 he would have paid at the rate of £351, a reduction in his case of 51.65 per cent. We can see, therefore, that from the family with an income of £150 per annum the Minister for Finance took £1 15s. 9d. more in 1928-29 than he did in 1925-26, but from the family with an income of £5,000 he took £533 less than in 1925-26. It is, therefore, not unjust to say that the whole trend of the Minister's taxation policy has been to make the poor poorer and the rich richer. There have been admirable ruffians in history who have been loved and remembered because they robbed the rich in order that they might relieve the poor. But the Minister will go down to posterity as the Minister who plundered the poor in order that he might relieve the rich. It is clear that before a taxpayer may hope for any sympathy from the Minister he must possess an income of at least [1239] £1,000. If he should be in that fortunate position and come pleading, as he did come pleading in 1926-27 and 1927-28, to the Minister for a remission of taxation, the Minister will weep golden tears on his behalf. If he be a farmer pleading for derating, or if he be an old age pensioner asking for restoration of the conditions which prevailed here in 1922-23; if he be a shop-keeper asking for relief of his rates, or a land annuitant asking for time to pay, the Minister tells him the State cannot afford it, that there can be no extension of the social services, that, as a matter of fact, we are scarcely able to pay our way without imposing further taxation. He hardens his heart, closes his pockets, and lets the poor of this country starve or emigrate as they may.

Mr. Shaw: I think the Minister is to be congratulated on the Budget for many reasons, but firstly because, after all the gloomy predictions we heard, there is to be no increase in taxation. While we might all like or appreciate a reduction, it is pretty evident from the figures that on this particular occasion such a thing could not occur. In the second place, there have been no surprises or stunts of any kind that would interfere with business development.

I also welcome the tax that the Minister imposed on what are known as travelling motor shops. This tax will go a long way to save the smaller towns from extinction, because I am personally aware of the grave injury that has been caused by the unfair competition of these people who pay no rates, rents or taxes and give no employment. They come in there and sell their goods and take away the money to some other place. It has been certainly unfair, and I am very pleased that the Minister has partially met the matter. I do not agree that £10 is enough, and I hope to see the amount increased.

The Minister's announcement in connection with simplifying the income tax code is very welcome. He stated that it should be possible to have a Bill for the simplification of [1240] the income tax code prepared and passed by the Dáil before the next Budget. I believe that any such Bill will certainly have a speedy passage through this House and be highly appreciated throughout the country, because the present forms are very complicated, and there are very few persons, no matter how intelligent they may be, who are able to fill them up. I know very many cases in which they have not been filled up simply because the people did not understand them. A great many persons are penalised not for any fault of their own, but through the very great difficulty experienced in filling them properly. I certainly hope that the Committee will bring to this House as soon as possible this simplified code. The country will appreciate it, and the Dáil will lose no time in passing it.

I am sorry that the Minister did not make any allusion yesterday to the removal of the betting tax on race-courses. The Betting Committee made a unanimous recommendation to this effect, and now that the Tote is in operation and the Minister will obtain a very large revenue from it, I hope he will see his way speedily to remove this tax, which is undoubtedly causing grave injury to racing in Ireland. The Tote or PariMutuel was in operation last week at Fairyhouse. There was over £10,000 invested, and the Minister obtained in revenue £250, as he received 2½ per cent. on the turnover; as there was £10,000 invested at Punchestown he backed a winner there for a similar amount and got £250 more. I would like to ask the Minister also when it is his intention to introduce the Betting Bill, because there are many matters of importance on which the Committee made recommendations. I hope there will not be much delay with regard to that.

As a director of the Irish Tourist Development Association, I regret very much the remarks which Deputy Lemass made here yesterday with regard to attracting or bringing into the country wealthy people who have money to spend. The Irish Tourist Development Association are doing everything in their power to [1241] attract those people here and this would bring about a large circulation of money and much-needed employment.

Mr. Lemass: On a point of correction, may I point out to Deputy Shaw that I said nothing whatever about tourists?

Mr. Shaw: What I am talking about is bringing in wealthy people to reside here.

Mr. Lemass: They are not tourists.

Mr. Shaw: I think Deputy Lemass said “We do not want those people here; I think we would be much better off without them.” When Deputy Lemass comes to Longford and Westmeath—I presume we will see him there shortly——

An Ceann Comhairle: Not Longford and Westmeath yet, please.

Mr. Davin: This is the beginning of it.

Mr. Shaw: There are two such people there, the Earl of Longford and the Earl of Granard, and they are giving enormous employment. In fact, in the areas where they reside there are no idle persons, and, in addition to that, they give huge sums to every possible kind of charity. I am very sorry those remarks were made and I do not think that there are very many people who will agree with them. I consider that the country is well satisfied with the Budget, because we all thought there must be an increase in taxation. It is perfectly apparent that we have reached the stage now when the position is stabilised, and in the future we certainly can look forward to a considerable reduction. This will give people who want to develop their business and invest money in this country the courage to do so. I repeat that the country is well satisfied with the Budget which the Minister introduced yesterday.

Mr. Lemass: I think it is desirable that I should make it quite clear that I have no objection to millionaires coming into the country, but I do object [1242] to attractions being held out to them for which the poor working men of Dublin have to pay. The speech which the Minister made yesterday in relation to the proposal to give allowances to the smaller income taxpayers with families was to the effect that he could not see his way to do so because if he did he would lessen the attraction to his titled friends in England to establish their residences here. I do not want to say anything against Lord Longford or the Earl of Granard, or any other similar individual in the country, but I say the first concerns of this Dáil should be to protect the interests and preserve the happiness of the men who build up the wealth of the country, and they are not dukes, earls or millionaires. They are plain, good, honest-to-God working men whose interests were neglected when this Budget was being framed.

The amount required to put into operation the scheme of allowances devised by the Departmental Committee was £100,000, according to the Minister for Finance. The yield of income tax last year worked out, I think, at almost £100,000 per penny in the standard rate. It does not seem to me an extravagant suggestion that the inducement of 1/6 in the £ which these millionaires and lords in England have at present to establish their residences here will not become inoperative if the inducement is reduced to 1/5. Yet for the additional £100,000 we could give reliefs that have been long promised, and in fact long overdue, to one of the most important classes in the State. Although we have a standard rate of 3/- in the £ here, in comparison with a standard rate of 4/6 in Britain, the fact is that a man with a family with an income of less than £1,000—certainly less than £500—has to pay more in this country than a man in a similar position in England. The interesting speech which we have just heard from Deputy MacEntee confirms the statement I made yesterday, that the whole tendency of Government policy during the past six years has [1243] been to transfer the weight of the burden of taxation from the shoulders of the rich to the shoulders of the poor. It is the poor who pay the greater part of the indirect taxation. It is the rich who pay the greater part of the direct taxation.

If any Deputy chooses to work out the percentages in each year since Mr. Blythe became Minister for Finance, he will find that the percentage of direct taxation has been diminishing and the percentage of indirect taxation has been growing. In other words, the amount which the poor are asked to contribute to the maintenance of the State has been increased, whilst the amount which the rich are forced to give has been considerably reduced. That may be good policy from the point of view of the Tourist Development Association, but I doubt it. It certainly is not good policy from the point of view of the Irish people. Any Government that was anxious to preserve conditions in this country as they should be for the great bulk of the people, and not quite so much concerned about dukes and Iords as Deputy Shaw and the Minister for Finance are, would, I think, have tended to move in the opposite direction. There was not merely a general hope but a general expectation that in the Budget statement of this year the allowances recommended by the Departmental Committee would have been given. All the political correspondents of the newspapers for the past week have been foretelling that these concessions were to be given. I am quite certain that the majority of the members of the Cumann na nGaedheal Party anticipated that they would have been given and are just as disappointed as we are at the barren nature of the Minister's statement.

The only tax remission that has been given is the one on champagne. This Budget should go down to history under the title of the Champagne Budget. The Minister's only concern was to reduce the cost of the banquets which he and his colleagues give to the lords and the earls or other distinguished foreign visitors [1244] who occasionally come to our shores. I do not say that these distinguished foreign visitors should not be properly entertained, but I do say that the reduction in the cost of their entertainment is a much less important matter than the granting of concessions to the small taxpayers with large families.

The Budget statement which the Minister made was, as Deputy O'Connell described it, an indication that the Minister's stock of ideas has become exhausted. He was apparently quite satisfied when he found that the revenue from existing taxation would be adequate to meet the slightly increased bill for Government services. It did not worry him in the least that the great problems which we discussed here on this resolution last year—the problem of inadequate housing, the problem of unemployment, the problem of emigration, the problem of trade depression—are as serious, or more serious, than they were twelve months ago. That was only a matter of detail. The Minister was satisfied so long as the Budget could be made to balance by the simple process of deducting from the Estimate for supply services an arbitrary sum representing what he calls abnormal expenditure. If this State is going seriously to tackle its problems we have got to have increased expenditure. An expenditure, however, which will provide the houses and give the works which are needed cannot obviously be met out of taxation. The Minister was boasting yesterday about the low level of the national debt. It is true that he gave a figure for the national debt which left out of account several big items which have been referred to here today by Deputy MacEntee. The low level of national debt as defined by him exists because the Government has failed in its duty to the people in the provision of such essential services as housing. It is not, I think, a matter on which this Dáil can pride itself that we have a dead-weight debt of only £20,000,000 while we have at the same time 68,000 people in the city of Dublin living in dwellings officially condemned as unfit for [1245] human habitation. It is not a matter of pride that we had in 1926, according to the Census, 55,000 houses urgently required for the proper accommodation of our people, and that the only reaction of the Government to the publication of that figure was to reduce the grant available for the encouragement of building.

The Minister for Finance, taking the purely orthodox finance view, may be quite satisfied with the uneventful nature of the Budget statement he made yesterday, but the people of this country who are looking for a change of Government policy because the existing policy has not met their needs have no grounds for satisfaction with this Budget. Expenditure designed to remove the social evils that exist amongst our people, the lack of houses, bad drainage, inadequate water supplies, and other evils of that kind would be productive expenditure which could be met out of borrowed money without necessarily increasing the burden of dead-weight debt. It is certainly expenditure that should be undertaken in any case, because the first duty of a modern State is to ensure that these services will be provided. The attitude of the Government is similar to the attitude of the average Farmers' Union member of a county council. So long as they can keep down the rates they do not care what happens to the social services for which they are expected to provide. That was the attitude of the Minister for Finance yesterday. He was quite satisfied, because it was unnecessary to alter any existing taxes. It did not matter to him, and apparently it does not matter to members of the Cumann na nGaedheal, that the Budget statement was in fact an admission of the Government's inability to do its job. The Budget was made to balance by a very simple and very old trick. The Minister found himself with an Estimate for expenditure that was some £1,200,000 in excess of the estimated revenue. Instead of taking steps to increase the revenue, he merely proceeded to deduct from the Estimate a number of [1246] items of expenditure amounting to £1,200,000, and, calling it abnormal, made provision to meet it by borrowing. When introducing the Budget in 1929, the Minister for Finance said:—“We may reasonably hope that in the year 1930-31”—that is, this year—“the expenditure of the kind which has hitherto been classed as abnormal will include very little in addition to whatever sum may be required for the Local Loans Fund.” That was the Minister's intention last year, but this year, finding that the Estimate for supply services had been increased, he forgot what he said twelve months ago, and he proceeded to deduct from that Estimate, for the purpose of meeting it by borrowing, a sum which actually exceeds by £653,000 the amount required for the Local Loans Fund. He is in fact deducting from the Estimate this year, as representing abnormal expenditure on supply services an amount which exceeds by £155,000 the amount which he deducted last year, although he told us last year that he would not again deduct any such amount except it was required for the Local Loans Fund. That is high finance! A plainer word could be used outside, but the Ceann Comhairle would not allow me to use it here.

In each year it is obvious that there will be a number of items of expenditure of a non-recurrent nature, amounting in the aggregate probably to the same sum every year. Although the individual items might reasonably be described as abnormal, they would be concerned with expenditure of the same type, and should therefore be provided out of normal revenue. I hope I am making my meaning clear. In each year's Estimate for the supply services there will be a certain number of abnormal items, and because of that fact provision for these abnormal items should be made out of normal revenue and not out of borrowed moneys. It is, I think, tricky finance to argue that because some such item as that which the Minister included yesterday, like the provision of a capital grant to University College, [1247] Cork, is not a recurring item, it can be provided for out of capital. It is undoubtedly true that no item of that kind is likely to appear in the Estimate for the next year, but some other non-recurring item of a similar nature will appear. The aggregate of the abnormal items in one year's Estimate will be the same as the aggregate of the abnormal items in another year's, and we can reckon as a normal phenomenon in our financial life the existence of these abnormal items. Therefore it should be the duty of the Dáil to take steps to provide that they will be met out of normal revenue and that, if necessary, taxes should be imposed which will enable that revenue to be realised. It is untrue to say that this Budget has been balanced. It has been balanced only by the trick of passing on to posterity the charge which should be met in this year.

We had hoped that the Minister might be forced by circumstances to do something on this occasion that would ease the industrial depression and help to find work for the unemployed. Reference was made yesterday to the coach-building industry. For four years the representatives of that industry have been hanging around the doors of the Tariff Commission trying to get the protection which would have meant the preservation of their industry in this country. In 1926, when their application was first made, there were 1,290 hands engaged in coach-building factories. The giving of protection then would have meant additional employment for 2,000 hands in the coach-building factories and 600 hands in subsidiary industries.

According to the statistics published by the Department of Industry and Commerce, the number of persons engaged in the manufacture of motor bodies on July 1st, 1924, was 249. An inadequate duty went on those bodies in that year, and in consequence the employment given by the industry increased, until on September 1st. 1928, it was 569. But last year, while the representatives of the industry, as I said, were hanging [1248] round the corridors of Merrion Street asking for protection, the employment given by the industry decreased by 47 per cent., some concerns were shut up, a good deal of the invested capital was wasted. The industry is not now in a position to take the same advantage of protection, if it were given to-morrow, as it would have been in 1926. The value of the products of the industry imported in 1928 was £750,000, and in 1929 it was about £900,000. This is an industry which all Governments seek to preserve within their shores, because the relationship which the amount paid in wages bears to the value of the gross output is higher than in any other industry except house building; it is not less than 50 per cent. The loss in wages, therefore, in the year 1929, because the protection asked for by those engaged in the industry was not granted was about £450,000. The loss in wages to the Irish workers since 1926, due to the vexatious and unnecessary delay in presenting the Tariff Commission's Report, exceeds £1,000,000. That long-delayed examination of the application is now at an end, we understand, and I think it is even possible that the Minister has the report in his possession. We did hope, however, that he would take steps to ensure that the Report would reach him before he prepared his Budget statement, and that if the recommendation is, as we believe it must be, in favour of the application, we would now be considering the necessary financial resolution imposing the duty. However, no reference to the matter appeared in the Budget statement, and from that people are concluding that the Tariff Commission, in this matter as in others, has considered, not the welfare of the industrialists or the workers here, but the theories which they have learned from the text-books of British economists and which they are apparently determined to apply here, irrespective of their effect on the wellbeing of the people.

I was recently afforded an opportunity of visiting a large factory in the Midlands that is devoted to the construction of furniture and coach [1249] bodies, and I was struck very forcibly by the fact that there was considerable evidence of activity in the portion of the factory which was used for the manufacture of furniture, on which there is an import duty, but when I came to the part of the factory that had been utilised for the manufacture of motor bodies I saw a large empty space, and I was told that it was only twelve months ago since there had been 50 and 60 skilled workers employed in that room, where now only two were maintained. That situation is reflected in practically every coach-building factory in the country, and the Government appears to regard the whole situation with indifference.

The coach-building industry is, of course, not the only one that has been pleading for protection from this Government and has not got it. The paper-making industry is also engaged in promoting an application before this infamous Tariff Commission. I have said in the past, and I repeat it now, that this Tariff Commission appears to have been established for the sole purpose of delaying and impeding the granting of protection to Irish industries, and the action of the Government last year in placing upon its members the additional duty of conducting the Grain Inquiry appears to point very directly to that end. There are, possibly, 50,000 people unemployed at this moment in the Free State. I make that estimate subject to correction. I do not know the number unemployed. Twelve months ago I commented on the fact that the figures relating to unemployment ascertained in 1926 had not been published. I can make that comment with greater force now. Can we learn the reason why these unemployment figures have been suppressed? Surely it was more important when the census was taken that the figures relating to matters of that kind should be made available before we were told the number of persons of different religions living in each town, village and townland. The number of persons of various [1250] creeds living in different parts of the country is only of minor interest. The number unemployed is a matter of major concern, and still we find ourselves, four years after the census was taken, without the information that was ascertained then. Can the Minister tell us why that information has not been made available? It is certainly my belief that it has been deliberately suppressed, because its publication would not suit the political interests of Cumann na nGaedheal.

The attitude of the Government towards this and all the big problems that are confronting the Irish people to-day appears to be one of absolute futility. On every occasion when any matter is raised here, or any project mooted which would benefit the Irish people, they talk, not about the advantages which would be gained by success, but about the administrative difficulties which would result if an attempt were made to put those projects into operation. Every member of the present Government, with one or two exceptions, appears to have long since exceeded his term of usefulness, and to be content now with merely carrying on the routine functions of his Department, without bringing any element of originality or initiative into the consideration of the problems with which they should be dealing. The situation this year is likely to be even more serious than it was last year, owing to the slump in agricultural prices, which is taking place, not merely here, but throughout the whole world. For us that slump is much more likely to have serious consequences than for others, because, under the influence of the present Minister for Agriculture, we have been encouraged to put all our hopes on the prospects of one or two branches of the agricultural industry.

It is a long time now since Deputies on this side of the house advocated the adoption of a scheme for the encouragement of wheat-growing. A certain scheme was submitted to the Economic Committee and rejected by the majority. That scheme [1251] was the best that the Fianna Fáil members of that Committee could devise, but even admitting that it may not have been perfect, its rejection by that Committee should not have ended the matter. I think even the Minister for Agriculture is learning to regret now that he has not, during his term of office, taken some steps to encourage the production of that cereal here. The only encouragement that it requires is the guarantee of a market to the farmers if they grow it, and to a lesser extent, the guarantee of a fair price. We spend over £7,000,000 a year on foreign wheat and on the products of foreign wheat, a large part of which could be kept at home and which would be a very considerable benefit to the Irish farmers, while they are tiding over this crisis in the dairying industry. I have already pointed out that in this matter of developing the production of wheat at home the Free State Government will soon occupy a position unique in Europe. The Minister for Agriculture has his eyes turned on Canada, Australia and the United States; but, in fact, there is more wheat grown in Europe, excluding Russia—and I would like Deputies to keep this fact in mind—than in Canada, the United States, the Argentine and Australia added together. Every Government in Europe is taking steps to encourage the production of wheat within its shores, except the Free State and Britain, but it has been officially accepted as the policy of the party that at present constitutes the Government in Britain to put such a scheme into operation there. The members of that party are engaged in advocating a scheme very similar —in fact, almost identical—with that submitted by Fianna Fáil to the Economic Committee.

Mr. Davin: Then it is the reverse. It is generally the Fianna Fáil Party copies other people's programmes.

Mr. Lemass: On this occasion the Labour Party have done us the [1252] honour of copying our scheme. If the Labour Party here did the same they would be taken more seriously than they are taken at the present time. The consequences which the crisis in the dairying industry are likely to have for the farmers are due to the fact that the Minister for Agriculture has been working all the time with his eyes on the British market, and neglecting the much more valuable market for Irish agricultural produce which is available at home. There was published within the last three weeks a little booklet by the Department of Industry and Commerce giving statistics relating to the agricultural output which I hope Deputies on the benches opposite will study very carefully. There is one fact in that booklet which I would like to refer to now, and that is that one worker employed in Ireland is worth to the Irish farmer fifteen workers employed in England. That one fact alone indicates that it is directly in our interests to give employment here in the production of goods required by us in preference to giving that employment in England, even if the production of these goods at home could not be done at as low cost as it could be done in England, where mass production methods are in operation.

With the situation as serious as it is, I think it is no wonder that a large number of people are beginning to despair of the possibility of revival. There are people who are apparently of the opinion that the vitality of the nation has been so weakened by this Government during the past eight years, that a revival would not be possible, no matter what Government is in office, or what policy is in operation. I do not think these people are right. I do not think that the damage done has yet reached the stage at which it is irreparable. I think that if any Government went into office determined to put into operation a pro-Irish policy in economic matters, they would be able gradually to build up the resources and strength of the country again. I know that the members of the present Executive [1253] are all supermen, inspired by heaven, and incapable of doing wrong, but even if an Executive Council composed of ordinary individuals was elected by this House, these ordinary individuals could produce better results if they worked on a better policy. It is not, perhaps, the men who are wrong in the present Government. It is the policy that is wrong, and so long as that policy is in operation, it does not matter if they were all archangels. The results will be no different to those that now exist.

I do not know if there will be a vote on the motion we are now discussing. It is a very innocuous form of motion. It merely suggests that there should be a change in the law and the purpose for which it is moved is merely to give us an opportunity of discussing the Budget. If there is a vote, and I think it is advisable that there should be, I take it that a vote against the motion will be an indication of dissatisfaction with the Budget and with the policy of the Government in general. I hope that those who were elected to represent the plain people and not the lords, those who have the interests of the plain people and not the lords at heart, will indicate that fact by voting against the motion and, consequently, against the Government.

Mr. O'Hanlon: Having listened to the criticism which the Budget has called forth, I think I must come to the conclusion that it is a highly satisfactory Budget. I do not propose to analyse it for what it contains or for what it omits. I think that on the whole the people in the country will say that the Minister for Finance has done his work exceedingly well. Many people will be surprised that he has been able to balance his Budget so well. Deputy Lemass's main criticism of the Budget was as to its want of originality. Well, no doubt there is a lack of originality about it. It satisfies the people outside who expected some new taxation. Deputy Lemass said that if some statistician went into the proportion of indirect [1254] taxation paid by the poorer people in the State as against the amount paid in direct taxation he would find that the burden of indirect taxation fell very largely on the poor. That is quite true, I believe, but it is an extraordinary statement coming from what I may call a whole-hog protectionist. If Deputy Lemass had his way the burden of indirect taxation would be still heavier on the poor.

Mr. Lemass: Not at all.

Mr. O'Hanlon: And, while the Government, according to their own statement, have only tariffed something like 50 per cent. of taxable articles, the Opposition Party, if in a position to do so, would tax all of them and still expect that the poor would have a lighter burden to carry to enable them to pay for the necessaries of life.

Mr. Lemass: So they would.

Mr. O'Hanlon: That is a line of argument that I cannot follow. For that reason, I think that the whole criticism of this Budget has completely broken down. I think that the Budget will be a most satisfactory one to the people of the country.

Mr. Derrig: If Deputy O'Hanlon would look at the example of Australia he would find that the Labour Party, which places first in its programme the welfare and advancement of the workers in the towns, has a strong protectionist policy, and that the Farmers' Party in Australia as well is pretty protectionist, unless it can be shown definitely that a particular measure of protection is going to injure the farming industry. The Minister for Finance has told us that he is setting aside the amount of money collected from wireless licences and wireless tax for the purpose of developing a broadcasting station. He thinks it is a good principle that the money he collects from that particular amusement should go to develop the amusement further. It is a pity that, in other spheres, the Minister would not earmark the revenue he [1255] collects from particular sections of the community and spend it for the benefit of those people. If Deputy O'Hanlon, or any other member of the House, can show us any other policy except whole-hog protection which will remedy the present situation, which will do something to stop emigration, and relieve unemployment, let him do so. No other policy has been suggested.

As to the policy which Deputy Lemass has referred to, of waiting for the patriotic exiles who left this country when a native Government began to function in it, but who are coming back because they have found that they were nobodies while they were across the water, and feel that if they return here they may shine in the ranks of society— those who say that kind of thing is going to affect economic upliftment in the country are simply fooling the people. No doubt, if these people do return and take their places, as they ought to have taken them, when the change was originally made in the country and contribute to its welfare as citizens—not only themselves but their ancestors in the last 100 or 200 years ought to have done that—then we will be very glad. If they do that it will show that they are beginning to recognise that this country is their natural home, their cultural home, and not some other country. If they decide to make their home their sphere of interest, and their sphere of influence in this country, nobody will be more delighted than we will.

So far we have not seen any results in that direction from the lower rate of income tax charged in this country as compared with other countries. The Minister referred to a few cases of that kind, but I think they are very few. I think it may happen that some people whom the Minister has in mind may not be of such advantage to the country. They may not be so wealthy as the Minister would have us believe. It is very unlikely that people of the very wealthy classes, no matter how they are taxed in England, if they prefer [1256] to live in that country are going to leave all their amenities, all their comforts, and all their other connections behind them and come over here merely for the sake of getting the benefits arising out of the remission in income tax to which the Minister referred. If they do come, if there is a change of front on their part and they consider that at this hour of the day it would have been better for them to have stayed in Ireland and to have worked for Ireland—they got very little thanks for going where they went—we will all be very pleased. The position at present is that these taxes which are being collected are not being set aside for a particular purpose. Protection, if it means anything, should not alone mean that you want to keep out foreign products, but that you will utilise revenue in order to develop the home situation, to increase employment, develop business activities and commercial prosperity.

In Australia there is a tariff which would absolutely shock the Irish Farmers' Party out of existence. Australia has a tariff on butter. The extraordinary thing about it is that the Australian working man is prepared to pay a tariff of 4d. a pound on Australian butter and of 6d. a pound on New Zealand butter in order to help the Australian farmers, it being understood on the other hand that, when Australian industries are being protected, that when measures are passed in Parliament for the purpose of developing industries in the towns, the farmers on their part will make a corresponding sacrifice. If butter is to be taxed for the special benefit of agriculture and the working man is prepared to pay his share of that burden, he demands in return for that that the farmers of Australia will help him to build up industries and not object when tariffs are imposed—tariffs which have been successful in developing Australian industries.

You have as well as a tariff on butter a tariff on agricultural implements. That means the farmer will have to pay more for his Australian implements, but he will get a special class of agricultural implements [1257] which will suit his farm and which he could not get elsewhere. If we were to develop on these lines in this country I think we would be on the right road. Undoubtedly this money that Deputy O'Hanlon has referred to is collected mainly from the farmer, and at present the farmer is not benefiting from it in any way. It is not going to benefit or give any relief to agriculture, and it is not making people in the towns more prosperous. There may be some slight increases in employment here and there, but they are not commensurate with the extraordinary increases which have been made in taxation, as far as protective tariffs are concerned. As far as the industries themselves are concerned, we find from looking at the figures, that substantially the same amount of materials or commodities are being imported in some of the most heavily taxed articles as some years ago. In the case of clothing apparel I find that in 1927, according to finance returns, £661,000 was collected in taxation in customs dues, and in 1929 the amount was £645,000. Therefore, there is practically no improvement as far as the clothing industry is concerned. The same amount of taxation is being paid, and we may take it that substantially the same amount of foreign material is coming into this country that ought to be manufactured at home. If that material cannot be manufactured at home, speaking for myself, I say that tax ought not to be called a protective tariff but a revenue tariff and dealt with as such.

In the case of boots and shoes the taxation raised last year came to £257,000, and in 1927 it came to £264,000. The figure, as far as I can see, is practically stationery, so that imports of boots and shoes are coming in in as large quantities as some years ago. Therefore, the farmer is paying, as in Australia, but the corresponding advance to that which is made in Australia in building up industries, in having large boot factories, and in having thousands of people employed, is not being made.

[1258] It is due to these people, the farmers or the town labourers, who are paying their share of this taxation, to have it explained to them what exactly is the effect of this tax. Is it really building up industries or is it a revenue tax? Take the case of furniture. Foreign furniture ought to be excluded altogether. I have referred already in this House to the tremendous advantage the foreign furniture manufacturer has when he can send over here and sell a suite of furniture on a deposit of five shillings or something like that. It would be quite impossible on whatever tariff you give to make up to the home manufacturers for these extraordinary credit facilities these distributors for foreign manufacturers are able to give. Irish manufacturers, in my opinion, considering that the whole wholesale trade has been in the hands of foreign manufacturers, have already had a sufficient burden to contend with, and if those big shops are going to open up throughout the country with the special facilities they have they would do away completely with whatever advantage the furniture tariff is giving. It is no wonder that in that particular case whereas £45,000 was collected from the furniture tariff in 1927 in 1929 it went up to £50,000. That is, £5,000 more was paid in 1929 than two years previously as a tax on foreign furniture. That is a clear indication that the tariff is useless.

Not alone have we the same amount of stuff coming in in the shape of boots, shoes and clothing apparel, but actually an increased amount. The same applies to small commodities like bedsteads and blankets, on both of which the Minister for Finance has collected an increased revenue. In 1927 £3,800 was collected on bedsteads and in 1929 £4,700. In the case of blankets, in 1927 £4,400 was collected and in 1929 £7,300. Even in the case of comparatively simple commodities, either we are thoroughly inefficient or those industries we are seeking to protect are absolutely hopeless, or else irrespective of the effect on the industry and [1259] unemployment figures, and the expansion of enterprise here, the Minister is allowing the present state of affairs to continue because he can see all this money coming to him. In the case of sugar and soap the amount available has decreased. You have certain large foreign firms coming in and drastically reorganising and buying out the native industry. In that case as well as the disadvantage of having a foreigner taking charge you have the loss of revenue, because there is far less material coming in. However, it may be that is the only way we will ever get our industries efficient and into a position where they will supply practically our whole internal needs. If that is so it is a pity, and it is a pity that our Shannon power scheme and all our dreams and imaginings of technical education and what native industry could do to give the Irishman employment in his own country comes to this, that we have what is called protection, but what is really and simply the collection of revenue on a large scale from, as Deputy O'Hanlon said, very often the poorest class in the country, without any corresponding advantage as far as I can see.

If we are going forward for protection, let us go forward for it sincerely and realistically, and not be looking at it from the point of view of collecting revenue, and see that side by side with it money will be given towards the advancement of education and the development of our industries by whatever other means the Government may have at its hand to help these enterprises. The Minister has told us that he does not want to put any fresh burdens on agriculture. The Minister claims that £24,500,000 is the minimum limit within the field of which economies cannot be made, or, at any rate, economies worth speaking of. When he talks of fresh burdens and the necessity of fresh taxation in the event of further services being given to us, it is up to him to show that agriculture is getting value for its money out of the £24,500,000. That money is out of all proportion to [1260] what was generally expected when this country got a native Government. It is out of all proportion to what the people who had been looking for self-government for this country expected it should be. Although we must agree that under the post-war circumstances, and under the circumstances in which the present Government took control, they were faced with heavy expenditure and had to do things perhaps in an unnecessarily expensive way, it is not right now when things are normal that the Minister should tell us we are stabilised at £24,500,000 without telling us exactly what value we are getting for the money, without telling us exactly what service we are getting, and without letting us know in some more detail than he has what this economic committee of his has done. Has it merely gone into ridiculous and petty proposals like taking the boots off the Civic Guards, or has it viewed the whole position of certain Government Departments with regard to their general working? Is the Minister satisfied that some of these Departments, which seem to be filled up with people who do not want to work for a native Government, are giving the best service to the country? Is the Minister satisfied that these Departments, with these types of people predominating in them, are helping him or are giving to the Government the best possible service that can be given? If the Minister can give us that assurance we shall be delighted.

I can assure the Minister that there are several Departments in which it is believed friction is going on. We have the old class of civil servant and the new class of civil servant, and I think before we are told things are now definitely fixed and that we cannot expect any changes in future we ought to have at least some information as to what ground has been covered by the Minister in his investigations and what ground has been covered by his Departmental Committee. Is the Minister satisfied that no reorganisation is necessary in any Department, that the Departments [1261] generally are giving the best possible service, and that there is no necessity for any change to be made? We know that civil servants have been given very important offices of a trading nature. We know that certain civil servants have had responsibilities placed upon them which in the normal way they should not have. I have one particular case in mind in which a considerable amount of Government trading activity is placed in the hands of a civil servant who has had no previous training in trade matters. I think that is a thing which should not have occurred. The Minister ought definitely to assure us that he has gone through the Departments one by one and is satisfied that the best men are in the responsible jobs. If he tells us that, we will be satisfied.

The Minister tells us that if we view the position from the point of the total salaries and bonuses involved we will find that the percentage in regard to full expenditure is very small. I think the percentage is 16½ of the total amount spent. There is another side to that. Until we get certain assurances from the Minister we have to look at the fact that there may be whole Departments that need thorough reorganisation and there are several changes that could still be made. Let us take the case of the Broadcasting Station. Is the Minister satisfied that that is the best way in which the money could be expended, while we know that money is urgently needed in other directions? I think the Minister will find very little support in the country for the proposed new Broadcasting Station, and on examination he will find that the £85,000 proposed to be spent on the new station could be more usefully expended elsewhere.

Then there is the case of the External Affairs Department. That is a Department that is costing substantially the same amount of money —a total expenditure of £85,000. As the years go on that amount will increase; the expenditure will be greater. I wonder are the people [1262] getting value for the money? I have not heard any definite results accruing so far from our foreign representation. One of the things we would like to know is, what value exactly are we getting out of foreign representation? Even in the case of the Army and the Civic Guards, two items that naturally appeal to us, the amounts are unnecessarily large. There has been a considerable reduction in the cost of the Army. Is that reduction effected from the point of view that we must always have the Army, and that every year we can make only a small reduction, or are we to view it from the point which I think the country expects the Minister to adopt—that we have definitely settled down to peaceful conditions here, and once the Army Reserve has been established and is functioning properly, the standing Army as such could be cut down to a very small and very nominal standard? If we are going to reduce the Army expenditure by a few thousands every year we will have to face the establishment of vested interests, the continuance of the maintenance of buildings, overhead expenses, rates, stationery and all these other things. All these expenses will have to be paid, and they will be all the greater in proportion to a very small Army than if they were applied to a comparatively larger force. I agree with Deputy MacEntee that there is no reason why steps could not be taken to abolish the Army within the next few years. The Ministry have placed the Army Reserve in the hands of Army officers. When they have that Reserve properly equipped and under their control they ought to be quite satisfied; but I think very poor progress has been made in order to bring about that transition. There has not been much progress made in carrying over the Army Reserve and definitely establishing it.

I do not think the Minister can be in earnest when he says he wants definite proof, apparently from this side of the House, that the last shred of danger of an internal rising against the authority of his Executive has passed. How can the Minister get that assurance, and what kind [1263] of assurance does he want? It shows that he was not sincere when he stated that even if we found that all danger of internal conflict had disappeared we would still have to consider our position with regard to the League of Nations. It is talk like that that makes the country believe that the Ministers are really not sincere.

What does the League of Nations or the Great Powers care about this small State of ours? What influence can we have beyond the fact that we are here, and that we may see our photographs occasionally in the papers? What real influence can we have at the League of Nations or at the Naval Conference? If we are going to go on that line, I think we are adopting a very wrong policy. We are told that there is no money available for certain social services and for the building up of industries; yet here we are faced with increasing expenditure on matters which do not constitute the really big issues of interest to our country. The expenditure on representation abroad, just as expenditure on the proposed new Broadcasting Station, ought not be made while there are general complaints of bad business and general distress in the country, together with a great scarcity of money. If Cumann na nGaedheal members believe that the country is not in a bad state and that it is fairly comfortable; if they are satisfied that because the entertainment tax and other taxes of that sort have increased it indicates that the people are better off, they are simply off the rails. These increased taxes are, no doubt, due to big advertising that is being carried on relative to all these luxuries. We must consider the growth of new ideas; the people have new ideas and new standards. The fact that we are getting more money out of these luxuries does not prove that the country is better off, because it certainly is not. The ordinary worker or businessman in 99 cases out of 100 is worse off than he was five years ago. The Minister may have his Revenue Commissioners [1264] to tell him that they have found out somebody who had money hidden in England or somewhere like that, or that some prominent Cumann na nGaedheal supporter was suddenly found to have defrauded the Government for a great many years—perhaps back to the time of his grandfather. Things of that sort may suddenly be found out, but that does not prove that the country is well off. You will always have those isolated cases of people defrauding the revenue just as you will have people spending on a vast scale, on a scale out of proportion to the wealth and conditions, as you have here in Dublin, as compared with corresponding cities in other countries. I call attention to the case of the police because there has been an increase of £45,000 this year. The only real economy made was the closing of a few small barracks.

It has been suggested on this side that with the advent of the telephone, the motor bicycle and the motor car, more economies could have been effected. We can run this country with a much smaller police force than we have at present. It is not necessary to run this country with a police force greater in numbers than the police force in the whole of Scotland. Our police force is costing far more money. Surely the Minister is not serious when he tells us that public morality in this country has not advanced sufficiently to enable a small village in the West of Ireland to get on and its people to be regarded as lawful and peaceful citizens unless they have a Civic Guard barracks to look after them. I think that is quite wrong. In the same way as they got on when there was no R.I.C. barracks there, they can get on now. If a serious offence is committed, with the advantage of the telephone and the motor car these things can come under notice in a very short time and far more quickly than they could a few years ago, though you had a barracks in every single village. Barracks in these villages are not necessary. The only offences in these villages are cases of strayed donkeys. Cases like that are [1265] being attended to by the Gárda. The Minister talked about poteen. Poteen will be easily abolished if the Minister spends money in these areas and gives the people something to do. The demoralisation arising from poverty and ignorance is responsible for the poteen evil. If people had self-respect, clean houses and employment, they would have no poteen. The present policy of exterminating poteen and having the Minister for Finance regarding himself as a new grand inquisitor to scourge the Gaeltacht of this dreadful evil is quite wrong. I admit it is necessary to wipe out the poteen evil, but we ought not to look at these unfortunate people as being criminals. Even the worst of criminals can say that circumstances and environment have led them to it. The argument that these large Civic Guard forces are necessary, and that they must be kept on on account of the poteen evil, is not a sound argument.

Deputy MacEntee has called attention to the fact that the Minister has completely ignored all the other commitments in regard to local loans and land annuities for which this State is responsible to Great Britain. He has definitely ignored them in his annual statement on the national debt. He has tried to gull the people into the belief that because our national debt is only £20,000,000, or less than one year's revenue, the country is a paradise. The service of that debt compares very unfavourably with the amount of the debt. The total amount that we are going to pay this year for the service of that debt comes to £1,883,000. We are paying that amount on our national debt. If we are going to go on borrowing, and if we are going to proceed on the belief that no economies can be made, that only through fresh taxation or borrowing can anything big or real be done to relieve the situation in the country, we had better keep in mind also that that in itself imposes a very heavy burden upon us. The amount is now practically £2,000,000, and if the present rate of borrowing goes on it will pass on and go to nearly £3,000,000.

[1266] Mr. M. O'Reilly: At a time like this, when the Budget is introduced, there are generally great expectations and a certain amount of excitement. Except for the daily Press, I think the introduction of this Budget was free from excitement. The main policy that underlies the introduction of the Budget would seem to be a certain inducement for people with capital—not necessarily capital to be employed in production, but capital to be expended here in this country —to come to live here. That would seem to be behind the introduction of the Budget. But there was no consideration whatsoever given to the question of the relief of production in this country. To my mind the particular form of protection that underlies the Budget will have a certain amount of demoralisation. I believe we have been living long enough under that system. I believe that wealthy men living in this country did very little more than demoralise the surrounding workers. I believe that we have reached a stage now when we should take a different outlook. That is, that we should have our own production and that taxation, as far as possible, should be worked so as to encourage that production.

I remember some time ago the Minister for Finance making a very true statement here on the question of tariffs. He told us that tariffs were an investment. That, I believe, is perfectly correct, and if he had stuck to that, and stuck to it in a system of taxation. I am quite convinced that good results would accrue. But the Minister seems to have left that line and gone on the other one—that is, the policy of bringing into this country wealthy people who will hunt and tour the country while we, incidentally, shall get the alms. It is nothing more. I think he should go back to the other policy and, as far as possible, try to encourage or stimulate production. After all, we have a series of heavy debts to pay out to other countries for production. We are actually paying out large sums of money that we cannot afford to pay. We are paying that money in general [1267] for what we could really produce here ourselves. That has gone on now for some sixty or seventy years, and I believe that that arises largely through this particular system of taxation. The Minister for Finance spoke some time ago on the question of £1 per head being put on Irish cattle if certain things occurred in this country. The Minister wanted the people in this country to believe that they would have to pay that £1 per head if it were put on Irish cattle. But I do not see the logic of the argument that the English people, being the consumers, could avoid paying that £1 per head.

If a tax is put on foreign produce coming in here we are expected to pay it, but if a tax is put on our cattle going into England the English people are not expected to pay it, but we are expected to do so. That would seem to be the reasoning. I believe, and I have stated before, that the Minister for Finance has shown a great deal of ability in the selection he has made of his Revenue Department. That Department is certainly most efficient in its methods of collecting money by all means. It leaves no stone unturned to make that collection, and as often as not, whether the money is there or not, it has to be found in some way or another, and everything goes well. I wonder if the Minister could lend himself to the Minister for Industry and Commerce. There must be more men of ability to be found, and perhaps he would try to select some team or body of men who would be trained to endeavour to solve some of the economic problems with which we are faced. On my journeys throughout the country I see any amount of good food. The country generally is stored with any amount of good potatoes which are to all intents and purposes unsaleable. Going through the streets of Dublin one notices many people in want of such food. You have the farmer who cannot sell it, and you have people here hungry who cannot [1268] get it, while those who can get it must pay an enormous price.

Potatoes in Dublin are selling at one shilling a stone, whereas in the country I do not suppose that they can sell them for threepence. They cannot feed them to pigs, because pigs are nearly useless at present. The Minister should apply himself to that problem. He should give a lead. We have the ability to collect money, but we have no ability to stimulate production in any way. It has been taught to us here for generations that we are purely an agricultural country and that the moment we leave agriculture we are lost, because God Almighty never intended us for anything else. We have been told that if we enter into any industrial production we must of necessity be a failure. I think that the Minister for Agriculture is convinced that under no conditions, certainly not under present conditions, can he make a success of agriculture. We will not be able to make a success of agriculture until we develop other industries.

I believe that direct assistance to farmers will not do anything, and that the assistance that farmers can get, to do them any good, must be indirect assistance. That is largely the reason that you find all through the country such indifference amongst all farmers. There is no doubt that there is that indifference. They were indifferent about this Budget. I suppose they heaved a sigh of relief when they found that there was no increase in taxation. That, however, is all; they are not jubilant about it. All that they say to-day is: “This is stabilised. Here we are. We are not going to have it any higher, but certainly we are not going to have it any lower, nor is any effort going to be made to increase or encourage our production.” That is the reason that all through the country during the last winter the agricultural classes, with their highly paid and efficient instructors, were so poorly attended. I believe that all that demoralisation and indifference arises absolutely from the system of taxation which we have inherited but from which [1269] we are making no effort whatever to get away. When we come to examine the system of taxation and when we read its history we generally find that it sprang up because of some abnormal conditions, because there was a big war or something of that kind. When money was wanted in a hurry Ministers of Finance found that this was a very convenient and handy method of getting it. There was no trouble about it so far as they were concerned. There it has remained. That is the present system and no change has been made.

Local rates, for instance, are nothing but a tax, and every effort is being made to collect them to-day, so much so that if they are not paid and if a man is not capable of paying them immediately, he is not allowed to make an effort to pay. No heed whatever is paid to the question of production there. It means that he is locked up and held there until such time as somebody may lend him money to pay his rates. That local tax is raised on a basis which undoubtedly is not equitable, and, furthermore, a good deal of ordinary taxation is still raised on that basis. You find that our main producers, the farmers, are taxed, either centrally or nationally, on that basis, which is completely inequitable, but no consideration can apparently be given to it. This year we have come to the point of stabilising that. I hope that the Minister only means that the amount he wants, between £24,000,000 and £26,000,000, is stabilised, and that he does not mean to stabilise this particular system. Before he does so, I hope he will have an inquiry into the whole subject in order to try and find means to stimulate production rather than to stimulate what is, to all intents and purposes, luxury.

There is no doubt that the poorest people in this country pay the heaviest amount of taxation. There is no use in saying that such taxation is based on their capacity to pay. The capacity of some of them to pay is practically nothing, but still, if they want to live at all, they [1270] must try and find some means of paying such taxes. In general, such tax is paid before they start to earn or produce anything. You have, for instance, the tobacco tax. That was mentioned by the Minister yesterday, and there is no doubt that it is a very handy way of getting money. From his point of view the Minister is perfectly right, because he has not the slightest trouble with it. Before such commodity is removed from bond, if it is home produced, the manufacturer has to pay 6/8, even if he only takes out one pound of tobacco. The man has to pay that 6/8 before he manufactures anything. He is taxed long before the article is produced and much longer before it is consumed. On the other hand, we have imported tobacco and the tax is paid by the manufacturer on the leaf. What is the position with the consumer? He pays practically half the value of the article he consumes directly to the Government, and it is collected by the shopkeeper. That is a very economic system and there is no doubt that it is quite right because it saves the State the cost of collection.

Who are the people who have to pay that tax and who have no means of avoiding it? They are the very poorest people we have. There is no difference made, no preference given to them whatsoever. This commodity was called a luxury, and that was the ostensible reason it was taxed, but that was not the real reason. The real reason was that it was simply a handy means of raising revenue. I believe that on certain classes of that commodity consumed by the very poor, the Minister should consider giving some form of rebate. It would be very easy to differentiate, as the very poor generally smoke the strong class of tobacco. I think the Minister might consider giving some small rebate on that strong class of tobacco, if not this year certainly in next year's Budget, and so afford these people an opportunity of indulging in that little luxury, if he calls it a luxury.

I made the statement that tariffs were to a large extent investments. [1271] and if we ask farmers in this country to pay duty on foreign goods and if the proceeds of that duty are invested in the development of production in factories in this country, the farmers are sure to get the benefit of such a tariff at some future date. Not alone that, but according to the policy which we are pursuing to-day it will be necessary to provide some form of production in which the sons and daughters of farmers will be absorbed. If the tariff or duty is properly imposed and properly adjusted so that it will become an investment, the Minister for Finance gets no benefit. It is then perfectly right. The proceeds are invested in that industry so that it may be developed and its produce efficiently marketed, and finally in order that the sons and daughters of the small farmers, a class which is rapidly increasing, may be engaged in that industry. Whether the Minister, this Government, or any other Government that may follow them, like it or not, they will be faced with that problem, because we have innumerable small farmers springing up in each county. These small farmers will eventually have children. They will have sons and daughters who will be faced with the problem of securing some position in life. Certainly the thirty acres of land or so which the father of a family may possess will not be sufficient to divide amongst his children.

Unless we continue the policy of emigration there is no other avenue of employment left to these people. Unless we make a determined attempt to absorb them in industry emigration is bound to continue. There is no other means of preventing it. We are not wealthy enough to give them gratuities or bonuses, and no matter how many people of the wealthy class we may encourage to come in here, they will not be able to absorb them as servants, grooms or chauffeurs. There seems to be no means of keeping them here in Ireland except through the establishment of other industries. The agricultural industry alone is not able to provide for them. It cannot [1272] of itself employ the number of people that we have been hitherto persuaded it could employ. For instance, in our present condition. I take it that we have more cattle and sheep in this country per 100 of the population than in any other country in Europe. We have even more than they have in Canada and the United States, and still we are in the condition in which we now find ourselves. Emigration continues, absolute poverty exists, and no attempt is made to increase production.

Mr. Gorey: I desire, speaking on the general Resolution, to make some inquiries in regard to the tariffs already in force, and particularly in regard to the tariff on wearing apparel. I would like if the Minister would tell us what was the intention of the Dáil when the tariff on wearing apparel was imposed. Recently a case came under my personal notice regarding material brought from England for cricket— batting gloves, wicket - keeping gloves and leg pads. These were held up at the port of Waterford as wearing apparel. I was notified about their arrival, and I went down and saw them. I had subsequently an interview with some official of the Department of Finance, but I heard nothing more about it until I heard that if these articles were not removed within a certain date they would be sent back to England, and they have been sent back. Was it ever the intention of the Minister or the House to rate articles of that description as wearing apparel? We have been told that these are borderline cases, but it is left to the Commissioners or some of their officials at ports down the country to say whether this tax is to be imposed or not. Are they to be the judges? Surely the House had some definite object in mind when imposing the tariff, and surely the Minister who proposed it had also something definite in his mind? If it is to be the law that these articles should be subject to a tariff, let that be stated definitely, but if it is not, what is the use of holding up articles which it was never intended should be [1273] taxed? I think I am voicing the opinion of the House when I say that it was not intended to rate these articles as wearing apparel.

Mr. M. Hennessy: What are they?

Mr. Gorey: Batting gloves, partly rubber and partly leather.

Mr. MacEntee: Are they worn?

Mr. Gorey: They are. Another thing which comes under the heading of furniture is the ordinary zine bucket with a small bit of timber in the centre of the handle. They are sent back or charged as wooden furniture. There are some other articles.

Mr. Lemass: A diving suit.

Mr. Gorey: I do not know about that. Surely commonsense should have some bearing on this matter, and the officials of the Department of Finance down the country who see these goods should use a little commonsense in their examination of them. It is not too much to expect them to come to some standard of commonsense. There is a large number of other voxatious details in connection with this that ought to be put right. It is annoying to people when they think the tariff is being strained too far, and they resent it. Let it be stated definitely what is and is not dutiable. Let definite articles come under the heading, and let us have a decision in law in those border cases which are reported from time to time, so that there will be no further disputes between the people to whom goods are consigned and the officials. This House made the law and they should make it clear.

Mr. Flinn: I want to take up a few details here more than any question of large principle. There is the question of harbour boards and other authorities and their trading profits. The Minister said that relief could not be given in this particular case unless it was extended to the trading profits made by all local authorities and by the Electricity Supply Board. I understand that the profits of the Electricity Supply [1274] Board are already immune from that particular tax. It seems to me that the question of relieving a harbour board from income tax upon its income is not covered by the question of ordinary trading profits of a municipality. The income of a harbour board is all taken from dues and to the extent to which it is relieved would be relieved from dues, and therefore relieved from an addition which is invariably and inevitably put upon the cost of goods. Any taxation on the revenue of a harbour board is simply a direct increase in the cost of service. You can justify a tax upon coal or upon oil used for industrial purposes on exactly the same ground. A tax upon any other portion of the effective production could be justified on exactly the same ground as income taxation upon harbour board revenue. It has certain work to do, and if the Government take out of its revenues any sum of money by means of income tax then it has to get that money from other sources. It does not matter whether it is income tax deducted from the interest upon its stocks or upon what might seem nominally trade profit, the effect is exactly the same. It is a direct increase in the cost of production, in so far as the production is represented by effective transport.

The Minister has taken £180,000 of the accumulated interest of the Post Office Savings Bank. This has been accumulating over a period of years. He now proposes to take 75 per cent. of the accumulated amount of that interest as income in this particular year. Needs must, I suppose, when the devil drives, and if one were to regard that transaction alone and separate there might be something in the case which he has put up; at any rate, he has a British precedent for doing so. But, having regard to the fact that in another portion of revenue largely collected through the Post Office, that is, Savings Certificates, he told us last year that he was in arrear in his provision of interest to meet his liabilities under that head by over £400,000, it does seem very extraordinary book-keeping, to say the least of it, that he [1275] takes that asset of £180,000 and converts it into revenue this year instead of putting it to meet the liability which he has on his books of over £400,000 The principle of “heads I win and tails you lose” seems to be the Minister's method of dealing with recurrent and non-recurrent obligations. This £180,000, on any system of sound book-keeping, having regard to the fact that he owes the savings certificates people this money, ought to be put to that purpose.

The Minister has gone through the list and has told us that of the total expenditure of the country the whole lot is irreducible. Having said it is irreducible two or three times, he is quite satisfied that he has proved it is irreducible, and therefore, we must accept it and start on that basis. But absolutely no evidence of any sort, kind, or description has been given to us except his own declaration to that effect. Deputy Derrig has called attention to a very extraordinary statement made by the Minister for Finance and one of which I hope the Minister for Agriculture will take very careful note. He said:

“I think it will be agreed by most people that expenditure on the Army cannot safely be reduced below the figure at which it now stands, at any rate until the possibility of internal attack on the State has completely disappeared. Even then it is questionable whether much further reduction would be justifiable until the sanctions of international law and the institutions of the League of Nations have grown more powerful than they now are.”

Here we have a statement by the Minister for Finance that the statement made by the Minister for Agriculture as to the purpose of the Army is all nonsense. If that statement means anything, it is now a direct answer to anyone who says that any organisation in this country, due to its threat of disorder, is causing any cost under the head of the Army. The Minister for Agriculture said that Army exists only, [1276] and that £1,500,000 is paid only, because there is this threat from inside. The Minister for Finance said that even if that threat from inside was not there the expenditure would be the same. What I want the House to ask themselves is: What do they think of a Budget of £24,000,000 that is justified by a Cabinet, two members of which, in relation to an item of £1,500,000, make statements so absolutely different and then, on the face of these two absolutely contradictory justifications of the same expenditure, say it is irreducible?

As far as I can see we have to look for a third explanation of the irreducibility of this £1,500,000. That explanation, apparently, is one given by the newspaper which has as its directors practically the whole of the Front Bench opposite; that is, that an Army costing £1,500,000 is maintained for the purpose of seeing that when this particular Government goes out of power there will be left in this country a power which will assert over any Dáil which is its successor the right to see that the policy of that and all succeeding Dala shall be the policy of Ministers opposite. It is irreducible because the only guarantee they have that the policy of Cumann na nGaedheal will be maintained after Cumann na nGaedheal has disappeared is this particular Army which costs £1,500,000. That is an irreducible sum. I do not know whether the average member of Cumann na nGaedheal is willing to go into the division lobby to say that £1,500,000 should be spent in building up a military organisation here in this country which will rule the succeeding Dáil, and which will prevent the succeeding Dáil altering its policy to any policy other than that for which Cumann na nGaedheal to-day stands. That is the only justification, as far as I can see, for that £1,500,000 and that seems to be utterly inadequate. I do not think that any honest member of Cumann na nGaedheal would defend that.

The whole question of what this £1,500,000 is spent for is, apparently, absolutely in the air. And unless [1277] the three or four or twenty-four voices of Cumann na nGaedheal can come to an agreement as to what the purpose of it is, it is futile, impossible and stupid to put it forward as an organisation for which an irreducible sum of this kind should be provided.

Amongst the assets of the Government there are various things, such as shares in the Agricultural Credit Corporation, and that “Crown and Anchor” establishment called the Industrial Trust Company of Ireland. The Industrial Trust Company of Ireland was a special inspiration from heaven. Inspiration from heaven is not confined, apparently, to the Minister for Local Government. The Minister for Finance gets it also. The Industrial Trust Company of Ireland is one of “the banking institutions of a new character” which was to take the place of the effete organisations of that type in this country, and which was to do for Irish industry what the Minister for Finance, at that particular moment, did not think the existing banking institutions were doing. Into that organisation the Government put £50,000, which is included amongst their miscellaneous assets. It is included as £50,000 amongst their existing assets. What is the value of that £50,000? Of course, it is making a profit. It made a very respectable profit of £14,851 in the year ended 31st March, 1930, on a capital, I think, of £250,000. That is not at all bad. But in making up that profit it shows investments in industrial and other undertaking of £271,547. Apparently, lest the auditor might have insisted on alluding to it, there is a footnote that shows that the market value of these investments which they value at £271,547 was £199,000. In other words, they make a profit of £14,851 in that particular year by including £72,000 of assets that they had not got, and that they knew they had not got.

Now, the Government, I understand, have two representatives on that particular board. Is this the type of accounting that is shown here also in the Budget? If the Industrial [1278] Trust Company of Ireland has balanced its budget to the extent of a profit of £14,851 by including £70,000 worth of assets which they know they have not got, is that a type or sample of the finance of the Minister for Finance, who includes £50,000 worth of shares at par that he has in that company? I think we shall have another opportunity in this House—I certainly think there ought to be another opportunity in this House—in which we will go into exactly what is done, by whom it was done, when £271,000 was invested, how and where it was invested. I think it is time this House knew why £50,000 of Government money was invested in a purely gambling transaction. In the previous year, investments by this company were put down as £291,000 when they knew their value was £233,000. Then also they showed a profit.

Having regard to the finance of the subsidiary companies of the Minister for Finance, the House will not be in the least bit surprised to know that he includes amongst his assets what really are debts. He values “advances to the unemployment fund” at £563,000. Among the assets which make this country more solvent is included the fact that industries will have to be directly taxed in the future to the amount of £563,000. That is the plain meaning. He might just as well include £400,000 for a petrol tax which he has not put on. You know that is the sort of finance which gave free board and lodging to Hooley, Hatry and Whittaker Wright. There is no difference except the size of the sum.

Mr. Gorey: Is not Hatry too personal to your Cork friends?

Mr. Flinn: I am sorry I did not hear you. I do not think I am losing much, but I want to give you an opportunity. I had, on another occasion, an opportunity of going through some of these other assets which he has laid out here. I do not propose to go through them again. You do not need to go past this one single item. If a man includes amongst his assets the assets [1279] of the State, the fact that he is to tax industry in the future he is capable of anything. National Loan Sinking Fund, unspent balance, £197,000. Last year that was £122,000. I would like to know where that is, and what has been done with it, whether it is invested, whether it is providing income, or whether it is not. At the present moment it is a very vague figure. I can quite see the Minister's position. National Loan is at such a level he does not want to buy it. I think that is quite good justification for him to say that he will wait until it is cheaper, or something of that kind, but I certainly want to know what is happening and what is being done with the £197,000 that he has. On one occasion, a very critical occasion in the credit of this country, he allowed National Loan to drop one-and-a-half points, and to remain one-and-a-half points down for five most critical days, when £7 10s. would have saved it. He had apparently £122,000 somewhere about that time. He certainly does seem to be very careful of the finances of this State when he saves £7 10s. at the cost of letting the credit of the country be depreciated at a particular moment of that kind. The Deputy from Kilkenny, Deputy Gorey, objected to the fact that the Minister for Finance has not shown common sense. He ought not to be surprised at that. Why should he ask the Minister for Finance to be exceptional among his comrades? In a particular case in the courts in which an official of the Minister for Justice was concerned, when the magistrate said that a Civic Guard should exercise common sense in the discharge of his functions, the Minister for Justice appealed to a higher court; so that, I think, Deputy Gorey will feel that perhaps he has been unjust to the Minister for Finance in suggesting that he is in any way exceptional among his comrades or in any way breaking the tradition of the Government which Deputy Gorey supports, when he failed in common sense.

The Minister tells us that he does [1280] not propose to make any definite changes in the income tax position. He apparently forgets that two years ago he gave us a promise, or an engagement, which would at any rate justify an action for breach of promise, that he would consider very favourably the proposal to exempt from income tax moneys put back into business. He has not done so now. A few days ago he suggested, in relation to the milling situation, that possibly he would deal with it by discrimination in taxation, presumably income taxation. There is no sign of that. There is no sign of what you might call a constructive method at all. It is purely and simply the book-keeping of a man who, hard driven, collects any unconsidered trifle and sells it for revenue. He takes £180,000, which he certainly has no right to take, just as in the previous year he took about £250,000 of brewers' credit, and I think about £50,000 to £100,000 of currency conversion money which does not appear this year. He balances his Budget every year on exactly the same principle that a lodger might balance his weekly budget—by selling one week his landlady's clock, and, if she did not notice it, next week his landlady's dog, eventually, no doubt, acquiring a right to free board and residence at the expense of the whole community.

The Minister for Finance performs on a larger scale exactly the same kind of function. He finds, for instance, that he has a few million pounds' worth of stock which is now giving him only interest. He sells it and regards it as income. He has done that to the extent of many millions of pounds. Some American once wrote a story. “The man who stole the National Debt.” The Minister for Finance, in the pretence of balancing his Budget for the last few years, has in fact stolen the national debt. He has put to current expenses purposes capital resources equal to what he stated to be the net national debt. No doubt, as he says now, he is coming to the end of his landlady's furniture. He will have either to live on his income or get out. I have an idea that the Minister for [1281] Finance is budgeting for a deficit next year. I think he knows what is coming to him and to those who supported him here, and he has decided to leave the cupboard absolutely bare for his successor, having sold out everything that was of movable value. This Budget is not honest. It is not as dishonest as some of the previous ones, because there was less movable property to be disposed of. When the Minister for Finance has reached the stage that there is no movable property then he will be honest and remove himself, as my friend behind says. It is not the worst of his Budgets. It would be an inspired thing if he could repeat some of his expedients in this Budget.

This Budget will not contribute in any way, as far as I can see, to the increase of any industrial activity in the country. There is no suggestion whatever of any encouragement. He has up his sleeve, which he ought to have included with the £563,000 advances to the Unemployment Fund, a petrol tax with which he hopes to buy some support in some subsequent by-elections on the pretence that he is going to de-rate. Apart from that he seems now to have reached his limit. A man with no sense of responsibility or of sound finance has now apparently reached the end of his tether. Personally, I hope the end of that tether will come soon. A Minister for Finance is not merely an accountant; he is not merely a person charged with the duty of keeping books; he is charged with the duty of organising the finance and resources of the country so as to stimulate wealth production in the country. There is no sign whatever of any such purpose or intention in this Budget.

Mr. Clery: To me, at any rate, the Minister's statement yesterday in introducing the Budget was disappointing, and I am of opinion that it will be read with very great disappointment throughout the country in general. In listening to the Minister yesterday, I felt that I was listening to a tired man who had very little energy and certainly no [1282] enthusiasm to face up to the situation that exists in the country to-day. There were, in the past year at any rate, many suggestions as to how certain economies could be effected in administration. Perhaps there were so many that the Minister got bewildered and rather than face up to the situation he threw up his hands in despair and decided to leave things as they were. During the past year we have read discussions in the papers as to the taxable capacity of the people of this State. I followed the discussions as closely as I could but, unfortunately, I found myself, after I had read them, in a greater mess than before. I felt that the Minister might give some indication in his Budget statement as to what our taxable capacity is. It surely is a thing which cannot very well be passed over by Deputies. I think some authoritative statement should be made on that matter. Does the Minister for Finance hold that we have not yet reached the limit of our taxable capacity or does he think that we have overreached it? I think that matter, in a young State of this kind, should be considered. The Minister, for instance, stated that we could not expect for years to come to have social services in this State up to the standard of other countries that are longer established. That is quite reasonable, but my impression is that it is only certain social services which are of benefit to the ordinary taxpayer of this country that are to be inferior to other countries. At the same time we are to have what might be termed governmental luxuries which are far ahead of similar institutions in other countries, particularly when we take into account the wealth-producing resources of other countries compared with ours.

I think the Minister can certainly not claim as he did yesterday that he has reached the bedrock of economy as regards certain services under Government control. He stated yesterday that it was impossible to make any further economies in certain Departments. I think that before this Budget was introduced we might at least have had a report [1283] from this Economy Committee which